/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090925.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, September 25, 2009, Vol. 13, No. 265 Headlines 1031 TAX GROUP: Court Approves Deal With Huron Consulting 750 LLC: Voluntary Ch. 11 Case Summary & Unsecured Creditor ABITIBIBOWATER INC: To Sell Idled Texas Plant for $20.5 Million ACTION MOTORS: Case Summary & 20 Largest Unsecured Creditors ADVENTURE PARKS: Cypress Gardens Shuts; Talks With Bidders Ongoing ALFRED FRAUMENI: Voluntary Chapter 11 Case Summary ALON REFINING: S&P Raises Corporate Credit Rating to 'B+' AMCAST INDUSTRIAL: EPA Adds Cedarburg Site to Superfund List AMERICAN AIRLINES: Moody's Assigns 'B2' Rating on $450 Mil. Notes AMERICAN AIRLINES: S&P Assigns 'B' Rating on $450 Mil. Notes AMR CORP: Fitch Assigns 'C' Rating on $400 Mil. Senior Notes ANTHONY MONTALBANO: Lists 104 Creditors in Bankruptcy Filing ARIMAR PROPERTIES LLC: Case Summary & 12 Largest Unsec. Creditors ASARCO LLC: Sterlite's New Offer Rejected by Judge ASAT HOLDINGS: Scraps Cayman Scheme, to Explore Other Options BARJINDER GILL: Case Summary & 20 Largest Unsecured Creditors BE AEROSPACE: S&P Downgrades Corporate Credit Rating to 'BB+' BERNARD MADOFF: Prosecutors May Use Forfeiture, Judge Rules BERNARD MADOFF: Victims Oppose U.S.'s Picard Hiring BONANZA OIL: Posts $1.2MM Net Loss in Six Months Ended June 30 BOPHA SAM: Case Summary & 20 Largest Unsecured Creditors C. KNUDSEN BUILDERS: Blames Bradford Bank for Bankruptcy CANWEST GLOBAL: Sells 50.1% Stake in Ten Network to Macquarie CARDICA INC: Announces Going Concern Opinion per Nasdaq Rule CELL THERAPEUTICS: Annual Shareholders' Meeting on October 20 CENGAGE LEARNING: Moody's Cuts Rating on $4.3 Bil. Loan to 'B2' CHARLES DENNIS BRADLEY: Case Summary & 4 Largest Unsec. Creditors CHINIQUY CENTER: Case Summary & 3 Largest Unsecured Creditors CHRYSLER LLC: Court OKs $24MM Payout in Wrongful Death Action CIB MARINE: Wants to Hire Godfrey & Kahn as Bankruptcy Counsel CIRCUIT CITY: May Now Solicit Votes on Liquidating Plan CIRCUIT CITY: Wants Marlon Mondragon Class Suit Dismissed CITIGROUP INC: Registers 2 Securities with NYSE Arca CITIGROUP INC: To Trim Down Branches to Six Metropolitan Areas CLARIENT INC: Has Employment Agreement with Kenneth Bloom COFFEYVILLE RESOURCES: S&P Affirms 'B' Corporate Credit Rating COLONIAL BANCGROUP: Fitch Withdraws 'D' Issuer Default Rating COMSTOCK HOMEBUILDING: Settles Litigation with Cornerstone CONCHO BUSINESS: Voluntary Chapter 11 Case Summary COYOTES HOCKEY: Balsillie Offers to Delay Purchase to June DOLCE VITA RESTAURANT: Case Summary & 20 Largest Unsec. Creditors DOWNEY REGIONAL: Gets Schedules Filing Extension Until October 29 DS WATERS: S&P Raises Corporate Credit Rating to 'B' EARTHFIRST CANADA: GE, Plutonic Move Closer to Buying Project EDGE PETROLEUM: Maturity of Union Bank Loan Extended to Sept. 30 EDGE PETROLEUM: Receives Nasdaq Non-Compliance Notice EDUCATION MANAGEMENT: S&P Puts 'B' Rating on CreditWatch Positive ENERGY PARTNERS: To Start Trading of New Common Stock on NYSE EXTENDED STAY: Prime Group Realty Sells Stake F & G STORES: Case Summary & 9 Largest Unsecured Creditors FBL FINANCIAL: A.M. Best Assigns "bb" to Senior Unsecured Debt FINLAY ENTERPRISES: Gordon Brothers Wins Auction for Assets FIRSTFED FINANCIAL: Extends Expiry Date, Consent Payment Deadline FORD MOTOR: Finalizes $5.9-Bil. Loan Under DOE's ATVM Program GAYLORD ENTERTAINMENT: Tender Offer Won't Affect Moody's Rating GEOEYE INC: S&P Downgrades Rating on Proposed Senior Notes to 'B' GEORGETOWN GOLF CLUB: Ch. 11 Case Dismissed; Stay Lifted GILL FOOD MART: Case Summary & 20 Largest Unsecured Creditors GRAY TELEVISION: Gabelli Discloses 5.92% Equity Stake GTS 900: Ch 11 Bankruptcy Will Allow Closure of 77 Condos HARRAH'S ENTERTAINMENT: Court Decision May Derail Thistledown Sale HANESBRANDS INC: PBGC Has Deal to Strengthen Pension Funding HARRAH'S OPERATING: Moody's Assigns 'Caa1' Rating on $1 Bil. Loan HERBST GAMING: Voting Creditors Accept First Amended Plan IDEARC INC: Reorganizes Sales Divisions From Three to Two INN OF THE MOUNTAIN: In Talks with Debtholders on Missed Payment INSIGHT HEALTH: Warns It May Not Refinance Floating Rate Notes INTEGRAL VISION: Registers 20.8 Mil. Shares for Resale IRVINE SENSORS: Optex Unit Files for Chapter 7 Bankruptcy IVIVI TECHNOLOGIES: To Sell All Assets to Insider Group JEFFREY LAMBERT: Voluntary Chapter 11 Case Summary JEWETT TUCKER: Case Converted to Chapter 7 Liquidation JL BERRIOS INVESTMENTS: Case Summary & 3 Largest Unsec. Creditors JOHN HOLLOWAY: Case Summary & 20 Largest Unsecured Creditors JOSEPH PERRI: Case Summary & 20 Largest Unsecured Creditors KANSAS PUBLIC: Bankrupt Under Current Operating Assumptions KENT SWIG: Close to Personal Bankruptcy Filing LAKE AT LAS VEGAS: Former Owner Wants Bankruptcy Case Dismissed LAUREATE EDUCATION: S&P Assigns 'B' Rating on $200 Mil. Loan LEAP WIRELESS: Harbinger Cuts Equity Stake to 4.5% LEAP WIRELESS: Registers 1-MM Shares Under 2004 Stock Option Plan LEHMAN BROTHERS: European Units Seeking Around $150 Billion LEHMAN BROTHERS: Barclays Refutes Charges on $8 Bil. Windfall LEHMAN BROTHERS: Court OKs Protocol for Derivative Contract Claims LEHMAN BROTHERS: HK Agency Reviewing 522 Non-Minibond Cases LEHMAN BROTHERS: LCPI Proposes to Complete Deal in SCC Bankruptcy LEHMAN BROTHERS: LCPI Proposes to Purchase Fairpoint Participation LEHMAN BROTHERS: Proposes DiscoverReady as Contract Attys Provider LEHMAN BROTHERS: PwC Has Recovered $30 Billion in Client Assets LIVE CURRENT: Posts $2.3MM Net Loss in Six Months Ended June 30 LOUISIANA FILM: Files Required Documents, Discloses $2.8MM Debt MAGNA ENTERTAINMENT: Court Decision May Derail Thistledown Sale MECHANICAL TECHNOLOGY: Board Approves Amended 2006 Equity Plan MICHAEL FENTON BRUTON: Case Summary & 8 Largest Unsec. Creditors MIDLAND DIRECT: Case Summary & 14 Largest Unsecured Creditors MYLAN INC: S&P Raises Corporate Credit Rating to 'BB' NEGUS-SONS INC: Case Summary & 20 Largest Unsecured Creditors NORTEL NETWORKS: Avaya Sale to Be Reviewed by Canada Govt. OPTEX SYSTEMS: Files for Chapter 7 Bankruptcy OPUS EAST: Ch. 7 Trustee Proposes YCS&T as Co-Counsel OPUS SOUTH: Court Grants Interim OK to DIP Loans for Water Edge OPUS SOUTH: Court OKs to Solicit Bids for Assets OPUS SOUTH: Plan Exclusivity Extended Until Dec. 18 OPUS WEST: Court Approves Sale for Hill Country Properties OPUS WEST: Proposes Lakepointe Lien Claim Procedures OPUS WEST: Proposes Pact With Wells Fargo, et al. OPUS WEST: Proposes to Sell Hill CNTRY Galleria Interests OSCAR ECHAGUE: Case Summary & 20 Largest Unsecured Creditors PAETEC HOLDING: Expects to Report Up to $48MM in FY2009 Net Loss PLAINFIELD APARTMENTS: Water Service at Viola's May be Shut Off PONY EXPRESS LAND: Case Summary & 16 Largest Unsecured Creditors PREGIS CORPORATION: Moody's Rates Add-On on Senior Notes at 'B2' PREGIS CORP: S&P Assigns 'B+' Rating on EUR125 Mil. Senior Notes PREMONT INDEPENDENT: Moody's Cuts Rating on $2.3 Mil. Debt to Ba1 PRIME GROUP REALTY: Sells Extended Stay Investment PROGRESSIVE BAPTIST: Files for Ch 11 Bankruptcy, Averts Auction QUALITY HOME: S&P Downgrades Corporate Credit Ratings to 'CC' QUANTUM GROUP: July 31 Balance Sheet Upside-Down by $9.5 Million RAPID LINK: July 31 Balance Sheet Upside-Down by $7.7 Million READER'S DIGEST: Committee Taps Trentwith as Investment Banker READER'S DIGEST: Committee Wants to Retain Otterbourg as Counsel READER'S DIGEST: Proposes November 16 Claims Bar Date READER'S DIGEST: Wants to Assume Time Sublicense Agreement READER'S DIGEST: Wants to File Portions of Schedules Under Seal READER'S DIGEST: S&P Assigns 'B-' Rating on DIP Loan Facility RESERVE PRIMARY: Judge Weighs SEC Distribution Plan RITE AID: Incurs $116MM Quarterly Loss, Lowers FY2010 Outlook RJ GROOVER: No Excusable Neglect for Tardy Notice of Appeal ROGER ORLAND WARREN: Case Summary & 18 Largest Unsecured Creditors S&I INVESTMENTS: 12 Years of Rent Payments Evidenced Lease Deal SELAH INVESTMENT: Files for Ch 11 to Keep Franchise Designation SEMGROUP LP: Wins Approval of Fourth Amended Disclosure Statement SHUMATE INC: Proposes Southwell & Rourke as Bankruptcy Counsel SPARTA COMMERCIAL: July 31 Balance Sheet Upside-Down by $2.5MM SPRINGBOARD GROUP: Moody's Assigns 'B2' Corporate Family Rating SPRINGBOARD GROUP: S&P Assigns Corporate Credit Rating at 'B' STANFORD FINANCIAL: Owner Seeks Reversal of Equity Sale Orders STRIVE ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors SUN-TIMES MEDIA: Authorized to Hold Tyree-Led Auction SYNOVICS PHARMA: July 31 Balance Sheet Upside-Down by $773,000 TAYLOR BEAN: Must Ink Pact With Ocala to Keep Electricity TENET HEALTHCARE: TCW Group Discloses 4.8% Equity Stake TENET HEALTHCARE: To Issue 7% Mandatory Convertible Preferreds TEXANS CUSO: Proposes Rochelle McCullough as Bankruptcy Counsel TIB FINANCIAL: Deferring Payments to Trust Preferred Holders TRIAD AT LAGRANGE: Case Summary & 17 Largest Unsecured Creditors TRIBUNE CO: Can't Exit Chapter 11 Until LBO Claims Resolved TRIBUNE CO: Wins Court Nod to Sell Chicago Cubs US AIRWAYS: Financial Condition Won't Affect Moody's Rating USMDS INC: Case Summary & 14 Largest Unsecured Creditors VELOCITY EXPRESS: Files for Bankruptcy to Sell to ComVest VULCAN ENERGY: Moody's Assigns 'Ba2' Rating on $280 Mil. Loan WARNER CHILCOTT: $980 Mil. Sale Deal Won't Affect Moody's Ratings WASHINGTON MUTUAL: Wants to Sell Windpower Assets to Goldman * CBS Broadcasting Denies Possible Bankruptcy * Airline Outlook Improves While Fliers Face Fees, Packed Planes * Luxury Hotels in U.S. Risk Default, Says Realpoint * FDIC's Bair Seeks Alternative for Replenishing Insurance Funds * Existing-Home Sales Ease Following Four Monthly Gains * U.S. Newspapers Need Immediate Access to Cash, Group Says * Nonprofits Across U.S. May Collapse, Says Norman Silber * BOOK REVIEW: Megamergers - Corporate America's Billion-Dollar Takeovers ********* 1031 TAX GROUP: Court Approves Deal With Huron Consulting --------------------------------------------------------- Bankruptcy Judge Martin Glenn approved a settlement by the Chapter 11 trustee of 1031 Tax Group LLC with the Company's former financial adviser Huron Consulting Group Inc. to subordinate $3.68 million in legal fees and avoid possible malpractice litigation, Erik Larson at Bloomberg News reported. Mr. Larson relates that the settlement covers fees incurred before trustee Gerard McHale was appointed to liquidate 1031 Tax Group. He objected to the fees from Huron and other bankruptcy professionals, claiming they spent lavishly on the case even as 1031 Tax Group's estimated value fell from $300 million in August 2007 to about $11 million. The settlement, according to the Bloomberg report, prevents Huron from collecting the fees until 1031 Tax Group's defrauded customers are fully reimbursed $126 million stolen by 1031 Tax Group's founder, Edward Okun, who was sentenced in August. Huron said it would have prevailed in any litigation over the fees. Settlements and Liquidating Plan Gerard A. McHale, the Chapter 11 trustee, has asked for court approval of five groups of settlements with insurers, former 1031 attorneys, former owners of 1031 intermediaries and Wachovia Bank NA, which will provide a total of $92 million in funding for 1031 Tax's Chapter 11 plan. As reported by the TCR on Sept. 4, 2009, the Bankruptcy Court is scheduled to convene a hearing on October 7 to consider approval of the liquidating plan proposed by the Chapter 11 trustee of 1031 Tax Group. Creditors entitled to vote on the Plan have until September 25 to submit their ballots. Funding for distributions to creditors under the Plan is primarily derived from settlements of claims against various firms and entities in connection with the alleged fraudulent activities and misappropriation of funds by Edward Okun that led to the collapse of 1031 Tax Group and its units in 2007. Under the Plan, holders of general unsecured claims aggregating $150 million will recover 35% of their claims. Holders of these claims identified as "exchangers" will recover up to 44% after giving effect to a class action agreement. Creditors that have higher rank to unsecured creditors will receiver full recovery. Holders of equity interests won't get anything. On the effective date, a liquidating trust will be formed to implement the settlement agreements, and to pursue causes of action. The projected cash balance of the Liquidation Trust as of the effective date is $78,970,000. This amount will be funded by the $70,277,500 collectively payable under the settlement agreements plus cash on hand of $5,897,000 and an anticipated tax refund of $2,800,000. The Plan is being co-proposed by debtor IPofA Shreveport Industrial Park, LLC. The Plan also provides for the reorganization of IPofA Shreveport, which owns the Mineral Servitude (the below-ground rights to exploit the shale gas deposits in a property in Shreveport, LA). The Liquidating Trustee will be the sole member of IpofA Shreveport. Reorganized IPofA Shreveport's activities will relate solely to maximizing any revenues that may be potentially generated or derived from the Mineral Servitude. A copy of the August 12 Plan and Disclosure Statement is available for free at http://bankrupt.com/misc/1031_Tax_DS_Plan.pdf About The 1031 Tax Group Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- was a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. The Company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447 through 07-11462). Gerard A. McHale, Jr., was appointed Chapter 11 trustee. Jonathan L. Flaxer, Esq., and David J. Eisenman, Esq., at Golenbock Eiseman Assor Bell & Peskoe LLP, represent the Chapter 11 trustee. Kurtzman Carson Consultants LLC acts as claims and notice agent. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent the Official Committee of Unsecured Creditors. As of Sept. 30, 2007, the Debtors had total assets of $164,231,012 and total liabilities of $168,126,294, resulting in a total stockholders' deficit of $3,895,282. Former CEO Edward H. Okun is in federal prison at Northern Neck Regional Jail in Warsaw, Virginia, after being convicted of mail fraud, among other charges. Mr. Okun allegedly engaged in several misappropriations of funds of 1031 Tax Group and other entities. The funds were used for Mr. Okun's lavish lifestyle including acquiring properties and luxury asset. 750 LLC: Voluntary Ch. 11 Case Summary & Unsecured Creditor ----------------------------------------------------------- Debtor: 750 LLC 18520 NW 67th Ave Ste 248 Miami Lakes, FL 33015 Bankruptcy Case No.: 09-30154 Chapter 11 Petition Date: September 23, 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: $500,001 to $1,000,000 The Debtor identified Fire Alarm Specialists with a debt claim for $6,000 as its largest unsecured creditor. A list of the Company's largest unsecured creditor is available for free at: http://bankrupt.com/misc/flsb09-30154.pdf The petition was signed by Ameena Ali, managing member of the Company. ABITIBIBOWATER INC: To Sell Idled Texas Plant for $20.5 Million --------------------------------------------------------------- Michael Bathon at Bloomberg News reports that AbitibiBowater Inc. is seeking persmission from the Bankruptcy Court to sell a permanently idled plant in Texas for $20.5 million. AbitibiBowater wants to sell to CIT Partners LLC the mill in Lufkin, Texas, which closed in December 2007. The plant consists of 895.5 acres of land, including 150 acres of landfill and 100 acres of ponds and marsh, court papers show. The sale would save the AbitibiBowater about $250,000 a month, or $3 million a year, that it spends on maintaining the facility, Abitibi said. 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 Sept. 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). ACTION MOTORS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Action Motors Corporation 74 Newtown Road Danbury, CT 06810 Bankruptcy Case No.: 09-51891 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: James M. Nugent, Esq. Harlow, Adams, and Friedman 300 Bic Drive Milford, CT 06460 Tel: (203) 878-0661 Email: jmn@quidproquo.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of at least $0, and total debts of $1,950,836. 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/ctb09-51891.pdf The petition was signed by Michael Bernstein, president of the Company. ADVENTURE PARKS: Cypress Gardens Shuts; Talks With Bidders Ongoing ------------------------------------------------------------------ Gary White & Kyle Kennedy at The Ledger report that Adventure Parks Group LLC's Cypress Gardens, along with the Splash Island Water Park, has closed for the third time since 2003. Cypress Gardens co-owners Rob Harper and Brian Philpot said in a statement that they are "in the process of negotiating with several potential purchasers and lessees for all or part of the property, and do not feel it is fair to our employees, the guests, or the public to continue operations heading into the fall with the future of the property in flux." Mr. Philpot said that he and his partner are committed to finding buyers who will reopen Cypress Gardens as a theme park, The Ledger relates, citing Rick Dantzler, a Winter Haven lawyer and former state senator. Based in Valdosta, Georgia, Adventure Parks Group LLC is the holding company of Wild Adventures and Cypress Gardens. Wild Adventures operates an amusement park in Valdosta, Georgia, while Cypress operates an amusement park in Winter Haven, Florida. The Company, along with Wild Adventures and Cypress Gardens, filed for Chapter 11 protection on Sept. 11, 2006 (Bankr. M.D. Ga. Case Nos. 06-70659 through 06-70661). George H. McCallum, Esq., James P. Smith, Esq., and Ward Stone, Jr., Esq., at Stone & Baxter, LLP, represent the Debtors. The U.S. Trustee for Region 21 appointed creditors to serve on an Official Committee of Unsecured Creditors in these cases. Mark J. Wolfson, Esq., at Foley & Lardner LLP and James C. Frenzel, Esq., at James C. Frenzel P.C. in Georgia represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $50 million and $100 million. Adventure Parks, on March 11, 2008, filed an Amended Plan of Reorganization and Disclosure Statement. ALFRED FRAUMENI: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Alfred V. Fraumeni Jr., Inc. 7 Glen Road Lynnfield, MA 01940 Bankruptcy Case No.: 09-19043 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Sandab Communications Limited Partnership II 09-19044 Cape Cod Broadcasting I, LLC 09-19045 Cape Cod Broadcasting License II, LLC 09-19046 Cape Cod Broadcasting License I, LLC 09-19047 Cape Cod Broadcasting License II, LLC 09-19048 World Classical Network LLC 09-19049 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Frank J. Bailey Debtor's Counsel: Jay P. Johnson, Esq. 10 First Avenue, Suite 34 Peabody, MA 01960 Tel: (978) 531-5600 Email: jpj@jpjlaw.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 According to the schedules, the Company has assets of at least $5,780,000, and total debts of $150,135. The Company says it does not have unsecured creditors who are non insiders when they filed their petition. The petition was signed by Alfred V. Fraumeni Jr., president of the Company. ALON REFINING: S&P Raises Corporate Credit Rating to 'B+' --------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on refining company Alon Refining Krotz Springs Inc. to 'B+' from 'B' and removed the ratings from CreditWatch, where they were placed with positive implications on April 28, 2009. Krotz Springs is a wholly owned, restricted indirect subsidiary of Alon USA Energy Inc. (B+/Stable/--). S&P raised the issue-level rating on the term loan to 'BB-' (one notch above the corporate ratings) from 'B+'. The recovery rating on this debt remains '2', indicating expectations of substantial (70%-90%) recovery in a payment default. The outlook is stable. "The upgrade reflects S&P's expectations that Alon USA Energy Inc. and parent Alon Israel Oil Co. Ltd. will continue to provide financial and operational support to Alon Refining Krotz Springs Inc.," said Standard & Poor's credit analyst Aniki Saha- Yannopoulos. "This thus leads us to equate S&P's ratings on Alon Krotz Springs to that of its parent, Alon USA." During April 2009, concurrent with Krotz Spring paying down its debt through the monetization of its hedges and the release of its cash collateral, Alon USA provided an additional $25 million in equity while Alon Israel provided another $25 million in letter-of-credit support. Total parental support to Krotz Springs currently includes $126 million in equity. The parents also provide in total $91 million in LOC support for the Krotz Springs revolving credit facility as mandated by the facility. The ratings on Alon Krotz Springs reflect the significant challenges the company faces as a small, single-asset petroleum refiner and marketer participating in a competitive, volatile, and highly capital-intensive industry. In addition, the Krotz Springs refinery is unable to produce ultra-low sulfur diesel and processes lighter grades of crude oil, which limits cash flows and liquidity in general. The ratings also incorporate the company's low debt leverage, market access via the Colonial Pipeline, and originally a five-year contract with Valero Energy Corp. for its high sulfur diesel production. The stable outlook reflects S&P's expectations that the company will maintain sufficient liquidity while keeping debt to EBITDA below 4x and FFO to debt around 20% in the current industry conditions. S&P could revisit the ratings if S&P perceive that the parents' support toward Krotz Spring has weakened, either due to weak operating conditions at the parents or a catastrophic event at Krotz Springs. S&P could also consider a negative rating action if poor operations leads to weak financial measures at Krotz Springs over an extended period of time. Given current weak industry conditions, S&P does not anticipate any positive rating actions in the intermediate term. AMCAST INDUSTRIAL: EPA Adds Cedarburg Site to Superfund List ------------------------------------------------------------ U.S. Environmental Protection Agency has added the Amcast Industrial Corp. site in Cedarburg, Wisconsin, to the Superfund National Priorities List of hazardous waste sites. Amcast was an automotive aluminum die-casting facility from 1939 to 2004, when the Company filed for bankruptcy under Chapter 11. PCB contamination from Amcast's operations polluted the plant property, adjacent sewers, a pond in a nearby park, a retention pond, some private properties near the plant and sediment in Cedar Creek. It may also have reached the Milwaukee River, a distance of five creek miles away. Headquartered in Fremont, Indiana, Amcast Industrial Corporation, manufactures and distributes technology-intensive metal products to end-users and suppliers in the automotive and plumbing industry. The Company and four debtor-affiliates filed for chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court for the Southern District of Ohio confirmed the Debtors' Third Amended Joint Plan of Reorganization on July 29, 2005. The Debtors emerged from bankruptcy on Aug. 4, 2005. Amcast Industrial Corporation and Amcast Automotive of Indiana, Inc., filed for their second chapter 11 petitions on Dec. 1, 2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman, Esq., and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, P.C., represent the Debtors in their restructuring efforts. Henry A. Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP, represent the Official Committee of Unsecured Creditors. Kevin I. Dowd at Berkeley Square Group LLC serves as Amcast's financial advisor. The Creditors' Committee receives financial advice from Thomas E. Hill at Alvarez & Marsal, LLC. When the Debtor and its affiliate filed for protection from their creditors, they listed total assets of $97,780,231 and total liabilities of $100,620,855. AMERICAN AIRLINES: Moody's Assigns 'B2' Rating on $450 Mil. Notes ----------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to the planned $450 million senior secured notes due September 2012 to be issued by American Airlines, Inc. Moody's also affirmed all of its existing debt ratings of AMR Corporation and of American. The outlook is stable. The proceeds of the Notes are expected to fund the planned refinancing of American's senior secured first lien credit facility due December 2010 (B2, LGD2-26). "The liquidity benefits of this and other recent capital raising activities heavily weighed in Moody's recent upgrade of AMR's speculative grade liquidity rating to SGL-2 and change in the outlook to stable," said Moody's Analyst Jonathan Root. "American is now better able to meet its debt maturities and capital commitments in upcoming periods," continued Root. The Notes will be secured by perfected first priority security interests in the 141 aircraft comprising the collateral package; 68 Boeing aircraft of three types (757-223, 767-223 and 767-323) and 73 McDonnell Douglas MD-82's or MD-83's that American currently operates. None of the aircraft will be subject to Section 1110 of the U.S. Bankruptcy Code because their delivery dates precede October 22, 1994. AMR will guarantee American's obligations under the Notes indenture. There will be no financial covenants in the indenture; however, American will need to comply with a collateral maintenance test performed semi-annually and the maximum LTV will be capped at 43 percent. Moody's will withdraw the B2 rating on the existing credit facility of American upon its payoff and termination, which is required to relieve the existing liens on the aircraft that will secure the Notes. The termination of this facility will take with it the sole financial covenant to which American has been required to comply. American will still be subject to a holdback should it not meet a minimum unrestricted cash balance requirement found in its agreement with its primary credit card processor, and a minimum unrestricted cash balance condition precedent to the availability of its new aircraft sale/leaseback facility provided by General Electric Capital Aviation Services. The non-existence of financial covenants further supports the liquidity profile. The last rating action was on September 22, 2009, when Moody's affirmed the Caa1 corporate family and probability of default ratings of AMR, changed the outlook to stable from negative and the speculative grade liquidity rating to SGL-2 from SGL-3. Moody's also lowered its ratings of American's Series 2001-1 Enhanced Equipment Trust Certificates. Assignments: Issuer: American Airlines, Inc. -- Senior Secured Regular Bond/Debenture, Assigned a range of 26 - LGD2 to B2 American Airlines, Inc., and its parent AMR Corporation are based in Fort Worth, Texas. AMERICAN AIRLINES: S&P Assigns 'B' Rating on $450 Mil. Notes ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' issue-level rating and '2' recovery rating to American Airlines Inc.'s $450 million senior secured notes due 2012. The '2' recovery rating indicates S&P's expectation of substantial (70% to 90%) recovery in a payment default scenario. In addition, S&P placed the 'B' issue-level rating on CreditWatch with negative implications, because if S&P lower American's corporate credit rating, S&P would also lower this rating. The notes, which American's parent, AMR Corp. guarantees, are secured by 141 older B757, B767, and MD80 aircraft. Because American acquired these aircraft before the October 1994 revision to the U.S. Bankruptcy Code, and the debt S&P is rating does not have a purchase money security interest, the notes do not have the benefit of protection under Section 1110 of the Code. S&P therefore analyzed them as secured debt, and assigned a recovery rating, rather than analyzing them as equipment trust certificates. American will use the proceeds to prepay its secured term loan. The aircraft that will secure the notes, as well as certain international route rights and takeoff and landing slots, currently secure the term loan. S&P's default scenario was a bankruptcy of AMR and American in 2011. Although S&P believes it is likely that the companies would reorganize, S&P considered it possible that American would choose to return the collateral securing the notes to noteholders. S&P's recovery analysis started with the lower of two appraised current market values for each aircraft (totaling $1.1 billion). S&P then modeled the effect of two years' depreciation, applied a discount to reflect the adverse conditions in which the aircraft would be repossessed and sold by noteholders, and also deducted estimated costs for repossession, remarketing, and certain maintenance requirements. The net stressed value was $409 million, which covered 85% of the $450 million principal amount, plus six months' interest (an estimated $27 million). Ratings List AMR Corp. American Airlines Inc. Corp. credit rating B-/Watch Neg/-- New Ratings Assigned $450 mil. sr secd notes due 2012 B/Watch Negative Recovery rating 2 AMR CORP: Fitch Assigns 'C' Rating on $400 Mil. Senior Notes ------------------------------------------------------------ Fitch Ratings has assigned a rating of 'C' and a Recovery Rating of 'RR6' to AMR Corp.'s $400 million senior convertible note issue. The notes, which are guaranteed by AMR's principal operating subsidiary, American Airlines, Inc. (American), mature in 2014 and carry a coupon of 6.25%. The underwriters of the notes have been given the option to increase the principal amount up to $460 million to cover over-allotments, if any. Fitch's current Issuer Default Rating for AMR is 'CCC'. The issuance of the convertible notes, along with an offering of 48 million shares of common equity (which could be raised to as much as 56 million shares to cover over-allotments), will raise a total of approximately $771 million of additional capital after underwriting discounts and offering expenses (and excluding any additional proceeds from over-allotments). This represents an important step for AMR in supplementing its unrestricted liquidity position as the carrier continues to face very weak air travel demand patterns and the prospects of significantly negative free cash flow during the seasonally soft demand period through next spring. Third quarter revenue trends have firmed somewhat, based on the airline's updated guidance provided on Sept. 18, 2009. AMR expects mainline revenue per available seat mile to decline in the range of 14.5% - 15.5% in the third quarter, reflecting some improvement in high-fare demand since June. Along with the RASM guidance, American announced that it is planning to grow mainline capacity by about 1% in 2010, with domestic mainline capacity planned to be flat and international capacity expected to grow 2.5%. Capital market access, while constrained in the first half of 2009, has improved for AMR since the spring. In addition to the newly launched convertible note and equity offerings, the carrier has completed (or plans to complete) other secured transactions this month that will raise a total of approximately $3.3 billion. Approximately $1.3 billion of this amount, consisting of a $1 billion frequent flyer mileage sale to Citigroup, approximately $282 million in aircraft-backed debt from General Electric Capital Aviation Services, and $450 million in new senior secured notes due 2012, represents immediate sources of cash. The remaining $1.6 billion will be in the form of sale/leaseback financing, also from GECAS, that will be used to finance a portion of upcoming Boeing B737-800 aircraft deliveries scheduled over the next two years. During the first half of 2009, the airline completed $470 million of aircraft-backed financing through loans and sale-leaseback transactions. After the end of the second quarter, AMR closed a public pass-through certificates transaction that raised $520 million. The certificates were collateralized by four owned B777-200ERs and 16 B737-800s (future deliveries) with an interest rate of 10.375%. Following an amendment to its Boeing aircraft purchase agreement in June, AMR now expects to take delivery of 31 Boeing B737-800 aircraft this year, 45 in 2010 and eight in 2011. Financing for these deliveries (through 2011) has been committed. During the third quarter, the airline also closed on a $276 million privately-placed secured note deal. Following the closing of all recent transactions, Fitch estimates that AMR's total liquidity position (including about $460 million in restricted cash) will rise to around $5 billion. However, AMR faces significant near-term obligations that will continue to pressure liquidity through the remainder of the year. As of June 30, AMR faced debt principal and capital lease payments of $864 million for the second half of 2009. The carrier's capital spending for the second half of the year totals approximately $1 billion, with all of the aircraft commitments in this total already financed. In addition, AMR will face an increasing cash pension funding burden as minimum required payments to its under- funded defined benefit plans ramp up significantly in 2010. In June, AMR and American reached an agreement with lenders to waive compliance with the second-quarter 2009 adjusted EBITDAR fixed charge coverage covenant in the airline's $433 million secured bank credit facility due in December 2010. Fixed charge coverage ratio requirements for future quarters were also reduced through 2010. However, the carrier will maintain significant headroom above the bank facility unrestricted liquidity covenant, which is set at $1.25 billion. ANTHONY MONTALBANO: Lists 104 Creditors in Bankruptcy Filing ------------------------------------------------------------ Nick Vogel at The Doing Oak Brook reports that Anthony P. Montalbano, Sr., has filed for Chapter 11 bankruptcy protection, listing $1,000,001 to $10,000,000 in assets against $100,000,001 to $500,000,000 in debts owed to 104 creditors. According to The Doing Oak Brook, the highest debt among Mr. Montalbano's creditors is $35 million, owed to RBC Builder Finance, followed by Countrywide/Bank of America Real Estate Managed Assets, which claims that Mr. Montalbano owes it about $22.5 million. The Doing Oak Brook relates that RBC filed on August 24 a foreclosure against Mr. Montalbano in Will County, claiming that the Debtor borrowed more than $64.5 million and still has an unpaid balance of $34 million. According to the report, the foreclosure lists these defendants: -- Montalbano Builders Inc., -- Montalbano Homes of Arizona Inc. -- Montalbano Builders of Arizona Inc., -- APM Holdings Inc., -- Interstate Bank, -- Kenmare and Associates Inc., -- Illinois Brick Company, -- Nantucket Cove Homeowners Association, -- unknown owners and non-records claimants. The Doing Oak Brook says that no court dates have been set. According to court documents, Mr. Montalbano's former workers are seeking a total of $108,000 in unpaid salary, wages, and benefits. Anthony P. Montalbano, Sr., is an Oakbrook Terrace-based contractor. He filed for Chapter 11 bankruptcy protection on August 19, 2009 (Bankr. N.D. Ill. Case No. 09-30477). Howard L. Adelman, Esq., at Adelman & Gettleman Ltd. assists the Debtor in his restructuring efforts. ARIMAR PROPERTIES LLC: Case Summary & 12 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Arimar Properties LLC 536 Heartwood Road Cherry Hill, NJ 08003 Bankruptcy Case No.: 09-35104 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court District of New Jersey (Camden) Debtor's Counsel: Nicholas S. Herron, Esq. Seymour Wasserstrum 205 Landis Avenue Vineland, NJ 08360 Tel: (856) 696-8300 Email: mylawyer7@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 12 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/njb09-35104.pdf The petition was signed by Aristo Albert Martin, member of the Company. ASARCO LLC: Sterlite's New Offer Rejected by Judge -------------------------------------------------- Bankruptcy Judge Richard Schmidt stuck with his original decision that ASARCO LLC should emerge from bankruptcy with Grupo Mexico LLC's proposed Chapter 11 plan and bid to regain control of its unit. On August 31, Judge Schmidt issued a decision that Grupo's Mexico offer was superior to Asarco LLC's plan, which was built around a sale of the business to Sterlite Industries (India) Ltd., a unit of India's Vedanta Resources Plc. But after Judge Schmidt entered an decision recommending to District Court Judge Andrew S. Hanen to recommend Grupo's plan, Sterlite beefed up its offer for the business and stated that it would release Grupo from a $8 billion liability in connection with the $9.13 billion judgement against Grupo in connection with the suit that it forced its unit to sell shares in Southern Peru Copper Company, now known as Southern Copper Corporation. In a September 24 ruling, Judge Schmidt, however, rejected Sterlite's request that its bid, made after he made his Aug. 31 decision, should be considered by the federal judge who will decide which company gets Asarco. Letting Sterlite revise its bid would be "fundamentally unfair," he said. Judge Schmidt also said that Grupo's failure to reach an agreement with the United Steel Workers does not render its plan unfeasible. He said that the risk of a union strike is overstated. Grupo Mexico and Sterlite have filed full-payment plans, each promising to return full principal and interest to the creditors. ASARCO LLC's plan sells the assets to Sterlite for $1.44 billion in cash plus $722 million to monetize the SCC Litigation Trust. In its plan, Grupo Mexico will contribute to the Debtor $2.2 billion cash. A copy of Judge Schmidt's latest recommendation to the District Court is available for free at: http://bankrupt.com/misc/Asarco_Schmidt_Amended_Order.pdf District Judge Hanen is expected to rule on the Plan in November 2009. The Debtors are expected to emerge from bankruptcy by the end of 2009 should Judge Hanen accept the Bankruptcy Court's recommendation, Grupo Mexico SAB said. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASAT HOLDINGS: Scraps Cayman Scheme, to Explore Other Options ------------------------------------------------------------- The Board of Directors of ASAT Holdings Limited has commenced a formal process to seek strategic alternatives, which could include the sale of the company or one of more of its subsidiaries. Interested stakeholders in ASAT Holdings have agreed that this course of action accelerates the process to create a financially stronger business. ASAT has hired Macquarie Capital to provide strategic advisory services and explore other alternatives to maximize value for the Company's stakeholders. "For several months we worked in collaboration with our creditors to develop an equitable solution that would be in the best interest of the Company, creditors, shareholders, customers and employees. Recently, it became clear the best path to pursue was to explore other strategic alternatives. The restructuring options we were previously considering, combined with challenging industry conditions, would have continued to put pressure on our capital requirements. These factors were the primary reason the Board is seeking strategic alternatives in lieu of proceeding with the previously announced scheme of arrangement in the Cayman Islands that was scheduled for September 21, 2009. We are committed to expediting this process and are confident we can reach a favorable outcome for stakeholders," said Eric E. Thompson, Chief Restructuring Officer and CEO of ASAT Holdings Limited. "ASAT has a world class manufacturing center in Dongguan, which is one of the largest and most advanced semiconductor assembly and test operations in mainland China," said Mr. Thompson. "This facility offers room for considerable expansion, and will remain an important part of our future plans." The Company does not intend to provide updates or make any further comment until the outcome of the process is determined or until there are significant developments. ASAT Holdings said August 31 it has received an Extension of Forbearance Period under the Forbearance Agreements dated as of March 2, 2009, with certain of the Noteholders under the 9.25% Senior Notes due 2011 issued by New ASAT (Finance) Limited and the lenders under the Purchase Money Loan Facility. The extended duration of the Forbearance Agreements is for an additional period of 30 consecutive days, commencing at 7:01 pm (New York City time) on August 30, 2009, and expiring at 7:00 pm (New York City time) on September 29, 2009. The same terms and conditions of the original Forbearance Period will stay in effect for the Additional Forbearance Period. Under the terms of the Forbearance Agreements, the Noteholders and PMLA Lenders agree to forbear from exercising their rights and remedies against the Company with respect to certain designated defaults until after September 29, 2009, subject to certain early termination events. On July 1, 2009, ASAT reached an agreement in principle with a majority of its creditors on the terms of a consensual financial restructuring of the obligations of New ASAT (Finance) Limited under the Notes and the Company under the PMLA. The restructuring of the Notes was to be implemented through a creditor scheme of arrangement in the Cayman Islands courts. About ASAT Holdings Limited ASAT Holdings Limited (OTC Bulletin Board: ASTTY) -- http://www.asat.com/-- is a global provider of semiconductor package design, assembly and test services. With 20 years of experience, the Company offers a definitive selection of semiconductor packages and world-class manufacturing lines. ASAT's advanced package portfolio includes standard and high thermal performance ball grid arrays, leadless plastic chip carriers, thin array plastic packages, system-in-package and flip chip. ASAT was the first company to develop moisture sensitive level one capability on standard leaded products. The Company has operations in the United States, Asia and Europe. BARJINDER GILL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Joint Debtors: Barjinder S. Gill Gurmeet Gill 2295 Autumn Ridge Blvd. Lafayette, CO 80026 Bankruptcy Case No.: 09-29918 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Debtors' Counsel: John G. Nelson, Esq. 600 17th St., Suite 2800 South Denver, CO 80202 Tel: (720) 359-1615 Fax: (303)b 260-6401 Email: nelsonlawoffice@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/cob09-29918.pdf The petition was signed by the Joint Debtors. BE AEROSPACE: S&P Downgrades Corporate Credit Rating to 'BB+' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating to 'BB+' from 'BBB-' on Wellington, Florida-based BE Aerospace Inc. S&P also lowered the issue-level rating on the company's senior unsecured notes to 'BB' from 'BB+' and assigned a recovery rating of '5', indicating expectations of modest (10%- 30%) recovery in a payment default scenario. At the same time, S&P affirmed its 'BBB-' issue-level rating on the company's senior secured credit facility and assigned a recovery rating of '2', indicating expectations of substantial (70%-90%) recovery in a payment default scenario. S&P removed all ratings from CreditWatch, where S&P had placed them with negative implications on June 26, 2009. The outlook is stable. The company has about $1.1 billion of debt. "The downgrade reflects difficult conditions for commercial aviation suppliers due to the widespread global recession, resulting in materially lower air traffic, airline capacity cuts, weak orders for new aircraft, and uncertain airplane delivery prospects, which have adversely affected BE Aerospace's sales and earnings," said Standard & Poor's credit analyst Betsy R. Snyder. "As a result, the company's key credit protection measures have fallen below levels appropriate for the previous (investment- grade) rating, and S&P believes they are unlikely to rebound significantly in the near term," she continued. The ratings on BE Aerospace reflect the risks associated with the cyclical global airline industry, the company's primary customer base, which is currently in a downturn, the relatively small size of the markets the company serves, and higher financial risk following the 2008 acquisition of Honeywell International Inc.'s Consumables Solutions Distribution business. Higher debt levels following the HCS transaction, coupled with reduced earnings, have reduced credit protection measures. Standard & Poor's could raise the ratings if earnings and cash flow generation allow for material debt reduction, raising funds from operations to total debt to above 35% and decreasing debt to EBITDA to below 2.5x. Although less likely, S&P could lower the ratings if market conditions deteriorate further, and FFO to total debt falls below 20% and debt to EBITDA rises above 3.5x on a sustained basis. BERNARD MADOFF: Prosecutors May Use Forfeiture, Judge Rules ----------------------------------------------------------- David Glovin at Bloomberg News reports that the judge overseeing a criminal case against Bernard Madoff said prosecutors may employ forfeiture law as a way to repay investors who lost billions of dollars in a massive Ponzi scheme. As reported by the TCR on Sept. 24, 2009, prosecutors from the U.S. Attorney's office in Manhattan have asked the U.S. District Court for the Southern District of New York to find that Bernard Madoff's case due to the large number of potential victims and the complexity of determining their losses. The prosecutors, instead, want to start the process of distributing the proceeds from the sale of confiscated assets to victims through the forfeiture process. Prosecutors said that they are considering retaining Mr. Picard to assist the Department of Justice in administering the distribution of forfeited funds. Mr. Picard has identified 2,336 account holders at BLMIS who suffered net losses of more than $13 billion. Mr. Picard has received 15,870 claims in total from victims of the fraud. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. In addition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on December 15, 2008, the Securities and Exchange Commission charged Mr. Madoff and his investment firm with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The estimated losses from Mr. Madoff's fraud were allegedly at least US$50 billion. Also on December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. Irving H. Picard, Esq., was appointed as trustee for the liquidation of BLMIS, and Baker & Hostetler LLP was appointed as counsel. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors. BERNARD MADOFF: Victims Oppose U.S.'s Picard Hiring --------------------------------------------------- According to Bloomberg News's David Glovin, a group of victims of Bernard Madoff's multibillion-dollar Ponzi scheme conveyed objections to the U.S. prosecutors' plan to hire Irving Picard, the trustee for the liquidation of Bernard Madoff Investment Securities LLC, to help repay investors. The Group told District Judge Denny Chin that Mr. Picard shouldn't be retained by the government because in his capacity as trustee for Madoff Securities he hasn't protected the rights of Madoff investors. The group of investors is represented by Helen Chaitman. As reported by the TCR on Sept. 24, 2009, prosecutors from the U.S. Attorney's office in Manhattan have asked the U.S. District Court for the Southern District of New York to find that Bernard Madoff's case due to the large number of potential victims and the complexity of determining their losses. The prosecutors, instead, want to start the process of distributing the proceeds from the sale of confiscated assets to victims through the forfeiture process. Prosecutors said that they are considering retaining Mr. Picard to assist the Department of Justice in administering the distribution of forfeited funds. Mr. Picard has identified 2,336 account holders at BLMIS who suffered net losses of more than $13 billion. Mr. Picard has received 15,870 claims in total from victims of the fraud. Mr. Picard has clashed with investors in some instances in the SIPA proceedings for BLMIS. Various investors have asserted that claims should be valued based on the November 30, 2008 account statement provided by BLMIS. Mr. Picard disputes this, noting that the statement was based on fictitious profits. Mr. Picard contends that customer's claim will be the amount deposited less amounts received, given that the Madoff firm was a Ponzi scheme in which securities were never purchased with customers' funds. Mr. Picard had also said that he will pursue avoidance actions for those customers who withdrew money more than they invested. When Mr. Picard's firm, Baker & Hostetler LLP, sought payment of $14 million in fees for its first four months of work, a group of victims filed an objection, citing that the fees were "excessive." The Court, nevertheless, approved the fees. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. In addition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on December 15, 2008, the Securities and Exchange Commission charged Mr. Madoff and his investment firm with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The estimated losses from Mr. Madoff's fraud were allegedly at least US$50 billion. Also on December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. Irving H. Picard, Esq., was appointed as trustee for the liquidation of BLMIS, and Baker & Hostetler LLP was appointed as counsel. