/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090826.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, August 26, 2009, Vol. 13, No. 236 Headlines 222 SOUTH CALDWELL: Condo Buyers Didn't Have Equitable Liens AMGA LLC: Case Summary & 3 Largest Unsecured Creditors AMN HEALTHCARE: 'Ba1' on Bank Debt Not Impacted by Demand Drop ANTHRACITE CAPITAL: Swaps Debt for Stock With Two Noteholders APPALACHIAN BANCSHARES: Posts $30.9-Mil. Loss in Second Quarter APPLIED SOLAR: Quercus Trust, et al., Hold 84.8% Equity Stake ARCLIN US: Obtains Final Approval of $25 Million Borrowing ARIZONA RATTLERS: May Seek Bankruptcy Protection ARK OF SAFETY APOSTOLIC: Case Summary & 9 Largest Unsec. Creditors ARTISTDIRECT INC: Villard Discloses 21.3% Equity Stake ASARCO LLC: Judge Schmidt Says Plans "Unfeasible" in Appeals Court AUTO CAST: Case Summary & 20 Largest Unsecured Creditors BANKUNITED FINANCIAL: Wants Jan. 19 Extension for Ch. 11 Plan BANNER BEDDING: Emerges From Chapter 11 Bankruptcy Protection BARZEL INDUSTRIES: Faces Nasdaq Delisting of Common Stock BERNARD MADOFF: Cohmad Asks for Dismissal of Picard's $100MM Suit BF LAS OLAS: May File for Bankruptcy to Stop Foreclosure on Center BILLY BELCHER: No Early Discharge to Escape U.S. Trustee Fees BLUEWATER BROADCASTING: Case Summary & 16 Largest Unsec. Creditors BORDERS GROUP: Net Loss Widens to $45.6MM in Qrtr. Ended August 1 BROADSTRIPE LLC: Settles With NCTC for $4 Million BROOKSIDE TECHNOLOGY: Posts $1.03MM Net Loss for June 30 Quarter CALYPTE BIOMEDICAL: Annual Report Warned of Ch. 7 Absent Funding CENTERLINE INVESTOR: Saks Park Selling Collateral on September 23 CERTIFIED DIABETIC: June 30 Balance Sheet Upside-Down by $11.19MM CHRYSLER LLC: Daimler Sued for Refusing Pacts Sent to New Chrysler COEUR D'ALENE: Permit at Kensington Mine Reactivated CONVERSION SERVICES: Frederick Lester Resigns from Board CORNERSTONE E & P: Has Until Sept. 9 to File Schedules CORNERSTONE E & P: U.S. Trustee Names 9 to Creditors' Panel CORNERSTONE E & P: Taps Haynes and Boone as Bankruptcy Counsel COYOTES HOCKEY: NHL Submits Own Bid for Phoenix Coyotes Team COYOTES HOCKEY: Balsillie's Amended Bid Allows Him to Walk Away CREATIVE LOAFING: Atalaya Beats Eason Family at Auction DARIN BENNETT: Case Summary & 20 Largest Unsecured Creditors DELTA MUTUAL: Martin Chilek Steps Down as Chief Financial Officer DEVELOPERS DIVERSIFIED: Moody's Reviews Ba1 Preferred Stock Rating DBSD NORTH AMERICA: Sprint, et al., Say Ch. 11 Plan is Flawed DPP ARCADIA: Case Summary & 20 Largest Unsecured Creditors DUANE READE: S&P Raises Rating on $225 Mil. Facility to 'B+' E-Z PEDS PA: Case Summary & 20 Largest Unsecured Creditors EARL JONES CONSULTING: Trustee Details Owner's Defrauding EXTENDED STAY: Five Mile Wants Case Remanded to Supreme Court EXTENDED STAY: Lichtenstein Opposes BofA Bid to Remand Suit EXTENDED STAY: Line Trust Want Suit Move to Supreme Court EXTENDED STAY: U.S. Trustee Files Motion to Appoint Examiner EXTENDED STAY: Wants to Hire PKF Consulting as Appraisers FELLOWS ENERGY: Has Yet to File Q1 and Q2 2009 Financial Reports FIRSTFED FINANCIAL: Files Monthly Financial Data as of July 31 FIRSTFED FINANCIAL: Special Stockholders' Meeting on Sept. 30 FOUNTAIN POWERBOAT: Case Summary & 3 Largest Unsecured Creditors FRESH DEL: S&P Raises Corporate Credit Rating to 'BB' FOUNTAIN POWERBOAT: Files for Chapter 11 Bankruptcy Protection GENERAL MOTORS: Advisers Suggest Keeping Opel for Euro Presence GENOIL INC: Posts C$3 Million Net Loss in 1H of 2009 GROUNDHOG MINES: Files Chapter 11 in Anchorage ICONIX BRAND: S&P Changes Outlook to Stable, Affirms 'B+' Rating JEFFERSON COUNTY: State Supreme Court Hands Tax Defeat INNOVATIVE CARD: Discloses Looming Liquidity Crisis KEATING CHEVROLET: Section 341(a) Meeting Set for September 9 KIWI ENTERPRISES: Case Summary & 3 Largest Unsecured Creditors LAVATEC INC: Washex Employees Seek Unpaid Wages LEAR CORP: Chamberlain Continues Patent Infringement Suit LEAR CORP: Kirkland & Ellis Bills $919,000 for July 7-31 Work LEAR CORP: Reaches Agreement With Rozmor Land Company LEAR CORP: Schedules of Assets and Liabilities LEAR CORP: Statement of Financial Affairs LEHMAN BROTHERS: U.K. Administrator to Appeal London Court Ruling LEHMAN RE: Court Adjourns Recognition Hearing to September 15 MAGNACHIP SEMICONDUCTORS: Creditors Group File Competing Plan MCG CAPITAL: Fitch Affirms Issuer Default Rating at 'BB+' MERRILL LYNCH: BofA to Release More Info on Settlement With SEC MIA BELLA PROPERTIES: Case Summary & Largest Unsecured Creditor MICHAELS STORES: Loan Amendment Won't Affect S&P's 'B-' Rating MIDWAY GAMES: Completes Sale of San Diego Studio, Foreign Units MOD HOSPITALITY: Earns $819,301 in Three Months Ended June 30 NATIONAL CONSUMER: S&P Downgrades Counterparty Rating to 'BB-/B' NEW CENTURY COS: KMJ Corbin Replaces Squar Milner as Auditor NEW CENTURY COS: To Restate March 2009 Financial Statements NEXSTAR BROADCASTING: Admits to Being Highly Leveraged NOVADEL PHARMA: Receives $109,000 From Sale of Shares to Seaside NOVADEL PHARMA: Receives $150,000 From Velcera on License Deal OMNOVA INC: S&P Changes Outlook to Stable, Affirms 'B' Rating ONE LAND LLC: Case Summary & 19 Largest Unsecured Creditors PEAK FITNESS: Shuts Robinhood Unit; Rival Gym to Accept Members PENN OCTANE: Hasn't Paid Auditors, Can't File 2nd Quarter Report PHH CORPORATION: Fitch Keeps 'B' Short-Term Issuer Default Rating PHILADELPHIA NEWSPAPERS: Back to Mediation for DIP Loan Objections PROPEX INC: Court Approves Fabrics' Settlement With PBGC PROPEX INC: Court Confirms Fabrics Estate Liquidation Plan PTS INC: June 30 Balance Sheet Upside-Down by $328,900 PULTE HOMES: Fitch Affirms Issuer Default Rating at 'BB+' READER'S DIGEST: Wants October 8 Extension for Schedules READER'S DIGEST: Court OKs Access to $100-Mil. DIP Loan READER'S DIGEST: Chapter 11 Filing Cues Moody's 'D' Ratings RESERVE PRIMARY FUND: Investors May Recover 99 Cents a Share ROYAL INVEST: June 30 Balance Sheet Upside-Down by $1.25 Million SADDLE MOUNTAIN: Fitch Affirms 'BB' Rating on $13.1 Mil. Bonds SAINT ANNE ADOPTION: Collapses After Freeze of Assets SAN WEST: Posts $152,238 Net Loss in Three Months Ended June 30 SB PARTNERS: Earns $1.8 Million in Three Months Ended June 30 SCO GROUP: Wins Appeal Against Novell; Trustee to be Named SEA CONTAINERS: Auditor Recommends Final OK for Professional Fees SEA CONTAINERS: Court Denies Mervyn Dacey's $420,000 Claim SEA CONTAINERS: Post-Confirmation Report - Ended June 30, 2009 SHIRLEY A JOBE: Proposes Goe & Forsythe as Bankruptcy Counsel SHIRLEY A JOBE: Wants Schedules Filing Extended Until September 8 SHIRLEY A JOBE: Section 341(a) Meeting Slated for September 8 SINCLAIR BROADCAST: S&P Retains Negative Watch on 'B-' Rating SIX FLAGS: Terms of Amended Reorganization Plan SIX FLAGS: Treatment of Claims Under Amended Reorganization Plan SIX FLAGS: Financial Projections Under Amended Plan SIX FLAGS: Proposes Amendment to Prepetition Credit Facility SOUTH FINANCIAL: Fitch Downgrades Issuer Default Rating to 'B+' SPANSION INC: Asset Purchase Agreement With Powertech SPECTRUM BRANDS: Amends Credit Pact for Plan Consummation SPEEDEMISSIONS INC: Registers 40.4 Million Shares for Sale ST JAMES: U.S. Trustee Sets Meeting of Creditors for September 9 STERLING MINING: SNS Has Admin. Claim for Sunshine Mine Costs SUBURBAN PROPANE: Moody's Upgrades Corp. Family Rating to 'Ba2' T.H. PROPERTIES: Wants Plan Filing Deadline Moved to Nov. 27 TAMARON PROPERTIES: Case Summary & 3 Largest Unsecured Creditors TELKONET INC: Has $7.4 Million 2009 Second Quarter Net Income TITANIUM GROUP: June 30 Balance Sheet Upside-Down by $600,790 TONY KUKUMO AKINSETE: Case Summary & 20 Largest Unsec. Creditors TRILOGY DEV'T: Lenders OK Hiring of Consultant to Seek Buyers TRILOGY INTERNATIONAL: Moody's Cuts Corp. Family Rating to 'B3' TROPICANA ENT: Fee Auditor Recommends Approval of Applications TROPICANA ENT: Lender Group Supports Enjoinment of Trademark Suit TROPICANA ENT: OpCo Debtors Seek 3rd Amendment to Credit Facility TRUMP ENTERTAINMENT: Fights Noteholders' Proposed Competing Plan TRUMP ENTERTAINMENT: Investors Cry on Zero Recovery under Plan US SHIPPING PARTNERS: Delays Filing of June 30 Quarterly Report VIEW SYSTEMS: June 30 Balance Sheet Upside-Down by $225,969 WARNER CHILCOTT: Moody's Affirms Corporate Family Rating at 'B1' WESTFALL TOWNSHIP: To Pay $6MM Over 20 Years in Katz Settlement WILLIAM BLINCOE: Files Amended List of Largest Unsecured Creditors WILLIAM BLINCOE: Files Schedules of Assets and Liabilities WILLIAM TURNER III: Case Summary & Largest Unsecured Creditor WINDSOR CENTURY: Taps Michael W. Carmel as Bankruptcy Counsel WORLDSPACE INC: Plan Deadline Extended to Oct. 31 * Business Bankruptcies Up by 64%, Says ABI * FDIC Meets to Ease Rules on Investors' Purchase of Closed Banks * Existing Homes Sales Up, Median Price Down 15% * Upcoming Meetings, Conferences and Seminars ********* 222 SOUTH CALDWELL: Condo Buyers Didn't Have Equitable Liens ------------------------------------------------------------ WestLaw reports that under North Carolina law, the purchasers of condominium units did not hold equitable liens against the residential condominium tower project that the Chapter 7 debtor, a single-purpose entity, had been formed to construct, develop, and sell. Neither the paragraph of the purchase contracts which offered a comprehensive explanation of the deposit obligation, nor any other portion of the purchase contracts, expressed or implied an intention to charge the project with any deposits paid under those purchase contracts. Accordingly, the purchase contracts failed to express the intention necessary to create an equitable lien. In addition, because the purchasers' deposit payments did not create the payment obligations, such payments could not be the source of any equitable liens. Finally, because a written contract was the purported basis for the equitable liens, the purchasers' "relations" or "dealings" with the debtor could not be the basis for any equitable liens. In re 222 South Caldwell Street, Ltd. Partnership, --- B.R. ----, 2009 WL 2475262 (Bankr. W.D.N.C.). 222 South Caldwell Street Limited Partnership is a North Carolina limited partnership. C.P. Buckner Steel Erection Inc., Southern Steel Co., and Gary Williams, collectively owed nearly $2 million, filed an involuntary Chapter 7 petition (Bankr. W.D.N.C. Case No. 08-31710) against 222 South Caldwell on Aug. 14, 2008, and the Court entered an uncontested order for relief on Oct. 6, 2008, displacing a state court receiver. Langdon M. Cooper serves as the Chapter 7 Trustee. AMGA LLC: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------ Debtor: AMGA LLC 11075 Blasius Road Jacksonville, FL 32226 Bankruptcy Case No.: 09-07064 Chapter 11 Petition Date: August 24, 2009 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Gust G. Sarris, Esq. Affinity Law Firm, P.L. 3947 Boulevard Center Drive, #101 Jacksonville, FL 32207 Tel: (904) 398-9510 Fax: (904) 398-9512 Email: gsarris@affinitylawfirm.com Total Assets: $1,591,528 Total Debts: $1,288,540 A full-text copy of the Debtor's petition, including a list of its 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-07064.pdf The petition was signed by Gary D. Ayers, partner/owner of the Company. AMN HEALTHCARE: 'Ba1' on Bank Debt Not Impacted by Demand Drop -------------------------------------------------------------- Moody's Investors Service said the ratings of AMN Healthcare Services, Inc., are currently not impacted by the steep decline in demand for its services, due to a material reduction in debt and solid liquidity. The last rating action for AMN occurred on May 15, 2008, when Moody's upgraded the senior secured credit facility rating to Ba1 from Ba2. AMN Healthcare Services, Inc., is the largest healthcare staffing company in the United States, operating in three segments: travel nurse and allied staffing, locum tenens staffing (temporary physician staffing), and physician permanent placement services. AMN generated revenues of approximately $1.1 billion in the twelve months ended June 30, 2009. ANTHRACITE CAPITAL: Swaps Debt for Stock With Two Noteholders ------------------------------------------------------------- Anthracite Capital, Inc., reports that on August 17, 2009, it issued 5,000,000 shares of its common stock, par value $0.001 per share, in exchange for $15,000,000 aggregate principal amount of its 11.75% Convertible Senior Notes due 2027 with a holder of the notes pursuant to an exchange agreement entered into on August 14 with that holder. On August 13, the Company agreed to issue 915,000 shares of its common stock in exchange for $3,000,000 aggregate principal amount of its 11.75% Convertible Senior Notes due 2027 with another holder of the notes pursuant to an exchange agreement with the holder. The exchange was expected to settle on August 18. In each of the transactions, the shares of the Company's common stock were or are expected to be issued in reliance upon the exemption set forth in Section 3(a)(9) of the Securities Act of 1933 for securities exchanged by the issuer and an existing security holder where no commission or other remuneration is paid or given directly or indirectly by the issuer for soliciting such exchange. About Anthracite Capital Anthracite Capital, Inc., is a specialty finance company focused on investments in high yield commercial real estate loans and related securities. Anthracite is externally managed by BlackRock Financial Management, Inc., which is a subsidiary of BlackRock, Inc., one of the largest publicly traded investment management firms in the United States with roughly $1.307 trillion in global assets under management at December 31, 2008. BlackRock Realty Advisors, Inc., another subsidiary of BlackRock, provides real estate equity and other real estate-related products and services in a variety of strategies to meet the needs of institutional investors. At June 30, 2009, the Company's balance sheet showed total assets of $2.74 billion, total liabilities of $2.198 billion, resulting to a stockholders' equity of $504.67 million. Going Concern Doubt After auditing the Company's 2008 report on Form 10-K, the Company's independent registered public accounting firm issued an opinion saying that the uncertainty relating to the outcome of the Company's ongoing negotiations with its lenders have raised substantial doubt about the Company's ability to continue as a going concern. The Company obtained agreements from its secured credit facility lenders on March 17, 2009, that the going concern reference in the independent registered public accounting firm's opinion to the consolidated financial statements was waived. APPALACHIAN BANCSHARES: Posts $30.9-Mil. Loss in Second Quarter --------------------------------------------------------------- Appalachian Bancshares, Inc., posted a net loss of $30.9 million for three months ended June 30, 2009, compared with a net income of $701,000 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $32.6 million compared with a net income of $1.8 million for the same period in 2008. At June 30, 2009, the Company had total assets of $1.20 billion, which was a slight decrease over its total assets at Dec. 31, 2008. Cash and cash equivalents increased $51.3 million, or 35.0% from Dec. 31, 2008, to $198.2 million at June 30, 2009. Securities available-for-sale decreased $23.3 million, or 29.4%, from $79.3 million at Dec. 31, 2008, to $56.0 million at June 30, 2009. The Company's total loans decreased $28.5 million, or 3.2%, from Dec. 31, 2008, to $856.9 million at June 30, 2009. Net premises and equipment increased $635,000, or 1.6%, since Dec. 31, 2008, to $40.3 million at June 30, 2009. Foreclosed assets increased $12.7, million or 95.5%, since Dec. 31, 2008, to $26.0 million at June 30, 2009. The Company's liabilities at June 30, 2009, totaled $1.1 billion, which was a slight increase over its total liabilities at Dec. 31, 2008. Total deposits increased $31.9 million over the Dec. 31, 2008, balance to $1.1 billion. Federal Home Loan Bank advances remained at $72.0 million since Dec. 31, 2008. Short-term borrowings decreased $272,000 or 2.6% since Dec. 31, 2008. Shareholders' equity at June 30, 2009. totaled $39.2 million, which was a 45.9% decrease over the Dec. 31, 2008, balance of $72.4 million. The Company's management said that there is substantial doubt about its ability to continue as a going concern as a result of recurring losses, well as uncertainties associated with its subsidiary, Appalachian Community Bank's ability to increase its capital levels to meet regulatory requirements. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?42f6 Appalachian Bancshares, Inc. (NASDAQ:APAB) is the holding company for Appalachian Community Bank. The Company provides a range of retail and commercial banking products and services to individuals and small- to medium- sized businesses through its community banking relationship model. The products and services include the receipt of demand and time deposit accounts, the extension of personal and commercial loans, and the furnishing of personal and commercial checking accounts. It also serves as the holding company for Appalachian Community Bank, F.S.B, and Appalachian Real Estate Holdings, Inc. APPLIED SOLAR: Quercus Trust, et al., Hold 84.8% Equity Stake ------------------------------------------------------------- The Quercus Trust, David Gelbaum and Monica Chavez Gelbaum as of August 14, 2009, beneficially own 753,322,321 shares of Applied Solar, Inc.'s Common Stock representing 84.8% of the issued and outstanding securities of Applied Solar calculated in accordance with Rule 13D-3 of the Securities Exchange Commission. On July 28, 2009, Quercus APSO, LLC, an affiliate of Quercus, and Applied Solar entered into an Asset Purchase Agreement, pursuant to which Quercus APSO agreed to acquire substantially all of the assets of Applied Solar and Solar Communities I, LLC, a wholly owned subsidiary of Applied Solar. The purchase consideration offered by Quercus APSO under the APA includes, without limitation, the assumption or waiver of certain indebtedness owed by Applied Solar to Quercus, et al., the assumption of certain of Applied Solar's obligations to third parties and cash. The APA is subject to approval of the United States Bankruptcy Court for the District of Delaware and certain other contingencies and conditions, including, without limitation, overbid by third parties. In addition, Quercus, et al., and Applied Solar have entered into a Debtor-In-Possession Credit and Security Agreement on July 28, 2009, pursuant to which Quercus, et al., provided to Applied Solar funding of up to $1,465,000 in working capital, on a secured, superpriority basis, funded in bi-weekly increments. The loans made pursuant to DIP Agreement bear interest at the rate of 10% per annum, and matures on the 85th day immediately following July 24, 2009. The DIP Agreement contains covenants and restrictions on the incurrence of liens, the incurrence of indebtedness and other customary covenants. The BK Court has approved the DIP financing on an interim basis, subject to final approval in the coming weeks. As a result of the DIP Agreement, the APA and transactions contemplated, Quercus, et al., may potentially acquire all or substantially all of the assets of Applied Solar and Solar Communities I, LLC through the Chapter 11 sale process. Moreover, Quercus, et al., expressly retain their rights to further modify their plans with respect to the transactions described, to vote, acquire or dispose of securities of Applied Solar and to formulate different plans and proposals which could result in the occurrence of any other actions, subject to applicable laws and regulations. ARCLIN US: Obtains Final Approval of $25 Million Borrowing ---------------------------------------------------------- Arclin US Holdings Inc. received final approval of $25 million in secured financing, Bill Rochelle at Bloomberg News reported. The DIP financing of up to $25 million is provided by certain of the Debtors' prepetition first lien lenders. The Debtors have an immediate need to obtain the DIP Facility to permit operation of their businesses. Arclin Canada, a CCAA Debtor, and Arclin US are borrowers, and the remaining Debtors and CCAA Debtors are guarantors under a certain credit loan agreement dated as of July 10, 2007, with UBS Securities LLC, as lead arranger and syndication agent, UBS Loan Finance LLC, as US swingline lender, UBS AG Canada Branch, as Canadian swingline lender, the Canadian issuing bank from time to time party thereto, and UBS AG, Stamford Branch, as US issuing bank, administrative agent for the first lien lenders and as collateral agent. As of Arclin's petition date, the Debtors owe $204,132,994 to the first lien lenders. The Debtors granted the first lien lenders first priority and continuing pledges, liens and security interest in substantially all of the Debtors' property and assets to secure the first lien indebtedness. The Debtors related that they owe $30,000,000 to the second lien lenders. The Debtors granted the second lien lenders first priority and continuing pledges, liens and security interest to secure the first lien indebtedness. Salient Terms of the DIP Financing Borrowers: Arclin US Holding and Arclin Canada Ltd. Guarantors: The guarantors under the first liean credit facility Administrative Agent: UBS DIP Arrangers: Black Diamond Commercial Finance, L.L.C. and UBSS Collateral Agent: UBS Syndication Agent: UBSS DIP Lenders: Some or all of the lenders under the first lien credit facility Type and Amount of DIP Facility: $25 million senior secured, superpriority revolving credit facility; $15 million available upon entry of the interim order and an interim order in the Canadian Court authorizing and approving the DIP facility. Use of Proceeds: The proceeds of the DIP loans will be subject to and used in a manner consistent with the budget to (i) fund postpetition operating expenses; (ii) pay certain administrative expenses; (iii) pay court approved critical vendors; and (iv) make other court approved payments. Interest Rate: Alternate Base rate plus 7.0%; adjusted LIBOR rate plus 6.0% and default rates increase by 2.0% Maturity and Extension: December 1, 2009, which may be extended by up to two distinct three-month periods with the approval of the administrative agent, the DIP arrangers, and the required lenders. Fees: Initial Fee: 2.0% of the DIP Commitment Reduction Fee: 2.0% of the amount of any permanent reduction of the DIP commitment Exit Fee: 2.0% of the amount of the DIP Commitment as of the maturity date Commitment Fee: 1.5% per annum will accrue on the unused amounts of the DIP commitment Events of Default: Usual and customary About Arclin US Holdings, Inc. 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. ARIZONA RATTLERS: May Seek Bankruptcy Protection ------------------------------------------------ Gary Harper posted at 3 On Your Side that Arizona Rattlers might be heading to the bankruptcy court. According to 3 On Your Side, the Rattlers and the Arena Football League suspended their season this year. 3 On Your Side quoted Phoenix bankruptcy attorney Dale Schian as saying, "If the company is to be liquidated, then it would come from whatever the assets are to be liquidated and distribute to creditors . . . . It is possible that the U.S. Trustee's Office will file for a committee for season ticket holders who will then represent all ticket holders and will try to get them repaid their monies." The Arizona Rattlers were an Arena Football League team, based in Phoenix, Arizona, that began play as a 1992 expansion team. They were most recently coached by Kevin Guy before the league folded in 2009. As reported by the TCR on August 14, 2009, 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. 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). 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. 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. ARK OF SAFETY APOSTOLIC: Case Summary & 9 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Ark of Safety Apostolic Faith Temple, Inc. 5241-49 W 23rd Street Cicero, IL 60804 Bankruptcy Case No.: 09-31025 Chapter 11 Petition Date: August 24, 2009 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Debtor's Counsel: Forrest L. Ingram, Esq. 79 W Monroe Street, Suite 900 Chicago, IL 60603 Tel: (312) 759-2838 Fax: (312) 759-0298 Email: fingram@fingramlaw.com Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 9 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ilnb09-31025.pdf The petition was signed by Bishop Herman H. Jackson, president of the Company. ARTISTDIRECT INC: Villard Discloses 21.3% Equity Stake ------------------------------------------------------ Dimitri Villard discloses owning 8,876,627 shares of ARTISTdirect, Inc. Common Stock, options to purchase 85,000 shares of Common Stock, exercisable at $1.95 per share, options to purchase 20,000 shares of Common Stock, exercisable at $2.00 per share, options to purchase up to 22,888 shares of Common Stock, exercisable at $3.35 per share and options to purchase up to 3,920,000 shares of Common Stock, exercisable at $0.03 per share (options vest monthly over a 36 month period commencing February 1,2009), equal to 21.3% of ARTISTdirect's Common Stock. The percentage is calculated based on the assumption that ARTISTdirect had 56,620,046 shares outstanding (based on the 56,077,158 shares reported by ARTISTdirect as outstanding as of May 15, 2009, on its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2009). Mr. Villard has the sole right to vote and the right to dispose of the securities held by his trust. Pursuant to a Stock Purchase Agreement dated as of August 7, 2009, Mr. Villard -- through the Dimitri Villard Revocable Living Trust Dated 6/4/92 -- purchased from ARTISTdirect 500,000 shares of the Common Stock for a purchase price of $5,000. ARTISTdirect Suspends SEC Disclosures On August 5, ARTISTdirect filed a Form 15 with the United States Securities and Exchange Commission to suspend the Company's SEC reporting obligations. Upon the filing of the Form 15, the Company's obligation to file periodic and current reports with the SEC, including Forms 10-K, 10-Q and 8-K, will be immediately suspended. The Company expects the registration of its common stock will be terminated 90 days after such filing. Upon termination of the registration of the Company's common stock, the Company's securities will not be eligible for trading on any national exchange or the OTC Bulletin Board; however, the Company's securities may be eligible for quotation on the Pink Sheets by broker dealers. The Company's Board of Directors approved the filing of the Form 15 after careful consideration of the advantages and disadvantages of continuing the Company's SEC reporting obligations. Suspending the SEC reporting obligations will allow the Company to eliminate the substantial expenses associated with SEC reporting and compliance and reallocate those resources to support business operations, while also enabling management to focus more of its time and efforts on managing and developing the business and enhancing shareholder value. ARTISTdirect Cancels Shares Registration On August 3, ARTISTdirect filed separate Form S-8 POS to terminate the effectiveness of several Registration Statements and to deregister any of the securities registered under the Registration Statement remaining unsold: -- Registration Statement on Form S-8 (File No. 333-53208) pertaining to the registration of an aggregate of 20,907 shares of ADI's common stock issuable under the Audio Explosion, Inc. 1998 Stock Option Plan (as to 2,195 shares) and the Mjuice.com, Inc. 1999 Stock Option Plan (as to 18,712 shares). -- Registration Statement on Form S-8 (File No. 333-63572) pertaining to the registration of an aggregate of 1,133,883 shares of ADI's common stock issuable under the 1999 Employee Stock Option Plan and 1999 Employee Stock Purchase Plan (as to 377,961 shares). -- Registration Statement on Form S-8 (File No. 333-68396) pertaining to the registration of 444,480 shares of ADI's common stock issuable under Non-Plan Employee Stock Options. -- Registration Statement on Form S-8 (File No. 333-122027) pertaining to the registration of 899,659 shares of ADI's common stock issuable under Non-Plan Employee Stock Options Agreements and the Consultant Stock Plan. -- Registration Statement on Form S-8 (File No. 333-143905) pertaining to the registration of 1,500,000 shares under the 2006 Equity Incentive Plan. -- Registration Statement on Form S-8 (File No. 333-143904) pertaining to the registration of 3,395,098 shares of ADI's common stock issuable under Non-Plan Stock Option Agreements. About ARTISTdirect ARTISTdirect, Inc. (OTC BB ARTD) is a publicly held holding company with two operating subsidiaries: ARTISTdirect Internet Group, Inc., which operates one of the largest destination sites on the Internet for music and motion picture news, information and streaming music. ADIG also operates an ad network that is currently ranked 5th in comScore's ranking of music sites. Peer Media Technologies, Inc., incorporating the company's MediaDefender and MediaSentry units, provides intellectual property protection and business information services to major motion picture studios, record labels, television networks, gaming companies and software publishers, and Internet marketing services to advertising agencies and other clients. As of March 31, 2009, ARTISTdirect had $4,196,000 in total assets; and total current liabilities of $4,076,000 and total long-term liabilities of $1,450,000; resulting in stockholders' deficiency of $1,330,000. Going Concern Doubt Gumbiner Savett Inc., in its audit report on the Company's 2008 Annual Report, raised substantial doubt about the Company's ability to continue as a going concern. Gumbiner Savett said the Company has experienced declining revenues, negative working capital, a net loss, and uncertainty relating to its ability to improve its operating results under current economic conditions. ASARCO LLC: Judge Schmidt Says Plans "Unfeasible" in Appeals Court ------------------------------------------------------------------ According to Steven Church at Bloomberg, U.S. Bankruptcy Judge Richard Schmidt said that Asarco LLC's reorganization may fail should ASARCO LLC and Grupo Mexico, which have submitted competing plans, carry their battle to a U.S. appeals court. Both of the competing plans would be "unfeasible" should the loser persuade an appeals court to delay Asarco's proposed exit from bankruptcy, Judge Schmidt said. As reported by the Troubled Company Reporter, Sterlite Industries (India) Ltd., on August 19 raised its bid for ASARCO LLC, by pledging to pay all of the Company's unsecured debts in full, thus matching an offer from Grupo Mexico SAB. Under the plan backed by ASARCO LLC, Sterlite would guarantee to pay unsecured debts of Asarco LLC that are ultimately considered legitimate by Judge Schmidt. Grupo Mexico SAB on August 18 beefed up its offer for ASARCO LLC to $2.2 billion in cash. Grupo Mexico said this offer guarantees full payment for creditors. Because the creditors are no longer impaired, voting in favor of the Parent Plan is no longer required as the creditors can be deemed to accept the Plan. ASARCO LLC and Grupo Mexico, through unit ASARCO Inc., have filed competing plans of reorganization for ASARCO LLC. Judge Richard Schmidt began on August 10 hearings to choose between the competing plans, which originally included a third plan, sponsored by investors led by Harbinger Capital Partners Master Fund I Ltd. Grupo Mexico previously offered to purchase ASARCO LLC, in exchange for $1.72 billion in cash plus a note for $280 million for unsecured creditors. ASARCO LLC's plan is built upon an agreement to sell assets to Vedanta unit Sterlite Industries Inc. Sterlite has agreed to provide a $770 million promissory note, pay $1.59 billion in cash and assume certain liabilities as part of its consideration in exchange for ASARCO's assets. ASARCO Inc. and AMC early this year lost a lawsuit filed against it for intentional fraudulent conveyance of ASARCO LLC's crown jewel -- its stock in Southern Peru Copper Company, now known as Southern Copper Corporation. The U.S. District Court for the Southern District of Texas concluded that AMC is the transferee of an avoidable transfer, and ordered AMC to return the SPCC Shares to ASARCO LLC and to pay ASARCO LLC $1.38 billion in money damages. ASARCO Inc. and AMC, however, are appealing the ruling. The recovery by creditors from the SPCC Litigation may depend on the outcome of the litigation and which Chapter 11 plan is selected by the Bankruptcy Court. According to Bloomberg, under the ASARCO LLC Plan, creditors may collect money from the judgement against Grupo Mexico. The Parent Plan, however, would limit any payments related to the judgement. According to Bloomberg, Kenneth N. Klee, a professor at the University of California, Los Angeles, School of Law, testified before the Bankruptcy Court on August 17 that Grupo Mexico may be forced to pay as much as $2.94 billion in connection with the SPCC Litigation. "There is a 51% chance of Asarco prevailing," said Mr. Klee, a lead author of the U.S. Bankruptcy Code when Congress overhauled the law in the late 1970s. Mr. Klee was hired by ASARCO LLC to determine how much its parent, Grupo Mexico, may have to pay creditors in connection with the SPCC Litigation -- the last major issue for Judge Schmidt to decide before he chooses between two competing plans, Bloomberg aid. Judge Schmidt will make a final decision on August 31. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AUTO CAST: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Auto Cast, Inc. 4565 Spartan Industrial Dr. SW Grandville, MI 49418 Bankruptcy Case No.: 09-09958 Chapter 11 Petition Date: August 24, 2009 Court: United States Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: James D. Gregg Debtor's Counsel: A. Todd Almassian, Esq. Keller Vincent & Almassian PLC 2810 East Beltline Ln, NE Grand Rapids, MI 49525 Tel: (616) 364-2100 Email: kvalaw@sbcglobal.net Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/miwb09-09958.pdf The petition was signed by Carl Homrich, CEO of the Company. BANKUNITED FINANCIAL: Wants Jan. 19 Extension for Ch. 11 Plan ------------------------------------------------------------- BankUnited Financial Corp. has filed its first request for an extension of its exclusive plan period, seeking a January 19 extension of its deadline to file a Chapter 11 plan. The Court will convene a hearing to consider the proposal on Sept. 9. BankUnited Financial -- http://www.bankunited.com/-- was the holding company for BankUnited FSB, the largest banking institution headquartered in Coral Gables, Florida. On May 21, 2009, BankUnited FSB was closed by regulators and the Federal Deposit Insurance Corporation facilitated a sale of the bank to a management team headed by John Kanas, a veteran of the banking industry and former head of North Fork Bank, and a group of investors led by W.L. Ross & Co. BankUnited, FSB, had assets of $12.8 billion and deposits of $8.6 billion as of May 2, 2009. The Company and its affiliates filed for Chapter 11 on May 22, 2009 (Bankr. S.D. Fla. Lead Case No. 09-19940). Stephen P. Drobny, Esq., and Peter Levitt, Esq., at Shutts & Bowen LLP; Mark D. Bloom, Esq., and Scott M. Grossman, Esq., at Greenberg Traurig, LLP; and Michael C. Sontag, at Camner, Lipsitz, P.A., represent the Debtors as counsel. The U.S. Trustee for Region 21 appointed three creditors to serve on an official committee of unsecured creditors. Corali Lopez-Castro, Esq., David Samole, Esq., at Kozyak Tropin & Throckmorton, P.A.; and Todd C. Meyers, Esq., at Kilpatrick Stockton LLP, serve as the Committee's counsel. BANNER BEDDING: Emerges From Chapter 11 Bankruptcy Protection ------------------------------------------------------------- Advertiser Talk reports that Banner Bedding Inc., with Weintraub & Selth, APC, as its general bankruptcy counsel, was able to completely restructure its balance sheet, shedding the Company of burdensome and unprofitable stores, restructuring its quality leases and eliminating millions of dollars of debt less than a year from filing for Chapter 11 bankruptcy protection. Advertiser Talk relates that under the Plan proposed by Weintraub & Selth, creditors would be paid 3% of approved claims over a three-year period, with the possibility of an additional 1% if Banner Bedding "makes all of its numbers". Advertiser Talk says that the creditors accepted the Plan. Riverside, California-based Banner Bedding Inc., dba Banner Mattress, is a mattress company founded by the Scorzeill family. It started doing business in 1926 in Ohio. In 1964, the Company moved to California and has been managed by three generations of the Scorzeill family to date. The Company, which originally manufactured mattresses for the wholesale market, grew to encompass 37 retail stores to compliment its factory and production facility. The general economic downturn following Banner Bedding's rapid expansion created a need to revisit the Company's operational methodology. Banner Bedding filed for Chapter 11 bankruptcy protection on June 9, 2008 (Bankr. C.D. Calif. Case No. 08-16828). Daniel J. Weintraub, at Weintraub & Selth APC, assisted the Company in its restructuring efforts. The Company listed $1 million to $10 million in assets and $1 million to $10 million in debts. BARZEL INDUSTRIES: Faces Nasdaq Delisting of Common Stock --------------------------------------------------------- Barzel Industries Inc. received a Deficiency Letter from the Staff of The Nasdaq Stock Market, Inc., stating that the Company was not in compliance with Nasdaq Rule 5550(b)(1) for continued listing of its common stock and warrants on The Nasdaq Capital Market. The Staff requested that, by August 6, 2009, the Company submit a plan to regain compliance with the Rule. The Company thereafter informed the Staff that it did not intend to submit such a plan. Nasdaq Listing Rule 5550(b) requires companies whose securities are listed on the Nasdaq Capital Market to maintain a minimum of $2,500,000 in stockholders' equity or to have had a minimum of $500,000 of net income for the most recently completed fiscal year (or 2 of the last 3 years) or to have a minimum of $35,000,000 of market value of listed securities. The Company has not been in compliance with the second and third minimum requirements and, at the end of the second fiscal quarter, the Company's stockholder equity, as reported in its Quarterly Report on Form 10-Q for that quarter filed on July 20, 2009, decreased to less than $2,500,000. Accordingly, the Company no longer meets any of the three alternative minimum requirements under such Rule for continued listing. On August 11, 2009, the Company received a determination letter from the Staff notifying the Company that the Staff has determined that the Company did not provide a definitive plan evidencing its ability to achieve near term compliance with the continued listing requirements or sustain such compliance over an extended period of time. Accordingly, unless the Company requests an appeal of the determination, trading of the Company's common stock and warrants on The Nasdaq Capital Market will be suspended by Nasdaq at the opening of business on August 20, 2009 and a Form 25-NSE will be filed by Nasdaq with the Securities and Exchange Commission which will remove the Company's securities from listing and registration on The Nasdaq Capital Market. The Company has not issued any update on the matter. Upon delisting from The Nasdaq Capital Market, the Company's common stock and warrants may become eligible for quotation on the Over-the-Counter Bulletin Board or the Pink Sheets. Eligibility requires action by a registered broker-dealer and cannot be accomplished by the Company. The Company does not expect to devote significant resources to securing eligibility. Securities quoted on the OTCBB or the Pink Sheets are not considered to be traded on a national stock exchange. The Company has obtained a deferral to October 13, 2009 of payment of interest on its 11.5% Senior Secured Notes due 2015 in the aggregate principal amount of $315 million. Under the deferral agreement, the Company agreed to use its best efforts to consummate a debt or equity recapitalization or restructuring, a debt refinancing, a capital raising transaction, or a sale of its equity securities or its assets. The Company has retained an independent third party investment banker to assist in connection therewith. The Company has determined that it is in the best interests of the corporation to devote its full management resources to completing such a transaction. About Barzel Industries Headquartered in Norwood, Massachusetts, with an operational hub in Mississauga, Ontario, Barzel Industries Inc. (NASDAQ: TPUT, TPUTW) operates a network of 15 manufacturing, processing and distribution facilities in the United States and Canada. The Company offers a wide range of metal solutions to a variety of industries, from construction and industrial manufacturing to transportation, infrastructure development and mining. BERNARD MADOFF: Cohmad Asks for Dismissal of Picard's $100MM Suit ----------------------------------------------------------------- Erik Larson and Linda Sandler at Bloomberg News report that Cohmad Securities Corp., the stock brokerage co-founded by Bernard Madoff, asked the U.S. Bankruptcy Court for the Southern District of New York to dismiss part of a $100 million lawsuit accusing it of feeding investor money to Madoff and earning hundreds of millions of dollars in fees. "The complaint's conclusory allegations that the Cohmad defendants knew of, or were complicit, in BLMIS's fraudulent scheme fall far short of meeting" the law's standards of pleading and alleges liability on the theory of "guilt by association," according to the filing. Irving H. Picard, the trustee for the liquidation of Bernard L. Madoff Investment Securities LLC, in June filed a complaint in Bankruptcy Court against Cohmad and a number of its principals, including Maurice "Sonny" Cohn, Marcia Cohn and Robert Jaffe, as well as other related defendants. The complaint seeks to avoid decades' worth of transactions through which BLMIS paid well over $100 million to Cohmad, Sonny Cohn and other Cohmad related individuals in exchange for Sonny Cohn, Marcia Cohn, Robert Jaffe and other Cohmad employees introducing victims to BLMIS and knowingly helping Madoff create, fund and maintain his massive Ponzi scheme. "Although Madoff stated he was operating alone, our investigation has yielded significant evidence that, in fact, a variety of other people helped Madoff prey on innocent victims," explained David Sheehan, counsel for the Trustee and a partner at Baker & Hostetler, the court appointed counsel for Mr. Picard. The SEC in June 2009 also charged Cohmad as well as its chairman Maurice J. Cohn, chief operating officer Marcia B. Cohn, and registered representative Robert M. Jaffe for actively marketing investment opportunities with Mr. Madoff while knowingly or recklessly disregarding facts indicating that Mr. Madoff was operating a fraud. The SEC's complaint against the Cohmad defendants alleges that while bringing investors to Mr. Madoff, they ignored and even participated in many suspicious practices that clearly indicated Mr. Madoff was engaged in fraud. For example, the SEC's complaint alleges that the Cohns and Cohmad filed false Forms BD and FOCUS reports that concealed Cohmad's primary business of bringing in investors for BMIS. This referral business comprised as much as 90% of Cohmad's revenue in some years, brought in more than 800 accounts, and billions of dollars into BMIS' advisory business, for which BMIS paid them more than $100 million. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. In addition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on December 15, 2008, the Securities and Exchange Commission charged Mr. Madoff and his investment firm with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The estimated losses from Mr. Madoff's fraud were allegedly at least US$50 billion. Also on December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. Irving H. Picard, Esq., was appointed as trustee for the liquidation of BLMIS, and Baker & Hostetler LLP was appointed as counsel. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors. BF LAS OLAS: May File for Bankruptcy to Stop Foreclosure on Center ------------------------------------------------------------------ BF Las Olas may file for bankruptcy to stop foreclosure on its Las Olas Centre, the two-building property in Downtown Fort Lauderdale, Daily Business Review reports, citing Craig Rasile, a partner in the Miami office of Hunton & Williams who represents Wachovia Bank. Daily Business Review relates that Wachovia Bank and an affiliate filed a foreclosure suit against the property, claiming BF Las Olas has defaulted on two loans totaling $219.4 million. "[The bank] was willing to do a deal with the borrowers to avoid litigation, but we just couldn't reach an agreement. Now the value of the building is going down, way down, below the amount of the debt so the bank got frustrated," Daily Business Review quoted Mr. Rasile as saying. BF Las Olas and related companies paid in July 2007 about $230.9 million for the property, setting a record for the most expensive office deal based on price per square foot. Citing the Broward County property appraiser, Daily Business Review says that the taxable value of the Las Olas Centre buildings is $154 million. According to Daily Business Review, Stephen B. Meister -- who represents BentleyForbes, BF Las Olas' parent company -- said that Wachovia "urged BentleyForbes to acquire the Las Olas Centre with temporary financing . . . which all parties knew was to be repaid out of the IPO proceeds" from a planned stock offering by the property owner. Court documents say that Wachovia provided financing for almost 95% of the deal with a senior loan and a mezzanine loan. Daily Business Review states that the loans came due in January 2008 and that Wachovia extended the maturity date several times, until the final deadline was April 2009. Mr. Meister said in a statement, "When the IPO market fell apart, Wachovia failed to move forward with IPO; yet Wachovia now seeks to strip BentleyForbes of their equity and hard work. BentleyForbes intends to defend Wachovia's unwarranted suit in the most aggressive way, and further to hold Wachovia responsible for the vast damages their predatory conduct is causing BentleyForbes." BF Las Olas, according to court documents, paid interest on the loans until June 2009. BF Las Olas owes $170 million on the senior mortgage -- including $166 million in principal and $3.1 million in accrued interest -- and $49.4 million in the mezzanine loan, including $48.49 million in principal and $618,993 in accrued interest, Daily Business Review relates, citing Wachovia. "We are expecting that the owners might file bankruptcy to stop the foreclosure," Daily Business Review quoted Mr. Rasile as saying. BF Las Olas is a subsidiary of BentleyForbes, a Los Angeles-based commercial real estate investment company. BILLY BELCHER: No Early Discharge to Escape U.S. Trustee Fees ------------------------------------------------------------- WestLaw reports that 11 U.S.C. Sec. 1141(d)(5)(B) -- the Bankruptcy Code provision authorizing the court, at any time after confirmation of a Chapter 11 plan and after notice and hearing, to grant the debtor a discharge prior to completion of all plan payments if unsecured creditors have been paid at least as much as they would receive in a hypothetical Chapter 7 liquidation, and if modification of the plan is impracticable -- contemplates a situation in which an individual debtor seeks entry of an order of discharge, even though, due to some particular cause or set of circumstances, the debtor is unable to fulfill all of his payment obligations under the confirmed plan or demonstrates some other cause why he should be excused from doing so, where modification of the debtor's payment obligations is impracticable. The provision was not intended simply to provide additional discretion to bankruptcy courts to grant an early discharge once creditors have received at least as much as they would have received in a Chapter 7 liquidation case. The Honorable William F. Stone, Jr., held that the debtors' desire to be relieved of any continuing obligation for payment of quarterly fees to the United States Trustee did not constitute "cause" for granting the debtors an early discharge. In re Belcher, --- B.R. ----, 2009 WL 2515788 (Bankr. W.D. Va.). Billy E. Belcher, Jr., and Jane I. Belcher filed a voluntary Chapter 7 petition (Bankr. W.D. Va. Case No. 06-71448) on November 30, 2006. The chapter 7 trustee filed a No Asset Report on February 8, 2007, signaling that under a Chapter 7 liquidation, no funds would have been available for distribution to the unsecured creditors. On August 31, 2007, the Debtors filed a Motion to Convert Case, seeking to convert their case from one under Chapter 7 to one under Chapter 11. The Court granted this Motion to Convert by Order entered September 25, 2007. After conversion, the Debtors managed their properties as debtors-in- possession under 11 U.S.C. Secs. 1107 and 1108. The Debtors filed a Disclosure Statement and Chapter 11 Plan of Reorganization on January 31, 2008. The Disclosure Statement was conditionally approved by Order entered February 1, 2008. An Amended Plan, containing only non-material modifications, was subsequently filed on March 5, 2008. The Debtors' Plan was then confirmed by Order entered March 11, 2008. BLUEWATER BROADCASTING: Case Summary & 16 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Bluewater Broadcasting Company, L.L.C. 4101 Wall Street Montgomery, AL 36106 Bankruptcy Case No.: 09-32291 Chapter 11 Petition Date: August 24, 2009 Court: United States Bankruptcy Court Middle District of Alabama (Montgomery) Debtor's Counsel: James L. Day, Esq. Memory & Day P.O. Box 4054 Montgomery, AL 36103-4054 Tel: (334) 834-8000 Fax: (334) 834-8001 Email: jlday@memorylegal.com Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,000 to $50,000,000 A full-text copy of the Debtor's petition, including a list of its 16 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/almb09-32291.pdf The petition was signed by Richard Peters, managing partner of the Company. BORDERS GROUP: Net Loss Widens to $45.6MM in Qrtr. Ended August 1 ----------------------------------------------------------------- Borders Group, Inc., reported reported results for the fiscal second quarter of 2009, ended August 1, 2009. For the quarter ended August 1, 2009, Borders reported a $45.6 million net loss (GAAP basis), compared to $9.2 million (GAAP basis) in the quarter ended August 2, 2008. Adjusted EBITDA was $6.9 million compared to $14.9 million in the prior year quarter. On a year-to-date basis, adjusted EBITDA was $9.9 million compared to $0.6 million in 2008. SG&A expenses, on an operating basis, were reduced by $35.8 million. Inventory was reduced by $201.3 million, including a reduction in multimedia inventory of $57.3 million. Debt, net of cash, at the end of the second quarter was $242.5 million, a reduction from the prior year of $179.3 million, or 42.5%. Debt, net of cash, compared to year-end levels was reduced by $40.1 million, or 14.2%. Total consolidated sales were $616.8 million, down $132.4 million, or 17.7%. Comparable store sales declined by 17.9% and 10.8% at Borders superstores and Waldenbooks Specialty Retail stores, respectively. Excluding multimedia, comparable store sales at Borders declined by 13.0%. On an operating basis, the company generated a loss from continuing operations of $12.7 million or $0.21 per share compared to a loss of $10.5 million or $0.18 per share a year ago. On a GAAP basis, the loss from continuing operations was $45.6 million or $0.76 per share compared to a loss of $11.3 million or $0.19 per share a year ago. The $0.76 per share loss includes $0.55 per share of non-operating charges that were primarily non-cash. "The second quarter was a transitional one as we made significant space and inventory reductions to strategically position declining categories for profitability while further developing businesses that have potential," said Borders Group Chief Executive Officer Ron Marshall. "While this transition impacted sales in the short run, our stores are now better positioned to drive improved sales in the back half of the year. Further, we are pleased that even with the level of transformation we undertook in the second quarter, our financial disciplines remained intact and we continued to strengthen our balance sheet by cutting debt, generating positive cash flow, reducing inventory and tightly managing working capital. The big changes for the year are behind us now and the challenge is to deliver on the opportunity we have created to drive sales." Second quarter consolidated sales were $616.8 million, down 17.7% from a year ago. On an operating basis, Borders Group generated a second quarter loss of $12.7 million or $0.21 per share compared to a loss of $10.5 million or $0.18 per share for the same period last year. On a GAAP basis, the second quarter loss was $45.6 million or $0.76 per share compared to a GAAP loss of $11.3 million or $0.19 per share a year ago. The second quarter GAAP loss includes non-operating, after-tax charges-primarily non- cash-totaling $32.9 million. Excluding non-operating charges, SG&A as a percent of sales improved over last year by 0.2% from 26.0% to 25.8% due to the company's aggressive expense reduction initiatives, which were partially offset by de-leveraging due to negative sales trends. Expense reduction initiatives helped reduce SG&A dollar expenses by $35.8 million compared to the prior year. On a GAAP basis, SG&A as a percent of sales was flat with last year at 27.4%. Operating cash flow in the second quarter was $40.6 million compared to $71.1 million one year ago when the company first initiated a significant inventory reduction program. Second quarter capital expenditures were $2.0 million compared to $27.1 million in 2008 as the company continued to manage capital prudently. Debt, net of cash, at the end of the second quarter totaled $242.5 million compared to debt, net of cash, at the end of the second quarter a year ago of $421.8 million, a reduction of 42.5%. Inventory was reduced by 18.5% as the company reduced its second quarter inventory investment to $889.0 million compared to year-ago inventory of $1.1 billion. Financial statements are available at: http://ResearchArchives.com/t/s?430c Karen Talley at The Wall Street Journal says that Borders has struggled financially, having to receive extensions on its debt to help avoid the prospect of bankruptcy. About Borders Headquartered in Ann Arbor, Mich., Borders Group, Inc. -- http://www.bordersgroupinc.com/-- describes itself as a $3.8 billion retailer of books, music and movies with more than 1,100 stores and over 30,000 employees worldwide. Borders owns a majority stake in Paperchase Products Limited, a leading gifts and stationery retailer in the United Kingdom, and showcases their products in their stores, as well as Books etc., Borders other, mostly London-based bookshop chain. As reported by the Troubled Company Reporter on April 7, 2009, Jim McTevia, managing partner of Bingham Farms-based turnaround firm McTevia & Associates, said that downsizing and cuts in inventory most likely wouldn't staunch, and Borders would probably be forced to file for Chapter 11 bankruptcy protection this year. BROADSTRIPE LLC: Settles With NCTC for $4 Million ------------------------------------------------- Broadstripe LLC has reached a settlement with National Cable Television Cooperative Inc., a provider of programming and hardware purchasing. According to Bill Rochelle at Bloomberg News, Broadstripe has agreed to pay NCTC $3.5 million, plus $500,000 for NCTC attorney fees. Broadstripe has also agreed to pay NCTC in advance for services. The U.S. Bankruptcy Court for the District of Delaware will consider approval of the settlement on September 9. Mr. Rochelle recounts that when the petition was filed, Broadstripe owed NCTC $3.5 million. A lawsuit ensued in which Broadstripe initially won an injunction from the Bankruptcy Court compelling NCTC to continue allowing participation in new programming agreements. Broadstripe already filed a reorganization plan to carry out an agreement reached before the Chapter 11 filing with holders of the first- and second-lien debt. However, a lawsuit by the official committee of unsecured creditors that seeks to invalidate the lenders' liens remains unresolved. Until the suit is resolved, the Committee won't support a plan that recognizes the validity of the lenders' claims. Under the Plan, the Debtors' senior secured obligations under the First Lien Credit Agreement will be exchanged for new debt and convertible debt instruments issued by the Reorganized Debtor. The Debtors' junior secured obligations under the Second Lien Credit Agreement and their remaining General Unsecured Claims against Debtors other than Broadstripe Capital LLC will be converted to equity through the issuance of New Members Interests in the Reorganized Debtor. A full-text copy of the Debtors' Chapter 11 Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?3878 A full-text copy of the Debtors' Disclosure Statement is available for free at http://ResearchArchives.com/t/s?3879 The first lien credit facility consists of a revolving credit facility and a term loan, which bear interest at the Base Rate plus the applicable rate for portions and the Eurodollar rate plus applicable rate. As of Dec. 31, 2008, the amount outstanding under (i) the credit facility was $10.2 million priced at LIBOR plus 7%, and (ii) the term loan was $170.6 million -- excluding incurred but unpaid expenses -- priced at LIBOR plus 7%. On the one hand, the second lien credit facility comprised of two term loans: term loan C and term loan D, which provide for cash interest to be paid on the term loans in an amount equal to LIBOR, and PIK interest accrued on the term loans for the balance. In March 2008, the PIK interest terms of the loans were made consistent and now accrue at 14.5% per annum under the first amended second lien credit facility. As of Dec. 31, 2008, the total aggregate amount under the loans was about $102.1 million -- excluding incurred but unpaid expenses. The first lien credit facility is secured by first liens on and security interest in substantially all of the Debtors' assets while the other facility is secured by second priority liens on and security interest in substantially all of the Debtors' assets. About Broadstripe LLC Headquartered in Chesterfield, Missouri, Broadstripe LLC -- http://www.broadstripe.com/-- provides videos and telephone services to consumers and business in Maryland, Michigan, Washington and Oregon. The Company and five of its affiliates filed for Chapter 11 protection on January 2, 2009 (Bankr. D. Del. Lead Case No. 09-10006). Attorneys at Ashby & Geddes, and Gardere Wynne Sewell LLP represent the Debtors in their restructuring efforts. The Debtors proposed FTI Consulting Inc. as their restructuring consultant, and Epiq Bankruptcy Consultants LLC as their claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million in their petition The U.S. Bankruptcy Court for the District of Delaware has approved sale procedures proposed by the Chapter 7 trustee, under which Emaar Properties PJSC will be the lead bidder at an August 20 auction for WL Homes LLC. BROOKSIDE TECHNOLOGY: Posts $1.03MM Net Loss for June 30 Quarter ---------------------------------------------------------------- Brookside Technology Holdings Corp. posted a net loss of $1,032,224 for the three months ended June 30, 2009, from a net loss of $1,875,236 for the same period a year ago. It posted a net loss of $2,360,202 for the six months ended June 30, 2009, from a net loss of $3,673,323 for the same period a year ago. As of June 30, 2009, the Company had $25,244,455 in total assets and $13,171,525 in total liabilities. The Company generated significant net losses in the prior three fiscal years. The Company has cash and cash equivalents of $1,087,872 at June 30, 2009. Additionally, effective August 13, 2009, the Company and its senior creditor, Chatham Credit Management III, LLC, further updated its letter agreement dated May 29, 2009, pursuant to which, among other things, Chatham agreed, for the period July 31, 2009 through June 30, 2010 to suspend the Company's compliance of the minimum fixed charge coverage ratio and maximum leverage ratio contained in the credit agreement. The Company is in full compliance with its financial covenants under this agreement. Additionally, effective June 1, 2009, the Company entered into a Securities Purchase Agreement with Vicis Capital Master Fund, a sub-trust of Vicis Capital Series Master Trust, and the Company's largest preferred stockholder, pursuant to which Vicis invested an additional $1,000,000 in the Company and the Company issued to Vicis 1,000,000 shares of the Company's Series A Convertible Preferred Stock and a warrant to purchase 100,000,000 shares of Common Stock at an exercise price of $0.01 per share. The Company sustained a loss for the three months and six months ended June 30, 2009, of approximately $1.0 million and $2.4 million, respectively, and has a retained deficit of approximately $19.9 million. The losses were primarily due to the amortization expense related to the accounting treatment of warrants issued in connection with the debt raised to fund the USVD acquisition. For the six months ended June 30, 2009, the Company had net cash used in operations of approximately, $1 million. Historically, the Company has relied on borrowings and equity financings to maintain its operations. The Company believes it has enough cash to operate for the coming year with its cash on hand, cash to be generated from operations and the borrowing availability on its credit lines. However, the recent economic downturn could have a material effect on its business operations. Management is focused on managing costs in line with estimated total revenues for the balance of fiscal 2009 and beyond, including contingencies for cost reductions if projected revenues are not fully realized. However, there can be no assurance that anticipated revenues will be realized or that the Company will successfully implement its plans. Additionally, the Company is in discussions with its senior and subordinated lender regarding obtaining additional financing to execute its business plan. 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?42f0 Brookside Technology Holdings Corp., is the holding company for Brookside Technology Partners, Inc., US Voice & Data, LLC, Standard Tel Acquisitions, Inc., Trans-West Network Solutions, Inc., and Standard Tel Networks, LLC, and all operations are conducted through these wholly owned subsidiaries. Collectively, the subsidiary companies provide converged business communications products and services from Mitel, Inter-tel (owned by Mitel), Nortel and NEC. The Company, as the 2nd largest MITEL dealer, is recognized as a Diamond Dealer. CALYPTE BIOMEDICAL: Annual Report Warned of Ch. 7 Absent Funding ---------------------------------------------------------------- Calypte Biomedical Corporation's balance sheet at Dec. 31, 2008, showed total assets of $6.54 million and total liabilities of $18.68 million, resulting in a stockholders' deficit of about $12.14 million. In fiscal year ended Dec. 31, 2008, the Company posted a net loss of $9.17 million compared with a net loss of $8.27 million for the same period in 2007. The Company related that as of April 3, 2009, it is in default under the 2005 Credit Facility, as amended, with Marr Technologies BV, its largest stockholder, holding approximately 17% of its outstanding capital stock as of April 20, 2009, and joint venture partner in the People's Republic of China, and under its Secured 8% Convertible Promissory Notes, as amended, issued to three note holders, one of whom is Marr, pursuant to a Purchase Agreement dated April 4, 2005. At maturity, the Company owed an aggregate of $5.01 million under the Credit Facility and $5.96 million under the Convertible Notes. The Company added that it is discussing termination, reduction or restructuring of its debt obligations under the Credit Facility and the Convertible Notes with each of the secured creditors. These defaults, coupled with its significant working capital deficit and limited cash resources, put us in significant financial jeopardy and place a high degree of doubt on its ability to continue its operations. Failure to obtain additional financing and to resolve the existing defaults with respect to the Credit Facility and the Convertible Notes will likely cause the Company to seek bankruptcy protection under Chapter 7, which would have a material adverse effect on its business, on its ability to continue its operations and on the value of its equity. Going Concern Doubt On April 22, 2009, Odenberg, Ullakko, Muranishi & Co. LLP in San Francisco, California expressed substantial doubt about Calypte Biomedical Corporation's ability to continue as a going concern after auditing the Company's financial statements fro the fiscal years ended Dec. 31, 2008, and 2007. The auditor noted that the Company suffered recurring operating losses and negative cash flows from operations, and management believes that the Company's cash resources will not be sufficient to sustain its operations through 2009 without additional financing. The Company filed an amendment no. 1 on Form 10-K/A to its annual report on Form 10-K for the year ended Dec. 31, 2008, filed with the Securities and Exchange Commission on April 27, 2009. The Company stated that it only amends and restates Item 9A of Part II of the Original Filing to include its management's conclusion regarding the effectiveness of its internal control over financial reporting as of the end of the period covered by the Original Filing. A full-text copy of the Company's Amendment No. 1 on Form 10-K/A is available for free at http://ResearchArchives.com/t/s?42e3 A full-text copy of the Company's Form 10-K is available for free at http://ResearchArchives.com/t/s?42e4 About Calypte Biomedical Based in Portland, Calypte Biomedical Corporation (OTC BB: CBMC) -- http://www.calypte.com/-- is a U.S.-based healthcare company focused on the development and commercialization of rapid testing products for sexually transmitted diseases like the Aware(TM) HIV- 1/2 OMT test that are suitable for use at the point of care and at home. Calypte Biomedical Corp.'s consolidated balance sheet at March 31, 2008, showed $7,387,000 in total assets and $16,971,000 in total liabilities, resulting in a $9,584,000 total stockholders' deficit. Going Concern Doubt Odenberg, Ullakko, Muranishi & Co. LLP, in San Francisco, expressed substantial doubt about Calypte Biomedical Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm reported that the company has suffered recurring operating losses and negative cash flows from operations, and management believes that the company's cash resources will not be sufficient to sustain its operations through 2008 without additional financing. CENTERLINE INVESTOR: Saks Park Selling Collateral on September 23 ----------------------------------------------------------------- Pursuant to Fla. Stat. 679.610, Saks Park Homes Limited Dividend Housing Association Limited Partnership, as holder of the security interest in all right, title and interest of Debtors Centerline Investor LP LLC and Centerline SLP LLC in the Partnership and all proceeds, increases, additions, replacements and substitutions thereof, will offer to sell all of the Collateral to the highest and best qualified bidder, as determined in the sole and commercially reasonable discretion of the Partnership on Wednesday, September 23, 2009, at 10 a.m. at the offices of Broad and Cassel, 390 North Orange Avenue, Suite 1400, Orlando, Florida, 32801. The Partnership intends to bid for the Collateral through its nominee. The Partnership may accept and rank bids based on certain conditions imposed by the Partnership in its commercially reasonable discretion. The Partnership may leave the sale period open for a length of time as determined in its sole and absolute discretion. Interested parties should contact: Randal M. Alligood Broad and Cassel 390 North Orange Avenue, Suite 1400 Orlando, Florida 32801 Tel: (407) 839-4202 Fax: (407) 650-0914 E-mail: ralligood@broadandcassel.com or Andrew Tanner NRP Group LLC 5309 Transportation Boulevard Cleveland, Ohio 44125 Tel: (216) 475-8900 Fax: (216) 475-9300 E-mail: atanner@nrpgroup.com CERTIFIED DIABETIC: June 30 Balance Sheet Upside-Down by $11.19MM ----------------------------------------------------------------- Certified Diabetic Services, Inc.'s balance sheet showed total assets of $4.40 million and total liabilities of $15.59 million, resulting in a stockholders' deficit of $11.19 million. For three months ended June 30, 2009, the Company posted a net loss of $2.27 million compared with a net income of $7.51 million for the same period in 2008. For six months ended June 30, 2009, the Company reported a net income of $6.33 million compared with a net loss of $1.79 million for the same period in 2008. The Company's management said that there is substantial doubt about its ability to continue as a going concern. The Company incurred cumulative operating losses in recent years and have a working capital deficiency of $5.03 million at June 30, 2009. The Company's management is executing certain plans, including raising capital and curtailing costs, to alleviate the negative trends and conditions. The Company related that its ability to continue as a going concern is dependent on its ability to raise additional capital. Ultimately, its ability to continue as a going concern is dependent upon the achievement of profitable operations. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?42f7 Headquartered in Fort Myers, Florida, Certified Diabetic Services, Inc. -- http://www.cdiabetic.com/-- is a direct-to-you provider of diabetes medical supplies, testing, products, education and information - all designed to help you manage your diabetes and live a healthier life. In addition to being approved as a provider for diabetic Medicare and diabetic Medicaid reimbursement, CDS holds significant contracts with more than 75 private insurance carriers to provide diabetes educational programs for members. CHRYSLER LLC: Daimler Sued for Refusing Pacts Sent to New Chrysler ------------------------------------------------------------------ Chrysler Group LLC and Old Carco LLC, formerly known as Chrysler LLC commenced an adversary proceeding against Daimler AG on August 21, 2009, to redress Daimler's: (a) willful refusal to honor its obligations under contracts assumed by Old Chrysler and assigned to New Chrysler; (b) refusal to abide by the procedures set forth in the Court's May 7, 2009 bidding procedures order, and June 1, 2009 order in connection with the Fiat S.p.A. sale transaction; and (c) breach of a cure dispute resolution agreement executed by New Chrysler and Daimler on July 6, 2009. The expedited sale of the Debtors' assets to New Chrysler was animated by the wasting nature of the Debtors' assets, the pressing need to resume vehicle production for the 2010 model year and the public interest in saving the U.S. automotive industry, relates counsel for Chrysler Group LLC, Gregory P. Joseph, Esq., in New York. Daimler's bad faith conduct and contractual breaches following the acquisition threaten to derail the efforts, severely harm New Chrysler, and send devastating ripple effects through the automotive industry, Mr. Joseph says. Daimler is, and has been, a supplier of critical component parts used by Old Chrysler, and now, New Chrysler, to manufacture vehicles. Both before and after the Acquisition, Daimler, Old Chrysler and New Chrysler have negotiated various aspects of the continuing supply relationship, which process has resulted in New Chrysler's designation of many individual contracts for assumption and assignment. Two of the assumed and assigned contracts relate to the development and supply of OM 651 diesel engines: (i) the Letter of Agreement Supplying DC Corporation with OM 651 Diesel Engines dated July 20, 2005, and (ii) the Amendment Agreement to the Letter of Agreement (OM 651 Diesel Engines) dated August 3, 2007. New Chrysler confirmed the OM 651 Contracts on August 12, 2009, pursuant to the Bidding Procedures Order. Two additional, and critical, component parts supplied by Daimler are steering columns and torque converters, which are essential to New Chrysler's manufacturing process for several key 2010 model year vehicles, and cannot be obtained from any other supplier. Without a continuing supply of the parts, Mr. Joseph asserts, New Chrysler will be forced to cease manufacturing operations altogether for the affected vehicles, shut down plants, idle workers, and cease related orders from other suppliers. Daimler supplied steering columns and torque converters to Old Chrysler for years prior to the Chapter 11 filing. Chrysler's dependence on Daimler as the sole supplier of vehicle components is well known to Daimler because this dependence dates back to the period in which Daimler owned Chrysler, Mr. Joseph asserts. The components were supplied pursuant to purchase orders placed under pre-existing agreements that have been assumed and assigned -- a Supply Framework Agreement dated October 13, 2004, and a Procurement and Supply Cooperation Agreement dated August 3, 2007. Both Agreements were confirmed by New Chrysler on June 26, 2009. Following the Acquisition, New Chrysler and Daimler agreed to a process for the assumption and assignment of contracts to New Chrysler and for the resolution of a handful of other outstanding issues, including a dispute that had arisen between the parties over the OM 651 cure amount, Mr. Joseph tells the Court. He adds that New Chrysler and Daimler also agreed to the essential terms for the future supply and agreed to finalize the paperwork necessary to ensure the continued supply of the steering column and torque converter parts for the remainder of the 2010 model year. The agreements, which comprised consideration for one- another, were memorialized in writing on July 6, 2009, in the Cure Dispute Resolution Agreement that contains six paragraphs each addressing a separate issue, and contains distinct contractual requirements. The agreements made in each paragraph provided consideration for agreements made in the others. The six issues are: (a) Postpetition payments; (b) Assumed and assigned contracts; (c) Continuing performance, which establishes effective dates for the assumption and assignment of contracts, and sets forth Daimler's contractual commitment to perform under the contracts assumed and assigned to New Chrysler; (d) Steering Columns supply; (e) Torque Converters supply; (f) Resolution Process for these specified issues: * "all cure cost issues" * "all remaining assumption and assignment issues, including issues relating to the effectiveness of assumption and assignment" * "any asserted basis for non-performance"; and * "issues relating to OM 651." In reliance on Daimler's agreement set forth in paragraph 6 of the Cure Dispute Resolution Agreement, New Chrysler made the payments set forth in the agreement; verified and confirmed the assignment to New Chrysler of contracts identified; and negotiated complete steering column and torque converter contracts, Mr. Joseph asserts. He adds that to resolve the OM 651 cure dispute, New Chrysler confirmed the assignment of the OM 651 Contracts on August 12, 2009, with a cure amount of $0 because New Chrysler believes there are no prepetition amounts due. Daimler disputes this, he notes, contending that scores of millions of euros are due for, inter alia, volume shortfalls. Mr. Joseph contends that New Chrysler assigned a cure amount of $0 to the OM 651 dispute because the OM 651 volume shortfall payment issue was resolved in an April 17, 2009, prepetition agreement that settled a number of disputes between Daimler and Old Chrysler. He says that under the Cure Dispute Resolution Agreement, Daimler contractually agreed to reduce to a written contract the parties' agreement over the material terms, including the pricing of Daimler-supplied steering columns and torque converter contract. He adds that the parties were already in agreement as to all material terms, and all that remained was to paper a formal amendment and make whatever word changes were necessary. The precise wordings of the written amendments were agreed to by both parties on August 12, 2009, Mr. Joseph relates. Daimler, however, has refused to sign the Final Steering Column Amendment and the Final Torque Converter Amendment in flagrant breach of its commitments in the Cure Dispute Resolution Agreement, he contends. "Daimler's refusal to sign the fully-negotiated Final Amendments for the steering columns and torque converters is a product of its bad faith attempt to place Chrysler in extremis so that Chrysler will accede to Daimler's unreasonable demands for volume shortfall payments on OM 651 diesel engines that Daimler had previously waived, in violation of paragraph 6 of the Cure Dispute Resolution Agreement," Mr. Joseph contends. Daimler, Old Chrysler and New Chrysler have been negotiating for the assumption and assignment of the OM 651 contract both before and after the Acquisition, but have been unable to reach agreement, Mr. Joseph avers. Despite the plain terms of the April Settlement Agreement, Daimler has resurrected the previously- settled OM 651 dispute in connection with those discussions. He points out that the OM 651 and cure issues were expressly, and intentionally, treated separately from the steering column and torque converter issues in the Cure Dispute Resolution Agreement. Daimler has also repudiated its agreement and its obligation to have the Court resolve the OM 651 disputes, Mr. Joseph asserts. He notes that Daimler has agreed in the OM 651 Cure Resolution Provisions to resolve the OM 651 disputes in a trial no later than mid-September. "Now, Daimler is trying to avoid that obligation by using the Final Steering Column Amendment and Final Torque Converter Amendment as leverage to force Chrysler to capitulate to demands that Daimler has no right to make under the plain terms of the April Settlement Agreement," Mr. Joseph alleges. "The parties' ongoing dispute relating to OM 651 is no excuse for Daimler's refusal to perform its good faith obligation to execute and perform the fully negotiated Final Steering Column Amendment and Final Torque Converter Amendment," he adds, among other things. The Plaintiffs, therefore, ask the Court to issue judgment against Daimler, and to award them: -- equitable relief, including injunctive relief, to redress the irreparable harm to New Chrysler that will result if Daimler does not continue to ship the steering column and torque converter parts as it is contractually required to do; -- specific performance by Daimler of its contractual obligations under the Cure Dispute Resolution Agreement; -- damages, in an amount to be determined at trial, though an inadequate remedy to compensate New Chrysler for the harm resulting from Daimler's actions; -- a declaration that: * Daimler has no entitlement to volume shortfall payments under the OM 651 Contracts , having waived any right to those payments in Section 6 of the April Settlement Agreement; * the cure amounts under Section 365 of the Bankruptcy Code with respect to the OM 651 Contracts are $0; and * Daimler is required to honor the Cure Dispute Resolution Agreement, including the OM 651 cure dispute resolution procedures and the parties' agreement as to steering columns and torque converters; and -- costs and disbursements for the adversary action, including reasonable attorneys' fees. 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) COEUR D'ALENE: Permit at Kensington Mine Reactivated ---------------------------------------------------- The U.S. Army Corps of Engineers has reactivated the 404 permit for Coeur d'Alene Mines Corporation's Kensington Gold Mine located 40 miles northwest of Juneau, Alaska. With approximately 90% of the mine already complete, the Company will immediately begin to finalize construction of the remaining areas of the operation. "There is an extensive list of groups and individuals to thank for their efforts and continued support of Kensington. The Company looks forward to getting back to accomplishing the main objective, which is to construct and operate a world-class gold mine that all stakeholders will be proud of," said Dennis E. Wheeler, Chairman, President and Chief Executive Officer of Coeur. "Kensington represents Coeur's third new mine in the past two years. This transformation to these large, long-life mines will continue to provide shareholders with further growth in production and cash flow." About Coeur d'Alene Mines Coeur d'Alene Mines Corporation (NYSE:CDE, TSX:CDM, ASX:CXC) is one of the world's leading silver companies and also a significant gold producer. Coeur common shares are traded on the New York Stock Exchange under the symbol CDE, the Toronto Stock Exchange under the symbol CDM, and its CHESS Depositary Interests are traded on the Australian Securities Exchange under symbol CXC. As of June 30, 2009, the Company had $3.05 billion in total assets and $924.8 million in total liabilities, resulting in $1.95 billion in stockholders' equity. Coeur d'Alene Mines had $402.2 million in accumulated deficit as of June 30, 2009. As reported by the Troubled Company Reporter on August 11, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Coeur D'Alene Mines to 'B-' from 'CCC' and raised the ratings on the company's $180 million senior unsecured notes due 2024 ($106 million outstanding) and $230 million senior unsecured notes due 2028 ($150 million outstanding) to 'CCC+' from 'CCC-'. The recovery rating on the notes remains unchanged at '5'. S&P removed the corporate credit and issue-level ratings from CreditWatch, where they were placed with positive implications on May 18, 2009. The outlook is positive. CONVERSION SERVICES: Frederick Lester Resigns from Board -------------------------------------------------------- Frederick Lester notified Conversion Services International, Inc., on August 17, 2009, that effective immediately, he is resigning from the board of directors. Mr. Lester had served as Chairman of the Corporate Governance Committee and member of the Executive Compensation and Audit Committees. Mr. Lester's resignation is purely personal in nature and not as a result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices. At June 30, 2008, the Company's consolidated balance sheet showed $9,574,782 in total assets, $4,885,775 in total liabilities, and $3,770,675 in total stockholders' equity. The Company's consolidated balance sheet at June 30, 2008, also showed strained liquidity with $3,478,359 in total current assets available to pay $4,522,375 in total current liabilities. Going Concern Doubt The Company has incurred net losses for the six months ended June 30, 2008, and the years ended Dec. 31, 2007, 2006, 2005, and 2004, negative cash flows from operating activities for the six months ended June 30, 2008, and the years ended Dec. 31, 2007, 2006, 2005, and 2004, and had an accumulated deficit of $65,373,298 at June 30, 2008. The Company says that these factors raise substantial doubt as to the its ability to continue as a going concern. About Conversion Services Headquartered in East Hanover, N.J., Conversion Services International Inc. (AMEX: CVN) -- http://www.csiwhq.com/-- provides professional services focusing on strategic consulting, data warehousing, business intelligence, business process reengineering, as well as integration and information technology management solutions. CSI's current customers include ADP, Coach, Goldman Sachs, Liberty Mutual, Merck, Morgan Stanley, and Pfizer. CORNERSTONE E & P: Has Until Sept. 9 to File Schedules ------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas extended until Sept. 9, 2009, Cornerstone E & P Company, LP, and Cornerstone Southwest GP, LLC's time file their schedules of assets and liabilities, schedules of executory contracts and unexpired leases and statements of financial affairs. Irving, Texas-based Cornerstone E & P Company, LP, operates an oil and gas exploration business. The Company and Cornerstone Southwest GP, LLC filed for Chapter 11 on Aug. 6, 2009 (Bankr. N. D. Tex. Case Nos. 09-35228 and 09-35229). Stephen M. Pezanosky, Esq., at Haynes and Boone, LLP, represents the Debtors in their restructuring efforts. In its petition, E & P listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in debts. CORNERSTONE E & P: U.S. Trustee Names 9 to Creditors' Panel ----------------------------------------------------------- The U.S. Trustee for Region 6 appoints nine members to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Cornerstone E & P Company, LP, and Cornerstone Southwest GP, LLC. The Creditors Committee members are: 1. Thomas Burke Complete Production Services P.O. Box 1299 Gainesville, TX 76241-1299 Tel: (940) 668-5152 Fax: (832) 201-0731 2. Greg Attrep Smith International, Inc. 16740 E. Hardy Street Houston, TX 77032 Tel: (832) 601-3059 Fax: (281) 233-9515 3. David Mulroney Simons Petroleum, Inc. 210 Park Avenue, Ste. 1800 Oklahoma City, OK 73120 Tel: (405) 848-3500 Fax: (405) 848-3508 4. Michael Stephenson Schlumberger Technology Corporation 14131 Midway Blvd., Suite 700 Addison, TX 75001 Tel: (972) 789-7779 Fax: (972) 980-2208 5. Ted Gabillot Rowan Companies, Inc. 2800 Post Oak Blvd., Suite 5450 Houston, TX 77056 Tel: (713) 960-7587 Fax: (713) 960-7658 6. Matt Krieder Precision Energy Services P.O. Box 200698 Dallas, TX 75320-0698 Tel: (817) 249-7200 7. Christopher Ryan Baker Hughes Inc. 2929 Allen Pkwy., Suite 2100 Houston, TX 77019-2118 Tel: (713) 439-8771 Fax: (713) 439-8778 8. Duncan Simpson Select Energy Services Bell Supply Company P.O. Box 170 Gainesville, TX 76241-0170 Tel: (940) 665-4373 Fax: (940) 665-8434 9. Daniela Quast Newpark Drilling Fluids, Inc. 2700 Research Forest Drive, Suite 100 The Woodlands, TX 77381 Tel: (281) 362-6805 Fax: (832) 442-5789 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also Attnempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Irving, Texas-based Cornerstone E & P Company, LP, operates an oil and gas exploration business. The Company and Cornerstone Southwest GP, LLC filed for Chapter 11 on Aug. 6, 2009 (Bankr. N. D. Tex. Case Nos. 09-35228 and 09-35229). Stephen M. Pezanosky, Esq., at Haynes and Boone, LLP, represents the Debtors in their restructuring efforts. In its petition, E & P listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in debts. CORNERSTONE E & P: Taps Haynes and Boone as Bankruptcy Counsel -------------------------------------------------------------- Cornerstone E & P Company, LP, and Cornerstone Southwest GP, LLC, ask the U.S. Bankruptcy Court for the Northern District of Texas for authority to employ Haynes and Boone, LLP, as counsel. Haynes and Boon will: a. advise the Debtors of their rights, powers and duties as debtors-in-possession under the Bankruptcy Code; b. perform all legal services for and on behalf of the Debtors that may be necessary or appropriate in the administration of the bankruptcy cases and the Debtors' businesses; c. advise the Debtors concerning, and assisting in, the negotiation and documentation of financing agreements and debt restructurings; d. counsel the Debtors in connection with the formulation, negotiation, and consummation of a possible sale of the Debtors' or their assets; e. review the nature and validity of agreements relating to the Debtors' interests in real and personal property and advising the Debtors of their corresponding rights and obligations; f. advise the Debtors concerning preference, avoidance, recovery, or other actions that they may take to collect and to recover property for the benefit of the estates and their creditors, whether or not arising under Chapter 5 of the Bankruptcy Code; g. prepare on behalf of the Debtors all necessary and appropriate applications, motions, pleadings, draft orders, notices, schedules, and other documents and reviewing all financial and other reports to be filed in the bankruptcy cases; h. advise the Debtors concerning, and preparing responses to, applications, motions, complaints, pleadings, notices, and other papers that may be filed and served in the bankruptcy cases; i. counsel the Debtors in connection with the formulation, negotiation, and promulgation of a plan of reorganization and related documents or other liquidation of the estates; j. working with and coordinating efforts among other professionals to attempt to preclude any duplication of effort among those professionals and to guide their efforts in the overall framework of Debtors' reorganization or liquidation; and k. work with professionals retained by other parties in interest in the bankruptcy case to attempt to structure a consensual plan of reorganization, liquidation, or other resolution for Debtors. The hourly rates of Haynes and Boon's personnel are: Robert D. Albergotti, partner $650 Stephen Pezanosky, partner $550 Scott Everett, partner $495 Autumn Highsmith, associate $300 John Middleton, associate $300 Dian Gwinnup, paralegal $153 Mr. Pezanosky tells the Court that prior to the petition date, Haynes and Boone received a $25,000 retainer. The retainer was applied to prepetition invoices prior to the filing of the bankruptcy cases. Haynes and Boone currently does not hold a retainer for this engagement. Haynes and Boone was paid a total of $307,867 for services rendered in the 12 months prior to the petition date. Mr. Pezanosky assures the Court that Haynes and Boon is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Pezanosky can be reached at: Haynes and Boone, LLP 2323 Victory Avenue, Suite 700 Dallas, TX 75219 Tel: (214)651-5000 Fax: (214)651-5940 About Cornerstone E & P Company Irving, Texas-based Cornerstone E & P Company, LP, operates an oil and gas exploration business. The Company and Cornerstone Southwest GP, LLC, filed for Chapter 11 on Aug. 6, 2009 (Bankr. N.D. Tex. Case Nos. 09-35228 and 09-35229). Stephen M. Pezanosky, Esq. at Haynes and Boone, LLP, represents the Debtor in its restructuring efforts. In its petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in debts. COYOTES HOCKEY: NHL Submits Own Bid for Phoenix Coyotes Team ------------------------------------------------------------ The National Hockey League posted on its Web site that it has submitted a bid to purchase the Phoenix Coyotes franchise out of bankruptcy and keep it in Arizona. NHL Deputy Commissioner Bill Daly said in a statement, "Today [Tuesday], the League filed its own bid to purchase the Phoenix Coyotes' franchise out of bankruptcy in an effort to maximize the likelihood that the Club ultimately will be sold to an acceptable purchaser who is committed to operating the franchise in Glendale." "We remain supportive of the other efforts that have been and are being made to purchase and operate the Coyotes in Glendale, and we will continue to do everything we can to assist interested groups in those efforts leading up to the scheduled sale hearing on September 10, 2009, and thereafter, if the NHL is the winning bidder. We believe this step was necessary at this time in order to best preserve and maximize the value of the Club asset for benefit of the Club's creditors and for the community of Glendale," Mr. Daly stated. Mr. Daly said, "The bankruptcy petition and subsequent events have been incredibly damaging to the Club's business, and the sooner the Club can be extricated from the bankruptcy process, the sooner Club personnel can begin to restore the team's vitality and local fan base. In the event the League's bid proceeds forward and ultimately is the one approved by the Court, we intend to conduct an orderly sale process to a third party buyer outside of bankruptcy. It continues to be our intention and hope to conclude satisfactory agreements with existing Club business partners that will allow the Coyotes to be owned and operated on a viable basis in Glendale for many years to come." NHL didn't mention the amount it was offering to buy Phoenix Coyotes. 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. COYOTES HOCKEY: Balsillie's Amended Bid Allows Him to Walk Away --------------------------------------------------------------- Bob Baum at The Canadian Press reports that Jim Balsillie has submitted an amended proposed agreement to purchase Phoenix Coyotes for US$212.5 million and move the team to Hamilton, Ontario. Court documents say that Mr. Balsillie can withdraw from the deal if the contentious issues in the complex case haven't been resolved in his favor by September 14, or if the sale "been stayed or postponed or prohibited in effect in whole or part by any court or governmental body." According to The Canadian Press, Mr. Balsillie is seeking the approval of the Hon. Redfield T. Baum of the U.S. Bankruptcy Court for the District of Arizona. The Canadian Press relates that Mr. Balsillie's proposed purchase agreement requires either the National Hockey League's approval of the sale or a court order superseding the owners' rejection of him, and requires the NHL to come up with a relocation fee. Citing Mr. Balsillie, The Canadian Press states that the Court should determine a "reasonable and appropriate" figure if the NHL doesn't come up with the fee. The Canadian Press says that a hearing is set for September 2 to hear arguments on the validity of Mr. Balsillie's bid, among other things. The NHL, The Canadian Press states, said that it would immediately appeal any ruling that overturns its rejection of Mr. Balsillie as an owner. The city of Glendale said in court documents filed on Monday that Phoenix Coyotes cannot get out of its lease without paying a $794 million penalty. 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. CREATIVE LOAFING: Atalaya Beats Eason Family at Auction ------------------------------------------------------- Hedge fund Atalaya Capital Management won an auction for Creative Loafing Inc.'s assets with its $5 million cash offer. Atalaya doubled a bid by Creative's management to purchase, ending months of legal wrangling and 37 years of control by the CEO Ben Eason and his family, The Daily Loaf said. Michael Bogdan, managing partner of the winning New York-based hedge fund, said he is committed to keeping the chain's 230 employees and 400,000 readers in six cities. "We are here for the long haul and we want to make this work," Mr. Bogdan said minutes Judge Caryl E. Delano accepted Atalaya's bid, The Daily Loaf said. Creative Loafing's management bid $2.32 million in cash and other securities. The deal is expected to close within 10 days. Creative Loafing owed $31 million to Atalaya and $10 million to BIA Digital Partners. The borrowings were used to reduce debt and purchase the Chicago Reader and the Washington City Paper in 2007. BIA also bid at the auction. Headquartered in Tampa, Florida, Creative Loafing, Inc. -- http://www.creativeloafing.com/-- publishes newspapers and magazines. The Company and eight of its affiliates filed for Chapter 11 protection on September 29, 2008 (Bankr. M.D. Fla. Lead Case No. 08-14939). Chad S. Bowen, Esq., and David S. Jennis, Esq., Jennis & Bowen, P.L., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts of between $10 million and $50 million each. DARIN BENNETT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Darin Edward Bennett 8095 Palm Cove Ct. Las VEGAS, NV 89129 Bankruptcy Case No.: 09-25531 Chapter 11 Petition Date: August 24, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Christopher Patrick Burke, Esq. 218 S Maryland Pky. Las Vegas, NV 89101 Tel: (702) 385-7987 Email: atty@cburke.lvcoxmail.com Total Assets: $2,338,560 Total Debts: $2,412,616 A full-text copy of Mr. Bennett's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-25531.pdf The petition was signed by Mr. Bennett. DELTA MUTUAL: Martin Chilek Steps Down as Chief Financial Officer ----------------------------------------------------------------- Delta Mutual, Inc., reports that on August 12, 2009, Martin G. Chilek, resigned as its Chief Financial Officer for personal reasons. Delta Mutual, Inc., invests in oil and gas properties in South America. It intends to focus its investments in the energy sector, including development of energy producing investments and alternative energy production in Latin America and North America. As of June 30, 2009, the Company had $2,054,683 in total assets, including $3,826 in cash; and $2,940,242 in total liabilities, all current; resulting in $885,559 in stockholders' deficiency attributable to Delta Mutual and subsidiaries. On April 13, 2009, Wiener, Goodman & Company, P.C., in Eatontown, New Jersey, raised substantial doubt about Delta Mutual, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended December 31, 2008. The auditor noted that the Company has a working capital deficiency, incurred losses from operations, needs to obtain additional financing to meet its obligations on a timely basis and to fulfill its proposed activities and ultimately achieve a level of sales adequate to support its cost structure. DEVELOPERS DIVERSIFIED: Moody's Reviews Ba1 Preferred Stock Rating ------------------------------------------------------------------ Moody's Investors Service placed the Baa3 senior unsecured rating of Developers Diversified Realty Corporation under review for possible downgrade. Since Moody's last rating action, DDR executed a number of transactions to increase liquidity, reduce refinancing risk and lower leverage. Risks remain, however; should DDR be unable to successfully complete the remaining transactions for 2009, Moody's will likely lower the company's ratings. Moody's also notes that the retail environment is very uncertain and the American consumer has demonstrated very little confidence lately. Therefore, if the important back-to-school and holiday shopping seasons cause additional retailer stress, it could put further pressure on DDR's credit metrics and rating. Given the recessionary environment and severe weakness inflicted on the retail sector, including the bankruptcies of a number of DDR's major tenants, the REIT has had to quickly shore up its balance sheet. Additional pressure on its credit profile resulted from a sizable development pipeline as well as from recent large acquisitions. Moreover, the company has had little capacity available on its bank line, limiting liquidity. In order to repair its balance sheet and alleviate refinancing risk, DDR entered into several transactions, including secured financings of approximately $200 million, the first part of a common equity purchase transaction with an institutional real estate investor for $52.5 million, and the sale of properties worth approximately $418 million YTD (including JV sales). In addition, DDR lowered its dividend and paid a significant portion of it with equity, preserving cash flow. All this enabled DDR to retire over $700 million in debt, including all 2009 maturities. The REIT's next significant maturity is approximately $200 million in May 2010. DDR has several major transactions in the pipeline, including raising additional equity, issuing unsecured and secured debt (including a TALF deal), and a bond tender. It is possible Moody's will restore DDR's rating outlook to negative and confirm the Baa3 rating should the successful execution of these items lead to significant improvement in their liquidity and credit profile. Moody's indicated that a rating downgrade would result from secured debt reaching 30% of gross assets (without JVs), coverages that are consistently below the low 1.8x range (including merchant building gains), debt to EBITDA consistently above 9x and any liquidity (including line of credit availability averaging less than 20%) or debt repayment challenges. Negative ratings pressure may also occur should more than 20% of the REIT's total revenues be derived from JVs (defined as pro-rata JV revenues). A return to a stable outlook would be predicated upon fixed charge coverage remaining consistently at 2x, secured debt over gross assets not exceeding the mid-20% range and debt EBITDA at or below 8x (without principal amortization and without pro rata consolidation of JVs). According to the rating agency, a stable outlook would also reflect adequate liquidity, which implies unencumbered assets at more than 50% of total gross assets and line of credit availability greater than 40%. The successful completion of the TALF debt financing and further success in raising common equity would help solidify a stronger liquidity and credit profile and provide positive ratings momentum. These ratings were placed under review for downgrade: * Developers Diversified Realty Corporation -- Baa3 senior unsecured; Ba1 preferred stock; (P)Baa3 senior debt shelf; (P)Ba1 preferred stock shelf. Moody's last rating action in relation to DDR was on March 11, 2009 when the rating agency lowered the REIT's senior rating to Baa3 from Baa2 and held the rating outlook at negative. Developers Diversified Realty Corporation is a REIT headquartered in Beachwood, Ohio, USA that owns and manages over 690 retail operating and development properties in 45 states, plus Puerto Rico, Brazil, and Canada, totaling over 151 million square feet. DBSD NORTH AMERICA: Sprint, et al., Say Ch. 11 Plan is Flawed ------------------------------------------------------------- Sprint Nextel Corporation, Hughes Network Systems LLC, and Illinois Union Insurance Company object to the second amended Chapter 11 plan of reorganization of DBSD North America Inc. and its debtor-affiliates. Sprint, et al., say the Plan cannot be confirmed on these grounds: -- the Plan violates the absolute priority rule by providing for a distribution to the Debtors' pre-petition shareholders even though general unsecured creditors are not receiving a full recovery; -- the Debtors cannot show that the best interests of creditors test is satisfied because their liquidation analysis is prepared on a consolidated basis and is inherently flawed; -- claims against the Debtors' bankruptcy estates are consolidated for distribution purposes even though the Plan does not provide for substantive consolidation, and, in any event, there is no basis for substantive consolidation; -- the discharge provisions contained in the Plan exceed the scope of the discharge allowed by section 1141 of the Bankruptcy Code; and -- the provisions of the Plan providing for retention of jurisdiction by the Bankruptcy Court are overly broad and should be expressly limited to clarify that they are not intended to encompass matters within the exclusive jurisdiction of the Federal Communications Commission. Sprint, et al., note the Plan proposes to satisfy all senior notes claims and general unsecured claims by issuing stock in the reorganized debtors. Although holders of general unsecured claims will not receive full recovery on account of their claims, the Plan provides for a distribution to the Debtors' existing stockholder. According to the disclosure statement, the percentage ownership interest that the Existing Stockholder will receive in the Reorganized Debtors is estimated to range from 3.64% to 4.99%. In contrast, the percentage ownership being provided to General Unsecured Creditors is estimated to range from a mere 0.11% to 0.15%, Sprint, et al., points out. A full-text copy of the Second Amended Disclosure Statement is available for free at http://ResearchArchives.com/t/s?3f2e A full-text copy of the Second Amended Plan is available for free at http://ResearchArchives.com/t/s?3f30 About DBSD North America Inc. Headquartered in Reston, Virginia, DBSD North America Inc. aka ICO Member Services Inc. offers satellite communications services. The company and nine of its affiliates filed for Chapter 11 protection on May 15, 2009 (Bankr. S.D.N.Y. Lead Case No. 09- 13061). James H.M. Sprayregen, Esq., Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, in New York; and Marc J. Carmel, Esq., Sienna R. Singer, Esq., at Kirkland & Ellis LLP, in Chicago, serve as the Debtors' counsel. Jefferies & Company is the proposed financial advisors to the Debtors. The Garden City Group Inc. is the court-appointed claims agent for the Debtors. When the Debtors sought for protection from their creditors, they listed between $500 million and $1 billion each in assets and debts. DPP ARCADIA: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: DPP Arcadia LLC 210 S Orange Grove Blvd Pasadena, CA 91105 Case No.: 09-32576 Chapter 11 Petition Date: August 24, 2009 Court: United States Bankruptcy Court Central District Of California (Los Angeles) Judge: Richard M. Neiter Debtor's Counsel: John P. Schock, Esq. 210 S Orange Grove #200 Pasadena, CA 91105 Tel: (626) 298-6444 Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cast in Place Construction Trade debt $706,339 10911 Hole Avenue Riverside, CA 92505 Roberston's Ready Mix Trade Debt $143,632 HUB Construction Trade Debt $52,014 William D. Rice Trade Debt $48,486 Academy Valet Parking Trade Debt $35,646 Precision Color Trade Debt $21,650 Flores Steel Construction Trade Debt $19,053 Otis Elevator Company Trade Debt $18,040 First Service Trade Debt $17,364 MCE Consultants Trade Debt $16,920 DMX Trade Debt $15,938 Sauna Workz Trade Debt $15,909 Group Mackenzie Trade Debt $15,294 Royal Plywood Trade Debt $12,238 Coastal Tile Trade Debt $10,799 All Floors Trade Debt $10,782 Cutting Edge Protection Trade Debt $9,240 Interior Services Trade Debt $8,590 ADT Security Services, Inc. Trade Debt $7,102 Sandstone Designs Trade Debt $6,400 DUANE READE: S&P Raises Rating on $225 Mil. Facility to 'B+' ------------------------------------------------------------ Standard & Poor's Ratings Services said it raised its issue rating on $225 million secured revolving credit facility due 2011 issued by Duane Reade Inc. (a New York General Partnership and subsidiary of Duane Reade Holdings Inc.) to 'B+' from 'B'. The recovery rating on the debt remains at '1', indicating its expectation for very high (90%-100%) recovery in the event of a payment default. This rating action follows the upgrade of Duane Reade Inc. to 'B-' from 'SD' on Aug. 11, 2009, after the completion of the discounted tender offer for its subordinated notes. Ratings List Duane Reade Holdings, Inc. Corporate Credit Rating B-/Stable/-- Duane Reade Inc. To From -- ---- Secured Revolving Credit Facility B+ B Recovery Rating 1 1 E-Z PEDS PA: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: E-Z Peds, P.A. 10794 Pines Blvd, Suite 102 Pembroke Pines, FL 33026 Bankruptcy Case No.: 09-27622 Chapter 11 Petition Date: August 24, 2009 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Raymond B. Ray Debtor's Counsel: Grace E. Robson, Esq. 2450 Hollywood Blvd # 706 Hollywood, FL 33020 Tel: (954) 239-4760 Fax: (954) 239-4761 Email: grobson@hkrlegal.