/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090908.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, September 8, 2009, Vol. 13, No. 249 Headlines A ADVOCATES & ATTORNEYS: Case Summary & Largest Unsec. Creditors ABITIBIBOWATER INC: Canada Court Extends Stay Period to Dec. 15 ABITIBIBOWATER INC: Committee May Challenge Liens Until Sept. 25 ABITIBIBOWATER INC: Completes Sale Of Quebec Timberland Assets ABITIBIBOWATER INC: U.S. Court Sets Nov. 13 Claims Bar Date ABITIBIBOWATER INC: To Sell Manicouagan Power Plant for $615MM ALLEN SYSTEMS: S&P Retains Developing Watch on 'CCC+' Rating AMERICAN ACHIEVEMENT: S&P Raises Corporate Credit Rating to 'B-' AMERICAN CAPITAL: Notice of Acceleration Won't Affect S&P's Rating AMERICAN EXECUTIVE: Case Summary & 2 Largest Unsecured Creditors AMERICAN TONERSERV: Annual Stockholders Meeting on September 24 AMICHAI VARDI: Case Summary & 20 Largest Unsecured Creditors ANGEL ACQUISITION: June 30 Balance Sheet Upside-Down by $1.67MM ANTHONY MOSLEY: Case Summary & 20 Largest Unsecured Creditors ARRAY BIOPHARMA: Insufficient Funding May Affect Going Concern BACCHUS DEVELOPMENT: Case Summary & 19 Largest Unsecured Creditors BANK OF GUAM: Fitch Affirms Support Rating Floor at 'B' BARNES COMMERCIAL: Voluntary Chapter 11 Case Summary BASE HOLDINGS: Closes Chili's Grill at American Airlines Center BERTHEL SBIC: Sells Interest in Schebler for $170,000 Cash BETH WAYNE: Case Summary & 15 Largest Unsecured Creditors BRUGNARA CORP: Owner Withdraws Guilty Plea in Federal Tax Case BUSSON DIGITAL: Case Summary & 20 Largest Unsecured Creditors C & F AUTO: Case Summary & 20 Largest Unsecured Creditors CAFE DES ARTISTES: NY Restaurant Closes Doors CANADIAN SUPERIOR: Posts $10MM Net Loss in Quarter Ended June 30 CAPMARK FINANCIAL: $1.6 Bil. Losses Cue S&P to Junk Corp. Rating CAPMARK FINANCIAL: Moody's Cuts Senior Unsecured Ratings to 'C' CDX GAS: Court Approves Settlement Pact With Int'l Coal Group CHARTER COMM: Court Questions $200MM Payment to Allen CHARTER COMM: M. Ford Wants to Pursue Employment Suit CIRCUIT CITY: Court OKs Sale of California & Georgia Properties CIRCUIT CITY: Court OKs Sale of Moreno Valley Property for $2.25MM CIRCUIT CITY: Disclosure Statement Hearing on September 22 CIRCUIT CITY: Proposes Settlements With GE, et al. CITY OF VALLEJO: Electrical Workers Union to Appeal CBA Rejection CMG HOLDINGS: Has Going Concern Doubt Due to Accumulated Deficit COASTLINE CONSTRUCTION: Case Summary & 20 Largest Unsec. Creditors CONGOLEUM CORP: Armstrong Amends Suit Over False Ad Claims COOPER-STANDARD: Cooper Tire Sues for $60 Mil. in Tax Refunds COOPER-STANDARD: DIP Facility Matures August 2010 COOPER-STANDARD: Gets Final Approval for Cash Collateral Use COOPER-STANDARD: U.S. Trustee to Convene Creditors on Sept. 10 COYOTES HOCKEY: Ice Edge Confident of Offer for Hockey Team COYOTES HOCKEY: NHL Wants Up to $195MM Fee for Relocation CROSS CANYON: In Talks With Lenders for Waiver of Default CRUCIBLE MATERIALS: Workers Okay Pay Cuts in New Contract D&E LEASING: Case Summary & 8 Largest Unsecured Creditors DBSD NORTH AMERICA: Says Reorganization Plan is Viable DELPHI CORP: GM & IUE-CWA Interim Pact Includes Delphi Retirees DELPHI CORP: GM Gets Anti-Trust Office Nod to Buy Assets DELPHI CORP: Judge Drain Overrules Contract Assignment Objections DELPHI CORP: Methode to Sue D.A.S. Over Contract Termination DELTA PETROLEUM: Registers 93.7MM Shares as Part of Tracinda Deal DELTA PETROLEUM: Special Stockholders' Meeting on October 6 DIAMOND RANCH: June 30 Balance Sheet Upside-Down by $3.85 Million ENERGY XXI: Debt Exchange Offer Cues S&P to Junk Corp. Rating ENERGY XXI: Moody's Affirms Corporate Family Rating at 'Caa3' ENVIRONMENTAL TECTONICS: Registers Shares Under 2009 Stock Plan ENVIROSOLUTIONS HOLDINGS: Moody's Cuts Corp. Family Rating to Caa3 ESCADA AG: US Court Sets Initial Case Conference for Sept. 9 ESCADA AG: US Unit Gets Interim Nod to Pay Common Carriers ESCADA AG: US Unit to Honor Prepetition Workers' Programs ETHOS DESIGN LLC: Case Summary & 20 Largest Unsecured Creditors EXTENDED STAY: Mezzanine Lenders Want Examiner FANNIE MAE: Executives' Legal Bills Paid by U.S. Government FLEETWOOD ENTERPRISES: Retail Units Sec. 341(a) Meet on Sept. 25 FLEETWOOD ENTERPRISES: Wants to Sell IT Assets to En Pointe Tech. FONTAINEBLEAU LAS VEGAS: Contractors' Notice of FRBP 7030 Probe FONTAINEBLEAU LAS VEGAS: Contractors Seek to Perfect Lien Claims FONTAINEBLEAU LAS VEGAS: Court OKs Cash Coll. Use Until Sept. 17 FONTAINEBLEAU MIAMI: May Face Default Judgment FORMTECH INDUSTRIES: Taps Potter Anderson as Bankruptcy Counsel FORMTECH INDUSTRIES: U.S. Trustee Picks 3-Member Creditors Panel FORMTECH INDUSTRIES: Section 341(a) Meeting Slated for October 2 FORMTECH INDUSTRIES: Taps Strobl & Sharp, P.C. as Special Counsel FRANCESCO CARRUBBA: Case Summary & 9 Largest Unsecured Creditors FRANKLIN TOWERS: Records $2.2-Mil. Net Loss for 1H of 2009 FTI CONSULTING: S&P Raises Corporate Credit Rating to 'BB+' FUTURE ENERGY SERVICES: Case Summary & 20 Largest Unsec. Creditors GENERAL MOTORS: Detroit Diesel Wants Asbestos Suits Stayed GENERAL MOTORS: Old GM Wants Jan. 27 Extension for Ch. 11 Plan GENERAL MOTORS: U.S. Antitrust Officials OK Delphi Purchase GENERAL MOTORS: Unlikely to Sell Opel to Magna, CDU Head Says GENERAL MOTORS: Koenigsegg Secures Addt'l Funds for Saab Sale Deal GENERAL MOTORS: Opel Trustees to Meet Sept. 10 on GM Decision GENTA INCORPORATED: Re-Issues Financial Statements GKC INVESTMENTS: Case Summary & 4 Largest Unsecured Creditors GUIDED THERAPEUTICS: Raises $3.5MM by Issuing More 13% Notes HAIGHTS CROSS: Moody's Changes Default Rating to 'Ca/LD' HAMPSHIRE GROUP: Jeffrey Meier Retires as VP of Global Sourcing HRH CONSTRUCTION LLC: Voluntary Chapter 11 Case Summary IA GLOBAL: March 31 Balance Sheet Upside-Down by $6.27 Million IMPERIAL INDUSTRIES: Restates June 30, 2009 Balance Sheet INTEGRAL VISION: Marxe and Greenhouse Disclose 18% Equity Stake INTEGRAL VISION: Needs Funds in Q3 2009 to Meet Note Payments JAMES JOHN VLAHOS: Case Summary & 14 Largest Unsecured Creditors JAMES PENTA: Voluntary Chapter 11 Case Summary JOSEPH ROSILEZ: Case Summary & 20 Largest Unsecured Creditors JOSHUA HEDLUND: Case Summary & 5 Largest Unsecured Creditors KB TOYS: Toys "R" Us Acquires Brand for $2.1 Million KENNEDY LAW: Files for Chapter 11 Bankruptcy Protection KK OF SOUTH FLORIDA: In Default of Certain Credit Agreements KREMEWORKS LLC: Seeks Covenant Waiver From Lender KRISPY KREME: KKSF in Default of Certain Credit Agreements KRISPY KREME: Kremeworks Seeks Covenant Waiver From Lender KRISPY KREME: Posts $157,000 Net Loss in Q2 of Fiscal 2010 KRISPY KREME: Says Mexico Franchise Affected by Country's Woes KRISPY KREME MEXICO: Operating Results Affected by Country's Woes LANDAMERICA FIN'L: Employs Jenner & Block as Litigation Counsel LANDAMERICA FIN'L: Govt Bar Date for Claims vs. LCS on Jan. 14 LANDAMERICA FIN'L: LCS Sells Assets to Lamat LLC Under Ch. 11 LANDAMERICA FIN'L: Meeting of LCS's Creditors on Sept. 9 LANDAMERICA FIN'L: Wants October 15 Extension for Plan Filing LEHMAN BROTHERS: Examiner's Report is Expected by February 1 LEXARIA CORPORATION: Posts $208,000 Net Loss in Qtr. Ended July 31 LODGENET INTERACTIVE: Key Colony Fund Discloses 6.9% Equity Stake LODGENET INTERACTIVE: Victorian Capital Discloses 6.1% Stake LOUNGE 22 LLC: Case Summary & 20 Largest Unsecured Creditors LUMINENT MORTGAGE: Settles $24MM Contract Breach Dispute With HSBC LYONDELL CHEMICAL: Asks Court to Halt Suits on Non-Filed Units MCCLATCHY CO: Receives Compliance Notice From NYSE MCCLENTON INVESTMENTS: Voluntary Chapter 11 Case Summary MCGRATH HOTELS: Forced Into Chapter 11 Bankr. by Lighthouse Group MEDIS TECHNOLOGIES: Incurs $43.5-Mil. Loss for 1H of 2009 METALDYNE CORP: Wants to File Chapter 11 Plan until January 2010 MOECHERVILLE WATER: Case Summary & 2 Largest Unsecured Creditors MONEYGRAM INT'L: Appoints Patsley to Replace Ryan as CEO MONEYGRAM INT'L: Panel Approves Option Grant to Woods & O'Malley MRS JOHN STRONG: Wants to Auction Assets After Filing for Ch 11 NEW MEXICO SOFTWARE: Posts $63MM Net Loss in Quarter Ended June 30 NOEMI YABUT: Case Summary & 18 Largest Unsecured Creditors NORTEK INC: S&P Downgrades Corporate Credit Rating to 'D' NORTH AMERICAN ENERGY: Moody's Assigns Ba3 Rating on $205M Notes NOWAUTO GROUP: To Restate June 30, 2008 Financial Report PACIFIC ENERGY: Abandons Trading Bay Unit After Sale Collapses PEREGRINE PHARMA: Posts $2MM Net Loss for Quarter Ended July 31 PHYSICANS IMAGING: Case Summary & 18 Largest Unsecured Creditors RAPTOR NETWORKS: Balance Sheet Upside-Down by $18MM as of June 30 RASHMI PATEL: Case Summary & 10 Largest Unsecured Creditors SEAWAY VALLEY: March 31 Balance Sheet Upside-Down by $5.7 Million SHERYL STILES: Case Summary & 11 Largest Unsecured Creditors SIGNATURE APPAREL: Forced Into Chapter 7 by Two Creditors SINO ASSURANCE: Going Concern Uncertainty Due to Neg. Cash Flow SIRVA INC: Court Strikes Out $38 Mil. Fraud & Antitrust Claims SIX FLAGS: 32 Units' Schedules of Assets & Debts SIX FLAGS: 32 Units' Statements of Financial Affairs SIX FLAGS: G. Osborne Asks for Probe on True Worth SIX FLAGS: Hearing on Amended Plan Outline on October 8 SIX FLAGS: Revised Budget for Cash Collateral Use SPORT CHALET: Files Script of Option Exchange Conference Call STAR TRIBUNE: Insurers Balk Plan's Treatment of Insurance Policy STERLING SILVER: Alberta Star Eyes Corporate Assets SUN STATE TREES: Case Summary & 20 Largest Unsecured Creditors SYDELL INC: Files Chapter 11 as Demand for Spa Treatments Drops TERRAINE SAUNDERS: Case Summary & 25 Largest Unsecured Creditors TH PROPERTIES: In Default for Uncompleted Whitfield Project THOMAS TODD PITTENGER: Case Summary & 16 Largest Unsec. Creditors TOYS R US: Net Earnings Increases to $27MM for 2nd Fiscal Quarter TOYS R US: Acquires KB Toys Brand for $2.1 Million TRAVELLER'S INN: Files for Bankr.; Owner Plans to Sell Assets TRIBUNE CO: Assumes Web Site Deals With Classified Ventures TRIBUNE CO: Assumes Willis Tower, Chicago Leases TRIBUNE CO: Bondholder Trustee Wants to Probe 2007 Buyout TRIBUNE CO: Proposes Settlement With Calif. Franchise Tax Board TRIBUNE CO: Wants Lift Stay to Pay ERISA Defense Costs TRUMP ENTERTAINMENT: Developers Balk at Disclosure Statement TURCHAN TECHNOLOGIES: Case Summary & 20 Largest Unsec. Creditors TVI CORP: Files Reorganization Plan, to Sell Signature TXCO RESOURCES: Pushes to Amend EnCana Pact to Transfer Oil Rights US SHIPPING: Has Until December 25 to File Chapter 11 Plan VALLEY HEALTH: Fitch Downgrades Ratings on $45.5 Mil. Bonds to 'C' VELOCITY EXPRESS: Management Buyout Group Assigns Stake to Comvest VERASUN ENERGY: Disclosure Statement Hearing Moved to Sept. 9 VERASUN ENERGY: Pays AgStar $12.5 Mil. to Settle Lawsuit VERASUN ENERGY: Sells Cargill Receivables to West LB VERASUN ENERGY: To Auction Undeveloped Illinois Farmlands WALTER ENERGY: S&P Assigns 'BB+' Rating on $300 Mil. Facility WILLIAM HALL: Case Summary & 12 Largest Unsecured Creditors WL HOMES: Nevada Homeowners Want Court OK to Continue Lawsuit * Stiglitz Says Economic Recovery May Not Be 'Sustainable' * G-20 Mulls Hike in Standards for More Stable Financial System * Construction Firms' Bankr. Filings Hurt NW Ark Banks * More Restaurants Will Close, Experts Say * S&P's Global Corporate Default Tally Up to 213 * Large Companies With Insolvent Balance Sheets ********* A ADVOCATES & ATTORNEYS: Case Summary & Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: A Advocates & Attorneys of Kennedy Law Group aka Kennedy Law Group fdba A Professional Association of Trial Lawyers, P.A. fdba A Personal Injury Law Firm, P.A. 5100 West Kennedy Boulevard, Suite 100 Tampa, FL 33609 Bankruptcy Case No.: 09-20020 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Scott A. Stichter, Esq. Stichter, Riedel, Blain & Prosser 110 E. Madison Street, Suite 200 Tampa, FL 33602-4700 Tel: (813) 229-0144 Fax: (813) 229-1811 Email: sstichter.ecf@srbp.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 12 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flmb09-20020.pdf The petition was signed by Thomas J. Kennedy, president of the Company. ABITIBIBOWATER INC: Canada Court Extends Stay Period to Dec. 15 --------------------------------------------------------------- Honorable Mr. Justice Clement Gascon, J.S.C., of the Superior Court Commercial Division for the District of Montreal in Quebec, Montreal, Canada, extended the period within which no right may be exercised and no proceeding may be commenced or proceeded against the CCAA Applicants or any of their property, assets, rights and undertakings, through and including December 15, 2009. The Applicants' latest CCAA Stay Period expired on September 4, 2009. Stikeman Elliott LLP, in Montreal, Canada, relates that the CCAA Applicants have continued to work on implementing and maintaining effective procedures to permit an efficient monitoring of their financial situation, along with the assistance of the Ernst & Young Inc., as the Court-appointed Monitor in the CCAA Proceedings. The CCAA Applicants aver that they made and continue to make significant efforts to address the concerns of all stakeholders. They expect to conduct discussions and negotiations with their Unions over the coming weeks, which opportunities will be provided by an extension of the CCAA Stay Period. The CCAA Applicants add that they continue to undertake pre- filing initiatives and are taking the necessary steps to dispose of non-productive or redundant assets, which processes require time in order to maximize the return on the disposal of their assets. Moreover, the Applicants maintain that an extended Stay Period will afford them adequate time to make material progress in relation to their goals. Accordingly, it will allow the Applicants to complete the stabilization of their business and commence negotiations with their stakeholders with a view to assembling a plan of compromise or arrangement under the CCAA. The CCAA Applicants affirm that no creditor will suffer any undue prejudice by the extension of the Stay Period. Monitor Supports Extension of Stay Period, Presents July-August 2009 Cash Flow Results In a fifteenth report submitted to the Canadian Court on September 2, 2009, Ernst & Young, Inc., the Court-appointed monitor in the Canadian proceedings of the CCAA Applicants, recommended the extension of the CCAA Stay Period to allow the Applicants to develop a restructuring plan for the benefit of all stakeholders. E&Y Senior Vice President Alex Morrison also apprised Mr. Justice Gascon regarding the four-week cash flow results of the CCAA Applicants for the period from July 27, 2009, to August 23, 2009. Mr. Morrison disclosed that as of August 21, 2009, the Pulp and Paper Week Report noted that the year-over-year price of newsprint has fallen from $785 per ton in July 2008, to $645 per ton in July 2009. The pace of price decreases, however, have slowed due to increased downtime taken by newsprint producers, according to the Report. During the Reporting Period, the ACI Group had ending cash balance and liquidity availability that are each $41.3 million lower than the forecast. Bowater Canadian Forest Products Inc., on the other hand, had overall ending cash balance that was $5.3 million lower than the BCFPI Forecast. As of August 23, 2009, the ACI Group had cash on hand of $36.4 million. In addition, the undrawn portion of the ACI DIP Facility was $55.2 million; however, $12.5 million of that amount must remain undrawn under the Facility, resulting in net available liquidity under the ACI DIP Facility of $42.7 million. Accordingly, the total liquidity of the ACI Group was $79.1 million, as at August 23, 2009, Mr. Morrison related. From the commencement of the CCAA Proceedings until August 23, 2009, the net cash flow for BCFPI was approximately negative $53.4 million, exclusive of DIP draws. This negative cash flow is forecast to be offset somewhat over the next several weeks when the settlement of funds related to pulp sales occurs, as pulp sales from BCFPI are collected by Bowater Inc. The proceeds have not yet been paid to BCFPI as Management only recently completed the reconciliation that would allow the transfer to occur, Mr. Morrison added. The 15th Monitor Report also notes that the ACI Group has entered into engagement letters with advisors for the ACI Ad Hoc Committee of Bondholders, including counsel in the U.S. and Canada, Broadpoint Capital Inc. and Genuity Capital Markets, each of which has been retained to advise and perform various services for the ACI Ad Hoc Bondholder Committee. The Monitor has reviewed, and does not object to the Engagement Letters. The Monitor also points out that payments due to the beneficiaries under the pension plans maintained by the CCAA Applicants have not been altered as a result of the CCAA Proceedings and are being paid in full while negotiations concerning the future of the Pension Plans are ongoing. As a result, current retirees are receiving the full value of amounts due to them under the relevant Pension Plans and there has been no adjustment to current service payments, regardless of the deficits in the relevant Plans, Mr. Morrison tells the Canadian Court. A full-text copy of E&Y's 15th Monitor's Report is available for free at http://bankrupt.com/misc/CCAA_15thMonitorReport.pdf About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 29 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: Committee May Challenge Liens Until Sept. 25 ---------------------------------------------------------------- To recall, Judge Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware authorized AbitibiBowater, Inc., and its debtor affiliates, on a final basis, to borrow up to $360,000,000, under a Senior Secured Superpriority Debtor-in- Possession Credit Agreement, dated as of April 21, 2009, with Fairfax Financial Holdings Ltd. and Avenue Investments, L.P., as Initial Lenders, and Law Debenture Trust Company of New York, as administrative and collateral agent. On a final basis, the Court also allowed the Debtors to enter into and perform under the Amended and Restated Securitization Program, a "receivables purchase facility" among (1) Abitibi- Consolidated, Inc. and Abitibi Consolidated Sales Corporation or "the Abitibi Group" as Originators, (2) Abitibi Consolidated U.S. Funding Corp. and Donohue Group as Guarantors, (3) Citibank, as Agent, and (4) Barclays Capital Inc., as Syndication Agent. ACI and ACSC originate accounts receivables under an Amended and Restated Receivables Purchase Agreement with ACI Funding, Eureka Securitization, PLC, Citibank, Citibank, N.A., London Branch, as agent. Judge Carey subsequently entered a final order on July 1, 2009, approving in connection with implementation of the Amended and Restated Securitization Program, the receivables agreements, which have been amended and restated as of June 16, 2009. In separate filings with the Court, the Official Committee of Unsecured Creditors stipulated with the lender parties an extension of the period, through and including September 25, 2009, within which the Creditors' Committee may: (i) assert a Lender Claim under the DIP Agreement, pursuant to a stipulation with (x) Wachovia Bank, National Association, as agent under that a Credit Agreement dated May 31, 2006, as amended, (y) the Bank of Nova Scotia, as administrative agent, under the Credit Agreement, and (z) Law Debenture Trust Company of New York, as administrative agent and collateral agent under the DIP Loan Agreement; and (ii) challenge the stipulations, admissions and releases in the Final Securitization Order, solely as they relate to the ACCC Term Loan Creditors and ACCC Term Loan Credit Documents, pursuant to a stipulation with Wells Fargo Bank, National Association, as successor administrative agent, under and on behalf of the lenders party to a credit agreement dated as of April 1, 2008. * * * The Court authorized the parties to enter into the Stipulations, full-text copies which are available for free at: * http://bankrupt.com/misc/ABH_STIPDIP&CashCollExtension.pdf * http://bankrupt.com/misc/ABH_STIPSecuritizationExtension.pdf The Stipulation relating to the DIP Financing was amended, as agreed by the parties, to clarify that "Prepetition Secured Indebtedness," as defined under the Stipulation, includes any letter of credit issued postpetition by an issuing bank in accordance with the Prepetition Credit Agreement, to replace, exchange or continue any other outstanding L/C. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 29 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: Completes Sale Of Quebec Timberland Assets -------------------------------------------------------------- AbitibiBowater announced that it has completed the sale of approximately 121,000 hectares (300,000 acres) of private timberlands in Quebec, Canada, for C$53 million in cash. AbitibiBowater plans to use the proceeds from this sale for general corporate purposes. Timberlands located in the Mauricie, Charlevoix and Saguenay regions were sold to two newly formed limited partnerships held by Societe de gestion d'actifs forestiers Solifor, s.e.c. Timberlands located in the Cote-Nord region were sold to Amenagements forestiers Portneuf (3908666 Canada Inc.). About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 29 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: U.S. Court Sets Nov. 13 Claims Bar Date ----------------------------------------------------------- By this motion, AbitibiBowater Inc. and its affiliates ask the U.S. Bankruptcy Court for the District of Delaware to: (1) establish November 13, 2009, at 4:00 p.m., as the final date and time for creditors to file against the Debtors proofs of claim arising, or deemed to have arisen, pursuant to Section 501(d) of the Bankruptcy Code, prior to the Petition Date; and (ii) approve the form and manner of notice of the Bar Date. Patrick A. Jackson, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates that establishing the Bar Date will enable the Debtors to obtain complete and accurate information regarding the nature, validity and scope of prepetition claims, thus allowing the Debtors to concentrate their efforts on securing the timely approval of a disclosure statement and confirmation of a plan of reorganization in their Chapter 11 cases. The Chapter 11 Debtors are coordinating the claim processes with the CCAA Applicants. Accordingly, the CCAA Applicants have also asked Mr. Justice Gascon to establish November 13, 2009, as the Claims Bar Date. Specifically, the Chapter 11 Debtors and the CCAA Applicants contemplate these procedures for filing proofs of claim: (a) Creditors of the U.S. Debtors must file proofs of claims in the Chapter 11 Cases. (b) Creditors of the CCAA Debtors must file proofs of claims in the CCAA Proceeding. (c) Creditors of both the U.S. Debtors and the CCAA Applicants -- the Cross-Border Debtors -- should file proofs of claim in the CCAA Proceeding, provided, however, that the claims will be accepted and considered timely in the Chapter 11 cases if received by the Ernst & Young, Inc., the Court- appointed monitor in the Canadian proceedings of the CCAA Applicants, prior to the Bar Date. Conversely, proofs of claim filed against the Cross-Border Debtors will be accepted and considered timely in the CCAA Proceedings if received by Epiq Bankruptcy Solutions LLC, prior to the expiration of the Claims Bar Date. Proofs of Claim sent to Epiq via first-class mail must be addressed to: AbitibiBowater Inc. Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC FDR Station, P.O. Box 5269 New York, NY 10150-5269 Proofs of Claim sent to Epiq by hand delivery or overnight mail must be delivered to: AbitibiBowater Inc. Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC 757 Third Avenue, Third Floor New York, NY 10017. The Monitor will provide notice of the Bar Date, and mail proof- of-claim packages including the Chapter 11 materials, to creditors of the Cross-Border Debtors. In addition, any proofs of claim filed with the Monitor against a Cross-Border Debtor will be transferred to Epiq for compilation and inclusion in the Chapter 11 claims registry. Likewise, any claim filed with Epiq against a Cross-Border Debtor will be transferred to the Monitor for compilation and inclusion on the CCAA claims registry. The Proposed Bar Date Order provides that each person or entity -- including, without limitation, each individual, partnership, joint venture, limited liability company, corporation, estate, trust or governmental unit -- asserting a prepetition claim against the Debtors will be required to file a separate proof of claim that substantially complies with Official Bankruptcy Form No. 10. The Debtors propose that all holders of claims under Section 503 (b)(9) of the Bankruptcy Code for goods received by the Debtors within the 20 days prior to the Petition Date must be submitted on or before the Claims Bar Date. Any person or entity that asserts a claim against the Debtors arising from the Debtors' rejection of an executory contract or unexpired lease must file a claim on account of rejection damages on or before the later of (i) the Bar Date, or (ii) 30 days after the effective date of such rejection established by the Court. Parties Not Required to File Claims The Debtors propose that these persons or entities will not be required to file proofs of claim: * any person or entity that has already properly filed a claim; * any person or entity (i) whose claim is listed in the Schedules or any amendments, and (ii) whose claim is not described as "disputed," "contingent," or "unliquidated," and (iii) who does not dispute the amount or characterization of its claim; * professionals retained by the Debtors or the Official Committee of Unsecured Creditors pursuant to orders of the Court who assert administrative claims for fees and expenses pursuant to Sections 330, 331 and 503(b) of the Bankruptcy Code; * any person or entity that holds or asserts a claim against the Debtors pursuant to Sections 503(b) and 507(a)(2) of the Bankruptcy Code as an administrative expense; provided, however, that the 503(b)(9) Claim must be submitted on or before the Bar Date; * current officers and directors of the Debtors who assert claims for indemnification or contribution arising as a result of prepetition or postpetition services; * any entity whose claim is limited exclusively to a claim for repayment by the applicable Debtors of principal, interest, and other applicable fees and charges on or under the credit agreement, dated as of May 31, 2006 among Bowater Incorporated, Bowater Newsprint South LLC, Bowater Alabama LLC, and Bowater Newsprint South Operations LLC as lenders, and Wachovia Bank, National Association, as administrative agent; * any entity whose claim is limited exclusively to a claim for repayment by the Debtors of principal, interest, and other applicable fees and charges on or under the credit agreement, dated as of May 31, 2006 among Bowater Canadian Forest Products Inc., as borrower, the US Prepetition Borrowers and certain subsidiaries of BCFPI, as guarantors, the lenders, and The Bank of Nova Scotia, as administrative agent; * any entity whose claim is limited exclusively to a claim for payment by the Debtors of principal, interest, and other applicable fees and charges on or under the Credit and Guaranty Agreement, dated as of April 1, 2008, among ACCC as borrower, certain Debtors, as guarantors, the other guarantors party, the lenders, and Wells Fargo Bank, N.A., as successor-in-interest to Goldman Sachs Credit Partners, L.P., as administrative and collateral agent; * any entity whose claim is limited exclusively to a claim for payment by the Debtors of principal, interest and other fees and charges on or under any notes or bonds; * any Debtor asserting a claim against another Debtor; * any person or entity whose claim has already been paid by a Debtor or a CCAA Applicant; * any wholly owned non-debtor subsidiary of a Debtor or a CCAA Debtors asserting a claim against a Debtor; * any person or entity whose claim against the Debtors has been allowed by the Bankruptcy or the Canadian Courts, pursuant to orders entered on or before the Bar Date; and * any person who was an employee of any Debtor or CCAA Applicant as of the Petition Date. Any entity holding any interest in any Debtor, which interest is based solely upon the ownership of common or preferred stock in a corporation, a membership interest in a limited liability company, warrants or rights to purchase, sell or subscribe to such a security or interest, need not file a proof of interest. Pursuant to Rule 3003(c)(2) of the Federal Rules of Bankruptcy Procedure, any person or entity that fails to file a timely claim will not be treated as a creditor for purposes of voting on and distribution under any Chapter 11 plan proposed and confirmed in the Debtors' Chapter 11 cases. The proposed November 13, 2009 Claims Bar Date ensures that potential claimants receive no less than 60 days' notice after the service date to file Proofs of Claim in the Debtors' cases, according to Mr. Jackson. In its fourteenth report dated August 24, 2009, Ernst & Young, Inc., the Court-appointed monitor in the Canadian proceedings of the CCAA Applicants, recommended the approval of the Claims Procedure in the Chapter 11 and CCAA Insolvency Proceedings, to provide the Debtors and the Applicants with sufficient time to address issues relating to the Claims, and ultimately assist in their restructuring efforts. A full-text copy of E&Y's 14th Monitor's Report is available for free at http://bankrupt.com/misc/CCAA_14thMonitorReport.pdf * * * Judge Carey grants the Debtors' request. Prior to the Court's approval, the Debtors confirmed that they received no objections to the Claims Bar Date Motion. Accordingly, a copy of the Court- approved Bar Date Notice was filed with the Court. Mr. Justice Gascon subsequently approved the Bar Date request, as it applies to the CCAA Applicants. The CCAA Claims Process, which was concurrently submitted for the Canadian Court's approval, outlines the procedures by which creditors can assert claims as of April 17, 2009, against the Applicants. "Launching the Claims Process at this juncture demonstrates continued progress in AbitibiBowater's restructuring efforts," stated David J. Paterson, President and Chief Executive Officer in an official statement. "This key step in our creditor protection filings will allow the Company to better assess the scope and nature of creditor claims and assist AbitibiBowater in formulating a restructuring plan," he added. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 29 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: To Sell Manicouagan Power Plant for $615MM -------------------------------------------------------------- After engaging in negotiations since March 2009, AbitibiBowater has finally struck a deal for the sale of its 335-megawatt Manicouagan power plant in Quebec to a joint venture formed by Hydro-Quebec and Alcoa Inc. for $615 million, Ross Marowits of The Canadian Press reports. The deal contemplates the transfer of AbitibiBowater's 60% interest in the power plant to Quebec's public utility, Hydro- Quebec; while the remaining 40% of the hydro asset will be held by Alcoa, The Canadian Press relates. Mr. Marowits further relates that the sale proceeds: -- will be used, in part, to repay a $100 million loan the Company obtained the Bank of Montreal, which matures in November 2009; -- of about $282 million will be reserved to "meet obligations to Alcoa regarding potential tax consequences, pension and other liabilities;" and -- of about $57 million will be used to "pay taxes incurred by Alcoa as well as money owed for electricity purchased." Another $31 million of the sale proceeds will be set aside for two years to cover indemnification obligations to Hydro-Quebec, Mr. Marowits adds. Subject to court and regulatory approvals, the proposed sale is expected to close by October 15, 2009, according to the report. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 29 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ALLEN SYSTEMS: S&P Retains Developing Watch on 'CCC+' Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said that its 'CCC+' rating on Naples, Florida-based Allen Systems Group will remain on CreditWatch with developing implications until the company's proposed $355 million first- and second-lien financing deal is completed. "We believe a new financing would be a positive development for ASG, as it will use the proceeds on the proposed facility to refinance the existing $340 million senior secured credit facility and thereby resolve its technical default," said Standard & Poor's credit analyst Joseph Spence. As currently proposed, the first- lien portion consists of a $20 million, three-year revolving credit facility and a $235 million, four-year term-loan with a modest amortization schedule. The second-lien portion consists of a $100 million, four-and-a-half-year term-loan B. The resolution of ASG's technical default and resulting post- transaction pro forma adjusted leverage in the low 5x area would likely result in the rating being raised to 'B' from CCC+. At the same time, S&P would likely assign a 'BB-' rating level to the first-lien tranche with a recovery rating of '1' and a 'B+' rating to the second-lien tranche with a recovery rating of '2'. Given the tightness of the proposed covenants and the still soft IT environment S&P expects the outlook to be negative. Standard & Poor's originally placed the ratings on CreditWatch negative on June 5, 2008, following ASG's announcement that it would not be in compliance with certain covenants in its secured credit facilities due to the revised treatment of several refinanced operating leases as capital leases, and the subsequent delay in issuing its compliance documentation. S&P revised the CreditWatch to developing on Oct. 3, 2008. AMERICAN ACHIEVEMENT: S&P Raises Corporate Credit Rating to 'B-' ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Austin, Texas-based American Achievement Corp. to 'B-' from 'SD' (selective default). The rating outlook is stable. The recovery ratings on the debt of AAC and its related entities remain unchanged. The issue-level ratings on the debt were raised in conjunction with the corporate credit rating, in accordance with Standard & Poor's notching criteria for each debt issue's recovery rating. All issue-level ratings previously listed on CreditWatch were removed from CreditWatch. Current ratings are: * AAC's senior secured credit facility is rated 'B+' with a recovery rating of '1'; * AAC's senior subordinated notes are rated 'B-' with a recovery rating of '3'; and * American Achievement Group Holding Corp.'s (the parent company of AAC) senior PIK notes and AAC Group Holding Corp.'s (the intermediate holding company of AAC) senior discount notes are rated 'CCC' with a recovery rating of '6'. The ratings upgrade follows the conclusion of S&P's review of the company's capital structure subsequent to the most recent subpar repurchase of $65 million face value of the 12.75% senior PIK notes (currently accruing PIK interest at a stepped-up rate of 16.75%) issued by AAC's parent company at an aggregate purchase price of $23 million. S&P viewed the purchase as being tantamount to default given the distressed financial condition of the company and S&P's prior concerns around AAC's ability to sustain its capital structure over the intermediate term. There remains an estimated about $50 million outstanding (including accrued PIK interest) at August 2009 in these parent company PIK notes. Funding for the subpar note repurchase was accommodated through cash at the operating company, as well as proceeds from a preferred equity issuance from a newly formed, wholly owned subsidiary of the parent company of AAC, American Achievement Intermediate Holding Corp. The new preferred equity will accrue dividends at a rate of 25% per annum and is redeemable at the option of the company or by the holders of the securities, under certain circumstances. Although there are no mandatory redemption provisions, the preferred issuance requires the company to pursue a realization event, including a change of control transaction or an initial public offer, after the fifth anniversary of the issuance. In addition, there currently exists $7.5 million of preferred equity at the parent company which has a mandatory redemption provision occurring in January 2013. Given S&P's expectation for a limited life for these securities, S&P consider the preferred equity to possess debt-like features and, therefore, S&P include it as debt when calculating credit measures. "Although S&P believes the recent notes repurchase will result in free cash flow generation modestly in excess of accreting debt balances over the intermediate term, improving the company's ability to sustain its capital structure, the 'B-' corporate credit rating reflects AAC's high debt leverage and S&P's concern about large debt maturities in 2012," noted Standard & Poor's credit analyst Michael Listner. Notes totaling about $350 million (including accretion) at AAC and at AAC's parent and intermediate holding companies mature in 2012, which S&P expects will represent all but a modest portion of the company's outstanding debt at that time. AMERICAN CAPITAL: Notice of Acceleration Won't Affect S&P's Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said that the notice of acceleration from private debt holders, coupled with the forbearance agreement with virtually all of the note holders, does not affect S&P's ratings on American Capital Ltd. (B-/Negative/ --). By issuing the notices of acceleration to ACAS, private note holders are retroactively entitled to a make-whole payment and all accrued or unpaid interest. ACAS paid default interest to the private note holders retroactive to March 30, 2009, and added obligations under the make-whole provisions -- about $22 million -- to the principal balance owed private note holders. This payment does not materially degrade ACAS's liquidity position. On Aug. 21, 2009, S&P lowered its ratings on ACAS because of accelerated deterioration in the firm's realized earnings and reported leverage in second-quarter 2009, as well as the weakening performance of its portfolio companies. The forbearance agreement will allow management to continue to negotiate covenant relief with its lenders. AMERICAN EXECUTIVE: Case Summary & 2 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: American Executive Services International, LLC 14340 Biscayne Boulevard North Miami, FL 33181 Bankruptcy Case No.: 09-28872 Chapter 11 Petition Date: September 6, 2009 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: Joel M. Aresty, Esq. 13499 Biscayne Blvd #T-3 No. Miami, FL 33181 Tel: (305) 899-9876 Fax: (305) 723-7893 Email: aresty@mac.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 2 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flsb09-28872.pdf The petition was signed by Jacob Nae, managing member of the Company. AMERICAN TONERSERV: Annual Stockholders Meeting on September 24 --------------------------------------------------------------- The Annual Meeting of Stockholders of American TonerServ Corp. will be held at the Santa Rosa Golf and Country Club, Santa Rosa, California, on September 24, 2009, at 2:30 p.m. (PDT) for these purposes: 1. To elect six directors; 2. To consider and vote upon the ratification of the appointment of Perry-Smith LLP as the independent registered public accounting firm for ATS for the fiscal year ending December 31, 2009; and 3. To transact other business as may be properly brought before the meeting and any adjournments thereof. Stockholders of the Company of record at the close of business on August 26, 2009, are entitled to vote at the meeting and all adjournments thereof. These individuals are nominees to serve on the Board of Directors: Period of Service Name Age Positions as a Director ---- --- --------- ----------------- Chuck Mache 52 Director, President 2007 to Present and CEO Daniel J. Brinker 52 Chairman of the Board 1995 to Present William A. Robotham 67 Director 2006 to Present Thomas Hakel 49 Director 2001 to Present Chad Solter 37 Director 2009 to Present Gregory Curhan 47 Nominee for Director Not Applicable A full-text copy of the proxy statement is available at no charge at http://ResearchArchives.com/t/s?4440 American TonerServ is seeking to renegotiate the terms of a portion of its short term note obligations or to exchange equity securities for a portion of the debt. At June 30, 2009, the Company had a working capital deficit of $3,846,017, including cash and equivalent balances of $25,836 compared to a working capital deficit of $4,973,437 at December 31, 2008. The deficit is primarily related to short term note obligations which are due over the next 12 months. As of June 30, 2009, the Company had $16.7 million in total assets and $13.5 million in total liabilities. The Company's June 30 balance sheet showed strained liquidity with $5.03 million in total current assets against $8.88 million in total current liabilities. The Company believes that it will be successful in addressing its short term working capital requirements through various strategies. In a regulatory filing with the Securities and Exchange Commission in August, the Company said it has inadequate financial resources to sustain its business activities as they currently are. Management believes that the Company can achieve positive cash flow through an aggressive organic growth plan to increase sales, increasing operational efficiencies and by aggressively reducing overhead costs. During the six months ended June 30, 2009, the Company raised $360,000 in proceeds from private offerings. The Company estimates that it will need to raise an additional $1,000,000 during the next 12 months to meet its minimum capital requirements. There is substantial doubt that the Company will be able to continue as a going concern, absent raising additional financing. There can be no assurance that the Company will be successful in obtaining the required financing or renegotiating terms or converting a portion of its short term obligations into equity. About American TonerServ American TonerServ Corp. -- http://www.AmericanTonerServ.com/-- markets compatible toner cartridges, serving the printing needs of small- and medium-sized businesses by consolidating best-in-class independent operators in the more than $6.0 billion recycled printer cartridge and printer services industry, offering top- quality, environmentally-friendly products and local service teams. AMICHAI VARDI: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Amichai Vardi fdba Westlake Wireless dba Valdi Plastics Engineering 1876 Sandalwood Place Thousand Oaks, CA 91362 Bankruptcy Case No.: 09-21702 Chapter 11 Petition Date: September 7, 2009 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: David I. Brownstein, Esq. Brownstein & Brownstein LLP 21700 Oxnard St., Ste. 1160 Woodland, CA 91367 Tel: (818) 905-0000 Fax: (818) 593-3988 Email: brownsteinlaw@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-21702.pdf The petition was signed by Amichai Vardi. ANGEL ACQUISITION: June 30 Balance Sheet Upside-Down by $1.67MM --------------------------------------------------------------- Angel Acquisition Corp.'s balance sheet at June 30, 2009, showed total assets of $1.78 million and total liabilities of $3.45 million, resulting in a stockholders' deficit of $1.67 million. For six months ended June 30, 2009, the Company reported a net profit of $953,561, compared with a net loss of $823,287 for the same period in 2008. For three months ended June 30, 2009, the Company posted a net loss of $187,054, compared with a net loss of $667,207 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 it is dependent upon the available cash on hand and either future sales of securities or upon its current management or advances or loans from controlling shareholders or corporate officers to provide sufficient working capital. However, there is no legal obligation for either management or controlling shareholders to provide the additional fund. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4414 Angel Acquisition Corp., formerly known as Palomar Enterprises, Inc., was incorporated on March 10, 1999, in accordance with the laws of the State of Nevada. On Feb. 5, 2008, Palomar changed its name to Angel Acquisition Corp. to properly reflect the change in business direction. The Company assists private companies in the process of going public as well as being a licensed mortgage broker and developer. ANTHONY MOSLEY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Anthony V. Mosley 1845 Fairhaven Street Las Vegas, NV 89108 Bankruptcy Case No.: 09-26633 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Samuel A. Schwartz, Esq. 626 S Third St. Las Vegas, NV 89101 Tel: (702) 385-5544 Fax: (702) 385-2741 Email: sam@schwartzlawyers.com Nikoll Nikci, Esq. The Schwartz Law Firm 626 S Third St. Las Vegas, NV 89101 Tel: (702) 385-5544 Fax: (702) 385-2741 Email: sam@schwartzlawyers.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 $1,053,521, and total debts of $3,928,871. A full-text copy of Mr. Mosley's petition, including a list of his 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-26633.pdf The petition was signed by Mr. Mosley. ARRAY BIOPHARMA: Insufficient Funding May Affect Going Concern -------------------------------------------------------------- Array Biopharma Inc. recorded a net loss of $127,815,000 on revenue of $17,228,000 of revenue for fiscal year ended June 30, 2009, compared with a net loss of $96,288,000 on $28,808,000 of revenue in fiscal year 2008. The Company had total assets of $94,055,000 against debts of $168,756,000, resulting to a stockholders' deficit of $73,701,000. The Company had cash and cash equivalents of $33,202,000 as of June 30, 2009. On July 31, 2009, the Company drew $40.0 million under its Amended Credit Facility with Deerfield Capital. The Company believes that its existing cash, cash equivalents and marketable securities, including the $40.0 million disbursement received July 31, 2009 will enable it to continue to fund operations for the next 12 months assuming it obtains additional sources of funding as anticipated and/or reduce our levels of spending. This funding may include up-front fees or research funding through new out-licensing transactions, milestone payments on existing collaborations, and sales of equity securities or issuance of additional debt, the Company said. "However, if we are unable to obtain additional funding to the extent or when needed, it will be necessary to significantly reduce our current rate of spending through further reductions in staff and delaying, scaling back or eliminating certain research and development programs. Insufficient funds may also require us to relinquish greater or all rights to product candidates at an earlier stage of development or on less favorable terms to us or our stockholders than we would otherwise choose in order to obtain funding for further development and/or up-front license fees needed to fund our operations. If we are unable to continue to fund our ongoing operations as a result of insufficient funds, our ability to continue as a going concern may be in substantial doubt." A copy of the Company's Form 10-K is available for free at: http://researcharchives.com/t/s?4446 Array Biopharma Inc. is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule drugs to treat patients afflicted with cancer, inflammatory and metabolic diseases. Its proprietary drug development pipeline includes clinical candidates that are designed to regulate therapeutically important target proteins and are aimed at significant unmet medical needs. In addition, leading pharmaceutical and biotechnology companies collaborate with Array to discover and develop drug candidates across a broad range of therapeutic areas. BACCHUS DEVELOPMENT: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Bacchus Development 8801 Research Drive Irvine, CA 92618 Bankruptcy Case No.: 09-19457 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Bacchus Investment Group, LLC 09-19460 Bacchus Commercial, LLC 09-19462 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Robert N. Kwan Debtor's Counsel: Marc J. Winthrop, Esq. 660 Newport Center Dr, Suite 400 Newport Beach, CA 92660 Tel: (949) 720-4100 Email: pj@winthropcouchot.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A full-text copy of the Debtors' petition, including a list of their 19 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-19457.pdf The petition was signed by Steven M. Bren, president of the Company. BANK OF GUAM: Fitch Affirms Support Rating Floor at 'B' ------------------------------------------------------- Fitch Ratings has affirmed the Hagatna, Guam based Bank of Guam's ratings: -- Long-term Issuer Default Rating at 'BBB'; -- Short-term IDR at 'F2'; -- Long-term deposits at 'BBB+'; -- Short-term deposits at 'F2'; -- Individual at 'C'; -- Support at '4'; -- Support Floor at 'B'. The Rating Outlook is Stable. Bank of Guam continues to benefit from robust capital levels and stable funding, while profitability levels declined somewhat as a result of higher credit costs and net interest margin compression. The bank's 2008 and first half of 2009 profit levels declined to $6.2 million and $2.9 million, respectively (return on assets of 0.73% and 0.66%) as the lower interest rate environment pressured the net interest margin. In addition, credit costs increased primarily due to challenging real estate markets in the U.S., where Bank of Guam has moderate loan exposure. The bank continued to benefit from improving asset quality in its local markets. In total, non-performing asset levels are considerable manageable at 2.64% of loans at June 30, 2009. Further, Bank of Guam benefits from a stable funding base comprised mostly of core deposits. The bank's capital is comprised entirely of common equity, with no hybrid capital or preferred in the mix. Its 13.6% Tier I risk- adjusted capital ratio provides the bank with meaningful financial flexibility. Although fiscal challenges are still evident, Guam's economy has continued to show improvement, and the island territory is expected to be the recipient of material Federal stimulus monies for critical infrastructure projects. BARNES COMMERCIAL: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Barnes Commercial Holdings, LLC PO Box 1537 Greenville, SC 29602 Bankruptcy Case No.: 09-06594 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court District of South Carolina (Spartanburg) Judge: Helen E. Burris Debtor's Counsel: Robert H. Cooper, Esq. 3523 Pelham Road, Suite B Greenville, SC 29615 Tel: (864) 271-9911 Email: bknotice@thecooperlawfirm.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 Robert W. Barnes, managing member of the Company. BASE HOLDINGS: Closes Chili's Grill at American Airlines Center --------------------------------------------------------------- Karen Robinson-Jacobs at The Dallas Morning News reports that Base Holdings LLC has closed the Chili's Grill & Bar at American Airlines Center. Base Holdings' lawyer, Richard Pullman, said that the Company closed the 10-month-old restaurant, removing furniture and equipment, after an ongoing dispute with Center Operating Co., American Airlines Center's landlord, according to The Dallas Morning. Center Operating Co. President Brad Mayne said in a statement, "Of course, we are disappointed that the franchisee has closed the store that everyone hoped would attract new customers to Victory Park. COC has been working diligently for several months to assist the restaurant operator and continue the Chili's operations. Therefore, we were surprised that this action was taken and especially that it occurred in this manner." Dallas, Texas-based Base Holdings LLC was launched by entrepreneur Gilbert Aranza. It operated Chili's Grill & Bar at American Airlines Center. The Company filed for Chapter 11 bankruptcy protection on July 6, 2009 (Bankr. N.D. Texas Case No. 09-34269). Davor Rukavina, Esq., at Munsch, Hardt, Kopf & Harr, assists the Company in its restructuring efforts. The Company listed $1,000,001 to $10,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. BERTHEL SBIC: Sells Interest in Schebler for $170,000 Cash ---------------------------------------------------------- Berthel Growth & Income Trust I said the United States Small Business Administration, as Receiver for Berthel SBIC, LLC, on September 2, 2009, provided to Berthel Growth & Income Trust I a copy of a Securities Purchase Agreement pursuant to which on July 28, 2009, Berthel SBIC, LLC concluded the sale of securities in The Schebler Co., an Illinois corporation formerly known as GMKS Acquisition Corp. Pursuant to the Transaction, Berthel SBIC LLC transferred its interest in 166,666 shares of common stock of Schebler, 166,666 shares of preferred stock of Schebler, and a warrant to purchase 1.666% of the issued and outstanding common stock of Schebler. The Securities represented all of Berthel SBIC LLC's interest in the capital stock of Schebler. As consideration for the transfer of the Securities, Berthel SBIC LLC received the purchase price of $170,000, in cash. The Securities were purchased by Schebler, Marshall Capital Fund, L.P., X-Men, LLC, Barry Cohn, James R. Anderson, Susan Anderson, Julie Biegert, Douglas Biegert, James R. Booe, and Judy Booe. Berthel SBIC LLC was the holder of a promissory note delivered to it by Schebler. At the closing of the Transaction, Schebler repurchased the Promissory Note from Berthel SBIC LLC for the original principal amount of $166,661.33, plus accrued interest through May 15, 2009, of $2,787.59, plus $59.36 each day thereafter to the date of closing, paid in cash at the closing of the Transaction. There are no material relationships, other than in respect of the Transaction, between the Purchasers and Berthel SBIC, LLC or Berthel Growth & Income Trust I or any of their affiliates, directors or officers, or any associate of any such director or officer. As reported by the Troubled Company Reporter on September 22, 2008, Berthel Growth & Income Trust I's wholly owned subsidiary, Berthel SBIC LLC, violated September 1, 2008, the terms of its loan agreement dated September 1, 2003, with the United States Small Business Administration by failing to pay the balance of the loan in full. As of September 1, 2008, the balance of the loan is $2,777,946.30. As a result of the default, the United States Small Business Administration on September 3, 2008, issued Berthel SBIC LLC a notice of default, indicating that if Berthel SBIC LLC does not pay the amount in full within 30 days, the United States Small Business Administration will take appropriate legal action. Berthel SBIC LLC is now in receivership. About Berthel Growth Based in Marion, Iowa, Berthel Growth & Income Trust I was a Delaware business trust that has elected to be treated as a business development company under the Investment Company Act of 1940. The trust's Registration Statement was declared effective June 21, 1995, at which time the trust began offering Shares of Beneficial Interest. The underwriting period was completed on June 21, 1997, with a total of $10,541,000 raised. The trust is a closed-end management investment company intended as a long-term investment and not as a trading vehicle. At September 30, 2008, the Trust had $2,760,919 in total assets and $9,565,186 in total liquidation. BETH WAYNE: Case Summary & 15 Largest Unsecured Creditors --------------------------------------------------------- Joint Debtors: Beth Wayne David R Wayne aka Randy Wayne P.O. Box 778 Bayside, CA 95524 Bankruptcy Case No.: 09-12892 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtors' Counsel: David N. Chandler, Esq. Law Offices of David N. Chandler 1747 4th St. Santa Rosa, CA 95404 Tel: (707) 528-4331 Email: DChandler1747@yahoo.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 $3,023,430, and total debts of $3,479,776. A list of the Company's 15 largest unsecured creditors is available for free at: http://bankrupt.com/misc/canb09-12892.pdf The petition was signed by the Joint Debtors. BRUGNARA CORP: Owner Withdraws Guilty Plea in Federal Tax Case -------------------------------------------------------------- Brugnara Corp. and Brugnara Properties VI owner Luke Brugnara has successfully withdrawn a guilty plea in a tax evasion case, court documents say. According to court documents, Mr. Brugnara will go to trial on both matters early next year. Mr. Brugnara is also facing federal charges for allegedly poaching endangered fish on his Gilroy property, Chris Bone at The Gilroy Dispatch states. The Gilroy Dispatch relates that the poaching trial starts on January 25, 2010, while the tax trial begins on February 1, 2010. The Gilroy Dispatch reports that Mr. Brugnara, if convicted, could: -- end up in prison for up to three years, and would be fined with millions of dollars for tax evasion; and -- be put in prison for 5.5 years for poaching endangered fish and making false statements to investigators. Court documents say that in April 2008, a federal grand jury indicted Mr. Brugnara and his seven companies with filing false claims and failing to report $45.5 million in gains from the sale of four San Francisco properties and one in Las Vegas between 2000 and 2002. Mr. Brugnara pleaded guilty in May 2009 to not reporting $15 million in gains from the sale of two downtown San Francisco buildings in 2000, in exchange for the dropping of additional tax charges by U.S. Attorney Joseph Russoniello's office. U.S. Attorney Spokesperson Jack Gillund said that Mr. Brugnara will now face all the charges, The Gilroy Dispatch states. According to The Gilroy Dispatch, prosecutors claimed that Mr. Brugnara failed to report travel through one of his companies, Brugnara Properties. The report says that Mr. Brugnara also filed Chapter 11 bankruptcy claims last winter through three of his companies -- Brugnara Corporation and Brugnara Properties I and VI. Court documents show that creditors in the three bankruptcy cases have claimed almost $85 million from the commercial property companies. Court documents state that the Brugnara VI case was dismissed, while the other two were converted to Chapter 7. San Francisco, California-based Brugnara Corporation and Brugnara Properties VI filed for Chapter 11 bankruptcy protection on January 7, 2009 (Bankr. N.D. Calif. Case No. 09-30041 and 09- 30038). David N. Chandler, Esq., at the Law Offices of David N. Chandler and Stephen D. Finestone, Esq., at the Law Offices of Stephen D. Finestone, assist Brugnara Corp. and Brugnara Properties respectively in their restructuring efforts. Brugnara Corp. listed $1 million to $10 million in assets and $10 million to $50 million in debts, while Brugnara Properties listed $17,800,000 in assets and $17,540,328 in liabilities when they filed for bankruptcy. BUSSON DIGITAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Busson Digital Printing, Inc. fdba Busson Photography, Inc. 523 West Tuscarawas Avenue Barberton, OH 44203 Bankruptcy Case No.: 09-54018 Chapter 11 Petition Date: September 7, 2009 Court: United States Bankruptcy Court Northern District of Ohio (Akron) Judge: Marilyn Shea-Stonum Debtor's Counsel: Harold A. Corzin, Esq. Christine Corzin, Esq. 304 N Cleveland Massillon Rd Commonwealth Square Akron, OH 44333 Tel: (330) 670-0770 Email: hcorzin@csu-law.com Estimated Assets: $500,001 to $1,000,000 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/ohnb09-54018.pdf The petition was signed by Dennis R. Busson, president of the Company. C & F AUTO: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: C & F Auto, Inc. 21780 Gillette Road Watertown, NY 13601 Bankruptcy Case No.: 09-32491 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Northern District of New York (Syracuse) Judge: Margaret M. Cangilos-Ruiz Debtor's Counsel: David P. Antonucci, Esq. Antonucci Law Firm 12 Public Square Watertown, NY 13601 Tel: (315) 788-7300 Fax: (315) 788-1643 Email: antonlaws@nnymail.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/nynb09-32491.pdf The petition was signed by Charles Minhinnett, president of the Company. CAFE DES ARTISTES: NY Restaurant Closes Doors --------------------------------------------- Florence Fabricant posted at The New York Times blog, Diner's Journal, that Cafe des Artistes has closed. According to Diner's Journal, Jenifer and George Lang said that they had closed for vacation earlier in August and had planned on reopening in September, but changed their minds. The report quoted Ms. Lang as saying, "George is 85, business has been down - not terrible, but down, like everybody else's -- and we feel it's time." Cafe des Artistes opened in 1917. Cafe des Artistes is among New York's most theatrical, romantic, and historic restaurants. Jenifer and George Lang have owned it since 1975. CANADIAN SUPERIOR: Posts $10MM Net Loss in Quarter Ended June 30 ---------------------------------------------------------------- Canadian Superior Energy Inc. posted a net loss of $9.88 million for three months ended June 30, 2009, compared with a net loss of $1.58 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $18.87 million compared with a net loss of $3.45 million for the same period in 2008. The Company's balance sheet at June 30, 2009, showed total assets of $445.51 million, total liabilities of $225.66 million and stockholders' equity of about $219.85 million. A full-text copy of the Company's Form 6-K is available for free at http://ResearchArchives.com/t/s?4417 Canadian Superior Energy Inc. -- http://www.cansup.com/-- is a Calgary, Alberta, Canada-based diversified global energy company engaged in the exploration and production of oil and natural gas, and liquefied natural gas projects, with operations offshore Trinidad and Tobago, offshore Nova Scotia, Canada, in Western Canada, in the United States and in North Africa. On March 5, 2009, Canadian Superior made an application for protection under the Companies' Creditors Arrangement Act and an Initial Order was granted by the Court of Queen's Bench of Alberta for creditor protection for 20 days, which was subsequently extended to May 4, 2009, June 4, 2009, July 24, 2009, and Sept. 15, 2009. Deloitte & Touche Inc. was appointed Interim Receiver of the Company's Participation Interest in Block 5(c) Trinidad pursuant to a Court Order granted by the Court of Queen's Bench of Alberta. At June 30, 2009, the Company estimates its net obligation to the receiver to be approximately $49.5 million, which includes $74.6 million paid by the receiver net of $25.1 million of Block 5(c) joint interest billings collected by the receiver on the Company's behalf. The Court appointed Hardie and Kelly Inc. as Monitor of the Company. CAPMARK FINANCIAL: $1.6 Bil. Losses Cue S&P to Junk Corp. Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings on Capmark Financial Group Inc., including lowering the local-currency, long-term corporate credit rating on the company to 'CC' from 'B-'. At the same time, S&P revised the CreditWatch listing of the ratings to negative from developing, where it was placed on April 24, 2009. All of S&P's Capmark-related commercial mortgage-servicer rankings (in the U.S., S&P's "strong" commercial mortgage master servicer, primary servicer, and special servicer rankings on Capmark Finance Inc.; in Japan, S&P's "above average" commercial mortgage master servicer and commercial mortgage primary servicer rankings on Premier Asset Management Co.; and in Canada, S&P's "above average" commercial mortgage primary servicer ranking on Capmark Canada Ltd.) are unchanged and remain on CreditWatch with negative implications, where S&P placed them on March 5, 2009. Although the lowered credit rating has changed the financial position associated with these servicer rankings to "insufficient" from "sufficient," Capmark's servicer entities remain on S&P's Select Servicer List in accordance with S&P's revised criteria dated April 16, 2009. The CreditWatch on the servicer rankings also remains in place as S&P conducts additional reviews of these servicing operations. The downgrade follows Capmark's announcement that it lost $1.6 billion in second-quarter 2009 and that it has entered into an asset-put agreement that gives it the right to sell its North American servicing and mortgage-banking businesses. "We expect Capmark either to enter Chapter 11 bankruptcy proceedings or to negotiate a distressed exchange outside of bankruptcy, which most likely would affect most of its debt. "We will consider either of these events to be a default," said Standard & Poor's credit analyst Jeffrey Zaun. By selling its servicing and originations businesses, the firm should be able to preserve their value. But the consideration received in the sale -- $375 million in cash and a $75 million note -- will not enable Capmark to meet its debt obligations. The CreditWatch with negative implications indicates that S&P expects the firm to default in the coming months. Because the company has enough unrerestricted cash to meet short-term obligations and funding commitments ($1.2 billion at the holding company), S&P expects that default may be delayed while management negotiates with creditors. CAPMARK FINANCIAL: Moody's Cuts Senior Unsecured Ratings to 'C' --------------------------------------------------------------- Moody's Investors Service downgraded the senior unsecured ratings of Capmark Financial Group Inc. to C from Caa1 following Capmark's announcement of its potential sale of its North American servicing and mortgage banking businesses, its announcement of second quarter 2009 operating results and its update on its restructuring efforts. In Moody's view, the sale of the servicing and mortgage banking businesses would remove key sources of income needed to service and repay unsecured debt obligations, while impairing the value of its franchise and remaining businesses. The rating also accounts for the material deterioration in asset quality, the diminished size of its unencumbered asset portfolio, and the potential for additional required support (possibly in cash and/or assets) to bolster Capmark Bank. As a result, Moody's believes that the unsecured lenders and bondholders, either in a default or a restructuring scenario, would experience substantial losses. The C rating reflects the potential loss severity. These ratings were downgraded: * Capmark Financial Group Inc. -- senior unsecured debt to C from Caa1 Moody's last rating action with respect to Capmark Financial Group was on April 28, 2009 when Moody's downgraded the company to Caa1 from B2. The ratings remained under review for possible downgrade. Capmark Financial Group Inc., formerly known as GMAC Commercial Holding Corp., is an industry leader in the commercial real estate finance, investments and services, with 55 offices worldwide. It is headquartered in Horsham, Pennsylvania, USA. Capmark Financial Group's ratings were assigned by evaluating factors Moody's believes are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Capmark's core industry and the company's ratings are believed to be comparable to those of other issuers of similar credit risk. CDX GAS: Court Approves Settlement Pact With Int'l Coal Group ------------------------------------------------------------- CDX Gas LLC has reached a settlement with International Coal Group Inc. and its subsidiaries, which earlier had objected to the debtor's disclosure statement on the grounds that it was not specific enough regarding its plan for certain contracts, according to Law360. The Hon. Letitia Paul of U.S. Bankruptcy Court for the Southern District of Texas approved the deal that CDX struck with International Coal Group's subsidiary CoalQuest Development LLC. As reported on the Troubled Company Reporter on August 11, 2009, the Debtors filed a document containing three separate Chapter 11 plans for three groups -- a liquidating plan for CDX Acquisition, a reorganization plan for CDX Gas and another plan for CDX Exploration LLC. Holders of debt backed by second priority liens on CDX's assets will receive 95.5% of the membership interests of reorganized CDX Gas. Holders of first lien debt will receive full payment. Copies of the Plan and the Disclosure Statement are available for free at: http://bankrupt.com/misc/CDX_DiscStatement.pdf http://bankrupt.com/misc/CDX_Plan.pdf Based in Houston, Texas, CDX Gas LLC -- http://www.cdxgas.com/-- is an independent gas company that explores, develops, and produces onshore North American unconventional natural gas resources located in coal, shale, and tight gas sandstone formations. The Company and 19 of its affiliates filed for Chapter 11 protection on December 12, 2008 (Bankr. S.D. Tex. Lead Case No. 08-37922). CDX Rio, LLC, an entity in which CDX Gas indirectly owns a 90% membership interest, and Arkoma Gathering, LLC, an entity in which CDX Gas owns a 75% membership interest, filed for Chapter 11 protection on April 1, 2009. In its schedules, CDX listed total assets of $996,308,606 and total debts of $831,259,526. Harry Perrin, Esq., D. Bobbitt Noel, Esq., John E. Mitchell, Esq., and Michaela C. Crocker, Esq., at Vinson Elkins LLP, represent the Debtors in their restructuring efforts. Gardere Wynne Sewell LLP, serves as conflicts counsel. Epiq Bankruptcy Solutions, LLC, is the claims and noticing agent. The Debtors also hired Ryder Scott Company, L.P. as Petroleum Consultants; Wilhoit & Kaiser as special title examination counsel; Fish & Richardson LLP as Special Intellectual Property Counsel; Deloitte Tax LLP as Tax Consultants; and Jefferies & Company, Inc., as valuation experts. On January 7, 2009, the Office of the United States Trustee informed the Court of its inability to solicit sufficient interest from creditors to form an official committee of unsecured creditors. CHARTER COMM: Court Questions $200MM Payment to Allen ----------------------------------------------------- At the hearing held September 2, 2009, to consider confirmation of Charter Communications, Inc., and its subsidiaries' Amended Joint Plan of Reorganization, Judge James M. Peck questioned Paul G. Allen's investment manager, Lance Conn, why he thinks Mr. Allen is entitled to "compensation" as part of Charter's restructuring, Josh Kosman of The New York Post reports. Mr. Allen's role in Charter's debt restructuring is under scrutiny since distributions are being provided to him on account of his equity interests in Charter, in direct violation of the absolute priority rule. Charter's restructuring, notes the New York Post, particularly calls for Mr. Allen to be paid around $200 million, based on his having provided the company with between $2 billion and $3 billion of value. Mr. Kosman said many people at the courtroom were startled when Judge Peck asked Mr. Conn if he thought it "appears somewhat unseemly for a person as wealthy as Allen" to be collecting money in the bankruptcy. Mr. Allen, a co-founder of Microsoft, is reportedly worth more than $10 billion. As previously reported, the Debtors' pre-arranged Chapter 11 plan, is premised on a global settlement with Mr. Allen, and is supported by the members of an Unofficial Cross-over Committee representing the interests of Holders of CCH I Notes and CCH II Notes. The CII Settlement forms the basis for the Plan, which: -- cancels approximately $8 billion of debt at various holding companies; -- reduces Charter's annual interest expense by more than $830 million; -- raises approximately $1.6 billion in additional equity through a rights offering; and -- refinances approximately $1.467 billion in senior holding company debt instruments. "[Mr.] Allen's Vulcan Ventures has teamed with the owners of about half of Charter's bonds -- including Leon Black-led Apollo Management -- to propose a reorganization of the cable company, in which the bondholders would get ownership in the company in exchange for forgiving about half of what they're owed," notes Mr. Kosman. Mr. Conn defended the proposed deal, saying Mr. Allen invested $8 billion in the firm, and has sustained losses as a result of its struggles, added Mr. Kosman. However, the report noted that Mr. Allen has personally benefited from Charter's billions in losses by applying that red ink to his profitable investments, thus reducing his tax burden. "I think if we made a decision based upon appearance, we would be in a different place," Mr. Conn told Judge Peck at the hearing, says the New York Post. To recall, the Confirmation Hearing on the Debtors' Plan commenced July 20, 2009, with Sept. 2 set as the last day of hearing. Prior to the Sept. 2 Hearing, speculations have circulated that Charter's Plan may have reached an impasse, after bondholders contended that allowing Mr. Allen to retain control of the company post-bankruptcy only benefits himself. According to the New York Post, sources said that after spending the summer in a legal back- and-forth, the banks opposing the Plan and bondholders who sponsored the Plan are not talking. The banks have asked for one or two percentage points more in interest on their roughly $8 billion in debt, several sources said, according to the New York Post. That would amount to between $80 million and $160 million a year extra for Charter, which after the reorganization expects to generate $300 million annually in free cash flow. Charter's plan would leave Mr. Allen with the biggest voting stake and keep the company's tax structure intact, the report added. This allows Mr. Allen to take advantage of $1 billion in net operating losses. However, JPMorgan and other senior Charter lenders, according to the New York Post, object to the restructuring, saying it amounts to a change of control since the bondholders would wind up owning the business in exchange for forgiving about half their loans. With a change in the ownership structure, Mr. Allen would be unable to take advantage of Charter's net operating losses, making him personally liable for more than $1 billion in taxes, a source said, according to the report. According to New York Post, several sources said Charter has not been willing to agree to such a concession since the equity and debt markets have rallied, and appears to have stopped negotiating altogether with Charter's senior lenders. About Charter Communications Based in St. Louis, Missouri, Charter Communications, Inc. (Pink OTC: CHTRQ) -- http://www.charter.com/-- is a broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. Charter Communications and more than a hundred affiliates filed voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y. Case No. 09-11435). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 billion. The Hon. James M. Peck presides over the cases. Richard M. Cieri, Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to the Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at Togut, Segal & Segal LLP in New York, serves as Charter Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost, Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel. Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the Debtors' independent auditors. The Debtors' valuation consultants are Duff & Phelps LLC; the Debtors' financial advisors are Lazard Freres & Co. LLC; and the Debtors' restructuring consultants are AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims agent is Kurtzman Carson Consultants LLC. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHARTER COMM: M. Ford Wants to Pursue Employment Suit ----------------------------------------------------- Maureen Ford asks the Court to lift the automatic stay pursuant to Section 362(d)(1) of the Bankruptcy Code to the extent necessary to allow her to continue and pursue her claim against Charter Communications, Inc., arising out of various acts of employment discrimination, asserted in Maureen Ford vs. Charter Communications, Inc. Prior to the Petition Date, Ms. Ford filed a four-count complaint against Charter in a circuit court in the state of Michigan, asserting that her employment was terminated due to age and gender discrimination in violation of the Age Discrimination in Employment Act and the Michigan Elliott Larsen Civil Rights Act. Representing Ms. Ford, Edward R. Minson, Esq. at Stein Riso Mantel, LLP, in New York, asserts that she was fired after long tenure with the Debtor, like others over 50 years old, for allegedly not meeting the "Standards of Success" Sales Guidelines of the Company. Mr. Minson contends, among other things, that Ms. Ford was held to objectively stricter standards than a comparably situated male. Mr. Minson argues that the Debtors will not be greatly prejudiced if the automatic stay is lifted, while Ms. Ford will be substantially harmed without the relief. He points out that Charter is a multi-billion dollar going-concern and appears to have adequate resources to mount a viable defense if the stay is lifted, particularly in light of the representations it made at the commencement of bankruptcy just months ago. The Court will commence a hearing on September 24, 2009, at 10:00 a.m. to consider the request. Objections are due September 21. About Charter Communications Based in St. Louis, Missouri, Charter Communications, Inc. (Pink OTC: CHTRQ) -- http://www.charter.com/-- is a broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. Charter Communications and more than a hundred affiliates filed voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y. Case No. 09-11435). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 billion. The Hon. James M. Peck presides over the cases. Richard M. Cieri, Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to the Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at Togut, Segal & Segal LLP in New York, serves as Charter Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost, Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel. Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the Debtors' independent auditors. The Debtors' valuation consultants are Duff & Phelps LLC; the Debtors' financial advisors are Lazard Freres & Co. LLC; and the Debtors' restructuring consultants are AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims agent is Kurtzman Carson Consultants LLC. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: Court OKs Sale of California & Georgia Properties --------------------------------------------------------------- Circuit City Stores Inc. and its affiliates obtained the Court's authority to sell three properties, including the buildings, fixtures and equipment found in the properties, free and clear of all liens to proposed purchasers or to otherwise better bidders: (1) certain of Circuit City Store, Inc.'s real property located at 1332-1406 Virgil Place, in Los Angeles, California; (2) certain of Circuit City Stores West Coast, Inc.'s real property located at 4070-4080 Stevens Creek Boulevard, in San Jose, California; and (3) Circuit City's real property located at 1325 West Corporate Court, in Lithia Springs, Georgia. The Debtors entered into separate agreements with the proposed purchasers for these properties: (1) James Moushould for the Virgil Place LA Property. A copy of the Moushould Agreement is available for free at: http://bankrupt.com/misc/CC_LApropSaleAgreement062309.pdf (2) Mathew Zaheri for the San Jose Property. A copy of the Zaheri Agreement is available for free at http://bankrupt.com/misc/CC_SanJosePropSaleAgreement072009.pdf (3) Axion Holdings, LLC for the Lithia Springs Property. A copy of the Axion Agreement is available for free at: http://bankrupt.com/misc/CC_LithiaSpringsPropSaleAgreement070509.p df In light of the failure to obtain any feasible going concern bids and the decision to liquidate the Debtors' inventory through going-out-of-business sales, the Debtors have been left with various assets for which they have no remaining use. The sale of these assets, including the Properties, would result in significant proceeds for the Debtors' estates and creditors, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, said. The Debtors, as seller, own the San Jose Property, comprising approximately 5.17 acres in San Jose, California. In addition to operating a retail store on the San Jose Property, Circuit City West leases certain portions of the Property to Don Sherwood Golf Shop, Inc., pursuant to a lease dated January 26, 2998, as amended. The Sale of the San Jose Property would be subject to the Lease, which would be assigned to any purchaser of the San Jose Property, Mr. Foley informed the Court. According to Mr. Foley, the salient terms of the Agreements include: (a) Circuit City would sell the Virgil Place LA Property to Mr. Moushould for $325,000; (b) The purchase price to be paid by Mr. Zaheri for the San Jose Property would be $8,250,000; (c) The purchase price for the Lithia Springs Property is $1,500,000, subject to higher or otherwise better proposals. (d) In accordance with the Moushould Agreement, Mr. Moushould has placed $32,500 into an escrow account with Chicago Title Insurance Company for the Virgil Place LA Property. Upon closing of the Sale, or if the Moushould Agreement is terminated before Closing because of the Purchaser's breach of the Agreement, Circuit City would be entitled to the funds in the escrow account. Retention of the Deposit would constitute the Seller's sole recourse in that event. (e) In accordance with the Zaheri Agreement, Mr. Zaheri has placed $500,000 into an escrow account with Fidelity Title for the San Jose Property. Upon closing of the Sale, or if the Zaheri Agreement is terminated before Closing because of the Purchaser's breach of the Agreement, the Seller would be entitled to the funds in the escrow account. In recognition of Mr. Zaheri's expenditure of time, energy, and resources, Circuit City West has agreed to reimburse Mr. Zaheri for his reasonable out-of-pocket third-party due diligence expenditures actually incurred in connection with the Zaheri Agreement, in an amount not to exceed of $37,500. (f) In accordance with the Axion Agreement, Axion will deliver to Chicago Title Insurance Company $250,000 for the Lithia Springs Property. If the Sale is consummated under the Axion Agreement, the Deposit will be applied to the Purchase Price. If the Axion Agreement is terminated before Closing of the Sale because of Axion's breach of the Agreement, Circuit City would be entitled to retain the Deposit as the Seller's sole recourse. Circuit City has agreed to reimburse Axion for its actual, reasonable, verifiable and documented third-party out-of- pocket costs and expenses in an amount not greater than $25,000. Golfsmith Objects to San Jose Sale On July 30, 2009, Golfsmith International, L.P., provided written notification to the Debtors, as Sellers, regarding various issues with the San Jose Property constituting violations of the Seller's obligations under the Lease. During the two months before the Notice Date, Golfsmith repeatedly attempted to contact Sarah Snelson, the individual the Debtors had originally indicated to Golfsmith to be the appropriate business contact for the Property, without success, Catherine Creely, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Washington, D.C., relates. Upon information and belief, Ms. Snelson is no longer employed by the Debtors, Ms. Creely adds. Golfsmith does not object per se to the Seller's proposal to sell the Property and to assume and assign the Lease to the Purchaser or another successful bidder. However, Golfsmith does object to any proposal of the Seller to assume and assign the Lease without curing certain Lease violations, Ms. Creely tells the Court. At or immediately following the time of the proposed transfer of the Property, if the violations are not remedied, the Debtors will be in default under the Lease, according to Ms. Creely. Accordingly, Golfsmith objects to the assumption and assignment of the Lease to the extent that the Lease violations are not immediately rectified. * * * Pursuant to court-approved bidding procedures, auctions were conducted with respect to the sale of the three Properties. In separate orders, the Court granted the Sale Motions and approved the sale to the best bidders and the corresponding purchase agreements: (1) Agreement dated August 25, 2009, between Circuit City and Children's Hospital Los Angeles, a California non-profit, public benefit corporation, with respect to the Virgil Place LA Property, with a purchase price of $500,000. A copy of the order and agreement is available for free at: http://bankrupt.com/misc/CC_OrdVirgilLAPropSale083109.pdf (2) Agreement dated August 26, 2009, between Circuit City West and Smythe European, Inc., with respect to the San Jose Property, with a purchase price of $11,150,000. A copy of the order and the agreement is available for free at: http://bankrupt.com/misc/CC_OrdSanJosePropSale083109.pdf (3) Agreement with Axion for the Lithia Springs Property. The Purchase Price is $2,200,000. A copy of the order and agreement is available at no charge at: http://bankrupt.com/misc/CC_OrdLithiaSpringsPropSale083109.pdf Any and all objections to the Sale Motions not waived, withdrawn settled, adjourned or otherwise resolved are overruled on the merits and denied with prejudice. 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. 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. CIRCUIT CITY: Court OKs Sale of Moreno Valley Property for $2.25MM ------------------------------------------------------------------ Circuit City Stores and its affiliates asked the Court to, among other things, a sale process for Circuit City Stores West Coast, Inc.'s real property located at 12530 Day Street in Moreno Valley, California. The Debtors proposed to sell the property to 99cents Only Stores for $2.25 million, absent higher and better bids for the property. Following a sale hearing, the Bankruptcy Court has approved the Agreement dated May 15, 2009, between Circuit City Stores West Coast, Inc., and 99cents Only Stores. The Purchase Price is $2,250,000. A copy of the sale order is available for free at: http://bankrupt.com/misc/CC_OrdMorenoVallPropSale083109.pdf 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. CIRCUIT CITY: Disclosure Statement Hearing on September 22 ---------------------------------------------------------- The Bankruptcy Court will convene a hearing on September 22, 2009, to consider approval of the disclosure statement attached to the proposed Chapter 11 plan of liquidation sponsored by Circuit City Stores Inc. Judge Huennekens has extended the deadline for parties to object to the Disclosure Statement to September 18, 2009, at 4:00 p.m. The Debtors and the Creditors Committee have propose this schedule in line with confirmation of the Plan: Date Event ---- ----- Sep. 18, 2009 Disclosure Statement objection deadline Sep. 22, 2009 Disclosure Statement hearing Sep. 22, 2009 Voting record date Sep. 30, 2009 Solicitation Package mailing date Sep. 30, 2009 Deadline to publish confirmation hearing notice Oct. 20, 2009 Deadline for Debtors to object to claims for voting purposes Nov. 5, 2009 Exhibit filing deadline Nov. 10, 2009 Voting deadline Nov. 10, 2009 Rule 3018(a) motion deadline Nov. 16, 2009 Confirmation objection deadline Nov. 23, 2009 Confirmation hearing The Court has previously approved the Debtors' retention of Kurtzman Carson Consultants, LLC as claims, noticing and balloting agent, recounts the Debtors' counsel, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia. The Proposed Plan 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 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. CIRCUIT CITY: Proposes Settlements With GE, et al. -------------------------------------------------- Pursuant to Sections 105 and 365 of the Bankruptcy Code and Rule 9019 of the Federal Rules of Bankruptcy Procedure, Circuit City Stores Inc. and its affiliates ask the Court to approve stipulations they entered into with: (i) Federal Warranty Service Corporation and certain affiliates, (ii) General Electric Company, and (iii) Service Plan, Inc., and certain affiliates. As part of the Debtors' consumer electronics business, they also sold long-term service contracts -- warranties -- for products purchased through their stores, as well as those purchased online. Each Service Contract was sold pursuant to agreements with various third parties, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, relates. Generally, the Debtors acted as the claims administrator and performed various product repair and replacement services, and third parties acted as underwriters to insure the obligations associated with the Service Contracts. In their role as claims administrator, the Debtors received and processed claims and performed repairs or provided replacement products, or subcontracted with additional third parties, including GE, to provide repairs. The Debtors submitted each claim to third-party insurers, including the Settlement Parties, for reimbursement, according to Mr. Foley. Relationship with SPI On December 1, 1992, Circuit City and SPI entered into three agreements pursuant to which the Debtor agreed to sell certain Service Contracts, act as third-party claim administrator, and perform various product repair and replacement services. SPI agreed to act as the underlying obligor: (a) Agreement Regarding Repair Service Agreements -- SPI Master Agreement; (b) Authorized Repair Center Agreement; and (c) Contingent Commission Agreement. In November 2006, Circuit City and GE entered into a letter agreement whereby the parties agreed that GE would satisfy certain claims by performing repair services the Debtor was obligated to perform under the Repair Center Agreement with SPI. The parties further agreed that GE would submit the claims in the appropriate format to Circuit City, as the claim administrator, for processing. Once processed, Circuit City agreed to submit the GE claims to SPI for payment. Upon receiving payment, Circuit City further agreed to reimburse GE for all valid GE Claims, Mr. Foley informs the Court. Circuit City ceased selling Service Contracts under the SPI Master Agreement in late 2006, but continued to serve as claims administrator and provided repair and replacement services. GE continued to provide repair services. However, since the Petition Date, SPI has not remitted any payments to Circuit City on account of GE's claims, Mr. Foley says. The most recent distribution from the certain claim fund under the SPI Master Agreement was due February 2009, but was not paid, he notes. The Debtors sent SPI a demand for payment of approximately $21,000,000 in April 2009. The demand included amounts on account of certain GE Claims. Among other things, SPI argued that as a result of the Debtors' liquidation, it was unlikely that the Claim Fund would be sufficient to satisfy potential claims, according to Mr. Foley. Relationship with GE and Federal Warranty In 2000, Circuit City began to sell Service Contracts for personal computers. The Service Contracts were sold as part of a relationship with GE and, later, Federal Warranty. In December 2006, Circuit City transitioned its Service Contract business with SPI to GE and Federal Warranty. As a result, the Debtor's entire Service Contract business since December 206 was with GE and Federal Warranty, Mr. Foley relates. Circuit City and GE have entered into various agreements -- Assurant Agreements -- wherein the Debtor marketed and sold Service Contracts and administered and performed repair and replacement services for certain Service Contracts: (a) an agreement for the sale of personal computer service contracts -- PC Program Agreement; (b) Consumer Electronics Program Agreement dated December 1, 2006, as amended -- Brown Goods Program Agreement; and (c) Consumer Electronics Program Services Agreement dated December 1, 2006, as amended -- Brown Goods Services Agreement. On September 26, 2008, GE assigned, sold or otherwise transferred all of its rights, title and interest in and under the Assurant Agreements to Federal Warranty. Under the Assurant Agreements, GE and Federal Warranty served as the obligor for Service Contracts issued, and Federal Warranty continues to serve as the obligor for Service Contracts in all States, except allegedly in the State of Massachusetts, Mr. Foley relates. As of March 31, 2009, Circuit City asserted that approximately $18,000,000 was immediately due and payable under the Assurant Agreements. The Debtors also asserted that once all Service Contracts and all claims were administered, they would be entitled to millions of dollars on account of certain "Underwriting Profit." Federal Warranty contended that the Debtors owed it $17,800,000 on account of postpetition Service Contract sales and unpaid GE Claims, and that no Underwriting Profit would ever come due and payable under the Assurant Agreements, according to Mr. Foley. As of the Petition Date, both GE and Federal Warranty asserted that Circuit City owed each party for various amounts under the Assurant Agreements. GE has filed secured claims in excess of $29,000,000. Federal Warranty has likewise filed various claims, Mr. Foley notes. SPI Stipulation SPI and the Debtors agreed, among other things, that: (a) SPI will make a one-time cash payment to the Debtors of $23,250,000. (b) The parties mutually release each other from any and all past, present and future claims, demands, damages, obligations, liabilities, losses, costs, expenses, fees and causes of action of every nature, character and description for anything and everything based on, related to, in connection with, or resulting from any facts, events, circumstances, acts, or failures to act related to the SPI Agreements, the Debtors, or these Chapter 11 cases. Assurant Stipulation Pursuant to the Assurant Stipulation among the Debtors and Federal Warranty, the parties agree, among other things, that: (a) The Brown Goods Services Agreement, PC Program Agreement, and GE Letter Agreement will be deemed rejected by the Debtors. (b) Federal Warranty will be granted an allowed general unsecured claim for $6,000,000, which will be deemed full and final resolution of all amounts owed by the Debtors to Federal Warranty in the Debtors' bankruptcy cases or otherwise in any way related to the Brown Goods Services Agreement and the PC Program Agreement. (c) The Brown Goods Program Agreement will be deemed assumed by the Debtors without objection from Federal Warranty. Federal Warranty will pay $46,000,000 to the Debtors to account for the Debtors' share of profits under the Brown Goods Program Agreement less (1) a settlement amount of $4,109,104 for postpetition amounts due and payable from the Debtors to Federal Warranty, (2) $4,250,000 in full and final resolution of all amounts advanced or incurred by Federal Warranty under the GE Letter Agreement in adjusting and paying claims formerly administered by the Debtors, and (3) $3,500,000 to be deposited in a custodial trust account -- Escrow Account -- for a net initial lump- sum profit sharing payment of $34,140,896. Upon assumption of the Brown Goods Program Agreement, the Agreement will be deemed to have terminated, and no party to the Agreement will owe any further performance or have any further liability under the Brown Goods Program Agreement to any other party to that Agreement, including GE. (d) The Debtors will transfer the toll-free numbers relating to the Service Contract business to Federal Warranty. The Debtors also grant Federal Warranty the perpetual, royalty-free worldwide exclusive right to use the data collected about customers who had purchased Service Contracts under the Brown Goods Program Agreement and PC Program Agreement to communicate with these customers about existing Service Contracts. (e) Except for the Settlement Claim, any and all claims filed by Federal Warranty in the bankruptcy cases will be deemed withdrawn without further action by the Debtors, Federal Warranty or any other party, or Court order. GE Stipulation The Debtors and GE agreed, among other things, that: (a) GE's Filed Claims will be deemed withdrawn with prejudice. (b) GE, solely with respect to its GE Consumer & Industrial business component, and the Debtors, on behalf themselves and on behalf of their estates, irrevocably and fully release and discharge one another from and against any and all claims, including the Filed Claims, or causes of action arising from, in connection with, relating to, or based in any way on the AON Agreements or the Assurant Agreements. Copies of the Stipulations are available at no charge at: http://bankrupt.com/misc/CC_GE_FedWar_SPI_Stipulations.pdf In a separate filing, the Debtors ask the Court to approve shortened and limited notice of the Motion. 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. CITY OF VALLEJO: Electrical Workers Union to Appeal CBA Rejection ----------------------------------------------------------------- The International Brotherhood of Electrical Workers plans to appeal a ruling by the Bankruptcy Court that would allow the city of Vallejo to reject their collective bargaining agreement, the Bond Buyer reported, citing Dean Gloster, an attorney at Farella Braun & Martel LLP, which is representing the labor group. The Brotherhood of Electrical Workers is the only union that hasn't agreed to the modification or rejection of its collective bargaining agreement with Vallejo. As reported by the TCR on September 7, the International Association of Firefighters has agreed to the rejection of its CBA with Vallejo. The parties have agreed to negotiate a new contract. Vallejo -- http://www.ci.vallejo.ca.us/GovSite-- is a city in Solano County, in California. As of the 2000 census, the city had a total population of 116,760. It is located in the San Francisco Bay Area on the northern shore of San Pablo Bay. The City is a charter city organized and exercising governmental functions under its charter and the laws and constitution of the state. Its governing body is its City Council. The City filed for protection under Chapter 9 of the U.S. Bankruptcy Code on May 23, 2008 (Bankr. E.D. Calif. Case No. 08-26813). Marc A. Levinson, Esq., and Norman C. Hile, Esq., at Orrick, Herrington & Sutcliffe LLP in Sacramento, California, represent the City. CMG HOLDINGS: Has Going Concern Doubt Due to Accumulated Deficit ---------------------------------------------------------------- CMG Holdings Inc. recorded a net income of $482,672 against net revenue of $872,575 as of June 30, 2009. It recorded a net loss of $855,968 on zero revenues during the same period in 2008. The Company reported total assets of $1,793,358 against total debts of $1,711,293, all current, as of June 30, 2009. Accumulated deficit has reached $4,410,198 at that point. The Company noted that it has an accumulated deficit and a working capital deficit as of June 30, 2009. "These conditions raise substantial doubt as to our ability to continue as a going concern," it said. In response to these conditions, the Company said it may raise additional capital through the sale of equity securities, through an offering of debt securities or through borrowings from financial institutions or individuals. A copy of the Company's Form 10-Q is available for free at: http://researcharchives.com/t/s?444c CMG Holdings, Inc. is a full service global marketing and communications company operating in the sectors of talent management, event management and commercial rights. COASTLINE CONSTRUCTION: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Coastline Construction Group, Inc. 108-C Kerr Ave Wilmington, NC 28403 Bankruptcy Case No.: 09-07733 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Debtor's Counsel: Trawick H. Stubbs Jr., Esq. Stubbs & Perdue, P.A. P. O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 Email: efile@stubbsperdue.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/nceb09-07733.pdf The petition was signed by Michael R. Jones, president of the Company. CONGOLEUM CORP: Armstrong Amends Suit Over False Ad Claims ---------------------------------------------------------- Armstrong World Industries Inc. has added false advertising claims to a lawsuit seeking a declaration that it has not infringed the patents of Congoleum Corp. Armstrong World filed an amended complaint in the U.S. District Court for the Eastern District of Pennsylvania accusing Congoleum of falsely suggesting its DuraCeramic brand of residential floor, according to Law360. Based in Mercerville, New Jersey, Congoleum Corporation (OTC: CGMC) -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The Company filed for Chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No. 03-51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennan, Esq., at Pillsbury Winthrop Shaw Pittman LLP, and Paul S. Hollander, Esq., and James L. DeLuca, Esq., at Okin, Hollander & DeLuca, LLP, represent the Debtors. The Asbestos Claimants' Committee is represented by Peter Van N. Lockwood, Esq., and Ronald Reinsel, Esq., at Caplin & Drysdale, Chtd. The Bondholders' Committee is represented by Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP. Nancy Isaacson, Esq., at Goldstein Isaacson, PC, represents the Official Committee of Unsecured Creditors. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, the Court-appointed Futures Claimants Representative, is represented by Roger Frankel, Esq., Richard Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick Herrington & Sutcliffe LLP, and Stephen B. Ravin, Esq., at Forman Holt Eliades & Ravin LLC. American Biltrite, Inc. (AMEX: ABL), which owns 55% of Congoleum, is represented by Matthew Ward, Esq., Mark S. Chehi, Esq., Christopher S. Chow, Esq., and Matthew P. Ward, Esq., at Skadden Arps Slate Meagher & Flom. Various entities have filed bankruptcy plans for the Debtors. In February 2008, the legal representative for future asbestos- related claimants; the asbestos claimants' committee; the official Committee of holders of the Company's 8-5/8 % Senior Notes due August 1, 2008; and Congoleum jointly filed a joint plan of reorganization. Various objections to the Joint Plan were filed. In June 2008, the Bankruptcy Court issued a ruling that the Joint Plan was not legally confirmable. In August 2008, the Bondholders' Committee, the ACC, the FCR, representatives of holders of prepetition settlements and Congoleum entered into a term sheet describing the proposed material terms of a new plan of reorganization and a settlement of avoidance litigation with respect to prepetition claim settlement. Certain insurers and a large bondholder filed objections to the Litigation Settlement or reserved their rights to object to confirmation of the Amended Joint Plan. The Bankruptcy Court approved the Litigation Settlement in October 2008. The Amended Joint Plan was filed in November 2008. In January 2009, certain insurers filed a motion for summary judgment seeking denial of confirmation of the Amended Joint Plan. On February 26, 2009, the Bankruptcy Court rendered an opinion denying confirmation of the Amended Joint Plan. Moreover, the Bankruptcy Court dismissed Congoleum's bankruptcy case. On February 27, 2009, Congoleum and the Bondholders' Committee appealed the Order of Dismissal and the ruling denying plan confirmation to the U.S. District Court for the District of New Jersey. On March 3, the Bankruptcy Court stayed the Order of Dismissal pending entry of a final non-appealable decision affirming the Order of Dismissal. Appeal proceedings are underway before the District Court.. COOPER-STANDARD: Cooper Tire Sues for $60 Mil. in Tax Refunds ------------------------------------------------------------- Cooper Tire & Rubber Company filed a complaint in the U.S. Bankruptcy Court for the District of Delaware to compel Cooper- Standard Holdings Inc. to remit about $60 million in tax refunds to the company. In a 23-page complaint, Cooper Tire asked the Court to require CS Holdings to remit the tax refunds received by its Canada-based unit, Cooper-Standard Automotive Canada Ltd. from the Canada Revenue Agency in July. Cooper Tire asserts ownership of the tax refunds based on the terms of a 2004 stock purchase agreement that was executed in connection with the transfer of its stock to CS Holdings. Under the agreement, Cooper Tire is reportedly entitled to all refunds of its taxes and interest received by CS-Holdings or any of its units. Canada Revenue Agency or another agency is expected to remit additional tax refunds to CSA Canada, parts of which Cooper Tire is reportedly entitled to under the agreement. CSA Canada is owned and controlled by Cooper-Standard Automotive Inc., another party named as defendant in the complaint. Cooper Tire's attorney, Jeffrey Waxman, Esq., at Morris James LLP, in Wilmington, Delaware, expressed concern that CS Holdings might transfer the tax refunds to its affiliates or to its lenders and key suppliers in light of its bankruptcy filing. "Because of this threatened breach of the agreement, Cooper Tire is entitled to a decree of specific performance requiring CS Holdings to comply with its obligations under the agreement by promptly remitting or causing any or all of its subsidiaries or affiliates to remit approximately US $60 million in Cooper Tire's refunds and interest," Mr. Waxman says in the complaint. Mr. Waxman also seeks recognition of a resulting trust, or in the alternative, the Court's imposition of a constructive trust in favor of Cooper Tire to the extent the refunds are held or controlled by CS Holdings or any of its units. Cooper Tire has already filed a motion in the Ontario Superior Court of Justice, which oversees CSA Canada's insolvency proceeding, to lift the stay of proceedings so that it could name CSA Canada as a defendant of the complaint. About Cooper-Standard Cooper-Standard Automotive Inc., headquartered in Novi, Mich., is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main customers include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive -- http://www.cooperstandard.com/ -- employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately- held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) COOPER-STANDARD: DIP Facility Matures August 2010 ------------------------------------------------- Cooper-Standard Holdings Inc. and its affiliated debtors obtained final approval from the U.S. Bankruptcy Court for the District of Delaware to obtain as much as $200 million in debtor-in- possession financing. The final order dated September 2, 2009, authorized the Debtors to obtain an additional $125 million from a group led by Deutsche Bank Trust Company Americas under the DIP Credit Agreement dated August 5, 2009. The Debtors previously obtained $35 million from the lenders while their Canada-based unit, Cooper-Standard Automotive Canada Ltd., obtained $15 million pursuant to the interim orders issued by the U.S. Bankruptcy Court and the Ontario Superior Court of Justice. The Debtors may also access an additional $25 million standby uncommitted single draw term loan facility from the lenders. Judge Peter Walsh said the proposed financing is necessary to "avoid immediate and irreparable harm" to Cooper-Standard Holdings and its U.S.-based and foreign units. "Entry of this final order is in the best interests of the U.S. Debtors' respective estates and creditors as its implementation will, among other things, allow for the continued flow of supplies and services to the obligors necessary to sustain the operation of [their[ existing businesses," Judge Walsh said in his order. The Debtors intend to use the loan for payment of the cost and fees of Deutsche Bank and other lenders; payment of administration costs of their bankruptcy cases, claims or amounts approved by the Court; and for working capital and other general corporate purposes. The maturity date of the DIP loans will be the earliest of: (1) the date that is 364 days after August 5, 2009; (2) the first date on which the Debtors' plan of reorganization or plan of liquidation is confirmed by the U.S. Bankruptcy Court and a plan under proceedings in the Canadian Court pursuant to Canada's Companies' Creditors Arrangement Act is approved by the requisite creditors of CSA Canada and by the Canadian Court; (3) the date of the acceleration of the loans under Section 11 of the DIP Credit Agreement. The DIP Credit Agreement contains certain milestones that include: (1) a motion seeking approval of a disclosure statement for a Chapter 11 plan of reorganization proposing to pay all obligations under the DIP facility in full in cash on the effective date of the plan must be filed before the 70th day before the maturity date; (2) a motion seeking approval for the circulation to the requisite creditors of CSA Canada of a plan of compromise or arrangement that proposes to pay all obligations under the DIP facility in full in cash on the effective date of the plan must be filed before the 60th day before the maturity date; (3) an order approving the disclosure statement must be entered before the 45th day before the maturity date; (4) the chapter 11 plan must be confirmed before the 10th day before the maturity date and the CCAA plan must be approved by the requisite creditors of CSA Canada before the 15th day before the maturity date, and by the Canadian Court before the 5th day before the maturity date; and (5) the chapter 11 plan and the CCAA plan must be consummated and become effective and fully implemented before the maturity date. In return for the financing, the lenders were granted an allowed "superpriority administrative expense claim. The Court also granted "postpetition liens" to the lenders on all property and assets of the Debtors and their estates. In response to Cooper Tire & Rubber Company's objection, the Court held that no provisions in the final order prejudice Cooper Tire's claims or right to recover about $60 million of tax Refunds received by Canada-based Cooper-Standard Automotive Canada Ltd., from the Canada Revenue Agency. Cooper Tire previously filed an objection to block any bid that would authorize the Debtors or their affiliates to use or disburse the tax refunds. Cooper Tire asserts ownership of the tax refunds based on a provision of a stock purchase agreement that was executed in connection with the transfer of its stock to CS Holdings. A full-text copy of the Final DIP Order is available without charge at http://bankrupt.com/misc/CooperFinalDIPOrder.pdf About Cooper-Standard Cooper-Standard Automotive Inc., headquartered in Novi, Mich., is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main customers include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive -- http://www.cooperstandard.com/ -- employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately- held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) COOPER-STANDARD: Gets Final Approval for Cash Collateral Use ------------------------------------------------------------ Cooper-Standard Holdings Inc. and its affiliated debtors obtained final approval from the U.S. Bankruptcy Court for the District of Delaware to use the cash earmarked as collateral for the loan which they availed under a December 23, 2004 credit agreement. The credit agreement allowed the Debtors and Canada-based Cooper- Standard Automotive Canada Ltd. to borrow $503.4 million, C$50 million and EURO63.1 million. Deutsche Bank Trust Company Americas serves as the administrative agent under the agreement. The Debtors are not authorized to use the Cash Collateral until all conditions precedent to initial borrowing under the Debtor- in-Possession Credit Agreement have been satisfied. The Debtors and their foreign units are prohibited from using the Cash Collateral on the date the DIP loans become due and payable in accordance with the Court's final order, and on the date the commitments have been terminated as a result of the occurrence of an event of default. In return for the Debtors' use of the Cash Collateral, the lenders under the December 23 Credit Agreement, are granted a security interest in and liens on the Debtors' collateral; and a superpriority administrative expense claim junior to the claims held by the administrative agent under the DIP Credit Agreement. As further compensation for the use of the Cash Collateral by the Debtors, Deutsche Bank Trust or these professionals will receive from the Debtors: * current cash payments payable under the December 23 Credit Agreement for all fees and expenses payable to any agent under that agreement including the fees and disbursements of (i) Milbank, Tweed, Hadley & McCloy LLP, (ii) each local counsel of Deutsche Bank Trust, (iii) Capstone Advisory Group LLC, (iv) Houlihan Lokey Howard & Zukin Capital, Inc.; * Capstone will be given reasonable access for purposes of monitoring the business of the Debtors and their foreign subsidiaries and the value of the collateral under the December 23 Credit Agreement; and * the U.S. Debtors will continue to provide Deutsche Bank Trust, Capstone, and Houlihan with financial and other reporting substantially in compliance with the December 23 Credit Agreement and any reporting described or in the DIP documents. About Cooper-Standard Cooper-Standard Automotive Inc., headquartered in Novi, Mich., is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main customers include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive -- http://www.cooperstandard.com/ -- employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately- held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) COOPER-STANDARD: U.S. Trustee to Convene Creditors on Sept. 10 -------------------------------------------------------------- Roberta De Angelis, Acting United States Trustee for Region 3, will convene a meeting of the creditors of Cooper-Standard Holdings Inc. and its affiliated debtors on September 10, 2009, at 2:00 p.m. (Eastern Daylight Time) at the J. Caleb Boggs Federal Building, 844 King Street, 2nd Floor, Room 2112, in Wilmington, Delaware. The meeting, which is required under Section 341(a) of the Bankruptcy Code, offers the creditors a one-time opportunity to examine the Debtors' representative under oath about their financial affairs and operations that would be of interest to the general body of creditors. About Cooper-Standard Cooper-Standard Automotive Inc., headquartered in Novi, Mich., is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main customers include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive -- http://www.cooperstandard.com/ -- employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately- held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) COYOTES HOCKEY: Ice Edge Confident of Offer for Hockey Team ----------------------------------------------------------- Bob Baum at The Associated Press reports that Ice Edge is confident that its bid is still and will be viable when Phoenix Coyotes is sold at the auction this week. The AP quoted Ice Edge CEO Anthony LeBlanc as saying, "We remain confident we will finalize everything that needs to be done by Thursday." SOF Investments, the largest secured creditor with debts of $80 million, previously said it has reached an agreement with Ice Edge Holdings for repayment of its claim. The investment firm, however, said that doesn't rule out also reaching a similar agreement with the NHL. NHL's board of governors will still vote on Ice Edge's proposed ownership. Aside from Ice Edge, the NHL and Jim Ballsillie are bidding for the Phoenix Coyotes. As reported by the Troubled Company Reporter on August 27, 2009, the NHL has submitted a $140 million offer to buy the Phoenix Coyotes and keep the team in Arizona after sports entrepreneur Jerry Reinsdorf withdrew his $150 million bid. "[T]he League filed its own bid to purchase the Phoenix Coyotes' franchise out of bankruptcy in an effort to maximize the likelihood that the Club ultimately will be sold to an acceptable purchaser who is committed to operating the franchise in Glendale," NHL Deputy Commissioner Bill Daly said in an August 25 statement. Another bidder, Jim Balsillie, has reaffirmed its bid for the Phoenix Coyotes. He has offered $212.5 million but his bid requires a move of the team to Hamilton, Ontario, which is being opposed by the NHL. About Coyotes Hockey Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. Jim Balsillie, Research in Motion Ltd.'s co-chief executive officer, offered to buy the Phoenix Coyotes for $212 million and move the NHL team to Hamilton, Ontario, and the League balked at the relocation proposal. Mr. Balsillie was unsuccessful in 2007 when he attempted to buy and relocate the Nashville Predators, and lost a similar bid in 2006 to buy and relocate the Pittsburgh Penguins. COYOTES HOCKEY: NHL Wants Up to $195MM Fee for Relocation --------------------------------------------------------- The National Hockey League has sought the approval of the Hon. Redfield T. Baum at the U.S. Bankruptcy Court for the District of Arizona to set a $101 million to $195 million fee for the relocation of Phoenix Coyotes, court documents say. The figures were recommended by two consulting firms hired by the NHL, and were in sharp contrast to the estimate put forth by the sports-economist-for-hire Andrew Zimbalist, paid consultant to James L. Balsillie. The relocation fee ought to be between $11.2 million and $12.9 million Mr. Zimbalist said in court documents. Mr. Zimbalist, according to The NY Times, asserted that a part of his recommended fee will suffice as the entire territorial compensation to the Maple Leafs and, presumably, the Sabres. "The notion that a team in Hamilton would be worth only $11.2 million to $12.9 million more than a team in Phoenix is patently absurd," NHL said in court documents. To recall Jim Balsillie, has reaffirmed its bid for the Phoenix Coyotes. He has offered $212.5 million but his bid requires a move of the team to Hamilton, Ontario, which is being opposed by the NHL. The NHL and Ice Edge Holdings, which are also bidding for the team, have pledged to keep the Coyotes in Glendale, Arizona. About Coyotes Hockey Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. Jim Balsillie, Research in Motion Ltd.'s co-chief executive officer, offered to buy the Phoenix Coyotes for $212 million and move the NHL team to Hamilton, Ontario, and the League balked at the relocation proposal. Mr. Balsillie was unsuccessful in 2007 when he attempted to buy and relocate the Nashville Predators, and lost a similar bid in 2006 to buy and relocate the Pittsburgh Penguins. CROSS CANYON: In Talks With Lenders for Waiver of Default --------------------------------------------------------- Cross Canyon Energy Corp. recorded a net loss of $1,127,694 on total revenue from oil and natural gas of $874,833 for three months ended June 30, 2009. This compares to a net income of $774,689 on net revenue of $4,226,880 during the same period in 2008 by its predecessor entity. It has total assets of $55,368,329 against liabilities of $37,474,686 as of June 30, 2009. The Company generally will rely on cash generated from operations, cash generated from the Company's energy swap hedges and cash on hand to fund our operations during the next twelve-month period. As a condition to obtain waivers of certain financial covenants, it agreed that no further borrowings or loans may be requested or made under its CIT Credit Facility unless and until the lenders, in their sole and absolute discretion, shall otherwise agree in writing. Additionally, the Company was notified by its senior lender on May 5, 2009, that its borrowing base had been reduced to $1.0 million and it has a borrowing base deficiency of $10.5 million. "Additionally, we have a `going concern' opinion and as of June 30, 2009, we are not in compliance with the financial covenant requiring us to not permit our consolidated current assets to consolidated current liabilities to be less than 1.0 to 1.0," the Company said. On August 7, 2009, senior lender formally notified the Company that an Event of Default had occurred by reason of the Company's failure to cure the borrowing base deficiency resulting in all loans outstanding under the CIT Credit Facility accruing, commencing July 19, 2009, interest at the Post Default Rate equal to the interest rate applicable to the Revolving Loan and Term Loan plus 3% per annum until the time the Event of Default has been cured or waived. In addition, no loans may be continued or converted into Eurodollar loans and no new loans may be requested. The effect of converting the Company's Eurodollar loans to prime rate loans has increased its interest rate on both the Revolving Loan and Term Loan by an additional 1.6% per annum for a combined increase of approximately 4.6% per annum. In addition to the deficiency under the Company's Revolving Loan, the capital expenditures required to maintain or grow production and reserves are substantial. The Company is obligated to begin drilling operations on one of its significant leases by September 29, 2009, or risk abandoning approximately 9,000 acres of its approximate 13,700 net acres the Company currently owns following the Voyager Acquisition. The Company's stock price has significantly declined over the past year with its last reported sale price on August 14, 2009, being $0.10 per share, which makes it more difficult to obtain equity financing on acceptable terms to address the Company's liquidity issues. In addition, primarily as a result of reporting its total debt pursuant to the CIT Credit Facility as a current liability, its reporting negative working capital at June 30, 2009. "Therefore, there is substantial doubt as to our ability to continue as a going concern for a period longer than the current fiscal year," the Company acknowledged. The Company is in on-going discussions with its senior lender to obtain a waiver or standstill arrangement with respect to the Events of Default occasioned by the covenant breaches to enable the Company to explore various strategic alternatives to resolve such defaults and to support the continued development of its operations and assets. A copy of the Company's Form 10-Q is available for free at http://researcharchives.com/t/s?444b About Cross Canyon Energy On September 2, 2008, Cross Canyon Energy Corp. completed its acquisition of Voyager Gas Corporation's business operations and properties, including the Duval County Properties, consisting of ownership interests in oil and natural gas lease blocks in Duval County, Texas, which currently covers approximately 13,700 net acres. Since completing the Voyager Acquisition, Cross Canyon is engaged in the exploration, production, development and exploitation of the crude oil and natural gas reserves located in the Duval County Properties. CRUCIBLE MATERIALS: Workers Okay Pay Cuts in New Contract --------------------------------------------------------- The Associated Press reports that Crucible Materials Corp. workers have accepted a contract that includes pay cuts and increased health insurance costs. The AP relates that BlackEagle Partners, which wants to purchase Crucible Materials, said that it needs a new union contract and assistance from New York state before it can submit a purchase offer in bankruptcy court. According to The AP, 700 union members voted on the contract last week. Based in Syracuse, New York, Crucible Materials Corporation -- aka Crucible Specialty Metals, Crucible Service Centers, Crucible Compaction Metals, Crucible Research and Trent Tube -- makes stainless and alloy steel for use in the aircraft, automotive, petrochemical, and other industries. The Company is currently employee-owned. Its Web site is http://www.crucible.com/ The Company and its affiliate, Crucible Development Corporation, filed for Chapter 11 protection on May 6, 2009 (Bankr. D. Del. Lead Case No. 09-11582). Mark Minuti, Esq., at Saul Ewing LLP represents the Debtors in their restructuring efforts. The Debtors engaged Duff & Phelps Securities LLP as investment banker; RAS Management Advisors LLC as business advisor; and Epiq Bankruptcy Solutions LLC as claims agent. Roberta A. DeAngelis, United States Trustee for Region 3, appointed five creditors to serve on the Official Committee of Unsecured Creditors. The Debtors listed assets and debts both ranging from $100 million to $500 million. D&E LEASING: Case Summary & 8 Largest Unsecured Creditors --------------------------------------------------------- Debtor: D&E Leasing Company 2330 East 79th Street Cleveland, OH 44104 Bankruptcy Case No.: 09-18421 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- D&E Leasing Co 09-18422 D&E Leasing Baxter 09-18423 D&E Leasing Company 09-18424 Chapter 11 Petition Date: September 7, 2009 Court: United States Bankruptcy Court Northern District of Ohio (Cleveland) Judge: Randolph Baxter Debtor's Counsel: Ronald E. Henderson, Esq. 23240 Chargin Blvd Cleveland, OH 44122 Tel: (216) 861-4416 Fax: (216) 595-2787 Email: rnldhn@aol.com Estimated Assets: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 8 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ohnb09-18421.pdf The petition was signed by William D. Hall, general partner of the Company. DBSD NORTH AMERICA: Says Reorganization Plan is Viable ------------------------------------------------------ DBSD North America Inc. has refuted claims by first-lien lender Dish Network Corp. that its proposed reorganization plan will result in a third bankruptcy filing. DBSD insists the plan is viable. DBSD and its affiliates have filed with the Court a proposed reorganization plan, built upon the terms reached with noteholders. The Plan offers to repay 57 to 81 cents on the dollar to holders of senior notes claims and 1% to 17% to generla unsecured creditors. The Bankruptcy Court will begin hearings to consider confirmation of the Plan on September 9, 2009. A full-text copy of the Plan, as twice amended, is available for free at http://ResearchArchives.com/t/s?3f30 A full-text copy of the disclosure statement explaining the terms of the Second Amended Plan is available for free at: http://ResearchArchives.com/t/s?3f2e About DBSD North America Headquartered in Reston, Virginia, DBSD North America Inc. aka ICO Member Services Inc. offers satellite communications services. The company and nine of its affiliates filed for Chapter 11 protection on May 15, 2009 (Bankr. S.D.N.Y. Lead Case No. 09- 13061). James H.M. Sprayregen, Esq., Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, in New York; and Marc J. Carmel, Esq., Sienna R. Singer, Esq., at Kirkland & Ellis LLP, in Chicago, serve as the Debtors' counsel. Jefferies & Company is the proposed financial advisors to the Debtors. The Garden City Group Inc. is the court-appointed claims agent for the Debtors. When the Debtors sought for protection from their creditors, they listed between $500 million and $1 billion each in assets and debts. DELPHI CORP: GM & IUE-CWA Interim Pact Includes Delphi Retirees --------------------------------------------------------------- Pursuant to a public statement dated September 1, 2009, International Union of Electric, Electrical, Salaried, Machine and Furniture Workers - Communications Workers of America and General Motors Company entered into a temporary agreement to provide baseline security for retirees who are facing the loss of health care and pensions. The tentative agreement essentially offers pre-65 year old retirees covered by GM an improved package with an extra $50 million in payments and contemplates post-65 year old retirees to retain a $1 billion claim with General Motors Corporation, now known as Motors Liquidation Company. According to IUE-CWA President Jim Clark, the Tentative Agreement also secures a "top-up" from GM for Delphi Corporation retirees whose pension was surrendered to the Pension Benefit Guaranty Corporation. In light of the PBGC's takeover of Delphi's pension plans, Delphi retirees stood to lose half of their income without the tentative agreement in place, he said. Mr. Clark further noted that GM will honor its 1999 Benefit Guarantee and a 2007 tri-partite Memorandum of Understanding to ensure that eligible retirees at Delphi are made whole if the PBGC reduces their pensions. Reductions could be made because the PBGC is not required to pay early retirement supplements or benefit increases made within the last five years, he explained. However, Local 717 of the IUE, as union representative of Delphi Packard Electrical retirees in Ohio, told the retirees to be wary in accepting any health-insurance coverage as much work needs to be done before a change in health insurance can take effect effective January 1, Youngstown Vindicator reports. The IUE- represented Delphi retirees also promised to help the Delphi salaried retirees in their fight for health care and pension benefits, www.wytv.com said. For its part, the Delphi Salaried Retirees Association called the Tentative Agreement reached between the IUE-CWA and GM as another "slap in the face," citing in a public statement that the only ones left out in the cold are the Delphi Salaried Retirees. Thirty-two retirees sent to the Court letters, between August 18, 2009 and August 28, 2009, objecting to the PBGC's takeover of their pension plans under the PBGC Settlement of the Debtors' Confirmed First Amended Joint Plan of Reorganization, as modified. 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) DELPHI CORP: GM Gets Anti-Trust Office Nod to Buy Assets -------------------------------------------------------- General Motors Company has been authorized by United States antitrust officials as of September 3, 2009, to purchase certain assets of Delphi Corporation pursuant to a Master Disposition Agreement, according to Reuters. As previously reported, Delphi entered into a Master Disposition Agreement with GM, Motors Liquidation Company, formerly known as General Motors Corporation, GM Components Holdings, LLC, and DIP Holdco 3 LLC -- a newly created entity by certain DIP Lenders of Delphi -- for the purchase of Delphi's assets. The assets to be sold include Delphi's global steering business and certain United Auto Workers sites, including facilities located in Grand Rapids, Michigan; Rochester, New York; Kokomo, Indiana; and Lockport New York. The U.S. Bankruptcy Court for the Southern District of New York approved the Master Disposition Agreement as part of Delphi's Modified First Amended Joint Plan of Reorganization, which Plan was confirmed on July 30, 2009. Upon the effective date of the Modified Plan, Delphi is anticipated to effectuate transactions, including the Master Disposition Agreement, through which DIP Holdco 3 will operate Delphi's U.S. and non-U.S. businesses going forward with $3.6 billion in emergence capital and capital commitments but without the labor-related legacy costs associated with the North American sites, which are being acquired by GM Components. A new entity, DPH Holdings Corporation, will emerge as the reorganized company that retains certain residual non-core and non-strategic assets and liabilities of Delphi that will be divested over time. Considering foreign governmental approval regarding investment, antitrust, monopolization, restraint of trade and competition antitrust, closing of the Master Disposition Agreement must occur by September 30, 2009, or the involved parties can terminate the Disposition Agreement, Delphi disclosed in July 2009. Moreover, Delphi expects to emerge from Chapter 11 during the third quarter of 2009, following the syndication and closing of its exit financing facilities and satisfaction of other conditions to the Effective Date of the Plan, including closing on transactions contemplated under the provisions of the Master Disposition Agreement. Delphi's Exclusivity Request On behalf of the Debtors, John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, tells the Court that consummation of the transactions through the Modified Plan will provide for the satisfaction of all of the Debtors' administrative claims, secured claims, and priority claims and a potential distribution to holders of general unsecured claims. Against this backdrop, and out of abundance of caution, the Debtors believe that extension of their Exclusive Periods under Section 1121(d) of the Bankruptcy Code will prevent any lapse in exclusivity. Accordingly, the Debtors ask the Court to extend the exclusivity period, solely as between them and the Official Committee of Unsecured Creditors, to: (a) file a plan of reorganization, through and including November 30, 2009; and (b) solicit acceptances of that plan, through and including January 31, 2010. The Debtors' current Exclusive Plan Filing Period will expire on September 30, 2009, while their Exclusive Solicitation Period ends on November 30, 2009. Mr. Butler informs the Court that the Debtors have continued to make progress in their reorganization process. They have: -- obtained Court approval of the Modified Plan after garnering the support of JPMorgan Chase Bank, N.A., as administrative agent under the Amended and Restated DIP Credit Facility, the Committee, GM, the Pension Benefit Guaranty Corporation, the requisite DIP Lenders, certain state and federal agencies, Wilmington Trust Company as indenture trustee, and various other parties with respect to the Modified Plan following the auction that led to the modified Master Disposition Agreement with DIP Holdco and GM Components; -- obtained Court approval of the Delphi-PBGC Settlement Agreement, which provides for the consideration and means by which the liens and other claims of the PBGC will be released so that the transactions contemplated by the Modified Plan can be consummated, and entered into an Agreement for Appointment of Trustee and Termination of Plan, whereby the PBGC has become trustee of Delphi's salaried and hourly defined benefit pension plans; -- obtained two Court orders, reflecting the resolution or withdrawal of 34 objections filed by 28 counterparties to the non-assumption, adequate assurance of future performance, assumption and assignment with respect to executory contracts or unexpired leases to be assumed and assigned under the Modified Plan, and cure amounts; -- obtained Court approval to sell their minority interest in a non-core joint venture, PBR Knoxville LLC, for $1.75 million; and -- entered into further amendments of the DIP Accommodation Agreement with JPMorgan and the requisite DIP Lenders; and -- reconciled about 17,000 proofs of claim filed in their Chapter 11 cases, aggregating $34 billion in liquidated amounts plus certain unliquidated amounts. As of August 31, 2009, the Debtors have objected to 14,000 claims, asserting about $10.6 billion, and the Court has granted relief with respect to $10 billion in asserted liquidated claims. The Debtors have filed their 35th omnibus claims objection. Mr. Butler insists that the tasks of closing the transactions under the Master Disposition Agreement and consummating the Modified Plan remain significant both due to magnitude and complexity. In light of the size and complexity of the Debtors' Chapter 11 cases, the scope of actions required to effectuate Delphi's restructuring requirements is exceedingly complex, he points out. He also assures the Court that the Debtors' extension request is not a negotiation tactic. He adds that the Debtors are paying their bills as they become due, including the statutory fees paid quarterly to the United States Trustee for Region 2. Judge Drain will consider the Debtors' Exclusivity Motion on September 24, 2009. Objections are due September 17. 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) DELPHI CORP: Judge Drain Overrules Contract Assignment Objections ----------------------------------------------------------------- On behalf of Delphi Corp., John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, related that as of August 14, 2009, about 61 parties have filed objections under Section 365 of the Bankruptcy Code with respect to the Debtors' assumption and assignment of certain contracts under the Confirmed First Amended Joint Plan of Reorganization, as modified. He noted that the Debtors have worked with several counterparties and accordingly, 14 parties have withdrawn, settled or resolved their objections. A schedule of the 16 Resolved Objections is available for free at http://bankrupt.com/misc/Delphi_SettledPactObjs.pdf Specifically, Mr. Butler pointed out that although the Debtors and American Aikoku Alpha, Inc., entered into a postpetition contract using an existing prepetition purchase number for administrative convenience, the parties modified their relationship by (i) negotiating an additional year beyond the scheduled expiration of the previous contract; (ii) altering the pricing; and (iii) adding a provision stating that the Postpetition Purchase Order would no longer be subject to assumption or rejection under the Bankruptcy Code and that American Aikoku waived any right to cure. He asserted that American Aikoku has performed under the Postpetition Purchase Order for more than 18 months and has waived any right to assert cure for prepetition defaults arising under the prepetition purchase order. As to Spartech Corporation and Spartech Polycom, Inc.'s objection, Mr. Butler insisted that the assumption notices have adequately identified Spartech's contracts by listing Contract No. 55538 and its cure amount of $4,581. He also pointed out that Spartech's asserted amount is not on account of a default and thus, is not a cure claim or a proper administrative expense claim. He asserted that the Debtors and applicable buyers under the Master Disposition Agreement have provided adequate assurance for the contracts that are being assumed under the Confirmed First Amended Joint Plan of Reorganization, as modified, and the Master Disposition Agreement. Similarly, the Reorganized Debtors or the Buyers will cure defaults under or relating to each of the Assumed Contracts and Leases, he assured the Court. With respect to objections asserting claims for cure amounts based on postpetition obligations, Mr. Butler noted that throughout the course of their Chapter 11 cases, the Debtors pay all postpetition expenses as they become due. As a result, the Debtors believe that all of the valid outstanding postpetition obligations in certain of the Contract Objections will be satisfied in the ordinary course of business. With respect to Objectors who have asserted postpetition obligations but who have not yet filed administrative claims, the Debtors propose that those claims should be dealt within the procedures set forth in the Modified Plan. Accordingly, the Debtors asked the Court to (i) overrule American Aikoku's and Spartech's Objections; (ii) apply the determinations found in the Confirmation Order with respect to adequate assurance of future performance to arguments raised in the Contract Objections; (iii) hold that the postpetition obligation objections will be treated as Administrative Claims; and (iv) approve the settlement of the Resolved Objections. In response to the Debtors, American Aikoku argued that the Court should find the Postpetition Purchase Order invalid because it is inconsistent with other documents and is unambiguous and unenforceable. American Aikoku thus asked the Court to compel the Debtors' assumption of the Postpetition Purchase Order and payment of $257,636 as cure amount to the Prepetition Purchase Order before the Debtors can assign the Postpetition Purchase Order. For their part, the Debtors insisted that their payment of $275,636 owed under the Prepetition Purchase Order would, in essence, constitute payment of a prepetition claim avoidable under Section 549 of the Bankruptcy Code. Accordingly, the Debtors asked the Court to deny American Aikoku's request for cure payment. Judge Drain's Rulings The Court issued two orders, one on August 18, 2009 and another on August 28, 2009, with to the Debtors' assumption and assignment of certain contracts under the Modified Plan. Judge Drain specifically acknowledged that 16 contract objections have been resolved, a schedule of which is available for free at: http://bankrupt.com/misc/Delphi_ResolvedPactObjs.pdf Judge Drain further overruled contract objections to the extent not waived, withdrawn, settled, adjourned, or resolved. Judge Drain held that any unpaid, undisputed postpetition obligations arising under the Assumed and Assigned Contracts will be satisfied either as (i) postpetition obligations that are not yet due and payable pursuant to the applicable contract terms and thus, will be paid by the Debtors or the Buyers in the ordinary course of business; or (ii) as postpetition obligations that will be subject to the treatment provided for administrative claims under the Modified Plan and the Master Disposition Agreement. Counterparties to the Assumed and Assigned Contracts are not prejudiced by the Orders to reassert their objections with respect to postpetition obligations in the event they are barred from seeking payment. The Debtors noted that they withdrew assumption and assignment notices with respect to contracts they entered into with Daimler AG-Duesseldorf; STMicroelectronics, Inc.; Technical Materials Inc.; Findlay Industries, Inc.; Precision Interconnect; and Vitec, LLC. Judge Drain adjourned the hearing for the consideration of 33 Contract Objections to September 24, 2009, a schedule of which is available for free at: http://bankrupt.com/misc/Delphi_Sept24AdjournedPactObjs.pdf Court-Approved Stipulations Upon engaging in negotiations, the Debtors were able to resolve the contract objections of certain parties, the objections of which are deemed withdrawn pursuant to separate Court-approved stipulations with the Debtors. The parties are: * Audio MPEG, Inc. and Societa' Italiana per lo Sviluppo dell'Electronica -- Upon the assumption and assignment of a License Agreement to DIP Holdco 3, LLC, Audio MPEG and Societa' Italiana will be paid $358,257, plus interest at 1% per month from the due dates until payment. As of July 31, 2009, the Agreed Cure Amount under the License Agreement was $558,545, which will be paid in cash after the Effective Date. * Clarion Corporation of America -- Clarion's Claim No. 2127 will be allowed for $2,115,905 and will be treated as an allowed general unsecured non-priority claim against Debtor Delphi Automotive Systems, LLC. Clarion will also be entitled to receive a True-Up Payment for $843,636 within 30 days after September 1, 2009, pursuant to a confidential settlement agreement but its cure claim filed in May 2008 will be disallowed and expunged. * Datwyler Rubber -- Upon the assumption and assignment by the Debtors of Purchase Order No. D055072164 to GM Components Holdings LLC or Steering Solutions Services Corporation, as applicable, Datwyler will be entitled to a $66,816 cure payment. * TK Holdings Inc. and Takata Corporation -- The Debtors' assumption and assignment notices will be amended to add descriptions of TK Holdings' and Takata's contracts to be assumed and assigned to DIP Holdco 3. * ACE American Insurance Company, Pacific Employers Insurance Company, and Illinois Union Insurance Company -- ACE, Pacific Employers and Illinois Union will have allowed administrative claims for all liabilities of the Debtors under the ACE Companies' insurance agreements, subject to the Debtors' and ACE Claims' rights and claims under the Insurance Agreements. ACE Companies' claims will be paid by the Debtors or the Reorganized Debtors, in the ordinary course of business. About 13 parties formally withdrew their contract objections. They are: * F&G Multi-Slide Inc. * Hewlett-Packard Company and Electronic Data Systems, LLC * Ogura Clutch Company * Brose North America Holding LP and its affiliates * Brose Gainesville, Inc. * Brose Chicago, Inc. * Brosa Tuscaloosa, Inc. * Brose Puebla SA de CV * Methode Electronics, Inc. * Microsoft Corporation and Microsoft Licensing, GP * Valeo, Inc. * Cisco Systems Inc. and Cisco Systems Capital Corporation * Gibbs Die Casting Corporation * PBR Tennessee, Inc., fka PBR Automotive Knoxville, Inc. * SKF USA Inc. * STMicroelectronics, Inc. * Technical Materials, Inc. According to F&G Mutli-Slide, the Debtors agreed to assume its Purchase Order No. SAG 9014150, and to pay a cure amount of $9,913. Debtors Assign More Pacts to DIP Holdco The Debtors informed the Court as of August 28, 2009, that they intend to assume and assign to DIP Holdco these contracts: (i) Four executory contracts between the Debtors and Sun Microsystems, including a software license agreement, general terms and conditions for information systems and services, hardware purchase agreement, and services agreement. (ii) Two executory contracts between the Debtors and Oracle USA, Inc., namely a general terms and conditions for information systems and services, and a software license agreement. Each Contract has a zero cure amount. 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) DELPHI CORP: Methode to Sue D.A.S. Over Contract Termination ------------------------------------------------------------ Methode Electronics Inc. is suing Delphi Automotive Systems, Inc., for breach of contract, The Associated Press reports. Methode is Delphi Automotive's supplier of sensor pads, AP says. The Wall Street Journal noted in a separate report that Delphi has notified Methode of its plan to terminate its supply contract with Methode. Methode said that it is contesting Delphi Automotive's right to prematurely terminate a long-term supply contract entered between Methode and Delphi Automotive by September 10, 2009, AP quotes Methode as saying. The Wall Street Journal added that Methode previously filed a patent-infringement suit against Delphi in April 2009, "contending [that] it owns the technology for a sensing device built by Methode." 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) DELTA PETROLEUM: Registers 93.7MM Shares as Part of Tracinda Deal ----------------------------------------------------------------- Delta Petroleum Corporation filed PRE-EFFECTIVE AMENDMENT NO. 1 TO FORM S-3 with the Securities and Exchange Commission to register 93,797,701 shares of the Company's common stock that may be sold from time to time by selling stockholders. Specifically, Delta Petroleum said Tracinda Corporation may use the prospectus in connection with sales of up to 93,797,701 shares of the Company's common stock. On February 20, 2008, Delta Petroleum sold to Tracinda in a private placement, 36 million shares of common stock at a purchase price of $19.00 per share. In accordance with a Company Stock Purchase Agreement, dated as of December 29, 2007, between Delta Petroleum and Tracinda, the Company agreed to register for resale the 36 million shares issued to Tracinda and any other Delta shares acquired by Tracinda before or after the closing of the Tracinda transaction. As of July 20, 2009, Tracinda held an additional 57,797,701 shares of common stock included in the prospectus, 53,333,333 of which were purchased in the Company's May 2009 underwritten registered public offering. "[W]e have prepared and filed this prospectus for the purpose of any such resale by Tracinda, but we do not know when or whether, or at what price, any or all of these shares may be sold," the Company said. Tracinda may sell the common stock at prices and on terms determined by the market, in negotiated transactions or through underwriters. Delta Petroleum will not receive any proceeds from the sale of shares by the selling stockholder. Delta Petroleum's common stock is traded on The NASDAQ Global Select Market(R) under the symbol "DPTR." On July 20, 2009, the last reported sale price of Delta Petroleum's common stock on The NASDAQ Global Select Market(R) was $1.90 per share. A full-text copy of the prospectus is available at no charge at: http://ResearchArchives.com/t/s?4432 Going Concern Doubt As of June 30, 2009, Delta had $1.66 billion in total assets; and $366.5 million in total current liabilities and $463.8 million in total long-term liabilities. The Company had at June 30, 2009, a working capital deficiency of $225.5 million, including $83.0 million outstanding under its credit agreement and $83.3 million outstanding under the credit agreement of DHS Drilling Company, the Company's 49.8% subsidiary. The net loss and working capital deficiency, the Company said, raises substantial doubt about the Company's ability to continue as a going concern. At June 30, 2009, the Company was in compliance with its quarterly financial covenants under its credit agreement; however, projections indicate that without an increase in Rocky Mountain natural gas prices upon which the majority of the Company's production is sold, the senior secured debt to EBITDAX ratio covenant in its credit agreement could be violated within the next twelve months. The borrowing base under the Company's credit agreement is to be redetermined effective September 1, 2009. A decrease in the borrowing base determined by the lenders would decrease the Company's remaining availability under the line of credit. As reported by the Troubled Company Reporter on March 3, 2009, KPMG LLP in Denver, Colorado, raised substantial doubt about Delta Petroleum Corporation's ability to continue as a going concern after auditing the Company's financial statements for the periods ended December 31, 2008, and 2007. The auditors related that the Company has suffered recurring losses from operations, has a working capital deficiency, and was not in compliance with its debt covenants at December 31, 2008. DHS Default At June 30, 2009, DHS Drilling Company, the Company's 49.8% subsidiary, was in not in compliance with its obligation to provide to Lehman Commercial Paper, Inc., by March 31 of each year audited financial statements reported on without a going concern qualification or exception by the independent auditor and DHS's previous forbearance agreement with LCPI expired on June 15, 2009. In addition, DHS was not in compliance with its various financial covenants as of June 30, 2009. Although DHS is in ongoing negotiations with LCPI to modify the terms of the existing DHS credit facility, there can be no assurance that DHS will be able to renegotiate the terms of its debt agreement. The DHS facility is non-recourse to Delta. Delta continues to have the support of its banking group and is confident that a September bank re-determination will not have a material impact on the Company's effort to preserve liquidity. About Delta Petroleum Corporation Headquartered in Denver, Colorado, Delta Petroleum Corporation (NASDAQ: DPTR) -- http://www.deltapetro.com/-- is an oil and gas exploration and development company. The company's core areas of operations are the Gulf Coast and Rocky Mountain Regions, which comprise the majority of its proved reserves, production and long- term growth prospects. * * * According to the TCR on March 9, 2009, Moody's Investors Service downgraded Delta Petroleum Corporation's (Delta) $150 million 7% senior unsecured notes due 2015 to Ca (LGD 5, 78%) from Caa3 (LGD 5, 76%). Moody's also downgraded Delta's Corporate Family Rating to Caa3 from Caa2 and its Probability of Default Rating to Caa3 from Caa2. Delta's Speculative Grade Liquidity rating remains at SGL-4. Moody's said that the outlook is negative. The TCR reported on March 6, 2009, Standard & Poor's Ratings Services said that it lowered the corporate credit rating on exploration and production company Delta Petroleum Corp. to 'CCC' from 'B-'. S&P removed all ratings from CreditWatch with negative implications where they were placed on January 16, 2009, because of concerns about near-term liquidity and covenant compliance. S&P said that the outlook is developing. DELTA PETROLEUM: Special Stockholders' Meeting on October 6 ----------------------------------------------------------- A Special Meeting of Stockholders of Delta Petroleum Corporation will be held at the Company's offices located at 370 17th Street, Suite 4300, in Denver, Colorado, on October 6, 2009, at 10:00 a.m. (MDT) for these purposes: -- To consider and vote upon an amendment to the Company's certificate of incorporation to increase the number of authorized shares of the Company's Common Stock from 300,000,000 to 600,000,000 shares; and -- To consider and vote upon a proposal to adopt the 2009 Performance and Equity Incentive Plan, pursuant to which certain incentive awards would be issued. Stockholders of Delta Petroleum of record at the close of business on August 20, 2009, are entitled to vote at the meeting and all adjournments thereof. A full-text copy of the Company's proxy statement is available at no charge at http://ResearchArchives.com/t/s?4433 Going Concern Doubt As of June 30, 2009, Delta had $1.66 billion in total assets; and $366.5 million in total current liabilities and $463.8 million in total long-term liabilities. The Company had at June 30, 2009, a working capital deficiency of $225.5 million, including $83.0 million outstanding under its credit agreement and $83.3 million outstanding under the credit agreement of DHS Drilling Company, the Company's 49.8% subsidiary. The net loss and working capital deficiency, the Company said, raises substantial doubt about the Company's ability to continue as a going concern. At June 30, 2009, the Company was in compliance with its quarterly financial covenants under its credit agreement; however, projections indicate that without an increase in Rocky Mountain natural gas prices upon which the majority of the Company's production is sold, the senior secured debt to EBITDAX ratio covenant in its credit agreement could be violated within the next twelve months. The borrowing base under the Company's credit agreement is to be redetermined effective September 1, 2009. A decrease in the borrowing base determined by the lenders would decrease the Company's remaining availability under the line of credit. As reported by the Troubled Company Reporter on March 3, 2009, KPMG LLP in Denver, Colorado, raised substantial doubt about Delta Petroleum Corporation's ability to continue as a going concern after auditing the Company's financial statements for the periods ended December 31, 2008, and 2007. The auditors related that the Company has suffered recurring losses from operations, has a working capital deficiency, and was not in compliance with its debt covenants at December 31, 2008. DHS Default At June 30, 2009, DHS Drilling Company, the Company's 49.8% subsidiary, was in not in compliance with its obligation to provide to Lehman Commercial Paper, Inc., by March 31 of each year audited financial statements reported on without a going concern qualification or exception by the independent auditor and DHS's previous forbearance agreement with LCPI expired on June 15, 2009. In addition, DHS was not in compliance with its various financial covenants as of June 30, 2009. Although DHS is in ongoing negotiations with LCPI to modify the terms of the existing DHS credit facility, there can be no assurance that DHS will be able to renegotiate the terms of its debt agreement. The DHS facility is non-recourse to Delta. Delta continues to have the support of its banking group and is confident that a September bank re-determination will not have a material impact on the Company's effort to preserve liquidity. About Delta Petroleum Corporation Headquartered in Denver, Colorado, Delta Petroleum Corporation (NASDAQ: DPTR) -- http://www.deltapetro.com/-- is an oil and gas exploration and development company. The company's core areas of operations are the Gulf Coast and Rocky Mountain Regions, which comprise the majority of its proved reserves, production and long- term growth prospects. * * * According to the TCR on March 9, 2009, Moody's Investors Service downgraded Delta Petroleum Corporation's (Delta) $150 million 7% senior unsecured notes due 2015 to Ca (LGD 5, 78%) from Caa3 (LGD 5, 76%). Moody's also downgraded Delta's Corporate Family Rating to Caa3 from Caa2 and its Probability of Default Rating to Caa3 from Caa2. Delta's Speculative Grade Liquidity rating remains at SGL-4. Moody's said that the outlook is negative. The TCR reported on March 6, 2009, Standard & Poor's Ratings Services said that it lowered the corporate credit rating on exploration and production company Delta Petroleum Corp. to 'CCC' from 'B-'. S&P removed all ratings from CreditWatch with negative implications where they were placed on January 16, 2009, because of concerns about near-term liquidity and covenant compliance. S&P said that the outlook is developing. DIAMOND RANCH: June 30 Balance Sheet Upside-Down by $3.85 Million ----------------------------------------------------------------- Diamond Ranch Foods, Ltd.'s balance sheet at June 30, 2009, showed total assets of $1.04 million and total liabilities of $4.89 million, resulting in a stockholders' deficit of $3.85 million. For three months ended June 30, 2009, the Company posted a net loss of $158,601 compared with a net loss of $66,710 for the same period in 2008. The Company related that its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company. Management plans include acquiring additional meat processing and distribution operations and obtaining additional financing to fund payment of obligations and to provide working capital for operations and to finance future growth. The Company is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained. In the interim, shareholders of the Company have committed to meeting its operating expenses. Management believes these efforts will generate sufficient cash flows from future operations to pay the Company's obligations and realize other assets. There is no assurance any of these transactions will occur. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4415 About Diamond Ranch Diamond Ranch Foods, Ltd. -- http://www.diamondranchfoods.com/-- processes and distributes meats and fresh cut portion controlled poultry, and is located in the historic Gansevoort meatpacking district in lower Manhattan, NY. Operations include packing, processing, labeling and distribution of products. The company also provides portion controlled meats, custom meat cutting, and private labeling. The company's diversified customer base includes in-home food service businesses, retailers, hotels, restaurants, and institutions, deli and catering operators and industry suppliers. Going Concern Doubt On May 1, 2009, Gruber & Company, LLC, in Lake Saint Louis, Missouri, raised substantial doubt on the ability of Diamond Ranch Foods, Ltd., 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 from operations. ENERGY XXI: Debt Exchange Offer Cues S&P to Junk Corp. Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its long- term corporate credit rating on oil and gas exploration and production company Energy XXI (Bermuda) Ltd. to 'CC' from 'B-'. At the same time, S&P lowered the rating on Energy XXI Gulf Coast Inc.'s senior notes to 'C' from 'CCC+'. S&P also placed the ratings on CreditWatch with negative implications. "The rating actions follow the company's announcement that it will conduct a debt exchange offer for at least 50% of its senior unsecured notes due 2013 at a 20%-25% discount to par," said Standard & Poor's credit analyst Paul Harvey. Under its criteria, S&P view a formal cash tender offer or exchange offer at discount by a company under substantial financial pressure as a distressed exchange and tantamount to a default. The company plans to finance the share repurchase through the issuance of second-lien junior secured notes due 2014. The company plans to finance the share repurchase through the issuance of second-lien junior secured notes due 2014. Concurrently, it also plans to offer an aggregate principal amount of at least $50 million, but up to a maximum of $89 million in a private placement of second-lien junior secured notes as well as common equity. A portion of the proceeds, $41 million, will be applied to reduce borrowings under its $240 million borrowing-base first- lien revolving credit facility due 2011 ($234.5 million is currently outstanding). The balance will be used for general corporate purposes. S&P's downgrade does not reflect S&P's view of a perceived increase in Energy XXI's bankruptcy risk. Rather, S&P base its downgrade on the financial pressure S&P believes Energy XXI is under to reduce its debt burden by retiring debt for less than originally contracted. The ratings on Energy XXI will remain on CreditWatch with negative implications until the debt exchange offer is finalized. When and if this happens, barring other factors, S&P expects to lower the corporate credit rating on Energy XXI to 'SD' (selective default) and lower its rating on the issue repurchased under the tender offer to 'D' (default). S&P expects that the auction will end by early October. Shortly thereafter, S&P expects to assign new ratings to Energy XXI, representative of S&P's assessment of its credit risk and capital structure following the completion of the tender offer and related transactions. Energy XXI (Bermuda) Ltd. is an acquisition, exploration, development, and operation of oil and natural gas properties onshore in Louisiana and Texas and offshore in the Gulf of Mexico. ENERGY XXI: Moody's Affirms Corporate Family Rating at 'Caa3' ------------------------------------------------------------- Moody's Investors Service affirmed Energy XXI Gulf Coast, Inc.'s Caa3 Corporate Family Rating, downgraded its Probability of Default Rating to Ca from Caa3, and affirmed the Ca rating on its senior notes due 2013. The rating outlook remains negative. The rating actions reflect Energy XXI's recently announced bond exchange offer for its senior unsecured notes due 2013. The tender would offer all bondholders the opportunity to exchange their senior unsecured notes due June 15, 2013 for new 2nd lien notes due June 15, 2014 at a conversion price of $0.80. The 2nd lien notes would bear interest at 14% cash with an additional 2% PIK compared to the 10% cash interest on the existing senior notes. The tender would be open for 20 days per the tender rules; and concurrent with the bond exchange, Energy XXI will execute a private placement of between $50-89 million in 2nd lien/equity which would be used to fund the reduction in the borrowing base revolver from $240 million to $199 million and to enhance liquidity. The exchange offer is subject to several conditions, notably approval by 67% of the company's revolving credit facility to approve the issuance of the 2nd lien debt. The company is also soliciting consents from the note holders for several proposed amendments to the indenture. The proposed amendments, permit the issuance of the 2nd lien notes, but leave the change of control feature untouched. Moody's views the successful culmination of the exchange offer as tantamount to a distressed exchange and would classify this transaction as a limited default when the exchange offer closes. At that time, Moody's will also re-evaluate the ratings based on the post-exchange capital structure. The last rating action on Energy XXI was on March 27, 2009, at which time the Corporate Family and Probability of Default ratings were downgraded to Caa3 and the senior unsecured note rating was lowered to Ca. Energy XXI Gulf Coast, Inc., is an independent exploration and production company based in Houston, Texas. ENVIRONMENTAL TECTONICS: Registers Shares Under 2009 Stock Plan --------------------------------------------------------------- Environmental Tectonics Corporation filed a registration statement on Form S-8 with the Securities and Exchange Commission to register 1 million shares of common stock -- par value $0.05 per share, at $1.20 per share -- that may be granted under the Company's 2009 Employee, Director and Consultant Stock Plan. The proposed maximum aggregate offering price is $1.2 million. A full-text copy of the Form S-8 filing is available at no charge at http://ResearchArchives.com/t/s?443a Southampton, Pennsylvania-based Environmental Tectonics Corporation (AMEX: ETC) -- http://www.etcusa.com/-- designs, develops, installs and maintains aircrew training systems (aeromedical, tactical combat and general), disaster management training systems and services, entertainment products, sterilizers (steam and gas), environmental testing products, hyperbaric chambers and related products for domestic and international customers. The Company had total assets of $35,538,000 and total liabilities of $37,486,000, at May 29, 2009. ENVIROSOLUTIONS HOLDINGS: Moody's Cuts Corp. Family Rating to Caa3 ------------------------------------------------------------------ Moody's Investors Service lowered its debt ratings of EnviroSolutions Holdings, Inc., and EnviroSolutions Real Property Holdings, Inc.; corporate family and probability of default, each to Caa3 from Caa2, senior secured to Caa2 from Caa1. The outlook is negative. The downgrades reflect Moody's belief that the probability of default for ESI has increased because of the effects of the weak volume pattern the solid waste sector continues to endure, including in the two regions the company serves. Reported EBITDA and funds from operations have declined meaningfully below the levels expected when ESI arranged the most recent refinancing in the Spring of 2008. This has weakened the ability of ESI to adequately service its debt obligations, resulting in an unsustainable capital structure. The timing of the build-out of the rail-side, Newark, N.J.-based DART transfer station has resulted in larger than expected negative free cash flow generation over the past 15 months. This, other capital expenditures and the high cash interest burden have consumed the majority of the company's unrestricted cash, significantly weakening its liquidity. Moody's expects increasing price competition in the company's Northern New Jersey and New York tri-state market areas to continue to pressure earnings and cash flow generation. Expected continuing weak economic activity also indicates that it will be difficult for ESI to attain adequate waste volumes that allow it to efficiently operate its Newark, N.J.-based transfer station capacity. The negative outlook considers that the weak demand environment is likely to continue to constrain operating cash flow as ESI will need to aggressively price any bids to help maintain throughput at its transfer operations. Weak cash flows could depress valuations of the company or its assets and complicate any efforts by ESI to refinance its capital structure. The negative outlook also considers the company's weak liquidity profile. Although the revolver remains undrawn, ESI's access to this facility could be limited due to potential non-compliance with the facility's financial covenants. Moody's could further downgrade its ratings if it becomes evident that ESI will resort to a compromise of its debt obligations. The outlook could be stabilized if ESI is able to amend or otherwise restructure the terms of the credit facility such that it is able to adequately meet such revised terms of its debt agreements or demonstrate the ability to achieve positive free cash flow that restores adequate liquidity. The last rating action was on July 25, 2008, when Moody's affirmed the Caa2 corporate family and probability of default ratings and changed the outlook to stable from negative. Downgrades: Issuer: EnviroSolutions Holdings, Inc. -- Probability of Default Rating, Downgraded to Caa3 from Caa2 -- Corporate Family Rating, Downgraded to Caa3 from Caa2 Issuer: EnviroSolutions Real Property Holdings, Inc. -- Senior Secured Bank Credit Facility, Downgraded to Caa2 from Caa1 Outlook Actions: Issuer: EnviroSolutions Holdings, Inc. -- Outlook, Changed To Negative From Stable Issuer: EnviroSolutions Real Property Holdings, Inc. -- Outlook, Changed To Negative From Stable EnviroSolutions Holdings, Inc., based in Manassas, Virginia, is an integrated solid waste management company with a presence in Virginia, Maryland, New Jersey, Kentucky, West Virginia, and the District of Columbia. The company's assets include three landfills, four transfer stations and several hauling and collection operations. ESCADA AG: US Court Sets Initial Case Conference for Sept. 9 ------------------------------------------------------------ To aid in the efficient administration of Escada USA's Chapter 11 case, Judge Bernstein of the U.S. Bankruptcy Court for the Southern District of New York will conduct an initial case management conference in the Chapter 11 case of Escada (USA) Inc. on September 9, 2009, at 10:00 A.M. During the Initial Case Conference, the retention of professionals, the creation of a committee to review budget and fee requests, the use of alternative dispute resolution, timetables, and the scheduling of additional case management conferences will be tackled, according to the Court. About Escada AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009 the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. ESCADA AG filed of an insolvency petition in Munich, Germany, on August 13, 2009. The competent Municipal Court of Munich has appointed Dr. jur. Christian Gerloff as preliminary insolvency administrator. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Judge Stuart M. Bernstein handles the case. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. A copy of Escada US's Chapter 11 petition and list of largest unsecured creditors is available for free at: http://bankrupt.com/misc/sdny09-15008.pdf ESCADA AG: US Unit Gets Interim Nod to Pay Common Carriers ---------------------------------------------------------- On an interim basis, the U.S. Bankruptcy Court for the Southern District of New York authorized, but not directed, Escada USA to pay in its sole discretion any or all of the valid prepetition charges of (i) common carriers, which consist of carriers, shippers, freight forwarders and truckers, holding goods belonging to the Debtor in transit as of the Petition Date; and (ii) any common carrier or the distribution manager that would be entitled to a lien on the Debtor's goods as of the Petition Date. Judge Bernstein clarified that the Debtor is not allowed to pay prepetition charges of Common Carriers and the Distribution Manager that exceed $190,000 without further authorization of the Court. The Carrier Claims Interim Order does not prejudice the Debtor's right to dispute or contest the amount of, or basis for, any claims against the Debtor by the Common Carriers and the Distribution Manager. Similarly, the Interim Order will not be deemed to constitute an assumption of an executory contract, whether under Section 365 of the Bankruptcy Code or otherwise, the Court ruled. The Court will convene a hearing on September 9, 2009, to consider approval of the Debtor's request, on a final basis. About Escada AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009, the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. ESCADA AG filed of an insolvency petition in Munich, Germany, on August 13, 2009. The competent Municipal Court of Munich has appointed Dr. jur. Christian Gerloff as preliminary insolvency administrator. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Judge Stuart M. Bernstein handles the case. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. A copy of Escada US's Chapter 11 petition and list of largest unsecured creditors is available for free at: http://bankrupt.com/misc/sdny09-15008.pdf ESCADA AG: US Unit to Honor Prepetition Workers' Programs --------------------------------------------------------- In the ordinary course of its business, Escada (USA) Inc. maintains several insurance programs through different insurance carriers. The Debtor specifically procured the Liability and Property Insurance Programs, which provide it with insurance coverage for liabilities relating to general liability, primary property liability, automobile liability, ocean cargo liability, fiduciary liability, crime liability, umbrella liability, excess liability insurance and foreign liability insurance. A list of Escada USA's Insurance Programs is available for free at http://bankrupt.com/misc/Escada_InsurancePrograms.pdf Escada USA is required to pay premiums under the Liability and Property Insurance Programs based on fixed rates established by the Insurance Carrier. The annual premiums for those policies, and the Workers Compensation Programs, aggregate approximately $730,500, Gerard C. Bender, Esq., at O'Melveny & Myers LLP, in New York, told Judge Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York. Under the Debtor's Liability and Property Insurance Programs, if a claim is filed against a policy that has a deductible, the provider will pay the claim less the amount of the deductible, rather than pay the full amount of the claim and charge the Debtor for the amount of the deductible. As of the Petition Date, there are no accrued and outstanding amounts with respect to any deductibles under the Program. Subsequent to the Petition Date, however, deductibles for claims relating to the period prior to the Petition Date may arise, Mr. Bender avers. The Debtor employs insurance broker Marsh USA, Inc., to assist with the procurement and negotiation of Insurance Programs, the processing of claims, and the remittance of payments to the Insurance Carriers on its behalf. The Debtor pays Marsh USA a commission for the performance of the firm's duties. As of the Petition Date, there are no amounts accrued and outstanding with respect to payments to Marsh USA, Mr. Bender notes. Mr. Bender elaborates that Escada USA is obligated to remain current with respect to its primary Insurance Policies. Therefore, he maintains, the continuation of the Insurance Programs, on an uninterrupted basis, and the satisfaction of all undisputed payments are essential to preserve the Debtor's business. Almost all of the Insurance Programs are due for payment and renewal on November 1, 2009. Hence, the renewal or negotiation of the insurance policies under competitive terms, including payments to Marsh USA does not necessitate the Court's prior approval, Mr. Bender explains. To the extent any Insurance Program or related agreement is deemed an executory contract within the meaning of Section 365 of the Bankruptcy Code, the Debtor says it does not seek to assume any contract. Hence, Mr. Bender relates, the Court's authorization to satisfy the insurance premium payments should neither be deemed to constitute a postpetition assumption or adoption of the programs, policies, or agreements as executory contracts, nor affect the Debtor's right to contest the amount or validity of those obligations. Workers' Compensation Program Escada USA also maintains insurance policies and programs with respect to employee benefits, including health, dental, disability, and life insurance. The Debtor is specifically required by state laws to maintain workers' compensation policies and programs to provide its employees with workers' compensation benefits for claims arising from or related to their employment with the Debtor. The Debtor maintains workers' compensation coverage through insurance policies provided by the Travelers Indemnity Co. of America and Travelers Casualty and Surety Co. The Travelers Program obliges the Debtor to pay an estimated annual premium of $170,000 for the period from November 1, 2008, to November 1, 2009. The Estimated Premium is paid by the Debtor in 10 equal installments of $17,000. As of the Petition Date, the Debtor says it has no remaining payments of the Estimated Premium due to Travelers. In particular, Travelers performs an audit of the Debtor's actual payroll at the conclusion of each policy year. Following the annual audit and subsequent to the Petition Date, Travelers may assert a liquidated prepetition claim. To the extent the Debtor's employees hold valid workers' compensation claims, the Debtor seeks the Court's authority to permit the employees to proceed with their claims in the appropriate judicial or administrative through modification of the automatic stay imposed by under Section 362(d) of the Bankruptcy Code. To effectuate the modification of the automatic stay, the Debtor asks Judge Bernstein to waive the stay of a judgment under Rule 7062 of the Federal Rules of Bankruptcy Procedure, as well as the requirements under Bankruptcy Rule 9014 relating to contested matters with respect to claims under the Workers' Compensation Programs. Prohibiting the Debtor's employees from proceeding with their claims could have a detrimental effect on the financial well- being and morale of the employees and lead to their departure, which could cause a severe disruption in the Debtor's business to the detriment of all parties-in-interest, Mr. Bender says. Escada further asks Judge Bernstein to authorize JPMorgan Chase to honor and process prepetition and postpetition checks and transfers related to the payment of their Insurance Obligations under Disbursement Account No. XXX-XXX-5904. Mr. Bender assures the Court that the Checks or Transfers are or will be drawn on accounts as authorized under the Cash Management Order and therefore, can be readily identified as relating directly to payments under the Insurance Programs. Accordingly, prepetition Checks and Transfers other than those relating to the Insurance Programs will not be honored inadvertently, he points out. About Escada AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009 the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. ESCADA AG filed of an insolvency petition in Munich, Germany, on August 13, 2009. The competent Municipal Court of Munich has appointed Dr. jur. Christian Gerloff as preliminary insolvency administrator. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Judge Stuart M. Bernstein handles the case. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. A copy of Escada US's Chapter 11 petition and list of largest unsecured creditors is available for free at: http://bankrupt.com/misc/sdny09-15008.pdf ETHOS DESIGN LLC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Ethos Design, LLC 1805 Flower Street Glendale, CA 91201 Bankruptcy Case No.: 09-33922 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Victoria S. Kaufman Debtor's Counsel: Anthony A. Friedman, Esq. Levene Neale Bender Rankin & Brill LLP 10250 Constellation Bl., Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 Email: aaf@lnbrb.com David B. Golubchik, Esq. Levene Neale Bender Rankin & Brill LLP 10250 Constellation Blvd, Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Email: dbg@lnbrb.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/cacb09-33922.pdf The petition was signed by Armen Gharabegian, CEO of the Company. EXTENDED STAY: Mezzanine Lenders Want Examiner ---------------------------------------------- Mezzanine lenders Line Trust Corp. and Deuce Properties Ltd. are supporting the U.S. Trustee's request for an examiner to investigate Extended Stay Inc. Twelve days prior to the bankruptcy filing of Extended Stay, Line Trust and Deuce commenced an action in the Supreme Court of the State New York, in and for the County of New York, against some of the Debtors, and their original lenders, Bank of America, Wachovia and U.S. Bank National Association, as successor in interest to Bear Stearns Commercial Mortgage, Inc. Line Trust and Deuce alleged that the Original Lenders had engineered the contrived and trivial operating expense default in order to permit them to move forward with a conveyance in lieu transaction so that they could wipe out billions of dollars worth of junior mezzanine debt, on or before the maturity date of the entire debt stack, June 12, 2009, and thereby satisfy a so-called debt yield test and avoid the millions of dollars in required amortization payments due to the senior debt holders, in the event of a failure of the debt yield test on June 12, 2009. On June 15, 2009, the Debtors filed for Chapter 11 and submitted a term sheet reached with the defendant lenders. The Term Sheet sets forth a proposed restructuring of the Debtors' debt and proposed distributions to various claimants and interest holders. Line Trust and Deuce assert that the facts and circumstances that led to the Term Sheet must be investigated thoroughly and carefully by the independent examiner. Stephen B. Meister, Meister Seelig & Fein LLP, asserts that the Term Sheet forcefully demonstrates the collusion that took place between CEO David Lichtenstein and the Ad Hoc Mortgage Lender Group. "In situations such as this, where issues of fraud and misconduct exist, appointment of an independent examiner is necessary in order to preserve the integrity of the bankruptcy process." About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). FANNIE MAE: Executives' Legal Bills Paid by U.S. Government ----------------------------------------------------------- The New York Post reports that, according to inquiries by Representative Alan Grayson, a Florida Democrat, taxpayers' money are used to pay for legal defense bills of three top former executives, including Franklin D. Raines, who left the Company in late 2004 under accusations of accounting improprieties. From Sept. 6, 2008, to July 21, these legal payments totaled $6.3 million. The U.S. Government provided aid to Fannie Mae to avert its collapse. According to the New York Post, citing the Company's most recent quarterly financial statement, the Treasury will, by Sept. 30, have handed more than $45 billion to shore up the Company's net worth. The New York Post recounts that government inquiries found that between 1998 and 2004, senior executives at Fannie manipulated its results to hit earnings targets and generate $115 million in bonus compensation. Fannie had to restate its financial results by $6.3 billion. About Fannie Mae The Federal National Mortgage Association -- (FNMA) (NYSE: FNM) -- commonly known as Fannie Mae, is a shareholder-owned U.S. government-sponsored enterprise. Fannie Mae has a federal charter and operates in America's secondary mortgage market, providing mortgage bankers and other lenders funds to lend to home buyers at low rates. Fannie Mae was created in 1938, under President Franklin D. Roosevelt, at a time when millions of families could not become homeowners, or risked losing their homes, for lack of a consistent supply of mortgage funds across America. The government established Fannie Mae to expand the flow of mortgage funds in all communities, at all times, under all economic conditions, and to help lower the costs to buy a home. In 1968, Fannie Mae was re-chartered by the U.S. Congress as a shareholder-owned company, funded solely with private capital raised from investors on Wall Street and around the world. Fannie Mae is the U.S. largest mortgage buyer, according to The New York Times. As of March 31, 2009, Fannie Mae had $919,638,000,000 in total assets and $938,567,000,000 in total liabilities, resulting in Fannie Mae stockholders' deficit of $19,066,000,000. At March 31, 2009, Fannie Mae had $137,000,000 in non-controlling interest, resulting in total deficit of $18,929,000,000. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government-sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. FLEETWOOD ENTERPRISES: Retail Units Sec. 341(a) Meet on Sept. 25 ---------------------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of creditors in the Chapter 11 cases of: -- Fleetwood Retail Corp. of Arkansas -- Fleetwood Retail Corp. of Arizona -- Fleetwood Retail Corp. of Georgia -- Fleetwood Retail Corp. of Florida -- Fleetwood Retail Corp. of South Carolina The meeting will be held on Sept. 25, 2009, at 2:30 p.m. at the Office of the United States Trustee, 3685 Main Street Suite 300, Riverside, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Fleetwood Enterprises Founded in 1950, Fleetwood Enterprises, Inc., and its various subsidiaries produce, distribute, and service recreational vehicles and manufactured housing. Fleetwood employed 2,100 people in 14 plants located in 10 states. Based in Riverside, California, Fleetwood Enterprises, Inc., together with 19 of affiliates, filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., and Solmaz Kraus, Esq., at Gibson, Dunn & Crutcher LLP, represent the Debtors in their restructuring efforts. FTI Consulting Inc. is the financial advisors to the Debtors. The Debtors tapped Greenhill & Co.. LLC as its investment banker. Fleetwood was authorized in June to sell its recreational vehicle business for $53 million to private-equity investor American Industrial Partners. FLEETWOOD ENTERPRISES: Wants to Sell IT Assets to En Pointe Tech. ----------------------------------------------------------------- Fleetwood Enterprises, Inc., and its affiliated debtors ask the U.S. Bankruptcy Court for the Central District of California for authority to enter into an IT Services Agreement, which provides for: (i) the sale of certain IT equipment and software free and clear of liens, claims, interests and encumbrances to En Pointe Technologies, Inc.; (ii) En Pointe's offer of employment to FEI's IT employees; and (iii) the vendor's provision of requisite information technology services to the parties under the transition services agreements. The Debtors related that its estates will be liquidated and they have decided that it was most cost effective to outsource the IT services. Moreover, pursuant to at least one of the TSAs, the sooner FEI can outsource its IT service obligations, the sooner the Debtors can withdraw $2 million deposited in a segregated account. The key terms of the IT Services Agreement the are: -- the vendor agrees to: (i) assume FEI's IT service obligations under the TSAs; (ii) provide certain IT Services to the Debtors, the RV Purchaser and the Housing Purchaser for a period of up to two years; (iii) purchase from FEI for $100, and in consideration of vendor's other promises contained in the IT Services Agreement, the right and title to the IT Assets, and to certain related software, free and clear of liens, claims, interests and encumbrances; (iv) assume or obtain on its own certain additional software licenses and third party contracts; (v) offer employment, including base wages and benefits, to the employees of FEI's IT group on terms that are not materially worse than the employees received from FEI; and (vi) in its own reasonable discretion, offer retention incentives to the employees. -- In consideration for the assumption and performance of the foregoing obligations, FEI will pay vendor: (i) for the provision of the IT Services, an amount equal to $292,000 per month for a period of 12 months; (ii) for the provision of the IT Services under the Housing TSA, an amount equal to $29,000 per month for a period of 12 months, and $134,000 per month for an optional period of 13-18 months; (iii) for the provision of IT Services to FEI, $100,000 per month for a period of 12 months; and (iv) initial non-recurring charges of (a) $1,000,000, and (b) $75,000 intended for payment of one week of salaries and benefits for the IT Employees. Additionally, FEI will bear the costs of 45 days of rent and utilities for FEI's data center. -- In addition, the vendor agrees to pay FEI, based upon its revenues received from RV Purchaser and Housing Purchaser during the second year following the execution of the proposed IT Services Agreement, these amounts: (i) 10% of any revenues in excess of $4,000,000 that vendor receives from RV Purchaser during the Second Year, provided that the amount will not exceed $250,000; and (ii) 10% of any revenues in excess of $1,600,000 that vendor receives from Housing Purchaser during the Second Year, provided that the amount will not exceed $150,000. -- The IT Services Agreement may be unwound if approval of this Court is not obtained within a reasonable time after its execution. In that a scenario, the vendor will be entitled to retain a portion of the non-recurring charges, calculated to reflect the value of the services provided up to the point. The Debtor has asked the Court to schedule a hearing on the motion for Sept. 8, 2009, at 2:30 p.m. before the Hon. Meredith A. Jury, in Courtroom 302, located at the U.S. Bankruptcy Court, 3420 Twelfth 10 Street, Riverside, California. About Fleetwood Enterprises Founded in 1950, Fleetwood Enterprises, Inc., and its various subsidiaries produce, distribute, and service recreational vehicles and manufactured housing. Fleetwood employed 2,100 people in 14 plants located in 10 states. Based in Riverside, California, Fleetwood Enterprises, Inc., together with 19 of affiliates, filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., and Solmaz Kraus, Esq., at Gibson, Dunn & Crutcher LLP, represent the Debtors in their restructuring efforts. FTI Consulting Inc. is the financial advisors to the Debtors. The Debtors tapped Greenhill & Co.. LLC as its investment banker. Fleetwood was authorized in June to sell its recreational vehicle business for $53 million to private-equity investor American Industrial Partners. FONTAINEBLEAU LAS VEGAS: Contractors' Notice of FRBP 7030 Probe --------------------------------------------------------------- Pursuant to Rule 7030 of the Federal Rules of Bankruptcy Procedure and Rule 7030-2 of the Local Bankruptcy Rules of the U.S. Bankruptcy for the Southern District of Florida, Contractor Claimants Desert Fire Protection, a Nevada Limited Partnership, Bombard Mechanical, LLC, Bombard Electric, LLC, Warner Enterprises, Inc., doing business as Sun Valley Electric Supply Co., Absocold Corporation, Austin General Contracting, Powell Cabinet and Fixture Co., and Safe Electronics, Inc., ask the Term Lender Steering Group and Jefferies & Company to produce certain documents, at these date, time and location: (a) Term Lender Steering Group Date: September 8, 2009 Time: 10:00 a.m. (E.T.) Location: Genovese, Joblove & Battista 100 SE 2nd St., 44th Floor Miami, Florida 33131-2158 (b) Jefferies & Company Date: September 8, 2009 Time: 12:00 p.m. (E.T.) Location: Genovese, Joblove & Battista 100 SE 2nd St., 44th Floor Miami, Florida 33131-2158 The Contractor Claimants are seeking a representative of Jefferies & Company with the most knowledge and information concerning any reports, projections, appraisals, or valuations concerning the Debtors' construction of their "Tier A" casino hotel resort -- the Project -- and the Debtors' property generally, all postpetition loans, extensions of credit, and agreements concerning the Debtor's use of cash collateral, including the proposed priming liens being extended to the Term Lenders and any adequate protection that the Term Lenders will provide to the senior lien holders on the Project. The Contractor Claimants are also seeking a representative of the the Term Lender Steering Group with the most knowledge and information concerning all postpetition loans, extensions of credit, and agreements concerning the Debtor's use of cash collateral. Lists of the documents requested by the Contractor Claimants are available for free at: http://bankrupt.com/misc/FB_CC_7030ExamJefferies.pdf http://bankrupt.com/misc/FB_CC_7030ExamSteeringG.pdf According to the Notices, the scope of the examination will be as described in Rule 7030 of the Federal Rules of Bankruptcy Procedure. Pursuant to Local Rule 7030-2, no order will be necessary. The examination may continue from day to day until completed. If the examinee requires an interpreter, it is the examinee's responsibility to engage the employment of the interpreter to be present at the examination. About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC - http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. An official committee of unsecured creditors has been appointed in the Chapter 11 cases. As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FONTAINEBLEAU LAS VEGAS: Contractors Seek to Perfect Lien Claims ---------------------------------------------------------------- In separate filings, Bombard Mechanical, LLC, Austin General Contracting Inc., and Absocold Corporation, prepetition contractors for the Debtors and construction lien claimant pursuant to Nevada Revised Statutes Section 108.221 through Section 108.246, ask the Court to lift the automatic stay under Section 362(b) of the Bankruptcy Court and Rule 4001-1 of the Local Bankruptcy Rules of the U.S. Bankruptcy for the Southern District of Florida, so as to perfect their construction lien claims against the property of Debtor Fontainebleau Las Vegas, LLC. As of the Petition date, the Contractors supplied work, materials, and equipment, for which payment is due, for the Debtors' construction of their "Tier A" casino hotel resort -- the Project. The Contractors recorded their claims at the Clark County Recorder, at Clark County, in Nevada. The Contractors assert these lien claim amounts against the Debtor: Contractor Claim Amount ---------- ------------ Bombard Mechanical, LLC $54,647,384 Austin General Contracting Inc. 5,783,502 Absocold Corporation 453,554 In a separate filing, Bombard Mechanical explained that it entered into a contract with Fontainebleau Las Vegas in order to provide heating, ventilation, and air conditioning for the Tower portion of the Project. As of the Petition date, Bombard Mechanical has performed and provided $9,525,710 of work, materials, and equipment for which payment is due and owing. Bombard Mechanical has recorded the $9,525,710 due payment at the Clark County Recorder. On June 6, 2007, the Prepetition Term Lenders and Prepetition Revolver Lenders and the Debtors closed on a variety of loans to fund the continued construction of the Project. The Contractors tell the Court that work on the Project commenced in November 2006, which was prior to the signing and closing of the Debtors' June 6, 2007 Loans. Counsel for Absocold, Robert P. Charbonneau, Esq., at Ehrenstein Charbonneau Calderin, in Miami, Florida, asserts that any of Absocold's valid mechanics' liens are superior to the liens granted to the Prepetition Term Lenders and Prepetition Revolver Lenders in connection with the June 6, 2007 Loans. The adjudication of that issue will be resolved by separate adversary proceeding, Mr. Charbonneau adds. Notwithstanding the plain language of Section 546(b) of the Bankruptcy Court and in deference to the Court's broad jurisdiction and the broad protections afforded to the Debtors by the automatic stay under Section 362(b), the Contractors ask the Court to determine that the automatic stay does not apply to their postpetition perfection steps pursuant to Section 546(b), or, in the alternative, modify the provisions of the automatic stay, nunc pro tunc to the petition date, in order to give effect to the Contractors' perfection steps. Mr. Charbonneau notes that the statutory liens created by N.R.S. Section 108.221 through Section 108.246 are purely statutory in nature, and any lienor's right to enforce liens emanates entirely from statutory provisions. FONTAINEBLEAU LAS VEGAS: Court OKs Cash Coll. Use Until Sept. 17 ---------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of Florida has authorized Fontainebleau Las Vegas Holdings, LLC, and its debtor affiliates, pursuant to Section 363(c)(2)(A) and (B) of the Bankruptcy Code, to use the Cash Collateral on a fourth interim basis solely and exclusively for the disbursements set forth in the Budget for the period of August 31, 2009, until the earliest to occur of (a) the date that the Order or a Final Order ceases to be in full force and effect, or (b) the occurrence and continuation of a "Termination Event." A Termination Event will constitute any of these events: * September 17, 2009; * the Debtors fail to comply with any of the terms of the Fourth Interim Cash Collateral Order; * the Debtors seek any modification or extension of the Fourth Interim Cash Collateral Order without the prior written consent of the Term Lender Steering Group, or any order be entered, other than with the consent of the Term Lender Steering Group, amending, supplementing, or modifying the Order in any material respect or terminating the use of Cash Collateral by the Debtors pursuant to the Interim Order; * the cumulative aggregate cash disbursements exceed 105% of cumulative aggregate amount of cash disbursements projected in the Budget line "Weekly Subtotal" during the term of the Budget; and * an application filed by any Debtor for the approval of any Superpriority Claim or any lien in any of the Cases which is senior to the Adequate Protection Obligations or Adequate Protection Liens; However, the Term Lender Steering Group may waive in writing any Termination Event. The Debtors' authority to use the Cash Collateral will automatically terminate upon the occurrence of a Termination Event, all without further order or relief from the Court. All of the rights, remedies, benefits, and, protections provided to the Prepetition Secured Parties under the Fourth Interim Cash Collateral Order will survive the Termination Event. From and after the Petition Date, all proceeds of the Collateral, including all of the Debtors' existing or future cash and Cash Collateral, will not be used to pay expenses of the Debtors or to make debt payments except for those debt payments, expenses or disbursements that are expressly permitted under the Order and are consistent with the Budget. The Prepetition Secured Parties are granted a valid and perfected replacement security interest in, and lien on the Collateral, which Adequate Protection Liens will be senior to any liens on the Collateral including any statutory Liens that may exist under Nevada law, provided that any Adequate Protection Liens resulting from use of Cash Collateral under the First Interim Order and Second Interim Order will not have priority under Section 364(d) and will instead have the priority set forth in those Orders. The Adequate Protection Liens will not be (i) subject or junior to any Lien that is avoided and preserved for the benefit of the Debtors' estates under Section 551 of the Bankruptcy Code, or (ii) subordinated to or made pari passu with any other Lien, whether under Section 364(d) or otherwise. The Adequate Protection Liens are deemed to be valid, enforceable, and perfected liens, effective as of the Petition Date. The Prepetition Secured Parties are granted in each of the Debtors' Cases an allowed, superpriority administrative expense claim under Section 507(b) of the Bankruptcy Code with respect to the Adequate Protection Obligations. Each Debtor and each of its affiliates will forever release, waive, and discharge the Prepetition Agent and each Prepetition Term Lender from any claims or defenses as to the extent, validity, priority, or perfection of the Prepetition Liens or the Prepetition Term Obligations, or any actions, claims, or defenses under Chapter 5 of the Bankruptcy Code. The Prepetition Term Lenders and Turnberry West Construction, Inc., but not the Debtors, have agreed that the releases, waivers and discharges of the Prepetition Agent and each Prepetition Term Lender will not apply to any Claims and Defenses that have been asserted in a complaint filed against the Prepetition Agent or Prepetition Term Lenders by Turnberry in the Court on July 14, 2009. Any objections to the relief sought in the Motion that have not been previously resolved or withdrawn are overruled without prejudice to the legal issues being raised in connection with subsequent applications for the use of Cash Collateral provided, that the Court will, based on supplemental briefs that were filed on August 10, 2009, by the Debtors, the Term Lender Steering Group, and the M&M Lienholders, issue a separate ruling regarding whether it has jurisdiction over the M&M Lienholders to impose the October 15 deadline for any party-in-interest to file a complaint pursuant to Rule 7001 of the Federal Rules of Bankruptcy Procedure seeking to undertake any action with respect to claims and defense afforded by the Debtors to the Prepetition Agent and each of the Prepetition Term Lender. The Court had directed the Debtors to serve last September 3, 2009, copies of the Cash Collateral Motion, the Forth Interim Cash Collateral Order, and a notice of the Final Hearing or a further interim hearing to be held on September 10, 2009, at 3:00 p.m., to consider entry of the Final Order or interim order, as the case may be, on the Interim Notice Parties. Objections are due on September 8, 2009, at 4:00 p.m. A full-text copy of the Fourth Interim Cash Collateral Order is available for free at: http://bankrupt.com/misc/FB_CashColl_4thInterimOrd.pdf Prior to the entry of the Court's Order, Lien Claimants Derr and Gruenewald Construction Co., Graybar Electric Company, Inc., Quality Cabinet and Fixture Company, Tracy & Ryder Landscape, Inc., Z-Glass, Inc., Zetian Systems, Inc., and Water FX, Inc., informed the Court that they support the objection raised by Contractor Claimants Desert Fire Protection, a Nevada Limited Partnership, Bombard Mechanical, LLC, Bombard Electric, LLC, Warner Enterprises, Inc. doing business as Sun Valley Electric Supply Co., Absocold Corporation doing business as Econ Appliance, Austin General Contracting, Powell Cabinet and Fixture Co., Safe Electronics, Inc., and Union Erectors, LLC. The Contractor Claimants contend that the Court should not approve the Debtors' further request for continued of the Cash Collateral nor enter the Fourth Interim Cash Collateral Order. The Construction Claimants object to the improper accommodations that are extended to the Term Lenders. About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC - http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. An official committee of unsecured creditors has been appointed in the Chapter 11 cases. As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FONTAINEBLEAU MIAMI: May Face Default Judgment ---------------------------------------------- Lenders of Fontainebleau Miami Beach, led by Bank of America Corp., could declare a default on Fontainebleau Miami's $670 million construction loan, partly due to $60 million in unpaid contractor claims, according to The Wall Street Journal. The report says that a 45-day agreement by lenders not to declare default on the $670 million in construction debt had expired on August 31, 2009. In a statement to the Journal, Fontainebleau Miami executives declined to comment on the expired forbearance deal, calling it a "private document" adding that it is "engaged in constructive negotiations with . . . lenders." The hotel has not missed a debt payment and is faring better than its South Florida rivals since reopening in November, Fontainebleau said, the report noted. The lenders are purportedly withholding a final $26 million on the $670 million construction loan until the Soffers, owners of Fontainebleau Miami Beach, resolve the problems with contractors, the Journal reports. The Journal further revealed that the lenders could also declare a default on the loan because the hotel had not delivered audited financial statements to the lenders or maintained cash-management records for the lenders' review. Fontainebleau Miami Beach and Fontainebleau Las Vegas are both run by Soffer's Fontainebleau Resorts. However, the projects are separate corporate entities. The Fontainebleau Miami Beach has not filed for bankruptcy protection and has not played a role in Fontainebleau Las Vegas' Chapter 11 case. FORMTECH INDUSTRIES: Taps Potter Anderson as Bankruptcy Counsel --------------------------------------------------------------- FormTech Industries, LLC and FormTech Industries Holdings LLC ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ Potter Anderson & Corroon LLP as counsel. Potter Anderson will, among other things: -- take all necessary action to protect and preserve the estates of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors is involved, and the preparation of objections to claims filed against the Debtors' estates; -- provide legal advice with respect to the Debtors' powers and duties as debtors-in-possession as the Debtor move forward with the bankruptcy case; and -- negotiate, prepare and pursue a plan and disclosure statement and the approval of the same. In a separate application, the Debtors seek to employ Strobl & Sharp, P.C., as special counsel to provide specialized services in conjunction with the cases but that are not duplicative with the services of Potter Anderson Steven M. Yoder, Esq., a partner at Potter Anderson, tells the Court that the firm received a $75,000 retainer in payment of prepetition services and related expenses. The hourly rates of the firm's personnel are: Partners $425 - $595 Counsel $220 - $375 Associates $235 - $325 Paralegals and other administrative personnel $70 - $180 Mr. Yoder assures the Court that the firm is a "disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Yoder can be reached at: Potter Anderson & Corroon LLP Hercules Plaza, Sixth Floor 1313 North Market Street, P.O. Box 951 Wilmington, DE 19899-0951 Tel: (302) 984-6000 Fax: (302) 658-1192 About FormTech Industries, LLC Headquartered in Royal Oak, Michigan, FormTech Industries, LLC -- http://www.formtech2.com/-- is among the largest independent manufacturers of forged automotive parts in North America and the leader in high volume hot-formed manufacturing through its operations in Royal Oak, Michigan and Tonawanda, New York. FormTech was adversely impacted by the precipitous decline in automotive production in the first half of 2009. Through this time period, FormTech remained a highly reliable supplier and substantially restructured its operations. The company has over 400 employees, primarily in Michigan and Ohio and operates six manufacturing facilities. The Company and FormTech Industries Holdings LLC filed for Chapter 11 on Aug. 26, 2009 (Bankr. D. Del. Case No. 09-12964 and 09-12965). Lynn M. Brimer, Esq., Meredith E. Taunt, Esq., and at Andrew A. Ayar, Esq., at Strobl & Sharp, P.C. represent the Debtor in its restructuring effort. The Debtor selected Steven M. Yoder, Esq., Jeremy W. Ryan, Esq., and R. Stephen McNeill, Esq., at Potter Anderson & Corroon LLP as co-counsel; and Kurtzman Carson Consultants LLC as claims agent. In its petition, the Debtor listed $100 million to $500 million in assets and $50 million to $100 million in debts. FORMTECH INDUSTRIES: U.S. Trustee Picks 3-Member Creditors Panel ---------------------------------------------------------------- Roberta A. DeAngelis, Acting U.S. Trustee for Region 3 appoints three members to the official committee of unsecured creditors in the Chapter 11 cases of FormTech Industries, LLC, and FormTech Industries Holdings LLC. The Creditors Committee members are: 1. Macsteel Jackson Attn: Stefan J. Prociv 5591 Morrill Road Jackson, MI 49201, Tel: (517) 782-0415 Fax: (517) 782-9134 2. International Union, UAW Attn: Niraj R. Ganatra Solidarity House 8000 East Jefferson Avenue Detroit, MI 48214 Tel: (313) 926-5000 Fax: (313) 823-6016 3. The Timken Company Attn: Robert Morris 1835 Duebar Avenue, S.W. Canton, OH 44706 Tel: (330) 471-4589 Fax: (330) 458-6483 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also Attnempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About FormTech Industries, LLC Headquartered in Royal Oak, Michigan, FormTech Industries, LLC -- http://www.formtech2.com/-- is among the largest independent manufacturers of forged automotive parts in North America and the leader in high volume hot-formed manufacturing through its operations in Royal Oak, Michigan and Tonawanda, New York. FormTech was adversely impacted by the precipitous decline in automotive production in the first half of 2009. Through this time period, FormTech remained a highly reliable supplier and substantially restructured its operations. The company has over 400 employees, primarily in Michigan and Ohio and operates six manufacturing facilities. The Company and FormTech Industries Holdings LLC filed for Chapter 11 on Aug. 26, 2009 (Bankr. D. Del. Case No. 09-12964 and 09-12965). Lynn M. Brimer, Esq., Meredith E. Taunt, Esq., and at Andrew A. Ayar, Esq., at Strobl & Sharp, P.C., represent the Debtor in its restructuring effort. The Debtor selected Steven M. Yoder, Esq., Jeremy W. Ryan, Esq., and R. Stephen McNeill, Esq., at Potter Anderson & Corroon LLP as co-counsel; and Kurtzman Carson Consultants LLC as claims agent. In its petition, the Debtor listed $100 million to $500 million in assets and $50 million to $100 million in debts. FORMTECH INDUSTRIES: Section 341(a) Meeting Slated for October 2 ---------------------------------------------------------------- Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, will convene a meeting of creditors in FormTech Industries, LLC, and FormTech Industries Holdings LLC's Chapter 11 cases on Oct. 2, 2009, at 10:00 a.m. The meeting will be held at J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Royal Oak, Michigan-based FormTech Industries, LLC -- http://www.formtech2.com/-- is among the largest independent manufacturers of forged automotive parts in North America and the leader in high volume hot-formed manufacturing through its operations in Royal Oak, Michigan and Tonawanda, New York. FormTech was adversely impacted by the precipitous decline in automotive production in the first half of 2009. Through this time period, FormTech remained a highly reliable supplier and substantially restructured its operations. The company has over 400 employees, primarily in Michigan and Ohio and operates six manufacturing facilities. The Company and FormTech Industries Holdings LLC filed for Chapter 11 on Aug. 26, 2009 (Bankr. D. Del. Case No. 09-12964 and 09-12965). Lynn M. Brimer, Esq., Meredith E. Taunt, Esq., and at Andrew A. Ayar, Esq., at Strobl & Sharp, P.C., represent the Debtor in its restructuring effort. The Debtor selected Steven M. Yoder, Esq., Jeremy W. Ryan, Esq., and R. Stephen McNeill, Esq., at Potter Anderson & Corroon LLP as co-counsel; and Kurtzman Carson Consultants LLC as claims agent. In its petition, the Debtor listed $100 million to $500 million in assets and $50 million to $100 million in debts. FORMTECH INDUSTRIES: Taps Strobl & Sharp, P.C. as Special Counsel ----------------------------------------------------------------- FormTech Industries, LLC, and FormTech Industries Holdings LLC ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ Strobl & Sharp, P.C., as special counsel. Strobl & Sharp will represent the Debtors in connection with: -- supplier and customer matters; -- commercial matters; -- corporate matters; -- tax matters; -- real estate matters; and -- labor and collective bargaining matters. Lynn M. Brimer, Esq., a shareholder at Strobl, tells the Court that since 2007, the firm represented the Debtors in unrelated non-bankruptcy matters and received $557,685 in fees and $9,128 in costs. On the petition date, the firm had no outstanding balance due in connection with the prepetition matters. Ms. Brimer adds that Strobl received $296,596 in fees and $6,041 in costs for services rendered prepetition. The firm is holding in its client trust account a retainer of $94,512. Ms. Brimer assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Ms. Brimer can be reached at: Strobl & Sharp, P.C. 300 E. Long Lake Road, Suite 200 Bloomfield Hills, MI 48304 Tel: (248) 540-2300 Fax: (248) 645-2690 About FormTech Industries, LLC Headquartered in Royal Oak, Michigan, FormTech Industries, LLC -- http://www.formtech2.com/-- is among the largest independent manufacturers of forged automotive parts in North America and the leader in high volume hot-formed manufacturing through its operations in Royal Oak, Michigan and Tonawanda, New York. FormTech was adversely impacted by the precipitous decline in automotive production in the first half of 2009. Through this time period, FormTech remained a highly reliable supplier and substantially restructured its operations. The company has over 400 employees, primarily in Michigan and Ohio and operates six manufacturing facilities. The Company and FormTech Industries Holdings LLC filed for Chapter 11 on Aug. 26, 2009 (Bankr. D. Del. Case No. 09-12964 and 09-12965). Lynn M. Brimer, Esq., Meredith E. Taunt, Esq., and at Andrew A. Ayar, Esq., at Strobl & Sharp, P.C., represent the Debtor in its restructuring effort. The Debtor selected Steven M. Yoder, Esq., Jeremy W. Ryan, Esq., and R. Stephen McNeill, Esq., at Potter Anderson & Corroon LLP as co-counsel; and Kurtzman Carson Consultants LLC as claims agent. In its petition, the Debtor listed $100 million to $500 million in assets and $50 million to $100 million in debts. FRANCESCO CARRUBBA: Case Summary & 9 Largest Unsecured Creditors ---------------------------------------------------------------- Joint Debtors: Francesco Carrubba Concettina Carrubba 9 Ashdown Place Half Moon Bay, CA 94019 Case No.: 09-32649 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Northern District of California (San Francisco) Judge: Dennis Montali Debtors' Counsel: Heinz Binder, Esq. Law Offices of Binder and Malter 2775 Park Ave. Santa Clara, CA 95050 Tel: (408) 295-1700 Email: heinz@bindermalter.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by the Joint Debtors. Debtors' List of 1 Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Express Credit Purchases Unknown PO Box 0001 Los Angeles, CA 90096-8000 FRANKLIN TOWERS: Records $2.2-Mil. Net Loss for 1H of 2009 ---------------------------------------------------------- Franklin Towers Enterprises Inc. has assets of $13,064,494 as against total debts of $14,655,957, all current as of June 30, 2009. The Company recorded a net loss of $956,797 on net sales of $2,485,527 for three months ended June 30, 2009. This compares to a net loss of $1,593,218 on net sales of $1,124,478 for the same period in 2008. The Company started its test production at the end of June 2007 and commenced its manufacturing operations during the third quarter of 2007. The Company has incurred a net loss of $2,192,698 for the six months ended June 30, 2009 and has an accumulated deficit of $19,883,654 at June 30, 2009. Substantial portions of the losses are attributable to the common stock issued for consulting service, amortization of debt discount, deferred finance costs and beneficial conversion feature, and accrued interest and penalties in connection with the default of the Convertible Notes. The Company had a working capital deficiency of $3,440,745 and $1,780,617 as of June 30, 2009 and December 31, 2008, respectively. In addition, the Company's gross margin rate from its current operations was low. It was 8% for the six months ended June 30, 2009 and 5.2% for the year ended December 31, 2008. Furthermore, as of July 12, 2008, the Company was in default on its Convertible Notes payments due July 12, 2008. The Notes provide that, at the option of the holder, an event of default shall make all sums of principal and interest then remaining unpaid and all other amounts payable immediately due and payable upon demand. As of June 30, 2009, the unpaid convertible notes payable balance is $2,792,175; unpaid accrued interest is $344,741; and unpaid accrued liquidated damages penalty and default penalty are $1,563,056. The Company is currently negotiating with investors and seeking ways to resolve the default issue with all investors. "These factors raise substantial doubt concerning the Company's ability to continue as a going concern," Franklin Towers said. A copy of the Company's Form 10-Q filed with the Securities and Exchange Commission is available for free at: http://researcharchives.com/t/s?444d Franklin Towers Enterprises, Inc., was incorporated on March 23, 2006 under the laws of the State of Nevada. On June 19, 2007, Franklin entered into a Share Purchase Agreement with the shareholders of Chongqing Qiluo Textile Co. Ltd., a limited liability company organized under the laws of the People's Republic of China, whereby Franklin agreed to acquire 100% of the issued and outstanding registered capital of Qiluo. Upon consummation of such purchase, Qiluo became a wholly-owned subsidiary of Franklin. After the acquisition, Franklin focused on the production and sale of silk and silk products. The Company started its test production at the end of June 2007 and commenced operations in the third quarter of 2007. FTI CONSULTING: S&P Raises Corporate Credit Rating to 'BB+' ----------------------------------------------------------- Standard & Poor's Ratings Services raised the corporate credit rating on Baltimore, Maryland-based FTI Consulting Inc. to 'BB+' from 'BB'. The outlook is stable. All issue-level ratings on the company were also raised one notch in conjunction with the corporate credit rating. "The rating action is based on FTI's solid operating performance, good credit metrics, and S&P's expectation that the company will continue to generate healthy growth over the intermediate term," said Standard & Poor's credit analyst Andy Liu. The 'BB+' rating reflects the company's dependence on highly mobile and sought-after senior staff, high acquisition activity, and the pressures of a competitive marketplace. Its modest business diversity, good growth rate, and discretionary cash flow are positive factors that partly offset these risks. FTI's performance relies on a group of senior managing directors with the expertise sought by clients. The loss of any of these senior professionals could result in the loss of some existing engagements and/or some client relationships. Although the company has been successful in retaining senior professionals, this will remain a key rating factor that S&P will continue to monitor. FTI has been very active making acquisitions. The company purchased 23 companies over the past two years to expand its global footprint and enhance service offerings. As of Dec. 31, 2008, the company had operations in 22 foreign countries, which accounted for 18% of total revenues, compared to 10 countries in 2006. The company's goal is to increase international revenue contribution to roughly 30% over the next three years. Despite FTI's success in incorporating acquisitions into the business, its aggressive acquisition strategy and integration risks remain a concern. FUTURE ENERGY SERVICES: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Future Energy Services of Oklahoma, Inc. P.O. Box 702508 Dallas, TX 75370-2508 Bankruptcy Case No.: 09-14938 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. ------ -------- Future Energy Services, LLC 09-14939 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Western District of Oklahoma (Oklahoma City) Judge: Richard L. Bohanon Debtor's Counsel: Jason M. Kreth, Esq. Phillips Murrah P.C. 101 N Robinson Oklahoma City, OK 73102 Tel: (405) 235-4100 Email: jmkreth@phillipsmurrah.com Robert J. Haupt, Esq. Phillips Murrah P.C. Corporate Tower, 13th Floor 101 N. Robinson Oklahoma City, OK 73102 Tel: (405) 235-4100 Fax: (405) 235-4133 Email: rjhaupt@phillipsmurrah.com Robert N. Sheets, Esq. Phillips Murrah 101 N Robinson Avenue 13th Floor Oklahoma City, OK 73102 Tel: (405) 235-4100 Fax: (405) 235-4133 Email: rnsheets@phillipsmurrah.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/okwb09-14938.pdf The petition was signed by Rick Jackson, president of the Company. GENERAL MOTORS: Detroit Diesel Wants Asbestos Suits Stayed ---------------------------------------------------------- Detroit Diesel Corporation asks the U.S. Bankruptcy Court for the Southern District of New York to extend and enforce the automatic stay to prevent the prosecution of claims in various courts around the United States, or elsewhere, wherein the plaintiffs seek monetary damages from DD for personal injuries and wrongful death for asbestos-related diseases based on exposure to asbestos- containing components incorporated into products manufactured, sold, and distributed by DD's predecessors. In the alternative, to the extent the Bankruptcy Court does not find an extension of the automatic stay appropriate in the present, DD seeks a commensurate preliminary injunction preventing further prosecution of the asbestos cases as against DD to avoid prejudice to the Debtors' estate. Michael T. Conway, Esq., at LeClair Ryan, a Professional Corporation, in New York, relates that there are approximately 65 civil lawsuits pending in the state courts of 12 different states. At least eight of those lawsuits are scheduled for start of trial in the next six months. He says in each of the Asbestos Cases, DD is sued for the sole reason that it was once a division of the Debtors' and as a conduit for liability, which, if it exists at all, would exist with the Debtors, and not with DD, which has not manufactured, sold, or distributed products with asbestos- containing components. Detroit Diesel was founded in 1938 as the Detroit Diesel Division of General Motors Corporation. In 1988, GM sold certain assets of the Detroit Diesel Division to DD, a joint venture between GM and Penske Corporation. As part of a "sales agreement" between GM and DD, Mr. Conway says, GM agreed to assume all liabilities and to indemnify and hold harmless Detroit Diesel and its successors for any products manufactured, distributed or sold prior to January 1, 1988, by GM's Detroit Diesel Division. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as 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). 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. 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, serves as the Chief Executive Officer for Motors Liquidation Company. 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. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Old GM Wants Jan. 27 Extension for Ch. 11 Plan -------------------------------------------------------------- Section 1121(b) of the Bankruptcy Code provides for an initial period of 120 days after the Petition Date during which a debtor has the exclusive right to file a Chapter 11 plan. Section 1121(c)(3) provides that if a debtor files a plan within the 120- day Exclusive Filing Period, it has a period of 180 days after the Petition Date to obtain acceptances of that plan, during which time competing plans may not be filed. However, where the initial 120- and 180-day Exclusive Periods provided for in the Bankruptcy Code prove to be an unrealistic time frame, Section 1121(d) allows the bankruptcy court to extend a debtor's Exclusive Periods for cause. In this regard, Motors Liquidation Company and its debtor- affiliates ask Judge Robert E. Gerber of the United States Bankruptcy Court for the Southern District of New York to extend: (1) the Exclusive Plan Filing Period through and including January 27, 2010; and (2) the Exclusive Solicitation Period through and including March 29, 2010. The Debtors' Exclusive Filing Period is currently set to expire on September 29, 2009, and the Exclusive Solicitation Period on November 28. According to Harvey R. Miller, Esq., at Weil, Gotshal & Manges LLP, in New York, the Debtors have made substantial progress in their Chapter 11 cases. In only three months, the Debtors have: -- completed the sale of substantially all their assets pursuant to Section 363 of the Bankruptcy Code to NGMCO, Inc., a U.S. Treasury-sponsored purchaser, which Transaction resulted in substantial recoveries to the estates and preservation of employment for 235,000 employees; -- negotiated and executed an agreement with the Debtors' largest secured creditor, the U.S. Treasury, to provide the Debtors with a postpetition Wind-Down Credit Facility of $1.175 billion, which proceeds are to be used by the Debtors to wind down their affairs; -- retained dozens of professionals to assist in the administration of the estates, including the professionals at AlixPartners, who have taken the lead in compiling information related to the Debtors' business and administering the estates, local and foreign counsel, as well as investment banking and accounting professionals; -- analyzed more than 700,000 contracts, and, filed omnibus motions to reject more than 250 executory contracts and unexpired leases of nonresidential real property; -- conducted a comprehensive, objective, and quantitative evaluation of each of the Debtors' 6,000 dealerships, negotiated with each of them, and rejected approximately 38 dealerships in total; -- established global procedures for asset sales; -- filed a request to establish a bar date for the filing of claims; and -- responded to countless inquiries related to the status of The Chapter 11 cases and specific contract counterparty demands. Despite the substantial progress achieved by the Debtors, an extension of the Exclusive Periods is customary, as well as essential, in the context of their Chapter 11 cases, which are "among the largest and most complex ever filed in the United States," according to Mr. Miller. Mr. Miller specifies that while the interests of economic stakeholders have been enhanced through the Sec. 363 Transaction, the Debtors continue to work on substantial post-closing contingencies, which inhibit them from filing a confirmable Chapter 11 plan at this time. Mr. Miller further relates that the Debtors have approximately 2,500,000 creditors and equity security holders and are parties more than 700,000 executory contracts. Thus, with the several thousands of claims expected be filed in the Debtors' cases, 120 days is simply inadequate to evaluate the universe of assets belonging to, and claims asserted against, the estates, and prepare a disclosure statement containing adequate information. In this regard, any Chapter 11 plan proposed by the Debtors prior to meaningful analyses of the claims ultimately filed "would be premature and could actually lead to protracted litigation and a delay of confirmation of a plan," Mr. Miller contends. Mr. Miller relates that in connection with their wind-down efforts, the Debtors have been working closely with their key constituencies to address the issues critical to developing and implementing a plan. Therefore, the Proposed Exclusive Periods Extensions are not meant to pressure creditors into accepting a plan they find unacceptable, but to develop and build consensus for a Chapter 11 plan. Ultimately, the Extension will allow the Debtors to wind-down their estates in an orderly, efficient, and cost-effective way, analyze potential recoveries. Most importantly, afford the Debtors a full and fair opportunity to negotiate, propose, and seek acceptances of a Chapter 11 plan. The Court will convene a hearing on September 14, 2009, to consider the Debtors' request. Objections, if any, must be filed by September 9. 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). 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. 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, serves as the Chief Executive Officer for Motors Liquidation Company. 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. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: U.S. Antitrust Officials OK Delphi Purchase ----------------------------------------------------------- U.S. antitrust officials approved on September 3, 2009, General Motors Company's plans to purchase certain assets of Delphi Corporation, consisting of the global steering business and four of former Delphi's plants in New York and Indiana, Reuters reported. The bankruptcy court overseeing Delphi's Chapter 11 case has previously approved on July 30, 2009, the new Master Disposition Agreement entered into between Delphi and GM, among others, which agreement contemplated the sale of Delphi's assets to GM. The bankruptcy court also confirmed Delphi's First Amended Joint Plan of Reorganization, as modified. Under the Sale, GM will assume more than $1 billion in Delphi obligations and waive $2 billion in claims. GM also plans to invest $1.75 billion and provide Delphi with loans, the report adds. GM is purchasing Delphi's assets hopes to exit bankruptcy at the end of September 2009, under control of its lenders, which have agreed to forgive nearly $3.5 billion in debt, according to Reuters. 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). 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. 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, serves as the Chief Executive Officer for Motors Liquidation Company. 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. 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/r 215/945-7000) GENERAL MOTORS: Unlikely to Sell Opel to Magna, CDU Head Says ------------------------------------------------------------- Andreas Cremer at Bloomberg News, citing Kurt Lauk, head of the Christian Democratic Union's Economic Council, reports that General Motors Co. is unlikely to sell Opel to Magna International Inc. because the U.S. carmaker doesn't want to hand over its intellectual property to Russia. "I just can't believe that GM's new board will accept transferring important know-how to the Russians," Bloomberg quoted Mr. Lauk as saying, referring to Magna's investment partner OAO Sberbank, Russia's largest bank. Mr. Lauk told Bloomberg it would be "commercially wise" for GM to keep Opel on the basis of a "restructuring plan". GM's 13-member board may take a decision on Opel's future at a two-day meeting in Detroit starting today, Sept. 8. In a Sept. 4 report Bloomberg News, citing two people familiar with the situation disclosed the German government-backed trust created to facilitate a sale Opel plans to meet Sept. 10 to evaluate an investor decision by the U.S. automaker's new board. Opel Stake Melissa Akin at Reuters, citing Vedomosti newspaper, reports Oleg Deripaska's carmaker GAZ, the Russian industrial parter in a Magna-led bid for Germany's Opel is not interested in an equity stake in Opel. Reuters relates Mr. Derispaka told the newspaper in remarks published on Monday "We can help them set up assembly at our facility and offer our dealer network for marketing. There is no talk of buying a stake." About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Koenigsegg Secures Addt'l Funds for Saab Sale Deal ------------------------------------------------------------------ Andrew Ward at The Financial Times reports that Koenigsegg Automotive AB has secured additional funding to complete its acquisition of Saab Automobile from General Motors Co. According to the FT, officials at Saab and the Swedish government said Koenigsegg planned to announce a new financial plan in coming days that would plug the roughly EUR300 million shortfall, without needing further government aid. "The remaining part of the financing problem has been solved," the FT quoted a Saab spokesman as saying. The FT recalls Koenigsegg finalized terms with GM last month but warned that financing was not fully secured. The FT relates a request from Christian von Koenigsegg, the company's founder, for an additional government loan was rejected by Sweden's center-right administration. The FT notes even without further aid, the acquisition is still dependent on a EUR400 million-EUR500 million loan from the EU-backed European Investment Bank, guaranteed by Sweden. Creditor Protection The Troubled Company Reporter Europe, citing Bloomberg News, reported on Feb. 23, 2009, Saab filed for protection from creditors after parent GM said it will cut ties with the Swedish carmaker following two decades of losses. The Trollhaettan, Sweden-based company filed for reorganization with a Swedish district court to separate itself from GM and bring resources back to Sweden. On June 25, 2009, Troubled Company Reporter, citing The Wall Street Journal, reported creditors of Saab approved the automakers' proposal for settling its debts by paying a quarter of what it originally owed. Saab proposed to settle its debts by paying 25% of about US$1.34 billion it owed to more than 600 creditors, including auto suppliers and the Swedish government. The vast majority of the debt, almost SEK10 billion, was owed to GM. About Saab Automobile Saab Automobile AB -- http://www.saab.com-- is a wholly owned subsidiary of General Motors. With an annual production of up to 126,000 cars, Saab's current models include the 9-3 (available as a convertible or sport sedan), the luxury 9-5 sedan (also available in a sport wagon), and the seven-passenger 9-7X SUV. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Opel Trustees to Meet Sept. 10 on GM Decision ------------------------------------------------------------- The German government-backed trust created to facilitate a sale of General Motors Co.'s Opel unit plans to meet Sept. 10, signaling GM will have likely made a decision on Opel's future by then, Bloomberg News reported, citing a person familiar with the situation. The trustees, including two representatives from GM and two from Germany as well as a non-voting chairman, will evaluate any proposal by the U.S. automaker's new board, which is scheduled to meet Sept. 8 and 9 in Detroit, said the person. Meanwhile, General Motors's continued reluctance to sell its Opel and Vauxhall units in Europe to Magna International, Inc, have "angered" German leaders and labor unions, Reuters reported. Senior labor leader Klaus Franz threatened GM that Opel workers may take back its commitment to reduce some $1.2 billion in costs "if we should return to 100 percent control under GM," the report said. Some 100,000 people in Germany are estimated to have jobs that depend on Opel, according to the report. Should GM's board of directors, who are set to meet on September 8, 2009, vote to keep Opel, "then we will demand back our bridge financing of 1.5 billion euros," Volker Kauder, leader of Chancellor Angela Merkel's conservative parliamentary faction in the Bundestag, was quoted as telling German business daily Handelsblatt. GM Europe President Carl-Peter Forster had told Germany's Die Welt that Magna has "the greatest probability" of becoming Opel's future owner, "since all prerequisites are fulfilled, the contracts have been negotiated to their conclusion, and the financing is there," according to the report. Magna had requested Mr. Forster to stay on to run Opel should it win the deal, unnamed sources told Reuters. GM advisers have reportedly looked into tapping other European countries to provide GM with financing should it retain ownership of the Opel division. Under this scenario, GM particularly expected the UK, Spain and Poland to offer EUR1 billion, reported The Wall Street Journal. Persons familiar with the matter told Reuters, though, that "no direct overtures have been made." Ferdinand Dudenhoeffer, head of the Center for Automotive Research at the University of Duisburg-Essen, opined that in considering other sources of financing under retained ownership of Opel, GM "wants to sideline and demoralize the German government by playing the various Opel countries in Europe against each other," Reuters reported. "Only talks with (President Barack) Obama offer a chance. Everything else is condemned to fail. Everything else would make the chancellor and her economy minister regrettable losers," Mr. Dudenhoeffer wrote in an e-mail to the media, according to the report. The European Union said that rules forbidding member countries to offer aid to companies conditional on keeping local plants open would also apply if GM were to receive aid from the U.K., Spain and Poland to restructure its Opel division, according to the Journal. GM had previously denied any interest in keeping Opel. Fred Irwin, the chairman of the German government-backed Opel Trust, said that the Company is negotiating with the German government toward a "commercially reasonable solution." About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as 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). 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. 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, serves as the Chief Executive Officer for Motors Liquidation Company. 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. 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 INCORPORATED: Re-Issues Financial Statements -------------------------------------------------- Genta Incorporated re-issued its historical consolidated financial statements included in its Annual Report on Form 10-K for the years ended December 31, 2008, 2007, and 2006 as amended, as filed with the Securities and Exchange Commission on February 13, 2009, and as amended on April 6, 2009, to show the effects of the subsequent reverse stock split at a ratio of one for 50 shares implemented by the Company on June 26, 2009. A full-text copy of Selected Consolidated Financial Data is available at no charge at http://ResearchArchives.com/t/s?443b A full-text copy of Management's Discussion and Analysis of Financial Condition and Results of Operations (with respect to the Results of Operations for the years ended December 31, 2006 through 2008) is available at no charge at: http://ResearchArchives.com/t/s?443c A full-text copy of Financial Statements and Supplementary Data is available at no charge at http://ResearchArchives.com/t/s?443d The Company also has filed a registration statement on Form S-8 with the Securities and Exchange Commission to register 83,478,929 shares of common stock -- par value $0.001 per share, at $0.38 per share -- that may be granted under the Genta Incorporated 2009 Stock Incentive Plan. The proposed maximum aggregate offering price is $31,721,993. A full-text copy of the Form S-8 filing is available at no charge at http://ResearchArchives.com/t/s?443e A full-text copy of the 2009 Stock Incentive Plan is available at no charge at http://ResearchArchives.com/t/s?443f 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. In its quarterly report on Form 10-Q, the Company said 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. 