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors. BONANZA OIL: Posts $1.2MM Net Loss in Six Months Ended June 30 -------------------------------------------------------------- Bonanza Oil & Gas, Inc., posted a net loss of $682,096 for three months ended June 30, 2009, compared with a net loss of $898,733 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $1,274,504 compared with a net loss $1,177,920 for the same period in 2008. The Company's balance sheet at June 30, 2009, showed total assets of $9,029,570, total liabilities of $4,910,964 and a stockholders' equity of $4,118,606. The Company said that there is substantial doubt about its ability to continue as a going concern. The Company noted that it incurred significant losses and had negative cash flow from operations since inception, and has an accumulated deficit of $8,337,156 at June 30, 2009. The Company's ability to continue as a going concern is dependent upon achieving a profitable level of operations and obtaining additional financing. The Company added that in the event it is unable to continue as a going concern, it may elect or be required to seek protection from its creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. To date, management has not considered this alternative, nor does management view it as a likely occurrence. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?456f Bonanza Oil & Gas, Inc., is an independent energy company engaged primarily in the acquisition, development, production and the sale of crude oil, natural gas and natural gas liquids. The Company's production activities are located in the United States of America. The principal executive offices of the Company are located in Houston, Texas. BOPHA SAM: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Bopha Sam 1963 Petaluma Hill Road Santa Rosa, CA 95404 Bankruptcy Case No.: 09-13083 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court Northern District of California (Santa Rosa) Debtor's Counsel: Michael C. Fallon, Esq. Law Offices of Michael C. Fallon 100 E., St. #219 Santa Rosa, CA 95404 Tel: (707) 546-6770 Email: mcfallon@fallonlaw.net 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/canb09-13083.pdf The petition was signed by Bopha Sam. C. KNUDSEN BUILDERS: Blames Bradford Bank for Bankruptcy -------------------------------------------------------- Daniel J. Sernovitz at Baltimore Business Journal reports that C. Knudsen Builders LLC is blaming Bradford Bank for its collapse, suing the bank for $55 million. Court documents say that owner Christian S. Knudsen claims that Bradford Bank looked for reasons to find his company in default of a $2 million loan that he secured to finance his projects. The Business Journal disclosed the loan default on August 22, 2008. Business Journal says that the disclosure caused a ripple effect that prompted these actions by other companies that forced the Company into bankruptcy: -- halt in doing business with C. Knudsen, -- rescinding of its lines of credit, and -- demanding of payment for what they were owed. Federal regulators closed Bradford Bank on August 28 and placed it in the hands of the Federal Deposit Insurance Corp. to act as its receiver and handle claims against it. C. Knudsen Builders LLC is a home builder in Ellicott City. The Company file for Chapter 7 bankruptcy in February 2009. CANWEST GLOBAL: Sells 50.1% Stake in Ten Network to Macquarie ------------------------------------------------------------- Lyndal McFarland at Dow Jones Newswires reports that CanWest Global Communications Corp. said that it has sold its 50.1% stake in Ten Network Holdings Ltd. to Macquarie Capital Advisers for $594 million, ending months of speculation that the Company would dump its stake in Ten Network. CanWest Global said in a statement the sale will help it pay down debt. According to Dow Jones, CanWest Global has faced significant debt problems and has been locked in tough negotiations with bond holders for months. Canwest Global Communications Corp. -- http://www.canwest.com/-- (TSX: CGS and CGS.A,) an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and/or holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey,Indonesia, Singapore, the United Kingdom and the United States. At May 31, 2009, Canwest Media had C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities. * * * As reported in the Troubled Company Reporter on June 9, 2009, Moody's Investors Service downgraded Canwest Limited Partnership's probability of default rating to Ca/LD and its corporate family to Caa3 after the Company failed to pay $10 million due under its senior secured credit facility on May 29, 2009, the end of the company's fiscal quarter. This suggests that CLP has chosen to force the issue with its bank lenders, and is also likely an indication that ongoing negotiations with the bank lenders were not going well, according to Moody's. Since the payment includes a principal component and there is no cure period, the bank credit facility is now in default. The lenders have not accelerated repayment. The TCR on June 2, 2009, said Standard & Poor's Ratings Services lowered its ratings on Canwest LP, including the corporate credit and senior secured ratings to 'D' (default) from 'CCC' and the rating on the C$75 million senior subordinated credit facility due 2015 to 'D' from 'CC'. S&P also lowered the rating on the Company's US$400 million senior subordinated notes due 2015 to 'C' from 'CC'. CARDICA INC: Announces Going Concern Opinion per Nasdaq Rule ------------------------------------------------------------ Cardica, Inc., said Sept. 24 that, as required by Nasdaq Marketplace Rule 5250(b)(2), its previously filed consolidated financial statements for the fiscal year ended June 30, 2009, included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 18, 2009, contained a going concern qualification from its independent registered public accounting firm. Nasdaq Marketplace Rule 5250(b)(2) requires separate public disclosure of a previously issued audit opinion that contains a going concern qualification. This announcement does not represent any change or amendment to the Company's fiscal year 2009 financial statements or to its Annual Report on Form 10-K. According to its annual report, Cardica posted a net loss of $17,205,000 for fiscal Year Ended June 30, 2009, compared with a net loss of $18,196,000 for the same period in 2008. The Company's balance sheet at June 30, 2009, showed total assets of $10,340,000, total liabilities of $4,078,000 and a stockholders' equity of $6,262,000. Ernst & Young LLP, in Palo Alto, California, expressed substantial doubt about Cardica's ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended June 30, 2009, and 2008. The auditor noted Cardica's recurring losses from operations. A full-text copy of the Company's Form 10-K is available for free at http://ResearchArchives.com/t/s?454b About Cardica Inc. Cardica (Nasdaq: CRDC) provides automated anastomosis systems for coronary artery bypass graft (CABG) surgery. By replacing hand- sewn sutures with easy-to-use automated systems, Cardica's products provide cardiovascular surgeons with rapid, reliable and consistently reproducible anastomoses, or connections of blood vessels, often considered the most critical aspect of the CABG procedure. Cardica's C-Port(R) Distal Anastomosis Systems are marketed in the United States and Europe and its PAS-Port(R) Proximal Anastomosis System is marketed in the United States, Europe and Japan. In addition, the Company has developed the Cardica Microcutter, a true multi-fire endoscopic stapling device designed to be used in a variety of settings including bariatric, thoracic and general surgery. CELL THERAPEUTICS: Annual Shareholders' Meeting on October 20 ------------------------------------------------------------- The Annual Meeting of Shareholders of Cell Therapeutics, Inc., will be held at 10:00 a.m. Pacific Daylight Time (PDT) on Tuesday, October 20, 2009, at 501 Elliott Avenue West, Suite 400, Seattle, Washington. The purposes of the Annual Meeting are: (1) To elect three Class III directors to the Company's Board of Directors, each to serve until the 2012 Annual Meeting; (2) To approve an amendment to the Company's 2007 Equity Incentive Plan to increase the number of shares available for issuance under the plan by 45,000,000 shares; (3) To approve an amendment to the Company's 2007 Employee Stock Purchase Plan to increase the number of shares available for issuance under the plan by 500,000 shares; (4) To ratify the selection of Stonefield Josephson, Inc. as the Company's independent auditors for the year ending December 31, 2009; (5) To approve the issuance of shares of common stock as consideration under the Second Amendment to Acquisition Agreement, which amends the Acquisition Agreement with Systems Medicine, Inc., dated as of July 24, 2007, as amended by that certain First Amendment to Acquisition Agreement dated as of January 6, 2009, and the Cancellation Agreement dated as of January 23, 2009; and (6) To transact such other business as may properly come before the meeting and all adjournments and postponements thereof. All shareholders are invited to attend the meeting. Shareholders of record at the close of business on September 14, 2009, the record date fixed by the Board, are entitled to vote at the meeting and all adjournments and postponements thereof. A full-text copy of the proxy statement is available at no charge at http://ResearchArchives.com/t/s?4575 About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc., (Nasdaq and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. Going Concern Doubt Stonefield Josephson Inc. in Los Angeles, California, expressed substantial doubt about Cell Therapeutics' ability to continue as a going concern after auditing company's financial statements for the years ended December 31, 2008, and 2007. The auditing firm reported that the Company has substantial monetary liabilities in excess of monetary assets as of December 31, 2007, including roughly $19.8 million of convertible subordinated notes and senior subordinated notes which mature in June 2008. It also noted that the Company has sustained loss from operations over the audit periods, incurred an accumulated deficit, and has substantial monetary liabilities in excess of monetary assets as of December 31, 2008. As of June 30, 2009, the Company had $43.2 million in total assets; and $98.7 million in total liabilities; resulting in $57.6 million in shareholders' deficit. The Company had $1.35 billion in accumulated deficit as of June 30, 2009. CENGAGE LEARNING: Moody's Cuts Rating on $4.3 Bil. Loan to 'B2' --------------------------------------------------------------- Moody's Investors Service downgraded the rating of Cengage Learning Acquisitions, Inc.'s $4.3 billion senior secured bank credit facility to B2 from B1. The downgrade reflects the reduced loss absorption cushion beneath the bonds driven by open market repurchases of Cengage Learning's 13.25% senior subordinated notes and the 13.75% senior unsecured PIK notes issued by Cengage Learning Holdco, Inc. LGD assessments were also updated to reflect the current debt mix. The company's B3 Corporate Family Rating, B3 Probability of Default Rating and SGL-3 Speculative Grade Liquidity rating are not affected by these actions and the rating outlook is stable. Moody's has taken these rating actions: Downgrades: Issuer: Cengage Learning Acquisitions, Inc. -- Senior Secured Bank Credit Facility, Downgraded to B2, LGD3- 34% from B1, LGD3-32% LGD Assessment Updates: -- Senior Unsecured Notes, Changed to LGD5- 84% from LGD5- 81% (no change to Caa2 rating) -- Senior Subordinated Notes, Changed to LGD6-94% from LGD6-92% (no change to Caa2 rating) Assignments: Issuer: Cengage Learning Acquisitions, Inc. -- Corporate Family Rating, Assigned B3 -- Probability of Default Rating, Assigned B3 -- Speculative Grade Liquidity Rating, Assigned SGL-3 Withdrawals: Issuer: Cengage Learning Holdco, Inc. -- Corporate Family Rating, Withdrawn, previously rated B3 -- Probability of Default Rating, Withdrawn, previously rated B3 -- Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-3 In addition, Moody's is reassigning the company's CFR, PDR and Speculative Grade Liquidity rating to Cengage Learning from CL Holdco as Moody's no longer rates CL Holdco's debt. Moody's nevertheless continues to factor the debt at CL Holdco into Cengage Learning's CFR. The B3 CFR reflects Cengage Learning's relatively stable revenue and good cash flow generated from a strong market position and broad product offerings in higher education publishing, constrained by the continued very high leverage (debt-to-EBITDA is about 9.5x LTM 6/30/09 incorporating Moody's standard adjustments and cash pre-publication costs as an expense) following the July 2007 leveraged buy-out from The Thomson Corporation. The stable rating outlook reflects Moody's expectation that the company will continue to generate modest free cash flow, sustain debt-to-EBITDA leverage in the low 9.0x range in fiscal 2010, and maintain a comfortable cushion under its credit facility covenants. Moody's believes this leads to low near-term default risk and some flexibility for Cengage to execute its operating plans and absorb weakness in its more pro-cyclical lines of business (library reference, K-12 school). The last rating action was on March 5, 2009, when Moody's lowered Cengage Learning's 10.5% senior notes to Caa2 from Caa1. Cengage Learning's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Cengage Learning's core industry and Cengage Learning's ratings are believed to be comparable to those of other issuers of similar credit risk. Cengage Learning, headquartered in Stamford, Connecticut is a provider of learning products to colleges, universities, professors, students, libraries, reference centers, government agencies, corporations and professionals. Cengage Learning publishes college textbooks and reference materials, and supplements its print publications with software tools and training/assessment applications that support students and professionals in all phases of their careers. Annual revenue approximates $2.0 billion. CHARLES DENNIS BRADLEY: Case Summary & 4 Largest Unsec. Creditors ----------------------------------------------------------------- Joint Debtors: Charles Dennis Bradley, Sr. Irene Minetee Bradley 1415 Willowbrooke Circle Franklin, TN 37069 Bankruptcy Case No.: 09-10873 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court Middle District of Tennessee (Nashville) Judge: Keith M. Lundin Debtors' Counsel: Steven L. Lefkovitz, Esq. Law Offices Lefkovitz & Lefkovitz 618 Church St., Suite 410 Nashville, TN 37219 Tel: (615) 256-8300 Fax: (615) 255-4516 Email: slefkovitz@lefkovitz.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 $1,938,468, and total debts of $1,735,602. A full-text copy of the Debtors' petition, including a list of their 4 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/tnmb09-10873.pdf The petition was signed by the Joint Debtors. CHINIQUY CENTER: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Chiniquy Center, L.L.C. 555 South Bluff Street, Suite 300 Saint George, UT 84770 Bankruptcy Case No.: 09-30275 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court District of Utah (Salt Lake City) Judge: William T. Thurman Debtor's Counsel: Michele P. Chambers, Esq. Rob Graham & Associates 1091 N. Bluff Street, Suite 306 St. George, UT 84770 Tel: (435) 986-8200 Fax: (435) 986-9720 Email: mchambers@lawyerswest.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 3 largest unsecured creditors is available for free at: http://bankrupt.com/misc/utb09-30275.pdf The petition was signed by Chad Chiniquy, manager of the Company. CHRYSLER LLC: Court OKs $24MM Payout in Wrongful Death Action ------------------------------------------------------------- Charles D. Naylor of the Law Offices of Charles D. Naylor and Robert J. Nelson of Lieff Cabraser Heimann & Bernstein, LLP, announced Sept. 24 that the U.S. Bankruptcy Court approved the payment of $24 million for the wrongful death of longshoreman Richard Mraz. The settlement is believed to be one of the largest ever for the wrongful death of a longshore worker, as well as one of the largest settlements ever of an individual wrongful death action involving an auto manufacturer. "Richard was a loving husband and father who was just 38 years old when he died," stated Adriana Mraz, wife of Richard Mraz. "When I found out many people have been injured by the same defect, and some even killed, I was determined to hold Chrysler accountable and send a strong message to all automakers that they must put safety first." Naylor and Nelson, along with Scott P. Nealey of Lieff Cabraser, served as co-counsel in the action. They demanded that Chrysler post an appeal bond which guaranteed the automaker's ability to pay the $55.4 million verdict awarded by a Los Angeles jury in 2007. "The appeal bond was a key factor," said Naylor, a 34-year maritime litigator. "Had we agreed to Chrysler's request to waive an appeal bond two years ago, the unexpected bankruptcy filing this year would have left the Mraz family without a dime for the tragic and preventable death of its breadwinner, husband and father." "We're gratified that the Bankruptcy Court has approved the settlement, and the action has been resolved," stated Nelson, who served as lead trial and appellate counsel. "We hope that the new Chrysler Corporation will never put short-term profits ahead of the safety of its customers." Chrysler Corporation (formerly DaimlerChrysler) appealed the jury verdict to the California Court of Appeals. In April 2009 the automaker filed for bankruptcy, staying the appeal before a hearing could take place. The automaker's bankruptcy put the Mraz family's compensation at risk in the event of a reversal or remand on appeal; additionally, it exposed the appeal bond in the event the verdict was upheld. This summer, the U.S. Bankruptcy Court lifted the stay and allowed direct negotiations to occur with appeal bond issuer, Safeco Insurance Company. At the center of the settlement negotiations was the issue of how compensation to the Mraz family would impact Chrysler's creditors due to the structure of the appeal bond. Safeco posted an $81 million bond to guarantee payment of the judgment and post-judgment interest. "Ultimately, the $24 million settlement offered a substantial return to Chrysler's creditors while providing fair compensation to the Mraz family, our ultimate goal," said Naylor. The settlement was approved by Judge Arthur J. Gonzalez of the U.S. Bankruptcy Court, Southern District of New York, who is presiding over the Chrysler bankruptcy filing. In 2007 a Los Angeles Superior Court jury awarded $55.4 million, including $50 million in punitive damages, to the family of 38- year-old Mraz, who died after being hit and run over by a Dodge Dakota while working in the Port of Los Angeles in 2004. Attorneys for Mraz - Naylor, Nelson and Nealey - successfully argued that a "park-to-reverse" defect in the truck's automatic transmission caused Mraz's death. The jury found that the automaker acted with malice by failing to warn consumers of the defect it had known about for years and by conducting a "phony" recall that did not adequately fix the vehicle. Mraz left behind his wife and three children. About Lieff Cabraser With three offices nationwide and on the web at http://www.lieffcabraser.com/,Lieff Cabraser is one of the largest law firms in America dedicated solely to advancing the rights of plaintiffs. For the last six years, The National Law Journal has selected Lieff Cabraser as one of the top plaintiffs' law firms in the United States. Vehicle owners who wish to learn more about the park-to-reverse defect, and report their experience, should visit http://www.usautoinjurylaw.com/cases/defects/transmission/false- park.htm For their work in the case, Robert J. Nelson and Scott P. Nealey won California Lawyer Attorney of the Year (CLAY) awards by California Lawyer Magazine. About Law Offices of Charles D. Naylor Since 1975, the Law Offices of Charles D. Naylor has been compassionately and aggressively representing injured workers from the maritime trades including seamen, longshore and marine construction workers, and cruise ship passengers and crew. With more than 100 years combined experience, our attorneys specialize in Maritime Personal Injury, Jones Act, Longshore & Harbor Workers Compensation Act and Cruise Ship Injury. Charles D. Naylor received California Lawyer magazine's prestigious CLAY Award in 2008, has an AV rating from Martindale- Hubbell and has been recognized by Southern California Super Lawyers as one of the "top attorneys in Southern California" (2007- 2009). For more information, http://visit www.naylorlaw.com/ About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIB MARINE: Wants to Hire Godfrey & Kahn as Bankruptcy Counsel -------------------------------------------------------------- CIB Marine Bancshares, Inc., asks the U.S. Bankruptcy Court for the Eastern District of Wisconsin for authority to employ Godfrey & Kahn, S.C. as counsel. G&K will, among other things: -- advise the Debtor of its rights, powers and duties as debtor-in-possession and the continued management and operation of its business and property; -- advise the Debtor concerning, and assisting in the negotiations and documentation of financing agreements, debt restructurings, securities disclosures, and related transactions; and -- review the nature and validity of liens asserted against the property of the Debtor and advise the Debtor concerning the enforceability of the liens. Timothy F. Nixon, a shareholder in the law firm of G&K, tells the Court that the hourly rates of G&K's personnel are: Shareholders $315 - $495 Associates/Special Counsel $180 - $400 Paralegals $140 - $190 The personnel with primary responsibility in the case and their hourly rates are: Timothy F. Nixon $420 David G. Peterson, shareholder $395 Katherine Stadler, shareholder $395 Andrew J. Guzikowski, shareholder $420 James A. Sheriff, shareholder $485 Daniel B. Geraghty, special counsel $390 Carla O. Andres, special counsel $325 Patricia L. Wheeler, associate $245 Patrick S. Murphy, associate $315 Jennifer B. Herzog, associate $245 Gale Raiche, paralegal $155 Maribeth Roufus, paralegal $145 Mr. Nixon assures the Court that G&K is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Nixon can be reached at: Godfrey & Kahn, S.C. P.O. Box 13067 Green Bay, WI 54307-3067 Tel: (920) 432-9300 Fax: (920) 436-7988 About CIB Marine Bancshares Pewaukee, Wisconsin-based CIB Marine Bancshares, Inc., fdba Central Illinois Bancorp, Inc., operates a multi-bank holding company. The Company filed for Chapter 11 on Sept. 15, 2009 (Bankr. E.D. Wis. Case No. 09-33318). Timothy F. Nixon, Esq., at Godfrey & Kahn, S.C., represents the Debtor in its restructuring effort. The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. As of Aug. 31, 2009, the Debtor has total assets of $104,800,110 and total debts of $107,214,495. CIRCUIT CITY: May Now Solicit Votes on Liquidating Plan ------------------------------------------------------- U.S. Bankruptcy Judge Kevin Huennekens in Richmond, Virginia, has ruled the disclosure statement explaining Circuit City Stores Inc.'s amended liquidating plan provides adequate information for creditors to make an informed decision. A confirmation hearing is set for Nov. 23. Circuit City, prior to the Sept. 22 hearing, submitted a revised disclosure statement to address objections filed by various parties. Those objections include a contention by Longacre Opportunity Fund, L.P., which bought a $4,156,411 administrative claim filed by Cisco-Linksys, LLC, that the Plan is not confirmabl because it provides for distributions to administrative claimants on a nebulous schedule occurring sometime after the liquidating trust is funded. The revised plan provided that the administrative claims will be paid on the Plan effective date. A copy of the Revised Disclosure Statement is available for free at http://bankrupt.com/misc/CircuitCity_Revised_DS.pdf The Proposed Plan The Plan provides for the orderly liquidation of the remaining assets of the Debtors and the distribution of the proceeds of the liquidation of the Debtors' assets according to the priorities set forth under the Bankruptcy Code. Under the Debtors' Joint Plan of Liquidation, all claims against the Debtors -- other than administrative claims and priority tax claims, which will be paid in full -- 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% - A Liquidating Trust will be established on the Plan Effective Date. All Distributions to the Holders of allowed claims will be from the Liquidating Trust. 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: Wants Marlon Mondragon Class Suit Dismissed --------------------------------------------------------- Circuit City Stores, Inc., ask the Court to dismiss Marlon Mondragon's purported class action complaint filed on March 17, 2009, or, in the alternate, ordering Mr. Mondragon to plead a more definitive statement. Mr. Mondragon was an employee of Circuit City at its retail store located in Palisades Mall, in West Nyack, New York. On November 2, 2008, Circuit City announced its intention to close 154 retail stores, including the Nyack Store. As a consequence, on or shortly after November 2, Mr. Mondragon was advised that his employment by Circuit City was or would be terminated. Circuit City commenced a store-closing sale at the Nyack Store, as well as store-closing sales at 153 other retail store locations on November 5, 2008, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, related. After the hearing held on November 10, 2008, the Court allowed, on an interim basis, the Debtors to make payment in an estimated amount of $8,000,000 to $10,000,000 to employees that were entitled to receive advance notice of termination under the Workers Adjustment and Notification Act even though the Debtors maintained that these payments were arguably not entitled to administrative expense status. The Court approved the Debtors' request for a final order authorizing the continuation of the WARN Payments after the hearing held on December 6, 2008. According to Mr. Foley, the Mondragon Complaint should be dismissed because: (a) Even assuming, arguendo, that Mr. Mondragon adequately alleged a claim for relief for "back pay" and benefits under the WARN Act, the only conclusion that the Court may properly reach is that the Warn Act Claim is a prepetition claim against Circuit City. Mr. Mondragon had a "claim" as of November 2, 2008. Consequently, the Mondragon Complaint should be dismissed and Mr. Mondragon's WARN Act Claim addressed in the claims administration process contemplated by Sections 501 and 502 of the Bankruptcy Code, and Rules 3001 and 3007 of the Federal Rules of Bankruptcy Procedure. (b) To state a claim for relief under the WARN Act, Mr. Mondragon must allege sufficient facts, upon which the Court could conclude that his employment loss was a result of a covered plant closing or a mass layoff "at a single site." This, Mr. Mondragon has not, and cannot do. Mr. Mondragon's allegations fail because he does not, and cannot, allege that "the Stores and Related Facilities" are a single site for purposes of the WARN Act. If the Motion to Dismiss is denied, the Court should require Mr. Mondragon to plead a more definitive statement, Mr. Foley said. According to Mr. Foley, there is a need for a more definitive statement because: (a) The Mondragon Complaint is ambiguous because it is internally inconsistent. It is impossible for Circuit City to determine whether Mr. Mondragon is seeking an unsecured priority claim under Section 507(a)(4) of the Bankruptcy Code or an administrative expense under Section 503(b)(1)(A) of the Bankruptcy Code. (b) The Mondragon Complaint is riddled with vague and conclusory statements, not well-pled facts. Among other things, the Mondragon Complaint is devoid any facts that, taken as true, would establish that the Stores and Related Facilities constitute a "single site" for purposes of the WARN Act. Mondragon Opposes Motion to Dismiss On behalf of Mr. Mondragon, Gary E. Mason, Esq., at The Mason Law Firm, L.L.P., in Washington, DC, maintained that Circuit City failed to provide notice or compensation, as required by the WARN Act, when it implemented mass layoffs and store closings. Circuit City terminated Mr. Mondragon and the members of the putative class after it filed its bankruptcy petition on November 10, 2008, and failed to give either adequate notice of termination or adequate remuneration in lieu thereof, he said. Mr. Mason argued that: (a) Mr. Mondragon's claim is not a prepetition claim since the claim did not vest until after Circuit City terminated Mr. Mondragon without a WARN-compliant 60-day notice after the petition was filed. (b) Even if Mr. Mondragon's claim was a prepetition claim, it should nonetheless be litigated in the adversary proceeding because Mr. Mondragon and the putative class' WARN Act claims will be expedited and handled more efficiently in a class adversary proceeding where the claims can be handled collectively rather than in a piecemeal fashion. (c) Mr. Mondragon has properly pled a WARN Act claim because, under Rule 8 of the Federal Rules of Civil Procedure, a pleading must only contain a short and plain statement of the claim showing that the pleader is entitled to relief, not "detailed factual allegations." Mr. Mondragon has more than met this liberal pleading standard. Debtors' Reply The dispute between Mr. Mondragon and the Debtors requires the Court to resolve the bankruptcy law question of when Mr. Mondragon's purported "claim" under the WARN Act first arose, the Debtors' counsel, Mr. Foley noted. The facts alleged by Mr. Mondragon demonstrate that under controlling Fourth Circuit precedent, Mr. Mondragon held, at most, a contingent claim under the WARN Act as of the Petition Date. Consequently, Mr. Mondragon's alleged WARN Act Claim, if any, is a prepetition unsecured claim, Mr. Foley asserted. In his opposition, Mr. Mondragon argued that even if the WARN Act Claim is a prepetition claim, the adversary proceeding should proceed. Mr. Foley asserted that the argument should be rejected on substantive and procedural grounds: (a) Although some courts have allowed prepetition WARN Act claims to proceed by way of adversary proceedings, there is no controlling precedent in this Circuit and the better-reasoned cases hold otherwise. Mr. Mondragon filed a proof of claim asserting his individual claim for payments he is allegedly owed under the WARN Act and submitted himself to the claims administration process. Permitting him to proceed on the adversary proceeding is unnecessary, potentially duplicative, and a waste of judicial and estate assets. (b) Permitting Mr. Mondragon to proceed in the adversary proceeding on the purported class claim is procedurally improper and potentially prejudicial to the Debtors' estates and other creditors. Mr. Mondragon did not file a class proof of claim at all. Moreover, he did not move to file a class proof of claim, much less obtain an order from the Court authorizing a filing before the January 30, 2009 bar date. Mr. Foley maintained that Mr. Mondragon has failed to allege facts upon the Court to infer that the necessary number of employees or a percentage of layoffs occurred at a "single site." Absent these factual allegations, Mr. Mondragon's conclusory allegations of a "mass layoff" or "plant closing" are nothing more than a mere "formulaic recitation" of the elements of a WARN Act claim and plainly inadequate to meet even the relaxed pleading standard of Federal Rule 8, he told the Court. Mondragon's Surreply in Opposition to Motion to Dismiss The Debtors presented a "newly minted" argument that Mr. Mondragon should not be permitted to prosecute his claim in an adversary proceeding because he has not filed a class proof of claim nor made a motion to make Bankruptcy Rule 7023 applicable, Mr. Mason, counsel to Mr. Mondragon, noted. The Debtors' argument "misses the mark" because Mr. Mondragon asserts his claim, and the claims of the putative class members he seeks to represent, in an adversary proceeding, not in a contested matter, Mr. Mason pointed out. The prosecution of class claims in an adversary proceeding does not require the filing of a class proof of claim, nor a motion to make Rule 7023 applicable, and the Debtors cite no case to the contrary. The Court should, therefore, reject the Debtors' argument, Mr. Mason said. Second Amended Mondragon Complaint Mr. Mondragon amended his Complaint to, among other things, add to his allegations that the (i) Nyack Store; (ii) the Circuit City retail outlets in Hialeah, Florida; Jackson, Michigan; Atlanta, Georgia; Memphis, Tennessee; Sparks, Nevada; (iii) Circuit City's corporate headquarters in Richmond, Virginia; and (iv) Circuit City's numerous other locations, at the time of closure, had 50 or more employees. Debtors Seek to Dismiss 2nd Amended Mondragon Complaint The Debtors present similar arguments presented in their First Motion to Dismiss. According to the Debtors' counsel, Mr. Foley, even assuming, arguendo, that Mr. Mondragon adequately alleged a claim for relief for "back pay" and benefits under the WARN Act, the only conclusion that the Court may properly reach is that the WARN Act Claim is a prepetition claim against Circuit City. The Amended Mondragon Complaint should be dismissed and Mr. Mondragon's WARN Act Claim addressed in the claims administration process contemplated by Bankruptcy Code Sections 501 and 502, and Bankruptcy Rules 3001 and 3007, Mr. Foley maintained. Mr. Mondragon's alleged WARN Act Claim constitutes a prepetition claim under Section 101(5)(A) of the Bankruptcy Code and prevailing Fourth Circuit precedent, Mr. Foley asserted. He noted that in both the Amended Mondragon Complaint and the Proof of Claim, Mr. Mondragon concedes that any right to payment based on the WARN Act arose prepetition. Consequently, the WARN Act Claim is a claim under Section 101(5)(A), he pointed out. Mr. Mondragon reiterated that, as contemplated by the Bankruptcy Code and the Bankruptcy Rules, the resolution of whether the WARN Act Claim should be allowed and, if so, in what amount and with what priority should be addressed and adjudicated in the context of the claims allowance and disallowance process, not in the context of an adversary proceeding. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. CITIGROUP INC: Registers 2 Securities with NYSE Arca ---------------------------------------------------- Citigroup Inc. filed with the Securities and Exchange Commission three Form 8-A12Bs to register these securities with the NYSE Arca pursuant to Section 12(b) of the Securities Exchange Act of 1934: -- 2% Minimum Coupon Principal Protected Notes Based Upon the S&P 500(R) Index Due 2014; and -- 2% Minimum Coupon Principal Protected Notes Based Upon the Price of Gold Due 2014 Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. At June 30, 2009, Citigroup had total assets of $1.84 trillion and total liabilities of $1.69 trillion. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup, the third-biggest U.S. bank, received $52 billion in bailout aid. Other bailed-out banks, including Bank of America Corp., Wells Fargo & Co., have pledged to repay TARP money. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, repaid TARP funds in June. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIGROUP INC: To Trim Down Branches to Six Metropolitan Areas -------------------------------------------------------------- Citigroup Inc. executives will narrow the focus of the Company's U.S. branch network to six major metropolitan areas, David Enrich at The Wall Street Journal reports, citing people familiar with the matter. According to The Journal, Citigroup will limit its overall consumer lending in the U.S. primarily to credit cards and "jumbo" mortgages, while catering largely to affluent clients. The Journal relates that Citigroup executives would present details of the plan to the board in October, and the moves will leave the Company's U.S. banking operations concentrated in New York, Washington, Miami, Chicago, San Francisco, and Los Angeles. Sources, according to the report, said that Citigroup could abandon or scale back where it is an also-ran, including Boston, Philadelphia, and parts of Texas. The Journal notes that the U.S. pullback will leave Citigroup more dependent on corporate clients and its non-U.S. operations, longtime strengths that could help rev up its overall growth. The Journal states that 75% of Citigroup branches are outside the U.S. Some Citigroup executives are nervous that the move could spark criticism, since the government owns a 34% stake in the Company, The Journal notes. Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. At June 30, 2009, Citigroup had total assets of $1.84 trillion and total liabilities of $1.69 trillion. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup, the third-biggest U.S. bank, received $52 billion in bailout aid. Other bailed-out banks, including Bank of America Corp., Wells Fargo & Co., have pledged to repay TARP money. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, repaid TARP funds in June. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CLARIENT INC: Has Employment Agreement with Kenneth Bloom --------------------------------------------------------- Clarient, Inc., and its wholly owned subsidiary, Clarient Diagnostic Services, Inc., on September 1, 2009, entered into an Amended and Restated Professional Services Agreement with Clarient Pathology Services, Inc., pursuant to which all of Clarient's pathology and other medical services are provided by, or under the supervision of, CPS. In connection therewith, on September 17, 2009, the Company entered into an employment agreement with Kenneth J. Bloom, M.D., pursuant to which Dr. Bloom will continue to serve as the Company's Chief Medical Officer. Under the terms of the Agreement, Dr. Bloom will receive a base salary of $135,000 per year. In addition, Dr. Bloom will participate in the Company's Management Incentive Plan and will be eligible to receive a target incentive bonus of 50% of his base salary (which will also include Dr. Bloom's base salary of $315,000 per year received in his capacity as President of CPS, as such salary is reimbursed by the Company pursuant to the terms of the PSA) based on the achievement of Company and personal objectives. Dr. Bloom is also entitled to certain perquisites, such as an automobile allowance, matching contributions under a voluntary savings plan, and other benefits generally available to the Company's executives. Dr. Bloom will also be entitled to receive severance payments in the event his employment is terminated (i) by the Company without "cause," (ii) by him for "good reason" within 12 months of a change of control of the Company, or (iii) by him as a result of his death or disability. The severance payments will consist of payment of 12 months' base salary -- based on his combined Company and CPS base salaries in effect at the time of termination -- as well as continued coverage under the Company's medical and health plans in accordance with applicable COBRA regulations, and all options that are exercisable on or before the termination date will remain exercisable until the earlier of the first anniversary of his date of termination or the expiration of the original term of the options. About Clarient Inc. Based in Aliso Viejo, California, Clarient Inc. (Nasdaq: CLRT) -- http://www.clarientinc.com/-- is an advanced oncology diagnostics services company. The Company's principal customers include pathologists, oncologists, hospitals and biopharmaceutical companies. At June 30, 2009, Clarient had $54.3 million in total assets; $13.8 million in total current liabilities, $982,000 in long-term capital lease obligations and $3.75 million in deferred rent and other non-current liabilities; and $35.6 million in stockholders' equity. Going Concern Doubt KPMG LLP in Irvine, California -- in its audit report dated March 19, 2009 -- raised substantial doubt about the Company's ability to continue as a going concern. KPMG cited the Company's recurring losses from operations and negative cash flows from operations, and working capital and net capital deficiencies. KPMG said it is not probable that the Company can remain in compliance with the restrictive financial covenants in its bank credit facilities. COFFEYVILLE RESOURCES: S&P Affirms 'B' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its ratings and stable outlook on Kansas-based petroleum refiner Coffeyville Resources LLC, including the 'B' corporate credit rating and the 'BB-' issue rating on its senior secured credit facilities. At the same time, S&P left unchanged the '1' recovery rating on the senior secured facilities, indicating S&P's expectation for a full recovery of principal in a payment default. The affirmation follows the announced amendment to Coffeyville's credit agreement that includes these proposed details: Financial covenants will become less stringent with the maximum allowed debt to EBITDA leverage ratio increasing to 2.75x from 2.25x, and the minimum allowed EBITDA to interest coverage ratio dropping to 3.0x from 3.75x. Distributions will be allowed from Coffeyville up to the parent to pay interest costs from any future debt issuance and 35% of proceeds from any parent-level issuance will be required to pay down the existing term loan. Excess cash flow sweeps will be reduced to 75%, 50%, and 25%, depending on the company's leverage ratio. The leverage ratio uses a net debt amount in which cash balances up to a $40 million cap are netted from debt. The amendment increases this cash cap to $60 million. Termination of the remaining hedge position and the supporting letter of credit facility In exchange, the project is offering a 50 bps fee. Coffeyville hopes to conclude the amendment by the end of third- quarter 2009. While the changes largely benefit equity interests to the detriment of lenders, the effect is marginal at this time. If the project executes the amendment under substantially the same terms as proposed, S&P doesn't expect any effect on the ratings. However, if the terms include significant increases to the fee, interest rates, or other key terms that are negative to credit, S&P could revise its ratings. The affirmation assumes that parent will not use debt to fund an equity distribution or share buyback. If this is not the case, or if management undertakes a more aggressive financial policy, the company's credit strength could weaken. In addition, if Coffeyville issues debt at the parent level, S&P would review its intended use and the resulting effect on the forecast metrics and make any appropriate rating changes. S&P incorporates into the current ratings an expectation that management will continue to deleverage and target a consolidated debt to EBITDA leverage of less than 2.0x and a net debt to cap ratio of about 30%. Beyond the impact of the amendment, if market conditions for either refined products or fertilizer weaken, it could pressure the company's financial covenants, and reduce cash sweeps, potentially driving a ratings revision. Coffeyville is a 115,000 barrel per day (bpd), independent refiner and marketer of high value transportation fuels and a low-cost producer of ammonia and urea ammonium nitrate (UAN) fertilizers, located in Coffeyville, Kansas. The company's petroleum complex is a medium sour crude refinery. The refinery has undergone numerous expansions and upgrades since 2005, with aggregate capital expenditures of about $519 million. The adjacent fertilizer plant has an average daily production rate of 1,225 tons of ammonia and 2,025 tons of UAN, and when natural gas prices are high, enjoys cost advantages over natural gas-based fertilizer plants due to its use of petroleum coke produced at the refinery rather than natural gas. Supporting businesses constitute less than 5% of EBITDA projections and include a crude oil gathering system, an asphalt and refined fuels terminal facility, and a crude oil pipeline system. S&P does not view revenue from these businesses as being significant credit drivers for Coffeyville. However, the gathering system improves the refinery's realized crude differential. The stable outlook reflects stable margins and cash flow available for debt service despite poor sector economics and the final payments of Coffeyville's deferred obligation to J. Aron. S&P expects profitability in the refining sector to remain highly volatile in the near term, but could revise the outlook to positive or raise the rating if the company continues to successfully use its operating flexibility to maintain stable margins through the end of 2009, which would decrease the possibility of covenant trips, and result in debt amortization in line with the company's base case projections. If sector crack spreads deteriorate to the $6 per barrel range (i.e., 2002 absolute levels adjusted for inflation), and the contango market structure for crude ends without an increase in crude differentials, Coffeyville's margins may deteriorate significantly and the company could violate financial covenants as early as 2010. Furthermore, the termination of crack spread hedges, either under the amendment or in 2010, will result in increased commodity sensitivity over the next several years, and the proposed amendment would allow for increased leverage and a diversion of the cash flows from existing lenders if the parent issues debt. S&P could revise the outlook to negative if this occurs, or if reduced cash sweeps result in an expected remaining debt at maturity that is not significantly below $400 million. COLONIAL BANCGROUP: Fitch Withdraws 'D' Issuer Default Rating ------------------------------------------------------------- Fitch Ratings has withdrawn the Issuer Default Ratings and outstanding debt ratings for The Colonial BancGroup and its subsidiaries: The Colonial BancGroup, Inc. -- Long-term IDR 'D'; -- Short-term IDR 'D'; -- Subordinated debt 'C/RR6' -- Individual 'F'. Colonial Bank -- Long-term IDR 'D'; -- Short-term IDR 'D'; -- Subordinated debt 'C/RR6'; -- Individual 'F'. Colonial Capital Trust IV -- Preferred stock 'C/RR6'. CBG Florida REIT -- Preferred stock 'C/RR6'. Fitch will no longer provide ratings or analytical coverage on CNB or its subsidiaries. COMSTOCK HOMEBUILDING: Settles Litigation with Cornerstone ---------------------------------------------------------- Effective as of September 21, 2009, Comstock Homebuilding Companies, Inc., and Mathis Partners, LLC, concluded its negotiations with Cornerstsone Bank and entered into a Settlement Agreement and Mutual Release relating to $5,221,000 of outstanding indebtedness owed by the Borrower to Lender, and guaranteed by the Company, related to an acquisition and construction loan originally provided by Haven Trust Bank in connection with a single family development project in Atlanta, Georgia known as The Gates of Luberon; the Project was acquired as part of the Company's stock purchase of Parker Chandler Homes, Inc. and its subsidiaries. Under the terms of the Agreement, the parties have agreed to dismiss the pending litigation against each other, and Lender has unconditionally released the Borrower and the Company from their respective obligations and guarantees relating to the Debt in consideration of a cash payment of $50,000 to Lender and the delivery by the Company of a non-interest bearing unsecured subordinate note in the amount of $400,000 with a three-year term. As a result of completing the negotiations in September, the Company will write off the remaining carrying value of the Project and reduce the recorded value of the debt to the final settlement amount and expects to record a gain on troubled debt restructuring of roughly $1.2 million during the quarter ending September 30, 2009. In December 2008, prior to any substantive action taking place in the litigation, Haven Trust failed and was placed into receivership by the Federal Deposit Insurance Corporation. Cornerstone Bank was a participant in the loan originally made by Haven Trust to Parker Chandler and was assigned control of the loan by the FDIC after its seizure of Haven Trust. The entirety of the Project has been foreclosed upon by Cornerstone; the proper participation of the Debt and the foreclosure proceeding being the central issues in the litigation being settled by the Agreement. About Comstock Homebuilding Established in 1985, Comstock Homebuilding Companies, Inc. -- http://www.comstockhomebuilding.com/-- is a publicly traded, diversified real estate development firm with a focus on a variety of for-sale residential products. The company currently actively markets its products under the Comstock Homes brand in the Washington, D.C. and Raleigh, N.C. metropolitan areas. Comstock Homebuilding Companies trades on NASDAQ under the symbol CHCI. Comstock Homebuilding had total assets of $105,329,000 against total debts of $104,904,000 as of June 30, 2009. CONCHO BUSINESS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Concho Business Solutions, Inc. 1720 Neil Gay Rd., Suite 1D Mesquite, TX 75149 Bankruptcy Case No.: 09-36248 Chapter 11 Petition Date: September 22, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Jeffery D. Carruth, Esq. Reed & Elmquist, P.C. 604 Water St. Waxahachie, TX 75165 Tel: (972) 938-7334 Fax: (972) 923-0430 Email: jcarruth@bcylawyers.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 Roger L. Stephens, vice president - director of the Company. COYOTES HOCKEY: Balsillie Offers to Delay Purchase to June ---------------------------------------------------------- Jim Balsillie, whose bid for Phoenix Coyotes entails transferring the team to Hamilton, would keep the team in Glendale this season, Mike Sunnucks at Phoenix Business Journal reports, citing the bidder's lawyers. According to Business Journal, Coyotes president Doug Moss said that could help fans be more certain about Phoenix Coyotes this season and boost weakening ticket sales. The Phoenix Coyotes are offering ticket discounts, hoping to selling out their October 10 National Hockey League season opener at Jobing.com Arena, says the report. According to Steven Church and Joe Schneider at Bloomberg, Mr. Balsillie offered to keep the Phoenix Coyotes in Arizona this season as part of his bid to buy the hockey team and move it to Canada. His offer would give the National Hockey League until June 30 to complete a deal with a competing buyer willing to keep it in the Phoenix suburb of Glendale, his attorney said Sept. 23. The team could be moved as early as February should the NHL fail to find a competing buyer by Dec. 31. James L. Balsillie's group PSE Sports and Entertainment has offered to buy the Coyotes for a consideration of $242.5 million for creditors of the Coyotes, which include $50 million for the city of Glendale. Mr. Balsillie, however, will move the team from Glendale to Hamilton Ontario. The NHL has voiced opposition to Mr. Balsillie's offer for the Coyoyes. To fend off Mr. Balsillie's bid, the NHL submitted its own bid, offering $140 million for the Coyotes in hopes that it could keep the team while it finds another buyer. The NHL has committed only to one more season in Glendale but said its preference is to find a buyer who will not move the team. About Coyotes Hockey Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. DOLCE VITA RESTAURANT: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Dolce Vita Restaurant, Inc. P.O. Box 716 Sanibel, FL 33957 Bankruptcy Case No.: 09-21370 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court Middle District of Florida (Ft. Myers) Judge: Alexander L. Paskay Debtor's Counsel: Richard Johnston Jr., Esq. Fowler, White, Boggs, P.A. Post Office Box 1567 Fort Myers, FL 33902-1567 Tel: (239) 334-7892 Fax: (239) 334-3240 Email: richard.johnston@fowlerwhite.com 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 $3,714,400, and total debts of $5,477,899. 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/flmb09-21370.pdf The petition was signed by John Armenia, president of the Company. DOWNEY REGIONAL: Gets Schedules Filing Extension Until October 29 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California extended until Oct. 29, 2009, Downey Regional Medical Center- Hospital Inc.'s time to file (i) schedules of assets and liabilities; (ii) schedules of current income and expenditures; (iii) schedules of executory contracts and unexpired leases; and (iv) statements of financial affairs. Los Angeles, California-based Downey Regional Medical Center- Hospital Inc. operates a non-profit community hospital. The Company filed for Chapter 11 on Sept. 14, 2009 (Bankr. C.D. Calif. Case No. 09-34714). Lisa Hill Fenning, Esq., represents the Debtor in its restructuring effort. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. DS WATERS: S&P Raises Corporate Credit Rating to 'B' ---------------------------------------------------- Standard & Poor's Ratings Services said that it raised its ratings on DS Waters by one notch, including the corporate credit rating to 'B' from 'B-'. The outlook is stable. For analytical purposes, S&P views DS Waters and its holding companies, DSW Group Inc. (not rated) and DSW Holdings (not rated), as one economic entity. About $741 million of debt was outstanding as of June 26, 2009. "The upgrade reflects DS Waters' improved EBITDA margins and cash generating ability which have resulted in relatively stable credit measures despite current weak economic conditions," said Standard & Poor's credit analyst Jean C. Stout. "In addition, S&P believes the company has a solid liquidity position, including its ability to meet modest near-term maturities and maintain adequate cushion under financial covenants that do not become more restrictive over time." The ratings on DS Waters of America Inc. reflect its very aggressive financial policy, leveraged financial profile, narrow business focus, and its relatively good market position in the mature and highly fragmented HOD segment of the U.S. bottled water industry. The stable outlook reflects S&P's belief that the company will continue to have adequate liquidity and cushion under all of its financial covenants during the next 12 months, despite concerns that current weak economic conditions will continue to pressure the company's sales volume. Although unlikely in the near term, S&P could revise the outlook to positive if the company can maintain a stable operating performance and credit measures, specifically leverage below 5x, EBITDA interest coverage above 2x, and maintain adequate liquidity and cushion under all of its financial covenants. Alternatively, S&P could revise the outlook to negative if DS Waters' credit measures weaken from current levels and financial covenant cushion levels tighten significantly. S&P believes that a covenant default on the rated senior secured facilities is highly unlikely over the near term, because S&P believes that EBITDA would have to decline significantly in order to trigger a covenant default (assuming debt levels do not increase from current levels). EARTHFIRST CANADA: GE, Plutonic Move Closer to Buying Project ------------------------------------------------------------- GE Energy Financial Services, a unit of GE, and Plutonic Power Corporation said they have moved a step closer to purchasing the 144-megawatt Dokie Ridge Wind Project, the largest wind farm under construction in British Columbia, from EarthFirst Canada Inc. GE and Plutonic have completed their due diligence, waived initial due diligence conditions and have committed to purchase the Dokie project subject to satisfaction or waiver of closing conditions. GE and Plutonic have formed a partnership through which they intend to own and operate the project, located 1,100 kms northeast of Vancouver. The Dokie project would represent GE Energy Financial Services' and Plutonic's first wind energy investment in Canada and an expansion of their relationship from hydroelectric power development into wind energy. The Dokie project consists of the fully permitted and partially built 144-megawatt Dokie Phase 1 project and the rights to expand to 300 megawatts. As partners, GE and Plutonic or their affiliates would jointly provide equity and seek project debt financing to complete construction and operate the project. The estimated construction cost of the project is C$225 million. Other financial details are being finalized. EarthFirst has reported that the 144-megawatt Dokie project, once completed, would generate 340 gigawatt-hours annually; enough electricity to meet the annual needs of 34,000 homes and avoid more than 229,000 tonnes of carbon dioxide emissions from a coal plant -- the equivalent of taking 44,000 cars off the road. EarthFirst obtained court-ordered protection from its creditors under Canada's Companies' Creditors Arrangement Act, and on Sept. 22, the Dokie partners informed the Court of Queens Bench of Alberta, Judicial Centre of Calgary of their waiver of initial due diligence conditions. GE Energy Financial Services and Plutonic plan to complete the acquisition of the Dokie project in early November, with completion of construction estimated in early 2011. A GE affiliate will hold 49 percent and a Plutonic affiliate will hold 51 percent of the Dokie partnership, which has signed and put into escrow an amended and restated electricity purchase agreement with BC Hydro. Among other conditions, the transaction is subject to the BC Utilities Commission's acceptance of the electricity purchase agreement, an agreement to obtain renewable energy incentives in Canada's ecoENERGY program and arrangement of debt financing. In keeping with its commitment to good community citizenship, the partnership has received consents for the assignment of EarthFirst's memorandums of understanding with the West Moberly, Halfway River and McLeod Lake First Nations. The partnership has signed a letter of understanding with the Saulteau First Nation and looks forward to working with all First Nations. In addition to the Dokie project, GE Energy Financial Services and Plutonic are partnering on three hydroelectric projects in British Columbia: the 196-megawatt East Toba River Montrose Creek project- under construction since July 2007-the proposed 166-megawatt Upper Toba Valley Project and the proposed 1027-megawatt Bute Inlet Project. The companies bid Upper Toba Valley and Bute into BC Hydro's 2008 Call for Power issued in November 2008. About GE Energy Financial Services GE Energy Financial Services -- http://www.geenergyfinancialservices.com/-- experts invest globally with a long-term view, backed by the best of GE's technical know-how, financial strength and rigorous risk management, across the capital spectrum, in one of the world's most capital-intensive industries, energy. GE Energy Financial Services helps its customers and GE grow through new investments, strong partnerships and optimization of its more than US$22 billion in assets. In renewable energy, GE Energy Financial Services is growing its portfolio of more than US$4 billion in assets in wind, solar, biomass, hydro and geothermal power. GE Energy Financial Services is based in Stamford, Connecticut. GE (NYSE: GE) -- http://www.ge.com/-- is a diversified global infrastructure, finance and media company that is built to meet essential world needs. From energy, water, transportation and health to access to money and information, GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. About Plutonic Power Corporation Plutonic Power's vision is to provide leadership and create a legacy through the development of renewable, reliable, clean energy projects. Its proposed Green Power Corridor TM, comprised of 42 generation facilities (including the 2 facilities being constructed by the Toba Montrose General Partnership), could have the capacity to meet the annual energy needs of about 660,000 homes and offset more than 4.4 million tons of CO2 emissions every year - the equivalent of taking more than 850,000 cars off the road. Build out of the Green Power Corridor TM, including the current construction of the $660 million, 196 megawatt East Toba River and Montrose Creek run-of-river hydroelectric project, could create approximately 6,500 person-years of employment. Plutonic Power is committed to working in partnership with First Nations, stakeholder groups and local communities in the development of all of its projects. By developing its suite of projects, Plutonic Power will help British Columbia realize its goal of becoming electricity self-sufficient by 2016 utilizing 90% clean domestic generation sources, will create employment opportunities and will play a significant role in the fight against climate change. About EarthFirst Canada Inc. Headquartered in Canada, EarthFirst Canada Inc. (TSX: EF, EF.WT) - - http://www.earthfirstcanada.com/-- fka Dokie Wind Energy Inc., is a developer of renewable wind energy. On Dec. 11, 2007, the company acquired Bonavista Wind Power Inc., Windrise Power Inc., Benchlands Wind Power Corp., Buffalo Atlee Wind Energy Inc., and Grand Valley Wind Farms Inc. On Nov. 4, 2008, The Court of Queen's Bench of Alberta, Judicial Centre of Calgary granted EarthFirst Canada Inc. creditor protection under the Companies' Creditors Arrangement Act. Ernst & Young Inc., serves as the Court-appointed Monitor of EarthFirst's CCAA process. EDGE PETROLEUM: Maturity of Union Bank Loan Extended to Sept. 30 ---------------------------------------------------------------- Edge Petroleum Corporation on August 31, 2009, entered into Amendment No. 9 to its Fourth Amended and Restated Credit Agreement, as amended, with Union Bank, N.A. (f/k/a Union Bank of California, N.A.), as administrative agent for the lenders and as issuing lender. The amendment changes the maturity date of the Revolving Facility from August 31 to September 30. Members of the lending syndicate are: * JPMorgan Chase Bank, N.A. * SunTrust Bank * Mizuho Corporate Bank, Ltd. * BNP Paribas * Fortis Capital Corp. * The Frost National Bank * Compass Bank * U.S. Bank National Association * Bank of Scotland plc Edge Petroleum Corporation (Nasdaq:EPEX) (Nasdaq:EPEXP) is a Houston-based independent energy company that focuses its exploration, production and marketing activities in selected onshore basins of the United States. As reported by the Troubled Company Reporter on February 4, 2009, Edge Petroleum Corp., said that it may be required to seek protection under Chapter 11 of the U.S. Bankruptcy Code if it is unable to address its debt obligations. The Company engaged Akin Gump Strauss Hauer & Feld LLP to act as the company's legal advisor in connection with its evaluation of various financial and strategic alternatives and to represent the Company generally in its ongoing corporate and securities matters as its primary outside counsel. Going Concern Doubt On March 16, 2009, BDO Seidman, LLP, in Houston, Texas raised substantial doubt about Edge Petroleum Corp.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended December 31, 2008, and 2007. The auditor noted that the Company is in a negative working capital position with significant payments due June 30, 2009, under the revolving credit agreement. The carrying amount of the Company's debt as of December 31, 2008, approximated fair value because the interest rates were variable and reflective of market rates, but as of June 30, 2009, the Company related it is not practicable to estimate the fair value of its outstanding debt in light of the impending maturity on August 31, 2009, that the Company is seeking to address. The carrying amount of the Company's debt as of June 30, 2009, was $234 million and the interest rate applied at June 30, 2009, was 5.75%. At June 30, 2009, the Company's balance sheet showed total assets of $264,030,000, total liabilities of $252,492,000 and stockholders' equity of $11,538,000. EDGE PETROLEUM: Receives Nasdaq Non-Compliance Notice ----------------------------------------------------- Edge Petroleum Corporation on September 16, 2009, received notice from The Nasdaq Stock Market that the minimum bid price of the Company's common stock was below $1.00 per share for 30 consecutive business days and that the Company was therefore not in compliance with the minimum bid price rule for continued listing set forth in Nasdaq Marketplace Rule 5450(a)(1). The notice states that the Company will be afforded 180 calendar days, or until March 15, 2010, to regain compliance with the minimum bid price rule. If at any time prior to March 15, 2010 the bid price of the Company's common stock closes at $1.00 per share or higher for a minimum of 10 consecutive business days, Nasdaq staff will provide the Company with written confirmation of compliance with the minimum bid price rule and the matter will be resolved. If the Company does not regain compliance by March 15, 2010, Nasdaq staff will provide written notification to the Company that its common stock is subject to delisting. At that time, the Company may appeal Nasdaq's delisting determination to a Nasdaq Hearings Panel. Alternatively, the Company could apply to transfer its common stock to The Nasdaq Capital Market if it satisfies all of the requirements, other than the minimum bid price rule, for initial listing on The Nasdaq Capital Market set forth in Nasdaq Marketplace Rule 5505. If the Company were to elect to apply for such transfer and if it satisfies the applicable requirements and its application is approved, the Company would have an additional 180 days to regain compliance with the minimum bid price rule while listed on The Nasdaq Capital Market. The Company intends to actively monitor the bid price for its common stock between now and March 15, 2010, and is currently evaluating all available options in response to the notice to resolve the deficiency and regain compliance with the Nasdaq minimum bid price rule but has not yet determined to take any other action in response to the notice. Edge Petroleum Corporation (Nasdaq:EPEX) (Nasdaq:EPEXP) is a Houston-based independent energy company that focuses its exploration, production and marketing activities in selected onshore basins of the United States. As reported by the Troubled Company Reporter on February 4, 2009, Edge Petroleum Corp., said that it may be required to seek protection under Chapter 11 of the U.S. Bankruptcy Code if it is unable to address its debt obligations. The Company engaged Akin Gump Strauss Hauer & Feld LLP to act as the company's legal advisor in connection with its evaluation of various financial and strategic alternatives and to represent the Company generally in its ongoing corporate and securities matters as its primary outside counsel. Going Concern Doubt On March 16, 2009, BDO Seidman, LLP, in Houston, Texas raised substantial doubt about Edge Petroleum Corp.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended December 31, 2008, and 2007. The auditor noted that the Company is in a negative working capital position with significant payments due June 30, 2009, under the revolving credit agreement. The carrying amount of the Company's debt as of December 31, 2008, approximated fair value because the interest rates were variable and reflective of market rates, but as of June 30, 2009, the Company related it is not practicable to estimate the fair value of its outstanding debt in light of the impending maturity on August 31, 2009, that the Company is seeking to address. The carrying amount of the Company's debt as of June 30, 2009, was $234 million and the interest rate applied at June 30, 2009, was 5.75%. At June 30, 2009, the Company's balance sheet showed total assets of $264,030,000, total liabilities of $252,492,000 and stockholders' equity of $11,538,000. EDUCATION MANAGEMENT: S&P Puts 'B' Rating on CreditWatch Positive ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Education Management LLC, including the 'B' corporate credit rating, on CreditWatch with positive implications. The CreditWatch listing was in response to EDMC's commencement of an IPO of 20 million shares of its common stock. The company will use the net proceeds to repay debt, to pay a termination fee under a management agreement with certain of its shareholders, and for general corporate purposes. At the same time, the company announced a tender offer for up to $323.9 million, excluding accrued interest, of its 10.25% senior subordinated notes due 2016 and its 8.75% senior notes due 2014. EDMC's completion of the tender offer is subject to consummation of the IPO. In the quarter ended June 30, 2009, EDMC's revenue and EBITDA grew by 25% and 43%, respectively, because of a 20% increase in enrollment in the April 2009 quarter and a 6% hike in tuition fees. For the fiscal year ended June 30, 2009, lease-adjusted EBITDA coverage of interest was 2.2x, up from 1.9x the previous year. As of June 30, 2009, lease-adjusted debt to EBITDA declined to 5.2x, from 6.0x the previous year. The company has a comfortable margin of compliance with its financial covenants, with an EBITDA cushion of more than 40% against the leverage covenant and the interest coverage covenant as of June 30, 2009. The covenants tighten over the next several quarters, but S&P expects headroom to remain satisfactory. Discretionary cash flow is improving, and the company converted about 29% of its EBITDA into discretionary cash flow in the fiscal year ended June 30, 2009. In resolving S&P's CreditWatch listing, S&P will review the company's business strategy, particularly in the light of potential regulatory changes to student lending that could adversely affect the company; the outlook for continued EBITDA growth; and its financial policy subsequent to the IPO. "Given the company's progress in deleveraging its balance sheet over the past three years and its intention to reduce leverage further with the IPO proceeds, S&P could raise the rating if S&P believes that the company can maintain its lease-adjusted debt to EBITDA at or below its immediate post-IPO level over the long term," said Standard & Poor's credit analyst Deborah Kinzer. ENERGY PARTNERS: To Start Trading of New Common Stock on NYSE ------------------------------------------------------------- Alan Sayre at The Associated Press reports that Energy Partners Ltd. expects to start trading 40 million shares of new common stock on the New York Stock Exchange, after its reorganization plan was implemented. The AP relates that pre-bankruptcy shareholders will get 5% of the new stock, while Energy Partners' noteholders will get 95%. According to The AP, Energy Partners said that it has converted $470 million of debt to equity. Energy Partners said that it had settled an overdue $47 million payment to the federal Minerals Management Service, allowing the Company to start restoring production to one of its fields in the Gulf of Mexico, The AP states. Based in New Orleans, Louisiana, Energy Partners, Ltd., (Pink Sheets: ERPL.PK) is an independent oil and natural gas exploration and production company. The Company had interests in 24 producing fields, six fields under development and one property on which drilling operations were then being conducted, all of which are located in the Gulf of Mexico Region. Energy Partners, Ltd., and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. S.D. Tex. Lead Case No. 09-32957). Paul E. Heath, Esq., at Vinson & Elkins LLP represents the Debtors in their restructuring effort. The Debtors also tapped Parkman Whaling LLC as financial advisor. The Debtors' financial condition as of December 31, 2008, showed total assets of $770,445,000 and total debts of $708,370,000. EXTENDED STAY: Prime Group Realty Sells Stake --------------------------------------------- Prime Group Realty Trust said PGRT ESH, Inc., a wholly owned subsidiary of the Company, sold its membership interests in BHAC Capital IV, L.L.C., an entity which owns 100% of Extended Stay Hotels, Inc., to LSG-ESH LLC, an affiliate of the Company's Chairman of the Board and parent company. In connection with the transfer, PGRT ESH was released from its obligations under a loan from Citicorp USA, Inc., which encumbers the BHAC membership interests. The principal amount of the Citicorp Loan as of the effective date was $80.0 million. The Citicorp Loan was non-recourse to PGRT ESH, the Company and its subsidiaries, but as a result of the transaction, the Citicorp Loan will no longer be a liability on the Company's financial statements. ESH and its affiliates own mid-price extended-stay properties in the United States and Canada. The transfer of the BHAC membership interest was approved unanimously by the Company's independent Trustees. On Monday, June 15, 2009, ESH filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in the Southern District of New York. BHAC did not file for bankruptcy protection. The consideration for the sale of the BHAC membership interests to LSG-ESH was LSG-ESH's assumption of all of PGRT ESH's rights and obligations under the Citicorp Loan. In connection with the transfer, the terms of the Citicorp Loan were amended and restated and the maturity date of the loan was extended. The transaction was effective as of July 16, 2009 and the documents were finalized on September 18, 2009. In addition, one of the Company's subsidiaries was the defendant in a lawsuit in the Circuit Court of Cook County Illinois brought by Prime/Mansur Investment Partners, LLC, an affiliate of Michael Reschke and E. Barry Mansur, alleging that our termination of a purchase and sale agreement that provided for Prime/Mansur's acquisition of the membership interest in Plumcor Thistle, L.L.C. was not justified. Prime/Mansur requested the Court grant it either specific performance or damages in the amount of $5.0 million. On Monday September 21, 2009, the Judge in the case granted the motion for summary judgment and ruled that Prime/Mansur's case had no merit. Prime/Mansur may or may not appeal the decision and if it does, the Company intends to vigorously defend the Judge's decision. On July 9, 2009, Prime Group Realty said the Company's Board of Trustees determined not to declare a quarterly distribution on its Series B Preferred Shares for the second quarter of 2009, and that the Board is unable to determine when the Company might recommence distributions on the Series B Preferred Shares. The Company said its Board is in the process of considering various financing and other capitalization alternatives for the Company. The Board's decision was based on the Company's current capital resources and liquidity needs and the overall negative state of the economy and capital markets. The Company said the Board intends to review the suspension of the Series B Preferred distributions periodically based on the Board's ongoing review of the Company's financial results, capital resources and liquidity needs, and the condition of the economy and capital markets. The Company can give no assurances that distributions on the Company's Series B Preferred Shares will be resumed, or that any financing or other capitalization alternatives will be satisfactorily concluded. The Company posted a net loss attributable to common shareholders of $3.0 million as compared to a net loss attributable to common shareholders of $15.3 million for the second quarter of 2008. At June 30, 2009, the Company had total assets of $493.9 million and total liabilities of $521.6 million. 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). About Prime Group Realty Trust Prime Group Realty Trust (NYSE: PGEPRB) -- http://www.pgrt.com/-- is a fully-integrated, self-administered, and self-managed real estate investment trust which owns, manages, leases, develops, and redevelops office and industrial real estate, primarily in metropolitan Chicago. The Company currently owns 8 office properties containing an aggregate of 3.3 million net rentable square feet and a joint venture interest in one office property comprised of roughly 101,000 net rentable square feet. The Company leases and manages roughly 3.3 million square feet comprising all of its wholly-owned properties. In addition, the Company is the asset and development manager for an roughly 1.1 million square foot office building located at 1407 Broadway Avenue in New York, New York. F & G STORES: Case Summary & 9 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: F & G Stores, Inc. 2295 Auburn Ridge Blvd. Lafayette, CO 80026 Bankruptcy Case No.: 09-29929 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Debtor's Counsel: John G. Nelson, Esq. 600 17th St., Suite 2800 South Denver, CO 80202 Tel: (720) 359-1615 Fax: (303) 260-6401 Email: nelsonlawoffice@aol.com Estimated Assets: $50,001 to $100,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 9 largest unsecured creditors is available for free at: http://bankrupt.com/misc/cob09-29929.pdf The petition was signed by Barjinder Gill, president of the Company. FBL FINANCIAL: A.M. Best Assigns "bb" to Senior Unsecured Debt -------------------------------------------------------------- A.M. Best Co. has assigned indicative debt ratings of "bb" to senior unsecured debt, "bb-" to subordinated debt and "b+" to preferred stock of FBL Financial Group Inc (FBL) (headquartered in West Des Moines, IA) [NYSE:FFG], which may be issued under its recently filed shelf registration statement. Additionally, A.M. Best has assigned an indicative rating of "b+" to the shelf trust preferred securities of FBL Financial Group Capital Trust II. The outlook assigned to all ratings is negative. FBL's financial strength, issuer credit and existing debt ratings are unchanged. The proceeds from the offerings may be added to FBL's general funds and used for general corporate purposes, unless specified in subsequent debt issuances. A.M. Best will monitor the company's ability to generate earnings to adequately cover any additional interest expense incurred from debt instruments issued under the shelf. The ratings reflect the limited, although improved, financial flexibility and sizable unrealized loss position of FBL, although this unrealized loss position has improved through second quarter 2009. In addition, A.M. Best believes that spread management will continue to be a challenge for FBL. FINLAY ENTERPRISES: Gordon Brothers Wins Auction for Assets ----------------------------------------------------------- Finlay Enterprises, Inc. confirmed in a statement that it has selected Gordon Brothers Retail Partners, LLC, as having the highest and best bid at an auction. Gordon Brothers will be appointed to act as the Company's agent to conduct "store closing" or similar sales of merchandise located at all of the Company's retail store locations and the Company's two distribution centers. The proposed transaction remains subject to the approval of the Court, which is scheduled to conduct a hearing to consider the results of the auction today, September 25, 2009. If approved, the transaction is expected to be completed on or before February 28, 2010. Gordon Brothers bid 85.75 cents on the dollar for inventory valued at an estimated $116 million for closings sales of 49 Finlay stores. Gordon had a prepetition contract to conduct store closings sales for 55 other stores. As reported by the TCR on August 31, the U.S. Bankruptcy Court for the Southern District of New York authorized Finlay to select a buyer for substantially all of their assets at a September 23 auction where Gordon Brothers would be lead bidder. About Finlay Enterprises Finlay Enterprises, Inc. (OTC Bulletin Board: FNLY) through its wholly owned subsidiary, Finlay Fine Jewelry Corporation, is a retailer of fine jewelry operating luxury stand-alone specialty jewelry stores and licensed fine jewelry departments in department stores throughout the United States and achieved sales of $754.3 million in fiscal 2008. The number of locations at the end of the second quarter ended August 1, 2009, totaled 182, including 67 Bailey Banks & Biddle, 34 Carlyle and four Congress specialty jewelry stores and 77 licensed departments with The Bon Ton. The Company and seven affiliates filed for Chapter 11 on August 5, 2009 (Bankr. S.D.N.Y. Case No. 09-14873). Weil, Gotshal & Manges LLP, serves as bankruptcy counsel. Alvarez & Marsal North America, LLC, is engaged as restructuring advisor in the Chapter 11 case, and the firm's David Coles is appointed as chief restructuring officer. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. Judge James Peck presides over the case. In its bankruptcy petition, Finlay Enterprises disclosed assets of $331,824,000 against debts of $385,476,000 as of July 4, 2009. As of the petition date, Finlay owes $38 million outstanding under a first lien credit agreement, $24.7 million under second lien notes, $176.6 million outstanding under third lien notes (in addition to $17.5 million to secured vendors), and $40.6 million under remaining unsecured obligations under the senior notes. FIRSTFED FINANCIAL: Extends Expiry Date, Consent Payment Deadline ----------------------------------------------------------------- FirstFed Financial Corp. has extended the Expiration Date and Consent Payment Deadline with respect to its previously announced cash tender offers and consent solicitations for its outstanding senior debt securities. The Expiration Date will now be 5:00 p.m., New York City time, on September 30, 2009, unless extended or earlier terminated by the Company, and the Consent Payment Deadline will now be 5:00 p.m., New York City time, on September 30, 2009, unless extended or earlier terminated by the Company. To be eligible to receive the purchase price of $200.00 per $1,000 in principal amount of Securities, which includes the consent payment of $20.00 per $1,000 in principal amount of Securities, holders must validly tender, and not validly withdraw, their Securities prior to the Consent Payment Deadline. Securities purchased in the tender offers will be paid for on the applicable settlement date for each tender offer, which, assuming the tender offers are not extended, will be promptly after the applicable Expiration Date. The terms and conditions of the tender offers and consent solicitations are described in the Offer to Purchase and Consent Solicitation Statement, dated June 19, 2009, and the related Letter of Transmittal and Consent. Except for the extension of the Expiration Date and Consent Payment Deadline, all other terms and conditions of the tender offers and consent solicitations remain unchanged. As of 5:00 p.m., New York City time, on September 21, 2009, the Company had received tenders and consents from holders of: -- $50,000,000 in aggregate amount of the Fixed/Floating Rate Senior Debt Debentures due March 15, 2016, representing 100% of the securities, -- $20,000,000 in aggregate amount of the Fixed/Floating Rate Senior Debt Debentures due June 15, 2015, representing 40% of the securities, and -- $14,500,000 in aggregate amount of the Fixed/Floating Rate Senior Debt Debentures due June 15, 2017, representing 29% of the securities. For additional information regarding the terms of the tender offers and consent solicitations, please contact James P. Giraldin, President and Chief Operating Officer of the Company, at (310) 302-1713. Requests for documents may be directed to the Corporate Secretary of the Company at (310) 302-5600. A special meeting of stockholders of FirstFed will be held at its Corporate Headquarters, located at 12555 West Jefferson Boulevard, Los Angeles, California, on September 30, 2009 at 10:00 a.m., local time, for these purposes: (1) To approve an amendment to our restated certificate of incorporation to increase the number of authorized shares of the Company's common stock from 100,000,000 to 5,000,000,000; (2) To approve an amendment to the Company's restated certificate of incorporation to (i) effect a reverse stock split of the common stock by a ratio of not less than one-for-10 and not more than one-for-70 at any time prior to August 31, 2010, with the exact ratio to be set at a whole number within this range as determined by the Board of Directors in its sole discretion, and (ii) reduce the number of authorized shares of the common stock by the reverse stock split ratio determined by the Board of Directors; and (3) To approve an adjournment of the special meeting to allow time for further solicitation of proxies in the event there are insufficient votes present at the meeting, in person or by proxy, to approve the amendments to the restated certificate of incorporation to effect the Authorized Share Increase and the Reverse Stock Split. Going Concern As reported by the Troubled Company Reporter on August 21, 2009, FirstFed's second quarter report on Form 10-Q includes a note on its ability to continue as a "going concern". The Company and its banking unit First Federal Bank of California are operating under Amended Orders to Cease and Desist issued on May 28, 2009, by the Office of Thrift Supervision. As required by the Amendments, the Company and the Bank have submitted a detailed capital plan to the OTS addressing how the Bank will meet and maintain a tier 1 core capital ratio of 7% and a minimum total risk-based capital ratio of 14% by September 30, 2009. The Bank's risk-based capital ratio was 9.63% at June 30, 2009, and its core and tangible capital ratios were 4.79%. These capital ratios are below the levels required by the Bank's federal regulators to be considered "well capitalized". "The ability of the Company and the Bank to continue to meet all of the requirements of the Amendments and the Orders will be affected by market conditions in the economy and other uncertainties. Declining real estate values and rising unemployment in the state of California could have a significant impact on future losses incurred on loans. In addition, there can be no assurance in the current economic environment that the Company will be able to raise capital to regain "well capitalized" status or to meet future regulatory requirements. Due to these conditions and events, substantial doubt exists in the Company's ability to continue as a going concern," the Company stated. FirstFed posted a comprehensive loss $48.74 million or $3.37 per diluted share of common stock for the second quarter of 2009 compared with a comprehensive loss of $36.56 million or $2.60 per diluted share of common stock for the second quarter of 2008. A copy of the Company's Form 10-Q filed with the Securities and Exchange Commission is available at: http://researcharchives.com/t/s?4269 Based in Los Angeles, California, FirstFed Financial Corp. (OTC- FFED.PK) -- http://www.firstfedca.com/-- is the parent company of First Federal Bank of California. The Bank operates 39 retail banking offices in Southern California. At June 30, 2009, the Company had $6.36 billion in total assets and $6.20 billion in total liabilities. FORD MOTOR: Finalizes $5.9-Bil. Loan Under DOE's ATVM Program ------------------------------------------------------------- Ford Motor Company and the U.S. Department of Energy finalized the arrangements for loans provided under the Advanced Technology Vehicles Manufacturing Incentive Program, an initiative which focuses on investment in the leading fuel economy technologies in American manufacturing. Ford is the first manufacturer to finalize loans under the ATVM Program, commonly referred to as Section 136. Congress approved the program as part of the 2007 Energy bill. It provides up to $25 billion in loans to companies making cars and components in U.S. factories that increase fuel economy at least 25% above 2005 levels. As part of a competitive process, Ford was selected to receive a total of $5.9 billion in loans through early 2012 to fund the development of advanced fuel-efficient vehicles and technologies. It expects to receive approximately $900 million in loan proceeds by September 30, 2009. "The company greatly appreciates the leadership of Secretary Steven Chu and the expertise of the Department of Energy officials who were dedicated to a timely and successful conclusion," Ford Group Vice President for Government and Community Relations Ziad Ojakli, said. As reported by the Troubled Company Reporter, Ford submitted an application for term loans totaling $11.4 billion to the U.S. Department of Energy dated November 18, 2008, pursuant to the ATVM Program. The Company's application, which was deemed substantially complete on December 16, 2008, relates to ATVM Program expenditures approved by the DOE to be made by the Company extending beyond 2011. By mutual agreement of the Company and the DOE, the Company's application was amended and restated on June 12, 2009, as so amended and restated, to request, initially, term loans totaling $5.937 billion to fund up to 80% of the ATVM Program expenditures approved through mid-2012. Loans to fund up to 80% of the approved ATVM Program expenditures beyond that point will require further Congressional appropriation and are subject to further approvals by the DOE. The ATVM Program was authorized by section 136 of the Energy Independence and Security Act of 2007, as amended from time to time -- Section 136 -- to provide up to $25 billion of loans to automobile and automobile part manufacturers for the cost of re-equipping, expanding, or establishing manufacturing facilities in the United States to produce advanced technology vehicles or qualified components, and for associated engineering integration costs. Loans under the ATVM will be made by and through the Federal Financing Bank, an instrumentality of the United States government created by the Federal Financing Bank Act of 1973 that is under the general supervision of the Secretary of the Treasury. On September 16, 2009, the Company and DOE entered into a Loan Arrangement and Reimbursement Agreement dated as of September 16, 2009, pursuant to which DOE agreed to (i) arrange a 13-year multi- draw term loan facility under the ATVM Program in the aggregate principal amount of up to $5.937 billion, (ii) designate the Company as a borrower under the ATVM Program and (iii) cause FFB to enter into the Note Purchase Agreement for the purchase of notes to be issued by the Company evidencing such loans. The proceeds of advances under the Facility will be used to finance certain costs eligible for financing under the ATVM Program that are incurred through mid-2012 in the implementation of thirteen advanced technology vehicle programs approved by DOE. With the execution of the Arrangement Agreement and related loan documents, the Company became able to request loans under the Facility. The Arrangement Agreement limits the amount of advances that may be used to fund Eligible Project Costs for each Project, and the Company's ability to borrow to finance Eligible Project Costs with respect to a Project is conditioned on the Company meeting agreed timing milestones and fuel economy targets for that Project. Maturity, Interest Rate and Amortization Advances may be requested from September 16, 2009 through June 30, 2012, and the loans will mature on June 15, 2022. The Company has submitted draw requests totaling approximately $886 million to date and expects that such draw requests will be funded by September 30, 2009. Each advance will bear interest at a blended rate based on the Treasury yield curve at the time such advance is borrowed and the principal amortization schedule for that advance. Interest will be payable quarterly in arrears. (Based on the Treasury yield curve as of September 16, 2009, the interest rate would be 3.22% per annum.) The principal amount of the loans will be payable in equal quarterly installments commencing on September 15, 2012 through the Maturity Date. Collateral The Company's obligations under the Facility will be secured by a first priority security interest in any assets purchased or developed with the proceeds of the loans and a junior security interest in all of the collateral pledged under the Company's existing Credit Agreement dated as of December 15, 2006, subordinated solely to (a) perfected security interests securing certain indebtedness, as defined in the Arrangement Agreement, and letters of credit not to exceed $19,100,000,000 and short-term cash management and hedging obligations in an amount not to exceed $1,500,000,000 and (b) certain other permitted liens described in the Arrangement Agreement. Guarantees Certain of the Company's subsidiaries that, together with the Company, hold a substantial portion of the Company's consolidated domestic automotive assets (excluding cash) and that guarantee the Existing Credit Agreement will guarantee the Company's obligations under the Facility, and future material domestic subsidiaries will become guarantors when formed or acquired. Affirmative Covenants The Arrangement Agreement contains affirmative covenants substantially similar to those in the Existing Credit Agreement (including similar baskets and exceptions), including delivery of the Company's financial statements and those of certain of its subsidiaries, delivery of compliance certificates and notices of default, maintenance of the Company's automotive business and corporate existence, delivery of certain future guarantees and collateral, as well as certain other affirmative covenants required in connection with the ATVM Program, including compliance with ATVM Program requirements, introduction of advanced technology vehicles to meet or exceed projected overall annual fuel economy improvements and delivery of progress reports and audit reports with respect to the Projects. Negative Covenants The Arrangement Agreement contains negative covenants substantially similar to those in the Existing Credit Agreement, including restrictive covenants that limit, subject to certain exceptions, the Company's ability to pay dividends, make certain repurchases of equity or repay certain of its material indebtedness prior to maturity, its ability and the ability of the guarantors to incur secured indebtedness, the Company's ability to merge or consolidate with another person or to grant liens on the collateral securing the loans, and the ability of the Company's foreign subsidiaries whose equity has been pledged under the Existing Credit Agreement to incur indebtedness. The Arrangement Agreement also contains negative pledge and sale-leaseback covenants substantially similar to covenants in the Existing Credit Agreement and the Company's existing senior unsecured debt. The Arrangement Agreement also contains a negative covenant substantially similar to the liquidity covenant in the Existing Credit Agreement requiring that the Company not permit Available Liquidity to be less than $4,000,000,000. Among other things, Ford will be in default under the Arrangement Agreement in the event the Company or any significant guarantor, Ford Motor Credit Company LLC, Ford Canada, Volvo or certain other Volvo-related subsidiaries, file for bankruptcy. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported by the Troubled Company Reporter on April 15, 2009, Standard & Poor's Ratings Services said it raised its ratings on Ford Motor Co. and related entities, including the corporate credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank PLC, Ford Credit's European bank, are also unchanged, at 'B-', maintaining the one-notch rating differential between FCE and its parent Ford Credit. S&P said that the outlook on all entities is negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring in order to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently- approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. GAYLORD ENTERTAINMENT: Tender Offer Won't Affect Moody's Rating --------------------------------------------------------------- Moody's Investors Service stated that the ratings and rating outlook for Gaylord Entertainment Company will not be affected by the company's announcement that it has commenced a tender offer for its outstanding 8% senior notes due 2013 and proposes to issue $200 to $240 million of convertible senior notes due 2014 in a 144a private placement. Gaylord also intends to offer approximately five million shares of common equity in an underwritten public offering. The last rating action on Gaylord occurred on May 8, 2009, when the Corporate Family Rating was downgraded to B3 from B2. Gaylord Entertainment Company, headquartered in Nashville, Tennessee, is a hospitality and entertainment company. Gaylord owns and operates several convention centers and resorts located in Tennessee, Florida, Texas, and Washington, D.C., and specializes in hosting large conferences and conventions. Revenues are approximately $900 million. GEOEYE INC: S&P Downgrades Rating on Proposed Senior Notes to 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its issue-level ratings on Dulles, Virginia-based GeoEye Inc.'s proposed senior secured notes due 2015 to 'B' from 'B+'. S&P also revised the recovery rating on this issue to '3' from '2'. A '3' recovery rating indicates expectations for meaningful (50%-70%) recovery in the payment default. The rating action reflects the upsizing of the notes to $400 million from an initial size of $350 million and does not imply a diminution in the overall credit quality of the company. The upsized notes are provided lower collateral coverage. The upsizing has no effect on the company's 'B' corporate credit rating and stable outlook. Ratings List GeoEye Inc. Corporate Credit Rating B/Stable/-- Rating Lowered; Recovery Rating Revised To From -- ---- Senior Secured B B+ Recovery Rating 3 2 GEORGETOWN GOLF CLUB: Ch. 11 Case Dismissed; Stay Lifted -------------------------------------------------------- Angeljean Chiaramida and Paul Tennant at The Daily News report that William Hillman of the U.S. Bankruptcy Judge William Hillman has dismissed the Georgetown Golf Club's bankruptcy case. Judge Hillman approved on September 28 an emergency motion filed by Georgetown Golf owner and president Peter Wojtkun, allowing him to use the Company's cash to pay employees or try to meet his obligations to others who have contracted with him to have functions at the club, but the Judge said that the "Debtor's Chapter 11 cases are dismissed effective Monday, Sept. 21, 2009, at 7:00 p.m. EST." The Daily News quoted Chris Rich, one of Wojtkun's creditors, as saying, "That means he [Mr. Wojtkun] is no longer protected from his creditors. That means all lawsuits filed against him can go forward. That means those brides who've lost their deposits can sue him if they want to try to get them back." According to court documents, Mr. Wojtkun claimed that he owned but couldn't repay $10 million in mortgages, legal judgments, as well as more than half a million in legal fees, and debts to vendors and taxes. Georgetown, Massachusetts-based Georgetown Golf Club, Inc., and its affiliates filed for Chapter 11 bankruptcy protection on September 11, 2009 (Bankr. D. Mass. Case No. 09-18710). Kara Zaleskas, Esq., and Paul D. Moore, Esq., at Duane Morris LLP and assist Georgetown Golf Club in its restructuring efforts. Georgetown Golf Club listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. GILL FOOD MART: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Gill Food Mart, Inc. 2295 Auburn Ridge Road Lafayette, CO 80026 Bankruptcy Case No.: 09-29934 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Debtor's Counsel: John G. Nelson, Esq. 600 17th St., Suite 2800 South Denver, CO 80202 Tel: (720) 359-1615 Fax: (303) 260-6401 Email: nelsonlawoffice@aol.com Estimated Assets: $50,001 to $100,000 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/cob09-29934.pdf The petition was signed by Barjinder S. Gill, president of the Company. GRAY TELEVISION: Gabelli Discloses 5.92% Equity Stake ----------------------------------------------------- Gabelli Funds, LLC, GAMCO Asset Management Inc., and Teton Advisors, Inc., disclose holding in the aggregate 2,536,675 shares, representing 5.92% of the 42,861,009 shares outstanding of Gray Television, Inc., as of September 21, 2009. Gray Television, Inc. -- http://www.gray.tv/-- is a television broadcast company headquartered in Atlanta, GA. Gray currently operates 36 television stations serving 30 markets. Each of the stations are affiliated with either CBS (17 stations), NBC (10 stations), ABC (8 stations) or FOX (1 station). In addition, Gray currently operates 38 digital second channels including 1 ABC, 4 Fox, 7 CW, 16 MyNetworkTV and 1 Universal Sports Network affiliates plus 8 local news/weather channels and 1 "independent" channel in certain of its existing markets. Potential Covenant Breach Gray Television has warned that based on its financial projections it is likely not to be in compliance with the leverage ratio under its senior credit facility as of March 31, 2010. Effective as of March 31, 2009, the Company amended its senior credit facility. The terms of the amended senior credit facility include, but are not limited to, an increase in the maximum ratio allowed under the leverage ratio covenant for the year ending December 31, 2009, a general increase in the restrictiveness of the remaining covenants and increased interest rates. Gray said without the amendment, it would not have been in compliance with the leverage ratio covenant and such noncompliance would have caused a default under the agreement. This amendment increased Gray's cash interest rate by 2% per annum (200 basis points) and beginning April 1, 2009, requires an additional 3% per annum (300 basis point) facility fee. For the period beginning April 4, 2009 and ending April 30, 2010, the annual facility fee for the term loan and the revolving loan will accrue and be payable on the respective term loan and revolving loan maturity dates. For the period beginning after April 30, 2010, and for the remaining term of the senior credit facility, the annual facility fee will be payable in cash on a quarterly basis and interest will accrue at an annual rate of 6.5% on the facility fee balance accrued as of April 30, 2010. Series D Perpetual Preferred Stock The Company did not fund the Series D Perpetual Preferred Stock cash dividend payments due on January 15, 2009, April 15, 2009 or July 15, 2009, that had accumulated for the three-month periods ended December 31, 2008, March 31, 2009 and June 30, 2009. Dividends on the Series D Perpetual Preferred Stock accrued at 12.0% per annum through December 31, 2008 after which the dividend rate increased to 15.0% per annum. The accrued Series D Perpetual Preferred Stock dividend balance as of June 30, 2009, was $10.5 million. The deferral of dividend payments is allowable under the terms of the Series D Perpetual Preferred Stock. The Company said it can provide no assurances when any future cash payments will be made on any accumulated and unpaid Series D Perpetual Preferred Stock cash dividends presently in arrears or that become in arrears in the future. The Series D Perpetual Preferred Stock has no mandatory redemption date but may be redeemed at the stockholders' option on or after June 30, 2015. The deferral of paying cash dividends on the Series D Perpetual Preferred Stock and the corresponding suspension of paying cash dividends on the common and Class A common stock was made to reallocate cash resources to support the Company's ability to pay increased interest costs or fees associated with the amendment to its senior credit facility. GTS 900: Ch 11 Bankruptcy Will Allow Closure of 77 Condos --------------------------------------------------------- Roger Vincent at Los Angeles Times reports that Sonny Astani, one of GTS 900 F LLC's members, said that Chapter 11 bankruptcy protection will let the Company close its 77 condos, pay its contractors, and complete the construction of the tower, amenities, and the retail space. According to LA Times, Mr. Astani sold the condos in a completed six-story loft building for $400,000 each in August to raise enough money to finish an adjacent 30-story tower that is almost done, but his primary lender on the development, Corus Bank, was recently taken over by federal regulators. GTS 900 F LLC is a business that owns a residential building known as Concerto in Los Angeles. According to a Web site for the Concerto building, developed by Astani Living, all 77 loft residences have been sold. The Company filed for bankruptcy protection, listing up to $500 million in assets and debt (Bankr. C.D. Calif. Case No. 09-35127). HARRAH'S ENTERTAINMENT: Court Decision May Derail Thistledown Sale ------------------------------------------------------------------ The Associated Press reports that a state Supreme Court decision that allows a vote on a slots proposal could derail plans by Harrah's Operating Co., Harrah's Entertainment Inc.'s wholly owned subsidiary, to acquire Magna Entertainment Corp.'s Thistledown track for $89.5 million. As reported by the TCR on September 24, 2009, the U.S. Bankruptcy Court for the District of Delaware approved an agreement for the sale of Thistledown to Harrah's Operating Company. Closing of the sale is subject to satisfaction of certain conditions and receipt of all required regulatory approvals. According to The AP, Harrah's Operating Company is permitted to walk away from the deal if the state's plan to put lottery-run slot machines at horse tracks is put on hold for a vote. The AP relates that the Supreme Court said on Monday that the governor's plan is subject to approval by voters. About Harrah's Entertainment Las Vegas, Nevada-based Harrah's Entertainment, Inc. -- http://www.harrahs.com/-- operates nearly 40 casinos across the United States, primarily under the Harrah's(R), Caesars(R) and Horseshoe(R) brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker(R). Private equity firms Apollo Global Management and TPG Capital LP acquired Harrah's in January for $31 billion. As of June 30, 2009, the Company had $30.7 billion in total assets and total current liabilities of $1.71 billion, long-term debt of $19.3 billion, deferred credits and other of $718.2 million, deferred income taxes of $5.74 billion, and preferred stock of $2.46 billion. As of March 31, 2009, the Company's consolidated condensed balance sheets showed total assets of $31.9 billion, total liabilities of $31.1 billion and preferred stock of $2.3 million, resulting to stockholders' deficit of $1.5 million. * * * The Troubled Company Reporter said June 15, 2009, that Standard & Poor's Ratings Services raised its corporate credit ratings on Harrah's Entertainment and Harrah's Operating to 'CCC+' from 'CCC', reflecting S&P's assessment that the recent capital raise, combined with an amendment to certain terms of HOC's senior secured credit facilities, has alleviated S&P's concerns that given S&P's expectation for operating performance this year, HOC would not be able to remain in compliance with its senior secured leverage ratio covenant. In addition, S&P raised the issue-level rating on HOC's senior secured credit facilities to 'B' (two notches higher than the 'CCC+' corporate credit rating) from 'B-'. The recovery rating on these loans remains at '1', indicating S&P's expectation of very high (90% to 100%) recovery for lenders in the event of a payment default. HANESBRANDS INC: PBGC Has Deal to Strengthen Pension Funding ------------------------------------------------------------ The Pension Benefit Guaranty Corporation has reached a $13.8 million agreement with apparel maker Hanesbrands Inc. of Winston- Salem, N.C. to strengthen funding of its retirement plan. Unlike situations where the PBGC assumes responsibility for pension plans that can no longer pay benefits, the Hanesbrands Inc. Pension Plan, which covers more than 30,000 workers and retirees, remains ongoing and under the company's sponsorship. Hanesbrands has agreed to put more money into the plan for the benefit of participants and to reduce risk to the PBGC insurance program by enhancing the plan's financial health. Under the agreement, Hanesbrands has put $7 million into the pension plan in September and will make an additional $6.8 million payment by Sept. 15, 2010. The payments are in addition to any required contributions to the plan. "The nation's workers and retirees have worked hard to earn the benefits they were promised and we will use all the statutory tools at our disposal to protect those retirement benefits," said PBGC Acting Director Vince Snowbarger. "We will continue to monitor corporate activities that may weaken pension plan funding and negotiate appropriate protections. We applaud Hanesbrands for its cooperation in working with us to create a solution that is in the best interests of the company's employees." The agreement stems from the Feb. 8, 2009 closure of the company's Eden Textiles facility in Eden, N.C., which affected 290 of the active participants in the National Textiles LLC Pension Plan. The National Textiles plan has since been merged into the Hanesbrands plan. The Employee Retirement Income Security Act of 1974 (ERISA), the federal pension law that created the PBGC, requires the agency to seek additional protection when more than 20 percent of a company's employees covered by a pension plan lose their jobs due to a cessation of operations at a facility. However, the agency strives to craft settlements that safeguard pension plans, while recognizing the business needs of the companies that sponsor them. On September 15, 2009, Hanesbrands approved the closing of a yarn manufacturing facility, a yarn warehouse and a cotton warehouse, all located in North Carolina, which will result in the termination of roughly 175 employees. Operations at each of the Closing Facilities are expected to cease by the end of 2009. Hanesbrands also has entered into an agreement with Parkdale America, LLC, under which Hanesbrands will sell or lease assets related to operations at its four yarn manufacturing facilities, which are located in Georgia, Virginia, North Carolina and Tennessee, to Parkdale America. The transaction is expected to close in the fourth quarter of 2009 and will result in Parkdale America operating three of the four facilities. Hanesbrands also has entered into a yarn purchase agreement with Parkdale America and Parkdale Mills, LLC. Under this agreement, which has an initial term of six years, Parkdale will produce and sell to Hanesbrands a substantial amount of Hanesbrands' Western Hemisphere yarn needs. During the first two years of the term, Parkdale will also produce and sell to Hanesbrands a substantial amount of the yarn needs of Hanesbrands' Nanjing, China textile facility. As of Sep. 8, 2009, the PBGC had negotiated 18 settlements involving cessation of operations. These agreements added a total of about $400 million to pension plans covering about 50,000 workers and retirees. Hanesbrands markets apparel under the Hanes, Champion, C9 by Champion, Playtex, and Duofold brand names, among others. The PBGC is a federal corporation created under ERISA. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 29,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns. HARRAH'S OPERATING: Moody's Assigns 'Caa1' Rating on $1 Bil. Loan ----------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to the proposed $1.0 billion senior secured term loan to be issued by Harrah's Operating Company, Inc. Moody's also affirmed Harrah's Entertainment, Inc.'s Caa3 Corporate Family rating, Caa3 Probability of default rating and all of the long-term debt ratings of HET and HOC, Inc. The rating assignment and rating affirmations reflect very high leverage and a negative outlook for gaming demand over the next year. The continuing decline in gaming revenues across Harrah's largest markets -- Las Vegas and Atlantic City -- will continue to negatively impact the company's operating performance over through 2010. "Harrah's consolidated debt to EBITDA remains over 10 times -- a level Moody's believes is unsustainable over the intermediate term," said Moody's Senior Credit Officer, Peggy Holloway. The negative outlook reflects Moody's view that gaming demand and Harrah's earnings will remain under pressure through 2010. Additionally, the negative outlook considers the high probability that the company will pursue a transaction that Moody's would deem to be a distressed exchange. Rating assigned: Harrah's Operating Company * Senior secured bank term loan at Caa1 (LGD 2, 26%) Ratings affirmed and assessments updated: Harrah's Entertainment, Inc. * Corporate Family Rating at Caa3 * Probability of Default rating at Caa3 Harrah's Operating Company * Senior secured guaranteed revolving credit facility at Caa1 (LGD 2, 26%) from (LGD 2, 25%) * Senior secured guaranteed term loans at Caa1 (LGD 2, 26% from LGD 2, 25%) * Senior unsecured guaranteed notes to Ca (LGD 5, 86%) from Ca (LGD 5, 84%) * Senior unsecured debt at Ca (LGD 6, 91%) * Senior subordinated notes at Ca (LGD 6, 96%) Harrah's Operating Escrow LLC and Harrah's Escrow Corporation assumed by HOC * $2.095 billion senior secured notes due 2017 at Caa1 (LGD 2, 26%) from (LGD 2, 25%) Moody's last action on Harrah's took place on May 29, 2009, when Moody's changed the rating on the $1.375 billion first lien notes due 2017 issued by Harrah's Operating Escrow LLC and Harrah's Escrow Corporation to Caa1 from Caa3. HERBST GAMING: Voting Creditors Accept First Amended Plan --------------------------------------------------------- Herbst Gaming, Inc., on September 18, 2009, filed with the Bankruptcy Court a Certification of Acceptance of Debtors' First Amended Plan of Reorganization reporting that each class of claims from whom solicitation was required had accepted the Debtors' First Amended Plan of Reorganization as of the voting deadline on September 15. Roughly 97% of the number of votes from Holders of Class 3 Senior Credit Facility Claims accepted the Plan. Roughly 88.6% in amount of Class 3 Claims -- $654,486,580 of $738,395,231 -- voted to accept the Plan. Roughly 100% in the number of Votes from Holders of Class 7 Intercompany Claims and roughly 100% in the amount of Class 7 Claims -- $169,391,513.41 -- voted to accept the Plan. Class 1 Other Priority Claims is unimpaired under the Plan. Holders of Class 1 Claims are deemed to accept the Plan; therefore, solicitation was not required. Class 2 Other Secured Claims is unimpaired under the Plan. Holders of Class 2 Claims are deemed to accept the Plan; therefore, solicitation was not required. Class 4 General Unsecured Claims is unimpaired under the Plan. Holders of Class 4 Claims have deemed to accept the Plan; therefore, solicitation was not required. Class 5 Senior Subordinated Note Claims is impaired under the Plan. Class 5 Claims are deemed to have rejected the Plan and are not entitled to vote on the Plan; therefore, solicitation was not required. Class 6 Section 726(A)(4) Claims is impaired under the Plan. Class 6 Claims are deemed to have rejected the Plan and are not entitled to vote on the Plan; therefore, solicitation was not required. Class 8 Equity Interests in Herbst Gaming is impaired under the Plan. Class 8 Claims are deemed to have rejected the Plan and are not entitled to vote on the Plan; therefore, solicitation was not required. Class 9 Intercompany Interests is impaired under the Plan. Class 9 Claims are deemed to have rejected the Plan and are not entitled to vote on the Plan; therefore, solicitation was not required. As reported by the Troubled Company Reporter on August 17, 2009, the U.S. Bankruptcy Court for the District of Nevada entered on August 10, 2009, an order approving a second amended disclosure statement related to the first amended joint plan of reorganization filed by Herbst Gaming, Inc., and certain of its subsidiaries. The Court will hold a hearing to consider confirmation of the Plan on October 28, 2009, at 10:00 a.m. (PDT), and October 29. The Debtors mailed the Disclosure Statement, the Plan and ballots on August 12. The deadline for submitting ballots been established as September 15, 2009. About Herbst Gaming Headquartered in Reno, Nevada, Herbst Gaming Inc. -- http://www.herbstgaming.com/-- is a diversified gaming company. The Company and its subsidaries focuses on two business lines, slot route operations and casino operations. The slot route business involves the exclusive installation and operation of slot machines in non-casino locations, such as grocery stores, drug stores, convenience stores, bars and restaurants throughout Nevada. As of March 31, 2009, the slot route Debtors operated approximately 6,900 slot machines machines through Nevada. The casino business consists of 12 casinos in Nevada, and two in Missouri and one in Iowa. As of the petition date, the Nevada casinos had an aggregate of roughly 5,082 hotel rooms, 329 recreational vehicle spaces/hookups, 6,800 slot machines and 138 table games. As of the petition date, the non-Nevada casinos had an aggregate of roughly 2,300 slot machines and 47 table games. The Iowa casino also offers roughly 60 all-suite hotel rooms and 65 RV spaces with utility hookups. The Company and 17 of its affiliates filed for Chapter 11 protection on March 22, 2009 (Bankr. D. Nev. Lead Case No. 09-50752). Thomas H. Fell, Esq., and Gerald M. Gordon, Esq., at Gordon Silver, represent the Debtors in their restructuring efforts. Herbst Gaming had $919.1 million in total assets; and $33.5 million in total liabilities not subject to compromise and $1.24 billion in liabilities subject to compromise, resulting in $361.0 million in stockholders' deficiency as of March 31, 2009. IDEARC INC: Reorganizes Sales Divisions From Three to Two --------------------------------------------------------- Scott Klein, Idearc Inc.'s Chief Executive Officer, on September 21, 2009, announced the reorganization of the Corporation's Sales divisions from three to two -- East and West. As part of the reorganization, Scott Laver's position as Executive Vice President -- Central is being eliminated, effective immediately. Mr. Laver will retire from the Corporation, effective September 30, 2009. As reported by the Troubled Company Reporter on September 14, 2009, the official committee of unsecured creditors formed in Idearc's Chapter 11 case is opposing the reorganization plan of Idearc and recommending that creditors vote "no." The Committee, according to Bill Rochelle at Bloomberg News, says the plan undervalues the Company, leaves it with too much debt, and doesn't recognize the invalidity of some of the secured creditors' liens. As reported by the TCR on September 11, 2009, the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, has approved the disclosure statement filed in connection with Idearc's proposed First Amended Joint Plan of Reorganization and has authorized Idearc to begin the process for soliciting approval from eligible creditors for the Plan. With these developments, Idearc is positioned to emerge from Chapter 11 protection before year end. A confirmation hearing for the Court to consider approval of the Plan has been scheduled for December 9, 2009. Idearc expects to emerge from its reorganization process with an appropriate capital structure to support its future strategic business plans and objectives. Under the proposed Plan, the Company's total debt will be reduced from approximately $9 billion to approximately $2.75 billion of secured bank debt, with the remainder of the Company's current bank debt and bonds converted to new equity. Upon emergence from Chapter 11, the Company will have a cash balance of approximately $150 million. Upon confirmation of the Plan, current holders of Idearc's common stock will not receive any distributions following emergence and their equity interests will be cancelled and have no value once the Plan becomes effective. About Idearc Inc. Headquartered in DFW Airport, Texas, Idearc, Inc. (NYSE: IAR) -- http://www.idearc.com/-- formerly known as Directories Disposition Corporation, provides yellow and white page directories and related advertising products in the United States and the District of Columbia. Products include print yellow pages, print white pages, Superpages.com, Switchboard.com and LocalSearch.com, the company's online local search resources, and Superpages Mobile, their information directory for wireless subscribers. Idearc is the exclusive official publisher of Verizon print directories in the markets in which Verizon is currently the incumbent local exchange carrier. Idearc uses the Verizon brand on their print directories in their incumbent markets, well as in their expansion markets. Idearc and its affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31828). Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represents the Debtors in their restructuring efforts. The Debtors have tapped Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their claims agent. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on an official committee of unsecured creditors of Idearc, Inc., and its debtor-affiliates. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co- counsel. The Debtors' financial condition as of Dec. 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. INN OF THE MOUNTAIN: In Talks with Debtholders on Missed Payment ---------------------------------------------------------------- Inn of the Mountain Gods Resort and Casino filed with the Securities and Exchange Commission its quarterly report for period ended April 30, 2008. The Company's balance sheet at April 30, 2009, showed total assets of $205,096,765 and total liabilities of $223,714,954, resulting in a stockholders' deficit of $18,618,189. For three months ended April 30, 2009, the Company reported a net income of $2,430,638 compared with a net income of $2,179,382 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 The Company incurred significant losses and did not generate sufficient cash to make the May 15, 2009, interest payment on its 12% senior notes due 2010. This non-payment of interest constitutes an event of default under the indenture governing the senior notes. The Company is in discussions with certain of its debtholders regarding the issues. As of July 31, 2009, the Company had negative working capital of $218,000,000 and a total deficit of $30,100,000. The Company added that in the event that IMG Resort and Casino is unable to refinance or restructure its debt, IMG Resort and Casino will be left without sufficient liquidity and IMG Resort and Casino will not be able to meet the debt service requirements and repayment obligations. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4570 Inn of the Mountain Gods Resort and Casino (IMG Resort and Casino) is a wholly-owned enterprise of the Mescalero Apache Tribe (the Tribe), which manages and owns resort, hotel and gaming enterprises of the Tribe, including the IMG Resort and Casino and its subsidiaries, which include Casino Apache, Casino Apache Travel Center, Ski Apache and Inn of the Mountain Gods. IMG Resort and Casino is located on tribal land in Mescalero, New Mexico and consists of a full-service casino, the travel center, offering 17,000 square feet of gaming space including 476 slot machines, 11 table games, ski resort, golf course; big-game hunting and various other outdoor recreational activities. * * * As reported in the Troubled Company Reporter on Aug. 18, 2009, Moody's Investors Service lowered Inn of the Mountain Gods Resort and Casino's probability of default rating to Ca/LD from Ca. The corporate family rating and the senior unsecured notes rating were affirmed at Ca. INSIGHT HEALTH: Warns It May Not Refinance Floating Rate Notes -------------------------------------------------------------- InSight Health Services Holdings Corp. said its 2007 reorganization significantly deleveraged its balance sheet and improved its projected cash flow after debt service. InSight Health, however, noted it still has a substantial amount of debt, which requires significant interest and principal payments. As of June 30, 2009, InSight Health had total indebtedness of roughly $298.2 million in aggregate principal amount, including InSight's $293.5 million of senior secured floating rate notes due 2011, or floating rate notes. InSight Health believes that future net cash provided by operating and investing activities and its credit facility will be adequate to meet its operating cash and debt service requirements for at least the next 12 months. InSight Health, nevertheless, warned the floating rate notes mature in November 2011 and unless its financial performance significantly improves, it can give no assurance that its will be able to refinance the floating rate notes on commercially reasonable terms, if at all. On May 29, 2007, InSight Health Services Holdings Corp. and InSight Health Services Corp. filed voluntary petitions to reorganize their business under chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (Case No. 07-10700). The filing was in connection with a prepackaged plan of reorganization and related exchange offer. The other subsidiaries of Holdings were not included in the bankruptcy filing and continued to operate their business. On July 10, 2007, the bankruptcy court confirmed Holdings' and InSight's Second Amended Joint Plan of Reorganization pursuant to Chapter 11 of the Bankruptcy Code. The plan became effective and Holdings and InSight emerged from bankruptcy protection August 1, 2007, or the effective date. Pursuant to the confirmed plan of reorganization and the related exchange offer, (1) all of Holdings' common stock, all options for Holdings' common stock and all of InSight's 9.875% senior subordinated notes due 2011, or senior subordinated notes, were cancelled, and (2) holders of InSight's senior subordinated notes and holders of Holdings' common stock prior to the effective date received 7,780,000 and 864,444 shares of newly issued Holdings' common stock, respectively, in each case after giving effect to a one for 6.326392 reverse stock split of Holdings' common stock. At June 30, 2009, Insight had $176.1 million in total assets against accounts payable and accrued expenses of $36.0 million, notes payable, including current maturities, of $279.9 million, capital leases, including current maturities, of $4.0 million; and stockholders' deficit of $153.9 million. About InSight Lake Forest, California-based InSight Health Services Holdings Corp. (OTCBB: ISGT) is a provider of diagnostic imaging services through a network of fixed-site centers and mobile facilities. InSight serves a diverse portfolio of customers, including healthcare providers, such as hospitals and physicians, and payors, such as managed care organizations, Medicare, Medicaid and insurance companies, in over 30 states, including the following targeted regional markets: California, Arizona, New England, the Carolinas, Florida and the Mid-Atlantic states. As of June 30, 2009, InSight's network consists of 61 fixed-site centers and 112 mobile facilities. INTEGRAL VISION: Registers 20.8 Mil. Shares for Resale ------------------------------------------------------ Integral Vision, Inc., filed a prospectus covering 20,812,450 shares of the Company's common stock which may be disposed of by selling shareholders. Integral Vision will receive no part of the proceeds from dispositions of the shares covered by the prospectus. The prospectus relates to shares of Integral Vision common stock underlying outstanding warrants and convertible notes and there can be no assurance that any of the outstanding warrants or convertible notes will be exercised or converted. If all of the outstanding warrants are exercised for cash, Integral Vision may receive proceeds of up to roughly $380,600.50. The prospectus also covers, to the extent permitted by Rule 416 under the Securities Act, such indeterminate number of additional shares of common stock as may become issuable upon the exercise and conversion of such warrants and notes to prevent dilution resulting from stock splits, stock dividends or similar events. Integral Vision will pay the expenses incurred in connection with the registration of the shares, but all selling and other expenses incurred by the selling shareholders will be borne by the selling shareholders. The shares of common stock covered by this prospectus are "restricted securities" under the Securities Act of 1933, as amended, before their sale under this prospectus. A full-text copy of the prospectus is available at no charge at http://ResearchArchives.com/t/s?4577 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'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. IRVINE SENSORS: Optex Unit Files for Chapter 7 Bankruptcy --------------------------------------------------------- Optex Systems, Inc., a Texas corporation and a wholly owned subsidiary of Irvine Sensors Corporation, on September 21, 2009, filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court in California. Optex's assets were sold in October 2008 pursuant to a UCC public foreclosure sale to a Delaware corporation controlled by the Company's senior lenders, and Optex has not conducted any operations since that time. In connection with the jury verdict awarding Timothy Looney liquidated damages of $105,000 in one of his lawsuits against the Company, the Company disclosed that it may also be liable for Mr. Looney's legal expenses. On September 15, 2009, a court order was issued awarding Mr. Looney $834,275 in attorneys' fees. The Company currently plans to file post trial motions or an appeal to overturn the jury's verdict and the related attorneys' fees award. About Irvine Sensors Headquartered in Costa Mesa, California, Irvine Sensors Corporation (NASDAQ: IRSN) -- http://www.irvine-sensors.com/-- is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating such products and research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications. As of June 28, 2009, Irvine Sensors had total assets of $6,627,800 and total liabilities of $11,999,000, resulting to stockholders' deficit of $5,371,200. * * * Grant Thornton LLP in Irvine, California, in a letter dated January 9, 2009, pointed out that the Company incurred net losses of $21.6 million, $22.1 million, and $8.4 million for the years ended September 28, 2008, September 30, 2007, and October 1, 2006, respectively, and the Company has a working capital deficit of $16.1 million at September 28, 2008. "These factors, among others, raise substantial doubt about the company's ability to continue as a going concern." IVIVI TECHNOLOGIES: To Sell All Assets to Insider Group ------------------------------------------------------- Ivivi Technologies, Inc., on September 24 said it has entered into an asset purchase agreement to sell substantially all of its assets to an entity controlled by Steven Gluckstern, the Company's Chairman, President, Chief Executive Officer and Chief Financial Officer. The purchase price to be paid to the Company under the terms of the Asset Purchase Agreement will equal the aggregate of (i) the principal and interest outstanding, as of closing, under the Company's loan with Emigrant Capital Corp., which was approximately $2,620,000 as of September 21, 2009, and (ii) $475,000; provided, that the aggregate purchase price specified in clauses (i) and (ii) would not be in excess of $3.15 million. The closing of the transactions contemplated by the Asset Purchase Agreement is subject to certain customary conditions, including the receipt of approval by the Company's shareholders of the transactions contemplated by the Asset Purchase Agreement. Under the terms of the Asset Purchase Agreement, the Company and Foundation Ventures, LLC, the Company's investment banker, will continue to have the right to solicit other proposals regarding the sale of the Company's assets and equity until receipt of the approval by the Company's shareholders of the transactions contemplated by the Asset Purchase Agreement. Prior to the receipt of approval by the Company's shareholders of the transactions contemplated by the Asset Purchase Agreement, the Company may terminate the Asset Purchase Agreement under specified circumstances in order to enter into a definitive agreement implementing a Superior Proposal (as defined in the Asset Purchase Agreement). If the Company terminates the Asset Purchase Agreement to enter into a Superior Proposal, the Company is required to pay the Buyer a termination fee equal to $90,000. In connection with the signing of the Asset Purchase Agreement, the Buyer, the Company and certain shareholders of the Company, who have the power to vote approximately 39.5% (and together with the Company's common stock held by Steven M. Gluckstern, approximately 51.3%) of the Company's common stock, entered into a Voting Agreement. Pursuant to the Voting Agreement, the signatory shareholders agreed to vote their shares of the Company's common stock in favor of the transactions contemplated by the Asset Purchase Agreement. In the event that the Company terminates the Asset Purchase Agreement in connection with a Superior Proposal, the Voting Agreement will also terminate. The transaction was reviewed by a special committee of the board of directors of the Company comprised of independent directors. The special committee engaged Foundation to evaluate the transaction and to solicit other proposals and assist the special committee in analyzing and evaluating other proposals, if any, received by the Company. Although the Company and Foundation have received a few inquiries and requests for due diligence materials from potentially interested parties, the Company has not received any competing offers. The transaction was unanimously approved by the special committee and recommended to the board of directors of the Company by the special committee. The board of directors of the Company also unanimously approved the transaction. In approving the transactions contemplated by the Asset Purchase Agreement (including the consideration to be paid by the Buyer for the Company's assets), the special committee and the board of directors of the Company considered the lack of a current market for the Company's assets, equity and debt, previous unsuccessful attempts over more than 12 months to obtain additional capital for the Company, the right to continue to solicit other proposals for the Company, the Company's obligations to Emigrant, a fairness opinion from Foundation and other considerations. In connection with the execution of the Asset Purchase Agreement, Emigrant and the Company entered into an Amended and Restated Forbearance Agreement under which Emigrant agreed to extend the forbearance period through the earlier of (i) November 30, 2009 and (ii) the occurrence of a termination event under the Amended and Restated Forbearance Agreement. The Amended and Restated Forbearance Agreement also provides for an increase in the interest rate to be paid with respect to the Loan to the lesser of (i) 18% or (ii) the maximum rate permitted by law during the forbearance period. In addition, in the event the Company completes a Superior Proposal under which the purchase price exceeds $3.15 million, Emigrant shall be entitled to receive an additional fee equal to the lesser of (i) 20% of such excess amount or (ii) $175,000. In the event the transaction with the Buyer is completed, following the closing, it is likely that the Company's liabilities will exceed its available cash and the Company's board of directors may elect to liquidate the Company and utilize its available cash and assets to repay its outstanding creditors to the extent of its remaining assets. Following such repayment, the Company does not believe that there will be any assets remaining to distribute to the Company's shareholders. In the event the Company does not successfully complete the transactions contemplated by the Asset Purchase Agreement or complete a Superior Proposal, the Company will not be able to meet its obligations under the Loan and Emigrant will have the right to foreclose under the Loan, which is secured by all of the Company's assets. In such an event, the Company would have to cease its operations or file for bankruptcy protection. About Ivivi Technologies Based in Montvale, NJ, Ivivi Technologies, Inc. is a medical technology company focusing on designing, developing and commercializing its proprietary electrotherapeutic technology platform, with a primary focus on developing treatments for cardiovascular disease. Ivivi's research and development activities are focused specifically on targeted pulsed electromagnetic field, or tPEMF(TM) technology, which, by creating a therapeutic electrical current in injured soft tissue, is believed to modulate biochemical and physiological healing processes to help reduce related pain and inflammation. The Company's most recent clinical studies have shown reductions in anginal pain and increases in blood flow to the heart in certain cardiac patients; however, additional studies are required in this area. The Company expects to develop new tPEMF(TM) devices and to seek strategic partners to pursue the cardiac market and others, such as osteoarthritis, neurology and other inflammatory-related conditions if FDA marketing approvals or clearances can be achieved in these areas. JEFFREY LAMBERT: Voluntary Chapter 11 Case Summary -------------------------------------------------- Joint Debtors: Jeffrey Lambert Tracy Lambert fka Tracy Elaine Windischman 24 West Zion Ridge Drive Mount Carmel, UT 84755 Bankruptcy Case No.: 09-30350 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court District of Utah (Salt Lake City) Debtors' Counsel: Charles Todd Wright, Esq. Piet & Wright 509 South 7th Street Las Vegas, NV 89101 Tel: (702) 566-1212 Fax: (702) 566-4833 Email: todd.wright@pietwright.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 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. JEWETT TUCKER: Case Converted to Chapter 7 Liquidation ------------------------------------------------------ WestLaw reports that upon determining that "cause" existed to dismiss or convert a debtor's individual Chapter 11 case based on his continued delay in filing monthly operating reports, and based on the inaccurate or misleading nature of such schedules and reports as the debtor filed, a bankruptcy court would exercise its authority to convert the case to Chapter 7 rather than to dismiss. The case had been pending for more than one year, during which time the debtor had benefited from the automatic stay despite his failure to adhere to his duties as a debtor-in-possession. Dismissal of the case, while subjecting the debtor to the full range of state law creditor remedies, would not preclude him from seeking bankruptcy relief again if creditors' state court collection efforts proved onerous. In re Tucker, --- B.R. ----, 2009 WL 2867736 (Bankr. S.D. Ga.). Jewett W. Tucker, Jr., sought Chapter 11 protection (Bank. S.D. Ga. Case No. 08-40990) on June 5, 2008, is represented by James L. Drake, Jr., Esq., in Savannah, Ga., and estimated $50 million to $100 million in assets and liabilities of $10 million to $50 million at the time of the chapter 11 filing. JL BERRIOS INVESTMENTS: Case Summary & 3 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: JL Berrios Investments Corp. PO Box 2617 Vega Baja, PR 00694 Bankruptcy Case No.: 09-07989 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Antonio Fiol Matta, Esq. 1561 Ave Americo Miranda Urb Caparra Terrace San Juan, PR 00921 Tel: (787) 792-4368 Fax: (787) 792-4763 Email: afiollaw@gmail.com According to the schedules, the Company has assets of at least $1,211,350, and total debts of $1,407,216. A full-text copy of the Debtor's petition, including a list of its 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/prb09-07989.pdf JOHN HOLLOWAY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Joint Debtors: John Holloway Karina Barbosa 8602 Tweedy Lane Downey, CA 90240 Bankruptcy Case No.: 09-35629 Chapter 11 Petition Date: September 22, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Thomas B. Donovan Debtors' Counsel: Jason Boyer, Esq. The Law Office of Jason Boyer PO Box 2729 Venice, CA 90294-2729 Tel: (213) 219-9953 Fax: (213) 402-3008 Email: jasonjboyer@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 Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-35629.pdf The petition was signed by the Joint Debtors. JOSEPH PERRI: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Joseph J. Perri, Jr. 602 Frederick Court Canonsburg, PA 15317 Bankruptcy Case No.: 09-27003 Chapter 11 Petition Date: September 22, 2009 Court: United States Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Judge: Bernard Markovitz Debtor's Counsel: Robert O. Lampl, Esq. 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 Email: rol@lampllaw.