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flsb09-27622.pdf The petition was signed by Mario D. Zambrano, president of the Company. EARL JONES CONSULTING: Trustee Details Owner's Defrauding --------------------------------------------------------- Earl Jones habitually spent money from investors on personal expenses, Ingrid Peritz at Globe and Mail reports, citing RSM Richter Inc., the bankruptcy trustee seeking the return of investors' vanished millions. As reported by the Troubled Company Reporter on August 21, 2009, Mr. Jones was declared personally bankrupt, and the probe into whether he defrauded investors of as much as $50 million from nearly 150 former clients would proceed to the next phase. According to Globe and Mail, RSM Richter alleged in a report that: * Mr. Jones paid himself and his wife, Maxine, $4.6 million -- almost $600,000 went to private schooling of their daughter at a specialized school for learning disabilities in Massachusetts; * Mr. Jones withdrew almost $890,000 in cash from ATMs, sometimes up to $1,000 per day: -- $170,000 on cars like his BMW and Audi, and -- more than $900,000 to purchase condos in Boca Raton and Quebec's Laurentians; and * Mr. Jones transferred almost half a million dollars to the Bank of Bermuda. Globe and Mail relates that several years of bank statements are still missing. Accountant Gilles Robillard, according to the report, said that he expects that the misappropriated funds could almost $25 million by the time they're located. Creditors, Globe and Mail notes, have little hope of recouping their losses. Investigators have found $15,000 in a corporate bank account, the report states, citing Mr. Robillard. Earl Jones Consulting was a company ran by investment adviser Earl Jones. The Company in July 2009 was declared bankrupt by the Quebec Superior Court in Montreal. Quebec's securities regulator alleges Mr. Jones swindled at least 50 investors out of at least $30 million in a possible Ponzi scheme. EXTENDED STAY: Five Mile Wants Case Remanded to Supreme Court ------------------------------------------------------------- Five Mile Capital II SPE ESH LLC asks the U.S. Bankruptcy Court for the Southern District of New York to transfer the lawsuit filed against Cerberus Capital Management LP and three other entities back to the New York Supreme Court. Five Mile Capital's request came after the Lawsuit was transferred to the Bankruptcy Court following the Chapter 11 petition of Extended Stay Inc. and its affiliated debtors on grounds that it is related to the Debtors' bankruptcy. Five Mile sued Cerberus, Centerbridge Partners LP, The Blackstone Group Inc. and GEM Capital Management Inc. after the defendants allegedly negotiated with the Debtors on the restructuring of the Debtors' debt. Five Mile asserted that the negotiations led to an agreement on the terms of a restructuring that was detrimental to the Debtors while beneficial to the defendants. Attorney for Five Mile, Jeffrey Golenbock, Esq., at Golenbock Eiseman Assor Bell & Peskoe LLP, in New York, says the Lawsuit is not a core proceeding in the Debtors' bankruptcy cases and its outcome will have no bearing on those cases. "None of the Debtors are party to the action and none of their property will be affected by Five Mile's claims," Mr. Golenbock says. He adds that the claims are based on the defendants' violation of the terms of their trust and servicing agreement by engaging in the negotiations, and do not concern the administration of the Debtors' estates. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: Lichtenstein Opposes BofA Bid to Remand Suit ----------------------------------------------------------- David Lichtenstein, chairman of Lightstone Group LLC, opposes Bank of America N.A.'s bid to remand the lawsuit BofA filed, together with two other banks, against him and his company to the New York Supreme Court. In court papers, Mr. Lichtenstein asks the U.S. Bankruptcy Court for the Southern District of New York to deny the remand request of Bank of America, Wachovia Bank N.A., and U.S. Bank N.A. Mr. Lichtenstein maintains that the BofA Lawsuit is a "core proceeding" in the bankruptcy cases of Extended Stay Inc. and its affiliated debtors. The Plaintiffs' motion to remand relies on the sole argument that because the defendants have no indemnification right against the Debtors, remand must be granted, says David Friedman, Esq., at Kasowitz Benson Torres & Friedman LLP, in New York, on behalf of Mr. Lichtenstein. "This argument is both wrong and devoid of legal support." "In focusing their attention on indemnification, plaintiffs ignore the many other facts that make this action a core bankruptcy proceeding not subject to remand," Mr. Friedman contends. Bank of America, Wachovia Bank and U.S. Bank sought a remand of their Lawsuit after the Lawsuit was transferred to the Bankruptcy Court pursuant to a July 10, 2009 order from the U.S. District Court for the Southern District of New York. The BofA Lawsuit was initially filed in the Supreme Court after Lightstone Holdings and Mr. Lichtenstein allegedly failed to honor their obligation to pay $100 million to the Banks as guarantors under a series of guaranty agreements. The Banks asserted that the Lawsuit is not related to the Debtors' bankruptcy proceedings as their claim is directed against Lightstone as well as Mr. Lichtenstein, who is not a debtor and who has waived any right to seek indemnification from the Debtors. The Banks also asserted that their claim is based purely on state law. Mr. Friedman contends that the Banks are suing Lightstone and its chairman on a guaranty that was triggered by the Debtors' bankruptcy filing and thus, resulting in the Lawsuit directly implicating "the federal preemption doctrine and public policy questions" which the Bankruptcy Court is qualified to adjudicate. Mr. Friedman emphasizes that in placing the creditors' interests above their own by filing the Debtors' Chapter 11 petition, Mr. Lichtenstein and his company "vindicated the public policy aims that bankruptcy law protects -- the unencumbered access to bankruptcy protection to maximize value, stabilize assets and preserve jobs." "The federal preemption and policy questions, coupled with the fact that the Debtors' bankruptcy filing itself was the alleged trigger for liability under the guarantees, make this a core bankruptcy matter," Mr. Friedman maintains. The Debtors, which are currently seeking Bankruptcy Court approval to intervene in the BofA Lawsuit, also criticize the proposed transfer of the Lawsuit to the Supreme Court. On the Debtors' behalf, Howard Comet, Esq., at Weil Gotshal & Manges LLP, in New York, says that the Banks gloss over the fact that ESI and Homestead Village LLC are also subject to the same obligations under the guaranty agreements. "While the [lawsuit] does not name any of the Debtors as defendants, plaintiffs seek to hold [Mr. Lichtenstein and Lightstone] liable under certain guaranty provisions based on the mere fact that the Debtors have commenced these chapter 11 cases," he points out. "If the [lawsuit] were to be remanded to state court, the Debtors would inevitably become active, if reluctant, participants in discovery and have to expend substantial resources given that they are in possession of substantially all of the relevant documents," Mr. Comet further says. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: Line Trust Want Suit Move to Supreme Court --------------------------------------------------------- David Lichtenstein, chairman of Lightstone Group LLC, asks the U.S. Bankruptcy Court for the Southern District of New York to deny Line Trust Corporation Ltd. and Deuce Properties Ltd.'s bid to remand their lawsuit against certain parties, which include Mr. Lichtenstein, to the New York Supreme Court. The Lawsuit is captioned Line Trust Corporation Ltd. and Deuce Properties Ltd. vs. David Lichtenstein, Lightstone Holdings LLC, Wells Fargo Bank, N.A., Wachovia Bank N.A., Bank of America NA, US Bank National Association, Cerberus Capital Management LP, Centerbridge Partners LP, and John Does 1-20. Line Trust and Deuce Properties seek a transfer of their Lawsuit back to the New York Supreme Court where it was initially filed after it was transferred to the Bankruptcy Court as a result of the Chapter 11 filings of Extended Stay Inc. and its affiliated debtors. Line Trust and Deuce Properties argued that the Lawsuit is not related to the Debtors' bankruptcy cases. Line Trust and Deuce Properties filed their Lawsuit against Mr. Lichtenstein after he allegedly failed to honor his obligations to pay them $100 million as guarantor under certain guaranty agreements. They also accused Mr. Lichtenstein of being induced by Bank of America N.A. and other lenders to put the Debtors to bankruptcy to push junior loan holders out of the money, and that the Lenders promised to indemnify Mr. Lichtenstein against $100 million in liabilities and provide a $5 million "litigation defense war chest" to resist potential claims from junior lenders. Attorney for Mr. Lichtenstein, David Friedman, Esq., at Kasowitz Benson Torres & Friedman LLP, in New York, says the proposed transfer of the Lawsuit must be denied on grounds that it is intertwined with the Debtors' bankruptcy cases. "Plaintiffs are suing [Mr. Lichtenstein] and Lightstone on a guaranty that was triggered by the bankruptcy filing itself," Mr. Friedman says in court papers. "As a result, this action directly implicates the federal preemption doctrine and public policy questions that th[e] [Bankruptcy] Court is uniquely qualified to adjudicate." He points out that in placing the creditors' interests above their own by filing the Debtors' petition, Mr. Lichtenstein and his company "vindicated the public policy aims that bankruptcy law protects--the unencumbered access to bankruptcy protection to maximize value, stabilize assets and preserve jobs." "The federal preemption and policy questions, coupled with the fact that the bankruptcy filing itself was the alleged trigger for liability under the guarantees, make this a core bankruptcy matter," Mr. Friedman says. The proposed transfer of the lawsuit to the New York Supreme Court also drew flak from Cerberus Capital Management LP, Centerbridge Partners LP, Wells Fargo Bank N.A. and the Debtors, who are currently seeking Bankruptcy Court approval to intervene in the Lawsuit. In a separate filing, Bank of America and U.S. Bank National Association seek dismissal of the Lawsuit, saying it is baseless and failed to prove that they "caused any injury that could give rise to any claim." "In the absence of any allegation of injury, [Line Trust and Deuce Properties'] complaint as against the defendants must be dismissed with prejudice for failure to state claims upon which relief may be granted," the Banks argue. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: U.S. Trustee Files Motion to Appoint Examiner ------------------------------------------------------------ Diana Adams, the U.S. Trustee for Region 2, asks the U.S. Bankruptcy Court for the Southern District of New York to appoint an examiner to investigate into the events and circumstances that lead to the bankruptcy filing of Extended Stay Inc. and its debtor affiliates pursuant to Section 1104(c) of the Bankruptcy Code. Ms. Adams seeks the appointment of an examiner to investigate and report in particular, on the structuring, negotiation and closing of the acquisition of the Debtors in 2007 by an investment consortium led by Lightstone Group LLC Chairman David Lichtenstein. Mr. Lichtenstein acquired the Debtors from Blackstone Group LP in April 2007 through a $7.4 billion secured loan he availed from Wachovia Bank N.A., Bank of America N.A, and Bear Stearns Commercial Mortgage Inc. The $7.4 billion loan consisted of a $3.3 billion "mezzanine" loan and a $4.1 billion mortgage loan. The U.S. Trustee's request came after some groups threw allegations of fraud and dishonesty against Mr. Lichtenstein and the lenders. Those groups, which include Line Trust Corporation Ltd. and Deuce Properties Ltd., accused the lenders of inducing Mr. Lichtenstein to put the Debtors in bankruptcy to push junior loan holders out of the money. In return, the lenders allegedly promised to indemnify Mr. Lichtenstein against $100 million in liabilities and provide another $5 million to fight claims that might be asserted by junior lenders. Line Trust and Deuce Properties are investors that contributed $214 million in the aggregate to the junior debt used for the acquisition of the Debtors. Line Trust and Deuce Properties have commenced a lawsuit against Mr. Lichtenstein and the lenders before the Supreme Court for the State of New York barely two months ago. "The acquisition and the events that unfolded after th[e] [acquisition] transaction, leading to the ultimate bankruptcy filings [of Extended Stay], require investigation by an independent third party," Ms. Adams says in court papers. "When such allegations of fraud and dishonesty, and breach of fiduciary duty involving the current management are present, the appointment of an examiner is warranted," Ms. Adams maintains. The U.S. Trustee also wants to find out through the investigation if the Debtors' estates have claims against the lenders, Mr. Lichtenstein and any of the companies that he controls. The appointment of an examiner to undertake the investigation is preferable, the U.S. Trustee maintains, to avoid the costs related to having multiple parties conduct the same discovery and bringing piecemeal litigation in the Debtors' Chapter 11 proceedings. Maiden LLC has expressed support for the proposed appointment of an examiner, saying it would bring the much needed transparency and independence to the Debtors' bankruptcy cases. "Having an independent investigation conducted by an examiner would provide the added benefit of minimizing the need for duplicative discovery by various parties," Maiden LLC related in a statement filed in Court. Maiden LLC asks the Court to authorize any examiner appointed in the Debtors' cases to issue subpoenas to compel the production of documents and to compel the witnesses to testify in connection with the contemplated investigation. In a separate report, The Wall Street Journal related that the U.S. Federal Reserve has exposure to the Extended Stay bankruptcy by virtue of a fund it created called Maiden Lane, which holds about $900 million in Extended Stay debt. The Federal Reserve is working with BlackRock Inc. and other advisers to try to maximize its recovery on that debt, according to Lingling Wei and Jon Hilsenrath of The Journal. The Federal Reserve created Maiden Lane to take over "$30 billion of assets from the Bear Stearns collapse and hotel debt accounts for 79% of the commercial mortgages held by that fund," the news source revealed. The Federal Reserve is torn between recovering on its exposure to the Extended Stay debt and analyzing what went wrong with the market for commercial mortgage-backed securities or CBMS, a type of financing utilized by Extended Stay, The Journal pointed out. In this light, the Federal Reserve supports the U.S. Trustee's move for an investigation of the Extended Stay collapse by an independent examiner, according to the report. The hearing to consider approval of the Examiner Motion has been scheduled for September 22, 2009. Creditors and other concerned parties have until September 16, 2009, to file their objections. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: Wants to Hire PKF Consulting as Appraisers --------------------------------------------------------- Extended Stay Inc. and its affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ PKF Consulting as their appraisers effective as of August 18, 2009. The Debtors have selected PKF Consulting because of its extensive experience and knowledge in the field of real estate appraisal and valuation-consulting services and its particular expertise in the hospitality industry, says Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York. The Debtors add that being a member of Pannell Kerr Forster International Ltd, PKF Consulting also has "direct access to the resources of one of the world's largest accounting and consulting firms." The Debtors relate that at about August 18, 2009, they engaged PKF Consulting to prepare an analysis of the liquidation value of their assets. As appraisers to the Debtors, PKF Consulting will be tasked to conduct appraisals of the Debtors' properties, including the Debtors' 664 hotels and corporate office building, and provide consulting services or expert testimony, if required. The Debtors may also request PKF Consulting to appraise certain properties, which do not constitute collateral for their $4.1 billion pre-bankruptcy loan, including two certain properties owned by ESA UD Properties LLC. Specifically, PKF Consulting will perform preliminary valuation services, including (1) physical inspections of each property, (2) analysis of the historical operating performance of each property, (3) review and evaluation of leases and management agreements, (4) evaluation of the economic environment of each property's local and regional markets, (5) research of relevant market data to the extent necessary to provide credible appraisal results, (6) review and evaluation of terms associated with sales of similar types of hotel properties located within each local market, and (7) other services the Debtors and the Debtors' counsel agree with the firm as appropriate. Ms. Marcus tells the Court that the services to be provided by PKF Consulting will be utilized in connection with confirmation of a plan of reorganization for the Debtors and perhaps, in connection with plan negotiations with various creditor constituencies. The Debtors will pay for PKF Consulting's services in accordance with the firm's customary hourly rates, which are: Senior and Executive Vice Presidents $325 - $500 Vice President $275 - $325 Associates $225 - $275 Consultants $150 - $225 Nevertheless, in light of the magnitude of its services, PKF Consulting has agreed to limit its total fees for valuation services to $2.25 million, excluding expenses. If the Debtors decide that a physical inspection of a sample of hotels is all that is necessary, PKF Consulting's cap on the amount of fees for the appraisal will be limited to $1.75 million. The Debtors also agree to pay for the firm's out-of-pocket expenses, including travel expenses and lodging costs. The Debtors have also agreed to provide PKF with a $900,000 refundable retainer, upon the Court's approval of the PKF Employment Application. Any fees and expenses owed to PKF will be charged against the Retainer. Thomas Callahan, co-president and chief executive officer of PKF Consulting, assures the Court that his firm does not represent or hold interest adverse to the Debtors or their estate, and that it is a "disinterested person" under Section 101(14) of the Bankruptcy Code. Mr. Callahan will oversee PKF Consulting's engagement with the Debtors. Professor Jack Corgel and Mark Woodworth will also be available to render services in connection with the contemplated retention. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). FELLOWS ENERGY: Has Yet to File Q1 and Q2 2009 Financial Reports ---------------------------------------------------------------- Fellows Energy Ltd. has yet to file its quarterly reports on Form 10-Q for the periods ended June 30, 2009, and March 31, 2009. "The compilation, dissemination and review of the information required to be presented in the Form 10-Q for the relevant fiscal quarter has imposed time constraints that have rendered timely filing of the Form 10-Q impracticable without undue hardship and expense to the [Company]. The [Company]undertakes the responsibility to file such quarterly report no later than five days after its original due date," George S. Young, the Company's Chief Executive Officer, said on August 17. In May 2009, the Company filed its unaudited Annual Report on Form 10-K for the period ended December 31, 2008. The Company said as of December 31, 2008, it had total assets of $1,060,897, and total current liabilities of $3,097,998, interest payable - related party of $775,826, and notes payable - related party of $3,406,858. About Fellows Energy Based in Lafayette, Colo., Fellows Energy Ltd. (OTC BB: FLWE) -- http://www.fellowsenergy.com/-- is an early stage oil and gas company focused on exploration and production of natural gas and oil in the Rocky Mountain Region. FIRSTFED FINANCIAL: Files Monthly Financial Data as of July 31 -------------------------------------------------------------- FirstFed Financial Corp. a summary monthly financial data as of and for the period ended July 31, 2009. FirstFed reported total assets of $6,318,798,000 at July 31, 2009, lower compared to $6,367,188,000 at June 30, 2009, and $7,429,429,000 at July 31, 2008. FirstFed had gross loans receivable of $5,978,309,000 at July 31, 2009, lower compared to $6,133,210,000 at June 30, 2009, and $6,579,861,000 at July 31, 2008. A full-text copy of the monthly report is available at no charge at http://ResearchArchives.com/t/s?4310 As reported by the Troubled Company Reporter on August 21, 2009, FirstFed's second quarter report on Form 10-Q includes a note on its ability to continue as a "going concern". The Company and its banking unit First Federal Bank of California are operating under Amended Orders to Cease and Desist issued on May 28, 2009, by the Office of Thrift Supervision. As required by the Amendments, the Company and the Bank have submitted a detailed capital plan to the OTS addressing how the Bank will meet and maintain a tier 1 core capital ratio of 7% and a minimum total risk-based capital ratio of 14% by September 30, 2009. The Bank's risk-based capital ratio was 9.63% at June 30, 2009 and its core and tangible capital ratios were 4.79%. These capital ratios are below the levels required by the Bank's federal regulators to be considered "well capitalized". "The ability of the Company and the Bank to continue to meet all of the requirements of the Amendments and the Orders will be affected by market conditions in the economy and other uncertainties. Declining real estate values and rising unemployment in the state of California could have a significant impact on future losses incurred on loans. In addition, there can be no assurance in the current economic environment that the Company will be able to raise capital to regain "well capitalized" status or to meet future regulatory requirements. Due to these conditions and events, substantial doubt exists in the Company's ability to continue as a going concern," the Company stated. FirstFed posted a comprehensive loss $48.74 million or $3.37 per diluted share of common stock for the second quarter of 2009 compared with a comprehensive loss of $36.56 million or $2.60 per diluted share of common stock for the second quarter of 2008. A copy of the Company's Form 10-Q filed with the Securities and Exchange Commission is available at: http://researcharchives.com/t/s?4269 FirstFed Financial Corp. (Pink Sheets: FFED) is the parent company of First Federal Bank of California. The Bank operates 39 retail banking offices in Southern California. At June 30, 2009, the Company had $6.36 billion in total assets and $6.20 billion in total liabilities. FIRSTFED FINANCIAL: Special Stockholders' Meeting on Sept. 30 ------------------------------------------------------------- A special meeting of stockholders of FirstFed Financial Corp. will be held at its Corporate Headquarters, located at 12555 West Jefferson Boulevard, in Los Angeles, California, on September 30, 2009 at 10:00 a.m., local time, for these purposes: (1) To approve an amendment to its restated certificate of incorporation to increase the number of authorized shares of its common stock from 100,000,000 to 5,000,000,000; (2) To approve an amendment to its restated certificate of incorporation to (i) effect a reverse stock split of its common stock by a ratio of not less than one-for-10 and not more than one-for-70 at any time prior to August 31, 2010, with the exact ratio to be set at a whole number within this range as determined by the Board of Directors in its sole discretion, and (ii) reduce the number of authorized shares of its common stock by the reverse stock split ratio determined by the Board of Directors; and (3) To approve an adjournment of the special meeting to allow time for further solicitation of proxies in the event there are insufficient votes present at the meeting, in person or by proxy, to approve the amendments to its restated certificate of incorporation to effect the Authorized Share Increase and the Reverse Stock Split. The Board of Directors urges stockholders to vote FOR Items 1, 2 and 3. Stockholders of record at the close of business on August 26, 2009, are entitled to vote at the special meeting or any adjournment or postponement thereof. A full-text copy of the Company's proxy statement is available at http://ResearchArchives.com/t/s?4311 As reported by the Troubled Company Reporter on August 21, 2009, FirstFed's second quarter report on Form 10-Q includes a note on its ability to continue as a "going concern". The Company and its banking unit First Federal Bank of California are operating under Amended Orders to Cease and Desist issued on May 28, 2009, by the Office of Thrift Supervision. As required by the Amendments, the Company and the Bank have submitted a detailed capital plan to the OTS addressing how the Bank will meet and maintain a tier 1 core capital ratio of 7% and a minimum total risk-based capital ratio of 14% by September 30, 2009. FirstFed Financial Corp. (Pink Sheets: FFED) is the parent company of First Federal Bank of California. The Bank operates 39 retail banking offices in Southern California. At June 30, 2009, the Company had $6.36 billion in total assets and $6.20 billion in total liabilities. FOUNTAIN POWERBOAT: Case Summary & 3 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Fountain Powerboat Industries, Inc. PO Drawer 457 Washington, NC 27889 Bankruptcy Case No.: 09-07132 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Fountain Powerboats, Inc. 09-07133 Fountain Dealers' Factory Superstore, Inc. 09-07134 Baja by Fountain, Inc. 09-07135 Chapter 11 Petition Date: August 24, 2009 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: Randy D. Doub Debtor's Counsel: John A. Northen, Esq. Northen Blue, LLP PO Box 2208 Chapel Hill, NC 27515-2208 Tel: (919) 968-4441 Fax: (919) 942-6603 Email: jan@nbfirm.com Stephanie Osborne-Rodgers, Esq. Northern Blue PO BOX 2208 Chapel Hill, NC 27515-2208 Tel: (919) 968-4441 Email: sor@nbfirm.com Total Assets: $3 Total Debts: $19,619,331 A full-text copy of the Debtors' petition, including a list of their 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nceb09-07132.pdf The petition was signed by Irving Smith, chief financial officer of the Company. FRESH DEL: S&P Raises Corporate Credit Rating to 'BB' ----------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on Cayman Islands-based Fresh Del Monte Produce Inc., to 'BB' from 'BB-'. The outlook is positive. About $335 million of debt was outstanding as of June 26, 2009. "The upgrade reflects what S&P view as Fresh Del Monte's improved financial risk profile," said Standard & Poor's credit analyst Alison Sullivan. The company successfully refinanced its prior revolving credit facility that was due to mature in November 2009, and $100 million term loan due 2011. As of July 17, 2009, about $166.6 million was available under a new $500 million revolver that matures in 2013. In addition, Fresh Del Monte has sustained strong credit measures, including 1.6x leverage and 59% funds from operations to total debt for the 12 months ended June 26, 2009. The ratings on Fresh Del Monte reflect its participation in the highly variable, commodity-oriented fresh fruit and vegetable industry. Uncontrollable factors such as global supply, world trade policies, political risk, currency swings, weather, and disease affect the industry. Fresh Del Monte benefits from its leading positions in the production, marketing, and distribution of fresh produce. Fresh Del Monte is the No. 1 marketer of fresh pineapples worldwide, and the No. 3 marketer of bananas worldwide. However, product concentration remains a rating concern, because of the high sales and earnings concentration from bananas and pineapples, respectively, and intense competition in those markets. Fresh produce operating results are also subject to seasonality, with about 60% of gross profit skewed toward the first half of the calendar year, before local summer fruit enters the market in the northern hemisphere. The company has a royalty-free perpetual license to use the Del Monte trademark for processed and/or canned food, juices, snacks, and desserts, in Europe, Africa, and the Middle East. S&P assumes Fresh Del Monte will maintain credit measures that are stronger than its rating category to compensate for inherent volatility in the produce industry. S&P could consider an upgrade if the company can sustain improved credit measures, and maintain a rolling two-year quarterly average leverage of about 2x or less, and average FFO to total debt of about 40%. A potential upgrade would also require a prudent financial policy with respect to acquisitions and modest share repurchases. The outlook could be revised to stable if financial policy becomes more aggressive, and/or Fresh Del Monte's average credit measures decline to about 2.5x leverage and 30%-35% FFO to total debt. FOUNTAIN POWERBOAT: Files for Chapter 11 Bankruptcy Protection -------------------------------------------------------------- Fountain Powerboat Industries, Inc., has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in the Eastern District of North Carolina. Fountain Powerboat listed said in court documents that it has $3 in assets, listed under personal property. Fountain Powerboat listed $1 each for Baja by Fountain, Fountain Dealers' Factory Superstore, and Fountain Powerboats. Fountain Powerboat listed more than $19.6 in debts owed to Regions Bank. According to court documents, Fountain Powerboat is seeking court permission to sell "substantially all" of its tangible and intangible assets, including the real estate, tooling in North Carolina, brand names, and unsold inventory for the Fountain and Baja brands. Fountain Powerboat said that the sale of these assets could bring in $6 to $8 million or more, Beth Rosenberg at Trade Only Today relates. Fountain Powerboats, Inc., a subsidiary of Fountain Powerboat Industries, Inc., has its executive offices and manufacturing facilities along the Pamlico River in Beaufort County, North Carolina. The Company designs, manufactures and sells offshore sport boats, sport fishing boats and express cruisers that target the segment of the recreational power boat market where speed, performance, safety and quality are the main criteria for purchase. These recreational boats are based upon an innovative, award-winning design enabling world class performance while using standard reliable power. There are currently 12 buildings located on 65 acres totaling over 237,000 square feet accommodating 40 to 45 boats in various stages of construction at any one time. The present plant site can also accommodate up to 300,000 square feet of additional manufacturing space. The land and buildings are wholly owned by Fountain Powerboat Industries, Inc., and its subsidiary, Fountain Powerboats. GENERAL MOTORS: Advisers Suggest Keeping Opel for Euro Presence --------------------------------------------------------------- General Motors Co. advisers are recommending that the board consider spurning a German-backed sale of its Opel unit to retain a bigger presence in Europe and Russia, Serena Saitto and Jeff Green at Bloomberg News report, citing a person familiar with the discussions. Bloomberg relates, the person, who asked not to be identified because the talks aren't public, said the advisers suggest that GM seek aid from other European governments to retain ownership of Opel as an alternative to surrendering control to a group led by Canada's Magna International Inc. or to Brussels-based RHJ International SA. According to Bloomberg, GM's new board, dominated by members appointed after the Obama administration forced the company into bankruptcy, is questioning the decision made by previous directors to give up control of the unit to save it. Citing people familiar with the unit's finances, Bloomberg discloses Opel has enough cash to operate well into the fourth quarter without new loans. Opel and its sister brand Vauxhall also have operations in the U.K., Spain and Poland, among the larger nations that may be asked to contribute aid for the Ruesselsheim, Germany-based automaker's restructuring, Bloomberg says. Talks German officials will hold talks with an unidentified GM executive in Berlin this week in a bid to encourage a decision, Bloomberg discloses. Bloomberg notes Ulrich Wilhelm, German Chancellor Angela Merkel's chief spokesman said Germany sees no evidence that GM is pulling back from its intention to sell. Decision Aaron Kirchfeld at Bloomberg News reports Roland Koch, the state premier of Hesse, and Peer Steinbrueck, Germany's finance minister, are calling on GM to decide on a buyer for Opel. Bloomberg relates Mr. Koch told Die Welt "nothing has changed" in Germany's preference for Magna and the German government will only provide EUR4.5 billion (US$6.4 billion) in guarantees if it has the most possible security that taxpayers can be paid back, while Mr. Steinbrueck told Handelsblatt the government won't offer a financing concept or bridge financing to RHJ. Bloomberg notes Mr. Steinbrueck said in an interview with Handelsblatt there should be a decision on the future of GM's Opel unit as quickly as possible and it is "irritating" that GM's board hasn't decided yet. Workers Chris Reiter at Bloomberg News reports Armin Schild, an official with the IG Metall union, said Opel workers plan to pressure GM into accepting an offer to sell a majority stake to a group led by Magna. "The parent needs to understand that there's no going back," Bloomberg quoted Mr. Schild quoted as saying in an e-mail. "Neither the continuation of the waiting game aimed at the unit's insolvency nor a return to 'un-independence' will be accepted without opposition." Mr. Schild, as cited by Bloomberg, said that neither RHJ nor GM have the trust of Opel's 55,000 employees in Europe, while a GM-Opel-Magna deal is "signature ready" and would represent a "win-win-win." Bloomberg states unions are concerned that an opportunity to secure the independence from GM of Opel, which is based near Frankfurt, may be lost if a deal isn't agreed before federal elections on Sept. 27. Bloomberg discloses German newspaper Bild, citing Schild's office, reported yesterday union leaders plan to decide on protest plans today, Aug. 25. Bloomberg notes the newspaper said that workers may rally this weekend in front of the U.S. Embassy, which is next to the Brandenburg Gate in Berlin. As reported in the Troubled Company Reporter-Europe on Aug. 24, 2009, Bloomberg News said GM postponed a decision on the sale of its Opel division after the board questioned the German government's financing of a bid from Magna and sought information on funding for an offer from RHJ. The board hasn't scheduled another meeting or set a deadline for a decision. 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) GENOIL INC: Posts C$3 Million Net Loss in 1H of 2009 ---------------------------------------------------- Genoil Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 6-K for three and six months ended June 30, 2008. At June 30, 2009, the Company's balance sheet showed total assets of C$4.52 million, total liabilities of C$1.95 million and shareholders' equity of C$2.57 million. For three months ended June 30, 2009, the Company posted a net loss of C$1.41 million compared with a net loss of C$1.13 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of C$2.86 million compared with a net loss of C$4.59 million for the same period in 2008. The Company said that its ability to continue as a going concern is in substantial doubt and is dependent on achieving profitable operations, commercializing its upgrader technology, and obtaining the necessary financing in order to develop this technology further. The Company will continue to review the prospects of raising additional debt and equity financing to support its operations until the time that its operations become self- sustaining, to fund its research and development activities and to ensure the realization of its assets and discharge of its liabilities. The Company added that it is not expected to be profitable during the ensuing twelve months and therefore must rely on securing additional funds from either issuance of debt or equity financing for cash consideration. A full-text copy of the financial statements is available for free at http://ResearchArchives.com/t/s?42e6 Genoil Inc. is a technology development company based in Alberta, Canada. The company has developed innovative hydrocarbon and oil and water separation technologies. The Company's securities trade on both the TSX Venture Exchange (Symbol: GNO) and the NASDAQ OTC Bulletin Board (Symbol: GNOLF). GROUNDHOG MINES: Files Chapter 11 in Anchorage ---------------------------------------------- According to Bloomberg News, Groundhog Mines LLC and its affiliate Nika Mines LLC filed Chapter 11 petition in Anchorage, Alaska. Both say in their petitions that debts are less than $500,000 while assets exceed $10 million. The gold, copper and molybdenum mines have rights in almost 72,000 acres of undeveloped land in Alaska, according to the Web site. Groundhog Mines and Nika Mines filed for Chapter 11 on August 20 (Bankr. D. Alaska Case Nos. 09- 00574 and 09-00575). ICONIX BRAND: S&P Changes Outlook to Stable, Affirms 'B+' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on New York-based Iconix Brand Group Inc. to stable from negative. At the same time, S&P affirmed the 'B+' corporate credit rating. As of June 30, 2009, Iconix had about $640 million in adjusted debt outstanding (adjusted for operating leases and full amount of convertible debt, which is unadjusted for APB 14-1, "accounting for convertible debt instruments that may be settled in cash upon conversion"). "The outlook revision reflects Iconix's ability to maintain its current operating performance amid a very weak retail environment, reduce its debt leverage and improve credit protection measures over the past two years, and sustain an adequate liquidity profile," said Standard & Poor's credit analyst Bea Chiem. S&P estimate for the 12 months ended June 30, 2009, EBITDA margins were about 76% and leverage declined to about 3.9x as compared with 4.7x during the same period in 2008. S&P also believe that Iconix has adequate liquidity. "The ratings on Iconix Brand Group reflect its participation in the highly competitive and volatile fashion apparel industry, a high degree of licensing contract renewal risk, an aggressive acquisition strategy, and ownership of some brands that require revitalization," added Ms. Chiem. Iconix benefits, to an extent, from the diversity and strong recognition of brands, and the company's high margin, high cash flow, and royalty income-based business model. The majority of Iconix's retail licensing agreements will be up for renewal in the next three years, many for the first time under Iconix's brand management. In addition, the company has an aggressive growth strategy, as demonstrated by the 16 brands acquired since 2004. In 2008, the company expanded its presence in China and Latin America through joint ventures. Recently, Iconix purchased a 50% interest in Ed Hardy brands and trademarks. Standard & Poor's expects the company to continue to make acquisitions and enter into partnerships to diversify its brand portfolio and build scale to support its licensing business. The stable outlook reflects the company's ability to maintain solid operating margins and adequate liquidity amid the weak retail environment. Despite the company's exposure to the intensely competitive apparel industry and currently difficult operating environment, S&P expects Iconix to maintain its high EBITDA margins and cash flows resulting from its growing royalty income streams. S&P could revise the outlook to negative if Iconix issues additional debt and increases leverage significantly (to more than 5x) to fund a sizable acquisition, or if the company cannot renew its licensing agreements, generate the expected levels of royalty income and its financial condition deteriorates and the covenant cushion level tightens. Although unlikely over the near term, S&P may consider an outlook revision to positive if the company reduces debt leverage significantly, while achieving strong operating results. JEFFERSON COUNTY: State Supreme Court Hands Tax Defeat ------------------------------------------------------ The Alabama Supreme Court upheld a lower court ruling that Jefferson County's occupational tax was repealed in 1999. The ruling means that Jefferson County won't have access to the tax money it collected but placed in escrow, the newspaper reported. While Governor Bob Riley signed a bill this month approving a new occupational tax for Jefferson County, Jefferson County wanted a Supreme Court ruling that would allow them to spend the funds collected under the previous version of the levy, the newspaper reported. As reported by the Troubled Company Reporter on August 17, 2009, Alabama's Senate and House of Representatives have separately approved a measure authorizing a new occupational tax for Jefferson County, which is on the brink of insolvency. The new tax legislation authorizes a 0.45% levy on businesses in the county and a referendum on the tax in 2012. If voters reject the levy, it will be phased out by 2016. After state lawmakers failed to agree on a new occupational tax in May, Jefferson County put more than 900 employees, or about 30% of its workforce, on unpaid leave, in order to cut costs. As a result, according to County Commission President Bettye Fine Collins, the county's 640,000 residents are enduring long lines and delays in county services as a result of the cuts. Bloomberg relates that the county's occupational tax problems have superseded a sewer debt crisis that began last year when interest rates on $3 billion of sewer debt soared as high as 10% amid Wall Street's credit crunch. Banks, including JPMorgan Chase & Co. and Bank of America Corp., have granted the county forbearance agreements on its sewer debt. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. It ended its 2006 fiscal year with a $42.6 million general fund balance, according to Standard & Poor's. The Birmingham firm of Bradley Arant Rose & White, represents Jefferson County. Porter, White & Co. in Birmingham is the county's financial adviser. A bankruptcy by Jefferson County stands to be the largest municipal bankruptcy in U.S. history. It could beat the record of $1.7 billion, set by Orange County, California in 1994. As reported by the TCR on July 24, 2009, Moody's Investors Service has affirmed the Caa3 rating and negative outlook on Jefferson County's (Alabama) outstanding $3.2 billion sewer revenue bonds. Moody's underlying Caa3 rating reflects the likelihood of eventual repayment by the county of principal, irrespective of outside enhancement through bond insurance. It does not reflect the claims paying ability of Syncora, which is rated Ca and failed to fulfill its obligation to make a July 1 Bank Bond principal payment. INNOVATIVE CARD: Discloses Looming Liquidity Crisis --------------------------------------------------- Innovative Card Technologies, Inc., said as of August 10, 2009, it has approximately $36,000 in cash. Combined with anticipated revenue collections and planned expense reductions, the Company believes this amount will last through the third quarter of 2009. The Company reported a net loss of $1,309,120 for the three months ended June 30, 2009, from a net loss of $800,715 for the same period a year ago. The Company had a net loss of $12,215,389 for the six months ended June 30, 2009, from a net loss of $2,763,156 for the same period a year ago. Revenue for the three months ended June 30, 2009, and 2008 was $1,296,645 and $800,209, respectively. As of June 30, 2009, the Company had total assets of $1,996,871 and total liabilities of $16,221,667, resulting in stockholders' deficiency of $14,224,796. The Company has a history of recurring losses from operations and has an accumulated deficit of $44,692,435 as of June 30, 2009. "We incurred net losses of $8,929,537 for the twelve months ending December 31, 2008. During the six months ending June 30, 2009, we incurred additional net losses of $12,215,389. Sales of the InCard DisplayCard, the Company's main product, are not expected to generate positive cash flow until the fourth quarter of 2009. As a result, there is substantial doubt about the Company's ability to continue as a going concern at June 30, 2009 and December 31, 2008," the Company said. "Management's plan regarding these matters is to increase sales, resulting in reduced losses and raise additional debt and/or equity financing to cover operating costs as well as its obligations as they become due. "There can be no assurances that funds will be available to the Company when needed or, if available, that such funds would be available under favorable terms. In the event that the Company is unable to generate adequate revenues to cover expenses and cannot obtain additional funds in the near future, the Company may seek protection under bankruptcy laws. A full-text copy of the Company's quarterly report is available at no charge at http://ResearchArchives.com/t/s?42f8 A full-text copy of its the Company's news statement announcing financials for the second quarter of 2009 is available at no charge at http://ResearchArchives.com/t/s?42f9 Exec Board Compensation Policy Amended On July 22, 2009, Innovative Card Technologies amended its non- executive board compensation policy. Pursuant to the terms of the Policy, non-employee directors will be entitled to the following compensation for service on the Company's board of directors: -- First Year Grant. Upon joining the board, members will receive options to purchase 100,000 common shares. The options shall vest as follows: (i) 25,000 shall vest on the one month anniversary of joining the Board; and (ii) 75,000 shall vest quarterly over a one year period commencing on the date such Director joins the Board. -- Annual Grant. Starting on the first year anniversary of commencing service as a board member, and each subsequent anniversary thereafter, each eligible director will be granted options to purchase 50,000 shares of common stock. These Annual Grants will vest quarterly during the year. -- Committee Grant. Each Director will receive options to purchase an additional 25,000 shares for each committee on which he or she serves. These Committee Grants will vest quarterly during the year. -- Special Committee Grants. From time to time, board members may be requested by the board to provide extraordinary services by way of serving on a special committee. These services may include such items as the negotiation of key contracts, assistance with technology issues, or such other items as the general board deems necessary and in the best interest of the Company and its shareholders. In such instances, the board of directors should have the flexibility to issue special committee grants. The amount of such grants would vary commensurate with the function and tasks of the special committee. -- Measure Date. For purposes of this plan, all current directors will be considered first year directors and be eligible for the First Year Grant. Irrespective on when a director joined the Board, all current directors shall have as their anniversary date the date that this plan is approved by the Board. All subsequent directors will have as their measure date the date on which they accepted appointment to the Board. About Innovative Card Technologies Innovative Card Technologies, Inc., develops and markets secure powered cards for payment, identification, physical and logical access applications. KEATING CHEVROLET: Section 341(a) Meeting Set for September 9 ------------------------------------------------------------- The U.S. Trustee for Region 6 will convene a meeting of creditors in Keating Chevrolet, Inc.'s Chapter 11 case on Sept. 9, 2009, at 10:30 a.m. The meeting will be held at Jack Brooks Federal Building, 300 Willow Street, Suite 116, Beaumont, Texas. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Nederland, Texas-based Keating Chevrolet, Inc. dba Mike Young Motor Company, Mike Young Chevrolet and Mike Young Chrysler Dodge Jeep operates an automobile dealing business. The Company filed for Chapter 11 on Aug. 6, 2009 (Bankr. E.D. Tex. Case No. 09- 10438). Robert E. Barron, Esq., represents the Debtor in its restructuring efforts. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. KIWI ENTERPRISES: Case Summary & 3 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Kiwi Enterprises, Ltd., a Corporation 14010 Overstreet Road, Suite B Maumelle, AR 72113 Bankruptcy Case No.: 09-16077 Chapter 11 Petition Date: August 24, 2009 Court: United States Bankruptcy Court Eastern District of Arkansas (Little Rock) Debtor's Counsel: Derrick Mark Davidson, Esq. Derrick Davidson, P.A. 3061 N. Market Ave., Ste. 8 Fayetteville, AR 72703 Tel: (479) 935-4100 Fax: (479) 856-6168 Email: derrick@davidsonbusinessattorney.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A list of the Company's 3 largest unsecured creditors is available for free at: http://bankrupt.com/misc/areb09-16077.pdf The petition was signed by Tony Meredith, president of the Company. LAVATEC INC: Washex Employees Seek Unpaid Wages ----------------------------------------------- Five workers of Lavatec Inc.'s Wichita Falls manufacturing plant Washex have filed a wage claim form with the Workforce Solutions North Texas, claiming that they had not been paid for almost a month, Times Record News reports, citing Bill Scantlin, an employer services representative for Workforce Solutions. Times Record quoted Mr. Scantlin as saying, "The only thing I know is they (plant employees) haven't been paid for nearly a month. We are being told by employees that the parent company, Lavatec, filed for bankruptcy. That is kind of all we know now. We are ready to help the employees, but we can't force them to come in." Naugatuck, Connecticut-based Lavatec, Inc., manufactures industrial laundry equipment with installations across the U.S. The Company filed for Chapter 11 bankruptcy protection on July 24, 2009 (Bankr. D. Conn. Case No. 09-32004). Dean W. Baker, Esq., at Law Offices of Dean W. Baker assists the Company in its restructuring efforts. American Laundry News says that Lavatec listed $3.5 million in assets and $5.5 million in debts. Lavatec estimated that it has 100 to 199 creditors, according to the report. LEAR CORP: Chamberlain Continues Patent Infringement Suit --------------------------------------------------------- Prior to the Petition Date, Chamberlain and Johnson Controls Interiors, LLC, commenced a suit against Lear for patent infringement in the U.S. District Court for the Northern District of Illinois. The Illinois Action was stayed by virtue of Lear's filing of Chapter 11 filing. Johnson Controls asserts that it is the legal and exclusive licensee of the "patents-in-suit." Johnson and Chamberlain entered into a license agreement dated October 1, 2009. Under the agreement, Chamberlain granted to Johnson Controls an exclusive worldwide license to certain intellectual property for Johnson Controls to make, use, sell, offer for sale, import or otherwise commercialize the products sold by Johnson Controls within the field of use defined as radio frequency transmitters or transceivers developed for or sold to automotive original equipment manufacturers for integration into vehicles. Chamberlain and Johnson Controls are asserting infringement of three patents owned by Chamberlain and exclusively licensed to Johnson Controls: * U.S. Patent No. 6,154,544 * U.S. Patent No. 6,810,123 * U.S. Patent No. 7,412,056 Karl R. Fink, Esq., at Fitch, Even, Tabin & Flannery, in Chicago, Illinois, attorney of The Chamberlain Group, says that when Lear could not obtain a legal license to the patents-in-suit, it copied Chamberlain's patented design, so that Lear's transmitters could open and close Chamberlain garage door openers. According to Mr. Fink, to copy the patented design, Lear gave directives to certain of its engineer employees, as well as contracted with a group of former Johnson Controls employees, to copy Chamberlain's patented design for Lear's product, Car2U(R). Lear claims that it "designed around" the patents-in-suit by avoiding the use of binary numbers. However, Mr. Fink argues that to operate Chamberlain garage door openers, Lear's Car2U(R) product must produce the signal that is expected by a Chamberlain garage door opener, otherwise the door would not open. Mr. Fink asserts that Lear continues to sell its infringing products into the market, causing damage to Chamberlain and Johnson Controls including, at least, lost profits, price erosion, and lost royalties. According to Mr. Fink, the damages exceeded $88 million as of the Petition Date, and they continue to accrue due to Lear's ongoing infringement. The willfulness of Lear's infringement warrants trebling, which results in prepetition liability in excess of $264 million, and requires tripling of the administrative expense claims Plaintiffs would otherwise hold. Thus, Chamberlain and Johnson Controls seek: (a) a judgment that the '544, '123, and '056 Patents are valid, enforceable and infringed by Lear; (b) a judgment that the intellectual property that is subject to the '544, '123 and '056 Patents is not property of Lear's estate in the Bankruptcy Case; (c) a permanent injunction enjoining Lear, its officers, directors, agents, employees, servants, attorneys, licensees, successors, assigns, customers, and those persons acting in active concert or participation with Lear from infringing, inducing infringement of, and contributorily infringing the '544, '123, and '056 Patents; (d) an accounting and an award of damages arising prior to the Petition Date as a result of Lear's infringement, inducing infringement of, or contributory infringement of the '544, '123, and '056 Patents, together with pre-judgment and post-judgment interest; (e) an accounting and an award of damages arising on or after the Petition Date as a result of Lear's infringement, inducing infringement of, or contributory infringement of the '544, '123, and '056 Patents, together with pre- judgment and post-judgment interest; (f) judgment that the damages so adjudged be trebled; (g) a judgment that Chamberlain and Johnson Controls be awarded their reasonable attorneys' fees, costs and expenses incurred in the action prior to the Petition Date; (h) judgment that, pursuant to 35 U.S.C. Section 285, Chamberlain and Johnson Controls be awarded their reasonable attorneys' fees, costs and expenses incurred in the action on and after the Petition Date; (i) allowance of all amounts arising prior to the Petition Date as claims in the Bankruptcy Case; and (j) allowance of all those amounts arising on or after the Petition Date as administrative expenses in the Bankruptcy Case. Chamberlain and Johnson Controls demand trial by jury of all issues triable of right by a jury. Chamberlain and Johnson Controls Seek Withdrawal of Reference Chamberlain and Johnson Controls request that the reference to the U.S. Bankruptcy Court for the Southern District of New York of the Adversary Proceeding be withdrawn so that the complaint will be heard in the U.S. District Court for the Southern District of New York. They explain that the relief sought in their Complaint is entirely predicated upon Lear's violation of non-bankruptcy federal patent law. The Plaintiffs assert that because resolution of the patent infringement proceeding will require substantial consideration of non-bankruptcy federal law, the judicial code requires that the reference be withdrawn. 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 tapped as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restructuring 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 $1,270,800,000 against debts of $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: Kirkland & Ellis Bills $919,000 for July 7-31 Work ------------------------------------------------------------- Pursuant to Sections 330 and 331 of the Bankruptcy Code, these professionals hired in Lear Corp. and its affiliates' bankruptcy cases filed interim fee applications: Professional Period Fees Expenses ------------ ------ ---- -------- Brooks Kushman P.C. 07/07/09- 07/31/09 $136,132 $53,553 Bodman LLP 07/01/09- 07/31/09 27,760 863 Winston & Strawn LLP 07/01/09- 07/31/09 212,846 10,976 Kirkland & Ellis LLP 07/07/09- 07/31/09 919,732 61,916 Alvarez & Marsal North 07/07/09- America, LLC 07/31/09 642,822 26,980 Ernst & Young LLP 07/07/09- 07/31/09 714,375 0 Curtis, Mallet-Prevost, 07/07/09- Colt & Mosle LLP 07/31/09 43,336 854 Alvarez & Marsal serves as special advisor to the Debtors. Kirkland & Ellis serves as attorneys for the Debtors. Winston & Strawn serves as special counsel to the Debtors. Brooks Kushman serves as special counsel to the Debtors. Bodman LLP serves as special Michigan counsel to the Debtors. Ernst & Young serves as the Debtors' auditors. Curtis Mallet serves as conflict counsel to the Debtors. 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 tapped as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restructuring 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 $1,270,800,000 against debts of $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: Reaches Agreement With Rozmor Land Company ----------------------------------------------------- Rozmor Land Company and Lear Corp. have agreed that the automatic stay imposed under Section 362 of the Bankruptcy Code, will be lifted, without further order of the Court, to permit Rozmor to provide the Debtors with a written notice of acceleration of any and all amounts due to Rozmor under the Note, solely for the purposes of allowing Rozmor to draw on the Letter of Credit. As previously reported, Lear Corporation entered into an agreement with Rozmor, whereby the Debtor agreed to purchase from Rozmor certain real property aggregating $6,730,951, pursuant to the Real Estate Purchase Agreement. Section 2 of the Agreement provides that the remaining balance of the Purchase Price will be paid pursuant to a corresponding promissory note and that the periodic outstanding balance of, and all amounts due and to become due to Rozmor under the Note, will be secured by a letter of credit. In accordance with the agreement, the Debtor waive any further right to cure any payment default under the Note or the Real Estate Purchase Agreement, and Rozmor may provide the written notice of acceleration. Moreover, Rozmor will submit a draw request with respect to the Letter of Credit within 15 days from the entry of the Court's order approving the parties' Stipulation. Immediately upon receipt of any funds from its draw on the Letter of Credit, Rozmor will first apply the Funds to all principal and interest payable under the Note. Within three business days of the application of the Funds, Rozmor will provide the Debtors with written notice demonstrating application of the Funds, including any remaining amount of principal and interest owing after application of those Funds. The Debtors and Rozmor mutually agree, immediately upon: (i) Rozmor's exercise of its right to draw on the Letter of Credit; and (ii) receipt by Rozmor of indefeasible payment of all principal and interest payable under the Note, from the proceeds of the Letter of Credit, which payment will fully and finally satisfy the Note, Letter of Credit, Real Estate Purchase Agreement and all other related documents, to fully, completely and finally release any and all claims, causes of action or otherwise with respect, or relating to, or in connection with the Note, the Letter of Credit, the Real Estate Purchase Agreement or any other related document and any rights or remedies which (a) Rozmor and any of its affiliates, predecessors or successors have or may have against the Debtors, as reorganized pursuant to and under a plan of reorganization, or any successor, by merger, consolidation, or otherwise and their predecessors, successors, directors, officers and employees and (b) the Debtors or the Reorganized Debtors have or may have against Rozmor and its predecessors, successors, directors, officers and employees; provided that, after application of the Funds received from the draw on the Letter of Credit to the principal and interest payable under the Note, if any balance of principal and interest under the Note remains applied, Rozmor will retain any claim against the Debtors for the Balance and Debtors will reserve all rights to object to or contest any assertion by Rozmor of the claim for the Balance. 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 tapped as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restructuring 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 $1,270,800,000 against debts of $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: Schedules of Assets and Liabilities ---------------------------------------------- A. Real Property Land $39,863,074 Buildings & Leasehold Improvements 116,753,587 Buildings - Capital Lease 13,290,848 Accumulated Depreciation - Buildings & leasehold improvements (60,467,402) Capital Lease Amortization - Buildings (7,589,437) B. Personal Property B.1 Cash on hand 72,208 B.2 Bank Accounts 118,507,275 See http://bankrupt.com/misc/LearCorp_BankAccounts.pdf B.3 Security Deposits 0 B.4 Household goods 0 B.5 Collectibles 0 B.6 Wearing apparel 0 B.7 Furs and Jewelry 0 B.8 Firearms and other equipment 0 B.9 Interests in Insurance Policies Undetermined See http://bankrupt.com/misc/LearCorp_Insurance.pdf B.10 Annuities 0 B.11 Interests in an education IRA 0 B.12 Interests in IRA, ERISA or other Pension Plans 0 B.13 Business Interests and stocks Undetermined B.14 Interests in partnerships Undetermined B.15 Government and Corporate Bonds 0 B.16 Accounts Receivable Aggregated 3rd Party A/R (10,330,951) Intercompany A/R - Debtor Entity 1,833,419,114 Intercompany A/R - NonDebtor Entity 3,762,215,033 B.17 Alimony 0 B.18 Other Liquidated Debts 0 B.19 Equitable or Future Interests 0 B.20 Interests in estate of a debt benefit plan Estate Preservation Plan 6,174,973 B.21 Other Contingent & Unliquidated claims Undetermined B.22 Patents and other intellectual property Undetermined See http://bankrupt.com/misc/LearCorp_IntellectualProp.pdf B.23 Licenses, franchises, and other intangibles Undetermined B.24 Customer lists or other compilations 0 B.25 Vehicles 0 B.26 Boats, motors, and accessories 0 B.27 Aircraft and accessories 0 B.28 Office equipment, furnishings and supplies 0 B.29 Machinery Machinery & Equipment - Purchase 225,809,609 Accumulated Depreciation - M&E (209,243,094) B.30 Inventory Raw Material 5,647,442 Work In process 213,318 Finished goods 641,240 Inventory Reserves (1,734,956) B.31 Animals 0 B.32 Crops 0 B.33 Farming Equipments and implements 0 B.34 Farm supplies, chemicals, and feed 0 B.35 Other Personal Property Customer Tooling and Engineering 6,407,359 Long term receivable 6,232,863 Hedge Fund (312,716) Prepaid Expenses 10,972,348 Miscellaneous Receivables 2,874,291 Other assets 6,162,436 Pension Plan Non-Qualified-Rabbi Trust 2,499,436 Restricted Cash 25,129,356 Deferred Finance Fee 7,708,333 Other Deferred Charge 5,839,000 TOTAL SCHEDULED ASSETS $5,904,754,586 ======================================================= C. Property Claimed as Exempt D. Secured Claim JP Morgan Chase Bank, NA $985,000,000 JP Morgan Chase Bank, NA 1,192,003,208 See http://bankrupt.com/misc/LearCorp_ScheduleD.pdf E. Unsecured Priority Claims Undetermined See http://bankrupt.com/misc/LearCorp_UnsecuredPriority.pdf F. Unsecured Non-priority Claims Bank of New York 400,000,000 Bank of New York 298,000,000 Bank of New York 589,250,000 Lear European Operations 1,047,100,816 Others 799,178,989 See http://bankrupt.com/misc/LearCorp_NonPriority.pdf TOTAL SCHEDULED LIABILITIES $5,310,533,012 ======================================================== *** Actual computation of the figures under Schedule B total $5,804,903,916, that when added to figures under Schedule A would result to Total Assets of $5,906,754,586. 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 tapped as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restructuring 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 $1,270,800,000 against debts of $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: Statement of Financial Affairs ----------------------------------------- Matthew J. Simoncini, senior vice president and chief financial officer of Lear Corporation, discloses that the company has earned income from employment, trade or from operation of business within two years before the Petition Date: Source Amount ------ ------ 01/01/2007-12/31/2007 $963,201,265 01/01/2008-12/31/2008 485,734,608 01/01/2009-07/07/2009 97,311,598 According to Mr. Simoncini, Lear Corporation's non-operating income within two years before the Petition Date includes: Source Amount ------ ------ 01/01/2007-12/31/2007 $11,432,634 01/01/2008-12/31/2008 60,852,079 01/01/2009-07/07/2009 (40,932,200) The Debtor made payments or transfers to creditors within 90 days before the Petition Date aggregating $610,435,964. Among the largest payments are: Name of Creditor Amount ---------------- ------ Amerigon $3,698,734 Anderson Cook Inc. 1,358,977 Anthem Blue Cross and Blue Shield 1,177,146 AON (Bermuda) Ltd. 2,572,943 AON Risk Services Central Inc. 16,555,222 Aunde Mexico SA de CV 1,868,521 Autoliv ASP Inc. 1,749,903 Autoliv Mexico SA de CV 1,482,750 Autotek Mexico SA de CV 2,818,630 BAE Industries 5,206,519 Bank of America 1,046,025 Bank of America, N.A. 4,776,032 Banque Paribas 2,627,572 Blue Cross Blue Shield of MI 12,065,033 BOS Automotive Products 2,163,995 Bridge of Weir Leather Company Ltd. 2,559,720 Brooks and Kushman P.C. 1,155,557 Brown Corporation 6,943,961 Brown Corporation De Saltillo 2,534,298 Burnside Acquisition LLC 1,040,869 Canadian General - Tower Ltd. 5,653,004 Cass Information Systems 33,665,623 Catalyst RX 3,975,017 Celestica Philippines Inc. 2,183,365 Citibank Corporate Cards 4,354,052 CRH-DAS LLC 13,951,750 Daewoo International 1,929,719 Delphi Delco Electronics 5,471,502 Dura Automotive Systems Inc. 1,499,447 Eagle Ottawa LLC 8,126,835 Fisher Dynamics 7,035,583 Moelis & Company 1,410,000 Molex Automotive 1,670,277 A complete list of the payments is available for free at: http://bankrupt.com/misc/LearCorp_Sofa3b.pdf Lear Corporation also disclosed that it made payment to insiders, a list of which is available for free at: http://bankrupt.com/misc/LearCorp_Sofa3c.pdf The company was a party to approximately 100 lawsuits and administrative proceedings pending in non-bankruptcy courts within one year before the Petition Date. A list of the lawsuits is available for free at: http://bankrupt.com/misc/LearCorp_Sofa4a.pdf Within one year before the Petition Date, the Debtor gave gifts or made charitable contributions. Among the recipients of the gifts are: Name Amount ---- ------ Arts League of Michigan $60,000 American Cancer Society 48,000 College For Creative Studies 25,000 Detroit Renaissance 145,000 Focus: Hope 50,000 Northwood University 100,000 The Henry Ford 90,000 United Way 204,000 Wayne State University 50,000 Inforum Center for Leadership 10,000 The Company further disclosed that it incurred losses from damaged properties within one year immediately preceding the Petition Date: Date of Loss Value ------------ ----- 05/18/09 $53,000 Various 21,254 08/05/08 6,559 01/28/09 14,000 04/03/09 1,647 07/11/09 40,000 Within one year before the Petition Date, the Company also made payments or transfers to persons, including attorneys, for consultation concerning debt consolidation, bankruptcy law or preparation of a petition. A list of these payments may be accessed for free at: http://bankrupt.com/misc/LearCorp_Sofa9.pdf 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 tapped as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restructuring 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 $1,270,800,000 against debts of $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: U.K. Administrator to Appeal London Court Ruling ----------------------------------------------------------------- PricewaterhouseCoopers LLP staff acting as joint administrators to Lehman Brothers International (Europe) said that on July 14 they made an application to the U.K. High Court concerning the jurisdiction of the court to sanction a scheme of arrangement dealing with property held on trust by LBIE. A public hearing of the Application took place before Mr. Justice Blackburne at the Royal Courts of Justice on July 29 and 30. Counsel for LBIE and the Joint Administrators and counsel for GLG Partners LP, as a representative of the scheme working group of creditors, made representations in support of the Application. Counsel for the London Investment Banking Association made representations in opposition of the Application. The High Court handed down its judgment in relation to the Application on August 21. Mr. Justice Blackburne concluded that, "Insofar as the scheme is concerned with the distribution by LBIE of property held or controlled by it on trust for its clients (and seeks to do so in ways that will vary or, in some cases, extinguish those rights), there is no jurisdiction to enable this to be done, so as to bind dissentients . . ." under Part 26 of the Companies Act 2006. Mr. Justice Blackburne has, however, given leave to appeal. In his judgment he noted, "Given the exceptional problems that the administrators face in dealing with client assets and the very great effort that they have devoted to devising a means . . . to bring about speedy return of those assets, this is not a conclusion which I am happy to reach. But I must set out the law as I see it, not as I wish it to be." The Joint Administrators, having consulted with their legal advisers and representatives of the creditors' working group, intend to appeal the decision. In parallel, the Administrators, their legal advisers and representatives of the creditors working group will be assessing whether the current scheme can be revised to eliminate the jurisdictional problem and still facilitate the return of assets to clients or whether an alternative approach incorporating many features proposed in the current scheme should be adopted. The Joint Administrators are also continuing to return assets to clients through bilateral negotiations. The return of client assets remains a core objective of the Joint Administrators. The proposed scheme sought to materially reduce the time required to return assets to clients. The judgment is a disappointment but does not affect our commitment to deliver the most effective solution. 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) LEHMAN RE: Court Adjourns Recognition Hearing to September 15 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has adjourned the hearing on recognition of the winding up of Lehman Re Ltd. commenced under the Bermuda Companies Act 1981 before the Supreme Court of Bermuda, to 2:00 p.m. on September 15, 2009. The recognition hearing was previously scheduled for 10:00 a.m. on September 9, 2009. As reported in the TCR on August 18, 2009, Peter C.B. Mitchell and D. Geoffrey Hunter, as provisional liquidators of the Company, filed on August 6, 2009, a petition pursuant to Chapter 15 of the U.S. Bankruptcy Code with the Bankruptcy Court seeking recognition of the winding-up of the Company commenced under the Bermuda Companies Act 1981 before the Supreme Court of Bermuda as a "foreign main proceeding," or as a "foreign nonmain proceeding" as defined in Section 1502(4) and 1502(5) of the Bankruptcy Code. Copies of the petition and related documents are available to parties in interest on the Bankruptcy Court's Electronic Case Filing System, which can be accessed from the Bankruptcy Court's Web site at http://www.nysb.uscourts.govor upon written request to the petitioners' United States counsel (including by facsimile or e-mail) addressed to: Cadwalder, Wickersham & Taft LLP One World Financial Center New York, NY 10281 Fax: (212) 504-6666 Attn: Betty Comerro Betty.Comerro@cwt.com Any party in interest wishing to submit a response or objection to the petition or the relief requested by the petitioners must do so in accordance with the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure, in writing and setting forth the basis therefor, which response or objection must be filed electronically with the Court by registered users of the Court's electronic case filing system in accordance with General Order M-242 (a copy of which may be viewed on the Court's Web site) and by all other parties in interest on a 3.5 inch disc, preferably in Portable Document Format (PDF), Word Perfect or any other Windows-based word processing format. A hard copy of any response or objection must be sent to the Chambers of the Honorable James M. Peck, United States Bankruptcy Judge and served upon the petitioners' United States counsel, so as to be received no later than 4:00 p.m. on September 1, 2009. In addition to filing a written objection, all parties in interest opposed to the petition must appear at the hearing at the time and place set forth above. Lehman Re Ltd. is a Bermuda-based insurance unit of Lehman Brothers Holdings Inc. Lehman Re's petition for liqudation was filed with the Supreme Court of Bermuda on September 23, 2008. 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) MAGNACHIP SEMICONDUCTORS: Creditors Group File Competing Plan ------------------------------------------------------------- Creditors of MagnaChip Semiconductor LLC and its affiliates may now be able to choose between two proposals on how to pay off their claims after the Official Committee of Unsecured Creditors filed a proposed Chapter 11 plan for MagnaChip. MagnaChip has filed its own Chapter 11 plan. Under its Plan, the Creditors Committee seeks to reorganize the Debtors' operations and provide for the satisfaction of claims against the Debtors through (a) the issuance of a new term loan in full and complete satisfaction of the first lien lender claims aggregating $95 million, (b) the distribution of 5% of the new stock and rights to participate in a $25 million offering for new common stock to holders of second lien notes aggregating $500 million, (d) distribution, as a "gift" from second lien noteholders, cash equivalent to 10% of their allowed claims to holders of unsecured claims expected to aggregate $3.23 million, (e) distribution, as a "gift" from second lien noteholders, of 1% of the new stock plus warrants to purchase 5% of the New stock with a strike price equivalent to a $600 million total enterprise value to holders of $250 million subordinated notes claims. Under the Committee's Plan, first lien lenders will recover 100% of their allowed claims, and the unsecured creditors will recover 10%. The estimated percentage recoveries for second lien noteholders and subordinated noteholders were not provided. The Creditors Committee notes that recoveries to all creditors under the Committee Plan substantially exceed the recoveries to creditors under the Debtors' Plan. Lowenstein Sandler PC is general insolvency counsel to the Creditors Committee. Copies of the Committee's Plan and the explanatory Disclosure Statement are available for free at: http://bankrupt.com/misc/MagnaChip_Panel_DiscStatement.pdf http://bankrupt.com/misc/MagnaChip_Panel_Plan.pdf Judge Peter Walsh previously entered an order allowing the Creditors Committee to file a rival plan. MagnaChip Plan MagnaChip's Chapter 11 plan is co-sponsored by UBS AG, Stamford Branch, as agent to the first lien lenders. The Debtors' Plan provides for the satisfaction of Claims against the Debtors and the enforcement of first lien lender secured Claims through the authorization by the Debtors of the sale of substantially all of the assets of mostly non-debtor subsidiaries located in Korea and other foreign countries. Under MagnaChip's plan, creditors will receive these recoveries: Estimated Creditor Class Treatment of Claims Recovery -------------- ------------------- -------- First Lien Payment from most 70.6% Lenders Owed of the proceeds $95 Million of the sale Second Lien Noteholders Payment from the $1 million 0.2% owed about allocated to unsec. Creditors $500 million and noteholders Unsec. Creditors Payment from the $1 million 0.1% Owed $3.2 million allocated to unsec. creditors and noteholders. The 0.1% recovery by unsecured creditors is contingent on their support of the plan. Unsecured creditors would get nothing if they vote to reject the plan. About MagnaChip Semiconductor Headquartered in South Korea, MagnaChip Semiconductor LLC -- http://www.magnachip.com/-- is a leading, Asia-based designer and manufacturer of analog and mixed-signal semiconductor products for high volume consumer applications. The Company has a broad range of analog and mixed-signal semiconductor technology and intellectual property, supported by its 29-year operating history, large portfolio of registered and pending patents and extensive engineering and manufacturing process expertise. Citigroup Venture Capital Equity Partners LP was part of the investor group that acquired MagnaChip in 2004 from Hynix Semiconductor Inc. MagnaChip Semiconductor S.A. and five other entities filed for Chapter 11 on June 12, 2009, in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 cases are jointly administered under Case No. 09-12008, MagnaChip Semiconductor Finance Company. Judge Peter J. Walsh handles the case. Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. Howard A. Cohen, Esq., at Drinker Biddle & Reath serves as counsel for the official committee of unsecured creditors. Omni Management Group LLC is the Debtors' claims agent. In their formal schedules, MagnaChip Semiconductor S.A. disclosed $951,917,782 in assets against $845,903,186 in debts while MagnaChip Semiconductor B.V. disclosed assets of $762,465,739 against debts of $1,800,612,084. MCG CAPITAL: Fitch Affirms Issuer Default Rating at 'BB+' --------------------------------------------------------- Fitch Ratings has affirmed MCG Capital Corporation's ratings: -- Long-term Issuer Default Rating at 'BB+'; and -- Senior unsecured debt at 'BB+'. The Rating Outlook remains Negative. Approximately $60 million of unsecured debt is affected by this action. The ratings affirmation reflects MCG's reduced funding flexibility as a result of extended disruptions in the capital markets and the expectation that the company will be unable to grow its portfolio of investments until capital market conditions improve and investor confidence is restored. Funding capacity is currently limited to unrestricted cash, cash flows from portfolio investments, and available capacity on secured facilities, although actual draws will be limited by leverage restrictions and collateral requirements. Still, MCG has been successful de-leveraging its balance sheet in the last year in order to offset mounting unrealized portfolio depreciation. The company has completed $198.3 million of asset sales since July 2008, including 21 that were completed at 99.6% of fair value and one distressed sale of TNR Holdings at 42.3% of its most recently reported fair value. The asset coverage ratio amounted to 209% as of July 29, 2009, up from 206% at June 30 and 199% at the end of the first quarter, and above the 180% debt covenant requirement, which was renegotiated in February 2009. Valuation multiples did show signs of stabilization in the second quarter, but Fitch believes the weaker economy's impact on underlying portfolio performance will yield further unrealized portfolio depreciation in the latter half of 2009. As a result, Fitch expects MCG will continue to de-leverage with further asset sales as opportunities arise. Negative rating action could be triggered by further unrealized portfolio depreciation which is not tempered by asset sales and reductions in leverage and/or deterioration in the company's liquidity position. Conversely, rating stability will be driven by an improvement in market spreads, valuation multiples, and underlying portfolio performance which result in unrealized portfolio appreciation, combined with the ability to access the debt and equity markets to raise investment capital when market conditions improve, which should yield better operating performance. MERRILL LYNCH: BofA to Release More Info on Settlement With SEC --------------------------------------------------------------- Jess Bravin at The Wall Street Journal reports that a Bank of America spokesperson said that the bank will comply with federal judge Jed S. Rakoff's request for more information on the bank's $33 million settlement with BofA over investor disclosures. As reported by the Troubled Company Reporter on August 25, 2009, Judge Rakoff refused to approve the settlement, saying that the amount isn't appropriate if BofA lied about billions in bonus payments before the merger. BofA denied that it misled shareholders about its approval of Merrill Lynch & Co. bonuses, saying that it was "widely understood" that billions of dollars would be awarded for 2008 performance, as Merrill disclosed its intention to pay those bonuses in separate federal filings throughout 2008. Judge Rakoff said he needs more information on the accord between the bank and the U.S. Securities and Exchange Commission, which filed the suit. If the SEC is correct that BofA lied about whether to pay the bonuses, then the proposed settlement isn't "remotely reasonable," Judge Rakoff said. Judge Rakoff asked for further filings by August 24 and said he wouldn't be able to approve the settlement before September 9. Judge Rakoff, according to The Journal, has criticized the government in the SEC's $33 million settlement with BofA, saying that the government's justification for letting individual executives off the hook is "at war with common sense." Citing the BofA spokesperson, the report says that the SEC didn't find there was "willful misrepresentation" by the bank on the bonus issue. According to The Journal, the SEC said that it couldn't conduct a probe on executives' culpability because they said they depended on lawyers' advice. The SEC said that it would face "substantial obstacles" to building a case, unless the executives waived their right to keep the advice private, The Journal states. "It would seem that all a corporate officer who has produced a false proxy statement need offer by way of defense is that he or she relied on counsel," The Journal quoted Judge Rakoff as syaing. The Journal says that Wachtell, Lipton, Rosen & Katz represented BofA, while Shearman & Sterling represented Merrill in the case. John Madden, the Shearman partner involved in the negotiations, said the firm doesn't comment on clients. Based in Charlotte, North Carolina, Bank of America -- http://www.bankofamerica.com/-- is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The Company serves more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers support to more than 4 million small business owners. The Company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. The bank needed the government's financial help in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies with more than $1 trillion in assets under management. Merrill Lynch's operations are organized into two business segments: Global Markets and Investment Banking (GMI) and Global Wealth Management (GWM). As reported by the Troubled Company Reporter on March 27, 2009, Moody's Investors Service lowered the senior debt rating of Bank of America Corporation to A2 from A1, the senior subordinated debt rating to A3 from A2, and the junior subordinated debt rating to Baa3 from A2. The preferred stock rating was downgraded to B3 from Baa1. The holding Company's short-term rating was affirmed at Prime-1. MIA BELLA PROPERTIES: Case Summary & Largest Unsecured Creditor --------------------------------------------------------------- Debtor: Mia Bella Properties, LLC aka Silicon Valley Self Storage fka Overland Self Storage fka Silicon Valley Storage Solutions 5694 Mission Center Rd., #421 San Diego, CA 92108 Bankruptcy Case No.: 09-57051 Chapter 11 Petition Date: August 24, 2009 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Roger L. Efremsky Debtor's Counsel: Heinz Binder, Esq. Law Offices of Binder and Malter 2775 Park Ave. Santa Clara, CA 95050 Tel: (408) 295-1700 Email: heinz@bindermalter.com Roya Shakoori, Esq. Binder and Malter 2775 Park Ave. Santa Clara, CA 95050 Tel: (408) 295-1700 Email: roya@bindermalter.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor identified AICCO, Inc. with an insurance claim for $1,866 as its largest unsecured creditor. A full-text copy of the Debtor's petition, including a list of its largest unsecured creditor, is available for free at: http://bankrupt.com/misc/canb09-57051.pdf The petition was signed by John Milano, manager of the Company. MICHAELS STORES: Loan Amendment Won't Affect S&P's 'B-' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that Michaels Stores Inc.'s (B-/Stable/--) announcement that it amended its credit facility so that the company can issue secured or unsecured debt to refinance its current senior secured debt has no immediate impact on S&P's ratings or outlook on the company. The amendment does not affect the interest costs or the amount of debt of the company. If the company moves forward and issues debt to refinance its existing term loan, S&P would examine the terms of the new debt instruments and take any appropriate rating actions at that point. S&P would expect that the new debt would have higher interest costs than the company's current term loan, but the new debt would have a longer dated maturity which would provide the company additional financial flexibility. MIDWAY GAMES: Completes Sale of San Diego Studio, Foreign Units --------------------------------------------------------------- Midway Games Inc. and its wholly owned subsidiaries, Midway Home Entertainment Inc. and Midway Studios-Los Angeles Inc. said in an August 25 regulatory filing that on August 19 they completed the sale of the assets used in connection with and arising out of the operation of the video game design and development studio in the Registrant's San Diego, California facility to THQ Inc. The aggregate gross purchase price for the 11 U.S.C. Section 363 sale was increased $740,000 plus assumption of certain liabilities, pursuant to the sale order entered by the Bankruptcy Court on August 19, 2009. At this time, Midway Games is unable to determine whether or not a material impairment to its assets will be required as a result of the THQ Section 363 Sale. European Subsidiaries Stock Purchase On August 19, Midway Home Entertainment completed its the sale of all of the shares of its wholly-owned German subsidiary, Midway Games GmbH to F+F Publishing GmbH in a sale conducted under the provisions of 11 U.S.C. Section 363. Also on August 19, MHE completed its previously announced sale of all of the shares of its wholly-owned subsidiaries (i) Midway Games SAS, a company organized under the laws of France, and (ii) Midway Games Limited, an English limited liability private company ("MGL"), to Spiess Media Holding (UG). The aggregate purchase price for the shares of MGL and MGS was EUR1 allocated 50% towards the purchase of the shares of MGL and 50% towards the purchase of the shares of MGS. The purchase price for the shares of MGG was EUR1. In addition, pursuant to the terms of the Europe Purchase Agreements, it was a condition of closing that MHE and its affiliates enter into an Intercompany Agreement which was approved by the Court in connection with the approval of the Europe Purchase Agreements and resolved certain intercompany obligations so that there are no intercompany obligations outstanding among MGL, MGS, MGG and any of MHE or its affiliates. The Intercompany Agreement resulted in a payment of $1,700,000 from MGL to MHE at the closing of the F+F Section 363 Sale and the SMH Section 363 Sale. SMH was formed by Martin Spiess for the purpose of purchasing the shares of MGL and MGS. Until August 19, 2009, Mr. Spiess was a named executive officer of Midway Games and served as the Executive Vice President - International for MGL. On August 19, 2009, as a result of the SMH Section 363 Sale, Martin Spiess resigned as Executive Vice President-International of MGL and is no longer an employee or officer of any of Midway Games' affiliates. About Midway Games Midway Games Inc. (OTC Pink Sheets: MWYGQ), headquartered in Chicago, Illinois, with offices throughout the world, is a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. More information about Midway and its products can be found at http://www.midway.com/ The Company and nine of its affiliates filed for Chapter 11 protection on February 12, 2009 (Bankr. D. Del. Lead Case No. 09-10465). Michael D. DeBaecke, Esq., Jason W. Staib, Esq, and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, in Wilmington, Delaware; and Marc E. Richards, Esq., and Pamela E. Flaherty, Esq., at Blank Rome LLP, in New York, represent the Debtors in their restructuring efforts. Attorneys at Milbank, Tweed, Hadley & McCloy LLP and Richards, Layton & Finger, P.A. represent the official committee of unsecured creditors as counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims, noticing, and balloting agent. On July 10, 2009, Midway and certain of its U.S. subsidiaries completed the sale of substantially all of their assets to Warner Bros. Entertainment Inc. in a sale approved by the Court. The aggregate gross purchase price is approximately $49 million, including the assumption of certain liabilities. At June 30, 2009, the Debtors had $1.39 billion in total assets and $1.59 billion in total liabilities. A full-text copy of the Debtors' monthly operating report for the month ended June 30, is available at http://researcharchives.com/t/s?41c1 MOD HOSPITALITY: Earns $819,301 in Three Months Ended June 30 ------------------------------------------------------------- Mod Hospitality, Inc., posted a net income of $819,301 for three months ended June 30, 2009, compared with a net loss of $91,151 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $1.75 million compared with a net loss of $287,893 for the same period in 2008. The Company's balance sheet showed total assets of $5.72 million, total liabilities of $5.50 million and stockholders' equity of $218,832. As of June 30, 2009, the Company has an accumulated deficit of $4,436,810. The Company's management said there is substantial doubt about its ability to continue as a going concern. The management relates that an additional capital will be required to fund operations through the year ending Dec. 31, 2009, and beyond, as it attempts to generate increasing revenue. Management intends to raise capital through additional equity offerings. There can be no assurance that the Company will be successful in obtaining financing at the level needed or on terms acceptable to the Company. In addition, there is no assurance, assuming the Company is successful in raising additional capital, that the Company will be successful in achieving profitability or positive cash flow. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?42fb Mod Hospitality, Inc. (NASDAQ:MODY) fka PSPP Holdings Inc., through its three subsidiaries ECRV Hanover LeaseCo, LLC, ECRV Clinton LeaseCo, LLC, and ECRV FM LeaseCo, LCC, is engaged in hotel operations worldwide. The Company focuses on franchise and boutique operations throughout the country. NATIONAL CONSUMER: S&P Downgrades Counterparty Rating to 'BB-/B' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings on National Consumer Cooperative Bank, including the counterparty credit rating to 'BB-/B' from 'BBB-/A-3'. S&P also put the ratings on CreditWatch with negative implications. At the same time, S&P affirmed its 'AAA' rating on debt issued under the Temporary Liquidity Guaranty Program by NCB and its indirect thrift subsidiary NCB FSB. "The rating action reflects materially weaker financial flexibility and liquidity at NCB's parent company following the violation of financial covenants associated with its senior notes and credit facility (both unrated)," said Standard & Poor's credit analyst Rian M. Pressman, CFA. Per a forbearance agreement entered into with note holders and lenders on Aug. 14, 2009, NCB has no access to its credit facility, which had been the parent's primary source of contingent liquidity. Although NCB no longer originates new loans at its parent, existing commitments to lend are material relative to available liquidity. (NCB FSB uses deposits and Federal Home Loan Bank borrowings to fund new loans.) Management is working with note holders and lenders to amend its existing agreements or repay the outstanding amounts. (NCB owes approximately $105 million in senior notes and $165 million in credit facility borrowings.) S&P believes there is considerable uncertainty associated with possible outcomes from these negotiations. If NCB is unable to reach an agreement prior to the expiration of the forbearance agreement on Nov. 16, 2009, note holders and lenders can demand repayment. The CreditWatch reflects the uncertainty associated with the negotiations between NCB and its note holders and lenders. S&P may lower the rating by one or more notches if the outcome further weakens financial flexibility and liquidity at the parent company. Moreover, any outcome that results in NCB repaying its obligations at anything less than the promised amount may trigger a "selective default" counterparty credit rating per S&P's criteria for loan modifications and distressed exchanges. These rating actions would not affect the 'AAA' rating on debt issued under the TLGP. NEW CENTURY COS: KMJ Corbin Replaces Squar Milner as Auditor ------------------------------------------------------------ The Board of Directors of New Century Companies, Inc., has approved the engagement of KMJ Corbin & Company LLP as the Company's independent registered public accounting firm. On August 6, 2009, the Board of Directors resolved to dismiss Squar, Milner, Peterson, Miranda & Williamson, LLP, as the Company's independent registered public accounting firm, and Squar was notified of the action on the same day. During the fiscal years ended December 31, 2008, and December 31, 2007, and the subsequent interim period through August 6, 2009, the Company had (i) no disagreements, within the meaning of Item 304(a)(1)(iv) of Regulation S-K, with Squar on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, any of which that, if not resolved to Squar's satisfaction, would have caused it to make reference to the subject matter of any such disagreement in connection with its reports for such years and interim period and (ii) no reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K, except: A. Material weaknesses in internal control over financial reporting related to: (1) Not effectively implementing comprehensive entity- level internal controls, (2) Not having sufficient personnel with appropriate training and experience in accounting principles generally accepted in the United States of America, (3) Not adequately segregating the duties of certain accounting personnel due to an insufficient complement of staff, (4) Not implementing financial controls that were properly designed to meet the control objectives and address all risks of the processes or the applicable assertions of the significant accounts, (5) Due to the material weaknesses identified in its entity level controls, the Company did not test whether its financial activity level controls or its information technology general controls were operating sufficiently to identify a significant deficiency in the Company's ICFR, or a combination of such deficiencies, that may result in a reasonable possibility that a material misstatement of the Company's consolidated financial statements would not be prevented or detected on a timely basis. B. March 31, 2009 Form 10-Q: (1) The Form 10-Q for the three-month period ended March 31, 2009 was filed by the Company on May 20, 2009 before Squar had completed its review of the Company's unaudited condensed consolidated financial statements, and the filing did not contain any disclosure that Squar had not completed such review. The Company has determined that its unaudited condensed consolidated financial statements for the three-month period ended March 31, 2009, need to be restated, which will be reviewed by KMJ before an amended Form 10-Q is filed. The Company has authorized Squar to respond fully to the inquiries of KMJ concerning any matter. Squar's reports on the Company's consolidated financial statements for the fiscal years ended December 31, 2008, and December 31, 2007, do not contain any adverse opinion or disclaimer of opinion, nor are they qualified or modified as to uncertainty, audit scope, or accounting principles but contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern and a consistency paragraph regarding restatement of the following audited/unaudited consolidated financial statements of the Company: for each of the quarters during the nine-month period ended September 30, 2008, for the year ended December 31, 2007, for each of the quarters during the nine-month period ended December 31, 2007, for the year ended December 31, 2006 and for each of the quarters during the nine-month period ended December 31, 2006. The restatement also affected the results of operations for the fourth quarter of calendar 2007 and 2006. During the fiscal years ended December 31, 2008 and December 31, 2007, and the subsequent interim period through August 6, 2009, neither the Company nor anyone on its behalf has consulted with KMJ regarding (i) the application of accounting principles to a specific transaction, either completed or proposed, (ii) the type of audit opinion that might be rendered on the Company's consolidated financial statements, (iii) any matter that was the subject of a disagreement of the type described in Item 304(a)(1)(iv) of Regulation S-K, or (iv) any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K. New Century Companies, Inc., and its wholly owned subsidiary, New Century Remanufacturing, Inc., provides after-market services, including rebuilding, retrofitting and remanufacturing of metal cutting machinery. Once completed, a remanufactured machine is "like new" with state-of-the-art computers and the cost to the Company's customers is substantially less than the price of a new machine. The Company currently sells its services by direct sales and through a network of machinery dealers primarily in the United States. Its customers are generally medium to large sized manufacturing companies in various industries where metal cutting is an integral part of their businesses. The Company grants credit to its customers who are predominately located in the western United States. The Company trades on the OTC Bulletin Board under the symbol "NCNC." NEW CENTURY COS: To Restate March 2009 Financial Statements ----------------------------------------------------------- New Century Companies, Inc.'s management concluded on August 14, 2009, that the Company's interim consolidated financial statements for the three-month period ended March 31, 2009 contained in its quarterly report on Form 10-Q needed to be restated and should no longer be relied upon. The Company intends to file an amendment of its March 31, 2009 Form 10-Q, which will contain restated financial statements. In connection with the preparation of financial statements for the quarter ended June 30, 2009, the Company determined that the valuation of its derivative liabilities, certain contract related balances and a classification error, which it reported for the three-month period ended March 31, 2009 needed to be restated. Specifically, the financial statements will be restated to (i) change the valuation of our derivative liabilities, and (ii) record a credit to decrease the previously reported change in warrant value during the quarter ended March 31, 2009, and (iii) adjust our revenues, cost of sales, costs in excess of billings and billings in excess of costs in connection with our contract accounting. "Our management has discussed the matters . . . with members of our Board of Directors and our independent registered public accounting firm, KMJ Corbin & Company LLP," the Company said. New Century Cos. filed its June 30 quarterly report on Form 10-Q on August 14, 2009. The Company swung to a net loss of $858,020 for the six months ended June 30, 2009, from net income of $438,349 for the same period a year ago. It posted a net loss of $3,533,626 for the six month period ended June 30, 2009, from net income of $764,184 for the same period a year ago. As of June 30, 2009, the Company had $1,205,254 in total assets and $9,047,284 in total liabilities, resulting in $7,842,030 stockholders' deficit. As of June 30, 2009, the Company has an accumulated deficit of $16,455,000, had recurring losses, a working capital deficit of $8,108,000, and was also in default on its convertible notes. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company intends to fund operations through anticipated increased sales along with renegotiated or new debt and equity financing arrangements which management believes may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending December 31, 2009. Therefore, the Company will be required to seek additional funds to finance its long-term operations. The successful outcome of future activities cannot be determined at this time and there is no assurance that if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results. In response to these problems, management has taken these actions: -- The Company continues its aggressive program for selling machines. -- The Company continues to implement plans to further reduce operating costs. -- The Company is seeking investment capital through the public and private markets. -- The Company is seeking strategic acquisition candidates. A full-text copy of the Company's quarterly report is available at no charge at http://ResearchArchives.com/t/s?430d New Century Companies, Inc., and its wholly owned subsidiary, New Century Remanufacturing, Inc., provides after-market services, including rebuilding, retrofitting and remanufacturing of metal cutting machinery. Once completed, a remanufactured machine is "like new" with state-of-the-art computers and the cost to the Company's customers is substantially less than the price of a new machine. The Company currently sells its services by direct sales and through a network of machinery dealers primarily in the United States. Its customers are generally medium to large sized manufacturing companies in various industries where metal cutting is an integral part of their businesses. The Company grants credit to its customers who are predominately located in the western United States. The Company trades on the OTC Bulletin Board under the symbol "NCNC." NEXSTAR BROADCASTING: Admits to Being Highly Leveraged ------------------------------------------------------ Nexstar Broadcasting Group, Inc., acknowledged in a regulatory filing with the Securities and Exchange Commission that the Company and its affiliate Mission Broadcasting, Inc., "are highly leveraged, which makes the Company vulnerable to changes in general economic conditions. According to the Company, "Our and Mission's ability to meet the future cash requirements . . . depends on our and Mission's ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other conditions, many of which are beyond our and Mission's control. Based on current operations and anticipated future growth, we believe that our and Mission's available cash, anticipated cash flow from operations and available borrowings under the Nexstar and Mission senior credit facilities will be sufficient to fund working capital, capital expenditure requirements, interest payments and scheduled debt principal payments for at least the next twelve months. In order to meet future cash needs we may, from time to time, borrow under credit facilities or issue other long- or short-term debt or equity, if the market and the terms of our existing debt arrangements permit, and Mission may, from time to time, borrow under its available credit facility. We will continue to evaluate the best use of Nexstar's operating cash flow among its capital expenditures, acquisitions and debt reduction." As of June 30, 2009, Nexstar and Mission had total combined debt of $672.8 million, which represented 131.1% of Nexstar and Mission's combined capitalization. Nexstar and Mission's high level of debt requires that a substantial portion of cash flow be dedicated to pay principal and interest on debt which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes. Remainder Total of 2009 ----- --------- Nexstar senior credit facility $235,208,000 $879,000 Mission senior credit facility $173,224,000 $864,000 Senior subordinated PIK notes due 2014 $42,628,000 - 7% senior subordinated notes due 2014 $47,910,000 - 7% senior subordinated PIK notes due 2014 $143,600,000 - 11.375% senior discount notes due 2013 $49,981,000 - -------------- --------- $692,551,000 $1,743,000 The Company makes semiannual interest payments on its 7% (non-PIK) Notes of on January 15 and July 15 of each year. The 11.375% Notes began to accrue cash interest on April 1, 2008. The Company makes semiannual interest payments on its 11.375% Notes on April 1 and October 1. Its subordinated PIK notes due 2014 will begin paying cash interest in 2010 and its 7% senior subordinated PIK notes due 2014 will begin paying cash interest in 2011. Interest payments on Nexstar's and Mission's senior credit facilities are generally paid every one to three months and are payable based on the type of interest rate selected. The Company's senior secured credit facility agreement contains covenants which require its to comply with certain financial ratios, including: (a) maximum total and senior leverage ratios, (b) a minimum interest coverage ratio, and (c) a minimum fixed charge coverage ratio. The covenants, which are calculated on a quarterly basis, include the combined results of Nexstar Broadcasting and Mission. Mission's senior secured credit facility agreement does not contain financial covenant ratio requirements; however it does include an event of default if Nexstar does not comply with all covenants contained in its credit agreement. The senior subordinated notes and senior discount notes contain restrictive covenants customary for borrowing arrangements of this type. As of June 30, 2009, the Company was in compliance with all covenants contained in the credit agreements governing the senior secured credit facility and the indentures governing the publicly- held notes. On March 30, 2009, the Company closed an offer to exchange $143,600,000 of the 7% senior subordinated notes due 2014 in exchange for $142,320,761 7% senior subordinated PIK Notes due 2014. Based on the financial covenants in the senior secured credit facility, the PIK Notes are not included in the debt amount used to calculate the total leverage ratio until January 2011. In addition to the debt exchange, the Company has undertaken certain actions as part of its efforts to ensure it does not exceed the maximum total leverage and senior leverage ratios including 1) the elimination of corporate bonuses for 2008 and 2009, 2) the consolidation of various back office processes in certain markets, 3) the execution of a management services agreement whereby Nexstar operates seven stations in exchange for a service fee, and 4) the consummation of a purchase agreement on March 12, 2009, to acquire all the assets of KARZ and the consummation of a purchase agreement on May 1, 2009, to acquire all the assets of WCWJ. The Company's plans for 2009 include certain other cost containment measures, including one-week Company furloughs for all employees and reduction of discretionary operating expenses. The Company believes the consummation of the exchange offer combined with the actions, will allow it to maintain compliance with all covenants contained in the credit agreements governing the senior secured facility and the indentures governing the publicly held notes for a period of at least the next 12 months from June 30, 2009. "However, no assurance can be provided that the actions will be successful or that further adverse events outside of our control may arise that would result in our inability to comply with the debt covenants. In such event, we would consider a range of transactions or strategies to address any such situation. For example, we might decide to divest non-core assets, seek an amendment to our bank credit facility, refinance our existing debt or obtain additional equity financing. There is no assurance that any such transactions, or any other transactions, or strategies we might consider, could be consummated on terms satisfactory to us or at all," the Company said. The Company swung to a net loss $1,242,000 for the three months ended June 30, 2009, from net income of $3,877,000 for the same period a year ago. The Company reported net income of $4,810,000 for the six months ended June 30, 2009, from a net loss of $11,451,000 for the same period a year ago. As of June 30, 2009, the Company had $629,760,000 in total assets and in total liabilities of 789,371,000, resulting in stockholder's deficit of $159,611,000. In a news statement, the Company said net revenue for the quarter ended June 30, 2009, totaled $62.2 million, a 12.0% decline from the Company's record second quarter revenue of $70.6 million in the comparable period of 2008. The lower net revenue reflects the overall downturn in advertising spending due to the impact of the current economic recession as well as a $2.8 million or 77.0% reduction in gross political spending in a non-election year. The net revenue decline related to the economy and reduction in political spending in a non-election year more than offset a $4.1 million or 56.2% increase in total revenue derived from retransmission consent agreements, e-Media initiatives and management fees. A full-text copy of the Company's Form 10-Q report is available at no charge at http://ResearchArchives.com/t/s?42f4 Nexstar Broadcasting Group, Inc., as of June 30, 2009, owned, operated, programmed or provided sales and other services to 63 television stations (inclusive of the digital multi-channels), which includes affilates of NBC, ABC, CBS, Fox, MyNetworkTV and The CW in markets located in New York, Pennsylvania, Illinois, Indiana, Missouri, Texas, Louisiana, Arkansas, Alabama, Utah, Massachusetts, Florida, Montana and Maryland. Through various local service agreements, Nexstar provided sales, programming and other services to stations owned or operated by independent third parties. NOVADEL PHARMA: Receives $109,000 From Sale of Shares to Seaside ---------------------------------------------------------------- NovaDel Pharma Inc. on August 14, 2009, had its third closing of an offering pursuant to which Seaside 88, LP purchased 500,000 shares of the Company's Common Stock at a price per share of $0.23 having an aggregate value of $113,710. The Company received net proceeds of $109,000, after deducting commissions and $1,500 in non-accountable expenses, pursuant to the terms of the parties' Agreement. On July 31, 2009, the Company had its second closing of the Offering pursuant to which Seaside purchased 500,000 shares of the Company's Common Stock at a price per share of $0.22 having an aggregate value of approximately $111,665, and, the Company received net proceeds of approximately $107,000, after deducting commissions and $1,500 in non-accountable expenses, pursuant to the terms of the Agreement. In June 2009, NovaDel entered into a Common Stock Purchase Agreement with Seaside, whereby the Company agreed to issue and sell to Seaside 500,000 shares of the Company's common stock, $0.001 par value per share once every two weeks for 26 closings over a 52-week period. Pursuant to the terms of the Agreement, at the initial closing, the offering price of the Common Stock equaled 87% of the volume weighted average trading price of the Common Stock during the trading day immediately prior to the initial closing date. At each subsequent closing, on each 14th day thereafter, the offering price of the Company's Common Stock will equal 87% of the volume weighted average trading price of the Common Stock for the 10-day trading period immediately preceding each subsequent closing date. If, with respect to any subsequent closing, the volume weighted average trading price of the Company's Common Stock for the three trading days immediately prior to such closing is below $0.25 per share, then the particular subsequent closing will not occur and the aggregate number of Shares to be purchased shall be reduced by 500,000 shares of Common Stock. Novadel posted a net loss of $1,701,000 for the three months ended June 30, 2009, from a net loss of $3,202,000 for the same quarter a year ago. The Company had a net loss of $3,840,000 for the six months ended June 30, 2009, from a net loss of $5,174,000 for the same period a year ago. As of June 30, 2009, the Company had $2,358,000 in total assets and $9,146,000 in total liabilities, resulting in $6,788,000 in stockholders' deficit. In a news statement, the Company said as of June 30, 2009, its cash and cash equivalents were $500,000. The Company had negative working capital of $3.6 million as of June 30, 2009, as compared to working capital of $100,000 as of December 31, 2008, representing a net decrease in working capital of $3.7 million, principally due to the net cash used in operations of $2.8 million and $1.0 million payment to ProQuest against the First Tranche Notes. The Company issued $4.0 million of secured convertible notes to ProQuest Investments, II, L.P., and related entities, consisting of approximately $1.5 million of notes issued on May 30, 2008, and $2.5 million of notes issued on October 17, 2008. On April 29, 2009 the Company remitted $1.0 million to ProQuest against the May 30, 2008 First Tranche Notes. As of June 30, 2009, the secured convertible notes balance is $3.0 million. The Company acknowledged it has a history of losses. As a result, the Company's independent registered public accounting firm in their audit report has expressed substantial doubt about the Company's ability to continue as a going concern. The Company believes that the cash inflows that have been generated from the convertible note financing and any additional potential cash inflows that may be received during 2009 will improve its ability to continue its operations as a going concern. Continued operations are dependent on the Company's ability to complete product licensing agreements, equity or debt financing activities or to generate profitable operations. The capital formation activities may not be available or may not be available on reasonable terms. A full-text copy of the June 2009 Quarterly Report is available at no charge at http://ResearchArchives.com/t/s?430e About Novadel Pharma Flemington, New Jersey-based NovaDel Pharma Inc. (NYSE AMEX: NVD) -- http://www.novadel.com/-- is a specialty pharmaceutical company developing oral spray formulations for a broad range of marketed drugs. The Company's proprietary technology offers, in comparison to conventional oral dosage forms, the potential for faster absorption of drugs into the bloodstream leading to quicker onset of therapeutic effects and possibly reduced first pass liver metabolism, which may result in lower doses. Oral sprays eliminate the requirement for water or the need to swallow, potentially improving patient convenience and adherence. The Company filed with the Securities and Exchange Commission its Annual Report for the year ended December 31, 2008, which included an audit opinion with a "going concern" explanatory paragraph. The going-concern explanatory paragraph from NovaDel's independent registered public accounting firm -- J.H. Cohn LLP in Roseland, New Jersey -- expressed substantial doubt, based upon current financial resources, as to whether NovaDel can continue to meet its obligations beyond 2009 without access to additional working capital. NOVADEL PHARMA: Receives $150,000 From Velcera on License Deal -------------------------------------------------------------- NovaDel Pharma Inc., received on August 17, 2009, a milestone payment of roughly $150,000 from Velcera, Inc., relating to its License and Development Agreement with Velcera dated June 22, 2004. The Agreement provides Velcera with a license to develop and commercialize animal health products using the Company's buccal spray delivery technology. Steve Ratoff, the Company's CEO, says, "I am very pleased to see one of our partners, Velcera, Inc., continue to move forward on development efforts utilizing NovaDel's proprietary oral spray technology." The milestone payment resulted from Velcera's recently announced global licensing agreement for the first canine pain management product delivered in a transmucosal mist form. According to Dennis Steadman, CEO of Velcera, "Pet health has been a growth market attracting increased attention thanks in part to its relative insulation from economic downturns and this delivery technology can create pet medicines that provide superior convenience and compliance." About Novadel Pharma Flemington, New Jersey-based NovaDel Pharma Inc. (NYSE AMEX: NVD) -- http://www.novadel.com/-- is a specialty pharmaceutical company developing oral spray formulations for a broad range of marketed drugs. The Company's proprietary technology offers, in comparison to conventional oral dosage forms, the potential for faster absorption of drugs into the bloodstream leading to quicker onset of therapeutic effects and possibly reduced first pass liver metabolism, which may result in lower doses. Oral sprays eliminate the requirement for water or the need to swallow, potentially improving patient convenience and adherence. As of June 30, 2009, the Company had $2,358,000 in total assets and $9,146,000 in total liabilities, resulting in $6,788,000 in stockholders' deficit. The Company filed with the Securities and Exchange Commission its Annual Report for the year ended December 31, 2008, which included an audit opinion with a "going concern" explanatory paragraph. The going-concern explanatory paragraph from NovaDel's independent registered public accounting firm -- J.H. Cohn LLP in Roseland, New Jersey -- expressed substantial doubt, based upon current financial resources, as to whether NovaDel can continue to meet its obligations beyond 2009 without access to additional working capital. OMNOVA INC: S&P Changes Outlook to Stable, Affirms 'B' Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on OMNOVA Inc. to stable from negative. At the same time, S&P affirmed all ratings on the company including S&P's 'B' corporate credit rating. "The outlook revision reflects OMNOVA's improving operating performance and the strengthening of its financial profile," said Standard & Poor's credit analyst Henry Fukuchi. The outlook revision also incorporates improved cash flow generation and liquidity in recent quarters. Most of this has been attributable to falling raw material prices, particularly butadiene and styrene, and lower energy costs. Selling prices have also been favorable in recent quarters as several competitors exiting or shutting down production levels lowered industry capacity. Although operating results have been somewhat stronger in recent quarters, S&P remains concerned about weak volumes associated with end markets dependant on discretionary spending and pressures consistent with the overall economy. In addition, margins could suffer if key raw material prices increase, narrowing margins on an already low volume base. These factors coupled with uncertainty related to a substantial recovery in key end markets related to construction, housing refurbishment, and marine limit upward rating prospects in the near term. The stable outlook reflects S&P's expectation of improving operating trends and adequate liquidity in the near to intermediate term. S&P could revise the outlook to positive or raise the ratings slightly in the next 12 months if favorable operating trends and financial policies continue to support the current financial profile. S&P could lower the ratings or revise the outlook to negative in the next 12 months if operating results deteriorate, leading to a weakening in the financial profile. Specifically, S&P expects OMNOVA to maintain an FFO to total adjusted debt ratio of 15% or higher over a business cycle. The ratings could also come under pressure if OMNOVA's cash flow and liquidity weaken because of adverse working capital movements, if key end markets (such as paper, carpet, and upholstery manufacturing) weaken materially, or if the company makes a large, debt-financed acquisition that stretches the financial profile beyond S&P's expectations. In S&P's downside scenario, S&P could revise the outlook to negative or lower the rating if volumes decline by 20% or more or margins decrease 2 percentage points or more from current levels. This could result from unexpected demand declines in one of its segments or raw material cost pressures. At that point, S&P estimate that FFO to debt would decrease below 15%. ONE LAND LLC: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: One Land LLC dba County Inn & Suites at Calabasas 23627 Calabasas Road Calabasas, CA 91302 Case No.: 09-20989 Type of Business: The Debtor operates a hotel. Chapter 11 Petition Date: August 24, 2009 Court: United States Bankruptcy Court Central District Of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Robert M. Yaspan, Esq. Law Offices of Robert M. Yaspan 21700 Oxnard St., Ste .1750 Woodland Hills, CA 91367 Tel: (818) 905-7711 Fax: (818) 501-7711 Email: ryaspan@yaspanlaw.com Total Assets: $15,000,000 Total Debts: $15,196,799 The petition was signed by Kwi Hahn, the company's member manager. Debtor's List of 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Verizon California $106 Bank of America $175 HD Supply Facilities $336 Maintenance US Foodservice $368 Micros Systems, Inc. $745 Eagle I $1,268 COVAD Communications $1,300 Ldgenet Interac COrporation $1,301 AT&T Mobility $2,000 Day Dot $3,500 Kwi Hahn $5,000 Susan Chun $5,000 LVMWD $6,700 Southern California Edison $11,000 The Gas Company $11,000 Oceans 5 Investment, Inc. $15,000 Ducki Hahn $18,000 Carlson Hospitality Worldwide $140,000 Yong II Yoon $800,000 1622 Island Drive Fullerton, CA 92833 PEAK FITNESS: Shuts Robinhood Unit; Rival Gym to Accept Members --------------------------------------------------------------- Brent Campbell at FOX8 News reports that Peak Fitness Centers shut down its Robinhood location on Monday. Peak Fitness had more than 4,000 members at its Robinhood unit, FOX8 News relates. FOX8 News quoted Peak Fitness' Robinhood unit member Roger Hyman as saying, "They had no signs of anything closing. Everything was as scheduled." The Robinhood space was rented and after bankruptcy and restructuring, Peak Fitness failed to renegotiate lease terms, FOX8 News says, citing the gym's manager. According to FOX8 News, Peak Fitness memberships are being honored at a nearby Gold's Gym. The report says that the Better Business Bureau is working those with dues drafted out of their bank accounts to contact the financial institution responsible for the drafts and their bank immediately. Based in Charlotte, North Carolina, Fitness Management Group, Inc. -- http://www.peakfitnessclubs.com/-- is the holding company for Peak Fitness centers. Peak Fitness is a leading regional provider of fitness centers in North and South Carolina. The company currently has 17 locations and is the largest independently operated fitness club chain in the Carolinas. The Company filed for Chapter 11 bankruptcy protection on July 10, 2009 (Bankr. W.D. N.C. Case No. 09-31863). James H. Henderson, Esq., assists the Company in its restructuring efforts. The Company listed $100,001 to $500,000 in assets and $10,000,001 to $50,000,000 in debts. PENN OCTANE: Hasn't Paid Auditors, Can't File 2nd Quarter Report ---------------------------------------------------------------- Penn Octane Corporation's Form 10-Q for the quarter ended June 30, 2009, was required to be filed with the Securities and Exchange Commission by August 14, 2009. Penn Octane did not file the Form 10-Q by the required due date. Penn Octane's consolidated subsidiary, Rio Vista Energy Partners L.P. also did not file its Form 10-Q for the quarter ended June 30, 2009 by the required August 14 due date. Penn Octane consolidates Rio Vista in its financial statements and accordingly requires the Rio Vista financial information to prepare its financial statements. In addition, due to Penn Octane's continued cash flow constraints, Penn Octane has been unable to satisfy the outstanding amounts owed to its independent accountants for prior work performed and accordingly the Auditors have not yet commenced their review of the March 31, 2009 financial information. The Auditors have not made any review of the June 30, 2009 quarterly financial information. Penn Octane owns 75% of Rio Vista GP LLC, the general partner of Rio Vista. Penn Octane does not have operations other than managing the general partner of Rio Vista. Penn Octane does not have any estimate as to when the Auditors will be paid or when Rio Vista will be able to issue its quarterly financial reports which Penn Octane requires to complete its quarterly financial reports. Penn Octane believes that filing of its financial information and other reports will be made, if at all, only in the event that it has adequate funds to satisfy its currently outstanding obligations and its management determines that Penn Octane will have sufficient assets to allow it to resume and thereafter continue filing reports as required under the Securities Exchange Act. The Company filed its March 31, 2009 quarterly report on May 20. Its independent auditor was not engaged to and did not review the consolidated financial statements included prior to the deadline for filing the Form 10-Q, as required by Rule 10-01(d) of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended. As of March 31, 2009, the Company had $52,050,000 in total assets and total current liabilities of $40,224, and deferred income tax of $2,909,000. The Company posted a net loss of net loss of $1,358,000 for the quarter ended March 31, 2009. Rio Vista's Report of Independent Registered Public Accounting Firm on the consolidated financial statements of Rio Vista at December 31, 2008, contains an explanatory paragraph which describes an uncertainty about Rio Vista's ability to continue as a going concern. If Penn Octane's and Rio Vista's cash flows are not adequate to pay their obligations, Penn Octane or Rio Vista may be required to raise additional funds to avoid foreclosure by creditors. There can be no assurance that such additional funding will be available on terms attractive to either Penn Octane or Rio Vista or available at all. If additional amounts cannot be raised, existing debts restructured and cash flow is inadequate, Penn Octane or Rio Vista would likely be required to seek other alternatives which could include the sale of assets, closure of operations or protection under the U.S. bankruptcy laws. About Penn Octane Corporation Headquartered in Palm Desert, California, Penn Octane Corporation (NASDAQ:POCC) -- http://www.pennoctane.com/-- formerly known as International Energy Development Corporation buys, transports and sells liquefied petroleum gas for distribution in northeast Mexico, and resells gasoline and diesel fuel. The company has a long-term lease agreement for approximately 132 miles of pipeline, which connects ExxonMobil Corporation's King Ranch Gas Plant in Kleberg County, Texas and Duke Energy's La Gloria Gas Plant in Jim Wells County, Texas, to the company's Brownsville Terminal Facility. PHH CORPORATION: Fitch Keeps 'B' Short-Term Issuer Default Rating ----------------------------------------------------------------- Fitch Ratings has affirmed the long-term Issuer Default Rating and related ratings of PHH Corporation. Approximately $1.69 billion in debt is affected by this action. Fitch has affirmed these ratings: PHH Corporation -- Long-term IDR at 'BB+; -- Senior unsecured at 'BB+'; -- Short-term IDR at 'B'; -- Commercial paper at 'B'. The Rating Outlook is Negative. The ratings affirmation reflects PHH's improved financial flexibility as a result of recent thawing of the ABS markets for the commercial fleet asset class and positive trends emerging around profitability. PHH's capacity to issue up to $3.5 billion of notes under the Term Asset-Backed Liquidity Facility securities was a key element in rehabilitating its funding profile. However, as TALF and related programs phase out, PHH's funding challenges could resurface. At present, the company's reliance on relatively few wholesale funding providers and uneven operating performance continue to support a speculative grade rather than an investment grade rating. Fitch acknowledges the company's good competitive position in the fleet leasing and mortgage businesses. Prior concerns over weaker profitability have been alleviated somewhat by positive developments in the company's mortgage segment, driven by rational pricing and higher volumes. Recent improvements in this segment appear sustainable given the company's scale and significant changes in the competitive landscape. Rate volatility and other factors, however, will continue to impact the value of mortgage servicing rights which tend to skew financial results on a GAAP basis. The fleet leasing segment, on the other hand, is beginning to slowly recover from pricing mismatch on existing customers due to higher funding costs and lower volume from the lagging recession. Assuming continued execution in TALF related deals, Fitch believes PHH has adequate liquidity and funding vehicles to finance both businesses through the first half of 2010, when a $1.5 billion mortgage repurchase facility is up for renewal. More importantly, the company's $1.3 billion bank facility, a key source of unsecured debt used to supplement secured facilities matures in January 2011. The bank facility and most mortgage-related secured facilities are covered by a net worth covenant of approximately $1 billion. Headroom under this covenant increased substantially as net income improved significantly, both sequentially and year over year, for the quarter and six months ending June 30, 2009 compared to the same period ending 2008. Fitch believes a negative rating action could result if board and management changes produce a sudden strategy shift that adversely impacts bondholders or yield shareholder friendly initiatives. Ratings stability could emerge if operating performance improves and remains consistent to create a wider cushion under the net worth covenant. PHH currently operates in two businesses: mortgage operations and vehicle management services. On June 30, 2009, PHH reported $8.93 billion in assets. PHILADELPHIA NEWSPAPERS: Back to Mediation for DIP Loan Objections ------------------------------------------------------------------ The Philadelphia Inquirer reports that its publisher Philadelphia Newspapers L.L.C. and its creditors will resume mediation to resolve a dispute over interim debtor-in-possession financing. Lawrence G. McMichael, a lawyer for the Company, said the parties made progress August 24 but were unable to resolve the dispute over short-term financing. The Company, according to the Inquirer, is seeking permission to borrow $15 million to fund operations during the coming months. The Company's lenders -- including the largest senior lenders, Angelo Gordon & Co. and CIT Group -- objected, offering a similar loan, but on terms that would require their approval of any reorganization plan. The Company is opposed to that provision, saying the lenders want local management to "turn over the keys" to the Company. The parties will report the results of the mediation to Judge Stephen Raslavich on August 27. About Philadelphia Newspapers Philadelphia Newspapers -- http://www.philly.com/-- owns and operates numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications are the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its debtor-affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa. Case No. 09-11204). Proskauer Rose LLP is the Debtors' bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth Paxson LLP is the local counsel. The Debtors' financial advisor is Jefferies & Company Inc. The Garden City Group, Inc. serves as claims and notice agent. Philadelphia Newspapers listed assets and debts of $100 million to $500 million in its bankruptcy petition. PROPEX INC: Court Approves Fabrics' Settlement With PBGC -------------------------------------------------------- The Bankruptcy Court has approved a settlement reached by Fabric Estates Inc. and its affiliates with the Pension Benefit Guaranty Corp. As of the Petition Date, the Debtors were the administrator of their Cash Retirement Plan or "Cash Balance Plan" and their Cash Value Retirement Plan or "Cash Value Plan." Benefit accruals have been frozen under the Cash Balance Plan as of Sept. 1, 2005, and under the Cash Value Plan as of August 1, 2006. As previously reported, the Debtors sought the Court's permission in March 2009 to enter into agreements with the Pension Benefit Guaranty Corporation for the termination of the Cash Balance Retirement Plan and the Cash Value Retirement Plan, and the appointment of PBGC as trustee of the Pension Plans. The Court granted the Debtors' request on April 15, 2009. Subsequently, the PBGC filed proofs of claim against the Debtors totaling more than $20 million: (1) Claim Nos. 560, 561, 564, 565, 568, 569, 572, 573, 576 and 5771 assert claims based on alleged unfunded benefit liabilities under the Pension Plans. The PBGC characterizes these estimated claims as consisting of secured, priority, administrative, and unsecured status. (2) Claim Nos. 562, 563, 566, 567, 570, 571, 574, 575, 578, and 5792 against each of the Debtors, asserting alleged minimum funding contributions to the Pension Plans. The PBGC characterizes these alleged estimated claims as consisting of priority, administrative, and unsecured status. On July 31, 2009, the PBGC sought the payment of an alleged administrative claim for $4,632 against the Debtors for pension insurance premiums with respect to the Cash Value Retirement Plan. In addition to its claims, the PBGC also filed a limited objection to the Debtors' Disclosure Statement Motion, whereby the PBGC argued that the injunction and release language in the Plan is overbroad and would prevent the PBGC from carrying out its statutory duties to enforce certain provisions of the Employee Retirement Income Security Act of 1974 against non- debtors. On July 15, 2009, the Court approved the Debtors' Disclosure Statement with the addition of language summarizing the PBGC Objection. Pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure, the Debtors seek the Court's authority to settle: (a) the PBGC's substantial claims filed against the Debtors estates; and (b) the PBGC's objection to certain language in the Debtors' First Amended Joint Plan of Liquidation. The salient terms of the Parties' Settlement provides that: -- the PBGC will be granted a Class 2 Allowed Priority Claim for $125,000; -- the PBGC's Pension Insurance Premiums Claim of $4,632 will be deemed to have been withdrawn; -- the PBGC's remaining claims against Fabrics Estate Inc. will be allowed as Class 3 General Unsecured Claims, and the corresponding claims against the other Debtors will be deemed withdrawn; -- this language will be included under the modified Section 13.1 of the Plan: "Notwithstanding the foregoing or anything to the contrary in this Plan, the Pension Benefit Guaranty Corporation, whether acting on its own behalf or as trustee of the Pension Plans . . . , is not and shall not be enjoined from any act or action against any Representatives or individuals regarding fiduciary obligations under the Employee Retirement Income Security Act; provided, however, that all Representatives and individuals reserve all rights they otherwise have at applicable law, and such rights are not affected and (4) the PBGC will not object to the confirmation of the Plan on any ground." The Debtors relate that the Official Committee of Unsecured Creditors consent to the approval of the PBGC Settlement. About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. In Europe, the company has manufacturing facilities in Germany, Hungary and the United Kingdom. The Company and its debtor-affiliates filed for Chapter 11 protection on January 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex changed its name to Fabrics estate following the sale of substantially all of its assets to Xerxes Operating Company, LLC, and Xerxes Foreign Holding Corp. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PROPEX INC: Court Confirms Fabrics Estate Liquidation Plan ---------------------------------------------------------- Judge John C. Cook of the U.S. Bankruptcy Court for the Eastern District of Tennessee confirmed the First Amended Joint Plan of Liquidation of Fabrics Estate Inc., Fabrics Estate Holdings Inc., Concrete Estate Systems Corp., Fabrics Estate International Holdings I Inc., and Fabrics Estate International Holding II Inc. on August 21, 2009. Upon review, Judge Cook held that the Debtors' Plan complied with the statutory requirements under Section 1129: A. The Plan complies with all provisions of the Bankruptcy Code, including Sections 1122 and 1123 of the Bankruptcy Code, governing classification and contents of the Plan. Thus, the Plan satisfies the requirements of Section 1129(a)(1). In addition, in accordance with Bankruptcy Rule 3016(a), the Plan is dated and identified with the name of the Debtors as proponents of the Plan. In accordance with Sections 1122 and 1123, the Plan provides for: -- reasonable classification of claims and equity interests; -- all holders of Claims and Interests in a particular class to receive identical treatment; -- adequate means for implementation of the Plan, including the creation of a Liquidating Trust and that power for that Trust to conserve, protect, collect and liquidate or otherwise convert into cash all assets that constitute part of the Trust Assets and make Distributions; -- the selection and powers of the Liquidating Trustee are consistent with the interests of creditors and with public policy; -- the impairment or unimpairment of Claims or Interests; -- sound business judgment in determining contracts and leases for assumption or rejection as of the Plan Effective Date; -- the pursuit of causes of action by the Liquidating Trustee; and -- the continuing jurisdiction of the Court over all matters related to the Debtors' Chapter 11 cases and Plan as consistent with applicable law. The Debtors' Plan is a liquidating plan and does not provide for the issuance of any non-voting equity securities. B. The Debtors, as proponents of the Plan, have complied with the applicable provisions of the Bankruptcy Code, including Sections 1125 and 1126 of the Bankruptcy Code, which requires that the Disclosure Statement provides "adequate information" for parties entitled to vote to make an informed decision on the Plan. In this light, the Debtors have thus satisfied the requirements of Section 1129(a)(2). C. The Plan was proposed in good faith and not by any means forbidden by law, thus satisfying the requirements of Section 1129(a)(3). The Court held that the Plan was proposed by the Debtors with the honest intent to liquidate their remaining assets, primarily Cash and potential Avoidance Actions, in an orderly, efficient and expeditious manner so as to maximize the potential recovery of creditors. The Plan was the product of arm's-length, good faith negotiations among the Debtors, the Committee, the Indenture Trustee, the Pension Benefit Guaranty Corporation and other parties-in-interest, the Court opined. D. The Plan satisfies the requirements of Section 1129(a)(4) as it provides for the payment of costs and expenses. Any payments made or to be made by the Debtors or by a person acquiring property under the Plan, for services or for costs and expenses in or in connection with these Chapter 11 cases, or in connection with the Plan and incident to these Chapter 11 Cases, have been approved by, or are subject to the approval of, the Court as reasonable. E. The Plan complies with Section 1129(a)(5) as it identifies officers, directors and insiders of the Debtors. The Plan identifies Eugene I. Davis as the initial Liquidating Trustee, and Mr. Davis's appointment as Liquidating Trustee is approved. The proposed compensation of Mr. Davis has been disclosed and is also approved. The Liquidating Trust Agreement, the terms of which will authorize the actions of Mr. Davis, is also authorized and approved. F. The Plan does not provide for any rate change over which a governmental regulatory commission will have jurisdiction and thus, Section 1129(a)(6) is not applicable to the Debtors. G. The Plan satisfies the "best interest of creditors" requirement under Section 1129(a)(7). With respect to each Class of impaired Claims and Interests in the Debtors, each holder of a Claim or Interest of that Class has either (a) accepted the Plan, or (b) will receive or retain under the Plan on account of that Claim or Interest, property of a value, as of the Effective Date of the Plan, that is not less than the amount that such holder would so receive or retain if the Debtors were liquidated on that date under Chapter 7 of the Bankruptcy Code. H. The Court acknowledged that the sole Voting Class has voted to accept the Plan. With respect to each Class, other than Classes 4 and 5, the Plan satisfies the "plan acceptance" requirements of Section 1129(a)(8). Classes 1 and 2 are not impaired under the Plan and are thus presumed to have accepted the Plan. Classes 4 and 5 are deemed to reject the Plan as the Plan does not provide distribution to those Classes. Moreover, the estate of Fabrics Estate Holdings Inc. holds no assets, so the failure to provide any distribution to holders of claims or interests in that estate is fair and equitable. I. Except to the extent that the holder of a particular Claim has agreed to different treatment of that Claim, the Plan provides that Administrative Claims, Priority Tax Claims and Priority Claims will be treated in accordance with Section 1129(a)(9). J. The Plan has been accepted by at least one Class of Claims that is impaired under the Plan, Class 3, and thus, complies with Section 1129(a)(10). K. The Plan provides for the liquidation of the Debtors' remaining assets through the transfer of all the Debtors' assets to the Liquidating Trust. The Plan contemplates the liquidation and winding down of the Debtors' Estates, therefore, no subsequent reorganization will ensue after the Plan Effective Date. The Debtors believe that they will be able to timely perform all obligations described in the Plan and that the Plan is feasible, thereby complying with Section 1129(a)(11). L. The Plan satisfies the requirements of Section 1129(a)(12) as it provides that all fees and charges due and payable as of the Effective Date will be paid on or before the Effective Date or when otherwise due and that all those post- confirmation fees will be paid by the Liquidating Trust, including fees payable under Section 1930 of the Judiciary and Judicial Procedures Code. M. Pursuant to the Court's April 15, 2009 order approving the termination of the Debtors' retirement plans and the appointment of the Pension Benefit Guaranty Corporation as trustee of those plans, there are no retiree benefits to be continued by the Debtors as to any current or former employees. Thus, Section 1129(a)(13) is inapplicable to the Debtors. N. Section 1129(a)(14), which addresses domestic support obligations, does not apply to the Debtors. O. Section 1129(a)(15), which concerns individual debtors, does not apply to the Debtors. P. Section 1129(a)(16), which addresses non-profit organizations, does not apply to the Debtors. Judge Cook also opined that the Plan satisfies the "cramdown" requirements of Section 1129(b) and can be confirmed notwithstanding the deemed rejection by Classes 4 and 5. The Court that the Plan does not discriminate fairly against holders of Class 4 Allowed Interests and Class 5 Allowed Holdings Claims and Interests, who are deemed to reject the Plan. Furthermore, no Class of Claims or Interests junior to Classes 4 and 5 will receive or retain any property under the Plan. Voting Results James Katchadurian, senior vice president at Epiq Bankruptcy Solutions, LLC, the Debtors' balloting agent, presented to the Court a tabulation of the voting results on August 20, 2009. He noted that only holders of Class 3 General Unsecured Claims were allowed to vote on the Plan and majority of the members of the Voting Class voted to accept the Plan. Voting Class Accept Amt. Accept Count Reject Amt. Reject Count ------ ------------- ------------ ------------- ------------ Class 3 $96,712,024 740 $5,675,907 7 Gen. 94.46% 99.06% 5.54% 0.94% Unsecured Claims A full-text copy of the report of all votes included in the tabulation prepared by Epiq is available for free at: http://bankrupt.com/misc/Propex_Class3Votes.pdf All ballots not validly executed in accordance with the Disclosure Statement Order were not counted. Plan Supplements Prior to the Confirmation hearing, the Debtors also submitted to the Court a Memorandum of Law in support of their 1st Amended Plan of Liquidation on August 20, 2009. The Debtors maintained that the Plan complied with the confirmation requirements under the Bankruptcy Code. With regard to the Internal Revenue Service's contention that the Revised 1st Amended Plan fails to provide certainty with regard to the occurrence of the Effective Date, the Debtors note their intention, as well as that of Official Committee of Unsecured Creditors, is for the Effective Date to be declared 11 days after the entry of the Confirmation Order. The Debtors tell the Court that it is anticipated that payments on account of undisputed priority claims, including the IRS claim, will be made soon after the Effective Date. The Debtors assert that the IRS' objection that the Plan Injunction Provision concerning injunction of any claim against the Debtors violates the Anti-Injunction Act. The Debtors note that the IRS makes unfounded contention without citation to any case law. The Debtors have subsequently modified Plan language to reflect that the terms of the Plan do not constitute an injunction binding on the IRS. The Debtors also submitted exhibits to the Court, including the declaration of Mr. Katchadurian of Epiq Bankruptcy Solutions, Secured Claim Summary, Administrative Claim Summary, Priority Claim Summary, Current Cash Excel Spreadsheet, and resume of Eugene I. Davis. Approval of Liquidating Trust Agreement The Court has also approved the Liquidating Trust Agreement. The Liquidating Trust will be established and become effective as of the Plan Effective Date. Title to Trust Assets will automatically vest in the Liquidating Trust as of the Effective Date. Eugene I. Davis is designated as the liquidating trustee. The Liquidating Trust and the Liquidating Trustee have the exclusive right to institute, prosecute, enforce, abandon, settle, compromise or release any and all Causes of Action, and to distribute the Trust Assets pursuant to the Plan and the Liquidating Trust Agreement. The Debtors will continue to exist after the Effective Date as legal entities. After the final distribution has been made pursuant to the Plan, the Liquidating Trustee may take actions necessary to cause the Debtors to be dissolved as deemed appropriate by the Liquidating Trust. The Confirmation Order is deemed to permanently enjoin all persons that have held, currently hold or may hold a claim against the Debtors from commencing or continuing any lawsuit, action or other proceeding against any Debtor or the Liquidating Trust. The Official Committee of Unsecured Creditors will cease operating and dissolve on the Effective Date, except that the Committee will remain in existence for the limited purposes of (i) filing fee applications for fees incurred in these Chapter 11 Cases; and (ii) litigating any pending litigation or appeal to which the Committee is a party and is ongoing as of the Effective Date. A full-text copy of the Confirmation Order is available for free at http://bankrupt.com/misc/Fabrics_PlanConfirmation.pdf About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. In Europe, the company has manufacturing facilities in Germany, Hungary and the United Kingdom. The Company and its debtor-affiliates filed for Chapter 11 protection on January 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex changed its name to Fabrics estate following the sale of substantially all of its assets to Xerxes Operating Company, LLC, and Xerxes Foreign Holding Corp. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PTS INC: June 30 Balance Sheet Upside-Down by $328,900 ------------------------------------------------------ PTS Inc.'s balance sheet at June 30, 2009, showed total assets of $1.41 million and total liabilities of $1.74 million, resulting in a stockholders' deficit of $328,925. For three months ended June 30, 2009, the Company posted a net loss of $242,668 compared with a net loss of $122,510 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $353,686 compared with a net loss of $582,124 for the same period in 2008. As of June 30, 2009, the Company had a deficiency in working capital of $948,861. Cash provided by operations was $4,506 during the six months ended June 30, 2009. A loss of $305,387 was offset by a decrease in accounts receivable of $183,555 and by non-cash charges of $54,402 of depreciation and amortization, $25,225 in stock based expense, $17,544 in financing expense and $8,204 of loss attributable to extinguishment of debt. Going Concern Doubt On April 13,2009, Lynda R. Keeton CPA, LLC, in Las Vegas, expressed substantial doubt about PTS Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2008, and 2007. The auditing firm pointed to the company's limited operations and continued net losses. About PTS Inc. Headquartered in Las Vegas, Nevada, PTS Inc. (OTC BB: PTSH) -- http://www.ptspi.com/-- is a holding company with two operating subsidiaries. GloveBox Inc. which owns the rights to patented, revolutionary Glove Box(TM), the only product that offers contamination reduction through automated glove dispensing. The Glove Box(TM) system is a free-standing dispenser of disposable latex gloves. Disability Access Consultants Inc. which conducts facility inspections, policy review and program analysis in addition to comprehensive continuums of other compliance services. PULTE HOMES: Fitch Affirms Issuer Default Rating at 'BB+' --------------------------------------------------------- Fitch Ratings has affirmed Pulte Homes, Inc.'s ratings: -- Issuer Default Rating at 'BB+'; -- Senior unsecured at 'BB+'; -- Unsecured bank credit facility at 'BB+'. Fitch has also upgraded and removed Centex Corp.'s ratings from Rating Watch Positive: -- IDR to 'BB+' from 'BB'; -- Senior unsecured to 'BB+' from 'BB'. In addition, Fitch has withdrawn these ratings for CTX: -- Short-term IDR at 'B'; -- Commercial paper at 'B'. The Rating Outlook is Negative. The affirmation of PHM's ratings and the upgrade of CTX's IDR and unsecured notes are consistent with Fitch's actions in April 2009 when the merger was initially announced. At that time, Fitch affirmed PHM's ratings and placed CTX's IDR and unsecured debt ratings on Rating Watch Positive. Following the Aug. 18, 2009 closing of the merger, CTX became a wholly owned subsidiary of PHM. Fitch equalized the IDRs of PHM and CTX based on the guarantees provided by each of the companies' homebuilding material operating subsidiaries to both of the issuing entities. PHM assumed CTX's unsecured notes, which will now benefit from the guarantees of PHM's homebuilding operating subsidiaries. Similarly, PHM's unsecured notes and revolving credit facility will also have the guarantees of CTX's homebuilding operating subsidiaries. The rating affirmation for PHM acknowledges that while the company's leverage increases moderately as a result of the merger, the combined company has a strong liquidity position, a more diversified product line, an expanded market presence in top markets, and the potential for significant cost savings from operating efficiencies. Furthermore, the ratings affirmation incorporates the expectation that PHM will likely be able to improve its leverage profile by year-end 2009 with the recently announced tender offer for $1.5 billion of debt as well as the repayment of $211 million of senior notes coming due in September. However, the erosion of shareholder's equity from potential significant non-cash inventory impairment charges could impede the company's ability to lower its leverage despite the expected debt paydown. On a pro forma basis as of June 30, 2009, the combined company had a debt to capitalization ratio of 65.6% and a net debt to capitalization ratio of 48.6%. PHM has an established track record of financial discipline as leverage has historically remained below 45% (on an annual basis). However, the erosion of shareholder's equity from non-cash real estate charges and deferred tax valuation allowances led to untypically high leverage in 2008. PHM's long term targeted leverage range is 35%-45%. The combined company has a strong liquidity position with $3.08 billion of cash on the balance sheet. Even after factoring in the $1.5 billion of cash to be used for the tender offer and the $211 million for the repayment of an upcoming debt maturity, PHM will continue to have cash in excess of $1.3 billion, $703 million of availability under its revolving credit facility, and no near-term debt maturities until 2012. The combination of PHM and CTX further enhances PHM's broad geographic and product diversity. CTX's significant presence in the entry level and first move-up categories complements PHM's strength in both the move-up and active adult segments. PHM's Del Webb (active adult) segment is perhaps the best-recognized brand name in the homebuilding business and continues to outperform the company's traditional housing segment. Together, PHM and CTX will have considerable presence in more than 59 markets across the country. The increased size of the combined company is also expected to result in cost savings from operating efficiencies. PHM estimates that efficiency gains and other savings from the transaction could generate cost reductions of approximately $350 million annually. The combined company will control a roughly 6.3-year supply of land based on latest 12 months deliveries, 84.6% of which will be owned and the balance controlled through options. Land holdings will include more than 50,000 owned, finished lots. Given the company's current land position, Fitch expects PHM to continue to be disciplined in its land acquisition and development spending, while acknowledging that the company may selectively acquire lots at attractive prices. The Negative Outlook reflects the current very difficult U.S. housing market and Fitch's expectations that the housing environment remains challenging for the remainder of the year. Nevertheless, there are more positive signals and developments for housing and related industries now than at any time previously in the downturn. Of course, challenges remain or are on the horizon, which may not prevent a near-term bottom, but are likely to meaningfully moderate the early stages of a recovery. The Outlook also considers the integration risk associated with a large acquisition. Although PHM has successfully integrated large acquisitions in the past, execution risk remains in implementing a sizeable combination at a time when the operating environment is expected to remain difficult for all industry participants. The combined company will have LTM closings of approximately 28,300 homes, roughly 35% more than the 21,000 homes delivered by PHM in 2008. It is important to note that PHM's management has had experience managing a much larger operation in the recent past. PHM delivered 45,600 homes in 2005 and 41,500 homes in 2006. Fitch will continue to monitor management actions, including progress on debt repayment, achievement of cost savings from operating efficiencies, and inventory management. Divergence from management's stated goals could have negative ratings implication. Future ratings and Outlooks will also be influenced by broad housing market trends as well as company specific activity, such as land and development spending, general inventory levels, speculative inventory activity (including the impact of high cancellation rates on such activity), gross and net new order activity, debt levels and free cash flow trends and uses. READER'S DIGEST: Wants October 8 Extension for Schedules -------------------------------------------------------- The Reader's Digest Association, Inc., and its 48 Debtor- affiliates ask the Court to extend until October 8, 2009, the deadline within which they may file their schedules of assets and liabilities, schedules of current income and expenditures, schedules of executory contracts and unexpired leases, and statements of financial affairs. Section 521 of the Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure require a debtor to file its (i) schedules of assets and liabilities; (ii) schedules of current income and expenditures; (iii) schedules of executory contracts and unexpired leases; and (iv) statements of financial affairs within 15 days after a debtor's bankruptcy filing. James H.M. Sprayregen P.C., Esq., at Kirkland & Ellis LLP, in New York, contends that the scope and complexity of the Debtors' businesses, coupled with the limited time and resources available to the Debtors to marshal the required information, necessitate an extension of the deadline to file the Schedules and Statements. He points out that like the large bankruptcy cases of General Motors Corp. and Chrysler LLC, the Reader's Digest Debtors require extra time to prepare and file their Schedules and Statements. The limited staff available to perform the required internal review of their financial records and affairs, the numerous critical operational matters that their accounting and legal personnel must address in the early days of their Chapter 11 cases, the pressure incident to the commencement of the cases and the fact that certain prepetition invoices have not yet been received or entered into their accounting systems provide ample cause justifying, if not necessitating, a 30-day extension of the Debtors' deadline to file the Schedules and Statements, Mr. Sprayregen further argues. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of $2.2 billion against total debts of $3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. READER'S DIGEST: Court OKs Access to $100-Mil. DIP Loan ------------------------------------------------------- Judge Robert Drain has granted The Reader's Digest Association Inc. interim approval of its request to obtain debtor-in- possession financing of up to $150 million from its prepetition senior lenders. Reader's Digest will be able to access up to $100 million pending final approval of the DIP financing, Christopher Scinta and Linda Sandler at Bloomberg News reported. Seven of the Company's senior lenders led by JPMorgan Chase & Co. and GE Capital Corp. agreed to provide the $150 million DIP loan, which will become exit financing once the company leaves Chapter 11 protection. Reader's Digest has said the financing will ensure adequate funding for its reorganization case and for its international operations. Before filing for bankruptcy, Reader's Digest has reached agreement on a Chapter 11 plan with 80% of its senior lenders but has not yet filed the plan with the Bankruptcy Court. "We think the heavy lifting has been done," a Company lawyer, Paul Basta of Kirkland & Ellis LLP, said of the pre-negotiated agreements with lenders, according to the Bloomberg report. "We're working hard on a plan and disclosure statement." Under the agreement, RDA's senior lenders would exchange a substantial portion of the company's $1.6 billion in senior secured debt for equity, effectively transferring ownership to the lender group. The agreement also establishes the substantive terms of the $550 million in debt that will remain on RDA's balance sheet upon exit. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of $2.2 billion against total debts of $3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. READER'S DIGEST: Chapter 11 Filing Cues Moody's 'D' Ratings ----------------------------------------------------------- Moody's Investors Service changed The Reader's Digest Association's Probability of Default rating to D from Ca following the company's announcement that it filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code on August 24, 2009. The rating outlook was changed from negative to stable, although Moody's plans to withdraw all ratings for the company over the near-term. Downgrades: Issuer: Reader's Digest Association, Inc. (The) -- Probability of Default Rating, Downgraded to D from Ca Outlook Actions: Issuer: Reader's Digest Association, Inc. (The) -- Outlook, Changed To Stable From Negative The downgrade of the PDR to D reflects the company's bankruptcy filing, which Moody's classifies as a "default" event, consistent with the "D" Probability of Default rating. The Ca Corporate Family Rating and ratings for individual debt instruments are based on application of Moody's Loss Given Default framework utilizing an expected 35% family recovery rate driven by a 4.0x distress multiple to estimated EBITDA. These ratings remain unchanged as they had previously been set to ultimate expected loss levels preceding the now definitive but anticipated bankruptcy restructuring announcement. Moody's last rating action on RDA was on August 17, 2009, when it lowered RDA's CFR and PDR to Ca from Caa3, its senior secured credit facility rating to Ca from Caa2 and its senior subordinated notes rating to C from Ca. RDA's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near-to-intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of RDA's core industry and RDA's ratings are believed to be comparable to those of other issuers of similar credit risk. RDA, headquartered in Pleasantville, New York, is a global publisher and direct marketer of products including books, magazines, recorded music collections and home videos, and food and gifts. Annual revenue is approximately $2.2 billion. RESERVE PRIMARY FUND: Investors May Recover 99 Cents a Share ------------------------------------------------------------ The Reserve Primary Fund and its Independent Trustees, in a statement released by Business Wire, said they unequivocally support the distribution of the Fund's remaining assets on a fair and equitable basis as quickly as possible and on Friday filed briefs with the U.S. District Court for the Southern District of New York stating that position. In those briefs, the Independent Trustees explained that, based on revised calculations and updated data, each unpaid shareholder may receive $0.9875 per share, pro rata, and possibly up to $0.99 per share, based on certain assumptions. The Independent Trustees previously estimated that investors would receive $0.985 per share. To date, the Primary Fund has distributed $46.08 billion through four interim distributions on a pro rata basis to remaining shareholders, representing $.90 per share for each of the remaining 51.18 billion shares outstanding. The Fund holds $4.55 billion of remaining assets (not counting any value for its $785 million face amount of Lehman Brothers Holdings securities). The Board has set aside $3.5 billion of those assets in a special reserve to satisfy possible legal, accounting and other expenses, including claims for indemnification that could be made against Fund assets as a result of pending shareholder claims against the Fund, its officers and Trustees. The Independent Trustees retained Cornerstone Research to analyze the amount that could be distributed to remaining investors on a pro rata basis based on certain assumptions. One assumption is that the special reserve could be substantially reduced, possibly to around $90 million, if the court were to approve a Proposed Plan of Distribution suggested by the Securities and Exchange Commission. Based on this assumption and assuming that the Fund would be unable to recover any value for its Lehman position, remaining investors would be paid $.9875 per share, pro rata. Shareholders could possibly receive up to $0.99 per share, pro rata, should the Fund receive 17% of par value for its Lehman securities, a figure that may reflect the current market value of the position. The ultimate amount distributed will vary depending on the actual price received for the Lehman securities, the amount of Fund expenses, and other factors. There can be no guarantee at this stage that the Court will approve the SEC's proposed plan, or that the special reserve can be reduced. Nor can there be a guarantee as to the price at which Lehman securities can be sold or the timing of any such sale. Still, the Board is hopeful that through the SEC's proposed distribution plan or through other resolution of the litigation, the Fund can release more to investors more quickly. As previously stated, "the sooner the litigation is resolved, the sooner moneys held in the special reserve can be released to shareholders and, potentially, the greater the payout. The Reserve Primary Fund is a large money market mutual fund that is currently in liquidation. On September 16, 2008, during the global financial crisis, it lowered its share price below $1 because of exposure to Lehman Brothers debt securities. This resulted in demands from investors to return their funds as the financial crisis mounted. The Reserve had multiple other funds frozen because of this failure. ROYAL INVEST: June 30 Balance Sheet Upside-Down by $1.25 Million ---------------------------------------------------------------- Royal Invest International Corp.'s balance sheet at June 30, 2009, showed total assets of $136.14 million and total liabilities of $137.39 million, resulting in a stockholders' deficit of about $1.25 million. For three months ended June 30, 2009, the Company posted a net loss of $1.15 million compared with a net loss of $2.16 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $2.59 million compared with $1.91 million for the same period in 2008. The Company has incurred a net loss of $2,590,204 for the six months ended June 30, 2009, has an accumulated deficit of $23,731,595 at June 30, 2009, and there are existing uncertain conditions which the Company faces relative to its obtaining financing and capital in the equity markets. The Company said there is substantial doubt about its ability to continue as a going concern. The Company is working to raise additional capital to meet its working capital needs and is restructuring operating costs to be more in line with revenues. There can be no assurances, however, that it will be successful in its efforts to raise capital or to reduce operating costs to a level where it will attain profitability. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?42fd Royal Invest International Corp. (OTC:RIIC) together with its subsidiaries, owns, operates and manages real estate in Europe. As of December 31, 2008, the Company owned 18 properties. The properties aggregate approximately 88,077 square meters, consisting of office buildings and business centers. The properties are located in Germany and the Netherlands. The Company's direct and indirect subsidiaries include Royal Invest Europe B.V., Royal Invest Development and Services B.V., Vastgoed Beleggings Mij. Bunnik 1 B.V., Royal Invest German Properties 1 B.V., Alfang B.V., and AmogB B.V. SADDLE MOUNTAIN: Fitch Affirms 'BB' Rating on $13.1 Mil. Bonds -------------------------------------------------------------- In the course of surveillance, Fitch Ratings affirms the 'BB' rating on approximately $13.1 million in outstanding school improvement bonds of Saddle Mountain Unified School District (US$) No. 90 (AZ). The Rating Outlook is revised to Positive from Stable. The Outlook revision reflects the district's improved financial performance, planning and management policies. The district expects to come out of state receivership by December 2009 as a result of its enhanced financial profile. The district was placed under state receivership in June 2007 due to substantially weak financial operations resulting in negative general fund balances dating back to fiscal 2005. Under the state receiver the district has made significant expenditure cuts in order to restore balanced financial operations. Other rating factors include a favorable debt profile and moderate capital needs, and substantial taxpayer concentration. Although enrollment pressures have subsided recently, projected population growth and corresponding capital needs may pressure general fund operations in the intermediate term. Fitch will continue to monitor the district's pace of recovery under new management. It's emergence from receivership and ability to generate consecutive years of positive financial results are imperative in order for the district to return to an investment grade rating. Audited fiscal 2008 results show the district generated an operating surplus of approximately $472,000, thereby reducing the negative general fund balance to roughly $426,000 from about $900,000 in fiscal 2007. The balance in the debt service fund grew to a healthy $279,000 from a negative balance of about $291,000 in fiscal 2007. The district expects to achieve a positive general fund balance for fiscal 2009, the first time since fiscal 2005, and also carried over 4% of its general fund balance for the fiscal 2010 budget per the state mandate. In fiscal 2009 the district reduced expenditures by eliminating more than 27 non-certified and highly paid classified positions. The district implemented a strict salary schedule for all employees and hired a reduced number of certified classified employees to effectively manage class sizes and resources. Additionally, the district no longer offers financial incentives for current and prospective employees and began to maximize the use of volunteers. Transportation costs were also substantially reduced through operational efficiencies, the elimination of over-time pay for bus drivers, and a reduction in work hours. The fiscal 2010 budget assumes no salary increases and includes a $250,000 surplus for the general fund. The district worked with the state receivers to construct a financial recovery model that forecasts revenues and expenditures and accounts for a certain level of enrollment growth over the next nine years. Development of this plan demonstrates significant improvement in financial planning and management policies. The district has repaid $1 million of the $3.8 million originally owed to the state of Arizona (the State); the model helps ensure the district will successfully meet all required payments over the next nine years. Although projections for enrollment growth have moderately subsided to 3-5% over the next three to five years due to a slowdown in residential development, the district faces certain capital maintenance needs in the near-term. The district will request voter-approval for a $12 million bond initiative in November 2009 to renovate its oldest elementary school and implement security upgrades to several of its facilities. The district's maintenance and operations override is also up for renewal, and the outcome of that election will affect its ability to maintain a stable financial position while making the required payments to the State. The district receives no state aid because of its property rich tax base. Approximately 92% of the district's assessed valuation is concentrated in the four owners of the Palo Verde Nuclear Generation Station. Although still a credit concern, the district's concentration risk is somewhat offset by the utility's role as a major power provider for the southwestern region of the U.S. Currently, the district has $13.1 million in outstanding general obligation debt, which is equal to low 0.3% of market value due to its wealthy tax base. Saddle Mountain US$ No. 90 encompasses 550 square miles in the west-central portion of Maricopa County. The district captures most of the undeveloped land in the western valley of the Phoenix- Mesa MSA, the unincorporated areas Tonopah and Wintersburg and a portion of the Town of Buckeye. SAINT ANNE ADOPTION: Collapses After Freeze of Assets ----------------------------------------------------- Brian Caldwell at The Record reports that Saint Anne Adoption Agency has gone bankrupt. The Record relates that Saint Anne stopped operations after its assets were frozen. The report says that money had been moving between Saint Anne and Kids Link International Adoption Agency, a non-profit group operating under the name Imagine Adoption and which already went bankrupt. The report states that Saint Anne has $35,000 in the bank, and its liabilities are likely to be several times that amount. Imagine and Saint Anne operated as one organization and held provincial licenses to facilitate adoptions in different parts of the world, according to The Record. They remained separate legal entities with different boards of directors, states the report. Andrew Morrow, Saint Anne's remaining director and who held key posts with the Company and Imagine, agreed last week to file for bankruptcy, The Record says. According to the report, families were considering costly, time-consuming legal action to force a bankruptcy on Saint Anne. The Record quoted Susan Taves, the bankruptcy trustee for DBO Dunwoody in Kitchener, Ontario, as saying, "This is the right decision to wrap up a company in trouble and the right decision to help families . . . try to move forward." The Record states that a meeting of creditors is being arranged for the first week of September. The Record relates that four of Saint Anne's five directors claimed they had resigned or didn't know they were listed as members of the board. According to The Record, 30 families using Saint Anne to adopt children from South America and the Caribbean, primarily Ecuador, had their cases put on indefinite hold due to the collapse of Imagine, but they will be able to claim their files for possible transfer to other adoption agencies. It is unlikely Saint Anne can be saved or rolled into the new agency because it has so little money left, The Record reports, citing Ms. Taves. The Record relates that Waterloo Regional Police are conducting probes on allegations that senior staff at Imagine and Saint Anne made more than $300,000 in questionable purchases -- including trips, home renovations and a horse -- using corporate credit cards. Saint Anne Adoption Agency is the sister agency of Cambridge adoption agency Kids Link International Adoption Agency. It shares a Web site with Kids Link at: http://www.kids-link.ca/stanne/privacy.html SAN WEST: Posts $152,238 Net Loss in Three Months Ended June 30 --------------------------------------------------------------- San West, Inc., fka Human BioSystems, posted a net loss of $152,238 for three months ended June 30, 2009, compared with a net loss of $18,810 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $312,393 compared with a net loss of $27,627 for the same period in 2008. The Company's balance sheet showed total assets of $3.68 million, total liabilities of $3.15 million and stockholders' equity of 528,082. The Company said there is substantial doubt about its ability to continue as a going concern. The Company said that in the course of funding research and development activities, the Company sustained operating losses since inception and has an accumulated deficit of $671,468 and $359,075 at June 30, 2009, and Dec. 31, 2008, respectively. In addition, the Company has negative working capital of $2,413,800 and $177,931 at June 30, 2009, and Dec. 31, 2008, respectively. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of its common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?42ff San West, Inc. fka Human BioSystems (OTC:HBSY) designs, manufactures, sells and repairs off-road buggies, well as provides after market performance products and accessories for buggies. San West's products are sold both at its store and online, while its buggy repair services are sold and fulfilled at its store. SB PARTNERS: Earns $1.8 Million in Three Months Ended June 30 ------------------------------------------------------------- SB Partners reported a net income of $1.86 million for three months ended June 30, 2009, compared with a net income of 624,780 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $4.24 million compared with a net loss of $1.36 million for the same period in 2008. At June 30, 2009, the Company's balance sheet showed total assets of $57.52 million, total liabilities of $39.20 million and partners' capital of $18.32 million. As of June 30, 2009, the Company had cash and cash equivalents of approximately $392,000. These balances are approximately $152,000 lower than cash and cash equivalents held on Dec. 31, 2008. Cash and cash equivalents were lower as Company paid down operating liabilities, scheduled mortgage principal payments and capital costs for the industrial flex property in Minnesota. Total outstanding debt at June 30, 2009, consisted of $16.71 million of long-term non-recourse first mortgage notes, secured by real estate owned by the Company and $22.00 million under an unsecured credit facility. The Company has no other debt except normal trade accounts payable and accrued management fees. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?42e5 About SB Partners SB Partners is a New York limited partnership engaged in acquiring, operating and holding for investment a varying portfolio of real estate interests. 1971, the year it began operations. As of December 31, 2008, the Company owns an industrial flex property in Maple Grove, Minnesota, and warehouse distribution properties in Lino Lakes, Minnesota and Naperville, Illinois. In addition, the Company has a 30% interest in Sentinel Omaha, LLC, an affiliate of the Company's general partner. Going Concern Doubt On May 27, 2009, Dworken, Hillman, LaMorte & Sterczala, P.C., in Shelton, Connecticut raised substantial doubt about SB Partners' ability to continue as a going concern after auditing the Company's financial results of the years ended December 31, 2008, and 2007. The auditor pointed that the partnership's unsecured credit facility matured on Feb. 28, 2009, and the partnership has not been able to arrange a replacement loan, extension or refinancing. SCO GROUP: Wins Appeal Against Novell; Trustee to be Named ---------------------------------------------------------- On August 24, 2009, the United States Court of Appeals for the Tenth Circuit issued its published opinion in the case of The SCO Group, Inc. v. Novell, Inc. (No. 08-4217). According to SCO Group, in the opinion, the Tenth Circuit Court reversed in material respects the summary judgment of August 10, 2007, rendered by the United States District Court of Utah, and the Final Judgment entered on November 20, 2008. In its opinion, the Tenth Circuit Court reversed the summary judgment that Novell did not transfer certain UNIX copyrights to the Santa Cruz Operations as part of an Asset Purchase Agreement executed in 1995, as amended, and it also reversed the summary judgment that Novell had the right, under that Asset Purchase Agreement, to waive on behalf of SCO, or to direct SCO to waive, certain claims it had asserted against International Business Machines. The Tenth Circuit Court affirmed the District Court's judgement with regards to the royalties due Novell under the 2003 Sun-SCO Agreement of $2,547,817 plus interest. The Court remanded the case back to the District Court for trial. The Tenth Circuit Court's conclusion is: "For the foregoing reasons, we AFFIRM the district court's judgment with regards to the royalties due Novell under the 2003 Sun-SCO Agreement, but REVERSE the district court's entry of summary judgment on (1) the ownership of the UNIX and UnixWare copyrights; (2) SCO's claim seeking specific performance; (3) the scope of Novell's rights under Section 4.16 of the APA; (4) the application of the covenant of good faith and fair dealing to Novell's rights under Section 4.16 of the APA. On these issues, we REMAND for trial." SCO Group Losing Ch. 11 Control While SCO has won a signal victory in its prolonged litigation with Novell, it is unclear, though, whether the victory in the Tenth Circuit Court came in time to save the ability of the company to control the destiny of its Chapter 11 case, Bloomberg's Bill Rochelle points out. On Aug. 5, the U.S. Bankruptcy Court for the District of Delaware ordered the appointment of a Chapter 11 trustee for SCO. Given how the focus of the SCO reorganization has been on the Novell lawsuit, the bankruptcy judge suggested appointing a retired judge or lawyer specializing in litigation. A Chapter 11 trustee hadn't been named as of August 24, Mr. Rochelle said. According to Bloomberg, rather than have a trustee, SCO had wanted the Bankruptcy Court to allow the sale of the business. SCO argued it had a buyer who would pay $5 million, allowing the payment of creditors in full while it continued pursuing the lawsuit with Novell. The bankruptcy judge disagreed with SCO's strategy. The Bankruptcy Court ruling came before the Appeals Court decision. About SCO Group Headquartered in Lindon, Utah, The SCO Group Inc. (Nasdaq:SCOX) fka Caldera International Inc. -- http://www.sco.com/-- provides software technology for distributed, embedded and network-based systems, offering SCO OpenServer for small to medium business and UnixWare for enterprise applications and digital network services. The company has office locations in Australia, Austria, Argentina, Brazil, China, Japan, Poland, Russia, the United Kingdom, among others. The Company and its affiliate, SCO Operations Inc., filed for Chapter 11 protection on September 14, 2007 (Bankr. D. Del. Lead Case No. 07-11337). Paul Steven Singerman, Esq., and Arthur Spector, Esq., at Berger Singerman P.A., represent the Debtors in their restructuring efforts. James O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, are the Debtors' Delaware and conflicts counsel. Epiq Bankruptcy Solutions LLC, acts as the Debtors' claims and noticing agent. The United States Trustee failed to form an Official Committee of Unsecured Creditors in the Debtors' cases due to insufficient response from creditors. As of January 31, 2009, the Company had $8.78 million in total assets and $13.2 million in total liabilities, resulting in $4.51 million in stockholders' deficit. SEA CONTAINERS: Auditor Recommends Final OK for Professional Fees ----------------------------------------------------------------- Having reviewed all of the final reports and orders allowing fees and expenses for the prior interim periods, Warren H. Smith & Associates, P.C., the Debtors' fee auditor, tells the Court that it does not believe there is any reason to change any of the amounts awarded to certain of the Debtors' bankruptcy professionals for the prior interim periods. Thus, the Fee Auditor recommends final approval of these fees and expenses: Professional Period Total Fees Expenses ------------ ------ ---------- -------- Kirkland & Ellis 10/15/06 - 11/30/08 $32,094,441 $1,650,304 Pricewaterhouse- 10/16/06 - 11/24/08 13,703,464 166,756 Coopers LLP Bingham McCutchen 10/26/06 - 11/24/08 10,410,440 477,729 AP Services, LLC 04/01/07 - 11/24/08 7,939,514 37,629 Willkie Farr & 01/22/07 - 11/30/08 6,750,593 277,771 Gallagher LLP Zolfo Cooper Ltd. 10/26/06 - 11/24/08 6,115,166 111,626 Houlihan Lokey 10/26/06 - 11/24/08 4,795,322 226,240 Howard & Zukin Capital, Inc. Sidley Austin LLP 10/15/06 - 11/24/08 3,006,228 100,618 Vollman Brothers 10/15/06 - 11/30/08 2,924,884 291,364 Limited Carter Ledyard & 10/15/06 - 11/24/08 2,429,976 76,613 Milburn LLP Reed Smith 10/15/06 - 11/24/08 1,827,970 174,774 Richards Butler Young Conaway 10/15/06 - 11/24/08 1,495,890 271,748 Stargatt & Taylor Appleby 10/15/06 - 11/30/08 1,053,622 18,421 Morris, Nichols, 10/26/06 - 11/30/08 922,662 -- Arsht & Tunnell Pricewaterhouse- 02/23/07 - 11/24/08 802,003 12,570 Coopers Legal LLP Navigant 02/15/08 - 11/24/08 467,459 8,959 Consulting Inc. Pepper Hamilton 01/26/07 - 11/24/08 301,031 31,802 Conyers Dill & 10/15/06 - 11/24/08 127,821 779,854 Pearman Attride-Stirling 08/13/07 - 11/24/08 110,108 874 & Woloniecki The Fee Auditor also recommends payment of Rothschild, Inc.'s fees aggregating $1,725,000, and reduced expenses totaling $41,600 for the period from September 1, 2007, through July 31, 2008. About Sea Containers Ltd. Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provided passenger and freight transport and marine container leasing. Registered in Bermuda, the company had regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The Company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. Through its GNER subsidiary, Sea Containers Passenger Transport operated Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represented the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. were represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors was represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083 as of its bankruptcy filing. Sea Containers Ltd., Sea Containers Services Ltd., and Sea Containers Caribbean, Inc., notified the Court and parties-in- interest on February 11, 2009, that their Fourth Amended Joint Plan of Reorganization became effective. (Sea Containers Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Court Denies Mervyn Dacey's $420,000 Claim ---------------------------------------------------------- Sea Containers Ltd. and its affiliates filed on October 23, 2008, an objection to Claim No. 1, which was asserted for $420,290 by Mervyn Dacey, purportedly on behalf of Muriel Barry, trustee of the Dacey Trust. The Claimant did not file a response to the Objection, but responded by a letter to the Debtors dated November 25, 2008, enclosing a copy of a Trust Deed Document dated March 24, 1985. On December 9, 2008, the Court held a hearing on the Objection, at which time the Claimant appeared by telephone. The Court opined that the Claimant has not provided the Court with sufficient evidence or documentation to show that he is a representative of Ms. Barry's estate. Judge Carey maintained that there is nothing in the record to show that the Sea Containers Ltd.'s shares owned by Ms. Barry were transferred to the Trust or to the Claimant. Hence, Judge Carey sustained the Objection, and disallowed Claim No. 1. About Sea Containers Ltd. Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provided passenger and freight transport and marine container leasing. Registered in Bermuda, the company had regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The Company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. Through its GNER subsidiary, Sea Containers Passenger Transport operated Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represented the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. were represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors was represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083 as of its bankruptcy filing. Sea Containers Ltd., Sea Containers Services Ltd., and Sea Containers Caribbean, Inc., notified the Court and parties-in- interest on February 11, 2009, that their Fourth Amended Joint Plan of Reorganization became effective. (Sea Containers Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Post-Confirmation Report - Ended June 30, 2009 -------------------------------------------------------------- Sea Containers, Ltd. Post Confirmation Summary Report Ending June 30, 2009 Beginning Cash Balance $18,446,031 All receipts received by the Debtor Repayment of loan note to Seaco Ltd. (18,760,000) Interest income 6,342 Sale of Debtors assets 100,000 SC Group cash repatriation 18,617,229 Foreign exchange 1,281,265 Inter company banking sweep (1,344,750) ------------ Total of cash received (99,914) Total of cash available 18,346,117 Less all disbursements or payments made by the Debtor: Disbursements made pursuant to the - admin. claims of bankruptcy professionals Debtor in possession loan repayment - All other disbursements made in the ordinary course 537,733 ------------ Total Disbursements 537,733 ------------ Ending Cash Balance $17,808,384 ============ Sea Containers Services, Ltd. Post Confirmation Summary Report Ending June 30, 2009 Beginning Cash Balance $92,307 All receipts received by the Debtors: SCSL cash repatriation to SCL 2,905,635 SC Group cash repatriation to SCSL (2,905,635) Tax refunds 308,364 Interest income 10 Foreign exchange 6,418 Inter company banking sweep 1,344,750 ------------ Total of cash received 1,659,542 Total of cash available 1,751,849 Less all disbursements or payments made by the Debtor: Disbursements made under the plan, excluding - the admin. claims of bankruptcy professionals Disbursements made pursuant to the - admin. claims of bankruptcy professionals All other disbursements made in the ordinary course 1,369,255 ------------ Total Disbursements 1,369,255 ------------ Ending Cash Balance $382,594 ============ About Sea Containers Ltd. Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provided passenger and freight transport and marine container leasing. Registered in Bermuda, the company had regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The Company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. Through its GNER subsidiary, Sea Containers Passenger Transport operated Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represented the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. were represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors was represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083 as of its bankruptcy filing. Sea Containers Ltd., Sea Containers Services Ltd., and Sea Containers Caribbean, Inc., notified the Court and parties-in- interest on February 11, 2009, that their Fourth Amended Joint Plan of Reorganization became effective. (Sea Containers Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SHIRLEY A JOBE: Proposes Goe & Forsythe as Bankruptcy Counsel ------------------------------------------------------------- Shirley A. Jobe asks the U.S. Bankruptcy Court for the Central District of California for authority to employ Goe & Forsythe, LLP as counsel. The firm will, among other things: -- advise and assist the Debtor with respect to compliance with the requirements of the U.S. Trustee; -- advice the Debtor regarding matters of bankruptcy law, including the rights and remedies of the Debtor in regards to their assets and with respect to the claims of the creditors; and -- represent the Debtor in any proceedings or hearings in the Bankruptcy Court and in any action in any other court where the Debtor's rights under the Bankruptcy Code may be litigated or affected. Marc C. Forsythe, Esq., a member of the firm, tells the Court that the firm received a $2,500 prepetition retainer from Castle Antiques, a business owned by the Debtor. Mr. Forsythe assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Forsythe can be reached at: Goe & Forsythe, LLP 18101 Von Karman Avenue, Suite 510 Irvine, CA 92612 Tel: (949) 798-2460 Fax: (949) 955-9437 About Shirley A. Jobe Corona del Mar, California-based Shirley A. Jobe dba Castle Antiques filed for Chapter on Aug. 6, 2009 (Bankr. C.D. Calif. Case No. 09-18128). Marc C. Forsythe, Esq., represents the Debtor in its restructuring efforts. In its petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. SHIRLEY A JOBE: Wants Schedules Filing Extended Until September 8 ----------------------------------------------------------------- Shirley A. Jobe asks the U.S. Bankruptcy Court for the Central District of California to extend until Sept. 8, 2009, its time to file its schedules of assets and liabilities, statement of financial affairs. Corona del Mar, California-based Shirley A. Jobe dba Castle Antiques filed for Chapter on Aug. 6, 2009 (Bankr. C.D. Calif. Case No. 09-18128). Marc C. Forsythe, Esq., represents the Debtor in its restructuring efforts. In its petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. SHIRLEY A JOBE: Section 341(a) Meeting Slated for September 8 ------------------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of creditors in Shirley A. Jobe's Chapter 11 case on Sept. 8, 2009, at 11:00 a.m. The meeting will be held at 411 W Fourth St., Room 1-159, Santa Ana, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Corona del Mar, California-based Shirley A. Jobe dba Castle Antiques filed for Chapter on Aug. 6, 2009 (Bankr. C.D. Calif. Case No. 09-18128). Marc C. Forsythe, Esq., represents the Debtor in its restructuring efforts. In its petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. SINCLAIR BROADCAST: S&P Retains Negative Watch on 'B-' Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Hunt Valley, Maryland-based TV broadcaster Sinclair Broadcast Group Inc. and its operating subsidiary, Sinclair Television Group Inc., including the 'B-' corporate credit rating, remain on CreditWatch with negative implications. Sinclair has agreed in principle with the ad hoc committee of certain holders of its 3.000% and 4.875% putable convertible senior notes that STG will launch a private placement of second- lien notes due 2014. Issuance of such notes requires STG to obtain an amendment to its bank credit facility. The proceeds of the notes issuance will be used to repurchase the putable convertibles in cash tender offers at a modest discount to par value. S&P initially placed the ratings on CreditWatch with negative implications on July 13, 2009, in response to Sinclair's announcement that Cunningham, its local marketing agreement (LMA) partner in six markets, could enter bankruptcy proceedings by the end of July (the termination date of its $33.5 million term loan), which would cause a default and potential acceleration under Sinclair's bank credit facility. Sinclair's credit facility contains certain cross-default provisions with respect to Cunningham as a "material third-party licensee." A default by Cunningham would therefore cause a default under Sinclair's credit facility and could lead to acceleration of repayment of Sinclair's debt. "In resolving S&P's CreditWatch listing," said Standard & Poor's credit analyst Deborah Kinzer, "we will monitor Sinclair's progress in obtaining a bank amendment. S&P will also evaluate the final terms of such amendment and the results of the cash tender offers and private placement issuance." SIX FLAGS: Terms of Amended Reorganization Plan ----------------------------------------------- Six Flags, Inc., Premier International Holdings, Inc., and their debtor affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware a first amended joint plan of reorganization and an accompanying disclosure statement, dated August 20, 2009. The First Amended Plan, among others, reflects estimated recovery and amounts for classified claims, and adds one class of claim -- Funtime, Inc. Unsecured Claims. The Amended Plan also includes financial projections and valuation and liquidation analyses. Under the First Amended Plan, the Debtors estimate that the reorganization value of Six Flags will range between approximately $1.12 billion and $1.38 billion, with a midpoint value of $1.25 billion, as of an assumed Effective Date of December 31, 2009. Under the Plan, the holders of Prepetition Credit Agreement Claims against Six Flags Theme Parks Inc. and certain of its wholly-owned domestic subsidiaries will convert those Claims into (i) approximately 92% of the New Common Stock to be issued by Reorganized SFI, subject to dilution by the Long-Term Incentive Plan, and (ii) a new term loan in the aggregate amount of $600 million. Based on the Debtors' estimate of Allowed Claims as of an assumed December 31, 2009 Plan Effective Date in these Reorganization Cases, the First Amended Plan provides for a recovery of: -- approximately 92.2% to 112.8% to holders of Six Flags Theme Parks, Inc. Prepetition Credit Agreement Claims; -- a 100% recovery for the holders of all Other Secured Claims; -- a 100% recovery for the holders of Unsecured Claims against all Debtors other than SFO and SFI; -- 8.2% to 12.4% to holders of Unsecured SFO Claims; -- 0.4% to 0.6% to holders of Unsecured SFI Claims; and -- no recovery for holders of Funtime, Inc. Claims, Subordination Securities Claims and Pre-confirmation Equity Interests in SFI. Registration Rights Agreement On the Plan Effective Date, Reorganized SFI expects to enter into a registration rights agreement with each holder of greater than 5% of the New Common Stock. Pursuant to the Registration Rights Agreement, holders collectively owning at least 20% of the outstanding shares of New Common Stock would have the right to require Reorganized SFI to effect registered, underwritten secondary offerings of those holders' New Common Stock on terms and conditions to be negotiated and reflected in the Registration Rights Agreement, with the number of demand registration rights to be determined. Holders of New Common Stock entitled to demand those registrations will be entitled to request an aggregate of three registrations. A blacklined version of the First Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/sixf_1stplanblackline.pdf A blacklined version of the First Amended Chapter 11 Plan is available for free at: http://bankrupt.com/misc/sixf_1stdsblackline.pdf About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: Treatment of Claims Under Amended Reorganization Plan ---------------------------------------------------------------- Six Flags Inc.'s First Amended Joint Plan of Reorganization added one class of claims -- Funtime Inc. Unsecured Claims. The First Amended Plan also discloses the estimated amount of claims under each class and revises the estimated recovery for some classes of claims. The First Amended Plan contemplates these classification and treatment of claims: Class Description Treatment ----- ----------- --------- N/A Administrative Paid in full, in Cash, on the Expense Claims later of the Effective Date or when the Claim becomes Allowed. Claims incurred in the ordinary course of business will be paid in full or performed, as applicable, in the ordinary course of business. Estimated Recovery: 100% Estimated Amount: $500,000 plus any amounts incurred or payable in the ordinary course of business N/A Professional Paid in full, in Cash, in Compensation and accordance with the order of Reimbursement the Court allowing any Claim. Claims Estimated Amount: Undetermined Estimated Recovery: 100% N/A Priority Tax Either (i) paid in full, in Claims Cash, on the Effective Date or as soon as practicable, or (ii) commencing on the Effective Date, over a period not exceeding five years from and after the Petition Date, in equal semi-annual Cash payments with interest for the period after the Effective Date at the rate determined under applicable non-bankruptcy law. Estimated Amount: Undetermined Estimated Recovery: 100% 1 Other Priority Unimpaired. Deemed to accept Claims the Plan, not entitled to vote. Paid in full, in Cash. Estimated Amount: $11.1 mil. Estimated Recovery: 100% 2 Secured Tax Claims Unimpaired. Deemed to accept the Plan, not entitled to vote. Either paid in full in Cash on the Effective Date or paid over a period not exceeding five years from and after the Petition Date in equal semi-annual Cash payments with interest at the rate determined under non-bankruptcy law. Estimated Amount: $13.9 mil. Estimated Recovery: 100% 3 Other Secured Unimpaired. Deemed to accept Claims the Plan, not entitled to vote. Either (i) reinstated, (ii) paid in full in Cash, or (iii) receive the Collateral securing Other Allowed Secured Claim and any required interest. Estimated Amount: $0 Estimated Recovery: 100% 4 Six Flags Theme Impaired. Entitled to vote. Parks Prepetition On each periodic Distribution Credit Agreement Date, each holder of an Claims Allowed Prepetition Credit Agreement Claim will receive its Ratable Proportion of the New Term Loan and 92% of newly issued New Common Stock in Reorganized SFI, subject to dilution, by the Long-Term Incentive Plan, in full and complete satisfaction of the STFP Prepetition Credit Agreement Claim. Estimated Amount: $1.128 bil., plus accrued and unpaid interest at the default rate Estimated Recovery: 92.2% to 112.8% 5 SFTP TW Guaranty Impaired. Entitled to vote. Claims On the Effective Date, SFTP's guaranty of the obligations under the TW Loan will be discharged and TW will receive a new guaranty of the obligations under the TW Loan by Reorganized SFTP. Estimated Amount: Undetermined Estimated Recovery: 100% 6 SFTP TW Indemnity Impaired. Entitled to vote. Claims On the Effective Date, the SFTP's guaranty of the obligations under the Subordinated Indemnity Agreement will be discharged and exchanged for a new guaranty of the obligations under the Subordinated Indemnity Agreement by Reorganized SFTP. Estimated Amount: Undetermined Estimated Recovery: N/A 7 SFTP and SFTP Unimpaired. Deemed to accept Subsidiary Unsecured the Plan, not entitled to Claims vote. Each Allowed Subsidiary Unsecured Claim will be either (i) reinstated, or (ii) paid in full in Cash. Estimated Amount: $27.1 mil. Estimated Recovery: 100% 8 Six Flags Operations Impaired. Entitled to vote. Prepetition Credit On the Effective Date, SFO's Agreement Claims guaranty of the obligations under the Prepetition Credit Agreement will be discharged and exchanged for a new guaranty of the obligations under the New Term Loan by Reorganized SFO. Estimated Amount: Contingent and unliquidated Estimated Recovery: N/A 9 SFO Time Warner Impaired. Entitled to vote. Guaranty Claims On the Effective Date, SFO's guaranty of the obligations under the TW Loan will be discharged and TW will receive a new guaranty of the obligations under the TW Loan by Reorganized SFO. Estimated Amount: Undetermined Estimated Recovery: N/A 10 SFO TW Indemnity Impaired. Entitled to vote. Claims On the Effective Date, SFO's guaranty of the obligations under the Subordinated Indemnity Agreement will be discharged and exchanged for a new guaranty of the obligations under the Subordinated Indemnity Agreement by Reorganized SFO. Estimated Amount: Undetermined Estimated Recovery: N/A 11 SFO Unsecured Claims Impaired. Entitled to vote. On each periodic Distribution Date, Allowed SFO Unsecured Claims receive a Distribution Pro Rata Share of 7% of newly issued New Common Stock in Reorganized SFI, subject to dilution by the Long-Term Incentive Plan. Estimated Amount: $420 million Estimated Recovery: 8.2% to 12.4% 12 SFI TW Guaranty Impaired. Entitled to vote. Claims On the Effective Date, SFI's guaranty of the obligations under the TW Loan will be discharged and TW will receive a new guaranty of the obligations under the TW Loan by Reorganized SFI. Estimated Amount: Undetermined Estimated Recovery: N/A 13 SFI TW Indemnity Impaired. Entitled to vote. Claims On the Effective Date, SFI's guaranty of the obligations under the Subordinated Indemnity Agreement will be discharged and exchanged for a new guaranty of the obligations under the Subordinated Indemnity Agreement by Reorganized SFI. Estimated Recovery: N/A 14 SFI Unsecured Claims Impaired. Entitled to vote. On each periodic Distribution Date, Allowed SFI Unsecured Claims receive a Distribution Pro Rata Share of 1% of newly issued New Common Stock in Reorganized SFI, subject to dilution by the Long-Term Incentive Plan. Estimated Amount: $1.346 bil. Estimated Recovery: 0.4% to 0.6% 15 Funtime, Inc. Impaired. Deemed to reject Unsecured Claims the Plan, not entitled to vote. No distribution. Estimated Amount: $0 Estimated Recovery: 0% 16 Subordinated Impaired. Deemed to reject Securities Claims the Plan, not entitled to vote. No distribution. Estimated Amount: $0 Estimated Recovery: 0% 17 Preconfirmation Unimpaired. Deemed to accept Subsidiary Equity the Plan, not entitled to Interests vote. Unaltered by the terms of the Plan. Estimated Amount: N/A Estimated Recovery: N/A 18 Preconfirmation SFO Impaired. Deemed to reject Equity Interests the Plan, not entitled to vote. No distribution. Estimated Amount: N/A Estimated Recovery: 0% 19 Preconfirmation SFI Impaired. Deemed to reject Equity Interests the Plan, not entitled to vote. No distribution. Estimated Amount: N/A Estimated Recovery: 0% About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: Financial Projections Under Amended Plan --------------------------------------------------- In connection with the development of the Joint Plan of Reorganization, and for the purposes of determining whether the Plan satisfies the feasibility standard, Six Flags Inc. and its affiliates analyzed their ability to satisfy financial obligations while maintaining sufficient liquidity and capital resources. In this regard, the Debtors, in consultation with their advisors, prepared projected consolidated statements of operations and projected consolidated statements of cash flows for the years ending December 31, 2009 through 2013, and the projected consolidated balance sheets for SFI as of December 31, 2009 through 2013. The Projections were prepared by the Debtors in August 2009 and reflect the anticipated impact of the Plan and actual results through June 2009. Therefore, the Projections assume that the Plan will be implemented in accordance with its stated terms. The Projections are inherently uncertain as they are based on estimates and assumptions that rely on the forecast of key economic variables, including, but not limited to, unemployment, consumer confidence, personal savings rates and consumer spending trends which impact attendance at the theme parks and demand for in-park and other products and services, U.S. amusement and theme park industry projections, capital market conditions, the ability to manage increases in its costs, particularly labor and utilities, working capital needs and capital expenditures, and the ability to maintain good customer relations and appropriately manage the growth of operations. In addition, the Projections make assumptions with regard to certain operations that are not majority owned by Six Flags, and therefore results of operating decisions and strategic direction could vary materially from the forecast since Six Flags does not ultimately control these entities. The Projections assume a Plan Effective Date of December 31, 2009, with Allowed Claims and Allowed Interests treated as described in the Plan. If the Debtors do not emerge from Chapter 11 as currently scheduled, additional Administrative Expense will be incurred until the time as a plan of reorganization is confirmed and becomes effective. These Administrative Expenses could significantly impact Six Flags' cash flows if the Effective Date is materially later than the Effective Date assumed in the Financial Projections. Projected Condensed Consolidated Balance Sheets (In $ Thousands) As of December 31, 2009 2010 2011 ---------- ---------- ---------- Assets: Cash $109,052 $83,849 $108,869 Accounts Receivable 20,491 20,577 20,847 Inventories 22,859 23,472 24,048 Prepaid Expenses and other 44,438 42,863 44,145 ---------- ---------- ---------- Total Current Assets $196,840 $170,761 $197,909 Net Property Plant & Equipment 1,517,333 1,461,239 1,396,145 Other Assets 204,396 202,904 208,875 ---------- ---------- ---------- Total Assets $1,918,569 $1,834,904 $1,802,929 ========== ========== ========== Liabilities and Equity: Accounts Payable $22,235 $20,285 $20,892 Accrued Expenses 103,755 101,601 104,641 Other Current Liabilities 16,227 15,702 16,269 ---------- ---------- ---------- Total Current Liabilities $142,217 $137,588 $141,802 Long-Term Debt $636,844 $622,394 $622,609 Liabilities from Discontinued Operations 6,450 6,600 6,750 Other Long-Term Liabilities 60,892 57,992 48,992 Deferred Income Taxes 116,233 109,706 115,899 Redeemable Non-controlling Interests 355,933 325,933 295,933 Mandatorily Redeemable Preferred Stock - - - ---------- ---------- ---------- Total Stockholders' Equity 600,000 574,691 570,944 Total Stockholders' Equity and Liabilities $1,918,569 $1,834,904 $1,802,929 ========== ========== ========== Projected Condensed Consolidated Balance Sheets (In $ Thousands) As of December 31, 2012 2013 ---------- ---------- Assets: Cash $165,886 $253,263 Accounts Receivable 20,914 21,043 Inventories 24,813 25,370 Prepaid Expenses and other 43,875 44,213 ---------- ---------- Total Current Assets $255,488 $343,889 Net Property Plant & Equipment 1,319,884 1,242,457 Other Assets 218,066 218,380 ---------- ---------- Total Assets $1,793,438 $1,804,726 ========== ========== Liabilities and Equity: Accounts Payable $20,764 $20,924 Accrued Expenses 104,000 104,800 Other Current Liabilities 16,417 16,698 ---------- ---------- Total Current Liabilities $141,181 $142,422 Long-Term Debt $622,238 $622,238 Liabilities from Discontinued Operations 6,900 7,050 Other Long-Term Liabilities 46,092 43,193 Deferred Income Taxes 129,823 150,164 Redeemable Noncontrolling Interests 265,933 235,933 Mandatorily Redeemable Preferred Stock - - Total Stockholders' Equity 581,271 603,726 ---------- ---------- Total Stockholders' Equity and Liabilities $1,793,438 $1,804,726 ========== ========== A full-text copy of the Financial Projections is available for free at http://bankrupt.com/misc/sixf_finlprojections.pdf About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: Proposes Amendment to Prepetition Credit Facility ------------------------------------------------------------ Pursuant to Section 363 of the Bankruptcy Code, Six Flags Inc. and its affiliates ask Judge Christopher S. Sontchi of the United States Bankruptcy Court for the District of Delaware for authority to amend a senior secured credit facility, dated May 25, 2007. The Prepetition Credit Facility provides for: -- an $850 million term loan maturing in April 2015, $835,125,000 of which was outstanding as of March 31, 2009; and -- a revolving facility totaling $275 million, $242,658,000 of which was outstanding as of March 31, 2009, as well as letters of credit in the amount of $31,402,000 on that date, and an uncommitted optional term loan tranche of up to $300 million. JPMorgan Chase Bank, N.A., serves as agent for the Prepetition Lenders. The Borrowers are dependent on the Revolver to fund off-season expenses and must remain compliant with certain conditions, including a senior secured leverage ratio and certain other covenants. The Revolver matures on March 31, 2013. Six Flags Theme Parks, Inc., is the borrower under the Credit Facility, and its direct parent, Six Flags Operations, Inc., along with its domestic subsidiaries, are guarantors. The Credit Facility contains customary representations and warranties, as well as affirmative and negative covenants. The Credit Facility requires quarterly principal repayments in the amount of $2.125 million, which commenced on September 30, 2007, with all remaining principal under the Credit Facility due at maturity on April 30, 2015, other than with respect to the Revolver, which matures on March 31, 2013. As consideration for the Credit Facility, SFTP and SFO granted the agent for the Prepetition Lenders a security interest in substantially all of the Borrowers' assets, including those of its wholly-owned domestic subsidiaries. The Debtors are obligated to redeem certain outstanding preferred income equity redeemable shares, which were required to be redeemed for cash on August 15, 2009, and total approximately $287.5 million, in addition to accrued and unpaid dividends, which will total approximately $31,300,000. Zachary I. Shapiro, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates that as an inducement to the Participating Lenders to support the Debtors' Plan of Reorganization, the Debtors consented to certain amendments to the Credit Facility. Specifically, the Amendment sets forth, among other things, revised liquidity covenants extending the consolidated leverage rations to the term lenders under the Credit Facility. In addition, the Amendment changes certain terms and conditions to the optional and mandatory prepayments requirements under the Credit Facility. These relatively modest revisions are part of the overall business deal struck by the Debtors with the participating lenders, Mr. Shapiro notes. A full-text copy of the First Amendment to the Credit Facility is available for free at: http://bankrupt.com/misc/SixF_1stamendedCrdfacility.pdf The Court will convene a hearing to consider the motion on September 10, 2009, at 1:00 p.m. About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SOUTH FINANCIAL: Fitch Downgrades Issuer Default Rating to 'B+' --------------------------------------------------------------- Fitch Ratings has downgraded the ratings for The South Financial Group, Inc., and its principal bank subsidiary, Carolina First Bank, including the long-term Issuer Default Rating to 'B+' from 'BB+'. The Individual Rating for both entities is lowered to 'D' from 'C/D'. The Outlook is Negative. Fitch's downgrade of TSFG's ratings reflects the company's continued high net credit losses, and elevated and increasing level of problem assets. Many parts of its Southeast U.S. footprint remain under economic stress. The company has been particularly hard hit in its residential construction and development, land, and mortgage portfolios, particularly in Florida and the coastal areas of the Carolinas. High provisioning needs continue to produce quarterly net losses and erode capital. Fitch believes that loan losses will remain elevated during 2009 and into 2010. Additionally, TSFG's pre-provision operating earnings continue to suffer from a relatively weak net interest margin and low contribution from fee income. Fitch notes that TSFG has taken steps to bolster capital, including the recent issuance of common equity and the sale of non-core assets and businesses. It has preferred stock exchange offers pending that would bolster Tier I common equity further. Fitch believes that even if these exchanges proceed as TSFG anticipates, the company will need to raise additional common equity in 2010 given Fitch's asset quality outlook. TSFG's ratings reflect the level of asset quality and earnings pressure on the company. The Negative Outlook conveys that if the pending preferred stock exchanges are not successful, Fitch believes the institution would continue to operate, although the risk of deferral on preferred stock dividends would be significantly heightened. The Negative Outlook also incorporates the possibility that asset quality trends and general market conditions may worsen beyond Fitch's expectations. The South Financial Group, Inc., is a $12.6 billion bank holding company headquartered in Greenville, SC, that operates a branch network of 177 offices. It operates as Carolina First Bank in North Carolina and South Carolina and under the Mercantile Bank name in Florida. Fitch has taken these rating actions, with a Negative Outlook: South Financial Group, Inc. (The) -- Long-term IDR downgraded to 'B+' from 'BB+'; -- Preferred stock to 'CCC' from 'B+'; -- Short-term IDR affirmed at 'B'; -- Individual downgraded to 'D' from 'C/D'; -- Support affirmed at '5'; -- Support floor affirmed at 'NF'. Carolina First Bank -- Long-term IDR downgraded to 'B+' from 'BB+'; -- Long-term deposits downgraded to 'BB-' from 'BBB-'; -- Short-term IDR affirmed at 'B'; -- Short-term deposits downgraded to 'B' from 'F3'; -- Individual downgraded to 'D' from 'C/D'; -- Support affirmed at '5'; -- Support floor affirmed at 'NF'. SPANSION INC: Asset Purchase Agreement With Powertech ----------------------------------------------------- Spansion LLC, a wholly owned subsidiary of Spansion Inc., on August 21, 2009, entered into an Asset and Share Purchase Agreement with Powertech Technology Inc., a company organized under the laws of the Republic of China (Taiwan), pursuant to which Spansion LLC will sell its assembly, mark, test and pack facility located in Suzhou, China and other related assets owned by Spansion LLC. Pursuant to the Purchase Agreement, Spansion LLC will sell (i) all of the issued and outstanding ordinary shares of its wholly owned subsidiary, Spansion Holdings (Singapore) Pte. Ltd., a company organized under the laws of the Republic of Singapore, which in turn owns all the registered capital of Spansion (China) Limited, a wholly foreign-owned enterprise organized under the laws of the People's Republic of China and the entity that owns the Suzhou Facility, and (ii) certain assembly, mark and pack equipment and tooling equipment and other assets related to the Suzhou Facility that is owned directly by Spansion LLC. In consideration for the Purchased Assets, PTI will pay to Spansion LLC approximately $35 million, comprised of an initial payment of $6 million to be made after PTI has obtained the requisite investment approval from the Investment Commission of the Ministry of Economic Affairs of the Republic of China (Taiwan), and a promissory note for $30 million, which requires scheduled installment payments to be made by PTI to Spansion LLC of $10 million on each of the 60th, 120th and 180th day following the date of closing. The Shares will be held in escrow and one- third of the Shares to be distributed to PTI upon Spansion LLC's receipt of each installment payment made pursuant to the promissory note. The Purchase Price will be subject to adjustment depending on the amount of net assets held by each of Singapore Subsidiary and Suzhou Subsidiary as of the Closing Date. Pursuant to the Purchase Agreement, Suzhou Subsidiary will have cash of not less than $4,240,000 as of the Closing Date to compensate PTI for estimated employee benefit and severance costs associated with Suzhou Subsidiary's employees. Consequently, the Company expects that net proceeds (before deducting costs and expenses associated with this transaction) to Spansion LLC from the sale of the Purchased Assets will be approximately $31 million. The closing of the sale of the Purchased Assets is subject to certain customary closing conditions and the approval of the Bankruptcy Court. The Purchase Agreement may be terminated by (i) mutual agreement of the parties, (ii) by the non-breaching party if a party has materially breached the representations and warranties or covenants of such party in the Purchase Agreement and such breach cannot be cured or, if curable, the breaching party is no longer making attempts to cure such breach, (iii) by either party if the transaction has not closed within six months of the date of the Purchase Agreement or (iv) by either party if the Bankruptcy Court does not approve of the sale of the Purchased Assets. In addition, if PTI is not able to obtain the Investment Approval within 60 days of the Closing Date, then the Purchase Agreement will be terminated, the Shares will be returned to Spansion LLC and any portion of the Purchase Price received by Spansion LLC will be returned to PTI. In connection with the sale of the Purchased Assets, Spansion LLC and PTI entered into a Supply Agreement, dated August 21, 2009 but effective upon the Closing Date, pursuant to which PTI will use the Suzhou Facility to perform assembly, mark, pack and test services for Spansion products for a term of 12 months. During the first six months, Spansion LLC's loading commitment under the Supply Agreement will be approximately 8 million units per month. Spansion LLC will consign commercial and Flash memory die and direct materials to PTI for processing by PTI. To the extent that PTI has manufacturing losses based on the agreed upon pricing terms under the Supply Agreement during the first year, Spansion will reimburse certain of the manufacturing costs up to cap of five percent. During the second six months of the term, Spansion LLC will purchase services that will result in at least seventy- five percent of the revenue paid to PTI for the services during the initial six months. Spansion LLC and PTI also entered into a Transition Services Agreement, dated August 21, 2009 but effective upon the Closing Date, pursuant to which Spansion LLC will provide specified general administrative and information technology services to support PTI in connection with its obligations under the Supply Agreement. A copy of the Purchase Agreement is available at: http://researcharchives.com/t/s?4309 A copy of the Supply Agreement is available at: http://researcharchives.com/t/s?430a A copy of the Transition Services Agreement is available at: http://researcharchives.com/t/s?430b 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. SPECTRUM BRANDS: Amends Credit Pact for Plan Consummation --------------------------------------------------------- Spectrum Brands Inc. and its affiliates seek the Court's authority and approval effective as of the effective date of the Debtors' Plan of Reorganization, of their proposed Amendment No. 2 to the Credit Agreement dated as of March 30, 2007 among Spectrum Brands, Inc. as Borrower, the Lenders - the "Term Lenders", Bank of New York, Mellon, Successor to Goldman Sachs Credit Partners, L.P. as Administrative Agent, Collateral Agent and Syndication Agent, Wachovia Bank National Association, as Deposit Agent, and Bank of America, N.A. as LC Issuer. Mark A. McDermott, Esq. at Skadden, Arps, Slate, Meagher & Flom LLP tells the Court the Term Credit Agreement includes the synthetic LC facility. Wachovia intends to resign as Deposit Agent and LC Issuer with respect to that facility upon the effective date. As a practical matter, any entity replacing Wachovia in these capacities must be a commercial bank and thus the Debtors' options for replacing Wachovia are somewhat limited. Mr. McDermott relates that Bank of America, who is supposed to become Co-Collateral Agent and LC Issuer under the Debtors' exit credit facility, has indicated that it is willing to assume the positions under the Term Credit Agreement that have, to date, been held by Wachovia, subject to the execution of certain technicak amendments to the Term Credit Agreement, including, but not limited to: (a) modification which reflect the fact that the deposit account will bed moved from Wachovia to BofA; (b) modification which provide that the cash collateralization of LCs will be upon terms that are consistent with BofA's internal policies; (c) modifications of certain terms to make clear that funds in the deposit account will be invested in a manner which conforms to BofA's internal policies; (d) modifications which provide BofA with the ability to resign upon 30 days' notice. A full-text copy of Credit Agreement as amended is available for free at: http://bankrupt.com/misc/Spectrum_Credtagrmnt_2ndamendmnt.pdf According to Mr. McDermott, the Debtors believe that the technical amendments to the Term Credit Agreement which have been requested by BofA are commercially reasonable. The Debtors further believe that there is a limited universe of qualified institutions which would be willing and able to assume Wachovia's roles under the Term Credit Agreement within a time frame that will provide the Debtors with uninterrupted access to the synthetic LC facility. Most importantly, if the Debtors are not authorized to enter into Amendment No. 2, the effectiveness of the Plan will be delayed, and maybe jeopardized, Mr. McDermott stresses. The Debtors ask the Court to convene an emergency hearing to to consider this emergency motion on August 25, 2009. Wachovia 's Limited Objection Wachovia Bank, National Association, the existing LC Issuer and Deposit Agent under the Credit Agreement dated as of March 30, 2007, informs the Court it supports in principle Bank of America's appointment as Deposit Agent and successor LC Issuer, however, Wachovia believes that the proposed terms and conditions outlined in the proposed Amendment No. 2, does not adequately protect Wachovia. Wachovia informs the Court that it objects to Amendment No. 2 in its present form, subject to negotiations with the Debtors and other interested parties. About Spectrum Brands Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. An official committee of equity security holders -- composed of Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and the Peter and Karen Locke Living Trust -- was appointed by the U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009. The Equity Committee has tapped Alston & Bird LLP as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) SPEEDEMISSIONS INC: Registers 40.4 Million Shares for Sale ---------------------------------------------------------- Speedemissions, Inc., filed Pre-Effective Amendment No. 7 to the Form S-1 Registration Statement under the Securities Act of 1933 to register 2,127,150 shares of common stock for sale by existing shareholders, and 38,354,932 shares of common stock for sale by existing warrant and preferred stock holders upon the exercise of warrants or conversion of preferred shares. The will terminate on the earlier of August 20, 2011 or when all 40,482,082 shares are sold. The common stock is quoted on the over-the-counter electronic bulletin board under the symbol "SPMI." A full-text copy of Pre-Effective Amendment No. 7 is available at no charge at http://ResearchArchives.com/t/s?42f1 The Company posted net income of $102,916 for the three months ended June 30, 2009, from a net loss of $173,646 for the same period a year ago. It posted net income of $145,068 for the six months ended June 30, 2009, from a net loss of $349,278 for the same period a year ago. As of June 30, 2009, the Company had $9,044,063 in total assets and $1,064,045 in total liabilities and series A convertible, redeemable preferred stock, of $4,579,346. A full-text copy of the Company's quarterly report is available at no charge at http://ResearchArchives.com/t/s?42f2 As reported in the Troubled Company Reporter on May 19, 2008, Tauber & Balser, P.C., in Atlanta, expressed substantial doubt about Speedemissions Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations and limited capital resources. The audit report dated March 27, 2009, of Habif, Arogeti & Wynne, LLP, in Atlanta, Georgia, on the Company's annual report for the fiscal year ended December 31, 2008, does not contain any adverse going concern opinion. About Speedemissions Inc. Speedemissions, Inc., performs vehicle emissions testing and safety inspections in certain cities in which vehicle emissions testing is mandated by the Environmental Protection Agency. As of August 20, 2009, the Company operated 40 vehicle emissions testing and safety inspection stations under the trade names of Speedemissions (Atlanta, Georgia); Mr. Sticker (Houston, Texas); and Just Emissions (Salt Lake City, Utah). It also operates four mobile testing units in the Atlanta, Georgia area. The Company uses computerized emissions testing and safety inspections equipment that test vehicles for compliance with vehicle emissions and safety standards. Its revenues are generated from the test or inspection fee charged to the registered owner of the vehicle. It does not provide automotive repair services. This concludes the Troubled Company Reporter's coverage of Speedemissions until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. ST JAMES: U.S. Trustee Sets Meeting of Creditors for September 9 ---------------------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of creditors in St. James and Ennis Hanford Investment, LLC's Chapter 11 case on Sept. 9, 2009, at 10:00 a.m. The meeting will be held at Robert E. Coyle, U.S. Courthouse, 2500 Tulare Street, Room 1452, 1st Floor, Fresno, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Porterville, California-based St. James and Ennis Hanford Investment, LLC filed for Chapter 11 on Aug. 5, 2009 (Bankr. E. D. Calif. Case No. 09-17500). Peter L. Fear, Esq., represents the Debtors in their restructuring efforts. In their petition, the Debtor listed total assets of $26,299,660 and total debts of $20,266,847. STERLING MINING: SNS Has Admin. Claim for Sunshine Mine Costs ------------------------------------------------------------- SNS Silver Corporation announced via Marketwire a ruling from the Bankruptcy Court for the United States District Court, District of Idaho, granting a significant administrative claim against Sterling Mining Company. Following the abandonment of the Sunshine Mine in Kellog, Idaho, by Sterling on February 19, 2009, SNS assumed responsibility for the mine. Based in part on representations made by management for Sterling, SNS entered a temporary and then final lease for the mine in hopes that the mine could once again be a contributor to the economy and employment in the Silver Valley. On May 15, 2009 the Bankruptcy Court for the United States District Court, District of Idaho, entered the Memorandum of Decision on Motion to Assume Lease and Motion for Approval of Post-Petition Financing determining that Sterling had not unequivocally abandoned the mine and had the right to retake possession. In July, based upon the Court's ruling SNS left the premises refusing to continue care and maintenance for property that it had no continuing right to. Recently, the Court has determined that Sterling has the right to take possession of the mine. On August 21, 2009, the Court ruled that SNS is entitled to an administrative claim against Sterling. As a result, SNS has a priority right to recover its costs and expenses related to the care and maintenance of the Sunshine Mine from Sterling. The Court awarded the majority of the reimbursement categories requested by SNS. According to lead trial counsel for SNS, Bradley J. Dixon of Stoel Rives LLP, "The Court ruling takes a substantial step in reimbursing SNS for its stewardship of the Sunshine Mine. SNS had significant and exciting plans for the mine. It is unfortunate for the miners and economy in the Silver Valley that this mine continues to be the subject of litigation. However, for SNS, this ruling makes the first major move in assuring that SNS's efforts and willingness to protect this piece of Idaho history is not overlooked. This benchmark similarly signals the end of SNS's need for meaningful involvement in the Sterling Bankruptcy." Chief Executive Officer for SNS, David Greenway, echoed Mr. Dixon's sentiments stating that "SNS would have loved to have executed upon its realistic and different strategy at moving the Sunshine mine back into production. We were looking forward to working with Mr. Mori and Sunshine Precious Metals. This ruling begins to take care of the costs we expended in caring for the mine in the short time we held the property." Mr. Greenway also advises that Andrew Grundman has resigned from the SNS Board of Directors. Mr. Greenway states, "SNS appreciates the substantial efforts contributed by Mr. Grundman and wishes him the best of luck in his new undertakings." SNS Silver Corporation (TSX VENTURE: SNS.V) is an exploration mining company, whose assets include a number of near term production projects in geopolitically secure Idaho, USA. The 100% owned Crescent Mine consists of 24 patented mining claims over approximately 350 acres. These adjacent properties operated independently to produce nearly 400 million ozs of silver. About Sterling Mining Based in Coeur d'Alene, Idaho, Sterling Mining Company (OTCBB:SRLM and FSE:SMX) -- http://www.SterlingMining.com/-- is a mineral resource development and exploration company. The company has a long term lease on the Sunshine Mine in North Idaho's Coeur d'Alene Mining District. The Sunshine Mine is comprised of 5,930 patented and unpatented acres, and historically produced over 360 million ounces of silver from 1884 until its closure in early 2001. Sterling Mining leased the Sunshine Mine in June 2003, along with a mill, extensive mining infrastructure and equipment, a large land package, and a database encompassing a long history of exploration, development and production. As of September 30, 2008, Sterling Mining had $31.9 million in total assets, and $13.2 million in total current liabilities and $1.6 million in total long-term liabilities. In its schedules, the Debtor listed total assets of $11,706,761 and total debts of $14,159,010. Sterling Mining filed for bankruptcy protection on March 3, 2009 (Bankr. D. Idaho Case No. 09-20178). Bruce A. Anderson, Esq., at Elsaesser Jarzabek Anderson Marks Elliott & McHugh, Chartered represents the Debtor as counsel. SUBURBAN PROPANE: Moody's Upgrades Corp. Family Rating to 'Ba2' --------------------------------------------------------------- Moody's Investors Service upgraded Suburban Propane Partners, L.P.'s Corporate Family Rating to Ba2 from Ba3. Moody's also upgraded the partnership's senior unsecured notes rating to Ba3 from B1. The outlook is stable. These actions follow Suburban's recent equity offering and announced tender for $175 million of its senior unsecured notes. "Suburban's use of equity proceeds and surplus cash to retire a substantial portion of its long-term debt further strengthened its already sturdy balance sheet," commented Pete Speer, Moody's Vice President. "The partnership has significantly reduced its financial risk profile and positioned itself to pursue major consolidation within the propane sector." On August 10, 2009, Suburban commenced a 2.2 million common units offering and a tender offer to purchase up to $175 million of its existing $425 million of senior unsecured notes due 2013. The $95.7 million net proceeds of the common units offering, including the underwriter's over-allotment purchase, and cash on hand will be used to fund the debt purchase. Suburban has offered to pay 101.25% of par value for each bond tendered by August 21, 2009, and 98.25% for tenders through the offer's closing date of September 8, 2009. The partnership announced that $301.79 million principal amount of notes have been validly tendered through August 21, 2009. When the tender is completed for the $175 million of debt, Suburban's pro forma Debt/EBITDA as of June 27, 2009 will be around 1.7x, the lowest of all rated Master Limited Partnerships (MLP). The partnership already had low leverage and strong interest and distribution coverage prior to management taking this proactive step to further reduce the partnership's financial risk profile. While Suburban has clearly stated its desire to be a consolidator of the major propane industry players, Moody's expect that any large acquisition will have substantial equity funding and that the leverage metrics would not be increased beyond the 3.5x Debt/EBITDA range consistent with a Ba2 rating. Absent major acquisitions, Moody's expect management to maintain its strong financial profile to offset its relatively small scale for the Ba2 rating. The Ba3 rating for the senior unsecured notes reflects both the overall probability of default of Suburban, to which Moody's assigns a PDR of Ba2, and a loss given default of LGD 5 (76% changed from 73%). The $250 million revolving credit facility (unrated) is senior secured and therefore the notes are rated one notch beneath the Ba2 CFR under Moody's Loss Given Default Methodology. The last rating action was on November 19, 2007, when Suburban's Ba3 CFR and B1 senior unsecured notes ratings were affirmed. Suburban Propane Partners, L.P., is a publicly traded MLP based in Whippany, NJ. The partnership is among the largest retail marketers of propane in the United States and also distributes fuel oil and refined fuels, markets natural gas and electricity and sells related products and services. T.H. PROPERTIES: Wants Plan Filing Deadline Moved to Nov. 27 ------------------------------------------------------------ T.H. Properties LP has asked the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to extend the exclusive periods for filing and soliciting acceptance of a reorganization plan. According to David Hare at Journal Register News, T.H. Properties wants the exclusive filing period to end on November 27, 2009, and exclusive solicitation period to end on January 25, 2010. The current deadlines for the exclusive filing and solicitation period are August 28,2009, and October 27, 2009, respectively. The Court has set a September 17 hearing on the extension reques. T.H. Properties said in court documents that the extensions are needed due to the size and complexity of its Chapter 11 case. According to court documents, T.H. Properties said that while it has downsized since filing for bankruptcy, it has "many projects with a variety of issues that require attention and resolution," including: -- inquiries from homebuyers, -- mechanics liens analysis, -- DIP financing negotiations, and -- vendor negotiations. T.H. Properties posted on its Web site that it had resumed construction in its Belmont Estates II, Cliffside Manor, Hawthorne Estates and Westport Farm communities. Several homes have already settled with more scheduled in the months ahead. T.H. Properties said, "Our discussions for resuming additional communities are encouraging and we are optimistic that we will reach agreements soon. These discussions include the removal of mechanics liens as well as the completion of outstanding items for our existing homeowners. We are grateful to both current and future homeowners and vendors for their understanding and patience through this process." T.H. Properties said in court documents that it has engaged in "good faith" talks with a committee of unsecured creditors, as well as lenders, "to formulate an exit strategy from bankruptcy." Journal Register notes that T.H. Properties has had three months to prepare its case. "More time is needed to prepare information and negotiate," the report says, citing the Company. According to the report, T.H. Properties is also paying its bills "as they come due." The Company, court documents say, is "negotiating a means by which all professional fees will be paid as part of the plan process. To allow the exclusive periods to expire before this process has substantially matured would defeat the purpose" of the bankruptcy code. Sales of T.H. Properties' existing homes had been taken over by The Davidson Group, Journal Register reports. Philadelphia-based T.H. Properties, L.P., has 12 working developments in Pennsylvania and New Jersey. Timothy Hendricks and his brother Todd started the firm in 1992. T.H. Properties and its affiliates filed for Chapter 11 bankruptcy protection on April 30, 2009 (Bankr. E.D. Pa. Case No. 09-13201). Barry E. Bressler, Esq., at Schnader, Harrison, Segal & Lewis, LLP, and Natalie D. Ramsey, Esq., at Montgomery McCracken Walker and Rhoads LLP represent the Debtors in their restructuring efforts. The Debtors listed assets between $100 million and $500,000,000, and debts between $10 million and $50 million. TAMARON PROPERTIES: Case Summary & 3 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Tamaron Properties LLC 2162 West Alexis Rd Toledo, OH 43613-2216 Bankruptcy Case No.: 09-35803 Chapter 11 Petition Date: August 24, 2009 Court: United States Bankruptcy Court Northern District of Ohio (Toledo) Judge: Richard L. Speer Debtor's Counsel: Raymond L. Beebe, Esq. Raymond L. Beebe Co LPA 1107 Adams St. Toledo, OH 43604 Tel: (419) 244-8500 Email: RLBCT@buckeye-express.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,000 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ohnb09-35803.pdf The petition was signed by Anthony A. Fuhrman, managing member of the Company. TELKONET INC: Has $7.4 Million 2009 Second Quarter Net Income ------------------------------------------------------------- Telkonet, Inc., reported a 2009 second quarter net income of $7.4 million, or $0.08 per share, compared to a net loss of $4.2 million or $(0.08) per share in the 2008 second quarter. Net income for the second quarter of 2009 included a gain on deconsolidation of MSTI Holdings, Inc., of $6.9 million, or $0.07 per share. For the 2009 second quarter, Telkonet had revenue of $3.1 million, a decrease of 33% compared to $4.6 million in the 2008 second quarter. The Company's second quarter results for 2009 were impacted by the challenges presented by the current economic environment, which significantly impacted Telkonet's largest target market, the Hospitality segment. Telkonet's revenues increased by 7% when compared to the quarter ended March 31, 2009. Telkonet reported gross margins of 57% for the second quarter of 2009 compared to the 2008 second quarter of 42%, and 52% in the first quarter of 2009. Selling, general and administrative expenses were $1.7 million, compared to $2.6 million in the 2008 second quarter and $1.6 million in the 2009 first quarter. Excluding the results of operations of MST, Telkonet had a negative adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), a non-GAAP measure, in the second quarter of 2009 of approximately $(185,000) compared to a negative adjusted EBITDA of $1.2 million in the 2008 second quarter. "Our financial results in the second quarter represent a significant milestone for the Company and our shareholders, which is the deconsolidation of our former MST subsidiary," said Jason Tienor, Chief Executive Officer of Telkonet, Inc. "Our financial statements now provide much-needed financial transparency, and we are able to highlight to shareholders the positive results of the Company's restructuring efforts over the past 18 months. Although this year has not provided the top-line sales growth anticipated after 2008's record year, primarily due to the impact of the economy on our customers, we have continued to grow our sales pipeline, so that when the economy rebounds the Company will be positioned to realize our long-term goals of sustained growth and increased shareholder value. In addition, we believe that our near-term goals are within reach and we expect to achieve positive EBITDA for the first time in the Company's history." Telkonet reported a net income of $6.3 million, or $0.07 per share, for the six months ended June 30, 2009, when compared to a net loss of $9.3 million, or $(0.13) per share for the six months ended June 30, 2008. Net income in 2009 includes a $6.9 million gain on the deconsolidation of MST. For the six months ended June 30, 2009, Telkonet had revenue of $6.0 million, a decrease of 31% compared to $8.6 million in the six months ended June 30, 2008. Telkonet reported gross margins of 55% for the six months ended June 30, 2009, compared to 35% for the six months ended June 30, 2008. Selling, general and administrative expenses were $3.4 million for the six months ended June 30, 2009, compared to $5.1 million for the six months ended June 30, 2008. Telkonet had a negative adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), a non-GAAP measure, of approximately $(565,000) for the six months ended June 30, 2009, compared to negative adjusted EBITDA of $3.2 million for the six months ended June 30, 2008. As of June 30, 2009, the Company had $18.5 million in total assets and $5,632,036 in total current liabilities and $2,257,539 in total long-term liabilities. The Company has an accumulated deficit of $108.4 million and a working capital deficit of $3.19 million as of June 30, 2009. The Company believes that anticipated revenues from operations will be insufficient to satisfy its ongoing capital requirements for at least the next 12 months. If the Company's financial resources from operations are insufficient, the Company will require additional financing to execute its operating plan and continue as a going concern. The Company cannot predict whether this additional financing will be in the form of equity or debt, or be in another form. The Company may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In any of these events, the Company may be unable to implement its current plans for expansion, repay its debt obligations as they become due, or respond to competitive pressures, any of which circumstances would have a material adverse effect on its business, prospects, financial condition and results of operations. Management intends to raise capital through asset-based financing or the sale of its stock in private placements. Management believes that with this financing, the Company will be able to generate additional revenues that will allow the Company to continue as a going concern. There can be no assurance that the Company will be successful in obtaining additional funding. 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?42fe About Telkonet Telkonet Inc. (NYSE Amex: TKO) -- http://www.telkonet.com/-- provides integrated, centrally-managed energy management and SmartGrid networking solutions that improve energy efficiency and reduce the demand for new energy generation. The Company's energy management systems, aimed at the hospitality, commercial, government, healthcare and education markets, are dynamically lowering HVAC costs in over 140,000 rooms, and are an integral part of various utilities' green energy efficiency and rebate programs. TITANIUM GROUP: June 30 Balance Sheet Upside-Down by $600,790 ------------------------------------------------------------- Titanium Group Limited's balance sheet at June 30, 2009, showed total assets of $1.15 million, and total liabilities of $1.75 million, resulting in a stockholders' deficit of about $600,790. For three months ended June 30, 2009, the Company posted a net loss of 287,241 and for six months ended June 30, 2009, the Company posted a net loss of $609,193. The Company said that there is substantial doubt about it ability to continue as a going concern. As of June 30, 2009, the Company had working deficit of $42,428, as compared to working capital of $349,711 at Dec. 31, 2008, due to the loss for the six-month period. The decrease was reflected in reductions in cash of $123,149 and accounts receivable, net of $148,826, and an increase in accounts payable and accrued liabilities of $142,108, offset by small increases in inventories of $6,483 and deposits and other receivables of $14,229. Additionally, the Company incurred substantive losses over the past several years and has a capital deficit. The management has taken certain action and continues to implement changes designed to improve the Group's financial results and operating cash flows. The actions involve certain cost-saving initiatives and growing strategies, including rapid promotion and marketing the new products in the People's Republic of China. Management believes that these actions will enable the Group to improve future profitability and cash flow in its continuing operations through June 30, 2010. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?42e7 Titanium Group Limited (OTC:TTNUF), through its subsidiaries, is engaged in the development of biometric technology and installation and implementation of facial-based biometric identification and security projects for law enforcement, mass transportation, and other government and private sector customers. The Company has developed and sold automatic face recognition systems and other biometric and security solutions to governments, law enforcement agencies, gaming companies, and other organizations in China and other parts of Asia. TONY KUKUMO AKINSETE: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Tony Kukumo Akinsete dba T K A Rental Properties aka Anthony K. Akinsete 809 Still Breeze Way Sacramento, CA 95831 Case No.: 09-37940 Chapter 11 Petition Date: August 24, 2009 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Thomas Holman Debtor's Counsel: Kenrick Young, Esq. 52 Seraspi Ct Sacramento, CA 95834 Tel: (916) 929-6865 Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Mr. Akinsete. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of America Automobile $42,872 Attn: Bankruptcy NC4-105-02-77 Bank of America Credit Card $14,206 Bank of America Credit Card $3,316 Chase Credit Card $7,417 Citi Credit Card $7,279 Citibank USA Unsecured $26,273 Attn: Centralized Bankruptcy Citibank Usa Charge Account $19,886 Attn: Centralized Bankruptcy Citibankna Check Credit $3,684 Or Line Of Credit DCFS USA LLC Automobile $2,863 Discover Fin Svcs LLC Credit Card $6,795 Harley Davidson Financial Automobile $4,288 HSBC/RS Check Credit $12,184 Or Line Of Credit Toyota Motor Credit Automobile $22,591 UNVL/CITi Credit Card $20,719 Attn: Centralized Bankruptcy Wells Fargo Bank Check Credit $9,310 Or Line Of Credit Wells Fargo Bank N A Credit Line Secured $280,000 PO Box 31557 Billings, MT 59107 Wells Fargo Home Mtg Conventional Real $663,769 Attention: Bankruptcy Estate Mortgage Department MAC-X 3476 Stateview Blvd. Fort Mill, SC 29715 WFS Financial/Wachovia Automobile $27,220 World Savings & Loan Conventional Real $247,800 Attn: Bankruptcy Estate Mortgage World Savings & Loan Conventional Real $197,961 Attn: Bankruptcy Estate Mortgage TRILOGY DEV'T: Lenders OK Hiring of Consultant to Seek Buyers ------------------------------------------------------------- R. Pete Smith, the attorney representing Trilogy Development Company, LLC, founder Robert Bernstein, said that lenders have agreed to a plan to hire a consultant to seek buyers for the long- stalled development near the Country Club Plaza and review proposals, KansasCity.com reports. The development is located at 48th Street and Belleview Avenue. It includes a 205,000-square-foot office building and a 131-room hotel which, according to KansasCity.com, is 70% complete. It still lacks windows. According to KansasCity.com, a consultant would be hired by early September. KansasCity.com quoted Mr. Smith as saying, "We have a list of people who've expressed interest in the project and in parts of the project. It's complicated because it's not a completed structure." The development, KansasCity.com notes, could be sold to different buyers. Trilogy Development must also obtain a final estimate of how much it will cost to complete the complex, KansasCity.com states. Kansas City, Missouri-based Trilogy Development Company, LLC, was founded by advertising magnate Bob Bernstein to build his west edge project. The Company filed for Chapter 11 on May 15, 2009 (Bankr. W.D. Mo. Case No. 09-42219). Jonathan A. Margolies, Esq., and R. Pete Smith, Esq., at McDowell, Rice, Smith & Buchanan represent the Debtor in its restructuring efforts. In its petition, the Debtor disclosed assets and debts ranging from $100 million to $500 million. TRILOGY INTERNATIONAL: Moody's Cuts Corp. Family Rating to 'B3' --------------------------------------------------------------- Moody's Investors Service lowered the corporate family rating of Trilogy International Partners LLC to B3 from B2 based on erosion of the liquidity profile, due primarily to the slower than expected ramp up of subscribers in the Dominican Republic and increased cash investments in Trilogy's New Zealand venture. These factors, as well as curtailed growth in Haiti due to the softening economy, contribute to a credit profile more appropriate for a B3 corporate family rating. The outlook remains negative, incorporating Moody's concerns over continued uncertainty regarding the timeframe for and ability of management to turn around operations in the Dominican Republic and the weakened liquidity profile. To sustain a B3 corporate family rating, Trilogy must enhance its liquidity, either through external sources, improvement of operations, or some combination of these. Moody's also revised lower the probability of default rating and the secured term loan rating to B3 from B2. Trilogy International Partners LLC -- Corporate Family Rating, Downgraded to B3 from B2 -- Probability of Default Rating, Downgraded to B3 from B2 -- Senior Secured Bank Credit Facility, Downgraded to B3, LGD4, 60% from B2, LGD4, 51% -- Outlook, Negative Trilogy's B3 CFR reflects the impact of its aggressive growth strategy, including increased projected investments in New Zealand, on free cash flow, which Moody's expects to remain negative over the next few years, as well as political and business risk related to its presence in emerging economies and the intense competition it faces. Furthermore, the company's New Zealand investment pressures liquidity but remains outside of the bank group, and secured lenders accrue no direct benefit from the venture. Good growth prospects given relatively low overall levels of telecommunications penetration and the inferior quality of wireline in its targeted markets (Bolivia, Haiti, and Dominican Republic) and Trilogy's favorable competitive position (demonstrated by a current weighted average market share of almost 25%), as well as moderate leverage (in the low 3 times debt-to- EBITDA), support the rating. The rating also considers that Trilogy generates a reasonable portion of its cash flow in U.S. dollars, which partially mitigates foreign exchange risks arising from the need to service U.S dollar-denominated debt obligations with local cash flows. Moody's most recent rating action for Trilogy occurred July 28, 2008. At that time, Moody's changed Trilogy's outlook to negative from stable. Based in Bellevue, WA, Trilogy International Partners LLC provides wireless communication services to approximately 3 million subscribers in Haiti, Dominican Republic, and Bolivia. TROPICANA ENT: Fee Auditor Recommends Approval of Applications -------------------------------------------------------------- Warren H. Smith & Associates, P.C., the Court-appointed fee auditor in the Debtors' cases, delivered to the Court its final report on bankruptcy professionals' fee applications for the third interim fee period and recommends the approval of these fees and expenses: Requested Recommended -------------------- --------------------- Professional Fee Expense Fee Expense ------------ --------- --------- ----------- --------- AlixPartners LLP $2,728,532 $187,966 $2,467,661 $187,744 Debtors' Restructuring Advisors Period: 11/01/08-01/31/09 Richards, Layton & 66,102 8,721 65,927 8,721 Finger P.C. Debtors' Counsel Period: 11/01/08-01/31/09 Ernst & Young LLP 409,458 11,875 408,598 11,454 Debtors' auditor & accounting advisor Period: 11/01/08-01/31/09 Ernst & Young LLP 550,536 8,872 547,699 8,789 Debtors' tax advisor Period: 11/01/08-01/31/09 Capstone Advisory 886,635 24,654 886,635 24,409 Group LLP Creditors Committee's Financial Advisors Period: 11/01/08-01/31/09 Franklin Mutual - 5,835 - 5,698 Advisers LLC Creditors Committee Member Period: 05/30/08-12/04/08 About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The Company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. On April 29, 2009, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711). Judge Judith H. Wizmur presides over the cases. Adamar and Manchester Mall or the New Jersey Debtors are both affiliates of Tropicana Entertainment LLC. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. The New Jersey Debtors own and operate one of the largest, and one of the most established, destination casino resorts in Atlantic City, New Jersey, known as Tropicana Casino and Resort - Atlantic City, which ranks third in gaming positions among Atlantic City's 11 casino properties. The New Jersey Debtors initiated the Chapter 11 cases to effectuate a sale of substantially all their assets in accordance with a mandate issued by the New Jersey Casino Control Commission pursuant to the New Jersey Casino Control Act. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: Lender Group Supports Enjoinment of Trademark Suit ----------------------------------------------------------------- The steering committee of lenders under a certain Credit Agreement dated January 3, 2007, as amended, among Tropicana Entertainment Inc. and certain affiliates, certain financial institutions, and Credit Suisse as administrative agent and collateral agent, supports (1) the OpCo Debtors' Motion to Enforce the automatic stay on the Trademark Action or in the alternative, enjoin the Trademark Action, and (2) the OpCo Debtors' objection to the Tropicana Las Vegas Plaintiffs' Lift Stay Motion. The Trademark Action is a complaint for declaratory relief with respect to "trademark issues" commenced by "the LandCo Debtors" Tropicana Las Vegas, Inc., and Reorganized Debtor Hotel Ramada of Nevada LLC in the District Court of Clark County, Nevada. The Trademark Action filed by the Tropicana Las Vegas Plaintiffs without leave of the Bankruptcy Court is a willful violation of the automatic stay, warranting compensatory and punitive damages, Michael R. Lastowski, Esq., at Duane Morris LLP, in Wilmington, Delaware, asserts. The Tropicana Las Vegas Plaintiffs, he maintains, have failed to meet their burdens to show that an exception to the automatic stay applies or that annulment of the stay is warranted. As acknowledged by the Tropicana Las Vegas Plaintiffs in their Lift Stay Motion, the OpCo and LandCo Debtors agreed to postpone disputes over trademark issues until the post-confirmation period. There has been no change in those circumstances since that agreement was struck. The OpCo Debtors have simply applied for the registration of a variation on the Tropicana Marks consistent with their marketing and branding strategy. On behalf of the Steering Committee, Mr. Lastowski contends that the OpCo Debtors should be permitted to complete their reorganization, free from the interference and delay caused by the Trademark Action. The OpCo Debtors are also entitled to compensatory and punitive damages for the reasons provided in their Enforcement Motion, Mr. Lastowski adds. The Steering Committee thus asks the Court to deny the Tropicana Las Vegas Plaintiffs' Lift Stay Motion and to grant the OpCo Debtors' Enforcement Motion. OpCo Debtors Misses Point of Trademark Action, Tropicana LV Plaintiffs Assert On behalf of the Tropicana Las Vegas Plaintiffs, M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, notes that the OpCo Debtors concede that Section 959(a) of the Judiciary and Judicial Procedures Code exempts from the automatic stay "actions arising from a [debtor-in-possession's] postpetition conduct in carrying on its business." The OpCo Debtors, however, have argued that the Trademark Action does not fall within the scope of Section 959(a) because it is premised on prepetition acts or transactions, specifically the prepetition registration of a trademark for the "Tropicana" name by Ramada, Inc., the predecessor to Tropicana Entertainment. "This misses the point of the Trademark Action," Mr. Cleary argues. He asserts that the Trademark Action is not about registration, as no one disputes that the "Tropicana" trademark name is registered to Tropicana Entertainment and that Hotel Ramada of Nevada has the right to use the Tropicana name in connection with the Tropicana Las Vegas Resort and Casino. Instead, he contends, the Trademark Action is all about what happened after the Petition Date -- that the OpCo Debtors, apparently at the behest of their future owners, the OpCo secured lenders, "invented an alleged right" to terminate the Tropicana Las Vegas Plaintiffs' ongoing use of the name and attempted to exploit that alleged right to extract royalties even though none had ever been paid before. Citing the OpCo Debtors' application to attempt to register the trademark "The Trop Las Vegas|Est. 1957" even though they operate no casinos or hotels in Las Vegas and neither they nor any of their property were established in 1957, and Scott Butera's threat to the Tropicana Las Vegas Plaintiffs, Mr. Cleary asserts that these are exactly the type of postpetition conduct that Section 959(a) is intended to address. Even if Section 959(a) somehow does not apply, it is clear that the automatic stay should be annulled immediately in order to put an end to the OpCo Debtors' illegitimate attempt to use the automatic stay as a "sword" and to let the postpetition dispute over matters reserved in each of the LandCo and OpCo Plans proceed, Mr. Cleary tells the Court. The OpCo Debtors cannot continue to threaten the Tropicana Las Vegas Plaintiffs with ongoing "peril" and take affirmative steps to deprive the Plaintiffs of the right to use the "Tropicana" name while simultaneously cloaking themselves in the protection of the automatic stay due to an alleged lack of time or resources to deal with the trademark matters, Mr. Cleary maintains. For the same reasons, the Court should deny the OpCo Debtors' Enforcement Motion, which raises identical issues regarding applicability of the automatic stay and "appears to have been filed solely to create the opportunity to file an impermissible sur-reply to the [Lift Stay] Motion," Mr. Cleary says. Now that the OpCo Debtors have confirmed their Plan and will shortly exit bankruptcy, there are no grounds to enjoin the Trademark Action, Mr. Cleary emphasizes. Finally, given that the Tropicana Las Vegas Plaintiffs acted in good faith and voluntarily offered to extend the response deadline with respect to the Trademark Action until 20 days after the hearing on their Lift Stay Motion, the OpCo Debtors have incurred no damages in respect of the alleged violation of the automatic stay and there is no basis whatsoever for an award of sanctions, Mr. Cleary tells the Court. OpCo Debtors Insist on Entitlement to Stay Protection On behalf of the Tropicana Las Vegas Plaintiffs, Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, argues that the Plaintiffs' objection to the OpCo Debtors' Enforcement Motion confirms that the Plaintiffs had no legitimate excuse for their violation of the automatic stay. "The decision to file and serve the Trademark Action and therefore, to purposefully 'start the clock' in that litigation was one made by bankruptcy counsel whose clients, just weeks before, 'basked in the shade of the automatic stay' themselves," Mr. Madron says. "This was not an oversight by some unwitting litigant oblivious to the Chapter 11 cases, as demonstrated by the Tropicana Las Vegas Plaintiffs' nearly contemporaneous filing of a motion to lift the stay in this Court. To the contrary, it was an attempt by the Tropicana Las Vegas Plaintiffs to manipulate the bankruptcy process to obtain a preferred venue to litigate what is nothing other than a bona fide federal trademark dispute, regardless of how the plaintiffs attempt to characterize the action," Mr. Madron contends. Mr. Madron asserts that the OpCo Debtors are entitled to the benefit of the automatic stay to ensure the success of numerous ongoing regulatory, operational, and financial tasks critical to their reorganization. The OpCo Debtors thus reiterate their request for the Court to grant their Enforcement Motion and schedule a hearing on sanctions to deter the Tropicana Las Vegas Plaintiffs and others from disregarding the automatic stay in the future. Parties Stipulate on Response Deadline The OpCo Debtors and the Tropicana LV Plaintiffs subsequently entered into a Court-approved stipulation for the extension of deadlines related to the Trademark Action. The Parties also agreed to refrain from exercising certain rights in connection to the Trademark Action. The OpCo Debtors' deadline to respond to, answer, or otherwise plead in response to the Trademark Action are governed by the Nevada Rules of Civil Procedure, and the OpCo Debtors' deadline to seek removal of the Trademark Action is governed by Section 1446 of the Judiciary and Judicial Procedures Code. The Parties stipulate that: (a) All deadlines and obligations relating to or resulting from the filing or service of the Trademark Action, including the response deadline, are extended through September 2, 2009. (b) Nothing in the Stipulation will prevent (1) the OpCo Debtors from filing a petition for removal as provided under Section 1446, or (2) the Tropicana LV Plaintiffs from objecting or responding to that petition, including the filing of a motion to remand the action initiated by the Trademark Action. (c) The parties will deliver to the OpCo Debtors' counsel without delay executed copies of a "Stipulated Extension of Time for Defendants to File an Answer or Otherwise Respond." (d) In all other respects, the parties agree not to take any action in any court regarding the Trademark Action until the earlier of September 2, 2009, or the time the Bankruptcy Court enters one or more orders with respect to the Tropicana LV Plaintiff's Lift Stay Motion and he OpCo Debtors' Enforcement Motion. * * * The Court held a hearing on the OpCo Debtors' Lift Stay Motion and the Tropicana LV Plaintiff's Enforcement Motion on August 13, 2009, as scheduled. The OpCo Debtors previously asked the Court for an August 5, 2009 hearing date, but the Tropicana LV Plaintiffs argued that there was no basis for an expedited hearing. The Tropicana LV Plaintiffs said it was willing to extend the time for the OpCo Debtors to respond to the Trademark Action so long as the OpCo Debtors agree to take no action in other courts until the Bankruptcy Court ruled on the Plaintiff's Lift Stay Motion. Upon consideration of all evidence presented, Judge Carey entered an order on August 21, 2009: -- annulling the automatic stay in its entirety with respect to the Trademark Action and proceedings related to removal or remand of the Trademark Action and any counterclaim asserted by the OpCo Debtors; and -- denying the OpCo Debtors' request for an enforcement of the automatic stay on the Trademark Action. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The Company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana have emerged from bankruptcy pursuant to a reorganization plan. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have emerged from Chapter 11 via a separate Chapter 11 plan. On April 29, 2009, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711). Judge Judith H. Wizmur presides over the cases. Adamar and Manchester Mall or the New Jersey Debtors are both affiliates of Tropicana Entertainment LLC. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. The New Jersey Debtors own and operate one of the largest, and one of the most established, destination casino resorts in Atlantic City, New Jersey, known as Tropicana Casino and Resort - Atlantic City, which ranks third in gaming positions among Atlantic City's 11 casino properties. The New Jersey Debtors initiated the Chapter 11 cases to effectuate a sale of substantially all their assets in accordance with a mandate issued by the New Jersey Casino Control Commission pursuant to the New Jersey Casino Control Act. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: OpCo Debtors Seek 3rd Amendment to Credit Facility ----------------------------------------------------------------- Tropicana affiliates known as the OpCo Debtors seek the Court's authority to enter into an amendment of their existing DIP Credit Agreement and pay certain amendment fees. As previously reported, the Court entered on May 30, 2008, a final order authorizing the OpCo Debtors to obtain up to $67,000,000 in postpetition financing on a superiority administrative claim and first priority priming lien basis, pursuant to the terms of the OpCo Debtors' DIP Credit Agreement with Silver Point Finance, LLC, who has since been replaced by The Foothill Group, Inc., as administrative agent, collateral agent, sole bookrunner, and sole lead arranger. The Debtors have amended the Credit Agreement twice since May 2008. The Court approved on October 14, 2008, the First DIP Amendment, wherein the parties agreed to waive certain EBITDA covenant defaults. The Court approved on March 17, 2009, the Second DIP Amendment, wherein the agreement was further modified to waive certain EBITDA covenant defaults. The OpCo Debtors have made substantial progress in their Chapter 11 cases, Travis A. McRoberts, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, reminds the Court. They have obtained confirmation of their Plan of Reorganization and have made significant headway satisfying the conditions precedent to the consummation of the Plan. The OpCo Debtors anticipate to exit from Chapter 11 protection within the next several months. In the meantime, however, the DIP Credit Agreement will mature by its own terms on September 5, 2009, before the OpCo Plan can be consummated. Thus, the OpCo Debtors have initiated a dialogue with the DIP Lenders to extend the maturity date of the DIP Credit Agreement pursuant to a Third DIP Amendment. The Third DIP Amendment provides for these salient terms: * The maturity date of the DIP Credit Agreement would be extended through and including December 31, 2009 -- First Maturity Date. * The potential further extension of the maturity date through and including February 28, 2010, or the "Second Maturity Date" at the election of the OpCo Debtors. * The payment of an upfront amendment fee payable as of the execution date of the amendment to extend the maturity of the DIP Credit Agreement to the First Maturity Date, and an additional upfront amendment fee payable as of the First Maturity Date payable upon the OpCo Debtors' election to further extend the DIP Credit Agreement to the Second Maturity Date. * In addition to the upfront fees, the Third DIP Amendment contemplates certain fees that will be paid on any future borrowings under the DIP Credit Agreement. The OpCo Debtors are presently negotiating with the DIP Lenders to determine the amounts of the amendment fees based on present market rates and also continue to determine certain other terms of the Third DIP Amendment, Mr. McRoberts tells the Court. The OpCo Debtors are also exploring alternative financing agreements with other potential lenders and will inform the Court if a better alternative eliminates the need to enter into the Third DIP Amendment, according to Mr. McRoberts. The OpCo Debtors believe that their entry into the Third DIP Amendment is a sound exercise of their business judgment. Upon maturity of the DIP Credit Agreement, the OpCo Debtors will be required to satisfy in full the DIP Obligations. By extending the maturity date pursuant to the Third DIP Amendment, the OpCo Debtors will be able to continue to pursue consummation of the OpCo Plan, the occurrence of which provides a means to satisfy the DIP Credit Agreement in full, Mr. McRoberts says. Deadline for objections for the Debtors' request is August 26, 2009, at 4:00 p.m., Eastern Time. The matter is scheduled to be heard by the Court on September 2, 2009. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The Company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana have emerged from bankruptcy pursuant to a reorganization plan. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have emerged from Chapter 11 via a separate Chapter 11 plan. On April 29, 2009, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711). Judge Judith H. Wizmur presides over the cases. Adamar and Manchester Mall or the New Jersey Debtors are both affiliates of Tropicana Entertainment LLC. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. The New Jersey Debtors own and operate one of the largest, and one of the most established, destination casino resorts in Atlantic City, New Jersey, known as Tropicana Casino and Resort - Atlantic City, which ranks third in gaming positions among Atlantic City's 11 casino properties. The New Jersey Debtors initiated the Chapter 11 cases to effectuate a sale of substantially all their assets in accordance with a mandate issued by the New Jersey Casino Control Commission pursuant to the New Jersey Casino Control Act. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRUMP ENTERTAINMENT: Fights Noteholders' Proposed Competing Plan ---------------------------------------------------------------- Trump Entertainment Resorts Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of New Jersey to deny the request of the Ad Hoc Committee of Holders of 8.5% Senior Secured Notes Due 2015 to (i) terminate the Debtors' exclusive periods in which to file a Chapter 11 plan of reorganization and solicit acceptances of that plan, and (ii) adjourn the hearing to approve the Debtors' disclosure statement for their joint Chapter 11 plan of reorganization dated Aug. 11, 2009. The Debtors relate that, over the past eight months, they have done everything within their power to facilitate a consensual financial restructuring among their three main constituencies -- Beal Bank, Donald Trump, and the Ad Hoc Committee. When it became clear that the parties had reached a stalemate and a global agreement was not possible, the Debtors' Board of Directors, in exercising their business judgment, determined that the best interests of the Debtors would be served by selecting the highest and best restructuring proposal available. It has done so, and the Debtors filed their plan of reorganization based on a joint proposal from Beal and Trump. The Board did not make this decision lightly. It was based not only on the most recent competing proposals submitted by Beal/Trump and the Ad Hoc Committee, but also on the opinion of their financial advisor, Lazard Freres & Co. LLC on valuation and an extensive but unsuccessful marketing effort to obtain third party investment in the Debtors. The Debtors say that the Ad Hoc Committee's disappointment in the Board's decision is understandable. Unfortunately, there is insufficient value in the Debtors' estates to provide any recovery beyond Beal's $488 million of first lien debt. However, the Ad Hoc Committee's unsupported and completely unwarranted attacks on the Debtors and their efforts to maximize the value of their estates are not only disappointing and unproductive, but also demeaning to the Ad Hoc Committee's own important role in the negotiation process over the last eight months. The Debtors note that the Ad Hoc Committee now seeks to terminate the Debtors' exclusive period in which to seek acceptances of the Plan. This is also unproductive, Trump Entertainment asserts. It avers that the Ad Hoc Committee is entitled to oppose confirmation of the Plan, using every argument at its disposal -- at the confirmation hearing. "But the Ad Hoc Committee has failed to advance any argument, much less any evidence, that would warrant the unusual step of terminating exclusivity." According to Trump Entertainment, the Noteholders Group does not and cannot prove any facts that would support the standards for terminating exclusivity set forth in the cases that the Debtors: -- are being dysfunctionally managed; -- failed to file a reorganization plan in a reasonable time, or -- have used their exclusivity rights in an oppressive or otherwise improper manner. The Debtors point out that the law is clear that the Ad Hoc Committee's unhappiness with the Board's decision to select the Beal/Trump proposal does not satisfy its heavy burden of demonstrating sufficient cause to terminate exclusivity. According to the Debtors, the Ad Hoc Committee's claim that the Debtors' exclusivity period should be terminated merely because Trump is purchasing equity under the Plan also lacks merit. The Debtors' Board of Directors consists of six individuals, five of whom qualify as "independent." Trump has no control over the Board or the decisions it makes. Moreover, based on market testing, the only two parties with any interest in making a capital infusion into the Debtors, Beal/Trump and the Ad Hoc Committee, were both intimately involved in the negotiations that led to the Plan. The Debtors therefore have already considered the available restructuring proposals, and have adopted what, in their business judgment, is the most viable available restructuring plan. Trump/Beal Plan The U.S. Bankruptcy Court for the District of New Jersey has scheduled a hearing for September 16, 2009, at 10:00 a.m. on the adequacy of the disclosure statement filed by Trump Entertainment Resorts, Inc., in support of its joint plan of reorganization. Writen objections to the adequacy of the disclosure statement must be filed no later than September 4, 2009. As reported in the TCR on August 6, 2009, Trump Entertainment Resorts Inc. filed a Chapter 11 plan built around the proposed sale of the company to shareholder Donald Trump. Under the agreement reached with the Company, Donald J. Trump and BNAC, Inc., an affiliate of Beal Bank Nevada, will invest $100 million cash in the newly private company and become its owners. Beal Bank and Beal Bank Nevada to amend and restate a prepetition credit agreement with the partnership subsidiary of the Company in order to restructure approximately $486 million in debt. Under the amendment, the debt will be assumed by the reorganized company post-emergence and the maturity period for the repayment is extended until December 2020 from the existing maturity of 2012. Under the Plan, only Beal Bank will have recovery, and lowed ranked creditors would receive nothing. According to the disclosure statement explaining the Plan, Beal Bank will recover 94% of its claims. Based on the assessment by Lazard Freres & Co., LLC, the value of the Debtors' business operations is less than the amount of Beal Bank's $486 million claim. Because the value of their business operations is less than the amount of the First Lien Lender Claims, there is no value available for the holders of the Second Lien Note Claims and other lower ranked creditors. Holders of equity interests would receive nothing. Donald Trump, which owns shares, will obtain ownership of the reorganized Debtors on account of his $100 million investment. Copies of the Plan and the Disclosure Statement are available for free at: http://bankrupt.com/misc/Trump_Chapter11Plan.pdf http://bankrupt.com/misc/Trump_DiscStatement.pdf 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 November 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 April 5, 2005, and in May 2005, it exited from bankruptcy under the name Trump Entertainment Resorts Inc. TRUMP ENTERTAINMENT: Investors Cry on Zero Recovery under Plan -------------------------------------------------------------- Trump Entertainment Resorts Inc.'s investors would see all of their stock or bonds become worthless if the plan backed by Beal Bank and Donald Trump's offer to invest $100 million in Trump Entertainment and take it private is confirmed by the Bankruptcy Court. As reported by the Troubled Company Reporter on August 20, 2009, Trump Entertainment filed a Chapter 11 plan built around the proposed sale of the Company to shareholder Donald Trump. Under the agreement reached with the Company, Mr. Trump and BNAC, Inc., an affiliate of Beal Bank Nevada, will invest $100 million cash in the newly private company and become its owners. Beal Bank and Beal Bank Nevada will amend and restate a prepetition credit agreement with the partnership subsidiary of the Company in order to restructure approximately $486 million in debt. Under the amendment, the debt will be assumed by the reorganized company post-emergence and the maturity period for the repayment is extended until December 2020 from the existing maturity of 2012. Under the Plan, only Beal Bank will have recovery, and lowed ranked creditors would receive nothing. According to the disclosure statement explaining the Plan, Beal Bank will recover 94% of its claims. pressofAtlanticCity.com relates that shareholders wouldn't get a penny for their stock. The report quoted former Trump Entertainment investor Michael Yacyk as saying, "I know people now who are absolutely aghast about what's going to happen. The brazen attempt by Trump to steal the company in broad daylight is unconscionable, particularly in a post-Enron and Sarbanes-Oxley era." Mr. Yacyk served on a committee that represented Trump shareholders when the Trump casinos last went through bankruptcy in 2005. He is also part of an investor lawsuit that is seeking $4.1 million from Trump Entertainment, pressofAtlanticCity.com states. According to pressofAtlanticCity.com, Mr. Yacyk blames Mr. Trump for the Company's struggle with bankruptcy three times since the early 1990s. Investors have ignored Trump Entertainment's troubled history, largely due to the strength of Mr. Trump's celebrity persona, the report says, citing Mr. Yacyk. pressofAtlanticCity.com reports that Mr. Trump blames Trump Entertainment's bondholders, saying, "I haven't run the company for years. The bondholders have run the company. This is why we want to get involved. We do want to run the company." 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 November 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 April 5, 2005, and in May 2005, it exited from bankruptcy under the name Trump Entertainment Resorts Inc. US SHIPPING PARTNERS: Delays Filing of June 30 Quarterly Report --------------------------------------------------------------- U.S. Shipping Partners L.P., all of its wholly owned subsidiaries, and certain of its affiliates filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York on April 29, 2009. Because of the extraordinary and critical demands that the Bankruptcy Filing and related matters, including the litigation with the third-party investors in, and lenders to, the Partnership's joint venture to construct five product tankers, have placed on the time and attention of the Partnership's senior management and staff, the Partnership has been unable to complete all work necessary to file the Partnership's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2009 by the filing deadline without unreasonable effort or expense. The Partnership's results of operations during the second quarter of 2009 were adversely affected by significantly decreased demand for its vessels, the costs incurred in connection with the Partnership's restructuring and litigation with the investors in, and lenders to, the Joint Venture, and the adoption of Statement of Position 90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code". The Partnership's revenues for the three and six months ended June 30, 2009, were approximately $31.7 million and $79.6 million, respectively, compared to $49.8 million and $101.3 million for the three and six months ended June 30, 2008, respectively. Costs relating to restructuring and the Joint Venture Litigation were approximately $2.2 million and $5.2 million for the three and six months ended June 30, 2009, respectively. The Company did not have any costs related to these matters in the three and six months ended June 30, 2008. The Partnership is still completing the work necessary for the adoption of SOP 90-7 and, therefore, is unable at this time to quantify the effect its adoption will have on the results of operations. In a Form 10-Q filing on August 12, 2009, U.S. Shipping Partners reported a net loss of $13,238,000 for the three months ended March 31, 2009, from a net loss of $6,182,000 for the three months ended March 31, 2008. As of March 31, 2009, the Company had $807,087,000 in total assets and $737,640,000 in total liabilities. About U.S. Shipping U.S. Shipping Partners L.P. -- http://www.usslp.com/-- provides long-haul marine transportation services for refined petroleum, petrochemical and commodity chemical products in the U.S. domestic "coastwise" trade. Its existing fleet consists of twelve tank vessels: five integrated tug barge units; one product tanker; three chemical parcel tankers and three ATBs. U.S. Shipping has embarked on a capital construction program to build additional ATBs and, through a joint venture, additional tank vessels that upon completion will result in U.S. Shipping having one of the most modern versatile fleets in service. The Company and its affiliates filed for Chapter 11 bankruptcy protection on April 29, 2009 (Bankr. S.D.N.Y. Case No. 09-12711). Alfredo R. Perez, Esq., at Weil Gotshal & Manges, assists the Debtors in their restructuring efforts. The U.S. Trustee for Region 2 appointed three creditors to serve on the Official Committee of Unsecured Creditros. Craig A. Wolfe, Esq., Kelley Drye & Warren LLP, represent the Committee. U.S. Shipping listed $717,443,000 in assets and $606,534,000 in debts as of September 30, 2008. VIEW SYSTEMS: June 30 Balance Sheet Upside-Down by $225,969 ----------------------------------------------------------- View Systems Inc.'s balance sheet at June 30, 2009, showed total assets of $1.46 million and total liabilities of $1.69 million, resulting in a stockholders' deficit of $225,969. For three months ended June 30, 2009, the Company posted a net loss of $412,650 compared with a net income of $108,136 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $894,572 compared with a net income of $42,194 for the same period in 2008. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?42ef Going Concern Doubt On March 25, 2009, Davis, Sita & Company, P.A, in Greenbelt, Maryland, expressed substantial doubt about View Systems Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2008 and 2007. The auditing firm said, "The company has incurred ongoing operating losses and does not currently have financing commitments in place to meet expected cash requirements through 2008. In addition, certain notes payable have come due and the note holders have demanded payment." About View Systems Based in Baltimore, Maryland, View Systems Inc. (OTC BB: VYST) -- http://www.viewsystems.com/-- manufactures and installs unique security products to government agencies, schools, courthouses, event and sports venues, the Military and commercial businesses. WARNER CHILCOTT: Moody's Affirms Corporate Family Rating at 'B1' ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Warner Chilcott Company, LLC, and Warner Chilcott Corporation including the B1 Corporate Family Rating and B1 Probability of Default Rating. The rating outlook remains stable. This rating action follows the announcement that Warner Chilcott has entered an agreement to acquire the global pharmaceuticals business of The Procter & Gamble Company for $3.1 billion. The acquisition of P&G's pharmaceuticals business will more than triple Warner Chilcott's revenues and headcount, and will result in incremental financial leverage. The transaction is subject to regulatory review and is expected to close by year-end 2009. "Despite higher leverage, Warner Chilcott's cash flow to debt and debt/EBITDA ratios will remain within Moody's expectations for the B1 rating," stated Moody's Senior Vice President Michael Levesque. "Cash flow immediately following the deal should be substantial allowing for deleveraging," continued Levesque. "However, the long-term value of the acquisition will depend on successful life cycle management strategies for Actonel and Asacol," said Levesque. The affirmation of Warner Chilcott's ratings reflects good strategic benefits of the transaction, including expanded presence in the women's healthcare market, geographic expansion, and new product pipeline opportunities. The affirmation further considers the expected cash flow accretion from the transaction and Warner Chilcott's past track record of deleveraging. Moody's currently estimates pro forma debt/EBITDA of approximately 3.3 to 3.6 times, CFO/debt of approximately 18% to 22%, and free cash flow to debt of approximately 14% to 18%. Moody's may refine these estimates once pro forma financial statements with the PGP business are available, and once the specific details of the financing are known. Risks of the transaction include integration risks, and high product concentration risk in PGP's Actonel and Asacol. Actonel has faced declining script trends based on the availability of generic alendronate (Fosamax) in early 2008. Asacol faces a patent challenge from a generic manufacturer, although P&G recently launched a new version of the product (Asacol HD). Moody's is affirming Warner Chilcott's speculative grade liquidity rating at SGL-1, indicating very good liquidity. However, this rating could be lowered once the full terms of the financing are determined, based on such factors as expected cash on hand, term loan amortization, revolver availability, and covenant cushion. In most scenarios Moody's anticipates that Warner Chilcott will at least maintain good liquidity. Ratings affirmed: Warner Chilcott Company, LLC: -- B1 Corporate Family Rating -- B1 Probability of Default Rating -- Ba3 (LGD3, 36%) senior secured revolving credit facility due 2011 -- Ba3 (LGD3, 36%) senior secured term loan due 2012 -- SGL-1 speculative grade liquidity rating Warner Chilcott Corporation: -- Ba3 (LGD3, 36%) senior secured term loan due 2012 -- B3 (LGD5, 89%) senior subordinated notes due 2015 The secured bank facilities are being affirmed at Ba3. Moody's anticipates that these ratings would be withdrawn if the bank facilities are refinanced in conjunction with the transaction. The senior subordinated notes are being affirmed at B3, subject to final financing terms. Moody's last rating action on Warner Chilcott took place on September 25, 2007, when Moody's upgraded Warner Chilcott's ratings including the Corporate Family Rating to B1 from B2 and the Probability of Default Rating to B1 from B2. Headquartered in Ardee, Ireland, Warner Chilcott (NASDAQ: WCRX) is a marketer and developer of branded pharmaceutical products focused on the U.S. women's healthcare and dermatology markets. For the first six months of 2009, the company reported total revenue of approximately $497 million. WESTFALL TOWNSHIP: To Pay $6MM Over 20 Years in Katz Settlement --------------------------------------------------------------- As widely reported, Westfall Township, a small northeastern Pennsylvania township, has reached a settlement to a $20 million claim by developer David Katz. Westfall has agreed to pay Mr. Katz a total of $6 million to be paid for 20 years. The Associated Press recounts that Westfall officials were found guilty in 1999 of violating Mr. Katz's civil rights by conspiring to stop him from developing a 730-acre wooded area. The original judgment, according to The AP, ballooned to more than $20 million with interest and fees, forcing the township to file for bankruptcy. Westfall Township filed its Chapter 9 petition on April 10, 2009 (Bankr. M.D. Pa. Case No. 09-02736). The primary purpose of Chapter 9 is to allow the municipality to continue its operations and its provision of services while it adjusts or restructures creditor obligations. In a Chapter 9 case, the jurisdiction and powers of the bankruptcy court are limited such that the court may not interfere with any of the political or governmental powers of the municipality, or the municipality's use or enjoyment of any income-producing property. WILLIAM BLINCOE: Files Amended List of Largest Unsecured Creditors ------------------------------------------------------------------ William P. Blincoe, III, filed with the U.S. Bankruptcy Court for the Southern District of Georgia an amended list of largest unsecured creditors, disclosing: Entity Claim Amount ------ ------------ Bank of Monticello $642,742 141 Green Street Monticello, GA 31064 Thomas A. Bucher $90,000 430 Skyline Drive Covington, GA 30014 Southland Florida Properties, Inc. $64,354 750 hammond Drive, NE Bldg. 18, Suite 200 Atlanta, GA 30328-5532 Citi Cards $47,741 P.O. Box 688901 Des Moines, IA 50368-8901 Jasper County Tax Commissioner $36,490 126 W. Greene Street, Suite 125 Monticello, GA 31064-1199 Bryan County Tax Commissioner $25,261 P.O. Box 447 Pembroke, GA 31321-0447 Chatham County Tax Commissioner $23,076 P.O. Box 9827 Savannah, GA 31412 HSBC Card Services- GM Card $15,805 Dept. 9600 Carol Stream, IL 60128-9600 G&W Motorwerkes, Ltd. $15,632 125 Greenville Avenue Staunton, VA 24401 City of Richmond Hill $5,010 P.O. Box 250 Richmond Hill, GA 31324 Boca Grande, Florida-based William P. Blincoe, III filed for Chapter 11 on Aug. 4, 2009 (Bankr. S.D. Ga. Case No. 09-41691). C. James McCallar Jr., Esq., at McCallar Law Firm represents the Debtor in his restructuring efforts. In his petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. WILLIAM BLINCOE: Files Schedules of Assets and Liabilities ----------------------------------------------------------- William P. Blincoe, III, filed with the U.S. Bankruptcy Court for the Southern District of Georgia its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $10,024,994 B. Personal Property $792,255 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $4,714,975 E. Creditors Holding Unsecured Priority Claims $89,839 F. Creditors Holding Unsecured Non-priority Claims $786,276 ----------- ----------- TOTAL $10,817,250 $5,591,090 Boca Grande, Florida-based William P. Blincoe, III filed for Chapter 11 on Aug. 4, 2009 (Bankr. S.D. Ga. Case No. 09-41691). C. James McCallar Jr., Esq., at McCallar Law Firm represents the Debtor in his restructuring efforts. In his petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. WILLIAM TURNER III: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------- Debtor: William Deane Turner, III 5660 Shaddelee Lane Fort Myers, FL 33919 Case No.: 09-18615 Chapter 11 Petition Date: August 24, 2009 Court: United States Bankruptcy Court Middle District of Florida (Ft. Myers) Debtor's Counsel: Richard Johnston Jr., Esq. Fowler, White, Boggs, P.A. Post Office Box 1567 Fort Myers, FL 33902-1567 Tel: (239) 334-7892 Fax: (239) 334-3240 Email: richard.johnston@fowlerwhite.com Total Assets: $10,926,183 Total Debts: $2,929,976 The petition was signed by William Deane Turner, III. Debtor's List of 1 Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Chase - Cc Credit Card $1,976 Attn: Bankruptcy Dept WINDSOR CENTURY: Taps Michael W. Carmel as Bankruptcy Counsel ------------------------------------------------------------- Windsor Century Plaza, LLC, asks the U.S. Bankruptcy Court for the District of Arizona for authority to employ Michael W. Carmel, Ltd., as counsel. The firm will, among other things: a) give the Debtor-in-possession legal advice with respect to his powers and duties in the proceedings; b) prepare on behalf of the Debtor the necessary applications, answers, orders, reports and other legal papers; and c) perform all other legal services for the Debtor which may be necessary herein. Michael W. Carmel, Esq., a lawyer at the firm, tells the Court that his hourly rate is $525 and the rate for paralegals is $135. Mr. Carmel assures that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Court. Mr. Carmel can be reached at: Michael W. Carmel, Ltd. 80 E. Columbus Ave Phoenix, AZ 85012-4965 Tel: (602) 264-4965 Fax: (602) 277-0144 About Windsor Century Plaza Phoenix, Arizona-based Windsor Century Plaza, LLC, operates a real estate business. The Company filed for Chapter 11 on Aug. 5, 2009 (Bankr. D. Ariz. Case No. 09-18571). Michael W. Carmel, Esq., represents the Debtor in its restructuring efforts. In its petition, the Debtor listed total assets of $19,000,000 and total debts of $45,465,186. WORLDSPACE INC: Plan Deadline Extended to Oct. 31 ------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware granted Worldspace Inc. an Oct. 31 extension of its exclusive period to file a Chapter 11 plan, Bill Rochelle at Bloomberg News said. According to the report, no objections were raised to the requested extension. According to Mr. Rochelle, the Bankruptcy Court in March authorized a sale of the business for $28 million in cash to Yenura Pte, a company controlled by WorldSpace's Chief Executive Noah Samara. There were no other bidders at auction. The sale hasn't been completed while regulatory approvals are being sought. Based in the Washington, DC metropolitan area, WorldSpace, Inc. (WRSPQ.PK) -- http://www.1worldspace.com/-- provides satellite- based radio and data broadcasting services to paying subscribers in 10 countries throughout Europe, India, the Middle East, and Africa. 1worldspace(TM) satellites cover two-thirds of the earth and enable the Company to offer a wide range of services for enterprises and governments globally, including distance learning, alert delivery, data delivery, and disaster readiness and response systems. 1worldspace(TM) is a pioneer of satellite-based digital radio services. The Debtors and their affiliates operate two geostationary satellites, AfriStar and Asia Star, which are in orbit over Africa and Asia. The Debtor and two of its affiliates filed for Chapter 11 bankruptcy protection on October 17, 2008 (Bankr. D. Del., Case No. 08-12412 - 08-12414). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors as counsel. The U.S. Trustee for Region 3 appointed creditors to serve on an official committee of unsecured creditors. Neil Raymond Lapinski, Esq., and Rafael Xavier Zahralddin-Aravena, Esq., at Elliot Greenleaf, represent the Committee as counsel. When the Debtors filed for bankruptcy, they listed total assets of $307,382,000 and total debts of $2,122,904,000. * Business Bankruptcies Up by 64%, Says ABI ------------------------------------------- More than 30,000 businesses sought bankruptcy protection in the first half of 2009, a 64% rise from the same period in 2008, Business First of Louisville reported, citing the American Bankruptcy Institute. According to ABI, the number of Chapter 11 business reorganizations increased by 113%, to 7,396, and Chapter 7 business liquidations jumped by 5%, to 20,375. * FDIC Meets to Ease Rules on Investors' Purchase of Closed Banks ----------------------------------------------------------------- The Federal Deposit Insurance Corporation will meet today to consider a proposal to ease rules to allow private-equity investors to acquire troubled banks. The move would help reduce the number of failed banks the FDIC needs to support as its insurance fund has been depleted because of bank closings at the highest pace since 1992. "There are a lot of private-equity bidders that have been waiting to see how this rule plays out," Mark Tenhundfeld, senior vice president at the American Bankers Association, said August 24 in a telephone interview with Bloomberg News. "As modified, I think private equity is likelier to want to get back in the game." The modifications may lower to 10% from 15% the Tier 1 capital ratio private-equity investors must maintain after buying a bank, Mr. Tenhundfeld said. Tier 1 ratios measure a lender's ability to withstand losses and new banks must maintain at least 8 percent to be deemed well capitalized. This year's closed banks have risen to 81, costing the fund an estimated $21.5 billion this year. FDIC's insurance fund had $13 billion at the end of March. Five of the closed banks this year - - Guaranty Bank, Colonial Bank, BankUnited FSB, Silverton Bank, Vineyard Bank cost the fund $12.58 billion. According to Bloomberg, the agency may impose an emergency fee in the third quarter -- sooner than planned -- to replenish the fund, the second assessment this year. The FDIC has twice entered into deals with investor groups this year. In March, IndyMac Federal Bank, the entity that took over Indymac Bank (seized by regulators last year), was sold to investors led by Steven Mnuchin, an ex-Goldman Sachs Group Inc. investment banker, and including buyout firm J.C. Flowers & Co. Florida's BankUnited Financial Corp. was sold in May to firms including Blackstone Group and WL Ross & Co. 2009 Failed Banks List The FDIC was appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks that agreed to assume the deposits of most of the closed banks: Buyer's FDIC Cost Assumed to Insurance Deposits Fund Closed Bank Buyer (millions) (millions) ----------- ---- -------- ----- Guaranty Bank BBVA Compass, Birmingham $11,656.0 $3,000.0 ebank, Atlanta, GA Stearns Bank, N.A. $130.0 $163.0 First Coweta Bank United Bank, Zebulon $144.0 $48.0 CapitalSouth Bank IBERIABANK, Lafayette $542.4 $151.0 Colonial Bank BB&T, Winston-Salem $20,000.0 $2,800.0 Union Bank, N.A. MidFirst Bank $14.0 $61.0 Community Bank Nev FDIC-Created DINB $1,375.8 $781.5 Community Bank Ariz MidFirst Bank $143.8 $25.5 Dwelling House PNC Bank, N.A. $13.8 $6.8 First State Bank Stearns Bank, N.A. $379.0 $116.0 Community National Stearns Bank, N.A. $93.0 $24.0 Community First Home Federal Bank, Nampa $151.0 $45.0 Integrity Bank Stonegate Bank, Fla. $102.0 $46.0 Mutual Bank United Central, Tex. $1,600.0 $696.0 First BankAmericano Crown Bank, Brick, NJ $157.0 $15.0 First State, Altus Herring Bank, Amarillo, Tex. $98.2 $25.2 Peoples Community First Financial Bank, Ohio $598.2 $129.5 Waterford Village Evans Bank, N.A. $58.0 $5.6 SB - Gwinnett State Bank and Trust $292.0 } SB - North Fulton State Bank and Trust $191.0 } SB - Jones County State Bank and Trust $387.0 } $807.0 SB - Houston County State Bank and Trust $320.0 } SB - North Metro State Bank and Trust $212.0 } SB - Bibb County State Bank and Trust $1,000.0 } Temecula Valley First-Citizen Bank $996.0 $391.0 Vineyard Bank Calif. Bank, San Diego $1,456.0 $579.0 BankFIrst, Sioux Alerus Financial, N.A. $254.0 $91.0 First Piedmont First American Bank $109.0 $29.0 Bank of Wyoming Central Bank & Trust $59.0 $27.0 John Warner Bank State Bank of Lincoln $64.0 $10.0 1st State Winchest. First Nat'l Beardstown $34.0 $6.0 Rock River Bank Harvard State Bank $75.8 $27.6 Elizabeth State Galena State Bank $50.4 $11.2 1st Nat'l Danville First Financial $147.0 $24.0 Founders Bank PrivateBank and Trust $848.9 $188.5 Millennium State State Bank of Texas $115.0 $47.0 Mirae Bank Wilshire State Bank $362.0 $50.0 Metro Pacific Bank Sunwest Bank, Tustin $67.0 $29.0 Horizon Bank Stearns Bank, N.A. $69.4 $33.5 Neighborhood Comm CharterBank, West Point $191.3 $66.7 Community Bank -- None -- - - First National Bank Bank of Kansas $142.5 $32.2 Cooperative Bank First Bank, Troy, N.C. $717.0 $217.0 Southern Community United Community $307.0 $114.0 Bank of Lincolnwood Republic Bank, Chicago $202.0 $83.0 Citizens National Morton Community $200.0 $106.0 Strategic Capital Midland States Bank $471.0 $173.0 BankUnited FSB WL Ross-Led Investors $8,300.0 $4,900.0 Westsound Bank Kitsap Bank $295.1 $108.0 America West Cache Valley Bank $284.1 $119.4 Citizens Community N.J. Community Bank $43.7 $18.1 Silverton Bank -- No Buyer -- - $1,300.0 First Bank of Id US Bank, Minneapolis $261.2 $191.2 First Bank of BH -- No Buyer -- - $394.0 Heritage Bank Level One Bank $101.7 $71.3 American Southern Bank of North Georgia $55.6 $41.9 Great Basin Bank Nevada State Bank $221.4 $42.0 American Sterling Metcalf Bank, Lee Summit $171.9 $42.0 New Frontier Bank -- No Buyer -- - $670.0 Cape Fear Bank First Federal, Charleston $403.0 $131.0 Omni National -- No Buyer -- - $290.0 TeamBank, N.A. Great Southern Bank $474.0 $98.0 Colorado National Herring Bank, Amarillo, TX $82.7 $9.0 FirstCity Bank -- No Buyer -- - $100.0 Freedom Bank Nat'l Georgia Bank, Lavonia $161.0 $36.2 Security Savings Bank of Nevada, L.V. $175.2 $59.1 Heritage Community MB Financial Bank, N.A. $218.6 $41.6 Silver Falls Citizens Bank $116.3 $50.0 Pinnacle Bank Washington Trust Bank $64.0 $12.1 Corn Belt Bank Carlinville Nat'l Bank $142.4 $100.0 Riverside Bank TIB Bank $281.4 $201.5 Sherman County Heritage Bank $85.1 $28.0 County Bank Westamerica Bank $1,300.0 $135.0 Alliance Bank California Bank & Trust $951.0 $206.0 FirstBank Regions Bank $279.0 $111.0 Ocala National CenterState Bank $205.2 $99.6 Suburban Federal Bank of Essex $302.0 $126.0 MagnetBank -- No Buyer -- - $119.4 1st Centennial First California Bank $302.1 $227.0 Bank of Clark Umpqua Bank $523.6 $120-145 Nat'l Commerce Republic Bank of Chicago $402.1 $97.1 A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html * Existing Homes Sales Up, Median Price Down 15% ------------------------------------------------ For the first time in five years, existing-home sales have increased for four months in a row, the National Association of Realtors(R), said in an August 21 news release. Existing-home sales -- including single-family, townhomes, condominiums and co-ops -- rose 7.2% to a seasonally adjusted annual rate1 of 5.24 million units in July from a level of 4.89 million in June, and are 5.0% above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005. Total housing inventory at the end of July rose 7.3% to 4.09 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6% lower than a year ago when the number of unsold homes was at a record. The national median existing-home price for all housing types was $178,400 in July, which is 15.1% lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15% to 20% less than traditional homes. Lawrence Yun, NAR chief economist, said he is encouraged. "The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales," he said. The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999. "Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint," Mr. Yun said. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.22% in July from 5.42% in June; the rate was 6.43% in July 2008. An NAR practitioner survey showed first-time buyers purchased 30% of homes in July, and that distressed homes accounted for 31% of transactions. NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the first-time buyer tax credit is working. "In addition to first-time buyers, we're also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they're also freeing some existing owners to sell and make a move," he said. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Sept. 10-11, 2009 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 2, 2009 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown University Law Center, Washington, D.C. Contact: http://www.abiworld.org/ Oct. 7-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Oct. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Paris Las Vegas, Las Vegas, Nev. Contact: http://www.abiworld.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 21-23, 2010 INSOL International Annual Regional Conference Madinat Jumeirah, Dubai, UAE Contact: 44-0-20-7929-6679 or http://www.insol.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 6-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: August 10, 2009 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Danilo Munnoz, Joseph Medel C. Martirez, Denise Marie Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission **