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/raid1/www/Hosts/bankrupt/TCR_Public/090831.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, August 31, 2009, Vol. 13, No. 241 Headlines 1031 TAX: Okun Victims Who Sold Claims Can't Share Restitution ACCESS PHARMACEUTICALS: Pro Forma Financials on MacroChem Deal ADVANCED ENVIRONMENTAL: Seeks Court Ruling on Debt Compliance AFFINITY BANK, VENTURA: Pacific Western Bank Assumes All Deposits AFFINITY BANK, VENTURA: Seized Because of Inadequate Capital AJA NEW YORK: Blames Chapter 11 Filing on Market Conditions AMERICAN BIO MEDICA: Receives Nasdaq Delisting Notice APEX OIL: No Discharge for Environmental Clean-Up Claim APPLIED SOLAR: Bid Protocol Approved; October 13 Sale Hearing Set AVIS BUDGET: Bank Debt Trades at 11% Off in Secondary Market BAYSIDE SQUARE: Voluntary Chapter 11 Case Summary BEARINGPOINT INC: Terminates Hunter as Chief Operating Officer BELO CORP: S&P Downgrades Corporate Credit Rating to 'B+' BERNARD MADOFF: Has Schedule for Resolving Disputed Claim Amounts BLOCKBUSTER INC: Mark Wattles, WCM Own 4.0% of Class A Shares BRADFORD BANK, BALTIMORE: Closed; M&T Buffalo Assumes All Deposits BRIGHT HORIZONS: Bank Debt Trades at 4.5% Off in Secondary Market BROADSTRIPE LLC: Spent $20MM to Upgrade Technology & Add Staff BSC DEV'T: Buyer Wants One-Month Extension for Closing Date BURLINGTON COAT: Highly Leveraged; FY09 Net Loss Widens to $191MM CAPITAL GROWTH: Files Earnings Call Script; VDUL Impact Discussed CARIBBEAN RESTAURANTS: Moody's Affirms 'Caa1' Corporate Rating CARTERET ARMS: Six Properties Put Up on Sale After Bankr. Filing CERBERUS CAPITAL: Loses Almost 71% of Hedge Fund Assets CHRYSLER LLC: Bankruptcy Blamed for Drop in Shiloh Q3 Sales CHRYSLER LLC: Creditors Committee Sues Daimler, et al. CHRYSLER LLC: Daimler Opposes Panel Retention of Two Firms CHRYSLER LLC: Gets Extension for Time to Decide on Select Leases CHRYSLER LLC: Motors Unit's Schedules of Assets and Liabilities CHRYSLER LLC: Motors Unit's Statement of Financial Affairs CHRYSLER LLC: Old CarCo Plan Filing Deadline Moved to Sept. 11 CHRYSLER LLC: Old CarCo Seeks to Sell 2,951 Company Cars CHRYSLER LLC: Proposes Manheim Deal on Set Offs CIGNA: AM Best Assigns 'bb+' Rating to Preferred Stock CIRCUIT CITY: Disclosure Statement Hearing on September 22 CITIGROUP INC: Citi Funding to Issue 1.5% CPI-Linked Notes CITIGROUP INC: Citi Funding to Issue 2% Gold-Linked Notes CITIGROUP INC: Citi Funding to Issue 2010 AmEx-Linked ELKS CITIGROUP INC: To Issue $6.1MM in Brazilian Real-Linked Notes CLAIRE'S STORES: Bank Debt Trades at 35.5% Off in Secondary Market CLEARWIRE CORP: Bank Debt Trades at 9% Off in Secondary Market COMMUNITY BANCORP: To Liquidate Under Chapter 7 After Banks Seized CORNELL COMPANIES: Moody's Affirms 'B2' Senior Unsec. Debt Rating CORPORACION DURANGO: Fitch Upgrades Issuer Default Rating to 'CCC' CORTEX PHARMACEUTICALS: Receives NYSE Amex Staff Determination CRYOPORT INC: Board Approves CEO Stambaugh's Employment Agreement CYCLACEL PHARMACEUTICALS: Receives NASDAQ Noncompliance Notice DANA HOLDING: Bank Debt Trades at 24% Off in Secondary Market DECODE GENETICS: Earl Collier Steps Down as Director DELPHI CORP: Lenders Extend Milestones Deadline to Sept. 3 ECOSPHERE TECHNOLOGIES: Liquidity Woes Raise Going Concern Doubt ELEPHANT TALK: June 30 Balance Sheet Upside-Down by $5.3 Million EMPIRE RESORTS: Registers 7.08MM Shares for Resale FINLAY ENTERPRISES: Can Use Cash Collateral Until December 31 FINLAY ENTERPRISES: Court Sets September 23 Auction Sale of Assets FORD MOTOR: Bank Debt Trades at 13.6% Off in Secondary Market FORD MOTOR: To Resume 3 Shifts at Michigan & Missouri Plants FORD MOTOR: Wants Add'l Concessions from UAW; Local Unions Oppose FORMIDABLE LLC: Case Summary & Largest Unsecured Creditor FREEDOM COMMUNICATIONS: May File for Bankruptcy This Week FRONTIER AIRLINES: MLT Gets $1.2MM Claim for Rejected Deal FRONTIER AIRLINES: Teamsters Ratify Labor Pact GATEWAY HEALTH: AM Best Affirms Financial Strength at B- GENCORP INC: Board Sets Objectives, Other Terms of 2009 LTIP GENERAL MOTORS: Bankruptcy Blamed for Drop in Shiloh Q3 Sales GENTA INC: Stockholders Approve 2009 Stock Incentive Plan GEORGIA GULF: Bank Debt Trades at 4.75% Off in Secondary Market GLOBAL ENERGY HOLDINGS: Plan of Compliance Accepted by NYSE Amex GOODMAN GLOBAL: S&P Gives Positive Outlook, Affirms 'B+' Rating GRAHAM PACKAGING: Bank Debt Trades at 2.8% Off in Secondary Market GSI GROUP: Receives Noncompliance Letter From Nasdaq GUARANTY FINANCIAL: Case Summary & 20 Largest Unsecured Creditors HAWAIIAN TELCOM: Plan Set for Oct. 7 Confirmation Hearing HAYES LEMMERZ: Wants to Pay Over $10MM in Bonuses to Executives HCA INC: Bank Debt Trades at 6% Off in Secondary Market HELEN ZAMBA: Case Summary & 20 Largest Unsecured Creditors HIGHLANDS ACQUISITION: Confirms Intention to Liquidate HTG REAL PROPERTY: Voluntary Chapter 11 Case Summary HYTHIAM INC: Receives NASDAQ Staff Determination IDEARC INC: Bank Debt Trades at 51% Off in Secondary Market INTEGRATED HEALTHCARE: June 30 Balance Sheet Upside-Down by $43MM INTERLAKE HANDLING: Declares Ch 11 Plan Effective as of August 24 ISLE OF CAPRI: Bank Debt Trades at 7% Off in Secondary Market JOSEPH UVINO: Case Summary & 20 Largest Unsecured Creditors KEARNEY CONSTRUCTION: Sued Pasco County Before Filing for Bankr. KNOLOGY INC: Moody's Upgrades Corporate Family Rating to 'B1' LAS VEGAS SANDS: Bank Debt Trades at 22% Off in Secondary Market LCG MARICOPA: Case Summary & 10 Largest Unsecured Creditors LEAP WIRELESS: Bank Debt Trades at 100.96 Cents on Dollar LEHMAN BROTHERS: APS Capital Offers 16% to 38% of Face for Claims LEHMAN BROTHERS: European Administrator May File $100-Bil. Claim LEHMAN BROTHERS: Ex-Chief Operating Officer Files $233MM Claim LEIGH COAL: Gets Court OK to Borrow $3.5MM to Continue Operations LEXINGTON PRECISION: Net Loss Widens to $3.2MM for June 30 Quarter LITHIUM TECHNOLOGY: Posts $6.4MM Net Loss for 2008 LOWE ENTERPRISES: Defaults on Two Secured Loans LUXE LOFTS: Files for Chapter 11 Bankruptcy Protection MAGUIRE PROPERTIES: JMB Fund, et al., Disclose 4.99% Equity Stake MAINSTREET BANK: Closed; Minnesota Bank Assumes Deposits SCO GROUP: Former District Judge Named Chapter 11 Trustee MCDONALD ELECTRICAL: Case Summary & 5 Largest Unsecured Creditors METRO-GOLDWYN-MAYER: Bank Debt Trades at 43% Off METROPCS WIRELESS: Bank Debt Trades at 6% Off in Secondary Market MGM MIRAGE: Joseph Sugerman Joins Board of Directors MICHAELS STORES: Bank Debt Trades at 11% Off in Secondary Market MIDWAY GAMES: Gets Plan Filing Extension Until September 29 MILACRON INC: Has Yet to File June 30 Quarterly Report MIRANT CORP: Bank Debt Trades at 4.46% Off in Secondary Market MORRIS PUBLISHING: Lenders Extend Waiver Until September 4 MUSIFEX INC: Case Summary & 20 Largest Unsecured Creditors NAVISTAR INT'L: Osborne Replaces Belton on Board of Directors NCI BUILDING: CD&R Agrees Exchange Offer May Be Started on Sept. 9 NCI BUSINESS: Prepack Chapter 11 Plan Cues Moody's to Junk Ratings NEUMANN HOMES: Cole Taylor Has No Interest in Reserve Account NEUMANN HOMES: Files Chapter 11 Plan of Liquidation NEUMANN HOMES: Proposes Settlement With Merryman, et al. NEUMANN HOMES: To Seek Approval of Plan Outline on Sept. 23 NEW GENERATION BIOFUELS: Receives NASDAQ Noncompliance Notice NEXMED INC: Submits Compliance Plan to Nasdaq NORTH AMERICAN TECH: Executes $100,000 Promissory Note NORTH AMERICAN TECH: Four Directors Step Down From Board NORTH CENTRAL PROCESSORS: Voluntary Chapter 11 Case Summary NOVELOS THERAPEUTICS: Unveil $9 Million Private Placement OPUS SOUTH: Gets November 18 Deadline to Decide on Leases OPUS SOUTH: Proposes Settlement with Wachovia, Lenders OPUS SOUTH: Wants December 18 Extension for Plan Filing OSI RESTAURANT: Bank Debt Trades at 20.5% Off in Secondary Market PACERS INC: Case Summary & 20 Largest Unsecured Creditors PAPER INT'L: Durango Plan Declared Effective August 27 PARAMOUNT RESOURCES: S&P Affirms 'B' Corporate Credit Rating PELICAN BAY DEVELOPMENTS: Voluntary Chapter 11 Case Summary PHILADELPHIA NEWSPAPERS: Reaches Pacts on Taping Probe, DIP Loans PHILADELPHIA NEWSPAPERS: Newsroom Employees Extend CBA by 30 Days PINNACLE FOODS: Bank Debt Trades at 8% Off in Secondary Market PLATFORM TAXI SERVICE: Case Summary & Largest Unsecured Creditor PROLIANCE INT'L: Designs $100,000 Retention Bonus Program PROVIDENT ROYALTIES: Court Approves Sale to Sinclair PULTE HOMES: Moody's Downgrades Corporate Family Rating to 'B1' RADIATION THERAPY: S&P Downgrades Corporate Credit Rating to 'B' REPUBLIC SERVICES: Fitch Affirms Issuer Default Rating REVLON INC: Files Amendments to Exchange Offer Documents RICHARD E. O'NEAL: Case Summary & 20 Largest Unsecured Creditors RITE AID: Offers to Exchange Unregistered 9.750% Notes ROMEO MONTESSORI: Lists Down Financial Missteps Prior to Bankr. ROUTE 1 AUTO: Voluntary Chapter 11 Case Summary RYLAND GROUP: S&P Affirms Corporate Credit Rating at 'BB-' SALON MEDIA: June 30 Balance Sheet Upside-Down by $3.54 Million SARATOGA SHOE DEPOT: Case Summary & 20 Largest Unsecured Creditors SCO GROUP: Edward Cahn Named as Chapter 11 Trustee SCORPIO SPIRITS: Case Summary & 5 Largest Unsecured Creditors SEMGROUP LP: Terms of Third Amended Reorganization Plan SEMGROUP LP: Liquidation Analysis Under 3rd Amend Plan SEMGROUP LP: Producers Demand Docs. to Prepare for Plan Hearings SEMGROUP LP: Producers Want Admin. Claims Bar Date Extension SEMGROUP LP: Secured Lenders Want Mediation for Producers Dispute SES SOLAR: Going Concern Continuation Depends on Loans Conversion SHAMUS HOLDINGS: Time for Mortgagee's Filing Not Tolled SIELOX INC: Posts $1.19MM Net Loss in Three Months Ended June 30 SIMMONS CO: Lenders Extend Forbearance Periods to September 11 SLM CORP: Moody's Reviews 'Ba1' Senior Unsecured Ratings SPANSION INC: Board Committee Approves KEIP SPANSION INC: Noteholders Wants TRO vs. Samsung SPECTRUM BRANDS: Exits Chapter 11 With a Stronger Balance Sheet SPORT CHALET: Files CEO's Memorandum on Proposed Options Exchange SPORTS CONSTRUCTOR'S: Case Summary 20 Largest Unsecured Creditors SRW INVESTMENTS: Case Summary & 2 Largest Unsecured Creditors ST. MARY'S HOSPITAL: Hospital Building Bids Due by Oct. 5 STANDARD PACIFIC: Lenders Reduce Commitment, Relax Covenants SUNGARD DATA: Bank Debt Trades at 3% Off in Secondary Market TALON INTERNATIONAL: June 30 Balance Sheet Upside-Down by $9.7MM TAYLOR BEAN: Gets Interim Nod to Use Cash Collateral THORNBURG MORTGAGE: Changes Name to TMST Inc., Files Relevant Docs THORNBURG MORTGAGE: Consensual Exit Plan for ADFITECH Explored TITAN ENERGY: Posts 649,678 Net Loss in Six Months Ended June 30 TROPICANA ENTERTAINMENT: Gets NJCC Permit for Atlantic City Return TRW AUTOMOTIVE: Bank Debt Trades at Less Than 1% Off UNI-MARTS LLC: Disclosure Statement Hearing Set for September 22 UNITED AIR: Bank Debt Trades at 36.65% Off in Secondary Market US FOODSERVICE: Bank Debt Trades at 20% Off in Secondary Market US SHIPPING: Plan Set for Oct. 1 Confirmation VENETIAN MACAU: Bank Debt Trades at 9.7% Off in Secondary Market VIKING DRILLING: Creditor Wants U.S. Unit Liquidated in Chapter 7 VISTEON CORP: Bank Debt Trades at 36.3% Off in Secondary Market VISTEON CORP: Proposes More Time to Decide on Leases VISTEON CORP: Proposes October 15 Claims Bar Date VISTEON CORP: Schedules of Assets & Liabilities VISTEON CORP: Statement of Financial Affairs VISTEON CORP: S&P Withdraws 'D' Corporate Credit Rating WASHINGTON MUTUAL: FDIC Addresses JP Morgan Lawsuit WASHINGTON MUTUAL: FDIC Seeks to Intervene in Suit vs. JPM WASHINGTON MUTUAL: JPM Opposes Rule 2004 Discovery WASHINGTON MUTUAL: Plan Filing Deadline Moved to Oct. 21 WASHINGTON MUTUAL: Proposes Bingham McCutchen as Tax Counsel WEST MILLENIUM: Sales Resume at Housing Project WIRELESS ENTERPRISES: Voluntary Chapter 11 Case Summary XCORPOREAL INC: Receives Delisting Notice From NYSE Amex WISE METALS: Net Loss Widens to $17.5MM for June 30 Quarter WIZZARD SOFTWARE: Posts $2.19MM Net Loss in Quarter Ended June 30 WOLVERINE TUBE: Inks Deal With President Regarding $100,000 Bonus YELLOWSTONE CLUB: Consultants Seek Payment of Over $10MM in Fees YRC WORLDWIDE: Board Names A&M's Williamson as Strategy Officer * Auto Suppliers Want to Pay Bonuses to Key Executives * 3 Banks Shuttered; Year's Bank Failures Now 84 * Owen Ellsworth Joins Kurtzman Carson as Consultant * BOND PRICING -- For the Week From August 24 to 28, 2009 ********* 1031 TAX: Okun Victims Who Sold Claims Can't Share Restitution -------------------------------------------------------------- Judge Robert Payne of the U.S. District Court Eastern District of Virginia, in Richmond, ruled that customers who sold claims in the bankruptcy case of 1031 Tax Group LLC, can't share in Edward Okun's restitution, Erik Larson at Bloomberg reported. According to the report, four victims who sold their claims argued the restitution should make up the difference between the sale price for their claims and their actual losses. Judge Payne disagreed, saying, "Permitting such sales or assignments empowers victims by allowing them to receive immediate recompense for their harms without reducing the amount of restitution that will eventually be owed by the defendant." As reported by the TCR on August 19, 2009, Gerard A. McHale, Jr., the Chapter 11 trustee for the estates of the 1031 Tax Group LLP, et al., has filed a Chapter 11 plan that proposes to pay 35 cents on the dollar to unsecured creditors. A copy of the August 12 Plan and Disclosure Statement is available for free at http://bankrupt.com/misc/1031_Tax_DS_Plan.pdf About The 1031 Tax Group Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- was a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. The Company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447 through 07-11462). Gerard A. McHale, Jr., was appointed Chapter 11 trustee. Jonathan L. Flaxer, Esq., and David J. Eisenman, Esq., at Golenbock Eiseman Assor Bell & Peskoe LLP, represent the Chapter 11 trustee. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent the Official Committee of Unsecured Creditors. The Debtors' operating report for the month ended Sept. 30, 2007, showed net loss of $67,903 on $0 revenues. As of Sept. 30, 2007, the Debtors had total assets of $164,231,012 and total liabilities of $168,126,294, resulting in a total stockholders' deficit of $3,895,282. Former CEO Edward H. Okun was sentenced to 100 years in federal prison at Northern Neck Regional Jail in Warsaw, Virginia, after being convicted of mail fraud, among other charges. Mr. Okun allegedly engaged in several misappropriations of funds of 1031 Tax Group and other entities. The funds were used for Mr. Okun's lavish lifestyle including acquiring properties and luxury asset. ACCESS PHARMACEUTICALS: Pro Forma Financials on MacroChem Deal -------------------------------------------------------------- Access Pharmaceuticals, Inc., filed with the Securities and Exchange Commission Pro Forma Financial Information reflecting the Company's merger with MacroChem Corporation. Access also filed MacroChem's consolidated financial statements for the year ended December 31, 2008. The statements were audited by Whitley Penn LLP. In February 2009, Access closed the acquisition of MacroChem through the issuance of 2.5 million shares of Access common stock. Prior to the acquisition of MacroChem, SCO, an investment company, held a majority of Access' and MacroChem's voting stock. SCO owned 53% of the voting stock of Access and 63% of the voting stock of MacroChem. A non-controlling interest of 37% existed at the merger date of MacroChem. In addition, certain members of SCO's management serve on the board of directors of both Access and MacroChem. Based on these facts, Access and MacroChem were deemed under the common control of SCO. Upon acquisition, all outstanding warrants and any other dilutive instruments in MacroChem's stock were cancelled. The in-the-money warrants converted with the common stock. In addition to the merger, the MacroChem noteholders agreed to exchange their notes and interest due on the notes in the total amount of $859,000 for 859,000 restricted shares of the Access' common stock. The value of the shares issued was determined based on the carrying value of the debt, which was established to be the more readily determinable fair value. In addition, Access issued 125,000 shares of its common stock valued at $197,000 to former executives of MacroChem for the settlement of employment agreements. In connection with the exchange of equity interests, $106,000 in merger costs were expensed. The pro forma adjustments are based upon available information and certain assumptions that Access believes are reasonable under the circumstances. A full-text copy of the Pro Forma Financial Information is available at no charge at http://ResearchArchives.com/t/s?437b A full-text copy of MacroChem's Financial Information is available at no charge at http://ResearchArchives.com/t/s?437c Access said in a Form 10-Q filing, "We have generally incurred negative cash flows from operations since inception, and have expended, and expect to continue to expend in the future, substantial funds to complete our planned product development efforts. Since inception, our expenses have significantly exceeded revenues, resulting in an accumulated deficit as of June 30, 2009 of $241,226,000. We expect that our capital resources will be adequate to fund our current level of operations into the first quarter of 2010. However, our ability to fund operations over this time could change significantly depending upon changes to future operational funding obligations or capital expenditures. As a result we may be required to seek additional financing sources within the next twelve months. We cannot assure . . . that we will ever be able to generate significant product revenue or achieve or sustain profitability. "In order to conserve cash for the operations of Access, management, employees and consultants reduced their monthly stipends. Some consultants also agreed to take common stock and warrants for their services. As of June 30, 2009, the Company had $2,351,000 in total assets and $16,177,000 in total liabilities, resulting in $13,826,000 stockholders' deficit. On March 31, 2008, Whitley Penn LLP, in Dallas, expressed substantial doubt about Access Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations, negative cash flows from operating activities and an accumulated deficit. About Access Pharmaceuticals Headquartered in Dallas, Texas, Access Pharmaceuticals Inc. (OTC BB: ACCP.OB) -- http://accesspharma.com/-- is an emerging biopharmaceutical company developing products for use in the treatment of cancer, the supportive care of cancer, and other disease states. The Company's product for the management of oral mucositis, MuGard(TM) has received marketing clearance by the FDA as a device. The Company's lead clinical development program for the drug candidate ProLindac(TM) is in Phase II clinical testing. Access also has advanced drug delivery technologies including Cobalamin(TM) mediated oral drug delivery and targeted delivery. ADVANCED ENVIRONMENTAL: Seeks Court Ruling on Debt Compliance ------------------------------------------------------------- Advanced Environmental Recycling Technologies, Inc., on August 19, 2009, filed an action seeking a declaratory judgment in Delaware chancery court that the Company is in compliance with the terms of its Series D preferred stock issued in October 2007 (Advanced Environmental Recycling Technologies, Inc., vs. Fort Mason Master, L.P., and Fort Mason Partners, L.P.). The Company also seeks a ruling to clarify its obligation with respect to late registration penalties attributable to delays in getting the S-3 resale registration statement effective as a result of circumstances beyond the Company's control. AERT is not seeking monetary damages in this action. In its quarterly report for the period ended June 30, 2009, the Company said it continues to explore financing options, including various financial assistance programs sponsored by state and federal governments, as well as more traditional debt and equity financings. AERT said the expiration of its line of credit agreement with Liberty Bank of Arkansas was extended from June 15, 2009, to September 15, 2009, and it is seeking alternate financing to expand or replace the line of credit. The line is secured by inventory, accounts receivable, chattel paper, general intangibles and other current assets, as well as by fixtures and equipment, and bears interest at a rate of 9%. The full amount of the line is guaranteed as to payment by the Company's largest stockholder, Marjorie Brooks, and by Joe Brooks, its chairman and chief executive officer, and Steve Brooks, its chief operating officer. Ms. Brooks increased the collateral under her guarantee upon a recent renewal of the line of credit. Ms. Brooks is collateralized by a subordinate lien on all of our assets subject to priority liens of Allstate and Liberty Bank. The credit facility includes a debt service coverage ratio, current ratio, and accounts payable and accounts receivable aging covenants substantially similar to those under its 2007 and 2008 bond agreements, and customary restrictions on dividends and the incurrence of additional debt or liens, among other matters. The Company also said in the first six months of 2009, it received a deferral of five monthly principal and interest payments on its Series 2007 and 2008 bonds from Allstate, the bond purchaser, totaling $1.2 million. Payments resumed June 15, 2009. The semi- annual interest payment on the bonds in the amount of $1.0 million was paid in June 2009. Of that amount, $700,000 was paid from the debt service reserve funds, which had a balance of $1.4 million at June 30, 2009. "We are currently developing a plan to repay the reserve funds in the future. Maintaining reserve funds and continuing payments will allow us to shorten the term of the bonds. The establishment of reserve funds when the bonds were originally sold was also designed to allow us to endure difficult times if necessary," the Company said. Under its 2007 and 2008 bond agreements, AERT covenants that it will maintain certain financial ratios. The Company said, "[i]f we fail to comply with, or to secure a waiver for, certain of the covenants, the bond trustee would have the option of demanding immediate repayment of the bonds. In such an event, it could be difficult for us to refinance the bonds, which would give the bond trustee the option to take us into bankruptcy. Our line of credit contains all of the financial covenants. . . , with the exception of the debt to equity covenant. In the case of noncompliance with certain of the covenants, the bank loan could also immediately become due and payable at any time and the bank lender could foreclose on the property used to secure the debt, which could force us into a bankruptcy proceeding before we can refinance this indebtedness." The Company was not in compliance with the debt service coverage, current ratio and accounts payable covenants as of June 30, 2009. The bond purchaser waived the debt service coverage covenant through July 1, 2009, and waived the current ratio and accounts payable covenants through July 1, 2010. Failure to comply with the debt service coverage covenant does not allow the holder of the bonds to demand repayment of the loan. The bank lender for the Company's line of credit, Liberty Bank, has not waived the covenants, and as such could enforce all remedies available to it under the loan agreement. However, Liberty Bank has continued to work with the Company and has extended the line of credit to September 15, 2009. Since June 30, 2008, the Company has paid down the balance on the line of credit by $2.1 million, and an additional $0.5 million was paid in July 2009. The Company's Allstate notes payable have cross-default provisions that caused them to be in technical default at June 30, 2009, due to its non-compliance with the loan covenants. The covenants were waived by Allstate Investments, which is the investor in the bonds and the holder of the Allstate loans. About AERT Based in Springdale, Arizona, Advanced Environmental Recycling Tech. (NASDAQ:AERT) -- http://www.aertinc.com/-- develops, manufactures and markets composite building materials that are used in place of traditional wood or plastic products for exterior applications in building and remodeling homes and for certain other industrial or commercial building purposes. At June 30, 2009, the Company's balance sheet showed total assets of $59.2 million and total liabilities of $63.6 million, resulting in a stockholders' deficit of $4.4 million. At June 30, 2009, the Company had a working capital deficit of $23.5 million and a stockholders' deficit of $4.4 million. The Company incurred losses from operations of $19.8 million and $8.8 million for the years ended December 31, 2008, and 2007. The Company says it has limited additional financial resources available to support its operations and has relied over the last year on extensions of certain of its financings by its lenders. The Company will require additional financial resources to fund maturities of debt and other obligations as they become due. AERT said there is substantial doubt about its ability to continue as a going concern. AFFINITY BANK, VENTURA: Pacific Western Bank Assumes All Deposits ----------------------------------------------------------------- Affinity Bank, Ventura, California, was closed August 28 by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Pacific Western Bank, San Diego, California, to assume all of the deposits of Affinity Bank. Affinity Bank had ten branches. Depositors of Affinity Bank will automatically become depositors of Pacific Western Bank. Depositors will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until Pacific Western Bank can fully integrate the deposit records of Affinity Bank. As of July 10, 2009, Affinity Bank had total assets of $1 billion and total deposits of approximately $922 million. In addition to assuming all of the deposits of the failed bank, Pacific Western Bank agreed to purchase essentially all of the assets. The FDIC and Pacific Western Bank entered into a loss-share transaction on approximately $934 million of Affinity Bank's assets. Pacific Western Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss- sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. Customers who have questions about the transaction can call the FDIC toll-free at 1-800-640-2631. Interested parties can also visit the FDIC's Web site at: http://www.fdic.gov/bank/individual/failed/affinity-ca.html The FDIC will make available Chinese-speaking representatives in the following branches: Sunset and Richmond in San Francisco, and San Mateo. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $254 million. Pacific Western Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. Affinity Bank is the 84th FDIC- insured institution to fail in the nation this year, and the ninth in California. The last FDIC-insured institution closed in the state was Vineyard Bank, National Association, Rancho Cucamonga, on July 17, 2009. AFFINITY BANK, VENTURA: Seized Because of Inadequate Capital ------------------------------------------------------------ The California Department of Financial Institutions said August 28 that regulators have closed Affinity Bank because of "inadequate capital." As of July 31, 2009, Affinity Bank, located in Ventura, had total assets of approximately $1.2 billion and total deposits of approximately $1 billion. The DFI says t has been closely monitoring the bank because of its inadequate capital level. The DFI had ordered it to increase its capital reserves to a safe and sound level but efforts by the bank to do so were unsuccessful. Immediately following the closure, the DFI named the Federal Deposit Insurance Corporation as Receiver of Affinity Bank. The depositors of Affinity Bank are protected by the FDIC. The FDIC has accepted a bid from Pacific Western Bank, San Diego to assume the deposits and substantially all the assets of Affinity Bank. DFI supervises over 700 state financial institutions, including over 200 state-chartered banks. Maintaining the integrity of financial services remains the primary mission of the Department. The DFI is responsible for administering state laws regulating state-licensed financial institutions: banks, credit unions, industrial banks, trust companies, offices of foreign banks, issuers of travelers' checks and payment instruments (money orders), and money transmitters. In addition to posting information about licensees, the DFI Web site features consumer information on a variety of financial topics and DFI consumer brochures available in seven languages. The Department reports to Dale E. Bonner, Secretary of the Business, Transportation and Housing Agency and Governor Arnold Schwarzenegger. AJA NEW YORK: Blames Chapter 11 Filing on Market Conditions ----------------------------------------------------------- Crain's New York Business reports that AJA New York Restaurant Holdings LLC filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of New York, blaming it on market conditions. "Because of market conditions, [AJA New York] fell behind in making their franchise payments," and the downturn caused the bankruptcy filing, Crain's relates, citing Daniel Brown, Esq., of Damon Morey, who assists the Company in its restructuring efforts. According to Crain's some industry experts were surprised that AJA New York was forced into bankruptcy by market conditions. Other fast-food chains like McDonald's have been strong performers during the recession, says the report. "Burger King is a value proposition, so I would think [AJA New York] would be benefitting from people trading down," the report quoted restaurant development firm BCD CEO Andrew Moger as saying. Burger King Corp. sued AJA New York in July 2009, alleging that AJA New York breached contract agreements by failing to pay the complainant monthly fees for royalties, advertising, and other receivables. Court documents say that AJA New York owes Burger King over $841,000. Crain's relates that Mr. Brown said he wasn't aware of the lawsuit and that AJA New York hasn't been served with papers. According to Crain's, Mr. Brown said that none of AJA New York's nine locations would be closed, and the Company was already seeing an uptick in August business due to a new marketing promotion. "We expect that the franchisee's nine Burger King in Brooklyn, N.Y., will remain open during the bankruptcy process. BKC has worked closely over the past two years with the franchisee to assist him during his period of financial difficulty," the report quoted a Burger King spokesperson ass saying. AJA New York runs nine Burger King restaurants in Brooklyn, New York. AJA New York and its affiliates filed for Chapter 11 protection on Aug. 12 in Brooklyn, New York (Bankr. E.D.N.Y. Case No. 09-46885). Franchisor Burger King Corp., owed $841,000, has the second-largest unsecured claim. The petition says debt is less than $10 million. AMERICAN BIO MEDICA: Receives Nasdaq Delisting Notice ----------------------------------------------------- American Bio Medica Corporation on August 25, 2009, received a delisting notice from the NASDAQ Stock Market, for failure to regain compliance with the minimum bid price requirement pursuant to Listing Rule 5550(a)(2). The Company can request a hearing to appeal NASDAQ's determination by 4:00 p.m. (ET) on September 1, 2009, however, if the Company does not request a hearing, trading of the Company's common stock will be suspended at the opening of business on September 3, 2009, and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the Company's securities from listing and registration on the NASDAQ Capital Market. Although the Company meets all other continued listing requirements to maintain its position on the NASDAQ Capital Market, the Company does not currently expect to challenge the delisting. Based upon discussions with several market makers, the Company believes that a market maker will make an application to the OTC Bulletin Board, and its common stock will be eligible for listing on the OTC Bulletin Board following its delisting from the Nasdaq Capital Market. About American Bio Medica American Bio Medica Corporation -- http://www.abmc.com/-- is a biotechnology company that develops, manufactures and markets accurate, cost-effective immunoassay diagnostic test kits, including some of the world's most effective point of collection tests for drugs of abuse. The Company and its worldwide distribution network target the workplace, government, corrections, clinical and educational markets. APEX OIL: No Discharge for Environmental Clean-Up Claim ------------------------------------------------------- In an environmental case, FindLaw reports, a district court injunction requiring the debtor-defendant to clean up a contaminated site is affirmed where the government's claim to an injunction was not discharged in bankruptcy and thus can be renewed in a subsequent lawsuit as the government's equitable claim entitles it to require defendant to clean up the contaminated site at defendant's expense. U.S. v. Apex Oil Co. Inc., No. 08-3433, --- F.3d ----, 2009 WL 2591545, slip op. http://www.ca7.uscourts.gov/tmp/QF160NSF.pdf(7th Cir. Aug. 25, 2009). Bridget Lee at Sive, Paget & Riesel, P.C., explains that Apex argued that the government's remediation injunction, which was estimated to require expenditures of approximately $150 million, was a "right to payment" that had been properly discharged in bankruptcy proceedings. The circuit court rejected this argument. Writing for the court, Judge Richard A. Posner concluded that a RCRA injunction to remediate does not qualify as a claim that can be discharged in bankruptcy because it does not give rise to a "right to payment" as that phrase is defined by the Bankruptcy Code. Unlike CERCLA, RCRA does not entitle the government to a monetary payment of cleanup costs by a responsible party; instead, it allows the government to secure equitable relief requiring a responsible party to abate an environmental hazard. According to the Judge Posner, the fact that Apex did not have the ability to conduct the cleanup itself and would have to spend money to comply with the remediation injunction did not create a dischargeable claim. He reasoned that whether the defendant conducts a cleanup or hires a third party to do so proves irrelevant to the question of whether a "right to payment" exists since "[a]lmost every equitable decree imposes a cost on the defendant." The Apex Oil Company, threatened with foreclosure on a $533 million loan and liquidation of its assets following its disastrous purchase of Clark Oil & Refining Corp., filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in Dec. 1987. At the time of the filing, Fortune magazine reported that Apex was the nation's fifth-largest privately held company, with annual sales of $8 billion, and employed more than 9,000 people in 49 states. After shedding its refining operations and returning to its roots by focusing on oil trading, storage, and shipping, Apex emerged from Chapter 11 in 1990. APPLIED SOLAR: Bid Protocol Approved; October 13 Sale Hearing Set ----------------------------------------------------------------- On August 17, 2009, the U.S. Bankruptcy Court for the District of Delaware approved bid procedures and bid protections in connection with the sale of substantially all of Applied Solar Inc. and Solar Communities I, LLC's assets. As reported in the TCR on August 6, 2009, Applied Solar, Inc. have entered into an asset purchase agreement with Quercus APSO, LLC, an affiliate of The Quercus Trust, for the sale, subject to higher and better offers, of the assets for consideration consisting of the assumption or waiver of certain indebtedness owed by the Company to The Quercus Trust, the assumption of certain of the Company's obligations to third parties and cash. Objections, if any, to the proposed sale, must be filed with the clerk of the Court by 4:00 p.m. on October 2, 2009. The Court has set a hearing on October 13, 2009, at 10:30 a.m. to approve the sale to the stalking horse bidder or to a bidder submitting the highest, best or otherwise financially superior offer at an auction. Requests for a copy of the asset purchase agreement or for any other information concerning the sale of the acquired assets shoulbe be directed by written request to: Cross & Simon, LLC 913 North Market Street, 11th Floor Wilmington, Delaware 19801 Applied Solar, Inc., a Nevada Corporation, is a "next-generation" solar energy company. The Company develops, commercializes and licenses clean energy solutions, innovative solar products and energy management applications. Applied Solar was formerly known as Barnabus Energy Inc., Barnabus Enterprises Inc. and Open Energy Corporation. Applied Solar Inc. and its affiliate Solar Communities I LLC filed for Chapter 11 on July 24 (Bankr. D. Del. Lead Case No. 09-12623). Katherine J. Clayton, Esq., represents the Debtors as counsel. In its petition, the Debtor listed between $1 million and $10 million in assets, and between $10 million and $50 million in debts. AVIS BUDGET: Bank Debt Trades at 11% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which Avis Budget Car Rental LLC is a borrower traded in the secondary market at 89.13 cents-on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.63 percentage points from the previous week, The Journal relates. The loan matures on April 1, 2012. The Company pays 125 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's CCC+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Based in Parsippany, New Jersey, Avis Budget Group, Inc., provides car and truck rentals and ancillary services to businesses and consumers in the United States and internationally. As reported by the Troubled Company Reporter on April 30, 2009, Standard & Poor's Ratings Services assigned a '6' recovery rating to Avis Budget Car Rental LLC's (CCC+/Developing/--) unsecured notes, indicating expectations of negligible (0%-10%) recovery of principal in the event of a payment default. Avis Budget Car Rental LLC is a subsidiary of Avis Budget Group, Inc. (CCC+/Developing/--). BAYSIDE SQUARE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Bayside Square LLC 1111 Bayside Dr Corona del Mar, CA 92625 Case No.: 09-18716 Type of Business: The Debtor a real estate business. Chapter 11 Petition Date: August 26, 2009 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Mark D. Northrup, Esq. Pier 70 2801 Alaskan Wy, Ste. 300 Seattle, WA 98121-1128 Tel: (206) 340-9628 Email: mnorthrup@grahamdunn.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $100,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. BEARINGPOINT INC: Terminates Hunter as Chief Operating Officer -------------------------------------------------------------- BearingPoint, Inc., BearingPoint Australia Pty Limited, a wholly owned subsidiary of the Company, and David R. Hunter, the Company's Chief Operating Officer, on August 21, 2009, entered into a Release Agreement whereby Mr. Hunter was terminated as the Chief Operating Officer of the Company and as an employee of BearingPoint Australia, effective as of that day. Pursuant to the Release Agreement, BearingPoint Australia will pay Mr. Hunter regular wages through August 31, 2009, and an amount equal to AU$300,000 on or before August 31, 2009, in exchange for the release of potential claims against the Company and its affiliates. The Company believes that this termination is consistent with the Company's plans regarding the liquidation of its business in connection with its bankruptcy proceedings. Asset Sales On March 23, 2009, BearingPoint and certain of its subsidiaries entered into an Asset Purchase Agreement to sell a significant portion of their assets related to BearingPoint's North American Public Services business to Deloitte LLP. On April 17, the Bankruptcy Court approved this sale. The closing of this transaction occurred on May 8. In connection with the closing, BearingPoint received net proceeds of roughly $329.3 million. On April 2, BearingPoint International Bermuda Holdings Limited, BearingPoint's indirect subsidiary, entered into a Share Sale Agreement with PwC Advisory Co., Ltd., the Japanese member firm of the PricewaterhouseCoopers global network of firms, for the sale of BearingPoint's consulting business in Japan to PwC Japan for roughly $45 million. In addition, PwC Japan assumed the intercompany debt owed by certain non-debtor subsidiaries of BearingPoint to BearingPoint Co., Ltd. (Chiyoda-ku). The closing of the PwC Japan Transaction occurred on May 11. On April 17, BearingPoint and certain of its subsidiaries entered into an Asset Purchase Agreement with PricewaterhouseCoopers LLP pursuant to which BearingPoint agreed to sell a substantial portion of its assets related to its North American Commercial Services business unit, including Financial Services, to PwC and PwC agreed to assume certain liabilities associated with the assets. In addition, affiliates of PwC also entered into definitive agreements to purchase the equity interests of BearingPoint Information Technologies (Shanghai) Limited, a subsidiary of BearingPoint that operates a global development center in China, and certain assets of a separate global development center in India. On April 27, the Bankruptcy Court approved bidding procedures in connection with an auction of all or substantially all of the assets of the CS Business and BearingPoint China GDC. The Auction was held on May 27 and concluded on May 28. At a hearing May 28, the Bankruptcy Court approved PwC as the winning bidder at the Auction. The aggregate purchase price for the PwC Commercial Services Transaction was $44 million (subject to certain contractual adjustments). The closing of the PwC U.S. Transaction occurred on June 15, and, as a result, PwC acquired the CS Business. The purchase price for the PwC U.S. Transaction was $39 million. BearingPoint anticipates that the PwC China Transaction and the PwC India Transaction will close within the next several months; however, there can be no assurance that the transactions will be completed. On July 9, BearingPoint and certain of its subsidiaries entered into a Stock Purchase Agreement with CSC Brazil Holdings LLC and Computer Sciences Corporation for the sale of BearingPoint's consulting business in Brazil. Pursuant to the Brazil Stock Purchase Agreement, CSC agreed to purchase BearingPoint, S.A., a wholly owned subsidiary of BearingPoint, through the purchase of all issued and outstanding shares of common stock of BearingPoint Brazil, for a purchase price of US$7.9 million. The Bankruptcy Court approved the Brazil Transaction on July 23. The consummation of the Brazil Transaction is expected to occur on or prior to August 7 and is subject to customary closing conditions. There can be no assurance that the Brazil Transaction will be completed. As reported by the Troubled Company Reporter on August 14, 2009, Tiffany Kary at Bloomberg News said Judge Robert Gerber authorized BearingPoint to sell its European division and intellectual property for $69 million to BE Partners B.V., a newly formed company established by a significant majority of the managing directors of BearingPoint's EMEA practice. About BearingPoint BearingPoint, Inc. -- http://www.BearingPoint.com/-- was one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP - - has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next- generation" technology. BearingPoint, Inc., fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 protection on February 18, 2009 (Bankr. S.D.N.Y., Case No. 09-10691). Alfredo R. Perez, Esq., at Weil Gotshal & Manges LLP, in Houston; Marcia J. Goldstein, Esq., Ronit J. Berkovich, Esq., and Jose R. Alcantar, Esq., at Weil Gotshal & Manges LLP, in New York, represent the Debtors as restructuring counsel. AlixPartners, LLP, is the Debtors' restructuring advisors. Greenhill & Co., LLC, is the Debtor's financial advisor & investment banker. Jeffrey S. Sabin, Esq., at Bingham McCutchen LLP represents the Creditors' Committee as counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of September 30, 2008. BELO CORP: S&P Downgrades Corporate Credit Rating to 'B+' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Dallas, Texas-based TV broadcaster Belo Corp. to 'B+' from 'BB-'. The rating outlook is stable. At the same time, S&P lowered its issue-level rating on the company's senior unsecured debt to 'B' from 'B+'. The recovery rating on this debt remains unchanged at '5', indicating S&P's expectation of modest (10% to 30%) recovery for debtholders in the event of a payment default. "The downgrade reflects S&P's expectation that Belo's operating performance will remain weak over the intermediate term, which will cause the company's leverage metrics to stay above a level appropriate for a 'BB-' rating," said Standard & Poor's credit analyst Deborah Kinzer. "In addition, S&P is concerned that the company will need to amend the financial covenants in its credit agreement to avoid a covenant violation as early as the fourth quarter of 2009." Belo's declining EBITDA has quickly absorbed the moderate cushion the company obtained from the February 2009 amendment to its credit agreement, despite cutting costs and modestly reducing debt. As of June 30, 2009, the company had a roughly 16% EBITDA cushion of compliance with its leverage covenant. Leverage per lenders was 5.30x, versus a 6.25x covenant at June 30, 2009. Although S&P foresee that the company will continue to generate modest discretionary cash flow that could be used for debt repayment, S&P expects that EBITDA will continue to deteriorate from large declines in local and national ad revenue. As of June 30, 2009, Belo had roughly $1.1 billion of debt outstanding. The 'B+' rating reflects Belo's high financial leverage from the retention of all outstanding indebtedness after the February 2008 spinoff of its newspaper business, the vulnerability of TV broadcasting's revenues to economic cycles, earnings volatility between election and nonelection years, and competition from alternative media. The company's strong station portfolio and diversification among network affiliations minimally offset these factors. BERNARD MADOFF: Has Schedule for Resolving Disputed Claim Amounts ----------------------------------------------------------------- Irving H. Picard, Trustee for the liquidation of the business of Bernard L. Madoff Investment Securities LLC and for Bernard L. Madoff, asks the U.S. Bankruptcy Court for the Southern District of New York to enter a scheduling order to resolve the "net equity" issue in computing for investors' allowed claims. Under the Securities Investor Protection Act of 1970, 15 U.S.C. Sec. 78aaa et seq., Mr. Picard is responsible for recovering and distributing customer property to BLMIS's customers, assessing claims, and liquidating any other assets of the firm for the benefit of the estate and its creditors. The statutory framework for the satisfaction of Customer Claims in a SIPA liquidation proceeding provides that customers share pro rata in customer property to the extent of their Net Equity (as defined in Section 78lll(11) of SIPA, 15 U.S.C. Sec. 78lll(11)), and to the extent that a customer's Net Equity exceeds his or her ratable share of customer property, the Securities Investor Protection Corporation will advance funds to the SIPA trustee up to $500,000 for securities for that customer. Certain claimants disagree with Mr. Picard as to the construction of the term Net Equity and how that term should be applied to determine the amount of the valid Customer Claim of each claimant. It is the Trustee's position that for purposes of determining customer claims, each BLMIS customer's Net Equity will be determined by crediting the amount of cash deposited by the customer into his BLMIS account, less any amounts already withdrawn by him from his BLMIS customer account -- cash in/cash out approach. Various claimants have asserted that Net Equity should be determined on the basis of each claimant's balance as shown on their November 30, 2008 account statement provided by BLMIS or, alternatively, that the calculation should reflect the time value of money deposited by each claimant and/or interest, unjust enrichment or other factors. Furthermore, two adversary proceedings were filed challenging the Trustee's definition of "net equity": Less, et al. v. Picard, Adv. Pro. No. 09 CV 1265 (Bankr. S.D.N.Y.) (BRL) (seeking class action relief); and Peskin, et al. v. Picard, Adv. Pro. No. 09 CV 1272 (Bankr. S.D.N.Y.) (BRL). In furtherance of the requirement under the Court's prior order that the Trustee obtain and notify an objecting party of a hearing on an objection, the purpose of this proposed scheduling order is to establish an orderly procedure for this Court to resolve objections involving the proper determination of Net Equity. The Trustee proposes this schedule: A. On or before October 16, 2009, the Trustee will file motion(s) to affirm certain customer claims determinations as to which objections have been filed, specifically with regard to the Trustee's Net Equity determinations. B. In accordance with the Claims Procedures Order, the Motion(s) will identify those claimants who have filed objections to his determination of their customer claims for which he intends to schedule a hearing on the Net Equity issue. C. In support of the Motion(s), the Trustee shall file a memorandum of law and supporting papers setting forth the factual and legal bases for the Trustee's construction of the term Net Equity on the same date. D. SIPC will file any brief with reference to the Motion(s) on or before October 16, 2009. E. The Objecting Claimants will file their responses to the Motion(s) on or before November 13, 2009. F. Any Interested Parties who wish to file a brief in opposition to the Trustee's Motion(s) will file their briefs on or before November 13, 2009. G. Any Interested Parties who wish to file a brief in support of the Trustee's Motion(s) will file their briefs on or before December 11, 2009. H. To the extent that Interested Parties who filed briefs in raise issues, factual or legal, that have not been previously raised, Interested Parties who filed a brief in opposition to the Trustee's Motion(s) may file a reply brief addressing the issues on or before December 21, 2009. I. The Trustee and SIPC will file any reply papers on or Before January 15, 2010. J. The Court will hold a hearing on the Motion on February 2, 2010, at 10:00 a.m., or such other time as the Court determines. The Trustee's proposed procedures have been disseminated in advance of filing to three law firms, each of which has demonstrated an interest in the litigation of this issue: (a) Lax & Neville, LLP, (b) Milberg LLP, and (c) Phillips Nizer LLP 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. BLOCKBUSTER INC: Mark Wattles, WCM Own 4.0% of Class A Shares ------------------------------------------------------------- Wattles Capital Management, LLC, as of August 24, 2009, owned 4,841,937 Class A shares of Blockbuster Inc. Common Stock, representing 4.0% of Blockbuster's outstanding shares of Class A Common Stock. Through WCM and the HKW Trust, Mark J. Wattles beneficially owns Class A Shares. Mr. Wattles is the sole member and manager of WCM, and owner of 100% of its membership interests. He is also the settlor and sole trustee of the Trust and exercises sole discretion over the Trust pursuant to the terms and conditions set forth in the Trust instrument. Mr. Wattles beneficially owns shares of Blockbuster Class B Common Stock as well as the 9.0% senior notes of Blockbuster. Mr. Wattles' principal occupation is serving as President of WCM, which is primarily engaged in investing in public and private companies in the consumer products and retail sectors. WCM indirectly owns a majority interest in Ultimate Acquisition Partners, LP, which owns and operates consumer electronics retail stores under the name Ultimate Electronics. Mr. Wattles also serves as Chairman of UAP. Prior to forming WCM, Mr. Wattles founded Hollywood Entertainment Corporation, the second largest video rental and retail chain (after Blockbuster Inc.) and the second largest video game specialty retailer (after Game Stop Corp.), where he was Chairman and Chief Executive Officer for more than 17 years before Hollywood was sold for $1.25 billion to Movie Gallery, Inc. in April 2005. The Trust acquires, holds, manages and disposes of assets for the benefit of a member of Mr. Wattles' family and The Wattles Family Foundation. About Blockbuster Blockbuster, Inc., headquartered in Dallas, Texas, is a leading global provider of in-home movie and game entertainment with approximately 7,400 stores throughout the Americas, Europe, Asia, and Australia. As of July 5, 2009, the Company had $1.93 billion in total assets and $1.71 billion in total liabilities. Blockbuster continues to hold Moody's Investors Service's Caa3 Probability of Default Rating, B1 secured bank credit facilities rating and B1 senior secured rating of B1. Blockbuster also holds Standard & Poor's Ratings Services' 'CCC' corporate credit rating. S&P has lowered the issue-level ratings on both its secured debt to 'CCC+' from 'B' and its subordinated debt to 'CC' from 'CCC'. Fitch Ratings has affirmed Blockbuster's long-term Issuer Default Rating at 'CCC'. BRADFORD BANK, BALTIMORE: Closed; M&T Buffalo Assumes All Deposits ------------------------------------------------------------------ Bradford Bank, Baltimore, Maryland, was closed August 28 by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Manufacturers and Traders Trust Company, Buffalo, New York, to assume all of the deposits of Bradford Bank. The nine branches of Bradford Bank will reopen as branches of M&T. Depositors of Bradford Bank will automatically become depositors of M&T. Depositors will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until M&T can fully integrate the deposit records of Bradford Bank. As of June 30, 2009, Bradford Bank had total assets of $452 million and total deposits of approximately $383 million. In addition to assuming all of the deposits of the failed bank, M&T agreed to purchase essentially all of the failed bank's assets. The FDIC and M&T entered into a loss-share transaction on approximately $338 million of Bradford Bank's assets. M&T will share in the losses on the asset pools covered under the loss- share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. Customers who have questions about the transaction can call the FDIC toll-free at 1-800-640-2693. Interested parties can also visit the FDIC's Web site at: http://www.fdic.gov/bank/individual/failed/bradford-md.html The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $97 million. M&T's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. Bradford Bank is the 82nd FDIC-insured institution to fail in the nation this year, and the second in Maryland. The last FDIC-insured institution closed in the state was Suburban Federal Savings Bank, Crofton, on January 30, 2009. BRIGHT HORIZONS: Bank Debt Trades at 4.5% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which Watertown, Massachusetts-based Bright Horizons Family Solutions, Inc., is a borrower traded in the secondary market at 95.50 cents-on-the- dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.70 percentage points from the previous week, The Journal relates. The loan matures on May 1, 2014. Bright Horizons pays 400 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Founded in 1986, Bright Horizons Family Solutions is the world's leading provider of employer-sponsored child care, early education, and work/life solutions. Conducting business in the United States, Europe, and Canada, Bright Horizons has created employer-sponsored child care and early education programs for more than 700 clients, including more than 90 of the Fortune 500. Bright Horizons carries a 'B2' long term corporate family and probability of default ratings, and a 'Ba3' bank loan debt rating from Moody's. BROADSTRIPE LLC: Spent $20MM to Upgrade Technology & Add Staff -------------------------------------------------------------- St. Louis Business Journal reports that Broadstripe LLC said that it has spent $20 million on technology upgrades and additional staff. Citing Broadstripe's new chief commercial officer Tony Lent, Business Journal relates that the Company spent $20 million in: -- upgrading its network for faster Internet speeds, -- overhauling customer service operations, -- purchasing new call center technologies, and -- hiring more technicians and call center representatives. Business Journal states that other than Mr. Lent, Broadstripe also hired: -- Chad Coben as chief financial officer; -- Debra Wood, executive vice president of finance operations; and -- Tamara Shelman, senior vice president of customer care. According to Business Journal, Mr. Lent said that Broadstripe has surpassed "aggressive" sales targets for its new lifetime price guarantee offer, which was unveiled this month and provides new and existing subscribers with cable, Internet, and phone service for a never-changing price of $130 a month. Mr. Lent said that Broadstripe is focused on emerging from bankruptcy by year-end with less debt and stronger operations. 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. BSC DEV'T: Buyer Wants One-Month Extension for Closing Date ----------------------------------------------------------- New Buffalo Statler Development LLC has asked the Hon. Carl Bucki of the U.S. Bankruptcy Court Western District of New York to delay until to September 28 the closing date for BSC Development BUF LLC's Statler Towers, court documents say. As reported by the TCR on August 20, 2009, Judge Bucki approved the $1.3 million sale of Statler Towers to New Buffalo Statler. New Buffalo Statler's lawyer David Pfalzgraf Jr. said that a sale closing of the towers is tentatively set for August 28, but it may be delayed a few days if the pre-closing due diligence takes longer than expected. James Fink at Business First of Buffalo reports that Judge Bucki was expected to review the request during an August 28 hearing. Business First quoted David Pfalzgraf Jr., New Buffalo Statler Development's attorney, as saying, "We are trying to close before then. We have a lot of good things in the works, but we need a little more time to make them happen. We are working very hard to make this happen." According to Business First, New Buffalo Statler said that it is planning a $100 million facelift of the venerable building, renovating the structure into a mixed-use property with a hotel, apartments, office space, restaurants, a jazz club. Business First says that Park Lane Catering -- owned by William Koessler, who is among the leaders of New Buffalo Statler -- will anchor the main floor and ballroom, an work is expected to start this fall. Business First relates that Morris Horwitz, the court-appointed trustee, has attached several recommendations to Judge Bucki in connection with the delayed closing, among them are: -- Gail Pirincci's $100,000 deposit be held until New Buffalo Statler Development completes the closing process, according to the report. Gail Pirincci represented a group that bid against New Buffalo Statler; and -- New Buffalo Statler, effective Friday, must be responsible for: * The payroll of the Statler's nine employees, including standard union payments, worker's compensation insurance costs and all related taxes; * New Buffalo Statler Development pay all utility costs. * The partnership pay such costs as employee parking, or parking for tenants -- if it is part of their lease, and cleaning services for the building; and * Should New Buffalo Statler Development not close on the property by September 28, then Ms. Pirincci will have 72 hours to present a $100,000 down payment to the court. Contract Specialists International, Inc., Firstsource Manufacturing, Inc., and Parklane Catering LLC filed a Chapter 11 bankruptcy petition for BSC Development BUF LLC, aka BSC Tower, LLC, on April 13, 2009 (Bankr. W.D. N.Y. Case No. 09-11550). BURLINGTON COAT: Highly Leveraged; FY09 Net Loss Widens to $191MM ----------------------------------------------------------------- "We are highly leveraged," Burlington Coat Factory Investments Holdings, Inc., warned in a regulatory filing with the Securities and Exchange Commission. "Our ability to make payments on and to refinance our debt and to fund planned capital expenditures will depend on our ability to generate cash in the future. To some extent, this is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If we are unable to generate sufficient cash flow to service our debt and meet our other commitments, we will be required to adopt one or more alternatives, such as refinancing all or a portion of our debt, including the notes, selling material assets or operations or raising additional debt or equity capital." As of May 30, 2009, Burlington Coat Factory's total indebtedness was $1.449 billion, including $300.8 million of 11.1% senior notes due 2014, $99.3 million of 14.5% senior discount notes due 2014, $870.8 million under its Senior Secured Term Loan Facility, and $150.3 million under the ABL Line of Credit. Estimated cash required to make minimum debt service payments (including principal and interest) for these debt obligations amounts to $87.7 million for the fiscal year ending May 29, 2010, inclusive of minimum interest payments related to the ABL Line of Credit. The ABL Line of Credit has no annual minimum principal payment requirement. "We may not be able to effect any of these actions on a timely basis, on commercially reasonable terms or at all, or that these actions would be sufficient to meet our capital requirements. In addition, the terms of our existing or future debt agreements, including the credit agreements governing our senior secured credit facilities and each indenture governing the notes, may restrict us from effecting any of these alternatives," the Company said. Burlington Coat Factory warned if it fails to make scheduled payments on its debt or otherwise fails to comply with its covenants, it will be in default and, as a result: -- its debt holders could declare all outstanding principal and interest to be due and payable, -- its secured debt lenders could terminate their commitments and commence foreclosure proceedings against its assets, and -- it could be forced into bankruptcy or liquidation. The indenture governing the Company's senior notes and the credit agreements governing its senior secured credit facilities impose significant operating and financial restrictions on the Company and its subsidiaries, which may prevent it from capitalizing on business opportunities. The indenture governing the Company's senior notes and the credit agreements governing its senior secured credit facilities contain covenants that place significant operating and financial restrictions on the Company. The covenants limit the Company's ability to, among other things: -- incur additional indebtedness or enter into sale and leaseback obligations; -- pay certain dividends or make certain distributions on capital stock or repurchase capital stock; -- make certain capital expenditures; -- make certain investments or other restricted payments; -- have the Company's subsidiaries pay dividends or make other payments to the Company; -- engage in certain transactions with stockholders or affiliates; -- sell certain assets or merge with or into other companies; -- guarantee indebtedness; and -- create liens. "As a result of these covenants, we are limited in how we conduct our business and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we may incur could include more restrictive covenants. If we fail to maintain compliance with these covenants in the future, we may not be able to obtain waivers from the lenders and/or amend the covenants," the Company said. "Our failure to comply with the restrictive covenants described above, as well as others that may be contained in our senior secured credit facilities from time to time, could result in an event of default, which, if not cured or waived, could result in us being required to repay these borrowings before their due date. If we are unable to refinance these borrowings or are forced to refinance these borrowings on less favorable terms, our results of operations and financial condition could be adversely affected." Fiscal 2009 Burlington Coat Factory has experienced recurring net losses since its formation in April 2006. The losses are primarily the result of impairment charges and increased interest expense associated with the Company's leveraged debt structure. Burlington Coat Factory recorded a net loss of $191.6 million during fiscal year 2009, which ended May 30, 2009, compared with a net loss of $49.0 million for Fiscal 2008. The primary driver of the net loss in Fiscal 2009 was the impairment charges incurred throughout the year. The Company experienced an increase in net sales for Fiscal 2009 compared with Fiscal 2008. Consolidated net sales increased $148.6 million, or 4.4%, to $3.542 billion -- $3.200 billion of which represents comparative store sales -- for Fiscal 2009 from $3.393 billion -- $3.282 billion of which represents comparative store sales -- for Fiscal 2008. As of May 30, 2009, the Company had total assets of $2.533 billion; and total current liabilities of $473.7 million, long term debt of $1.438 billion, other liabilities of $159.4 million, and deferred tax liabilities of $326.3 million. As of May 30, 2009, the Company had accumulated deficit of $328.4 million and stockholder's equity of $135.0 million. During Fiscal 2009, the Company recorded impairment charges of $294.6 million and $37.5 million related to its tradenames and long-lived assets. At May 30, 2009, working capital was $312.3 million, cash and cash equivalents were $25.8 million and unused availability under the Company's ABL Senior Secured Revolving Facility (ABL Line of Credit) was $235.3 million. Despite the current trends in the retail environment and their negative impact on the Company's comparative store sales, the Company believes that cash generated from operations, along with its existing cash and availability under its ABL Line of Credit, will be sufficient to fund its expected cash flow requirements and planned capital expenditures for at least the next 12 months as well as the foreseeable future. "However, there can be no assurance that, should the economy continue to decline, the Company would be able to continue to offset decreases in its comparative store sales with continued savings initiatives," the Company said. A full-text copy of the Company's annual report on Form 10-K is available at no charge at http://ResearchArchives.com/t/s?4361 On August 24, 2009, John Tudor provided written notice to the Company of his decision to resign as a director of each of Burlington Coat Factory Investments Holdings, Burlington Coat Factory Holdings, Inc., and Burlington Coat Factory Warehouse Corporation, such resignation to be effective on August 31, 2009. The resignation of Mr. Tudor did not involve any disagreement with the Company. About Burlington Coat Factory Burlington Coat Factory Investments Holdings, Inc., and its subsidiaries operate stores in 44 states and Puerto Rico, which sell apparel, shoes and accessories for men, women and children. A majority of the stores offer a home furnishing and linens department and a juvenile furniture department. As reported by the Troubled Company Reporter on June 29, 2009, Fitch Ratings affirmed its Issuer Default Rating at 'B-'; US$800 million asset-based revolver rating at 'B+/RR1'; US$900 million term loan rating at 'B/RR3', on Burlington Coat Factory Warehouse Corp. Fitch revised these ratings to reflect the new issue rating definitions as of March 2009 -- US$305 million senior unsecured notes revised to 'CC/RR6' from 'CCC/RR6'; US$99 million senior discount notes revised to 'C/RR6' from 'CCC-/RR6'. CAPITAL GROWTH: Files Earnings Call Script; VDUL Impact Discussed ----------------------------------------------------------------- Capital Growth Systems, Inc., filed with the Securities and Exchange Commission a copy of the script it prepared with respect to its earnings announcement presented to investors on August 20, 2009, for the year ended December 31, 2008 and for the quarterly periods ended March 31, 2009 and June 30, 2009. On the call were Jack Lodge, Chief Operating Officer of Global Capacity, the trade name for Capital Growth Systems; Patrick Shutt, Chief Executive Officer; George King, President; Jim McDevitt, Chief Financial Officer; and Bob Pollan, Chairman of the Board of Directors. Mr. Shutt discussed several Company metrics: -- During the past 11 quarters the Company has acquired four core and strategic assets. It has also completed two dispositions of non-performing and non-core assets; -- The core assets include: Magenta netlogic, CentrePath, Global Capacity Group and Vanco Direct U.S.A., LLC; -- The Company's revenue growth since 2006, excluding dispositions, has been 368% CAGR or "compounded annualized growth rate" and in 2009 the Company's revenue is expected to more than double 2008 revenue; -- The Company has 350 customers across the entire product portfolio that generate over $5 million per month in revenues, most of which is recurring in nature; -- The total cash invested in assembling this business is roughly equal to annualized recurring revenue or 1x multiplier. "We believe that revenue multipliers are an important metric in understanding the strategic landscape;" and -- Client services model since acquisition is gaining traction: * In Q1, total contract value sold was $4.3 million; and * In Q2, total contract value sold was $9.6 million. Mr. Pollan said the acquisition of Vanco Direct USA, LLC, in November 2008 provides Global Capacity with a tremendous addition to the Company's core assets, and provides a platform from which to grow customers, revenue, and profitability. "Management has worked diligently in the nine months since completing the acquisition to integrate the businesses, leveraging the core assets and setting us up to win. There have been some challenges along the way, but the Company has achieved some significant milestones as well," according to Mr. Pollan. Mr. King noted the Company has entered into a series of transactions as of July 31, 2009, related to amendment of its existing financing and the funding of additional financing. This transaction, he said, represents a significant milestone for the Company. "The financing was a supplement to the acquisition closing of Vanco Direct in November 2008 in that it allowed us to establish a vendor payment plan in order to reduce past due obligations of certain vendors over time. In addition, the Second Amendment to the November 2008 Loan Agreement with the Company's senior lender reset certain covenants of that agreement," he said. A full-text copy of the script is available at no charge at: http://ResearchArchives.com/t/s?437a As reported by the Troubled Company Reporter on August 24, 2009, the Company posted wider net loss of $14.1 million for the three months ended June 30, 2009, from a net loss of $5.69 million for the same period a year ago. For the six months ended June 30, 2009, the Company posted net loss of $35.2 million from net loss of $6.11 million for the same period a year ago. For the three months ended March 31, 2009, the Company posted net loss of $21.0 million from net loss of $420,000 for the same period a year ago. As of June 30, 2009, the Company had $52.1 million in total assets and $86.7 million in total liabilities, resulting in $34.5 million in shareholders' deficit. As of June 30, 2009, the Company's current liabilities exceeded its current assets by $29.9 million. Cash on hand at June 30, 2009 was $1.3 million -- not including $500,000 restricted for outstanding letters of credit. The Company's net working capital deficiency, recurring operating losses, and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern. However, the Company said the successful delivery on major customer contracts entered into since mid-2008 and continued success in closing these types of contracts will move it into profitability. In addition to those new contracts, management believes that the inclusion of VDUL's business and cash flows will have a positive impact on future results. At the same time, expenses are managed closely and lower-cost outsource opportunities are given case-by- case consideration. On May 22, 2009, the Company received from ACF CGS, LLC, a formal notification of certain covenant violations that occurred and continue to exist under the Loan Agreement dated November 19, 2008, by and among the Company and its subsidiaries. The Borrowers have timely paid all debt service obligations under the Loan Agreement. The Borrowers have agreed that the Forbearance Agreement constitutes an additional "Loan Document" under the Loan Agreement. Among other things, the Forbearance Agreement contemplates that from May 1, 2009, until the date that the Agent either waives all of the specified defaults or the parties otherwise agree, the Loan will continue to bear interest at the default rate of interest as specified in the Loan Agreement. About Capital Growth Systems Based in Chicago, Illinois, Capital Growth Systems Inc. (OTC BB: CGSY) doing business as Global Capacity Group Inc., delivers telecom integration services to systems integrators, telecommunications companies, and enterprise customers worldwide. It provides an integrated supply chain management system that streamlines and accelerates the process of designing, building, and managing customized communications networks. The Company also provides connectivity services for network integrators who bundle telecommunication solutions to enterprise customers; offers global pricing and quotation software and management services for data communications; and assists customers to reduce connectivity costs and attain understanding and control of their deployed communications network. CARIBBEAN RESTAURANTS: Moody's Affirms 'Caa1' Corporate Rating -------------------------------------------------------------- Moody's Investors Service affirmed all ratings of Caribbean Restaurants, LLC, including its Corporate Family Rating of Caa1 and senior secured notes due 2012 rating of B3. Concurrently, the rating outlook was revised to negative from stable. The outlook revision reflects Moody's expectation that Caribbean's operating and credit metrics will remain weak for the coming year, primarily driven by the persistently negative guest traffic at its 175 Burger King franchised restaurants in Puerto Rico, and the resultant margin pressure due to lower sales. Moody's believes that the key contributing factors to the company's weak guest traffic, such as the protracted recession and high unemployment rate in Puerto Rico, would likely remain while competitions among quick service restaurants focusing on promotional activities are likely to intensify over the intermediate term. These factors will likely keep the company from improving its performance and weak credit metrics within the rating horizon. As a result, Moody's now expects its free cash flow will be negative for the next 12-18 months. Further, the higher capital expenditure budget in FY2010 which Moody's views somewhat aggressive, and higher operating cost due to minimum wage increase, could exacerbate the company's negative cash flow. "Our previous stable outlook anticipated at least break-even free cash flow," explained Moody's analyst John Zhao. "The affirmation of the CFR, however, reflects Caribbean's operating performance will likely be within Moody's expectation, though at the lower end." The company was able to generate positive revenue growth for its FY 2009 (ended April 30, 2009). However, Moody's is somewhat concerned on the health of the growth since it was achieved through price increases to offset worsening traffic trend. The Caa1 CFR continues to incorporate Caribbean's geographic concentration and limited scale and revenue base, as well as the challenges the company is facing in reversing the negative traffic trend in light of high unemployment rate and weak consumer spending on the island. The ratings positively consider strong name recognition and leading position of Burger King brand in the Puerto Rico QSR segment, a seasoned management team and the company's exclusive development agreement within Puerto Rico. The ratings also anticipate the company will maintain an adequate liquidity position, supported by unencumbered access to its $30 million revolving credit facility and ample cushion above the financial covenant compliance. The rating action is: Caribbean Restaurants, LLC Rating affirmed: * Corporate Family Rating at Caa1 * Probability of Default Rating at Caa1 * $146 million senior secured second lien notes due 2012 -- B3 (LGD3, 39%) * Outlook: changed to Negative from Stable The last rating action on Caribbean occurred on August 5, 2008 when Moody's affirmed Caa1 CFR and assigned B3 rating to the new senior secured notes. Caribbean Restaurants, LLC, through an exclusive territorial development agreement with Burger King Corporation, is the sole franchisee of Burger King restaurants in Puerto Rico with approximately 175 units as of fiscal year-end April 30, 2009. CARTERET ARMS: Six Properties Put Up on Sale After Bankr. Filing ---------------------------------------------------------------- Mark Spivey at mycentraljersey.com reports that six of Connolly Properties Inc.'s 20 properties were put on sale after Carteret Arms, LLC, and its affiliates filed for bankruptcy. According to mycentraljersey.com, more than half of the city properties managed by apartment rental firm Connolly Properties are either tied up in bankruptcy proceedings or up for sale. Connolly Properties, says mycentraljersey.com, was the subject of separate Courier News and municipal investigations into tenant complaints of substandard living conditions. The report quoted Connolly Properties spokesperson Ron Simoncini as saying, "There are just a lot of variables and factors at this point. At this point our properties have an immense value; the question is how does David, working with his advisers, sequence his actions here to preserve the most value on them? That's the best thing for the town, the best thing for the tenants, and the best thing for Connolly Properties, probably in that order." mycentraljersey.com relates that several companies owning 13 different Connolly Properties-managed apartment entities in Plainfield and East Orange filed for bankruptcy. Before the bankruptcy filings, the two companies holding the loans on the 13 entities -- Spencer Savings Bank in Plainfield and the Federal National Mortgage Association, or Fannie Mae, -- filed foreclosure motions against all of them, demanding $34 million to settle the combined balances of the loans, says mycentraljersey.com. the report states that the apartment buildings and complexes in question include a total of 552 units -- 290 in Plainfield and 272 in East Orange. According to court documents, more than $450,000 is owed to Hess Co. for fuel service to the properties, with about $117,000 owed to PSE&G for utilities. mycentraljersey.com relates that Connolly Properties bank records show that a May 1 mortgage payment of $114,654 to Spencer Savings Bank overdrew the Company's checking account by $65,281, and no subsequent mortgage payments appeared in records running through July 21. mycentraljersey.com states that Plainfield Apartments LLC, owner of the nine city buildings tied up in bankruptcy, and representatives will have a meeting with some of the 31 creditors listed in its bankruptcy filing on September 9. ERA Reed Realty broker owner Carl Reed said in a statement that the firm contracted with Connolly Properties to sell the six properties. According to mycentraljersey.com, Mr. Reed also recently issued to Plainfield Municipal Court an audit of Connolly Properties after it was demanded by Andrew Baron, the presiding judge in a code violation case against Connolly. Mr. Reed said in a statement that none of the properties up for sale were involved in recent foreclosure filings, and that "the properties we are marketing are not any of the properties that have had fines levied by presiding Judge Andrew Baron during the July property maintenance violations hearing to abate code violations." Mr. Reed, according to mycentraljersey.com, said that he will send e-mails to some of his regular clients who might be interested in the available properties, which have a combined asking price of nearly $13 million. The report states that Mr. Reed said he is hopeful that the properties will sell in a rough market, but agreed with Connolly Properties that accepting less than what they believe is fair isn't an option. The report quoted him as saying, "Because of the (news) coverage or because of the issues that have happened, buyers are looking to make a deal or make a steal. Most of the people want to just take them as opposed to negotiate, but we want to spell out the fact that these apartments are above average and have many good, paying tenants . . . there is interest here, and I do feel that they are going to be selling." Plainfield, New Jersey-based Carteret Arms, LLC, and its affiliates operate real estate businesses. Carteret Arms filed for Chapter 11 bankruptcy protection on August 19, 2009 (Bankr. D. N.J. Case No. 09-31726). The Company's affiliates also filed separate Chapter 11 petitions. Richard D. Trenk, Esq., at Trenk, DiPasquale, Webster, Della Fera & Sodono, P.C., assists Carteret Arms in its restructuring efforts. Carteret Arms listed $232,663 in assets and $14,603,970 in debts. CERBERUS CAPITAL: Loses Almost 71% of Hedge Fund Assets ------------------------------------------------------- Investors in hedge funds run by Cerberus Capital Management LP are leaving the Company, withdrawing more than $5.5 billion or almost 71% of hedge fund assets, due to big in investment losses and their own need for cash, Peter Lattman and Jenny Strasburg at The Wall Street Journal reports, citing people familiar with the matter. Mr. Feinberg, The Journal says, blamed the withdrawals on "the liquidity crisis" and the inability of cash-strapped investors to tie up their money in funds. The report quoted him as saying, "Unfortunately a number of our LPs have indicated that they cannot invest in Cerberus Partners II LP without quarterly liquidity. In our view, given the current general illiquidity in the distressed markets, it would be practically impossible for a distressed investment fund to provide quarterly liquidity for 100% of its capital." According to The Journal, Cerberus Capital chief Stephen Feinberg and co-founder William Richter said in a letter sent to clients on Thursday that they have been surprised by the move. The Journal notes that investments in Chrysler LLC and GMAC LLC, Mr. Feinberg's two boldest bets, hurt Cerberus Capital. According to the report, Mr. Feinberg and other investors contributed about $14 billion to do the deals, and demand was so great that Cerberus Capital charged his co-investors rich fees to invest alongside it, but the investments were effectively wiped out when Chrysler filed for bankruptcy and GMAC was bailed out with billions of dollars in government aid. Cerberus Capital, says the report, was forced to give up control of GMAC. The Journal relates that Cerberus Partners, Cerberus Capital's main hedge fund, lost 24.5% in 2008 and is up about 3% in 2009. Cerberus Capital, says the report, has faced withdrawal requests by investors -- who were spooked by the markets and Cerberus Capital's own losses -- since December 2008. According to the report, Cerberus Capital refused to return cash, saying that weak market conditions would mean low prices if it sold holdings. The Journal states that investors that chose to stick with Cerberus Capital expressed confidence in Mr. Feinberg's ability to make money. The Journal relates that the investors who withdrew place their money in a wind-down vehicle that will exit from hard-to-sell assets over time. The report states that Cerberus Capital will charge investors a 0.5% annual management fee for the wind-down vehicle, a fee that was added in the last week, amounting to almost $28 million a year at the current asset level. Cerberus Capital, according to The Journal, said that it still reserves the right to scrap the liquidation and restructuring plan. Cerberus Capital could freeze withdrawals for another year and hope investors decide to stay put once the redemption gates open. An investor doubted that Mr. Feinberg would want to risk angering investors by doing that, the report says. About Cerberus Capital Headquartered in New York City, Cerberus Capital Management, L.P. -- http://www.cerberuscapital.com/-- along with its affiliates, is a private investment firm. Through its team of investment and operations professionals, Cerberus specializes in providing financial resources and operational expertise to help transform undervalued companies into industry leaders for long-term success and value creation. Cerberus Capital holds controlling or significant minority interests in companies around the world. Cerberus Capital also has affiliate and/or advisory offices in Europe, the Middle East, and Asia. CHRYSLER LLC: Bankruptcy Blamed for Drop in Shiloh Q3 Sales ----------------------------------------------------------- Shiloh Industries, Inc., said sales for the third quarter ended July 31, 2009 decreased $81.1 million, or 65%, from the third quarter of fiscal 2008. The Company's sales declined due to the closure of production operations by Chrysler for 60 days following its filing for bankruptcy on April 30, 2009, and the plant shutdowns by General Motors, which lasted as long as 9 weeks at most General Motors plants. Headquartered in Valley City, Ohio, Shiloh Industries is a leading manufacturer of first operation blanks, engineered welded blanks, complex stampings and modular assemblies for the automotive and heavy truck industries. The Company has 15 wholly owned subsidiaries at locations in Ohio, Georgia, Michigan, Tennessee and Mexico, and employs approximately 715. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Creditors Committee Sues Daimler, et al. ------------------------------------------------------ The Official Committee of Unsecured Creditors of Old Carco LLC, formerly known as Chrysler LLC, commenced an adversary proceeding against: * Daimler AG, formerly known as DaimlerChrysler AG; * Daimler North America Corporation, formerly known as DaimlerChrysler North America Holding Corporation; * Daimler Investments US Corporation, formerly known as DaimlerChrysler Holding Corporation; * John Does 1 through 50; * Ruediger Grube; * Bodo Uebber; * Thomas W. Sidlick; and * Eric Ridenour. As previously reported, Judge Gonzalez authorized the Creditors Committee to pursue certain claims on behalf of the Debtors' bankruptcy estates against the Daimler Parties, as well as against four former directors of the Debtors. The Court has also granted the Creditors Committee's request to file a redacted copy of the Daimler Complaint, and certain sealed documents relating to the request to pursue. The Debtors, therefore, filed a sealed unredacted reply in support of the Creditors Committee's request to pursue. On behalf of the Creditors Committee, Stephen D. Susman, Esq., at Susman Godfrey L.L.P., in New York, explains that the adversary proceeding is required to hold Daimler AG accountable for billions of dollars in assets that it unlawfully extracted from Chrysler. In 2007, immediately before the sale of a controlling interest in Chrysler to Cerberus Capital Management LP, Daimler engineered a restructuring of Chrysler's businesses, Mr. Susman relates. As part of the restructuring, he asserts, Daimler stripped away Chrysler's most valuable assets in exchange for assets that were worth considerably less, and sometimes for no consideration at all. The exchanges enriched Daimler at the expense of the many Chrysler creditors, who now are unable to look to these assets to satisfy their claims, Mr. Susman contends. "The Creditors' Committee brings this action to recover the value of these assets for the Chrysler bankruptcy estate," he asserts. "Before ridding itself of its potential obligations to Chrysler's creditors, Daimler determined to wrest as much value as possible from the Chrysler companies. Daimler knew that portions of the Chrysler business, particularly the financing operations, had tremendous value," Mr. Susman alleges. He says that Daimler could extract that value, at the expense of Chrysler and its creditors, in at least two different ways: (1) Daimler could assume control over the assets by directly transferring ownership to non-Chrysler entities that Daimler owned or controlled; or (2) Daimler could leave the assets in the group of Chrysler companies that was being sold but separate them from Chrysler itself. Any buyer of the Chrysler group, therefore, would pay more to Daimler because it would take the valuable assets free of potential claims by Chrysler's creditors, Mr. Susman contends. He points out that Daimler used both methods by orchestrating an extremely complex corporate restructuring primarily during the spring of 2007, shortly before Daimler sold a controlling interest in Chrysler to Cerberus. During this restructuring, valuable assets that had been held by Chrysler were passed up the corporate chain to Daimler-owned entities, Mr. Susman asserts. He notes that other assets were taken from Chrysler and transferred to a newly created Chrysler holding company wholly owned by Daimler, which was used as the vehicle for the sale to Cerberus. "In both types of transfers, Chrysler received inadequate value in exchange for the assets taken away," he points out. Mr. Susman tells the Court that the most egregious of the transfers was described in "Step 15" of the 48 step pre-sale restructuring plan, in which step Chrysler transferred its U.S. and Canadian financing subsidiaries -- collectively dubbed "FinCo" and by far Chrysler's most valuable business -- to the new Chrysler holding company. In exchange, he contends, Chrysler received a note from FinCo and ownership of a different, and much less valuable, Chrysler automotive entity, and FinCo then passed assets up to Daimler that Daimler valued at approximately $2.5 billion. He adds that by transferring FinCo to the holding company, Daimler was able to obtain a substantially better price from Cerberus than Daimler would have been able to obtain had FinCo remained subject to claims by Chrysler's creditors. "This restructuring and sale served Daimler's interests well, enabling it to extract the best possible terms in its sale of the Debtor, while eliminating billions of dollars of actual and contingent pension and other liabilities," Mr. Susman alleges. But, he points out, the transaction caused Chrysler and its creditors to suffer grievous harm. Daimler engineered the unlawful fraudulent transfers for its own benefit and to the detriment of Chrysler's creditors, Mr. Susman asserts. In the current action, the Creditors Committee says, it seeks to hold Daimler and its subsidiaries responsible in damages for the injuries caused by the fraudulent transfers. The Creditors Committee also asserts claims for breach of fiduciary duty against certain of the Debtor's former directors and against Daimler directly for authorizing, or, in Daimler's case, causing the director defendants to authorize, the fraudulent transfers. About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Daimler Opposes Panel Retention of Two Firms ---------------------------------------------------------- The Official Committee of Unsecured Creditors in Old CarCo LLC's bankruptcy cases ask the Court for authority to retain Stutzman Bromberg Esserman & Plifka PC and Susman Godfrey LLP as its special counsel in connection with certain litigation proceedings, nunc pro tunc to August 13, 2009. In early June 2009, the Creditors' Committee began an investigation into the existence and viability of potential claims and causes of action arising out of Daimler's restructuring of the Debtors and subsequent sale to Cerberus in 2007, including whether certain transfers that occurred in during that time were fraudulent and violated Daimler's fiduciary duties. Based on the Creditors' Committee's investigation, the Committee confirmed that the estate of Old CarCo LLC possesses claims against Daimler that are "meritorious" and have enormous potential value to Old CarCo's estate. At a Creditors' Committee meeting, it selected Susman Godfrey and Stutzman Bromberg as its special counsel to prosecute claims and causes of action on behalf of Old CarCo's estate because of the firm's extensive experience in representing plaintiffs in a broad range of complex, high-stakes commercial litigation matters. The Creditors' Committee further submits that both Susman Godfrey and Stutzman Bromberg possess superior experience and qualifications. The Firms will be retained exclusively for the Daimler Litigation. The Debtors will pay the Firms on a contingency basis. The contingent fee will vary depending on when the matter is resolved: * if within 90 days of the filing of a complaint, Special Counsel will receive 18.75% of the gross recovery under $125 million, 15% of the gross between $125 million and $200 million and 11.75% of any gross recovery above that; * if after 90 days but before 180 days after filing a complaint, Special Counsel will receive 21.875% of the gross recovery under $125 million, 17.5% of the gross recovery between $125 million and $200 million and 13.125% of any gross recovery above that; and * if settled after 180 days after filing a complaint, Special Counsel will receive 25% of the gross recovery under $125 million, 20% of the gross recovery between $125 million and $200 million and 15% of any gross recovery above that. Susman Godfrey and Stutzman Bromberg will split the fee and the work on a 70/30 basis. Susman Godfrey and Stutzman Bromberg have agreed that Stephen D. Susman, Esq., will be lead counsel and will have the final decision on whom work is assigned to and how it is allocated between the two firms. If the Daimler Litigation is settled and the Creditors' Committee receives value other than in cash, Special Counsel will be entitled to demand and receive, at their option: (i) payment in cash, under the Contingent Fee payment scheme, of Special Counsel's applicable contingent percentage of (a) the present value of any noncash consideration plus (b) any cash received upon settlement; or (ii) an undivided interest in any property received by the Creditors' Committee, equal to Special Counsel's applicable contingent percentage of the Contingent Fee payment scheme, plus payment of Special Counsel's applicable contingent percentage of any cash received as a result of settlement. Prior to the effective date of a plan, Special Counsel will submit their monthly out-of-pocket costs, disbursements, and litigation expenses to the Debtors for payment. If Special Counsel determines that the services of one or more experts or other non-legal professionals are necessary for the prosecution of the Claims prior to the Effective Date, the Creditors' Committee agree to retain the professionals pursuant to Sections 328 and 1103 of the Bankruptcy Code. For their services and expenses incurred prior to the Effective Date, the professionals will be compensated pursuant to the terms of an interim compensation Order and any other applicable bankruptcy court orders. For all Expenses incurred after the Effective Date, Special Counsel will invoice the Litigation Trust on a monthly basis, and all invoices will be due and payable within 30 days after receipt. To the extent that Special Counsel's pre-Effective Date Expenses have not been paid in full by the Effective Date, the Litigation Trust will promptly pay any remaining pre-Effective Date Expenses, plus interest at the rate of 1.5% per month on all unpaid amounts. In addition, the Litigation Trust will be responsible for payment of all fees and expenses incurred after the Effective Date by any expert witnesses or other non-legal professionals, and for all charges incurred after the Effective Date by any other outside service providers. For any outside service provider that the Special Counsel retain after the Effective Date on the Litigation Trust's behalf, the Litigation Trust will enter into a contract with the service provider that will clearly state that Special Counsel are not responsible for any of their charges and that the Litigation Trust will pay the charges directly to the provider as billed. Jacob Buchdal, Esq., a partner at Susman Godfrey, and Sander L. Esserman, Esq., a shareholder in Stutzman Bromberg, assure the Court that their firms are "disinterested persons" as the term is defined in Section 101(14) of the Bankruptcy Code. Daimler Objects Daimler AG and its affiliates ask the Court to deny the Committee's application. Alan S. Goudiss, Esq., at Shearman & Sterling LLP, in New York, contends that the Application fails to identify the source of any funds to pay litigation expenses. He notes that the fees will not be insubstantial and could reach more than $7.5 million. "This lack of a source of funds to pay expenses is all the more problematic in view of the prospect that the Committee may not even be able to pursue the lawsuit to completion," Mr. Goudiss says. In addition, Mr. Goudiss tells the Court that the retention agreement executed by the Committee and Susman Godfrey and Stutzman Bromberg allows the two firms to withdraw from the representation if litigation expenses are not paid when due, which is a highly likely occurrence given that there are currently no funds available to pay them and that the expenses are to be billed monthly. In addition, he points out that pursuant to the retention agreement, if the two firms withdraw, they have an option to receive either the full value of time and expenses as measured by applicable rates or the immediate right to compensation from any recovery the Committee may receive in the future amounting to Susman Godfrey's and Stutzman Bromberg's contingent fees and out-of-pocket expenses. Mr. Goudiss argues that the Provision applies broadly to all money or other things of value recovered by the bankruptcy estate of the Debtors or the Litigation Trust. About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Gets Extension for Time to Decide on Select Leases ---------------------------------------------------------------- Section 365(d)(4)(A) of the Bankruptcy Code provides that a debtor-in-possession has 120 days after the date of the order for relief within which to assume or reject nonresidential leases of real property. If the debtor-in-possession fails to assume a nonresidential lease of real property within the 120-day period, the lease is deemed rejected and the debtor-in-possession must immediately surrender possession of the leased premises. However, Section 365(d)(4)(B), provides that, the court, for cause shown, may grant a 90-day extension of the 120-day period. Against this backdrop, Chrysler LLC and its affiliated debtors sought and obtained a bankruptcy court ruling, giving them additional time to decide on whether to assume or reject 13 nonresidential real property leases. The leases primarily relate to certain warehouses, administrative offices and dealer training locations that currently are being used by Chrysler Group LLC, the new company formed under the deal between Chrysler LLC and Italy-based automaker, Fiat S.p.A. As of August 13, 2009, the leases remain in effect and have not expired or terminated. The leases may constitute an "unexpired lease" subject to assumption or rejection under the bankruptcy laws, according to the Debtors' attorney, Corinne Ball, Esq., at Jones Day, in New York. The deadline for the assumption or rejection of the Debtors' leases with these parties was extended to these dates: Requested Nondebtor Party Address Extension --------------- ----------------- --------- TCE Lathrop LLC 18260 Harlan Road 09/08/09 Lathrop, California MHB LLC 4175 East Raines Road 09/08/09 Memphis, Tennessee Chry-Detroit LLC 23400 Bell Road 09/08/09 New Boston, Michigan Opdyke-Walton Building B, 2367 Walton Blvd. 09/08/09 Development Co. LLC National Training Center Auburn Hills, Michigan Orange Point LLC 2828 East Kemper Road 09/08/09 Building B Cincinnati, Ohio Bedrosian Denver/ 14155 East 42nd Avenue 09/08/09 Cushman & Wakefield Building B of Colorado Inc. Denver, Colorado Bartlett Logistics 8370 Wolf Lake Boulevard 09/08/09 One LLC Training Center Bartlett, Tennessee HRPT Lenexa 10105 Marshall Drive 09/08/09 Properties Trust Lenexa, KS 66215 Merritt HK, LLC 8955 Henkels Lane 09/08/09 Annapolis Junction, MD NNN Britannia 5720 Stoneridge Drive 09/08/09 Business Center II Pleasonton, CA K-F Land Company 3851 Hamlin Road 08/31/09 LLC IV Rochester Hills, Michigan Shanghai APBC Business 16/F Gemdale Plaza Tower A 10/14/09 Consulting Co. Ltd Unit # 16-02W 91 Jian Guo Road Beijing 100022, China The Crown Group Inc. 6490 & 6334 Lynch Road 11/26/09 Detroit, Michigan All other nonresidential real property leases of the Debtors, which have not been previously rejected by a court order or are the subject of a pending rejection motion, and have not been assumed by the Debtors and assigned to Chrysler Group LLC are deemed rejected as of August 28, 2009. Any party asserting claims stemming from the rejection of the leases or asserting claims otherwise related to those leases including secured and administrative claims, must file a proof of claim on the later of September 28, 2009, or the date that is 30 days after August 27, 2009. About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Motors Unit's Schedules of Assets and Liabilities --------------------------------------------------------------- A. Real Property Lands and buildings $149,897,489 B. Personal Property Liberty Mutual 1,757,900 B.13 Stock and Interests Unknown B.16 Accounts Receivable Accounts Receivable - Vehicles 261,388,377 Accounts Rec. - Service Parts/Contracts 119,443,932 Accounts Receivable - Non-Dealer 40,345,115.00 Accounts Receivable - Other 4,098,839.00 Interco Receivable Balance 9,479,604,613 Others 246,102,941 B.21 Other Contingent and Unliquidated Claims Unknown B.28 Office Equipment, furnishings & supplies Staff Office -- furnitures & fixtures 8,266,244 Staff Office -- construction in process 5,674,941 Warren Parts Depo 1,607,852 Center Line National Parts Depo 1,092,582 Marysville National Parts Depo 892,169 Parts Supply Division - furnitures 756,217 AMC Milwaukee Parts - furnitures 699,824 Others 7,842,775 B.29 Equipment and Supplies for Business Equipment on operating lease 213,209,901 Others 35,839,077 B.30 Inventory Service 633,658,007 New vehicles 397,057,036 Company cars 193,627,230 Finished goods and parts 548,187 B.35 Other Personal Property Prepaids - service contracts 28,078,190 Remanufactured core deposits 11,161,391 Prepaid discount on sale of cars 7,697,497 Prepaid property taxes 7,196,100 Others 11,137,120 TOTAL SCHEDULED ASSETS $11,868,681,555 ========================================================== C. Property Claimed None D. Creditors Holding Secured Claims First Lien Credit Agreement 6,916,458,541 TARP Loan 4,285,371,805 Second Lien Credit Agreement 2,110,926,198 E. Creditors Holding Unsecured Priority Claims Unknown F. Creditors Holding Unsecured Nonpriority Claims Loan Agreement - Export Development Canada 673,307,785 Intercompany payable - Chrysler de Mexico 336,712,832 Intercompany payable - Chrysler Canada 283,902,834 Others 30,272,193 TOTAL SCHEDULED LIABILITIES $14,636,952,190 ========================================================== CHRYSLER LLC: Motors Unit's Statement of Financial Affairs ---------------------------------------------------------- Old Carco Motors LLC, formerly known as Chrysler Motors LLC, discloses that within two years immediately preceding the commencement of their Chapter 11 cases, it generated income from business operations. Year Amount ---- ------ 2009 to date $7,434,365,109 2008 $31,707,389,813 2007 $42,367,165,986 Ronald E. Kolka, Old Chrysler's chief executive officer, also disclosed that Old Carco Motors received income from other sources: Year Amount ---- ------ 2009 to date ($8,547,726) 2008 $86,563,402 2007 $39,265,529 Within a year prior to the Petition Date, Old Carco Motors gave gifts and charitable contributions to its employees, which gifts include watches, cookware sets, players and cameras. Mr. Kolka also reveals that within 90 days preceding the commencement of its bankruptcy case, Daimler AG made a set-off for $68,011,780 against a debt or deposit of the Debtor. CHRYSLER LLC: Old CarCo Plan Filing Deadline Moved to Sept. 11 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York issued a bridge order extending the deadline for Old CarCo LLC and its debtor affiliates to file their Chapter 11 plan to September 11, 2009. The Court gave the Official Committee of Unsecured Creditors until September 8, 2009, to file a response to the proposed extension requested by the Debtors. The hearing on the Debtors' request has been adjourned to September 10, 2009. About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Old CarCo Seeks to Sell 2,951 Company Cars -------------------------------------------------------- Old Carco LLC, formerly known as Chrysler LLC, and its affiliated Debtors seek the Court's authority to sell 2,951 company cars to Chrysler Group LLC free and clear of all liens, claims and encumbrances, pursuant to Sections 105 and 363 of the Bankruptcy Code. Old Chrysler has also executed a short-form letter agreement with New Chrysler, dated August 7, 2009, evidencing the parties' agreement to the basic economic terms of sale. A copy of the Letter Agreement can be obtained for free at: http://bankrupt.com/misc/Chrysler_LetterAgreement_082109.pdf As of the closing of the Fiat S.p.A. sale transaction, Old Chrysler owned and maintained approximately 7,600 Chrysler, Dodge and Jeep-branded vehicles to be used for various company purposes. Certain of the Company Cars were provided to employees of Old Chrysler, now employees of New Chrysler, pursuant to a special employee car program, pursuant to which participating Chrysler employees received a new Chrysler, Jeep or Dodge vehicle on terms and conditions similar to a traditional lease program, including (i) the employee's possession of the vehicle was limited to a fixed period of time between 12 and 24 months in most cases, and (ii) the employee was required to make a fixed monthly payment for use of the vehicle usually through payroll deduction. As of the Closing, Old Chrysler owned approximately 3,600 Revenue Cars. Pursuant to the Employee Car Program, the Revenue Cars are to be returned to Old Chrysler on a rolling basis, with the last Revenue Car scheduled to be returned on November 1, 2011. Certain of the other Company Cars were provided to various parties without any expectation of payment and generated no revenue for Old Chrysler. The approximately 4,000 Non-Revenue Cars were comprised of, among other things product evaluation vehicles for current executives, business vehicles for other non-executive employees, including sales representatives and other field representatives, certain test vehicles for internal performance, safety and reliability testing, promotional vehicles provided to movie studios, community organizations and other charitable organizations, marketing vehicles for rodeos and auto shows, and fleet demonstration vehicles for prospective fleet buyers. Pursuant to the Master Transaction Agreement and the other agreements related to the Fiat Transaction, the Company Cars were expressly designated as excluded assets, and thus, were not among the assets sold to New Chrysler. Notwithstanding the retention of ownership of the Company Cars by Old Chrysler, the parties reached an agreement with respect to the Company Cars to ensure a smooth and orderly transition following the completion of the Fiat Transaction, relates Corinne Ball, Esq., at Jones Day, in New York. Specifically, Ms. Ball notes, New Chrysler was provided with continued possession and use of all Non-Revenue Cars through August 9, 2009, which is a period of 60 days following the consummation of the Fiat Transaction, and the employees of New Chrysler were allowed to retain possession and use of the Revenue Cars until the agreed-upon date of return, pursuant to the Employee Car Program. In addition, New Chrysler agreed to assist in the orderly wind-down of all Company Car programs, at the conclusion of which New Chrysler would auction all Company Cars for the benefit of Old Chrysler. Rather than liquidating all of the Company Cars on a piecemeal basis through auctions for the benefit of Old Chrysler, New Chrysler expressed an interest in purchasing and retaining 2,951 of the Company Cars for its continued use in connection with its ongoing business operations and for the continued use of its employees, Ms. Ball tells Judge Gonzalez. She says that the Debtors engaged in negotiations with New Chrysler regarding the sale of the Purchased Vehicles, resulting in the execution of the Letter Agreement. Pursuant to the Letter Agreement, Old Chrysler has agreed to sell the Purchased Vehicles to New Chrysler for $17,500 per Company Car, or a total cash consideration of $51,642,500. The Letter Agreement contemplates that the purchase price will be paid by New Chrysler in cash in two separate payments of $25,821,250, one on September 10, 2009, and the other on October 9, 2009. All of the Purchased Vehicles are Non-Revenue Cars. In addition to the basic economic provisions set forth in the Letter Agreement, the sale of the Purchased Vehicles to New Chrysler will be: (a) free of any express or implied warranty, including implied warranty of merchantability or fitness for a particular purpose, regarding the value, use or condition of the Purchased Vehicles, which are being conveyed on an "As Is," "Where Is" basis; and (b) free and clear of any and all interests, claims or encumbrances of any kind or nature. The Letter Agreement is a short-form agreement and includes only the price to be paid, the timing of the payments and listing of the vehicle identification numbers for each of the Purchased Vehicles, Ms. Ball relates. Therefore, she says, the Letter Agreement does not contain any provisions, which may be considered extraordinary provisions under the Guidelines for the Conduct of Asset Sales. However, she notes, the Letter Agreement does not contemplate an auction, and the Debtors have not actively solicited, and do not intend to actively solicit, a higher and better offer for the Purchased Vehicles. Given the active market for used cars similar to the Purchased Vehicles, the market price for each Purchased Vehicle is readily ascertainable, and the Debtors have determined that the price offered by New Chrysler for all of the Purchased Vehicles represents a reasonable price and otherwise is consistent with the parties' obligations under the Transition Services Agreement between Old Chrysler and New Chrysler, dated June 10, 2009. About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Proposes Manheim Deal on Set Offs ----------------------------------------------- Old CarCo LLC and its affiliates seek the Court's authority to enter into a stipulation and agreed order modifying automatic stay to perform certain set-offs of amounts due and owing relating to certain mutual prepetition debts between Debtor Old Carco Motors LLC, formerly known as Chrysler Motors LLC, and Manheim Auctions, Inc., pursuant to Sections 362 and 553 of the Bankruptcy Code. Chrysler Motors and Manheim are parties to an Auction Service Agreement, dated August 6, 2007, pursuant to which Manheim agreed to, among other things, provide Chrysler Motors with certain storage, repair and vehicle detailing services in connection with the marketing and sale at auction of certain used vehicles owned by Chrysler Motors or certain of its affiliates. Upon the sale of a Vehicle at auction, Manheim agreed to pay to Chrysler Motors the "Net Price" obtained for the Vehicle. Prior to the Petition Date, Manheim performed certain services relating to the sale of Vehicles sold or marketed for sale at auction. As reflected in the Stipulation, Chrysler Motors and Manheim have agreed that, as of the Petition Date: (a) Manheim held $9,833,485 in proceeds realized through the sale of Vehicles at auction pursuant to the Auction Agreement; and (b) Chrysler Motors owed Manheim $2,572,822 for fees and charges payable to Manheim under the Auction Agreement. The difference between the Prepetition Manheim Obligations and the Prepetition Motors Obligations is $7,260,662, which was remitted to Chrysler Motors by Manheim on August 18, 2009, relates Corinne Ball, Esq., at Jones Day, in New York. Pursuant to the Stipulation, the Debtors have agreed that Manheim may set off the remaining portion of the Prepetition Manheim Obligations against the Prepetition Motors Obligations. Ms. Ball contends that Section 553 of the Bankruptcy Code provides that a right to set-off debts between a debtor and a third party under state law is preserved under the Bankruptcy Code. She asserts that the Prepetition Manheim Obligations and the Prepetition Motors Obligations represent actual, mutual prepetition debts between Manheim and Chrysler Motors arising under the Auction Agreement. About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 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) CIGNA: AM Best Assigns 'bb+' Rating to Preferred Stock ------------------------------------------------------ A.M. Best Co. has assigned indicative debt ratings of "bbb" to senior unsecured debt, "bbb-" to subordinated debt and "bb+" to preferred stock, which may be issued under CIGNA Corporation's recently filed shelf registration statement. This shelf registration statement replaces CIGNA's previous shelf registration statement, which expired on August 16, 2009. The debt ratings on the expired shelf registration have been withdrawn. CIGNA's financial strength, issuer credit and remaining debt ratings are unchanged, and the assigned outlook on the new debt ratings is negative. The proceeds from the offerings may be added to CIGNA's general funds and used for general corporate purposes unless specified in subsequent debt issuances. CIGNA's ratings reflect its strong operating performance in its core healthcare segment and good financial flexibility. Although CIGNA's financial leverage had increased to 40% in 2008, the ratio has declined to 36% as of June 30, 2009. Additionally, A.M. Best expects the leverage to continue to decline to a level below 35% by year-end 2009. CIGNA's debt service coverage remains at an adequate level of 12 times earnings before interest and taxes (EBIT). Offsetting factors include declining membership and a decline in risk-based capitalization. Earnings from investments may be challenged due to the low interest rate environment, and real estate funds have declined in market value due to deterioration in economic conditions. CIGNA Corporation, headquartered in Philadelphia, PA, provides employee benefits, including health care products and services, and group disability, life and accident insurance throughout the United States. It also provides life, accident, health and expatriate employee benefits insurance coverage in selected international markets, primarily in Asia and Europe. For the first six months of 2009, the company reported consolidated GAAP revenues of approximately $9.3 billion. As of June 30, 2009, shareholders' equity was approximately $4.5 billion, and total enrollment was 11.2 million medical members (excluding Part D membership and standalone dental, behavioral care, and pharmacy members). As reported in the Troubled Company Prospector on August 19, 2009, Moody's has assigned provisional ratings (senior debt at (P)Baa2) to CIGNA Corporation's new shelf registration. This new shelf registration replaces CIGNA's previously filed shelf registration of August 17, 2006. The shelf will be used for general corporate purposes, including debt refinancing. The outlook on all the shelf ratings is negative, aligned with the negative outlook on CIGNA. CIRCUIT CITY: Disclosure Statement Hearing on September 22 ---------------------------------------------------------- The Bankruptcy Court will convene a hearing on September 22 to consider the adequacy of the information in the disclosure statement in explaining the proposed plan of liquidation Inc. of Circuit City Stores Inc. The deadline to object to approval of the Disclosure Statement is September 18, 2009. Circuit City Stores, Inc., and its affiliated debtors delivered their Joint Plan of Liquidation and accompanying Disclosure Statement to the U.S. Bankruptcy Court for the Eastern District of Virginia on August 24, 2009. The Official Committee of Creditors holding general unsecured claims is a co-proponent to the August 24 Plan. The Plan provides for the orderly liquidation of the remaining assets of the Debtors and the distribution of the proceeds of the liquidation of the Debtors' assets according to the priorities set forth under the Bankruptcy Code. Under the Debtors' Joint Plan of Liquidation, all claims against the Debtors, other than Administrative Claims and Priority Tax Claims, are classified into eight classes: Estimated Estimated Aggregate Amount Class Description Recovery of Allowed Claims ----- ----------- --------- ----------------- 1 Miscellaneous Secured Claims 100% $5 mil.-$20 mil. 2 Non-Tax Priority Claims 100% $35 mil.-$95 mil. 3 Convenience Claims 10% unknown 4 General Unsecured Claims 0%-13.5% $1.8 bil.-$2 bil. 5 Intercompany Claims 0% $0 6 Subordinated 510(c) Claims 0% $0 7 Subordinated 510(b) Claims 0% $0 8 Interests 0% - The Liquidating Trust will be established and will become effective on the Plan Effective Date. All Distributions to the Holders of Allowed Claims will be from the Liquidating Trust. A full-text copy of Circuit City's Plan of Liquidation may be accessed for free at http://bankrupt.com/misc/CC_CircuitCPlan.pdf Copies of Circuit City's Disclosure Statement may be accessed for free at: Plain text version - http://bankrupt.com/misc/CC_CircuitCDS.pdf PDF version - http://researcharchives.com/t/s?4380 About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. CITIGROUP INC: Citi Funding to Issue 1.5% CPI-Linked Notes ---------------------------------------------------------- Citigroup Inc. has filed with the Securities and Exchange Commission a pricing supplement and a free writing prospectus in connection with Citigroup Funding Inc.'s issuance of 1.5% Fixed Coupon Principal Protected Notes Linked to the Consumer Price Index Due August 28, 2014, at $1,000 per Note. The notes will pay a fixed coupon at a rate of 1.5% per annum, payable on the 28th of each month (or if such day is not a business day, on the next business day), commencing September 28, 2009. The notes have a maturity of five years and will mature on August 28, 2014. In addition to the final coupon payment, the noteholder will receive at maturity for each note held an amount in cash equal to $1,000 plus an index return amount, which may be positive or zero. The index return amount payable on the maturity date will be based on the percentage change in the index level of the non-seasonally adjusted U.S. City Average All Items Consumer Price Index for All Urban Consumers from the starting index level of the CPI to the ending index level of the CPI. Citigroup will not apply to list the notes on any exchange. The notes represent obligations of Citigroup Funding Inc. only. The notes have not been passed on by the U.S. Bureau of Labor Statistics. The notes are not sponsored, endorsed, sold or promoted by the U.S. Bureau of Labor Statistics and the U.S. Bureau of Labor Statistics makes no warranties and bears no liability with respect to the notes. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the notes or determined that this pricing supplement and accompanying prospectus supplement and prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The notes are not deposits or savings accounts but are unsecured debt obligations of Citigroup Funding Inc. The notes are not insured by the Federal Deposit Insurance Corporation or by any other governmental agency or instrumentality, and are not guaranteed by the FDIC under the Temporary Liquidity Guarantee Program. The total Public Offering Price is $4,615,000. The total Underwriting Discount is $149,987.50. The total Proceeds to Citigroup Funding is $4,465,012.50. Citigroup Global Markets Inc., an affiliate of Citigroup Funding and the underwriter of the sale of the notes, will receive an underwriting fee of $32.500 for each $1,000.000 note sold in this offering. Certain dealers, including Citi International Financial Services, Citigroup Global Markets Singapore Pte. Ltd., and Citigroup Global Markets Asia Limited, broker-dealers affiliated with Citigroup Global Markets, will receive from Citigroup Global Markets $30.000 from the underwriting fee for each note they sell. Citigroup Global Markets will pay the Financial Advisors employed by Citigroup Global Markets and Morgan Stanley Smith Barney LLC, an affiliate of Citigroup Global Markets, a fixed sales commission of $30.000 for each note they sell. Additionally, it is possible that Citigroup Global Markets and its affiliates may profit from expected hedging activity related to this offering, even if the value of the notes declines. A full-text copy of the pricing supplement is available at no charge at http://ResearchArchives.com/t/s?4362 A full-text copy of the free writing prospectus is available at no charge at http://ResearchArchives.com/t/s?4363 About Citigroup Inc. Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. At June 30, 2009, Citigroup had total assets of $1.84 trillion and total liabilities of $1.69 trillion. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIGROUP INC: Citi Funding to Issue 2% Gold-Linked Notes --------------------------------------------------------- Citigroup Inc. has filed with the Securities and Exchange Commission a pricing supplement and free writing prospectus in connection with Citigroup Funding Inc.'s issuance of 2% Minimum Coupon Principal Protected Notes Based Upon the Price of Gold Due 2014, at $10 per Note. The notes have a maturity of five years and will mature on _______, 2014. The noteholder will receive at maturity for each note held an amount in cash equal to $10 plus the last coupon amount. The notes will pay a coupon per coupon period at a variable rate which will not be less than 2% per coupon period and will depend upon the price of gold during each coupon period. The coupon amount payable on each coupon payment date will depend upon the closing price of gold on each business day during the related coupon period, will be based on the percentage change in the closing price of gold during such coupon period and will not be less than $0.20 (2% of $10 principal amount per note) per note nor be greater than approximately $2.30 to $2.80 (23% to 28% of $10 principal amount per note) per note (to be determined on the pricing date). Thus, for each $10 principal amount note held, the noteholder will receive on each coupon payment date either: -- an amount equal to the product of (a) $10 and (b) the percentage change in the closing price of gold from the first business day of the related coupon period through the last business day of the coupon period, if (i) the closing price of gold on every business day during the coupon period is less than or equal to approximately 123% to 128% (to be determined on the pricing date) of the closing price of gold on the first business day of the coupon period and (ii) the gold percentage change is greater than 2%; or -- an amount equal to $0.20 (2% of $10 principal amount per note), in all other cases. -- Application will be made to list the notes on NYSE Arca under the symbol "MMF". A full-text copy of the pricing supplement is available at no charge at http://ResearchArchives.com/t/s?4367 A full-text copy of the free writing prospectus is available at no charge at http://ResearchArchives.com/t/s?4368 About Citigroup Inc. Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. At June 30, 2009, Citigroup had total assets of $1.84 trillion and total liabilities of $1.69 trillion. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIGROUP INC: Citi Funding to Issue 2010 AmEx-Linked ELKS ---------------------------------------------------------- Citigroup Inc. has filed with the Securities and Exchange Commission a free writing prospectus in connection with Citigroup Funding Inc.'s issuance of Equity LinKed Securities __% Per Annum Based Upon the Common Stock of American Express Company Due 2010, at $10.00 per ELKS. ELKS(R) are equity-linked investments that offer current income as well as limited protection against the decline in the price of the common stock on which the ELKS are based. The ELKS Based Upon the Common Stock of American Express Company have a maturity of 13 months and are issued by Citigroup Funding. The ELKS pay a fixed coupon, with a yield greater than both the current dividend yield of the Underlying Equity and the yield that would be payable on a conventional debt security of the same maturity issued by Citigroup Funding. The ELKS will pay a semi- annual coupon equal to approximately 11% to 14% per annum (to be determined on the Pricing Date). While the ELKS provide limited protection against the decline in the price of the Underlying Equity, the ELKS are not principal protected. ELKS are a series of unsecured senior debt securities issued by Citigroup Funding. Any payments due on the ELKS are fully and unconditionally guaranteed by Citigroup Inc., Citigroup Funding's parent company. The ELKS will rank equally with all other unsecured and unsubordinated debt of Citigroup Funding and, as a result of the guarantee, any payments due under the ELKS will rank equally with all other unsecured and unsubordinated debt of Citigroup Inc. The return of the principal amount of a participant's investment in the ELKS at maturity is not guaranteed. The ELKS are not deposits or savings accounts, are not insured by the Federal Deposit Insurance Corporation or by any other governmental agency or instrumentality, and are not guaranteed by the FDIC under the Temporary Liquidity Guarantee Program. All payments on the ELKS are subject to the credit risk of Citigroup Inc. Citigroup Global Markets Inc., an affiliate of Citigroup Funding and the underwriter of the sale of the ELKS, will receive an underwriting fee of $0.225 for each $10.000 ELKS sold in this offering. Certain dealers, including Citi International Financial Services, Citigroup Global Markets Singapore Pte. Ltd. and Citigroup Global Markets Asia Limited, broker-dealers affiliated with Citigroup Global Markets, will receive from Citigroup Global Markets not more than $0.200 from this underwriting fee for each ELKS they sell. Citigroup Global Markets will pay the Financial Advisors employed by Citigroup Global Markets and Morgan Stanley Smith Barney LLC, an affiliate of Citigroup Global Markets, a fixed sales commission of $0.200 for each ELKS they sell. Additionally, it is possible that Citigroup Global Markets and its affiliates may profit from expected hedging activity related to this offering, even if the value of the ELKS declines. A full-text copy of the free writing prospectus is available at no charge at http://ResearchArchives.com/t/s?4364 About Citigroup Inc. Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. At June 30, 2009, Citigroup had total assets of $1.84 trillion and total liabilities of $1.69 trillion. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIGROUP INC: To Issue $6.1MM in Brazilian Real-Linked Notes ------------------------------------------------------------- Citigroup Inc. filed with the Securities and Exchange Commission a pricing supplement and free writing prospectus in connection with Citigroup Funding Inc.'s issuance of 606,500 Principal Protected Notes Based Upon the Brazilian Real Due February 27, 2012, at $10 per Note. Citigroup Funding will not make any payments on the notes prior to maturity. The notes are based upon the value of the Brazilian real relative to the U.S. dollar, as measured by the BRL/USD exchange rate. The notes will mature on February 27, 2012. The currency return amount will be based on the percentage change in the BRL/USD exchange rate during the term of the notes. The Company will not apply to list the notes on any exchange. The notes are not deposits or savings accounts but are unsecured debt obligations of Citigroup Funding. The notes are not insured by the Federal Deposit Insurance Corporation or by any other governmental agency or instrumentality, and are not guaranteed by the FDIC under the Temporary Liquidity Guarantee Program. The total Public Offering Price is $6,065,000.00. The total Underwriting Discount total $136,462.50. The total Proceeds to Citigroup Funding is $5,928,537.50. Citigroup Global Markets Inc., an affiliate of Citigroup Funding and the underwriter of the sale of the notes, will receive an underwriting fee of $0.225 for each $10.000 note sold in this offering. Certain dealers, including Citi International Financial Services, Citigroup Global Markets Singapore Pte. Ltd., and Citigroup Global Markets Asia Limited, broker-dealers affiliated with Citigroup Global Markets, will receive from Citigroup Global Markets $0.200 from this underwriting fee for each note they sell. Citigroup Global Markets will pay the Financial Advisors employed by Citigroup Global Markets and Morgan Stanley Smith Barney LLC, an affiliate of Citigroup Global Markets, a fixed sales commission of $0.200 for each note they sell. Additionally, it is possible that Citigroup Global Markets and its affiliates may profit from expected hedging activity related to this offering, even if the value of the notes declines. A full-text copy of the pricing supplement is available at no charge at http://ResearchArchives.com/t/s?4366 A full-text copy of the free writing prospectus is available at no charge at http://ResearchArchives.com/t/s?4365 About Citigroup Inc. Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. At June 30, 2009, Citigroup had total assets of $1.84 trillion and total liabilities of $1.69 trillion. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CLAIRE'S STORES: Bank Debt Trades at 35.5% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Claire's Stores, Inc., is a borrower traded in the secondary market at 64.50 cents- on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.84 percentage points from the previous week, The Journal relates. The loan matures on May 29, 2014. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Caa2 rating while it carries Standard & Poor's B- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Claire's Stores, Inc. -- http://www.clairestores.com/-- operates as a specialty retailer of fashion accessories and jewelry for preteens and teenagers, as well as for young adults in North America and internationally. It offers jewelry products that comprise costume jewelry, earrings, and ear piercing services; and accessories, including fashion accessories, hair ornaments, handbags, and novelty items. Based in Pembroke Pines, Florida, Claire's Stores operates under two brands: Claire's(R), which operates worldwide and Icing(R), which operates only in North America. As of Jan. 31, 2009, Claire's Stores, Inc., operated 2,969 stores in North America and Europe. Claire's Stores, Inc., also operates through its subsidiary, Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint venture with AEON, Co., Ltd. The Company also franchises 198 stores in the Middle East, Turkey, Russia, South Africa, Poland and Guatemala. At May 2, 2009, Claire's Stores has $2,877,264,000 in assets, $212,884,000 in current liabilities and $2,743,540,000 in long- term liabilities (for $2,956,424,000 in total liabilities). CLEARWIRE CORP: Bank Debt Trades at 9% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Clearwire Corporation is a borrower traded in the secondary market at 91.25 cents-on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.75 percentage points from the previous week, The Journal relates. The loan matures on July 2, 2014. The Company pays 500 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's and Standard & Poor's. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Headquartered in Kirkland, Washington, Clearwire Corporation (NASDAQ:CLWR) -- http://www.clearwire.com-- offers a suite of advanced high-speed Internet services to consumers and businesses. The company is building the first, nationwide 4G mobile Internet wireless network, bringing together an unprecedented combination of speed and mobility. Clearwire's open all-IP network, combined with significant spectrum holdings, provides unmatched network capacity to deliver next-generation broadband access. Strategic investors include Intel Capital, Comcast, Sprint, Google, Time Warner Cable, and Bright House Networks. Clearwire currently provides mobile WiMAX-based service, to be branded Clear(TM), in two markets and provides pre-WiMAX communications services in 50 markets across the U.S. and Europe. As reported by the Troubled Company Reporter on Jan. 26, 2009, Standard & Poor's Rating Services said it assigned its 'B-' corporate credit rating to Kirkland, Washington-based wireless carrier Clearwire Corp. The outlook is stable. Its units have junk ratings in Moody's Investors Service. As reported by the Troubled Company Reporter on Jan. 26, 2009, Moody's assigned first-time ratings to Clearwire Communications LLC (corporate family rating of Caa1 and speculative grade liquidity rating of SGL-2) with a negative outlook. The ratings for Clearwire reflect the company's high financial and business risk given the start-up nature of its operations. In addition, while Clearwire will operate as an independent company, Moody's believe that there will be significant challenges to developing the business, in part due to the diverse objectives of its strategic investors. COMMUNITY BANCORP: To Liquidate Under Chapter 7 After Banks Seized ------------------------------------------------------------------ Community Bank of Nevada, the principal operating subsidiary of Community Bancorp Inc., was closed on August 14, 2009, by the State of Nevada Financial Institutions Division, and the Federal Deposit Insurance Corporation was appointed as receiver of the bank. In addition on August 14, Community Bank of Arizona, a subsidiary of the Company, was closed by the Arizona Department of Financial Institutions, and the FDIC was appointed as receiver of the bank. The Company said in an August 28 regulatory filing that it intends to file a voluntary petition in the U.S. Bankruptcy Court in Las Vegas in the near future, seeking relief under Chapter 7 of the Bankruptcy Code. The Chapter 7 bankruptcy filing is a result of the regulatory actions on its banking subsidiaries. As a result of the FDIC being appointed receiver of Community Bank of Nevada and Community Bank of Arizona on August 14, 2009 and the planned Chapter 7 bankruptcy filing, the Company has ceased all business activity and operations since the Banks were the Company's only source of revenue. Upon filing of the petition, the court will appoint a bankruptcy trustee who will be responsible for liquidating the Company. The planned Chapter 7 bankruptcy filing will cause an event of default under the terms of the indentures governing trust preferred securities issued by the Company's unconsolidated special purpose business trusts. Subject to certain notice and waiting requirements particular to the documentation of each trust, upon the occurrence of this event of default, the trustee or holders of not less than 25% in principal of the outstanding debentures of each trust may declare the entire principal, premium and any accrued unpaid interest immediately due and payable. The bankruptcy filing will also constitute an additional event of default pursuant to an outstanding $4.8 million installment loan. The Company previously announced that it was in payment default on such note. NASDAQ Delisting On August 17, 2009, the Company received a NASDAQ Staff Determination letter confirming that NASDAQ was concerned about the Company's ability to sustain compliance with all of the requirements for continued listing on NASDAQ principally due to the closure of Community Bank of Nevada and Community Bank of Arizona. As a result, NASDAQ Staff had made a determination to delist the Company's common stock from The Nasdaq Stock Market. The Company does not intend to appeal the delisting decision. As a result, trading will be suspended on August 26, 2009. A Form 25-NSE will then be filed with the Securities and Exchange Commission, which will remove the Company's common stock from listing and registration on The Nasdaq Stock Market. About Community Bancorp Community Bancorp -- http://www.community-bancorp.com/ --headquartered in Las Vegas, Nevada, was the holding company for Community Bank of Nevada and Community Bank of Arizona. In 2002, Community Bancorp was formed as the holding company of Community Bank of Nevada, a Las Vegas based bank organized in July 1995 by local community leaders and experienced bankers with the mission of providing superior community banking services. As of September 30, 2008, Community Bancorp had $1.78 billion in total assets and $1.55 billion in total liabilities. Community Bancorp reported a net loss of $2.96 million for the three months ended September 30, 2008. CORNELL COMPANIES: Moody's Affirms 'B2' Senior Unsec. Debt Rating ----------------------------------------------------------------- Moody's Investors Service has affirmed the B2 senior unsecured debt rating of Cornell Companies, Inc. with a stable outlook. The rating affirmation reflects the company's growing revenues, stronger debt service coverage ratios and adequate liquidity. The company's revenues have grown to an estimated $410 million on an annualized basis as of June 30, 2009 from $387 million in 2008 and $361 million in 2007. Furthermore, the company has additional new bed capacity to grow revenues over the next several quarters. Moody's notes the steady growth of facilities through internally generated cash. Management has done a good job of reorganizing Cornell's internal structure and improving operating efficiencies. Operating margins have improved to 21.7% as of 2Q09 from 21.2% in 2008 and 17.4% in 2007. Interest coverage ratios have significantly improved to 3.3x as of 2Q09 from 2.8x in 2008 and 2.3x in 2007. Cornell has adequate liquidity with limited debt maturities through 2010. The next significant debt maturity is the $100 million secured credit facility due in December 2011. Cornell has heavily utilized the facility to complete new development and expansion projects and has only $11 million or 11% available as of June 30, 2009. Cornell has limited capital commitments to new development projects and the company is expected to redirect cash from operations to meaningfully reduce the outstanding balance over the next twelve months. Moody's notes that, there is some uncertainty for private corrections companies in the short to intermediate term; however, longer term fundamentals are favorable due to growing prison populations, overcrowded prisons and the constraints on state capital expenditures for new public prison construction. There is concern, however, that some states severe budgetary constraints may delay addressing these needs and temporarily reduce the level of new contracts and/or reduce prison populations. There is also some uncertainty regarding Cornell's two other business segments, Adult Community Based programs, representing 22% of operating income and Abraxas Youth & Family Services, representing 8% of operating income as of June 30, 2009. It is likely some treatment and educational programs will be subject to state and local budget cuts. On the other hand, the company may benefit as community based transitional services are increasingly utilized to serve as an alternative to reduce long-term incarceration. Cornell is a leader in its youth and family services business segment and it will likely weather a decline in service contracts better than many of its generally smaller competitors. Over the longer term, it may position Cornell for gain market share in youth and family services. While there is concern and uncertainty over federal, state and local budget deficits and service cuts, at this time Moody's does not anticipate a significant decline in private correction revenues due to the overriding need for services. The stable outlook is based on Moody's expectation that Cornell will maintain, if not continue to grow, revenues to sustain debt service coverage ratios. The outlook is further supported by the company's adequate liquidity to meet its upcoming obligations. Moody's would consider a positive rating action should Cornell continue to achieve interest coverage consistently in excess of 2.5x, annual revenues approaching $500 million; secured debt below 25% of assets and persistent credit line availability closer to 50%. Conversely, sustained declines in coverage below 1.5x or revenues below $300 million, likely due to loss of contracts, would place negative pressure on the rating. This rating was affirmed with a stable outlook: * Cornell Companies, Inc.: B2 senior unsecured In its last ratings action with respect to Cornell, Moody's affirmed a senior unsecured rating of B2 on October 10, 2006. Cornell Companies, Inc. is based in Houston, Texas, USA, and is a private provider of corrections, treatment and educational services outsourced by federal, state and local governmental agencies. Cornell provides a diversified portfolio of services for adults and juveniles through its three operating divisions: Adult Secure Services; Abraxas Youth and Family Services; and Adult Community-Based Services. At June 30, 2009, the company operated 69 facilities with a total service capacity of 20,822 and had one vacant facility with a service capacity of 70 beds. The facilities are located in 15 states and the District of Columbia. CORPORACION DURANGO: Fitch Upgrades Issuer Default Rating to 'CCC' ------------------------------------------------------------------ Fitch Ratings has upgraded the foreign and local currency Issuer Default Ratings of Corporacion Durango S.A.B. de C.V. to 'CCC' from 'D'. In conjunction with this rating action, Fitch has rated the company's notes due in 2016 'CCC/RR4'. Simultaneously, Fitch has affirmed and withdrawn the 'CC/RR4' rating of the company's 2017 notes. Debt Restructuring Concluded Fitch's rating actions follow the announcement by Durango that its debt restructuring proposal has formally been concluded. As a result of this process, holders of US$357 million of the company's US$508.5 million outstanding 2017 notes have exchanged their notes for US$250 million of senior notes due 2016. These investors also received a one-time payment of US$ 10 million and have received a 6% equity stake in the company. A company related to Durango's controlling shareholders, exchanged its ownership of US$151 million of the 2017 notes for 35% of the company's common shares. On a pro forma basis, these two transactions will reduce Durango's total debt to US$263 million from US$522 million. Leverage Will Remain High The 'CCC' rating of Durango continues to reflect substantial credit risk due to high leverage, weak domestic demand for the company's packaging products and intense competition. Durango generated US$21 million of EBITDA during 2008, a sharp decline from US$95 million in 2007 and US$ 114 million in 2006. The decline was primarily driven by higher costs for energy and recycled fiber, while prices remained relatively stagnant. As a result, the margin between Durango's per ton revenues and unit cost decreased to US$38 per ton during 2008 from US$83 per ton in 2007 and US$93 per ton in 2006. Medium and Long-Term Credit Concerns Include Volatile Cost Structure, Need to Supply Financing to Customers, and Global Competitiveness The ratings of Durango reflect its inability to control its cost structure as of result of volatile energy and recycled fiber prices. A catalyst for rising recycled paper prices in Mexico and the U.S. was strong demand from China. Until Durango collects more recycled fiber through its collection networks in the U.S. and Mexico, it will remain vulnerable to Chinese purchases in these markets. The weakness in the U.S. market has increased exports to Mexico and heightened competition for Durango. Many of these competitors have greater financial resources than Durango; this will present challenges to Durango as it seeks to improve financing terms with its clients. The company's tight liquidity will also limit capital expenditures, thereby diminishing Durango's ability to improve its global competitiveness. CORTEX PHARMACEUTICALS: Receives NYSE Amex Staff Determination -------------------------------------------------------------- Cortex Pharmaceuticals, Inc., reported that it has received a delisting notification from the NYSE Amex LLC indicating that it has not accepted the Company's plan to regain compliance with the Exchange's continued listing standards, as submitted by the Company in June. Specifically, the notice indicated that the Company is not in compliance with Sections 1003(a)(i), 1003(a)(ii) and 1003(a)(iii) of the NYSE Amex Company Guide regarding stockholders' equity and losses from continuing operations or net losses; and Section 1003(a)(iv) of the Company Guide in that its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether the company will be able to continue operations or meet its obligations as they mature. The Company plans to appeal this determination and request a hearing before a listing qualifications panel. Such a hearing is anticipated to be scheduled within 45 days of the hearing request. During the appeals process, the Company expects that its common stock will remain listed on the Exchange. There can be no assurance that the listing qualifications panel will grant the Company's request for continued listing of its common stock. In the event that the Company's common stock is delisted from the Exchange, the Company believes that its common stock will be eligible to trade or be quoted on alternative markets, such as the Over the Counter Bulletin Board or the Pink OTC Markets, Inc. Currently patient enrollment is underway in Cortex's clinical trial of CX1739 in patients with moderate to severe sleep apnea. This pilot study in patients was undertaken based on research by Dr. John Greer at the University of Alberta. Chronic sleep apnea can lead to serious long-term consequences such as cardiovascular disease, stroke and diabetes. Also, recent studies with Cortex's High Impact AMPAKINE molecules in animal studies demonstrated that CX1837 produced marked increases in the rate and extent of recovery of motor function following brain damage induced by a stroke in mice. In another study, CX929 exhibited a mood stabilizing effect in mice, suggesting the potential for treating bipolar disorder. The Company currently has two compounds in clinical development: CX1739, which is targeted for sleep apnea and ADHD, and intravenous CX717 for treatment of drug-induced respiratory depression. Cortex is also actively engaged in on-going discussions related to strategic alternatives, including licensing, partnering and M&A opportunities. At some time in the future, Cortex may also seek to raise additional capital through the sale of debt or equity. There can be no assurance that any of these aforementioned discussions will result in a transaction. About Cortex Pharmaceuticals Cortex Pharmaceuticals, Inc. (NYSE Amex (COR) -- http://www.cortexpharm.com/-- located in Irvine, California, is a neuroscience company focused on novel drug therapies for treating psychiatric disorders, neurological diseases and brain-mediated breathing disorders. CRYOPORT INC: Board Approves CEO Stambaugh's Employment Agreement ----------------------------------------------------------------- The Compensation and Governance Committee of the Board of Directors of CryoPort, Inc., on August 21, 2009, approved an employment agreement with Larry G. Stambaugh, the Company's President, Chief Executive Officer and Chairman of the Board of Directors. Mr. Stambaugh was elected as Chairman of the Board on December 10, 2008 and subsequently as President and Chief Executive Officer on February 20, 2009. Mr. Stambaugh's employment agreement commenced on August 1, 2009 and will continue in effect until his employment is terminated under the provisions of the employment agreement. The employment agreement provides for an annual base salary of $360,000 which may be increased annually at the discretion of the Committee. Mr. Stambaugh also may be eligible to receive a discretionary annual bonus of up to 60% of his then effective annualized base salary pursuant to an incentive plan to be prepared by the Company's Board of Directors with Mr. Stambaugh's participation. In addition, in the event that the Company raises an aggregate of $5,000,000 pursuant to equity or convertible debt financings during the period from March 30, 2009 to the last day of the Term, then Mr. Stambaugh shall be entitled to receive a one-time incentive payment in the amount of $125,000. Mr. Stambaugh is eligible to participate in all employee benefits plans or arrangements which may be offered by the Company during the Term. The Company will pay the cost of Mr. Stambaugh's health insurance coverage in accordance with the Company's plans and policies during the Term. Mr. Stambaugh shall also be eligible for 25 days paid time off a year, and is entitled to receive fringe benefits ordinarily and customarily provided by the Company to its senior officers. In addition to a previously awarded warrant to purchase for 500,000 shares common stock issued to Mr. Stambaugh on December 10, 2008, on October 1, 2009, or sooner if permitted by debt restrictions, Mr. Stambaugh will become entitled to receive an incentive stock option to acquire 670,000 shares of common stock of the Company at the greater of the per share fair market value of such common stock or the current price allowable under convertible debenture agreements entered into by the Company on September 27, 2007, and May 30, 2008, if the Debentures are still in force and effect. The right to exercise the stock option will vest as to 33?