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. GKC INVESTMENTS: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: GKC Investments, Inc. 3960 West Ann Road, Bldg. 9 North Las Vegas, NV 89031 Bankruptcy Case No.: 09-26637 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Charles T. Wright, Esq. Piet & Wright 3130 S. Rainbow Blvd., Suite 304 Las Vegas, NV 89146 Tel: (702) 566-1212 Fax: (702) 566-4833 Email: todd.wright@pietwright.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of at least $900,000, and total debts of $1,599,710. A full-text copy of the Debtor's petition, including a list of its 4 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-26637.pdf The petition was signed by Gregory K. Cahoon, president of the Company. GUIDED THERAPEUTICS: Raises $3.5MM by Issuing More 13% Notes ------------------------------------------------------------ Guided Therapeutics, Inc., on August 31, 2009, issued additional 13% Senior Secured Convertible Notes of the Company in the aggregate principal amount of roughly $3.5 million. The New Notes were issued pursuant to the Company's existing Amended and Restated Loan Agreement, dated March 1, 2007. The New Notes were principally sold to certain existing security holders of the Company. Prior to the issuance of the New Notes, there were roughly $4.5 million in aggregate principal amount of 13% Senior Secured Convertible Notes outstanding, which were issued previously pursuant to the 2007 Loan Agreement. Accrued interest on the Existing 2007 Notes as of August 31, 2009, was roughly $1.5 million. The Senior Notes mature on March 1, 2010. Prior to any event of default, interest accrues on the Senior Notes at 13% per annum, and is due at maturity. The Senior Notes are senior secured obligations of the Company and are secured by (a) a first in priority lien on all of the Company's assets; (b) a guaranty by the Company's wholly owned subsidiary, InterScan Inc.; (c) a lien on all of InterScan's assets; and (d) a pledge on all issued and outstanding stock of InterScan and another (inactive) wholly owned subsidiary of the Company. The New Notes are convertible, subject to certain adjustments, into roughly 5.4 million shares of the Company's Common Stock. The Existing 2007 Notes are convertible, subject to certain adjustments, into roughly 9.1 million shares of Common Stock. The principal amount and all accrued but unpaid interest of each Senior Note is convertible at the election of the holder thereof. In addition, the Senior Notes are automatically convertible into shares of Common Stock should the average trading price for Common Stock for a period of at least 30 consecutive days exceed $1.30 per share, or should the Company issue and sell $5 million or more of new preferred stock of the Company meeting certain specified criteria. In accordance with the terms of the 2007 Loan Agreement, the Company issued to each purchaser of a New Note a warrant to purchase the number of shares of Common Stock into which such purchaser's New Note is initially convertible. Each New Warrant is immediately exercisable, at an exercise price, subject to certain adjustments, of $0.78 per share of Common Stock, and expires on March 1, 2012. The New Warrants are exercisable for an aggregate of roughly 5.4 million shares of Common Stock. Warrants having the same terms as the New Warrants, exercisable for an aggregate of roughly 9.1 million shares of Common Stock, were issued in 2007 in conjunction with the issuance of the Existing 2007 Notes. The proceeds from the sale of the New Notes were used to retire by repurchase all of the Company's 15% Subordinated Secured Convertible Notes, issued pursuant to its Note Purchase Agreement dated December 1, 2008. This purchase, by agreement with the holders of the 2008 Notes, was effected at a 15% discount for all outstanding sums owed, both principal and interest, and thus the Company expended roughly $2.2 million to retire the roughly $2.3 million of original principal amount of 2008 Notes, and roughly $263,000 of accrued but unpaid interest thereon. Warrants to purchase roughly 12.6 million shares of Common Stock, issued in conjunction with the original sale of the 2008 Notes, remain outstanding. These warrants, subject to certain adjustments, permit holders to purchase shares at a price of $0.65 per share and expire December 1, 2014. Proceeds from the sale of the New Notes were also used to retire, at par, loans made to the Company in 2009, including advances supporting the Company's recent working capital needs made in anticipation of this financing, having an aggregate principal amount of roughly $1.3 million, and accrued but unpaid interest of roughly $21,000. The remaining proceeds from the sale of the New Notes will be used for general working capital purposes. Q1 and Q2 Financial Reports On August 18, 2009, the Company filed with the Securities and Exchange Commission its financial reports on Form 10-Q: -- for the quarterly period ended June 30, 2009 See http://ResearchArchives.com/t/s?4441 -- for the quarterly period ended March 31, 2009 See http://ResearchArchives.com/t/s?4442 The Company posted wider net loss of $1,386,000 for the three months ended June 30, 2009, from a net loss of $1,204,000 for the same quarter a year ago. The Company posted a net loss of $2,699,000 for the six months ended June 30, 2009, from a net loss of $1,987,000 for the same period a year ago. The Company posted a net loss of $1,313,000 for the three months ended March 31, 2009, from a net loss of $783,000 for the same period a year ago. As of June 30, 2009, the Company had $870,000 in total assets and $10,866,000 in total liabilities, resulting in total capital deficit of $9,996,000. As of June 30, 2009, the Company's current liabilities exceeded current assets by roughly $5,400,000 and it had a capital deficit due principally to its recurring losses from operations. As of June 30, 2009, the Company was past due on payments due under its Convertible Notes payable in the amount of roughly $635,000 and under a 90-day 17% convertible, unsecured note payable in the amount of $50,000. In December 2008, the Company issued $2,300,000 in 2008 Convertible Notes. Of this amount, $1,300,000 represents existing loans that were converted into 2008 Convertible Notes. During 2009 the Company has issued additional short term notes to fund operations. Bankruptcy Warning The Company said if sufficient capital cannot be raised at some point in the third quarter of 2009, it might be required to enter into unfavorable agreements or, if that is not possible, be unable to continue operations, and to the extent practicable, liquidate or file for bankruptcy protection. The Company said this effort is on-going. These factors raise substantial doubts about the Company's ability to continue as a going concern, it said. The Company also noted if funds are not obtained, it will have to curtail its operations and attempt to operate by only pursuing activities for which it has external financial support, such as under the Konica Minolta Optical, Inc. development agreement and additional National Cancer Institute or other grant funding. However, there can be no assurance that such external financial support will be sufficient to maintain even limited operations or that the Company will be able to raise additional funds on acceptable terms, or at all. The Company has been seeking a new strategic partner and on April 30, 2009, signed a one-year exclusive negotiation and development agreement of optimization of its microporation system for manufacturing, regulatory approval, commercialization and clinical utility with KMOT. The exclusive negotiation agreement will expire on April 29, 2010; however, it can be renewed for an additional year by consent between KMOT and the Company. The Company paid a $500,000 fee in this regard, with the balance of $250,000 payable by November 1, 2009. This agreement resulted in significant revenue for the Company a portion of which is deferred over the life of the contract. Currently, the Company is working on extending the agreement for an additional year and considering a long-term agreement with KMOT. Guided Therapeutics, Inc., is a medical technology company focused on developing innovative medical devices that have the potential to improve health care. The Company is currently focused on completing the development of cervical cancer detection device. HAIGHTS CROSS: Moody's Changes Default Rating to 'Ca/LD' -------------------------------------------------------- Moody's Investors Service has changed Haights Cross Communications Inc. Probability of Default rating to Ca/LD, from Ca, following expiration of the 30-day grace period under the indenture governing the company's senior debt, the August interest payment for which was not made in accordance with the scheduled terms thereunder. Details of the rating action are: Rating changed: Haights Cross Communications, Inc.: * Probability of Default rating -- to Ca/LD from Ca Ratings unchanged: Haights Cross Communications, Inc.: * Corporate Family rating - Ca * 12.50% Senior Discount Notes -- C, LGD5, 86% Haights Cross Operating Company: * 11.75% Senior Unsecured Notes -- Ca, LGD3, 48% Moody's does not rate Haights Cross' $108 million senior secured term loan. The rating outlook remains negative given Moody's expectation that the limited default will likely transition into a full-scale default and subsequent restructuring of all of the company's debt obligations, although effectively only the Probability of Default Rating is subject to further downward revision in such a scenario as the Corporate Family Rating and specific senior unsecured debt instrument ratings had already been set to ultimate expected loss levels when the last rating action was taken. Moody's believes that the effective default of the 12.50% senior discount notes also triggers a cross default provision under the company's 11.75% senior note indenture. Accordingly, both of the company's rated senior notes are currently deemed to be in default, even if a default event has not yet been declared by the company and/or an acceleration of the debt has not yet been undertaken by investors. Haights Cross' Ca Corporate Family rating continues to reflect the company's weak liquidity profile, its heavy debt burden, persistently high default risk, and weak market conditions in the K-12 education and library markets. Moody's last rating action occurred on June 12, 2009 when Haights Cross' CFR and PDR were each lowered to Ca from Caa3. Haights Cross' ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and the competitive position of the company versus others in its industry, ii) the capital structure and the financial risk of the company, iii) the projected financial and operating performance of the company over the near-to-intermediate term, and iv) management's track record and tolerance of risk. These attributes were compared against other issuers both within and outside of Haights Cross' core industry and Haights Cross' ratings are believed to be comparable to those of other issuers of similar credit risk. Headquartered in White Plains, New York Haights Cross develops and publishes print and audio products for the K-12 education and library markets. The company recorded approximately $158 million in revenue for the twelve month period ended June 30, 2009. HAMPSHIRE GROUP: Jeffrey Meier Retires as VP of Global Sourcing --------------------------------------------------------------- Jeffrey Meier, Hampshire Group Limited's Senior Vice President of Global Sourcing, has retired effective September 1, 2009. In lieu of replacing Mr. Meier, his responsibilities will be divided among the senior management team. As reported by the Troubled Company Reporter on August 12, 2009, Hampshire Group completed an amendment and restatement of its $125.0 million Amended and Restated Credit Agreement and Guaranty with HSBC Bank USA, National Association, other financial institutions as bank parties, and HSBC, as Letter of Credit Issuing Bank and as Agent for the Banks. Under the amended terms and conditions, the Credit Facility that was set to expire in April 2013 was reduced to $48 million and now expires in June 2011. The reduction in size reflects the Company's current business needs and the success it has had in convincing its vendors to accept open terms rather than requiring letters of credit. The Amended and Restated Credit Agreement included certain financial and other covenants, including a covenant that Hampshire maintain a fixed charge ratio of consolidated earnings before interest, taxes, depreciation, and amortization of not less than 1.25 to 1.0 of certain fixed charges on the last day of each fiscal quarter on a rolling four quarter basis. Based on its 2008 results, Hampshire determined on March 13, 2009, it was not in compliance with the Credit Facility's consolidated fixed charge ratio covenant and thus could not borrow or issue letters of credit under the Credit Facility. On August 7, 2009, Hampshire amended the Credit Facility with the Banks to reduce and convert the facility to a $48.0 million asset based revolving credit facility including trade letters of credit with a $10.0 million sub-limit for standby letters of credit. The reduction in size reflects Hampshire's current business needs and the success Hampshire has had in convincing vendors to accept open terms rather than requiring letters of credit. The financial covenants have been adjusted to provide Hampshire with greater flexibility in the operation of its businesses. Hampshire believes fees and interest rates under the facility increased to current market rates, although much of this increase will be offset by the reduction in the size of the facility. The Amended Facility expires on June 30, 2011, and is secured by substantially all assets of the Company. Borrowings under the Amended Facility are limited by the lesser of $48.0 million or a formula which considers cash, accounts receivable and inventory. Interest rates under the Amended Facility vary with the prime rate or LIBOR. The Amended Facility includes certain covenants which include minimum earnings before interest, taxes, depreciation and amortization (net of certain charges), maximum capital expenditures, minimum availability, minimum liquidity, letters of credit tied to booked orders, and limitations on when direct debt is permitted. Hampshire expects to be in compliance with the covenants for the next 12 months, though there can be no assurance as compliance is dependent on future operating performance. The cash collateral and other requirements of the letter agreements were fully rescinded and replaced by terms and conditions in the Amended Facility. The Amended Facility has other customary provisions for periodic reporting, monitoring, and fees. Restructuring and Cost Reduction Plans During July 2009, the Company initiated the final phase of its 2009 restructuring plan, which included executive level organizational changes and the consolidation of its Asian operations. As a result of this consolidation, the Company will reduce its global workforce by an additional 29%, bringing total 2009 personnel reductions to approximately 50% of first quarter 2009 staffing levels. About Hampshire Group Hampshire Group, Limited (Pink Sheets: HAMP.PK) is a U.S. provider of women's and men's sweaters, wovens and knits, and a designer and marketer of branded apparel. Its customers include leading retailers such as JC Penney, Kohl's, Macy's, Belk's and Dillard's, for whom it provides trend-right, branded apparel. Hampshire's owned brands include Spring+Mercer(R), its "better" apparel line, Designers Originals(R), Hampshire's first brand and still a top- seller in department stores, as well as Mercer Street Studio(R), Requirements(R), and RQT(R). Hampshire also licenses the Geoffrey Beene(R) and Dockers(R) labels for men's sweaters, both of which are market leaders in their categories, and licenses JOE Joseph Abboud(R) for men's tops and bottoms and Alexander Julian Colours(R) for men's tops. HRH CONSTRUCTION LLC: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: HRH Construction LLC 50 Main Street White Plains, NY 10601 Case No.: 09-23665 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. ------ -------- HRH Construction of New Jersey, LLC 09-23666 Chapter 11 Petition Date: September 6, 2009 Court: United States Bankruptcy Court Southern District of New York (White Plains) Debtor's Counsel: Frederick E. Schmidt, Esq. Herrick, Feinstein LLP 2 Park Avenue New York, NY 10016 Tel: (212) 592-5941 Fax: (212) 592-1500 Email: eschmidt@herrick.com Hanh V. Huynh, Esq. Herrick, Feinstein LLP 2 Park Avenue New York, NY 10016 Tel: (212) 592-1482 Fax: (212) 592-1500 Email: hhuynh@herrick.com Joshua Joseph Angel, Esq. Herrick, Feinstein LLP 2 Park Avenue New York, NY 10016 Tel: (212) 592-5912 Fax: (212) 592-1500 Email: jangel@herrick.com Seth F. Kornbluth, Esq. Herrick, Feinstein LLP 2 Park Avenue New York, NY 10016 Tel: (212) 592-5988 Fax: (212) 592-1500 Email: skornbluth@herrick.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $50,000,001 to $100,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. IA GLOBAL: March 31 Balance Sheet Upside-Down by $6.27 Million -------------------------------------------------------------- IA Global, Inc.'s balance sheet at March 31, 2009, showed total assets of $24.86 million and total liabilities of $31.13 million, resulting in a stockholders' deficit of $6.27 million. For the year ended March 31, 2009, the Company posted a net loss of $20.24 million compared with a net loss of $7.05 million in 2008. The Company related that on July 17, 2009, ArqueMax Ventures, LLC, an entity controlled by Michael Ning, a shareholder and the chairman of Taicom, notified the Company that it was in default of the June 8, 2009 Services Agreement and as a result did not fund the $60,000 due June 30, 2009, July 15, 2009, and July 31, 2009. However, AMV was late in funding as required by the June 8, 2009 agreement. The Company said that AMV could claim ownership of the Company's Taicom shares which would result in a loss on equity investment of $3.31 million. Based on the $120,000 in funding under this agreement, the Company may be required to issue 4,000,000 shares. The parties are negotiating over the agreement. Going Concern Doubt On Sept. 2, 2009, Sherb & Co., LLP in New York City expressed substantial doubt about IA Global, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for fiscal years ended March 31, 2009, and 2008. The auditor noted that the Company incurred significant operating losses, and has a working capital deficit as of March 31, 2009. In addition, in connection with loans that the Company's fully owned subsidiary, Global Hotline, Inc., entered into, the equity shares of this subsidiary currently held by the lender of these loans is being challenged by IA Global, Inc. If these shares should not be successfully recovered, the Company's claim of ownership in this subsidiary may be limited. A full-text copy of thne Company's Form 10-K is available for free at http://ResearchArchives.com/t/s?442a IA Global, Inc. (AMEX:IAO) is a business process outsourcing and financial services company targeting the business to business and business to consumer markets in the Asia Region, the United States and Australia. The Company is seeking to expand its investments in the BPO, B2B and financial services sectors. In Japan, IA Global is 100% owner of Global Hotline, Inc., a BPO company, operating several call centers providing primarily outbound telemarketing services for telecommunications and insurance products. In the Philippines, IA Global is the 100% owner of Global Hotline Philippines Inc., a BPO company providing inbound and outbound telemarketing services, and collocation facilities to a variety of industries. In the Asia region, the Company has equity investments of 20.25% in Slate Consulting Co Ltd (Slate), 36% in Australian Secured Financial Limited and 16% in Taicom Securities Co. Ltd. IMPERIAL INDUSTRIES: Restates June 30, 2009 Balance Sheet --------------------------------------------------------- Imperial Industries, Inc., on August 31, 2009, concluded that the unaudited consolidated balance sheet as of June 30, 2009, as contained in the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, and the amendment No. 1 to Form 10-Q for the quarterly period ended June 30, 2009, should no longer be relied upon because of errors in the financial statements. The unaudited consolidated balance sheet as of June 30, 2009 contained in the Original Form 10-Q had classified certain of the Company's liabilities as long-term liabilities related to assets held for sale which should have been classified as current liabilities related to assets held for sale. In addition, the note payable line of credit balance was classified as a separate component of current liabilities and should have been classified within current liabilities related to assets held for sale. The consolidated balance sheet as of December 31, 2008, was also reclassified to conform to the presentation of the Note payable- line of credit balance within liabilities related to assets held for sale in the unaudited consolidated balance sheet as of June 30, 2009. The Company filed Amendment No. 2 to Form 10-Q reflecting the reclassification adjustments, modifying Item 4-Controls and Procedures, revising the signature page, re-filing the certifications, updating Note 23 and inclusion of a second amendment to the forbearance agreement dated August 28, 2009. As of June 30, 2009, as restated, the Company had $13,782,000 in total assets, including $9,185,000 in total current assets; against $10,777,000 in total liabilities, including $9,637,000 in total current liabilities, resulting in $3,005,000 in stockholders' equity. A full-text copy of Amendment No. 2 is available at no charge at: http://ResearchArchives.com/t/s?442d The Company's audit committee discussed these matters with the Company's independent accountant. Effective August 28, 2009, Imperial Industries as guarantor; and its principal subsidiaries Premix-Marbletite Manufacturing Co., DFH, Inc., and Just-Rite Supply, Inc.; Michael Phelan, as assignee for Assignment for the Benefit of the Creditors of Just-Rite; and Wachovia Bank, N.A., executed a Second Amendment to Forbearance Agreement, an amendment to the Company's Consolidating, Amended and Restated Financing Agreement dated as of January 28, 2000. The Lender agreed to extend the Line of Credit from August 31 to September 30, 2009. On July 9, 2009, and thereafter, the Lender orally advised the Company and the Assignee that they were not in compliance with the borrowing formulas and certain reporting requirements under the Forbearance Agreement and continued funding the Line of Credit in accordance with the terms of the Forbearance Agreement. The Lender thereafter required the Company to enter into the First Amendment to the Forbearance Amendment as of August 7, 2009, which was further amended by Second Amendment. The Company has said there can be no assurance it will be in compliance with the terms of its amended credit facility upon termination of the Forbearance Agreement, or obtain continued forbearance and funding from the Lender on terms acceptable to the Company, or that such financing will be available at all at the end of the Forbearance period. Pompano Beach, Florida-based Imperial Industries, Inc. -- http://www.imperialindustries.com/-- a building products company, sells products throughout the Southeastern United States with facilities in the State of Florida. The Company is engaged in the manufacturing and distribution of stucco, plaster and roofing products to building materials dealers, contractors and others through its subsidiary, Premix-Marbletite Manufacturing Co. INTEGRAL VISION: Marxe and Greenhouse Disclose 18% Equity Stake --------------------------------------------------------------- Austin W. Marxe and David M. Greenhouse disclosed that they beneficially own a total of 1,048,449 shares of Integral Vision Inc. Common Stock and 5,450,000 Warrants to purchase Common Stock. Messrs. Marxe and Greenhouse beneficially own 18.0% of the shares outstanding. Specifically, they share sole voting and investment power over: * 738,608 shares of Common Stock and 1,031,081 Warrants owned by Special Situations Cayman Fund, L.P., * 0 shares of Common Stock and 2,209,459 Warrants owned by Special Situations Private Equity Fund, L.P., * 0 shares of Common Stock and 309,325 Warrants owned by Special Situations Technology Fund, L.P., * 0 shares of Common Stock and 1,900,135 Warrants owned by Special Situations Technology Fund II, L.P. and * 309,841 shares of Common Stock are owned by Special Situations Fund III QP, L.P. Cayman owns 5.6% of the outstanding shares, SSPE owns 6.7% of the outstanding shares, Technology owns 1.0% of the outstanding shares, Tech 2 owns 5.8% of the outstanding shares and SSFQP owns 1.0% of the outstanding shares. Messrs. Marxe and Greenhouse are the controlling principals of AWM Investment Company, Inc., the general partner of and investment adviser to Special Situations Cayman Fund, L.P. AWM also serves as the general partner of MGP Advisers Limited Partnership, the general partner of Special Situations Fund III QP, L.P. Messrs. Marxe and Greenhouse are also members of MG Advisers L.L.C., the general partner of Special Situations Private Equity Fund, L.P., and members of SST Advisers, L.L.C., the general partner of Special Situations Technology Fund, L.P., and the Special Situations Technology Fund II, L.P. AWM serves as the investment adviser to SSFQP, SSPE, Tech, and Tech II. Integral Vision, Inc., develops, manufactures and markets flat panel display inspection systems to ensure product quality in the display manufacturing process. INTEGRAL VISION: Needs Funds in Q3 2009 to Meet Note Payments ------------------------------------------------------------- "We are currently working with a number of large customers who are using our technologies to evaluate their microdisplay production or are evaluating our technology for the inspection of LCD displays and components," Integral Vision, Inc., said in a regulatory filing with the Securities and Exchange Commission. "We expect that additional sales orders will be placed by these customers throughout 2009 and into 2010, provided that markets for these products continue to grow and the customers continue to have interest in our technology-assisted inspection systems. Ultimately, our ability to continue as a going concern will be dependent on these large companies getting their emerging display technology products into high volume production and placing sales orders with us for inspection products to support that production. However, there can be no assurance that we will be successful in securing sales orders sufficient to continue operating as a going concern," the Company said. "From November 2006 through June 30, 2009, we have used $6,545,666 of Class 2 and Class 3 Notes to fund operations. $4,050,666 of these are Class 3 Notes which mature on July 1, 2010. The remaining $2,495,112 are Class 2 Notes of which $857,500 were scheduled to mature on July 1, 2009; $100,000 were scheduled to mature on July 3, 2009; $718,500 mature on October 1, 2009, and $819,112 mature on December 31, 2009. We will need to raise additional funds in the third quarter of 2009 to pay these notes as they mature or negotiate the extension of their due dates," the Company said. "Taking into account existing and anticipated orders, we expect that we may need to raise an additional $600,000 to fund operations through the third quarter of 2009. If the anticipated orders do not materialize as expected, we will need to raise additional capital in the fourth quarter and early in 2010 to fund operations through the second quarter of 2010." The Company posted a net loss of $755,000 for the three months ended June 30, 2009, from a net loss of $649,000 for the same period a year ago. The Company posted a net loss of $1,282,000 for the six months ended June 30, 2009, from a net loss of $1,495,000 for the same period a year ago. As of June 30, 2009, the Company had $920,000 in total assets and $8,017,000 in total liabilities, resulting in $7,097,000 in stockholders' deficit. As of December 31, 2008, the Company had $1,037,000 in total assets and $7,121,000 in total liabilities, resulting in $6,084,000 in stockholders' deficit. The Company incurred losses in the first six months of 2009 and 2008 of $1,282,000 and $1,495,000 respectively. Additionally, it incurred losses from operations in the years of 2008 and 2007 of $11.0 million and $3.0 million respectively. The continuing losses raise substantial doubt about the Company's ability to continue operating as a going concern, it said. 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?4444 The Company's independent auditors included a "going concern" uncertainty in their audit report on the Company's audited financial statements for the years ended December 31, 2008, and 2007. Integral Vision, Inc., develops, manufactures and markets flat panel display inspection systems to ensure product quality in the display manufacturing process. JAMES JOHN VLAHOS: Case Summary & 14 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: James John Vlahos 50 Platt Avene Sausalito, CA 94965 Bankruptcy Case No.: 09-12890 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtor's Counsel: Mark J. Romeo, Esq. Law Offices of Mark J. Romeo 130 Sutter St. 7th Fl. San Francisco, CA 94104 Tel: (415) 495-2152 Email: romeolaw@msn.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 14 largest unsecured creditors is available for free at: http://bankrupt.com/misc/canb09-12890.pdf The petition was signed by Mr. Vlahos. JAMES PENTA: Voluntary Chapter 11 Case Summary ---------------------------------------------- Joint Debtors: James A. Penta, Sr. Gloria B. Penta 39 Pleasant View Ave. Greenville, RI 02828 Bankruptcy Case No.: 09-13481 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court District of Rhode Island (Providence) Judge: Arthur N. Votolato Debtors' Counsel: Russell D. Raskin, Esq. Raskin & Berman 116 East Manning Street Providence, RI 02906 Tel: (401) 421-1363 Email: mail@raskinberman.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtors did not file a list of their 20 largest unsecured creditors when they filed their petition. The petition was signed by the Joint Debtors. JOSEPH ROSILEZ: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Joint Debtors: Joseph Paul Rosilez Whitney Leigh Rosilez 4540 East Highway 46 Paso Robles, CA 93446 Bankruptcy Case No.: 09-13612 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Central District of California (Santa Barbara) Judge: Robin Riblet Debtors' Counsel: Franklyn S. Michaelson, Esq. 7 W Figueroa Street 2nd Fl Santa Barbara, CA 93101-3191 Tel: (805) 965-1011 Email: kim@msmlaw.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 $5,267,055, and total debts of $3,782,066. 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/cacb09-13612.pdf The petition was signed by the Joint Debtors. JOSHUA HEDLUND: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Joshua L. Hedlund 102 Hillcrest Terrace Santa Cruz, CA 95060 Bankruptcy Case No.: 09-57539 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Arthur S. Weissbrodt Debtor's Counsel: Judson T. Farley, Esq. Law Offices of Judson T. Farley 830 Bay Ave. #B Capitola, CA 95010-2173 Tel: (831) 476-1766 Email: judsonfarley@sbcglobal.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of Mr. Hedlund's petition, including a list of his 5 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/canb09-57539.pdf The petition was signed by Mr. Hedlund. KB TOYS: Toys "R" Us Acquires Brand for $2.1 Million ---------------------------------------------------- Toys "R" Us said that it acquired at a bankruptcy auction KB Toys Inc.'s trademarks and intellectual property, including the Web site KBToys.com, for $2.1 million, James Covert at New York Post reports. According to NY Post, Toys "R" Us hasn't yet decided what to do with KB Toys. Citing Needham & Co. analyst Sean McGowan, NY Post relates that noting that KB Toys had run its Web site partly as a venue for closeouts, Toys "R" Us might do the same. Headquartered in Pittsfield, Massachusetts, KB Toys, Inc. -- http://www.kbtoys.com/-- operates a chain of retail toy stores. On Jan. 14, 2004, the Debtor and 69 of its affiliates filed for protection under Chapter 11 of the Bankruptcy Code, which were administratively consolidated under Case No. 04-10120. Two of the 200 bankruptcy cases remain open, KB Toys Inc. and KB Toy of Massachusetts Inc. In connection with the emergence of KB Toys from bankruptcy in August 2005, and the subsequent organizational restructuring, the assets and operations of many of these prior debtors were transferred among then existing debtor entities and consolidated with KB Toys Group. Furthermore, most of the entities involved were either dissolved or were merged into surviving entities, and several of them changed their names. The company, together with eight of its affiliates, again filed for Chapter 11 on December 11, 2008 (Bankr. D. Del. Lead Case No. 08-13269). Joel A. Waite, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Wilmer Cutler Pickering Hale and Dorr LLP as their co-counsel, FTI Consulting Inc. as financial and restructuring advisor, and Epiq Bankruptcy Solutions LLC as claims and noticing agent. According to Bloomberg, KB listed assets of $241 million against debt totaling $362 million in its Chapter 11 petition filed on December 11. The debts include $143 million in unsecured claims; and $200 million in secured claims, including $95.1 million owed to first-lien creditors where General Electric Capital Corp. serves as agent; and $95 million owed to second-lien creditors. As reported by the Troubled Company Reporter on December 22, 2008, the Hon. Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware allowed KB Toys Inc. to start going-out-of-business sales. KENNEDY LAW: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------- Kennedy Law Group has filed for Chapter 11 bankruptcy protection, listing more than $1 million in debt and assets that are less than half that amount. According to court documents, Kennedy Law's creditors include: -- Idearc, -- Wachovia Bank, -- Bank of America, and -- three phone book publishers. Court documents say that Kennedy Law owes Idearc more than $1 million and Wachovia almost $400,000. Kennedy Law Group is a local TV legal expert's law firm at 5100 W. Kennedy Boulevard. The firm has four lawyers, including president Thomas Kennedy. Lawyers for the Kennedy group practice in the areas of personal injury, malpractice, foreclosure, driving under the influence, and criminal defense. KK OF SOUTH FLORIDA: In Default of Certain Credit Agreements ------------------------------------------------------------ Krispy Kreme Doughnuts Inc. disclosed in a regulatory filing that Krispy Kreme of South Florida, LLC, incurred defaults with respect to certain credit agreements with its lenders, including agreements related to KKSF indebtedness guaranteed, in part, by Krispy Kreme Doughnuts. In the first quarter of fiscal 2010, KKSF completed a transaction which resulted in Krispy Kreme Doughnuts's release from a lease guarantee for which its potential obligation was roughly $5.5 million, but which increased its guarantee of KKSF debt obligations by roughly $1.0 million. Krispy Kreme Doughnuts said current liabilities at August 2, 2009, and February 1, 2009, include accruals for potential payments under loan guarantees of roughly $2.7 million related to KKSF. Krispy Kreme Doughnuts has a 35.3% interest in Krispy Kreme of South Florida, LLC. KREMEWORKS LLC: Seeks Covenant Waiver From Lender ------------------------------------------------- Krispy Kreme Doughnuts Inc. disclosed in a regulatory filing that Kremeworks, LLC's results of operations and operating cash flow have declined. Although Kremeworks has paid all interest, fees and scheduled amortization of principal due under its bank indebtedness, it has failed to comply with certain financial covenants related to such indebtedness, a portion of which matured, by its terms, in January 2009. Krispy Kreme Doughnuts disclosed the aggregate amount of the indebtedness was roughly $7.9 million as of August 2, 2009, of which roughly $1.6 million is guaranteed by the Company. Krispy Kreme Doughnuts said Kremeworks has requested that the lender waive the loan defaults resulting from the covenant violations and refinance the maturing indebtedness. In the event the lender is unwilling to do so and declares the entire indebtedness immediately due and payable, the Company could be required to perform under its guarantee. Krispy Kreme Doughnuts said Kremeworks could have insufficient cash flows from its business to service the indebtedness even if it is refinanced, which might require capital contributions to Kremeworks by the Company and the majority owner of Kremeworks -- which has guarantees of the Kremeworks indebtedness roughly proportionate to those of the Company -- for Kremeworks to comply with the terms of the any new loan agreement. Krispy Kreme Doughnuts has a 25% interest in Kremeworks. KRISPY KREME: KKSF in Default of Certain Credit Agreements ---------------------------------------------------------- Krispy Kreme Doughnuts Inc. disclosed in a regulatory filing that Krispy Kreme of South Florida, LLC, incurred defaults with respect to certain credit agreements with its lenders, including agreements related to KKSF indebtedness guaranteed, in part, by Krispy Kreme Doughnuts. In the first quarter of fiscal 2010, KKSF completed a transaction which resulted in Krispy Kreme Doughnuts's release from a lease guarantee for which its potential obligation was roughly $5.5 million, but which increased its guarantee of KKSF debt obligations by roughly $1.0 million. Krispy Kreme Doughnuts said current liabilities at August 2, 2009, and February 1, 2009, include accruals for potential payments under loan guarantees of roughly $2.7 million related to KKSF. Krispy Kreme Doughnuts has a 35.3% interest in Krispy Kreme of South Florida, LLC. KRISPY KREME: Kremeworks Seeks Covenant Waiver From Lender ---------------------------------------------------------- Krispy Kreme Doughnuts Inc. disclosed in a regulatory filing that Kremeworks, LLC's results of operations and operating cash flow have declined. Although Kremeworks has paid all interest, fees and scheduled amortization of principal due under its bank indebtedness, it has failed to comply with certain financial covenants related to such indebtedness, a portion of which matured, by its terms, in January 2009. Krispy Kreme Doughnuts disclosed the aggregate amount of the indebtedness was roughly $7.9 million as of August 2, 2009, of which roughly $1.6 million is guaranteed by the Company. Krispy Kreme Doughnuts said Kremeworks has requested that the lender waive the loan defaults resulting from the covenant violations and refinance the maturing indebtedness. In the event the lender is unwilling to do so and declares the entire indebtedness immediately due and payable, the Company could be required to perform under its guarantee. Krispy Kreme Doughnuts said Kremeworks could have insufficient cash flows from its business to service the indebtedness even if it is refinanced, which might require capital contributions to Kremeworks by the Company and the majority owner of Kremeworks -- which has guarantees of the Kremeworks indebtedness roughly proportionate to those of the Company -- for Kremeworks to comply with the terms of the any new loan agreement. Krispy Kreme Doughnuts has a 25% interest in Kremeworks. KRISPY KREME: Posts $157,000 Net Loss in Q2 of Fiscal 2010 ---------------------------------------------------------- Krispy Kreme Doughnuts, Inc., reported financial results for the second quarter of fiscal 2010, ended August 2, 2009. Second Quarter Highlights: * Operating income for the second quarter was $2.9 million compared to an operating loss of $1.0 million in the second quarter last year * The Company posted a net loss of $157,000 in the second quarter (nil per share) compared to a net loss of $1.9 million ($0.03 per share) in the second quarter last year * Same store sales at Company-owned stores rose 5.9% year- over-year in the second quarter, compared to a gain of 2.1% in the first quarter this year and a decline of 4.1% in the second quarter last year As of August 2, 2009, the Company had total assets of $175.4 million and total current liabilities of $37.9 million, long-term debt, less current maturities, of $53.2 million, deferred income taxes of $106,000 and other long-term obligations of $22.2 million, resulting in shareholders' equity of $61.9 million. "Our operating results continued to improve year-over-year in the second quarter," commented Jim Morgan, the Company's President and Chief Executive Officer. "The warm summer months traditionally are a challenging time for our domestic Krispy Kreme shops, but we believe our improved results in the second quarter show that we can succeed in making our business more profitable year-round through continued implementation of our strategic initiatives." The Company's second quarter progress included these accomplishments: * Krispy Kreme opened its third new Company small retail concept shop on July 29, in the Raleigh, North Carolina market; * Krispy Kreme signed letters of intent for three leases in the Raleigh, North Carolina market, bringing its total new small retail concept commitments to eight; * Three domestic franchisees opened a total of four small retail concept shops in the quarter in Texas, Arizona and New York; * International franchisees continued to expand, with a net increase of 11 stores in the quarter; * The Kool Kreme(R) soft serve test was expanded into five additional Company shops, bringing the total number of Company test locations to 10; all Krispy Kreme shops in both the Piedmont Triad, North Carolina and Nashville, Tennessee markets offer Kool Kreme, and its broadcast advertising in these markets includes messaging about Kool Kreme; * Krispy Kreme's use of broadcast media has expanded beyond the Piedmont Triad, North Carolina and Nashville, Tennessee markets into Huntsville, Alabama and Columbia, South Carolina; * Krispy Kreme expanded the elements of its marketing mix beyond broadcast and print media into social and interactive media, including Facebook and Twitter; Krispy Kreme also signed a new sponsorship agreement with the NFL Carolina Panthers; and * Krispy Kreme introduced new longer shelf-life, individually wrapped snack products, including glazed cherry and apple pies and chocolate cupcakes, in its off-premises distribution channels in selected markets. "While there is still much work to be done to achieve sustained revenue growth and our long-term goals, we are pleased to have improved our financial performance in the second quarter and first half of fiscal 2010 compared to the same periods last year," Mr. Morgan continued. "These results reflect the hard work and dedication of our team members and franchisees. We continue to believe we have the right strategies, and that the results from their implementation will be more fully reflected in our financial results in the quarters and years ahead." The Company has filed its Quarterly Report on Form 10-Q, which includes interim financial information as well as management's discussion and analysis of the Company's financial condition and results of operations. A full-text copy of the Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?4437 About Krispy Kreme Based in Winston-Salem, North Carolina, Krispy Kreme Doughnuts Inc. (NYSE: KKD) -- http://www.KrispyKreme.com/-- is a retailer and wholesaler of doughnuts. The company's principal business, which began in 1937, is owning and franchising Krispy Kreme doughnut stores where over 20 varieties of doughnuts are made, sold and distributed and where a broad array of coffees and other beverages are offered. * * * As reported in the Troubled Company Reporter on April 17, 2009, Krispy Kreme Doughnuts, Inc., said it has reached an agreement with lenders on amendments to its credit facilities that should enable the Company to remain in compliance with the agreements and continue to provide backup sources of liquidity. KRISPY KREME: Says Mexico Franchise Affected by Country's Woes -------------------------------------------------------------- Krispy Kreme Doughnuts Inc. disclosed in a regulatory filing that Krispy Kreme Mexico, S. de R.L. de C.V.'s operating results have been adversely affected by economic weakness in that country. The franchisee also has been adversely affected by a significant decline in the value of Mexico's currency relative to the U.S. dollar, which has made the cost of goods imported from the U.S. more expensive, and which has increased the amount of cash required to service the portion of the franchisee's debt that is denominated in U.S. dollars. Krispy Kreme Doughnuts said as of August 2, 2009, management concluded that the decline in the value of the investment was other than temporary and, accordingly, the Company recorded a charge of roughly $500,000 in the quarter then ended to reduce the carrying value of the investment in KK Mexico to its estimated fair value of $700,000. In addition, during the second quarter, Krispy Kreme Doughnuts increased its bad debt reserve related to KK Mexico by roughly $525,000, of which roughly $145,000 and $380,000 is included in KK Supply Chain and International Franchise direct operating expenses, respectively; such reserve at August 2, 2009 is equal to the Company's aggregate receivables from this franchisee. KK Mexico posted a net loss of $630,000 for the three months ended August 2, 2009, from a net loss of $85,000 for the three months ended August 3, 2008. KK Mexico posted a net loss of $119,000 for the six months ended August 2, 2009, from a net loss of $265,000 for the six months ended August 3, 2008. KK Mexico recorded unaudited revenues of $2.756 million for the three months ended August 2, 2009, from revenues of $4.514 million for the three months ended August 3, 2008. KK Mexico recorded unaudited revenues of $5.739 million for the six months ended August 2, 2009, from revenues of $8.708 million for the six months ended August 3, 2008. KK Mexico posted an operating loss of $623,000 for the three months ended August 2, 2009, from an operating loss of $33,000 for the three months ended August 3, 2008. KK Mexico posted an operating loss of $83,000 for the six months ended August 2, 2009, from an operating loss of $146,000 for the six months ended August 3, 2008. Krispy Kreme Doughnuts has a 30% interest in Krispy Kreme Mexico, S. de R.L. de C.V. KRISPY KREME MEXICO: Operating Results Affected by Country's Woes ----------------------------------------------------------------- Krispy Kreme Doughnuts Inc. disclosed in a regulatory filing that Krispy Kreme Mexico, S. de R.L. de C.V.'s operating results have been adversely affected by economic weakness in that country. The franchisee also has been adversely affected by a significant decline in the value of Mexico's currency relative to the U.S. dollar, which has made the cost of goods imported from the U.S. more expensive, and which has increased the amount of cash required to service the portion of the franchisee's debt that is denominated in U.S. dollars. Krispy Kreme Doughnuts said as of August 2, 2009, management concluded that the decline in the value of the investment was other than temporary and, accordingly, the Company recorded a charge of roughly $500,000 in the quarter then ended to reduce the carrying value of the investment in KK Mexico to its estimated fair value of $700,000. In addition, during the second quarter, Krispy Kreme Doughnuts increased its bad debt reserve related to KK Mexico by roughly $525,000, of which roughly $145,000 and $380,000 is included in KK Supply Chain and International Franchise direct operating expenses, respectively; such reserve at August 2, 2009 is equal to the Company's aggregate receivables from this franchisee. KK Mexico posted a net loss of $630,000 for the three months ended August 2, 2009, from a net loss of $85,000 for the three months ended August 3, 2008. KK Mexico posted a net loss of $119,000 for the six months ended August 2, 2009, from a net loss of $265,000 for the six months ended August 3, 2008. KK Mexico recorded unaudited revenues of $2.756 million for the three months ended August 2, 2009, from revenues of $4.514 million for the three months ended August 3, 2008. KK Mexico recorded unaudited revenues of $5.739 million for the six months ended August 2, 2009, from revenues of $8.708 million for the six months ended August 3, 2008. KK Mexico posted an operating loss of $623,000 for the three months ended August 2, 2009, from an operating loss of $33,000 for the three months ended August 3, 2008. KK Mexico posted an operating loss of $83,000 for the six months ended August 2, 2009, from an operating loss of $146,000 for the six months ended August 3, 2008. Krispy Kreme Doughnuts has a 30% interest in Krispy Kreme Mexico, S. de R.L. de C.V. LANDAMERICA FIN'L: Employs Jenner & Block as Litigation Counsel --------------------------------------------------------------- LandAmerica Financial Group Inc. and its affiliates sought and obtained the Court's permission to employ Jenner & Block, LLP, as their special litigation counsel, effective as of July 13, 2009. Jenner will represent certain entities in connection with the analysis, investigation or pursuit of claims arising from the sale, promotion and distribution of Auction Rate Securities to the Debtors. Jenner's mandate is to investigate and analyze all potential claims against the Banks that are defendants to the ARS Litigation; prepare a report on the same, which report will be shared on a confidential basis with the Official Committee of Unsecured Creditors; ultimately bring all causes of action against the Bank Defendants, if any. The Debtors believe it is important for one qualified firm to commence lawsuits on their behalf, to avoid competing strategies and theories of the case that may inadvertently diminish the important asset of their estates. Moreover, Jenner has been charged to periodically consult with the Creditors' Committees in addition to the Debtors to keep the Committee apprised of the status of the actions and seek guidance on matters of strategy and any settlement opportunities that may arise. The Debtors will pay and reimburse Jenner's fees and out-of- pocket expenses in relation to the firm's engagement under their Chapter 11 cases. A portion of Jenner's requested compensation for professional services rendered will be based on the hours actually expended by each assigned lawyer, law clerk, paralegal and case assistant at their respective discounted hourly billing rate, with the total hourly fees capped at $2 million. The Hourly Fees charged by the Jenner professionals under its engagement with the Debtors reflect a reduction of 50% from the firm's normal and customary rates. Furthermore, the Debtors will pay Jenner additional amounts over the hourly fees and expenses based on these two options: * Under Option A, the Debtors propose to pay Jenner: (a) 15% of "net recovery" up to $100 million; plus (b) 10% of "net recovery" over $100 million up to $200 million; plus (c) 5% of "net recovery" over $200 million up to $500 million, plus; and (d) 2.5% of "net recovery" over $500 million. * Under Option B, the Debtors propose to pay 3 1/2 times the actual lodestar calculation. Jenner will be entitled to receive (i) the lesser of Option A or Option B in the event of a net recovery of $150 million or less, or (ii) the greater of Option A or Option B in the event of a net recovery exceeding $150 million. In the event a net recovery at or close to $150 million is obtained, the parties will negotiate in good faith to prevent either Jenner or the Debtors from receiving a windfall as a result of the recovery being above or below the $150 million threshold for determining whether Jenner will be entitled to receive the greater or lesser of Option A or Option B. In the event some or all of the ARS Litigation is settled before litigation is actually commenced as a result of a sale or auction or otherwise, and provided that the settlement was not achieved as a result, in whole or in substantial part, of Jenner's efforts, Jenner will be paid its standard Hourly Fees for work performed on the engagement in lieu of the foregoing compensation structure. The Court also approved the indemnification provision contained in the parties' Engagement Letter. The indemnification provision provides that Jenner will be indemnified for attorneys' fees and expenses incurred in defending claims arising out of Jenner's representation of the Debtors in the ARS Litigation, unless a Court order is entered, finding that Jenner acted fraudulently, negligently or is guilty of gross misconduct. Thomas C. Newkirk, Esq., a partner in Jenner & Block LLP, assures the Court that the members and associates of Jenner do not have any connection with the Debtors, their creditors or any other party-in-interest, or their attorneys, and neither Jenner, nor its members and associates, has any connection with the U.S. Trustee, or any key person employed in the office of the U.S. Trustee, or any Bankruptcy Judge currently serving on the United States Bankruptcy Court for the Eastern District of Virginia. Mr. Newkirk further assures the Court that his firm does not hold or represent an interest adverse to the Debtors' estates in respect of the matters on which Jenner is to be employed. Prior to entry of the Court's order, Millard Refrigerated Services, Inc., LUBExpress Land Company, Inc., LUBExpress Operating Company, and Lisa L. Dobson, Michael W. Dobson, Barbara W. Dobson and Ralph Dobson, informed the Court that they are in opposition to the Debtors' virtually identical application to employ Quinn Emanuel Urquhart & Hedges, LLP. Contingent fee counsel and related contingent fee arrangements usually arise in cases where the resources available to pay legal fees and expenses are severely constrained, where the issues are novel and difficult and where the chances of success are unclear, the Objectors note. "None of these facts exist here," said Benjamin G. Chew, Esq., at Patton Boggs LLP, in Washington, DC, on behalf of the Objectors. According to Mr. Chew, with plan confirmation being imminent and with the high likelihood that in liquidating Chapter 11s, the decision-making for estate recoveries will pass to a creditor trust, there is no reason for the decision on the engagement of Jenner to be made by the Debtors. Mr. Chew argued that this decision can be deferred until the creditor trust is in place and is then able to determine what is in the best interests of the creditor beneficiaries. About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Dion W. Hayes, Esq., and John H. Maddock III, Esq., at McGuireWoods LLP, are the Debtors' bankruptcy counsel. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: Govt Bar Date for Claims vs. LCS on Jan. 14 -------------------------------------------------------------- Rule 3003(c)(3) of the Federal Rules of Bankruptcy Procedure provides that the Court will fix the time within which proofs of claim must be filed in a Chapter 11 case pursuant to Section 501 of the Bankruptcy Code. Moreover, Rule 3003(c)(2) provides that any creditor who has a claim against any of the Debtors that arose prior to the Petition Date, and whose claim is not scheduled in the Debtors' schedules of assets and liabilities, schedules of executory contracts, and unexpired leases and statements of financial affairs or whose claim is listed on the Schedules as disputed, contingent, or unliquidated, must file a Proof of Claim. Section 502(b)(9) provides that governmental units will have a minimum of 180 days after the entry of the order for bankruptcy relief to file Proofs of Claim. Debtor LandAmerica Credit Services, Inc., sought and obtained from the Court an order establishing September 6, 2009, at 4:00 p.m. Eastern Time, as the deadline by which proofs of claim must be filed by the Debtors' creditors, and January 14, 2010, as the deadline by which governmental units must file proofs of claims against the Debtor. The Court also approved LandAm Credit's Proof of Claim Form, the proposed Bar Date Notice, and the proposed publication notice. For the avoidance of doubt, all claims based on acts or omissions of LandAm Credit that occurred before the Petition Date are to be filed on or prior to the applicable Bar Date, even if the claims (i) are not fixed or liquidated, or (ii) did not mature or become fixed or liquidated, before the Petition Date. Any claim arising solely from, or as a consequence of, the rejection of an unexpired lease or executory contract of LandAm Credit are required to be filed by the latest of: (a) 20 days following the date of any order of the Court authorizing LandAm Credit to reject the unexpired lease or executory contract; (b) the date set by any other order of the Court; and (c) the General Bar Date, or, if applicable, the Governmental Unit Bar Date. Each person or entity that asserts a Prepetition Claim must file an original, written proof of claim which substantially conforms to Official Form No. 10 so as to be received on or before the applicable Bar Date at these addresses: If Delivered by Mail: LandAmerica Credit Services, Inc. Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC FDR Station, P.O. Box 5285 New York, NY 10150-5285 If Delivered by Overnight or Hand Delivery: LandAmerica Credit Services, Inc. Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC 757 Third Avenue, 3rd Floor New York, NY 10017 Proofs of Claim may not be sent by facsimile, telecopy, or electronic mail transmission. Proofs of Claim are deemed timely filed only if the claims are actually received on or before the applicable Bar Date. Each Proof of Claim filed must: (a) be written in the English language; (b) be denominated in lawful currency of the United States as of the Petition Date; (c) conform substantially with the Proof of Claim provided or Official Form No. 10; (d) be in respect of a single Debtor, and claims against multiple Debtors must be filed on separate Proofs of Claim; (e) indicate the Debtor against which the creditor is asserting a claim; and (f) be signed by the claimant or, if the claimant is not an individual, by an authorized agent of the claimant. Each creditor must file a proof of claim on or before the General Bar Date or the Governmental Unit Bar Date or be forever barred, estopped and permanently enjoined from asserting a claim against LandAm Credit; participating in any distributions under a plan on account of the Prepetition Claim; participating, on account of the Prepetition Claim, in any voting and distribution under any plan of liquidation that is filed in LandAm Credit's Chapter 11 case; and receiving any further notices regarding the Prepetition Claim. Certain creditors will not be required to be file Proofs of Claim against LandAm Credit: (a) Any person or entity that has already properly filed with the Clerk of the United States Bankruptcy Court for the Eastern District of Virginia or Epiq Bankruptcy Solutions, LLC, a proof of claim against the Debtor utilizing a claim form that substantially conforms to Official Form No. 10. (b) Any person or entity (i) whose claim is set forth on the Bankruptcy Schedules, (ii) whose claim is not described as "disputed," "contingent," or "unliquidated," and (iii) who does not dispute the amount or type of the claim for that person or entity as set forth on the Bankruptcy Schedules. (c) Claims allowed by order of the Court entered on or before the applicable Bar Date. (d) Claims that have been paid by LandAm Credit. (e) Claims of any Debtor against LandAm Credit. (f) Claims allowable under Sections 503(b) and 507(a) as an administrative expense. (g) Claims by a current officer or director of LandAm Credit but only to the extent the claim is solely for indemnification or reimbursement against LandAm Credit, provided that any current officer or director of LandAm Credit who wishes to assert a claim that is not for indemnification or reimbursement must file a proof of claim on or prior to the General Bar Date. LandAm Credit will cause to publish a Bar Date Notice once in the Richmond Times Dispatch and once in the Wall Street Journal. About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Dion W. Hayes, Esq., and John H. Maddock III, Esq., at McGuireWoods LLP, are the Debtors' bankruptcy counsel. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: LCS Sells Assets to Lamat LLC Under Ch. 11 ------------------------------------------------------------- LandAmerica Credit Services, Inc. sought and obtained a ruling from the U.S. Bankruptcy Court for the Eastern District of Virginia in early August 2009, approving the sale of substantially all of its assets to LAMAT LLC for $5,000,000 in cash, subject to certain adjustments. The $5 million purchase price for the assets of LandAm Credit is subject to adjustment for Monthly Net Revenue and a Net Working Capital Adjustment. If the "Monthly Net Revenue" set forth on the monthly income statement of LandAm Credit for the calendar month most recent to closing is: (A) less than $850,000 but greater than or equal to $800,000, then the Purchase Price will be $4,500,000; (B) less than or equal to $799,999 and greater than or equal to $750,000, then the Purchase Price will be $4,000,000; (C) less than or equal to $749,999 and greater than or equal to $700,000, then the Purchase Price will be $3,500,000; (D) less than or equal to $699,999 and greater than or equal to $650,000, then the Purchase Price will be $3,000,000; and (E) less than or equal to $649,999 and greater than or equal to $600,000, then the Purchase Price will be $2,500,000. If the Net Working Capital is less than the target value of $850,000, then the Purchase Price will be adjusted down by the amount of the Working Capital Deficit, and the Purchaser and LandAm Credit will jointly deliver written notice to the escrow agent to pay the amount to the Purchaser out of the Deposit Amount, and the remaining portion of the Deposit Amount, if any, will be released to LandAm Credit. In the event the Net Working Capital is greater than the target value of $850,000, then the Purchase Price will be adjusted upward by the amount of the Working Capital Surplus. LAMAT deposited with the escrow agent upon the execution of the parties' Purchase Agreement $250,000, which will be credited against the asset purchase price at the closing. Under the parties' Purchase Agreement, on the closing date, LandAm Credit is to transfer to LAMAT LLC: -- all of its rights, title and interest in and to the accounts, notes and credit card receivables outstanding; -- its rights under certain contracts; -- all of its equipment, machinery, furniture, information technology equipment, tangible property, vehicles or other items; -- all of its rights to warranties and licenses received from manufacturers and any related claims, credits, rights of recovery and set-off with respect to it, to the extent transferable, all material licenses, permits, franchises, authorizations and approvals issued or granted to LandAm Credit relating primarily to its business; -- all of its intellectual property used in the conduct of its business; and -- all of its rights with respect to its bank accounts and all other assets, properties and rights of every kind, except certain excluded assets. The Court has also authorized LandAm Credit to assume and assign related executory contracts and unexpired leases to LAMAT. LAMAT will assume all liabilities for (i) for the postpetition trade accounts payable and accrued expenses of LandAm Credit, and (ii) all liabilities, obligations and duties to perform under any of the Assumed Contracts. LandAm Credit will remain solely liable for any employment claims for any employee based on acts occurring before the closing date, or as a result of the consummation of the transactions contemplated by the Purchase Agreement or the entering into of the Purchase Agreement. A full-text copy of the LandAm Credit-LAMAT Purchase Agreement dated July 17, 2009, is available for free at: http://bankrupt.com/misc/LCS_LamatAPAJul17.pdf LandAm Files Chapter 11 Petition to Effectuate Asset Sale LandAmerica Credit is a wholly owned subsidiary of Debtor LandAmercia Financial Group, Inc. LandAm Credit entered the national credit reporting business in August 2003 with a $47 million acquisition of a well established reporting agency, Info1 Holding Company, Inc. As of July 17, 2009, LandAm Credit had approximately $91,283 in cash currently held in its bank account at Bank of America. LandAm Credit provides consumer credit reports and income, tenant, and tax return verifications to national and regional mortgage lenders and brokers throughout the United States. Its main operations are located in Las Vegas, Nevada, and its accounts receivable department is located in Omaha, Nebraska. LandAm Credit is one of only six credit reporting agencies with Tier 1 direct connectivity with Fannie Mae and Freddie Mac, giving LandAm Credit a competitive advantage over other credit service companies. That access permits direct connections to those governmental agencies, and allows a "connected" credit company to provide credit reports for Fannie Mae and Freddie Mac loan submissions. LandAm Credit's clients consist of a diverse customer base in the mortgage industry, which include banks, thrifts, credit unions, mortgage companies, and mortgage brokers, as well as a limited number of mortgage servicers and subservicers, commercial lenders, and various businesses seeking consumer credit information. While LandAm Credit has a diverse clientele, historically, a significant percentage of its income comes from a few large customers. LandAm Credit's largest customer, Fannie Mae, accounted for approximately 7% of LandAm Credit's sales during April 2009. Furthermore, LandAm Credit's "top 5" and "top 25" customers represented 21% and 43% of LandAm Credit's April 2009 sales. LandAm Credit's revenue decreased from $29 million in 2007 to $15 million in 2008, as a result of the general deterioration of the real estate market and the effect of the "sub-prime crisis" on a large group of LandAm Credit's customers, the sub-prime brokers. Furthermore, shortly after the Chapter 11 filing of LFG, two of LandAm Credit's "top 5" customers stopped utilizing LandAm Credit for their credit reporting. The loss of those two customers alone resulted in a decline of over $230,000 in monthly revenue for the company. Other customers have threatened to decrease or halt altogether the amount of new business they place with LandAm Credit. Moreover, several potential new customers have removed LandAm Credit from their bidding process due to LFG's Chapter 11 filing. Also, LFG's Chapter 11 filing has delayed several major information technology consolidation projects, which were targeted to significantly reduce LandAm Credit's overhead costs. Prior to LFG's bankruptcy, LandAm Credit began the process of migrating its client database to a new technology platform, which would allow the company to close its data center located in Atlanta, resulting in a reduction of expenses by over $75,000 per month. In light of these events and prior monthly losses, LandAm Credit determined to pursue a sale of its business. It further determined to conduct the sale under bankruptcy protection. Accordingly, LandAm Credit filed a voluntary Chapter 11 petition before the U.S. Bankruptcy Court for the Eastern District of Virginia on July 17, 2009. In its bankruptcy schedules, LandAm Credit listed $1.9 million in assets and $14 million in liabilities. About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Dion W. Hayes, Esq., and John H. Maddock III, Esq., at McGuireWoods LLP, are the Debtors' bankruptcy counsel. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: Meeting of LCS's Creditors on Sept. 9 -------------------------------------------------------- W. Clarkson McDow, Jr., the United States Trustee for Region 4, will convene a meeting of the creditors of Debtor LandAmerica Credit Services, Inc., on September 9, 2009, at 3:00 p.m. Eastern Time, at Suite 4300 of the Office of the United States Trustee, at 701 E. Broad Street, in Richmond, Virginia. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in LandAm Credit's bankruptcy case. Attendance by the Debtor's creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtor's representative under oath about the Debtor's financial affairs and operations that would be of interest to the general body of creditors. The meeting may be continued or adjourned from time to time by notice at the meeting, without further written notice to the creditors. LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Dion W. Hayes, Esq., and John H. Maddock III, Esq., at McGuireWoods LLP, are the Debtors' bankruptcy counsel. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: Wants October 15 Extension for Plan Filing ------------------------------------------------------------- LandAmerica Financial Group, Inc., LandAmerica 1031 Exchange Services, Inc., LandAmerica Title Company, Southland Title Corporation, Southland Title of Orange County, and Southland Title of San Diego ask the Court to extend the period within which they have the exclusive right to: (a) file a Chapter 11 plan or plans, through and including October 15, 2009; and (b) solicit acceptances that plan or plans, through and including December 15, 2009. The Debtors are currently in the process of formulating a plan of liquidation and have made significant progress in that respect, Dion W. Hayes, Esq., at McGuirewoods LLP, Richmond, Virginia, tells the Court. The Debtors believe that an extension of the Exclusive Periods for the Initial Debtors is not only warranted, but critical in these cases in order to facilitate discussions with the Official Committee of Unsecured Creditors and other parties-in-interest and to maintain much needed order, process and momentum. Mr. Hayes tells the Court that the Debtors need more time to accomplish these tasks before they can file a Chapter 11 plan: -- Engage in negotiations with the Internal Revenue Service, which has asserted various priority tax claims aggregating $54 million; -- Work with the Pension Benefit Guarantee Corporation to value the potential costs of terminating the LandAmerica Cash Balance Plan, to determine an appropriate manner in which to accomplish the termination, and ultimately to resolve the PBGC's Claims. The PBGC has asserted claims for $37.5 million against the each of the estates of LFG and LES; -- Focus on efforts to market and sell LES' investments in subordinate loan auction rate securities, which has a total face value of $201.7 million; -- Continue to address complex issues relating to the sale of their underwriter entities to Fidelity National Financial Inc., including transition issues; and -- Continue to negotiate the settlement of certain pending lawsuits. Mr. Hayes contends that if the extensions of the Exclusive Periods are granted, the Debtors will be afforded the requisite time to propose and solicit a confirmable plan without the confusion and chaos that wound ensue if multiple competing agendas were permitted to be pursued by divergent constituencies. About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Dion W. Hayes, Esq., and John H. Maddock III, Esq., at McGuireWoods LLP, are the Debtors' bankruptcy counsel. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Examiner's Report is Expected by February 1 ------------------------------------------------------------ Anton Valukas, the examiner for Lehman Brothers Holdings Inc., told the Bankruptcy Court that he should be able to complete his investigation and file his report by Feb. 1, Bloomberg News reported. As reported by the Troubled Company Reporter on Jan. 21, 2009, former federal prosecutor Anton Valukas of the firm Jenner & Block LLP has been selected by Diana J. Adams, the United States Trustee for Region 2, to lead an independent investigation of the events leading to Lehman Brothers Holdings Inc.'s collapse and the claims creditors owed more than $613 billion may pursue. The Walt Disney Company in October 2008 filed a request for an appointment of an examiner who will, among other things, investigate pre-bankruptcy transactions between Lehman Brothers Holdings Inc., and its affiliates. After negotiations, Lehman Brothers reached an agreement with Walt Disney regarding an examiner's appointment and the scope of the trustee's investigation. Mr. Valukas is the chairman of the Illinois-based Jenner & Block LLP and a partner in Jenner & Block's litigation department. "Throughout my legal career of over 40 years, I have led numerous investigations of Fortune 500 companies and large international corporations involving potential financial misconduct, accounting irregularities, ethical issues, and alleged corporate fraud." He also held several positions with the United States Department of Justice, including United States Attorney for the Northern District of Illinois (1985-1989), First Assistant United States Attorney (1975-1976), Chief of Special Prosecutions Division (1974), and Assistant United States Attorney (1970-1974). 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) LEXARIA CORPORATION: Posts $208,000 Net Loss in Qtr. Ended July 31 ------------------------------------------------------------------ Lexaria Corporation posted a net loss of 208,287 for three months ended July 31, 2009, compared with a net loss of $59,183 for the same period in 2008. For nine months ended July 31, 2009, the Company posted a net loss of 584,404 compared with a net loss of $658,324 for the same period in 2008. The Company's balance sheet at July 31, 2009, showed total assets of $3,250,145, total liabilities of $788,180 and a stockholders' equity of $2,461,965. The Company said that there is substantial doubt about its ability to continue as a going concern. The Company noted that it suffered recurring losses from operations. The Company added that its continuation as a going concern is dependent upon its attaining and maintaining profitable operations or raising additional capital. The issuance of additional equity securities could result in a significant dilution in the equity interests of its current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase its liabilities and future cash commitments. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?442b In a separate filing with the Securities and Exchange Commission, Lexaria Corporation amended its 10Q for quarter ended July 31, 2009, which was filed on Sept. 2, 2009. The Company stated that the filing included the incorrect financial statements that did not reflect the Oct. 31, 2008, share consolidation numbers in the equity section of the balance sheet. A full-text copy of the Company's Form 10-Q/A is available for free at http://ResearchArchives.com/t/s?442c Lexaria Corporation (OTC:LXRP), is an exploration and development oil and gas company engaged in the exploration for and development of petroleum and natural gas in North America. The Company is generating revenues from its business operations in Mississippi and in Oklahoma. The Company has acquired the right to explore the Strachan Hills oil and gas property in Alberta, Canada and working interest in the Owl Creek Prospect, Oklahoma and the Palmetto Point oil and gas property in Mississippi, United States. LODGENET INTERACTIVE: Key Colony Fund Discloses 6.9% Equity Stake ----------------------------------------------------------------- Key Colony Fund, L.P., Key Colony Management, LLC, and their managing member Alex R. Lieblong collectively own an aggregate of 1,545,451 shares or 6.9% of the common stock of LodgeNet Interactive Corporation. All shares of Common Stock were purchased by Key Colony Fund. About LodgeNet Interactive LodgeNet Interactive Corporation (Nasdaq:LNET) -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms representing 10,000 hotel properties worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. As of June 30, 2009, the Company had $594.8 million in total assets and $659.6 million in total liabilities, resulting in $64.8 million in stockholders' deficiency. * * * As reported by the Troubled Company Reporter on June 10, 2009, Moody's affirmed LodgeNet's B3 corporate family rating, Caa1 probability of default rating and SGL-4 speculative grade liquidity rating (indicating poor liquidity). The rating continues to be influenced primarily by liquidity matters stemming from the company's very limited financial covenant compliance cushion. LODGENET INTERACTIVE: Victorian Capital Discloses 6.1% Stake ------------------------------------------------------------ Victorian Capital LP, Incorporated, as of September 2, 2009, was the direct beneficial owner of 1,364,056 shares of LodgeNet Interactive Corporation common stock, representing roughly 6.1% of the outstanding shares of Common Stock -- based on 22,537,664 shares of Common Stock outstanding as of August 3, 2009. Pension Corporation Co-Investment (GP) Limited, as the sole general partner of Victorian Capital, has voting and dispositive power over the shares of Common Stock directly owned by Victorian Capital, and therefore may be deemed to beneficially own the shares. By virtue of its ownership of all of the outstanding ordinary shares of PCCI, The Truell Charitable Foundation may be deemed to be the beneficial owner of all of the shares of Common Stock beneficially owned by Victorian Capital. Victorian Capital began purchasing shares of Common Stock on November 7, 2008. The shares of Common Stock were acquired for investment purposes. Victorian Capital presently intends to purchase, depending on market prices, additional shares of Common Stock (in open market transactions, privately negotiated transactions or otherwise) until it beneficially owns up to 9.9% of the total number shares of Common Stock outstanding. After reaching that level of ownership, Victorian Capital may purchase additional shares of Common Stock but has made no determination to do so. Even prior to reaching such level of ownership, Victorian Capital also presently intends to sell (in open market transactions, privately negotiated transactions or otherwise) some of the shares of Common Stock beneficially owned, depending on market prices. Victorian Capital intends to assess its investment in LodgeNet from time to time on the basis of various factors, including, without limitation, LodgeNet's business, financial condition, results of operations and prospects, general economic, market and industry conditions, as well as other developments and other investment opportunities. Depending on factors deemed relevant by Victorian Capital, it may acquire additional shares of Common Stock or other LodgeNet securities or financial instruments, or dispose of all or part of the shares of Common Stock, in open market transactions, privately negotiated transactions or otherwise. Any acquisition or disposition may be effected by Victorian Capital at any time without prior notice. On September 2, 2009, Victorian Capital sold 112,000 shares at $6.22 per share. All dispositions were through JP Morgan Cazenove Limited. None of PCCI's or TCF's directors or executive officers has effected any transaction in the Common Stock during the past 60 days. About LodgeNet Interactive LodgeNet Interactive Corporation (Nasdaq:LNET) -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms representing 10,000 hotel properties worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. As of June 30, 2009, the Company had $594.8 million in total assets and $659.6 million in total liabilities, resulting in $64.8 million in stockholders' deficiency. * * * As reported by the Troubled Company Reporter on June 10, 2009, Moody's affirmed LodgeNet's B3 corporate family rating, Caa1 probability of default rating and SGL-4 speculative grade liquidity rating (indicating poor liquidity). The rating continues to be influenced primarily by liquidity matters stemming from the company's very limited financial covenant compliance cushion. LOUNGE 22 LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Lounge 22, LLC 1805 Flower Street Glendale, CA 91201 Bankruptcy Case No.: 09-33926 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Victoria S. Kaufman Debtor's Counsel: Anthony A. Friedman, Esq. Levene Neale Bender Rankin & Brill LLP 10250 Constellation Bl, Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 Email: aaf@lnbrb.com David B. Golubchik, Esq. Levene Neale Bender Rankin & Brill LLP 10250 Constellation Blvd, Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Email: dbg@lnbrb.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/cacb09-33926.pdf The petition was signed by Armen Gharabegian, CEO of the Company. LUMINENT MORTGAGE: Settles $24MM Contract Breach Dispute With HSBC ------------------------------------------------------------------ The Hon. Duncan W. Keir in the U.S. Bankruptcy Court for the District of Maryland approved a compromise and settlement agreement between Luminent Mortgage Capital Inc. and HSBC Securities USA Inc. to close a district court case brought by the Debtor in 2007 accusing HSBC of undervaluing $24 million in subprime mortgage-backed bonds, according to Law360. Luminent Mortgage Capital, Inc. (OTCBB: LUMCE), is a real estate investment trust, or REIT, which, together with its subsidiaries, has historically invested in two core mortgage investment strategies. Under its Residential Mortgage Credit strategy, the company invests in mortgage loans purchased from selected high- quality providers within certain established criteria as well as subordinated mortgage-backed securities and other asset-backed securities that have credit ratings below AAA. Under its Spread strategy, the company invests primarily in U.S. agency and other highly-rated single-family, adjustable-rate and hybrid adjustable- rate mortgage-backed securities. Luminent and nine subsidiaries filed on September 5, 2008, for relief under Chapter 11 of the U.S Bankruptcy Code in the United States Bankruptcy Court for the District of Maryland, Baltimore Division (Lead Case No. 08-21389). Immediately prior to the filing, the Debtor executed a Plan Support and Forbearance Agreement with secured creditor Arco Capital Corp., Ltd., WAMU Capital Corp. and convertible noteholders representing 100% of the outstanding principal amount of its convertible notes. Joel I. Sher, Esq., at Shapiro Sher Guinot & Sandler, represents the Debtors as counsel. The U.S. Trustee for Region 4 appointed creditors to serve on an Official Committee of Unsecured Creditors. Jeffrey Neil Rothleder, Esq., at Arent Fox LLP, represents the Creditors Committee as counsel. As reported by the Troubled Company Reporter on July 20, 2009, Luminent Mortgage said that its second amended joint plan of reorganization became effective and it has emerged from Chapter 11 protection. The U.S. Bankruptcy Court for the District of Maryland confirmed the Debtor's plan on June 30, 2009. LYONDELL CHEMICAL: Asks Court to Halt Suits on Non-Filed Units -------------------------------------------------------------- The U.S. Bankruptcy Court will convene a hearing today, September 8, to consider Lyondell Chemical Co.'s request to stop holders of $1.3 billion of two issues of notes due 2015 from taking collection against European affiliates not in bankruptcy. Lyondell contends that forcing the currently non-bankrupt affiliates to begin insolvency proceedings abroad will lead to a loss of control over "operating companies in Europe that are vital to their reorganization efforts," Bloomberg News reported. According to Bloomberg, Lyondell, if it succeeds in stopping the noteholders, says it will file a reorganization plan by Sept. 15, proposing to exchange debt for new stock. The holders of the 2015 notes, though, are "hopelessly out of the money," according to Lyondell, and don't stand to receive anything under the plan. They play the role of "spoilers," the company says. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MCCLATCHY CO: Receives Compliance Notice From NYSE -------------------------------------------------- The McClatchy Company has been notified by the New York Stock Exchange that the company is now in compliance with the exchange's continued listing standards for share price. The NYSE notified the company on Feb. 4, 2009, that McClatchy's average share price over the previous 30 trading days was below the NYSE's quantitative listing standards. The standards required NYSE listed companies to maintain an average closing price above $1.00 per share for any consecutive, 30-trading-day period. The company had until Jan. 7, 2010, to cure the non-compliance. On Sept. 2, 2009, the NYSE received approval from the Securities and Exchange Commission to amend the NYSE's provisions for curing average share price non-compliance. Companies are now deemed compliant if they achieve a closing share price of at least $1.00 at the end of any calendar month during their cure period and the share price averages $1.00 or more over the 30-trading-day period ending on the last day of that month. The NYSE notified McClatchy that its month-end and average trading price for the month of August met this requirement. As a result of these changes, McClatchy is now in full compliance with the NYSE's listing standards. The company announced in June that McClatchy was in compliance with the exchange's continued listing standard for total market capitalization and stockholders' equity. About McClatchy The McClatchy Company is the third largest newspaper company in the United States, with 30 daily newspapers, roughly 50 non- dailies, and direct marketing and direct mail operations. McClatchy also operates leading local Web sites in each of its markets which extend its audience reach. The Web sites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, the Charlotte Observer, and The (Raleigh) News & Observer. McClatchy also owns a portfolio of premium digital assets, including 14.4% of CareerBuilder, the nation's largest online job site, 25.6% of Classified Ventures, a newspaper industry partnership that offers two of the nation's premier classified websites: the auto Web site, cars.com, and the rental site, apartments.com and 33.3% of HomeFinder, LLC which operates the real estate website HomeFinder.com. McClatchy is listed on the New York Stock Exchange under the symbol MNI. MCCLENTON INVESTMENTS: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: McClenton Investments LLC 2184 Pinkerton Road West Point, MS 39773 Bankruptcy Case No.: 09-14614 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Northern District of Mississippi (Aberdeen) Debtor's Counsel: Craig M. Geno, Esq. Harris Jernigan & Geno, PLLC P.O. Box 3380 Ridgeland, MS 39158-3380 Tel: (601) 427-0048 Email: cmgeno@harrisgeno.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company says it does not have unsecured creditors who are non insiders when they filed their petition. The petition was signed by Julius E. McClenton Jr., owner of the Company. MCGRATH HOTELS: Forced Into Chapter 11 Bankr. by Lighthouse Group ----------------------------------------------------------------- Lighthouse Group of Connecticut has filed an involuntary Chapter 11 bankruptcy in the U.S. Bankruptcy Court in Hartford against McGrath Hotels LCC, Stephen Chupaska at TheDay.com reports, citing New London attorney Narcy Z. Dubicki. According to TheDay.com, McGrath Hotels owes: -- New London about $120,000, -- the state some $96,000 in back taxes, and -- mortgage holder Business Loan Center LLC more than $2 million. TheDay.com relates that Mr. Dubicki had sent out 18 packages to potential buyers of McGrath Hotels' Lighthouse Inn, which has been closed since 2008 -- first in August 2008 by health officials due to lack of hot water, and then in September 2008 after wages were allegedly not paid to workers. Then bankruptcy filing postponed the scheduled foreclosure auction of the property, TheDay.com states. MEDIS TECHNOLOGIES: Incurs $43.5-Mil. Loss for 1H of 2009 --------------------------------------------------------- Medis Technologies Ltd. incurred a net loss of $26,938,000 for three months ended June 30, 2009, compared with $15,756,000 loss during the same period in 2008. For six months ended June 30, 2009, it incurred a net loss of $43,486,000, compared with a $29,747,000 net loss during the same period in 2008. The Company had assets of if $21,242,000 against debts of $15,026,000 as of June 30, 2009. Accumulated deficits have reached $47,024,000. In its Form 10-Q for the second quarter, Medis noted, "The Company has limited available cash resources and requires additional financing in order to continue to fund its current operations beyond August 2009, and to pay existing and future liabilities and other obligations, including payroll. The Company's executive management has agreed to defer the payment of their July payroll and the Company is in the process of attempting to obtain deferrals for the payment of July payroll for remaining employees. The Company is continuing to negotiate with third parties in an attempt to obtain additional sources of funds to finance the Company's operations. The satisfactory completion of these negotiations prior to the end of August 2009 is essential to provide sufficient cash flow to meet current operating requirements. Furthermore, even if the Company is successful in raising additional funds, the Company cannot give any assurance that it will, in the future, be able to achieve a level of profitability from the sale of its products to sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern." A copy of the Company's Form 10-Q is available for free at: http://researcharchives.com/t/s?4443 About Medis Technologies Medis Technologies Ltd. is a holding company, which through its wholly owned subsidiaries, Medis El Ltd. and More Energy Ltd., designs, develops and markets innovative liquid fuel cell solutions principally for the mobile handset and portable consumer electronics markets. MTL, through its majority owned indirect subsidiary, Cell Kinetics Ltd. is also seeking to exploit commercially an improved cell carrier under its CKChipTM product line, which was considered to be the nucleus of the company's CellScan system. METALDYNE CORP: Wants to File Chapter 11 Plan until January 2010 ---------------------------------------------------------------- Metaldyne Corporation and its debtor-affiliates ask the Honorable Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to further extend their exclusive periods to: * file a Chapter 11 plan until Jan. 22, 2010; and * solicit acceptances of that plan until March 23, 2010. According to the Debtors, the extension of time will allow them to (i) continue their efforts to complete and close the sale to MD Investor Corporation the sale of substantially all of their assets, (ii) develop and implement a plan for winding down and monetizing the assets not sold in the transaction, and (iii) work with their other stakeholders to develop and obtain confirmation of the Chapter 11 plan. The Court authorized the Debtors to move on with the sale of all their assets to MD Investors on Aug. 12, 2009. Richard H. Engman, Esq., at Jones Day in New York, says, presently, due to the timing of receiving necessary governmental approvals, the Debtors anticipate that the MD Investors Transaction is likely to close in late September 2009, and the Debtors recently secured the agreement of their postpetition lenders and their prepetition working capital lenders to extend the Debtors' ability to borrow money and use cash collateral until Oct. 2, 2009. A hearing is set for Sept. 16, 2009, at 10:00 a.m., to consider approval of the Debtors' request. Objections, if any, are due Sept. 9, 2009, at 12:00 p.m. About Metaldyne Corporation Metaldyne Corporation and its affiliates filed for Chapter 11 protection on May 27, 2009 (Bankr. S.D.N.Y. Case No. 09-13412). The filing did not include the company's non-U.S. entities or operations. Richard H. Engman, Esq., at Jones Day represents the Debtors in their restructuring efforts. Judy A. O'Neill, Esq., at Foley & Lardner LLP serves as conflicts counsel; Lazard Freres & Co. LLC and AlixPartners LLP as financial advisors; and BMC Group Inc. as claims agent. A committee of Metaldyne creditors is represented by Mark D. Silverschotz, Esq., and Kurt F. Gwynne, Esq., at Reed Smith LLP, and the committee tapped Huron Consulting Services, LLC, as its financial advisor. For the fiscal year ended March 29, 2009, the company recorded annual revenues of approximately US$1.32 billion. As of March 29, 2009, utilizing book values, the company had assets of approximately US$977 million and liabilities of US$927 million. Judge Glenn approved the sale of substantially all assets to Carlyle Group earlier this month for approximately $496.5 million. MOECHERVILLE WATER: Case Summary & 2 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Moecherville Water District N.F.P. 527 S. Kendall Street Aurora, IL 60505 Bankruptcy Case No.: 09-33028 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Carol A. Doyle Debtor's Counsel: Andrew J. Maxwell, Esq. Maxwell Law Group, LLC 105 West Adams Street, Suite 3200 Chicago, IL 60603 Tel: (312) 368-1138 Fax: (312) 368-1080 Email: maxwelllawchicago@yahoo.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 $4,329,677, and total debts of $4,247,468. 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/ilnb09-33028.pdf The petition was signed by Mark McDonald, president of the Company. MONEYGRAM INT'L: Appoints Patsley to Replace Ryan as CEO -------------------------------------------------------- MoneyGram International, Inc., and Anthony P. Ryan, President and Chief Executive Officer of the Corporation, have mutually agreed that Mr. Ryan's employment with the Corporation terminated without cause effective September 1, 2009. Mr. Ryan resigned from all positions he held with the Corporation and affiliates, including his position as a member of the Board of Directors of the Corporation. The Company anticipates it will enter into a separation agreement with Mr. Ryan. Effective September 1, 2009, the Board appointed Pamela H. Patsley, Executive Chairman of the Corporation, as Chief Executive Officer of the Corporation. Ms. Patsley, 52, has served as Executive Chairman of the Corporation since January 21, 2009. She worked with private equity firms to evaluate payment services business opportunities from January 2008 to January 21, 2009. Prior to that, Ms. Patsley was the senior executive vice president of First Data Corp., a provider of electronic commerce and payment solutions, from March 2000 to October 2007 and president of First Data International, an electronic payments processor, from May 2002 to October 2007. Prior to joining First Data, Ms. Patsley was the president and chief executive officer of Paymentech, Inc., a payment processor, from 1991 to 2000. Ms. Patsley is also a director of Molson Coors Brewing Company, a beer brewing company, Texas Instruments Inc., a semiconductor manufacturer, and Dr. Pepper Snapple Group Inc., a beverage manufacturer. Patsley Employment Agreement In connection with Ms. Patsley's appointment as CEO, the Corporation and Ms. Patsley entered into an amended and restated employment agreement effective September 1, 2009, amending and restating the employment agreement dated January 21, 2009 (as amended on May 12, 2009), whereby Ms. Patsley will be employed as CEO for a period commencing on September 1, 2009 and ending on August 31, 2013, subject to the Employment Agreement's termination provisions. Under the terms of the Employment Agreement, Ms. Patsley will: (i) continue to serve as the Corporation's Executive Chairman until the Board requests that she resign her position; (ii) devote substantially all of her time to the Corporation; (iii) receive an initial annual base salary of $850,000, subject to review annually; and (iv) receive a one-time signing bonus in the amount of $250,000 payable in a lump sum within thirty days of the effective date of the Employment Agreement. Ms. Patsley will also be eligible to receive other benefits and incentive compensation described in the Employment Agreement. If Ms. Patsley's employment is terminated for a reason other than cause (as defined in the Employment Agreement), death or disability (as defined in the Employment Agreement), or if she terminates with good reason (as defined in the Employment Agreement), Ms. Patsley will be entitled to receive a severance allowance in an amount equal to the sum of (x) (1) if the termination occurs prior to August 31, 2012, two times her base salary in effect as of September 1, 2009 or her then-current base salary if greater or (2) if the termination of employment occurs on or after August 31, 2012, one and a half times her base salary in effect as of September 1, 2009 or her then-current base salary if greater and (y) provided that the Corporation achieves certain performance goals -- as set forth in the Corporation's Management and Line of Business Incentive Plan -- for the applicable performance period necessary for participants in the MIP to receive bonuses (and such bonuses are actually paid), a pro-rata portion of her target bonus for the year or her full target bonus if she has been employed for more than 180 days during the calendar year in which the termination of employment occurs. In addition, Ms. Patsley will be entitled to continuation of medical and dental coverage for a period of 18 months and her stock options will continue to vest for a period of 12 months following her termination of employment. In the event that Ms. Patsley remains employed for the entire term of the Employment Agreement, (i) she will be entitled to receive her full target bonus for the calendar year in which the term of the Employment Agreement expires, provided that the Corporation actually achieves performance goals for the applicable performance period necessary for participants in the MIP to receive bonuses pursuant to the MIP and (ii) her performance-based options will continue to vest until August 31, 2014. In addition, the Employment Agreement provides that to the extent any of the payments are subject to an excise tax under Section 4999 of the Internal Revenue Code of 1986, an additional payment will be made in an amount sufficient to allow Ms. Patsley to pay all excise taxes without a reduction in severance benefits. Under the Employment Agreement, Ms. Patsley is subject to a (A) two-year (if her termination of employment occurs prior to August 31, 2012) or (B) one and a half-year (if her termination of employment occurs on or after August 31, 2012) post-employment non- competition and non-solicitation restrictions in addition to confidentiality and non-disparagement obligations. Stock Options for CEO Patsley On August 31, 2009, the Board granted Ms. Patsley, Executive Chairman, a non-qualified option to purchase 6,300,000 shares of common stock of the Corporation under the amended MoneyGram International, Inc. 2005 Omnibus Incentive Plan, pursuant to the Non-Qualified Stock Option Agreement dated August 31, 2009, with an exercise price of $2.66 per share (representing the fair market value of the common stock of the Corporation as of the grant date). Options for 50% of the shares are considered "Time Vested" and options for 50% of the shares are considered "Performance Vested." With respect to 2,000,000 option shares (allocated pro- rata between Time Vested and Performance Vested), the options will not vest and are subject to forfeiture if the stockholders of the Corporation do not approve an amendment to the Omnibus Plan to remove or increase the limitation on the number of option shares that may be granted to an executive officer in a year. Affiliates of Thomas H. Lee Partners, L.P. have provided an executed Proxy appointing a representative of the Corporation as attorney and proxy to vote "FOR" the amendment to the Omnibus Plan at the next annual or special meeting of stockholders of the Corporation. The Time Vested options will vest in equal installments over four years on the anniversary of the grant date. The Performance Vested options will vest as follows: Options for 50% of the shares will vest (i) when the value of the common stock of the Corporation has reached $3.50 per share for a period of 20 consecutive trading days during the five-year period following the grant date or (ii) on the date of a change in control (as defined in the Non-Qualified Stock Option Agreement) of the Corporation if there is a change in control during the five-year period following the grant date in the event the per share consideration in such change in control equals or exceeds $3.50; and options for 50% of the shares will vest (i) when the value of the common stock of the Corporation has reached $5.25 per share for a period of 20 consecutive trading days during the five-year period following the grant date or (ii) on the date of a change in control of the Corporation if there is a change in control during the five-year period following the grant date in the event the per share consideration in such change in control equals or exceeds $5.25. If the shares of common stock of the Corporation are not publicly traded, then vesting for the options that are Performance Vested will be vested in the manner set forth in the Non-Qualified Stock Option Agreement. The vesting of the Time Vested options will accelerate if following a change in control of the Corporation, Ms. Patsley's employment is terminated by the Corporation without cause (as defined in her employment agreement) or is terminated with good reason (as defined in her employment agreement) and the shares of common stock of the Corporation are no longer publicly traded. The options will also continue to vest for a period of 12 months following certain types of termination of Ms. Patsley's employment. There are no arrangements or understandings between Ms. Patsley and the Corporation or any other persons pursuant to which Ms. Patsley was selected as an officer. Ms. Patsley does not have a family relationship with any director or executive officer of the Corporation. There are no relationships or related transactions between the Corporation and Ms. Patsley of the type required to be disclosed under Item 404(a) of Regulation S-K. "We thank Tony for his valuable contributions to the company and wish him all the best. At the same time, we are very pleased that Pam has stepped into the role of chief executive officer in addition to her responsibilities as chairman," said Seth Lawry, director and chair of the Human Resources and Nominating Committee for MoneyGram. "Over these last months, Pam has proven to be a terrific addition and we believe that she is the ideal leader to build MoneyGram into a world-class competitor." Mr. Ryan joined MoneyGram in 1995 and had been responsible for overseeing day-to-day operations of the company since June 2008. About MoneyGram International MoneyGram International -- http://www.moneygram.com/-- is a global payment services company, helping consumers pay bills quickly and safely send money around the world in as little as 10 minutes. Its global network is comprised of 180,000 agent locations in nearly 190 countries and territories. MoneyGram's network includes retailers, international post offices and financial institutions. The Company posted a net loss of $3,317,000 for the three months ended June 30, 2009, from net income of $15,161,000 for the same quarter a year ago. As of June 30, 2009, the Company had $6,221,272,000 in total assets and $6,244,573,000 in total liabilities, resulting in $823,388,000 in stockholders' deficit. MONEYGRAM INT'L: Panel Approves Option Grant to Woods & O'Malley ---------------------------------------------------------------- The Human Resources and Nominating Committee of MoneyGram International, Inc.'s Board of Directors on August 11, 2009, approved an option grant with these terms to Jeffrey R. Woods, Executive Vice President and Chief Financial Officer of the Corporation: -- Non-qualified stock options to purchase 4,250,000 shares of common stock of the Corporation, with an exercise price of $2.30, which grant was made under the MoneyGram International, Inc. 2005 Omnibus Incentive Plan, as amended by the Board of Directors on February 9, 2009, pursuant to the Non-Qualified Stock Option Agreement dated August 11, 2009. The option has a 10-year term expiring on August 11, 2019. Options for 50% of the shares are considered "Time Vested" and options for 50% of the shares are considered "Performance Vested." -- The Time Vested options (2,125,000 shares) will vest in equal installments over five years on the anniversary of the grant date. The Performance Vested options (2,125,000 shares) will vest as follows: Options for 50% of the shares will vest when the value of the common stock of the Corporation has reached $3.50 per share for a period of 20 consecutive trading days during the 5-year period following the grant date; and options for 50% of the shares will vest when the value of the common stock of the Corporation has reached $5.25 per share for a period of 20 consecutive trading days during the 5-year period following the grant date. If the shares of common stock of the Corporation are not publicly traded, then vesting for the options that are Performance Vested will be vested in the manner set forth in the stock option agreement. On August 11, 2009, the HRN Committee approved an option grant and related agreement with Daniel J. O'Malley, Senior Vice President, Global Payment Systems/President Americas of the Corporation: -- Non-qualified stock options to purchase 2,500,000 shares of common stock of the Corporation, with an exercise price of $2.30, which grant was made under the Omnibus Plan pursuant to the Non-Qualified Stock Option Agreement dated August 11, 2009. The option has a 10-year term expiring on August 11, 2019. Options for 50% of the shares are considered "Time Vested" and options for 50% of the shares are considered "Performance Vested." -- The Time Vested options (1,250,000 shares) will vest as follows: On the 31st day after the Grant Date, 15%; on the 1st Anniversary of the Grant Date, 20%; on the 2nd Anniversary of the Grant Date, 20%; on the 3rd Anniversary of the Grant Date, 20%; on the 4th Anniversary of the Grant Date, 10%; and on the 5th Anniversary of the Grant Date, 15%. -- The Performance Vested options (1,250,000 shares) will vest as follows: Options for 50% of the shares will vest when the value of the common stock of the Corporation has reached $3.50 per share for a period of 20 consecutive trading days during the 5-year period following the grant date; and options for 50% of the shares will vest when the value of the common stock of the Corporation has reached $5.25 per share for a period of 20 consecutive trading days during the 5-year period following the grant date. If the shares of common stock of the Corporation are not publicly traded, then vesting for the options that are Performance Vested will be vested in the manner set forth in the stock option agreement. -- In consideration for receiving the option grant, the Corporation or its subsidiaries and Mr. O'Malley entered into an Employee Trade Secret, Confidential Information and Post-Employment Restriction Agreement dated August 11, 2009, whereby Mr. O'Malley agrees to the following: (i) an indefinite restriction on the disclosure of Confidential Information of the Corporation; (ii) a 12-month non- competition restriction with respect to general competitors and Conflicting Organizations; and a non- solicitation restriction with respect to employees and customer relationships; and (iii) that violation of the non-competition and/or non-solicitation restrictions would result in a suspension or termination of options, if any, and, if occurring within 18 months of the termination of employment, would require the repayment of gains realized from the exercise of options, if any, with such remedies being in addition to other legal remedies available to the Corporation in the event of such violation. About MoneyGram International MoneyGram International -- http://www.moneygram.com/-- is a global payment services company, helping consumers pay bills quickly and safely send money around the world in as little as 10 minutes. Its global network is comprised of 180,000 agent locations in nearly 190 countries and territories. MoneyGram's network includes retailers, international post offices and financial institutions. The Company posted a net loss of $3,317,000 for the three months ended June 30, 2009, from net income of $15,161,000 for the same quarter a year ago. As of June 30, 2009, the Company had $6,221,272,000 in total assets and $6,244,573,000 in total liabilities, resulting in $823,388,000 in stockholders' deficit. MRS JOHN STRONG: Wants to Auction Assets After Filing for Ch 11 --------------------------------------------------------------- Jacqueline Palank posted at The Wall Street Journal blog, Bankruptcy Beat, that Mrs. John L. Strong & Co. will seek the approval of the bankruptcy court for its planned September 23 auction. According to Bankruptcy Beat, the bankruptcy court will consider Mrs. John Strong's sale proposal on Wednesday. Mrs. John Strong, says Bankruptcy Beat, will propose that bids be submitted at least two business days before the auction. Bankruptcy Beat states that Mrs. John Strong already has a $350,000 bid lined up for its assets from the 1929 Paper Company LLC, for assets like intellectual property, inventory, raw materials, furniture, and two unexpired property leases on Madison Avenue. Bankruptcy Beat says that the winning bidder will also acquire Mrs. John Strong's customer and marketing lists. New York-based Mrs. John L. Strong & Co., LLC, is an 80-year-old provider of cards, letterhead and swanky invitations for everyone from Park Avenue socialites to British royalty. The Company filed for Chapter 11 bankruptcy protection on July 31, 2009 (Bankr. S.D.N.Y. Case No. 09-14820). The Company listed $500 thousand to $1 million in assets and $500 thousand to $1 million in liabilities. NEW MEXICO SOFTWARE: Posts $63MM Net Loss in Quarter Ended June 30 ------------------------------------------------------------------ New Mexico Software, Inc., posted a net loss of $63.00 million for three months ended June 30, 2009, compared with a net loss of $172.00 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $75.00 million, compared with a net loss of $245.00 million for the same period in 2008. The Company's balance sheet at June 30, 2009, showed total assets of $824.00 million, total liabilities of $690.00 million and stockholders' equity of $134.00 million. The Company said that there is substantial doubt about its ability to continue as a going concern. The Company noted that it incurred cumulative net losses of $14.72 million since its inception and occasionally requires capital for its contemplated operational and marketing activities to take place. The Company's ability to raise additional capital through the future issuances of the common stock is unknown. The obtainment of additional financing, the successful development of the Company's contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4413 New Mexico Software, Inc. (OTC:NMXC) develops and markets Internet technology based software for the management of digital high- resolution graphic images, documents, video clips, and audio recordings. The Company provides Software-as-a-Service solutions for a variety of industries. It offers services via its Web-based technology to customers in any type of commercial business. Its software solutions are the service that bridges the gap between the paper and digital worlds. In addition to organizing and archiving, NMSs software solution enables a company to control access to and dissemination of its digital files, providing protection of the digital assets. In May 2008, the Company created a wholly owned subsidiary called Telerad Service, Inc. to provide radiological services. NOEMI YABUT: Case Summary & 18 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Noemi C. Yabut aka Noemi Yabut 3568 Cour De Charles San Jose, CA 95148 Bankruptcy Case No.: 09-57550 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Roger L. Efremsky Debtor's Counsel: Saman Taherian, Esq. The Fuller Law Firm 60 N. Keeble Ave. San Jose, CA 95126 Tel: (408) 295-5595 Email: Fullerlawfirmecf@aol.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 $1,328,343, and total debts of $2,425,923. A list of the Company's 18 largest unsecured creditors is available for free at: http://bankrupt.com/misc/canb09-57550.pdf The petition was signed by Noemi C. Yabut. NORTEK INC: S&P Downgrades Corporate Credit Rating to 'D' --------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Nortek Inc. to 'D' from 'CCC'. Also, S&P lowered the issue-level rating on Nortek's 8.5% senior subordinated notes due 2014 to 'D' from 'CC' and on its $750 million 10% senior secured notes due 2013 to 'CC' from 'CCC'. "These ratings actions follow the company's recent announcement that it elected to forego making a $26.5 million semi-annual interest payment that was due on Sept. 1, 2009, on its 8.5% senior subordinated notes due 2014," said Standard & Poor's credit analyst Tobias Crabtree. A payment default has not occurred relative to the legal provisions of the indenture governing the notes since there is a 30-day grace period to make the payments. However, S&P considers a default to have occurred, even if a grace period exists, when the nonpayment is a function of the borrower being under financial stress -- unless S&P is confident that the payment will be made in full during the grace period. At the same time, Nortek entered into a forbearance agreement with its asset-based revolving credit facility lenders to forbear from exercising rights and remedies against the company that may exist as a result of the failure to make the interest payment on the 8.5% notes. An event of default under Nortek's ABL facility would trigger a cross-default under the indentures governing substantially all of Nortek's and parent company NTK Holdings Inc.'s indebtedness. In addition, Nortek has entered into a restructuring and lockup agreement with certain holders of, in aggregate, at least two- thirds of the outstanding amount of its 8.5% notes, as well as a substantial portion of the outstanding amount of its 10.75% notes and 10% notes. Under the terms of the agreement, Nortek's and NTK Holdings' note holders will exchange their debt for equity and new notes. The company intends to launch a formal process to solicit consent for the proposed restructuring from the remaining debt holders in the next few weeks. Following the conclusion of the solicitation period, Nortek intends to implement a financial restructuring through a prepackaged Chapter 11 filing. The company expects to reduce debt by approximately $1.3 billion. NORTH AMERICAN ENERGY: Moody's Assigns Ba3 Rating on $205M Notes ---------------------------------------------------------------- Moody's Investors Service has assigned a Ba3 rating to North American Energy Alliance, LLC's proposed $205 million 2nd lien secured notes due 2016. At the same time, Moody's has downgraded to Ba2 from Ba1 the existing $545 million of 1st lien senior secured credit facilities. The 1st lien credit facilities are comprised of an $85 million 1st lien term loan due 2015 ($79.15 million currently outstanding); a $340 million 1st lien term loan due 2015 ($316.6 million currently outstanding); an $80 million letter of credit facility due 2013; and a $40 million working capital revolving credit facility due 2013. The outlook is stable. The downgrade reflects expectations that projected EBITDA over the term of the financing will be lower than initially was projected by the company due to revised and lowered assumptions of projected merchant power margins and substantially lower capacity prices in PJM and ISO-NE. While a high percentage of output from the NAEA portfolio is contracted in the mid term, cash flow is expected to be lower than was initially projected thereafter on merchant power margins and capacity prices. The downgrade also reflects the clearing price of capacity auctions in PJM and ISO-NE that have taken place since the original financing. In particular, auctions in ISO-NE cleared at the floor of $3.60 for the 2011/2012 delivery year, with the effective price slightly less. The next auction in ISO-NE is scheduled for October 2009. In PJM, the last auction cleared at $4.26 for the EMAAC region for the delivery year 2012/2013. The lower auctions, have resulted in substantially lower EBITDA in calendar years 2012 and 2013, compared to projections Moody's received when Moody's first rated the 1st lien credit facilities, and have reduced expectations for future auctions. As a result, the NAEA transaction has higher refinancing risk, as the expected levels of EBITDA are expected to pay down less principal through the 100% cash sweep. The Ba3 2nd lien rating reflects the notching from the 1st lien facilities due to the 2nd lien security. Moody's notes that the ratings are notched close together to reflect Moody's consolidated approach to analyzing debt metrics and the fact that the 1st and 2nd lien debt would cross default in a default scenario. Also, the interest on the 2nd lien debt is paid prior to the sweep in the cash flow waterfall. Therefore, Moody's considered both the consolidated credit metrics in addition to the 1st lien debt metrics only. The ratings reflect, among other things, the high proportion of cash flow that is either contracted or hedged with creditworthy counterparties. In addition, the ratings reflect the significant level of cash equity support the NAEA project has received from its equity sponsor Industry Funds Management Pty Ltd. (IFM), an Australian investment management company. IFM had originally invested $816 million in cash equity at the time of the initial financing/acquisition, and IFM has recently invested an additional $155 million, the proceeds of which reduced the size of the unsecured term loan (which will be refinanced by the 2nd lien notes) and reduced the size of the 1st lien facilities. To date, IFM has invested a total of $971 million in NAEA. The ratings also reflect the risks related to the uncertainty of the level of capacity payments received through the portfolio's participation in the capacity markets in PJM and ISO-New England as well as the risks associated with the portfolio's merchant power exposure beyond the tenor of the loans. Furthermore, revenues earned under the financial hedges provide some cash flow stability relative to pure merchant cash flow, however, volatility related to basis risk and other hedge imperfections remain. There remains the risk that negative operational events will affect availability and expose the project to negative settlement events. In addition, the ratings reflect the increased level of refinancing risk due to lower than expected paydown of 1st lien debt. A Credit Opinion with additional details and ratings rationale will be posted on www.moodys.com. The stable outlook reflects the expectation that the portfolio of projects will generate the cash flows as forecasted, since the cash flows are predominantly derived from physical tolling agreements with creditworthy counterparties and known capacity prices, at least in the mid term. Further, capacity prices are continuously established three years in advance through an auction process. The outlook also assumes the stability in the credit quality of the project off-takers and counterparties. Also, the outlook assumes that the projects will continue to be operated and maintained in a manner that allows them to perform as expected. The new assigned Ba3 rating is predicated upon the final structure and documentation being consistent with Moody's understanding of the transaction. The last rating action was on May 20, 2008, when the 1st lien ratings of NAEA were first assigned. North American Energy Alliance, LLC, is a special purpose entity formed by Industry Funds Management Pty Ltd., an Australian investment management company. NAEA owns a portfolio of six power projects, acquired from Consolidated Edison Development, a subsidiary of Consolidated Edison, Inc. The six power generation facilities are located in two distinct power markets, PJM and ISO- New England. The aggregate generating capacity of the six facilities is 1,706 MWs, consisting of three assets in ISO-New England and three assets in PJM. In ISO -- New England, the Newington Energy Facility accounts for 525 MWs; the EMI facilities account for 185 MWs; and the EMI Expansion facility accounts for 96 MWs. In PJM, the Lakewood Facility accounts for 197 MWs (NAEA's 80% pro rata ownership); the Ocean Peaking Facility accounts for 351 MWs; and the Rock Springs Facility accounts for 352 MWs. NOWAUTO GROUP: To Restate June 30, 2008 Financial Report -------------------------------------------------------- NowAuto Group, Inc., said because of the change in auditor and the sanctions placed against Moore & Associates Chartered, its independent registered public account firm, the Company's Financial Statements for the period ending June 30, 2008 should not be relied on. In a regulatory filing with the Securities and Exchange Commission, the Company said its new independent auditor, Seale & Beers, CPAs, is re-auditing the Financial Statements for the period ending June 30, 2009. A restatement due to an error in accounting estimate is expected. All subsequent reports will be restated as a result. On August 7, 2009, NowAuto Group's Board of Directors dismissed Moore. On the same date, NowAuto Group engaged Seale and Beers as its new independent registered public account firm. The Board of Directors of NowAuto Group and its Audit Committee approved of the dismissal of Moore and the engagement of Seale and Beers as its independent auditor. NowAuto Group said none of the reports of Moore on the Company's financial statements for either of the past two years or subsequent interim period contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles, except that NowAuto Group's audited financial statements contained in its Form 10-K for the fiscal year ended June 30, 2008, a going concern qualification in the Company's audited financial statements. During NowAuto Group's two most recent fiscal years and the subsequent interim periods thereto, there were no disagreements with Moore whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Moore's satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its report on the Company's financial statements. The dismissal was made in anticipation of sanctions taken by the Public Company Accounting Oversight Board against Moore. On August 27, 2009, the PCAOB revoked the registration of Moore because of violations of PCAOB rules and auditing standards in auditing financial statements, PCAOB rules and quality controls standards, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and non-cooperation with a Board investigation. Based in Tempe, Ariz., NowAuto Group Inc. (OTC BB: NAUG) -- http://www.nowauto.com/-- operates three buy-here-pay-here used vehicle dealerships in Arizona. The company manages all of its installment finance contracts and purchases installment finance contracts from a select number of other independent used vehicle dealerships. Through its subsidiary, NavicomGPS Inc., the company markets GPS tracking devices, primarily to independent used vehicle dealerships. PACIFIC ENERGY: Abandons Trading Bay Unit After Sale Collapses -------------------------------------------------------------- Wesley Loy at Petroleum News reports that Pacific Energy Resources Ltd. has abandoned its minority interest in the Trading Bay unit in Cook Inlet. According to Petroleum News, Pacific Energy's effort to sell its Trading Bay stake failed. Petroleum News relates that the Hon. Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware signed an order on September 2 granting Pacific Energy permission to abandon the property and associated contracts. Pacific Energy said that it couldn't afford to hang onto Trading Bay any longer due to significant operating losses, Petroleum News states. Court documents say, "State law determines which party is responsible for property once it is abandoned." According to court documents, a lawsuit has been filed in state Superior Court of Alaska to determine who is liable for dismantlement of Trading Bay offshore platforms. Judge Carey had approved the sale contingent on the buyer meeting an August 31 deadline for showing "satisfactory evidence of financial ability" to meet the obligations, and when lawyers said at a September 1 hearing that a financing deal was close, the judge granted Ocar Energy and Pacific Energy a couple of extra hours to try to close it, Petroleum News relates. According to the report, Judge Carey signed an order on September 2 that said, "No sale transaction . . . could be consummated." Headquartered in Long Beach, California, Pacific Energy Resources Ltd. -- http://www.pacenergy.com/-- engages in the acquisition and development of oil and gas properties, primarily in the United States. The Company and seven of its affiliates filed for Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case No. 09-10785). Attorneys at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. The Debtors proposed Rutan & Tucker LLP as special corporation and litigation counsel; Schully, Roberts, Slattery & Marino, PLC, as special oil and gas and transactional counsel; Devlin Jensen as special Canadian counsel; Scott W. Winn, at Zolfo Cooper Management, LLC, as chief restructuring officer; Lazard Freres & Co. LLC as investment banker; and Albrecht & Associates, Inc., as agent for the Debtors in the sale of their oil and gas properties. Omni Management Group, LLC, is the claims, balloting, notice and administrative agent for the Debtors. When the Debtors filed for protection from their creditors, they listed between $100 million and $500 million each in assets and debts. PEREGRINE PHARMA: Posts $2MM Net Loss for Quarter Ended July 31 --------------------------------------------------------------- Peregrine Pharmaceuticals Inc. posted a net loss of $2.42 million for three months ended July 31, 2009, compared with a net loss of $5.08 million for the same period in 2008. The Company's balance sheet at July 31, 2009, showed total assets of $26.21 million, total liabilities of $20.99 million and stockholders' equity of $5.22 million. The Company said that it needs to raise additional capital through one or more methods, including but not limited to, issuing additional equity or debt, in order to support the costs of its research and development programs. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4416 Headquartered in Tustin, California, Peregrine Pharmaceuticals Inc. (NASDAQ:PPHM) -- http://www.peregrineinc.com/-- is a clinical-stage biopharmaceutical company developing monoclonal antibodies for the treatment of cancer and hepatitis C virus infection. The company is advancing three separate clinical programs with its compounds bavituximab and Cotara that employ its two platform technologies: Anti-Phosphatidylserine therapeutics and Tumor Necrosis Therapy. Going Concern Doubt On July 10, 2009, Ernst & Young LLP expressed substantial doubt about Peregrine Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the years ended April 30, 2009, and 2008. The auditing firm pointed to the Company's recurring losses from operations and recurring negative cash flows from operating activities. PHYSICANS IMAGING: Case Summary & 18 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Physicans Imaging Center of Florida LLC 4251 Mangrum Court Hollywood, FL 33021 Bankruptcy Case No.: 09-28837 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: John K. Olson Debtor's Counsel: Craig A. Pugatch, Esq. 101 NE 3 Ave #1800 Ft Lauderdale, FL 33301 Tel: (954) 462-8000 Fax: (954) 462-4300 Email: capugatch.ecf@rprslaw.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 18 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flsb09-28837.pdf The petition was signed by Herbert L. Shick MD, managing member of the Company. RAPTOR NETWORKS: Balance Sheet Upside-Down by $18MM as of June 30 ----------------------------------------------------------------- Raptor Networks Technology Inc. has total assets of $1,532,829 against total debts of $19,537,032, all current, resulting to a stockholders' deficit of $18,004,203 as of June 30, 2009. The Company recorded a net loss of $10,614,000 on net revenue of $553,037 for six months ended June 30, 2009. This compares to a net loss of $19,237,555 on net revenue of $476,146 during the year-ago period. Additionally, the Company also has an accumulated deficit of $81,842,749 and a working capital deficit of $18,063,156 as of June 30, 2009, of which $10,674,498 relates to the fair value of derivative financial instruments. In September 2008, the Company shifted its principal operating model from product development to licensing, enabling a reduction in headcount, footprint and infrastructure, reducing expense run rates substantially. There can be no assurance that this shift in business model will be successful, the Company said. "The items discussed above raise substantial doubt about the Company's ability to continue as a going concern," the Raptor Networks said. A copy of the Company's second quarter Form 10-Q is available for free at http://researcharchives.com/t/s?4448 A copy of the Company's first quarter Form 10-Q is available for free at http://researcharchives.com/t/s?4449 Raptor Networks designs, produces and sells standards-based, proprietary high-speed network switching technologies. Its "distributed network switching technology" allows users to upgrade their traditional networks with its switches to allow for more efficient management of high-bandwidth applications. RASHMI PATEL: Case Summary & 10 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Rashmi S. Patel 5918 Clifton Oaks Dr. Clarksville, MD 21029 Bankruptcy Case No.: 09-26736 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: Robert A. Gordon Debtor's Counsel: David Daneman, Esq. Bishop, Daneman, et al. 2 N. Charles St., Suite 500 Baltimore, MD 21201 Tel: (410) 385-5383 Email: ddaneman@bdslegal.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 10 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mdb09-26736.pdf The petition was signed by Rashmi S. Patel. SEAWAY VALLEY: March 31 Balance Sheet Upside-Down by $5.7 Million ----------------------------------------------------------------- Seaway Valley Capital Corp.'s balance sheet at March 31, 2009, showed total assets of $22.66 million and total liabilities of $28.36 million, resulting in a stockholders' deficit of $5.70 million. For three months ended March 31, 2008, the Company posted a net loss of $3.94 million compared with a net loss of $2.93 million for the same period in 2008. The Company said that it has a working capital deficit and is in default on its credit facility. Its ability to continue as a going concern is dependent upon achieving sales growth, reduction of operation expenses and ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due, and upon profitable operations. The Company also related that failure to secure additional financing in a timely manner and on favorable terms if and when needed in the future could have a material adverse effect on the Company's financial performance, results of operations and stock price and require the Company to implement cost reduction initiatives and curtail operations. Furthermore, additional equity financing may be dilutive to the holders of the Company's common stock, and debt financing, if available, may involve restrictive covenants, and may require the Company to relinquish valuable rights. A full-text copy of the Company's Form 10-Q/A is available for free at http://ResearchArchives.com/t/s?442f About Seaway Valley Based in Gouverneur, New York, Seaway Valley Capital Corp. (OTC: SWVC) -- http://www.seawaycapital.com/-- makes equity, equity- related, and debt investments in companies that require expansion capital. Seaway also seeks investments in leveraged buyouts and restructurings. Its current holdings include Patrick Hackett Hardware Company and North Country Hospitality Inc. Going Concern Doubt Dannible & McKee, LLP, in Syracuse, New York, expressed substantial doubt about Seaway Valley Capital Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the fiscal years ended Dec. 31, 2008, and 2007. The auditing firm noted that the Company suffered losses from operations, is in default on a credit facility and has a working capital deficiency as of Dec. 31, 2008. SHERYL STILES: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Sheryl Ann Stiles dba Sheryl Ann Moon 13315 Darview St. San Diego, CA 92129 Bankruptcy Case No.: 09-13383 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Southern District of California (San Diego) Judge: Chief Judge Peter W. Bowie Debtor's Counsel: Hugh D. Kelso III, Esq. H.D Kelso & Assoc. 8799 Balboa Avenue, Suite 155 San Diego, CA 92112 Tel: (858) 974-7150 Ext. 13 Email: hugh_kelso@yahoo.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 $2,412,620, and total debts of $2,479,742. A full-text copy of Ms. Stiles' petition, including a list of her 11 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/casb09-13383.pdf The petition was signed by Ms. Stiles. SIGNATURE APPAREL: Forced Into Chapter 7 by Two Creditors --------------------------------------------------------- Hitch & Trail Inc and Talful Ltd. have filed an involuntary Chapter 7 petition for Signature Apparel Group LLC in the U.S. Bankruptcy Court for the Southern District of New York. Santosh Nadgir at Reuters relates that the two creditors are claiming that Signature Apparel owed them about $8.3 million. Signature Apparel Group LLC owns the Fetish trademark and holds the licenses for Rocawear Juniors and Artful Dodger. SINO ASSURANCE: Going Concern Uncertainty Due to Neg. Cash Flow --------------------------------------------------------------- Sino Assurance Inc. recorded net income of $168,152 on net revenue of $928,447,000 for three months ended June 30, 2009, compared with a net income of $276,952 on net revenue of $923,633 for the same period in 2008. The Company had total assets of $5,368,229 against total debts of $2,346,048, all current. As of June 30, 2009, the Company has a negative operating cash flow of $86,469 with the accumulated deficits of $224,865. "These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders, the ability to obtain necessary additional financing to sustain operations and the attainment of profitable operations," the Company said in its Form 10-Q submitted to the U.S. Securities and Exchange Commission. A copy of the Company's Form 10-Q is available for free at: http://researcharchives.com/t/s?4447 Sino Assurance Inc. was incorporated in the State of Delaware on August 19, 1997 as Sheffield Products, Inc. On November 30, 2004, the Company changed its name to "Digital Network Alliance International, Inc." On November 20, 2008, the Company further changed its current name to "Sino Assurance Inc." The Company, through its subsidiaries and variable interest entity, is principally engaged in the provision of surety and tendering guarantees service to corporations and individuals in the People's Republic of China. SIRVA INC: Court Strikes Out $38 Mil. Fraud & Antitrust Claims -------------------------------------------------------------- The Hon. James M. Peck in the U.S. Bankruptcy Court for the Southern District of New York has expunged a $38 million claim for damages in connection with fraud and antitrust allegations against the now-reorganized debtors in the bankruptcy case of moving and relocation company Sirva Inc., which owns Allied Van Lines, among other interests, according to Law360. The Company and 61 of its affiliates filed separate petitions for Chapter 11 protection on February 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq., at Kirkland & Ellis, L.L.P., is representing the Debtor. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. The Court confirmed the Debtor's First Amended Prepackaged Plan on May 7, 2008. The Debtors' First Amended Prepackaged Joint Plan of Reorganization became effective on May 12, 2008. SIX FLAGS: 32 Units' Schedules of Assets & Debts ------------------------------------------------ Thirty-two debtor affiliates of Six Flags, Inc., filed with the Court separate schedules of assets and liabilities: Debtor Entity Assets Liabilities ------------- ------------ -------------- Astroworld GP LLC $0 $1,129,177,250 Astroworld LP $107,916,964 $1,129,177,250 Astroworld LP LLC $0 $1,129,177,250 Fiesta Texas Inc. $312,960,774 $1,129,949,263 Funtime, Inc. $11,778,447 $1,167,744,922 Funtime Parks, Inc. $733,495,200 $1,129,177,250 Great America LLC $683,718,882 $1,130,676,358 Great Escape Holding Inc. $0 $1,129,177,250 Great Escapes Rides L.P. $14,736,489 $1,143,913,739 Great Escape Theme Park L.P. $107,978,203 $1,144,611,671 Hurricane Harbor GP LLC $0 $1,129,177,250 Hurricane Harbor LP $63,931,610 $1,129,699,553 Hurricane Harbor LP LLC $0 $1,129,177,250 KKI, LLC $51,381,339 $1,153,308,156 Magic Mountain LLC $435,973,464 $1,132,585,542 Park Management Corp. $152,989,330 $1,234,782,807 PP Data Services Inc. $9,833,648 $1,159,544,381 Premier Parks Holdings Inc. $0 $1,129,177,250 Premier Parks of Colorado Inc. $0 $1,129,177,250 Premier Waterworld Sacramento Inc. $0 $0 Riverside Park Enterprises, Inc. $87,348,953 $1,204,707,379 SF HWP Management LLC $0 $0 SFJ Management Inc. $2,410,362 $1,195,060,171 SFRCC Corp. $2,212,974 $1,931,287 Six Flags Great Escape L.P. $0 $1,129,177,250 Six Flags America LP $96,837,263 $1,322,001,300 Six Flags America Corporation $29,076,282 $1,158,253,532 Six Flags Services of Illinois, Inc. $0 $1,129,177,250 Six Flags Services, Inc. $0 $1,129,177,250 Six Flags St. Louis LLC $137,709,995 $1,131,074,147 South Street Holdings LLC $1,346,709 $1,129,177,250 Stuart Amusement Company $69,983,058 $1,146,029,981 About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: 32 Units' Statements of Financial Affairs ---------------------------------------------------- James Coughlin, Six Flag's, Inc.'s general counsel, reports that within two years or the Petition Date, these Debtor-affiliates of Six Flags, Inc., earned these amounts from the operations of their businesses: Debtor-affiliate Period Amount ---------------- ------ ------ Fiesta Texas Inc. 1/1/2009 to 6/12/2009 ($81,380) 2008 $18,285,278 2007 12,970,331 Great America LLC 1/1/2009 to 6/12/2009 ($6,037,606) 2008 $43,228,001 2007 $33,725,840 Great Escape Theme Park L.P. 1/1/2009 to 6/12/2009 ($4,367,231) 2008 $3,697,865 2007 $3,271,552 Hurricane Harbor LP 1/1/2009 to 6/12/2009 ($2,495,200) 2008 $2,025,284 2007 $880,316 KKI, LLC 1/1/2009 to 6/12/09 ($3,998,200) 2008 ($4,742,607) 2007 ($9,901,012) Magic Mountain LLC 1/1/2009 to 6/12/2009 ($3,511,279) 2008 $20,221,040 2007 $11,161,818 Park Management Corp. 1/1/2009 to 6/12/2009 ($5,269,391) 2008 $3,107,400 2007 $2,264,219 PP Data Services, Inc. 1/1/2009 to 6/12/2009 ($11,481,723) 2008 $351,209 2009 $1,095,610 Riverside Park Enterprises 1/1/2009 to 6/1/2009 ($9,802,245) 2008 $11,749,078 2007 $9,791,126 SDF HWP Management LLC 2007 $800,520 Six Flags St. Louis LLC 1/1/2009 to 6/12/2009 ($6,646,960) 2008 $9,862,036 2007 $5,576,571 Six Flags Great Adventure LLC 1/01/2009 to 6/12/2009 ($22,116,493) 2008 $23,989,569 2009 $12,720,185 Six Flags America LP 1/1/2009 to 6/12/2009 ($8,770,182) 2008 $3,090,397 2007 $3,789,403 SFRCC Corp 1/1/2009 to 6/12/2009 ($538,264) 2008 ($216,385) SFJ Management Inc. 2007 (1,011,259) During the two years immediately preceding the Debtors' Petition Date, these Debtor-affiliates earned revenues in the form of interest income and disposal of assets: Revenue from Interest Income/ Debtor-affiliate Period Disposal of Assets ---------------- ------------ ------------------ Fiesta Texas Inc. 1/1/2009 to 6/12/2009 $8,471,080 2008 $16,558,500 2009 $13,412,600 Funtime Parks, Inc. 1/1/2009 to 6/12/2009 $32,150,800 2008 $66,478,900 2007 $63,147,200 Great America LLC 2008 $30,800 2007 $482,707 Great Escape Theme Park L.P. 1/1/2009 to 6/12/2009 $2,542,930 2008 4,994,103 2007 3,302 Hurricane Harbor LP 1/1/2009 to 6/12/2009 $1,782,180 2008 $401,679 2007 $2,678,900 Park Management Corp 2007 $9,475,224 Riverside Park Enterprises, Inc. 2008 $50,000 2007 20,000 Six Flags St. Louis LLC 1/1/2009 to 6/12/2009 $573 2007 $14,500 Six Flags Great Adventure LLC 1/1/2009 to 6/12/2009 $8,628 2008 $30,345 2007 $75,000 Six Flags America LP 1/1/2009 to 6/12/2009 $200,000 2008 $250,000 Within 90 days immediately preceding the Petition Date, these Debtor-affiliates made payments to various creditors: -- Fiesta Texas Inc. See http://bankrupt.com/misc/FiestaTX_sofa3b.pdf -- Great America LLC See http://bankrupt.com/misc/GreatAM_sofa3b.pdf -- Great Escape Theme Park L.P. See http://bankrupt.com/misc/GETP_sofa3b.pdf -- Hurricane Harbor LP See http://bankrupt.com/misc/Hurcanehrbr_sofa3b.pdf -- KKI, LLC See http://bankrupt.com/misc/KKI_sofa3b.pdf -- Magic Mountain LLC See http://bankrupt.com/misc/MgcMountain_sofa3b.pdf -- Park Management Corp. See http://bankrupt.com/misc/ParkMgtCorp_sofa3b.pdf -- PP Data Services, Inc. See http://bankrupt.com/misc/PPDataSvcs_sofa3b.pdf -- Riverside Park Enterprises Inc. See http://bankrupt.com/misc/RiversideParkEnt_sofa3b.pdf -- Six Flags St. Louis LLC See http://bankrupt.com/misc/SFstlouis_sofa3b.pdf -- Six Flags Great Adventure LLC See http://bankrupt.com/misc/SFGA_sofa3b.pdf -- Six Flags America LP See http://bankrupt.com/misc/SFAmerica-sofa3b.pdf -- SFRCC Corp. See http://bankrupt.com/misc/SFRCC_sofa3b.pdf Mr. Coughlin reports that these Debtor-entities made payments to company insiders during the one year period prior to the Petition Date, but the items containing the payment information is redacted: -- Fiesta Texas Inc. -- Great America LLC -- Great Escape Theme Parks, L.P. -- KKI, LLC -- Magic Mountain LLC -- PP Data Services, Inc. -- Riverside Park Enterprises Inc. -- Six Flags Services, Inc. -- Six Flags Services of Illinois, Inc. -- Six Flags Great Adventure LLC -- Six Flags America LP Within one year immediately preceding the Petition date, these affiliates became parties to civil or personal injury lawsuits: Debtor-affiliate No. of Cases ---------------- ------------ Astroworld LP 1 Fiesta Texas, Inc. 10 Funtime, Inc. 1 Great America LLC 25 Great Escape Holding Inc. 2 Great Escape Rides L.P. 3 Great Escape Theme Park L.P. 1 Hurricane Harbor GP LLC 4 Hurricane Harbor LP 6 KKI, LLC 11 Magic Mountain LLC 28 Park Management Corp. 14 Stuart Amusement Company 2 Premier WaterWorld Sacramento Inc. 2 Riverside Park Enterprises Inc. 18 Six Flags St. Louis LLC 53 Six Flags Services of Illinois, Inc. 5 Six Flags Great Escape L.P. 6 Six Flags Great Adventure LLC 61 Six Flags America Property Corporation 1 Six Flags America LP 17 SFJ Management Inc. 4 These Debtor-affiliates made contributions to various charitable institutions within one year prior to the Petition Date: Debtor-affiliate Value of Donation ---------------- ----------------- Fiesta Texas, Inc. $1,300 Great Escape Theme Park L.P. $17,118 KKI, LLC $9,000 Magic Mountain LLC $29,304 Riverside Park Enterprises Inc. $23,886 Six Flags St. Louis LLC $768 Six Flags Great Adventure LLC $17,704 These Debtor-affiliates incurred losses due injury of visitors or other casualty within one year to the Petition Date. The damages however, were covered in whole or in part by insurance: Debtor-affiliate Amount ---------------- ------ Fiesta Texas Inc. $30,528 Great Escape Theme Park L.P. $50,109 Hurricane Harbor LP $106,845 KKI, LLC $153,000 Magic Mountain LLC $153,000 Park Management Corp. $34,500 Riverside Park Enterprises Inc. $66,005 Six Flags St. Louis $64,723 Six Flags Services, Inc. $28,000 Six Flags America LP $1,874,894 Within two years to the Petition Date, Hurricane Harbor LP has transferred property as security valued at $341,562, to the City of Arlington, Texas. Fiesta Texas Inc., Funtime, Inc., Great America LLC, Magic Mountain LLC, Park Management Corp., and Six Flags St. Louis received separate notices from governmental units regarding potential liabilities for violation of certain environmental laws. Funtime, Inc., Great America LLC, Park Management Corp., Riverside Park Enterprises Inc., and Six Flags Great Adventure LLC have provided notice of release of hazardous materials, to different governmental units concerned with environmental protection. Fiesta Texas Inc., Funtime, Inc., Magic Mountain LLC, Riverside Park Enterprises Inc., and Six Flags St. Louis were parties to separate administrative proceedings involving Environmental Law filed by different agencies concerned with environmental protection. Mr. Coughlin reported that within two years to the Petition Date, Kyle Bradshaw, Lenny Russ, and Jeff Speed kept or supervised the keeping of books of accounts and records of these Remaining Debtors, as applicable, or were in possession of those books and records as of the Petition Date. -- Astroworld GP LLC -- Astroworld LP -- Astroworld LP LLC -- Funtime, Inc. -- Funtime Parks, Inc. -- Great Escape Holding Inc. -- Hurricane Harbor GP LLC -- Hurricane Harbor LP -- Hurricane Harbor LP LLC -- PP Data Services, Inc. -- Premier Parks Holdings Inc. -- Premier Parks of Colorado Inc. -- Premier Waterworld Sacramento Inc. -- SFJ Management Inc. The books and records of Fiesta Texas Inc., within two years immediately preceding the Petition Date were kept or supervised by Sandy Wemer and Tona Gidler, Controllers; Chris Haaland, Finance Director. The books and records of Great America LLC and Six Flags Services of Illinois, within two years immediately preceding the Petition Date were kept or supervised by Pamela Harrower, Finance Director and Cynthia Riesing, Controller. The books and records of these Debtor-affiliates, within two years immediately preceding the Petition Date are kept or supervised by Amy Van Alstyne and Adam Lundin Controllers; and Jack Fox, Finance Director. -- Great Escape Holding Inc. -- Great Escape Theme Park L.P. -- SF HWP Management LLC -- Six Flags Great Escape L.P. The books and records of KKI LLC, within two years immediately preceding the Petition Date are kept or supervised by Brent Hight, Finance Director and Brad Peterson, Controller. The books and records of Magic Mountain LLC, within two years immediately preceding the Petition Date were kept or supervised by David Groh and Scott McClellan Finance Directors, Camela Goujon, Assistant Accounting Manager and Deborah Howell, Controller: The books and records of Park Management Corp., within two years immediately preceding the Petition Date are kept or supervised by Omar Percich and Pam Omaas, Controllers; and Jodi Davenport, Finance director. The books and records of South Street Holdings LLC, Stuart Amusement Company and Riverside Park Enterprises, within two years immediately preceding the Petition Date were kept or supervised by Michael Hoffman, Finance Director, and Donna Leger, Controller. The books and records of Six Flags St. Louis LLC, within two years immediately preceding the Petition Date are kept or supervised by Curtis Stoll and Linda Leggitt, Controllers; and Mary Schamel, Finance Director: The books and records of Six Flags Services, Inc. and Six Flags Great Adventure, within two years immediately preceding the Petition Date are kept or supervised by Leonard Turtora and William Lambeth, Finance Directors; and Joseph Fair and Gary Natter, Controllers. The books and records of Six Flags America Property Corporation and Six Flags America LP, within two years immediately preceding the Petition Date were kept or supervised by Marty Donnelly, Saunadra Hicks and Benjamin Gidney, Controllers; Luis Carrasco, Finance Director; and Rick Howarth, General Manager: The books and records of SFRCC Corp., within two years immediately preceding the Petition Date are kept or supervised by Jeff Speed, Chief Financial Officer; Kyle Bradshaw, SVP for finance and Brian Wilcox Jr., finance director. The last two inventories on certain of these Debtors-affiliates were conducted or supervised by these individuals or entities, as applicable: Total Debtor-affiliate Supervisor Amount ---------------- ---------- ------ Fiesta Texas Inc. Joseph Brown $6,080,257 Philip Ingle Lenny Schelstrate Mike Slagle Great America LLC Mark Murrens $3,346,686 Jim Allie Dawn Shefsky Great Escape Theme Sarah Chapin $1,951,160 Park L.P. Joe Sciancalepore Rachel Doninger Terry Hopkins Hurricane Harbor LP Jamie Parker Mike Davis KKI, LLC Bill Norton $1,601,593 Jeanette Thompson Vemon Jeter Magic Mountain Dan Holland $6,545,242 Doug Mura Robert Bustle Brandon Smith Park Management Corp. Rick Romero $4,443,376 Vanessa Cabos Tiffany Rogers Riverside Park Joe Wandolowski $4,516,807 Enterprises Inc. Libby Sussman Jessie Johnson Stephanie Cunningham Washington Inventory Services SFNE Retail Staff Six Flags St. Louis LLC Michael Walleman $3,238,936 Justin Sharpe Chris Derby Nick Pitzer Six Flags Great Escape L.P. Sarah Chapin $2,265,809 Joe Sciancalepore Rachel Doninger Terry Hopkin Six Flags Great Adventure Joe Zdunek $8,988,260 Allyson Avallone Denny Gyurisin The persons having possession or custody of the records of the last two inventories of these Debtor-affiliates, as applicable, are: Debtor-affiliate Custodian ---------------- --------- Fiesta Texas Inc. Philip Ingle Joseph Brown Lenny Schelstrate Mike Slagle Great America LLC Mark Murrens Jim Allie Dawn Shefsky Great Escape Theme Park L.P. Sarah Chapin Joe Sciancalepore Rachel Doninger Terry Hopkins Hurricane Harbor LP Jamie Parker Mike Davis KKI, LLC Vemon Jeter Keith Klusman David Cook Magic Mountain LLC Alison Glaser Nicole Fraudenberg Alison Glaser Anita Bissonette Cherise Gustaveson Park Management Corp. Finance Retail Riverside Park Enterprises Inc. Donna Leger Six Flags St. Louis LLC Justin Sharpe Chris Derby Nick Pitzer Six Flags Great Escape L.P. Sarah Chapin Joe Sciancalepore Rachel Doninger Terry Hopkins Six Flags Great Adventure LLC Joe Zdunek Emmie Savage Denny Gyurisin Six Flags America LP Walter Hight About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: G. Osborne Asks for Probe on True Worth -------------------------------------------------- In a letter to Judge Christopher S. Sontchi dated August 12, 2009, Gardner C. Osborne, an investor with the Debtors' 2013 Bonds, tells the Court he believes the Debtors filed a bankruptcy petition that does not represent the true worth of the company. Further, Mr. Osborne asked the Court to investigate other opinions and suggest that the company's true value lies somewhere between $1 billion and $2 billion, and not just $1 billion, as the company declared in June 2009. Mr. Osborne tells the Court that Six Flags valued the company at $2 billion in April 2009. About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: Hearing on Amended Plan Outline on October 8 ------------------------------------------------------- Judge Christopher S. Sontchi of the United States Bankruptcy Court for the District of Delaware will convene a hearing on October 8, 2009, at 10:00 a.m., prevailing Eastern Time, to consider the adequacy of the Disclosure Statement explaining the First Amended Joint Plan of Reorganization filed by Six Flags, Inc., and its debtor affiliates. Objections are due October 1, 2009, at 4:00 p.m. Prevailing Eastern Time. Meanwhile, Stark Investments and its affiliates, as investment advisor to holders of senior notes issued by the Debtors, disagree with the Disclosure Statement explaining the Debtors' Amended Joint Plan of Reorganization. Neil B. Glassman, Esq., at Bayard, P.A., in Wilmington, Delaware, complains that the Disclosure Statement is, on its face, inadequate and fails to contain adequate information as required by Section 1125 of the Bankruptcy Code. The Amended Disclosure Statement, as proposed, does not provide sufficient disclosure concerning a number of key aspects of the proposed Amended Plan, including, among other things, sufficient information regarding the Debtors' assets and business, the business projections and valuation issues, he adds. As previously reported by the TCR, Six Flags, Inc., Premier International Holdings, Inc., and their debtor affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware a first amended joint plan of reorganization and an accompanying disclosure statement, dated August 20, 2009. The First Amended Plan, among others, reflects estimated recovery and amounts for classified claims, and adds one class of claim -- Funtime, Inc. Unsecured Claims. The Amended Plan also includes financial projections and valuation and liquidation analyses. Under the First Amended Plan, the Debtors estimate that the reorganization value of Six Flags will range between approximately $1.12 billion and $1.38 billion, with a midpoint value of $1.25 billion, as of an assumed Effective Date of December 31, 2009. Under the Plan, the holders of Prepetition Credit Agreement Claims against Six Flags Theme Parks Inc. and certain of its wholly-owned domestic subsidiaries will convert those Claims into (i) approximately 92% of the New Common Stock to be issued by Reorganized SFI, subject to dilution by the Long-Term Incentive Plan, and (ii) a new term loan in the aggregate amount of $600 million. Based on the Debtors' estimate of Allowed Claims as of an assumed December 31, 2009 Plan Effective Date in these Reorganization Cases, the First Amended Plan provides for a recovery of: -- approximately 92.2% to 112.8% to holders of Six Flags Theme Parks, Inc. Prepetition Credit Agreement Claims; -- a 100% recovery for the holders of all Other Secured Claims; -- a 100% recovery for the holders of Unsecured Claims against all Debtors other than SFO and SFI; -- 8.2% to 12.4% to holders of Unsecured SFO Claims; -- 0.4% to 0.6% to holders of Unsecured SFI Claims; and -- no recovery for holders of Funtime, Inc. Claims, Subordination Securities Claims and Pre-confirmation Equity Interests in SFI. A blacklined version of the First Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/sixf_1stplanblackline.pdf A blacklined version of the First Amended Chapter 11 Plan is available for free at: http://bankrupt.com/misc/sixf_1stdsblackline.pdf About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: Revised Budget for Cash Collateral Use ------------------------------------------------- Pursuant to the Final Cash Collateral Order entered by the Bankruptcy Court, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders agreed to permit the Debtors to use their Cash Collateral for the period through the Termination Date, subject to the terms and conditions set forth in the Final Cash Collateral Order. Furthermore, the Debtors are authorized to modify the Budget; provided that the modification complies with the terms and conditions of the Final; Cash Collateral Order. In accordance with the Final Cash Collateral Order, the Debtors submitted to Judge Christopher S. Sontchi of the United States Bankruptcy Court for the District of Delaware, their revised budget, a full-text copy of which is available for free at: http://bankrupt.com/misc/SixF_rev_cashcollbudget.pdf About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SPORT CHALET: Files Script of Option Exchange Conference Call ------------------------------------------------------------- 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 filed with the SEC a Schedule 14A to share a script of the conference call given by Craig Levra, the Chairman and Chief Executive Officer and Howard Kaminsky, the Chief Financial Officer on September 2, 2009, regarding the proposed Option Exchange. A full-text copy of the script is available at no charge at: http://ResearchArchives.com/t/s?444a As reported by the Troubled Company Reporter on August 31, 2009, Mr. Levra indicated in a memorandum 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. 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. STAR TRIBUNE: Insurers Balk Plan's Treatment of Insurance Policy ---------------------------------------------------------------- ACE American Insurance Co., a number of its subsidiaries and ESIS Inc., insurers of Star Tribune Holdings Corp., have objected to the Debtor's Chapter 11 plan, calling it unclear on the treatment of its insurance policies and saying it could prejudice the insurers' rights to defend claims and arbitrate certain disputes, according to Law360. Headquartered in Minneapolis, Minnesota, The Star Tribune Company -- http://www.startribune.com/-- operates the largest newspaper in the state of Minnesota and published seven days each week in an edition for the Minneapolis-Saint Paul metropolitan area. The Company and its affiliate, Star Tribune Holdings Corporation, filed for Chapter 11 protection on January 15, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-10244). Marshall Scott Huebner, Esq., James I. McClammy, Esq., and Lynn Poss, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Blackstone Advisory Services L.P. is the Debtors' financial advisor. The Garden City Group, Inc., serves as noticing and claims agent. Scott Cargill, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC, represent the official committee of unsecured creditors. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. STERLING SILVER: Alberta Star Eyes Corporate Assets --------------------------------------------------- Vancouver, British Columbia-based Alberta Star Development Corp. reports that it continues to be a party of interest with the United States Bankruptcy Court for the District of Idaho in the matter regarding the Sterling Silver Mining Company and its corporate assets situated in the Coeur d' Alene, Idaho mining district, Idaho. As a party of interest, Alberta Star said it is interested in pursuing options with Sterling Mining and its related assets. Alberta Star believes that there will continue to be a number of attractive acquisition opportunities available to the Company. Alberta Star has and continues to conduct due diligence reviews on a number of resource opportunities, including a number of advanced stage mineral exploration projects that meet the Company's corporate mandate of acquiring opportunities with established resources, expansion potential, infrastructure, cash flow and near term cash flow. However, investors are cautioned that there can be no assurance that a transaction could be completed on terms satisfactory to the Company, or at all. Alberta Star maintains a strong balance sheet and has no long term debt. Alberta Star continues to maintain seasoned and qualified management and seeks to fulfill its stated mandate of acquiring a world class advanced stage exploration and production projects. Alberta Star is a Canadian mineral exploration company that identifies, acquires, finances advanced stage mineral exploration projects. The Company is committed to creating long term shareholder value through the discovery of base and precious metals. About Sterling Mining Based in Coeur d'Alene, Idaho, Sterling Mining Company (OTCBB:SRLM and FSE:SMX) -- http://www.SterlingMining.com/-- is a mineral resource development and exploration company. The company has a long term lease on the Sunshine Mine in North Idaho's Coeur d'Alene Mining District. The Sunshine Mine is comprised of 5,930 patented and unpatented acres, and historically produced over 360 million ounces of silver from 1884 until its closure in early 2001. Sterling Mining leased the Sunshine Mine in June 2003, along with a mill, extensive mining infrastructure and equipment, a large land package, and a database encompassing a long history of exploration, development and production. As of September 30, 2008, Sterling Mining had $31.9 million in total assets, and $13.2 million in total current liabilities and $1.6 million in total long-term liabilities. In its schedules, the Debtor listed total assets of $11,706,761 and total debts of $14,159,010. Sterling Mining filed for bankruptcy protection on March 3, 2009 (Bankr. D. Idaho Case No. 09-20178). Bruce A. Anderson, Esq., at Elsaesser Jarzabek Anderson Marks Elliott & McHugh, Chartered represents the Debtor as counsel. SUN STATE TREES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Sun State Trees & Property Maintenance, Inc. 295 Lymann Road Casselberry, FL 32707 Bankruptcy Case No.: 09-13206 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Judge: Karen S. Jennemann Debtor's Counsel: Prabodh C. Patel, Esq. Straus & Patel, P.A. 118 West Orange Street Altamonte Springs, FL 32714 Tel: (407) 331-5505 Fax: (407) 331-6308 Email: lpather@moyerstrauspatel.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/flmb09-13206.pdf The petition was signed by Randall A. Nellis, president of the Company. SYDELL INC: Files Chapter 11 as Demand for Spa Treatments Drops --------------------------------------------------------------- Sydell Inc., doing business as Spa Sydell, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Georgia, listing $4.3 million in debts and $5 million in assets. Spending on luxury items like spa treatments has fallen in the recession, Rachel Tobin Ramos and David Markiewicz at The Atlanta Journal-Constitution reports, citing Atlanta bankruptcy attorney Scott Riddle. The Journal-Constitution quoted Sydell CEO Richard Harris as saying, "Due to the current economic times and for the continued future of Spa Sydell, it was necessary for us to take this proactive step." Court documents say that Sydell has $2.25 million in unsecured debt, $743,000 of which is owed on leases for six retail locations. According to the Journal-Constitutional, hundreds of unsecured creditors -- including Georgia Department of Revenue, whom Sydell owes more than $200,000 -- are listed, mostly for trade debt, from radio station and newspaper advertising to business cards, shipping and catering. BB&T is listed as a secured creditor, whom Sydell has a $1.8 million loan. Sydell said that its six-spa chain will continue to operate and will sell and honor gift certificates, the Journal-Constitutional states. According to the report, Sydell is adding a seventh location in Roswell. Spa Sydell is a purveyor of pampering in metro Atlanta for more than a quarter-century. The chain features services like massage, facials, manicures, microdermabrasion, and reflexology. The Company started with a single location in Buckhead in 1982 and has changed names and expanded since. It has about 350 employees. TERRAINE SAUNDERS: Case Summary & 25 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Terraine Saunders PO Box 15493 Arlington, VA 22215-0493 Bankruptcy Case No.: 09-26664 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: Duncan W. Keir Debtor's Counsel: David W. Cohen, Esq. Law Office of David W. Cohen 1 N. Charles St., Suite 350 Baltimore, MD 21201 Tel: (410) 837-6340 Email: dwcohen79@jhu.edu 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 $1,956,980, and total debts of $2,593,123. A full-text copy of the Debtor's petition, including a list of its 25 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mdb09-26664.pdf The petition was signed by Terraine Saunders. TH PROPERTIES: In Default for Uncompleted Whitfield Project ----------------------------------------------------------- Sarah Fulton at The Morning Call reports that Upper Macungie Township supervisors have declared TH Properties LP in default for failing to complete improvements at the Whitfield development. The Morning Call quoted township solicitor Andrew Schantz as saying, "All four of the phases [in Whitfield] are in default because those improvements have not been completed within 12 months." Citing township engineer Dean Haas, The Morning Call relates that work is yet to be done at detention basins and along roads within the development. The Morning Call notes that other work may needed according to new requirements from the state Department of Environmental Protection, which Mr. Haas says poses a problem as the permits for the basins are in the name of the developer. The township couldn't perform any work until the permit is transferred to its name, the report states. The Morning Call reports that community development director Bruce Wlazelek suggested that the township contact TH Properties to see if company officials will sign over the DEP permits, before taking any legal action. According to The Morning Call, developers are required to post a letter of credit or place money in escrow to ensure infrastructure improvements will be completed. Philadelphia-based T.H. Properties, L.P., has 12 working developments in Pennsylvania and New Jersey. Timothy Hendricks and his brother Todd started the firm in 1992. T.H. Properties and its affiliates filed for Chapter 11 bankruptcy protection on April 30, 2009 (Bankr. E.D. Pa. Case No. 09-13201). Barry E. Bressler, Esq., at Schnader, Harrison, Segal & Lewis, LLP, and Natalie D. Ramsey, Esq., at Montgomery McCracken Walker and Rhoads LLP represent the Debtors in their restructuring efforts. The Debtors listed assets between $100 million and $500,000,000, and debts between $10 million and $50 million. THOMAS TODD PITTENGER: Case Summary & 16 Largest Unsec. Creditors ----------------------------------------------------------------- Joint Debtors: Thomas Todd Pittenger Elizabeth Long Pittenger 500 Florida Street Orlando, FL 32806 Bankruptcy Case No.: 09-20011 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtors' Counsel: Buddy D. Ford, Esq. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 Email: Buddy@tampaesq.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 $1,059,264, and total debts of $1,033,024. A full-text copy of the Debtors' petition, including a list of their 16 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-20011.pdf The petition was signed by the Joint Debtors. TOYS R US: Net Earnings Increases to $27MM for 2nd Fiscal Quarter ----------------------------------------------------------------- Toys "R" Us, Inc., on Friday reported results for its second quarter beginning May 3, 2009, and ending August 1, 2009. The Company said net earnings increased to $27 million for the second quarter of fiscal 2009, compared to $13 million for the second quarter of fiscal 2008. Operating earnings increased to $86 million for the second quarter of fiscal 2009, compared to $79 million for the second quarter of fiscal 2008. Net sales during the second quarter of fiscal 2009 were $2.567 billion, compared to $2.771 billion for the second quarter of fiscal 2008. Foreign currency translation contributed to $59 million of this decrease. Comparable store net sales decreased by 7.2% and 3.9% in the second quarter of fiscal 2009 for the Company's Domestic and International segments, respectively. The majority of the decline in net sales was in the entertainment products category, specifically video game hardware and software, driven by the industry-wide weakness of those businesses. Higher-margin products sold much better than lower-margin video games. This is reflected in the improved gross margin rate of 37.0%, which represents an increase from 36.6% in the second quarter of fiscal 2008. SG&A expense for the quarter decreased by 6.4%, or $57 million. The favorable SG&A comparison benefited from $22 million related to foreign currency translation. "We are pleased with our performance for the first half of this year and believe our results clearly demonstrate that we can successfully operate and achieve results in any economic environment. Our second quarter results delivered on our expectations, and the team did a great job growing margin rate while managing expenses," said Jerry Storch, Chairman and CEO, Toys "R" Us, Inc. "At the same time, we remain aggressive in positioning the company for long-term growth and increasing our market share as the leading specialty toy and baby products retailer. In the second quarter, we announced the acquisition of the legendary FAO Schwarz. This followed our first quarter strategic acquisitions of eToys.com, babyuniverse.com, ePregnancy.com and Toys.com. And, just this week, we added KB Toys to our growing portfolio of family-friendly brands." "We continue to make prudent capital investments to expand our business, domestically and around the world. During the second quarter, we added two "R" Superstores and completed nine side-by- side store conversions in the U.S. We also opened four new Toys"R"Us stores internationally," continued Mr. Storch. Other income increased to $64 million in the second quarter of fiscal 2009, compared to $53 million in the second quarter of the prior year. The second quarter of fiscal 2009 included a $51 million gain from a litigation settlement with Amazon.com, and the second quarter of fiscal 2008 included a $39 million gain on the liquidation of the Company's Hong Kong subsidiary. Adjusted EBITDA for the second quarter of fiscal 2009 was $145 million, compared to $147 million in the second quarter of fiscal 2008. Interest rates on borrowings were down for the second quarter compared to the same period in fiscal 2008. The increase in net interest expense to $115 million compared to $96 million in the second quarter of fiscal 2008 was driven by changes in the fair value of derivatives which do not qualify for hedge accounting and the write-off of deferred fees related to the repayment of the company's unsecured credit agreement. Income tax benefit increased by $28 million, which was primarily attributable to the reversal of deferred tax liabilities associated with undistributed earnings of one of the Company's non-U.S. subsidiaries that are now considered to be invested indefinitely. Mr. Storch continued, "During this quarter, we were very pleased to have completed both the $950 million senior unsecured note offering and the extension of our secured revolving credit facility. The execution of these two transactions has well positioned us to address our remaining obligations that mature in the future." As of August 1, 2009, the company had $8.172 billion in total assets; total current liabilities of $2.085 billion, long-term debt of $5.496 billion, deferred tax liabilities of $55 million, deferred rent liabilities of $269 million, and other non-current liabilities of $372 million. As of August 1, 2009, the company had Toys "R" Us, Inc. stockholders' deficit of $214 million and noncontrolling interest of $109 million, and total stockholders' deficit of $105 million. On August 26, 2009, the company sold an idle distribution center for $14 million. The company ended the second quarter of fiscal 2009 with cash and unused credit lines of roughly $1.543 billion, including roughly $98 million that was available to its Japan subsidiary. Long-term debt was lowered by $409 million to $5.496 billion at the end of the second quarter of fiscal 2009 compared to the second quarter of fiscal 2008, primarily due to the pay down and refinancing of the company's $1.3 billion unsecured credit agreement. Capital spending for the quarter decreased $82 million to $93 million, as the company has taken, and continues to take, steps to moderate capital spending prudently in this economic environment. Total inventory at the end of the second quarter was down $29 million or 1.3%, compared to the same period in fiscal 2008. A full-text copy of the Company's quarterly report on Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?4431 Toys "R" Us, headquartered in Wayne, New Jersey, is the largest specialty retailer of toys, with annual revenues of around $14 billion. It operates stores both in the U.S. and internationally, as well as the Babies "R" Us format. TOYS R US: Acquires KB Toys Brand for $2.1 Million -------------------------------------------------- Toys "R" Us said that it acquired at a bankruptcy auction KB Toys Inc.'s trademarks and intellectual property, including the Web site KBToys.com, for $2.1 million, James Covert at New York Post reports. According to NY Post, Toys "R" Us hasn't yet decided what to do with KB Toys. Citing Needham & Co. analyst Sean McGowan, NY Post relates that noting that KB Toys had run its Web site partly as a venue for closeouts, Toys "R" Us might do the same. Toys "R" Us, headquartered in Wayne, New Jersey, is the largest specialty retailer of toys, with annual revenues of around $14 billion. It operates stores both in the U.S. and internationally, as well as the Babies "R" Us format. At May 2, 2009, the Company had $8,303,000,000 in total assets; $2,144,000,000 in current liabilities, $5,646,000,000 in long-term debt, $72,000,000 in deferred taxes, $265,000,000 in deferred rent, and $367,000,000 of Other non-current liabilities; $297,000,000 in Toys "R" Us, Inc. stockholders' deficit, and $106,000,000 in Noncontrolling interest; and Total stockholders' deficit of $191,000,000. TRAVELLER'S INN: Files for Bankr.; Owner Plans to Sell Assets ------------------------------------------------------------- CBC News reports that Traveller's Inn has filed for bankruptcy. CBC says that the Company's over 14 hotels and long-stay units around the capital city have fallen into receivership. CBC states that Traveller's Inn's creditors claimed that they are owed over $60 million in debt. According to CBC, the hotels were still open on Thursday and were run by the receivers. Ken Glover, the trustee for Traveller's Inn, said that his priority is ensuring that hotel staff get their last cheques from the Company, and that "in the interim, we're just trying to inventory and assemble any assets that are available so that we can start trying to distribute funds to the creditors, the first of whom would be the employees for payroll." Traveller's Inn owner John Asfar said that the Company's properties will be sold. Traveller's Inn is among the largest hotel chains in Victoria, British Columbia. TRIBUNE CO: Assumes Web Site Deals With Classified Ventures ----------------------------------------------------------- Tribune Co. and its affiliates sought and obtained the Court's authority for (i) Tribune Company to assume a Limited Liability Company Agreement of Classified Ventures, LLC; and for Debtors Chicago Tribune Company, Los Angeles Times Communications LLC, The Hartford Courant Company, Orlando Sentinel Communications Company, Sun-Sentinel Company, The Daily Press, Inc., The Morning Call, Inc., and The Baltimore Sun Company to assume their Affiliate Agreements with Classified Ventures. In 1998, certain Tribune Parties created Classified Ventures, LLC, to expand their classified advertising business into the then-emerging online marketplace. Through its Web sites -- Apartments.com, Cars.com, and HomeGain.com -- and its affiliate agreements with leading media companies, Classified Ventures provides online users with detailed information regarding a comprehensive set of local and national automotive, rental, and home listings, as well as photo galleries, videos, home values, editorial content, blogs, online calculators, and other useful content. The Publishing Debtors are parties to affiliate agreements with Classified Ventures pursuant to which Classified Ventures provides both a national and local Web site for the automotive and apartment rental classified advertising categories that the Publishing Debtors use in connection with their business. In addition, the Affiliate Agreements provide that Classified Ventures will offer a broad array of advertising products that the Publishing Debtors may sell to advertisers. Over the past several months, the Debtors have engaged in discussions with Classified Ventures regarding their ongoing relationships. The parties have acknowledged that the Publishing Debtors owe Classified Ventures $3,203,483 as of the Petition Date. Full-text copies of the LLC and Affiliate Agreements are available for free at: http://bankrupt.com/misc/Tribune_ClassifedLLC.pdf http://bankrupt.com/misc/Tribune_ClassifiedAffiiliate.pdf No objection was filed as to the request, the Debtors certified. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. Attorneys at Landis Rath & Cobb LLP, and Chadbourne & Parke LLP, represent the Official Committee of Unsecured Creditors. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Assumes Willis Tower, Chicago Leases ------------------------------------------------ Tribune Co. and its affiliates sought and obtained the Court's order authorizing Debtor WGN Continental Broadcasting Company to assume two unexpired leases of non-residential real property located at Willis (Sears) Tower, in Chicago, Illinois. The Debtors said 223 Broadcast, LLC, has consented to the sought assumption and the proposed cure amount of $132,967. In support of the Motion, Stephanie Pater, director, Real Estate of Tribune Company, said the Leases are essential to WGN's ongoing business. She added that the rejection of the Leases would be detrimental to WGN's business and reorganization prospects as they would be forced to quickly find an alternative location for WGN-TV, which would likely be impossible given the unique features of the transmission towers and may force WGN-TV to go off the air. Prior to the entry of the order, the Debtors certified to the Court that no objection was filed as to the request. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. Attorneys at Landis Rath & Cobb LLP, and Chadbourne & Parke LLP, represent the Official Committee of Unsecured Creditors. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Bondholder Trustee Wants to Probe 2007 Buyout --------------------------------------------------------- The Law Debenture Trust Company of New York, as successor trustee under an Indenture, dated March 19, 1996, between Tribune Company and Citibank, N.A., for the 6.61% Debentures due 2027 and the 7- 1/4 Debentures due 2096, as fiduciary for the interests of more than 18% of the Debtors' bondholders, seeks the Court's authority to conduct discovery relating to Tribune Company's leveraged buyout transaction in 2007. If the Court denies the Rule 2004 Request, Law Debenture asks the Court to appoint an examiner to analyze the claims related to the LBO. Law Debenture complains that neither the Debtors nor the Official Committee of Unsecured Creditors has conducted a complete factual investigation into the circumstances surrounding the LBO, including, without limitation, the knowledge and intent of the bank lending group before the funding and consummation of the transaction. Law Debenture alleges that the LBO caused the Debtors' demise. According to Garvan F. McDaniel, Esq., at Bifferato Gentilotti LLC, in Wilmington, Delaware, counsel for Law Debenture, the LBO did not provide the Debtors with reasonably equivalent value in exchange for the $11.2 billion in secured debt they incurred -- the majority of the LBO debt only to cash out former shareholders for no consideration at all. Mr. McDaniel asserts that despite the normal expectation that the Creditors' Committee would immediately probe deeply into the facts and circumstances surrounding the leveraged buyout, after nine months, nothing of substance addressing recoveries has transpired and no claims have been brought. Law Debenture tells the Court that it has asked for reasonable access to information relating to the LBO, however, parties have consistently and affirmatively ring-fenced Law Debenture out of any process to obtain and use discovery to protect its bondholders' rights in the Debtors' Chapter 11 cases. Law Debenture says that it previously sought discovery consensually. However, Law Debenture maintains that JPMorgan Chase refused to allow it to use the documents and refused to provide it with additional documents or any depositions. By this motion, Law Debenture seeks the Court's authority to direct the production of documents by the Debtors, Merrill and JPMC and Citigroup Global Markets, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley, and Valuation Research Corporation. Law Debenture also seeks depositions of the representatives who are most knowledgeable about matters for examination. David S. Rosner, a partner of Kasowitz, Benson, Torres & Friedman LLP, filed with the Court a declaration presenting documents in connection with the Motion of Law Debenture Trust Company of New York for Leave to Conduct Discovery of Tribune Company. Law Debenture's request, according to The Wall Street Journal, seeks to slow or nullify an advancing reorganization plan for the Debtors with the banks owning nearly all of Tribune in exchange for a forgiveness of Tribune's almost $8 billion debt. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. Attorneys at Landis Rath & Cobb LLP, and Chadbourne & Parke LLP, represent the Official Committee of Unsecured Creditors. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Proposes Settlement With Calif. Franchise Tax Board --------------------------------------------------------------- Tribune Co. and its affiliates sought and obtained the Court's authority to enter into and perform their obligations under a settlement agreement they inked with the Franchise Tax Board of the State of California. Pursuant to the Settlement, Tribune Company, KTLA, Inc., and California Community News Corporation seek to compromise an $833,540 claim for franchise tax refunds for the 2000 and 2001 tax years that the Debtors asserted are owed to them by the State of California. As part of the compromise, the Debtors will receive $707,538 in tax refunds and creditors, plus applicable interests. The matters addressed by the Settlement Agreement commenced on October 15, 2005, when KTLA filed a claim with the Franchise Tax Board of the State of California for a franchise tax refund resulting from the use of credits amounting to $1,406,707 for the taxable year ending December 31, 2001, and tax refund resulting from the use of credits amounting to $1,131,830 for the taxable year ending December 31, 2001. After the initial review, FTB denied the Debtor Taxpayers' claims for the franchise tax refunds and credits and disallowed an additional $177,575 of franchise tax creditors, for an aggregate amount of $2,716,112 in denied franchise tax refunds and credits. In January 2007, the Debtor Taxpayers and the California Settlement Bureau reached a resolution allowing $795,687 of the disallowed credits, leaving $1,920,425 of the Claims in dispute. As a result of the negotiations, the Debtor Taxpayers entered into the Settlement Agreement to effect a final and complete settlement of the remaining portion of the Debtor Taxpayers' claims. The Settlement Agreement allows the Debtor Taxpayers $707,538 of the 833,540 remaining portion of the Claims, as well as interest on the settlement amount. The $707,538 provided for in the Settlement Agreement consists in part of a refund for the taxable years ending December 31, 2000 and December 31, 2001, amounting to $310,700. The other part of the $707,538 consists of a tax credit amounting to $397,838 to carryover to later tax years. The Debtor Taxpayers believe that the Settlement Agreement provides for the recovery of the entire amount of franchise tax and credits they are entitled to under the California law, and do not believe they would be able to obtain refunds or credits without further litigation. The Debtors certified to the Court that no objections were filed as to the request. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. Attorneys at Landis Rath & Cobb LLP, and Chadbourne & Parke LLP, represent the Official Committee of Unsecured Creditors. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Wants Lift Stay to Pay ERISA Defense Costs ------------------------------------------------------ Tribune Co. and its affiliates relate that 23 present and former directors, officers, and employees of Tribune Company, together with Tribune Company Benefits Committee, Greatbanc Trust Company as trustee of the Employee Stock Ownership Plan and EGI-TRB, LLC, are named defendants in a class action lawsuit pending in the United States District Court for the Northern District of Illinois styled Dan Neil, Corrie Brown, Henry Weinstein, Walter Roche, Jr., Myron Levin and Julie Makinen, individuals, on behalf of themselves and on behalf of all other similarly situated v. Samuel Zell, GreatBanc Trust Company, EGI-TRB, LLC et al. The named plaintiffs are current and former employees of the Los Angeles Times, who claim to represent a putative class comprised of similarly situated ESOP participants, and who see compensatory and punitive damages and injunctive relief for alleged breach of fiduciary duties under the Employee Retirement Income Security Act of 1974, as amended. According to the Debtors, in defending the Neil Lawsuit, the Individual Defendants have incurred and continue to incur significant defense costs and fees. Accordingly, the Debtors note, the Individual Defendants are seeking payment or advancement of defense costs by the Insurance Providers pursuant to the Policies, including the costs relating to the Motion to Dismiss. In connection with its indemnification obligations to its directors, officers, employees, and agents relating to the ESOP, Tribune purchased a primary fiduciary liability from Illinois National Insurance Company, a member of Chartis for claims with respect to act occurring or allegedly occurring in the period prior to December 20, 2007. The 2007 Fiduciary Policy provides for $10,000,000 of insurance coverage to the insureds, which includes Tribune, its employee benefit plans, and their past, present, and future directors, officers, employees, fiduciaries, administrators, or trustees for a loss arising during the policy period from wrongful acts they allegedly committed in connection with the employee benefit plans. The beneficiaries of those plans thus include each of the Individual Defendants in the Neil Lawsuit based on their alleged conduct related to Tribune's ESOP. Accordingly, at the Debtors' behest, the Court lifted the automatic stay to allow payment and advancement by the Debtor's Insurance Providers of defense costs that are, or will become, owing to the Individual Defendants under the Policies. In the event and to the extent that the Insurance Providers consent to the advancement or payment of covered defense costs incurred by Greatbanc, Tribune requests that the sought relief be extended to Greatbanc without further order of the Court. The Debtors certified to the Court that no objection was filed as to the request. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. Attorneys at Landis Rath & Cobb LLP, and Chadbourne & Parke LLP, represent the Official Committee of Unsecured Creditors. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRUMP ENTERTAINMENT: Developers Balk at Disclosure Statement ------------------------------------------------------------ Power Plant Entertainment LLC, The Cordish Co., Native American Development LLC and Joseph Weinberg, developers embroiled in contract litigation with a subsidiary of bankrupt Trump Entertainment Resorts Inc., have hit out at the Debtor's proposed disclosure statement, saying the current reorganization plan would improperly immunize directors and officers from facing that litigation, according to Law360. As reported by the TCR on August 6, 2009, Trump Entertainment Resorts Inc. filed a Chapter 11 plan built around the proposed sale of the company to shareholder Donald Trump. Under the agreement reached with the Company, Donald J. Trump and BNAC, Inc., an affiliate of Beal Bank Nevada, will invest $100 million cash in the newly private company and become its owners. Beal Bank and Beal Bank Nevada to amend and restate a prepetition credit agreement with the partnership subsidiary of the Company in order to restructure approximately $486 million in debt. Under the amendment, the debt will be assumed by the reorganized company post-emergence and the maturity period for the repayment is extended until December 2020 from the existing maturity of 2012. Under the Plan, only Beal Bank will have recovery, and lowed ranked creditors would receive nothing. According to the disclosure statement explaining the Plan, Beal Bank will recover 94% of its claims. Based on the assessment by Lazard Freres & Co., LLC, the value of the Debtors' business operations is less than the amount of Beal Bank's $486 million claim. According to the Disclosure Statement, because the value of Trump Entertainment is less than the amount of the First Lien Lender Claims, there is no value available for the holders of the Second Lien Note Claims and other unsecured creditors. Holders of equity interests would receive nothing. The Debtors noted that Donald Trump, which owns shares, will obtain ownership of the reorganized Debtors on account of his $100 million investment and not on account of his existing equity interests. Copies of the Plan and the Disclosure Statement are available for free at: http://bankrupt.com/misc/Trump_Chapter11Plan.pdf http://bankrupt.com/misc/Trump_DiscStatement.pdf Judge Judith Wizmur has allowed noteholders to file a competing plan. About Trump Entertainment Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The Company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the Company and, as its non- executive Chairman, is not involved in the daily operations of the Company. The Company is separate and distinct from Mr. Trump's privately held real estate and other holdings. Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other affiliates filed for Chapter 11 on February 17, 2009 (Bankr. D. N.J., Lead Case No. 09-13654). The Company has tapped Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the Company's auditor and accountant and Lazard Freres & Co. LLC is the financial advisor. The Company disclosed assets of $2,055,555,000 and debts of $1,737,726,000 as of December 31, 2008. Trump Hotels & Casino Resorts, Inc., filed for chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Trump Hotels' obtained the Court's confirmation of its Chapter 11 plan on Apr. 5, 2005, and in May 2005, it exited from bankruptcy under the name Trump Entertainment Resorts Inc. TURCHAN TECHNOLOGIES: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Turchan Technologies Group, Inc. 12825 Ford Road Dearborn, MI 48126 Bankruptcy Case No.: 09-67671 Chapter 11 Petition Date: September 4, 2009 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Thomas J. Tucker Debtor's Counsel: Michael E. Baum, Esq. 40950 Woodward Ave., Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 Email: mbaum@schaferandweiner.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/mieb09-67671.pdf The petition was signed by Erik Bloomfield, president of the Company. TVI CORP: Files Reorganization Plan, to Sell Signature ------------------------------------------------------ TVI Corporation and its affiliates on August 31, 2009, filed their Plan of Reorganization pursuant to Chapter 11 of the Bankruptcy Code, which sets forth the manner in which claims against and equity interests in the Debtors are to be treated. The Plan contemplates, among other things: (i) the sale of Signature Special Event Services, Inc. as a going concern and/or the sale of substantially all of Signature's assets; (ii) the merger of all subsidiaries into the Company, which shall emerge as the reorganized debtor; and (iii) the payment in cash to holders of (a) allowed administrative claims, (b) allowed priority tax claims, (c) allowed priority non-tax claims, (d) other allowed secured claims, and (e) allowed general unsecured claims. The Plan further contemplates distribution of shares representing an aggregate of 100% of the issued equity interests in the Company to the Branch Banking & Trust Company on account of the Lender's secured claim. In addition, the Plan provides for the extinguishment of all intercompany claims, which claims shall be discharged by the Plan or confirmation of the Bankruptcy Court. Further, holders of the Company's outstanding equity interests, including the Company's outstanding shares of common stock, will receive no distribution, and all of the Company's outstanding equity interests, including the Company's outstanding shares of common stock, will be cancelled and deemed worthless as of the effective date of the Plan, if the Plan becomes effective. The Company cannot predict whether the Bankruptcy Court will approve the Plan and thus whether the Plan will become effective. Meanwhile, on September 1, 2009, the Company submitted an Offer of Settlement to the U.S. Securities and Exchange Commission for the revocation of the registration of its common stock pursuant to Section 12(j) of the Securities Exchange Act of 1934. Upon acceptance of the Offer of Settlement and entry of an appropriate order by the Commission, the registration of the Company's common stock pursuant to the Exchange Act will be revoked and the Company will cease to be obligated About TVI Corporation Headquartered in Glenn Dale, Maryland, TVI Corporation -- http://www.tvicorp.com/-- supplies military and civilian emergency first responder and first receiver products, personal protection products and quick-erect shelter systems. The products include powered air-purifying respirators, respiratory filters and quick-erect shelter systems used for decontamination, hospital surge systems and command and control. The users of these products include military and homeland defense/homeland security customers. The Company and two of its affiliates filed for Chapter 11 protection on April 1, 2009 (Bankr. D. Md. Lead Case No. 09-15677). Christopher William Mahoney, Esq., Jeffrey W. Spear, Esq., and Joel M. Walker, Esq., at Duane Morris LLP, represent the Debtors in their restructuring efforts. Alan M. Grochal, Esq., and Maria Ellena Chavez-Ruark, Esq., at Tydings and Rosenberg, serve as counsel to the official committee of unsecured creditors. When the Debtor filed for protection from its creditors, it listed $10 million to $50 million in assets and $1 million to $10 million in debts. TXCO RESOURCES: Pushes to Amend EnCana Pact to Transfer Oil Rights ------------------------------------------------------------------ TXCO Resources Inc. has asked a judge to allow an amendment to its joint exploration agreement with EnCana Oil & Gas Inc. so that it can avoid spending $25 million on drilling new wells by transferring certain oil exploration and production rights in three Texas counties to Redemption Oil & Gas LLC, according to Law360.. TXCO Resources Inc. is an independent oil and gas enterprise with interests in the Maverick Basin, the onshore Gulf Coast region and the Marfa Basin of Texas, and the Midcontinent region of western Oklahoma. TXCO's business strategy is to acquire undeveloped mineral interests and internally developing a multi-year drilling inventory through the use of advanced technologies, such as 3-D seismic and horizontal drilling. It accounts for its oil and gas operations under the successful efforts method of accounting and trades its common stock on Nasdaq's Global Select Market under the symbol "TXCO." The Company and its affiliates filed for Chapter 11 protection on May 17, 2009 (Bankr. W.D. Tex. Case No. 09-51807). The Debtors hired Deborah D. Williamson, Esq., and Lindsey D. Graham, Esq., at Cox Smith Matthews Incorporated, as general restructuring counsel; Fulbright and Jaworski, L.L.P., as corporate counsel & conflicts counsel; Albert S. Conly as chief restructuring officer and FTI Consulting Inc. as financial advisor; Goldman, Sachs & Co. as financial advisor for assets sale; Global Hunter Securities, LLC, as financial advisors and investment bankers; and Administar Services Group LLC as claims agent. Gardere Wynne Sewell LLP represents the Committee. As reported in Troubled Company Reporter on July 6, 2009, in their schedules of assets and liabilities, the Debtors have $357,855,952 in total assets and $331,422,792 in total liabilities. US SHIPPING: Has Until December 25 to File Chapter 11 Plan ---------------------------------------------------------- The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York issued a bridge order extending the exclusive periods of U.S. Shipping Partners L.P. and its debtor- affiliates to: * file a Chapter 11 plan until Dec. 25, 2009; and * solicit acceptances of that plan until Feb. 3, 2010. According to the Debtors' extension request, with a Chapter 11 plan and disclosure statement on file, the disclosure statement approved, the solicitation process to begin shortly, and a hearing to consider confirmation of the plan currently scheduled for Oct. 1, 2009, the Debtors' reorganization is progressing quickly and the Debtors hope to soon emerge from bankruptcy. The Debtors have requested an extension of the exclusivity periods to maintain forward progress and avoid the distraction of a competing chapter 11 plan, Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, said. The Debtors' current exclusive filings and solicitation periods expires on Aug. 27, 2009, and Oct. 26, 2009, respectively. 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. VALLEY HEALTH: Fitch Downgrades Ratings on $45.5 Mil. Bonds to 'C' ------------------------------------------------------------------ Fitch Ratings has downgraded to 'C' from 'CC' the rating on approximately $45.5 million of bonds issued by Valley Health System, California. In addition, Fitch has placed the bonds on Rating Watch Negative. On July 27, 2009, VHS' board of directors voted to enter into an exclusive 90-day agreement with Physicians for Healthy Hospitals (a group of local doctors) for the potential sale of the district's assets, including its two hospitals, Hemet Valley Medical Center and Menifee Valley Medical Center. It is not clear what the use of proceeds would be if such a sale were to occur. Fitch's 'C' rating indicates that payment default to bondholders appears imminent. As Fitch has reported in its recent rating actions, VHS remains under Chapter 9 bankruptcy protection (since 2007) while it attempts to implement several ongoing turnaround initiatives. However, unaudited interim financial statements for FY 2009 show continued operating losses that fell far short of budgeted targets, as VHS posted an operating loss of $7.6 million compared to a budgeted operating surplus of $3 million. In addition, VHS has failed to replenish the debt service reserve funds on its 1993 COPs and 1996A bonds as management projected. Current DSRF funds may not be sufficient to make the Nov. 15, 2009 interest payments to bondholders. Finally, the recent departures of VHS' CFO and CEO in May and August 2009, respectively, are indicative of continued operational and financial instability. As of June 30, 2009, unrestricted cash and investments totaled $11.8 million, representing 24.9 days of expenses. For the 12 month period ended June 30, 2009, operating EBITDA was slightly positive, at 0.6% on $167.7 million of net revenues. Fitch will closely monitor the outcome of these negotiations and will update the market accordingly. Fitch downgrades Valley Health System's outstanding debt: -- $4.9 million hospital revenue bonds (refunding and improvements project), 1996 series A to 'C' from 'CC'; -- $40.6 certificates of participation (refunding project), series 1993 to 'C' from 'CC'. VELOCITY EXPRESS: Management Buyout Group Assigns Stake to Comvest ------------------------------------------------------------------ MCG Acquisition LLC -- an entity formed by a management buyout group led by Vincent A. Wasik, Chief Executive Officer of Velocity Express Corporation and his private equity firm, MCG Global, LLC -- has entered into a series of agreements with holders owning roughly 99.1% of the principal amount of the Company's Senior Secured Notes -- which principal amount totals in the aggregate approximately $102 million -- and all of the related warrants. The Bond Sale Agreements granted MCG Acquisition the right to purchase the Senior Secured Notes and related warrants for a combination of the Sellers' pro rata share based on all bonds outstanding of (i) $10,000,000 cash and (ii) 10% of the common stock of the Company (under certain circumstances as set forth in the Bond Sale Agreements). On August 21, 2009, the Management Group assigned all of its equity interest in MCG Acquisition to Comvest Velocity Holdings, LLC. Prior to the assignment of the equity interest in MCG Acquisition, (i) certain members of the Management Group had entered into an agreement with ComVest establishing a framework for the negotiation of a possible restructuring of the Company that contemplates the issuance to the Management Group of 10% to 20% of the common stock of the Company in connection with a restructuring of the Company under certain circumstances and (ii) MCG Acquisition had entered into an agreement to sell a ComVest affiliates the Senior Secured Notes and warrants acquired pursuant to the Bond Sale Agreements. The Management Group did not receive any consideration in this transaction other than the obligation for ComVest to provide it with such equity consideration in the event of a restructuring. On August 27, 2009, MCG Acquisition acquired roughly 76% of the aggregate principal amount of the Company's Senior Secured Notes and the related warrants and immediately resold them to ComVest affiliates. As a result of this purchase and certain additional purchases since August 27, ComVest affiliates own, in the aggregate, roughly 95% of the principal amount of the Company's Senior Secured Notes and the related warrants. ComVest has advised the Company that it does not require further compliance with the terms of a Fifth Supplemental Indenture requiring the Company to conduct a sale of all or substantially all of the Senior Secured Notes or the Company or the assets of the Company. As reported by the Troubled Company Reporter, Velocity Express on August 14, 2009, received from MCG Acquisition a notice terminating the Recapitalization Agreement, dated as of July 31, 2009, among the Company, Newco and certain Preferred Stockholders of the Company. The termination of the Recapitalization Agreement is effective August 14, 2009, and did not result in the incurrence by the Company of any early termination penalties. As reported by the TCR on August 7, 2009, the Recapitalization Agreement provided for a series of issuances of shares of Common Stock of the Company in exchange for (i) delivery by Newco of certain of the Company's Senior Secured Notes and related warrants and (ii) delivery of all series of Preferred Stock of the Company such that, post-transaction, ownership of the Company would be as follows (on a fully diluted basis but subject to possible adjustments for certain outstanding options and warrants): (a) 68.5% of the Common Stock of the Company would be held by the Management Group and its financing source; (b) 10.0% of the Common Stock of the Company would be held by the current Note holders; (c) 19.9% of the Common Stock of the Company would be held by the holders of all series of the Company's outstanding Preferred Stock; and (d) 1.6% of the Common Stock of the Company would be retained by existing Common Stockholders and certain option or warrant holders. The transactions contemplated by the Recapitalization Agreement were subject to a number of conditions, including but not limited to financing, closing of purchases by Newco of sufficient Senior Secured Notes of the Company to effect the transactions contemplated by the Recapitalization Agreement, consent of the Company's senior secured lender and consent or reaffirmation of consent to the transactions contemplated by the Recapitalization Agreement of the Company's Preferred Stockholders. Newco's termination notice indicated that Newco had not obtained the necessary consents or reaffirmations of the Company's Preferred Stockholders. The Recapitalization Agreement permits Newco to terminate the agreement prior to obtaining the requisite number of Preferred Stockholder consents or reaffirmations. A full-text copy of the Recapitalization Agreement is available at no charge at http://ResearchArchives.com/t/s?40f3 Meanwhile, Goldman Capital Management Inc. disclosed in a Schedule 13G filing with the Securities and Exchange Commission that it has ceased to be the beneficial owner of more than 5% of the Company's common stock. Goldman no longer holds any Company shares. About Velocity Express Headquartered in Westport, Connecticut, Velocity Express Corporation (NASDAQ:VEXP) -- http://www.velocityexp.com/-- together with its subsidiaries, is engaged in the business of providing time definite ground package delivery services. The Company operates in the United States with limited operations in Canada. Its customers comprised of multi-location, blue chip customers with operations in the healthcare, commercial and office products, financial, transportation and logistics, technology and energy sectors. On July 2, 2009, the Company received a letter from Burdale Capital Finance, the Company's senior secured lender pursuant to a Loan and Security Agreement for a revolving line of credit dated as of March 13, 2009, notifying the Company of defaults relating to the Company's minimum fixed charge coverage ratio, minimum liquidity, delivery of timely financial information, and failure to make the June 30, 2009 interest payment due to the holders of the Senior Notes. Burdale stated that it is not currently exercising any of the rights and remedies available to it under the Loan Agreement by reason of such defaults, but that it and reserved all of its rights to take action with respect to such defaults in the future. VERASUN ENERGY: Disclosure Statement Hearing Moved to Sept. 9 ------------------------------------------------------------- Pursuant to a notice filed on September 4, 2009, the hearing on the Disclosure Statement explaining the Joint Plan of Liquidation of VeraSun Energy Corporation and its debtor affiliates is moved to September 9, 2009. The hearing was originally scheduled for September 3. Meanwhile, Liberty Mutual Insurance Company asks the United States Bankruptcy Court for the District of Delaware to deny the Debtors' request to approve the Disclosure Statement explaining the Joint Plan of Liquidation. On behalf of Liberty Mutual, Ian Connor Bifferato, Esq., at Bifferato LLC, in Wilmington, Delaware, contends that the Disclosure Statement fails to address the liens and property interests of certain constituencies in (i) assets and proceeds of assets to be liquidated under the Plan, and (ii) assets and proceeds of assets the Debtors' purported to transfer to secured lenders in connection with the sale of substantially all of the Debtors' assets. VeraSun Energy Corporation, its debtor affiliates, and the Official Committee of Unsecured Creditors submitted to the U.S. Bankruptcy Court for the District of Delaware on July 31, 2009, a joint Chapter 11 plan of liquidation and an accompanying disclosure statement. The Plan provides for the distribution of substantially all of the assets of the Debtors to various creditors and to subsequently wind up the Debtors' corporate affairs. A full-text copy of the Chapter 11 Liquidation Plan is available for free at http://bankrupt.com/misc/VerSPlan.pdf A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/VerSDS.pdf About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.comor http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The Company and its debtor-affiliates filed for Chapter 11 protection on October 31, 2008 (Bankr. D. Del. Case No. 08-12606). Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun closed on April 1, 2009, the sale of substantially all of its assets to Valero Renewable Fuels, a subsidiary of Valero Energy Corporation, North America's largest petroleum refiner and marketer. The purchased assets included five ethanol production facilities and a development site. The facilities are located in Aurora, South Dakota; Fort Dodge, Charles City, and Hartley, Iowa; and Welcome, Minnesota, and the development site is in Reynolds, Indiana. Valero paid $350 million for the ethanol production facilities in Aurora, Fort Dodge, Charles City, Hartley and Welcome, in addition to the Reynolds site. Valero also successfully bid $72 million for the Albert City facility and $55 million for the Albion facility. The purchase price also includes working capital and other certain adjustments. VeraSun also completed on April 9 the sale to AgStar Financial Services PCA of substantially all of the assets relating to the company's production facilities in Dyersville, Iowa; Hankinson, North Dakota; Janesville, Minnesota; Central City and Ord, Nebraska; and Woodbury, Michigan. AgStar released the USBE Subsidiaries from their obligations under $319 million of existing indebtedness and assumed certain liabilities relating to the AgStar Facilities. On April 13, US BioEnergy Corporation and US Bio Marion LLC completed the sale to Marion Energy Investments LLC, as assignee of Dougherty and First Bank & Trust, of substantially all of the assets relating to the Debtors' production facility in Marion, South Dakota. The consideration for the acquired assets consisted of release of US Bio Marion from its obligations under approximately $93 million of existing indebtedness to the Marion Buyers, payment by MEI of $934,861 in cash and assumption by the Marion Purchasers of certain liabilities relating to the Marion facility. VeraSun Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). VERASUN ENERGY: Pays AgStar $12.5 Mil. to Settle Lawsuit -------------------------------------------------------- VeraSun Energy Corp. and its affiliates asked the Court for authority to enter into a settlement agreement with AgStar Financial Services PCA pursuant to which they will pay $12,500,000 to AgStar for the dismissal with prejudice of a complaint for declaratory judgment filed by AgStar against the Debtors. AgStar filed the adversary proceeding against UBS AG, Stamford Branch, Debtor VeraSun Marketing, LLC, Wells Fargo Bank, N.A., and Wilmington Trust Company, relating to a series of postpetition transfers of ethanol, subject to AgStar's security interest, from the US Bio Debtors to VeraSun Marketing, LLC. Pursuant to the Settlement Agreement, AgStar agreed to release and discharge the Debtors and their subsidiaries, affiliates, directors, officers, employees, attorneys, advisors, agents, successors and assigns from certain claims, demands, and causes of action of any nature whatsoever that AgStar now has or ever had and the Debtors agreed to a similar release as to AgStar. Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Wilmington, Delaware, contends that the compromises and settlements set forth in the Settlement Agreement are fair, equitable and in the best interest of the Debtors, their estates, creditors and other parties in interest and therefore should be approved. By entering into the Settlement Agreement, the Debtors will avoid the uncertainty and risk that proceeding with the AgStar Litigation would entail, Mr. Chehi asserts. He adds that the resolution that the Debtors and AgStar have reached will obviate the Debtors' need to expend the significant time and other resources required to continue defending the AgStar Litigation. "Besides consuming extensive resources both in terms of time and professional fees, continuing to litigate would distract the Debtors from accomplishing the tasks necessary to wind down their estates," Mr. Chehi says. * * * The Court approved the Debtors' request and subsequently, on August 13, 2009, AgStar filed a notice dismissing the Complaint with prejudice. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.comor http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The Company and its debtor-affiliates filed for Chapter 11 protection on October 31, 2008 (Bankr. D. Del. Case No. 08-12606). Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun closed on April 1, 2009, the sale of substantially all of its assets to Valero Renewable Fuels, a subsidiary of Valero Energy Corporation, North America's largest petroleum refiner and marketer. The purchased assets included five ethanol production facilities and a development site. The facilities are located in Aurora, South Dakota; Fort Dodge, Charles City, and Hartley, Iowa; and Welcome, Minnesota, and the development site is in Reynolds, Indiana. Valero paid $350 million for the ethanol production facilities in Aurora, Fort Dodge, Charles City, Hartley and Welcome, in addition to the Reynolds site. Valero also successfully bid $72 million for the Albert City facility and $55 million for the Albion facility. The purchase price also includes working capital and other certain adjustments. VeraSun also completed on April 9 the sale to AgStar Financial Services PCA of substantially all of the assets relating to the company's production facilities in Dyersville, Iowa; Hankinson, North Dakota; Janesville, Minnesota; Central City and Ord, Nebraska; and Woodbury, Michigan. AgStar released the USBE Subsidiaries from their obligations under $319 million of existing indebtedness and assumed certain liabilities relating to the AgStar Facilities. On April 13, US BioEnergy Corporation and US Bio Marion LLC completed the sale to Marion Energy Investments LLC, as assignee of Dougherty and First Bank & Trust, of substantially all of the assets relating to the Debtors' production facility in Marion, South Dakota. The consideration for the acquired assets consisted of release of US Bio Marion from its obligations under approximately $93 million of existing indebtedness to the Marion Buyers, payment by MEI of $934,861 in cash and assumption by the Marion Purchasers of certain liabilities relating to the Marion facility. VeraSun Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). VERASUN ENERGY: Sells Cargill Receivables to West LB ---------------------------------------------------- VeraSun Energy Corp. and its affiliates sought and obtained authority to sell certain accounts receivable claims free and clear of all liens, claims, and encumbrances. The Accounts Receivable claims are the Debtors' right to receive payment from Cargill, Inc., on account of ethanol and distillers grains that the Debtors sold. The Debtors previously entered into certain agreements with Cargill pursuant to which, the Debtors sold ethanol and distillers grains to Cargill. When the Debtors sold substantially all of their assets, one of the buyers was WestLB AG, New York Branch, who bought the assets of ASA Bloomingburg LLC and ASA Linden LLC, two of the Debtors, along with "all Accounts Receivable." Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Wilmington, Delaware, said the Sale gave the Purchaser the Right to collect any amounts Cargill owes to the Debtors on account of the sale of ethanol. Before Judge Shannon entered his ruling, he overruled the objection filed by Cargill who objected to the extent the Debtors are seeking to exercise setoff under Sections 362, 553, 556, 560, and 561 of the Bankruptcy Code. The Purchaser responded to the Cargill's objection by pointing out that sale of the Accounts Receivable Claims will not impair any defenses that Cargill may have to payment on the Accounts Receivable Claims. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.comor http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The Company and its debtor-affiliates filed for Chapter 11 protection on October 31, 2008 (Bankr. D. Del. Case No. 08-12606). Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun closed on April 1, 2009, the sale of substantially all of its assets to Valero Renewable Fuels, a subsidiary of Valero Energy Corporation, North America's largest petroleum refiner and marketer. The purchased assets included five ethanol production facilities and a development site. The facilities are located in Aurora, South Dakota; Fort Dodge, Charles City, and Hartley, Iowa; and Welcome, Minnesota, and the development site is in Reynolds, Indiana. Valero paid $350 million for the ethanol production facilities in Aurora, Fort Dodge, Charles City, Hartley and Welcome, in addition to the Reynolds site. Valero also successfully bid $72 million for the Albert City facility and $55 million for the Albion facility. The purchase price also includes working capital and other certain adjustments. VeraSun also completed on April 9 the sale to AgStar Financial Services PCA of substantially all of the assets relating to the company's production facilities in Dyersville, Iowa; Hankinson, North Dakota; Janesville, Minnesota; Central City and Ord, Nebraska; and Woodbury, Michigan. AgStar released the USBE Subsidiaries from their obligations under $319 million of existing indebtedness and assumed certain liabilities relating to the AgStar Facilities. On April 13, US BioEnergy Corporation and US Bio Marion LLC completed the sale to Marion Energy Investments LLC, as assignee of Dougherty and First Bank & Trust, of substantially all of the assets relating to the Debtors' production facility in Marion, South Dakota. The consideration for the acquired assets consisted of release of US Bio Marion from its obligations under approximately $93 million of existing indebtedness to the Marion Buyers, payment by MEI of $934,861 in cash and assumption by the Marion Purchasers of certain liabilities relating to the Marion facility. VeraSun Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). VERASUN ENERGY: To Auction Undeveloped Illinois Farmlands --------------------------------------------------------- VeraSun Energy Corp. and its affiliates sought and obtained the Court's authority, after receiving no objection, to sell three pieces of undeveloped farmland in the state of Illinois through an auction process: (a) approximately 380 acres in Granite City Township, Madison County, Illinois; (b) approximately 486 acres in South Litchfield Township, Montgomery County, Illinois; and (c) approximately 733 acres in Danville Township, Vermillion County, Illinois. Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Wilmington, Delaware, relates that the Farmlands are among the few remaining assets the Debtors own with substantial value and the Debtors are committed to selling them for as high a sale price as possible, thereby generating as much revenue as possible for their estates and creditors. To ensure that the Debtors receive the best possible price for the Sites, the Debtors retained Schrader Real Estate & Auction Co., Inc., to coordinate the marketing of the Farmlands and to conduct auctions. Since the time of its retention, Schrader has been aggressively marketing the Farmlands, Mr. Chehi tells the Court. Accordingly, the Debtors have scheduled two Auctions for September 10, 2009. The first Auction is scheduled for 9:00 a.m. at the Staunton Knights of Columbus Hall in Staunton, Illinois. The second Auction is scheduled for 6:00 p.m. at the Beef House Restaurant near Danville, Illinois, and Covington, Indiana. Schrader will conduct the Auctions as "reserve auctions" on a non-binding basis and will seek the highest and best bids but those bids will not be final or binding on the Debtors unless and until the Debtors, in consultation with the Official Committee of Unsecured Creditors, accept a bid or bids as the successful bid. If the Debtors, in consultation with the Creditors' Committee, are not satisfied that the highest bid constitutes fair and reasonable consideration for the Site or Sites for which it was submitted, they reserve the right to decline to sell any or all of the Farmlands. If no bids are accepted, Schrader will have three additional months to market the Farmlands as realtors. The highest bidders will be required to sign purchase agreements at the Auctions, which will automatically terminate if not accepted by the Debtors, in consultation with the Creditors' Committee, by September 18, 2009. If the Debtors, in consultation with the Creditors' Committee, do elect to accept a bid, that bid will become a "Successful Bid" and the party that submitted it will be deemed the "Successful Bidder." The salient terms of the Purchase Agreements are: * a 10% down payment will be due on the day of the Auctions and the balance will be due approximately 30 days later; * the Debtors will be responsible for the 2009 taxes on the Farmlands and the purchasers will be responsible for all taxes thereafter; * the buyers will have the right to possess the Farmlands as of the date of closing, subject to the current tenants' rights to harvest the 2009 crop. The Debtors will receive all of the 2009 lease income; and * the sale of the Farmlands is "as is, where is," without any representations or warranties. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.comor http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The Company and its debtor-affiliates filed for Chapter 11 protection on October 31, 2008 (Bankr. D. Del. Case No. 08-12606). Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun closed on April 1, 2009, the sale of substantially all of its assets to Valero Renewable Fuels, a subsidiary of Valero Energy Corporation, North America's largest petroleum refiner and marketer. The purchased assets included five ethanol production facilities and a development site. The facilities are located in Aurora, South Dakota; Fort Dodge, Charles City, and Hartley, Iowa; and Welcome, Minnesota, and the development site is in Reynolds, Indiana. Valero paid $350 million for the ethanol production facilities in Aurora, Fort Dodge, Charles City, Hartley and Welcome, in addition to the Reynolds site. Valero also successfully bid $72 million for the Albert City facility and $55 million for the Albion facility. The purchase price also includes working capital and other certain adjustments. VeraSun also completed on April 9 the sale to AgStar Financial Services PCA of substantially all of the assets relating to the company's production facilities in Dyersville, Iowa; Hankinson, North Dakota; Janesville, Minnesota; Central City and Ord, Nebraska; and Woodbury, Michigan. AgStar released the USBE Subsidiaries from their obligations under $319 million of existing indebtedness and assumed certain liabilities relating to the AgStar Facilities. On April 13, US BioEnergy Corporation and US Bio Marion LLC completed the sale to Marion Energy Investments LLC, as assignee of Dougherty and First Bank & Trust, of substantially all of the assets relating to the Debtors' production facility in Marion, South Dakota. The consideration for the acquired assets consisted of release of US Bio Marion from its obligations under approximately $93 million of existing indebtedness to the Marion Buyers, payment by MEI of $934,861 in cash and assumption by the Marion Purchasers of certain liabilities relating to the Marion facility. VeraSun Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). WALTER ENERGY: S&P Assigns 'BB+' Rating on $300 Mil. Facility ------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'BB+' rating to Walter Energy Inc.'s amended $300 million revolving credit facility due 2012. The issue rating is two notches above the corporate credit rating and has a recovery rating of '1', indicating S&P's expectation of very high (90%-100%) recovery for lenders in the event of a payment default. S&P affirmed all ratings on Walter, including its 'BB-' corporate credit rating. The rating outlook is stable. The 'BB-' rating on Tampa-based Walter Energy reflects the limited diversity and scope of the company's core coal mining operations, the difficult coal mining conditions of its Central Appalachian operations, and cyclical end markets. Still, the company possesses high-quality metallurgical (met) coal reserves, has benefited from favorable met coal prices, and maintains a financial profile that S&P consider good for the current rating. The rating and outlook incorporate S&P's expectation that Walter is likely to maintain a solid balance sheet in the intermediate term and that it will likely offset a difficult coal environment and expected material declines in revenues and EBITDA in 2009. S&P currently estimates that EBITDA could decline by about 50% during 2009 compared to 2008, owing to cash margins in excess of $30 per ton, average realized prices of around $115 per short ton, and cash costs of $62 to $63 per ton. As a result, debt to EBITDA would still remain below 3x, a level that S&P would consider to be in-line with the current rating. Also, S&P expects that coal demand will improve in 2010 driven by increased operating rates at integrated steel mills. As a result, S&P expects EBITDA during 2010 to improve by about 20% compared to 2009 and that debt to EBITDA will strengthen back to about 2x after peaking at around 2.5x during the first half of 2010. This is based on S&P's estimate that Walter will sell about 6.5 million tons of met coal at an average price of around $115 per ton. WILLIAM HALL: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Joint Debtors: William D. Hall Virginia L. Hall 8071 Ravenna Road Hudson, OH 44236 Bankruptcy Case No.: 09-54016 Chapter 11 Petition Date: September 7, 2009 Court: United States Bankruptcy Court Northern District of Ohio (Akron) Judge: Marilyn Shea-Stonum Debtors' Counsel: Ronald E. Henderson, Esq. 23240 Chargin Blvd Cleveland, OH 44122 Tel: (216) 861-4416 Fax: (216) 595-2787 Email: rnldhn@aol.com Estimated Assets: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 12 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ohnb09-54016.pdf The petition was signed by the Joint Debtors. WL HOMES: Nevada Homeowners Want Court OK to Continue Lawsuit ------------------------------------------------------------- A group of 62 Nevada homeowners, including Murray Stravers, is seeking court approval to pursue a state court suit against WL Homes LLC over alleged construction defects at a Las Vegas housing development, according to Law360. Headquartered in Irvine, California, WL Homes LLC is a homebuilder doing business as John Laing Homes. John Laing traces its history to 1848, when its predecessor was a U.K. homebuilder. WL Homes was formed in 1998 when John Laing merged with Watt Homes. WL Homes and five of its affiliates filed for Chapter 11 protection on February 19, 2009 (Bankr. D. Del. Lead Case No. 09- 10571). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors' in their restructuring efforts. Ashby & Geddes represents the Official Committee of Unsecured Creditors. In its bankruptcy petition, WL Homes listed assets of more than $1 billion, and debts between $500 million and $1 billion. As reported in the TCR on June 10, 2009, the Bankruptcy Court converted WL Homes LLC and its debtor affiliates' Chapter 11 cases to cases under Chapter 7 liquidation, at the request of the official committee of unsecured creditors. * Stiglitz Says Economic Recovery May Not Be 'Sustainable' ---------------------------------------------------------- According to reporting by Michael McKee at Bloomberg, Nobel Prize- winning economist Joseph Stiglitz said that there is a "significant chance" that the U.S. economy contracts again after it emerges from the current economic crisis. Mr. Stiglitz said that in this scenario, the economy would rebound due to a government stimulus followed by an abrupt downturn -- an occurrence that economists call a "W-shaped' recovery. A second scenario for the coming months would be a period of "malaise," in which consumption lags and private investment is slow to accelerate. Mr. McKee relates that economists and policy makers are expressing concern about the strength of a projected economic recovery, with Treasury Secretary Timothy Geithner saying two days ago that it's too soon to remove government measures aimed at boosting growth. * G-20 Mulls Hike in Standards for More Stable Financial System --------------------------------------------------------------- Finance ministers and central bankers from the Group of 20 nations meet in London Sept. 4-5 to lay the groundwork for a summit in Pittsburgh later this month, where leaders will consider measures to overhaul supervision of the financial system. "The financial system is showing signs of repair. Growth is now underway," U.S. Treasury Tim Geithner told the G-20. However, he said that the G-20 continues to face significant challenges ahead. He noted that unemployment continues to be high and conditions for a sustained recovery led by private demand are not yet established. "We need to provide sustained support for growth and financial repair until we have in place a strong foundation for recovery." The U.S. Treasury Department is pushing for a global agreement requiring banks to increase their capital cushions to be reached by the end of next year. At the G-20 meeting he said, "We have broad agreement on a very strong set of principles and objectives for building a more stable global financial system. But we need to move now to put that framework in place. That will require actions at the national level to implement stronger rules of the game, but also more rapid progress internationally in reaching agreement on the details of more rigorous standards that create a more level playing field. In the United States, we are moving forward to legislate reforms designed to protect consumers and investors and create a more stable, more resilient financial system." * Construction Firms' Bankr. Filings Hurt NW Ark Banks ------------------------------------------------------ The Associated Press reports that NW Ark banks are hurt by bankruptcy filings by construction firms. The AP relates that more than a dozen bankruptcy filings have been made by construction-related businesses in northwest Arkansas since June 2009. More than $60 million in debts are left unpaid, The AP states. The AP says that a four-month stretch in 2008 when a string of builder bankruptcies resulted in northwest Arkansas banks taking back $44 million in real estate. * More Restaurants Will Close, Experts Say ------------------------------------------ Experts expect more restaurants to close down in the coming months, Crain's New York Business reports. According to Crain's, many restaurants will have insufficient funds to make it through the holiday season and will close in September or in October, rather than waiting until January 2010, which is "the traditional month for closure". Crain's relates that restaurants that closed or filed for bankruptcy include: -- Cafe des Artistes on West 67th Street, -- Cafe Deville, -- Tito's Pizzeria and Restaurant, and -- SoHo's Miro Cafe. * S&P's Global Corporate Default Tally Up to 213 ------------------------------------------------ Two global corporate issuers defaulted this week, bringing the 2009 year-to-date tally to 213 issuers -- nearly 4x the 55 defaults at this time in 2008, said an article published September 4 by Standard & Poor's, titled "Global Corporate Default (Aug. 28 - Sept. 3, 2009) (Premium)." Both of last week's defaults were based in the U.S., bringing the default tallies by region to 153 issuers in the U.S., 13 in Europe, 34 in the emerging markets, and 13 in the other developed region (Australia, Canada, Japan, and New Zealand). "Both defaulted issuers this week were the result of distressed exchange offers, which we consider to be tantamount to default," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Distressed exchange offers are now the top reason for default this year, accounting for 74 defaulted issuers." This is more than 5x the distressed exchange count in full-year 2008 and nearly 19x the total in 2007. Missed interest payments trailed closely behind at 73 issuers. Bankruptcy filings also have surged, with 54 issuers so far this year having filed for bankruptcy protection, which surpasses the full-year 2008 total of 49 bankruptcy-related defaults. The sharp increase in corporate bankruptcies brings with it significant difficulties to private equity investors, particularly for those whose buyout activities in the past several years placed much of their risks squarely in the speculative-grade domain. Indeed, more than half of the defaulters this year either had or continue to have private equity involvement, which presents both challenges and opportunities to private equity investors during restructuring and reorganization. Of the global corporate defaulters so far this year, 40% of issues with available recovery ratings had recovery ratings of '6' (indicating our expectation for negligible recovery of 0%-10%), 16% of issues had recovery ratings of '5' (modest recovery prospects of 10%-30%), 12% had recovery ratings of '4' (average recovery prospects of 30%-50%), and 11% had recovery ratings of '3' (meaningful recovery prospects of 50%-70%). And for the remaining two rating categories, 11% of issues had recovery ratings of '2' (substantial recovery prospects of 70%-90%) and 10% of issues had recovery ratings of '1' (very high recovery prospects of 90%-100%). This article is part of our premium Global Fixed Income Research content, which is available to premium subscribers to RatingsDirect, at www.ratingsdirect.com. Ratings information can also be found on Standard & Poor's public Web site at www.standardandpoors.com; under Ratings in the left navigation bar, select Find a Rating. Members of the media may request a copy of this report by contacting the media representative provided. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------- --------- -------- ABSOLUTE SOFTWRE ABT CN 117 1 35 ACCO BRANDS CORP ABD US 1100 -107 135 AFC ENTERPRISES AFCE US 142 -26 12 ALTERNATIVE AS-U AMV/U US 0 0 0 AMER AXLE & MFG AXL US 1920 -736 -1119 AMR CORP AMR US 24138 -3000 -3129 ARBITRON INC ARB US 220 0 2 ARVINMERITOR INC ARM US 2627 -846 3 AUTOZONE INC AZO US 5296 -45 -527 BIOSPECIFICS TEC BSTC US 12 6 9 BLOUNT INTL BLT US 474 -36 151 BOARDWALK REAL E BEI-U CN 2377 -22 N.A. BOARDWALK REAL E BOWFF US 2377 -22 N.A. BP PRUD BAY-RTU BPT US 9 8 0 BURCON NUTRASCIE BU CN 4 3 2 CABLEVISION SYS CVC US 9307 -5284 -198 CADIZ INC CDZI US 43 7 2 CARDTRONICS INC CATM US 468 -10 -50 CENTENNIAL COMM CYCL US 1455 -948 180 CENVEO INC CVO US 1459 -231 186 CHENIERE ENERGY CQP US 1920 -436 27 CHOICE HOTELS CHH US 357 -141 -22 CINCINNATI BELL CBB US 2009 -623 -19 CLOROX CO CLX US 4576 -175 -757 DEXCOM DXCM US 65 1 37 DISH NETWORK-A DISH US 7265 -1519 -240 DOMINO'S PIZZA DPZ US 461 -1372 113 DUN & BRADSTREET DNB US 1623 -719 -147 DYAX CORP DYAX US 68 -37 32 EASTMAN KODAK EK US 7105 -109 1100 EINSTEIN NOAH RE BAGL US 150 -4 -47 ELECTRO-OPTICAL MELA US 8 7 6 ENERGY COMPOSITE ENCC US 0 0 0 EPICEPT CORP EPCT SS 16 -3 7 EXELIXIS INC EXEL US 333 -123 29 EXTENDICARE REAL EXE-U CN 1719 -47 111 FORD MOTOR CO F US 204327 -9418 -39573 FORD MOTOR CO F BB 204327 -9418 -39573 GENCORP INC GY US 1015 1 -8 GLG PARTNERS INC GLG US 494 -271 166 GLG PARTNERS-UTS GLG/U US 494 -271 166 GOLD RESOURCE CO GORO US 9 9 7 HEALTHSOUTH CORP HLS US 1888 -662 -77 HERMAN MILLER MLHR US 767 8 167 HOVNANIAN ENT-A HOV US 2285 -73 1081 HOVNANIAN ENT-B HOVVB US 2285 -73 1081 HUMAN GENOME SCI HGSI US 670 -55 117 IDENIX PHARM IDIX US 82 -4 34 IMAX CORP IMX CN 270 -18 55 IMAX CORP IMAX US 270 -18 55 IMMUNOMEDICS INC IMMU US 53 1 -20 IMS HEALTH INC RX US 2030 -22 318 INCYTE CORP INCY US 159 -291 101 INSULET CORP PODD US 99 -3 63 INTERMUNE INC ITMN US 165 -80 98 IPCS INC IPCS US 553 -34 68 ISTA PHARMACEUTI ISTA US 72 -78 24 JAZZ PHARMACEUTI JAZZ US 108 -88 -17 JUST ENERGY INCO JE-U CN 457 -652 -369 KNOLOGY INC KNOL US 639 -44 37 LIN TV CORP-CL A TVL US 781 -187 14 LINEAR TECH CORP LLTC US 1421 -266 963 LOGMEIN INC LOGM US 47 7 1 MANNKIND CORP MNKD US 267 -19 0 MAP PHARMACEUTIC MAPP US 65 1 24 MAXLIFE FUND COR MXFD US 0 0 0 MEAD JOHNSON-A MJN US 1926 -808 466 MEDIACOM COMM-A MCCC US 3707 -426 -265 MODAVOX INC MDVX US 5 3 -1 MOODY'S CORP MCO US 1873 -749 -404 NATIONAL CINEMED NCMI US 603 -499 91 NAVISTAR INTL NAV US 9656 -1447 1784 NPS PHARM INC NPSP US 144 -219 80 OCH-ZIFF CAPIT-A OZM US 1854 -157 N.A. ONCOGENEX PHARMA OGXI US 7 3 4 OSIRIS THERAPEUT OSIR US 129 2 64 OTELCO INC-IDS OTT-U CN 349 9 24 OTELCO INC-IDS OTT US 349 9 24 OVERSTOCK.COM OSTK US 129 -3 33 PALM INC PALM US 643 -108 11 PDL BIOPHARMA IN PDLI US 217 -306 140 PERMIAN BASIN PBT US 10 0 9 PETROALGAE INC PALG US 7 -32 -16 POTLATCH CORP PCH US 916 0 N.A. QWEST COMMUNICAT Q US 20226 -1051 260 REGAL ENTERTAI-A RGC US 2647 -228 -40 RENAISSANCE LEA RLRN US 58 0 -6 REVLON INC-A REV US 797 -1074 87 SALLY BEAUTY HOL SBH US 1464 -645 420 SANDRIDGE ENERGY SD US 2364 -91 114 SEMGROUP ENERGY SGLP US 314 -131 -11 SIGA TECH INC SIGA US 8 -13 -4 SONIC CORP SONC US 828 -22 75 STANDARD PARKING STAN US 230 4 -13 STEREOTAXIS INC STXS US 43 -10 -3 SUCCESSFACTORS I SFSF US 165 -5 1 SUN COMMUNITIES SUI US 1192 -81 N.A. SYNERGY PHARMACE SGYP US 0 -1 -1 TALBOTS INC TLB US 999 -184 -28 TAUBMAN CENTERS TCO US 2858 -289 N.A. TENNECO INC TEN US 2767 -263 240 THERAVANCE THRX US 206 -159 144 UAL CORP UAUA US 18805 -2628 -2345 UNITED RENTALS URI US 3918 -46 316 US AIRWAYS GROUP LCC US 7857 -336 -548 VECTOR GROUP LTD VGR US 757 2 158 VENOCO INC VQ US 725 -165 -3 VIRGIN MOBILE-A VM US 320 -256 -126 WARNER MUSIC GRO WMG US 3988 -142 -680 WEIGHT WATCHERS WTW US 1085 -791 -309 WORLD COLOR PRES WC CN 2641 -1735 479 WR GRACE & CO GRA US 3815 -351 977 ZION OIL & GAS ZN US 9 7 1 ZYMOGENETICS INC ZGEN US 271 -14 85 ********* 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 **