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/pawb09-27003.pdf The petition was signed by Joseph J. Perri, Jr. KANSAS PUBLIC: Bankrupt Under Current Operating Assumptions ----------------------------------------------------------- Kansas Public Employees Retirement System is bankrupt under current operating assumptions, University of Kansas' Center for Applied Economics said in its report. KPERS, according to University of Kansas' Center, is experiencing a funding crisis. The recent collapse of financial markets has resulted in a significant decrease in the value of the KPERS portfolio. The problems in the pension plan have emerged over several decades, and are symptomatic of the poor incentive structure guiding the governance of many defined-benefit public pension plans. The financial market turmoil has exacerbated these problems, but KPERS is facing a long-run deterioration in its funding status. The Kansas legislature has enacted several reforms over the past decade to address the KPERS funding problems. These reforms have included changes in benefits, increased contribution rates, and administrative changes. Unfortunately, these reforms have failed to address the fundamentally flawed incentive structure built into the KPERS defined-benefit plan. A sharp decrease in the value of assets in the KPERS system in 2008 caused the funding ratio to fall to 49 percent. Unfunded liabilities in the system doubled, from about $5 billion to $10 billion. Assuming an 8% return on assets, Kansas-government employers would have to significantly increase contribution rates to bring the KPERS system into actuarial balance. This would be difficult for state and local employers that are experiencing a revenue shortfall. The solution to the funding crises in KPERS will require fundamental reform. Everything should be on the table, including changes in benefits and increased employee contribution rates, as well as increased employer contribution rates. The governments of Kansas should also explore a complete shift to a defined- contribution arrangement, similar to the one used by the Kansas Regents system (and most private employers). KansasCity.com Prime Buzz relates that KPERS executive director Glenn Deck agrees with much of the University of Kansas' Center report, saying that it's no secret the pension system is struggling and that lawmakers will have to do something soon to fix the problem. "We certainly disagree with the assertion that we're bankrupt. Our current benefits are safe. We've got more than $10 billion in assets and we're paying out benefits," Prime Buzz quoted Mr. Deck as saying. According to the report, Mr. Deck said that his staff is working with lawmakers to put together a list of options for KPERS. The Kansas Public Employees Retirement System (KPERS) was established in 1961 for State of Kansas public employees to provide a defined benefit pension plan. KPERS membership is mandatory for employees in eligible positions regardless of age. KENT SWIG: Close to Personal Bankruptcy Filing ---------------------------------------------- Kent Swig is exploring options including a potential bankruptcy filing after a $28 million judgment on his defaulted Sheffield57 condo conversion project in Midtown, The New York Post reported, citing on of Mr. Swig's advisors. According to The Post, a source close to the case said that Mr. Swig could be sued for borrowing money on false statements. The judgment, according to The Post's Jennifer Gould Keil, relates to a lawsuit filed by hedge fund Square Mile in January after Swig defaulted on a $21.15 million personal loan he obtained to help finance Sheffield57, which has since ended up in foreclosure and was auctioned off. Square Mile claims Swig misrepresented his assets when he obtained the loan. Square Mile is also expected to seek legal action against Mr. Swig after he defaulted on another loan for $18.5 million for another development, at 25 Broad St. Kent Swig and his Swig Equities has bought or developed more than 4 million square feet of commercial office space and 1.5 million square feet of residential space in the city. Mr. Swig is also co-owner and co-chair of Terra Holdings, the parent of residential brokers Brown Harris Stevens and Halstead Property. LAKE AT LAS VEGAS: Former Owner Wants Bankruptcy Case Dismissed --------------------------------------------------------------- Steve Green at Las Vegas Sun reports that Transcontinental Properties Inc., Lake at Las Vegas Joint Venture, LLC's former owner, is asking the court to dismiss the Company's bankruptcy case. The court has set a hearing for October 2 for the motion, says Las Vegas Sun. According to Las Vegas Sun, Transcontinental claims that the bankruptcy case should be dismissed because it's a charade in which Credit Suisse Group AG is both the main creditor and main debtor. Lawyers of Transcontinental Properties Inc. and Transcontinental Corp. said in court documents that Lake at Las Vegas was "solidly solvent" through mid-2004 but Credit Suisse later effectively took over the Company. Predatory-lending practices by Credit Suisse at Lake at Las Vegas let it take over the golf course, resort, and residential development in Henderson, Las Vegas Sun relates, citing Transcontinental. Transcontinental, Las Vegas Sun states, said that Credit Suisse loaned the development's owners $560 million in 2004, which refinanced $48 million in existing debt and allowed the Lake at Las Vegas developers to earn a return on their hundreds of millions of dollars in equity investments. Lake at Las Vegas, encumbered with more debt and facing a deteriorating economy, couldn't make a loan payment in September 2007 and Credit Suisse then took control of the project, the report states, citing Transcontinental. According to the report, Transcontinental said that Lake at Las Vegas has lost more than $65 million -- losses covered by Credit Suisse, since filing for bankruptcy. Transcontinental said in court documents, "The debtors are kept alive solely by their senior lender, who also happens to be, for all practical purposes, the debtors themselves. Credit Suisse as the senior creditor could have achieved the same result for itself as the owner and these Chapter 11 cases were entirely unnecessary. These cases present the novel circumstance of a lender creating an entity to control the debtors to give it the sham appearance of independence." Transcontinental claimed that the bankruptcy case was really filed so Credit Suisse could resolve disputes with other lenders, according to Las Vegas Sun. Citing Transcontinental, the report states that the bankruptcy case has accumulated $6.5 million in professional fee expenses, money that otherwise could have been used to pay the bills of unsecured creditors. Las Vegas Sun relates that Transcontinental claimed that the bankruptcy case serve no purpose since there is no equity to reorganize, as the value of Lake at Las Vegas's real estate is estimated at $147 million against the secured debt to Credit Suisse totaling more than $696 million. Lake at Las Vegas, Credit Suisse, Cayman Islands Branch, and the Unsecured Creditors Committee argued that Transcontinental is hoping to block threatened post-bankruptcy litigation against the former owners of the Company, Las Vegas Sun reports. Transcontinental is acting as a likely defendant "in certain anticipated post-confirmation litigation against the debtors' former insiders, including litigation to recover over $400 million in transfers from the debtors to the debtors' former equity holders," the report states, citing Lake at Las Vegas and its affiliates. Lake at Las Vegas said in court documents, "Transcontinental's real goal in seeking the dismissal of the cases is to force the debtors into a freefall liquidation, where the debtors will lack the ability to cover the costs of pursuing litigation and where the debtors will lose potential witnesses and documents that would otherwise be used in that litigation." Lake at Las Vegas is seeking approval during hearings October 15 and December 15 for its plan to emerge from bankruptcy, Las Vegas Sun states. About Lake at Las Vegas Headquartered in Henderson, Nevada, Lake at Las Vegas Joint Venture, LLC and 14 of its debtor-affiliates -- http://www.lakelasvegas.com/-- are owners and developers of 3,592-acre residential and resort destination Lake Las Vegas Resort in Las Vegas, Nevada. Centered around a 320-acre man-made lake, Lake Las Vegas contains more than 9,000 residential units, and also includes two luxury resort hotels (a Loews and a Ritz- Carlton), a casino, a specialty retail village shopping area, marinas, three signature golf courses and related clubhouses, and other real property. The Debtors filed separate petitions for Chapter 11 relief on July 17, 2008 (Bankr. D. Nev. Lead Case No. 08-17814). When Lake at Las Vegas Joint Venture, LLC filed for protection from its creditors, it listed assets of $100 million to $500 million, and debts of $500 million to $1.0 billion. Courtney E. Pozmantier, Esq., Martin R. Barash, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, Jason D. Smith, Esq., at Santoro, Driggs, Walch, Kearney, Holley & Thompson, Jeanette E. McPherson, Esq., Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, represent the Debtors as counsel. Kurtzman Carson Consultants serves as claims and notice agent. Kaaran E. Thomas, Esq., and Ryan J. Works, Esq., at McDonald Carano Wilson LLP, represent the official committee of unsecured creditors as counsel. LAUREATE EDUCATION: S&P Assigns 'B' Rating on $200 Mil. Loan ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its issue-level and recovery ratings to Laureate Education Inc.'s $200 million term loan A due 2014. S&P rated the loan 'B' (at the same level as S&P's 'B' corporate credit rating on the company) with a recovery rating of '4', indicating S&P's expectation of average (30% to 50%) recovery for lenders in the event of a payment default. S&P expects the company to use proceeds to eliminate borrowings under its revolving credit facility (which totaled $160 million as of June 30, 2009) and add to cash balances. At the same time, S&P affirmed its existing ratings on Laureate, including the 'B' corporate credit rating. The rating outlook remains negative. Total debt was $2.5 billion at June 30, 2009. "The 'B' corporate credit rating reflects Laureate's high debt leverage and weak cash flow measures, as well as the risks inherent in undertaking rapid debt-financed overseas expansion," said Standard & Poor's credit analyst Hal Diamond. "Also, credit measures are exposed to volatility in exchange rates, as the company derives roughly three-quarters of its EBITDA internationally, and about 80% of its debt is denominated in U.S. dollars." Baltimore, Maryland-based Laureate provides higher education programs through a network of more than 42 institutions in 17 countries in Latin America, Europe, and the U.S., and through its online division. The company's strategy is to acquire established international institutions that may have good positions in their markets. In 2008, the company also acquired underperforming assets in Mexico that were initially operating at low profitability. Laureate's goal, broadly, is to improve curriculum and drive enrollment growth. About 40% of revenue, and a slightly greater percentage of EBITDA, is earned in Mexico and Chile. The company's campuses in Europe account for 20% of revenues, but make a slightly smaller contribution to profitability. Standard & Poor's believes that the company intends to continue growing rapidly by making acquisitions, entering new countries, and building new campuses over the next several years. These plans involve considerable execution, financial, and country risk, in S&P's view. LEAP WIRELESS: Harbinger Cuts Equity Stake to 4.5% -------------------------------------------------- Philip Falcone and his Harbinger hedge fund reduced their ownership stake in Leap Wireless International, Inc., to roughly 4.5% after unloading roughly 1 million Leap shares in three separate transactions on September 18. Harbinger Capital Partners Master Fund I, Ltd., sold 421,168 shares at $20.35 apiece and 378,832 shares at $20.18 apiece. Harbinger Capital Partners Special Situations Fund, L.P., sold 200,000 shares at $20.18 apiece. Harbinger may be deemed to own in the aggregate 3,451,100 Leap shares. Leap Wireless International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/-- provides wireless services in 29 states and holds licenses in 35 of the top 50 U.S. markets. Cricket offers customers a choice of unlimited voice, text, data and mobile Web services. As of June 30, 2009, the Company had $5.42 billion in total assets; and $3.55 billion in total liabilities and $77.8 million in redeemable non-controlling interests; resulting in $1.79 billion in stockholders' equity. As of June 30, 2009, the Company had $323.9 million in accumulated deficit. * * * According to the Troubled Company Reporter on April 29, 2009, Standard & Poor's Ratings Services revised its outlook on Leap Wireless International Inc. to positive from stable. At the same time, S&P affirmed its ratings on the San Diego-based wireless carrier, including the 'B-' long-term corporate credit rating and 'B+' secured bank loan rating on subsidiary Cricket Communications Inc. LEAP WIRELESS: Registers 1-MM Shares Under 2004 Stock Option Plan ----------------------------------------------------------------- Leap Wireless International, Inc., filed with the Securities and Exchange Commission a Registration Statement on Form S-8 to register the offer and sale of an additional 1,000,000 shares of common stock for issuance under the 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan of Leap Wireless International, Inc., as amended. The 2004 Plan authorizes the issuance of a maximum of 9,300,000 shares of common stock. However, the offer and sale of 8,300,000 shares of common stock, which have been or may be issued under the 2004 Plan, have previously been registered. Leap Wireless International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/-- provides wireless services in 29 states and holds licenses in 35 of the top 50 U.S. markets. Cricket offers customers a choice of unlimited voice, text, data and mobile Web services. As of June 30, 2009, the Company had $5.42 billion in total assets; and $3.55 billion in total liabilities and $77.8 million in redeemable non-controlling interests; resulting in $1.79 billion in stockholders' equity. As of June 30, 2009, the Company had $323.9 million in accumulated deficit. * * * According to the Troubled Company Reporter on April 29, 2009, Standard & Poor's Ratings Services revised its outlook on Leap Wireless International Inc. to positive from stable. At the same time, S&P affirmed its ratings on the San Diego-based wireless carrier, including the 'B-' long-term corporate credit rating and 'B+' secured bank loan rating on subsidiary Cricket Communications Inc. LEHMAN BROTHERS: European Units Seeking Around $150 Billion ----------------------------------------------------------- PricewaterhouseCoopers, the administrators for Lehman Brothers Holdings Inc.'s affiliates in Europe, has already filed a claim for about $50 billion and will seek another $100 billion before an Oct. 22 deadline, PwC spokeswoman Stephanie Howel said Sept. 24 in an interview with Bloomberg. According to Josh Fineman and Christopher Scinta at Bloomberg, Credit Suisse Group AG is trying to sell a $1 billion claim it filed against LBHI. Aside from PwC and Credit Suisse, parties who have filed claims in excess of $500 million against LBHI include: Claim No. Claimant Claim Amount --------- -------- ------------ 10082 Wilmgington Trust, as Indenture Trustee $48,779,932,734 17894,17538 Bundesverband Deutscher Banken E.V. $25,725,484,071 14826 Heron Quays (HQ2) T1 Limited $4,280,970,000 1612 Lehman Brothers Bank, FSB $2,192,000,000 18074 Barclays Bank PLC $1,336,813,993 18076 Barclays Bank PLC $1,125,806,565 11037 NY State Department of Taxation and Finance $1,217,149,064 11307,11306 Morgan Stanley Capital Group $1,019,588,693 14971 BNP Paribas $895,971,755 3813 Boise Land & Timber II, LLC $833,781,693 17120 OMX Timber Finance Investments II, LLC $844,896,060 1439 OMX Timber Finance Investments II, LLC $833,171,475 17755 Deutsche Bank AG, London $801,478,085 17321,17319 Primary Fund of the Reserve Fund $785,000,000 17247 Danske Bank A/S London Branch $699,657,334 14664 GLG European Long-Short Fund $648,992,015 5576, 4727 New York City Dept. of Finance $626,999,222 15649 Abu Dhabi Investment Authority $609,695,486 12145 Chang Hwa Commercial Bank, Los Ang $511,720,568 Wilmington Trust Company. WTC, as successor indenture trustee to Citibank, N.A., filed a $48.8 billion claim against Lehman Brothers Holdings Inc., on behalf of holders of various unsecured senior notes due to mature 2009 to 2037 issued by Lehman. Wilmington Trust says that although the total claim is undetermined at this time, it says the total claim falls within a range of $49.2 billion, as provided by Citibank, to $73.1 billion, as provided by the Debtor. Heron Quays (HQ2) T1 Limited and Heron Quays (HQ2) T2 Limited filed a $4.28 billion claim. Heron Quays Lehman owes it money for leases at former headquarters at Canary Wharf, in London. The N.Y. State Department of Taxation made claim for $1.2 billion in taxes, interest and penalties from Lehman Brothers Holdings Inc. The state is seeking payment for tax bills dating to 1994, according to the proof of claim. New York-based Lehman owes $393 million in tax and interest for the 2003 tax year and $387.9 million for 2007. New York state said that $1.09 billion constitutes as an "unsecured priority" claim, while the remaining $131 million constitute as a "general unsecured" claim. Lehman Brothers' creditors filed more than 16,000 claims against the failed investment bank before the Sept. 22 deadline. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Barclays Refutes Charges on $8 Bil. Windfall ------------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors asked Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York to reconsider his prior decision authorizing the sale of the Debtors' North American broker-dealer business to Barclays Capital Inc. The move came following the results of LBHI's investigation into the sale, showing that the deal that closed differed materially from the one approved by the Court. The investigation showed that the deal was actually structured to give Barclays "immediate and enormous windfall profit" in the sum of $8.2 billion. "This immediate windfall to Barclays was not disclosed to the boards of LBHI or Lehman Brothers Inc., was not revealed in the agreement the Court was asked to approve, and was never disclosed to the Court until now," says LBHI's counsel, Robert Gaffey, Esq., at Jones day, in New York. The proposed revision of the sale order drew flak from Barclays, which argues that LBHI is trying "to re-trade the deal on the basis of a meritless argument" now that the economy has begun to stabilize, according to a September 15 report by Times Online. "This is an opportunistic claim," Barclays spokesman Michael O'Looney told the Wall Street Journal. Barclays' acquisition of LBHI's U.S. assets sent it scaling up the ranking of the U.S. investment banking scene. The U.K. bank's fixed income division was ranked No. 1 in an Institutional Investor annual poll of bond investors earlier this month, according to a September 16 report by Forbes.com. Lehman's Accusations Some Lehman executives allegedly agreed to give Barclays an undisclosed $5 billion discount off the book value of securities that were transferred to the U.K. bank, and later agreed to give billions more that the bank demanded, Mr. Gaffey says in court filings. Mr. Gaffey adds that the asset purchase agreement signed off by the Court stated that the securities transferred to Barclays were about $70 billion as of September 16, 2008, when their book value was actually $5 billion higher. The persons who participated in the sale negotiations also allegedly abandoned the original structure stated in the asset purchase agreement and, without disclosure, decided to deliver securities to Barclays by terminating a repurchase agreement it inked with Lehman Brothers Inc., LBHI's retail brokerage. The repurchase agreement dated September 18, 2008, authorized Barclays to transfer $45 billion in cash to LBI in return for about $50 billion of securities, subject to LBI's right to repurchase those securities at the same price from the U.K. bank at a later date. According to Mr. Gaffey, some Lehman and Barclays executives did not proceed with their original plan to mark down the value of the securities on Lehman's books to fit the undisclosed discount but instead terminated the repurchase agreement, which they found to be a better way to deliver the discount to Barclays. "Changing the deal in this way orchestrated an exchange of $50 billion in securities for a payment of only $45 billion, thus giving Barclays the agreed upon $5 billion undisclosed discount," Mr. Gaffey points out. LBHI wants the Court to, among other things, compel Barclays to return the $8.2 billion it received, which requires revision of the sale order. The proposed revision is scheduled for a hearing on October 15, 2009. Committee & LBI Trustee Back Proposed Revision The Official Committee of Unsecured Creditors and James Giddens, LBI's trustee, expressed support for the approval of LBHI's request. The Creditors' Committee asserts that its own investigation confirmed its suspicion that the estates lost billions of dollars of assets for no additional consideration due to lack of transparency. "The sale transaction that ultimately closed was far different from that described to the Court and the Committee. Not only were extensive structural changes implemented after the Court entered the sale order but Barclays extracted billions of dollars worth of additional assets from these estates," the panel says. Mr. Giddens says he supports LBHI's move insofar as the proposed revision relates to undisclosed benefits that Barclays realized from the sale, including the multi-billion dollar discount and the U.K. bank's failure to assume $1.5 billion in so-called contract cure liabilities. Mr. Giddens also filed his own motion in LBI's liquidation proceeding, focusing on the billions of dollars of additional LBI assets that are subject to a dispute between Barclays and the trustee. The motion, which is set to be heard on October 15, 2009, seeks a court ruling exempting the trustee from the sale order to the extent the sale order authorizes the transfer of the disputed assets to the U.K. bank. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Court OKs Protocol for Derivative Contract Claims ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized the Debtors to implement a process for prosecuting their claims under pre-bankruptcy derivative contracts with monetary recovery potential. The court order dated September 17, 2009, however, does not authorize the Debtors to implement the process with respect to derivative contracts that have not been terminated, and to which a counterparty has not failed to make a payment or fulfill its obligation to the Debtors. The court-approved process cannot also be used as a substitute for chapter 11 claims procedures, according to the order. Any trustee, indenture trustee or person acting in fiduciary capacity in connection with a trust or other financing arrangement relating to the derivative contracts with recovery potential is covered by the court order. The Court appointed James Freund of Skadden Arps Slate Meagher & Flom LLP, Ralph Mabey of Stutman Treister & Glatt and David Geronemus, a full-time neutral with JAMS, as mediators for disputes related to the derivative contracts which the Debtors and the counterparty have failed to resolve. If any of these mediators is not available, another mediator will be selected by the Court upon notice to the Debtors and other concerned parties. All mediation proceedings will take place in New York, New York, unless agreed to by the parties and the mediator. Judge Peck overruled objections to the proposed resolution process stating that the goal is "to get to an ADR process that encourages parties to write checks," the Wall Street Journal reported. "I think these procedures are quite appropriate." About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: HK Agency Reviewing 522 Non-Minibond Cases ----------------------------------------------------------- The Hong Kong Monetary Authority (HKMA) announced Sept. 18 that there are currently 522 Lehman-Brothers-related non-minibond cases under disciplinary consideration. These are cases which have gone through detailed investigation by the HKMA. Since 17 October 2008 the HKMA has referred a total of 334 Lehman- Brothers-related non-minibond cases (unchanged from last week) to the Securities and Futures Commission (SFC) for further action. These cases have been reviewed by the HKMA, which has determined that there are sufficient grounds for referring them to the SFC to facilitate its investigations into banks. The HKMA has, up to 17 September 2009, received 21,660 complaints concerning Lehman-Brothers-related products, of which 7,767 relate to non-minibond products. In respect of the Lehman- Brothers- related non-minibond complaints, 7,692 cases have gone through the preliminary assessment process and, as a result, the HKMA is currently investigating 2,586 cases and seeking further information on 2,964 cases. A total of 1,620 Lehman-Brothers- related non-minibond complaints have been closed as there was not sufficient prima facie evidence found after the preliminary assessment process or no sufficient grounds and evidence found after detailed investigations. Of the minibond complaints, 13,115 cases are eligible for the Lehman-Brothers Minibonds Repurchase Scheme or the voluntary offer made by the distributing banks to customers with whom they had reached settlements before the Scheme was introduced. Seven hundred and forty minibond complaints involving customers who are not eligible for, or have indicated that they do not accept, the repurchase offer under the Scheme or whose cases require clarification from the banks will continue to be handled by the HKMA if the complaints cannot be resolved by the enhanced complaint handling system introduced by the distributing banks as agreed by the regulators. "The HKMA has received 446 minibond complaints involving customers who are not eligible for the Scheme. The HKMA has referred these complaints to the distributing banks and required them to handle all these cases under the enhanced complaint handling system as soon as possible. Complainants do not need to re-lodge their complaints with the distributing banks as the banks will contact them directly and explain to them the arrangement of the system. If there is any case which cannot be resolved under the enhanced complaint handling system within one month since our referral, distributing banks are required to submit to the HKMA all relevant information in relation to such cases and the HKMA will then follow up these cases shortly," said an HKMA spokesperson. Since 7 August 2009, 16 minibond distributing banks have begun the issue of repurchase offer letters to eligible customers (about 25,000 customers) under the Scheme. Up to 16 September 2009, 21,044 customers have responded to the repurchase offers, of whom 20,828 customers or 99.0% have accepted the offers. "Eligible customers should consider carefully the terms of the offer and his or her personal circumstances before deciding whether to accept the offer from the distributing banks," added the HKMA spokesperson. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LCPI Proposes to Complete Deal in SCC Bankruptcy ----------------------------------------------------------------- Lehman Commercial Paper Inc. seeks approval of the U.S. Bankruptcy Court for the Southern District of New York to consummate the transactions contemplated in the Chapter 11 plan it proposed for the subsidiaries of SCC Acquisitions Inc. LCPI made the move to increase its prospect for recovery from SCC's subsidiaries, which availed of more than $2 billion from LCPI and its affiliates including Lehman ALI Inc., OVC Holdings LLC and Northlake Holdings LLC. SCC's subsidiaries are currently in bankruptcy before the U.S. Bankruptcy Court for the Central District of California. LBHI and its affiliates committed to fund continuing costs necessary to preserve the value of 18 SCC Projects. The loans totaled $2.3 billion. The amounts loaned and to be advanced by Lehman are all secured by, among other things, first priority trust deeds on the Projects' real property. LCPI's attorney, Shai Waisman, Esq., at Weil Gotshal & Manges LLP, in New York, says there is no guarantee that the proposed plan will be confirmed by the California bankruptcy court. The proposed plan, however, will increase the prospect for the Lehman lenders' recovery of the debts owed by SCC's subsidiaries and enable a timely resolution of the subsidiaries' bankruptcy cases, Mr. Waisman says. Under the proposed plan, LCPI and the other Lehman lenders agreed to earmark as much as $15 million to settle certain equitable subordination claims made against them by SCC's subsidiaries on behalf of their non-Lehman unsecured creditors. The proposed plan also grants the Lehman lenders or any other entity, which either asserts to be or is determined by the California bankruptcy court to be the owner of any of the loans, the right to credit bid on certain of the properties securing the $2 billion loan. LCPI 's disclosure statement detailing its proposed plan for SCC's subsidiaries, is set to be heard on October 15, 2009, before the California bankruptcy court. Full-text copies of LCPI's proposed chapter 11 plan and the disclosure statement for SCC's subsidiaries is available without charge at: http://bankrupt.com/misc/LehmanPlanSCC.pdf http://bankrupt.com/misc/LehmanDisclosureStatementSCC.pdf SunCal's Stand In a hearing held September 22, 2009, SunCal lawyers argued that Lehman's claims in the projects should be thrown out as they are based on about $1.5 billion in loans Lehman sold shortly before it filed for bankruptcy in September 2008, Bloomberg News reported. Lehman, the report said, failed to disclose in its proofs of claim that it no longer owned the loans and was acting as the agent of the current owners, Fenway Capital LLC. California bankruptcy judge Erith A. Smith said she will try to rule on the issue by October 15. However, the judge has already tentatively said that she would grant SunCal's request to strike Lehman's claim in part because Lehman failed to disclose who they truly represented when filing the claims," Bloomberg said. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LCPI Proposes to Purchase Fairpoint Participation ------------------------------------------------------------------ Lehman Commercial Paper Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to buy a participation from a securitization trust. LCPI intends to purchase a participation in a loan known as FairPoint Communications Term Loan A, which it previously assigned to Variable Funding Trust 2008-1, a Delaware statutory trust. The participation, which has a current notional value of $59,284,919, was pledged by VFT 2008 to The Bank of New York Trust Company N.A. for the notes that the securitization trust issued to The Metropolitan Life Insurance Company under a note purchase agreement dated May 9, 2008. VFT 2008 issued the notes in return for availing up to $500 million from MetLife. Repayment of the notes are guaranteed by Lehman Brothers Holdings Inc., and are secured by collateral in the form of participations in corporate loans that it sold and assigned to VFT 2008. LCPI's attorney, Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York, says LCPI could realize the full value of its interest in the term loan through the proposed purchase rather than a sale of the participation to a third party at the current market price. "The Fairpoint loan is currently trading at 76.25 percent of its par value. LCPI believes that it is possible that the FairPoint loan will be trading at a significantly higher market rate within the next eighteen months," Ms. Marcus says in court papers. LCPI, Ms. Marcus says, intends to buy the participation from VFT 2008 for a price equal to 76.25% of the notional value of the participation as of the date of the purchase. If the notional value on the date of the purchase is equal to $59,284,919, the participation would be bought by about $45.2 million. Under the transaction, LCPI will cause VFT 2008 to prepay the outstanding balance of the notes it issued to MetLife by an amount equal to the purchase price, upon the consummation of the purchase. In return, MetLife will cause BNY to waive and release its interest in the participation. At the conclusion of the proposed transaction, LCPI would own the beneficial interest in the portion of the loan that is the subject of the participation, free and clear of all liens. The hearing to consider approval of LCPI's request is scheduled for October 14, 2009. Creditors and other concerned parties have until October 1, 2009, to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Proposes DiscoverReady as Contract Attys Provider ------------------------------------------------------------------ Lehman Brothers Holdings Inc. and its affiliated debtors seek approval of the U.S. Bankruptcy Court for the Southern District of New York to employ DiscoverReady LLC as provider of contract attorneys effective October 15, 2008. The Debtors tapped the firm to provide them with lawyers who would review documents and assist in the production of those documents in connection with the investigation being conducted by Anton Valukas, the examiner appointed by the bankruptcy court, and by the Securities and Exchange Commission. Richard Krasnow, Esq., at Weil Gotshal & Manges LLP, in New York, says the employment of the contract attorneys through DiscoverReady would help the Debtors avoid the unnecessary expense of hiring an outside law firm or additional in-house attorneys to provide the services. Rather than paying DiscoverReady an hourly rate for its services, the Debtors negotiated a fixed fee amount per document that is reviewed. A copy of the document detailing the firm's fee structure is available for free at: http://bankrupt.com/misc/LehmanDiscoverReadyFees.pdf The Debtors will also reimburse DiscoverReady for all pre- approved travel and other out-of-pocket costs and expenses incurred by the firm in connection with its services. In connection with DiscoverReady's employment, the Debtors also seek a court ruling exempting the firm from filing interim fee applications or fee statements. Each contract attorney, however, will be required to execute an affidavit and disclosure statement, certifying that he does not represent or hold interest adverse to the Debtors and their estates. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: PwC Has Recovered $30 Billion in Client Assets --------------------------------------------------------------- On its online Web site, PricewaterhouseCoopers LLP, the administrator of Lehman Brothers Holdings Inc.'s European units, disclosed that a year since the collapse of LBHI, the firm had recovered about $30 billion of client assets, of which $13 billion had already been returned. PricewaterhouseCoopers also disclosed that $100 billion claim was filed into U.S.-based Lehman units, 800,000 failed transactions were being unwound and $9 billion of cash had been recovered for clients so far. In other news, PwC have called for a key element of U.S. bankruptcy rules to be introduced in the United Kingdom to help the administrators "avoid trawling through 'billions of dollars' of claims that would otherwise have been avoided," David Jetuah of Accountancy Age reported on September 17, 2009. Under U.S. Chapter 11, creditors of an insolvent company are stopped from getting their hands on a share of a trust in which the company has invested in. The so-called U.S. "anti- alienation" provisions would have provided Lehman UK's administrators some breathing space as certain asserts are ring- fenced from creditors, according to Steve Pearson, joint administrator of Lehman Europe. 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) LIVE CURRENT: Posts $2.3MM Net Loss in Six Months Ended June 30 --------------------------------------------------------------- Live Current Media Inc. posted a net loss of $1,415,430 for three months ended June 30, 2009, compared with a net loss of $2,150,570 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $2,331,839 compared with a net loss of $4,238,400 for the same period in 2008. The Company's balance sheet at June 30, 2009, total assets of $5,231,556, total liabilities of $4,369,872 and a stockholders' equity of $861,684. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?456d Live Current Media Inc. -- http://www.livecurrent.com/-- builds, owns and operates some of the most powerful and engaging content and commerce destinations on the Internet, including http://www.perfume.com/and http://www.cricket.com/ Through subject-specific DestinationHubs(TM), Live Current properties connect people to each other and to the information, brands, and products they are passionate about. Live Current has headquarters in Vancouver, Canada with a location in Seattle, WA and is publicly traded on the NASD OTCBB (LIVC). Going Concern Doubt On Sept. 10, 2009, Ernst & Young LLP in Vancouver, Canada, expressed substantial doubt about its ability to continue as a going concern after auditing the Company's financial statements for fiscal years ended Dec. 31, 2008, and 2007. The auditor pointed to the Company's recurring net losses. LOUISIANA FILM: Files Required Documents, Discloses $2.8MM Debt --------------------------------------------------------------- Louisiana Film Studios LLC CEO Wayne Read has filed required documents in the U.S. Bankruptcy Court, listing $2.8 million in debt, including under $1.7 million owed to present and past members of the New Orleans Saints who thought they were buying state film tax credits, court documents say. According to court documents, Louisiana Film also owes $700,000 to a construction company half-owned by former Saints player Kevin Houser. Harahan, Louisiana-based Louisiana Film Studios, LLC, is a movie studio. 47 Construction, LLC, et al., filed a Chapter 11 bankruptcy petition to put the Company into Chapter 11 protection on July 23, 2009 (Bankr. E.D. La. Case No. 09-12232). MAGNA ENTERTAINMENT: Court Decision May Derail Thistledown Sale --------------------------------------------------------------- The Associated Press reports that a state Supreme Court decision that allows a vote on a slots proposal could derail plans by Harrah's Operating Co., Harrah's Entertainment Inc.'s wholly owned subsidiary, to acquire Magna Entertainment Corp.'s Thistledown track for $89.5 million. As reported by the TCR on September 24, 2009, the U.S. Bankruptcy Court for the District of Delaware approved an agreement for the sale of Thistledown to Harrah's Operating Company. Closing of the sale is subject to satisfaction of certain conditions and receipt of all required regulatory approvals. According to The AP, Harrah's Operating Company is permitted to walk away from the deal if the state's plan to put lottery-run slot machines at horse tracks is put on hold for a vote. The AP relates that the Supreme Court said on Monday that the governor's plan is subject to approval by voters. Magna Entertainment's 11th Default Status Report MEC has filed its eleventh bi-weekly default status report under National Policy 12-203 of the Canadian Securities Administrators, pursuant to which MEC announced that it would not be filing its Annual Report on Form 10-K for the fiscal year ended December 31, 2008, nor would it be filing quarterly reports on Form 10-Q, with the U.S. Securities and Exchange Commission or the Canadian securities regulators during the period it continues to operate its business as a debtor-in-possession under the United States Bankruptcy Code. Since announcing the original notice of default on March 26, 2009, and filing its first default status report on April 7, 2009, its second default status report on April 28, 2009, its third default status report on May 29, 2009, its fourth default status report on June 12, 2009, its fifth default status report on June 26, 2009, its sixth default status report on July 10, 2009, its seventh default status report on July 24, 2009, its eighth default status report on August 7, 2009, its ninth default status report on August 25, 2009 and its tenth default status report on September 9, 2009, there have not been any material changes to the information contained therein, nor any failure by MEC to fulfill its intentions stated therein, and there are no additional defaults or anticipated defaults subsequent thereto. The Company intends to file its next default status report on October 8, 2009. About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J. Finnegan, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent for the Debtors. Magna Entertainment Corp. had total assets of US$1.054 billion and total liabilities of US$947.3 million based on unaudited consolidated financial statements as of December 31, 2008. MECHANICAL TECHNOLOGY: Board Approves Amended 2006 Equity Plan -------------------------------------------------------------- The Board of Directors of Mechanical Technology, Incorporated, on September 16, 2009, approved the adoption of the Amended and Restated 2006 Equity Incentive Plan for the purpose of increasing the aggregate number of shares of Common Stock the Company may issue under the Amended Plan from 250,000 (reflecting the 8-for-1 reverse stock split effective May 2008) to 600,000, to remove the requirement that stockholder approval is required for material changes or amendments to the Amended Plan since the Company's Common Stock is no longer listed on The Nasdaq Stock Market, and to make certain other changes as set forth in the Amended Plan. The Company's 2006 Equity Incentive Plan was originally adopted and effective upon approval by the Company's stockholders of the Original Plan on May 18, 2006. On June 5, 2006, the Company filed with the Securities and Exchange Commission a Registration Statement on Form S-8 (File No. 333-134730) registering 250,000 shares (as adjusted to reflect a eight-for-one reverse stock split effected in May 2008) of its common stock pursuant to the 2006 Equity Plan. On September 18, 2009, the Company filed another Registration Statement on Form S-8 to register an additional 350,000 shares of Common Stock that may be issued pursuant to the 2006 Plan. Restricted Stock Grants to Outside Directors On September 16, 2009, the Board of Directors approved the grant of 15,000 shares of fully-vested nonqualified stock options exercisable for the purchase of Common Stock under the Company's Amended Plan to each of Thomas J. Marusak, William P. Phelan, Dr. Walter L. Robb and E. Dennis O'Connor, the Company's outside directors. The Options were issued to the Outside Directors effective September 18, 2009, and are each subject to the terms and conditions of a Director Award Agreement (Non-Qualified Stock Option) entered into by and between the Company and each of the Outside Directors, respectively, and the Amended Plan. Going Concern The Company incurred significant losses as it continued to fund the direct methanol fuel cell product development and commercialization programs of its majority owned subsidiary, MTI MicroFuel Cells Inc., and had a consolidated accumulated deficit of $119,258,000 and working capital deficit of $1,079,000 at June 30, 2009. Because of these losses, limited current cash and cash equivalents, negative cash flows and accumulated deficit, the report of the Company's independent registered public accounting firm for the year ended December 31, 2008, expressed substantial doubt about the Company's ability to continue as a going concern. In August 2009, the Company said it does not expect to continue to fund MTI Micro. Based on the Company's projected cash requirements for operations and capital expenditures and its current cash and cash equivalents of $407,000 at June 30, 2009, management believes it will have adequate resources to fund its current operations, excluding MTI Micro operations, through at least December 2009. Since the company will no longer fund MTI Micro, the subsidiary has sought other sources of funding. To continue full commercialization of its micro fuel cell solution, MTI Micro will need to do one or more of these to raise additional resources, or reduce its cash requirements: * obtain additional government or private funding of the Company's direct methanol fuel cell research, development, manufacturing readiness and commercialization; * secure additional debt or equity financing; or * further reduce its current expenditure run-rate. There is no guarantee that resources will be available to MTI Micro on terms acceptable to it, or at all, or that such resources will be received in a timely manner, if at all, or that MTI Micro will be able to reduce its expenditure run-rate without materially and adversely affecting its business. MTI Micro had cash and cash equivalents as of June 30, 2009, of $38,000. Subsequently, MTI Micro received an additional $165,000 from its Secured Convertible Promissory Note Agreements or Bridge Notes, and received retroactive billings from the Department of Energy for work performed through June 30, 2009, of $1.06 million. Additionally, MTI Micro has $90,000 available through the Bridge Note, and the remainder of the $2.4 million DOE contract as work is performed. With these resources, management currently believes it will have adequate resources to fund its MTI Micro operations into the fourth quarter of 2009. At June 30, 2009, the Company had $4,993,000 in total assets against $4,891,000 in total liabilities and $11,000 in non- controlling interest, resulting in $102,000 in total equity. About Mechanical Technology Mechanical Technology, Incorporated, operates in two segments, the New Energy segment which is conducted through MTI MicroFuel Cells Inc., a majority owned subsidiary, and the Test and Measurement Instrumentation segment, which is conducted through MTI Instruments, Inc., a wholly owned subsidiary. At its MTI Micro subsidiary, the Company's Mobion(R) cord-free power packs are being developed to replace current lithium-ion and similar rechargeable battery systems in many handheld electronic devices for the military and consumer markets. Mobion(R) power packs are based on direct methanol fuel cell technology which has been recognized as enabling technology for advanced portable power sources by the scientific community and industry analysts. As the need for advancements in portable power increases, MTI Micro is developing Mobion(R) cord-free rechargeable power pack technology as a superior solution for powering the multi-billion dollar portable electronics market. At its MTI Instruments subsidiary, the Company continues to be a worldwide supplier of precision non-contact physical measurement solutions, portable balancing equipment and wafer inspection tools. MTI Instruments' products use a comprehensive array of technologies to solve complex real world applications in numerous industries including manufacturing, semiconductor, commercial/military aviation, automotive and data storage. The Company's products consist of electronic gauging instruments for position, displacement and vibration applications within the design, manufacturing/production, test and research markets; wafer characterization tools for the semiconductor and solar industries; and engine balancing and vibration analysis systems for both military and commercial aircraft. MICHAEL FENTON BRUTON: Case Summary & 8 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Michael Fenton Bruton 1744 E. Charles St. Republic, MO 65738 Bankruptcy Case No.: 09-62170 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court Western District of Missouri (Springfield) Debtor's Counsel: James P. Moroney, Esq. 1330 E. Cherry Street, Suite D Springfield, MO 65802 Tel: (417) 831-0606 Fax: (636) 600-5151 Email: moroney_james@hotmail.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 $1,635,030, and total debts of $1,404,469. A full-text copy of Mr. Bruton's petition, including a list of his 8 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mowb09-62170.pdf The petition was signed by Mr. Bruton. MIDLAND DIRECT: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Midland Direct, Inc. 2801 Finley Road 2nd Floor, Ste 906 Downers Grove, IL 60515 Bankruptcy Case No.: 09-35233 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtor's Counsel: Mitchell Elliot Jones, Esq. Jones Law Offices 25 East Washington Street, Suite 906 Chicago, IL 60602 Tel: (312) 236-2112 Fax: (312) 236-2634 Email: mej@joneslaw.org 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/ilnb09-35233.pdf The petition was signed by James Gentile, president of the Company. MYLAN INC: S&P Raises Corporate Credit Rating to 'BB' ----------------------------------------------------- Standard & Poor's Ratings Services said it raised its corporate credit rating on Canonsburg, Pennsylvania-based Mylan Inc. to 'BB' from 'BB-'. S&P also raised the senior secured rating to 'BB+' from 'BB', the senior unsecured rating to 'BB-' from 'B+', and the preferred stock rating to 'B' from 'B-'. The outlook is stable. "The upgrade of Mylan reflects its improved operating performance over the past year, success in integrating the Merck KGaA's generic business, significant reduction in leverage, and strong liquidity," said Standard & Poor's credit analyst David Lugg. The 2007 acquisition of Merck KGaA's generic operations helped Mylan attain a global stature, with a presence in more than 140 countries and leadership positions in France and several other key European markets, along with Australia. Financially, Mylan is reducing its leverage with debt to EBITDA falling to 4.4x as of June 30, 2009, from with a peak of 9.4x at the end of 2007. NEGUS-SONS INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Negus-Sons, Inc. P.O. Box 12459 Omaha, NE 68112 Bankruptcy Case No.: 09-82518 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court District of Nebraska (Omaha Office) Judge: Bankruptcy Judge Timothy J. Mahoney Debtor's Counsel: David Grant Hicks, Esq. Pollak & Hicks PC 6910 Pacific St, #216 Omaha, NE 68106 Tel: (402) 345-1717 Email: dhickslaw@aol.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/neb09-82518.pdf The petition was signed by Gregory D. Negus, president of the Company. NORTEL NETWORKS: Avaya Sale to Be Reviewed by Canada Govt. ---------------------------------------------------------- Nortel Networks Corp.'s sale of its phone-equipment unit to Avaya Inc. will be reviewed by the Canadian government under the country's foreign investment legislation, Industry Minister Tony Clement said, according to reporting by Hugo Miller and Sean Pasternak at Bloomberg. U.S. and Canadian bankruptcy courts on September 16 approved the sale of Nortel Networks' Enterprise Solutions business to Avaya Inc. Avaya emerged the winning bidder at the auction where it offered to pay US$900 million in cash to Nortel, with an additional pool of US$15 million reserved for an employee retention program. Avaya originally offered US$475 million. Under Canadian law, the government can review a sale to a foreign company if it considers it a threat to national security, or if the value exceeds C$312 million (US$287 million). In this case, the review was automatically triggered because of the value, Mr. Clement said. Mr. Clement previously said that the Canadian government won't block the US$1.13-billion-dollar deal to sell a portion of Nortel's wireless technology to Telefonaktiebolaget LM Ericsson. He said that following a review of, and hearings on, the transaction, they have determined that there are no grounds to believe that the sale could be injurious to Canada's national security. The Nortel-Ericsson transaction had elicited strong reactions from various groups who said the sale of Nortel's assets to a foreign-owned corporation is not in Canada's interests. "Based on all the information presented to me and to the government, there are no grounds to believe that this transaction could be injurious to Canada's national security," Mr. Clement reportedly said during a press conference. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) OPTEX SYSTEMS: Files for Chapter 7 Bankruptcy --------------------------------------------- Optex Systems, Inc., a Texas corporation and a wholly owned subsidiary of Irvine Sensors Corporation, on September 21, 2009, filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court in California. Optex's assets were sold in October 2008 pursuant to a UCC public foreclosure sale to a Delaware corporation controlled by the Company's senior lenders, and Optex has not conducted any operations since that time. In connection with the jury verdict awarding Timothy Looney liquidated damages of $105,000 in one of his lawsuits against the Company, the Company disclosed that it may also be liable for Mr. Looney's legal expenses. On September 15, 2009, a court order was issued awarding Mr. Looney $834,275 in attorneys' fees. The Company currently plans to file post trial motions or an appeal to overturn the jury's verdict and the related attorneys' fees award. About Irvine Sensors Headquartered in Costa Mesa, California, Irvine Sensors Corporation (NASDAQ: IRSN) -- http://www.irvine-sensors.com/-- is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating such products and research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications. As of June 28, 2009, Irvine Sensors had total assets of $6,627,800 and total liabilities of $11,999,000, resulting to stockholders' deficit of $5,371,200. * * * Grant Thornton LLP in Irvine, California, in a letter dated January 9, 2009, pointed out that the Company incurred net losses of $21.6 million, $22.1 million, and $8.4 million for the years ended September 28, 2008, September 30, 2007, and October 1, 2006, respectively, and the Company has a working capital deficit of $16.1 million at September 28, 2008. "These factors, among others, raise substantial doubt about the company's ability to continue as a going concern." OPUS EAST: Ch. 7 Trustee Proposes YCS&T as Co-Counsel ----------------------------------------------------- Jeoffrey L. Burtch, the appointed Chapter 7 trustee for the estates of the Opus East Debtors, ask the Court for authority to employ Young Conaway Stargatt & Taylor LLP as his co-counsel nunc pro tunc to July 6, 2009. As co-counsel to the Chapter 7 Trustee, Young Conaway is expected to represent the Chapter 7 Trustee regarding the liquidation of extensive real property assets; advise the Chapter 7 Trustee on estate administration issues; negotiate with secured lenders; examine claims against the estates; provide litigation services as may be necessary and other services customarily provided to a Chapter 7 trustee to aid in the administration of the estates. The Chapter 7 Trustee notes that Young Conaway will closely coordinate its services with Cooch and Taylor P.A. to avoid unnecessary duplication of services. The principal attorneys and paralegal presently designated to represent the Chapter 7 Trustee and their current standard hourly rates are: Professional Hourly Rate ------------ ----------- John D. McLaughlin, Jr. $480 per hour Special Counsel, Bankruptcy Daniel P. Johnson $375 per hour Partner, Real Estate John C. Kuffel $320 per hour Associate, Real Estate Casey Cathcart $155 per hour Paralegal, Bankruptcy John D. McLaughlin, Jr., Esq., a member of Young Conaway, assures the Court that his firm is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. In a separate filing, Mr. McLaughlin certified that there were no responses or objections to the Application as of August 21, 2009. About Opus East Rockville-based Opus East LLC has developed more than 13.3 million square feet of space since starting operations in 1994. It filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the District of Delaware. Opus East LLC listed $100 million to $500 million in debts, against $50 million to $100 million in assets in its Chapter 7 petition. Bankruptcy Creditors' Service, Inc., publishes Opus West Bankruptcy News. The newsletter tracks the separate Chapter 11 proceedings of Opus West Corp. and Opus South Corp. and Chapter 7 proceedings of Opus East their related debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) OPUS SOUTH: Court Grants Interim OK to DIP Loans for Water Edge --------------------------------------------------------------- Waters Edge One LLC, one of the Opus South Debtors, has been given authority, on an interim basis, by Judge Mary Walrath, to obtain postpetition financing from a syndicate of lenders led by Wachovia Bank N.A., as administrative agent. In addition, the Court authorized the DIP Lenders to make a $1,500,000 interim advance to Waters Edge. Subsequently, at a September 9, 2009 hearing, Judge Walrath approved Waters Edge's request, on a final basis. As security for Waters Edge's DIP obligations, the DIP Lenders are granted these security interests and liens: (a) First Lien on Unencumbered Property -- From and after the Petition Date, a valid, binding, continuing, enforceable, fully-perfected first priority senior security interest in and lien upon proceeds of the claims pursued by Waters Edge against Ruden McCloskey Smith Schuster & Russell P.A. and Mark Grant in the Circuit Court of the Sixth Judicial Circuit in and for Pinellas County, Florida, and all other prepetition and postpetition property of Waters Edge whether existing on the Petition Date or thereafter. (b) Priming Liens -- Pursuant to Section 364(d)(1) of the Bankruptcy Code, to the extent of the amount of any advance received by Waters Edge, valid, binding, continuing, enforceable, fully-perfected first priority senior priming security interests in and liens upon proceeds of the RMSSR Claims and all other prepetition and postpetition property of Waters Edge, that is subject to valid, perfected and unavoidable liens. The security interests and liens will be senior in all respects to interests of the Prepetition Waters Edge Lenders arising out of security interests or liens, if any, on property existing immediately prior to the Petition Date. The security interests and liens granted to the DIP Lenders pursuant to the Interim DIP Order constitute valid and duly perfected security interests and liens without the filing of financial statements pursuant to the Universal Commercial Code or other instruments with any other filing authority to perfect any lien, mortgage or security interest granted by the Interim Order or the taking of any other action to perfect the liens, mortgages and security interests granted to the DIP Lenders. Absent the DIP Lenders' consent, Waters Edge is prohibited from (i) incurring any debt with priority higher than or equal to the DIP Facility, and (ii) granting or allowing the imposition of any liens created postpetition other than the permitted liens and other liens acceptable to the DIP Lenders. About Opus South Headquartered in Atlanta, Georgia, Opus South Corporation -- http://www.opuscorp.com/-- provides an array of real estate related services across the United States including real estate development, architecture & engineering, construction and project management, property management and financial services. The Company and its affiliates filed for Chapter 11 on April 22, 2009 (Bankr. D. Del. Lead Case No. 09-11390). Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. The Debtors propose to employ Landis, Rath & Cobb, LLP, as conflicts counsel, Chatham Financial Corporation as real estate broker, Delaware Claims Agency LLC as claims agent. The Debtors have assets and debts both ranging from $50 million to $100 million. Bankruptcy Creditors' Service, Inc., publishes Opus West Bankruptcy News. The newsletter tracks the separate Chapter 11 proceedings of Opus West Corp. and Opus South Corp. and their related debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) Smurfit Turns July Profit, Cash Rises to $672 Million Smurfit-Stone Container Corp., the corrugated container and containerboard maker that filed under Chapter 11 in January, reported net income of $29 million in July on sales of $481 million. Income before reorganization items for the month was $35.8 million. From the inception of the reorganization, net income is $34.6 million on $2.87 billion revenue. The July operating report showed Smurfit-Stone holding $672 million cash and equivalents. The Chapter 11 petition by the Chicago-based company listed assets of $7.45 billion against debt totaling $5.58 billion as of Sept. 30. Debt includes $1.2 billion under secured revolving-credit and term-loan agreements, five issues of unsecured notes totaling $2.275 billion, $388 million under an accounts receivable securitization facility, and $284 million owing on tax-exempt bonds. The case is In re Smurfit-Stone Container Corp., 09-10235, U.S. Bankruptcy Court, District of Delaware (Wilmington). OPUS SOUTH: Court OKs to Solicit Bids for Assets ------------------------------------------------ Judge Mary F. Walrath of the United States Bankruptcy Court of the District of Delaware has authorized Debtors Waters Edge One LLC, Clearwater Bluff LLC, and 400 Beach Drive LLC to solicit bids for their properties in consultation with Wachovia Bank N.A., who holds a security interest over the properties and as administrative agent of the DIP Lenders of Waters Edge, which are Regions Bank, Bank of America, and National City Bank. Opus South Development LLC previously acquired security interest in a real property of 400 Beach and assigned its note and mortgage to the Waters Edge Lenders as additional collateral. As a part of a global settlement agreement among the parties, Opus South agreed to absolutely assign the 400 Beach Property Note and Mortgage to the Waters Edge Lenders. The original amount of the OSD Note is $32,000,000. Pursuant to the Global Settlement Agreement, Wachovia, on behalf of the Waters Edge Lenders, will be deemed to have an allowed claim amounting to no less than $70,796,928, plus other amounts permitted by the Bankruptcy Code, including transfer taxes, protective advances, costs and attorneys' fees. Wachovia will be permitted to exercise its rights to credit bid all or any lesser amount of its Allowed Claim on Waters Edge, 400 Beach, and Clearwater at the Sale. If Wachovia exercises its rights under the Global Settlement to acquire or foreclose upon the OSD Mortgage and OSD Note, then the outstanding balance of the Waters Edge Loan will be deemed to be reduced by not less than $8,000,000 and Wachovia may credit bid on the 400 Beach Property to the full extent of the balance due and owing on the OSD Mortgage and Note, or any lesser amount. The Debtors are also authorized to reject bids in their discretion and in consultation with Wachovia that are not in conformity with the bidding procedures. A copy of the Bidding Procedures is available for free at: http://bankrupt.com/misc/OSBidProc.pdf The Debtors are required to send a notice of the Bidding Procedures and the proposed assumption and assignment of the contracts tied up to the property being sold to parties in interest. Non-Debtor parties have until September 30, 2009, to object to the assumption and assignment of the Contracts or their cure amounts. After an auction, the Court will convene a hearing on October 7, 2009, to consider approval of the transactions. All objections must be filed no later than September 30, 2009. Opus South Sells Misc. Assets In separate filings, the Debtors notified the Court that they are selling to various entities certain miscellaneous assets, which include: -- four laptops and four monitors; -- two Ford F-150 trucks; -- one Ford F250 truck; and -- various office furniture. The Court subsequently approved the proposed sales after no objections were filed. The buyers of the miscellaneous assets are: * Anne Marie Solberg * Brian Linnihan * Opus Property Services LLC * Robert Burgess * Keith Hornsby * Linda Bragdon * Kelly Hall * CarMax About Opus South Headquartered in Atlanta, Georgia, Opus South Corporation -- http://www.opuscorp.com/-- provides an array of real estate related services across the United States including real estate development, architecture & engineering, construction and project management, property management and financial services. The Company and its affiliates filed for Chapter 11 on April 22, 2009 (Bankr. D. Del. Lead Case No. 09-11390). Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. The Debtors propose to employ Landis, Rath & Cobb, LLP, as conflicts counsel, Chatham Financial Corporation as real estate broker, Delaware Claims Agency LLC as claims agent. The Debtors have assets and debts both ranging from $50 million to $100 million. Bankruptcy Creditors' Service, Inc., publishes Opus West Bankruptcy News. The newsletter tracks the separate Chapter 11 proceedings of Opus West Corp. and Opus South Corp. and their related debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) Smurfit Turns July Profit, Cash Rises to $672 Million Smurfit-Stone Container Corp., the corrugated container and containerboard maker that filed under Chapter 11 in January, reported net income of $29 million in July on sales of $481 million. Income before reorganization items for the month was $35.8 million. From the inception of the reorganization, net income is $34.6 million on $2.87 billion revenue. The July operating report showed Smurfit-Stone holding $672 million cash and equivalents. The Chapter 11 petition by the Chicago-based company listed assets of $7.45 billion against debt totaling $5.58 billion as of Sept. 30. Debt includes $1.2 billion under secured revolving-credit and term-loan agreements, five issues of unsecured notes totaling $2.275 billion, $388 million under an accounts receivable securitization facility, and $284 million owing on tax-exempt bonds. The case is In re Smurfit-Stone Container Corp., 09-10235, U.S. Bankruptcy Court, District of Delaware (Wilmington). OPUS SOUTH: Plan Exclusivity Extended Until Dec. 18 --------------------------------------------------- Judge Mary Walrath has extended the Opus South Corp. and its affiliates' exclusive period to file a Chapter 11 plan by 120 days through and including December 18, 2009. However, with regard to Waters Edge One LLC, the Exclusive Filing Period is extended through and including October 30, 2009. The Opus South Debtors' exclusive period to solicit votes for a Chapter 11 plan is extended through and including February 16, 2010. For Waters Edge, the Exclusive Solicitation Period is extended through and including December 30, 2009. The Court's order is without prejudice to the Debtors' right to seek further extensions. About Opus South Headquartered in Atlanta, Georgia, Opus South Corporation -- http://www.opuscorp.com/-- provides an array of real estate related services across the United States including real estate development, architecture & engineering, construction and project management, property management and financial services. The Company and its affiliates filed for Chapter 11 on April 22, 2009 (Bankr. D. Del. Lead Case No. 09-11390). Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. The Debtors propose to employ Landis, Rath & Cobb, LLP, as conflicts counsel, Chatham Financial Corporation as real estate broker, Delaware Claims Agency LLC as claims agent. The Debtors have assets and debts both ranging from $50 million to $100 million. Bankruptcy Creditors' Service, Inc., publishes Opus West Bankruptcy News. The newsletter tracks the separate Chapter 11 proceedings of Opus West Corp. and Opus South Corp. and their related debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) Smurfit Turns July Profit, Cash Rises to $672 Million Smurfit-Stone Container Corp., the corrugated container and containerboard maker that filed under Chapter 11 in January, reported net income of $29 million in July on sales of $481 million. Income before reorganization items for the month was $35.8 million. From the inception of the reorganization, net income is $34.6 million on $2.87 billion revenue. The July operating report showed Smurfit-Stone holding $672 million cash and equivalents. The Chapter 11 petition by the Chicago-based company listed assets of $7.45 billion against debt totaling $5.58 billion as of Sept. 30. Debt includes $1.2 billion under secured revolving-credit and term-loan agreements, five issues of unsecured notes totaling $2.275 billion, $388 million under an accounts receivable securitization facility, and $284 million owing on tax-exempt bonds. The case is In re Smurfit-Stone Container Corp., 09-10235, U.S. Bankruptcy Court, District of Delaware (Wilmington). OPUS WEST: Court Approves Sale for Hill Country Properties ---------------------------------------------------------- In three separate orders, the Bankruptcy Court approved the sale of Opus West Corp.'s properties designated as Hill Country Townhome Land, Eastchase Pad, and 121 Lakepointe Crossing. Hill Country Townhome Land was bought by Robert B. Baldwin III for $110,000 bid, while the Eastchase Pad was bought by Rainmark, Inc. for $60,000. Lakepointe Crossing was successfully auctioned off to PCCP LLC who made a $29,900,000 bid. The sale of the Properties closed on September 2, 2009. In accordance with the sale of Lakepointe Crossing, the Debtors seek to assume and assign these four unexpired leases to PCCP LLC or its designee: 1. An industrial warehouse lease between Opus West LP and Alcatel-Lucent USA Inc., as successor-in-interest to Alcatel USA Sourcing, Inc.; 2. A multi-tenant industrial warehouse lease between Opus West LP and Southwestern Carpets, Ltd.; 3. A multi-tenant industrial warehouse lease between Opus West LP and Home Decor Solutions Limited; and 4. A multi-tenant industrial warehouse lease between Opus West LP and Mustang Electric Supply LLC. In a separate order, the Court approved the sale of the Debtors' interests in these entities with these buyers: Entities Buyers -------- ------ Hill Country Apartments L.P. Broadstone Galleria Alliance L.P. OWR Hill Country, Inc. Broadstone Galleria Alliance L.P. OWR Cypress, Inc. Broadstone Cypress Alliance L.P. Broadstone Cypress L.P. Broadstone Cypress Alliance L.P. OWR Walker Commons, Inc. Broadstone Walker Commons Alliance Broadstone Walker Commons Broadstone Walker Commons Alliance OWR Woodbridge, Inc. Broadstone Woodbridge Alliance LP Broadstone Woodbridge L.P. Broadstone Woodbridge Alliance LP OWR Fort Bend, Inc. GC 138 Land Acquisition Limited Partnership OWP Commons Retail LLC CH Venture Fund Two LLC Southwest Gateway, Inc. Atrium Sioux Falls LLC Shoppes Chino Hills, Inc. CH Venture Fund One LLC Irvine Center Partners III DMB REA LLC OWP Point Office LLC Real Estate Initiatives LLC PC 101, Inc. DMB REA LLC PIMA Center 101 LLC DMB REA LLC OWC Tempe, Inc. Premier Holding LLC OWP Point Office Condo LLC Real Estate Initiatives LLC ODP Stockton LLC Premier Holding LLC OWP Point II Office LLC Real Estate Initiatives LLC OWP Gateway Land LLC Remington Pacific Development OWP Point Land LLC Real Estate Initiatives LLC OWP Westlake Land LLC DMB REA LLC OWR 77th Avenue, Inc. DMB REA LLC Premier CR LLC Premier Holding LLC Premier VII LLC Premier Holding LLC Premier VIII LLC Premier Holding LLC Main St., Colonial Lakes Removed From Sales List With regard to the Main Street Commons and the Colonial Lakes Land, the Debtors and M & I Marshall & Isley Bank agreed that the Properties are withdrawn from the sales process. Any deficiency claim against the Debtors related to the Properties is released and waived by M&I. In addition, M&I will be responsible for all expenses related to the Properties after September 2, 2009. About Opus West Corporation Based in Phoenix, Arizona, Opus West Corporation is a full-service real estate development firm that focuses on acquiring, constructing, operating, managing, leasing and/or disposing of real estate development projects primarily located in the western United States. Opus West and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is co-counsel to the Debtors. Pronske & Patel, P.C., is conflicts counsel. Chatham Financial Corp. is financial advisor. BMC Group is the Company's claims and notice agent. As of May 31, Opus West -- together with its non-debtor affiliates -- had $1,275,334,000 in assets against $1,462,328,000 in debts. In its bankruptcy petition, Opus West said it had assets and debts both ranging from $100 million to $500 million. Opus West joins affiliates that previously filed for bankruptcy. Opus East LLC, a real estate operator from Rockville, Maryland, commenced a Chapter 7 liquidation on July 1 in Delaware. Opus South Corp., a Florida condominium developer based in Atlanta, filed a Chapter 11 petition April 22 in Delaware. Bankruptcy Creditors' Service, Inc., publishes Opus West Bankruptcy News. The newsletter tracks the separate Chapter 11 proceedings of Opus West Corp. and Opus South Corp. and their related debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) OPUS WEST: Proposes Lakepointe Lien Claim Procedures ---------------------------------------------------- Opus West Corporation and its debtor affiliates ask the U.S. Bankruptcy Court for the Northern District of Texas for authority to establish procedures for the resolution of mechanic's, materialmen's, and supplier liens with regard to the 121 Lakepointe Crossing I and II real estate development project. The 121 Lakepointe Project consists of 1,254,248 sq. ft. of space, contained in three industrial buildings, located on more than 60 acres of land in Lewisville, Texas. To finance the acquisition, construction and operation of the 121 Lakepointe Project, one of the Opus West Debtors, as borrower, entered into a loan agreement with Guaranty Bank. As of the Petition Date, the total debt outstanding on the loans was approximately $18,922,173. The Guaranty Bank Loans were secured by various collateral, including certain deeds of trust and assignments of leases and rents. The 121 Lakepointe Project was among the Opus West Debtors' assets that the Court authorized to be sold. The Debtors note that they received several qualified bids with respect to the 121 Lakepointe Project and an auction was held August 27, 2009. PCCP LLC submitted the highest and best offer and was ultimately selected as the winning bidder. The sale of the 121 Lakepointe Project to PCCP for $29 million was approved by the Court at an August 31, 2009 hearing, and was closed on September 2, 2009. PCCP purchased the 121 Lakepointe Project, free and clear of all liens and claims, including mechanic lien claims. During the construction and development of the 121 Lakepointe Project, the Debtors relied on a number of third-party contractors, subcontractors and suppliers who have or may be able to assert liens against the 121 Lakepointe Project to secure payment for certain prepetition goods and services provided to the Debtors, Clifton R. Jessup, Jr., Esq., at Greenberg Traurig LLP, in Dallas, Texas, tells the Court. Although a more thorough analysis is being conducted, a preliminary investigation by the Debtors and the Official Committee of Unsecured Creditors has indicated that there is approximately $10 million in potential Mechanic's and Materialmen's Lien Claims against the 121 Lakepointe Project, Mr. Jessup says. Mr. Jessup contends that establishing uniform procedures for the resolution of M&M Lien Claims will protect the rights of parties asserting M&M Liens, facilitate an orderly resolution of the M&M Lien Claims, and ensure that the funds available to satisfy the amounts owed will be distributed in an equitable fashion. He adds that a significant financial and administrative burden will be lessened by allowing the Debtors to address and resolve the M&M Lien Claims as efficiently and economically as possible. To help ensure the prompt resolution of lien disputes and satisfaction of all valid M&M Lien Claims, the Debtors propose that these M&M Lien Procedures be implemented: (a) Any M&M Claimant who believes it has a valid M&M Lien Claim against the 121 Lakepointe Project may send to the Committee counsel a written demand (i) stating the amount of its asserted claim(s), (ii) describing, with particularity, the reason the M&M Claimant believes it has a valid M&M Lien Claim against the 121 Lakepointe Project, and (iii) attaching these documentation: (i) Proof that an affidavit was filed pursuant to Section 53.052 of the Texas Property Code; (ii) A copy of the filed affidavit; (iii) A copy of any notice of the filed affidavit; (iv) A copy of any notice of unpaid balance; and (v) A copy of any notice of retainage agreement; and (vi) A copy of any notice for specially fabricated items to demonstrate that a valid M&M Lien Claim existed as of the closing date. (b) Any Demand must be mailed to counsel for the Committee, Gardere Wynne Sewell LLP, Attn: Deirdre B. Ruckman, 1601 Elm Street, Suite 3000, Dallas, Texas, 75201 so that it is received no later than 5:00 p.m. on October 26, 2009. (c) The Debtors must respond to each Demand within 15 business days after receipt. If the Debtors dispute the validity or extent of a M&M Lien Claim asserted in a Demand, the parties will negotiate in good faith to resolve the dispute. (d) If the dispute is not resolved within 30 business days after receipt of the Demand seeking a determination from the Court as to the validity and extent of the underlying M&M Lien; provided, however, that if the Debtors determine during the Resolution Period that the Demand is not likely to be resolved, the Debtors may file a Demand Resolution Motion at any time before the expiration of the Resolution Period and may seek an expedited hearing. (e) Each M&M Lien Claimant will bear the burden of proof with respect to proving the extent, validity, perfection, priority and amount of its M&M Lien Claim. (f) After receipt of the timely filed M&M Lien Claim by a M&M Lien Claimant and no later than November 30, 2009, the Debtors will jointly file with the Court a notice (i) listing all the timely filed and perfected M&M Lien Claims, (ii) the amount, if any, that the Debtors have determined to be valid for each M&M Lien Claim, (iii) the proposed distribution to be made to the Valid M&M Lien Claims from the Lakepointe Sale Proceeds, and (iv) a deadline by which a notice of objection must be filed. To determine if an M&M Lien Claim is valid, the Debtors, will among other things, analyze whether the M&M Lien Claim was properly filed in accordance with state law and compare their records with the records provided by each M&M Lien Claimant. The Debtors will serve the Notice on (i) all M&M Lien Claimants claiming a lien on the 121 Lakepointe Project, (ii) the U.S. Trustee for the Northern District of Texas, and (iii) members of the Creditors Committee. No distributions to Valid M&M Lien Claimants will be made until the validity of all M&M Lien Claims on the 121 Lakepointe Project are determined. Any M&M Lien Claimant included in the Notice as a holder of a Valid M&M Lien Claim will be deemed an Allowed M&M Lien Claim and resolved in the manner provided in the Notice. M&M Lien Claimants will have the right and opportunity to object to the proposed resolution or priority of any Valid M&M Lien Claim listed in the Notice. All Notice Objections must be timely filed with the Court and served on these persons: Clifton R. Jessup, Jr. Greenberg Traurig LLP 2200 Ross Avenue, Suite 5200 Dallas, Texas 75201 Peter Franklin Franklin Skierski Lovall Hayward LLP 10501 N. Central Expressway, Suite 106 Dallas, Texas 75231 Deirdre B. Ruckman Gardere Wynne Sewell LLP 3000 Thanksgiving Tower 1601 Elm Street Dallas, Texas 75201-4761 (g) If no Notice Objections are timely filed, the Debtors will be authorized to make the distributions set forth in the Notice. If a Notice Objection is timely filed, it will be addressed in accordance with further orders of the Court. (h) The Court may enter additional orders from time to time as may be required to implement these M&M Lien Procedures. About Opus West Corporation Based in Phoenix, Arizona, Opus West Corporation is a full-service real estate development firm that focuses on acquiring, constructing, operating, managing, leasing and/or disposing of real estate development projects primarily located in the western United States. Opus West and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is co-counsel to the Debtors. Pronske & Patel, P.C., is conflicts counsel. Chatham Financial Corp. is financial advisor. BMC Group is the Company's claims and notice agent. As of May 31, Opus West -- together with its non-debtor affiliates -- had $1,275,334,000 in assets against $1,462,328,000 in debts. In its bankruptcy petition, Opus West said it had assets and debts both ranging from $100 million to $500 million. Opus West joins affiliates that previously filed for bankruptcy. Opus East LLC, a real estate operator from Rockville, Maryland, commenced a Chapter 7 liquidation on July 1 in Delaware. Opus South Corp., a Florida condominium developer based in Atlanta, filed a Chapter 11 petition April 22 in Delaware. Bankruptcy Creditors' Service, Inc., publishes Opus West Bankruptcy News. The newsletter tracks the separate Chapter 11 proceedings of Opus West Corp. and Opus South Corp. and their related debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) OPUS WEST: Proposes Pact With Wells Fargo, et al. ------------------------------------------------- Opus West Corp. and its affiliates ask the Court to approve a settlement agreement providing mutual releases, which they entered into with Wells Fargo Bank, N.A.; Wachovia Bank, N.A.; National City Bank; and California National Bank. At the Petition Date, the Bank Group held a syndicated mortgage loan, amounting up to $98,176,000, made to 3000 The Plaza LLC, a Delaware limited liability company. As of the Petition Date, 85% of the membership interest in 3000 The Plaza was owned by OWR Development, Inc., a non-debtor and a wholly owned subsidiary of Debtor Opus West Corporation. The Debtor guaranteed the Loan pursuant to a payment and completion guarantee agreement. Thus, by virtue of the Loan Agreement and the Guaranty, the Bank Group is the holder of potentially very substantial claims against the Debtor's estate. In July 2009, OWR placed ads in the Wall Street Journal, seeking bids for the sale of its 85% membership interest in 3000 The Plaza. The deadline to submit bids was August 10, 2009, and an auction was scheduled for August 12, 2009. Clifton R. Jessup, Jr., Esq., at Greenberg Traurig LLP, in Dallas, Texas, relates that by the bid deadline, the only offer received by OWR was from GHE 3000 Residential Project LLC, a Delaware limited liability company and the entity which held the other 15% membership interest in 3000 The Plaza. Due to the lack of interest from the open market, OWR accepted the offer from GHE and the Bank Group gave its consent to the sale, subject to various conditions, including the Debtor's seeking authority to execute the mutual releases by and among the Bank Group and the Debtor of any claims against the Debtor's estate arising under the Guaranty. Mr. Jessup notes that the 3000 Plaza Transaction closed on August 21, 2009. The release by the Bank Group of claims against the Debtor's estate arising under the Guaranty would eliminate potentially substantial claims that may be asserted by the Bank Group against the Debtor's estate, Mr. Jessup contends. On the other hand, the Debtor asserts that it is not aware of, any claims it may have against the Bank Group pursuant to the Guaranty or the Loan Agreement and, therefore, a release of claims by the Debtor against the Bank Group as required by the Mutual Release Agreement would cause no harm or loss to the Debtor's estate and creditors. About Opus West Corporation Based in Phoenix, Arizona, Opus West Corporation is a full-service real estate development firm that focuses on acquiring, constructing, operating, managing, leasing and/or disposing of real estate development projects primarily located in the western United States. Opus West and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is co-counsel to the Debtors. Pronske & Patel, P.C., is conflicts counsel. Chatham Financial Corp. is financial advisor. BMC Group is the Company's claims and notice agent. As of May 31, Opus West -- together with its non-debtor affiliates -- had $1,275,334,000 in assets against $1,462,328,000 in debts. In its bankruptcy petition, Opus West said it had assets and debts both ranging from $100 million to $500 million. Opus West joins affiliates that previously filed for bankruptcy. Opus East LLC, a real estate operator from Rockville, Maryland, commenced a Chapter 7 liquidation on July 1 in Delaware. Opus South Corp., a Florida condominium developer based in Atlanta, filed a Chapter 11 petition April 22 in Delaware. Bankruptcy Creditors' Service, Inc., publishes Opus West Bankruptcy News. The newsletter tracks the separate Chapter 11 proceedings of Opus West Corp. and Opus South Corp. and their related debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) OPUS WEST: Proposes to Sell Hill CNTRY Galleria Interests --------------------------------------------------------- Opus West Corp. and its affiliates ask the Court for authority to sell the partnership interests of Debtors Opus West Corporation and Opus West Partnership in Hill Country Galleria L.P. and OWC Hill Country, Inc., free and clear of liens, claims, and interests to Galleria Holdco, a Delaware limited liability company owned indirectly by The Christopher F. and Lesya V. Milam Revocable Management Trust, for $15,000. Vickie L. Driver, Esq., at Pronske & Patel PC, in Dallas, Texas, contends that the price is fair and reasonable given the restricted nature of the general partnership portion of the Interests. HCG owns the real property commonly referred to as the Hill Country Galleria in the City of Bee Cave, in Travis County, Texas. The Property consists of a partially constructed outdoor mall of which approximately 70% is under current leases with tenants. The liens secured by the Property exceed $160 million, and HCG, as well as OWC and OWP, believe that the value of the Property is substantially less. Consequently, OWC and OWP each believe that the Interests have little to no market value. Ms. Driver tells the Court that the HCG partnership agreement dictates that the governance portion of the general partnership interest owned by OWC may only be sold to a limited partner. HCG's limited partners informed the Debtors that they would object to the sale of the Interests to any party other than one of the limited partners. Therefore, the pool of purchasers is restricted to HCG's limited partners. "Here, the Purchaser is the only limited partner willing and able to purchase the Interests for cash value," Ms. Driver notes. In a separate filing, the Debtors ask the Court to conduct a hearing on September 30, 2008. Ms. Driver contends that an expedited hearing is necessary because the Debtors are in the process of winding down and the sale needs to be set and heard before the wind-down is complete. About Opus West Corporation Based in Phoenix, Arizona, Opus West Corporation is a full-service real estate development firm that focuses on acquiring, constructing, operating, managing, leasing and/or disposing of real estate development projects primarily located in the western United States. Opus West and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is co-counsel to the Debtors. Pronske & Patel, P.C., is conflicts counsel. Chatham Financial Corp. is financial advisor. BMC Group is the Company's claims and notice agent. As of May 31, Opus West -- together with its non-debtor affiliates -- had $1,275,334,000 in assets against $1,462,328,000 in debts. In its bankruptcy petition, Opus West said it had assets and debts both ranging from $100 million to $500 million. Opus West joins affiliates that previously filed for bankruptcy. Opus East LLC, a real estate operator from Rockville, Maryland, commenced a Chapter 7 liquidation on July 1 in Delaware. Opus South Corp., a Florida condominium developer based in Atlanta, filed a Chapter 11 petition April 22 in Delaware. Bankruptcy Creditors' Service, Inc., publishes Opus West Bankruptcy News. The newsletter tracks the separate Chapter 11 proceedings of Opus West Corp. and Opus South Corp. and their related debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) OSCAR ECHAGUE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Oscar Echague aka Inc. Fernando Hispano Service 3851 Hildebrand Las Vegas, NE 89121 Bankruptcy Case No.: 09-27737 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Thomas E. Crowe, Esq. 7381 W. Charleston Blvd. #110 Las Vegas, NV 89117 Tel: (702) 794-0373 Fax: (702) 794-0734 Email: tcrowelaw@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 $1,333,204, and total debts of $2,656,050. A full-text copy of Mr. Echague's petition, including a list of his 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-27737.pdf The petition was signed by Mr. Echague. PAETEC HOLDING: Expects to Report Up to $48MM in FY2009 Net Loss ---------------------------------------------------------------- PAETEC Holding Corp. unveiled full year financial guidance for the fiscal year ending December 31, 2009. "Continued strong cash flow and new sales have provided stability for PAETEC and we are pleased to guide investors for the remainder of 2009," said PAETEC Chairman and CEO, Arunas A. Chesonis. "We anticipate addressing 2009 full year guidance during our third quarter earnings call in November and providing full year guidance for 2010 during our fourth quarter and fiscal year-end earnings call the early part of next year." PAETEC's revenue and adjusted EBITDA expectations for the full year 2009 assume, among other matters, that there is no further significant decline in economic conditions and that there are no significant changes in the competitive or regulatory environments. PAETEC's revenue and adjusted EBITDA expectations for full year 2009 are: Revenue $1,575,000,000 to $1,585,000,000 Adjusted EBITDA $245,000,000 to $255,000,000 The Company expects to book a net loss of at least $38,000,000 to at most $48,000,000 for the 12 months ended December 31, 2009. About PAETEC Holding PAETEC Holding Corp., through its subsidiaries, provides integrated communications services, including local and long distance voice, data, and broadband Internet access services, primarily to business and institutional customers. On February 8, 2008, PAETEC Holding completed its combination by merger with McLeodUSA Incorporated, which became a wholly owned subsidiary of PAETEC Holding upon completion of the merger. As of June 30, 2009, PAETEC had in service 223,311 digital T1 transmission lines, which represented the equivalent of 5,359,464 access lines, for over 47,000 business customers in a service area encompassing 82 of the country's top 100 metropolitan statistical areas. As of June 30, 2009, the Company had $1,453,905,000 in total assets and $1,259,830,000 in total liabilities. Effective on June 1, 2009, the Company entered into a Second Amendment and Waiver to its Credit Agreement with its lenders which amends the Credit Agreement, dated as of February 28, 2007, and amended as of June 27, 2007. The Amendment grants the Company the right, at its option and subject to specified conditions, voluntarily to prepay term loans outstanding under its term loan facilities at any time and from time to time during a period beginning on the effective date of the Amendment and ending 18 months after such effective date. The total cash payments to be made by the Company in connection with such voluntary prepayments may not exceed $100,000,000, excluding amounts applied to the payment of accrued and unpaid interest and fees. The Amendment also modifies some of the restrictive covenants in the Credit Agreement primarily to permit the Company to issue senior secured notes and to allow the Company and its subsidiaries to incur indebtedness and related obligations under such notes if specified conditions are satisfied. * * * As reported by the Troubled Company Reporter on June 18, 2009, Standard & Poor's Ratings Services assigned PAETEC Holding's proposed senior secured notes due 2017 an issue-level rating of 'B' (the same as the corporate credit rating) with a recovery rating of '3', indicating expectations for meaningful (50%-70%) recovery in the event of payment default. At the same time, S&P affirmed all other ratings on PAETEC, including the 'B' corporate credit rating. The outlook is stable. Moody's Investors Service assigned a B1 rating to the senior secured note issuance. Moody's affirmed all other ratings, including the SGL-1 liquidity rating. The rating outlook remains stable. PLAINFIELD APARTMENTS: Water Service at Viola's May be Shut Off --------------------------------------------------------------- Mark Spivey at MyCentralJersey.com reports that Plainfield Apartments LLC's Viola's Place, along with Pingry Arms, has received notices that its water service could be shut off in less than three weeks. According to MyCentralJersey.com, the notices say: "This notifies all occupants . . . that water service at this property will be shut off on or about October 12, 2009 for failure of the landlord to pay outstanding water bills. Water service will be restored when the outstanding balance, as well as the applicable reconnection fee, has been paid." MyCentralJersey.com relates that Viola's Place spokesperson Ron Simoncini called the notices a "pressure tactic," assuring that "the water bills are either up to date, or soon to be brought up to date. We've made payments on them in the last month . . . I think that (this) is an aggressive attempt to keep a client current who is known to have had recent financial problems." Plainfield Apartments, LLC, is a real estate company based in Plainfield, New Jersey. It filed for Chapter 11 on August 7 (Bankr. D. N.J. Case No. 09-30679). Richard D. Trenk, Esq., at Trenk, DiPasquale, Webster, Della Fera & Sodono, P.C., assists the Company in its restructuring efforts. The Company listed $14,181,853 in assets and $17,587,846 in debts. An affiliate, Fulton-Harrison LLC, filed for protection in the same court on July 29 (Case No. 09-29666). PONY EXPRESS LAND: Case Summary & 16 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Pony Express Land Property & Investments LLC 42389 Winchester Rd, Ste B Temecula, CA 92590 Bankruptcy Case No.: 09-32275 Chapter 11 Petition Date: September 22, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Thomas B. Donovan Debtor's Counsel: Adam Van Susteren, Esq. 8880 Rio San Diego Dr., Ste 1000 San Diego, CA 92108 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 16 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-32275.pdf The petition was signed by David Wakefield, director of the Company. PREGIS CORPORATION: Moody's Rates Add-On on Senior Notes at 'B2' ---------------------------------------------------------------- Moody's Investors Service rated the add on to the Senior Secured Notes due 2013 B2 and affirmed the B3 corporate family rating of Pregis Corporation. Moody's also upgraded the speculative grade liquidity rating to SGL-3 from SGL-4 and revised the ratings outlook to stable from negative. Additional instrument ratings are detailed below. On September 23, 2009, Pregis announced that it would issue and additional EUR125 million of the senior secured second lien notes due 2013. The notes will be issued under the same indenture as the existing notes and contain identical terms. The proceeds are to be used to pay down the existing senior secured first lien term loans B-1 and B-2 due 2012. The revision of the outlook and upgrade in the speculative grade liquidity rating reflect the improvement in liquidity due to the credit facility amendment, an anticipation of further improvements in liquidity and the company's success in cutting costs. The proposed amendment to the credit facility allowing the new issuance will also significantly improve the cushion under the financial covenants. Moreover, the pending sale lease back of several facilities will further improve liquidity. Pregis has undertaken significant cost cutting actions which have lowered fixed costs, positively impacted credit metrics and left the company well positioned to benefit from any improvement in volumes. Despite potential near term weakness stemming from a challenging competitive and operating environment, Moody's anticipates the credit profile will remain within the rating category over the intermediate term. The upgrade of the existing senior secured second lien notes due 2013 reflects the modest amount of first lien debt post the transaction. Moody's notes that the rating on the second lien notes is sensitive to the amount of first lien debt and could be downgraded upon any new issuance of such. The affirmation of the corporate family rating reflects the largely credit neutral impact of the transaction. Proceeds from the offering are to be used to pay down the outstanding term loans B1 and B2 due 2012. While interest expense will rise, the interest coverage ratio will remain within the rating category. Additionally, the term loan amortization of approximately $2 million will be eliminated. The revolver will remain in place and is due October 2011. The ratings are subject to receipt and review of the final documentation. Moody's took these rating actions: -- Corporate Family Rating, affirmed at B3 -- Probability of Default Rating, affirmed at B3 -- $50 million senior secured first lien revolver due 2011, affirmed at Ba3 (LGD1, 4% from LGD2, 20%) -- $87 million senior secured first lien term loan B-1 due 2012, affirmed at Ba3 (LGD2, 20%, to be withdrawn upon completion of the transaction) -- EUR68 million senior secured first lien term loan B-2 due 2012, affirmed at Ba3 (LGD2, 20%, to be withdrawn upon completion of the transaction) -- EUR100 million senior secured second lien notes due 2013, upgraded to B2 from B3 (LGD3, 38% from LGD 4, 55%) -- EUR125 million senior secured second lien notes due 2013 (add on), assigned B2 (LGD 3, 38%) -- $150 million senior subordinated notes due 2013, affirmed at Caa2 (LGD 5, 85% from 89%) -- Speculative Grade Liquidity Rating, upgraded to SGL-3 from SGL-4 The ratings outlook is revised to stable from negative. Moody's last rating action on Pregis occurred on July 31, 2009, when the speculative grade liquidity rating was downgraded to SGL- 4 from SGL-3 and the outlook revised to negative from stable. Deerfield, Illinois-based Pregis Corporation manufactures, markets and distributes protective and specialty packaging for industrial, foodservice and medical applications. Pregis operates in two segments including protective packaging and specialty packaging. The company generated approximately $866 million of revenue in the last twelve months ended June 30, 2009. PREGIS CORP: S&P Assigns 'B+' Rating on EUR125 Mil. Senior Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B+' issue rating and '2' recovery rating to Pregis Corp.'s proposed EUR125 million second-priority senior secured floating-rate notes due 2013 ($182.1 million equivalent). The '2' recovery rating indicates S&P's expectation for substantial (70% to 90%) recovery in the event of a payment default. Net proceeds from the proposed notes offering will be used to repay term loans outstanding under the company's existing senior secured credit facilities. S&P also affirmed the 'B' corporate credit rating on the company. The outlook is stable. The rating on Pregis reflects the company's high debt leverage as well as vulnerability to volatile plastic resin costs and economic slowdowns. Somewhat offsetting these risk factors are the company's value-added product mix; good geographic, end-market, and customer diversity; management's initiatives to reduce operating costs; and a relatively low level of capital spending and other required outlays. Deerfield, Illinois-based Pregis, with annual sales of about $866 million, was formed in October 2005 through equity sponsor AEA Investors LLC's acquisition of substantially all of Pactiv Corp.'s North American and European protective and specialty packaging businesses. Since then, it has made a few modest-size acquisitions to add products and expand operations in growing markets. PREMONT INDEPENDENT: Moody's Cuts Rating on $2.3 Mil. Debt to Ba1 ----------------------------------------------------------------- Moody's Investors Service has downgraded Premont Independent School District (Texas) to a Ba1 from a Baa3. The rating downgrade affects $2.3 million of outstanding general obligation debt rated by Moody's. While the revised rating is below investment grade, Moody's expects that the District will maintain full and timely payment of their debt service obligation based upon the unlimited general obligation pledge of the bonds outstanding. The rating action is a reflection of Moody's concerns regarding the District's inability to meet operational demands coupled with declining financial resources, poor financial management practices, as well as an inability to obtain voter support for increasing operating revenues. The rating action also reflects Moody's concerns that the efforts to eliminate deficit spending may not be sufficient to restore the district to a level of positive general fund reserves within the next two fiscal years. Negative Fund Balances; Long-Term Recovery Plan Uncertain The District's fiscal 2008 audit indicates an operating deficit of approximately $1.3 million (19.7% of budgeted revenues) and a negative fund balance of $965,278 (-17.1% of revenues), a further decrease from the negative fund balance of $63,303 at FYE 2007. The FYE 2008 negative fund balance includes a prior period adjustment of $439,550 due to an auditing change regarding the recording of workforce payables. The General Fund balance has declined consecutively since 2005 as a result of deficit spending of at least $500,000 annually. The District's deficit spending has been primarily attributed to overestimating state contributions by projecting higher than actual levels of Average Daily Attendance. The District has experienced steady yearly decreases in ADA since 2002 when ADA was reported at 919. ADA levels for 2009 were 600, a 28.2% decrease from 2005 levels of 836. District officials report that an additional decrease of 30 ADA is forecasted in their budget projections for 2010, for a total of 570 ADA. The District is heavily dependent on state funds (70.9% of total operating revenues in fiscal 2008) which are allocated based on ADA. Officials report that prior to the hiring of a new superintendent (May 2008), ADA levels were reported at approximately 700 rather than the actual levels of approximately 600. This resulted in an overpayment from the state and a use of unearned revenues. Year over year July unemployment has risen from 4.5% to 10.4% outpacing both the U.S. and State. District population has decreased in the area an estimated 21% from 2000. Moody's believes the high unemployment could result in lower than anticipated ADA and thereby lowering state revenues below the 2010 budget assumptions. Although the District is making an effort to control spending, full recovery will depend upon a multi-year practice of on-going expenditure reduction, balanced budgeting, as well as careful monitoring of the District's ADA. Under the new superintendent, 26 employees were eliminated through attrition in an effort to reduce expenditures. District officials report 2009 revenues are expected to exceed expenditures by approximately $495,000 to bring the FYE 2009 General Fund balance to an estimated negative $470,000. The fiscal 2009 revenue projections includes two one time revenue sources; $200,000 for a legal settlement and $35,000 for sale of the cafeteria. The 2010 budget is balanced at $5.8 million for revenues and expenditures. This includes $126,000 to be received from the tax shift, but officials report that these funds will not be expended until the results of the November 3rd elections are known. Restoration of fund balance will require sound financial management practices including disciplined spending, adoption of balanced budgets, and accurate student ADA reporting. Declining Values Caused By Oil And Gas Revaluations Located approximately 80 miles east of Laredo (Moody's rated A1) along state highway 281, Premont ISD is an agricultural and petroleum-producing area. The District has experienced some tax base volatility. The district has a positive five-year (FY 2006- 2010) average annual growth rate of 5.2% in assessed valuation. However, assessed value has declined in the most recent two years by 11.3% from a 2008 AV of $157.087 million to a 2010 AV of $139.363 million. Officials report that the primary reason for decline in values is the revaluation of mineral properties. The top-ten taxpayer concentration of petrochemical production facilities totals 33.4% of the total taxable value. In November 2008, the District sought voter approval for additional maintenance and operation rate authority of $1.30 per $1,000. Voters did not approve the proposed rate increase. In November 2009, the District plans to return to voters to seek approval for a rate shift of $0.20/$1,000 from the interest and sinking to M&O effectively changing the fiscal 2010 rates to $1.00 and $10.60, respectively. Officials report that the tax shift will increase the District's General Fund revenues by $126,000. Officials suggest the shift in the I&S tax rate will cause the District to draw down its debt service fund balance by nearly $17,000. The FYE 2008 debt service fund balance was $47,759. If the I&S tax rate is not restored and taxable assessed value continues to decline, then the District's Debt Service Fund could become strained. Debt Burden Low Given State Aid Contributions The District currently has $2.32 million of outstanding unlimited General Obligation debt that is enhanced by the Texas Permanent School Fund Guarantee Program (Moody's rated Aaa). The District also has an additional $660,000 of bonded debt secured by the district's operating tax levy which is not rated by Moody's. Officials report no plans to issue additional bonds. The district receives 35% of its debt service from the state which makes the net direct debt burden a modest 1.4% of fiscal 2010 taxable values. Principal retirement is satisfactory with 68.2% amortized in the subsequent ten years. Key Statistics: * District 2009 ADA: 600 * Fiscal 2010 Full Value: $139.36 million * Full Value per capita: $45,454 * Direct debt burden: 1.4% of fiscal 2010 taxable values (adjusted for state aid) * Overall debt burden: 3.3% of fiscal 2010 taxable values (adjusted for state aid) * Fiscal 2008 fund balance: negative $965,000 (-17.1% of General Fund revenues) * Outstanding debt: $2.3 million The last rating action was on May 2, 2006, when Moody's assigned the Baa3 rating on the District's general obligation debt. PRIME GROUP REALTY: Sells Extended Stay Investment -------------------------------------------------- Prime Group Realty Trust said PGRT ESH, Inc., a wholly owned subsidiary of the Company, sold its membership interests in BHAC Capital IV, L.L.C., an entity which owns 100% of Extended Stay Hotels, Inc., to LSG-ESH LLC, an affiliate of the Company's Chairman of the Board and parent company. In connection with the transfer, PGRT ESH was released from its obligations under a loan from Citicorp USA, Inc., which encumbers the BHAC membership interests. The principal amount of the Citicorp Loan as of the effective date was $80.0 million. The Citicorp Loan was non-recourse to PGRT ESH, the Company and its subsidiaries, but as a result of the transaction, the Citicorp Loan will no longer be a liability on the Company's financial statements. ESH and its affiliates own mid-price extended-stay properties in the United States and Canada. The transfer of the BHAC membership interest was approved unanimously by the Company's independent Trustees. On Monday, June 15, 2009, ESH filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in the Southern District of New York. BHAC did not file for bankruptcy protection. The consideration for the sale of the BHAC membership interests to LSG-ESH was LSG-ESH's assumption of all of PGRT ESH's rights and obligations under the Citicorp Loan. In connection with the transfer, the terms of the Citicorp Loan were amended and restated and the maturity date of the loan was extended. The transaction was effective as of July 16, 2009 and the documents were finalized on September 18, 2009. In addition, one of the Company's subsidiaries was the defendant in a lawsuit in the Circuit Court of Cook County Illinois brought by Prime/Mansur Investment Partners, LLC, an affiliate of Michael Reschke and E. Barry Mansur, alleging that our termination of a purchase and sale agreement that provided for Prime/Mansur's acquisition of the membership interest in Plumcor Thistle, L.L.C. was not justified. Prime/Mansur requested the Court grant it either specific performance or damages in the amount of $5.0 million. On Monday September 21, 2009, the Judge in the case granted the motion for summary judgment and ruled that Prime/Mansur's case had no merit. Prime/Mansur may or may not appeal the decision and if it does, the Company intends to vigorously defend the Judge's decision. On July 9, 2009, Prime Group Realty said the Company's Board of Trustees determined not to declare a quarterly distribution on its Series B Preferred Shares for the second quarter of 2009, and that the Board is unable to determine when the Company might recommence distributions on the Series B Preferred Shares. The Company said its Board is in the process of considering various financing and other capitalization alternatives for the Company. The Board's decision was based on the Company's current capital resources and liquidity needs and the overall negative state of the economy and capital markets. The Company said the Board intends to review the suspension of the Series B Preferred distributions periodically based on the Board's ongoing review of the Company's financial results, capital resources and liquidity needs, and the condition of the economy and capital markets. The Company can give no assurances that distributions on the Company's Series B Preferred Shares will be resumed, or that any financing or other capitalization alternatives will be satisfactorily concluded. The Company posted a net loss attributable to common shareholders of $3.0 million as compared to a net loss attributable to common shareholders of $15.3 million for the second quarter of 2008. At June 30, 2009, the Company had total assets of $493.9 million and total liabilities of $521.6 million. 