% of the underlying shares of common stock upon grant, with the remaining underlying shares vesting in equal installments on the first and second anniversary of the grant date. Upon any termination of Mr. Stambaugh's employment for any reason, including by the Company "for cause", Mr. Stambaugh will receive his salary through the date of termination and any accrued but unpaid vacation, and he will retain all of his rights to benefits earned prior to termination under Company benefit plans in which he participates. If the Company terminates Mr. Stambaugh's employment other than "for cause" or Mr. Stambaugh terminates his employment due to a "constructive discharge", subject to Mr. Stambaugh's signing of a general release, Mr. Stambaugh will receive a severance payment equal to (i) six months' base salary, if such termination occurs during the first 12 months of his employment, or (ii) 12 months' base salary if such termination occurs following the first 12 months of his employment, and, in either instance, continued health care insurance coverage for one year. Mr. Stambaugh has agreed not to solicit any Company employees during the Term and the one year period following the termination of his employment. Prior to entering into the employment agreement, Mr. Stambaugh worked as a consultant for the Company on a monthly retainer basis. The Board of Directors has confirmed that vesting of the Initial Warrant was originally approved and should have been reported as vesting as to 1/3 of the 500,000 underlying shares on the date of grant, and the remaining 2/3 of the 500,000 underlying shares will vest on the first and second year anniversary of the grant date in equal proportion. A full-text copy of the Stambaugh Employment Agreement is available at no charge at http://ResearchArchives.com/t/s?4372 Stambaugh Gives Up CFO Role Dee Kelly on July 20, 2009, informed the Board of Directors of CryoPort, Inc., of her intent to resign as the Company's Chief Financial Officer and Vice President of Finance effective August 20, 2009. In connection with Ms. Kelly's resignation, Ms. Catherine Doll has commenced working for the Company and is transitioning in to replace Ms. Kelly as the Company's Chief Financial Officer, to become effective on August 20, 2009, pursuant to a prior resolution of the Board of Directors dated July 29, 2009. Prior to filing its Form 10-Q for the quarter ended June 30, 2009, Ms. Kelly informed the Board of Directors that she was not going to sign the Form 10-Q and accompanying certifications required by the Sarbanes-Oxley Act of 2002 because she felt that she had not been made privy to all of the Company's activities following the announcement of her decision to resign. Consequently, on August 18, 2009, the Board of Directors removed Ms. Kelly as the Chief Financial Officer and Vice President of Finance of the Company effective August 18, 2009, prior to the scheduled effective date of her resignation, and appointed Mr. Stambaugh, the Company's existing Chairman of the Board of Directors, President and Chief Executive Officer, to the office of Chief Financial Officer to enable the Company to timely file its Form 10-Q and related certifications with the SEC. Mr. Stambaugh has informed the Board of Directors of his intention to resign as Chief Financial Officer effective August 20, 2009, the effective date of Ms. Doll's appointment to such office. Mr. Stambaugh, 62, currently serves as the Company's Chairman of the Board of Directors, and President and Chief Executive Officer. Mr. Stambaugh is currently a Principal of Apercu Consulting, a firm that he established in 2006. From December 1992 to January 2006, Mr. Stambaugh served as Chairman and CEO of Maxim Pharmaceuticals, a public company developing cancer and infectious disease drugs which he co-founded. From December 2007 to February 2008, Mr. Stambaugh reorganized two biotechnology companies owned by Arrowhead Research Corporation, a public holding company, Calando Pharmaceuticals and Insert Therapeutics and served as each of the subsidiaries' CEO. Mr. Stambaugh has more than 30 years experience building global businesses and setting strategies and has an extensive background in life sciences and clean tech including relationships with and knowledge of Contract Research Organizations, biotech and pharmaceutical companies Mr. Stambaugh serves on several boards including EcoDog, Ridge Diagnostics, Corporate Directors Forum and BioCom. Mr. Stambaugh earned his BBA Accounting/Finance from Washburn University in 1969. Going Concern Doubt The Company has noted it has not generated significant revenues from operations and has no assurance of any future revenues. The Company generated revenues from operations of $35,124, incurred a net loss of $16,705,151 and used cash of $2,586,470 in its operating activities during the year ended March 31, 2009. The Company generated revenues from operations of $13,703, had net income of $363,276, which included a gain on the change in fair value of the derivative liabilities of $3,134,298, and used cash of $505,960 in its operating activities during the three months ended June 30, 2009. In addition, the Company had a working capital deficit of $15,556,522, and has cash and cash equivalents of $556,922 at June 30, 2009. The Company's working capital deficit at June 30, 2009 included $13,664,537 of derivative liabilities, the balance of which represented the fair value of warrants and embedded conversion features related to the Company's convertible debentures which were reclassified from equity during the quarter. Currently management has projected that cash on hand, including cash borrowed under the convertible debentures issued in the first and second quarter of fiscal 2010, will be sufficient to allow the Company to continue its operations only into the third quarter of fiscal 2010 until more significant funding can be secured. The Company said these matters raise substantial doubt about its ability to continue as a going concern. Through August 6, 2009, the Company had raised proceeds of $1,176,500 under the Private Placement Debentures and proceeds of $711,600 from the exercise of warrants. As a result of the recent financings, the Company had an aggregate cash and cash equivalents and restricted cash balance of roughly $1,089,000 as of August 10, 2009 which will be used to fund the working capital required for minimal operations including limited inventory build as well as limited sales efforts to advance the Company's commercialization of the CryoPort Express(TM) Shippers until additional capital is obtained. The Company's management recognizes that the Company must obtain additional capital for the achievement of sustained profitable operations. Management's plans include obtaining additional capital through equity and debt funding sources; however, no assurance can be given that additional capital, if needed, will be available when required or upon terms acceptable to the Company or that the Company will be successful in its efforts to negotiate extension of its existing debt. KMJ Corbin & Company LLP raised substantial doubt about CryoPort, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended March 31, 2009, and 2008. The auditor pointed to the Company's recurring losses and negative cash flows from operations since inception. About Cryoport Inc. Headquartered in Lake Forest, Calif., CryoPort Inc. (OTCBB: CYRX) -- http://www.cryoport.com/-- develops proprietary, technology- driven shipping and storage products for use in the rapidly growing global biotechnology and biopharmaceutical cold chain. The products developed by CryoPort are essential components of the infrastructure required for the testing, research and end user delivery of temperature-sensitive medicines and biomaterials in an increasingly complex logistical environment. As of June 30, 2009, the Company had $1,876,237 in total assets and $18,474,572 in total liabilities, resulting in stockholders' deficit of $16,598,335. CYCLACEL PHARMACEUTICALS: Receives NASDAQ Noncompliance Notice -------------------------------------------------------------- Cyclacel Pharmaceuticals, Inc., received a letter on August 24, 2009, from the NASDAQ Listing Qualifications Department notifying the Company that it does not comply with the $10 million minimum stockholders' equity as required by the continued listing requirements of The NASDAQ Global Market set forth in NASDAQ Marketplace Rule 5450(b)(1)(A). NASDAQ's determination was based on a review of the Company's Form 10-Q for the period ended June 30, 2009. At that time the Company's stockholders' equity was reported at approximately $8.2 million. As provided in the NASDAQ rules, the Company has the opportunity to submit to NASDAQ a specific plan to achieve compliance within 15 calendar days from the date the Company received the letter. The Company intends to submit in a timely manner to the NASDAQ Staff a plan to regain compliance and continue listing on The NASDAQ Global Market. There is no assurance that NASDAQ will accept the Company's plan to satisfy the stockholders' equity requirement. In the event that NASDAQ does not accept the plan, NASDAQ will provide written notice that the Company's securities will be subject to delisting from The NASDAQ Global Market. In that event, the Company may either apply for listing on The NASDAQ Capital Market, provided it meets the continued listing requirements of that market, or appeal the decision to a NASDAQ Listing Qualifications Panel. In the event of an appeal, the Company's securities would remain listed on The NASDAQ Global Market pending a decision by the Panel following the hearing. About Cyclacel Pharmaceuticals Cyclacel Pharmaceuticals Inc. -- http://www.cyclacel.com/-- is a diversified biopharmaceutical company dedicated to the discovery, development and commercialization of novel, mechanism-targeted drugs to treat human cancers and other serious disorders. Cyclacel's strategy is to build a diversified biopharmaceutical business focused in hematology and oncology based on a portfolio of commercial products and a development pipeline of novel drug candidates. DANA HOLDING: Bank Debt Trades at 24% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Dana Holding Corporation is a borrower traded in the secondary market at 76.19 cents-on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.26 percentage points from the previous week, The Journal relates. The loan matures on Jan. 31, 2015. The Company pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Caa1 rating and Standard & Poor's B rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Based in Toledo, Ohio, Dana Holding Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. Dana Corp., together with affiliates, affiliates filed for Chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06- 10354). Attorneys at Jones Day represented the Debtors. It emerged from bankruptcy Jan. 31, 2008, and the reorganized entity was named Dana Holding Corporation. As reported in the Troubled Company Reporter on June 9, 2009, Moody's Investors Service lowered the Corporate Family Rating of Dana Holding Corporation to Caa2, raised the Probability of Default Rating to Caa1, and adjusted the ratings of certain debt instruments. According to Moody's, the positioning of Dana's PDR at Caa1 reflects ongoing pressures the company faces from the continued erosion in the global automotive and commercial vehicle markets. DECODE GENETICS: Earl Collier Steps Down as Director ---------------------------------------------------- Earl M. Collier, Jr., on August 26, 2009, resigned as a director of deCODE genetics, Inc. deCODE is not aware of any disagreement between it and Mr. Collier relating to deCODE's operations, policies or practices. Going Concern Doubt deCODE genetics' balance sheet at June 30, 2009, showed total assets of $69.85 million and total liabilities of $313.92 million, resulting in a stockholders' deficit of $244.07 million. As of June 30, 2009, the Company had cash and cash equivalents of $3.80 million, compared to $3.70 million at Dec. 31, 2008. In early 2009 deCODE sold its ARS for $11.3 million in cash, and in April it signed licensing agreements with Celera Corporation under which it received an upfront payment and will receive royalties on sales of Celera testing products and services incorporating deCODE genetic risk markers. deCODE states it has sufficient resources to fund operations only into the latter half of the third quarter. The Company is simultaneously pursuing several options to ensure sufficient funding to take it to the execution of strategic options that can support the near- and longer-term viability of our core business. Regardless, deCODE's planned operations require immediate additional liquidity substantially in excess of the amounts, raising substantial doubt about deCODE's ability to continue as a going concern. In deCODE's ongoing strategic review, deCODE was evaluating and pursuing various alternatives aimed at focusing its business and underpinning ongoing product development and commercialization in its core business, including the sale of some or all of deCODE's US medicinal chemistry and structural biology units. About deCODE Genetics deCODE genetics Inc. (Nasdaq: DCGN) -- http://www.decode.com/-- operates as a biopharmaceutical company that applies discoveries in human genetics to develop drugs and diagnostics for common diseases. The Company serves pharmaceutical companies, biotechnology firms, pharmacogenomics companies, government institutions, universities, and other research institutions primarily in the United States, Europe, and internationally. The Company was founded in 1996 and is headquartered in Reykjavik, Iceland. DELPHI CORP: Lenders Extend Milestones Deadline to Sept. 3 ---------------------------------------------------------- Delphi Corporation on August 26, 2009, entered into a twelfth amendment to its existing liquidity agreement between Delphi and General Motors Company (as assignee of Motors Liquidation Company, formerly known as General Motors Corporation). The effect of the Twelfth Amendment was to extend the deadline for Delphi to satisfy certain milestones, which if not met, would prevent Delphi from continued access to the facility. The GM Advance Agreement was amended and restated on June 1, 2009 to provide Delphi with an additional $250 million credit facility -- Tranche C Facility -- subject to Delphi's continued satisfaction of certain conditions and milestones. Delphi's continued ability to request advances under the Tranche C Facility is conditioned on progress in achieving the transactions contemplated by the confirmed First Amended Joint Plan Reorganization as modified, as filed with the U.S. Bankruptcy Court for the Southern District of New York on June 16, 2009. Specifically, prior to the Twelfth Amendment, the ability of Delphi to request advances on or after August 26, 2009 was conditioned on the entry by the Court of an order, in form and substance reasonably acceptable to GM, approving the Modified Plan or an implementation agreement pursuant to which the parties to the Master Disposition Agreement, dated June 1, 2009, as revised and amended, among Delphi, GM Components Holdings, LLC, GM and Parnassus Holdings II, LLC, would perform their obligations thereunder pursuant to Section 363 of the Bankruptcy Code, independent of and not pursuant to or contingent on the effectiveness of the Modified Plan. The Twelfth Amendment extends the August 26, 2009 date until 8:00 p.m. (Eastern time) on September 3, 2009. All other terms of the GM Advance Agreement remain in effect. Amendment to Accommodation Agreement On August 26, 2009, Delphi entered into a 21st amendment to its accommodation agreement, with the lenders under its existing debtor-in-possession financing agreement, consisting of a $1.1 billion first priority revolving credit facility -- Tranche A Facility -- a $500 million first priority term loan -- Tranche B Term Loan -- and a $2.75 billion second priority term loan -- Tranche C Term Loan. The effect of the Thirty-First Amendment is to extend the term of the Accommodation Agreement to 8:00 p.m. (Eastern time) on September 3, 2009. Pursuant to the Accommodation Agreement, as in effect through the Thirtieth Amendment, the lenders agreed, among other things, to allow Delphi to continue using the proceeds of the Amended and Restated DIP Credit Facility and to forbear from the exercise of certain default-related remedies, in each case until August 26, 2009, subject to the continued satisfaction by Delphi of a number of covenants and conditions. The Thirty-First Amendment further extends that date until 8:00 p.m. (Eastern time) on September 3, 2009. There currently remains approximately $230 million outstanding under the Tranche A Facility, $310 million outstanding under the Tranche B Term Loan and $2.75 billion outstanding under the Tranche C Term Loan under the Amended and Restated DIP Credit Facility. Finally, the Thirty-First Amendment provides that the requisite majority of lenders under the Amended and Restated DIP Credit Facility have 70 business days (modified from 65 business days) to notify Delphi that the modified plan of reorganization filed on June 1, 2009 is not satisfactory. The remaining provisions in the Accommodation Agreement are materially unchanged. About Delphi Corp Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi technology is also found in computing, communications, consumer accessories, energy and medical applications. Delphi has approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on January 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) ECOSPHERE TECHNOLOGIES: Liquidity Woes Raise Going Concern Doubt ---------------------------------------------------------------- Ecosphere Technologies, Inc.'s balance sheet at June 30, 2009, showed total assets of $2.43 million and total liabilities of $25.83 million, resulting in a stockholders' deficit of $23.40 million. For three months ended June 30, 2009, the Company posted a net loss of $18.47 million compared with a net loss of $3.14 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $15.37 million compared with a net loss of $4.76 million for the same period in 2008. The Company said there is substantial doubt about the Company's ability to continue as a going concern. The Company noted that at June 30, 2009, the Company had a working capital deficiency of $21.40 million, a stockholders' deficit and had outstanding convertible preferred stock that is redeemable under limited circumstances for $3.90 million. In addition, loans and accrued interest of $886,911 to two investors were in default as of June 30, 2009. The Company has not attained a level of revenues sufficient to support recurring expenses, and the Company does not presently have the resources to settle incurred obligations. The Company added that its continued existence is dependent upon its ability to resolve its liquidity problems. From April to July 2009 the Company received $1.00 million under a credit line and on July 21, 2009, received a $2.50 million investment and forgiveness of the above $1.00 million in exchange for a 33% minority interest in EES. Under the agreement to purchase the minority interest, the Company may receive certain preferred distributions in the future. The management is pursuing additional financing in order to complete the manufacturing of these units and to fund operating expenses until significant revenues are generated. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?435a About Ecosphere Technologies Ecosphere Technologies, Inc., was incorporated under the name UltraStrip Systems, Inc. in April 1998 in Florida. It was reincorporated on September 8, 2006 in Delaware under the name Ecosphere Technologies, Inc. Ecosphere's mission is to become a globally branded company known for developing and introducing patented innovative clean technologies to the world marketplace. The company invents, patents, develops, and expects to license and sell clean technologies with the potential for practical, economical and sustainable applications across industries throughout the world. ELEPHANT TALK: June 30 Balance Sheet Upside-Down by $5.3 Million ---------------------------------------------------------------- Elephant Talk Communications Inc.'s balance sheet showed total assets of $21.29 million and total liabilities of $26.59 million, resulting in a stockholders' deficit of $5.30 million. For three months ended June 30, 2009, the Company posted a net loss of $2.68 million compared with a net loss of $2.65 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of of $4.83 million compared with a net loss of $5.22 million 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?4360 Based in Orange, California, Elephant Talk Communications Inc. (OTC BB: ETLK) -- http://www.elephanttalk.com/-- until recently was engaged in the long distance telephone business in China and the Special Administrative Region Hong Kong. The company currently operates a switch-based telecom network with national licenses and direct fixed line interconnects with the Incumbents/National Telecom Operators in eight (8) European countries, one (1) in the Middle East (Bahrain), licenses in Hong Kong and the U.S.A. and partnerships with telecom operators in Scandinavia, Poland, Germany and Hong Kong. Going Concern Doubt As reported in the Troubled Company Reporter on May 5, 2008, Kabani & Company, Inc., raised substantial doubt on the ability of Elephant Talk Communications, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's net loss of $12.05 million, working capital deficit of $24.42 million, accumulated deficit of $29.01 million and cash used in operations of $3.44 million. EMPIRE RESORTS: Registers 7.08MM Shares for Resale -------------------------------------------------- Empire Resorts, Inc., filed with the Securities and Exchange Commission a prospectus relating to reoffer and resale by selling stockholders -- The Park Avenue Bank, Alan Lee and Kien Huat Realty III Limited -- of up to an aggregate 7,081,966 shares of the Company's common stock, which includes 277,778 shares of its common stock that are issuable upon the exercise of warrants with exercise prices of $0.01 per share. Empire Resorts will not receive any proceeds from the sale of the common stock under the prospectus. The selling stockholders may sell the securities, from time to time, on any stock exchange or automated interdealer quotation system on which the securities are listed, in the over-the-counter market, in privately negotiated transactions or otherwise, at fixed prices that may be changed, at market prices prevailing at the time of sale, at prices related to prevailing market prices or at prices otherwise negotiated. The selling stockholders have not been officers, directors or had any material relationships within the past three years with the Company or any of its predecessors or affiliates. Eric Reehl, the Company's Chief Restructuring Officer and Chief Financial Officer, is currently serving as the Acting Chief Financial Officer for Park Avenue Bancorp, Inc., a New York domiciled commercial bank and an affiliate of The Park Avenue Bank. Kien Huat is party to the Investment Agreement governing the investment of up to $55 million in the Company's common stock and providing Kien Huat with certain governance rights, including representation on the Company's board of directors. The Company's common stock is listed on the Nasdaq Global Market under the symbol "NYNY." The last reported sale price for the common stock on August 20, 2009, was $3.20 per share. A full-text copy of the prospectus is available at no charge at: http://ResearchArchives.com/t/s?4370 As reported by the Troubled Company Reporter, Empire Resorts on August 20, 2009, made the interest payment to the Bank of New York, as trustee, on the Company's 5-1/2%, senior convertible notes of $2.6 million that was due on July 31, 2009. The interest payment was made within the time period permitted pursuant to the indenture governing the Notes. On July 29, 2009, as reported by the TCR, The Park Avenue Bank delivered a notice to The Bank of New York advising that, as a result of the occurrence of the event of default under the loan agreement with The Park Avenue Bank, a standstill period has commenced under the intercreditor agreement with respect to the collateral. The standstill period will continue until the earlier to occur of (i) The Park Avenue Bank's express waiver or acknowledgement of the cure of the applicable event of default in writing or the occurrence of the discharge of the Loan Agreement secured obligations, and (ii) the date that is 90 days from the date of the Bank of New York's receipt of the standstill notice. About Empire Resorts Empire Resorts Inc. -- http://www.empiresorts.com/-- owns and operates the Monticello Casino & Raceway, including slot machines and a 230-acre harness racing facility in Sullivan County, 90 miles from midtown Manhattan. As of June 30, 2009, Empire Resorts had total assets of $45,791,000 against total debts of $81,489,000, resulting to total stockholders' deficit of $35,698,000. The $81,489,000 in liabilities, which include $65,000,000 owing to convertible notes, are all classified as "current liabilities". The Company had accumulated deficit of $105,375,000 as of June 30, 2009. FINLAY ENTERPRISES: Can Use Cash Collateral Until December 31 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has granted Finlay Enterprises, Inc., and its affiliated debtors permission on a final basis to use cash collateral of the prepetition agent and prepetition lenders from August 20, 2009, through the date which is the earliest to occur of (a) the expiration of the Remedies Notice Period, or (b) December 31, 2009, in accordance with a budget. As adequate protection of the interests of the prepetition senior lenders in the prepetition collateral to the extent of any diminution in value of such interest, the prepetition senior agent, for the benefit of itself and the prepetition senior lenders, are granted additional and replacement liens on any and all presently owned and hereafter acquired assets of the Debtors and their estates, together with any proceeds thereof. As adequate protection of the respective interests of the prepetition indenture trustees and the prepetition junior lenders in the prepetition collateral to the extent of any diminution in value of such interest, each prepetition indenture trustee, for the benefit of itself and the relevant prepetition junior lenders, are also granted additional and replacement liens on the collateral. As further adequate protection, the prepetition senior agent and prepetition senior lenders, the prepetition second lien indenture trustee and prepetition second lien lenders are each granted an allowed superpriority administrative expense claim in each of the cases and any successor cases, pursuant to Sections 503(b) and 507(b) of the Bankruptcy Code. As reported in the TCR on August 14, 2009, the Debtors are parties to the Fourth Amended and Restated Credit Agreement dated as of November 9, 2007, with General Electric Capital Corporation, as agent, L/C issuer, and lender, GE Capital Markets, Inc., as sole bookrunner and joint lead arranger, JPMorgan Securities Inc., as joint lead arranger, and Wachovia Bank, NA, as documentation agent, and the lenders that are parties thereto from time to time. As of Finlay's petition date, the outstanding principal amount of all loans under the prepetition credit agreement was not less than $37,500,000, and $8,500,281 face amount of issued and outstanding letters of credit. The Debtors also owe $24,745,869 under senior secured second lien notes and $176,590,830 under senior secured third lien notes. The Debtors granted security interests in and liens on substantially all of the Debtors' existing and after acquired personal and real property. The Debtors related that they had an arm's-length negotiation with the prepetition agents, prepetition lenders regarding the Debtors' use of cash collateral to fund the continued operation of the Debtors' businesses during the specified period. In connection with the use of the cash collateral, the Debtors are required to comply with these covenants: a) On or before August 17, 2009, the Court will have entered an order, in form and substance acceptable to the prepetition senior agent, approving sale procedures and scheduling an auction date and final sale hearing pursuant to the sale motion. b) By August 31, 2009, the Debtors will have completed an auction of substantially all of Debtors' assets. c) By September 1, 2009, the Court will have entered an order, in form and substance acceptable to the prepetition senior agent, approving the sale transaction. d) By September 3, 2009, the Debtors will close a sale transaction and deliver sufficient net proceeds of the sale to the prepetition senior agent in cash to repay all outstanding prepetition credit obligations in full. e) The Debtors and their advisors will provide the prepetition senior agent with telephonic reports of all sale efforts, expressions of interest and offers received periodically upon request. A full-text copy of the Budget is available for free at: http://bankrupt.com/misc/FINLAY_Budget.pdf Finlay Enterprises, Inc. (OTC Bulletin Board: FNLY) through its wholly owned subsidiary, Finlay Fine Jewelry Corporation, is a retailer of fine jewelry operating luxury stand-alone specialty jewelry stores and licensed fine jewelry departments in department stores throughout the United States and achieved sales of $754.3 million in fiscal 2008. The number of locations at the end of the second quarter ended August 1, 2009, totaled 182, including 67 Bailey Banks & Biddle, 34 Carlyle and four Congress specialty jewelry stores and 77 licensed departments with The Bon Ton. The Company and seven affiliates filed for Chapter 11 on August 5, 2009 (Bankr. S.D.N.Y. Case No. 09-14873). Weil, Gotshal & Manges LLP, serves as bankruptcy counsel. Alvarez & Marsal North America, LLC, is engaged as restructuring advisor in the Chapter 11 case, and the firm's David Coles is appointed as chief restructuring officer. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. Judge James Peck presides over the case. In its bankruptcy petition, Finlay Enterprises disclosed assets of $331,824,000 against debts of $385,476,000 as of July 4, 2009. As of the petition date, Finlay owes $38 million outstanding under a first lien credit agreement, $24.7 million under second lien notes, $176.6 million outstanding under third lien notes (in addition to $17.5 million to secured vendors), and $40.6 million under remaining unsecured obligations under the senior notes. FINLAY ENTERPRISES: Court Sets September 23 Auction Sale of Assets ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York granted on August 20, 2009, Finlay Enterprises, Inc. and its affiliated debtors' amended motion to: (i) approve procedures in connection with the sale of all or substantially all of their assets, subject to higher and better offers at an auction; (ii) authorize the Debtors to enter into an agency agreement (the "stalking horse agreement") with Gordon Brothers Retail Partners, LLC in connection with the sale; and (iii) approve the payment of a break-up fee of $850,000 in accordance with the terms of the stalking horse agreement. As soon a practicable after the conclusion of the auction, but no later than before the sale approval hearing, the Debtors will file a final form of order approving the sale as agreed upon between the Debtors and the successful bidder. Notwithstanding the authorization to enter into the stalking horse agreement, the Court is not approving the provisions thereof and such approval will be addressed at the sale hearing. Stalking Horse Agreement The stalking horse agreement provides for Gordon Brothers to act as the Debtors' agent to liquidate (a) all of the merchandise located in 106 of its specialty retail store locations and the Debtors' distribution centers and other offsite locations by means of a "going out of business," "sale on everything," "store closing," or similar sale, and (b) the Debtors' owned furniture, fixtures and equipment located at the stores. The stalking horse agreement provides a guaranty of payment of an amount the Debtors believe to be roughly $116 million. A full-text copy of the Agency Agreement is available at no charge at http://researcharchives.com/t/s?4148 Auction Date The bid deadline is August 26, 2009, at 4:00 p.m. in accordance with the approved bid procedures. Bids must have a value greater than or equal to the sum of (x) $116,500,000, which is the value determined by the Debtors of the stalking horse agreement, plus (y) $850,000, the amount of the break-up fee, plus (z) an initial overbid of $100,000. The Debtors reserve the right to reject any or all bids. The auction will be conducted at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153 on September 23, 2009, at 10:00 a.m. The sale hearing will be held on September 25, 2009, at 10 a.m. or such other time that the Court may direct. Objections to the sale of the assets must be filed so as to be actually received by September 14, 2009, at 5:00 p.m. by the Objection Notice Parties. Finlay Enterprises, Inc. (OTC Bulletin Board: FNLY) through its wholly owned subsidiary, Finlay Fine Jewelry Corporation, is a retailer of fine jewelry operating luxury stand-alone specialty jewelry stores and licensed fine jewelry departments in department stores throughout the United States and achieved sales of $754.3 million in fiscal 2008. The number of locations at the end of the second quarter ended August 1, 2009, totaled 182, including 67 Bailey Banks & Biddle, 34 Carlyle and four Congress specialty jewelry stores and 77 licensed departments with The Bon Ton. The Company and seven affiliates filed for Chapter 11 on August 5, 2009 (Bankr. S.D.N.Y. Case No. 09-14873). Weil, Gotshal & Manges LLP, serves as bankruptcy counsel. Alvarez & Marsal North America, LLC, is engaged as restructuring advisor in the Chapter 11 case, and the firm's David Coles is appointed as chief restructuring officer. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. Judge James Peck presides over the case. In its bankruptcy petition, Finlay Enterprises disclosed assets of $331,824,000 against debts of $385,476,000 as of July 4, 2009. As of the petition date, Finlay owes $38 million outstanding under a first lien credit agreement, $24.7 million under second lien notes, $176.6 million outstanding under third lien notes (in addition to $17.5 million to secured vendors), and $40.6 million under remaining unsecured obligations under the senior notes. FORD MOTOR: Bank Debt Trades at 13.6% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Ford Motor Co. is a borrower traded in the secondary market at 86.40 cents-on-the- dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.70 percentage points from the previous week, The Journal relates. The loan matures on Dec. 15, 2013. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ca rating and Standard & Poor's CCC+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The Company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. Ford Motor carries a 'Ca' issuer credit and a 'Caa3' long term corporate ratings, with negative outlook, from Moody's, 'CCC+' long term issuer credit ratings, and 'CCC' long term issuer default rating, with negative outlook, from Fitch. FORD MOTOR: To Resume 3 Shifts at Michigan & Missouri Plants ------------------------------------------------------------ Jeff Bennett at The Wall Street Journal reports that Ford Motor Co. will return its Michigan and Missouri plants to three shifts. As reported by the TCR on August 17, 2009, Ford Motor increased production plans for the rest of the year. For the third quarter 2009, Ford will increase production to 495,000 new vehicles, mainly due to the demand for the Ford Focus and Escape. Ford will build 6,000 more Focus vehicles during the third quarter -- 18% higher than the same period a year earlier -- through overtime and Saturday shifts. Ford said that it will also build 570,000 vehicles in the fourth quarter, about 33% above the year-earlier levels and 15% higher than planned third-quarter output. The Journal relates that the third shifts will be added at the Michigan truck plant in September and at the Kansas City Assembly plant in October. According to the report, Ford said that it is on track in August to post its first monthly year-over-year sales increase in its F-series trucks since October 2006. The Journal notes that the additional shift at the Michigan plant will boost the production of F-150 pick-up trucks by 10,000 vehicles this year and provide full-time employment for 2,800 workers who had been working on rotating shifts since April. The Journal states that overtime, combined with the third shift at the Kansas City plant, will result in 2,400 additional Ford Escapes and Mercury Mariners by the end of October. The Journal quoted Ford marketing, sales, and service vice president Ken Czubay as saying, "Even with 'cash for clunkers' behind us, we expect that demand will remain strong. We had a solid July sales month, and we are headed toward an even stronger August." Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The Company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. Ford Motor carries a 'Ca' issuer credit and a 'Caa3' long term corporate ratings, with negative outlook, from Moody's. Fitch Ratings said via Business Wire on August 26 that it has revised the Rating Outlook on Ford Motor Company and Ford Motor Credit Company to Stable from Negative. In addition, the Issuer Default Rating of Ford is affirmed at 'CCC'. FORD MOTOR: Wants Add'l Concessions from UAW; Local Unions Oppose ----------------------------------------------------------------- Kimberly S. Johnson at The Canadian Press reports that Ford Motor Co. is meeting with the United Auto Workers union, as it seeks additional concessions on work rules, strike provisions, and wages for new hires. Ford's union workers agreed to amend their 2007 contract in March 2008 with concessions to help Ford Motor cut costs and avoid taking government aid, and some local union officials said that workers have no interest in accepting further cuts, The Canadian Press states. The Canadian Press quoted Gary Walkowicz, bargaining committee member for UAW Local 600 and who is against future concessions, as saying, "Once you open door, it just doesn't stop, they keep coming back for more." According to The Canadian Press, several union officials said in recent months that workers have expressed concern and opposition to further cuts. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The Company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. Ford Motor carries a 'Ca' issuer credit and a 'Caa3' long term corporate ratings, with negative outlook, from Moody's. Fitch Ratings said via Business Wire on August 26 that it has revised the Rating Outlook on Ford Motor Company and Ford Motor Credit Company to Stable from Negative. In addition, the Issuer Default Rating of Ford is affirmed at 'CCC'. FORMIDABLE LLC: Case Summary & Largest Unsecured Creditor --------------------------------------------------------- Debtor: Formidable, LLC 3165 East Millrock Drive, Suite 550 Salt Lake City, UT 84121 Case No.: 09-29087 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court District of Utah (Salt Lake City) Debtor's Counsel: Lon A. Jenkins, Esq. Jones Waldo Holbrook & McDonough 170 South Main St., Suite 1500 Salt Lake City, UT 84101 Tel: (801) 521-3200 Fax: (801) 328-0537 Email: lajenkins@joneswaldo.com Troy J. Aramburu, Esq. Jones Waldo Holbrook & McDonough PC 170 South Main Street, Suite 1500 Salt Lake City, UT 84101 Tel: (801) 521-3200 Fax: (801) 328-0537 Email: taramburu@joneswaldo.com Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Jake Harouny, the company's manager. Debtor's List of 1 Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Medallion Exploration Services Provided $2,369,920 3165 E. Millrock Drive, #550 Holladay, UT 84121 FREEDOM COMMUNICATIONS: May File for Bankruptcy This Week --------------------------------------------------------- Freedom Communications Inc., may file for bankruptcy protection this week, The Wall Street Journal reported, citing unidentified people familiar with the matter. At the end of June 2009, Freedom Communications announced an across-the-board 5% reduction in base pay for employees at all levels, as part of a continuation of a company-wide furlough program. "We are facing the challenge of a general economic situation that experts say will continue to remain weak for many months to come," said Burl Osborne, Freedom Communications CEO, said in June. "In this very difficult climate we need to continue to reduce expenses, and we determined that the fairest way to accomplish this with the minimum impact on operations is the action we are announcing today." Freedom Communications, headquartered in Irvine, Calif., is a national privately owned information and entertainment company of print publications, broadcast television stations and interactive businesses. The Company's print portfolio includes more than 100 daily and weekly publications, including just over 30 daily newspapers, plus ancillary magazines and other specialty publications. The Company owns the Orange County Register newspaper. The broadcast company's stations - five CBS, two ABC network affiliates and one CW affiliate - reach more than 3 million households across the country. The Company's news, information and entertainment Web sites complement its print and broadcast properties. FRONTIER AIRLINES: MLT Gets $1.2MM Claim for Rejected Deal ---------------------------------------------------------- Frontier Airlines Holdings Inc. and MLT, Inc., doing business as MLT Vacations, informed the Court and parties-in-interest that they reached an agreement allowing MLT's non-priority general unsecured claim for an aggregate of $1,200,000. The Settlement also provides for the amendment of Claim No. 1105 to reflect the Claim amount and priority. MLT's Claim is in light of the Debtors' decision to reject their Charter Services Agreement with MLT as of June 1, 2008. Objections to the Agreement, if any, must be filed by September 3, 2009. Absent any Objections, the Agreement will be deemed final and effective. Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. As reported by the TCR on August 14, Republic Airways Holdings, Inc., has been declared the winning bidder in the auction to acquire Frontier, beating Southwest Airlines. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Teamsters Ratify Labor Pact ---------------------------------------------- Frontier Airlines and the International Brotherhood of Teamsters, Local 961 informed Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York that Letter of Agreement No. 09-01, was ratified by Frontier's Mechanics and Material Specialists on August 20, 2009. As previously reported, Frontier and the Teamsters announced on August 6, 2009, that they entered into the "consensual, long-term labor agreement and a comprehensive settlement of the 1113 Proceeding." Essentially, the LOA is intended to resolve the Company's litigation under Section 1113 of the Bankruptcy Code in its entirety by providing for, among other amendments to the CBAs, long-term wage and benefit reductions and a program through which IBT-represented workers can be placed on leave for periods during which certain heavy maintenance work is not required. In light of the Ratified LOA, the Court approved a stipulation between Frontier and the Teamsters, through which the parties agree that the Section 1113 Proceeding is dismissed with prejudice, and Frontier has dismissed with prejudice its appeal filed in the United States Court of Appeals for the Second Circuit. The LOA will be effective as of the ratification date, or August 20, 2009. Upon the Effective Date, the Teamsters will have allowed general non-priority unsecured claim under Section 502 of the Bankruptcy Code for $7,102,488 that is not subject to reconsideration, with respect to the concessions made by the Teamsters under the Agreement and the Interim Restructuring Relief Agreement. Neither the Teamsters nor any of the Mechanics or Material Specialists or other employees that it represents nor any other party will have any other claim or cause of action on account of the LOA or the Interim Agreement. Any transfer of all or any part of the Teamsters Claim prior to Frontier's exit from bankruptcy may only be made in compliance with the Final Order Establishing Procedures and Approving Restrictions on Certain Transfers of Claims Against and Interests in the Debtors' Estates, dated June 3, 2008. The Teamsters will have the sole authority and responsibility to determine the manner of allocation among its employees on account of the IBT Claim, including the allocation of any equity securities on account of the Claim, provided that the allocation schedule or formula is delivered to Frontier no later than 30 days prior to the date of distribution. The Debtors have indicated that it is their present intention to assume the Collective Bargaining Agreements, as amended by the LOA, pursuant to the Debtors' Plan of Reorganization, the Court noted. Neither the Stipulation nor Frontier's entry into the LOA will alter the order or priority of any claim under the Bankruptcy Code or convert any prepetition or unsecured claim into a priority claim, secured claim, postpetition claim or administrative claim. Judge Drain acknowledged that the Section 1113 Proceeding and Second Circuit appeal settled by the LOA are exceedingly complex, with substantial expense, inconvenience and delay for the Debtors and their estates. Moreover, the settlement and compromise reflected in the LOA was extensively negotiated at arm's-length, and is not the product of fraud or collusion, he said. Judge Drain ruled that the Stipulation is immediately effective and enforceable. About Frontier Airlines Holdings Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. As reported by the TCR on August 14, Republic Airways Holdings, Inc. has been declared the winning bidder in the auction to acquire Frontier, beating Southwest Airlines. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GATEWAY HEALTH: AM Best Affirms Financial Strength at B- -------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating (FSR) of B- (Fair) and issuer credit rating (ICR) of "bb-" of Gateway Health Plan, Inc. (GHPI). The outlook for both ratings is negative. Concurrently, A.M. Best has withdrawn the ratings at the company's request and assigned a category NR-4 to the FSR and "nr" to the ICR. These rating actions reflect the decision of GHPI's management to withdraw from A.M. Best's interactive rating process. Over the past five years, GHPI's risk-based capital has not grown at the rate required to support the company's strong revenue development. Generally, underwriting performance was unfavorable for four out of the past five years, which suggests that reimbursement rates have not kept up with the level of increased utilization and the commitments required to support the company's administrative infrastructure development. A.M. Best is concerned about Pennsylvania's perennial budget deficits and the level of service cuts that the state is required to make in order to bring into balance the state's cash flow. Additionally, the state's economy continues to shed jobs. The increases in unemployment and retirements are in direct proportion to increase enrollment in Medicaid and Medicare, adding significant pressure to the operations of GHPI. For these reasons, A.M. Best believes that GHPI is subject to significant geographic and legislative risks. Gateway Health Plan, Inc. -- http://www.gatewayhealthplan.com/-- provides managed health care services (as an HMO) to more than 240,000 recipients who are eligible for Medicare and Medicaid assistance. Specifically, the company serves either Medicaid- eligible recipients or, through its branded service Medicare Assured, recipients who qualify for both Medicare and Medicaid assistance. Gateway's service area covers 27 counties throughout Pennsylvania and 12 counties in Ohio. The company's services include primary care, dental, OB/GYN visits, and mental health services. Gateway, an affiliate of Highmark , was founded in 1996 as an alternative to the Department of Public Welfare's Assistance Program in Pennsylvania. GENCORP INC: Board Sets Objectives, Other Terms of 2009 LTIP ------------------------------------------------------------ The Board of Directors of GenCorp Inc., upon the recommendation and approval of the Organization & Compensation Committee, established on August 24, 2009, performance objectives and other terms of the Company's 2009 Long-Term Incentive Program for executive officers and other eligible employees of the Company. The 2009 LTIP has a three-year performance period with the potential for annual payouts based on meeting revenue growth and pre-tax earnings targets. Also on August 24, the Board awarded these stock options grants and restricted stock awards under the 2009 LTIP to: Executive Officer Stock Options Restricted Stock ----------------- ------------- ---------------- Kathleen E. Redd 35,000 30,000 Vice President, Chief Financial Officer and Secretary Chris W. Conley 7,500 7,500 Vice President, Environmental Health & Safety The stock option grants and restricted stock awards will be made pursuant to the Company's 1999 Equity and Performance Incentive Plan. As reported by the Troubled Company Reporter on July 27, 2009, GenCorp has said given its current and forecasted liquidity through January 2010, in the event the 4% Contingent Convertible Subordinated Notes are put to the Company, the Company may not have the liquidity to immediately repay the holders of the 4% Notes. The 4% Notes that were issued in January 2004 provide the holders of the 4% Notes with the right to require the Company to repurchase for cash all or a portion of the outstanding $125.0 million 4% Notes on January 16, 2010 at a price equal to 100% of the principal amount, plus accrued and unpaid interest. The Company's $280.0 million senior credit facility contains certain restrictions surrounding the ability of the Company to refinance its 4% Notes. The Company is seeking an amendment to its Senior Credit Facility in connection with the potential required repurchase of the 4% Notes. If the Company is unable to amend the Senior Credit Facility and obtain financing to repurchase the 4% Notes on terms favorable to the Company before January 2010, the Company may need to consider other alternatives. The Company has engaged Imperial Capital, LLC to facilitate its efforts to amend the Senior Credit Facility and to refinance the subordinated debt. Failure to pay principal on the 4% Notes when due is an immediate default under the Senior Credit Facility, and after the lapse of appropriate grace periods, causes a cross default on the Company's outstanding $146.4 million 2-1/4% Debentures and $97.5 million 9-1/2% Senior Subordinated Notes. The Company believes that if it is unable to amend the Senior Credit Facility and obtain financing to repurchase the 4% Notes on favorable terms before January 2010 this could raise a substantial doubt about the Company's ability to continue as a going concern. As of May 31, 2009, the Company had $1.015 billion in total assets; $1.013 billion in total liabilities and $7.0 million in redeemable common stock, resulting in $5.2 million of shareholders' deficit. Based in Rancho Cordova, California, GenCorp Inc. (NYSE: GY) -- http://www.GenCorp.com/-- is a technology-based manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the entitlement, sale and leasing of the Company's excess real estate assets. GENERAL MOTORS: Bankruptcy Blamed for Drop in Shiloh Q3 Sales ------------------------------------------------------------- Shiloh Industries, Inc., said sales for the third quarter ended July 31, 2009 decreased $81.1 million, or 65%, from the third quarter of fiscal 2008. The Company's sales declined due to the closure of production operations by Chrysler for 60 days following its filing for bankruptcy on April 30, 2009, and the plant shutdowns by General Motors, which lasted as long as 9 weeks at most General Motors plants. Headquartered in Valley City, Ohio, Shiloh Industries is a leading manufacturer of first operation blanks, engineered welded blanks, complex stampings and modular assemblies for the automotive and heavy truck industries. The Company has 15 wholly owned subsidiaries at locations in Ohio, Georgia, Michigan, Tennessee and Mexico, and employs approximately 715. 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) GENTA INC: Stockholders Approve 2009 Stock Incentive Plan --------------------------------------------------------- Genta Incorporated reports that at the Annual Meeting held on August 26, 2009, it received the requisite stockholder approval to implement its 2009 Stock Incentive Plan, as to which its Chief Executive Officer, Chief Financial Officer and other named executives may participate. At the Annual Meeting, the Company's stockholders were asked to consider and vote upon three proposals: -- to elect four Directors to the Company's Board of Directors to serve a one-year term expiring at the next Annual Meeting of Stockholders and until such Director's successor shall have been elected and qualified; -- to approve the implementation of the Company's 2009 Stock Incentive Plan; and -- to ratify the appointment of Amper Politziner & Mattia, LLP as the Company's independent registered public accounting firm for the year ended December 31, 2009. For Proposal 1, each nominee received the affirmative vote of a plurality of the shares of Common Stock cast by the stockholders present in person or represented by proxy at the Annual Meeting. For Proposal 2 and Proposal 3, the Company received the affirmative vote of a majority of the of the shares of Common Stock cast by the stockholders present in person or represented by proxy at the Annual Meeting. Therefore, each proposal was approved by the requisite number of votes at the Annual Meeting. Genta also said Martin J. Driscoll in March 2009, decided not to stand for re-election to the Company's Board of Directors at the Company's 2009 Annual Meeting and to no longer be a member of the Compensation Committee, Audit Committee or Nominating and Corporate Governance Committee, the terms of which would have commenced as of the date of the Annual Meeting. Mr. Driscoll's positions on the Compensation Committee, Audit Committee and Nominating and Corporate Governance Committee will be taken over by another independent member of the Company's Board of Directors, as determined by a majority of the Board of Directors. There is no disagreement between Mr. Driscoll and the Company on any matter relating to the Company's operations, policies or practices. 2nd Quarter 2009 Results On August 14, 2009, Genta announced financial results for the quarter ended June 30, 2009. For the second quarter of 2009, the Company reported a net loss of $43.1 million or ($0.63) per share, compared with a net loss of $738.4 million, or ($1,004.84) per share, for the second quarter of 2008. For the six months ended June 30, 2009, the Company reported a net loss of $54.1 million, or ($1.24) per share, compared with a net loss of $748.0 million, or ($1,060.69) per share, for the six months ended June 30, 2008. Net product sales of $69,000 and $131,000 for the second quarter and six months ended June 30, 2009 declined from their comparison period figures of $131,000 and $248,000, respectively, due to the continued absence of promotional support. At June 30, 2009, Genta had $10.2 million in total assets; and $12.1 million in total current liabilities and $2.46 million in total long-term liabilities, resulting in $4.33 million in stockholders' deficit. At June 30, 2009, Genta had cash and cash equivalents totaling $700,000 compared with $4.9 million at December 31, 2008. During the first six months of 2009, cash used in operating activities was $9.5 million compared with $14.4 million for the same period in 2008, reflecting the reduced size of the Company. In its quarterly report on Form 10-Q, the Company said its its recurring losses and negative cash flows from operation raise substantial doubt about its ability to continue as a going concern. The Company said it will require additional cash in order to maximize its commercial opportunities and continue its clinical development opportunities. The Company has had discussions with other companies regarding partnerships for the further development and global commercialization of Genasense(R). Additional alternatives available to the Company to subsequently sustain its operations include development and commercialization partnerships on other products in our pipeline, financing arrangements with potential corporate partners, debt financing, asset sales, asset-based loans, royalty-based financings, equity financing and other sources. However, there can be no assurance that any such collaborative agreements or other sources of funding will be available on favorable terms, if at all. If the Company is unable to raise additional funds, it will need to do one or more of the following: -- delay, scale back or eliminate some or all of the Company's research and product development programs and sales and marketing activity; -- license one or more of its products or technologies that the Company would otherwise seek to commercialize itself; -- attempt to sell the Company; -- cease operations; or -- declare bankruptcy. 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?437d Consent and Amendment Agreement On June 9, 2008, Genta issued to certain accredited institutional investors in a private placement $20 million of senior secured convertible notes. On April 2, 2009, the Company issued to certain accredited institutional investors in a private placement $6 million of senior secured convertible notes. On July 7, 2009, the Company entered into a securities purchase agreement with certain accredited institutional investors to place up to $10 million of units -- each Unit consisting of (i) 70% of a subordinated unsecured convertible note and (ii) 30% of shares of the Company's Common Stock, par value $0.001 per share. On that same date, the Company issued to the Investors in a private placement $3 million of the July 2009 Notes and Common Stock. In connection with the July 2009 Financing, the Company entered into a consent and amendment agreement with certain holders of its 2008 Notes and April 2009 Notes. Effective August 10, 2009, upon receipt of consent from the appropriate parties, the Company entered into an Amendment Agreement, dated August 6, 2009, to effect these amendments: -- An amendment to the Consent and Amendment Agreement to: * permit the Company to undertake a financing of up to $13 million of convertible debt, common stock and warrants; * prohibit the Company from closing or publicly announcing the entry into any debt or equity financing any time prior to the period expiring 14 days after the date on which the Company publicly releases detailed quantitative results regarding the primary assessment of progression-free survival, one of the co-primary endpoints of a Phase 3 trial of Genasense(R) plus chemotherapy in patients with advanced melanoma, which the Company refers to as AGENDA, without first obtaining the requisite consent; and * delay the Company's ability to force conversion of the 2008 Notes and April 2009 Notes until after January 1, 2010; -- An amendment to the July 2009 Notes to delay the Company's ability to force conversion of the July 2009 Notes until after January 1, 2010; -- An amendment to the July 2009 Purchase Agreement to delay the Additional Closing to August 24, 2009; and -- An amendment to the Registration Rights Agreement entered into by the Company and the Investors in connection with the July 2009 Purchase Agreement to: * delay the deadline for the Company to file an initial Registration Statement until the earlier of (i) August 24, 2009 and (ii) two business days after the Company consummates a public offering pursuant to an effective Registration Statement; and * provide that to the extent the Company consummates a public offering prior to the occurrence of the Additional Closing, the Registration Rights Agreement will terminate. Registration Statement Genta has filed with the Commission Amendment No. 5 to Form S-1 Registration Statement Under the Securities Act of 1933, in connection with its offering of units consisting of an aggregate principal amount of $7.0 million convertible notes and $3.0 million common stock, 70,000,000 shares of common stock underlying the convertible notes, $1,193,103 convertible notes convertible into 11,931,030 shares of common stock issuable as payment of interest on the convertible notes, warrants to purchase 17,500,000 shares of Genta common stock underlying the principal amount of the convertible notes and 17,500,000 shares of common stock underlying the warrants. All costs associated with the registration will be borne by the Company. On June 26, 2009, Genta effected a 1-for-50 reverse stock split. As a result, the share numbers and stock price numbers are all reflected on a post- split basis. On July 31, 2009, the closing price of Genta common stock was $0.36 per share. The common stock is quoted on the OTC Bulletin Board under the symbol "GETA." A full-text copy of the registration statement is available at no charge at http://ResearchArchives.com/t/s?437e About Genta Incorporated Genta Incorporated -- http://www.genta.com/-- is a biopharmaceutical company with a diversified product portfolio that is focused on delivering innovative products for the treatment of patients with cancer. Two major programs anchor the Company's research platform: DNA/RNA-based Medicines and Small Molecules. Genasense(R) (oblimersen sodium) Injection is the Company's lead compound from its DNA/RNA Medicines program. The leading drug in Genta's Small Molecule program is Ganite(R) (gallium nitrate injection), which the Company is exclusively marketing in the U.S. for treatment of symptomatic patients with cancer related hypercalcemia that is resistant to hydration. The Company has developed G4544, an oral formulation of the active ingredient in Ganite, which has recently entered clinical trials as a potential treatment for diseases associated with accelerated bone loss. The Company is also developing tesetaxel, a novel, orally absorbed, semi-synthetic taxane that is in the same class of drugs as paclitaxel and docetaxel. Ganite and Genasense are available on a "named-patient" basis in countries outside the United States. GEORGIA GULF: Bank Debt Trades at 4.75% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Georgia Gulf Corporation is a borrower traded in the secondary market at 96.25 cents-on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.00 percentage points from the previous week, The Journal relates. The loan matures on Oct. 3, 2013. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's C rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Georgia Gulf Corporation is a manufacturer and international marketer of two integrated chemical product lines, chlorovinyls and aromatics. The Company's primary chlorovinyls products are chlorine, caustic soda, vinyl chloride monomer (VCM), vinyl resins and vinyl compounds. Its aromatics products are cumene, phenol and acetone. The Company has four business segments: chlorovinyls; window and door profiles, and moldings products; outdoor building products, and aromatics. At March 31, 2009, the Company had $1.56 billion in total assets and $1.66 billion in total liabilities, resulting in $97.3 million stockholders' deficit. As reported in the Troubled Company Reporter on June 19, 2009, Standard & Poor's Ratings Services lowered its issue rating on Georgia Gulf Corp.'s $100 million 7.125% senior notes due 2013 to 'D' from 'C' and retained the '6' recovery rating, indicating S&P's expectation of negligible recovery (0%-10%) on the notes. At the same time, S&P kept its corporate credit rating on Georgia Gulf at 'D'. S&P had lowered its corporate credit rating and these issue ratings on Georgia Gulf to 'D' on May 21, 2009, following a missed interest payment of $34.5 million on these notes. As reported by the TCR on Aug. 3, Moody's Investors Service upgraded the Corporate Family Rating of Georgia Gulf Corporation to B2 from Caa2 as a result of the completion of the private debt- for-equity exchange offer and an amendment to its credit facility that substantially improves the company's liquidity. GLOBAL ENERGY HOLDINGS: Plan of Compliance Accepted by NYSE Amex ---------------------------------------------------------------- Global Energy Holdings Group, Inc., received notice from the NYSE Amex Exchange Staff, dated June 3, 2009, indicating that the Company was not in compliance with Section 1003(a)(iv) of the Company Guide in that it has sustained losses or its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether Global Energy will be able to continue operations or meet its obligations as they mature. Global Energy was afforded the opportunity to submit a plan of compliance to the Exchange and on July 10, 2009 presented its plan to the Exchange. On August 18, 2009, the Exchange notified Global Energy that it accepted Global Energy's plan of compliance and granted Global Energy an extension until December 3, 2009 to regain compliance with the continued listing standards. Global Energy will be subject to periodic review by the Exchange staff during the extension period. Failure to make progress consistent with the compliance plan or to regain compliance with continued listing standards by the end of the extension period could result in Global Energy being delisted from the Exchange. Global Energy Holdings Group, Inc. (NYSE AMEX: GNH) is based in Atlanta, Georgia. On the Net: http://www.gnhgroup.com/ GOODMAN GLOBAL: S&P Gives Positive Outlook, Affirms 'B+' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Houston- based Goodman Global Inc. to positive from stable. At the same time, S&P affirmed its ratings on Goodman, including the 'B+' corporate credit rating. "The outlook revision reflects Goodman's better-than-expected operating earnings and EBITDA in combination with S&P's expectation that the company's operating performance will continue to improve over the next several quarters despite muted repair spending due to high unemployment and fewer housing starts," said Standard & Poor's credit analyst Thomas Nadramia. The company has successfully increased its market share by expanding its distribution capabilities. The company also benefits from relatively stable demand for its products as 75% to 80% of its sales are derived from nondiscretionary repair and replacement activity. In addition, the improved operating results driven by continued cost-savings initiatives have enabled the company to steadily reduce debt balances and strengthen credit measures to a level that S&P would consider to be in line with a higher rating. Since affiliates of Hellman and Friedman acquired the company in February 2008, Goodman has reduced total adjusted debt to EBITDA to 4x as of June 30, 2009, from 5.3x in March 2008 fueled by $200 million in debt reduction. At the same time, the company has increased cushion under the financial covenants governing its bank credit facility, even after taking into account future scheduled step-downs. Currently, the total leverage covenant is 6.25x, stepping down to 4.75x at March 31, 2010. The positive rating outlook reflects S&P's expectation that Goodman will continue to benefit from increased operating efficiencies and leveraging of its distribution network. To date, Goodman has been successful in improving its product mix and adjusting its costs in the face of weaker demand, and the company has continued to gain market share as the value leader in its markets. S&P expects improvements in operating performance to continue as the company has expanded its market share and continues to pursue manufacturing efficiencies. As a result, credit measures are likely to remain at levels appropriate for a higher rating, with adjusted debt to EBITDA below 4x and operating margins (before depreciation and amortization) in the high teens. S&P could revise the outlook back to stable if recent positive operating trends reverse because of volatile raw material costs and increased pricing pressure due to competition, resulting in leverage increasing to over 4x for a sustained period. GRAHAM PACKAGING: Bank Debt Trades at 2.8% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Graham Packaging Holdings Company is a borrower traded in the secondary market at 97.19 cents-on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.52 percentage points from the previous week, The Journal relates. Graham Packaging pays interest at 200 points above LIBOR. The bank loan matures on September 30, 2011. The bank loan carries Moody's B1 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Headquartered in York, Pennsylvania, Graham Packaging Holdings Company, -- http://www.grahampackaging.com/-- the parent company of Graham Packaging Company, L.P., is engaged in the design, manufacture and sale of customized blow molded plastic containers for the branded food and beverage, household, automotive lubricants and personal care/specialty product categories. As of the end of June 2008, the company operated 83 manufacturing facilities throughout North America, Europe and South America. GSI GROUP: Receives Noncompliance Letter From Nasdaq ---------------------------------------------------- GSI Group Inc. received an additional staff determination notice from the Nasdaq Stock Market, indicating that the Company is not in compliance with Listing Rule 5250(c)(1) due to the delayed filing of the Company's Quarterly Report on Form 10-Q for the quarterly period ended July 3, 2009. The staff determination notice indicated that such non-compliance with the Rule would serve as an additional basis for delisting the Company's securities from Nasdaq. On July 22, 2009, the Nasdaq Hearings Panel granted the Company's request for continued listing on Nasdaq conditioned on the Company (i) reporting to the Panel before August 31, 2009 the status of its public disclosure about the range of adjustments the Company expects to make to revenue transactions in its Precision Technology Segment for 2004 through 2008 and (ii) filing on or before November 2, 2009 its delayed periodic reports and any required restatements. If the Company is unable to meet the exception requirements, the Panel will issue a final determination to delist the Company's shares. The Company's Audit Committee has concluded its review of sales transactions in the Company's Semiconductor Systems Segment for fiscal years 2006, 2007 and 2008, and the Company is currently reviewing the timing of revenue recognized in connection with multiple element arrangements in its Precision Technology Segment from 2004 through 2008 to determine if adjustments need to be made to those periods. The Company continues to work diligently to complete the preparation and filing of its delayed periodic reports, in addition to restated financial statements for fiscal years 2006, 2007 and 2008. About GSI Group GSI Group Inc. -- http://www.gsig.com/-- supplies precision technology to the global medical, electronics, and industrial markets and semiconductor systems. GSI Group Inc.'s common shares are listed on Nasdaq (GSIG). GUARANTY FINANCIAL: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Guaranty Financial Group Inc. fka Guaranty Financial Services fka Stanford Realty Advisors, Inc. fka Temple Inland Financial Services 8333 Douglas Avenue, Suite 504 Dallas, TX 75225 Case No.: 09-35582 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Guaranty Group Ventures Inc. 09-35583 Guaranty Holdings Inc. 09-35584 Guaranty Group Capital Inc. 09-35586 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Ian T. Peck, Esq. Haynes & Boone, LLP 201 Main Street, Suite 2200 Fort Worth, TX 76102 Tel: (817)347-6613 Fax: (817)348-2350 Email: ian.peck@haynesboone.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $100,000,001 to $500,000,000 According to the schedules, the Company has assets of at least $24,295,000, and total debts of $323,413,428. The petition was signed by Scott Almy. Guaranty Financial's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wilmington Trust Company Indenture trustee $305,000,000 Rodney Square North (principal 1100 North Market St. balance) Wilmington, DE 19890-0001 Kenneth R. Dubuque Former Guaranty $1,555,161 124 E. 84th St., Apt 7B Bank employee New York, NY 10028 with SERP balance & SBC Claim City of San Antonio Contractual $371,185 PO Box 839966 obligation San Antonio, TX 78283 Harold L. Shults, Jr. Former Guaranty $220,562 Bank employee with SERP balance Robert B. Greenwood Former Guaranty $217,239 Bank employee with SERP balance & SBC Claim Ronald D. Murff Former Guaranty $156,670 Bank employee with SERP balance Robert S. LeBlanc Former Guaranty $126,515 Bank employee with SERP balance Gregory W. Econn Former Guaranty $104,181 Bank employee with SERP balance Ken A. Clark Former Guaranty $85,513 Bank employee with SERP balance Jerry W. Hickenbottom Former Guaranty $82,702 Bank employee with SBC Claim Mark A. Crawford Former Guaranty $70,558 Bank employee with SERP balance Morris Knight Former Guaranty $70,433 Bank employee with SBC Claim Deborah M. Laycock Former Guaranty $67,968 Bank employee with SERP balance Kelli Glass Unpaid severance $65,962 James L. Johnson Former Guaranty $63,143 Bank employee with SERP balance Rusty Charlton Unpaid severance $60,646 Morris Knight Former Guaranty $57,844 Bank employee with SERP balance B. Lee Crawford Former Guaranty $44,364 Bank employee with SBC Claim John P. Halliburton Former Guaranty $42,511 Bank employee with SERP balance Michael D. Calcote Former Guaranty $39,962 Bank employee with SERP balance HAWAIIAN TELCOM: Plan Set for Oct. 7 Confirmation Hearing --------------------------------------------------------- The disclosure statement explaining the proposed reorganization plan for Hawaiian Telcom Communications Inc. was approved by the Bankruptcy Court on August 27, allowing creditors to begin voting on the plan, Bill Rochelle at Bloomberg News reported. The Debtors proposed August 14, 2009, to be set as the voting record date for determining which creditors may vote on the Plan. The Debtors also set a September 30, 2009, at 1:00 p.m., Hawaii Standard Time, deadline for the submission of votes on the Plan. The Debtors will seek confirmation of the Plan at hearings scheduled to begin October 7, 2009. Hawaiian Telcom's plan provides for these terms: -- Senior secured creditors will recover 75% to 80% of their claims through the conversion of $590 million of senior secured debt into a $300 million secured term loan and all of the new stock. -- Senior noteholders, owed $350 million, would recover 2% to 3% though warrants for 12.75% of the new stock and subscription rights to buy as much as $50 million more. -- Subordinated noteholders owed $150 million are to receive nothing while existing stock is to be canceled. -- General unsecured creditors with claims aggregating up to $40 million are to receive a cash recovery amounting to 1% to 2%. Hawaiian Telcom had said that in a Chapter 7 liquidation, administrative claimants who will recover 100% of their claims under the Plan will recover as low as 84 cents, senior secured creditors will only recover 56% to 65% of their claims, while unsecured creditors will recover only 0% to 0.6% of their allowed claims. Full-text copies of the Plan and Disclosure Statement dated August 23, 2009, are available for free at: * http://bankrupt.com/misc/HawTel_Aug23DS.pdf * http://bankrupt.com/misc/HawTel_Aug23Plan.pdf Blacklined versions of the Plan and Disclosure Statement dated August 23, 2009, are available for free at: * http://bankrupt.com/misc/HawTel_Aug23DS_blacklined.pdf * http://bankrupt.com/misc/HawTel_Aug23Plan_blacklined.pdf About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HAYES LEMMERZ: Wants to Pay Over $10MM in Bonuses to Executives --------------------------------------------------------------- David Shepardson at Detroit News Washington Bureau reports that Hayes Lemmerz International Inc. is seeking permission to pay more than $10 million in bonuses, including as much as $6.7 million to its top five execs. Detroit News states that Hayes Lemmerz cut its top executive ranks from 12 to five, saving $5 million a year. According to Detroit News, Hayes Lemmerz also proposed canceling its retiree health and life insurance coverage for households covering 2,200 families, a move that could save the Company some $140 million. Detroit News relates that Hayes Lemmerz has proposed creating the Voluntary Employee Beneficiary Association, which would let retirees who are ineligible for Medicare to keep coverage at a cost of $900 to $2,100 per month. Hayes Lemmerz, says the report, would contribute as much as $4.8 million over four years to cancel its accrued liability of $147.5 million. Originally founded in 1908, Hayes Lemmerz International, Inc. (NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel wheels for passenger cars and light trucks and of steel wheels for commercial trucks and trailers. The Company is also a supplier of automotive powertrain components. The Company has global operations with 23 facilities, including business, sales offices and manufacturing facilities, located in 12 countries around the world. The Company sells products to every major North American, Asian and European manufacturer of passenger cars and light trucks and to commercial highway vehicle customers throughout the world. The Company and certain affiliates filed for bankruptcy on May 11, 2009 (Bankr. D. Del. Case No. 09-11655) after reaching agreements with lenders holding a majority of the Company's secured debt. The Company's principal bankruptcy attorneys are Skadden, Arps, Slate, Meagher & Flom, LLP. Lazard Freres & Co., LLC, serves as the Company's financial advisors. AlixPartners, LLP, serves as the Company's restructuring advisors. The Garden City Group, Inc., serves as the Debtors' claims and notice agent. As of January 31, 2009, the Debtors had total assets of $1,336,600,000 and total debts of $1,405,200,000. This is the Company's second trip to the bankruptcy court, dubbed a Chapter 22, which was precipitated by an unprecedented slowdown in industry demand and a tightening of credit markets. The Company plans to reduce its debt and restructure its balance sheet. Hayes Lemmerz and its direct and indirect domestic subsidiaries and one subsidiary in Mexico first filed for bankruptcy in December 2001 before the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 filings were precipitated by declining market conditions and the Company's excessive debt burdens, according to Mr. Clawson, who also served as chairman and chief executive officer at that time. The Court confirmed the Company's reorganization plan in May 2003, allowing the Company to exit bankruptcy in June 2003. In accordance with the 2003 Plan, approximately $2.1 billion in pre-petition debt and other liabilities were discharged. The Plan provided for holders of prepetition secured claims to receive $478.5 million in cash and 53.1% of the reorganized company common stock. Holders of senior note claims were to receive $13 million in cash and 44.9% of the New Common Stock, and holders of general unsecured claims were to receive 2% of the New Common Stock. Hayes Lemmerz' prior common stock and securities were cancelled as of June 3, 2003. HCA INC: Bank Debt Trades at 6% Off in Secondary Market ------------------------------------------------------- Participations in a syndicated loan under which HCA, Inc., is a borrower traded in the secondary market at 93.91 cents-on-the- dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.83 percentage points from the previous week, The Journal relates. The loan matures on Nov. 6, 2013. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Headquartered in Nashville, Tennessee, HCA Inc. -- http://www.hcahealthcare.com/-- is the nation's leading provider of healthcare services. As of June 30, 2008, HCA operated 169 hospitals and 107 freestanding surgery centers, including eight hospitals and eight freestanding surgery centers operated through equity method joint ventures. As reported by the TCR on August 4, 2009, Moody's Investors Service assigned a 'Ba3' (LGD3, 32%) rating to HCA Inc.'s proposed offering of $750 million of first lien senior secured notes. Moody's also affirmed the existing ratings of HCA, including the 'B2' Corporate Family and Probability of Default Ratings. The outlook for the ratings is stable. HELEN ZAMBA: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Joint Debtors: Helen Zamba 6225 Park Street Las Vegas, NV 89149 Dennis S Zamba 9791 Overlook Ridge Las Vegas, NV 89148 Bankruptcy Case No.: 09-25839 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtors' Counsel: Charles T. Wright, Esq. Piet & Wright 3130 S. Rainbow Blvd., Ste. 304 Las Vegas, NV 89146 Tel: (702) 566-1212 Fax: (702) 566-4833 Email: todd.wright@pietwright.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-25839.pdf The petition was signed by the Joint Debtors. HIGHLANDS ACQUISITION: Confirms Intention to Liquidate ------------------------------------------------------ Highlands Acquisition Corp. said August 28 that, since it will be unable to complete a business combination by October 3, 2009, the date upon which its existence will terminate in accordance with its certificate of incorporation, the Company intends to send a letter to the Secretary of State of the State of Delaware confirming that the Company intends to dissolve on October 3, 2009. As a consequence, the Company will proceed with its dissolution and liquidation. Highlands Acquisition was incorporated in Delaware on April 26, 2007 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more operating businesses. At June 30, 2009, the Company's operations have been limited to organizational activities, activities relating to its initial public offering. The Company has not engaged in any operations or generated any revenues -- other than interest income earned on its trust account. On October 9, 2007, the Company sold 12,000,000 units in an initial public offering at a price of $10 per unit. The Offering generated net proceeds of approximately $114,600,000, which, together with $3,450,000 in deferred underwriters discounts and commissions, was placed in a trust account. At June 30, 2009, the Company's Trust Account balance of approximately $136,300,000 was invested in the Morgan Stanley Institutional Liquidity Funds -- Government Portfolio (stock symbol: MVRXX). Based upon information provided by Morgan Stanley, (i) the Government Portfolio seeks to maintain a stable net asset value of $1.00 per share by investing exclusively in obligations of the U.S. Government and its agencies and instrumentalities and in repurchase agreements collateralized by such securities; (ii) at June 30, 2009, 67.3% of the portfolio was invested in U.S. Government Agency Securities and 32.7% of the portfolio was invested in repurchase agreements collateralized by U.S. Government and Agency securities; and (iii) as of July 27, 2009, the one day yield was 0.13%, and the weighted average maturity was 25 days. The placing of funds in the Trust Account may not protect those funds from third party claims against the Company, the Company said in its Form 10-Q filed with the Securities and Exchange Commission on August 4, 2009. A copy of the Company second quarter report on Form 10-Q is available for free at: http://researcharchives.com/t/s?437f About Highlands Acquisition Highlands Acquisition Corp. (NYSE Amex: HIA.U, HIA, and HIA.WS) is a blank check company formed for the purpose of effecting a merger, capital stock exchange, stock purchase, asset acquisition or other similar business combination with one or more operating businesses. The Company had assets of $137,489,255 against debts of $4,424,244 as of June 30, 2009. HTG REAL PROPERTY: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: HTG Real Property Management Inc. 24165 W. IH 10 Suite 217-408 San Antonio, TX 78257 Case No.: 09-53282 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court Western District of Texas (San Antonio) Judge: Chief Bkptcy Judge Ronald B. King Debtor's Counsel: Steven G. Cennamo, Esq. 2929 Mossrock, Suite 117 San Antonio, TX 78230 Tel: (210) 979-9299 Fax: (210) 342-3633 Email: scenn@sbcglobal.net Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. HYTHIAM INC: Receives NASDAQ Staff Determination ------------------------------------------------ Hythiam, Inc., on August 28, 2009, received a letter from the Nasdaq Stock Market notifying the Company that, based upon the Company's non-compliance with the $10 million stockholders' equity requirement set forth in NASDAQ Listing Rule 5450(b) as of August 27, 2009, the Company's securities were subject to delisting from The NASDAQ Global Market unless the Company requests a hearing before the NASDAQ Listing Qualifications Panel. For the period ended June 30, 2009 and as reported in the Company's quarterly form 10Q filing, the Company's stockholders' equity was $2,026,000. On or before 4 P.M. Eastern Time on September 4, 2009, the Company plans to request a hearing before the NASDAQ Panel, which will stay any action with respect to the Staff Determination until the NASDAQ Panel renders a decision subsequent to the hearing. The Company is working towards completing contracts with third party payors in the near future. "With this validation of our business model, we are hopeful that we can demonstrate an overall plan to regain compliance with NASDAQ requirements. There can be no assurance that the Company will be able to do so, or that the NASDAQ Panel will grant the Company's request for continued listing," the Company said. On May 14, 2009, the Company received notice from NASDAQ that its stockholders' equity was below the minimum requirement for continued listing on The NASDAQ Global Market. Pursuant to the Listing Rules, the Company requested and was granted an extension of 105 days, through August 27, 2009, to regain compliance with that requirement. The Company did not regain compliance by August 27, 2009, which resulted in the subsequent issuance of the Staff Determination. About Hythiam Hythiam, Inc. -- http://www.hythiam.com/-- provides, through its Catasys(TM) offering, behavioral health management services to health plans, employers and unions through a network of licensed and company managed healthcare providers. IDEARC INC: Bank Debt Trades at 51% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Idearc, Inc., is a borrower traded in the secondary market at 48.56 cents-on-the- dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.81 percentage points from the previous week, The Journal relates. The loan matures on Nov. 17, 2014. The Company pays 200 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating while Standard & Poor's has assigned a default rating on the bank debt. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Headquartered in DFW Airport, Texas, Idearc, Inc. (NYSE: IAR) -- http://www.idearc.com/-- formerly known as Directories Disposition Corporation, provides yellow and white page directories and related advertising products in the United States and the District of Columbia. Products include print yellow pages, print white pages, Superpages.com, Switchboard.com and LocalSearch.com, the company's online local search resources, and Superpages Mobile, their information directory for wireless subscribers. Idearc is the exclusive official publisher of Verizon print directories in the markets in which Verizon is currently the incumbent local exchange carrier. Idearc uses the Verizon brand on their print directories in their incumbent markets, well as in their expansion markets. Idearc and its affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31828). Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represents the Debtors in their restructuring efforts. The Debtors have tapped Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their claims agent. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on an official committee of unsecured creditors of Idearc, Inc., and its debtor-affiliates. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co- counsel. The Debtors' financial condition as of Dec. 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. INTEGRATED HEALTHCARE: June 30 Balance Sheet Upside-Down by $43MM ----------------------------------------------------------------- Integrated Healthcare Holdings, Inc.'s balance sheet at June 30, 2009, showed total assets of $140.41 million and total liabilities of $184.26 million, resulting in a stockholders' deficit of $43.84 million. For three months ended June 30, 2009, the Company reported a net income attributable to the Company of $1.14 million compared with a net loss of $2.77 million for the same period in 2008. The Company said that there is substantial doubt about its ability to continue as a going concern. The Company noted that as of June 30, 2009, it has a working capital deficit of $92.00 million and accumulated total deficiency of $43.80 million. The Company's $50.00 million revolving credit agreement provides estimated liquidity as of June 30, 2009, of $33.00 million based on eligible receivables. However, due to significant delays in funding of advance requests by the affiliates of Medical Capital Corporation, namely Medical Provider Financial Corporation I, Provider Financial Corporation II, and Medical Provider Financial Corporation III as of June 30, 2009, the lender had collected and retained $11.90 million in excess of the amounts due to it under the $50.00 million revolving credit agreement. As of June 30, 2009, the unfulfilled advance requests aggregated approximately $34.20 million. The Company relies on the revolving line of credit for funding its operations, and any significant disruption in the funding could have a material adverse effect on the Company's ability to continue as a going concern. At June 30, 2009, the Company was in compliance with all covenants, as amended. However, given the history of non- compliance and high unlikelihood of compliance in fiscal year 2010, the Company's noncurrent debt of $81.00 million will continue to be classified as current in the accompanying unaudited condensed consolidated balance sheet as of June 30, 2009. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4357 Based in Santa Ana, California, Integrated Healthcare Holdings Inc. (OTC BB: IHCH) is a partially physician-owned management company that operates the following four hospital facilities in Orange County, California: 282-bed Western Medical Center in Santa Ana; 188-bed Western Medical Center in Anaheim; 178-bed Coastal Communities Hospital in Santa Ana; and 114-bed Chapman Medical Center in Orange. INTERLAKE HANDLING: Declares Ch 11 Plan Effective as of August 24 ----------------------------------------------------------------- Interlake Material Handling, Inc. filed on August 26, 2009, with the U.S. Bankruptcy Court for the District of Delaware a notice that the effective date of its confirmed second amended liquidating Chapter 11 plan occurred on August 24, 2009. As reported in the TCR on August 18, 2009, the Bankruptcy Court e confirmed on August 11, 2009, the Debtors' second amended liquidating Chapter 11 plan. The Plan calls for unsecured creditors with $60 million in claims to split up $350,000 cash and whatever is recovered from lawsuits in the future. Interlake Material has sold its business for $30 million to Mecalux SA, Spain's largest maker of warehouse equipment. A full-text copy of the Debtors' second amended chapter 11 liquidating plan is available for free at: http://bankrupt.com/misc/interlake.2ndamendedliquidatingplan.pdf Pursuant to Section 3.1(a) of the Plan, all holders of administrative claims (other than a fee claim) (i) against UFC Interlake Holding Co., United Fixtures, Interlake, or Conco- Tellus, Inc. which arose between April 1, 2009, and August 24, 2009 or (ii) against J&D Company, LLC which arose between June 25, 2009, and August 24, 2009, must file with the Bankruptcy court and serve on the Debtors and their counsel a motion or request for the payment of such administrative claim before October 8, 2009. Pursuant to Section 3.1(b) of the Plan, each professional person who holds or asserts an administrative claim that is a fee claim incurred before the Effective Date must file and serve a fee application by no later than October 23, 2009. About Interlake Material Headquartered in Naperville, Illinois, Interlake Material Handling, Inc. -- http://www.interlake.com/-- makes steel storage racks in the United States. The Company, United Fixtures Company, Inc., UFC Interlake Holding Co., and Conco-Tellus, Inc. filed for Chapter 11 relief on January 5, 2009, with the U.S. Bankruptcy Court for the District of Delaware. On May 30, 2009, J&D Company, LLC, a wholly owned subsidiary of United Fixtures Company, Inc., filed for Chapter 11 protection with the same Court. The original Debtors' cases together with J&D's Chapter 11 case are being jointly administered under Case No. 09-11751. Winston & Strawn LLP represents the Debtors in their restructuring efforts. Young, Conaway, Stargatt & Taylor LLP is the Debtors' local counsel. Lake Pointe Partners, LLC, is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the claims agent for the Debtors. Lowenstein Sandler PC represents the official committee of unsecured creditors as counsel. Stevens & Lee, P.C., represents the Committee as Delaware counsel. When the original Debtors filed for protection from their creditors, they listed between $50 million and $100 million in assets, and between $100 million and $500 million in debts. In its petition, J&D listed between $1 million and $10 million each in assets and debts. The original Debtors sold their business for $30 million to Mecalux SA, Spain's largest maker of warehouse equipment. The sale closed on March 9, 2009. ISLE OF CAPRI: Bank Debt Trades at 7% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Isle of Capri Casinos, Inc., is a borrower traded in the secondary market at 93.11 cents-on-the-dollar during the week ended on August 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.68 percentage points from the previous week, The Journal relates. The loan matures on December 19, 2013. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended August 28, among the 140 loans with five or more bids. Isle of Capri Casinos, Inc., located in Saint Louis, Missourri, owns and operates 18 casino properties throughout the U.S. The company also has international gaming interests in the Grand Bahamas and England. Net revenue for the 12-month period ended October 26, 2008, was about $1.1 billion. Standard & Poor's Ratings Services previously said that it 'B' rating and negative outlook were not affected by the June 10, 2009 earnings announcement by Isle of Capri Casinos. Isle of Capri announced fourth-quarter and fiscal- year-end 2009 results (Isle's fiscal year ends in April), which incorporated lower rates of decline than S&P previously expected. JOSEPH UVINO: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Joint Debtors: Joseph F. Uvino Wendy M. Uvino 50 East 89th Street, Apt 22F New York, NY 10128 Bankruptcy Case No.: 09-15225 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Debtors' Counsel: Avrum J. Rosen, Esq. The Law Offices of Avrum J. Rosen, PLLC 38 New Street Huntington, NY 11743 Tel: (631) 423-8527 Fax: (631) 423-4536 Email: ajrlaw@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nysb09-15225.pdf The petition was signed by the Joint Debtors. KEARNEY CONSTRUCTION: Sued Pasco County Before Filing for Bankr. ---------------------------------------------------------------- Jodie Tillman at St. Petersburg Times reports that prior to Kearney Construction o. LLC's Chapter 11 bankruptcy filing, the Company had sued Pasco County over its dismissal from a $5.3 million utility work on U.S. 41. According to St. Petersburg Times, Kearney Construction, which is seeking unspecified monetary damages, makes six claims, including wrongful termination and fraudulent misrepresentation. The report states that Kearney Construction has suffered from postponed and canceled projects, including the delayed Cypress Creek Town Center in Wesley Chapel. Citing county officials, St. Petersburg Times relates that Kearney Construction workers damaged a reclaimed water line multiple times, incorrectly installed new pipelines so that they were prone to leaks, and had gotten at least six weeks behind schedule, risking delays to the road work. Kearney Construction said in court documents that the delays are the fault of Pasco County and the county-paid project engineer, Parsons Water and Infrastructure, which is also named as a defendant. According to court documents, Kearney Construction said that Pasco provided incomplete drawings of the locations of existing utilities, rejected acceptable piping installation, and failed to provide timely responses to the Company's almost 50 questions seeking clarification. Kearney Construction stated, "This case involves Pasco County and its co-conspirator Parsons' attempt to find a scapegoat for its political and public blunders. From the beginning, Pasco County knew that the delay of (the) project would be publicly and politically embarrassing to Pasco County and the state of Florida." The utility work was "doomed from inception from being completed on time," the Company said in court documents. Peter Porebski, Pasco's utility program administrator, said that drawings showed a relatively small portion of an existing water main -- about 300 feet, as compared to the entire 31,000-foot-long pipeline project -- a couple of feet from where it actually lies, but Kearney Construction could have worked around it, possibly even chosen to ask the county for reimbursement for the additional work required, but it did not, St. Petersburg Times relates. Florida-based Kearney Construction Co. LLC is among the oldest and largest site developers in the Tampa Bay area. It was founded in 1956. It has done site development on many largest commercial projects in the region, including International Plaza at Bay Street and Citrus Park Mall. The Company filed for Chapter 11 bankruptcy protection on August 26, 2009 (Bank. M.D. Fla. Case No. 09-18848). Kearney Construction Company, Inc.; AVT Equipment, LLC; Florida Equipment Co., LLC; Florida Equipment Co., LLC; and Florida Trucking Company, Inc., also filed for bankruptcy. Stephen R. Leslie, Esq., at Stichter, Riedel, Blain & Prosser assists in Kearney Construction's restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. KNOLOGY INC: Moody's Upgrades Corporate Family Rating to 'B1' ------------------------------------------------------------- Moody's Investors Service upgraded Knology Inc.'s Corporate Family Rating to B1 from B2, its Probability of Default Rating to B2 from B3 and its senior secured bank debt ratings to B1 from B2. The speculative grade liquidity rating remains unchanged at SGL-2. The rating outlook was revised to stable from positive. Upgrades: Issuer: Knology, Inc. -- Corporate Family Rating, Upgraded to B1 from B2 -- Probability of Default Rating, Upgraded to B2 from B3 -- Senior Secured Bank Credit Facility Ratings, Upgraded to B1 (LGD3, 33%) from B2 (LGD3, 33%) Outlook Actions: Issuer: Knology, Inc. -- Outlook, Changed To Stable From Positive "The upgrades reflect steady improvement in Knology's key credit metrics, which Moody's expect to continue strengthening over the forward rating horizon," noted Moody's Senior Vice President Russell Solomon. The actions are supported by projected top-line growth in the low-to-mid single-digit range, healthy free cash flow generation and further corresponding debt reduction. Knology's financial leverage (as measured by debt-to-EBITDA, incorporating Moody's standard adjustments) at 6/30/2009 was 4.5x and has declined about one-half of one turn for each of the last two years. Moody's expects leverage to decline further to around 4.0x by the end of 2010, owing to continued earnings improvement and, "notably," according to Solomon, "the excess cash flow sweep encompassed in the credit agreement's governing financial covenants." The upgrades take into account Knology's demonstrated ability to generate strong and growing operating cash flows, which enhances the company's financial flexibility to pursue opportunistic investments. As a result of steady cash flow generation, free cash flow as a percentage of debt advanced from 5.2% at 12/31/2008 to 7.6% at 6/30/2009. The upgrades also consider Knology's good operating performance as evidenced by consistent positive quarter- over-quarter revenue growth, notwithstanding pressure at the unit level during the recently completed second quarter. The B1 CFR factors Moody's expectations of an ongoing conservative acquisition strategy in view of the company's historical track record of using acquisitions as a growth vehicle. Knology's ratings continue to broadly reflect the company's relatively small size, moderately high financial leverage and competition from much larger cable operators and direct broadcast satellite service providers that are generally more (and often much more) creditworthy and subsequently have better access to financial capital and other operational resources. The company's ratings also continue to be somewhat constrained by the risks inherent to its business model as an overbuilder, although over time this risk will continue to be partially mitigated if further share and penetration gains are realized. The ratings are supported by the improving financial profile, nonetheless, and good underlying value ascribed to the company's assets which remain poised to continue growing as edge-out and fill-in markets are built out and further penetration of commercial business is realized. The SGL-2 liquidity rating reflects Knology's good liquidity position as expected for the next twelve months. Internal sources of cash include Knology's sizeable balance sheet cash and equivalents of approximately $68 million at 6/30/09 and projected free cash flow of at least $35 million over the next four quarters. External liquidity is bolstered by the company's unused $25 million senior secured revolving credit facility maturing in 2012. The company has sufficient cushion under its bank covenants and is expected to remain covenant compliant over the next twelve months. Moody's last rating action for Knology was on September 16, 2008 when the company's CFR was affirmed at B2 and its rating outlook was changed to positive from stable. Knology, Inc., is a provider of video, Internet and telephony services via its broadband network. The company also provides traditional telephony services through its incumbent local exchange carrier subsidiary. The company maintains its headquarters in West Point, Georgia. Knology had revenues of $419 million for the last twelve months ended June 30, 2009. LAS VEGAS SANDS: Bank Debt Trades at 22% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Las Vegas Sands Corp. is a borrower traded in the secondary market at 77.72 cents- on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.03 percentage points from the previous week, The Journal relates. The loan matures on May 1, 2014. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Meanwhile, participations in a syndicated loan under which Venetian Macau US Finance Co. LLC is a borrower traded in the secondary market at 90.30 cents-on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.65 percentage points from the previous week, The Journal relates. The loan matures on May 25, 2013. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Venetian Macau is a wholly owned subsidiary of Las Vegas Sands. VML owns the Sands Macau in the People's Republic of China Special Administrative Region of Macau and is also developing additional casino hotel resort properties in Macau. Based in Las Vegas, Nevada, Las Vegas Sands Corp. (NYSE: LVS) -- http://www.lasvegassands.com/-- owns and operates The Venetian Resort Hotel Casino, The Palazzo Resort Hotel Casino, and an expo and convention center. The company also owns and operates the Sands Macao, the first Las Vegas-style casino in Macao, China. As reported by the TCR on Aug. 4, 2009, Moody's Investors Service has placed Las Vegas Sands, Corp.'s ratings, including its B3 Corporate Family Rating, on review for possible downgrade. The review for possible downgrade reflects LVSC's weak fiscal 2009 second quarter operating results and Moody's heightened concern regarding the company's ability to maintain an adequate liquidity profile, reduce leverage, and remain in compliance with its financial covenants. LCG MARICOPA: Case Summary & 10 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: LCG Maricopa, L.L.C. 2 Henry Adams Street, Suite 450 San Francisco, CA 94103 Bankruptcy Case No.: 09-20903 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court District of Arizona (Tucson) Judge: Eileen W. Hollowell Debtor's Counsel: Michael W. Carmel, Esq. Michael W. Carmel, Ltd. 80 E. Columbus Ave Phoenix, AZ 85012-4965 Tel: (602) 264-4965 Fax: (602) 277-0144 Email: michael@mcarmellaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 According to the schedules, the Company has assets of at least $2,002,000, and total debts of $10,681,625. A full-text copy of the Debtor's petition, including a list of its 10 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb09-20903.pdf The petition was signed by Bill Poland. LEAP WIRELESS: Bank Debt Trades at 100.96 Cents on Dollar --------------------------------------------------------- Participations in a syndicated loan under which Leap Wireless International Inc. is a borrower traded in the secondary market at 100.96 cents-on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.53 percentage points from the previous week, The Journal relates. The loan matures on June 6, 2013. Leap Wireless pays interest at 225 points above LIBOR. The bank loan carries Moody's Ba2 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Based in San Diego, Leap Wireless International Inc. (Nasdaq: LEAP) --http://www.leapwireless.com/-- provides innovative, high- value wireless services. With the value of unlimited wireless services as the foundation of its business, Leap pioneered its Cricket(R) service. The company and its joint ventures now operate in 29 states and hold licenses in 35 of the top 50 U.S. markets. Through its affordable, flat-rate service plans, Cricket offers customers a choice of unlimited voice, text, data and mobile Web services. About Leap Wireless Leap Wireless International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/-- provides wireless services in 29 states and holds licenses in 35 of the top 50 U.S. markets. Cricket offers customers a choice of unlimited voice, text, data and mobile Web services. As of June 30, 2009, the Company had $5.42 billion in total assets; and $3.55 billion in total liabilities and $77.8 million in redeemable non-controlling interests; resulting in $1.79 billion in stockholders' equity. As of June 30, 2009, the Company had $323.9 million in accumulated deficit. * * * According to the Troubled Company Reporter on April 29, 2009, Standard & Poor's Ratings Services revised its outlook on Leap Wireless International Inc. to positive from stable. At the same time, S&P affirmed its ratings on the San Diego-based wireless carrier, including the 'B-' long-term corporate credit rating and 'B+' secured bank loan rating on subsidiary Cricket Communications Inc. LEHMAN BROTHERS: APS Capital Offers 16% to 38% of Face for Claims ----------------------------------------------------------------- APS Capital Corporation is offering to purchase unsecured claims against certain Lehman Brothers subsidiaries and affiliates: Lehman Entity Price Offered ------------- ------------- LB Special Financing 36% to 48% LB International (Europe) 16% to 26% LB Commodity Services 29% to 38% APS notes that actual prices are determined by the size of the claim, the portfolio and whether or not there is a guarantee. APS says it is interested in buying claims against other subsidiaries, and bond pricing can be quoted separately. For more information, contact: Derik A. Polay Vice President APS Capital Corporation (303) 993-4022 Direct (303) 888-9777 Mobile dpolay@aps-capital.com LEHMAN BROTHERS: European Administrator May File $100-Bil. Claim ---------------------------------------------------------------- PricewaterhouseCoopers LLP, the administrator of Lehman Brothers' European units, may claim as much as $100 billion against New York-based former parent Lehman Brothers Holdings Inc., according to reporting by Kevin Crowley at Bloomberg. "A significant number of claims arise as a result of guarantees issued by the parent company to its subsidiaries globally," PwC said in an e-mailed statement. "These claims are exceptionally complex and we anticipate a large amount of further work in dealing with these claims." According to Bloomberg, clients of Lehman's European division including MKM Longboat Capital Advisors LLP and GLG Partners Inc. were among 700 hedge funds and investment companies that lost control of assets when Lehman filed for the biggest bankruptcy in history last year. The U.S. Bankruptcy Court for the Southern District of New York has set a Sept. 22 deadline for all claims against LBHI and its affiliated debtors. 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 BROTHERS: Ex-Chief Operating Officer Files $233MM Claim -------------------------------------------------------------- Joseph Gregory, former president and chief operating officer of Lehman Brothers Holdings Inc., has filed a claim for $233 million for unpaid equity awards, including stock options and stock units he was entitled to. According to the filing with the U.S. Bankruptcy Court for the Southern District of New York Mr. Gregory said when he filed Claim Nos. 7388 and 7389 he's owed more than a decade's worth of deferred stock and options grants. The Bankruptcy Court has set a Sept. 22 deadline for all claims against LBHI and its affiliated debtors. Other parties that have filed large claims in August are: Claim No. Claimant Claim Amount --------- -------- ------------ 7333 BERNER KANTONALBANK AG $90,252,136 8468 CITADEL EQUITY FUND LTD. $47,478,600 6949 CREDIT PROTECTION TRUST $43,830,089 6948 CREDIT PROTECTION TRUST $43,830,089 8468 CREDIT SUISSE LOAN FUNDING $423,036,453 8161 CYRUS OPPORTUNITIES MASTER FUND II, LTD. $48,421,592 8160 CYRUS OPPORTUNITIES MASTER FUND II, LTD. $48,421,592 7488 EUROPEAN BANK FOR RECONSTRUCTION AND DEVE $71,005,000 7487 EUROPEAN BANK FOR RECONSTRUCTION AND DEVE $71,005,000 8653 NORTHSTAR REAL ESTATE SECURITIES OPPORTU $49,911,385 8652 NORTHSTAR REAL ESTATE SECURITIES OPPORTU $49,911,385 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) LEIGH COAL: Gets Court OK to Borrow $3.5MM to Continue Operations ----------------------------------------------------------------- Kent Jackson at Standard Speaker reports that The Hon. John J. Thomas of U.S. Bankruptcy Court for the Middle District of Pennsylvania has granted Lehigh Coal and Navigation Co. permission to borrow $3.5 million from BET Associates IV, LLC, to continue operating while in bankruptcy. Creditors had tried to block the loan, but Judge Thomas ruled that "an immediate and critical need exists" for Lehigh Coal to secure funds, as the Company's ability to continue its business and reorganize under Chapter 11 bankruptcy depends on the financing, Standard Speaker says. Citing Judge Thomas, Standard Speaker relates that BET Associates will have first priority of repayment, and the best interests of Leigh Coal's estate are served by allowing the financing. The report states that Lehigh Coal has equity in its assets. Leigh Coal, says the report, granted a lien of its mineral rights and agreed to make monthly payments to the U.S. Department of Agriculture. Pottsville, Pennsylvania-based Lehigh Coal & Navigation Co. -- http://www.lcncoal.com/-- has been mining anthracite coal since the late 1700s, with 8,000 acres of coal-producing properties. Creditors filed an involuntary Chapter 11 petition against the Company on July 15, 2008 (Bankr. M.D. Penn. Case No. 08-51957). The involuntary filing was the third filed against the Company in less than four years. Jeffrey Kurtzman, Esq., at Klehr, Harrison, Harvey, Branzburg and Ellers, LLP, represents the petitioners. The Debtor consented to being in Chapter 11 in August 2008. LEXINGTON PRECISION: Net Loss Widens to $3.2MM for June 30 Quarter ------------------------------------------------------------------ Lexington Precision Corporation posted wider net loss of $3,203,000 for the three months ended June 30, 2009, from a net loss of $1,940,000 for the same period a year ago. It posted a net loss of $6,630,000 for the six months ended June 30, 2009, from a net loss of $3,402,000 for the same period a year ago. The Company recorded net sales of $15,377,000 for the three months ended June 30, 2009, from $20,000,000 in the prior year. The Company recorded net sales of $29,542,000 for the six months ended June 30, 2009, from $41,352,000 in the prior year. As of June 30, 2009, the Company had $47,367,000 in total assets, and total current liabilities of $43,062,000, liabilities subject to compromise of $56,812,000, and other long-term liabilities of $468,000, resulting in stockholders' deficit of $52,975,000. The Company filed its quarterly report on August 20, three days after informing the Securities and Exchange Commission it would not be able to file its June 30 Quarterly Report within the prescribed time period due to the additional demands placed on its accounting professionals because its bankruptcy filing. A full-text copy of the Quarterly Report is available at no charge at http://ResearchArchives.com/t/s?435b Closure of Vienna Facility During the last six months of 2008, Lexington experienced a dramatic downturn in sales of components used in automotive original equipment, which resulted in operating losses at Lexington's connector-seal facility in Vienna, Ohio. Because of the losses and because Lexington did not believe that it would be possible to return this facility to an adequate level of profitability in the foreseeable future, during the first quarter of 2009, Lexington decided to close this facility and move the production to its other rubber molding facilities. The shutdown of the Vienna facility was substantially completed on July 31, 2009. Lexington said the estimated cost to restructure the connector- seal business, including the cost to move the production at this facility to its other rubber molding facilities, will total approximately $636,000, which consists of (1) $392,000 for employee related expenses, including, special incentive compensation, severance, and other costs, (2) $159,000 for start- up expenses at the new manufacturing locations, and (3) $85,000 for moving and installation of manufacturing equipment. During the three-month period ended June 30, 2009, Lexington expensed $363,000 of restructuring expenses, of which $338,000 was included in cost of sales and $25,000 was included in selling and administrative expenses in Lexington's consolidated statements of operations. At June 30, 2009, Lexington had accrued $80,000 on its consolidated balance sheet for severance awards and termination benefits granted to employees of the Vienna, Ohio, facility. The accrued benefits are scheduled to be paid out during the third quarter of 2009. Although there can be no assurance, Lexington currently believes, based on independent appraisals, that it should be able to sell the Vienna, Ohio, manufacturing facility and certain manufacturing equipment that it is not planning to move to its other rubber molding facilities, at an amount that will be in excess of the carrying value of the assets. In December 2008, Lexington filed an amended plan of reorganization that, if confirmed, would provide for these distributions: -- The senior, secured credit facility would be repaid in full in cash; -- Each holder of a general unsecured claim, other than holders of Senior Subordinated Notes and the Junior Subordinated Note, would receive an initial cash payment equal to 10% of their claim and nine additional cash payments, each equal to 10.75% of their claim, payable quarterly, commencing three months after the effective date of the Amended Plan; -- Each holder of a Senior Subordinated Note claim would receive shares of new Series C Preferred Stock with an aggregate liquidation preference equal to their claim, increasing at the rate of 6% per annum, and convertible into common stock at $4.46 per share; and -- Each holder of a Junior Subordinated Note claim and a Series B Preferred Stock interest would receive new shares of common stock with a value equal to their claim or interest. If the Amended Plan had become effective on June 30, 2009, $51,206,000 of its liabilities would have been converted into equity securities. Lexington requires financing to consummate the Amended Plan. Lexington cannot assure that the Amended Plan will be confirmed or that it will be able to obtain the financing. The Amended Plan may be further amended. If the Amended Plan is not confirmed by the Bankruptcy Court, it is unclear what holders of claims or equity interests would ultimately receive with respect to their claims or interests. Including liabilities classified as subject to compromise, Lexington had a net working capital deficit of $78,921,000 at June 30, 2009, compared to a net working capital deficit of $73,922,000 at December 31, 2008. On June 30 and August 14, 2009, Lexington's cash on hand totaled $3,579,000 and $2,950,000, respectively. Although there can be no assurance, Lexington currently believes, based on its most recent financial projections, that it has adequate liquidity to operate during the chapter 11 proceedings. About Lexington Precision Headquartered in New York, Lexington Precision Corp. -- http://www.lexingtonprecision.com/-- manufactures tight-tolerance rubber and metal components for use in medical, automotive, and industrial applications. As of February 29, 2008, the Company employed about 651 regular and 22 temporary personnel. The Company and its affiliate, Lexington Rubber Group Inc., filed for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead Case No.08-11153). Christopher J. Marcus, Esq., and Victoria Vron, Esq., at Weil, Gotshal & Manges, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Systems - Bankruptcy Solutions LLC as claims agent. The U.S. Trustee for Region 2 appointed six creditors to serve on an official committee of unsecured creditors. Paul N. Silverstein, Esq., and Jonathan Levine, Esq., at Andrews Kurth LLP, represent the Committee as counsel. LITHIUM TECHNOLOGY: Posts $6.4MM Net Loss for 2008 -------------------------------------------------- Lithium Technology Corporation filed with the Securities and Exchange Commission an amendment to its Annual Report on Form 10-K for the year ended December 31, 2008. Lithium Technology, from January to December 2008, raised approximately $6.8 million in debt financing transactions and approximately $500,000 through the exercise by a holder of 40 million outstanding warrants. Lithium Technology is continuing to seek other financing initiatives, needing to raise additional capital to meet working capital needs, for the repayment of debt and for capital expenditures. Lithium Technology believes if it raises approximately $7 million in debt and equity financings, it would have sufficient funds to meet its needs for working capital, repayment of debt and for capital expenditures over the next 12 months and to meet expansion plans. With the funds the Company will be able to expand the production capacity to approximately 20MWh per annum and to expand battery assembly activities in both the U.S. and in Europe. After these investments, the existing production facility in Nordhausen will not be able to expand even further. If after that the Company would like to extend the production capacity substantially it will need substantially more new capital to build this new facility. The ultimate location will depend on the regional market needs. "No assurance can be given that we will be successful in completing any financings at the minimum level necessary to fund our capital equipment, debt repayment or working capital requirements, or at all. If we are unsuccessful in completing these financings, we will not be able to meet our working capital, debt repayment or capital equipment needs or execute our business plan. In such case we will assess all available alternatives including a sale of our assets or merger, the suspension of operations and possibly liquidation, auction, bankruptcy, or other measures," Lithium Technology said. Lithium Technology noted that since inception, it has incurred substantial operating losses and expect to incur additional operating losses over the next few years. As of December 31, 2008, Lithium Technology had an accumulated deficit of approximately $137,000,000. It has financed operations since inception primarily through equity financings, loans from shareholders and other related parties, loans from silent partners and bank borrowings secured by assets. The June 11, 2009 audit report of Amper, Politziner & Mattia LLP, in Edison, New Jersey, raised substantial doubt about the Company's ability to continue as a going concern. The Company posted a net loss of $6,414,000 for the year ended December 31, 2008, from a net loss of $24,391,000 in 2007. Revenues from product sales increased to $4,167,000 or 59% in the year ended December 31, 2008 from $2,609,000 in the same period in 2007. As of December 31, 2008, the Company had total assets of $11,107,000, and total liabilities of $21,897,000, resulting in stockholders deficit of $10,790,000. A full-text copy of the Amended Annual Report is available at no charge at http://ResearchArchives.com/t/s?4381 Based in Plymouth Meeting, Pennsylvania, Lithium Technology Corporation is a global manufacturer and provider of rechargeable energy storage solutions for diverse applications. The Company designs and builds a limited amount of large format, cylindrical lithium-ion (Li-ion) rechargeable cells and engineers and builds lithium-ion (Li-ion) rechargeable batteries complete with battery management systems for use in transportation, military/national security and stationary power markets. LTC also manufactures its own unique large format, cylindrical cells. In its audit report dated June 11, 2009, Amper, Politziner & Mattia LLP, in Edison, New Jersey, raised substantial doubt about the Company's ability to continue as a going concern, noting that the company has recurring losses from operations since inception and has a working capital deficiency. LOWE ENTERPRISES: Defaults on Two Secured Loans ----------------------------------------------- The Los Angeles Times reports that Lowe Enterprises has received a default notice from another major lender on Terranea Resort in Rancho Palos Verdes and has stopped making mortgage payments on its Sheraton Universal Hotel in Universal City. According to the report, Lowe completed the luxurious 582-room Terranea Resort in June at a cost of $480 million. According to Hotel Online, Corus Bank, a Chicago-based institution the Federal Deposit Insurance Corp. has put up for bids reportedly due next week, filed a notice of default earlier this month on its $180 million loan to Terranea. The notice was filed with Los Angeles County just three days after the resort's secondary lender -- led by Microsoft billionaire Bill Gates' Cascade Investment -- had made a similar filing Aug. 11 on its $110 million loan to the project. Lowe Enterprises in June opened Terranea (terra-NAY-a) Resort, among the largest development projects to open in Los Angeles County this year and its first true coastal resort. The Mediterranean-styled 582-room resort is set on 102-acres that span the coastline atop the bluffs in Rancho Palos Verdes, a verdant peninsula 20 miles south of Los Angeles International Airport. "Ten years and $480 million in the making, Terranea is the crowning achievement of our company," said Bob Lowe, chairman and CEO of Los Angeles-based Lowe Enterprises, in June. About 275 California hotels have received notices of default or already faced foreclosure by their lenders, said consultant Alan Reay, president of Atlas Hospitality Group, according to the L.A. Times report. About Lowe Enterprises Lowe Enterprises is a leading national real estate investment, development and management firm. Headquartered in Los Angeles, the firm maintains regional offices in Denver, Irvine, San Francisco, Sacramento and Washington D.C. and project offices nationwide. Founded in 1972 by Chairman and CEO Robert J. Lowe, the firm has an executive staff of 250 and a total employment of over 7,500. Lowe is owned by a group of 47 employee shareholders. Over the past 37 years, Lowe Enterprises has developed, acquired or managed more than $16 billion of real estate assets. LUXE LOFTS: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------ Luxe Lofts, LLC, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Nevada. Las Vegas Review-Journal reports that Frank Hamadani, managing member of Qualitect and developer of Luxe Lofts, estimated assets of $1 million to $10 million and estimated liabilities of $10 million to $50 million. The report states that Luxe Lofts has 100 to 199 creditors. According to Las Vegas Review-Journal, construction of the 83-unit project began in 2006, with units priced from $400,000. Las Vegas Review-Journal says that Oakview Building Consensus was general contractor for the project. Luxe Lofts, LLC, is a stalled $38 million condominium project on West Flamingo Road. MAGUIRE PROPERTIES: JMB Fund, et al., Disclose 4.99% Equity Stake ----------------------------------------------------------------- JMB Capital Partners Master Fund, L.P., Smithwood Advisers, L.P., Smithwood General Partner, LLC, Smithwood Partners, LLC and Jonathan Brooks report the sale of the common stock, $0.01 par value per share of Maguire Properties, Inc., by JMB Fund. As a result of the sales, JMB et al., ceased to be the beneficial owners of at least 5% of the Common Stock. As of August 26, 2009, JMB Fund is the registered owner of 2,398,200 shares of Common Stock. By virtue of their investment management authority, the Smithwood entities and Mr. Brooks may be deemed to beneficially own those shares of Common Stock owned by the Fund. Based on 47,965,645 shares of Common Stock of the Company currently outstanding, JMB Fund, the Smithwood entities and Mr. Brooks are currently the beneficial owner of 4.99% of the outstanding Common Stock. They share the power to vote and dispose of the 2,398,200 shares of Common Stock owned by the Fund. As reported by the Troubled Company Reporter on August 12, 2009, Maguire Properties may relinquish control of seven Southern California buildings with $1.06 billion of debt and said it's not planning on filing for bankruptcy. In its second quarter 2009 report on Form 10-Q, the Company warned, "We may not have the cash necessary to repay our debt as it matures. Therefore, failure to refinance or extend our debt as it comes due, or a failure to satisfy the conditions and requirements of such debt, could result in an event of default that could potentially allow lenders to accelerate such debt. If our debt is accelerated, our assets may not be sufficient to repay such debt in full, and our available cash flow may not be adequate to maintain our current operations. If we are unable to refinance or repay our debt as it comes due (particularly in the case of loans with recourse to our Operating Partnership) and maintain sufficient cash flow, our business, financial condition, results of operations and common stock price will be materially and adversely affected, and we may be required to file for bankruptcy protection." Net loss for three months ended June 30, 2009, was $428,608,000, compared with a $112,726,000 net loss during the year-ago period. As of June 30, 2009, assets total $4,392,301,000 against debts of $4,866,253,000, for a stockholders' deficit of $473,952,000. Maguire Properties said in an August 10 statement that its Board of Directors has approved management's plan to seek to dispose of four former EOP/Blackstone assets and two other assets in cooperation with lenders as well as Park Place I and certain parking areas and development rights. During the quarter ended June 30, 2009, the Company recorded a non-cash impairment charge of approximately $345 million associated with these assets. About Maguire Properties Maguire Properties, Inc. -- http://www.maguireproperties.com/-- is the largest owner and operator of Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high-quality office properties in the Southern California market. Maguire Properties, Inc. is a full- service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. MAINSTREET BANK: Closed; Minnesota Bank Assumes Deposits -------------------------------------------------------- Mainstreet Bank, Forest Lake, Minnesota, was closed August 28 by the Minnesota Department of Commerce, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Central Bank, Stillwater, Minnesota, to assume all of the deposits of Mainstreet Bank. The eight branches of Mainstreet Bank will reopen as branches of Central Bank. Depositors of Mainstreet Bank will automatically become depositors of Central Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until Central Bank can fully integrate the deposit records of Mainstreet Bank. As of June 30, 2009, Mainstreet Bank had total assets of $459 million and total deposits of approximately $434 million. Central Bank will pay the FDIC a premium of 0.10 percent to assume all of the deposits of Mainstreet Bank. In addition to assuming all of the deposits of the failed bank, Central Bank agreed to purchase essentially all of the assets. The FDIC and Central Bank entered into a loss-share transaction on approximately $268 million of Mainstreet Bank's assets. Central Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. Customers who have questions about the transaction can call the FDIC toll-free at 1-800-405-7869. Interested parties can also visit the FDIC's Web site at: http://www.fdic.gov/bank/individual/failed/mainstreet-mn.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $95 million. Central Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. Mainstreet Bank is the 83rd FDIC- insured institution to fail in the nation this year, and the second in Minnesota. The last FDIC-insured institution to be closed in the state was Horizon Bank, Pine City, on June 26, 2009. SCO GROUP: Former District Judge Named Chapter 11 Trustee --------------------------------------------------------- SCO Group Inc. said in a regulatory filing that the U.S. Bankruptcy Court for the District of Delaware issued an order approving the appointment of Edward N. Cahn, Esq., as Chapter 11 trustee. On July 27, 2009, the Bankruptcy Court held a hearing and took evidence on cross-motions consisting of (a) SCO Group's motion for the sale of property outside the ordinary course of business free and clear of interest and for approval of assumption and assignment of executor contracts and unexpired leases in conjunction with sale, and (b) the motions of Novell, IBM and the Office of the United States Trustee for conversion of Debtors' reorganization under Chapter 11 to a liquidation proceeding under Chapter 7 of the Bankruptcy Code. On August 5, 2009, the Bankruptcy Court issued its Memorandum Opinion, and denied all of the Conversion Motions and the Sale Motion. Instead, the Bankruptcy Court opted to appoint a Chapter 11 Trustee, and entered an Order directing the Office of the United States Trustee to do so. Pursuant to this Order, the Office of the United States Trustee would select, and the Bankruptcy Court would thereafter consider and approve, a Chapter 11 Trustee. The Chapter 11 Trustee, Mr. Cahn, is a former chief U.S. district judge for the Eastern District of Pennsylvania. He has extensive experience in the area of complex litigation, including intellectual property. Mr. Cahn received an honorary doctorate from Lehigh University in 2002. He was a Tresolini Lecturer in Law at Lehigh University. Mr. Cahn holds degrees from Yale Law School and Lehigh University, where he graduated magna cum laude. Pursuant to the Bankruptcy Code, and subject to the supervision and approval of the Bankruptcy Court, the Chapter 11 Trustee will have authority over the Debtors' assets and affairs and the future course of the Debtors' litigation against Novell, IBM. et al. Novell Litigation As reported by the TCR on August 26, 2009, 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." 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. MCDONALD ELECTRICAL: Case Summary & 5 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: McDonald Electrical Services, Inc. PO Box 1939 Fort Mill, SC 29716 Bankruptcy Case No.: 09-06324 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court District of South Carolina (Spartanburg) Debtor's Counsel: Reid B. Smith, Esq. Price Bird Smith & Boulware PA 1712 St Julian Place, Suite 102 Columbia, SC 29204 Tel: (803) 779-2255 Email: reid@pricebirdlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 5 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/scb09-06324.pdf The petition was signed by Richard McDonald, president of the Company. METRO-GOLDWYN-MAYER: Bank Debt Trades at 43% Off ------------------------------------------------ Participations in a syndicated loan under which Metro-Goldwyn- Mayer, Inc., is a borrower traded in the secondary market at 56.79 cents-on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.71 percentage points from the previous week, The Journal relates. The loan matures April 8, 2012. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt is not rated by either Moody's or S&P. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Metro-Goldwyn-Mayer, Inc., is an independent, privately-held motion picture, television, home video, and theatrical production and distribution company. The Company owns the world's largest library of modern films, comprising approximately 4,000 titles, and over 10,400 episodes of television programming. MGM is owned by an investor consortium comprised of Providence Equity Partners, TPG Capital, Sony Corporation of America, Comcast Corporation, DLJ Merchant Banking Partners and Quadrangle Group. The Troubled Company Reporter said May 22 that Metro-Goldwyn-Mayer hired Moelis & Co. to help refinance $3.7 billion debt and was in talks with a steering committee of 140 creditors led by JPMorgan Chase & Co. as part of the process. Sue Zeidler at Reuters said the studio "was exploring options for optimizing its capital structure and has begun talks with a steering committee of its lenders as part of the process." Ms. Zeidler said bankers estimate MGM is paying north of $250 million a year in interest on debt due in 2012. Sources told Reuters MGM was potentially seeking a way to make the loan due later, or reduce it in size. Comcast paid about $5 billion in debt and equity in September 2004 to buy MGM from majority owner Kirk Kerkorian. According to Reuters, merger specialists have said MGM could be worth $2 billion to $2.5 billion. MGM, however, has reiterated its commitment to staying independent. METROPCS WIRELESS: Bank Debt Trades at 6% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which MetroPCS Wireless is a borrower traded in the secondary market at 94.06 cents-on- the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.62 percentage points from the previous week, The Journal relates. The loan matures on Oct. 11, 2013. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. MetroPCS Communications, Inc., is a wireless communications provider that offers wireless broadband mobile services under the MetroPCS brand in selected metropolitan areas in the United States over its own licensed networks or networks of entities, in which the Company holds a substantial non-controlling ownership interest. The Company provides an array of wireless communications services to its subscribers on a no long-term contract, paid-in-advance, flat-rate, unlimited usage basis. As of Dec. 31, 2008, it had approximately 5.4 million subscribers in eight states. MetroPCs carries 'B' issuer credit ratings from Standard & Poor's. MGM MIRAGE: Joseph Sugerman Joins Board of Directors ---------------------------------------------------- MGM MIRAGE said Joseph H. Sugerman, M.D., F.A.C.S. has accepted an invitation to join the Company's Board of Directors. The California physician was elected to his new post by the Board of Directors at their meeting held on Aug. 25. Dr. Sugerman's election to the Board is subject to required approvals or waivers from gaming regulators. "I am delighted to announce that Dr. Sugerman has been elected to join our Board of Directors," said James Murren, MGM MIRAGE Chairman and Chief Executive Officer. "As the largest provider of health care benefits in Nevada, our Company will benefit immensely from his expertise, particularly as we, along with the entire nation, navigate through the challenges that we face related to health care coverage." Dr. Sugerman is a Beverly Hills-based, board-certified otolaryngologist with 32 years experience. He is an attending physician at the Cedars-Sinai Medical Center, and past Clinical Chief of his department. He is a Clinical Instructor at the University of Southern California Keck School of Medicine and the University of California at Los Angeles Department of Otolaryngology: Head and Neck Surgery Division. He is an honors graduate with a Bachelor of Science degree from UCLA and graduated with honors and first in his class from the Chicago Medical School. Dr. Sugerman is a fellow of the American Academy of Otolaryngology and the American College of Surgeons. He is a member of the American Rhinologic Society and Alpha Omega Alpha Honor Medical Society. About MGM MIRAGE Headquartered in Las Vegas, Nevada, MGM MIRAGE (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. At June 30, 2009, the Company had $22.4 billion in total assets, including $1.07 billion in total current assets; $1.23 billion in total current liabilities, $3.58 billion in deferred income taxes, $12.3 billion in long-term debt, $186.7 million in other long-term obligations; and $5.04 billion in stockholders' equity. * * * MGM Mirage continues to carry Standard & Poor's Ratings Services' 'CCC+' corporate credit ratings and Moody's Investors Service's Caa2 Corporate Family Rating and Caa3 Probability of Default Rating. MICHAELS STORES: Bank Debt Trades at 11% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Michaels Stores, Inc., is a borrower traded in the secondary market at 88.54 cents- on-the-dollar during the week ended on Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.50 percentage points from the previous week, The Journal relates. The loan matures on Oct. 31, 2013. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Headquartered in Irving, Texas, Michaels Stores, Inc., is the largest arts and crafts specialty retailer in North America. As of March 9, 2009, the Company operated 1,105 "Michaels" retail stores in the United States and Canada and 161 Aaron Brothers Stores. As of May 2, 2009, Michaels Stores had $1.61 billion in total assets and $4.49 billion in total liabilities. For the quarter ended May 2, 2009, the Company posted a $4 million net income on $852 million in net sales. MIDWAY GAMES: Gets Plan Filing Extension Until September 29 ----------------------------------------------------------- Midway Games Inc., et al., obtained from the U.S. Bankruptcy Court for the District of Delaware an extension of their exclusive period to file a plan until September 29, 2009, and their exclusive period to solicit acceptances thereof until November 30, 2009. This is the Debtors' second request for the extension of their exclusive periods. The Debtors told the Court that the extension will provide them with a meaningful and reasonable opportunity to negotiate, propose, and confirm a Chapter 11 plan. The Debtors related that sales of certain of their remaining assets are anticipated to be approved and then close by the end of August. About Midway Games Headquartered in Chicago, Illinois, Midway Games Inc. (OTC Pink Sheets: MWYGQ) -- http://www.midway.com/-- with offices throughout the world, is a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. 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 MILACRON INC: Has Yet to File June 30 Quarterly Report ------------------------------------------------------ Milacron Inc. has not filed its financial report on Form 10-Q for the quarter ended June 30, 2009. Milacron, however, has indicated its results of operations for such quarter were materially worse than for the comparable quarter of 2008, principally due to the conditions that led to its Chapter 11 filing and substantial costs related to the Chapter 11 proceeding. On May 21, June 29 and August 6, 2009, Milacron filed Current Reports on Form 8-K containing monthly operating reports that contain certain financial information relating to the months of April, May and June 2009. On August 17, 2009, Milacron said it "is not in a position to file its Periodic Report on Form 10-Q for the quarter ended June 30, 2009," citing its bankruptcy filing. Milacron explained that during its Chapter 11 proceeding, it will not have financial or human resources to prepare Forms 10-Q, as they will be needed to meet administrative and operating expenses and to provide substantial information to the Court and others. As reported by the Troubled Company Reporter, Milacron completed the sale of substantially all of its assets on August 21, 2009. Milacron said in an August 26 regulatory filing that the consideration provided by the purchaser of its assets consisted almost entirely of the payment and assumption of certain specified liabilities of the Debtors. "The Debtors' remaining assets are not sufficient to satisfy the claims of the Company's creditors," Milacron said. Accordingly, the holders of the Company's Preferred and Common Stock will not receive anything of value at the conclusion of the Debtors' bankruptcy proceedings. The Company considers its Preferred and Common Stock to be worthless. Milacron and certain of its subsidiaries sold their assets to Milacron LLC, a company formed by affiliates of Avenue Capital Group, certain funds or accounts managed by DDJ Capital Management LLC and certain other entities that together hold approximately 93% of the Company's 11-1/2% Senior Secured Notes, pursuant to a Purchase Agreement dated as of May 3, 2009, as amended. In return for the Debtors' assets, the Purchaser provided total consideration of approximately $180 million, consisting of repayment of the Company's debtor-in-possession loan facilities (one of which was provided by the Participating Noteholders), assumption of certain of the Debtors' other liabilities, including ordinary course liabilities and other debt, credit bid of a portion of the Participating Noteholders' Secured Notes and payment of additional consideration to non-Participating Noteholders. The amount and nature of the consideration were determined by arm's length negotiation between the parties. About Milacron Inc. Headquartered in Batavia, Ohio, Milacron Inc. (Pink Sheets: MZIAQ) supplies plastics-processing technologies and industrial fluids, with major manufacturing facilities in North America, Europe and Asia. First incorporated in 1884, Milacron also manufactures synthetic water-based industrial fluids used in metalworking applications. The Company and six of its affiliates filed for protection on March 10, 2009 (Bankr. S.D. Ohio Lead Case No. 09-11235). On the same day, the Company filed an ancillary proceeding for reorganization of its Canadian subsidiary under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. The petitions include the Company and its U.S. and Canadian subsidiaries and its non-operating Dutch holding company subsidiary only, and do not include any of the Company's operating subsidiaries outside the U.S. and Canada. Kim Martin Lewis, Esq., Tim J. Robinson, Esq., and Patrick D. Burns, Esq., at Dinsmore & Shohl LLP, represent the Debtors in their restructuring efforts. Conway, Del Genio, Gries Co., LLC, is the Debtors' financial advisor. Rothschild Inc. is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the noticing, balloting and disbursing agent for the Debtors. Paul, Hastings, Janofsky & Walker LLP, represents DIP Lender General Electric Capital Corp. Taft Stettinius & Hollister LLP is counsel for the Official Committee of Unsecured Creditors. At June 30, 2009, the Company had $528,548,000 in total assets and $818,577,000 in total liabilities. Milacron Inc. asked the Bankruptcy Court to change its name to MI 2009 Inc. following the Court-sanctioned sale of its assets to an investor group. MIRANT CORP: Bank Debt Trades at 4.46% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Mirant Corp. is a borrower traded in the secondary market at 95.54 cents-on-the- dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.79 percentage points from the previous week, The Journal relates. The loan matures on December 30, 2012. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba2 rating and Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Mirant Corporation -- http://www.mirant.com/-- produces and sells electricity in the United States. Mirant owns or leases approximately 10,097 megawatts of electric generating capacity. The company operates an asset management and energy marketing organization from its headquarters in Atlanta, Georgia. Mirant Corporation filed for Chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtor in its restructuring. When the Debtor filed for protection from its creditors, it listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. On March 7, 2007, the Court entered a final decree closing 46 Mirant cases. Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant New York Inc., and Hudson Valley Gas Corporation, were not included in the parent's bankruptcy exit plan. In February 2007, Mirant NY-Gen filed its Chapter 11 Plan of Reorganization and Disclosure Statement. The Court confirmed an amended version of the Plan on May 7, 2007. Mirant NY-Gen emerged from Chapter 11 on May 7, 2007. On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan. The Court confirmed Mirant Lovett's Plan on Sept. 19, 2007. Mirant Lovett emerged from bankruptcy on Oct. 2, 2007. Bankruptcy Creditors' Service, Inc., publishes Mirant Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Mirant Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MORRIS PUBLISHING: Lenders Extend Waiver Until September 4 ---------------------------------------------------------- Morris Publishing Group, LLC said August 28 that it has obtained an extension until September 4, 2009 to make two semi-annual interest payments of $9.7 million on its senior subordinated notes originally due Feb. 1, 2009 and August 3, 2009. The holders of more than 80% of the outstanding amount of senior subordinated notes have agreed to extend the forbearance period for these payments. Morris Publishing's senior bank group also agreed to extend until September 4, 2009 the waiver of the cross defaults arising from the overdue interest payments on the senior subordinated notes and waived any defaults that may occur from Morris Publishing's and Morris Communications' failure to meet the financial covenants under the Credit Agreement as of the end of the second quarter of 2009. The Waivers On August 28, 2009, Morris Publishing Group, LLC, as borrower, entered into Waiver No. 12, with JPMorgan Chase Bank, N.A. as Administrative Agent under the Credit Agreement dated as of December 14, 2005 to the Credit Agreement between Morris Publishing, Morris Communications Company, LLC, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent. Additional parties to the Waiver include the subsidiary guarantors of Morris Publishing, Morris Communications, MPG Newspaper Holding, LLC, the parent of Morris Publishing, Shivers Trading & Operating Company, the parent of MPG Holding, and Morris Communications Holding Company, LLC, the parent of Morris Communications. The lenders party to the Credit Agreement are JPMorgan Chase Bank, N.A., The Bank of New York, SunTrust Bank, Wachovia Bank, N.A., Bank of America, N.A., General Electric Capital Corporation, Allied Irish Banks, P.L.C., RBS Citizens, N.A., Comerica Bank, US Bank, National Association, First Tennessee Bank, National Association, Webster Bank, National Association, Keybank National Association, Sumitomo Mitsui Banking Corporation, and Mizuho Corporate Bank, Ltd. The Credit Agreement includes an event of default if Morris Publishing defaults in the payment when due of any principal or interest due on any other indebtedness having an aggregate principal amount of $5,000,000 or more -- such as Morris Publishing's $278,478,000 of 7% Senior Subordinated Notes due 2013. Morris Publishing failed to pay the $9,746,730 interest payment due February 1, 2009 and the $9,746,730 interest payment due August 3, 2009 on the Notes. Waiver No. 12 waives any defaults that arose from the failure to make such interest payments on the Notes until 5:00 p.m. New York City time on September 4, 2009. However, the waiver will terminate earlier if Amendment No. 9 to the Forbearance Agreement is terminated or amended prior to such time or upon other defaults. Waiver No. 12 also waives until September 4, 2009 any event of default that may have occurred at the end of the first quarter of 2009 which consisted solely of the consolidated cash flow ratio of Morris Communications and Morris Publishing exceeding the applicable amount permitted under the Credit Agreement and waives any event of default that may occur when Morris Publishing fails to meet the consolidated cash flow ratio or the consolidated interest coverage ratio under the Credit Agreement when Morris Publishing and Morris Communications deliver their consolidated financial statements for the second quarter of 2009 no later than August 29, 2009 (when the relaxed financial covenants under Amendment No. 3 to the Credit Agreement terminate). Also on August 28, 2009, Morris Publishing and Morris Publishing Finance Co., as issuers, and all other subsidiaries of Morris Publishing, as subsidiary guarantors, entered into Amendment No. 9 to the Forbearance Agreement dated as of February 26, 2009 with respect to the indenture relating to the Notes between the issuers, the subsidiary guarantors and US Bank Trust, N.A. as successor to Wachovia Bank, N.A., as Indenture Trustee, dated as of August 7, 2003. Morris Publishing failed to pay the $9,746,730 interest payment due February 1, 2009 and the $9,746,730 interest payment due August 3, 2009 on the Notes. Pursuant to the Forbearance Agreement, the holders, their investment advisors or managers of over $226,000,000 of outstanding principal amount of the Notes (over 80% of the outstanding Notes), agreed not to take any action during the forbearance period as a result of the Payment Defaults to enforce any of the rights and remedies available to the Holders or the Indenture Trustee under the Indenture or the Notes, including any action to accelerate, or join in any request for acceleration of, the Notes. The Holders also agreed to request that the Indenture Trustee not take any such remedial action with respect to the Payment Defaults, including any action to accelerate the Notes during the Forbearance Period. Under the Amendment No. 9, the "Forbearance Period" generally means the period ending at 5:00 p.m. EDT on September 4, 2009, but could be terminated earlier for various reasons set forth in the Forbearance Agreement including if the lenders under the Credit Agreement accelerate the maturity of the obligations under the Credit Agreement, if Waiver No. 12 is terminated, upon the occurrence of any other default under the Indenture, or if Morris Publishing files for bankruptcy protection or breaches its covenants under the Forbearance Agreement. About Morris Publishing Morris Publishing Group, LLC -- http://morris.com/-- is a privately held media company based in Augusta, Ga. Morris Publishing currently owns and operates 13 daily newspapers as well as nondaily newspapers, city magazines and free community publications in the Southeast, Midwest, Southwest and Alaska. As of June 30, 2009, Morris Publishing had $167,632,000 in total assets and $475,434,000 in total liabilities. MUSIFEX INC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Musifex Inc. dba MVI Post 6320 Castle Place Falls Church, VA 22044 Bankruptcy Case No.: 09-16966 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Debtor's Counsel: Kevin M. O'Donnell, Esq. Henry & O'Donnell, P.C. 300 N. Washington Street, Suite 204 Alexandria, VA 22314 Tel: (703) 548-2100 Fax: (703) 548-2105 Email: kmo@henrylaw.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/vaeb09-16966.pdf The petition was signed by Craig Maniglia, vice president of the Company. NAVISTAR INT'L: Osborne Replaces Belton on Board of Directors ------------------------------------------------------------- Navistar International Corporation said William H. Osborne, president and chief executive officer of Federal Signal Corporation, has been named to its board of directors. Mr. Osborne, 49, replaces Marc Belton on the Navistar board of directors. Mr. Belton, an executive vice president at General Mills, Inc., previously announced that he would leave the Navistar board in August. Mr. Mr. Osborne has been appointed to be a member of Navistar's finance committee. As a director of the Company, Mr. Osborne will receive compensation as a non-employee director in accordance with the Company's non-employee director compensation practices described in the Company's Annual Proxy Statement filed with the Securities and Exchange Commission on January 16, 2009. The compensation generally consists of an annual retainer in the amount of $60,000 -- 1/4 of which is to be paid in the form of restricted stock -- meeting attendance fees of $1,500 for each Board or Committee meeting and an annual stock option grant of 4,000 shares. The initial cash and stock award to be received by Mr. Osborne will be pro-rated accordingly. A veteran of more than 30 years in the automotive industry, Mr. Mr. Osborne was named to his present position with Federal Signal, a $1 billion manufacturer and marketer of fire, safety and municipal infrastructure equipment, in September 2008. Prior to joining Federal Signal in September 2008, Mr. Osborne served in a number of senior-level positions with Ford Motor Company. Most recently, Mr. Osborne served as president and chief executive officer of Ford of Australia. Previously, he served as president and chief executive officer of Ford of Canada. Mr. Osborne's earlier assignments included a variety of roles in product design, development and engineering. Prior to joining Ford, Mr. Osborne held positions at Chrysler and General Motors. "We are fortunate that Bill is joining the Navistar board of directors," said Daniel C. Ustian, Navistar chairman, president and chief executive officer. "His manufacturing and automotive experience and expertise will be of great value to Navistar as we continue to diversify and expand globally into new marketplaces. I also want to personally thank Marc Belton for his 10 years of distinguished service to our company. His knowledge, dedication and expertise have been invaluable to Navistar as we continue to grow and we wish him the best in his future endeavors." About Navistar International Based in Warrenville, Illinois, Navistar International Corporation (NYSE: NAV) -- http://www.navistar.com/-- produces International(R) brand commercial and military vehicles, MaxxForce(TM) brand diesel engines, IC brand school and commercial buses, and Workhorse(R) brand chassis for motor homes and step vans, and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. Navistar is also a provider of truck and diesel engine parts. Another affiliate offers financing services. Navistar reported $9.65 billion in total assets and $11.09 billion in total liabilities as of April 30, 2009, resulting in $1.44 billion in stockholders' deficit. * * * According to the Troubled Company Reporter on April 15, 2009, Fitch Ratings has affirmed the Issuer Default Ratings of Navistar International Corporation and Navistar Financial Corp. at 'BB-', the Rating Outlook remains Negative. The ratings cover roughly $1.8 billion of debt at NAV and $3.2 billion debt at NFC as of January 31, 2009. NCI BUILDING: CD&R Agrees Exchange Offer May Be Started on Sept. 9 ------------------------------------------------------------------ NCI Building Systems, Inc., on August 28, 2009, entered into an amendment to the Investment Agreement, dated as of August 14, with Clayton, Dubilier & Rice Fund VIII, L.P. The Amendment, among other things, extends the date on which the Company is required to commence the exchange offer to acquire all of the Company's existing 2.125% convertible notes due 2024 in exchange for a combination of in cash and shares of common stock, par value $0.01 per share, of the Company, until 11:59 p.m., Eastern Time, on September 9, 2009. A full-text copy of the Amendment, dated as of August 28, 2009, to the Investment Agreement with CD&R is available at no charge at: http://ResearchArchives.com/t/s?4369 NCI Building Systems has obtained an extension of the waivers granted by its senior credit facility lenders on May 20, 2009. Under the extension, the waivers of the Company's compliance with its financial maintenance covenants and the waivers of its restrictions on entering into an agreement for a substantial equity investment in the Company continue until November 6, 2009. Previously, the waivers had been in effect through August 14, 2009 with an automatic extension to September 15, 2009 upon the signing of a definitive agreement for an equity investment. On August 14, 2009, NCI entered into a definitive investment agreement with Clayton, Dubilier & Rice Fund VIII, L.P., a fund managed by Clayton, Dubilier & Rice, Inc., under which the CD&R Fund will invest $250 million in the Company through the purchase of newly issued Convertible Participating Preferred Shares. This investment is part of a comprehensive solution to address NCI's significant near term debt repayment obligations, reduce debt by $323 million and position the Company for future growth. Completion of the CD&R transaction is subject to a number of conditions, including the completion of an exchange offer for the Company's existing convertible notes; completion of the refinancing of the Company's existing senior secured credit facility; entry into a new asset-based revolving credit facility; and other customary closing conditions. While there can be no assurances that a transaction will be completed, the Company continues to work diligently toward the successful consummation of a comprehensive solution. NCI Building Systems, Inc., is one of North America's largest integrated manufacturers of metal products for the nonresidential building industry. NCI is comprised of a family of companies operating manufacturing facilities across the United States and Mexico, with additional sales and distribution offices throughout the United States and Canada. NCI BUSINESS: Prepack Chapter 11 Plan Cues Moody's to Junk Ratings ------------------------------------------------------------------ Moody's Investors Service lowered the probability of default rating of NCI Business Systems, Inc., to Ca from B3 and its term loan rating to Caa1 from B2. All of NCI's ratings, including its B3 corporate family rating, remain under review for possible downgrade, awaiting greater certainty on the company's ongoing balance sheet restructuring. These rating actions follow NCI's statement that it would proceed with a prepackaged Chapter 11 bankruptcy if the debt restructuring that it is attempting receives less than 100% approval from the company's term loan holders and less than 95% approval from its convertible subordinated debt (unrated) holders. When considered together, these factors constitute a distressed exchange and a limited default by Moody's definition: i) the requirement that $150 million of the $293 million term loan balance be rolled over into a new five-year term loan; and ii) the language in the 8K that is suggestive of a coercive exchange offer. At the conclusion of all of the contemplated transactions -- i.e., the investment by Clayton, Dubilier and Rice of $250 million into NCI, the rollover of the $150 million portion of the term loan, and the refunding of the convertible subordinated notes -- NCI's PDR will most likely be restored to a B3/LD, and the term loan rating will most likely be restored to a level at or close to its former B2 rating, consistent with Moody's loss-given- default framework. The B3 corporate family rating was affirmed and reflects the weakness in non-residential construction that is expected to persist throughout 2010, a negative tangible net worth position (from having to write off the bulk of its goodwill exposure during its 2009 first fiscal quarter), credit metrics that are expected to be substantially weaker than its historical performance for at least the next year, and its heavy exposure to volatile raw material costs (principally steel). The company's ratings are supported by its leading industry position in various niches of the engineered building systems and metal components markets, its geographic and product diversity, and the balanced mix of new construction, repair, retrofit, and other end market uses. The ratings remain on review for downgrade until such time as the investment of $250 million by Clayton Dubilier and Rice (or another investment by a different entity) occurs and the recapitalization of the company's debt structure is successfully completed. These ratings were affected: * Corporate family rating affirmed at B3 * Probability of default rating lowered to Ca from B3 * $293 million senior secured first lien term loan due June 2010 lowered to Caa1 (LGD2, 11) from B2 (LGD3, 37) Moody's most recent rating action for NCI was on August 10, 2009, at which time the company's corporate family rating was lowered to B3 from B1 and the ratings put on review for further downgrade. NCI Building Systems, Inc., is one of North America's largest integrated manufacturers of metal products for the nonresidential building industry. In its fiscal 2008 ending November 2, 2008, the company generated approximately $1.76 billion in revenues. NEUMANN HOMES: Cole Taylor Has No Interest in Reserve Account ------------------------------------------------------------- Neumann Homes Inc. and its affiliated debtors previously sought a ruling from the Court to enforce a prior sale order dated November 24, 2008, which authorized the Debtors to sell to Cole Taylor Bank their real and personal properties in Clublands of Antioch. The Debtors made the move to allow them to disburse a reserve account established under their contracts with buyers of homes at the Clublands of Antioch. If approved, Cole Taylor would be compelled to reimburse the Debtors for and take an assignment of the deposit they made to North Shore Gas Company. The Reserve Account consists of funds collected from the home buyers, which are being used to reimburse the Debtors for the design and construction of amenities and recreational areas at the Clublands of Antioch. The deposit in the sum of $167,533, was made by the Debtors to North Shore Gas under their agreement for the extension of gas lines to the subdivision. Under the Nov. 24 sale order, the Debtors are authorized to disburse the Reserve Account unless Cole Taylor asserts and proves it has a security interest in that account. Cole Taylor allegedly refused to comply with the provisions of the Court Order regarding the Reserve Account and the Deposit because it could not determine if it has an interest in the account. Cole Taylor has refused to reimburse the Debtors for the Deposit because it believes that it is not a deposit. To resolve the issues, Judge Wedoff issued a ruling declaring that Cole Taylor has no security interest in or claim to amounts in the Reserve Account. He also ruled that Cole Taylor is not obliged to reimburse the Debtors for or take an assignment of the amount since it is not a deposit. About Neumann Homes Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The Company has built more than 11,000 homes in some 150 residential communities. The Company offers formal business training to employees through classes, seminars, and computer- based training. The Company filed for Chapter 11 protection on November 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors has selected Paul, Hastings, Janofsky & Walker LLP, as its counsel in these bankruptcy proceeding. When the Debtors filed for protection from its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) NEUMANN HOMES: Files Chapter 11 Plan of Liquidation --------------------------------------------------- Neumann Homes Inc. and its affiliated debtors filed with the U.S. Bankruptcy Court for the Northern District of Illinois a joint plan of liquidation and a disclosure statement detailing the plan on August 26, 2009. The Plan provides for the liquidation of the Debtors' assets and the distribution of the net proceeds to creditors in order of their relative priority of distribution. The Plan contemplates and is predicated upon the substantive consolidation of the Debtors. Under the Plan, a liquidating trust will be created on the day the Plan becomes effective, where the Debtors' assets including real and personal properties will be held. An administrator of that trust and members of the Trust Advisory Board will be designated by the Debtors and the Official Committee of Unsecured Creditors, with the Committee designating one member and the Debtors designating the two other members of the Board. On the Plan Effective Date, the Creditors' Committee will be dissolved and the employment of its professionals will be terminated. Claims Classification and Treatment Claims against and interests in the Debtors are divided into 12 classes under the Liquidation Plan. Administrative claims and priority tax claims are not classified and will be paid in full. Paul Andrews, chief restructuring officer of Neumann Homes, explained that the Debtors have not instituted a claims resolution process in their Chapter 11 cases and thus, at this time, are unable to provide estimates of the amount of claims that will ultimately become allowed in each class, and an estimated percentage recovery for claimants in each class. The classification and treatment of claims pursuant to the Debtors' Plan are: Class Description Claim Treatment ----------------- --------------- Class 1-A Rights of the holders of Allowed (Bank of America Class 1-A Claims against the Secured Claims) Debtors, if any, are unaltered by the Plan. The Debtors believe that a portion of the Allowed Bank of America Secured Claims has been satisfied. Each Allowed Class 1-A Claim will be satisfied, and to the extent that all or a portion of the BofA's collateral has not been sold or abandoned and is not legally titled in the name of BofA, by the transfer of the collateral to the Class 1-A Claimholder, subject to all valid and enforceable claims. Class 1-B Rights of the holders of Allowed (Cole Taylor Secured Claims) Class 1-B Claims, if any, are unaltered. The Debtors believe that all Allowed Cole Taylor Secured Claims have been satisfied. Class 1-C Rights of the holders of Allowed (Comerica Secured Claims) Class 1-C Claims, if any, are unaltered. The Debtors believe that a portion of the Allowed Comerica Secured Claims has been satisfied. Each Allowed Class 1-C Claim will be satisfied, and to the extent that all or a portion of Comerica 's collateral has not been sold or abandoned and is not legally titled in the name of Comerica, by the transfer of the collateral to the Class 1-C Claimholder, subject to all valid and enforceable claims. Class 1-D Rights of the holders of Allowed (First Midwest Class 1-D Claims, if any, are Secured Claims) unaltered. The Debtors believe that all Allowed First Midwest Secured Claims have been satisfied. Class 1-E Rights of the holders of Allowed (Guaranty Bank Class 1-E Claims, if any, are Secured Claims) unaltered. The Debtors believe that a portion of the Allowed Guaranty Secured Claims has been satisfied. Each Allowed Class 1-E Claim will be satisfied, and to the extent that all or a portion of Guaranty Bank's collateral has not been sold or abandoned and is not legally titled in the name of Guaranty Bank, by the transfer of the collateral to the Class 1-E Claimholder, subject to all valid and enforceable claims. Class 1-F Rights of the holders of Allowed (IndyMac Secured Claims) Class 1-F Claims, if any, are unaltered. The Debtors believe that a portion of the Allowed IndyMac Secured Claims has been satisfied. Each Allowed Class 1-F Claim will be satisfied, and to the extent that all or a portion of IndyMac's collateral has not been sold or abandoned and is not legally titled in the name of IndyMac, by the transfer of the collateral to the Class 1-F Claimholder, subject to all valid and enforceable claims. Class 1-G Rights of the holders of Allowed (RBC Secured Claims) Class 1-G Claims, if any, are unaltered. The Debtors believe that all Allowed RBC Secured Claims have been satisfied. Class 1-H Rights of the holders of Allowed (RFC Secured Claims) Class 1-G Claims, if any, are unaltered. The Debtors believe that all Allowed RFC Secured Claims have been satisfied. Class 2 Rights of the holders of Class 2 (Other Secured Claims) Claims are unaltered. The Debtors will reinstate the Class 2 Claims or provide other treatment as agreed by the Debtors and the claimholders. Class 3 Rights of the holders of Class 3 (Non-Tax Priority Claims) Claims against the Debtors are unaltered. Each holder of an Allowed Class 3 Claim will receive, at the election of the Debtors, cash equal to the amount of its Allowed Class 3 Claim or other less favorable treatment that will not impair the claimholder. Class 4 The disbursing agent will receive, (General Unsecured Claims) on behalf of holders of Allowed Class 4 Claims, each of the holders' pro rata share of the assets held by the liquidating trust and the proceeds received by the trust from the prosecution of so-called "liquidation trust claims," which the disbursing agent will distribute pro rata to or for the benefit of the claimholders. Class 5 The Debtors' common stock, (Old Equity Interests Affiliate Interests and preferred Subordinated Claims) stock or other equity interest outstanding before their bankruptcy as well as "affiliate interests" will be cancelled. Neither the holders of those interests nor the holders of subordinated claims will receive or retain any distribution on account of those interests and claims. Classes 1-A to 3 have unimpaired status under the Plan, while Class 4 and Class 5 are impaired. Distribution of Liquidation Trust Recoveries The administrator of the Liquidation Trust will make distributions of the recoveries, which consist of the Debtors' assets held by the liquidating trust and the proceeds received by the trust from the prosecution of so-called "liquidation trust claims" as follows: (i) to satisfy all allowed deferred administrative claims in full; (ii) to pay all costs and expenses associated with the administration of the liquidation trust; (iii) to repay amounts, if any, borrowed by the administrator; and (iv) to make distributions to entitled holders of allowed general unsecured claims and any other claimholders entitled as required by the Plan. The administrator is required to make distributions of "net liquidation trust recoveries" to claimholders entitled to receive distributions from the liquidation trust at least semi-annually beginning with a calendar quarter that is not later than the end of the second calendar quarter after the Plan becomes effective. Substantive Consolidation & Intercompany Claims The Plan contemplates and is predicated upon entry of an order, which may be the confirmation order, that would substantively consolidate the Debtors' estates and their bankruptcy cases for purposes of all actions associated with confirmation and consummation of the Plan. The Plan constitutes a request to approve the substantive consolidation so that on the Plan effective date, (i) all intercompany claims by Debtors will be eliminated; (ii) all assets and liabilities of the affiliated debtors will be merged or treated as if they were merged with the assets and liabilities of Neumann Homes; (iii) any obligation of a Debtor and all related guarantees will be deemed to be one obligation of Neumann Homes; (iv) the "affiliate interests" will be cancelled; and (v) each claim filed or to be filed against any Debtor will be deemed filed only against Neumann Homes and will be deemed a single claim against and a single obligation of Neumann Homes. All claims based on guarantees of collection, payment or performance made by the Debtors as to the obligations of another Debtor will be released and of no further force and effect. If the order approving the proposed substantive consolidation is not the confirmation order, then that order will only be entered if the Bankruptcy Court enters the confirmation order. On the day the Plan becomes effective, the members, officers or directors of each of the affiliated debtors will be deemed to have resigned; each affiliated debtor will be merged with Neumann Homes; and the bankruptcy cases of these affiliate debtors will be closed. KPN Settlement Agreement The Plan will be funded in part pursuant to a settlement agreement to be entered into by the Debtors, their former chief executive, Kenneth Neumann, Jean Neumann, KJET Office Building LLC, Kreutzer Road LLC, KDJET LLC, KPN Michigan LLC, KPN Michigan Pool LLC, and KPN Sterling Woods LLC. The Debtors have negotiated the agreement in an effort to reach a consensual resolution of their claims against the parties. Prior to these negotiations, the Debtors filed a lawsuit against the Neumanns and KJET, alleging, among other things, that the defendants received fraudulent transfers that should be avoided. The Complaint alleged that Mr. Neumann caused Neumann Homes to fraudulently transfer $2.7 million to the defendants in 2006. The Debtors were reportedly insolvent on the date the transfers were made or became insolvent as a result of those transfers. Liquidation Analysis According to Mr. Andrews, a liquidation under Chapter 11 is more beneficial to the claimants than a liquidation under Chapter 7 because the Plan allows the Debtors' remaining assets to be promptly administered. He added that it also grants the Liquidation Trust's administrator the right to object to claims and to pursue claims and causes of action of the Debtors and their estates. "If these cases were to be converted to Chapter 7 cases, the Debtors' estates would incur the costs of payment of a statutorily allowed commission to the Chapter 7 trustee, as well as the costs of counsel and other professionals retained by the trustee," Mr. Andrews pointed out. "The Debtors believe such amount would exceed the amount of expenses that would be incurred in implementing the Plan and winding up the affairs of the Debtors," he further said. Full-text copies of the Debtors' Joint Plan of Liquidation and the disclosure statement are available for free at: http://bankrupt.com/misc/NeumannLiquidationPlan.pdf http://bankrupt.com/misc/NeumannDisclosureStatement.pdf The Debtors relate that they intend to file all exhibits and schedules to the Plan or appendices to the Disclosure Statement with the Court on or before seven days before the Voting Deadline, currently proposed as October 30, 2009. About Neumann Homes Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The Company has built more than 11,000 homes in some 150 residential communities. The Company offers formal business training to employees through classes, seminars, and computer- based training. The Company filed for Chapter 11 protection on November 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors has selected Paul, Hastings, Janofsky & Walker LLP, as its counsel in these bankruptcy proceeding. When the Debtors filed for protection from its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) NEUMANN HOMES: Proposes Settlement With Merryman, et al. -------------------------------------------------------- Prior to their bankruptcy filing, Neumann Homes Inc. and its affiliated debtors inked an annexation and development agreement with the local government of the village of Gilberts for the construction of 985 homes and the creation of a special service area in the village known as the Conservancy. In connection with the construction project, Gilberts and Wells Fargo Bank N.A. executed a trust indenture on December 1, 2006, under which Gilberts issued $15 million in Special Service Area No. 19 Special Tax bonds. The proceeds of the SSA No. 19 Bonds was to be used to pay for public infrastructure improvements related to the construction of what is known as the Galligan Road, and a school at the Gilberts Development. The SSA No. 19 Bonds are secured by special taxes on land in the village owned by the Debtors, which were pledged to Wells Fargo for repayment of the SSA No. 19 Bonds. Merryman Excavation Inc., CBI Contractors, Lake County Grading Company LLC, Manhard Consulting Ltd., Plote Construction and Trench-It Inc. provided construction work for the Gilberts Project pursuant to their contracts with the Debtors. On December 4, 2007, Gilberts sought approval from the U.S. Bankruptcy Court for the Northern District of Illinois to pay $593,670 from Draw No. 7 under the SSA No. 19 Bonds to Merryman, CBI and Plote. The Court entered an order requiring Gilberts and the Debtors to give advance notice of any order or agreement concerning payment of Merryman, CBI or Plote to any other party that claimed a right to receive payment from SSA No. 19 Bonds. The Debtors previously said they have not agreed to the payment of any of the SSA No. 19 Bond funds after their bankruptcy filing. Gilberts informed them that exclusive of the proceeds of Draw No. 7, at least $657,757 of SSA No 19 Bond proceeds remains payable. Moreover, Consolidated School District No. 300 is willing to contribute $100,000 to reimburse the contractors on a pro-rata basis with respect to their claims. The Debtors and Gilberts estimated that, exclusive of the amounts included in Draw No. 7 and the School District's contribution, the total amount of claims asserted by the contractors that may be eligible for reimbursement from the proceeds will not exceed $606,279. IndyMac Bank and Guaranty Bank hold mortgages on the Debtors' property in Gilberts. The Debtors previously obtained Court approval to sell the property but only the real property subject to Guaranty Bank's loans has been sold as of May 22, 2009. On July 11, 2008, the Office of Thrift Supervision closed IndyMac Bank, and the Federal Deposit Insurance Company was named conservator of IndyMac Federal Bank. All non-brokered insured deposit accounts and most of IndyMac Bank's assets, including the loan to the Debtors, were transferred to IndyMac Federal Bank. The portfolio, including the loans to the Debtors, was ultimately sold and the Debtors are in negotiations with the buyer of the loans with respect to the disposition of the property subject to the IndyMac loans. Merryman's Litigation On February 11, 2008, Merryman sought Bankruptcy Court approval to file a case against Gilberts to seek payment of $470,938. Before the Court could enter an agreed order granting Merryman's request, Merryman filed a lawsuit against Gilberts in the state court of Kane County, seeking payment for work it did for the Gilberts Development from SSA No. 19 Bond proceeds and from the Village under theories of unjust enrichment and "contract implied in law." Plote and LCG also filed a lawsuit against Gilberts in state court in connection with amounts owed to them by the Debtors. Settlement Agreement To resolve their dispute, the Debtors, Merryman, the School District and the village of Gilberts inked an agreement for the mutual releases of all claims in connection with the litigation and the SSA No. 19 Bond proceeds. The Settlement Agreement, as approved by the Bankruptcy Court, contains these terms: (1) Gilberts will pay $485,938 to Merryman from Draw No. 7 of the proceeds of the SSA No. 19 Bonds. (2) Gilberts will submit a request for Disbursement No. 8 to Wells Fargo that will include the sum of $111,500 to be paid to Merryman. After receipt of the Draw No. 8 funds, the Village will pay $111,500 to Merryman from Draw No. 8 of the proceeds of the SSA No. 19 Bonds. (3) The School District will pay $51,397 to Merryman. (4) Merryman will pay $47,175 to Neumann Homes after receiving the $485,938, and $10,825 after receiving the $111,500 from Gilberts. (5) Merryman, Gilberts and the School District will execute a stipulation to dismiss the litigation. (6) Certain of the parties, on behalf of themselves and their estates, irrevocably and unconditionally release certain of the other parties from various claims. A full-text copy of the Settlement Agreement is available without charge at http://bankrupt.com/misc/NeumannSettlementMerryman.pdf The Debtors also sought and obtained an order from the Bankruptcy Court, approving the forms of settlement agreements with Lake County Grading, Manhard Consulting and Plote Construction. Copies of the settlement agreements are available without charge at: http://bankrupt.com/misc/NeumannSettlementLCG.pdf http://bankrupt.com/misc/NeumannSettlementManhard.pdf http://bankrupt.com/misc/NeumannSettlementPlote1.pdf http://bankrupt.com/misc/NeumannSettlementPlote2.pdf The Debtors were also authorized to enter into settlement agreements with two other contractors, Trench-It and Lexon Insurance Company, as subrogee to CBI, in substantially the same form and on substantially the same terms stated in the Settlement Agreement. Prior to the approval of the Settlement Agreement, Wells Fargo, IndyMac Bank, Manhard Consulting and Lexon Insurance filed objections in Court, requesting that the agreement or the order approving the settlement provides for releases by the parties to any further claims or interests in the money held on account of the SSA 19 Bonds, a release of mechanics' liens claims by any additional contractor that enters into the settlement, among other things. About Neumann Homes Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The Company has built more than 11,000 homes in some 150 residential communities. The Company offers formal business training to employees through classes, seminars, and computer- based training. The Company filed for Chapter 11 protection on November 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors has selected Paul, Hastings, Janofsky & Walker LLP, as its counsel in these bankruptcy proceeding. When the Debtors filed for protection from its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) NEUMANN HOMES: To Seek Approval of Plan Outline on Sept. 23 ----------------------------------------------------------- Neumann Homes Inc. and its affiliated debtors ask the U.S. Bankruptcy Court for the Northern District of Illinois to approve the disclosure statement outlining their Joint Plan of Liquidation. The Debtors filed in Court their Plan, together with the Disclosure Statement, on August 26, 2009. The proposed plan provides for the liquidation of the Debtors' assets and for the distribution of their net proceeds to creditors. The Disclosure Statement, the Debtors aver, contains adequate information within the meaning of Section 1125 of the Bankruptcy Code necessary for a creditor to make an informed decision on the Plan. In connection with their request, the Debtors also ask the Court to approve the form and manner of notice of the hearing on the Disclosure Statement, which is scheduled for September 23, 2009. The Disclosure Statement Hearing Notice sets forth September 21, 2009, 12:00 noon Central time, as the proposed deadline to file and serve written objections to the Disclosure Statement. For purposes of soliciting votes in connection with the confirmation of their Joint Plan of Liquidation, Neumann Homes Inc. and its debtor affiliates ask the Court to: (a) set September 23, 2009, as the record date for determining creditors entitled to receive solicitation packages, and creditors entitled to vote to accept or reject the Plan; (b) set October 30, 2009, as the deadline by which ballots of accepting or rejecting the Plan must be received by their voting agent, Epiq Bankruptcy Solutions LLC, in order to be counted; and (c) approve uniform procedures to govern the requests for temporary allowance of certain claims for voting purposes; (d) approve uniform procedures for filing objections to the Plan; (e) approve proposed procedures and materials to be employed in the solicitation of votes with respect to the Plan and its confirmation; and (f) set November 10, 2009, as the hearing date to consider confirmation of the Plan, and October 30, 2009, as the deadline for filing and serving objections to the confirmation. About Neumann Homes Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The Company has built more than 11,000 homes in some 150 residential communities. The Company offers formal business training to employees through classes, seminars, and computer- based training. The Company filed for Chapter 11 protection on November 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors has selected Paul, Hastings, Janofsky & Walker LLP, as its counsel in these bankruptcy proceeding. When the Debtors filed for protection from its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) NEW GENERATION BIOFUELS: Receives NASDAQ Noncompliance Notice ------------------------------------------------------------- New Generation Biofuels Holdings, Inc., on August 26, 2009, received a letter from the Nasdaq Stock Market staff indicating that, based on the Company's stockholders equity as reported in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, the Company is no longer in compliance with the $2.5 million minimum stockholders' equity requirement for continued listing on the Nasdaq Capital Market under Listing Rule 5550(b)(1). As of June 30, 2009, the Company's stockholders' equity was approximately $0.6 million. This notification has no immediate effect on the listing or trading of the Company's common stock on The Nasdaq Capital Market. "As provided in the Nasdaq's rules, the Company has until September 10, 2009 to provide Nasdaq with a plan to regain compliance with the continued listing requirements, and we intend to submit such a plan before the deadline. If Nasdaq accepts the Company's plan, of which there can be no assurance, Nasdaq may grant the Company up to 105 days from August 26, 2009 to achieve and sustain compliance," the Company said. If Nasdaq determines that the Company's plan is not sufficient, it will provide written notice that the Company's common stock would be subject to delisting from The Nasdaq Capital Market. At such time, the Company may request a hearing before a Nasdaq Listing Qualifications Panel. In such an event, the Company's common stock would remain listed on The Nasdaq Capital Market pending a final determination by the panel. About New Generation Biofuels New Generation Biofuels Holdings, Inc., (NasdaqCM: NGBF) is a renewable fuels provider. New Generation Biofuels holds an exclusive license for North America, Central America and the Caribbean to commercialize proprietary technology to manufacture alternative biofuels from vegetable oils and animal fats that it markets as a new class of biofuel for power generation, commercial and industrial heating and marine use. The Company believes that its proprietary biofuel can provide a lower cost, renewable alternative energy source with significantly lower emissions than traditional fuels. New Generation Biofuels' business model calls for establishing direct sales from manufacturing plants that it may purchase or build and sublicensing its technology to qualified licensees. NEXMED INC: Submits Compliance Plan to Nasdaq --------------------------------------------- NexMed, Inc., submitted to Nasdaq its plan to achieve and sustain compliance with Marketplace Rule 4310(c)(3). The plan will be reviewed by Nasdaq and, if deemed to be acceptable, the Company would be granted up to 105 calendar days from the date of Nasdaq's notice to the company, or November 25, 2009, to evidence compliance with Marketplace Rule 4310(c)(3). On August 14, 2009, the Company said it had received a notice from Nasdaq indicating that it did not comply with the minimum $2.5 million in stockholders' equity requirement for continued listing on the Nasdaq Capital Market set forth in Marketplace Rule 4310(c)(3). There can be no assurance that Nasdaq's Listing Qualifications Panel will decide to allow the Company to remain listed. If the Company's plan is not acceptable to Nasdaq, then the Company will be notified of its delisting. The Company also remains on notice for maintaining the minimum $1 bid requirement as set forth in Marketplace Rule 4310(c)(8)(D). However, because Nasdaq had suspended enforcement of this requirement until August 3, 2009, as of its most recent announcement on July 13, 2009, the Company now has until January 25, 2010 to meet that requirement. About NexMed NexMed Inc.'s pipeline includes a late stage terbinafine treatment for onychomycosis, a late stage alprostadil treatment for erectile dysfunction, a Phase 2 alprostadil treatment for female sexual arousal disorder, and an early stage treatment for psoriasis. On the Net: http://www.nexmed.com/ NORTH AMERICAN TECH: Executes $100,000 Promissory Note ------------------------------------------------------ North American Technologies Group Inc. and its wholly owned subsidiary TieTek Technologies, Inc., and its wholly owned subsidiary TieTek LLC executed as co-makers on August 20, 2009, a Promissory Note in the principal amount of $100,000, and at the same time entered into with Opus the Second Lien Loan Agreement, the Second Lien Pledge Agreement, the Second Lien Security Agreement, and the Second Lien Intellectual Property Security Agreement. The Promissory Note is due and payable on the earlier to occur of (i) October 30, 2009 or (ii) an event of default, defined under such promissory note and under the Second Lien Loan Agreement. The Promissory Note bears interest at the rate of 15% per annum. The Second Lien Loan Agreement requires, among other things, that the Company ensure that all payments on its assets or otherwise relating to Opus' collateral securing the Promissory Note are made directly to one or more of the Company's deposit accounts. It further requires that the Company establish Opus' control of all of its deposit accounts and other accounts (other than an account exclusively used for payroll, payroll taxes or employee benefits), including, without limitation, entering into Deposit Account Control Agreements that authorize and direct each bank and other depository to deliver to Opus all balances in any deposit account maintained by the Company, without inquiry into the authority or right of Opus to make such requests. Each of the Second Lien Pledge Agreement, Second Lien Security Agreement, and Second Lien Intellectual Property Security Agreement is designed to secure and perfect Opus's first lien position in all of the Company's assets and to provide additional liens to Opus where none previously existed. The Company's viability and ability to pay or refinance its debt obligations, and to pay quarterly interest, in cash, on the Construction Loan, and to maintain adequate liquidity, depend on a number of factors. One of those factors includes the ability to obtain additional orders at prices that yield positive gross margins. The Company has not obtained additional orders to purchase its railroad ties from its major customer or any potential major customer. This lack of orders has and will continue to have a material and adverse effect on the Company's liquidity. The Company will have to continue funding future cash needs through financing activities. Opus has not committed to loan the Company any additional funds, and the Company has no other source of financing. If Opus does not loan the Company additional monies, Opus may foreclose on the loan to the Company, or the Company may seek relief through a filing under the Bankruptcy Code. Significant Cash Needs As of June 28, 2009, the Company had $13,505,982 in total assets and $24,299,734 in total liabilities, resulting in stockholders' deficit of $10,793,752. As of June 28, 2009, the Company had a cash balance of $281,721 and a negative working capital balance of $4,182,791. For the nine months ended June 28, 2009, and the year ended September 28, 2008, the Company incurred net losses of $3,905,128 and $2,924,340, respectively. During the same periods, the Company used cash in operating activities of $532,782 and $2,454,089, respectively. In addition, it is likely that the Company will incur losses for the foreseeable future. Going Concern Doubt As reported in the Troubled Company Reporter on June 29, 2009, KBA Group LLP in Dallas, Texas, the Company's independent auditor, raised substantial doubt about the Company's ability to continue as a going concern after its audit report dated June 12, 2009. The uncertainty of achieving profitability or obtaining additional financing raises substantial doubt about the Company's ability to continue as a going concern. About North American Technologies North American Technologies Group Inc. (OTC BB: NATK) -- http://www.natk.com/-- is engaged in the manufacturing and marketing of engineered composite railroad crossties through its 100% owned subsidiary TieTek LLC. The Company's composite railroad crosstie is a direct substitute for wood crossties, but with a longer expected life and with several environmental advantages. NORTH AMERICAN TECH: Four Directors Step Down From Board -------------------------------------------------------- Michel Amsalem and Joseph A. Ethridge, on and effective August 26, 2009, resigned as directors of the North American Technologies Group, Inc. The resignations of each of Mr. Amsalem and Mr. Ethridge were not because of a disagreement with the Company on any matter relating to the Company's operations, policies or practices. Mr. D. Patrick Long expressed his thanks to both Mr. Amsalem and Mr. Ethridge and commended each of them for their dedicated service to the Company. On and effective August 21, 2009, Richard J. Guiltinan resigned as a director of the Company. Mr. Guiltinan was chairman of the Company's audit committee. On and effective August 23, 2009, Bruce Leadbetter resigned as a director of the Company. The resignations of each of Mr. Guiltinan and Mr. Leadbetter were not because of a disagreement with the Company on any matter relating to the Company's operations, policies or practices. Mr. D. Patrick Long expressed his thanks to both Mr. Guiltinan and Mr. Leadbetter and commended each of them for their dedicated service to the Company. Significant Cash Needs As of June 28, 2009, the Company had $13,505,982 in total assets and $24,299,734 in total liabilities, resulting in stockholders' deficit of $10,793,752. As of June 28, 2009, the Company had a cash balance of $281,721 and a negative working capital balance of $4,182,791. For the nine months ended June 28, 2009 and the year ended September 28, 2008, the Company incurred net losses of $3,905,128 and $2,924,340, respectively. During the same periods, the Company used cash in operating activities of $532,782 and $2,454,089, respectively. In addition, it is likely that the Company will incur losses for the foreseeable future. The Company acknowledged it has significant cash needs: -- The Company is required to pay quarterly interest in cash on the bridge loan, through maturity on October 31, 2009, at which time the entire principal of $2,000,000 will be due; -- The Company also has a commitment to pay in 2009 roughly $740,000 for the remaining purchase price of equipment on order with a supplier; -- The Company is required to pay quarterly interest in cash on the construction loan with Opus 5949 LLC; -- On April 8, 2010, the Company is obligated to repay an $850,000 promissory note to a related party; -- On July 25, 2010, the Company will be required to pay $7,000,000 on the Construction Loan, and thereafter to make quarterly principal payments of $350,000 and the interest thereon beginning in October 2010; -- On July 31, 2010, the Company will be required to repay $3,000,000 for its 8% convertible debentures; and -- The Company will have to fund its working capital needs, potential operating losses, and capital expenditures. The Company said its viability and ability to pay or refinance its debt obligations, particularly to repay the Bridge Loan, together with interest thereon, to pay quarterly interest, in cash, on the Construction Loan, and to maintain adequate liquidity, depend on a number of factors. Going Concern Doubt As reported in the Troubled Company Reporter on June 29, 2009, KBA Group LLP in Dallas, Texas, the Company's independent auditor, raised substantial doubt about the Company's ability to continue as a going concern after its audit report dated June 12, 2009. The uncertainty of achieving profitability or obtaining additional financing raises substantial doubt about the Company's ability to continue as a going concern. About North American Technologies North American Technologies Group Inc. (OTC BB: NATK) -- http://www.natk.com/-- is engaged in the manufacturing and marketing of engineered composite railroad crossties through its 100% owned subsidiary TieTek LLC. The Company's composite railroad crosstie is a direct substitute for wood crossties, but with a longer expected life and with several environmental advantages. NORTH CENTRAL PROCESSORS: Voluntary Chapter 11 Case Summary ----------------------------------------------------------- Debtor: North Central Processors, Inc. 23D Country Club Lane Milford, MA 01757 Bankruptcy Case No.: 09-43518 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court District of Massachusetts (Worcester) Judge: Joel B. Rosenthal Debtor's Counsel: Nicholas Ruscitti, Esq. 217 LaurelWood Drive Hopedale, MA 01747 Tel: (508) 395-0416 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Peter Belli, president of the Company. NOVELOS THERAPEUTICS: Unveil $9 Million Private Placement --------------------------------------------------------- Novelos Therapeutics, Inc., on August 21, 2009, entered into exchange agreements with certain accredited investors who held warrants to purchase 6,947,728 shares of its common stock. Pursuant to the exchange agreements, Novelos issued an aggregate of 2,084,308 shares of its common stock in exchange for the warrants. The holders agreed not to transfer or dispose of the shares of common stock until February 18, 2010. The warrants had been issued in March 2006 in connection with a private placement of Novelos common stock, had an expiration date of March 7, 2011, and were exercisable at a price of $1.82 per share. Following the exchange, warrants expiring on March 7, 2011 to purchase a total of 5,432,120 shares of Novelos common stock at $1.82 per share remained outstanding. On August 25, 2009, Novelos entered into a Securities Purchase Agreement with Purdue Pharma, L.P., to sell 13,636,364 shares of Novelos common stock, $0.00001 par and warrants to purchase 4,772,728 shares of Novelos common stock at an exercise price of $0.66, expiring December 31, 2015, for an aggregate purchase price of $9,000,000. Pursuant to the Purchase Agreement, Novelos sold Purdue 5,303,030 shares of common stock and a warrant to purchase 1,856,062 shares of common stock at $0.66 per share for approximately $3,500,000. The sale of the remaining common stock and warrants will be completed in one or more subsequent closings subject to the availability of additional authorized shares of Novelos common stock and the satisfaction of certain customary closing conditions. Novelos also agreed to negotiate with Purdue for rights to license, develop and commercialize NOV-002 in the United States on an exclusive basis until the conclusion of the pivotal Phase 3 trial for non-small cell lung cancer under a Special Protocol Assessment (SPA) and Fast Track. The Phase 3 trial is expected to conclude in early 2010. Novelos also granted Purdue a conditional right of first refusal to acquire rights to NOV-002 in the United States after the conclusion of the Phase 3 trial. Novelos already has a partnership with Mundipharma, an independent associated company of Purdue, to develop and commercialize NOV-002 in Europe and Asia (excluding China). Novelos has also entered into a separate agreement to exclusively negotiate with Mundipharma and its independent associated company on a conditional basis for the rights to NOV-002 in Canada, Mexico and Latin America, as well as granting Mundipharma and its independent associated company a conditional right of first refusal to the NOV-002 rights in such territories upon the conclusion of the exclusive negotiation period. "I am very pleased with Purdue's continued support, providing Novelos funds for a robust development program thru mid-2010," said Harry Palmin, President and CEO of Novelos. "We expect our pivotal 900-patient Phase 3 lung cancer trial to conclude in early 2010. The trial was fully enrolled in March 2008, with the primary endpoint of increased median overall survival to be evaluated following the occurrence of 725 deaths." Novelos also entered into a registration rights agreement with Purdue. The registration rights agreement requires Novelos to file with the Securities and Exchange Commission no later than 5 business days following the earlier of the six-month anniversary of (i) the Final Subsequent Closing or (ii) the end of the Exclusive Negotiation Period, a registration statement covering the resale of all the shares of common stock issued pursuant to the Purchase Agreement and all shares of common stock issuable upon exercise of the warrants issued to pursuant to the Purchase Agreement. On March 17, 2009, Stowe & Degon LLC in Westborough, Massachusetts, expressed substantial doubt about Novelos Therapeutics Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended December 31, 2008, and 2007. The auditor noted that the Company has incurred continuing losses in the development of its products and has a stockholders' deficiency at December 31, 2008. About Novelos Therapeutics Headquartered in Newton, Massachusetts, Novelos Therapeutics Inc. (OTC BB: NVLT) -- http://www.novelos.com/-- is a biopharmaceutical company commercializing oxidized glutathione- based compounds for the treatment of cancer and hepatitis. NOV- 002, the lead compound currently in Phase 3 development for lung cancer under a Special Protocol Assessment (SPA) and Fast Track, acts together with chemotherapy as a chemoprotectant and an immunomodulator. NOV-002 is also in Phase 2 development for chemotherapy-resistant ovarian cancer and early-stage breast cancer. Novelos Therapeutics Inc.'s consolidated balance sheet at June 30, 2008, showed $5,753,832 in total assets, $8,238,837 in total liabilities, and $13,904,100 in redeemable preferred stock, resulting in a $16,839,105 total stockholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $5,699,642 in total current assets available to pay $8,238,837 in total current liabilities. The company reported a net loss of $4,676,638, on revenue of $45,676 for the second quarter ended June 30, 2008. OPUS SOUTH: Gets November 18 Deadline to Decide on Leases --------------------------------------------------------- Opus South Corp. and its affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend the time within which they may assume and assign, or reject all unexpired non-residential real property leases, through and including November 18, 2009. In addition, the Debtors seek an interim order temporarily granting an extension of the lease decision period until the Court enters a final ruling on their request. Pursuant to Section 365(d)(4) of the Bankruptcy Code, if a debtor does not assume or reject an unexpired lease of non-residential real property under which the debtor is a lessee within 120 days after the Petition Date, or within an additional time as the Court may fix, then the lease is deemed rejected. However, Section 365(d)(4) also authorizes a court to extend the Assumption or Rejection Period for 90 days for cause. The Opus South Debtors' current Lease Decision Period expire on August 20, 2009. Victoria W. Counihan, Esq., at Greenberg Traurig LLP, in Wilmington, Delaware, relates that over the past few months since the Petition Date, the Debtors have focused their efforts on marketing and selling or otherwise disposing of their various real estate and other assets, as well as upon reducing expenses, dealing with business operational issues, and addressing a variety of other issues in their Chapter 11 cases. However, due to the numerous issues that have required the Debtors' attention and given the current economic climate, the Debtors need additional time to determine if the Leases have value to their estates, Ms. Counihan explains. She notes that certain of the Leases are for warehouses and storage facilities where the Debtors' records are stored, and the Debtors need more time to determine which Leases may be necessary depending on whether their cases are liquidating cases or cases in which a plan will be proposed. "If the Debtors fail to obtain the requested extension, such failure may be to the economic detriment of the estates and may frustrate the Debtors' efforts to maximize the value of the estates," Ms. Counihan points out. * * * Judge Mary F. Walrath rules that the period during which the Opus South Debtors may assume, assume and assign, or reject unexpired non-residential real property leases is extended through and including November 18, 2009. About Opus South Headquartered in Atlanta, Georgia, Opus South Corporation -- http://www.opuscorp.com/-- provides an array of real estate related services across the United States including real estate development, architecture & engineering, construction and project management, property management and financial services. The Company and its affiliates filed for Chapter 11 on April 22, 2009 (Bankr. D. Del. Lead Case No. 09-11390). Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. The Debtors propose to employ Landis, Rath & Cobb, LLP, as conflicts counsel, Chatham Financial Corporation as real estate broker, Delaware Claims Agency LLC as claims agent. The Debtors have assets and debts both ranging from $50 million to $100 million. OPUS SOUTH: Proposes Settlement with Wachovia, Lenders ------------------------------------------------------ Opus South Corp. and its affiliates ask the Court for authority to enter into a settlement agreement with the Wachovia Bank N.A., Regions Bank, Bank of America and National City Bank through Wachovia Bank N.A., as administrative agent for the Lenders. Before the Petition Date, the Lenders extended a $90 million syndicated construction loan to Debtor Waters Edge One LLC, one of the Debtors. The Waters Edge Loan was subsequently reduced to $82 million. The Loan is evidenced by four promissory notes, aggregating $82 million, and secured by first and second lien mortgages on certain of the Debtors' properties in various locations. After the Opus South Debtors asked the Court's approval for the sale of certain assets and the assignment and sale of certain executory contracts, the Lenders filed an objection asserting that the sale of properties subject to their liens could not proceed without their consent and that the proposed bidding procedures were not sufficient to protect their interests. Subsequently, to resolve their dispute, the Debtors and the Lenders reached a settlement of their issues. The parties' Settlement Agreement provides for: (1) a consensual agreement by and among Wachovia, the Prepetition Waters Edge Lenders, and the Opus South Debtors to sell Subject Properties; (2) an agreement from the Prepetition Waters Edge Lenders, upon satisfaction of certain conditions, for the release of the Opus South Debtors' guaranty and the Capital Funding Commitment Letter obligations; and (3) a postpetition DIP financing by Wachovia, which will: -- incorporate the protective advances previously made by Wachovia to pay the operating expenses of the Subject Properties in order to preserve their values prior to a sale; -- provide additional funding to pursue the "RMSSR Claims"; and -- provide the funding necessary to permit Waters Edge to file and seek confirmation of a plan of reorganization, if the parties agree. Victoria W. Counihan, Esq., at Greenberg Traurig LLP, in Wilmington, Delaware, asserts that among other things, the parties' Settlement Agreement incorporates protective advances, which permits the Debtors to receive postpetition financing to fund the operations of the Subject Properties through the date of their sale, and also provide additional financing to fund the prosecution of "RMSSR Claims," which is a potential source of recovery for both the Waters Edge Lenders and other general unsecured creditors of Waters Edge. Waters Edge has been and is currently pursuing claims against Ruden McCloskey Smith Schuster & Russell P.A. and Mark Grant in the Circuit Court of the Sixth Judicial Circuit in and for Pinellas County, Florida. The subject matter of the RMSSR Claims relates to legal services provided in connection with the Waters Edge Property. The RMSSR Claims are subject to $30 million of insurance coverage. About Opus South Headquartered in Atlanta, Georgia, Opus South Corporation -- http://www.opuscorp.com/-- provides an array of real estate related services across the United States including real estate development, architecture & engineering, construction and project management, property management and financial services. The Company and its affiliates filed for Chapter 11 on April 22, 2009 (Bankr. D. Del. Lead Case No. 09-11390). Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. The Debtors propose to employ Landis, Rath & Cobb, LLP, as conflicts counsel, Chatham Financial Corporation as real estate broker, Delaware Claims Agency LLC as claims agent. The Debtors have assets and debts both ranging from $50 million to $100 million. OPUS SOUTH: Wants December 18 Extension for Plan Filing ------------------------------------------------------- Opus South Corp. and its affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend the period during which they have the exclusive right to file a Chapter 11 plan through and including December 18, 2009; and the period during which they have the exclusive right to solicit acceptances of that plan through and including February 16, 2010. Pursuant to Section 1121 (b) of the Bankruptcy Code, a debtor has the exclusive right to file a Chapter 11 plan during the first 120 days after the commencement of a Chapter 11 case. If a debtor files a plan during the period, pursuant to Section 1121(c)(3) of the Bankruptcy Code, an additional 60 day period is automatically granted during which the debtor may exclusively solicit acceptance of that plan. Section 1121(d) also permits the Court to extend the Exclusive Periods "for cause," but not beyond 18 months after the Petition Date. The Debtors' current Exclusive Plan Filing Period expired on August 20, 2009, and their Plan Solicitation Period will expire on October 19, 2010. Victoria W. Counihan, Esq., at Greenberg Traurig LLP, in Wilmington, Delaware, asserts that ample cause exists to extend the Debtors' Exclusive Periods. She contends that the Debtors have worked diligently to administer their estates and have focused on stabilizing their properties, obtaining necessary funding, negotiating and consummating sales of assets, and negotiating various alternative exit strategies for each particular property with each property's particular lender. Specifically, Ms. Counihan tells the Court that: -- Waters Edge One LLC, 400 Beach Drive LLC, and Clearwater Bluff LLC are in advanced negotiations with their lenders on a global deal to finalize a sale of substantially all of their assets, obtain DIP financing, and work towards an exit for their Chapter 11 cases. -- 8th & 14th LLC and Calm Waters LLC are in the process of finalizing sales of substantially all of their assets; and -- Shoppes of Four Corners LLC is also in the process of structuring a mutually acceptable arrangement between all interested parties but are still unable to finalize the proposed arrangement. Against this backdrop, Ms. Counihan asserts that the Debtors need additional time to complete their sales and related transactions before a Chapter 11 plan can be filed. The Court is set to convene a hearing to consider the Debtors' request on September 9, 2009. Pursuant to Del.Bankr.LR 9006-2, the Debtors' Exclusivity Periods is automatically extended until the conclusion of that hearing. About Opus South Headquartered in Atlanta, Georgia, Opus South Corporation -- http://www.opuscorp.com/-- provides an array of real estate related services across the United States including real estate development, architecture & engineering, construction and project management, property management and financial services. The Company and its affiliates filed for Chapter 11 on April 22, 2009 (Bankr. D. Del. Lead Case No. 09-11390). Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. The Debtors propose to employ Landis, Rath & Cobb, LLP, as conflicts counsel, Chatham Financial Corporation as real estate broker, Delaware Claims Agency LLC as claims agent. The Debtors have assets and debts both ranging from $50 million to $100 million. OSI RESTAURANT: Bank Debt Trades at 20.5% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which OSI Restaurant Partners, Inc., is a borrower traded in the secondary market at 79.45 cents-on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.65 percentage points from the previous week, The Journal relates. The loan matures May 9, 2014. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. OSI Restaurant Partners is the #3 operator of casual-dining spots (behind Darden Restaurants and Brinker International), with more than 1,400 locations in the US and 20 other countries. Its flagship Outback Steakhouse chain boasts more than 950 locations that serve steak, chicken, and seafood in Australian-themed surroundings. OSI also operates the Carrabba's Italian Grill chain, with about 240 locations. Other concepts include Bonefish Grill, Fleming's Prime Steakhouse, and Cheeseburger In Paradise. Most of the restaurants are company owned. A group led by chairman Chris Sullivan took the company private in 2007. As reported by the Troubled Company Reporter on Feb. 24, 2009, Moody's Investors Service downgraded OSI Restaurant's Probability of Default rating to Ca from Caa1 and lowered the rating on its $550 million 10% senior unsecured notes to C from Caa3. Moody's also placed OSI's Corporate Family and senior secured ratings on review for possible downgrade. The review was prompted by the recent announcement that OSI continues to experience a substantial decline in earnings and store traffic to levels worse than Moody's previously expected. The company also announced that it will likely need to take an impairment charge of between $480 and $540 million for goodwill due to a reduction in its projected results for future periods as a result of poor overall economic conditions. PACERS INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Pacers, Inc. 3334 Midway Dr. San Diego, CA 92110 Bankruptcy Case No.: 09-12738 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court Southern District of California (San Diego) Judge: Louise DeCarl Adler Debtor's Counsel: Michael T. O'Halloran, Esq. 1010 Second Avenue, Ste. 1727 San Diego, CA 92101 Tel: (619) 233-1727 Fax: (619) 233-6526 Email: mto@debtsd.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/casb09-12738.pdf The petition was signed by Jason Mohney, president of the Company. PAPER INT'L: Durango Plan Declared Effective August 27 ------------------------------------------------------ Paper International, inc., et al., said in a filing with the U.S. Bankruptcy Court for the Southern District of New York that their First Amended Joint Chapter 11 Plan of Reorganization co-proposed by Corporacion Durango, became effective August 27, 2009. All applications for payment of a fee claim are due within 45 days after the Effective Date. As reported by the TCR on June 24, 2009, the Hon. Robert R. Drain of the U.S. Bankruptcy Court for the Southern District of New York confirmed a first amended joint Chapter 11 plan of reorganization for Paper International Inc. and Fiber Management of Texas Inc. proposed by their parent company Corporacion Durango on May 15, 2009. Under the plan, the Debtors' businesses will continue to be operated in substantially their current form, with Paper International continuing to own its equity in McKinley and FMT, and FMT continuing the wind down of its fiber procurement business, which began when FMT ceased its operations in August 2008. Furthermore, the plan treats the estates of Paper International and FMT as comprising a single estate solely for purposes of voting on the plan, confirmation of the plan and making plan distributions in respect of claims against and equity interests in such Debtors under the plan. The plan relates that holders of allowed priority claims and general unsecured claims will be paid in full in accordance with the reinstated right, as and when the payment is due. Holders of allowed noteholder claims are expected to get new senior notes, new senior notes guarantees, restructuring fee or Durango new equity under the noteholder settlement of the Mexican reorganizational plan. Moreover, equity interests holders will keep 100% of their legal and equitable ownership rights. General unsecured holders, totaling $700,000, are expected to recover 100% while noteholders will get 70.4% of their allowed claim under the plan. A full-text copy of the Corporacion Durango's disclosure statement is available for free at http://ResearchArchives.com/t/s?3e1b A full-text copy of the Corporacion Durango's amended plan is available for free at http://ResearchArchives.com/t/s?3e1c Attorneys at Morrison & Foerster LLP, in New York, represented Paper International. Attorneys at White & Case LlP represented Corporacion Durango. About Paper International Headquartered in Prewitt, New Mexico, Paper International, Inc. -- http://www.internationalpaper.com/-- is the wholly-owned direct subsidiary of Corporacion Durango, S.A.B. de C.V., a corporation organized under the laws of Mexico, which maintains its principal place of business in Durango, Mexico. The Debtor currently owns 100% of the equity shares in Fiber Management of Texas, Inc., a corporation organized under the laws of Texas, as well as 100% of the equity shares in non-debtor Durango McKinley Paper Company, a New Mexico company. Paper International is a holding company which has no employees, no operations, and whose primary assets are its ownership interests in Durango McKinley and Fiber Management. Before August 2008, Fiber Management's primary business was the procurement of paper materials to manufacture recycled paper products for use by Durango McKinley and other paper manufacturing affiliates of Corporacion Durango located in Mexico. In August 2008, Fiber Management ceased procuring fiber and began winding up all of its business operations. Paper International and Fiber Management filed for Chapter 11 protection on October 6, 2008 (Bankr. S.D. N.Y. Lead Case No.08- 13917). Larren M. Nashelsky, Esq., and Lorenzo Marinuzzi, Esq., at Morrison & Foerster LLP, represent the Debtors as counsel. Eric Kate Mautner, Esq., at Bingham McCutchen LLP, represents the Official Committee of Unsecured Creditors as counsel. APS Services, LLC, serves as the Debtors' crisis managers. The Debtors designated Meade Monger, a managing director of AlixPartners, LLP, an affiliate of AP Services, as its chief restructuring officer. The Court appointed Kurtzman Carson Consultants, LLC, as claims agent in the Debtors' bankruptcy case. At March 31, 2009, the Debtors had $123,365,705 in total assets, $552,348,876 in total liabilities, and $428,983,171 in stockholders' deficit. PARAMOUNT RESOURCES: S&P Affirms 'B' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit and senior unsecured debt ratings on Calgary, Alberta-based Paramount Resources Ltd. The outlook is stable. At the same time, S&P revised the recovery rating on Paramount's 'B' rated senior unsecured debt to '4' from '3'. A '4' recovery rating indicates an average (30%-50%) recovery in a default scenario. "We revised the recovery rating to reflect lower reported reserves and a decreased valuation of its equity holdings," said Standard & Poor's credit analyst Jamie Koutsoukis. "In S&P's opinion, the ratings on Paramount reflect the company's low reserve life index and its high finding, development, and operating costs," Ms Koutsoukis added. In S&P's view, the company's financial flexibility and capital structure, which S&P believes are strong for the 'B' rating category, somewhat mitigate these factors and support the rating. Paramount is an exploration and production company operating primarily in the Western Canadian Sedimentary Basin. Its properties are predominantly in Alberta, British Columbia and the Northwest Territories in Canada; and North Dakota and Montana in the U.S. The company's reserves and production mix are weighted toward natural gas, which accounts for more than 75% of the company's gross proven reserves and approximately 73% of its production. It also owns and operates production facilities and processing infrastructure in its core operating regions. The stable outlook reflects Standard & Poor's expectation that Paramount will substantially fund its capital spending program in 2009 with internally generated funds, and that its focused capital program will result in it stabilizing its production declines and improving economics. Furthermore, S&P expects no material debt- financed acquisitions and no material increases in debt for the balance of 2009. An outlook revision to negative is likely if Paramount depletes its remaining cash balance and draws on its credit facility. Furthermore, a negative rating action is possible should Paramount experience a deterioration of its financial risk profile -- particularly if liquidity is significantly reduced to fund cash shortfalls related to capital expenditures -- and if reserve replacement economics associated with developing undeveloped acreage and long-term assets worsen. A positive rating action, which S&P believes is unlikely in the near term given Paramount's consolidated cost structure and its vulnerability to weak natural gas prices, depends on the company demonstrating internal reserve and production growth while maintaining and improving a stable, break-even cost profile. PELICAN BAY DEVELOPMENTS: Voluntary Chapter 11 Case Summary ----------------------------------------------------------- Debtor: Pelican Bay Developments I, Inc. 26381 South Tamiami Trail, Suite 300 Bonita Springs, FL 34134 Bankruptcy Case No.: 09-19039 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court Middle District of Florida (Ft. Myers) Debtor's Counsel: Steven M. Berman, Esq. Shumaker, Loop & Kendrick, LLP 101 E. Kennedy Blvd., Suite 2800 Tampa, FL 33602 Tel: (813) 229-7600 Fax: (813) 229-1660 Email: sberman@slk-law.com Estimated Assets: $1,000,001 to $100,000,000 Estimated Debts: $1,000,001 to $100,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by James Nashman, vice president of the Company. PHILADELPHIA NEWSPAPERS: Reaches Pacts on Taping Probe, DIP Loans ----------------------------------------------------------------- Christopher K. Hepp at Philadelphia Inquirer reports that Philadelphia Newspapers L.L.C. has reached a series of agreements with its major creditors, including a $15 million interim financing. Philadelphia Inquirer states that Philadelphia Newspapers and the creditors agreed that: -- Citizens Bank, one of the Company's senior lenders, will provide $15 million interim financial assistance, known as debtor-in-possession financing. The Company had been seeking financing through Republic First Bank. The agreement eliminated a loan clause giving the lenders approval rights over any reorganization plan. It also ensures that no other creditor would move ahead of the senior lenders when it came to repayment of debts. -- The period of time Philadelphia Newspapers has to exclusively pursue its plan of reorganization is extended from August 31 until November 2, the extension last sought by the Company, and it can be canceled if the Company fails to follow through on its plans to place the firm up for auction. -- Senior lenders can negotiate contracts with any of the Company's unions, so long as the unions approach them first. Talks are allowed if and when the lenders officially bid on the Company. -- A third party, possibly the U.S. Trustee's Office, will serve as an independent monitor to ensure that the Company's auction is open and fair. -- The probe into an unauthorized taping of a meeting between senior lenders and company officials is suspended until January 2. The Company had been pressing for a more aggressive investigation of the taping, which was conducted by an official of CIT Group, a senior lender, at a meeting with company officials. Philadelphia Inquirer says that the agreements don't mean the end to conflicts. The report states that in a hearing in the U.S. Bankruptcy Court in Philadelphia, Philadelphia Newspapers and the creditors disagreed on whether the lenders can use the debt they are owed in a bid to purchase the Company. According to the report, the result of that dispute could determine who will own the Company. Fred Hodara -- the attorney for senior lenders Angelo, Gordon & Co.; CIT Group; Eaton Vance Management; and Citizens Bank -- said that his clients will seek control of Philadelphia Newspapers, Philadelphia Inquirer relates. Maryclaire Dale at The Associated Press reports that the creditors have hired Bob Hall, publisher of The Philadelphia Inquirer and Philadelphia Daily News from 1990 to 2003, as an adviser. Mr. Hall, according to the report, has been advising the bank lenders since April. Citing the creditors, the report states that Mr. Hall would be part of the management team if creditors take over the Company. According to The AP, Philadelphia Newspapers is seeking to shed most of its $400 million in debt by buying back the Company through a bankruptcy auction for about 22 cents on the dollar. The AP says that the auction is open to other bidders, although only the creditors are known to be preparing a rival bid. The report states that bids are due by October 22. 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. PHILADELPHIA NEWSPAPERS: Newsroom Employees Extend CBA by 30 Days ----------------------------------------------------------------- Philadelphia Daily News reports that the Newspaper Guild, which represents most of the newsroom employees at Philadelphia Newspapers L.L.C.'s Daily News and Inquirer, has agreed to extend its contract by 30 days. As reported by the TCR on August 27, 2009, Philadelphia Newspapers' senior lenders, led by Citizens Bank would ask permission from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to be allowed to negotiate a tentative contract with the Newspaper Guild. The Guild's contract expires on August 31, and they are angry that current owners haven't started talks or otherwise show their hand. The AP relates that a dozen other unions onsite have agreed to month-to-month extensions of their contracts, which also expire on the same date. According to Philadelphia Daily News, there's been no significant bargaining reported between management and any of the unions, due to Philadelphia Newspapers' Chapter 11 bankruptcy proceedings. Management was pleased at the Guild action as it would help Philadelphia Newspapers stay focused on seeking support for a reorganization proposal, Philadelphia Daily News says, citing Jay Devine, a spokesperson of the Company. 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. PINNACLE FOODS: Bank Debt Trades at 8% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Pinnacle Foods is a borrower traded in the secondary market at 92.38 cents-on-the- dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.67 percentage points from the previous week, The Journal relates. The loan matures on April 2, 2014. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's B rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Based in Mt. Lakes, N.J., Pinnacle Foods Finance LLC manufactures, markets and distributes branded food products. It was formerly referred as Pinnacle Foods Group Inc., prior to April 2, 2007. PLATFORM TAXI SERVICE: Case Summary & Largest Unsecured Creditor ---------------------------------------------------------------- Debtor: Platform Taxi Service Inc. 330 McGuinness Blvd. Brooklyn, NY 11222 Bankruptcy Case No.: 09-47404 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Jerome Feller Debtor's Counsel: Herbert Noel Steinberg, Esq. Steinberg & Assoc 80-02 Kew Gardens Road, Suite 300 Kew Gardens, NY 11415 Tel: (718) 263-2922 Fax: (718) 575-4070 Email: steinbergassociates@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of at least $1,500,000, and total debts of $3,155,795. The Debtor identified Jesus Taveras and Urbana Taveras c/o Block, O'Toole & Murphy with a personal injury lawsuit claim for $2,799,774 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/nyeb09-47404.pdf The petition was signed by Gus Kodogiannis. PROLIANCE INT'L: Designs $100,000 Retention Bonus Program --------------------------------------------------------- Proliance International Inc. seeks approval from the U.S. Bankruptcy Court for the District of Delaware of a $100,000 retention-bonus program for a "handful" of workers whose help is needed to wind up the business, Bill Rochelle at Bloomberg News said. The program is funded by the secured lenders. Proliance says it's near a sale of its Dutch affiliate. Based in New Haven, Connecticut, Proliance International, Inc. -- http://www.pliii.com/-- aka Godan makes automobile parts. The Company and its affiliates filed for Chapter 11 on July 2, 2009 (Bankr. D. Del. Lead Case No. 09-12278). Christopher M. Samis, Esq., and Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger PA, represent the Debtors in their restructuring efforts. The Debtors' financial condition as of June 22, 2009, showed total assets of $160.3 million and total debts of $133.5 million. The sale of Proliance's North American assets to Centrum Equities XV, LLC, was consummated under the provisions of Section 363 of the Bankruptcy Code on August 14, 2009. PROVIDENT ROYALTIES: Court Approves Sale to Sinclair ---------------------------------------------------- Dennis L. Rossien, the Chapter 11 trustee for Provident Royalties LLC, was authorized by the Bankruptcy Court to sell most of the properties in exchange for $150 million of secured debt held by an affiliate of Sinclair Oil Corp, Bill Rochelle at Bloomberg News reported. As reported by the Troubled Company Reporter on Aug. 24, 2009, the official investors committee appointed in Provident Royalties' Chapter 11 cases objected to the proposed sale of substantially all of the Debtors' assets to Sinclair Oil & Gas Company. The Investors Committee pointed out, among other things certain assets that Sinclair seeks to purchase are not encumbered by Sinclair's liens and security interests, and in view thereof, as a matter of law, Sinclair should not be allowed to "credit bid" against those assets. About Provident Royalties Based in Dallas, Texas, Provident Royalties LLC owns working interests in oil and gas properties primarily in Oklahoma. Provident and its affiliates filed for Chapter 11 on June 22, 2009 (Bankr. N.D. Tex. Case No. 09-33886). Judge Harlin DeWayne Hale presides over the case. Epiq Bankruptcy Solutions, LLC is the claims and noticing agent. The United States Trustee for the Northern District of Texas appointed nine members to the Official Committee of Unsecured Creditors. On July 2, 2009, the Securities and Exchange Commission filed, under seal, a complaint in District Court for the Northern District of Texas against the Debtors and certain of their principals and managing partners on allegations that they sold stock and limited partnership interest to over 7,700 investors as part of a $485 million Ponzi scheme. On July 2, 2009, the District Court for the Northern District of Texas appointed Dennis L. Roossien, Jr., at Munsch Hardt Kopf & Harr P.C. in Dallas, Texas, as receiver for the Debtors. On July 20, 2009, the Bankruptcy Court appointed the receiver as the Debtors' Chapter 11 trustee. Mr. Roossien, Jr., has taken possession and control of the Debtors' property and business. Mr. Roossien, Jr., has selected Patton Boggs, LLP, as his special counsel. Patton Boggs, LLP, was Debtors' counsel before the appointment of Mr. Roossien, Jr., as Chapter 11 trustee. Mr. Roossien, Jr., has selected Munsch Hardt Koph & Harr, P.C., as counsel. Gardere, Wynne, Sewell, LLP, is the proposed counsel to the official committee of unsecured creditors. The Company, in its petition, listed between $100 million and $500 million each in assets and debts. PULTE HOMES: Moody's Downgrades Corporate Family Rating to 'B1' --------------------------------------------------------------- Moody's Investors Service lowered the ratings of both Pulte Homes, Inc. and Centex Corporation, including Pulte's corporate family and probability of default ratings to B1 from Ba3 and the ratings of all of the senior unsecured debt of both companies to B1 from Ba3. The speculative grade liquidity rating of Pulte was confirmed at SGL-2. This concludes the review that began following the announcement by the two companies of their estimated $3 billion stock-for-stock merger, with Pulte as the surviving entity. Pulte's rating outlook is stable. The downgrades reflect Moody's expectation that the combined entity's currently robust cash flow generation will decline substantially during the balance of 2009 and in 2010, as the benefits of inventory liquidation play out. Going forward, the combined entity will need to generate increasing proportions of cash flow from profitable operations, which will be a considerable challenge given the company's large land position, lower-than- industry average gross margins, and somewhat low pro forma revenue per employee compared to its peer group. In addition, adjusted debt leverage, which is a pro forma 60% as of June 30, 2009, is representative of a low-to-mid B rated company, and covenant compliance, which benefited from the equity issued to complete the merger and from the debt to be retired via the $1.5 billion cash tender offer for debt, will have received only a temporary reprieve if the company continues taking large quarterly impairment charges. At the same time, the ratings acknowledge that the combined entity will have no significant debt maturities until 2013 (post its tender offer) and no revolver usage for at least the next 12 months; and that the company has minimal off-balance sheet obligations considering its size. In addition, the merger will enable Pulte to access new markets and to broaden its product offerings, particularly its starter and first-time move up homes. The stable outlook reflects Moody's expectation that the increased risks to the company from its ownership of a large combined land position that is being absorbed slowly is offset by the potential benefits from operating synergies and geographic and product line diversification. These rating actions were taken: * Corporate family rating of Pulte lowered to B1 from Ba3 * Ba3 corporate family rating of Centex withdrawn * Probability of default rating of Pulte lowered to B1 from Ba3 * Ba3 probability of default rating of Centex withdrawn * Senior unsecured debt ratings of both Pulte and Centex lowered to B1 (LGD4, 52%) * SGL-2 rating of Pulte confirmed * SGL-3 rating of Centex withdrawn All of the homebuilding debt of both Pulte and Centex will be guaranteed by the principal operating subsidiaries of both Pulte and Centex. Moody's last rating action for both Pulte Homes, Inc. and Centex Corporation occurred on April 8, 2009, at which time Moody's put the ratings of both companies on review for downgrade following the announcement of their pending merger. Founded in 1950 and headquartered in Bloomfield Hills, Michigan, Pulte Homes, Inc. is one of the country's largest homebuilders, with total revenues and consolidated net income for the trailing 12-month period ended June 30, 2009, of $4.4 billion and $(1.3 billion), respectively. Founded in 1950 and headquartered in Dallas, Texas, Centex Corporation was one of the country's largest homebuilders, with operations in 74 markets across 22 states. Total revenues and consolidated net income for the trailing 12 months ended June 30, 2009 were approximately $3.2 billion and ($1.2) billion, respectively. RADIATION THERAPY: S&P Downgrades Corporate Credit Rating to 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit rating for Fort Myers, Florida-based outpatient radiation oncology services provider Radiation Therapy Services Inc. to 'B' from 'B+' and the senior secured debt rating to 'B+' from 'BB-'; the '2'recovery rating, reflecting prospects for substantial (70%-90%) recovery of principal in the event of a default, is unchanged. "The ratings on Radiation Therapy Services Inc. reflect the competitive and fragmented oncology market, reimbursement risk, some geographic concentration risk, and high debt leverage," said Standard & Poor's credit analyst Cheryl Richer. Debt protection measures have weakened as a result of a sharp decline in EBITDA in the first half of 2009. Radiation Therapy operates in a competitive and fragmented market. Although doctors use radiation to treat more than one-half of all cancer cases, the company's focus on a narrow niche of the oncology market makes it vulnerable to the development of even more highly effective cancer therapies. EBITDA for the first half of 2009 declined by 13% as a result of weaker volumes and reimbursement cuts. Pressure on patient throughput reflects the loss of jobs and healthcare coverage due to the recession, a decrease in the level of retiree migration to Florida for the winter months because of the weak economy, and increased competition in certain markets. While the company has expanded its geographic footprint beyond this state over the past few years, Florida still accounts almost half of revenues. Proposals for Medicare reimbursement cuts (effective 2010) related to the physician fee schedule and equipment utilization rates, could put additional pressure on profitability; Medicare accounts for almost 50% of the payor mix. Although demand for services is high because of an aging population with an increased incidence of cancer, revenue growth has benefited more from higher reimbursement per procedure than from procedural volume growth. Radiation Therapy's strategy has been to acquire sites and replace conventional radiation treatment with more advanced technologies such as intensity-modulated radiation therapy and image-guided radiation therapy, which provide more effective treatment and are reimbursed by payors at materially higher rates than conventional external-beam radiation therapy. However, until financial capacity grows, and there is visibility on 2010 Medicare reimbursement, acquisition activity is likely to be minimal. REPUBLIC SERVICES: Fitch Affirms Issuer Default Rating ------------------------------------------------------ Fitch Ratings has affirmed the ratings of Republic Services, Inc., and its rated subsidiaries: RSG -- Issuer Default Rating at 'BBB-'; -- Senior unsecured credit facility at 'BBB-'; -- Senior unsecured at 'BBB-'. Allied Waste Industries, Inc. -- IDR at 'BBB-'; -- Senior subordinated at 'BB+'. Allied Waste North America -- IDR at 'BBB-'; -- Senior unsecured at 'BBB-'. Browning-Ferris Industries -- IDR at 'BBB-'; -- Senior unsecured at 'BBB-'. Fitch's ratings apply to $5.7 billion in notes and debentures and two unsecured revolving credit facilities with a combined capacity of $2.75 billion. Fitch has revised the Rating Outlook for RSG and its subsidiaries to Positive from Stable. RSG's ratings reflect the waste services company's significant free cash flow generation potential and financial flexibility, offset somewhat by a heavy debt load following last year's merger with AW. However, RSG's debt level has declined materially since the merger was completed in December 2008, and Fitch expects debt to decline further over the next several years as leverage reduction remains the company's top priority for free cash flow deployment. In addition, although waste industry volumes have weakened over the past year, RSG, along with the other major industry participants, continues to realize margin growth due to a combination of ongoing pricing gains and cost discipline. The Outlook revision to Positive reflects Fitch's expectations that RSG's credit profile will continue to strengthen over the next several years as the company realizes merger-related efficiencies and uses its strong free cash flow to further reduce its debt balance. Fitch downgraded RSG's IDR to 'BBB-' from 'BBB+' last December when the merger with AW was completed. (Concurrently, Fitch upgraded AW's IDR to 'BBB-' from 'B+'.) The downgrade was due primarily to the addition of AW's $6.5 billion debt load to RSG's capital structure, which drove a significant increase in RSG's EBITDA leverage from about 2 times (x) pre-merger to over 3x (including an estimate of AW's 12-months EBITDA) after the merger was closed. From the time the merger was initially announced in June 2008, however, the company's management has consistently stated that leverage reduction is the company's top priority, with a goal of driving leverage down to RSG's pre-merger level over the next two to three years. Demonstrating that leverage reduction is a priority, management stopped the company's share repurchase program in mid-2008 in order to build liquidity that could be used to reduce debt. This was significant, given that RSG had repurchased a total of $855 million in shares in 2006 and 2007 combined. In addition to the free cash flow that has been redirected away from the share repurchase program, RSG has also used cash proceeds from asset sales required by the U.S. Department of Justice to fund debt reduction, as well. As of June 30 2009, RSG had received $425 million in pre-tax proceeds from DOJ-required asset sales, all of which had been used to reduce debt. Through the use of both asset sale proceeds and free cash flow, RSG reduced its outstanding debt balance by over $600 million in the first six months of 2009. By year end, Fitch expects RSG's EBITDA leverage will fall to slightly below 3.0x using the balance sheet debt calculation or to just over 3.0x using the principal value of outstanding debt. (The balance sheet value of RSG's debt is about $500 million below the total principal value, largely due to GAAP accounting treatment for AW's debt at the time the merger closed in December 2008, which called for the acquired debt to be recorded at fair value on RSG's consolidated balance sheet.) Fitch expects leverage to continue trending downward over the next several years as RSG uses its significant free cash flow to pay down a portion of its maturing debt obligations. Fitch also expects that RSG will look for other opportunities to accelerate debt reduction as well, including potentially tendering for a portion of the outstanding AW notes, although whether or not the company undertakes any tenders likely will depend on capital market conditions. RSG's liquidity position remains strong, with $68 million in cash and a total of $730 million available on its two revolvers at the end of the second quarter. In addition, Fitch estimates that RSG will produce between $200 million and $250 million of free cash flow (calculated as net cash from operations, less capital expenditures and dividends) in 2009 and potentially more than $250 million of free cash flow in 2010. However, the company's upcoming maturity profile is very uneven, with $1.1 billion in debt maturing annually in 2011 and 2013 but only $388 million coming due next year and a mere $38 million due in 2012. As a result of the heavy maturities in 2011 and 2013, as well as a need to smooth the company's maturity profile, Fitch expects RSG to enter the capital markets from time-to-time over the next several years by issuing new senior unsecured notes. While the issuance of new notes could cause a temporary increase in leverage at the time of issuance, Fitch does not expect any new debt issuances to signal a reversal of management's longer-term debt reduction plans. Instead, Fitch believes any new debt issued will be used primarily to refinance portions of the upcoming maturities or to fund potential tenders. As such, Fitch expects that the amount of debt repaid over the next several years will more than offset any increases from new debt issued. In terms of operations, RSG has seen a notable decline in collection and landfill volumes over the past year, as the U.S. recession has resulted in the production of less waste. Volume declines have been heaviest in the industrial segment, including temporary roll-off containers, as U.S. construction and manufacturing output have fallen, while volume declines in the commercial and residential segments have been more modest. In the second quarter of 2009, RSG reported that industrial volumes were off 18%, while commercial volumes declined about 6% and residential volumes were down about 3%. In the first half of this year, lower volumes accounted for 86% of the $490 million decline in internal revenue year-over-year (when adjusted to include AW's first-half 2008 revenue and excluding divested and intercompany revenues). Looking ahead, volumes are likely to remain depressed through at least the remainder of 2009 and, potentially, into next year, as well. However, there are indications that volumes have now stabilized, so absent an unanticipated further steep decline in the U.S. economy, volumes are not expected to worsen materially from current levels in the near term. Despite the general volume weakness, RSG continues to enjoy pricing gains. This pricing strength primarily has been the result of a change in industry pricing philosophy over the past six years, which has emphasized margin growth and return on invested capital over market share growth. This disciplined pricing approach has resulted in ongoing pricing strength, even in the industrial segment, despite double-digit volume declines over the past two years. In the first half of 2009, RSG's internal revenue growth due to pricing was 3.4%, and Fitch sees no signs of industry pricing strength waning in the near term. It is important to note that pricing in many of RSG's long-term contracts is tied to various inflationary indices, which protects the company against inflation-driven increases in costs. As a result, Fitch looks at RSG's pricing gains relative to the rate of inflation, as the magnitude of pricing changes will vary with increases and decreases in the rate of inflation. Furthermore, given the relatively fixed cost structure of the company's landfills, periods of higher inflation, which lead to growth in inflation-indexed pricing, can actually result in improved margins. This mitigates some of the concerns that potential future increases in the rate of U.S. inflation could negatively affect the company's financial performance and credit profile over the longer term. Further contributing to margin improvement are the benefits that RSG continues to derive from its merger with AW, which was completed last December. At the time the merger was proposed, RSG estimated that the combination would produce annualized synergy benefits of $150 million by the third year following the merger closing. Attainment of synergies appears to be occurring more quickly than planned, however, and the company has increased its estimate of the total synergy benefits to be achieved from the merger once the integration of the two companies is complete. On RSG's second quarter earnings call, management noted that $115 million in annualized run rate synergies had already been attained, and that $125 million in annualized run rate synergies are expected by the end of the year. The company now estimates that a total of $165 million to $175 million in annualized run rate synergies will be realized by the end of next year. Most of the synergies achieved so far have resulted from integrating company systems and procedures, adopting best practices from both organizations and rationalizing corporate and regional functions and headcount. In general, the integration process appears to be proceeding smoothly, with no noteworthy problems encountered so far. Largely due to the combination of improved pricing and merger-related synergy benefits, RSG achieved an EBITDA margin (adjusted for non-recurring items) of 31% in the first six months of this year, up from standalone EBITDA margins of 28.2% and 27.9% at RSG and AW, respectively, in the first half of 2008. RSG's ratings could be upgraded within the next 18 months if market conditions in the waste services industry do not worsen and if the company continues to demonstrate meaningful progress toward debt reduction, particularly if the company's EBITDA leverage approaches the mid-2x range. On the other hand, Fitch may revise RSG's Outlook back to Stable if the pace of de-levering slows, either due to a substantial further weakening in operating conditions or a change in the company's emphasis on debt reduction. In particular, a restart of the share repurchase program prior to attainment of the company's stated leverage reduction goals could mark a significant change in management philosophy that could result in a revision of the Outlook back to Stable. REVLON INC: Files Amendments to Exchange Offer Documents -------------------------------------------------------- Revlon Inc. filed with the Securities and Exchange Commission: -- Amendment No. 3 to amend its Tender Offer Statement and Schedule 13E-3 Transaction Statement on Schedule TO filed on August 10, 2009 -- as amended by Amendment No. 1 to the Tender Offer Statement and Schedule 13E-3 filed on August 11, 2009, and Amendment No. 2 to the Tender Offer Statement and Schedule 13E-3 filed on August 19, 2009; and -- Amendment No. 3 to amend the Rule 13E-3 Transaction Statement on Schedule 13E-3 filed on behalf of MacAndrews & Forbes Holdings Inc., on August 10, 2009, as amended by Amendment No. 1 to the Schedule 13E-3 filed on August 11, 2009 and Amendment No. 2 to the Schedule 13E-3 filed on August 19, 2009. The Amendments relate to Revlon's offer to exchange each share of Revlon's Class A common stock, par value $0.01 per share for one share of Revlon's newly issued Series A preferred stock, par value $0.01 per share, upon the terms and subject to the conditions set forth in the Offer to Exchange, dated August 10, 2009, as amended and restated on August 27, 2009, and in the related Letter of Transmittal. Amendment No. 3 to Rule 13E-3 Transaction Statement on Schedule 13E-3 also adds Ronald O. Perelman, together with MacAndrews & Forbes, as a filing person to the Schedule 13E-3. A full-text copy of the Amended and Restated Offer to Exchange is available at no charge at http://ResearchArchives.com/t/s?436e The Exchange Offer is subject to various conditions, including the non-waivable condition that at least 10,117,669 shares of Class A Common Stock -- representing a majority of the Class A Common Stock not beneficially owned by MacAndrews & Forbes Holdings Inc. and its affiliates -- are tendered. The Exchange Offer will expire at 5:00 p.m., New York City time, on September 10, 2009, unless the offer is extended. Each share of Series A Preferred Stock will have a liquidation preference of $3.71, will be entitled to receive a 12.75% annual dividend payable quarterly in cash and will be mandatorily redeemed after four years. Holders of Series A Preferred Stock will receive cash payments of roughly $7.10 over the four-year term of the preferred stock, through the payment of 12.75% annual dividends in cash -- equal to roughly $0.12 per share quarterly -- a special cash dividend of $1.50 per share after two years, and a $3.71 per share liquidation preference at maturity -- assuming Revlon does not engage in one of certain specified change of control transactions during that period. If Revlon engages in one of certain specified change of control transactions within two years of consummation of the Exchange Offer, the holders of the Series A Preferred Stock will have the right to receive a special dividend, capped at an amount that would provide aggregate cash payments of up to $12.00 per share -- including the liquidation preference and any dividends paid or payable in respect of the Series A Preferred Stock. If Revlon does not engage in such a change of control transaction within two years of consummation of the Exchange Offer, the holders of the Series A Preferred Stock will have the right to receive a special dividend of $1.50 per share out of funds lawfully available therefor. In addition, prior to the second anniversary of the issuance of the Series A Preferred Stock, each preferred stockholder will have a one-time opportunity, exercisable not earlier than six weeks nor later than two weeks prior to the second anniversary of the issuance of the Series A Preferred Stock, to convert his or her shares of Series A Preferred Stock into a new series of preferred stock in exchange for giving up the right to receive the $1.50 per share special cash dividend; the effect of this conversion would be to extend from the second anniversary of the issuance of the Series A Preferred Stock until the third anniversary of such issuance the preferred stockholder's right to receive the change of control payment -- but during such third year capped at $12.50 per share instead of $12.00 per share (in each case, including the liquidation preference and any dividends paid or payable in respect of the Series A Preferred Stock and the Series B Preferred Stock)). The terms of the Series B Preferred Stock will in all other respects be the same as those of the Series A Preferred Stock. Each share of Series A Preferred Stock will have the same voting rights as a share of Class A Common Stock, except with respect to certain mergers. Upon the consummation of the Exchange Offer, (1) MacAndrews & Forbes will contribute to Revlon $3.71 of the aggregate outstanding principal amount of the Senior Subordinated Term Loan Agreement between MacAndrews & Forbes and Revlon Consumer Products Corporation, Revlon's wholly owned operating subsidiary, for each share of Class A Common Stock tendered for exchange in the Exchange Offer, and not withdrawn, up to a maximum contribution of $75 million of the aggregate outstanding principal amount of the Senior Subordinated Term Loan, (2) the maturity date of the Senior Subordinated Term Loan will be extended from August 1, 2010 to the fourth anniversary of the consummation of the Exchange Offer, and the interest rate will be changed from 11% to 12.75% per annum, and (3) Revlon will issue to MacAndrews & Forbes one share of Class A Common Stock for each share of Class A Common Stock tendered for exchange, and not withdrawn, in the Exchange Offer. As of July 31, 2009, 48,443,072 shares of Class A Common Stock and 3,125,000 shares of our Class B Common Stock were issued and outstanding, and all calculations of percentage ownership in this Offer to Exchange are based on such numbers of outstanding shares. The Class A Common Stock is traded on the New York Stock Exchange under the symbol "REV." Revlon does not intend to list the Series A Preferred Stock on any securities exchange. Fidelity, the largest of Revlon's unaffiliated stockholders through its beneficial ownership of approximately 15.9% of Revlon Class A Common Stock, has indicated to MacAndrews & Forbes that -- although no investment decision to participate in the Exchange Offer has been made by Fidelity on behalf of itself or its funds and accounts and an investment decision would be subject to its review of SEC filings disclosing the Exchange Offer -- Fidelity would view the Exchange Offer as an attractive potential investment opportunity, provided it meets the investment needs of Fidelity and its funds and accounts. MacAndrews & Forbes has advised that the terms of the Series A Preferred Stock are consistent with terms described to Fidelity. Franklin M. Gittes, Esq., and Alan C. Myers, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, advise Revlon in the transaction. Adam O. Emmerich, Esq., and Trevor S. Norwitz, Esq., at Wachtell, Lipton, Rosen & Katz, in New York, advise MacAndrews & Forbes in the transaction. About Revlon Revlon Inc. -- http://www.revloninc.com/-- is a worldwide cosmetics, hair color, beauty tools, fragrances, skincare, anti- perspirants/deodorants and beauty care products company. Revlon Inc. conducts its business exclusively through its direct wholly owned operating subsidiary, Revlon Consumer Products Corporation, and its subsidiaries. Revlon is a direct and indirect majority owned subsidiary of MacAndrews & Forbes Holdings Inc., a corporation wholly-owned by Ronald O. Perelman. The Company's brands, which are sold worldwide, include Revlon(R), Almay(R), ColorSilk(R), Mitchum(R), Charlie(R), Gatineau(R), and Ultima II(R). At June 30, 2009, Revlon had $797.4 million in total assets; and $326.4 million in total current liabilities, $1.15 billion in long-term debt, $107.0 million in long-term debt by affiliates, $213.8 million in long-term pension and other post-retirement plan liabilities, $66.6 million in other long-term liabilities; resulting in $1.07 billion in stockholders' deficiency. RICHARD E. O'NEAL: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Richard E. O'Neal, Jr. 800 Denow Road, Suite C#384 Pennington, NJ 08534 Bankruptcy Case No.: 09-32453 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court District of New Jersey (Trenton) Debtor's Counsel: Christine M. Gravelle, Esq. Markowitz Gravelle, LLP 3131 Princeton Pike Lawrenceville, NJ 08648 Tel: (609) 896-2660 Email: cmgravelle@mgs-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/njb09-32453.pdf The petition was signed by Richard E. O'Neal, Jr. RITE AID: Offers to Exchange Unregistered 9.750% Notes ------------------------------------------------------ Rite Aid Corporation offers to exchange $410.0 million aggregate principal amount of 9.750% Senior Secured Notes Due 2016 for $410.0 million aggregate principal amount of 9.750% Senior Secured Notes Due 2016 which have been registered under the Securities Act of 1933, as amended. The exchange offer will expire at 5:00 p.m., New York City time, on October 1, 2009, unless the Company extends the exchange offer in our sole and absolute discretion. Terms of the exchange offer: -- Rite Aid will exchange new notes for all outstanding old notes that are validly tendered and not withdrawn prior to the expiration or termination of the exchange offer. -- Noteholders may withdraw tenders of old notes at any time prior to the expiration or termination of the exchange offer. -- The terms of the new notes are substantially identical to those of the outstanding old notes, except that the transfer restrictions and registration rights relating to the old notes do not apply to the new notes. -- The exchange of old notes for new notes will not be a taxable transaction for U.S. federal income tax purposes. -- Rite Aid will not receive any proceeds from the exchange offer. -- Rite Aid issued the old notes in a transaction not requiring registration under the Securities Act, and as a result, their transfer is restricted. Rite Aid is making the exchange offer to satisfy Rite Aid's registration rights, as a holder of the old notes. -- There is no established trading market for the new notes or the old notes. -- Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the new notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. The prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes where such old notes were acquired by such broker- dealer as a result of market-making activities or other trading activities. Rite Aid has agreed that, starting on the expiration date and ending on the close of business 210 days after the expiration date, Rite Aid will make the prospectus available to any broker-dealer for use in connection with any the resale. A full-text copy of the Company's regulatory filing is available at no charge at http://ResearchArchives.com/t/s?436a The Company has filed a registration statement in connection its issuance of 9.750% Senior Secured Notes due 2016 and related guarantees, a full-text copy of which is available at no charge at http://ResearchArchives.com/t/s?436b The Company also has filed Amendment No. 1 To Form S-4 Registration Statement, a full-text of which is available at no charge at http://ResearchArchives.com/t/s?436c About Rite Aid Corporation Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S. The Company operates more than 4,900 stores in 31 states and the District of Columbia. * * * The Troubled Company Reporter said on June 2, 2009, Moody's Investors Service assigned a B3 rating to Rite Aid Corporation's $400 million term loan due 2015. All other ratings, including the company's Caa2 Corporate Family Rating, Caa2 Probability of Default Rating, and SGL-4 Speculative Grade Liquidity rating, were affirmed. According to the Troubled Company Reporter on April 29, 2009, Fitch Ratings has affirmed Rite Aid's Issuer Default Rating at 'B-' and revised the Rating Outlook to Negative from Stable. Rite Aid had $6 billion of book debt outstanding as of Feb. 28, 2009. ROMEO MONTESSORI: Lists Down Financial Missteps Prior to Bankr. --------------------------------------------------------------- Aaron Foley at MLive.com reports that Romeo Montessori School has detailed its financial missteps that led to its collapse in a filing with the bankruptcy court. According to The Macomb Daily, Romeo Montessori has $385,000 in liabilities, against $107,000 in assets. Most of the money owed came from the school's landlord and to parents. The debts include: -- $163,000 in back rent owed to landlords Bill and Susan Parker. The school was only paying $11,000 of the $17,000 monthly rent; -- $157,000 owed to parents for prepaid tuition and deposits. Anne Ignasiak, president of the board Romeo Montessori School Association board, said parents could not agree on how to distribute the money. Some parents felt they deserved more than others; and -- money owed to 14 employees. Most of the payments are unknown, but two known payments owed are $2,083 to a teacher and $805 to the school's office manager. MLive.com relates that Romeo Montessori's former head, Paula Wrobel, was fired after it was discovered that: -- she hadn't been paying into a teacher retirement fund for two years, -- she didn't pay other bills; and -- gave teachers raises without prior approval. Romeo Montessouri's other assets, says MLive.com, are two checking and two money market accounts valued at $75,000. Susan Parker, one of the landlords and who had founded the school 32 years ago, had offered to return as head of school with no pay, according to MLive.com. the report quoted her husband Bill Parker as saying, "This was her baby; she built it. She has a deep passion for Montessori. What happened here we don't quite understand." An auction for Romeo Montessouri's assets was set for August 24, MLive.com states. According to the report, inventory at the school is valued at $32,000. Romeo Montessori School filed for filed for Chapter 7 bankruptcy July 28, 2009. ROUTE 1 AUTO: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Route 1 Auto Centers, LP P.O. Box 1394 Athens, TX 75751 Bankruptcy Case No.: 09-60847 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court Eastern District of Texas (Tyler) Debtor's Counsel: Nathan M. Johnson, Esq. Spector & Johnson, PLLC 12770 Coit Road, Suite 1100 Dallas, TX 75251 Tel: (972) 239-4260 Fax: (214) 237-3380 Email: njohnson@spectorjohnson.com Estimated Assets: $1,000,001 to $100,000,000 Estimated Debts: $1,000,001 to $100,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Ken Landers. RYLAND GROUP: S&P Affirms Corporate Credit Rating at 'BB-' ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit and senior unsecured note ratings on The Ryland Group Inc. and revised the outlook to stable from negative. S&P's '4' recovery rating on the company's senior unsecured notes remains unchanged, indicating S&P's expectation for an average recovery (30%-50%) in the event of a payment default. "The outlook revision reflects S&P's view that the combination of a sizable cash position and manageable capital needs limit downside risk to the corporate credit rating," said Standard & Poor's credit analyst George Skoufis. "The company faces no debt maturities until 2012, and its owned lots are predominantly developed." The rating does, however, acknowledge the company's still-weak credit and profitability metrics and S&P's view that while recent trends show signs of stabilization, housing conditions will remain challenging and could hinder Ryland's ability to enhance these metrics in the near term. S&P believes positive ratings momentum is unlikely until Ryland returns to consistent profitability and improves its key EBITDA- based credit metrics, while maintaining good liquidity. S&P would revise the outlook back to negative or lower the rating if S&P's base-case assumptions for the housing industry prove optimistic and conditions deteriorate such that Ryland's operations consume more cash and drain liquidity, although S&P considers these outcomes unlikely at this point. SALON MEDIA: June 30 Balance Sheet Upside-Down by $3.54 Million --------------------------------------------------------------- Salon Media Group Inc.'s balance sheet at June 30, 2009, showed total assets of $2.90 million and total liabilities of $6.44 million, resulting in a stockholders' deficit of $3.54 million. For three months ended June 30, 2009, the Company posted a net loss of $1.25 million compared with a net loss of $582,000 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?435f Based in San Francisco, Salon Media Group Inc. (OTC: SLNM.OB) -- http://www.salon.com/-- is an Internet media company that produces a content Website with ten subject-specific sections, one of which includes two online communities. Salon was originally incorporated in July 1995 in the State of California and reincorporated in Delaware in June 1999. Salon operates in one business segment. Going Concern Doubt On June 25, 2009, Burr, Pilger & Mayer LLP in San Francisco, California raised substantial doubt out of Salon Media Group, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the year ended March 31, 2009 and 2008. The auditor pointed to the company's recurring losses and negative cash flows from operations and accumulated deficit of $101.00 million at March 31, 2009. SARATOGA SHOE DEPOT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Saratoga Shoe Depot, Inc. 385 Broadway Saratoga Springs, NY 12866 Bankruptcy Case No.: 09-13175 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court Northern District of New York (Albany) Judge: Chief Judge Robert E. Littlefield Jr. Debtor's Counsel: Francis J. Brennan, Esq. Nolan & Heller, LLP 39 North Pearl Street Albany, NY 12207 Tel: (518) 449-3300 Email: fbrennan@nolanandheller.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nynb09-13175.pdf The petition was signed by Frank S. Panza, president of the Company. SCO GROUP: Edward Cahn Named as Chapter 11 Trustee -------------------------------------------------- Heise Online reports that Edward Cahn has been selected as trustee for The SCO Group, Inc. As reported by the TCR on August 26, 2009, the Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware ordered the appointment of a Chapter 11 trustee for SCO. Mr. Cahn is a former chief U.S. district judge for the Eastern District of Pennsylvania, says Heise Online. The report states that other than being in charge of the course of SCO, Mr. Cahn is also responsible for securing the rights of the Company's creditors. Mr. Cahn, according to the report, will be the first person outside of SCO to have full access to the "secret evidence" which supposedly protects several high-profile investors. Heise Online relates that the Court of Appeals ruled on August 26 that SCO must pay $2.5 million in royalties to Novell. 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. SCORPIO SPIRITS: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Scorpio Spirits, Inc. dba Earl's Super Liquors 833 Southern Avenue Oxon Hill, MD 20745 Bankruptcy Case No.: 09-26036 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Judge: Paul Mannes Debtor's Counsel: Richard M. McGill, Esq. Law Offices of Richard M. McGill PO Box 358 5303 West Court Drive Upper Marlboro, MD 20773 Tel: (301) 627-5222 Email: mcgillrm@aol.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 5 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mdb09-26036.pdf The petition was signed by Dilbag Singh Dhillon, secretary of the Company. SEMGROUP LP: Terms of Third Amended Reorganization Plan ------------------------------------------------------- SemGroup, L.P., and its debtor affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware on August 25, 2009, a Third Amended Joint Plan of Reorganization and the Disclosure Statement explaining that Plan. Under the Third Amended Plan, the Debtors expect their total available distributable value as of the Effective Date to be $2.354 billion, consisting of: * $1.019 billion in Cash, * $300 million in Second Lien Term Loan Interests, and * $1.035 billion in New Common Stock and Warrants. The $1.019 billion in Cash consists of (i) $618 million of Cash generated during the Debtors' Chapter 11 cases from the operations of the Debtors, which includes $112.4 million in restricted Cash, (ii) $164 million of Cash of the Canadian subsidiaries of SemGroup to be distributed pursuant to the Canadian Plans, (iii) $157 million in Cash from sales of assets by the SemGroup Companies and (iv) approximately $80 million of Cash expected to be received from the Canadian subsidiaries of SemGroup for crude settlements occurring after the Effective Date. In addition, the Debtors and Prepetition Lenders will contribute certain Causes of Action to the Litigation Trust. The Debtors will distribute interests in the Litigation Trust to the holders of certain Allowed Claims. The Debtors have not placed a value on the Litigation Trust. State Lien/Trust Claims Opt-In Settlements Moreover, the Debtors will seek agreement of certain holders of claims and administrative expense claims to opt-in settlements. The Debtors will enter into settlements for the resolution of State Lien/Trust Claims, Other State Claims and Other Commodity Twenty-Day Claims. Minimum participation in the Global Settlements means the acceptance of the Global Settlements by (i) the holders of at least 90% in amount of the Other Commodity Twenty-Day Claims against Debtors other than Eaglwing, L.P., and (ii) the holders of at least 90% in amount of the State Lien/Trust Claims against Debtors other than Eaglwing. In the event that the Minimum Global Settlement Participation is obtained and a global settlement reserve is not more than $27 million, the applicable settling parties will receive these payments under the Plan: (a) Each holder of a State Lien/Trust Claim against a Debtor other than Eaglwing that elects to participate in the Global Settlement will receive, in full satisfaction and release of its State Lien/Trust Claim, cash on the Effective Date equal to (i) 75% of its asserted Twenty-Day Claim plus (ii) 30% of its asserted State Lien/Trust Claim in excess of its asserted Twenty-Day Claim plus (iii) its pro rata share of the settling incentive. (b) Each holder of an Other State Claim against a Debtor other than Eaglwing that elects to participate in the Global Settlement will receive, in full satisfaction and release of its Other State Claim, cash on the Effective Date equal to 75% of its asserted Twenty-Day Claim. (c) Each holder of an Other Commodity Twenty-Day Claims against a Debtor other than Eaglwing that elects to participate in the Global Settlement will receive in full satisfaction and release of its Other Commodity Twenty-Day Claim, cash on the Effective Date equal to (i) 66% of that holder's asserted Other Commodity Twenty-Day Claims plus (ii) its pro rata share of the Settling Incentive. Moreover, Eaglwing will enter into settlements with holders of Other Commodity Twenty-Day Claims and Other State Claims asserted Eaglwing. Eaglwing will fund a reserve for the Settlements equal to the sum of (i) 100% of the estimated Other Commodity Twenty-Day Claims of holders that elect not to settle with Eaglwing, (ii) 100% of the estimated State Lien/Trust Claims of holders that elect not to settle with Eaglwing, and (iii) 20% of the estimated Other State Claims of holders that elect not to settle with Eaglwing. Minimum participation under the Eaglwing Settlements means (i) the acceptance of the Eaglwing Settlements by (a) the holders of at least 90% in amount of the Other Commodity Twenty-Day Claims against Eaglwing and (b) the holders of at least 90% in amount of the State Lien/Trust Claims against Eaglwing and (ii) the Minimum Global Settlement Participation. In the event that the Minimum Eaglwing Settlement Participation is obtained and the Eaglwing Settlement Reserve is not more than $12 million, the applicable Settling Parties will receive these payments under the Plan: (a) Each holder of a State Lien/Trust Claim against Eaglwing that elects to participate in the Eaglwing Settlement will receive, in full satisfaction and release of its State Lien/Trust Claim, cash on the Effective Date equal to 50% of that holder's asserted Twenty-Day Claim. (b) Each holder of an Other State Claim against Eaglwing that elects to participate in the Eaglwing Settlement will receive, in full satisfaction and release of its asserted Other State Claim, Cash on the Effective Date equal to 50% of its asserted Twenty-Day Claim. (c) Each holder of an Other Commodity Twenty-Day Claims against Eaglwing that elects to participate in the Eaglwing Settlement will receive, in full satisfaction and release of its asserted Other Commodity Twenty-Day Claim cash on the Effective Date equal to 66% of that holder's asserted Other Commodity Twenty-Day Claim. Total payments and reserves under the Opt-In Settlements will be subject to caps set forth in the Plan. Upon the Effective Date, each Creditor that elects to participate in an opt-in settlement with respect to a Twenty-Day Claim, Other State Claim or State Lien/Trust Claim will forever discharge the Debtors, the Prepetition Lenders and the Administrative Agent from and against all liability arising out of the applicable claim. The Releasing Creditor also agrees to withdraw its pleadings related to its applicable claim. If either the Minimum Eaglwing Settlement Participation has not been obtained or the Eaglwing Settlement Reserve has exceeded $12 million and that failure has not been waived by the Confirmation Date, then Eaglwing will withdraw from participation in the Plan. In the event Eaglwing withdraws from participation in the Plan, then every provision in the Plan with respect to Eaglwing will become inoperative and the Plan may be confirmed as to all other Debtors. Opt-In Settlement Construct Recovery % Description ---------- ----------- Non-Eaglwing Claims ------------------- Non-First Purchaser 503(b)(9) 66.0% Represents commodity, non- first purchaser, 503(b)(9) claims. This recovery does not apply to Alon, who received a separate settlement at the beginning of the bankruptcy proceedings. First Purchaser 503(b)(9) 75.0% Represents commodity, First purchaser 503(b)(9) claims in all states. First Purchaser - Lien States 30.0% Represents first purchaser, non-503(b)(9) claims in the following states: Kansas, Oklahoma, Texas, New Mexico, and Wyoming. First Purchaser - Other States Claims 0.0% Represents first purchaser, non-503(b)(9) claims in the following states: Louisiana, Colorado, Louisiana, Missouri, Montana, Nebraska and North Dakota. Eaglwing Claims --------------- Non-First Purchaser 503(b)(9) 66.0% Represents commodity, non- first purchaser, 503(b)(9) claims at Eaglwing. First Purchaser 503(b)(9) 50.0% Represents commodity, first purchaser 503(b)(9) claims in all states. First Purchaser - Lien States 0.0% Represents first purchaser, non-503(b)(9) claims in the following states: Kansas, Oklahoma, Texas, New Mexico, and Wyoming. First Purchaser - Other States Claims 0.0% Represents first purchaser, non-503(b)(9) claims in the following states: Colorado, Louisiana, Missouri, Montana, Nebraska and North Dakota. Treatment of Producer Secured Claims Under the Amended Plan, Classes 53 to 69 Non-Settling Producer Secured Claims are deemed to accept the Plan and are not entitled to vote to accept or reject the Plan Moreover, the Amended Plan modified the aggregate amounts of these classes of claims: Aggregate Class Description Amount ----- ----------- --------- 70-95 Secured Working Capital Lenders Claims $23,306,753 96-121 Secured Revolver/Term Lender Claims 16,023,247 Notwithstanding the cancellation of debt and equity securities on the Effective Date, the Prepetition Credit Agreement governing the relationship of Bank of America, N.A., as administrative agent to the Prepetition Lenders under the Prepetition Credit Agreement, and the Prepetition Lenders, will survive the Plan, entry of the confirmation order and the occurrence of the Effective Date. Moreover, neither SemGroup, G.P., L.L.C., the general partner of SemGroup, nor any of the Debtors, will make an election to treat any of the Debtors as an association taxable as a corporation for any tax purposes unless that election is effective the day after the Effective Date. On the Effective Date, the Debtors will establish one or more segregated bank accounts in the name of a Disbursing Agent under the Plan. The Disbursement Accounts will be utilized solely for the investment and distribution of Plan Cash and for distributions received from the Litigation Trust by the Disbursing Agent for further distribution to holders of Allowed Secured Working Capital Lender Claims and Litigation Trust Interests. The Litigation Trustee will pay all distributions to be made under the Litigation Trust to repay the Litigation Trust Funds to the holders of Allowed Secured Working Capital Lender Claims or with respect to the Litigation Trust Interests to the Disbursing Agent. The Litigation Trustee will distribute at least semi-annually to the holders of the Secured Working Capital Lender Claims until the Litigation Trust funds have been repaid and thereafter to the holders of the Litigation Trust Interests. The Debtors will hold in a separate disbursement account any cash reserved to pay any Administrative Expense Claims, Professional Compensation and Reimbursement claims, and the portion of any Priority Non-Tax Claims and Priority Tax Claims not paid on the Effective Date. Under the Amended Plan, the amount of any reasonable fees and expenses of the Fee Auditor incurred after the Effective Date will be paid in cash by the Reorganized Debtors without further order of the Bankruptcy Court within 30 days of receipt of an invoice by the Reorganized Debtors. In the event that the Reorganized Debtors object to payment of that invoice for post-Effective Date fees and expenses, in whole or in part, and the parties cannot consensually resolve the objection, the Bankruptcy Court will retain jurisdiction to determine whether the objected invoice should be paid by the Reorganized Debtors. In addition, the Debtors' Disclosure Statement also appended (i) an updated liquidation analysis, (ii) historical financial statements, and (iii) a preliminary schedule of suspense liabilities that contains "suspense" amounts assessed by the Debtors for crude oil or natural gas by state. Full-text copies of the historical financial statements and the suspense liabilities are available for free at: * http://bankrupt.com/misc/semgroup_histfinancialstats.pdf * http://bankrupt.com/misc/semgroup_suspenseliabilities.pdf A full-text copy of the Third Amended Plan dated August 25, 2009, is available for free at: http://bankrupt.com/misc/semgroup_Aug25Plan.pdf A full-text copy of the Disclosure Statement explaining the Third Amended Plan is available for free at: http://bankrupt.com/misc/semgroup_Aug25DiscStat.pdf A blacklined copy of the Third Amended Plan is available for free at http://bankrupt.com/misc/semgroup_Aug25Plan_blacklined.pdf Plan Confirmation Expected on Oct. 26 In a public statement dated August 25, 2009, SemGroup says it expected to announce the syndication date for its $500 million Exit Financing Facility in the near future. Moreover, SemGroup expects confirmation of the Plan on October 26, 2009, and an exit from Chapter 11 by early November. Judge Shannon will convene a supplemental hearing on September 24, 2009, to consider the adequacy of the Disclosure Statement explaining the Third Amended Plan. Objections to the Disclosure Statement are due September 21, 2009. About SemGroup L.P. SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Liquidation Analysis Under 3rd Amend Plan ------------------------------------------------------ Pursuant to SemGroup L.P.'s Third Amended Joint Plan of Reorganization, the Debtors prepared a hypothetical liquidation analysis to provide information so that the Court may determine that the Plan is in the best interests of all classes impaired by the Plan. The Liquidation Analysis assumes that the Debtors' Chapter 11 cases will be converted to cases under Chapter 7 of the Bankruptcy Code on November 1, 2009, a trustee is appointed to oversee the liquidation, and the liquidation occurs over a period of nine months. SemGroup, L.P., et al. Liquidation Analysis - Proceeds ($ in millions) Recovery ------------------- Low High ------- -------- Gross Proceeds Available for Distribution $1,039 $1,039 Asset Values: SemCrude L.P. 197 251 White Cliffs Pipeline LLC 165 220 ------- -------- Subtotal - U.S. Crude Operations 362 471 SemCAMS ULC 120 160 SemCanada Crude Company 90 123 ------- -------- Subtotal - Canadian Operations 210 283 SemStream LP 166 204 SemGas L.P. 45 61 SemLogistics Milford Haven Limited 55 75 SemMexico LLC 10 15 ------- -------- Subtotal - Gross Proceeds from Business Units 848 1,109 Litigation Recoveries - - ------- -------- Total Gross Proceeds $1,887 $2,148 ======= ======== Cost Associated with Liquidation Chapter 7 Trustee Fees ($80) ($90) Professional Fees (65) (50) Business Unit Operating Costs (80) (65) Overhead (12) (10) ------- -------- Total Liquidation Costs (237) (216) ------- -------- Net Proceeds Available for Distribution $1,650 $1,932 ======= ======== Mid-Point of Net Proceeds Available for Distribution $1,791 ======= SemGroup, L.P., et al. Liquidation Analysis - Allocation of Proceeds ($ in millions) Allowable Midpoint Allowable Claim Recovery Recovery --------- -------- -------- Net Proceeds Available for Distribution $1,791 ======= Postpetition Secured Claims Professional Fee Carve-Out $24 $24 100% Super Priority Administrative (DIP) 95 95 100% --------- -------- -------- Total Unclassified 119 119 100% Proceeds Available for Remaining Claims 1,672 Prepetition Secured Claims Revolver 668 355 53% Working Capital Facility 1,734 878 51% Term B Notes 143 76 53% GECC Construction Project Financing 120 120 100% Secured Financial Trades 480 243 51% --------- -------- -------- Total Secured Claims 3,145 1,672 53% Proceeds Available for Administrative/Priority Claims - Administrative/Priority Claims Administrative Claims 5 - 0% 503(b)(9) Claims 295 - 0% Postpetition Trade and Other 96 - 0% --------- -------- -------- Total Administrative/Priority Claims 396 - 0% Proceeds Available for Unsecured Claims Producer Claims 274 - 0% Accounts Payable 277 - 0% Senior Notes 610 - 0% Unsecured Financial Trades 29 - 0% Litigation Claims TBD - 0% SERP Claims 13 - 0% Rejection Claims (Estimated) 100 - 0% Intercompany Claims 7,270 - 0% --------- -------- -------- 8,573 - 0% -------- Proceeds Available for Equity Interests - 0% -------- Total Distributions $1,672 ======= A full-text copy of the Liquidation Analysis is available for free at http://bankrupt.com/misc/semgroup_liquidationanalysis.pdf About SemGroup L.P. SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Producers Demand Docs. to Prepare for Plan Hearings ---------------------------------------------------------------- To prepare for the confirmation hearing of SemGroup L.P.'s Third Amended Joint Plan of Reorganization, the Official Producers' Committee served Bank of America, N.A., as the administrative agent for the Debtors' Prepetition Secured Lenders, and the Official Committee of Unsecured Creditors with deposition notices and subpoenas. The Deposition Notices sought documents to be produced by August 10, 2009, in connection with a list of topics relevant to confirmation and scheduled depositions for those topics for August 20 and 21, 2009, under Rule 30(b)(6) of the Federal Rules of Bankruptcy Procedure. Despite the willingness to compromise and narrow the deposition requests, the Secured Lenders and the Creditors' Committee have stated that they are not going to produce any documents to the OPC, and are objecting to producing a Rule 30(b)(6) witness to testify on any of the designated topics, Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, points out. Mr. Pernick argues that the one-sided negotiations in the Plan resulted in significantly disparate treatment for the Producers. Given the disparate treatment to the Producers under the Plan and the failure to include the OPC or the Producers in the Plan negotiations, the OPC has every right to seek and obtain discovery from the Secured Lenders and the Creditors' Committee as among the three major players that were involved in the development of the Plan, he asserts. For those reasons, the OPC asks the Court to compel the Secured Lenders and the Creditors' Committee to (i) produce to the OPC immediately upon entry of the order to this Discovery Motion documents responsive to the Deposition Notices; and (ii) make witnesses available to the OPC for a deposition on the designated topics at least two weeks prior to the confirmation hearing. BofA Objects On behalf of BofA, Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, in Wilmington, Delaware, argues that while the Secured Lenders support the Amended Plan, they are not the Plan Proponents and thus, only the Debtors must prove that their Plan satisfies the confirmation requirements under Section 1129 of the Bankruptcy Code. Specifically, Ms. Silverstein complains that the OPC's Deposition Notice to BofA demanded testimony on 37 overly broad separate topics and the production in 12 days time of voluminous documents responsive to 39 overly broad separate requests. The Deposition Notice would require BofA to expend enormous time and resources to testify about and produce information entirely duplicative of that provided by the Debtors, she asserts. "It is no secret that the OPC is unhappy with the treatment of the producers' claims under the Plan, but being unhappy is not a valid basis for seeking discovery," Ms. Silverstein asserts. At best, the OPC's discovery demands are irrelevant, unduly burdensome and are nothing but a litigation tactic designed to harass and annoy BofA and derail the Plan confirmation process, she maintains. Accordingly, BofA urges the Court to deny the OPC's Discovery Motion. About SemGroup L.P. SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Producers Want Admin. Claims Bar Date Extension ------------------------------------------------------------ The Official Producers' Committee in SemGroup L.P.'cases asserts that the Debtors recently triggered a supplemental bar date by amending their Schedules of Assets and Liabilities on August 13, 2009, to mark every single non-zero Section 503(b)(9) claim as disputed. Norman L. Pernick, Esq., at Cole Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, notes that about 80,000 Producer Section 503(b)(9) creditors, and a significant number of non- Producer 503(b)(9) creditors who did not previously file proofs of claim in reliance on the Debtors' Schedules must do so to preserve their claims. However, under the Bar Date Order, those creditors will only have 20 days to file those claims. In light of these circumstances, this period should be enlarged, Mr. Pernick asserts. Mr. Pernick argues that the Bar Date Order did not contemplate that the Debtors would be radically amending their Schedules to affect every Section 503(b)(9) claim at a late stage in their Chapter 11 cases. Given the earlier bar date and procedures adopted by the Court to resolve claims, many Producers have been lulled into thinking their scheduled claims were deemed filed by virtue of the Schedules, he insists. In addition, because the reason that the claims are marked as disputed is due to the legal issue objections against the Debtors' Section 503(b)(9) Notice, creditors should not be forced to file a flurry of claims before those issues are determined. If the Section 503(b)(9) Objections are overruled, the Schedules will stand and the Court can rule that the creditors need to file proofs of claim, he maintains. Accordingly, the OPC asks the Court to: (i) require the Debtors to mail a supplemental notice, proof of claim forms, and instructions to all creditors, including the Producers, affected by the Debtors' recent schedule amendments; (ii) provide the creditors until the time as the Court has ruled on the Section 503(b)(9) Objections and the Debtors have thereafter provide an additional 45 days supplemental notice to file those proofs of claim; (iii) require that the notice clarify that creditors who previously filed proofs of claim need not refile their claims; and (iv) require the Debtors to clarify their statement in the Notice of Schedules Amendments regarding the effect of participating in the Section 503(b)(9) legal issue proceedings. About SemGroup L.P. SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Secured Lenders Want Mediation for Producers Dispute ----------------------------------------------------------------- Secured Lenders, led by Bank of America, N.A., as administrative agent, of SemGroup, L.P., and its debtor affiliates, have proposed to resolve their dispute with the Debtors' oil and gas producers through a non-binding third-party mediation. The Secured Lenders' proposal is in line with the Debtors' Third Amended Joint Plan of Reorganization, which provides for opt-in settlement for state lien/claims. SemGroup spokesperson Tom Becker told Tulsa World that the company welcomes the opportunity to participate in any way to the mediation that will result in a settlement with the producers. Judge Shannon of the U.S. Bankruptcy Court for the District of Delaware, according to the newspaper, commented that a number of cases had met substantial success due to judicial mediation and would like to know if the parties are interested, Tulsa World said. Meanwhile, the Official Producers' Committee's counsel has still to talk the mediation offer over with the producers, Tulsa World disclosed. Producers' Appeals Groups of oil and gas producers, including the Texas Producers -- Titan Energy, Inc.; Loren Gas, Inc.; Winstar Energy I, L.P.; Arrow Oil & Gas, Inc.; DC Energy, Inc.; Huntington Energy, LLC; LCS Production Co.; Samson Contour Energy E&P, LLC; Samson Lone Star, LLC; Samson Resources Company; St. Mary Land & Exploration Company; and Tempest Energy Resources, L.P. -- raised an appeal to the U.S. Court of Appeals for the Third Circuit from Judge Shannon's June 19, 2009, opinion and order finding that a security interest perfected only in Texas by virtue of the automatic perfection in Section 9.343 of the Texas Business & Commerce Code will be subordinate to a security interest that was duly perfected against the Debtors in the appropriate state. The Producers' Committee has asked the Bankruptcy Court to postpone the hearing on the confirmation of the Debtors' Plan until after the Circuit Court has made a decision on the appeals. At the Producer's request, the Circuit Court set an expedited schedule for the Appeals with oral arguments to be heard on October 7, 2009. Producers' & Banks' Disputes The Texas Producers have maintained that they are holders of automatically perfected purchase money security interests in all Texas Product sold to the Debtors and any resulting proceeds held by the Debtors. The claims of the Texas Producers involve many individual transactions aggregating more than $57 million in value. The Texas Producers thus contend that their rights are prior to the security interest of the Banks. According to Tulsa World, producers in Oklahoma, Texas, and Kansas said the Debtors owe them more than $400 million, with the Oklahoma Producers being owed close to $180 million. The Banks contended that perfection of the security interests claimed by the Texas Producers pursuant to Texas Section 9.343 are governed by either Delaware or Oklahoma law, depending on the relevant Debtor and its place of incorporation pursuant to the choice-of-law provisions in Article 9 of the Uniform Commercial Code. To the extent the Texas Producers did not perfect their Texas Section 9.343 security interests in either Oklahoma or Delaware before the Petition Date, the Banks contented that the Texas Producers possess unperfected security interests subordinate to the security interest of the Banks. June 19 Ruling In his 57-page opinion, Judge Shannon held that, pursuant to Texas Section 9.324(b), the Texas Producers' PMSI priority is limited to inventory on hand at the time the Debtors filed bankruptcy, any identifiable cash proceeds that the Debtors received prior to delivery of the oil and gas production to the subsequent purchaser, and certain chattel paper. Judge Shannon found that under the "first to file or perfect" rule, the Texas Producers' security interests in collateral like oil and gas production, accounts, cash, exchanged oil and gas, and the like, which extend for an unlimited time pursuant to Texas Section 9.343(c), would take priority under Texas law over the Banks' competing Article 9 security interest in the same collateral to the extent that those records benefiting the Texas Producers were filed prior to the Banks' financing statements covering the same collateral. To the extent that creditors possess unperfected security interests, however, they will be subordinate to a perfected security interest in the same collateral under Texas' Article 9 priority rules, Judge Shannon held. This is because Texas Section 9.322(a)(2) provides that "[a] perfected security interest or agricultural lien has priority over a conflicting unperfected security interest or agricultural lien," he explained. Judge Shannon further held that the general rule of Delaware, Texas and Oklahoma is that the location of the debtor governs perfection and in order to be perfected under Delaware law, the Texas Producers must have filed UCC-1 financing statements in the state, or perfected their security interest in another proper method under the state's version of Article 9. To the extent that the Texas Producers have failed to perfect their security interests under Delaware law, they are the holders of unperfected security interests, Judge Shannon ruled. Judge Shannon conducted a two-day oral argument on the issues raised in May 2009. Judge Shannon, recognizing that it was ruling on issues of great significance to the parties both in economic terms and as a business reality, certified his Opinion and Order sua sponte for direct appeal to the Third Circuit. A full-text copy of the June 19 Opinion is available for free at http://bankrupt.com/misc/sglp_june19opi.pdf About SemGroup L.P. SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SES SOLAR: Going Concern Continuation Depends on Loans Conversion ----------------------------------------------------------------- SES Solar Inc. posted a net income of $16,387 for three months ended June 30, 2009, compared with a net loss of $713,138 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $642,764 compared with a net income of $500,613 for the same period in 2008. The Company's balance sheet at June 30, 2009, showed total assets of $17.72 million, total liabilities of $15.05 million and stockholders' equity of $2.67 million. The Company said that there is substantial doubt about its ability to continue as a going concern. The Company noted that it incurred a net loss and a negative cash flow from operations of $560,434, and had a working capital deficiency of $12.94 million at June 30, 2009. The Company added that its ability to continue its operations and market and sell its products and services will depend on the Company's ability to convert the construction loans into mortgages and to obtain additional financing. If the Company is unable to obtain financing, the Company may not be able to continue its business. Any additional equity financing may be dilutive to shareholders, and debt financing, if available, will increase expenses and may involve restrictive covenants. The Company will be required to raise additional capital on terms that are uncertain, especially in light of current capital market conditions. Under these circumstances, if the Company is unable to obtain additional capital or is required to raise it on undesirable terms, its financial condition could be adversely impacted. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?435d SES Solar Inc. (OTC:SESI) is a renewable energy company that offers products and services focused on the design, development and commercialization of a portfolio of solar products and technologies capable of delivering alternative energy solutions. The Company produced and installed custom photovoltaic solar products for commercial, industrial and residential use. The Company manufactures solar modules and solar tiles using cells, components and other raw materials that are supplied to it from third-parties. The Company also offers comprehensive engineering services for PV projects. As an engineering service provider, it designs new methods of manufacturing PV modules. The Company is engaged in transforming its business from an engineering PV service company into a producer and manufacturer of solar modules and tiles. SHAMUS HOLDINGS: Time for Mortgagee's Filing Not Tolled ------------------------------------------------------- WestLaw reports that the Bankruptcy Code provision extending any applicable nonbankruptcy law period for a creditor to commence or continue a civil action on a claim against the debtor for 30 days after notice of expiration of the automatic stay did not apply to extend the time for a mortgagee to record an extension of its mortgage or acknowledgment or affidavit that the mortgage had not been not satisfied, in order to prevent the mortgage from being discharged pursuant to the provisions of the Massachusetts Obsolete Mortgages Statute. Recordation of an extension of the mortgage in the registry of deeds was not remotely equivalent to the "commencement or continuation of a civil action," within the meaning of this Code provision. In re Shamus Holdings, LLC, --- B.R. ----, 2009 WL 2407664 (Bankr. D. Mass.). Shamus Holdings, LLC, filed a Chapter 11 petition (Bankr. D. Mass. Case No. 07-14572) on July 25, 2007, estimating more than $1 million in assets and less than $50,000 in debts. The Debtor's lawyer is Charles A. Dale, III, Esq., at McCarter & English, LLP, in Boston. SIELOX INC: Posts $1.19MM Net Loss in Three Months Ended June 30 ---------------------------------------------------------------- Sielox, Inc., posted a net loss of $420,000 for three month ended June 30, compared with a net loss of $10,000 for the same period in 2008. For six month ended June 30, the Company posted a net loss of $1.19 million compared with a net loss of $463,000 for the same period in 2008. At June 30, 2009, the Company's balance sheet showed total assets of $17.20 million, total liabilities of $6.63 million and stockholders' equity of $10.57 million. As of June 30, 2009, the Company had an accumulated deficit of approximately $141,000 and outstanding debt in the amount of $2,736 from a line of credit which expires on December 16, 2009. The Company's management is aware that its current cash resources may not be adequate to fund its operations over the next year. The Company said that there is substantial doubt about its ability to continue as a going concern. The company noted that the Company's existing and future obligations include expenses general economic slowdown has negatively impacted demand for the Company's products, thereby limiting the ability of the Company to improve its liquidity through increased sales. Furthermore, due to the current credit crisis, it is uncertain whether the Company's current line of credit can be renewed when it comes due on acceptable terms. The Company is currently in violation of a certain financial ratio related to its line of credit which constitutes a default under the line of credit. In addition, the Company received a notice from the lender that the Stipulation related to the Berger v. L Q Corp. appraisal rights litigation constitutes a default under the line of credit. The Company disagrees with the lender's assertion and is currently in discussions with the lender regarding this matter. Due to these violations, the Company's line of credit is currently frozen and limited to $2,736, which is the amount outstanding at June 30, 2009. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4358 Sielox, Inc. (OTC:SLXN) develops, designs and distributes a range of security solution products, such as surveillance cameras, lenses, digital video recorders, high-speed domes and access control systems. It also develops, designs and distributes industrial vision products to observe repetitive production and assembly lines, thereby by detecting faults in the production process. The Company operates through two wholly owned subsidiaries: Costar Video Systems, LLC and Sielox, LLC. Costar runs the Company's operations relating to its security surveillance and industrial vision products, and Sielox, LLC, manages the Company's operations relating to its access control systems. SIMMONS CO: Lenders Extend Forbearance Periods to September 11 -------------------------------------------------------------- Simmons Bedding Company, a subsidiary of Simmons Company, reached agreements with the majority of its senior bank lenders and the majority of the holders of its $200.0 million 7.875% senior subordinated notes to extend their forbearance periods from August 31, 2009, to September 11, 2009. Effective August 28, Simmons Bedding entered into (i) the Fifth Amendment to Second Forbearance Agreement and Seventh Amendment to the Second Amended and Restated Credit and Guaranty Agreement with a majority of its senior lenders and (ii) Amendment No. 5 to the Forbearance Agreement to the Indenture with a majority of the holders of its 7.875% senior subordinated notes. Since September 27, 2008, Simmons Bedding has not been in compliance with certain covenants of its $540.0 million senior credit facility. After being unable to obtain a waiver or an amendment from its senior lenders to its senior credit facility, Simmons Bedding entered into an initial and subsequent forbearance agreement with a majority of its senior lenders pursuant to which the senior lenders agreed to refrain from enforcing their respective rights and remedies under the senior credit facility through March 31, 2009, subject to earlier termination in some circumstances. Simmons Bedding entered into amendments to the forbearance agreement with its senior lenders on March 25, 2009, May 27, 2009, June 30, 2009, and August 14, 2009, whereby the senior lenders extended their forbearance period through May 31, 2009, June 30, 2009, August 14, 2009, and August 31, 2009, respectively. On January 15, 2009, and July 15, 2009, Simmons Bedding did not make its scheduled interest payments due on its Subordinated Notes resulting in defaults under the indenture governing the Subordinated Notes. On February 14, the default associated with the failure to pay the interest due on January 15 matured into an event of default, which gave the holders of the Subordinated Notes the right to declare the full amount of the Subordinated Notes immediately due and payable. On February 4, Simmons Bedding and a majority of the outstanding Subordinated Notes holders entered into a forbearance agreement, pursuant to which such noteholders agreed to refrain from enforcing their respective rights and remedies under the Subordinated Notes and the related indenture through March 31, 2009. Simmons Bedding entered into amendments to the forbearance agreement with a majority of the Subordinated Notes holders on March 25, 2009, May 27, 2009, June 30, 2009, and August 14, 2009, whereby the noteholders extended their forbearance period through May 31, 2009, June 30, 2009, August 14, 2009, and August 31, 2009, respectively. Pursuant to the terms of the forbearance agreement, the noteholders party to the forbearance agreement have the obligation to take any actions that are necessary to prevent an acceleration of the payments due under the Subordinated Notes during the forbearance period. Because the noteholders party to the forbearance agreement represents a majority of the Subordinated Notes, they have the power under the indenture to rescind any acceleration of the Subordinated Notes by either the trustee or the minority holders of the Subordinated Notes. As a condition to the forbearance agreement with Simmons Bedding's senior lenders, the Company initiated a restructuring process in December 2008. A special committee of independent directors was formed by the board of directors on January 23, 2009, to evaluate and oversee proposals for restructuring the Company's debt obligations, including seeking additional debt or equity capital and evaluating various strategic alternatives, including a possible sale of Simmons Bedding, Bedding Holdco, Holdings, Bedding Superholdco or any of our affiliates or assets. There can be no assurance that the Company will be successful in implementing a restructuring or any other strategic alternatives. If the Company is unable to successfully complete a restructuring, comply with the terms of the forbearance agreements, or extend the forbearance periods as needed to successfully complete a restructuring, Simmons Bedding's payment obligations under the senior credit facility and the Subordinated Notes may be accelerated. If there is an acceleration of payments or default under the senior credit facility or Subordinated Notes, then Holdings would be in default under its Discount Notes and Bedding Superholdco would be in default under its $300.0 million senior unsecured loan Toggle Loan. The Company would not have the ability to repay any amounts accelerated under its various debt obligations without obtaining additional equity or debt financing. An acceleration of payments or default could result in a voluntary filing of bankruptcy by, or the filing of an involuntary petition for bankruptcy against, Simmons Bedding, Bedding Holdco, Holdings, Bedding Superholdco or any of their affiliates. Due to the possibility of such circumstances occurring, the Company is seeking a negotiated restructuring, including a restructuring of its debt obligations or sale of Simmons Bedding, Bedding Holdco, Holdings, Bedding Superholdco or any of their affiliates or assets, which could occur pursuant to a pre-packaged, pre-arranged or voluntary bankruptcy filing. Any bankruptcy filing could have a material adverse effect on the Company's business, financial condition, liquidity and results of operations. The considerations above raise substantial doubt about the Company's ability to continue as a going concern. As of June 27, 2009, the Company had $895.9 million in total assets and $1.26 million in total liabilities, resulting in stockholder's deficit of $367.5 million. The Company incurred restructuring expenses in the quarter and six months ended June 27, 2009 aggregating $6.6 million and $13.9 million, respectively. About Simmons Bedding Company Atlanta-based Simmons Bedding Company -- http://www.simmons.com/ -- is one of the world's largest mattress manufacturers, manufacturing and marketing a broad range of products including Beautyrest(R), Beautyrest Black(R), Beautyrest Studio(TM), BeautySleep(R), ComforPedic by Simmons(TM), Natural Care(R) and Beautyrest Beginnings(TM). Simmons Bedding operates 19 conventional bedding manufacturing facilities and two juvenile bedding manufacturing facilities across the United States, Canada and Puerto Rico. Simmons Bedding also serves as a key supplier of beds to many of the world's leading hotel groups and resort properties. SLM CORP: Moody's Reviews 'Ba1' Senior Unsecured Ratings -------------------------------------------------------- Moody's Investors Service placed the long-term ratings of SLM Corp. (senior unsecured Ba1) on review for possible downgrade. The rating action reflects Moody's continued concerns regarding SLM's earnings and cash flow generation as the company transitions to a potential post-FFELP lending environment. Additionally, the company faces significant uncertainties related to the political and consumer lending environment for student lenders. These issues could challenge the company's liquidity and funding position as it nears large unsecured debt maturities in 2010 and particularly in 2011. The action reflects Moody's ongoing analysis and concern that these key issues could have more adverse effects on SLM's credit profile than is reflected in the company's current ratings. Moody's notes that SLM remains a significant force in the education lending and servicing business. The company has benefited from access to the secured funding markets in recent months given U.S. government support through its TALF program, the DOE Participation Program, and the DOE Straight A Funding conduit program. As well, SLM has a significant student loan servicing franchise that is a platform for a potential future non-lending oriented business model. During the review period Moody's will re-evaluate SLM's future business strategy, core earnings and cash flow generation capability, and borrowing capacity resulting from this cash flow generation and the potential monetization of its unencumbered assets. As Moody's has noted, cash flow generation is taking on increasing importance in SLM's credit profile because the firm's unsecured debt balance exceeds its unencumbered earning assets. Therefore, SLM will need to generate profits and cash flow in order to service and ultimately repay some of its debt, as opposed to generating the required cash through asset liquidation. This will be a key area of focus, particularly given the potential major business model transition it faces, during Moody's review. During the review Moody's will also re-assess the potential structural subordination that could arise for SLM's unsecured creditors as it monetizes assets through secured financing to meet debt maturities; as well as SLM's capital adequacy including its ability to replenish capital from earnings generation and retention. The last rating action on SLM was on May 13, 2009 when Moody's downgraded the company's ratings and assigned a negative outlook. Headquartered in Reston, VA, SLM is the nation's leading provider of saving- and paying-for-college programs. The company manages approximately $188 billion in education loans and serves 10 million student and parent customers. SPANSION INC: Board Committee Approves KEIP ------------------------------------------- Spansion Inc. Executive Vice President and Chief Financial Officer Randy W. Furr notified the Securities and Exchange Commission that on August 27, 2009, the Compensation Committee of the Board of Directors of Spansion Inc. approved a Key Employee Incentive Plan, under which certain vice presidents of the Company, including named executive officers but excluding the Chief Executive Officer, will receive performance-based cash bonuses of: (i) up to 35 percent of their base salaries if the Company achieves certain cash and earnings before interest, taxes, depreciation and amortization objectives by October 1, 2009; (ii) 35 percent of their base salaries if the Company achieves certain other EBITDA objectives by April 1, 2010; and (iii) up to an additional 30 percent of their base salaries if the Company exceeds certain other EBITDA objectives by April 1, 2010. "The KEIP Plan was approved by the U.S. Bankruptcy Court," Mr. Furr said. He further disclosed that on August 27, 2009, the Committee also approved a retention plan, a sales incentive plan and award programs for employees not participating in the KEIP Plan. The objective of these plans and programs is to retain, reward, incentivize and attract qualified employees throughout the Company, Mr. Furr explained. Under the retention plan, employees may generally receive bonuses of between two and 30 percent of their base salaries if they remain employed by the Company as of certain dates in fiscal 2009 and 2010. Under the sales incentive plan, employees directly responsible for the sale of products may generally achieve bonuses between 15 and 50 percent of their base salaries if they achieve certain individual and corporate performance objectives. Under the award programs, the Company's management may provide discretionary cash bonuses to individual employees for their contributions to the Company. The Employee Plans were approved by the U.S. Bankruptcy Court, Mr. Furr noted. About Spansion Inc. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. SPANSION INC: Noteholders Wants TRO vs. Samsung ----------------------------------------------- The Ad Hoc Consortium of Floating Rate Noteholders of Spansion Inc. seeks the Court's authority to: (i) commence an adversary proceeding seeking injunctive relief from; and (ii) request a temporary restraining order and preliminary injunction against, Samsung Electronics Co., Ltd., for willful violation of the automatic stay. Prior to the Petition Date, the Debtors initiated two lawsuits against Samsung for patent infringement. One lawsuit demands damages and injunctive relief, and is pending before the U.S. District Court for the District of Delaware. The other lawsuit requests invocation of tariff protections, preventing Samsung's importation of patent infringing product into the United States, and is pending before the International Trade Commission. During the early stage of their Chapter 11 proceedings, the Debtors sought to settle both lawsuits on terms that drew staunch objection from the Ad Hoc Consortium. In its opposition, the Ad Hoc Consortium asserted, among other things, that Samsung over- reached in its handling of the matter. The Court subsequently denied the Debtors' requests. Since June 23, 2009, the Debtors and Samsung have reengaged as active litigants in the District Court Action. Among other things, Samsung has picked up where it left off prosecuting before Judge Robinson counter-claims against the Debtors related to U.S. Patent Nos. 6,930,050 and 5,740,065 -- the Counter-Claim Patents. In the District Court Action, Samsung has long demanded that Judge Robinson afford it both damages and injunctive relief pertaining to the Counter-Claim Patents. On July 31, 2009, Samsung initiated a new lawsuit before the ITC, demanding protections that would prevent the importation of any Debtor product allegedly involving the Counsel-Claim patents. According to the Ad Hoc Consortium, the New Samsung ITC Action: (a) involves claims that were already initiated by Samsung in the District Court Action, well before the Chapter 11 filings; (b) covers matter that, by stipulation and Court order, were placed squarely before Judge Robinson to resolve; (c) reflects litigation gamesmanship, as Samsung is attempting to compound and multiply the litigation over the Counter- Claim Patents; and (d) reflects a blatant disregard for the Court and the procedural history leading to the Samsung Stay Relief Stipulation. The Ad Hoc Consortium complains that Samsung did not limit its complaint to only the Debtors. In the New Samsung ITC Action, Samsung also named a number of the Debtors' key customers, seeking also to block importation of their product because they contain Debtor flash memory components that allegedly infringe on the Counter-Claim Patents. Customer indemnification obligations may have now been triggered, adding concerns over administrative cost, collateral estoppel, customer dislocation, and management distraction. Deeply concerned by this development, the Ad Hoc Consortium requested that the Debtors promptly initiate an adversary proceeding against Samsung for an order enjoining further prosecution of the New Spansion ITC Action until the Chapter 11 process reaches its natural conclusion. The Debtors responded that they will not undertake that action, but are supportive of the Ad Hoc Consortium's desire to prosecute that action. 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: Exits Chapter 11 With a Stronger Balance Sheet --------------------------------------------------------------- Spectrum Brands, Inc., said August 28 it has emerged from bankruptcy. The Company and its domestic subsidiaries officially concluded their Chapter 11 reorganization August 28 after meeting all closing conditions to the Company's Plan of Reorganization, which was confirmed by the U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division, in a written order entered on July 15, 2009. "I am very pleased that we have accomplished what we set out to do in this financial restructuring process. We have achieved significant debt reduction while maintaining our strong brand reputations and solid relationships with our suppliers and customers," said Kent Hussey, CEO of Spectrum Brands. "Importantly, our businesses continued to perform remarkably well throughout this process, expanding our market share in many key product categories, including major brands in all three of our business segments. Additionally, on August 7, 2009 we reported improved year-to-date consolidated adjusted EBITDA results through our fiscal third quarter versus last year, a strong testament to the strength and profitability of our businesses. I want to thank all of our employees for their dedication and tremendous commitment to ensuring the success of this company and its brands." In conjunction with its emergence from Chapter 11, Spectrum Brands on August 28 closed on its new $242 million exit financing facility provided by several financial institutions led by GE Capital. This financing will be available for the company's working capital needs. In accordance with the Plan, suppliers will be paid in full, to the extent the company has not already done so, for all valid outstanding invoices for goods and services. Suppliers do not need to take any action at this time. The Company expects to process and pay valid prepetition supplier claims within the next few weeks. Also, in accordance with the Plan, the company's old common stock has been extinguished and no financial distribution will be made to holders of the old common stock. The Company's bondholders as of the effective date are being issued a total of approximately 27 million shares of new common stock and $218 million in 12 percent Senior Subordinated Toggle Notes due 2019. The new shares are expected to trade initially on the Pink Sheets. In addition, also as of the effective date, approximately 3 million shares of new common stock are being issued to supplemental and sub-supplemental participants in the Company's debtor-in-possession loan facility pursuant to an equity fee provision. The Company's Board of Directors will ultimately decide when the Company will seek to be listed on an exchange, however the Company currently expects to begin that process later this year or in early 2010. The Company plans to continue to make public filings and disclosures as it has in the past. About Spectrum Brands Spectrum Brands is a global consumer products company and a leading supplier of batteries, shaving and grooming products, personal care products, specialty pet supplies, lawn & garden and home pest control products, personal insect repellents and portable lighting. Helping to meet the needs of consumers worldwide, included in its portfolio of widely trusted brands are Rayovac(R), Remington(R), Varta(R), Tetra(R), Marineland(R), Nature's Miracle(R), Dingo(R), 8-In-1(R), Spectracide(R), Cutter(R), Repel(R), and HotShot(R). Spectrum Brands' products are sold by the world's top 25 retailers and are available in more than one million stores in more than 120 countries around the world. Headquartered in Atlanta, Georgia, Spectrum Brands generates annual revenue from continuing operations in excess of $2 billion. 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. 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. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. On July 15, 2009, the U.S. Bankruptcy Court for the Western District of Texas entered a written order confirming the Company's joint plan of reorganization. On July 15, the official committee of equity security holders appointed in the Chapter 11 cases appealed the confirmation order. By order dated August 19, 2009, the Fifth Circuit Court of Appeals lifted this stay. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) SPORT CHALET: Files CEO's Memorandum on Proposed Options Exchange ----------------------------------------------------------------- Sport Chalet, Inc., on August 21, 2009, filed a definitive proxy statement with the Securities and Exchange Commission for use at its annual meeting of stockholders to be held on September 15, 2009. The Definitive Proxy Statement contains a proposal asking the stockholders of the Company to approve a one-time program in which the Company will offer each option holder eligible to participate an opportunity to exchange outstanding stock options to purchase shares of the Class A Common Stock for new options to purchase fewer Class A Shares at the fair market value of the Class A Shares on the date the new options are granted. In connection with the proposed Option Exchange, the Company has filed with its Schedule 14A a memorandum from Craig Levra, the President and Chief Executive Officer, to all employees dated August 27, 2009, regarding the proposed Option Exchange. A full- text copy of the memorandum is available at no charge at http://ResearchArchives.com/t/s?4373 Mr. Levra indicated that the stock option exchange program "increases employees' ability to share in the Company's future success." The program follows this Proposed Timeline: September 12, 2009 -- black out period begins prior to market open (15 days before second quarter ends) pursuant to Sport Chalet's Insider Trading Policy September 15, 2009 -- annual stockholders meeting (seeking stockholder approval of the employee stock option exchange program) September 27, 2009 -- second quarter ends October 1, 2009 -- employee stock option exchange program election period begins October 16, 2009 -- employee stock option exchange program election period ends November 4, 2009 -- Sport Chalet issues second quarter press release November 6, 2009 -- black out period ends after market close (two days after issuing second quarter press release) and earliest date of grant for the new options (after market close) for the employee stock option exchange program The stock option exchange program has not yet commenced. Sport Chalet will file a Tender Offer Statement on Schedule TO with the SEC upon the commencement of the stock option exchange program. As of June 28, 2009, the Company had $158.3 million in total assets; $104.3 million in total current liabilities, and $24.8 million in deferred rent, resulting in stockholders' equity of $29.1 million. The Company has said its primary capital requirements are for inventory, store relocation and remodeling. Historically, cash from operations, credit terms from vendors and bank borrowing have met its liquidity needs. For the foreseeable future, the Company said its ability to continue its operations and business is dependent on its cash flow from operations and borrowing capacity. Comparable store sales for the past eight quarters from the second quarter of fiscal 2008 to the first quarter of fiscal 2010 are - 2.2%, -6.9%, -8.8%, -11.1%, -6.7%, -15.4%, -17.7% and -14.7%, respectively. More recently, for the Company second quarter through August 2, 2009, it has experienced a 10.4% decline in comparable store sales. In the event sales decline at a rate greater than anticipated to support the loan covenants, the Company warned it may have insufficient working capital to continue to operate its business as it has been operated, or at all. As a result of the comparable store sales decline, the Company is focused on reducing operating expenses and improving liquidity through cost reductions and other initiatives. The amount the Company can borrow under its credit facility with Bank of America, N.A., is limited to a percentage of the value of eligible inventory, minus certain reserves. A significant decrease in eligible inventory due to the aging of inventory, an unfavorable inventory appraisal or other factors, could have an adverse effect on its borrowing capabilities under its credit facility, which may adversely affect the adequacy of its working capital. About Sport Chalet Sport Chalet, Inc. (Nasdaq: SPCHA, SPCHB) -- http://www.sportchalet.com/-- founded in 1959 by Norbert Olberz, operates full service specialty sporting goods stores in California, Nevada, Arizona and Utah. The Company offers more than 50 services for the serious sports enthusiast, including backpacking, canyoneering, and kayaking instruction, custom golf club fitting and repair, snowboard and ski rental and repair, SCUBA training and certification, SCUBA boat charters, team sales, racquet stringing, and bicycle tune-up and repair throughout its 55 locations. SPORTS CONSTRUCTOR'S: Case Summary 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Sports Constructor's, Inc. 77080 Wyatt Drive Fort Worth, TX 76108 Bankruptcy Case No.: 09-45242 Chapter 11 Petition Date: August 26, 2009 Court: United States Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Russell F. Nelms Debtor's Counsel: Michael A. McConnell, Esq. Kelly Hart & Hallman LLP 201 Main Street, Suite 2500 Ft. Worth, TX 76102 Tel: (817) 332-2500 Fax: (817) 878-9280 Email: michael.mcconnell@khh.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/txnb09-45242.pdf The petition was signed by Michael Gregory. SRW INVESTMENTS: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: SRW Investments LLC dba Waggoner Investments 910 South Jackson Street Frankfort, IN 46041 Bankruptcy Case No.: 09-12574 Chapter 11 Petition Date: August 27, 2009 Court: United States Bankruptcy Court Southern District of Indiana (Indianapolis) Judge: Anthony J. Metz III Debtor's Counsel: Alfred E. McClure, Esq. McClure & O'Farrell 210 Meijer Drive, Suite C Lafayette, IN 47905 Tel: (765) 446-8228 Email: almcclureecf@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A full-text copy of the Debtor's petition, including a list of its 2 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/insb09-12574.pdf The petition was signed by Stephen W. Waggoner, manager of the Company. ST. MARY'S HOSPITAL: Hospital Building Bids Due by Oct. 5 --------------------------------------------------------- St. Mary's Hospital, Passaic, N.J., filed its Motion (I) to Establish Bid and Sale Procedures for the Sale of [its 250,000 square-foot, 514-unit, hospital building located at] 211 Pennington Avenue, Passaic, New Jersey and Related Property Free and Clear of Liens, Claims, and Encumbrances and Interests, (II) to Schedule a Hearing on the Approval of the Sale, and (III) to Approve the Form and Manner of Notice of the Sale with the United States Bankruptcy Court for the District of New Jersey. All parties that may be interested in submitting a bid for the Purchased Assets or taking part in an Auction must read carefully the Bid Procedures as outlined in the Bid Procedures Order. Only Qualified Bidders may participate in the Auction. If you are interested in determining how to submit such a Qualified Bid, you must comply with the terms of the Bidding Procedures as referenced in the Order granting the Procedures Motion. Any party in interest wishing to receive a complete set of the Motion, the Bid Procedures and the Bid Procedures Order may do so free of charge upon written request of Debtor's counsel. Any party that wishes to take part in this process and submit a bid for the Purchased Assets must submit their bid prior to October 5, 2009, at 5:00 p.m. (EDT) (the "Bid Deadline") to: (a) counsel for the Debtor: Robert K. Malone, Esq. Michael P. Pompeo, Esq. Drinker Biddle & Reath LLP 500 Campus Drive Florham Park, NJ 07932 (b) the Office of the United States Trustee (c) Counsel to the Creditors' Committee: Brett S. Moore, Esq. Warren J. Martin, Jr., Esq. Porzio, Bromberg & Newman, P.C. 100 Southgate Parkway P.O. Box 1997 Morristown, NJ 07962 (d) Co-Counsel to HFG (a secured lender): Benjamin Mintz, Esq. Kaye Scholer, LLP 425 Park Avenue New York, NY 10022 - and - Richard M. Meth, Esq. Day Pitney, LLP 200 Campus Drive Florham Park, NJ 07932 in each case so as to be received not later than the Bid Deadline. In the event that the Debtor timely receives two or more conforming initial bids from prospective purchasers as described in the Procedures Motion and approved by the Debtor, then the Debtor, in consultation with the Creditors' Committee, the NJHCFFA and HFG, may conduct an auction with respect to the sale of the Purchased Assets on October 15, 2009, beginning at 12:00 p.m. (EDT), at the offices of Drinker Biddle & Reath LLP or at such other location as may be designated by the Bankruptcy court or the Debtor, in consultation with the Creditors' Committee, the NJHCFFA and HFG. Only Qualified Bidders will be eligible to participate at the Auction. In order to participate in the Auction, each prospective purchaser shall be required to comply with the requirements of the Bid Procedures and to submit an Initial Bid that is timely and that complies in all respects with the Bid Procedures Order. At the Sale Hearing, the Debtor may present to the Bankruptcy Court for approval both the Prevailing Bid and the next highest or otherwise best bid. Subject to Bankruptcy Court approval, the Debtor shall effect the Sale with the Successful Bidder. As set forth in the Sale Procedures, if the Successful Bidder fails to consummate an approved Sale because of a breach or a failure to perform on the part of such Successful Bidder, the Next Highest Bid, shall be deemed to be the Prevailing Bid and the Debtors shall be authorized to effect such Sale without further order of the Bankruptcy Court. The Debtor reserves the right in its business judgment, and in consultation with the Creditors' Committee, NJHCFFA and HFG, to (i) waive, modify or impose additional or different terms and conditions of the Bidding Procedures at or prior to the Sale, (ii) extend the deadlines set forth in the Bid Procedures and/or adjourn the Auction and/or the Sale Hearing without further notice, and (iii) reject any and all bids and/or cancel the Auction and/or Sale for any reason or no reason at all. If you seek to object to the sale of the Purchased Assets or other relief sought in the Motion, you must comply with the terms for making such objections as set forth in the Bid Procedures Order. Such Objection must be filed with the Bankruptcy Court in the District of New Jersey and served on the parties set forth in the Bid Procedures Order. If any party fails to timely file and serve an objection in accordance with the Bid Procedures Order, the Bankruptcy Court may disregard such objection. St. Mary's Hospital, Passaic, N.J., filed for Chapter 11 protection (Bankr. D. N.J. Case No. 09-15619) on March 9, 2009, listing listed assets of $70.8 million and debts of $128 million. STANDARD PACIFIC: Lenders Reduce Commitment, Relax Covenants ------------------------------------------------------------ Standard Pacific Corp. on August 12, 2009, entered into an Eighth Amendment to Revolving Credit Agreement and Seventh Amendment to Term Loan A Credit Agreement, with Bank of America, N.A., as Administrative Agent for the Revolving Lenders and as Administrative Agent for the Term A Lenders, and the Revolving Lenders and the Term A Lenders signatory thereto. The Amendment amended (i) the Revolving Credit Agreement, dated as of August 31, 2005, among the Company, Bank of America, as Administrative Agent, and the lenders party thereto and (ii) the Term Loan A Credit Agreement, dated as of May 5, 2006, among the Company, Bank of America, as Administrative Agent, and the lenders. Pursuant to the Amendment, among other things, the Company (i) reduced the total commitment under the Revolving Credit Agreement from $361.4 million to $50 million, with future extensions of credit under the Revolving Credit Agreement being limited (subject to certain limited exceptions) to the issuance of letters of credit, (ii) agreed to cash collateralize all letters of credit outstanding from time to time under the Revolving Credit Agreement and (iii) paid down the outstanding balance of term loans under the Term Loan A Credit Agreement from $37.1 million to $3.7 million and shortened the maturity of the Term Loan A Credit Agreement from May 5, 2011 to December 15, 2009. In addition, pursuant to the Amendment, the covenants contained in the Revolving Credit Agreement and the Term Loan A Credit Agreement were modified to, among other things, eliminate the negative covenants limiting liens, prepayment of indebtedness, changes in the nature of business, pension plans, payment of dividends, disposition of properties, investments, transactions with affiliates and indebtedness. The liquidity test requiring the Company to maintain either a minimum ratio of cash flow from operations to consolidated home building interest incurred or a minimum interest reserve was also eliminated and replaced with a financial covenant requiring the Company to either (i) maintain either a minimum ratio of cash flow from operations to consolidated homebuilding interest incurred, a minimum ratio of home building EBITDA to consolidated home building interest incurred or a maximum ratio of combined net home building debt to consolidated tangible net worth or (ii) pay a fee equal to 50 basis points per quarter on the outstanding principal amount of the loans under the Term Loan A Credit Agreement and prepay, on a quarterly basis, an aggregate principal amount of $7.5 million of the loans outstanding under the Term Loan A Credit Agreement and the Company's Term Loan B Credit Agreement. The event of default relating to the prepayment of subordinated debt was also eliminated from the Revolving Credit Agreement and the Term Loan A Credit Agreement. In addition, pursuant to the Amendment, the Revolving Credit Agreement was amended to add an event of default relating to the maintenance of cash collateral securing outstanding letters of credit under the Revolving Credit Agreement, as well as to add certain additional events of default relating to subsidiaries of the Company that have pledged cash to secure such letters of credit, including, among other things, events of default relating to bankruptcy and insolvency events, dissolutions, liquidations and sales of assets of such subsidiaries. The Amendment also makes certain other technical amendments to the Revolving Credit Agreement and the Term Loan A Credit Agreement. As a result of the Amendment and pursuant to the Term Loan B Credit Agreement, dated as of May 5, 2006, among the Company, Bank of America, as Administrative Agent, and the lenders, the representations and warranties, covenants and events of default under the Term Loan B Credit Agreement corresponding to the representations and warranties, covenants and events of default under Revolving Credit Agreement and the Term Loan A Credit Agreement were automatically amended to conform to those set forth in the Revolving Credit Agreement and the Term Loan A Credit Agreement after giving effect to the Amendment. The Company also has proposed that certain additional changes be made to the Term Loan B Credit Agreement to make the financial covenant more restrictive in future periods, and to require payment of the Financial Covenant Fee on the outstanding principal amount of the loans under the Term Loan B Credit Agreement in the event the Company does not comply with the financial covenant. The lenders under the Term Loan B Credit Agreement will have a period of 15 business days from the date such changes are proposed to the lenders to object to these additional changes, and such additional changes will not become effective unless lenders holding in excess of 66-2/3% of the aggregate principal amount of the loans outstanding under the Term Loan B Credit Agreement do not object to them. REVOLVER LENDER COMMITMENT SCHEDULE Lender Commitment Share ------ ---------- ----- Bank of America, N.A. $6,450,236.96 12.90% JPMorgan Chase Bank $4,729,857.82 9.46% The Royal Bank of Scotland $4,545,023.70 9.09% Wachovia Bank National Association $4,393,364.93 8.79% SunTrust Bank $2,369,668.25 4.74% Guaranty Bank $2,606,635.07 5.21% PNC Bank, National Association $2,369,668.25 4.74% Credit Suisse, Cayman Islands Branch $2,132,701.42 4.27% Washington Mutual Bank $2,606,635.07 5.21% Calyon New York Branch $1,398,104.27 2.80% Comerica Bank $1,658,767.77 3.32% US Bank National Association $1,658,767.77 3.32% Citibank, N.A. $1,056,872.04 2.11% Natixis $1,056,872.04 2.11% Key Bank National Association $1,658,767.77 3.32% Regions Bank $1,488,151.66 2.98% Bank of the West $1,421,800.95 2.84% City National Bank $1,184,834.12 2.37% Union Bank, N.A. $1,421,800.95 2.84% Wells Fargo Bank National Association $1,421,800.95 2.84% California Bank and Trust $947,867.30 1.90% Compass Bank $710,900.47 1.42% MidFirst Bank $710,900.47 1.42% ------------- ------ AMOUNT $50,000,000 100% TERM A LOAN LENDER COMMITMENT SCHEDULE Lender Amount Percentage ------ ------ ---------- Bank of Oklahoma, N.A. $74,259.31 2.00% Bank of the West $185,648.28 5.00% Bank of America, N.A. $720,315.35 19.40% Calyon New York Branch $204,213.11 5.50% Citibank, N.A. $471,546.64 12.70% JPMorgan Chase Bank National Association $471,546.64 12.70% Natixis $471,546.64 12.70% Regions Bank $133,666.76 3.60% The Royal Bank of Scotland $337,879.88 9.10% Union Bank, N.A. $185,648.28 5.00% Wachovia Bank National Association $271,046.50 7.30% Wells Fargo Bank National Association $185,648.28 5.00% ------------- ---------- TOTAL $3,712,965.69 100.00% A full-text copy of the Eighth Amendment to Revolving Credit Agreement and Seventh Amendment to Term Loan A Credit Agreement, effective as of August 12, 2009, by and among the Company, Bank of America, N.A., as Administrative Agent for the Revolving Lenders and as Administrative Agent for the Term A Lenders, and the Revolving Lenders and the Term A Lenders, is available at no charge at http://ResearchArchives.com/t/s?4383 A full-text copy of the Notice of Revolver and Term A Amendment, dated August 12, 2009, is available at no charge at: http://ResearchArchives.com/t/s?4384 About Standard Pacific Corp. Headquartered in Irvine, California, Standard Pacific Corp. (NYSE: SPF) -- http://www.standardpacifichomes.com/-- operates in many of the largest housing markets in the country with operations in major metropolitan areas in California, Florida, Arizona, the Carolinas, Texas, Colorado and Nevada. The Company also provides mortgage financing and title services to its homebuyers through its subsidiaries and joint ventures, Standard Pacific Mortgage Inc., SPH Home Mortgage and SPH Title. Standard Pacific generated a net loss of $23.1 million, or $0.10 per diluted share, for the second quarter ended June 30, 2009, versus a net loss of $249.0 million, or $3.44 per diluted share, for the year earlier period. As of June 30, 2009, the Company had $1.91 billion in total assets and $1.56 billion in total liabilities. * * * According to the Troubled Company Reporter on April 1, 2009, Standard & Poor's Ratings Services lowered its issue-level rating on Standard Pacific Corp.'s senior unsecured notes to 'CCC-' from 'CCC' and removed the rating from CreditWatch, where it was placed with negative implications on March 4, 2009. At the same time, S&P lowered its recovery rating on the debt to '5' from '4', indicating that senior noteholders can expect modest (10%-30%) recovery in the event of a payment default. SUNGARD DATA: Bank Debt Trades at 3% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which SunGard Data Systems, Inc., is a borrower traded in the secondary market at 96.65 cents-on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.95 percentage points from the previous week, The Journal relates. The loan matures on Feb. 28, 2014. The Company pays 375 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's while it carries Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. SunGard Data Systems, Inc., headquartered in Wayne, Pennsylvania, is a provider of software and IT services to the financial services industry well as higher education institutions and the public sector. SunGard also provides disaster recovery/business continuity services through its Availability Services division. Fitch currently rates SunGard Issuer Default Rating at 'B', $4.7 billion senior secured term loan due 2014 and 2016 at 'BB- /RR2', and $829 million senior secured revolving credit facility (RCF) due 2011 and 2013 at 'BB-/RR2'. Standard & Poor's Ratings Services rates (i) SunGard's corporate rating at 'B+', and its (ii) $2.7 billion tranche B secured term loan maturing Feb. 28, 2016, and the $580 million secured revolving credit facility maturing May 11, 2013, at 'BB'. TALON INTERNATIONAL: June 30 Balance Sheet Upside-Down by $9.7MM ---------------------------------------------------------------- Talon International, Inc.'s balance sheet at June 30, 2009, showed total assets of $17.36 million and total liabilities of $27.13 million, resulting in a stockholders' deficit of $9.77 million. For three months ended June 30, 2009, the Company reported a net income of $74,855 compared with a net income of $598,157 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $1.10 million compared with a net loss of $1.24 million for the same period in 2008. The Company said there is substantial doubt about its ability to continue as a going concern. The Company noted that it experienced substantial recurring losses from operations on declining revenues and has an accumulated deficit of $64.8 million as of June 30, 2009. The Company added that its continuation as a going concern is dependent on its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4356 Talon International, Inc. (OTC:TALN) is an apparel company specializes in the manufacturing and distribution of a full range of apparel accessories including zippers and trim items to manufacturers of fashion apparel, specialty retailers and mass merchandisers. The Company acts as a service outsourced trim management department for manufacturers, a specified supplier of trim items to owners of specific brands, brand licensees and retailers, a manufacturer and distributor of zippers under the TALON brand name and a distributor of stretch waistbands that utilize licensed patented technology under the TEKFIT brand name. The Company also provides full service outsourced trim design, sourcing and management services and supply specified trim items for manufacturers of fashion apparel as Abercrombie & Fitch, Victoria's Secret, American Eagle, Motherhood, Express, Polo Ralph Lauren, and others. TAYLOR BEAN: Gets Interim Nod to Use Cash Collateral ---------------------------------------------------- Taylor, Bean & Whitaker Mortgage Corp. received interim approval from Judge Jerry Funk to use cash collateral, Dawn McCarty at Bloomberg News reported. Taylor, Bean & Whitaker Mortgage Corp. is a 27-year-old company that grew from a small Ocala-based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean filed for Chapter 11 on August 24 (Bankr. M.D. Fla. Case No. 09-07047). Taylor Bean has more than $1 billion of both assets and liabilities, and between 1,000 and 5,000 creditors, according to the bankruptcy petition. Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Florida, represents the Debtor. Troutman Sanders LLP is special counsel. BMC Group, Inc., serves as claims agent. THORNBURG MORTGAGE: Changes Name to TMST Inc., Files Relevant Docs ------------------------------------------------------------------ Thornburg Mortgage Inc. on August 7, 2009, filed Articles of Amendment with the State Department of Assessments and Taxation of Maryland to change the Company's name to TMST, Inc. Under the Amended and Restated Management Agreement dated as of January 16, 2009, and deemed effective April 30, 2008, Thornburg Mortgage Advisory Corporation has the right to request the Company to cease use of the name "Thornburg" and to legally change the name of the Company to a name that does not include "Thornburg" or any approximation thereof. Following the receipt of such a request from TMAC, the Company filed a motion with the United States Bankruptcy Court for the District of Maryland seeking approval to change its name. The motion was granted by the Bankruptcy Court on July 27, 2009, and the name change became effective upon the acceptance for record of the Articles of Amendment by the State Department of Assessments and Taxation of Maryland. On August 11, 2009, the Board of Directors of the Company approved certain amendments to the Company's Amended and Restated Bylaws to provide that, unless otherwise provided by the Board of Directors or required by the Company's charter, shares of the Company's stock will be issued only in uncertificated form and no certificates representing shares of the Company's stock will be issued by the Company upon the surrender to the Company of certificates representing outstanding shares of the Company's stock. Following these amendments, the Company does not expect to issue any stock certificates. Shares of the Company's stock will be issued in uncertificated book entry form or registered for transfer through the Direct Registration System, and stockholders generally will not be entitled to obtain physical certificates representing their shares of the Company's stock. The amended Bylaws also eliminate provisions regarding the content and signature requirements of any certificates the Company may issue in the future, as these matters are governed by the Maryland General Corporation Law. A full-text copy of the Articles of Amendment is available at no charge at http://ResearchArchives.com/t/s?4376 A full-text copy of the Amended and Restated Bylaw is available at no charge at http://ResearchArchives.com/t/s?4377 About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. -- http://www.thornburgmortgage.com/-- is a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originates, acquires, and retains investments in adjustable and variable rate mortgage assets. Its ARM assets comprise of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage, Inc., and its four affiliates filed for Chapter 11 on May 1 (Bankr. D. Md. Lead Case No. 09-17787). Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, has been tapped as counsel. Orrick, Herrington & Sutcliffe LLP is employed as special counsel. Jim Murray, and David Hilty, at Houlihan Lokey Howard & Zukin Capital, Inc., have been tapped as investment banker and financial advisor. Protiviti Inc. has also been engaged for financial advisory services. KPMG LLP is the tax consultant. Epiq Systems, Inc., is claims and noticing agent. In its bankruptcy petition, Thornburg listed total assets of $24,400,000,000 and total debts of $24,700,000,000, as of January 31, 2009. THORNBURG MORTGAGE: Consensual Exit Plan for ADFITECH Explored -------------------------------------------------------------- TMST, Inc., formerly known as Thornburg Mortgage, Inc., disclosed that at the request of the unsecured creditors' committee appointed in its bankruptcy cases, the sale process for mortgage auditor, debtor ADFITECH, has been terminated. TMST said on May 1, 2009, it intended to sell the business operations of ADFITECH as a going concern. TMST said ADFITECH and the unsecured creditors' committee are working on a consensual plan of reorganization of ADFITECH, subject to approval by the Bankruptcy Court in accordance with the Chapter 11 plan confirmation requirements of the Bankruptcy Code. ADFITECH continues to operate as a going-concern entity. On July 1, 2009 Larry Goldstone, CEO of TMST, Clarence G. Simmons III, CFO of TMST, and Thomas Apel, CEO of ADFITECH, and their advisors met with the representatives of the Unsecured Creditors Committee and their advisors in New York City at the request of the Committee to address a variety of topics. After extensive discussion and negotiation with the Committee, the Debtor and its related debtors filed an emergency motion on July 29, 2009, requesting court approval of termination of the sale process for ADFITECH based upon an agreement with the Committee which had requested termination of the sale process and negotiation of a Chapter 11 plan of reorganization for ADFITECH. A hearing on the motion was held on August 12, 2009, following which the court held (i) court authorization for stopping the ADFITECH sale process was not required, (ii) court approval for a release by the Committee of the debtors and their officers and directors from liability relating to stopping the ADFITECH sale process was not required, and (iii) allowance of fees paid or to be paid to Houlihan Lokey Howard & Zukin Capital, Inc., required the filing of an appropriate application and notice and hearing thereon. Subsequently, ADFITECH and the other debtors decided to stop the sale process for ADFITECH and engage in plan negotiations with the Committee, and terminated the engagement of Houlihan Lokey. ADFITECH, the Committee, and their advisor's continue to work together in a collaborative manner. The parties' advisors were in frequent contact during the month and made progress in addressing the Committee's information requests. As reported by the Troubled Company Reporter on August 12, 2009, according to Law360, U.S. Trustee W. Clarkson McDow Jr. objected to the Debtors' request to halt the sale process of ADFITECH, saying it should not pay Houlihan Lokey for stopping work. The U.S. Trustee protested to the payment of almost $300,000 to the firm. TMST has indicated it is not expected that there will be any distribution to the Company's equity holders in connection with the Debtors' bankruptcy cases. About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. -- http://www.thornburgmortgage.com/-- is a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originates, acquires, and retains investments in adjustable and variable rate mortgage assets. Its ARM assets comprise of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage, Inc., and its four affiliates filed for Chapter 11 on May 1 (Bankr. D. Md. Lead Case No. 09-17787). Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, has been tapped as counsel. Orrick, Herrington & Sutcliffe LLP is employed as special counsel. Jim Murray, and David Hilty, at Houlihan Lokey Howard & Zukin Capital, Inc., have been tapped as investment banker and financial advisor. Protiviti Inc. has also been engaged for financial advisory services. KPMG LLP is the tax consultant. Epiq Systems, Inc., is claims and noticing agent. In its bankruptcy petition, Thornburg listed total assets of $24,400,000,000 and total debts of $24,700,000,000, as of January 31, 2009. TITAN ENERGY: Posts 649,678 Net Loss in Six Months Ended June 30 ---------------------------------------------------------------- Titan Energy Worldwide, Inc., posted a net loss of $312,865 for three months ended June 30, 2009, compared with a net loss of $289,701 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $649,678 compared with a net loss of $1.02 million for the same period in 2008. The Company's balance sheet at June 30, 2009, showed total assets of $6.23 million, total assets of $3.13 million and stockholders' equity of 3.10 million. The Company said that there is substantial doubt about its ability to continue as a going concern. The Company noted that it incurred a net loss for the six months ended June 30, 2009, and at June 30, 2009, had an accumulated deficit of $24,668,076. In addition, the Company issued Series D Convertible Preferred Stock with a beneficial conversion feature which resulted in recording a preferred stock dividend of $4.07 million. The accumulated deficit without these transactions would have been $10,823,580. The management related that the Company has enough capital through reserves and expected revenues to operate until Dec. 31, 2009; however, it is likely that it will need additional capital to continue operations. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?435e About Titan Energy Worldwide Titan Energy Worldwide, Inc. -- http://www.titanenergy.com/-- manufactures, markets and services energy generation products and services, including development and support for new energy-related technology. Founded in 2005, Titan serves disaster recovery first responders, relief agencies, homeland security, the department of defense and municipalities. TROPICANA ENTERTAINMENT: Gets NJCC Permit for Atlantic City Return ------------------------------------------------------------------ Dan Shaw at Evansville Courier & Press reports that Tropicana Entertainment LLC has obtained the New Jersey Casino Control Commission's permission to return to Atlantic City. According to Courier & Press, the Commission agreed to let Tropicana Entertainment take over ownership of the Tropicana Casino and Resort in Atlantic City. Courier & Press relates that New Jersey's approval will allow Tropicana Entertainment to reunite its Atlantic City casino with Casino Aztar and properties it owns in Mississippi and Louisiana. Tropicana Entertainment could receive a license is November, even though the commission is meeting in September, due to a probe by regulators on the Company, Courier & Press says, citing Ernie Yelton, the executive director of the Indiana Gaming Commission. 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) TRW AUTOMOTIVE: Bank Debt Trades at Less Than 1% Off ---------------------------------------------------- Participations in a syndicated loan under which TRW Automotive, Inc., is a borrower traded in the secondary market at 99.35 cents- on-the-dollar during the week ended on Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.97 percentage points from the previous week, The Journal relates The loan matures on Feb. 9, 2014. The Company pays 150 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. TRW Automotive, Inc., headquartered in Livonia, Michigan, is among the world's largest and most diversified suppliers of automotive systems, modules, and components to global vehicle manufacturers and related aftermarket. Standard & Poor's Ratings Services says TRW is one of the world's 10 largest manufacturers of original equipment automotive parts and designs. Nearly 70% of its sales comes from outside North America; its largest customer, Volkswagen AG, accounts for about 17% of sales. Combined sales to the Michigan-based automakers account for about 22% of TRW's consolidated revenues, S&P says. The Company has three operating segments; Chassis Systems, Occupant Safety Systems, and Automotive Components. Its primary business lines encompass the design, manufacture and sale of active and passive safety related products. Revenues in 2007 were approximately $14.7 billion. In June 2009, Fitch Ratings downgraded TRW's Issuer Default Rating to 'B-' from 'B'. The downgraded was driven by increased concerns that the global automotive downturn will cause TRW's credit profile to deteriorate more than previously anticipated. In August 23, Fitch affirmed TRW Automotive's IDR at 'B-', removed from Rating Watch Negative and assigned a Stable Outlook. UNI-MARTS LLC: Disclosure Statement Hearing Set for September 22 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware had set a hearing on September 22, 2009, at 4:00 p.m. to consider the approval of the disclosure statement explaining Uni-Marts, LLC, and its affiliated debtors' joint plan of liquidation dated August 18, 2009. Objections, if any, to approval of the disclosure statement must be in writing and filed with the clerk of the Bankruptcy Court not later than 4:00 p.m. on September 16, 2009. The Plan provides for the conduct of an auction for substantially all of the Debtors' assets, the proceeds of which will be used to make a number of payments contemplated by the Plan. Allowed other secured claims, allowed priority non-tax claims, and allowed unclassified claims will be fully paid. Certain outstanding interests in the Debtors will be cancelled. The Secured Claim of Comerica Bank will receive in full and final satisfaction of its claim (i) the New Comerica Note, or (ii) such other, less favorable treatment as is agreed upon by the Debtors or the Liquidation Trustee, and Comerica. Each holder of an allowed general unsecured claim against Uni- Marts under Class 4(a) will receive its ratable portion of the Class A interests in the Liquidation Trust. General unsecured claims against Uni-Marts Ohio under Class 4(b) and general unsecured claims against subsidiary Debtors under Class 4(c) will receive similar treatment, with the exception that Class 4(b) will receive its ratable portion of the Class B interests in the Liquidation Trust and Class 4(c) will receive its ratable portion of the Class C interests in the Liquidation Trust. Classification of Claims and Interests The plan places the various claims against and interests in the Debtors into 6 classes: % Class Description Treatment Rec. ----- -------------------- ------------------------- ----- 1 Priority Non-Tax Claims Unimpaired; Not entitled 100% to Vote 2 Secured Claims of Impaired; Entitled to Vote 100% Comerica 3 Other Secured Claims Unimpaired; Not entitled 100% to Vote 4(a) General Unsecured Claims Impaired; Entitled to Vote x.xx% Against Uni-Marts 4(b) General Unsecured Claims Impaired; Entitled to Vote x.xx% Against Uni-Marts Ohio 4(c) General Unsecured Claims Impaired; Entitled to Vote x.xx% Against Subsidiary Debtors 5 Convenience Class Claims Impaired; Entitled to Vote x.xx% 6(a) Interests in Uni-Marts Impaired; Not entitled to 0% Vote 6(b) Interests in Uni-Marts Impaired; Not entitled to 0% Ohio vote 6(c) Interests in Subsidiary Impaired; Note entitled to 0% Debtors vote A full-text copy of the disclosure statement accompanying Uni- Marts, LLC's joint plan of liquidation dated August 18, 2009, is available for free at http://bankrupt.com/misc/uni-marts.ds.pdf As reported in the TCR on August 28, 2009, Matrix Capital Markets Group, the firm handling Uni-Marts LLC's bankruptcy sale, named Kwik Pik LLC the new stalking horse bidder, pending court approval. According to Convenience Store News, Uni-Marts failed to obtain court approval for the first stalking horse bidder, the Company's primary shareholder Tri-Color Holdings LLC. Kwik Pik would pay $10 million for Uni-Marts' Ohio assets and $6.7 million for the Company's Pennsylvania and New York assets. According to Convenience Store News, Matrix Capital said that 70 of the assets in Pennsylvania and New York will be offered to individual store buyers if offers meet value requirements without any "all or none" restrictions. Convenience Store News stated that interested parties may bid on the entire company, groups of assets or on individual stores by September 16. Headquartered in State College, Pennsylvania, Uni-Marts LLC owned 283 convenience stores and gasoline stations in Pennsylvania, New York and Ohio, but later reduced the store count during its bankruptcy case, which is still pending. It was taken private in 2004 by the Sahakian family and private-equity investors. The Company and six of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. D. Del. Lead Case No.08-11037). Michael Gregory Wilson, Esq., at Hunton & Williams LLP, represents the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims, notice and balloting agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Blank Rome LLP as its counsel. UNITED AIR: Bank Debt Trades at 36.65% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which United Airlines, Inc., is a borrower traded in the secondary market at 63.35 cents- on-the-dollar during the week ended on Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.73 percentage points from the previous week, The Journal relates. The loan matures on February 13, 2013. United pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. US FOODSERVICE: Bank Debt Trades at 20% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which U.S. Foodservice, Inc., is a borrower traded in the secondary market at 80.40 cents- on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.10 percentage points from the previous week, The Journal relates. The loan matures on July 3, 2014. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating, while it is not rated by Standard & Poor's. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. U.S. Foodservice, Inc. -- http://www.usfoodservice.com/-- is a foodservice supplier serving some 250,000 customers from more than 70 distribution facilities. The Company supplies restaurants, hotels, school, and other foodservice operators with a wide variety of food products, including canned and dry foods, meats, frozen foods, and seafood. It also distributes kitchen equipment and cleaning supplies among other non-food supplies. U.S. Foodservice distributes both national brand products and its own private labels. Tracing its roots to 1853, the company is owned by private equity firms KKR & Co. and Clayton, Dubilier & Rice. US SHIPPING: Plan Set for Oct. 1 Confirmation --------------------------------------------- U.S. Shipping Partners L.P. will present to the Bankruptcy Court on October 1 for confirmation its reorganization plan negotiated with lenders prepetition. Objections to confirmation of the Plan are due September 25. U.S. Shipping has obtained approval of the disclosure statement explaining the terms of the Plan. A copy of the Disclosure Statement, as twice amended, is available for free at: http://bankrupt.com/misc/US_Shipping_AmendedDS.pdf The Official Committee of Unsecured Creditors does not support the plan. The Committee notes that if general unsecured creditors vote in favor of the Plan, each holder of an allowed general unsecured claim under class 5 will receive a distribution equal to its pro Rata shareof a $300,000 segregated fund as the sole recovery Under the plan. If, however, class 5 votes to reject the plan, each holder of an allowed general unsecured claim shall receive a distribution equal to its pro rata share of a $100,000 segregated fund and the creditors committee may have the opportunity to Seek to pursue the litigation, which may, if ultimately successful, provide an additional source of recovery, the Committee said. Under the Plan, holders of the $333 million senior secured credit are to receive $240 million in new first-lien notes, $60 million in junior secured term loans, shares and warrants to purchase Class A common stock. The second lien creditors will receiver shares and warrants to purchase class B common stock. The Plan provides for a 70.3% to 79.7% recovery to holders of Allowed Senior Secured Lender Claims, a 0.0% to 2.5% recovery to holders of Allowed Second Lien Secured Claims, a 4.3%-6.0% recovery to holders of Allowed General Unsecured Claims if Class 5 votes to accept the Plan, (or, alternatively, a 1.4%-2.0% recovery if Class 5 votes to reject the Plan) and no recovery for holders of prepetition equity interests. As reported by the TCR on August 7, Rand Logistics, Inc., submitted a non-binding proposal via letter to the board of directors of the general partner of U.S. Shipping Partners pursuant to which Rand proposed, as an alternative to the Partnership's proposed plan of reorganization dated July 10, 2009, a transaction in which Rand would acquire the majority of the assets, and assume certain liabilities, of the Partnership and its subsidiaries for a combination of cash, notes and warrants. The board of directors, after consultation with its financial and legal advisors and the Steering Committee of the secured lenders, rejected the alternative plan, citing that the Partnership's plan will deliver a higher value to all the Partnership's stakeholders. 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. Epiq Systems Inc. serves as claims and notice agent. 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. As of March 31, 2009, the Company had $807,087,000 in total assets and $737,640,000 in total liabilities. VENETIAN MACAU: Bank Debt Trades at 9.7% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Venetian Macau US Finance Co. LLC is a borrower traded in the secondary market at 90.30 cents-on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.65 percentage points from the previous week, The Journal relates. The loan matures on May 25, 2013. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Meanwhile, participations in a syndicated loan under which Las Vegas Sands Corp. is a borrower traded in the secondary market at 77.72 cents-on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.03 percentage points from the previous week, The Journal relates. The loan matures on May 1, 2014. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B- rating. The debt is also one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Venetian Macau is a wholly owned subsidiary of Las Vegas Sands. VML owns the Sands Macau in the People's Republic of China Special Administrative Region of Macau and is also developing additional casino hotel resort properties in Macau. Based in Las Vegas, Nevada, Las Vegas Sands Corp. (NYSE: LVS) -- http://www.lasvegassands.com/-- owns and operates The Venetian Resort Hotel Casino, The Palazzo Resort Hotel Casino, and an expo and convention center. The company also owns and operates the Sands Macao, the first Las Vegas-style casino in Macao, China. As reported by the TCR on Aug. 4, 2009, Moody's Investors Service has placed Las Vegas Sands, Corp.'s ratings, including its B3 Corporate Family Rating, on review for possible downgrade. The review for possible downgrade reflects LVSC's weak fiscal 2009 second quarter operating results and Moody's heightened concern regarding the company's ability to maintain an adequate liquidity profile, reduce leverage, and remain in compliance with its financial covenants. VIKING DRILLING: Creditor Wants U.S. Unit Liquidated in Chapter 7 ----------------------------------------------------------------- The Chapter 11 case of Viking Offshore (USA) Inc., should be converted to a liquidation in Chapter 7, according to United States Debt Recovery LLC, a buyer of a $2 million claim, Bill Rochelle at Bloomberg reported. U.S. Debt, according to the report, noted that Viking has not been unable to sell the three rigs after 18 months in Chapter 11, and that that cash has shrunk to $7 million from $18 million. According to Mr. Rochelle, the conversion motion notes how an $80 million sale fell through. Today, according to US Debt, the rigs are worth in the range of $20 million to $25 million. A hearing on the conversion motion is scheduled for Sept. 29. Debt includes $86 million of bonds sold in September 2006 and a $60 million second-lien loan from February 2007. Viking also entered into another second-lien loan in December 2007 for $125 million. In February 2008, Oslo, Norway-based Viking Drilling ASA sent its U.S. unit to Chapter 11 bankruptcy in the U.S., citing that the reactivation project of three rigs of SS Viking Producer will result in a major cost overrun. It explained that completing the reactivation project would require significant additional financing requirement. About Viking Drilling Viking Drilling ASA -- http://www.vikingdrilling.com/-- provides offshore drilling. Viking Offshore provides controlled services for each of the rig-owning entities under a managed service agreement. Viking Offshore currently has five employees at its offices in Houston. The Viking Drilling Group, comprised of Viking Drilling ASA and its subsidiaries, owns three out-of- service bare deck semi-submersibles: SS Viking Producer, SS Viking Century, and SS Viking Prospector. Viking Producer, Inc. and Viking Century, Inc. are Liberian corporations fully owned by Viking Drilling ASA. Viking Prospector, Inc. is a Marshall Islands corporation and is also fully owned by Viking Drilling ASA. Viking Offshore (USA) Inc., and its affiliates filed for Chapter 11 protection on February 29, 2008 (Bankr. S.D. Tex. Case No. 08- 3121). John P. Melko, Esq. at Gardere Wynne Sewell, LLP represents the Debtors. When they filed for protection from their creditors, the companies listed assets and debts both between US$100 million to US$500 million. VISTEON CORP: Bank Debt Trades at 36.3% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Visteon Corporation is a borrower traded in the secondary market at 63.70 cents-on-the-dollar during the week ended Friday, Aug. 28, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.45 percentage points from the previous week, The Journal relates. The loan matures on May 30, 2013. Visteon pays 300 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating while Standard & Poor's has assigned a default rating on the bank debt. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Aug. 28, among the 140 loans with five or more bids. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Proposes More Time to Decide on Leases ---------------------------------------------------- Visteon Corporation and its debtor affiliates ask Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware to extend the deadline by which they must assume or reject unexpired leases and executory contracts through December 24, 2009. Section 365(d)(4)(A) of the Bankruptcy Code provides that a debtor is deemed to automatically reject non-residential real property leases to which it is a party unless the debtor assumes the lease by the earlier of 120 days from the Petition Date. Section 365(d)(4)(B) provides that the Court may extend the initial 120-day period prior to its expiration for an addition 90 days for "cause." The Debtors' current Lease Decision Period expires on Sept. 25, 2009. Laura Davis, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, relates that "cause" exists to approve a 90-day extension of the Debtors' Lease Decision Period. She asserts that: (a) the Debtors' determination of which leases to assume or reject is critical to their developing plan of reorganization and is highly influenced by ongoing discussions with the Debtors' customers in connection with future business planning; (b) exiting and rejecting a facility lease is an expensive proposition that requires significant analysis and advanced planning; and (c) the proposed 90-day extension will not prejudice the counterparties to the Unexpired Leases or affect their ability to recover rejection damages, if any, available to them under the Bankruptcy Code. The Debtors relate that they currently lease an aggregate of 2,737,707 square feet of space pursuant to 14 Unexpired Leases for manufacturing, assembly, and warehousing operations as well as for office spaces. The Debtors maintain that they are currently paying for their use of the properties at the standard lease rates and are continuing to perform their other obligations under the Unexpired Leases in a timely fashion. The Court is set to consider the Debtors' request on September 9, 2009. Parties who wish to object have until September 2 to do so. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Proposes October 15 Claims Bar Date ------------------------------------------------- By this motion, Visteon Corp. and its affiliates ask the Court to establish: (i) October 15, 2009, at 5:00 p.m. as the deadline for creditors to submit proofs of claim and requests for payment under Section 503(b)(9) of the Bankruptcy Code; and (ii) November 24, 2009 at 5:00 p.m. as the deadline for governmental units to submit proofs of claim against the Debtors. The Debtors further ask the Court to establish additional bar dates related to amendments or supplements to the Debtors' schedules of assets and liabilities and rejection of executory contracts and unexpired leases. In the event the Debtors amend or supplement their Schedules to reduce, delete, or change the classification of a Claim, the Debtors propose to give notice of that amendment or supplement to the claimants affected, and those holders will be afforded the later of 30 days from the date on which that notice is given or the General Bar Date or Governmental Bar Date to submit a proof of claim with respect to that amended claim. Similarly, the Debtors ask the Court to establish the later of (i) the General Bar Date or the Governmental Bar Date; or (ii) 30 days after the rejection date as the deadline for filing proofs of claim in connection with the rejection of an executory contract or unexpired lease. The Debtors propose that each proof of claim must: -- be written in English; -- include a claim amount denominated in U.S. dollars; -- conform substantially with the Proof of Claim Form provided by the Debtors or Official Form 10; -- state a Claim against only one Debtor; -- clearly indicate the Debtor against which the creditor is asserting a Claim; -- be signed by the Claimant or if the Claimant is not an individual, by an authorized agent of the Claimant; and -- include supporting documentation or an explanation as to why such documentation is not available. A Proof of Claim that asserts the same Claim against more than one Debtor will be treated as asserting a Claim against only the first listed Debtor. Any Proof of Claim submitted in the jointly administered cases of the Debtors but which does not identify a specific Debtor will be treated as asserting a Claim against Visteon Corporation only. All Proofs of Claim must be submitted so as to be actually received by the Debtors' claims agent no later than 5:00 p.m. prevailing Pacific Time on the applicable Bar Date at this address: Visteon Corporation Claim Processing c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue EI Segundo, California 90245 Proofs of Claim may be delivered in person, through U.S. mail or courier service. Claims sent through facsimile or e-mail will not be accepted. A Claimant who wishes to receive acknowledgment of receipt of its Proof of Claim may submit a copy of the Proof of Claim and a self-addressed, stamped envelope to the Debtors' claims agent' address along with the original Proof of Claim. Any Claimant who is required, but fails, to submit a Proof of Claim in accordance with the Bar Date Order on or before the applicable Bar Date will be forever barred, estopped, and enjoined from asserting that claim against the Debtors. The Debtors propose to entitle these entities to submit a proof of claim: * Any Claimant whose Claim against a Debtor is not listed in the Debtors Schedules or is listed as any of disputed, contingent, or unliquidated if the holder of that Claim desires to participate in any of the Chapter 11 cases or share in any distribution in the Chapter 11 cases on account of that Claim. * Any Claimant who believes that its Claim is improperly classified in the Schedules, is listed in an incorrect amount and who desires to have its Claim allowed in a classification or amount other than that identified in the Schedules. * Any Claimant holding a Claim against a Debtor that is not listed in the applicable Schedules. * Any entity holding a Claim that is allowable under Section 503(b )(9) of the Bankruptcy Code as an administrative expense in these cases. The Debtors propose that these parties not be required to file proofs of claim: * Claimants who already submitted a Proof of Claim against the applicable Debtor with the Clerk of the Bankruptcy Court for the District of Delaware or with Kurtzman Carson Consultants LLC in a form substantially similar to Official Bankruptcy Form 10. * Any Claimant whose Claim is listed on the Debtors' Schedules if (i) the Claim is not scheduled as "disputed," "contingent," or "unliquidated"; (ii) the Claimant agrees with the amount, nature, and priority of the Claim as set forth in the Schedules; and (iii) the Claimant does not dispute that the Claim is an obligation of the specific Debtor as set forth in the Schedules. * Any Claimant who holds a Claim that has been allowed pursuant to an order of the Court before the entry of the Bar Date Order. * Any Claimant who holds a Claim that has been paid in full by any of the Debtors or any other part. * Any Claimant who holds a Claim that is subject to specific deadlines, aside from those established pursuant to the Bar Date Motion, fixed by the Court. * Any Debtor holding a Claim against another Debtor in these Chapter 11 cases. * Any Claimant who holds a Claim that is limited exclusively to the repayment of principal, interest, or other applicable fees and charges owed under any bond or note issued by the Debtors pursuant to an indenture; provided, however, that (i) an indenture trustee under a Debt Instrument must file one Proof of Claim, on or before the General Bar Date, with respect to all of the amounts owed under each of the Debt Instruments, and (ii) any holder of a Debt Claim wishing to assert a Claim, other than a Debt Claim, arising out of or relating to a Debt Instrument must file a Proof of Claim on or before the General Bar Date. * Any Claimant whose Claim is based on an interest in an equity security of the Debtors; provided, however, that any Claimant who wishes to assert a Claim against any of the Debtors based on, without limitation, Claims for damages or rescission based on the purchase or sale of an equity security, must file a Proof of Claim on or before the General Bar Date. * Any Claimant who holds a Claim allowable under Sections 503(b) and 507(a)(1) of the Bankruptcy Code as administrative expenses of the Debtors' Chapter 11 cases, with the exception of Claims allowable under Section 503(b)(9). KCC, the Debtors' claims agent, will cause to serve a Bar Date Notice on (1) the Office of the U.S. Trustee for the District of Delaware; (2) counsel to the Official Committee of Unsecured Creditors; (3) counsel to the ad hoc group of lenders for the Debtors' senior secured term loan facility; (4) counsel for the administrative agent for the Debtors' senior secured term loan facility; (5) counsel for the administrative agent for the Debtors' revolving senior secured credit facility; (6) the indenture trustee for each of the Debtors' unsecured bond issuances; (7) (7) the Internal Revenue Service; (8) The United States Attorney for the District of Delaware and relevant state attorneys general; (9) the United States Department of Justice; (10) the Securities and Exchange Commission; (11) all persons or entities that have requested notice of the proceedings in the Chapter 11 cases; and (12) all known claimants. In addition to providing a Bar Date Notice to the notice parties, the Debtors also intend to publish the Bar Date Notice, modified for publication in the Wall Street Journal (National, European, and Asian editions), Automotive News (national edition), the Detroit Free Press, the Philadelphia Inquirer, and the Indianapolis Star on one occasion on or before September 15, 2009. The Publication Notice will include a telephone number that creditors may call to obtain copies of the Proof of Claim Form, the URL for a website at which the creditors may obtain copies of the Proof of Claim Form, and information concerning the procedures and appropriate Bar Dates for submitting Proofs of Claim. The Bar Date Notice will also be published electronically through posting on the Debtors' restructuring website, http://www.kccllc.net/visteon About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Schedules of Assets & Liabilities ----------------------------------------------- A. Real Property Undetermined B. Personal Property B.1 Cash on hand 0 B.2 Bank Accounts JP Morgan Chase & Co. $88,670,862 JP Morgan Chase & Co. 80,000,000 Comerica Bank 12,685,931 Comerica Bank 11,365,546 JP Morgan Chase & Co. 1,504,993 Bank of America, N.A. 240,299 Scotia Bank 239,383 Comerica Bank 226 B.3 Security Deposits Livingston International Inc. 10,930 GAB Robins 90,300 Liberty Mutual 106,919 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/VisteonCorp_B9.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 Visteon Systems, LLC 3,337,658,929 Halla Climate Systems Alabama Corp. 104,208,101 VC Regional Assembly & Manufacturing, LLC 113,109,403 Visteon Asia Holdings, Inc. 190,395,593 Visteon Climate Control Systems Limited 132,339,626 Oasis Holding Statutory Trust 276,432,333 Others 380,074,453 B.17 Alimony 0 B.18 Other Liquidated Debts Foreign - 2009 Refunds(related to Canadian VAT) 29,000 Michigan SBT - 2007 Refund 23,000 B.19 Equitable or Future Interests 0 B.20 Interests in estate of a debt benefit plan 0 B.21 Other Contingent & Unliquidated claims Undetermined B.22 Patents and other intellectual property Undetermined See http://bankrupt.com/misc/VisteonCorp_B22.pdf B.23 Licenses, franchises, and other intangibles Undetermined B.24 Customer lists or other compilations 0 B.25 Vehicles 2003 White E350 Van VIN 23,481 Custom Turntable Trailer 48,076 2005 WUAC8030 Trailer 25,001 B.26 Boats, motors, and accessories 0 B.27 Aircraft and accessories 0 B.28 Office equipment, furnishings and supplies Software 45,908,955 Office Furniture and Equipment 6,651,786 Computers 4,228,351 B.29 Machinery Manufacturing Equipment 80,028,232 Dunnage 4,404,867 Tooling 2,294,090 B.30 Inventory Production 26,376,823 Non-Production 2,160,312 Reserves (6,271,060) 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 Prepaid Expenses 19,954,126 Retainers 2,592,810 Notes Receivable 6,788,102 Prototype Receivables 4,300,000 Escrow Receivables 824,323 TOTAL SCHEDULED ASSETS $4,929,524,102 ========================================================= C. Property Claimed as Exempt - D. Secured Claim Wilmington Trust FSB $1,500,000,000 The Bank of New York Mellon 88,632,432 Ford Motor Company 11,080,142 E. Unsecured Priority Claims Harwell, Matthew D 10,950 F. Unsecured Non-priority Claims Carplastic S.A. de C.V. 23,602,733 Oasis Holdings Statutory Trust 12,143,755 The Bank of New York Trust Company, N.A. 206,386,000 The Bank of New York Trust Company, N.A. 450,000,000 The Bank of New York Trust Company, N.A. 206,000,000 VC Regional Assembly & Manufacturing, LLC 213,892,792 Visteon Global Technologies, Inc. 1,646,825,155 Visteon Global Treasury, Inc. 167,400,920 Visteon Holdings, LLC 176,902,009 Visteon International Holdings, Inc. 512,673,432 Visteon Systems, LLC 8,779,442,442 Others 178,180,868 See http://bankrupt.com/misc/VisteonCorp_F.pdf TOTAL SCHEDULED LIABILITIES $14,173,173,630 ======================================================== About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Statement of Financial Affairs -------------------------------------------- William G. Quigley, III, chief financial officer and executive vice president of Visteon Corporation, disclosed to the Court that the Company earned income during the two years immediately preceding the Petition Date: Source Amount ------ ------------- 2009 Total Sales through May 2009 $258,690,281 2008 Total Sales 983,751,906 2007 Total Sales 1,259,595,605 Mr. Quigley said that the Company also earned income other than from operation of business within the two year period before the Petition Date: Source Amount ------ ------------ Contract income - Escrow Reimbursement $328,400,000 Contract income - Reimbursement Agreement Proceeds 61,800,000 Rental Income - Kennedy Square 1 1,600,000 Rental Income - Kennedy Square 2 2,900,000 Rental Income - Village - Credit Union 53,167 Rental Income - Helm Street 500,000 Divestitures - North American Aftermarket 24,000,000 Asset Sales - Small value machinery and equipment 1,800,000 Engineering services 60,500,000 Interest income 38,800,000 Legal settlement proceeds 4,000,000 Miscellaneous 15,200,000 Prototype sales 21,300,000 Royalties 1,900,000 Tooling sales 6,100,000 Intercompany dividends 384,767,469 Divestitures-Tacnet 2,500,000 Visteon Corp. related that it made payments or transfers to creditors within 90 days before the Petition Date, totaling $500,105,869, a list of which is available for free at: http://bankrupt.com/misc/VisteonCorp_3b.pdf Among the largest creditor payments are: Creditor Amount -------- ----------- Fidelity Payroll $107,374,010 Bank of New York 15,750,000 Ceridian Corporation 12,530,092 AON Risk Services Inc. of Illinois 11,910,182 Blue Cross Blue Shield of Michigan 11,889,070 Fidelity Investments 11,072,901 Software Solutions Unlimited Inc. 8,676,392 Freescale Semiconductor 7,426,707 Brasil Trading Ltd 4,252,064 Novelis 3,904,947 Blue Care Network 2,520,603 Jabil Circuit Inc. 2,433,685 Citibank Commercial Cards 1,803,421 AT&T 1,670,754 Ernst & Young LLP 1,604,887 Fraen Corp 1,547,192 Century Mold Mexico LLC 1,480,050 Basell USA Inc 1,409,569 Bingham Mccutchen LLP 1,318,214 Fawn Industries Inc. 1,296,586 Empire Electronics, Inc. 1,228,490 Comision Federal De Electricidad 1,215,449 Automotive Components Holdings, Inc. 1,186,458 Douglas Autotech Corp 1,175,153 Clarion Company Ltd 1,163,565 Deloitte Tax LLP 1,142,405 Comision Federal De Electricidad 1,093,142 According to Mr. Quigley, the Company also made payments within one year before the Petition Date for the benefit of creditors who are insiders, totaling $18,534,343, a list of which is available for free at http://bankrupt.com/misc/VisteonCorp3c.pdf The Company was a party to approximately 200 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/VisteonCorp_4a.pdf Within one year before the Petition Date, Visteon Corp. also gave gifts or made charitable contributions, including: Name Amount ---- ------ University of Michigan Hospitals $5,000 Habitat For Humanity Detroit 5,000 University of Michigan 7,500 Michigan Hispanic Chamber of Commerce 5,000 The Detroit Wine Organization 5,000 Charity Review 12,000 Detroit Economic Club 15,000 Michigan Hispanic Chamber of Commerce 3,000 American Heart Association, Inc 5,000 Holland Hospital Foundation 70 Tournament Players Club 8,165 American Heart Association, Inc. 10,000 University of Michigan Hospitals 2,500 The Company further disclosed that it incurred losses from damaged properties within one year immediately preceding the Petition Date: Date of Loss Value ------------ ----- 04/22/2009 $15,598 01/17/2009 6,700 Within one year before the Petition Date, Visteon Corp. also made payments or transfers to persons, including attorneys, for consultation concerning debt consolidation, bankruptcy law or preparation of a petition, a list of which is available for free at http://bankrupt.com/misc/VisteonCorp-Sofa9.pdf The Company also holds properties owned by another person. A list of those properties is available for free at: http://bankrupt.com/misc/VisteonCorp_Sofa14.pdf Within six years of the Petition Date, Visteon Corp. has been responsible for contributing to these pension funds: Visteon Pension Plan -Future Service EIN 38-3519512 Visteon Pension Plan -Past Service EIN 38-3519512 Visteon UAW Retirement Plan EIN 23-1159360 Visteon Corporation Master Trust EIN 04-3518423 The Company's current officers, directors and shareholders are: Pardus Capital Management LP Shareholder 23% stock ownership Donald Smith and Co., Inc. Shareholder 6% stock ownership Alex J. Mandl Director -- Charles L. Schaffer Director -- Donald J. Stebbins Pres, CEO -- Dorothy L. Stephenson Sr. VP, HR -- Eric D. Sachs Chief Tax Officer -- Glenda Minor VP -- Heidi A. Sepanik Secretary -- James D. Thornton Director -- John Donofrio Sr. VP -- Joy Greenway VP -- Julie A. Fream VP -- Karl J. Krapek Director -- Kenneth B. Woodrow Director -- Michael J. Widgren VP, Controller -- Michael P. Lewis Asst. Treasurer -- Patricia L. Higgins Director -- Richard J. Taggart Director -- Robert Pallash Sr. VP -- Steve Meszaros VP -- Steven K. Hamp Director -- William G. Quigley III CFO, Exec VP -- William H. Gray III Director -- About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: S&P Withdraws 'D' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services said it has withdrawn its ratings on Van Buren Township, Michigan-based Visteon Corp. S&P lowered the corporate credit rating to 'D' on May 28 upon the company's filing for bankruptcy protection. "We expect the company's complex bankruptcy proceeding to continue for the foreseeable future," said Standard & Poor's credit analyst Robert Schulz. According to its second-quarter 10-Q filing with the SEC, the company has yet to obtain a debtor-in-possession facility. Visteon is currently funding postpetition operations under a temporary cash collateral order from the court. As of June 30, 2009, Visteon reported cash balances of $742 million, down $25 million from the level reported as of March 31, 2009. WASHINGTON MUTUAL: FDIC Addresses JP Morgan Lawsuit --------------------------------------------------- The Federal Deposit Insurance Corporation affirms that Washington Mutual Inc. submitted a proof of claim to the FDIC-Receiver, but such Claim was disallowed in January 2009. This claim submission was also noted by JPMorgan Chase Bank, National Association, the acquirer of Washington Mutual Bank. Consequently, the Debtors filed a complaint against the FDIC in the United States District Court for the District of Columbia, questioning the disallowance of the Claim. Contrary to JPMorgan's complaint, however, "the acts or omissions of the FDIC-Receiver did not proximately cause any of the plaintiffs or counterclaim plaintiffs' alleged damages or harm," Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, tells the Court. FDIC is the receiver for WMB pursuant to a Purchase and Assumption Agreement dated September 25, 2008. It is an independent agency of the U.S. government, which functions as (i) insurer or regulator of depository institutions generally, and (2) the appointed receiver of specific failed depository institutions. To recall, WaMu's Disallowed Claim for $13.6 billion was filed against FDIC on account of outstanding principal and accrued interest due under certain Promissory Notes, Intercompany Receivables, tax refunds, fraudulent transfers, liquidation preference and property transfers. Through its Adversary Complaint, JPMorgan has sought to ensure that it is not divested of the assets and interests purchased in good faith from the FDIC, as receiver for WMB. JPMorgan is also seeking indemnification and recovery against the Debtors for certain liabilities that may be asserted against it. The Claims and Counterclaims asserted by JPMorgan in its Adversary Complaint "are barred under 12 U.S.C. Section 1821(G) to the extent they seek to restrain or affect the exercise of powers or functions of the FDIC-Receiver," Mr. Brady contends, on FDIC's behalf. Debtors & FDIC Oppose Bondholders' Intervention The Debtors maintain that the Washington Mutual Bank Bondholders do not have standing to assert claims against the Debtors, and should not be permitted to intervene in the JPMorgan-initiated Adversary Complaint. The Bondholders' claims are highly duplicative of the claims asserted by FDIC, Rafael X. Zahralddin-Aravena, Esq., at Elliott Greenleaf, in Wilmington, Delaware, contends, on the Debtors' behalf. He argues that the Bondholders are unable to overcome the presumption that the FDIC is adequately representing the interests of WMB's creditors. The FDIC, for its part, argues that participation of the Bondholders in the Adversary Proceeding "would hinder the progress of the litigation by adding unnecessary duplication to the proceedings. The FDIC is statutorily tasked and presumed to adequately represent the interests of the Receivership estate and its creditors. "The FDIC-Receiver is entirely capable of representing the interests of the WMB receivership in this litigation without the assistance of the WMB Bondholders," James N. Luton, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, says, on behalf of the FDIC. Refuting the Objections from the Debtors and the FDIC, the Bank Bondholders insist that they have direct claims against, and are creditors of, the Debtors, and are therefore parties-in-interest in these Chapter 11 cases under Section 1109 of the Bankruptcy Code. The Bondholders reiterate their right to intervene in the Adversary Complaint initiated by JPMorgan pursuant to Rule 24(a)(I) of the Federal Rules of Bankruptcy Procedure. Furthermore, the Bank Bondholders maintain that their interests to protect their own claims against the Debtors are not adequately represented by any party. "Because the resolution of these Adversary Proceedings will impact the Bank Bondholders' billions of dollars of claims against the Debtors, it is only fair that Bank Bondholders be allowed to be heard on those issues when they are presented to the Court," Daniel H. Bromberg, Esq., at Quinn Emmanuel Urquhart Oliver & Hedges, LLP, in Redwood Shores, California, tells Judge Walrath. JPMorgan Dismisses Claims V. FDIC-Corporate; Retains Claims V. FDIC-Receiver JPMorgan said that it has dismissed, without prejudice, its claims in the Adversary Complaint against the FDIC in its corporate capacity, or FDIC-Corporate. JPMorgan, however, is not dismissing any claims against the FDIC in its capacity as FDIC- Receiver, or receiver for WMB, in Henderson, Nevada. Consequently, FDIC-Receiver withdrew its request to dismiss the interpleader claim against FDIC-Corporate. In a separate statement, the Debtors noted that they have withdrawn their request for sanctions, in connection with their opposition to JPMorgan's motion to dismiss WaMu's counterclaims in the Adversary Proceedings. The Debtors' withdrawal is in light of an agreement reached between the Debtors and JPMorgan. * * * Judge Walrath authorized the Official Committee of Unsecured Creditors to intervene in JPMorgan's Adversary Complaint. The Creditors Committee previously averred its "absolute right" to intervene in the Adversary Proceeding, as the statutory fiduciary representative of all unsecured creditors and a party-in-interest under Section 1109(b) of the Bankruptcy Code. Key Lawsuits Among Parties Washington Mutual filed a suit in March against the FDIC before the U.S. District Court in Washington after its claim in the bank receivership was denied. The Debtor seeks to recover $6.5 billion in capital contributions, $4 billion in preferred securities and $3 billion in tax refunds. The lawsuit contends the FDIC sold the bank for substantially less than the assets were worth. The holding company believes the bank's assets were worth more than the bank's debt. In April 2009, JPMorgan, which acquired Washington Mutual Bank, filed in the Bankruptcy Court a complaint against Washington Mutual and WMI Investment Corp., and Federal Deposit Insurance Corporation, seeking (i) to ensure that it is not divested of the assets and interests purchased in good faith from the FDIC, as receiver for WMB; and (ii) for indemnification and recovery against the Debtors for certain liabilities that may be asserted against JPMorgan, as successor by merger to WMB, pursuant to a Purchase and Assumption Agreement dated September 25, 2008, with the FDIC. In mid-April 2009, Washington Mutual countered with its own lawsuit against JPM in the Bankruptcy Court, seeking recovery of $4 billion it was holding in deposit accounts at its bank unit when the thrift unit was taken over in September by the FDIC and immediately transferred to JPMorgan Chase & Co. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WASHINGTON MUTUAL: FDIC Seeks to Intervene in Suit vs. JPM ---------------------------------------------------------- In separate statements filed with the Bankruptcy Court, (i) the Federal Deposit Insurance Corporation, in its capacity as Receiver for Washington Mutual Bank, and (ii) the WMB Bondholders, as holders of senior notes issued by WMB, seek the Court's permission to intervene in the adversary proceeding relating to the Debtors' complaint for the turnover of $4 billion in funds held by JPMorgan Chase Bank, National Association. As previously reported, the Debtors averred that the Funds were held in six disputed accounts in WMB in Henderson, Nevada, and WMB fsb, in Park City, Utah. They noted that JPMorgan purchased substantially all of WMB's assets from the FDIC and subsequently, assumed all of WMB fsb's deposit liabilities by merging WMB fsb with JPMorgan's own banking operations. The FDIC contends that, among other things, the determination of assets of the Debtors' estates as a core issue in the Adversary Proceeding reinforces the importance of its direct participation. The WMB Bondholders, on the other hand, maintain that their intervention in the Adversary Proceeding will protect their interests in the Debtors' estates and "ensure that issues critical to those interests are not resolved without the Bank Bondholders' participation." Objections The Debtors argue that in the FDIC's intent to intervene in the Adversary Proceedings, it is seeking to strip the Bankruptcy Court of exclusive jurisdiction to resolve the issues, which are essential to the administration of the estates of Washington Mutual, Inc. Moreover, the determination of the assets of the Debtors' estates, which is a core issue in the Adversary Proceeding, is a matter that the Bankruptcy Court should rule upon in its exclusive jurisdiction. If the FDIC successfully stalls the Adversary Proceedings and puts off the Debtors' recovery, the only results will be continued delay and further harm to creditors, Rafael X. Zahralddin-Aravena, Esq., at Elliott Greenleaf, in Wilmington, Delaware, asserts, on behalf of the Debtors. Similarly, Mr. Zahralddin-Aravena contends, the Bondholders should not be allowed to intervene in the Adversary Proceeding, principally due to the group's lack of standing to assert claims against the Debtors. He emphasizes that the Bondholders "are creditors of WMB -- not of the Debtors, from whom they seek to recover approximately $4 billion. The Bondholders' move to intervene in the Adversary Proceeding where the FDIC is actively participating, "is threatening to impose yet another duplicative layer of administration in a proceeding that has already encountered a difficult time getting out of the gate," Mr. Zahralddin-Aravena adds. For its part, the FDIC maintains that the interests of the Bondholders in the Adversary Proceeding "[are] derivative of rights that are held by the FDIC," and therefore warrants a denial of their motion to intervene in the Proceeding. The Official Committee of Unsecured Creditors filed a joinder to the Debtors' objection to the FDIC's Intervention request. * * * Striking out the Debtors' Objection, Judge Walrath authorizes the FDIC to intervene in the Debtors' Turnover Complaint. In a separate order, the Court denies JPMorgan's motion to dismiss the Adversary Proceeding. JPMorgan had argued that the Debtors are raising "manifestly compulsory counterclaims" to those they asserted in the adversary proceeding styled JPMorgan Chase Bank, National Association v. Washington Mutual, Inc., et al., and thus, the Debtors' Turnover Complaint must be dismissed because the Disputed Accounts are central to an ongoing litigation. The Court also denies in their entirety the requests of JPMorgan and the FDIC to stay the Turnover Complaint. Key Lawsuits Among Parties Washington Mutual filed a suit in March against the FDIC before the U.S. District Court in Washington after its claim in the bank receivership was denied. The Debtor seeks to recover $6.5 billion in capital contributions, $4 billion in preferred securities and $3 billion in tax refunds. The lawsuit contends the FDIC sold the bank for substantially less than the assets were worth. The holding company believes the bank's assets were worth more than the bank's debt. In April 2009, JPMorgan, which acquired Washington Mutual Bank, filed in the Bankruptcy Court a complaint against Washington Mutual and WMI Investment Corp., and Federal Deposit Insurance Corporation, seeking (i) to ensure that it is not divested of the assets and interests purchased in good faith from the FDIC, as receiver for WMB; and (ii) for indemnification and recovery against the Debtors for certain liabilities that may be asserted against JPMorgan, as successor by merger to WMB, pursuant to a Purchase and Assumption Agreement dated September 25, 2008, with the FDIC. In mid-April 2009, Washington Mutual countered with its own lawsuit against JPM in the Bankruptcy Court, seeking recovery of $4 billion it was holding in deposit accounts at its bank unit when the thrift unit was taken over in September by the FDIC and immediately transferred to JPMorgan Chase & Co. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WASHINGTON MUTUAL: JPM Opposes Rule 2004 Discovery -------------------------------------------------- To recall, Judge Mary Walrath authorized the Debtors to subject JPMorgan Chase Bank National Association to an examination pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, with respect to an action filed with the District Court of Galveston County, Texas, captioned American Nat/I Ins. Co., et at. v. JPMorgan Chase & Co., et al., and the adversary action commenced by JPMorgan Chase, styled JPMorgan Chase Bank, National Association v. Washington Mutual, Inc. et al. Subsequently, the Debtors informed the Court and parties-in- interest that subpoenas for the Rule 2004 Examination have been served upon JPMorgan. The subpoenas were received by Linda Platone and Satti Jaran on behalf of JPMorgan. JPMorgan sought reconsideration of the Court's order, pointing out that the Court did not take into account the Debtors' counterclaims in the Adversary Proceeding, which were filed after the Motion had been briefed and argued. The Debtors' counterclaims alleged, among other things, that (i) JPMorgan received a "windfall" in acquiring WMB's assets from the FDIC, and (ii) WMB owed the Debtors $177 million under certain promissory notes, which JPMorgan is obligated to pay. Rule 2004 Discovery is improper in light of the Adversary Proceeding, which is related to the Discovery, Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, asserts, citing In re Bennett Funding Group, Inc., 203 B.R. 24, 39 (Bankr. N.D.N.Y. 1996). In this regard, the Debtors' attempt to engage in "self-help" discovery is improper and encroaches on the Court's exclusive authority under Bankruptcy Rule 2004, Mr. Landis says. Mr. Landis further points out that the Debtors should not be permitted discovery on the "potential business tort claims" that they have identified because the claims are plainly barred by the Financial Institutions Reform, Recovery and Enforcement Act of 1989. Key Lawsuits Among Parties Washington Mutual filed a suit in March against the FDIC before the U.S. District Court in Washington after its claim in the bank receivership was denied. The Debtor seeks to recover $6.5 billion in capital contributions, $4 billion in preferred securities and $3 billion in tax refunds. The lawsuit contends the FDIC sold the bank for substantially less than the assets were worth. The holding company believes the bank's assets were worth more than the bank's debt. In April 2009, JPMorgan, which acquired Washington Mutual Bank, filed in the Bankruptcy Court a complaint against Washington Mutual and WMI Investment Corp., and Federal Deposit Insurance Corporation, seeking (i) to ensure that it is not divested of the assets and interests purchased in good faith from the FDIC, as receiver for WMB; and (ii) for indemnification and recovery against the Debtors for certain liabilities that may be asserted against JPMorgan, as successor by merger to WMB, pursuant to a Purchase and Assumption Agreement dated September 25, 2008, with the FDIC. In mid-April 2009, Washington Mutual countered with its own lawsuit against JPM in the Bankruptcy Court, seeking recovery of $4 billion it was holding in deposit accounts at its bank unit when the thrift unit was taken over in September by the FDIC and immediately transferred to JPMorgan Chase & Co. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WASHINGTON MUTUAL: Plan Filing Deadline Moved to Oct. 21 -------------------------------------------------------- Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware, extended the exclusive periods within which Washington Mutual, Inc., and WMI Investment Corp., may: (a) file a plan of reorganization through October 21, 2009; and (b) solicit acceptance of that plan through December 21, 2009. The Exclusive Periods Extension Order is without prejudice to the Debtors' right to make further extension requests pursuant to Section 1121(d) of the Bankruptcy Code. Key Lawsuits Among Parties Washington Mutual filed a suit in March against the FDIC before the U.S. District Court in Washington after its claim in the bank receivership was denied. The Debtor seeks to recover $6.5 billion in capital contributions, $4 billion in preferred securities and $3 billion in tax refunds. The lawsuit contends the FDIC sold the bank for substantially less than the assets were worth. The holding company believes the bank's assets were worth more than the bank's debt. In April 2009, JPMorgan, which acquired Washington Mutual Bank, filed in the Bankruptcy Court a complaint against Washington Mutual and WMI Investment Corp., and Federal Deposit Insurance Corporation, seeking (i) to ensure that it is not divested of the assets and interests purchased in good faith from the FDIC, as receiver for WMB; and (ii) for indemnification and recovery against the Debtors for certain liabilities that may be asserted against JPMorgan, as successor by merger to WMB, pursuant to a Purchase and Assumption Agreement dated September 25, 2008, with the FDIC. In mid-April 2009, Washington Mutual countered with its own lawsuit against JPM in the Bankruptcy Court, seeking recovery of $4 billion it was holding in deposit accounts at its bank unit when the thrift unit was taken over in September by the FDIC and immediately transferred to JPMorgan Chase & Co. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WASHINGTON MUTUAL: Proposes Bingham McCutchen as Tax Counsel ------------------------------------------------------------ By this application, Washington Mutual Inc. and its affiliates ask the Court to allow them to employ Bingham McCutchen LLP as their special tax counsel, nunc pro tunc to August 1, 2009. The Debtors relate that in November 2008, they were authorized to retain McKee Nelson LLP as their special tax counsel for tax controversy matters. Bingham merged with McKee in August 2009. As a result, all of McKee attorneys who previously represented the Debtors in their Chapter 11 cases will continue to represent the Debtors as partners or employees of Bingham. Specifically, prior to the Petition Date, McKee represented the Debtors in connection with tax controversy matters with the Internal Revenue Service relating to (i) the management of tax audit of a cross-border financing transaction within 2004 and 2005, and (ii) an audit and administrative appeal of certain partnership tax issues within 2001 to 2003. After the Petition Date, McKee continued to represent the Debtors in relation to, and became familiar with, the Debtors' tax and controversy matters. Given their long-standing engagement with McKee, it is appropriate for the Debtors to engage Bingham -- in light of the McKee-Bingham Merger -- to continue to perform legal services pertaining to the specialized nature of the Debtors' intricate tax issues and business operations. The Debtors will pay Bingham's professionals in accordance with these hourly rates: Designation Hourly Rate ----------- ----------- Partners and Of counsel $605 - $995 Associates and Counsel $300 - $590 Paraprofessionals $215 - $305 Bingham will also be reimbursed for its necessary out-of-pocket expenses. Rajiv Madan, Esq., a partner at Bingham, assures the Court that his firm does not hold or represent an interest adverse to the Debtors' estates. The Court will convene a hearing on September 25, 2009, to consider the Debtors' request. Objections, if any, must be filed by September 2. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WEST MILLENIUM: Sales Resume at Housing Project ----------------------------------------------- Nick Green at Contra Costa Times reports that sales have continued at West Millennium Group's housing project adjacent Wilson Park. According to Contra Costa Times, Ray Millman at Keller Williams Realty, who is handling the sale of the remaining 24 of the original 59 units for a U.S. Bankruptcy Court trustee -- opened a sales office on August 6 in Parkview Court, part of a contentious Torrance housing development in a former industrial area. Contra Costa Times relates that starting prices of the one- bedroom, one-bathroom units have been reduced to $275,000, from the $319,000 that was asked when the condos went on the market in 2007. "It's also unusual to get a big hunk of a project versus one house here, one house there. When the (developer) had started (building) the market was good. By the time he finished, it had already peaked so the developer got caught on the wrong side of the market," Contra Costa Times quoted Mr. Millman as saying. West Millennium Group is the developer of a Torrance senior citizen condominium complex. The group reportedly filed for Chapter 7 bankruptcy in May 2008. WIRELESS ENTERPRISES: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Wireless Enterprises, Ltd. 921 E. Fort Avenue, Suite 120 Baltimore, MD 21230 Bankruptcy Case No.: 09-25250 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. ------ -------- Wireless Construction Services, LLC 09-25253 Acquisition Services, LLC 09-25259 Global Enterprise Technologies, Inc. 09-25261 Wel Management, LLC 09-25264 Wireless Enterprises - Government 09-25265 Chapter 11 Petition Date: August 17, 2009 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: Nancy V. Alquist Debtor's Counsel: Lawrence Coppel, Esq. 233 E. Redwood St. Baltimore, MD 21202 Email: lcoppel@gfrlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by William Imperato, president of the Company. XCORPOREAL INC: Receives Delisting Notice From NYSE Amex -------------------------------------------------------- Xcorporeal, Inc., on August 20, 2009, received notice from the staff of the NYSE Amex LLC (formerly American Stock Exchange) indicating that, in the opinion of the staff of the Exchange, the Plan of Compliance previously submitted by the Company to the Exchange does not make a reasonable demonstration of the Company's ability to regain compliance with Section 1003(a)(iv) of the NYSE Amex Company Guide by November 16, 2009, due to the Company having sustained losses which are so substantial in relation to the Company's overall operations or its existing financial resources, or its financial condition had become so impaired that it appears questionable, in the opinion of the Exchange, as to whether the Company would be able to continue operations or meet its obligations as they mature. Accordingly, the Company's securities are subject to immediate delisting proceedings. The Company will not appeal this decision and pursuant to the terms of the notice, if the Company elects not to appeal the Amex's decision by August 27, 2009, it will become final. The staff of the Exchange will then suspend trading in the Company's securities on the Exchange and file an application with the U.S. Securities and Exchange Commission to strike the Company's common stock from listing and registration on the Exchange. The Company hopes to procure a sponsoring market maker and commence the process of submitting via such market maker a Form 211 application with the Financial Industry Regulatory Authority to have its common stock quoted on the FINRA Over-The-Counter Bulletin Board. If successful, the Company anticipates that the move to the OTCBB would provide meaningful savings to it as a result of the elimination of fees associated with being listed on a national stock exchange. Having the Company's common stock quoted on the OTCBB may result in a less liquid market for its shares, but would result in continued public trading of the Company's common stock by holders wishing to trade. There can be no assurance that the Company will be successful in having its common stock quoted on the OTCBB and a failure to have it so quoted could result in a lack of a liquid market for its common stock. About Xcorporeal Xcorporeal Inc. (NYSE Amex: XCR) is a medical device company developing an innovative extra-corporeal platform technology to be used in devices to replace the function of various human organs. WISE METALS: Net Loss Widens to $17.5MM for June 30 Quarter ----------------------------------------------------------- Wise Metals Group LLC posted wider net loss of $17,573,000 for the three months ended June 30, 2009, from a net loss of $8,401,000 for the same period a year ago. The Company posted a net loss of $56,243,000 for the six months ended June 30, 2009, from a net loss of $16,688,000 for the same period in 2008. Wise Metals recorded lower sales of $161,601,000 for the three months ended June 30, 2009, from $350,003,000 for the same period a year ago. The Company booked sales of $319,406,000 for the six months ended June 30, 2009, from $665,666,000 for the same period in 2008. As of June 30, 2009, the Company had total assets of $481,973,000; and total current liabilities of $554,759,000, term loans and capital lease obligations, less current portion, of $1,933,000, senior note obligations of $150,000,000, accrued pension and other post retirement obligations of $13,521,000, other liabilities of $1,279,000, redeemable preferred membership interest of $87,875,000, resulting in total Members' deficit of $327,394,000. On August 26, 2009, company officials said production of wide can sheet coil is underway at the Company's Wise Alloys rolling mill facility in Muscle Shoals, AL. "This marks the completion of a major step," commented Danny Mendelson, chief strategic officer. "This achievement affords great opportunities in a growing global marketplace, previously denied to Wise due to width limitations." The expansion now allows Wise Alloys to produce can sheet coil up to 72 inches wide whereas previous capabilities were limited to 63 inches. Approximately one-half of the North American market for can sheet body stock prefers the use of the wider coil. Wise will now have the ability to service 100% of can makers' needs in the market. A wider can sheet coil enables can makers to achieve greater efficiencies in the process of stamping out can sheet blanks used in the production of aluminum beverage cans. As reported by the Aluminum Association, "Americans consume over 100 billion aluminum beverage cans on an annual basis." Through recycling operations such as Wise Recycling, "Aluminum beverage cans are 100% recyclable into new beverage cans indefinitely." Shipments at Wise Recycling increased 43% in the 2009 second quarter versus 2009 first quarter, while Company consolidated shipments, including shipments of recycled metal, totaled 161.7 million pounds for the second quarter of 2009 which increased 8% over first quarter of 2009 shipments of 150.2 million pounds. Overall sales for the quarter increased 2% to $161.6 million compared to the first quarter of 2009. Gross margin also improved significantly in the quarter by approximately $27.3 million as significant impacts from metal lag which affected first quarter results no longer had major impacts on margins after the complete implementation of the Company's aluminum price risk management program. Such a program better matches customer and supplier price commitments so as to greatly reduce dependency on third-party derivative "hedge" positions. After adjustments for metal lag and other items, Adjusted EBITDA with LCM impact for the second quarter of 2009 was ($3.5) million compared to the same ($3.5) million for the first quarter of 2009. Interest costs for the second quarter of 2009 of $8.9 million reflect an increase of $0.5 million over the first quarter of 2009 reflecting increased working capital needs. In addition to the ongoing engagement with Reznick Group, Wise has also engaged accounting firm Crowe Horwath, LLP to supplement management's accounting resources regarding the testing of internal controls. Management plans to utilize these resources as needed throughout 2009 and beyond. The Company noted that TMC (Total Maintenance Center), based in Muscle Shoals, Alabama, which specializes in providing maintenance, repairs and fabrication to manufacturing and industrial plants worldwide further expanded its operations by adding on-site capabilities in Mobile, Alabama, to bolster its already strong regional presence and add further enhanced specialty skills. "We are excited at the opportunities afforded to us in Mobile and look forward to a strong business relationship in the community," added Chip Flournoy, TMC President. A full-text copy of Wise's earnings release is available at no charge at http://ResearchArchives.com/t/s?4379 About Wise Metals Group Based in Baltimore, Maryland, Wise Metals Group LLC includes Wise Alloys, the world's third-leading producer of aluminum can stock for the beverage and food industries; Wise Recycling, one of the largest, direct-from-the-public collectors of aluminum beverage containers in the United States, operating shipping and processing locations throughout the United States that support a network of neighborhood collection centers; and Listerhill Total Maintenance Center, specializing in providing maintenance, repairs and fabrication to manufacturing and industrial plants worldwide ranging from small on-site repairs to complete turn-key maintenance. * * * As reported by the Troubled Company Reporter on July 16, 2009, Moody's Investors Service commented that the Caa3 corporate family rating and negative rating outlook for Wise Metals LLC would not be immediately impacted by the company's disclosure of weak results in its delayed first quarter financial statements filed on July 9, 2009. The prior rating action for Wise Metals was on September 27, 2006, when the probability of default rating of Caa3 was assigned. The credit opinion was updated on September 29, 2008. As reported in the TCR on March 20, 2009, Standard & Poor's Ratings Services revised its outlook on Wise Metals to negative from developing. At the same time, Standard & Poor's affirmed its 'CCC' corporate credit rating. WIZZARD SOFTWARE: Posts $2.19MM Net Loss in Quarter Ended June 30 ----------------------------------------------------------------- Wizzard Software Corporation posted a net loss of $2.19 million for three months ended June 30, 2009, compared with a net loss of $1.89 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $3.51 million compared with a net loss of $4.53 million for the same period in 2008. The Company's balance sheet at June 30, 2009, showed total assets of $22.25 million, total liabilities of $2.98 million and stockholders' equity of $19.27 million. The Company said there is substantial doubt about its ability to continue as a going concern. The Company noted that it has current liabilities in excess of current assets, incurred significant losses and has not yet been successful in establishing profitable operations. In this regard, the management plans to mitigate this doubt by raising additional funds through debt or equity offerings and by substantially increasing sales. There is no assurance that the Company will be successful in achieving profitable operations. The Company's ability to continue as a going concern is substantially dependent on the successful execution of many of the actions, on the timeline contemplated by its plans. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?435c Wizzard Software Corporation (AMEX:WZE)provides software products and services that focus on speech recognition and text-to-speech technology, podcasting and home healthcare industry. Wizzard provides software programming tools and services that allow companies to incorporate speech technology into their products and services. It offers speech technology software programming tools and speech engines from AT&T and IBM, for which it receives a royalty for each licensed copy of these engines distributed with its customer's products and services. The Company's products and services includes podcasting hosting and advertising services, speech tools and engine, Wizzard offers text-to-speech engines and home healthcare services. The Company's core business is broken into three department, including podcasting sales and services, speech technology sales and services and healthcare services. WOLVERINE TUBE: Inks Deal With President Regarding $100,000 Bonus ----------------------------------------------------------------- Wolverine Tube, Inc., on August 20, 2009, entered into a letter agreement with Harold M. Karp, President and Chief Operating Officer, regarding a retention bonus of $100,000 to be provided to Mr. Karp in exchange for his commitment to remain employed by the Company in his current capacity and for his continued performance of his duties in a satisfactory manner through June 30, 2011. Pursuant to the Letter Agreement, the retention bonus is payable to Mr. Karp in equal installments on August 31, 2009, March 31, 2010, and December 31, 2010. In the event that Mr. Karp voluntarily leaves the Company prior to July 1, 2011 or is terminated for cause prior to that date, he is required to repay to the Company the entire retention bonus at the time his active employment ends. The Letter Agreement expires on July 1, 2011. Wolverine Tube, Inc., is a global manufacturer and distributor of copper and copper alloy tube, fabricated products, and metal joining products. As of July 5, 2009, the Company had $201,105,000 in total assets and $241,483,000 in total liabilities. Wolverine Tube said in its quarterly report for the period ended July 5, 2009, the uncertainty about the Company's ability to achieve its projected results, the absence of such credit or capital commitments and the uncertainty about the future price of copper, which has a substantial impact on working capital, raises substantial doubt about the Company's ability to continue as a going concern. The Company expects to continue to actively manage and optimize its cash balances and liquidity, working capital, operating expenses and product profitability, although there can be no assurances the Company will be able to do so. YELLOWSTONE CLUB: Consultants Seek Payment of Over $10MM in Fees ---------------------------------------------------------------- Matthew Brown at The Associated Press reports that attorneys and others involved in Yellowstone Club's bankruptcy case have sought more than $10 million in fees and expenses. The AP says that fees approved by the court are paid by the Debtor's estate, out of the purchase price for the club. According to The AP, the payment sought includes some charges billed at more than $900 an hour. The AP relates that more than half the fees were racked up by lawyers, accountants, and consultants hired under former Yellowstone Club owner Edra Blixseth. The AP states that the lawyers describe their fees as reasonable, given the complexities of the bankruptcy case. The AP reports that Credit Suisse's lawyers had the steepest rate, at $930 per hour. Credit Suisse, according to the report, has so far recovered a fraction of the $375 million in loans it arranged for Yellowstone Club in 2005. Most of the legal fees stemmed from efforts to make sure other creditors got paid before Credit Suisse, The AP relates, citing Bill Keegan, Ms. Blixseth's spokesperson. Credit Suisse allowed Ms. Blixseth's ex-husband, Tim, to divert a majority of the loans to other entities under his control. Mr. Keegan said that most of the remaining legal fees were incurred defending against Credit Suisse's "baseless claims" that Ms. Blixseth had conspired to drive Yellowstone Club into bankruptcy, The AP states. The U.S. Bankruptcy Court had rejected the claims. The AP reports that the court has approved $4 million in fees so far, but there isn't any guarantee that additional fees will be approved. The AP relates that U.S. Bankruptcy Judge Ralph Kirscher denied $470,000 in fees submitted by lawyers working for CrossHarbor Capital Partners, saying htat attorneys for Goulston & Storrs PC - - which represented the Yellowstone Club buyer -- failed to adequately document their charges and they would have to return with a more detailed accounting before he would allow payment. A $7 million fund set up by CrossHarbor Capital will ensure most companies and individuals owed money by the club will be paid, The AP states, citing the lawyer representing Yellowstone Club's creditors. The AP says that $6 million in checks would be sent to the creditors this week. According to The AP, lawyers representing Greg LeMond, one of Yellowstone Club's original members, is seeking $400,000 for work done in a separate case from 2008 in state district court, claiming that they deserve payment because they were the first to reveal Tim Blixseth's diversion of the Credit Suisse loans. The court will still rule on their request, says the report. About Yellowstone Club Located near Big Sky, Montana, Yellowstone Club -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. The Company was founded in 1999. Yellowstone Mountain Club LLC and its affiliates filed for Chapter 11 on November 10, 2008 (Bankr. D. Montana, Case No. 08- 61570). The Company's owner affiliate Edra D. Blixseth, filed for Chapter 11 on March 27, 2009 (Case No. 09-60452). Connie Sue Martin, Esq., David A. Ernst, Esq., Lawrence R Ream, Esq., Richard G. Birinyi, Esq., Stephen Deatherage, Esq., Thomas L. Hutchinson, Esq., and Troy Greenfield, Esq., at Bullivant Houser Bailey PC; and James A. Patten, Esq., at Patten, Peterman, Bekkedahl & Green PLLC, represent the Debtors as counsel. The Debtors hired FTI Consulting Inc. and Ronald Greenspan as CRO. The official committee of unsecured creditors in the case are represented by J. Thomas Beckett, Esq., and David P. Billings, Esq., at Parsons, Behle and Latimer, as counsel, and James H. Cossitt, Esq., at local counsel. Credit Suisse, the prepetition first lien lender, is represented by Skadden, Arps, Slate, Meagher & Flom. YRC WORLDWIDE: Board Names A&M's Williamson as Strategy Officer --------------------------------------------------------------- The board of directors of YRC Worldwide Inc. on August 20, 2009, elected Richard Williamson, Managing Director of Alvarez & Marsal, as its Chief Strategy Officer to, among other things, coordinate and oversee the Company's continued recovery efforts. Mr. Williamson and Alvarez & Marsal were retained in early 2009, along with Tenex Capital Management, to assist the Company in formulating and implementing its comprehensive plan to address the Company's capital structure and liquidity needs. The Company is required under a modification to its collective bargaining agreement, and the recent amendment to its Credit Agreement to appoint and continue to engage a designated officer to, among other things, coordinate and oversee the Company's continued recovery efforts. On August 7, 2009, the Company's employees who are represented by the International Brotherhood of Teamsters ratified the modification to the CBA, which provides for: -- a temporary cessation of the requirement for the Company's subsidiaries to make contributions on behalf of most of the Company's Teamster represented employees to the Pension Funds from July 2009 through December 31, 2010. The contributions will not need to be repaid in the future and, therefore, will be a cost reduction during this period; -- a 15% wage reduction (which includes the 10% wage reduction previously implemented in January 2009) for most of the Company's Teamster represented employees; -- a reduction in the increase in contributions to multiemployer health and welfare plans from $1.00 per hour to $0.20 per hour that are scheduled for August 1, 2009 and to $0.40 per hour for those scheduled for August 1, 2010; -- the establishment of a stock option plan for participating union employees, providing for options to purchase an additional 20% of the Company's outstanding common stock on a fully diluted basis as if all outstanding stock options were exercised on the date the plan is established. This plan is required to be on terms substantially similar to the plan created in January 2009, when the first 10% wage reduction was implemented, including the requirement that the Company's shareholders approve the plan. If the Company's shareholders do not approve the plan, the participating union employees would receive stock appreciation rights on similar terms. The stock option grants will occur on the date the Teamsters certify to the Company that the Company has entered into an amendment to its Credit Agreement that is acceptable to the Teamsters and the date that the Company certifies to the Teamsters there exists no event or condition which constitutes a default (as defined in the Credit Agreement) or which upon notice, lapse of time or both would, unless cured or waived, become or lead to such a default; -- on or before September 6, 2009, subject to the approval of the Company's board of directors and the Company's bank group, the Company is required to appoint an officer with authority to coordinate and oversee the Company's continued recovery efforts. -- during the period in which the temporary pension contribution cessation is in effect, subject to the approval of the Company's board of directors, which approval may not be unreasonably withheld, the Company is required to appoint a director that the Teamsters nominate. A small number of the bargaining units representing less than 10% of the Teamster employees did not yet ratify the labor agreement modifications. The Company and the Teamsters expect to address employee concerns and have the smaller bargaining units reconsider the modifications in the near future. If the units do not approve the modification, they will continue under their current collective bargaining agreements without additional modification. Absent ratification, among other obligations, the Company would remain obligated to make contributions for these employees to the applicable Pension Funds. For the three months ended June 30, 2009, the Company was obligated to make approximately $2.1 million in average monthly contributions to the Pension Funds for these non-ratifying units. Certain of the smaller Pension Funds (primarily in the Northeast) to which the Company contributes terminated the Company's participation in these Pension Funds in advance of the ratification of the labor agreement modifications. With respect to the non-ratifying bargaining units, if these units do not subsequently ratify the modifications, the Company and these Pension Funds will need to agree to amend the termination notices to allow these units to continue to participate in the Pension Funds to avoid withdrawal liability. As reported by the Troubled Company Reporter, the Company and certain of its subsidiaries on July 30, 2009, entered into Amendment No. 9 to the Credit Agreement, which amends certain of the provisions of the Credit Agreement. The Credit Agreement continues to provide a $950 million senior revolving credit facility, including sublimits available for borrowings under certain foreign currencies and for letters of credit, and a senior term loan in an aggregate outstanding principal amount of approximately $111.5 million. Among other things, the Credit Agreement Amendment suspends the requirement that the Company maintains liquidity equal to or greater than $100 million at all times until September 1, 2009. In addition, the Credit Agreement Amendment amends the minimum consolidated EBITDA negative covenant. Pursuant to the Credit Agreement Amendment, the Company is required to deliver to the administrative agent and the lenders, prior to certain specified dates, a comprehensive strategic plan reasonably acceptable to the lenders, along with related financial projections, models and analysis and the written terms and conditions setting forth all of the necessary actions requested by the Company to be taken to achieve the comprehensive strategic plan. YRC Worldwide reported a net loss of $309.0 million for the three months ended June 30, 2009, compared to a net income of $35.7 million for the same period a year ago. For the six months ended June 30, 2009, YRC posted $582.8 million net loss compared to a $10.5 million net loss for the same period a year ago. As of June 30, 2009, the Company had $3.41 billion in total assets, including $164.5 million in cash and cash equivalents; $1.72 billion in total current liabilities, $832.9 million in long-term debt, $126.5 million in deferred income tax liabilities, $380.7 million in pension and post-retirement liabilities, and $423.1 million in claims and other liabilities; resulting in $72.9 million in shareholders' deficit. 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?4378 About YRC Worldwide Headquartered in Overland Park, Kansas, YRC Worldwide Inc. -- http://www.yrcw.com-- a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of successful brands including YRC, YRC Reimer, YRC Glen Moore, YRC Logistics, New Penn, Holland and Reddaway. YRC Worldwide has the largest, most comprehensive network in North America with local, regional, national and international capabilities. Through its team of experienced service professionals, YRC Worldwide offers industry-leading expertise in heavyweight shipments and flexible supply chain solutions, ensuring customers can ship industrial, commercial and retail goods with confidence. As reported by the Troubled Company Reporter on August 18, 2009, Standard & Poor's Ratings Services affirmed its 'CCC' long-term corporate credit rating on YRC Worldwide. S&P removed the ratings from CreditWatch, where S&P had placed them with negative implications on April 24, 2009. * Auto Suppliers Want to Pay Bonuses to Key Executives ------------------------------------------------------ David Shepardson at Detroit News Washington Bureau reports that bankrupt auto suppliers are seeking court approval to pay tens of millions of dollars in bonuses to key executives, while they lay off workers and cut costs. Detroit News relates that General Motors Corp., Ford Motor Co., and trustees named by the Justice Department to monitor bankruptcy cases have criticized some of the bonuses. The report quoted U.S. trustee Diana G. Adams as saying, "Considering the condition of the automotive industry and the adverse effect on auto suppliers, it is unclear why payments are even needed to retain employees who may have limited options to find employment elsewhere." According to Detroit News, companies like Visteon Corp. and Hayes Lemmerz International are asking to be allowed to pay millions in bonuses, while Lear Crop. has already won approval to pay $20.6 million in bonuses to 29 executives. Those key employees will help lead the company quickly from bankruptcy, the report says, citing Lear. Ford described Visteon's bonus plan as "entirely too rich", says Detroit News. Ford said in court documents that it "cannot see how, in a market with mass layoffs, salary reductions and bonus program curtailments occurring daily, anyone can justify a bonus program of $80.1 million when job retention should be enough." Auto Parts Suppliers Seek President Obama's Help The Associated Press reports that Motor & Equipment Manufacturers Association has asked President Barack Obama to consider new ways to help the industry. According to The AP, the association wrote to the White House, saying that there was "insufficient capital" available for parts suppliers to rehire workers and acquire raw materials for a possible increase in vehicle production later this year. Citing MEMA, The AP relates that about 40 parts suppliers have filed for bankruptcy protection this year. According to The AP, MEMA senior vice president Ann Wilson said that the association wants: -- the remainder of the $5 billion in aid to include companies that don't supply GM or Chrysler; -- more technology grants to help companies shift to making parts for fuel-efficient vehicles; and -- federal support for state programs like one in Michigan that links parts suppliers with potential sources of financing. The government set aside about $5 billion in April 2009 to help companies that supplied GM and Chrysler LLC while the two firms went through restructuring and bankruptcy. Auto suppliers, according to The AP, asked the government for up to $10 billion more in additional aid but were turned down in June. The AP quoted MEMA President Bob McKenna as saying, "This assistance is vital not only to the ability to manufacture safe, more fuel-efficient vehicles, but also to the long-term economic recovery of this nation." * 3 Banks Shuttered; Year's Bank Failures Now 84 ------------------------------------------------ Three banks -- Mainstreet Bank, Forest Lake, Minnesota; Affinity Bank, Ventura, California; and Bradford Bank, Baltimore, Maryland -- were closed August 28 by regulators and sent to receivership before the Federal Deposit Insurance Corporation (FDIC). This year's closed banks have risen to 84. The FDIC was able to locate buyers for all deposits and certain assets of the three banks that were closed on August 28. The FDIC entered into a loss-share transactions on majority of the closed banks' assets purchased by the buyers. In accordance with Federal law, allowed claims against failed financial institutions will be paid, after administrative expenses, in this order of priority: 1. Depositors 2. General Unsecured Creditors 3. Subordinated Debt 4. Stockholders 416 Banks on Problem List The Federal Deposit Insurance Corporation said August 27 that the number of banks and savings institutions in its "Problem List" increased to 416 at the end of the second quarter compared with 305 at March 31. The 416 banks have combined assets of $299.8 billion. The FDIC said this is the largest number of "problem" institutions since June 30, 1994, and the largest amount of assets on the list since December 31, 1993. At the end of the 2008, there were 252 banks on the Problem List. "Problem" institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. They are rated by the FDIC or Office of the Thrift Supervision as either a "4" or "5", based on a scale of 1 to 5 in ascending order of supervisory concern. The Problem List is not divulged to the public. No advance notice is given to the public when a financial institution is closed. The Deposit Insurance Fund (DIF) decreased by $2.6 billion -- 20.3% -- during the second quarter to $10.4 billion, based on unaudited figures. According to the FDIC, the reduction in the DIF was primarily due to an $11.6 billion increase in loss provisions for bank failures. Twenty-four insured institutions with combined assets of $26.4 billion failed during the second quarter of 2009, the largest number of quarterly failures since the fourth quarter of 1992, when 42 insured institutions failed. For 2009 through the end of the second quarter, 45 insured institutions with combined assets of $35.9 billion failed at an estimated current cost to the DIF of $10.5 billion. Problem Institutions Failed Institutions -------------------- ------------------- Year Number Assets (Mil) Number Assets (Mil) ---- ------ ------------ ------ ------------ Q2'09 416 $299,800 24 $26,400 Q1'09 305 $220,047 21 $9,498 2008 252 $159,405 25 $371,945 2007 76 $22,189 3 $2,615 2006 50 $8,265 0 $0 2005 52 $6,607 0 $0 2004 80 $28,250 4 $170 A copy of the FDIC's Quarterly Banking Profile for the second quarter of 2009 is available for free at: http://bankrupt.com/misc/FDIC_QBP_2Q_09.pdf 2009 Failed Banks List The FDIC has taken over 81 banks so far this year. 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) ----------- ---- -------- ----- Mainstreet Bank Central Bank, Stillwater $434.0 $95.0 Affinity Bank Pacific Western $1,000.0 $254.0 Bradford Bank M&T Buffalo, New York $383.0 $97.0 First Coweta Bank United Bank, Zebulon $144.0 $48.0 Guaranty Bank BBVA Compass, Birmingham $11,656.0 $3,000.0 CapitalSouth Bank IBERIABANK, Lafayette $542.4 $151.0 ebank, Atlanta, GA Stearns Bank, N.A. $130.0 $163.0 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 In 2008, 25 banks with total assets of $372 billion failed. IndyMac Bank, FSB, was closed by the Office of Thrift Supervision on July 11, and the FDIC was named conservator. At the time it was closed, IndyMac's assets of $32 billion made it the second largest bank failure in FDIC history. A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html Rules Already Eased The FDIC Board on August 26, adopted new guidelines for investors interested in acquiring or investing in failed banks. The FDIC agreed to lower to 10% from the proposed 15% the Tier 1 capital ratio private-equity investors must maintain after buying a bank. The FDIC is seeking to encourage private-equity investors to bid on assets of collapsed banks as the pace of failures reaches a 17- year high with 81 so far this year, draining the agency's insurance fund by more than $21 billion. The surge has forced the FDIC to enter loss-sharing arrangements and absorb other costs to unload the assets of failed lenders. 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. In addition, the FDIC may need to levy special fees on the banking industry through 2013 to raise the agency's reserve fund to a level mandated by law, Dakin Campbell at Bloomberg News reported, citing Fox-Pitt Kelton Cochran Coronia Waller analysts. Fox-Pitt analysts led by Jonathan Elmi wrote August 28 that as much as $45 billion may have to be raised in the next four years to bring the fund's reserve back to 1.15% of insured deposits. The ratio stood at 0.22% at the end of the second quarter, according to the FDIC. * Owen Ellsworth Joins Kurtzman Carson as Consultant ---------------------------------------------------- The Daily Breeze reports that Kurtzman Carson Consultants said that it hired Owen Ellsworth as a corporate restructuring services consultant. According to Daily Breeze, Mr. Ellsworth was responsible for strategy and product management for JPMorgan Chase Bank's bankruptcy and settlement services group, and financial management at Chase Manhattan Bank. Kurtzman Carson Consultants is an El Segundo business that serves as a claims and noticing agent for companies in Chapter 11 bankruptcy. * BOND PRICING -- For the Week From August 24 to 28, 2009 --------------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- 155 E TROPICANA 8.75% 4/1/2012 3.03 ABITIBI-CONS FIN 7.875% 8/1/2009 8.00 ACCURIDE CORP 8.5% 2/1/2015 18.00 ADVANTA CAP TR 8.99% 12/17/2026 5.25 ALERIS INTL INC 10% 12/15/2016 1.40 AMBAC INC 9.375% 8/1/2011 62.00 AMBASSADORS INTL 3.75% 4/15/2027 38.50 AMER GENL FIN 3.85% 9/15/2009 92.65 AMER GENL FIN 3.875% 10/15/2009 96.00 AMER GENL FIN 4.2% 10/15/2009 95.98 AMER GENL FIN 4.35% 3/15/2010 82.00 AMER GENL FIN 4.5% 9/15/2009 97.52 AMER GENL FIN 5% 10/15/2010 65.00 AMER GENL FIN 5.1% 9/15/2009 96.50 AMER GENL FIN 5.45% 9/15/2009 98.00 AMER GENL FIN 8.75% 9/15/2012 38.00 AMR CORP 9% 8/1/2012 58.00 AMR CORP 10.4% 3/10/2011 43.20 AMR CORP 10.45% 3/10/2011 47.00 ANTHRACITE CAP 11.75% 9/1/2027 14.90 ANTHRACITE CAP 11.75% 9/1/2027 14.77 ARCO CHEMICAL CO 10.25% 11/1/2010 29.35 BANK NEW ENGLAND 8.75% 4/1/1999 10.56 BANK NEW ENGLAND 9.875% 9/15/1999 10.63 BANKUNITED FINL 3.125% 3/1/2034 6.00 BARRINGTON BROAD 10.5% 8/15/2014 33.50 BELL MICROPRODUC 3.75% 3/5/2024 51.25 BLOCKBUSTER INC 9% 9/1/2012 50.50 BOWATER INC 6.5% 6/15/2013 16.00 BOWATER INC 9% 8/1/2009 17.87 BOWATER INC 9.375% 12/15/2021 17.25 BOWATER INC 9.5% 10/15/2012 15.05 BROOKSTONE CO 12% 10/15/2012 41.50 CALLON PETROLEUM 9.75% 12/8/2010 37.50 CAPMARK FINL GRP 7.875% 5/10/2012 21.00 CAPMARK FINL GRP 8.3% 5/10/2017 20.00 CCH I LLC 10% 5/15/2014 2.00 CCH I LLC 13.5% 1/15/2014 1.50 CCH I/CCH I CP 11% 10/1/2015 14.56 CCH I/CCH I CP 11% 10/1/2015 12.50 CHAMPION ENTERPR 2.75% 11/1/2037 15.25 CHARTER COMM HLD 10% 5/15/2011 1.00 CHARTER COMM INC 6.5% 10/1/2027 43.00 CHENIERE ENERGY 2.25% 8/1/2012 42.10 CIT GROUP FDG CA 4.65% 7/1/2010 80.13 CIT GROUP INC 3.85% 11/15/2009 59.00 CIT GROUP INC 3.95% 12/15/2009 79.00 CIT GROUP INC 4% 9/15/2009 96.00 CIT GROUP INC 4.05% 2/15/2010 67.00 CIT GROUP INC 4.125% 11/3/2009 67.50 CIT GROUP INC 4.25% 2/1/2010 61.88 CIT GROUP INC 4.25% 9/15/2010 58.20 CIT GROUP INC 4.3% 3/15/2010 60.00 CIT GROUP INC 4.3% 6/15/2010 28.00 CIT GROUP INC 4.35% 6/15/2010 57.44 CIT GROUP INC 4.4% 9/15/2009 80.50 CIT GROUP INC 4.45% 5/15/2010 58.00 CIT GROUP INC 4.6% 8/15/2010 47.25 CIT GROUP INC 4.625% 11/15/2009 60.00 CIT GROUP INC 4.75% 12/15/2010 58.00 CIT GROUP INC 4.8% 12/15/2009 55.00 CIT GROUP INC 4.85% 12/15/2009 63.25 CIT GROUP INC 4.85% 3/15/2010 49.00 CIT GROUP INC 4.85% 12/15/2011 46.50 CIT GROUP INC 4.9% 3/15/2010 46.25 CIT GROUP INC 4.9% 12/15/2010 52.00 CIT GROUP INC 4.9% 3/15/2011 48.00 CIT GROUP INC 5% 9/15/2009 94.17 CIT GROUP INC 5% 11/15/2009 58.50 CIT GROUP INC 5% 11/15/2009 62.00 CIT GROUP INC 5% 11/15/2009 62.00 CIT GROUP INC 5% 12/15/2010 55.05 CIT GROUP INC 5% 3/15/2011 50.50 CIT GROUP INC 5% 3/15/2011 44.00 CIT GROUP INC 5% 3/15/2012 49.00 CIT GROUP INC 5.05% 11/15/2009 34.00 CIT GROUP INC 5.05% 2/15/2010 50.15 CIT GROUP INC 5.05% 3/15/2010 60.75 CIT GROUP INC 5.05% 11/15/2010 53.00 CIT GROUP INC 5.05% 12/15/2010 53.02 CIT GROUP INC 5.05% 3/15/2011 52.50 CIT GROUP INC 5.15% 2/15/2010 67.00 CIT GROUP INC 5.15% 3/15/2010 70.00 CIT GROUP INC 5.15% 2/15/2011 50.98 CIT GROUP INC 5.15% 2/15/2011 50.00 CIT GROUP INC 5.15% 4/15/2011 44.25 CIT GROUP INC 5.15% 2/15/2012 50.00 CIT GROUP INC 5.2% 11/3/2010 65.64 CIT GROUP INC 5.2% 9/15/2011 53.00 CIT GROUP INC 5.2% 11/15/2011 53.00 CIT GROUP INC 5.25% 5/15/2010 58.00 CIT GROUP INC 5.25% 9/15/2010 53.00 CIT GROUP INC 5.25% 11/15/2010 60.10 CIT GROUP INC 5.25% 11/15/2010 53.00 CIT GROUP INC 5.25% 11/15/2010 60.50 CIT GROUP INC 5.25% 12/15/2010 57.00 CIT GROUP INC 5.25% 11/15/2011 52.50 CIT GROUP INC 5.25% 11/15/2011 53.00 CIT GROUP INC 5.25% 11/15/2011 47.75 CIT GROUP INC 5.25% 2/15/2012 46.92 CIT GROUP INC 5.3% 6/15/2010 51.00 CIT GROUP INC 5.35% 6/15/2011 50.50 CIT GROUP INC 5.35% 8/15/2011 52.75 CIT GROUP INC 5.4% 5/15/2011 49.73 CIT GROUP INC 5.45% 8/15/2010 59.75 CIT GROUP INC 5.5% 8/15/2010 55.10 CIT GROUP INC 5.6% 4/27/2011 58.00 CIT GROUP INC 5.75% 8/15/2012 42.75 CIT GROUP INC 5.8% 7/28/2011 56.00 CIT GROUP INC 6.1% 3/15/2067 12.75 CIT GROUP INC 6.25% 9/15/2009 93.75 CIT GROUP INC 6.25% 9/15/2009 96.70 CIT GROUP INC 6.25% 12/15/2009 79.00 CIT GROUP INC 6.25% 2/15/2010 59.00 CIT GROUP INC 6.5% 12/15/2009 76.98 CIT GROUP INC 6.5% 2/15/2010 60.00 CIT GROUP INC 6.5% 3/15/2010 60.00 CIT GROUP INC 6.5% 12/15/2010 54.00 CIT GROUP INC 6.5% 1/15/2011 52.50 CIT GROUP INC 6.5% 3/15/2011 53.00 CIT GROUP INC 6.6% 2/15/2011 52.50 CIT GROUP INC 6.75% 3/15/2011 48.00 CIT GROUP INC 6.875% 11/1/2009 70.63 CIT GROUP INC 7% 2/15/2012 50.00 CIT GROUP INC 7.25% 2/15/2012 51.00 CIT GROUP INC 7.25% 3/15/2012 50.00 CIT GROUP INC 12% 12/18/2018 23.38 CITADEL BROADCAS 4% 2/15/2011 17.50 CLEAR CHANNEL 4.4% 5/15/2011 54.00 CLEAR CHANNEL 4.5% 1/15/2010 89.00 CLEAR CHANNEL 5% 3/15/2012 50.00 CLEAR CHANNEL 5.75% 1/15/2013 33.13 CLEAR CHANNEL 6.25% 3/15/2011 57.50 CLEAR CHANNEL 7.65% 9/15/2010 75.25 COMPUCREDIT 3.625% 5/30/2025 37.25 COOPER-STANDARD 7% 12/15/2012 30.00 COOPER-STANDARD 8.375% 12/15/2014 5.88 CREDENCE SYSTEM 3.5% 5/15/2010 45.00 DECODE GENETICS 3.5% 4/15/2011 7.50 DECODE GENETICS 3.5% 4/15/2011 11.00 DELPHI CORP 6.5% 8/15/2013 0.88 DEX MEDIA INC 8% 11/15/2013 19.50 DEX MEDIA INC 9% 11/15/2013 19.00 DEX MEDIA INC 9% 11/15/2013 19.00 DEX MEDIA WEST 9.875% 8/15/2013 20.50 DOWNEY FINANCIAL 6.5% 7/1/2014 5.00 DUNE ENERGY INC 10.5% 6/1/2012 48.00 EDDIE BAUER HLDG 5.25% 4/1/2014 12.00 FAIRPOINT COMMUN 13.125% 4/1/2018 18.00 FAIRPOINT COMMUN 13.125% 4/1/2018 18.50 FEDDERS NORTH AM 9.875% 3/1/2014 0.75 FIBERTOWER CORP 9% 11/15/2012 52.00 FINLAY FINE JWLY 8.375% 6/1/2012 4.00 FLEETWOOD ENTERP 14% 12/15/2011 30.25 FORD MOTOR CRED 7.5% 8/20/2010 71.86 FRANKLIN BANK 4% 5/1/2027 0.00 GENERAL MOTORS 7.125% 7/15/2013 13.75 GENERAL MOTORS 7.4% 9/1/2025 13.88 GENERAL MOTORS 7.7% 4/15/2016 14.00 GENERAL MOTORS 8.1% 6/15/2024 14.23 GENERAL MOTORS 8.25% 7/15/2023 14.50 GENERAL MOTORS 8.375% 7/15/2033 15.38 GENERAL MOTORS 8.8% 3/1/2021 14.38 GENERAL MOTORS 9.4% 7/15/2021 14.36 GENERAL MOTORS 9.45% 11/1/2011 14.61 GEORGIA GULF CRP 10.75% 10/15/2016 12.50 GMAC LLC 7% 9/15/2009 98.26 GMAC LLC 7% 9/15/2009 97.40 HAIGHTS CROSS OP 11.75% 8/15/2011 43.00 HARRY & DAVID OP 9% 3/1/2013 47.50 HAWAIIAN TELCOM 9.75% 5/1/2013 1.75 HAWAIIAN TELCOM 12.5% 5/1/2015 1.00 HERBST GAMING 7% 11/15/2014 3.13 HERBST GAMING 8.125% 6/1/2012 3.13 IDEARC INC 8% 11/15/2016 8.13 INDALEX HOLD 11.5% 2/1/2014 1.25 INN OF THE MOUNT 12% 11/15/2010 45.00 INTCOMEX INC 11.75% 1/15/2011 45.75 INTL LEASE FIN 4% 10/15/2009 95.05 INTL LEASE FIN 4.05% 9/15/2009 97.00 INTL LEASE FIN 4.25% 9/15/2009 94.50 INTL LEASE FIN 4.55% 9/15/2009 96.10 IP-CALL09/09 5.125% 11/15/2012 100.00 ISTAR FINANCIAL 5.125% 4/1/2011 53.00 ISTAR FINANCIAL 5.15% 3/1/2012 42.00 ISTAR FINANCIAL 5.375% 4/15/2010 84.63 ISTAR FINANCIAL 5.5% 6/15/2012 44.50 ISTAR FINANCIAL 5.65% 9/15/2011 59.64 ISTAR FINANCIAL 5.8% 3/15/2011 55.00 ISTAR FINANCIAL 6% 12/15/2010 68.00 KEYSTONE AUTO OP 9.75% 11/1/2013 26.63 KNIGHT RIDDER 7.125% 6/1/2011 52.00 KNIGHT RIDDER 7.15% 11/1/2027 17.34 LANDAMERICA 3.125% 11/15/2033 22.50 LANDAMERICA 3.25% 5/15/2034 22.50 LAZYDAYS RV 11.75% 5/15/2012 15.00 LEHMAN BROS HLDG 4% 8/3/2009 9.00 LEHMAN BROS HLDG 4.375% 11/30/2010 16.05 LEHMAN BROS HLDG 4.5% 7/26/2010 18.00 LEHMAN BROS HLDG 4.5% 8/3/2011 12.84 LEHMAN BROS HLDG 4.7% 3/6/2013 6.95 LEHMAN BROS HLDG 4.8% 3/13/2014 18.13 LEHMAN BROS HLDG 4.8% 6/24/2023 12.38 LEHMAN BROS HLDG 5% 1/14/2011 17.75 LEHMAN BROS HLDG 5% 1/22/2013 12.00 LEHMAN BROS HLDG 5% 2/11/2013 12.50 LEHMAN BROS HLDG 5% 3/27/2013 6.95 LEHMAN BROS HLDG 5% 8/3/2014 10.00 LEHMAN BROS HLDG 5% 5/28/2023 11.50 LEHMAN BROS HLDG 5% 5/30/2023 12.50 LEHMAN BROS HLDG 5% 6/10/2023 11.91 LEHMAN BROS HLDG 5% 6/17/2023 12.50 LEHMAN BROS HLDG 5.1% 1/28/2013 10.00 LEHMAN BROS HLDG 5.1% 2/15/2020 12.00 LEHMAN BROS HLDG 5.15% 2/4/2015 9.50 LEHMAN BROS HLDG 5.2% 5/13/2020 14.00 LEHMAN BROS HLDG 5.25% 2/6/2012 16.25 LEHMAN BROS HLDG 5.25% 1/30/2014 8.23 LEHMAN BROS HLDG 5.25% 2/11/2015 12.00 LEHMAN BROS HLDG 5.25% 3/5/2018 8.25 LEHMAN BROS HLDG 5.25% 9/14/2019 9.00 LEHMAN BROS HLDG 5.25% 3/8/2020 9.10 LEHMAN BROS HLDG 5.25% 5/20/2023 12.00 LEHMAN BROS HLDG 5.35% 2/25/2018 12.00 LEHMAN BROS HLDG 5.35% 3/13/2020 9.00 LEHMAN BROS HLDG 5.35% 6/14/2030 8.75 LEHMAN BROS HLDG 5.375% 5/6/2023 10.50 LEHMAN BROS HLDG 5.4% 3/6/2020 12.00 LEHMAN BROS HLDG 5.4% 3/20/2020 12.00 LEHMAN BROS HLDG 5.4% 3/30/2029 12.50 LEHMAN BROS HLDG 5.4% 6/21/2030 11.88 LEHMAN BROS HLDG 5.45% 3/15/2025 12.00 LEHMAN BROS HLDG 5.45% 4/6/2029 11.88 LEHMAN BROS HLDG 5.45% 2/22/2030 12.00 LEHMAN BROS HLDG 5.45% 7/19/2030 9.25 LEHMAN BROS HLDG 5.45% 9/20/2030 12.00 LEHMAN BROS HLDG 5.5% 4/4/2016 16.13 LEHMAN BROS HLDG 5.5% 2/4/2018 12.00 LEHMAN BROS HLDG 5.5% 2/19/2018 12.50 LEHMAN BROS HLDG 5.5% 11/4/2018 12.00 LEHMAN BROS HLDG 5.5% 2/27/2020 10.75 LEHMAN BROS HLDG 5.5% 8/19/2020 8.03 LEHMAN BROS HLDG 5.5% 3/14/2023 12.50 LEHMAN BROS HLDG 5.5% 4/8/2023 12.00 LEHMAN BROS HLDG 5.5% 4/15/2023 11.30 LEHMAN BROS HLDG 5.5% 4/23/2023 8.00 LEHMAN BROS HLDG 5.5% 8/5/2023 11.88 LEHMAN BROS HLDG 5.5% 10/7/2023 8.25 LEHMAN BROS HLDG 5.5% 1/27/2029 8.75 LEHMAN BROS HLDG 5.5% 2/3/2029 12.00 LEHMAN BROS HLDG 5.5% 8/2/2030 9.75 LEHMAN BROS HLDG 5.55% 2/11/2018 12.00 LEHMAN BROS HLDG 5.55% 3/9/2029 12.00 LEHMAN BROS HLDG 5.55% 1/25/2030 12.00 LEHMAN BROS HLDG 5.55% 9/27/2030 12.50 LEHMAN BROS HLDG 5.55% 12/31/2034 12.50 LEHMAN BROS HLDG 5.6% 1/22/2018 12.13 LEHMAN BROS HLDG 5.6% 9/23/2023 9.00 LEHMAN BROS HLDG 5.6% 2/17/2029 11.22 LEHMAN BROS HLDG 5.6% 2/24/2029 12.50 LEHMAN BROS HLDG 5.6% 3/2/2029 12.38 LEHMAN BROS HLDG 5.6% 2/25/2030 12.40 LEHMAN BROS HLDG 5.6% 5/3/2030 12.00 LEHMAN BROS HLDG 5.625% 1/24/2013 18.50 LEHMAN BROS HLDG 5.625% 3/15/2030 12.00 LEHMAN BROS HLDG 5.65% 11/23/2029 12.50 LEHMAN BROS HLDG 5.65% 8/16/2030 8.00 LEHMAN BROS HLDG 5.65% 12/31/2034 12.40 LEHMAN BROS HLDG 5.7% 1/28/2018 12.00 LEHMAN BROS HLDG 5.7% 2/10/2029 12.00 LEHMAN BROS HLDG 5.7% 4/13/2029 12.50 LEHMAN BROS HLDG 5.7% 9/7/2029 12.00 LEHMAN BROS HLDG 5.7% 12/14/2029 11.88 LEHMAN BROS HLDG 5.75% 4/25/2011 17.75 LEHMAN BROS HLDG 5.75% 7/18/2011 18.00 LEHMAN BROS HLDG 5.75% 5/17/2013 17.00 LEHMAN BROS HLDG 5.75% 3/27/2023 11.35 LEHMAN BROS HLDG 5.75% 10/15/2023 9.19 LEHMAN BROS HLDG 5.75% 10/21/2023 11.88 LEHMAN BROS HLDG 5.75% 11/12/2023 11.90 LEHMAN BROS HLDG 5.75% 11/25/2023 12.50 LEHMAN BROS HLDG 5.75% 12/16/2028 10.10 LEHMAN BROS HLDG 5.75% 12/23/2028 8.75 LEHMAN BROS HLDG 5.75% 8/24/2029 8.25 LEHMAN BROS HLDG 5.75% 9/14/2029 12.00 LEHMAN BROS HLDG 5.75% 10/12/2029 10.41 LEHMAN BROS HLDG 5.75% 3/29/2030 9.00 LEHMAN BROS HLDG 5.8% 9/3/2020 12.00 LEHMAN BROS HLDG 5.8% 10/25/2030 12.50 LEHMAN BROS HLDG 5.85% 11/8/2030 8.75 LEHMAN BROS HLDG 5.875% 11/15/2017 16.50 LEHMAN BROS HLDG 5.9% 5/4/2029 12.50 LEHMAN BROS HLDG 5.9% 2/7/2031 7.00 LEHMAN BROS HLDG 5.95% 12/20/2030 8.50 LEHMAN BROS HLDG 6% 7/19/2012 16.19 LEHMAN BROS HLDG 6% 12/18/2015 8.06 LEHMAN BROS HLDG 6% 2/12/2018 11.50 LEHMAN BROS HLDG 6% 1/22/2020 11.75 LEHMAN BROS HLDG 6% 2/12/2020 12.25 LEHMAN BROS HLDG 6% 1/29/2021 12.10 LEHMAN BROS HLDG 6% 10/23/2028 12.00 LEHMAN BROS HLDG 6% 11/18/2028 12.00 LEHMAN BROS HLDG 6% 5/11/2029 12.50 LEHMAN BROS HLDG 6% 7/20/2029 12.38 LEHMAN BROS HLDG 6% 3/21/2031 8.06 LEHMAN BROS HLDG 6% 4/30/2034 12.00 LEHMAN BROS HLDG 6% 7/30/2034 12.00 LEHMAN BROS HLDG 6% 2/21/2036 12.50 LEHMAN BROS HLDG 6% 2/24/2036 12.50 LEHMAN BROS HLDG 6% 2/12/2037 11.50 LEHMAN BROS HLDG 6.05% 6/29/2029 11.00 LEHMAN BROS HLDG 6.1% 8/12/2023 8.25 LEHMAN BROS HLDG 6.15% 4/11/2031 12.00 LEHMAN BROS HLDG 6.2% 9/26/2014 16.75 LEHMAN BROS HLDG 6.2% 6/15/2027 12.00 LEHMAN BROS HLDG 6.2% 5/25/2029 12.00 LEHMAN BROS HLDG 6.25% 2/5/2021 13.00 LEHMAN BROS HLDG 6.25% 2/22/2023 9.13 LEHMAN BROS HLDG 6.4% 10/11/2022 10.20 LEHMAN BROS HLDG 6.5% 2/28/2023 10.03 LEHMAN BROS HLDG 6.5% 3/6/2023 11.00 LEHMAN BROS HLDG 6.5% 10/18/2027 12.25 LEHMAN BROS HLDG 6.5% 10/25/2027 12.50 LEHMAN BROS HLDG 6.5% 11/15/2032 9.45 LEHMAN BROS HLDG 6.5% 1/17/2033 14.00 LEHMAN BROS HLDG 6.5% 2/13/2037 11.67 LEHMAN BROS HLDG 6.5% 6/21/2037 12.50 LEHMAN BROS HLDG 6.5% 7/13/2037 12.50 LEHMAN BROS HLDG 6.6% 10/3/2022 10.26 LEHMAN BROS HLDG 6.625% 1/18/2012 16.23 LEHMAN BROS HLDG 6.625% 7/27/2027 9.09 LEHMAN BROS HLDG 6.75% 7/1/2022 12.38 LEHMAN BROS HLDG 6.75% 11/22/2027 10.00 LEHMAN BROS HLDG 6.75% 3/11/2033 10.25 LEHMAN BROS HLDG 6.75% 10/26/2037 13.00 LEHMAN BROS HLDG 6.8% 9/7/2032 11.00 LEHMAN BROS HLDG 6.85% 8/16/2032 10.13 LEHMAN BROS HLDG 6.85% 8/23/2032 9.40 LEHMAN BROS HLDG 6.875% 5/2/2018 18.50 LEHMAN BROS HLDG 6.875% 7/17/2037 0.01 LEHMAN BROS HLDG 6.9% 9/1/2032 5.55 LEHMAN BROS HLDG 7% 4/16/2019 11.25 LEHMAN BROS HLDG 7% 5/12/2023 11.00 LEHMAN BROS HLDG 7% 9/27/2027 16.75 LEHMAN BROS HLDG 7% 10/4/2032 9.75 LEHMAN BROS HLDG 7% 7/27/2037 14.00 LEHMAN BROS HLDG 7% 9/28/2037 12.25 LEHMAN BROS HLDG 7% 12/28/2037 11.40 LEHMAN BROS HLDG 7% 1/31/2038 11.63 LEHMAN BROS HLDG 7% 2/1/2038 9.37 LEHMAN BROS HLDG 7% 2/7/2038 11.63 LEHMAN BROS HLDG 7% 2/8/2038 12.50 LEHMAN BROS HLDG 7% 4/22/2038 11.00 LEHMAN BROS HLDG 7.05% 2/27/2038 11.38 LEHMAN BROS HLDG 7.2% 8/15/2009 14.00 LEHMAN BROS HLDG 7.35% 5/6/2038 12.13 LEHMAN BROS HLDG 7.73% 10/15/2023 10.13 LEHMAN BROS HLDG 7.875% 8/15/2010 16.00 LEHMAN BROS HLDG 8% 3/5/2022 8.25 LEHMAN BROS HLDG 8.05% 1/15/2019 10.89 LEHMAN BROS HLDG 8.4% 2/22/2023 12.50 LEHMAN BROS HLDG 8.5% 8/1/2015 15.00 LEHMAN BROS HLDG 8.5% 6/15/2022 8.00 LEHMAN BROS HLDG 8.75% 12/21/2021 11.00 LEHMAN BROS HLDG 8.75% 2/6/2023 7.00 LEHMAN BROS HLDG 8.8% 3/1/2015 16.50 LEHMAN BROS HLDG 8.92% 2/16/2017 12.00 LEHMAN BROS HLDG 9% 12/28/2022 11.00 LEHMAN BROS HLDG 9.5% 12/28/2022 11.88 LEHMAN BROS HLDG 9.5% 1/30/2023 11.00 LEHMAN BROS HLDG 9.5% 2/27/2023 7.20 LEHMAN BROS HLDG 11% 10/25/2017 10.00 LEHMAN BROS HLDG 11% 6/22/2022 8.19 LEHMAN BROS HLDG 11.5% 9/26/2022 13.38 LEINER HEALTH 11% 6/1/2012 2.00 LOCAL INSIGHT 11% 12/1/2017 38.50 LTX-CREDENCE 3.5% 5/15/2011 40.00 MAJESTIC STAR 9.5% 10/15/2010 63.00 MAJESTIC STAR 9.75% 1/15/2011 6.84 MCCC-CALL09/09 9.5% 1/15/2013 99.75 MCCLATCHY CO 15.75% 7/15/2014 45.50 MERISANT CO 9.5% 7/15/2013 12.30 MERRILL LYNCH 0% 3/9/2011 94.25 METALDYNE CORP 11% 6/15/2012 2.31 MILLENNIUM AMER 7.625% 11/15/2026 11.25 MORRIS PUBLISH 7% 8/1/2013 8.00 NEFF CORP 10% 6/1/2015 8.00 NEW PLAN EXCEL 7.4% 9/15/2009 85.45 NEW PLAN EXCEL 7.5% 7/30/2029 18.26 NEW PLAN REALTY 7.65% 11/2/2026 18.26 NEWPAGE CORP 10% 5/1/2012 54.25 NEWPAGE CORP 12% 5/1/2013 38.50 NORTH ATL TRADNG 9.25% 3/1/2012 25.00 NTK HOLDINGS INC 10.75% 3/1/2014 5.00 PAC-WEST TELECOM 13.5% 2/1/2009 4.00 PANOLAM INDUSTRI 10.75% 10/1/2013 5.00 PLY GEM INDS 9% 2/15/2012 45.00 POPE & TALBOT 8.375% 6/1/2013 0.51 PRIMUS TELECOM 8% 1/15/2014 11.75 PRTL-RESTR07/09 14.25% 5/20/2011 63.00 QUALITY DISTRIBU 9% 11/15/2010 60.25 QUANTUM CORP 4.375% 8/1/2010 61.00 RADIO ONE INC 6.375% 2/15/2013 33.25 RADIO ONE INC 8.875% 7/1/2011 50.00 RAFAELLA APPAREL 11.25% 6/15/2011 26.00 RATHGIBSON INC 11.25% 2/15/2014 35.50 READER'S DIGEST 9% 2/15/2017 4.00 REALOGY CORP 12.375% 4/15/2015 37.00 REALOGY CORP 12.375% 4/15/2015 41.00 RESIDENTIAL CAP 8% 2/22/2011 56.00 RESIDENTIAL CAP 8.375% 6/30/2010 68.50 RH DONNELLEY 6.875% 1/15/2013 4.25 RH DONNELLEY 6.875% 1/15/2013 6.00 RH DONNELLEY 6.875% 1/15/2013 5.25 RH DONNELLEY 8.875% 1/15/2016 5.00 RH DONNELLEY 8.875% 10/15/2017 6.00 ROTECH HEALTHCA 9.5% 4/1/2012 19.75 SECURITY BENEFIT 7.45% 10/1/2033 10.75 SECURITY BENEFIT 8.75% 5/15/2016 14.88 SIX FLAGS INC 4.5% 5/15/2015 8.00 SIX FLAGS INC 9.625% 6/1/2014 8.50 SIX FLAGS INC 9.75% 4/15/2013 8.00 SPHERIS INC 11% 12/15/2012 43.00 STANLEY-MARTIN 9.75% 8/15/2015 25.25 STATION CASINOS 6% 4/1/2012 31.25 STATION CASINOS 6.5% 2/1/2014 2.00 STATION CASINOS 6.625% 3/15/2018 2.25 STATION CASINOS 6.875% 3/1/2016 2.00 TEKNI-PLEX INC 12.75% 6/15/2010 64.96 THORNBURG MTG 8% 5/15/2013 2.86 TIMES MIRROR CO 6.61% 9/15/2027 5.00 TIMES MIRROR CO 7.25% 3/1/2013 5.00 TIMES MIRROR CO 7.5% 7/1/2023 6.00 TOUSA INC 7.5% 1/15/2015 0.50 TOUSA INC 9% 7/1/2010 9.00 TRANSMERIDIAN EX 12% 12/15/2010 6.75 TRIBUNE CO 4.875% 8/15/2010 7.25 TRIBUNE CO 5.25% 8/15/2015 7.13 TRIBUNE CO 5.67% 12/8/2008 5.00 TRONOX WORLDWIDE 9.5% 12/1/2012 24.75 TRUMP ENTERTNMNT 8.5% 6/1/2015 8.00 UAL CORP 4.5% 6/30/2021 50.45 UAL CORP 5% 2/1/2021 57.75 USFREIGHTWAYS 8.5% 4/15/2010 37.00 VERASUN ENERGY 9.375% 6/1/2017 14.25 VERENIUM CORP 5.5% 4/1/2027 44.00 VESTA INSUR GRP 8.75% 7/15/2025 0.73 VION PHARM INC 7.75% 2/15/2012 36.75 VISTEON CORP 7% 3/10/2014 6.63 WASH MUT BANK FA 5.125% 1/15/2015 0.49 WASH MUT BANK FA 5.65% 8/15/2014 0.40 WASH MUT BANK NV 5.55% 6/16/2010 30.44 WASH MUT BANK NV 5.95% 5/20/2013 0.31 WASH MUTUAL INC 4.2% 1/15/2010 87.00 WASH MUTUAL INC 8.25% 4/1/2010 70.13 WCI COMMUNITIES 4% 8/5/2023 1.56 WCI COMMUNITIES 6.625% 3/15/2015 4.00 WCI COMMUNITIES 7.875% 10/1/2013 1.00 WCI COMMUNITIES 9.125% 5/1/2012 2.25 WILLIAM LYON 7.625% 12/15/2012 33.75 WILLIAM LYONS 7.5% 2/15/2014 34.20 WILLIAM LYONS 7.625% 12/15/2012 32.84 WILLIAM LYONS 10.75% 4/1/2013 41.00 WISE METALS GRP 10.25% 5/15/2012 47.00 YELLOW CORP 5% 8/8/2023 29.00 YOUNG BROADCSTNG 10% 3/1/2011 1.00 ********* 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 **