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). About Prime Group Realty Trust Prime Group Realty Trust (NYSE: PGEPRB) -- http://www.pgrt.com/-- is a fully-integrated, self-administered, and self-managed real estate investment trust which owns, manages, leases, develops, and redevelops office and industrial real estate, primarily in metropolitan Chicago. The Company currently owns 8 office properties containing an aggregate of 3.3 million net rentable square feet and a joint venture interest in one office property comprised of roughly 101,000 net rentable square feet. The Company leases and manages roughly 3.3 million square feet comprising all of its wholly-owned properties. In addition, the Company is the asset and development manager for an roughly 1.1 million square foot office building located at 1407 Broadway Avenue in New York, New York. PROGRESSIVE BAPTIST: Files for Ch 11 Bankruptcy, Averts Auction --------------------------------------------------------------- Zoe Tillman at Gazette.Net reports that Progressive Baptist Church, Inc., has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Maryland to stay off the auction block. According to Gazette.Net, Progressive Baptist filed for bankruptcy less than 24 hours before an auctioneer was scheduled to sell off the 11.6-acre property on Tuesday. Court documents say that Progressive Baptist owes around $2.8 million on its mortgage to M&T Bank, on top of $1.8 million owed in federal and state taxes. Pastor Don DeJuan Massey, who has led Progressive Baptist since it opened in 1998, said that the school's financial troubles started four years ago, when student enrollment and church membership began declining, due to families moving away and the recent economic downturn that has made it more difficult for parents to pay the $6,500 average annual tuition and for the church's 200 parishioners to donate as much as they had in the past, Gazette.Net states. Mr. Massey, Gazette.Net relates, said that before Progressive Baptist filed for bankruptcy, he met with representatives of M&T Bank, which took over the mortgage from Bradford Bank in August, to negotiate a resolution. Mr. Massey admitted that the school has also had "administrative issues" in the past that affected day-to-day operations, according to Gazette.Net. Mr. Massey said that former principal Melvin Blount and another administrator resigned earlier this month, and the school has yet to refill the principal position, says the report. Progressive Baptist Church, Inc., is a church and school in Temple Hills, Maryland. It runs the Progressive Christian Academy. It church also runs dozens of other programs, from summer athletic camps and afterschool care to health fairs and rehabilitation programs for ex-offenders. QUALITY HOME: S&P Downgrades Corporate Credit Ratings to 'CC' ------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its ratings on Cary, North Carolina-based Quality Home Brands Holdings LLC, including its corporate credit rating, to 'CC' from 'CCC'. The outlook is negative. As of June 26, 2009, lease-adjusted debt outstanding was about $428.5 million. S&P also lowered the issue ratings on the company's $20 million senior secured revolver and $290 million senior secured first-lien term B bank loan due 2012 to 'CC' from 'CCC'. The recovery rating on these facilities remains at '4', indicating S&P's expectation for average (30%-50%) recovery in the event of a payment default. Concurrently, S&P lowered the issue rating on the $100 million second-lien term bank loan due 2013 to 'C' from 'CC'. The recovery rating remains at '6', indicating the expectation for negligible (0%-10%) recovery in the event of a payment default. "The downgrade reflects S&P's increased concerns about the company's liquidity position because of its continued very weak operating performance and very limited financial covenant cushion," said Standard & Poor's credit analyst Bea Chiem. QUANTUM GROUP: July 31 Balance Sheet Upside-Down by $9.5 Million ---------------------------------------------------------------- Quantum Group, Inc.'s balance sheet at July 31, 2009, showed total assets of $1,517,416 and total liabilities of $11,043,966, resulting in a stockholders' deficit of $9,526,550. For three months ended July 31, 2009, the Company posted a net loss of $3,861,395 compared with a net loss of $2,275,236 for the same period in 2008. For nine months ended July 31, 2009, the Company posted a net loss of $11,866,892 compared with a net loss of $17,891,255 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 has negative cash flows from operating activities of $3,800,000 for the nine months ended July 31, 2009, and an accumulated deficit of more than $50,200,000 at July 31, 2009. For the remainder of the year ending Oct. 31, 2009, the Company will need additional cash infusions to meet its operating expenses. Since the Company's common stock trades on the NYSE Amex, the Company may be in a position to raise additional funds through public equity or debt offerings. In addition, the private capital markets may also offer sources of additional capital. The Company may also secure strategic alliances or other joint ventures to defray a portion of its expenditures. The Company related that if it does not obtain additional funding within a short period of time, it may be required to substantially curtail or cease operations altogether. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?456e The Quantum Group, Inc. (AMEX:QGP) is a Healthcare Services Organization, which provides business process solutions to the healthcare industry, which include support services and leading- edge technology. The Company also provides other services and products to healthcare providers in and outside of its network. These services include medical billing and collection, purchasing, technology and insurance products. The operating divisions of the Company are Renaissance Health Systems, Quantum Medical Support Services and Quantum Innovations. As of Oct. 31, 2008, the Company's network included over 2,000 healthcare providers and operated in 29 counties in central and southern Florida. RAPID LINK: July 31 Balance Sheet Upside-Down by $7.7 Million ------------------------------------------------------------- Rapid Link, Incorporated's balance sheet at July 31, 2009, showed total assets of $9,788,627 and total liabilities of $17,508,548, resulting in a stockholders' deficit of $7,719,921. For three months ended July 31, 2009, the Company posted a net loss of $2,539,362 compared with a net loss of $662,934 for the same period in 2008. For nine months ended July 31, 2009, the Company posted a net loss of $4,353,223 compared with a net loss $473,558 for the same period in 2008. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?455b Rapid Link, Incorporated, and its subsidiaries have served as facilities-based, communication companies providing various forms of voice and data services to customers around the world. Rapid Link provides a multitude of communication services targeted to small and medium sized businesses, as well as individual consumers. These services include the transmission of voice and data traffic over public and private networks. The Company also sells foreign and domestic termination of voice traffic into the wholesale market. Going Concern Doubt On Jan. 27, 2009, KBA GROUP LLP in Dallas, Texas, expressed substantial doubt about Rapid Link, Incorporated's ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended Oct. 31, 2008, and 2007. The auditor noted that the Company suffered recurring losses from continuing operations during each of the last two fiscal years. Additionally, at Oct. 31, 2008, the Company's current liabilities exceeded its current assets by $2,100,000 and the Company has a shareholders' deficit totaling $2,900,000. READER'S DIGEST: Committee Taps Trentwith as Investment Banker -------------------------------------------------------------- The Debtors' Official Committee of Unsecured Creditors seeks the Court's authority to retain Trenwith Securities, LLP, nunc pro tunc to September 1, 2009, as investment banker. Trenwith, as investment banker, has agreed to: (a) advise the Creditors' Committee on plan and sale strategies proposed by the Debtors' professionals, including presentations, scope, and compensation proposed by Debtors' investment bankers; (b) establish criteria for the Creditors' Committee to consider alternative strategies; (c) prepare certain valuation analyses using various methodologies on the Debtors' assets, including Debtor and Non-Debtor entities around the world; (d) prepare alternative business projections relating to the valuation of the Debtors' business enterprise; (e) evaluate financing proposals and alternatives proposed by the Debtors for debtor-in-possession financing, exit financing, any plan of reorganization, and other analyses; (f) attend meetings of creditors and conferences with representatives of the creditor groups and their counsel; and (g) support the Creditors' Committee in matters as the Creditors Committee will request from time to time. Daniel Pevonka, on behalf of R.R. Donnelley & Sons Company, Co- Chairperson of the Creditors Committee, tells the Court that Trenwith's request for compensation for professional services rendered will be based upon the time expended to render the services and at billing rates commensurate with the experience of the person performing the services, and will be computed at the hourly billing rates customarily charged by Trenwith for those services. Expenses will be also be paid. Trenwith's hourly billing rates as of September 17, 2009, subject to adjustment, are: Position Hourly Rate -------- ----------- Partners $600 - $700 Principals $450 - $550 Vice Presidents $250 - $350 Associates $200 - $250 Analysts & Staff $150 - $200 Jeffrey R. Manning, a managing director of Trenwith, tells Judge Drain that Trenwith is a "disinterested person," as defined in Section 101(14) of the Bankruptcy Code and as modified by Section 1107(b) of the Bankruptcy Code. A hearing will be held October 5, 2009, to consider the application. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of $2.2 billion against total debts of $3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) READER'S DIGEST: Committee Wants to Retain Otterbourg as Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Reader's Digest's bankruptcy cases seeks the Court's permission to retain Otterbourg, Steindler, Houston & Rosen, P.C., nunc pro tunc to August 31, 2009, as counsel to the Creditors' Committee. As counsel, Otterbourg has agreed to: (a) assist and advise the Creditors' Committee in its consultation with the Debtors relative to the administration of the cases; (b) attend meetings and negotiate with the representatives of the Debtors; (c) assist and advise the Creditors' Committee in its examination and analysis of the conduct of the Debtors' affairs; (d) to assist the Creditors' Committee in the review, analysis and negotiation of any plans of reorganization, including the plan support agreement entered into prepetition between the Debtors and certain of their prepetition lenders, and to assist the Creditors' Committee in the review, analysis and negotiation of the corresponding disclosure statements; (e) assist the Creditors' Committee in the review, analysis, and negotiation of any financing agreements; (f) take all necessary action to protect and preserve the interests of the Creditors' Committee, including possible prosecution of actions on its behalf, negotiations concerning all litigation in which the Debtors are involved, and review and analysis of claims filed against the Debtors' bankruptcy estates; (g) generally prepare on behalf of the Creditors' Committee all necessary motions, applications, answers, orders, reports and papers in support of positions taken by the Committee; and (h) appear before the Court, the Appellate Courts, and the United States Trustee, and to protect the interests of the Creditors' Committee before those courts and before the United States Trustee. Otterbourg will be paid for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date the services are rendered and for its actual, reasonable and necessary out-of-pocket disbursements. Otterbourg's hourly rates are: Position Hourly Rate -------- ----------- Partner/Counsel $525 - $835 Associate $245 - $550 Paralegal $175 - $205 Scott L. Hazan, a member of Otterbourg, assures Judge Drain that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The Court will commence a hearing on October 5, 2009, to consider the application. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of $2.2 billion against total debts of $3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) READER'S DIGEST: Proposes November 16 Claims Bar Date ----------------------------------------------------- The Reader's Digest Association, Inc., and its debtor affiliates ask Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York to: (a) set November 16, 2009, as the deadline by which all persons and entities must file and serve proofs of claim asserting claims that arose on or prior to the Petition Date, including claims asserted under Section 503(b)(9) of the Bankruptcy Code against the Debtors in the Chapter 11 cases; (b) set February 20, 2010, as the deadline by which all governmental units must file and serve proofs of claim asserting claims against the Debtors; (c) approve their proposed procedures for filing proofs of claim; and (d) approve the form of notice of the Bar Dates and manner of service. The Debtors also seek authority to establish supplemental bar dates without further Court order to the extent the Debtors amend or supplement their schedules of assets liabilities and statements of financial affairs to provide adequate notice and opportunity to file a proof of claim to parties holding affected claims. In those instances, the Debtors will provide affected parties with notice that will clearly provide the Supplemental Bar Date by which the parties must file a proof of claim, which will afford parties 30 days from the notice date to file proofs of claim. The Debtors further seek to require any person or entity that holds a claim arising from the rejection of an executory contract or unexpired lease to file a proof of claim based on the rejection on or before the later of (i) the Claims Bar Date, or (ii) any date the Court may fix in the applicable order authorizing the rejection and, if no date is provided, 30 days from the date of entry of the order. Given the sheer number of creditors in the Chapter 11 cases and the Debtors' intention to emerge from bankruptcy expeditiously and pursuant to the milestones set forth in the restructuring support agreement with the Debtors' prepetition secured lenders, the Debtors must begin the claims reconciliation process as soon as practicable, asserts James H.M. Sprayregen P.C., Esq., at Kirkland & Ellis LLP, in New York. Accordingly, the Debtors submit that entry of the Bar Date Order at this time is appropriate and necessary under the circumstances of the cases. The Debtors propose that any person or entity not listed that holds a claim against any Debtor in the Chapter 11 cases be required to file a proof of claim to assert a claim in accordance with the Bar Date Order. The Debtors propose that these persons or entities do not need to file a proof of claim: -- any holder of a claim previously allowed by Court order; -- any holder of a claim that has already been paid in full; -- any holder of a claim for which a specific deadline has previously been fixed by the Court or otherwise fixed pursuant to the Bar Date Order; -- any Debtor having a claim against another Debtor or any of the non-debtor subsidiaries of Reader's Digest having a claim against any of the Debtors; -- any holder of a claim allowable under Sections 503(b) and 507(a)(2) of the Bankruptcy Code as an expense of administration of the Debtors' bankruptcy estates, except any holder of a Section 503(b)(9) Claim, which claim must be asserted by filing a proof of claim on or prior to the Claims Bar Date; -- any holder of an equity interest in the Debtors need not file a proof of interest with respect to the ownership of the equity interest at this time; -- any current employee of the Debtors, if a Court order authorized the Debtors to honor the claim in the ordinary course of business as a wage, commission or benefit; -- any current officer, director or employee need not file a proof of claim for claims based on indemnification, contribution or reimbursement; -- any customer of the Debtors, if a Court order authorized the Debtors to honor the claim in the ordinary course of business as a customer program or obligation; -- any holder of a claim against any of the Debtors' non-debtor affiliates; and -- any individual holder of a claim for principal, interest and applicable fees and charges on the Debtors' senior subordinated notes or other bond, note or debenture of the Debtors. The Debtors also intend to provide notice of the bar dates by publication to help ensure that all potential claimants receive adequate notice of the Claims Bar Date, Mr. Sprayregen tells the Court. Specifically, the Debtors propose to publish the Bar Date Notice, modified for publication, in the national editions of U.S.A. Today and The Wall Street Journal on one occasion at least 25 days before the Claims Bar Date. The Debtors believe that the claims filing procedures will facilitate the claims process by establishing guidelines for noticing and publishing the Bar Dates and providing claimants with clear instructions regarding the procedures and other requirements for filing a proof of claim. Accordingly, the Debtors submit that the procedures should be approved. The Bar Date Motion will be presented to the Court on October 5, 2009. Objections are due October 2. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of $2.2 billion against total debts of $3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) READER'S DIGEST: Wants to Assume Time Sublicense Agreement ---------------------------------------------------------- Reader's Digest Association Inc. and its affiliates ask the Court: (a) for authority to assume the Approved Sublicense Agreement between Direct Holdings U.S. and Direct Holdings IP L.L.C., as amended by the Amendment and Limited Waiver among Direct Holdings U.S., Direct Holdings IP L.L.C., Time Warner Inc. and Time Inc., dated August 20, 2009; (b) to approve the terms of the Sublicense Amendment and the execution, delivery and performance of the agreement by the Debtors; (c) to approve the cure of all prior defaults under the Sublicense Agreement; and (d) for relief from the automatic stay provided in Section 362 of the Bankruptcy Code in respect of termination rights arising after the date of the order approving the request under the Sublicense Agreement, as amended by the Sublicense Amendment. Direct Holdings IP, a non-debtor affiliate of Reader's Digest, and the Time Parties are parties to a License Agreement, dated December 31, 2003, as amended on March 1, 2005, and January 25, 2007, and further amended by an Amendment and Limited Waiver entered into as of August 20, 2009, pursuant to which the Time Parties license exclusively to the Licensee trademarks, trade names and domain names related to the Time Life Business. In connection with the License Agreement, the Licensee entered into the Sublicense Agreement, dated December 31, 2003, with Debtor Direct Holdings U.S., pursuant to which the Licensee exclusively sublicenses its rights to the IP Assets to Direct Holdings U.S. Under the Sublicense Agreement, Direct Holdings U.S., together with its Debtor subsidiaries, acts as the operating company of the IP Assets and, among other things, uses, exhibits, presents and advertises the IP Assets for the purpose of sale and distribution of certain products in accordance with the terms of the Sublicense Agreement. The utilization of the IP Assets is an important source of revenue for Direct Holdings U.S. and the Debtors and its non-debtor affiliates overall. In light of the importance of the IP Assets to the Debtors and their non-debtor affiliates' operations, they conducted a comprehensive analysis, and determined that a bankruptcy filing by the Debtors could result in the termination of the License Agreement and the Sublicense Agreement and the loss of the IP Assets, and that even if termination were avoided, there was a risk that the remaining term of the License Agreement could be shortened from 14 to four years and that the Licensee could be required to make changes to the design of the mark for the Time Life Business following Direct Holdings U.S.'s emergence from bankruptcy. Direct Holdings U.S. and the Licensee initiated negotiations with the Time Parties resulting to an amicable resolution and the execution of the Sublicense Amendment, which clarifies and amends certain terms of the Sublicense Agreement. At the same time, the Licensee and the Time Parties entered into an amendment to the License Agreement, dated as of August 20, 2009. The Amendments resolve issues between the Parties that have arisen or may arise in the future as a result of or in connection with Direct Holdings U.S.'s bankruptcy filing. Steven J. Reisman, Esq., at Curtis, Mallet-Prevost, Colt & Mosle LLP, in New York, contends that the Sublicense Amendment provides a mechanism for Direct Holdings U.S. to retain its exclusive license to the IP Assets following commencement of, and emergence from, Chapter 11, without having to litigate complex issues that have arisen or may arise in the future with respect to the "Change of Control" provisions and termination rights stemming in the License Agreement and Sublicense Agreement. Specifically, the Sublicense Amendment provides for these material amendments to the parties' rights and obligations in respect of Direct Holdings U.S.'s utilization of the IP Assets: (a) the "Change of Control" definition has been modified so that a "Change of Control" will not occur, and therefore the Sublicense Agreement will not terminate, if certain named parties or shareholders cease to control Direct Holdings U.S. and the Time Life Business upon Direct Holdings U.S.'s emergence from bankruptcy, so long as certain specifically defined competitors of the Time Parties do not acquire control of the Company; (b) the Sublicense Agreement will remain in effect for an additional seven years, which is three years longer than it may have remained in effect without the amendment; and (c) Direct Holdings U.S. will not be required to change the design of the mark for the Time Life Business at any point during the remaining seven-year term of the Sublicense Agreement. In addition, and in consideration of the favorable amendments to Direct Holdings U.S.'s rights to the IP Assets, the Sublicense Amendment requires: (a) modification of the automatic stay imposed by Section 362 solely to the extent necessary to permit the Time Parties to exercise their termination rights under the Sublicense Agreement, as amended by the Sublicense Amendment; and (b) a $1,250,000 payment by Direct Holdings U.S. to Time Inc., within 45 days following Direct Holdings U.S.'s emergence from Chapter 11. In the event that the Emergence Payment is not made in full as agreed, the Time Parties will be entitled to terminate the Sublicense Agreement. A hearing will be held on October 5, 2009, to consider the Debtors' request. Objections are due September 28. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of $2.2 billion against total debts of $3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) READER'S DIGEST: Wants to File Portions of Schedules Under Seal --------------------------------------------------------------- The Reader's Digest Association Inc. and its units seek the Court's authority to file under seal certain portions of their schedules of assets and liabilities. The Debtors relate that as part of their preparation of the Schedules, they identified certain sensitive information. Specifically, the Debtors seek to file under seal a version of Schedule F for two of the Debtor affiliates that contain information related to employee and retiree compensation and benefit data and home addresses for those individuals. The Debtors propose to file redacted versions of those Schedules that provide a more limited set of information but stop short of revealing Confidential Information, including the precise amounts of transfers or claims per individual. The Debtors propose to provide unredacted versions of the Schedules, including all Confidential Information, to the Office of the U.S. Trustee, counsel for the Official Committee of Unsecured Creditors, and counsel to the agent for the Debtors' postpetition secured lenders. The Debtors assert that disclosure of employees' and retirees' compensation levels in public filings available on the internet would cause an unnecessary lack of privacy and, in many cases, discomfort for individual employees and retirees, which in turn could have a significantly negative impact on employee morale. Judge Drain approved the Debtors' request and authorized them to file certain portions of their Schedules under seal. The Debtors have until October 8, 2009, to file their Schedules and Statements of Financial Affairs. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of $2.2 billion against total debts of $3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) READER'S DIGEST: S&P Assigns 'B-' Rating on DIP Loan Facility ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B-' rating to Reader's Digest Assn. Inc.'s debtor-in-possession term loan facility. S&P assumes that the total DIP loan commitment of $150 million will be converted into a three-year first-lien term loan upon emergence in accordance with the DIP loan terms. This DIP loan preliminary rating is a point-in-time rating. Accordingly, the preliminary rating is effective only for the date of this report, and S&P will not review, modify, or provide ongoing surveillance of the preliminary rating or any final rating. Documents used in S&P's analysis include the DIP credit agreement dated Aug. 26, 2009, and the interim DIP order by the U.S. Bankruptcy Court posted Aug. 27, 2009. S&P expects to issue the final rating when S&P has completed S&P's review of the final DIP order, the status of any issues raised during the appeals period, and any other matters relevant to S&P's rating analysis and its final rating will be subject to all of these factors. S&P's preliminary rating assumes that the company will be authorized to obtain the entire committed amount of the DIP facility under the terms set forth in the interim order and the DIP credit agreement. S&P further assumes that the entire amount of committed DIP financing will be outstanding at the time of emergence from bankruptcy, or in the event that the case converts to liquidation. S&P's preliminary rating reflects the DIP loan's exit financing conversion option and, therefore, its exposure to risks of lending to the post-emergence company. The rating also reflects: * The company's exposure to economic cyclicality; * The highly competitive nature of the publishing business; * Secular pressures facing the publications business; * The mature growth prospects of the direct marketing business; * The increasingly outmoded nature of Reader's Digest flagship magazine; and * An increasingly uncompetitive direct marketing model focused on selling music, videos, and books. All of these factors could contribute to continued business declines and could undermine the company's prospects for emergence, as well as the post-emergence company should the company emerge from bankruptcy. Ratings List Reader's Digest Assn. Inc. Corporate Credit Rating D/--/-- New Rating $150M DIP loan fac B- (preliminary) RESERVE PRIMARY: Judge Weighs SEC Distribution Plan --------------------------------------------------- U.S. District Judge Paul Gardephe in New York said at a hearing on Sept. 23 that he will consider a plan by the Securities and Exchange Commission that may lead to lawsuits against investors who took money from the failed Reserve Primary Fund before it shut off redemptions a year ago, according to a report by Erik Larson and David Glovin at Bloomberg. The report relates that part of the plan would have a court- appointed monitor make recommendations on whether there is a basis to file so-called clawback suits against investors whose payouts were excessive. Under the plan, a judge would decide whether such suits would go forward. The SEC said it hasn't endorsed clawback suits. Opponents of the SEC's distribution plan include New York-based Time Warner Inc. and the state of Massachusetts, which objects to the potential clawback suits. The SEC sued managers of Reserve Primary, accusing them of misleading shareholders about the safety of the fund after it suffered losses on Lehman Brothers Holdings Inc. debt. The case is SEC v. Reserve Management, 09-cv-4346, U.S. District Court, Southern District of New York (Manhattan). The Reserve Primary Fund is a large money market mutual fund that is currently in liquidation. On September 16, 2008, during the global financial crisis, it lowered its share price below $1 because of exposure to Lehman Brothers debt securities. This resulted in demands from investors to return their funds as the financial crisis mounted. The Reserve had multiple other funds frozen because of this failure. RITE AID: Incurs $116MM Quarterly Loss, Lowers FY2010 Outlook ------------------------------------------------------------- Rite Aid Corporation on Sept. 24 reported revenues of $6.3 billion and a net loss of $116.0 million or $.14 per diluted share for its fiscal second quarter ended August 29, 2009. Adjusted EBITDA was $216.5 million or 3.4 percent of revenues. Rite Aid relates that: * Both pharmacy same store sales and the number of prescriptions filled continued to increase, by 0.8 percent and 1.4 percent respectively. A 274 basis point increase in generic dispensing year over year negatively impacted sales. * Significant reduction in selling, general and administrative expenses as a percent of sales continued with SG&A 135 basis points lower than last year's second quarter. * Significant progress made in reducing inventory continued with FIFO inventory $351.1 million lower year over year. * Liquidity remained strong with $822.3 million of availability on the company's credit and accounts receivable facilities at quarter end. "We again made significant progress on many of our key initiatives, reducing both SG&A and controlling inventory, and finished the quarter with strong liquidity. We increased the number of prescriptions filled, but our pharmacy results were negatively impacted by additional pressure on pharmacy margins. A more discount-driven customer buying more items on sale continued to have a negative impact on front end results. "Because we expect these negative trends and a tough economy to continue throughout the second half of the year, we have lowered our outlook for fiscal 2010. We're focusing on growing profitable sales and will continue to control expenses. We expect liquidity to remain strong," she said. Second Quarter Summary Revenues for the 13-week second quarter were $6.3 billion versus revenues of $6.5 billion in the prior-year second quarter. Revenues declined 2.7 percent, primarily as a result of store closings and a decline in front-end same store sales. Same store sales for the quarter decreased 1.1 percent over the prior-year 13-week period, consisting of a 4.9 percent decrease in the front end and a 0.8 percent increase in pharmacy. The number of prescriptions filled increased 1.4 percent. Prescription sales accounted for 68.1 percent of total drugstore sales, and third party prescription revenue was 96.3 percent of pharmacy sales. Excluding the acquired Brooks Eckerd stores, same store sales for the 13-week second quarter decreased 0.6 percent over the prior- year period with front-end decreasing 4.9 percent and pharmacy growing 2.0 percent. At the former Brooks Eckerd stores, same store sales for the 13- week second quarter decreased 2.3 percent over the prior-year period with front end decreasing 4.7 percent and pharmacy decreasing 1.4 percent. Net loss for the quarter was $116.0 million or $.14 per diluted share compared to last year's second quarter net loss of $222.0 million and $.27 per diluted share. Adjusted EBITDA was $216.5 million or 3.4 percent of revenues for the second quarter compared to $219.9 million or 3.4 percent of revenues for the like period last year. Improvement in SG&A offset most of the decrease in sales and gross margin. As previously disclosed, adjusted EBITDA for the prior year second quarter reflects a $4.6 million reclassification of accounts receivable securitization fees as interest expense to make it comparable to the current period. In the second quarter the company opened 3 stores, relocated 10 stores, remodeled 1 store and closed 16 stores. Stores in operation at the end of the second quarter totaled 4,812. Company Lowers Fiscal 2010 Outlook Based on expectations for a continued weak economy with high unemployment negatively impacting front end sales along with increased pressure on pharmacy gross margins, Rite Aid has lowered its fiscal 2010 guidance. Total sales are expected to be between $25.7 billion and $26.2 billion in fiscal 2010 with same store sales ranging from a decrease of 1.0 percent to an increase of 1.0 percent over fiscal 2009. Adjusted EBITDA (which is reconciled to net loss on the attached table) is expected to be between $900 million and $1 billion. Net loss for fiscal 2010 is expected to be between $390 million and $615 million or a loss per diluted share of $.48 to $.74. Guidance for capital expenditures remains at approximately $250 million. A copy of Rite Aid's press release, which includes financial statements, is available at http://researcharchives.com/t/s?4576 About Rite Aid Corporation Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is one of the nation's leading drugstore chains with more than 4,800 stores in 31 states and the District of Columbia and fiscal 2009 annual revenues of more than $26.3 billion. * * * As of August 29, 2009, Rite Aid had $8,052,678,000 in assets against debts of $9,453,207,000. Rite Aid carries a 'Caa2' probability of default and corporate family ratings from from Mody's, 'B-' issuer default rating from Fitch, and 'B-' issuer credit ratings from Standard & Poor's. RJ GROOVER: No Excusable Neglect for Tardy Notice of Appeal ----------------------------------------------------------- WestLaw reports that a bankruptcy judge in Georgia has held that the Pioneer standard for deciding whether the claims bar date may be extended, after the fact, on an "excusable neglect" theory also governed whether a party against which an adverse judgment had been entered by the bankruptcy court could obtain an extension of the time for filing a notice of appeal, after the appeals deadline had expired, under this same "excusable neglect" standard. An insurer's mistaken assumption as to how quickly the underlying lawsuit involving its insured would be resolved did not support an extension of the time for it to appeal a denial of stay relief on the coverage question on an "excusable neglect" theory. In re R.J. Groover Const., LLC, --- B.R. ----, 2008 WL 6783038 (Bankr. S.D. Ga.). R.J. Groover Construction, LLC, sought Chapter 11 protection (Bankr. S.D. Ga. Case No. 08-40386) on March 3, 2008, together with its principals (Bankr. S.D. Ga. Case No. 08-40391). The debtors are represented by Richard C. E. Jennings, Esq., at the Law Offices Of Skip Jennings, PC, and James L. Drake, Jr., Esq., in Savannah, Ga. R.J. Groover estimated its assets and liabilities at $1 million to $10 million at the time of the Chapter 11 filing. ROGER ORLAND WARREN: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------------ Joint Debtors: Roger Orland Warren Debra Ann Warren 2872 Quartz Canyon Dr Henderson, NV 89052 Bankruptcy Case No.: 09-27688 Chapter 11 Petition Date: September 22, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtors' Counsel: Ambrish S. Sidhu, Esq. Sidhu Law Firm 810 S. Casino Center Blvd., Suite 104 Las Vegas, NV 89101 Tel: (702) 384-4436 Fax: (702) 384-4437 Email: asidhu@sidhulawfirm.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 $2,092,494, and total debts of $3,206,030. A full-text copy of the Debtors' petition, including a list of their 18 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-27688.pdf The petition was signed by the Joint Debtors. S&I INVESTMENTS: 12 Years of Rent Payments Evidenced Lease Deal --------------------------------------------------------------- WestLaw reports that under Florida law, fee owners' course of conduct constituted a waiver of a ground lease's assignment requirements and, thus, the lessees' unrecorded assignment of their leasehold interests to the Chapter 11 debtor-general partnership was valid. Accordingly, the debtor's interest in the lease was property of the estate which the trustee could assume or reject. Although the lease provided that a valid assignment had to be recorded in a specified county and that the lessees had to provide additional documentation to the lessor, the course of dealing between the fee owners and the debtor indicated that the fee owners knew of the debtor's role in the lease. The fee owners had accepted rent payments and had knowledge of the debtor's of the leased property for nearly 12 years, the court noted. Moreover, the fee owners' long-term acceptance of performance from the debtor was without protest. This course of conduct was reasonably susceptible of a good faith construction by the debtor that the unrecorded assignment had been accepted and the condition waived. In re S & I Investments, --- B.R. ----, 2009 WL 2900271 (Bankr. S.D. Fla.). The debtor's interest in the 99-year ground lease dated March 12, 1955, that was the subject of this dispute, is a significant asset of the estate. The property is a parcel of commercial real estate located at 2941 East Las Olas Blvd. and 136 Almond Avenue in Fort Lauderdale, Florida. The property consists of a strip mall type development located very close to Fort Lauderdale Beach. An involuntary Chapter 11 petition (Bankr. S.D. Fla. Case No. 08- 26220) was filed against S&I Investments on Oct. 29, 2009. The Involuntary Petition was filed by Stephanie Richmond, a 50% owner of the Debtor. Sisters Stephanie Richmond and Ilene Richmond own the Debtor in equal shares. On Jan. 7, 2009, the Court entered an order for relief in the case. On Feb. 6, 2009, the Court appointed Leslie S. Osborne as the chapter 11 trustee. On February 18, 2009, the Debtor filed its schedules. SELAH INVESTMENT: Files for Ch 11 to Keep Franchise Designation --------------------------------------------------------------- Josh Brodesky at Arizona Daily Star reports that Selah Investment Group Inc. has filed for Chapter 11 reorganization in a bid to keep its franchise designation. Selah Investment's lawyer, Eric Slocum Sparks, said that the Company has $2.5 million in debt, much of it tied to back franchise fees, which are equal to 3% of each shop's monthly gross revenues, Arizona Daily states. Selah Investment is four months behind in the franchise fees, the report says, citing Mr. Sparks. Arizona Daily quoted Mr. Sparks as saying, "Midas [an auto-repair chain] has advised us that they are going to try to cancel or terminate the franchise agreement. We expect a fight with Midas over the franchise agreement." According to Arizona Daily, Mr. Sparks said that sales have dropped 22% in the recession from a few years ago. The report says that work force at the seven locations has been cut from 51 to 32. Mr. Sparks said that he expects the reorganization to be completed within a year and that Selah Investment will emerge with all 32 employees, although he admits that there is a possibility some locations might close, Arizona Daily relates. "We are going to have to take each individual store as a separate profit center. We may be forced to close certain stores in order to keep the balance of those stores profitable," the report quoted Mr. Sparks as saying. Selah Investment Group Inc. owns seven Midas franchises in Tucson and Green Valley. It is owned by Ron Tacker. SEMGROUP LP: Wins Approval of Fourth Amended Disclosure Statement ----------------------------------------------------------------- SemGroup, L.P. announced September 24 it has won court approval of the adequacy of the Fourth Amended Disclosure Statement for its Plan of Reorganization, keeping the company on schedule to emerge from Chapter 11 in November as planned. The Fourth Amended Plan of Reorganization and Disclosure Statement were filed with the U.S. Bankruptcy Court, District of Delaware on September 22, 2009 to reflect a settlement with the Official Producers Committee. The company will seek confirmation of the plan at a hearing on October 26, 2009. "The Fourth Amended Plan of Reorganization has the support of the company's Official Committee of Unsecured Creditors, the Official Producers Committee, and the Secured Lenders," said Terry Ronan, the company's president and chief executive officer. "We look forward to presenting our plan for confirmation and successfully concluding the Chapter 11 restructuring." A black-lined version of the Fourth Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/Semgroup_DSto4thPlan.pdf About SemGroup L.P. SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SHUMATE INC: Proposes Southwell & Rourke as Bankruptcy Counsel -------------------------------------------------------------- Shumate, Inc., and its affiliates ask the U.S. Bankruptcy Court for the Eastern District of New York for authority to employ Southwell & Rourke, P.S., as counsel. Southwell & Rourke will, among other things: -- represent the Debtors in the Chapter 11 case; -- will prepare a Chapter 11 Plan; and -- deal with issues relating thereto. The hourly rates of Southwell & Rourke's personnel are: Dan O'Rourke $325 Kevin O'Rourke $250 Southwell & Rourke holds a $20,000 retainer in the Debtors' estate account. To the best of the Debtor's knowledge, Southwell & Rourke is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Southwell & Rourke, P.S. 960 Paulsen Center W.421 Riverside Avenue Spokane, WA 99201 Tel: (509) 624-0159 About Shumate, Inc. Kennewick, Washington-based Shumate, Inc., and its affiliates filed for Chapter 11 on Sept. 9, 2009, (Bankr. E.D. Wash. Case Nos. 09-05078 to 09-05081). Barry W. Davidson, Esq., at Davidson Backman Medeiros PLLC represents the Debtors in their restructuring efforts. In its petition, the Debtors listed assets and debts both ranging from $10,000,001 to $50,000,000. SPARTA COMMERCIAL: July 31 Balance Sheet Upside-Down by $2.5MM -------------------------------------------------------------- Sparta Commercial Services, Inc.'s balance sheet at July 31, 2009, showed total assets of $4,283,159 and total liabilities of $6,881,202, resulting in a stockholders' deficit of $2,598,043. For three months ended July 31, 2009, the Company posted a net loss of $994,456 compared with a net loss of $1,709,042 for the same period in 2008. The Company's existence is dependent upon management's ability to develop profitable operations. In order to improve the Company's liquidity, the Company's management is pursing additional equity financing through discussions with investment bankers and private investors. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4571 Headquartered in New York City, Sparta Commercial Services, Inc. (OTC BB: SRCO.OB) -- http://www.spartacommercial.com/-- is a nationwide, independent financial services company in the United States exclusively dedicated to the powersports industry. Going Concern Doubt On Aug. 13, 2009, RBSM LLP in New York expressed substantial doubt about the company's ability to continue as a going concern after auditing the company's financial statements for the year ended April 30, 2009, and 2008. The firm reported that the company suffered recurring losses from operations. SPRINGBOARD GROUP: Moody's Assigns 'B2' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Springboard Group S.a.r.l ("Skype"), including a B2 corporate family rating, B2 probability of default rating, and B1 (LGD3, 42%) senior secured instrument ratings to a $30 million senior secured revolving credit facility and $600 million senior secured term loan expected to be issued through Springboard Finance LLC, the primary US operating subsidiary of Skype. The outlook is stable. Skype is a leading provider of internet-based communication services (voice, video, text, and other features) through its peer-to-peer software technology. On September 1, 2009 eBay (rated A3) agreed to sell a 65% equity interest in Skype for approximately $1.9 billion to an equity consortium, including Silver Lake Partners, CPP Investment Board, Index Ventures, and Andreessen Horowitz. The ratings assignments reflect the anticipated capital structure for the standalone Skype entities post closing of the acquisition, which is anticipated sometime before the end of this year. Springboard Group S.a.r.l * Corporate family rating -- B2 * Probability of default rating -- B2 Springboard Finance, LLC * $30 million Senior Secured Revolving Credit Facility due 4yrs rated B1, (LGD3 42%) * $600 million Senior Secured Term Loan due 5yrs rated B1, (LGD3, 42%) * Stable outlook Skype's B2 CFR reflects the significant industry and technology risks inherent to the rapidly evolving field of peer-to-peer internet communications and the wider deployment of Voice-over- Internet-Protocol technology across the world, in addition to competitive threats from incumbent carriers, other technology developers, social networking sites, and regulatory bodies. These risks are significant and likely to constrain the rating over the near-to-medium term particularly given the limited product diversity of the company's revenue stream. Moody's notes that total post-closing adjusted Debt/EBITDA leverage (which includes $125 million in seller financing from eBay) at over 5.0x, based on 6/30/09 EBITDA, is high among its competitors in communications services and technology, although the company's projected revenue and EBITDA growth should enable it to delever over the intermediate term. At the same time, the rating is supported by the significant equity cushion provided by the sponsors, the collateral package and the company's success in building over a relatively short time period, a growing and profitable business with strong cash generating capabilities. Skype's revenues and EBITDA have grown substantially over the past several years in conjunction with the company's registered user base which is estimated to be around 480 million. While this number is substantial, the company has only monetized a relatively small proportion of the user base, generating revenues primarily from its international long distance voice service offering, which allows paying users to participate in calls between their computers and traditional telephone lines. Although this service has been successful to date, its longevity is threatened by the ongoing migration of land line users to internet-based phones (Skype does not charge users for computer to computer calls) as well as the possibility of future regulatory action in certain jurisdictions, as these calls effectively circumvent tariff-based international long distance calls, which can be an important revenue source for emerging market telecom operators and governments. Consequently, Moody's believes Skype's long-term success will ultimately be dependent on the company's ability to further develop new revenue streams, including mobile, advertising and enterprise sales, that harness the powerful network effects of its large user community. Moody's notes that the company faces ongoing litigation regarding licensing disputes in multiple jurisdictions involving core components of its technology. However, in addition to defending its position in the courts, the company is working on a software upgrade which will not involve the disputed technology. The stable outlook reflects Moody's view that the company's credit metrics will modestly improve over the next twelve to eighteen months through revenue, EBITDA growth, and stable free cash flow generation and that its prepaid calling business model will remain viable in the near term, given the strength of its brand and quality of its product. Headquartered in Luxembourg, Skype is a technology company centered around P2P communications and VoIP software tools. SPRINGBOARD GROUP: S&P Assigns Corporate Credit Rating at 'B' ------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' corporate credit rating to Springboard Group S.a.r.l (d/b/a Skype). The outlook is developing. S&P also assigned a 'B' issue-level rating and '4' recovery rating to Springboard Finance LLC's (aka Skype US LLC 2's) proposed $630 million credit facility. The '4' recovery rating indicates S&P's expectations for average (30%-50%) recovery in the event of payment default. As proposed, the credit facility would consist of a $30 million revolving credit facility due 2013 and a $600 million term loan B due 2014. Issue proceeds would be used to partially fund the purchase of a 65% equity stake in Skype by an equity consortium from eBay Inc. (A-/Positive/--). Ratings are based on preliminary documentation and are subject to the proposed transaction closing and review of final documents. Pro forma for the transaction, Skype would have $725 million in outstanding debt (including a $125 million seller pay-in-kind note to eBay). The developing outlook means that ratings could either be raised or lowered. "The ratings on Skype reflect S&P's view of rapid technology and market evolution; a short track record at current performance levels; significant uncertainties regarding the timing and outcome of ongoing patent litigations; and aggressive near-term leverage," said Standard & Poor's credit analyst Naveen Sarma. "Somewhat tempering these factors in S&P's opinion are Skype's significant global scale, which provides strong network effects; and healthy free cash flow conversion, which provides for potential deleveraging, given the credit facility's cash flow sweep feature." With about 480 million registered users, Skype is a global Internet communications company that delivers its voice over Internet protocol communication and other services through a peer- to-peer network architecture. Although the majority of customers use Skype to make free voice and video calls to other Skype users, Skype has indicated that most of its revenues are derived from a relatively small percentage of users that use the SkypeOut product to make calls to non-Skype phones. Skype focuses on low-volume international long-distance calling routes. S&P believes the company has a competitive advantage in these markets because it can offer its users a price below traditional fixed-line telephone companies. S&P thinks Skype faces the risk of technology obsolescence and the pressure to continually innovate in the face of evolving competition. The company provides its communications software at no charge, so its users have not made a financial commitment to continue using Skype's software (other than the prepayments made by SkypeOut users). However, S&P believes the company's global scale, which provides strong network effects, as well as its patent portfolio, serves as a limitation on the near-term ability for competitors to challenge Skype's leading market position. Although Skype is currently growing revenues at a mid-20% annual pace, the company only achieved the scale to generate positive EBITDA in 2007. Revenues and EBITDA for the last 12 months ended June 30, 2009, were about $615 million and $142 million, respectively. S&P expects revenue growth to continue at a similar pace, aided by strong growth in the core paid calling product, as well as expansion into both the small and midsize enterprise and mobile segments. Because of the investments necessary to expand into these new business lines, however, S&P expects that EBITDA margins will likely decline modestly to less than 20%. Adjusted leverage, at 5.1x, pro forma for the proposed debt financing (including the seller PIK note), is aggressive, though S&P believes the company has the ability to quickly reduce its leverage. If Skype were to continue on its present growth trajectory, with double-digit revenue growth, S&P would expect the company to generate healthy amounts of free cash flow, as capital expenditure requirements are likely modest at less than 5% of revenues. The company is required under the terms of its bank facility to make mandatory prepayments using its excess cash flow. Thus, S&P expects adjusted leverage to decline below 4x by the end of 2010. Skype has ongoing patent litigation in the U.K. and the U.S. with Joltid Ltd., a U.K.-based company owned by Skype's original founders. Skype licensed peer-to-peer communication technology from Joltid through a license agreement. According to eBay's SEC filings, in March 2009, Skype filed a complaint in the English High Court of Justice against Joltid. Following the filing of the claim, Joltid purportedly terminated the license agreement between the parties and brought a counterclaim alleging that Skype had repudiated the license agreement, infringed Joltid's copyright and misused confidential information. The U.K. trial is currently scheduled for June 2010. In September 2009, Joltid filed suit in U.S. District Court seeking an injunction against Skype and damages for various copyright infringements. In the meantime, Skype has indicated that it is pursuing the development of an alternate technology that would replace the peer-to-peer technology in question. If Skype were to lose these cases, the company could potentially lose the right to use the peer-to-peer technology. In addition, a significant financial judgment against the company could exhaust Skype's current liquidity. Significant uncertainties exist regarding the ultimate size, timing, and types of consideration that may be required to resolve the outstanding litigation. Because of the significant uncertainties, Standard & Poor's is unable to assess at this time the credit impact, if any, of the resolution of these events. The developing outlook reflects the significant uncertainties regarding timing and outcomes surrounding the ongoing patent litigations. If the litigations are settled without impacting Skype's competitive and financial position, S&P would likely consider raising the rating to 'B+'. Conversely, if Skype were to lose the Joltid cases, with a judgment that negatively impacted the business and financial risk profiles or if Skype's competitive positioning were to weaken due to increased competition such that margins and free cash flow were to decline materially, S&P would likely consider changing the outlook to negative or lowering the rating. STANFORD FINANCIAL: Owner Seeks Reversal of Equity Sale Orders -------------------------------------------------------------- R. Allen Stanford has filed with the U.S. District Court for the Southern District of Texas, in Dallas, that it intends to appeal Judge David Godbey's Aug. 25 rulings enabling the receiver to sell Stanford's stakes in a Houston luxury hotel development and two Israeli development funds, according to reporting by Andrew Harris at Bloomberg News. Ralph Janvey as receiver for Stanford's businesses, asked for, and received, permission to liquidate Stanford's shares in Midway CC Hotel Partners LP for $2.7 million plus the assumption of obligations of Stanford Venture Capital Holdings Inc., which the receiver said included a pending $4.5 million capital call. Mr. Janvey also obtained Godbey's permission to sell for $4.1 million Stanford's $14.3 million stake in the Israeli development funds to avoid $2.5 million in past-due capital calls and another $61 million in future commitments. About Stanford Group Stanford companies operated by selling certificates of deposit in more than 100 discrete locations spanning 15 states in the United States and 13 countries in Europe, the Caribbean, Canada and Latin America. Stanford claimed to have more than 30,000 clients located in 133 countries. Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On February 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The U.S. Securities and Exchange Commission, on Feb. 17, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi- billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him in June before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money-laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. The criminal case is U.S. v. Stanford, H-09-342, U.S. District Court, Southern District of Texas (Houston). The civil case is SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District Court, Northern District of Texas (Dallas). STRIVE ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Strive Enterprises, Inc. 210 Valley Brook Road McMurray, PA 15317 Bankruptcy Case No.: 09-27047 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Robert O. Lampl, Esq. 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 Email: rol@lampllaw.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $10,000,001 to $50,000,000 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/pawb09-27047.pdf The petition was signed by John Salvitti, president of the Company. SUN-TIMES MEDIA: Authorized to Hold Tyree-Led Auction ----------------------------------------------------- Sun-Times Media Group Inc. won approval from the Bankruptcy Court to conduct an auction where a group led by James C. Tyree will be the lead bidder with an offer valued at $26.5 million, Michael Bathon at Bloomberg News reported. Sun-Times Media will sell its business to James C. Tyree-led STMG Holdings LLC, absent higher and better bids at an auction on October 7. The Debtors will seek the Court's approval of the results of the auction on Oct. 8. Sun-Times Media Group has entered into a "stalking horse" asset purchase agreement with STMG Holdings, LLC, a private investor group led by Chicago businessman James C. Tyree, for substantially all assets of Sun-Times Media Group. The buyer will acquire substantially all assets of the Company for $5 million in cash, subject to a working capital adjustment, and will assume certain liabilities of Sun-Times Media Group estimated to total approximately $20 million. The Company said that Rothschild Inc. conducted extensive marketing efforts for its assets or business but only James C. Tyree submitted an offer to purchase assets on a going concern basis. About Sun-Times Media Sun-Times Media Group, Inc. -- http://www.thesuntimesgroup.com/-- (Pink Sheets: SUTM) owns media properties including the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities across Chicago. The Company and its affiliates conduct business as a single operating segment which is concentrated in the publishing, printing, and distribution of newspapers in greater Chicago, Illinois, metropolitan area and the operation of various related Web sites. The Company also has affiliates in Canada, the United Kingdom, and Burma. Sun-Times Media's balance sheet at September 30, 2008, showed total assets of $479.9 million, total liabilities of $801.7 million, resulting in a stockholders' deficit of roughly $321.8 million. The Company and its affiliates filed for Chapter 11 bankruptcy protection on March 31, 2009 (Bankr. D. Del. Case No. 09-11092). James H.M. Sprayregan, P.C., James A. Stempel, Esq., David A. Agay, Esq., and Sarah H. Seewer, Esq., at Kirkland & Ellis LLP, assist the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. As of November 7, 2008, the Debtors listed $479,000,000 in assets and $801,000,000 in debts. SYNOVICS PHARMA: July 31 Balance Sheet Upside-Down by $773,000 -------------------------------------------------------------- Synovics Pharmaceuticals Inc.'s balance sheet at July 31, 2009, showed total assets of $18,767,220 and total liabilities of $19,540,253, resulting in a stockholders' deficit of $773,033. For three months ended July 31, 2009, the Company posted a net loss of $2,020,887 compared with a net income of $489,670 for the same period in 2008. For nine months ended July 31, 2009, the Company posted a net loss $5,714,559 compared with a net loss of $4,676,159 for the same period in 2008. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?455c Based in Fort Lauderdale, Florida, Synovics Pharmaceuticals Inc. (OTC BB: SYVC) -- http://www.bionutrics.com/-- through its subsidiaries, engages in the development, manufacture, and commercialization of generic over-the-counter (OTC) pharmaceutical products and generic prescription drug products. The company's OTC product categories include analgesics, cough, cold, antihistamines, asthma relief, and laxatives. It also offers private label solid dosage Rx products, including Estratest, a product used by post-menopausal women. Synovics Pharmaceuticals packages and distributes its private label, or store brand OTC products to chain drug stores, wholesalers, and distributors in the United States. It has a strategic partnership with Maneesh Pharmaceuticals Pvt. Ltd. The company was founded in 1983. It was formerly known as Bionutrics Inc. Going Concern Doubt Miller Ellin & Company, LLP, in New York, expressed substantial doubt about Synovics Pharmaceuticals, Inc.'s ability to continue as a going concern after auditing the consolidated balance sheets of the Company and its subsidiaries as of Oct. 31, 2008, and 2007 and the related consolidated statements of operations, stockholders' equity and cash flows for the years ended Oct. 31, 2008, 2007, and 2006. The firm pointed out that the company has negative working capital of $6,540,018 and has experienced significant losses and negative cash flows. The company incurred net losses of $4,005,831, $20,857,884, $8,571,021, $2,911,260 and $1,124,336, for the years ended Oct. 31, 2008, 2007, 2006, 2005, and 2004. As of Oct. 31, 2008, the Company's accumulated deficit was $78,649,597. TAYLOR BEAN: Must Ink Pact With Ocala to Keep Electricity --------------------------------------------------------- Susan Latham Carr at Ocala Star-Banner reports that unless Taylor Bean & Whitaker Mortgage Corp. signs an agreement with the city of Ocala and pays a $71,000 deposit, it will lose the electricity at its Northeast 14th Street facilities. Star-Banner states that Taylor Bean owes the city $113,743 in electric charges. The city initially requested a deposit of $161,972, which represents 2-1/4 months of the average monthly usage, says Star-Banner. According to Star-Banner, Ocala Assistant City Attorney W. James Gooding worked out an agreement with Taylor Bean's bankruptcy attorneys on Wednesday in which the Company will pay the city for post-bankruptcy electric utility charges. The report says that the city would cut off the power if no agreement was reached. Star-Banner relates that the agreement is subject to Ocala City Council approval, which will likely be sought at a special City Council meeting on Tuesday. Star-Banner quoted Mr. Gooding as saying, "The city is putting them on a two-week billing cycle, and Taylor Bean has to pay the bills 10 days after they are rendered. The city can discontinue utility service four days after that. Therefore, the city could discontinue utility service before Taylor Bean owes us more than the amount of the deposit." The bankruptcy court has issued a cash collateral order that allows some of the money that Taylor Bean collects to pay operating expenses, Star-Banner reports, citing Mr. Gooding. Taylor Bean filed for Chapter 11 on August 24 (Bankr. M.D. Fla. Case No. 09-07047). Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Florida, represents the Debtor. Troutman Sanders LLP is special counsel. BMC Group Inc. serves as claims agent. Taylor Bean has more than $1 billion of both assets and liabilities, and between 1,000 and 5,000 creditors, according to the bankruptcy petition. TENET HEALTHCARE: TCW Group Discloses 4.8% Equity Stake ------------------------------------------------------- The TCW Group, Inc., discloses that it beneficially owns 23,226,697 shares or roughly 4.8% of the common stock of Tenet Healthcare Corporation. Based in Dallas, Texas, Tenet Healthcare Corporation -- http://www.tenethealth.com/-- is an investor-owned health care services company whose subsidiaries and affiliates principally operate general hospitals and related health care facilities. All of Tenet's operations are conducted through its subsidiaries. At June 30, 2009, Tenet had $7.92 billion in total assets against $7.59 billion in total liabilities. * * * As reported by the Troubled Company Reporter on June 22, 2009, Moody's Investors Service downgraded the ratings of Tenet's senior secured notes due 2015 and 2018 to B1 (LGD3, 32%) from Ba3 (LGD2, 23%) and senior unsecured notes to Caa2 (LGD5, 82%) from Caa1 (LGD5, 75%). Moody's also affirmed Tenet's B3 Corporate Family and Probability of Default ratings. The rating outlook remains stable. On June 3, 2009, the TCR said Standard & Poor's Ratings Services assigned Tenet's issuance of up to $1.0 billion senior secured notes its issue-level of 'BB-' (two notches higher than the 'B' corporate credit rating on the company). S&P also assigned the notes a recovery rating of '1', indicating S&P's expectation of very high (90% to 100%) recovery for noteholders in the event of a payment default. The issue-level and recovery ratings on Tenet's existing $1.4 billion senior secured notes and $800 million asset- based lending (ABL) facility remain unchanged at 'BB-' and '1', respectively. S&P also revised its recovery rating on Tenet's various tranches of senior unsecured debt to '6', indicating S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default, from '4'. S&P lowered the issue-level rating on this debt to 'CCC+' (two notches lower than the 'B' corporate credit rating) from 'B', in accordance with S&P's notching criteria for a '6' recovery rating. The TCR also said Fitch Ratings assigned a 'BB-/RR1' rating to Tenet's $450 million in senior secured notes due 2019. Fitch currently rates Tenet: -- Issuer Default Rating 'B-'; -- Secured bank facility 'BB-/RR1'; -- Senior secured notes 'BB-/RR1'; -- Senior unsecured notes 'B-/RR4'. The Rating Outlook is Stable. The ratings apply to roughly $4.6 billion of debt outstanding as of March 31, 2009. TENET HEALTHCARE: To Issue 7% Mandatory Convertible Preferreds -------------------------------------------------------------- Tenet Healthcare Corporation is offering 300,000 shares of 7.00% mandatory convertible preferred stock. Quarterly dividends on each share of the mandatory convertible preferred stock will accrue at a rate of 7.00% per year on the liquidation preference of $1,000 per share. Dividends will accrue and accumulate from September 25, 2009, and, to the extent that Tenet declare a dividend payable, it will pay dividends in cash on January 1, April 1, July 1, and October 1 of each year through, and including, October 1, 2012. Each share of the mandatory convertible preferred stock has a liquidation preference of $1,000, plus an amount equal to accrued, accumulated and unpaid dividends. Each share of the mandatory convertible preferred stock will automatically convert on October 1, 2012, into ____ between 142.4501 and 170.9402 shares of Tenet's common stock, subject to anti-dilution adjustments, depending on the average of the closing prices per share of its common stock on each of the 20 consecutive trading days ending on the third trading day immediately preceding the mandatory conversion date, subject to certain conditions. At any time prior to October 1, 2012, holders may elect to convert shares of the mandatory convertible preferred stock at the minimum conversion rate of 142.4501 shares of the common stock, subject to anti-dilution adjustments. If holders elect to convert shares of the mandatory convertible preferred stock during a specified period in connection with a make-whole event, the conversion rate will be adjusted under certain circumstances and holders will also be entitled to receive a make-whole amount in cash, common stock or a combination thereof (as elected by Tenet). Prior to the offering, there has been no public market for the mandatory convertible preferred stock. Tenet does not intend to list the mandatory convertible preferred stock on any securities exchange. Tenet's common stock is listed on the New York Stock Exchange under the symbol "THC." The last reported sale price of Tenet's common stock on September 21, 2009, was $5.85 per share. Goldman, Sachs & Co., Barclays Capital, Moelis & Company, and Wells Fargo Securities serve as underwriters. A full-text copy of the Prospectus Supplement is available at no charge at http://ResearchArchives.com/t/s?4573 A full-text copy of the Free Writing Prospectus is available at no charge at http://ResearchArchives.com/t/s?4574 About Tenet Healthcare Based in Dallas, Texas, Tenet Healthcare Corporation -- http://www.tenethealth.com/-- is an investor-owned health care services company whose subsidiaries and affiliates principally operate general hospitals and related health care facilities. All of Tenet's operations are conducted through its subsidiaries. At June 30, 2009, Tenet had $7.92 billion in total assets against $7.59 billion in total liabilities. * * * As reported by the Troubled Company Reporter on June 22, 2009, Moody's Investors Service downgraded the ratings of Tenet's senior secured notes due 2015 and 2018 to B1 (LGD3, 32%) from Ba3 (LGD2, 23%) and senior unsecured notes to Caa2 (LGD5, 82%) from Caa1 (LGD5, 75%). Moody's also affirmed Tenet's B3 Corporate Family and Probability of Default ratings. The rating outlook remains stable. On June 3, 2009, the TCR said Standard & Poor's Ratings Services assigned Tenet's issuance of up to $1.0 billion senior secured notes its issue-level of 'BB-' (two notches higher than the 'B' corporate credit rating on the company). S&P also assigned the notes a recovery rating of '1', indicating S&P's expectation of very high (90% to 100%) recovery for noteholders in the event of a payment default. The issue-level and recovery ratings on Tenet's existing $1.4 billion senior secured notes and $800 million asset- based lending (ABL) facility remain unchanged at 'BB-' and '1', respectively. S&P also revised its recovery rating on Tenet's various tranches of senior unsecured debt to '6', indicating S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default, from '4'. S&P lowered the issue-level rating on this debt to 'CCC+' (two notches lower than the 'B' corporate credit rating) from 'B', in accordance with S&P's notching criteria for a '6' recovery rating. The TCR also said Fitch Ratings assigned a 'BB-/RR1' rating to Tenet's $450 million in senior secured notes due 2019. Fitch currently rates Tenet: -- Issuer Default Rating 'B-'; -- Secured bank facility 'BB-/RR1'; -- Senior secured notes 'BB-/RR1'; -- Senior unsecured notes 'B-/RR4'. The Rating Outlook is Stable. The ratings apply to roughly $4.6 billion of debt outstanding as of March 31, 2009. TEXANS CUSO: Proposes Rochelle McCullough as Bankruptcy Counsel --------------------------------------------------------------- Texans CUSO Insurance Group LLC asks the U.S. Bankruptcy Court for the Northern District of Texas for authority to employ Rochelle McCullough L.L.P. as counsel. RM LLP will, among other things: -- take all necessary action to protect and preserve the estate of the Debtor, including the prosecution of actions on the Debtor's behalf, the defense of any action commenced against the Debtor, the negotiation of disputes in which the Debtor is involved, and the preparation of objections to claims filed against the Debtor's estate; -- prepare on behalf of the Debtor, all necessary motions, applications, answers, orders, reports and papers in connection with the administration ans prosecution of the Debtor's Chapter 11 case; and -- assist the Debtor in connection with any proposed sale of assets pursuant to Bankruptcy Code Section 363. RM LLP received an evergreen retainer of $150,000, RM LLP applied prepetition fees and expenses of $92,292. The remaining retainer will be held as security against postpetition fees and expenses. To the best of the Debtor's knowledge, RM LLP is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Rochelle McCullough L.L.P. 101 E. Park Blvd., Suite 951 Plano, TX 75074 Tel: (972) 735-9143 Fax: (972) 735-9780 About Texans CUSO Insurance Group Texans CUSO Insurance Group LLC, fka Curley Insurance Group, is a nonprofit credit union and a subsidiary of Texans Credit Union. The Company and its affiliates filed for Chapter 11 bankruptcy protection on September 5, 2009 (Bankr. N.D. Texas Case No. 09- 35981). Scott Mark DeWolf, Esq., at Rochelle McCullough L.L.P. assists the Debtors in their restructuring efforts. Texans CUSO listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. TIB FINANCIAL: Deferring Payments to Trust Preferred Holders ------------------------------------------------------------ TIB Financial Corp. received a request from the Federal Reserve Bank of Atlanta for the Company's Board of Directors to adopt a resolution that it will not declare or pay any dividends on its outstanding common or preferred stock, nor will it make any payments or distributions on the outstanding trust preferred securities or corresponding subordinated debentures, without the prior written approval of the Reserve Bank. The Board intends to adopt this resolution in October. Pursuant to the resolution, upon adoption, the Company must submit any such request 30 days prior to the date on which it wishes to declare or make such payments. The Company has an interest payment of approximately $105,000 payable on October 7, 2009 on its $20,000,000 of trust preferred securities due July 7, 2036. Accordingly, the Company notified the trustee of the trust preferred securities on September 21, 2009, as required by the indenture agreement, of its election to defer interest payments. The indenture agreement, under which the trust preferred securities are issued, allows the Company the right to defer interest payments up to 20 calendar quarters. Such an election to defer payments is not considered a default. During the period that the Company is deferring these interest payments, it may not pay any cash dividends on its common or preferred stock or repurchase any securities. TIB Financial Corp.'s balance sheet dated June 30, 2009, shows $1.8 billion in assets and $1.7 billion in liabilities. TIB Financial Corp. is a bank holding company headquartered in Naples, Florida, whose business is conducted primarily through its wholly owned subsidiaries, TIB Bank, The Bank of Venice, and Naples Capital Advisors, Inc. Together with its subsidiaries, TIB Financial Corp. has 28 full service banking offices in Monroe, Miami-Dade, Collier, Lee, and Sarasota counties, Florida. On February 13, 2009, TIB Bank acquired the non-brokered deposits, branch office operations and other specific assets from the FDIC as receiver of the former Riverside Bank of the Gulf Coast. TRIAD AT LAGRANGE: Case Summary & 17 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Triad at LaGrange I, LLC 10 Roswell Street, Suite 210 Alpharetta, GA 30009 Bankruptcy Case No.: 09-13383 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Triad at Jeffersonville I, LLC 09-13384 Triad at Lumber City I, LLC 09-13385 Triad at Powder Springs I, LLC 09-13386 Triad at Thomasville I, LLC 09-13387 Chapter 11 Petition Date: September 22, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Newnan) Judge: W. Homer Drake Debtor's Counsel: Gregory D. Ellis, Esq. Lamberth, Cifelli, Stokes, Ellis & Nason 3343 Peachtree Raod, NE Suite 550 Atlanta, GA 30326-1022 Tel: (404) 262-7373 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 17 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ganb09-13383.pdf The petition was signed by Ronald M. Herbert Jr., chief operating officer of the Company. TRIBUNE CO: Can't Exit Chapter 11 Until LBO Claims Resolved ----------------------------------------------------------- Creditors of Tribune Co. say the publisher cannot exit from bankruptcy protection without first resolving claims in connection with its 2007 buyout. The Law Debenture Trust Company of New York, as successor indenture trustee for 18% of the senior notes issued by Tribune, is seeking the Bankruptcy Court's authority to conduct discovery under F.R.B.P. Rule 2004 relating Tribune's $13.8 billion leveraged buyout led by Sam Zell in December 2007. The bondholder trustee wants to examine potential causes of action by the estate, noting that the transaction -- where Tribune incurred $11.2 billion in secured debt -- did not benefit Tribune, which filed for bankruptcy just a year after the LBO. David S. Rosner, a partner of Kasowitz, Benson, Torres & Friedman LLP, who represents Law Debenture said that claims in connection with the LBO is the central issue in the case. Centerbridge Credit Advisors, which holds about 37% of Tribune's pre-buyout unsecured notes, said in court documents the Company can't get out of bankruptcy by the end of the year as planned without quickly settling allegations that the buyout was a fraud under U.S. bankruptcy law. Howard Seife, who represents the official committee of unsecured creditors, agreed that the Company won't be able to exit bankruptcy without dealing with those claims. Mr. Rosner, according to Steven Church at Bloomberg News, said that Law Debenture will now get access to internal bank documents about the LBO under a confidentiality agreement. Law Debenture has withdrawn its request for an examiner to investigate the LBO. Law Debenture had asked for an examiner in the event it won't be allowed to conduct a discovery. Targets of a potential litigation include J.P. Morgan Chase Bank N.A., and Merrill Lynch Capital Corporation, banks which provided funding for the LBO. Also possible targets are former shareholders, including the Robert R. McCormick Foundation, which cashed out their shares in Tribune in the LBO. These parties have opposed Law Debenture's request for a probe. 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: Wins Court Nod to Sell Chicago Cubs ----------------------------------------------- Tribune Co. received permission from the Bankruptcy Court to sell the Chicago Cubs, paving the way for the baseball team to file bankruptcy to make the transaction final. Under the sale process approved by Judge Kevin Carey at the end of August, the National League Ball Club, LLC, Tribune's non-debtor affiliate directly owning the Cubs, will file for Chapter 11 as soon as the Bankruptcy Court approves Tribune's proposal and in order to effectuate the sale. Judge Carey has scheduled a hearing on October 1, 2009 to consider approval of the sale in CNLBC's case. Tribune will be selling the Chicago Cubs baseball team to the family of TD Ameritrade Holding Corp. founder Joe Ricketts, for a consideration expected to bring $740 million in cash for creditors. Aside from approval from the Bankruptcy Court, transfer of the Cubs team requires approval by Major League Baseball, an unincorporated association of 30 member clubs in North America. Because the transaction was a so-called leveraged partnership, it will enable Tribune to avoid paying about $300 million in taxes, Steven Church at Bloomberg said, citing tax consultant Robert Willens, who teaches a class on tax law at the business school at Columbia University. The structure, however, probably will prompt questions from the U.S. Internal Revenue Service, Mr. Willens said. 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) US AIRWAYS: Financial Condition Won't Affect Moody's Rating ----------------------------------------------------------- Moody's Investors Service said US Airways Group, Inc.'s equity issuance announced on September 22, 2009, modestly enhances the company's near term financial condition, but does not affect the Caa1 corporate family or other debt ratings of the company. The last rating action on US Airways was the July 23, 2008, when Corporate Family and Probability of Default Ratings were downgraded to Caa1 from B3. US Airways Group, Inc., based in Tempe, Arizona, through its subsidiaries operates one of the largest airlines in the U.S. with service throughout the U.S. as well as Canada, the Caribbean, Latin America and Europe. USMDS INC: Case Summary & 14 Largest Unsecured Creditors -------------------------------------------------------- Debtor: USMDS, Inc. 2801 Finley Road Downers Grove, Il 60515 Bankruptcy Case No.: 09-35231 Chapter 11 Petition Date: September 23, 2009 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: John H. Squires Debtor's Counsel: Mitchell Elliot Jones, Esq. Jones Law Offices 25 East Washington Street, Suite 906 Chicago, IL 60602 Tel: (312) 236-2112 Fax: (312) 236-2634 Email: mej@joneslaw.org 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/ilnb09-35231.pdf The petition was signed by James Gentile, president of the Company. VELOCITY EXPRESS: Files for Bankruptcy to Sell to ComVest --------------------------------------------------------- Velocity Express Corporation said that it has reached an agreement with a subsidiary of ComVest Investment Partners III, L.P., a leading private investment firm with a proven track record in the transportation industry. Under the agreement, ComVest will begin a process to become the Company's new majority owner and significantly deleverage the Company through an exchange of debt for equity in Velocity. Vincent A. Wasik, Velocity's Chairman and Chief Executive Officer, stated, "We believe that this transaction is a major win for Velocity, our Customers, Independent Contractors and Employees. It will reduce the burden of our legacy liabilities by eliminating over $100 million of debt and create a financially stronger, well capitalized company. With a stronger financial position, we will continue to be able to pursue large business development opportunities, and increase our investment in technology and services to benefit our valued Customers. We will also have the backing and support of a new strong financial and operating partner in ComVest. Thanks to the continued support and hard-work of our more than 4,000 dedicated Employees and Independent Contractors, we expect this transition to be seamless to our Customers." Jose Gordo, a Partner at ComVest, said, "ComVest is truly excited about the future prospects of Velocity. We believe that this restructuring will eliminate the significant debt that has burdened the Company for the last few years and turn the Company's balance sheet into a major strength. Velocity has a solid operational foundation with outstanding long-term Customers and a strong sales pipeline. Together, we look forward to continuing to provide Velocity's Customers with the timely, high-quality service they have come to expect." Velocity's restructuring will be accomplished through a pre- packaged Section 363 sale pursuant to Chapter 11 of the United States Bankruptcy Code. The change in ownership will be achieved through a restructuring of Velocity's balance sheet in which ComVest will exchange its Velocity debt for a controlling equity ownership interest. Upon the completion of the transaction, ComVest will own the substantial majority of Velocity's equity. The management team, which will remain in place, will own a minority stake in the restructured Company, as will former bondholders. The Company expects that this transition will be seamless for Customers, Independent Contractors, Employees and Vendors. All settlement payments for Independent Contractors as well as payroll and benefits for Velocity employees have been guaranteed by Velocity to ensure a smooth process, which should be completed in 30 to 45 days. About ComVest The ComVest Group is a leading private investment firm focused on providing debt and equity solutions to lower middle-market companies with enterprise values of less than $350 million. Since 1988 the ComVest Group has invested more than $2 billion of capital in over 200 public and private companies worldwide. Through our extensive financial resources and broad network of industry experts, we are able to offer our companies total financial sponsorship, critical strategic support, and business development assistance. About Velocity Express Velocity Express -- http://www.velocityexpress.com/-- has one of the largest nationwide networks of regional, time definite, ground delivery service areas, providing a national footprint for customers desiring same day service throughout the United States. The Company's services are supported by a customer-focused technology infrastructure, providing customers with the reliability and information they need to manage their transportation and logistics systems, including a proprietary package tracking system that enables customers to view the status of any package via a flexible web reporting system. Velocity, together with 12 affiliates, filed for Chapter 11 on Sept. 24, 2009 (Bankr. D. Del. Case No. 09-13294). The Company listed assets of $94.1 million and debt of $120.6 million as of Sept. 1. VULCAN ENERGY: Moody's Assigns 'Ba2' Rating on $280 Mil. Loan ------------------------------------------------------------- Moody's Investors Service assigned Ba2 (LGD 6; 96%) ratings to Vulcan Energy Corp.'s pending six year $280 million senior secured term loan and $5 million three year senior secured revolving credit facility, and affirmed its Ba1 Corporate Family Rating and stable rating outlook. Term loan proceeds will retire the remaining $274 million outstanding in VEC's existing term loan. VEC is 80% owned by Paul Allen and 20% by other private investors. VEC is an investment vehicle that owns 50.1% of Plains AAP, L.P., which, in turn, owns 100% of Plains All-American Pipeline, L.P.'s (PAA; Baa3 senior unsecured rating, stable outlook) general partner, Plains All-American GP, LLC. VEC also owns 9.1% of PAA's common master limited partner units. PAAGP is also 10% owned by Occidental Petroleum (A2, stable), 4.6% by PAA management, 17.9% by the Kayne Anderson investment group, 8.8% by the E-Holdings investment group, and 8.6% by other private investors. The Ba1 Corporate Family Rating reflects the effectively consolidated credit profile of the combined VEC, PAAGP, and PAA group, which Moody's considers to be fully leveraged relative to VEC's and PAA's ratings. The notching of VEC's Ba2 term loan rating below the CFR reflects the loan's structural subordination to first secured term debt at PAAGP, all debt at PAA, and, effectively, to the debt-like claim on cash flow of cash distributions to the common units. All operating assets and cash flow reside at PAA. All of VEC's cash flow comes from its 50.1% share of PAA's distributions to its 2% general partnership interest and its 9.1% share of PAA's cash distributions to its common unit holders. Incentive distribution rights have pushed general partner distributions to 57% of VEC's cash flow. If PAA needed to reduce its inherently heavy MLP cash distributions, distributions on GP units would suffer first and most and distributions on common units would suffer last and least. As PAA pursues its growth and consolidation strategy, VEC debt is also exposed to acquisition event and releveraging risk. VEC is also exposed to volatility in PAA's low margin crude oil, natural gas, and other hydrocarbon marketing and trading businesses. The CFR is placed at the VEC level, the uppermost rated entity in the economic group. The combined debt at VEC, PAAGP, and PAA depends on the same operating cash flow stream (PAA) for debt service and on the strength and outlook for PAA when VEC, PAAGP, and PAA refinance their debt. PAAGP manages PAA and PAAGP's board of directors serves as PAA's board of directors. While, under a voting rights agreement VEC's voting control over PAAGP is restricted to 49.9%, given the completely aligned economic interests of VEC, PAAGP, and PAA, as well as VEC's and PAA management's effective combined control of PAA and PAAGP, Moody's consolidates VEC, PAAGP, and PAA into one credit group. Furthermore, VEC can unilaterally terminate the VRA with one- year's notice, or, immediately if (i) private equity firms Kayne Anderson and ENCAP both sell their minority PAAGP interests, (ii) Greg Armstrong ceases to be PAA's chief executive officer, or (iii) Harry Pefanis ceases to be PAA's chief operating officer. VEC's first half 2009 EBITDA was $105 million annualized, 43% of which came from common unit distributions and 57% of which came from general partner distributions. PAA's public guidance for 2009 calls for approximately $1 billion of EBITDA, $225 million of interest expense, and approximately $350 million in capital spending. PAA reports that maintenance capital spending is approximately $90 million. At June 30, 2009, pro-forma group debt includes VEC's $280 term loan, PAAGP's $200mm term loan and $3.569 billion of senior notes, $325 million borrowed under its $1.6 billion unsecured bank revolver, and $436 million borrowed under its secured $525 million hedged inventory borrowing facility. Subsequently, during third quarter 2009 to-date, PAA issued $1 billion in senior notes and raised $246 million in net equity proceeds from a common units offering. The last rating action was November 16, 2006, when Moody's affirmed VEC ratings. Moody's July 24, 2008 Issuer Comment also stated that VEC's ratings would be unaffected by its reduced percentage ownership in PAAGP upon Occidental's purchase of a 10% interest in PAAGP. Vulcan Energy Corporation is headquartered in Seattle, Washington and Plains All-American Pipeline, L.P., is headquartered in Houston, Texas. PAA is a public master limited partnership engaged in the midstream crude oil activities of gathering, transporting, terminalling and storage, marketing, and crude oil trading, and marketing and storage of liquefied petroleum gas and other natural gas related petroleum products. WARNER CHILCOTT: $980 Mil. Sale Deal Won't Affect Moody's Ratings ----------------------------------------------------------------- Moody's Investors Service commented that there are no immediate rating implications for Warner Chilcott Company, LLC and Warner Chilcott Corporation based on the planned sale of certain dermatology products to Leo Pharmaceuticals for net proceeds of approximately $980 million. Warner Chilcott's Corporate Family Rating is B1 and the rating outlook is stable. Moody's last rating action on Warner Chilcott was an affirmation of the company's ratings with a stable outlook on August 24, 2009. Headquartered in Ardee, Ireland, Warner Chilcott is a marketer and developer of branded pharmaceutical products focused on the U.S. women's healthcare and dermatology markets. For the first six months of 2009, the company reported total revenue of approximately $497 million. WASHINGTON MUTUAL: Wants to Sell Windpower Assets to Goldman ------------------------------------------------------------ Washington Mutual Inc. and its affiliates seek the Court's authority to allow WMI Investment Corp., to enter into the Letter of Intent with Goldman, Sachs & Co., pursuant to which WMI Investment will: (1) enter into exclusive negotiations with Goldman Sachs regarding Goldman Sachs' potential purchase of WMI Investment's membership interest in JPMC Wind Investment Portfolio LLC; and (2) reimburse Goldman Sachs for its reasonable out-of-pocket professional fees and expenses, up to a maximum of $300,000. Goldman Sachs has presented an indicative purchase price in excess of $15 million, but requested that the purchase price offered and set forth in the Letter of Intent be treated as confidential information pursuant to Section 107(b) of the Bankruptcy Code and Rule 9018 of the Federal Rules of Bankruptcy Procedure. An unredacted copy of the Letter of Intent, with the indicative Purchase Price disclosed, has been provided to the Official Committee of Unsecured Creditors, Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates. Mr. Collins explains that the Wind Power Investment is comprised of WMI Investment's membership interest in JPMC Wind Investment Portfolio LLC, a portfolio holding company which owns an equity interest in each of these four project companies: (a) Airtricity Sand Bluff WF Holdco, LLC, which owns the Airtricity-Sand Bluff wind farm, near Sterling City, Texas; (b) UPC Hawaii Wind Partners II, LLC, which owns the UPC- Kaheawa Pastures wind farm, located in Maui, Hawaii; (c) Whirlwind Energy, LLC, which owns the RES-Whirlwind wind farm, located in Floyd County, Texas; and (d) Buffalo Gap Holdings 2, LLC, which owns the AES-Buffalo Gap 2 wind farm, located in Nolan and Taylor Counties, Texas. According to Mr. Collins, CP Energy Group, LLC, as the Debtors' investment banker, identified potential purchasers of the Wind Power Investment and assisted in negotiations with prospective purchasers. Out of seven parties that expressed interest in the Wind Power Investment, the Debtors determined that the bid submitted by Goldman Sachs is the highest and best bid remitted. Subsequently, WMI Investment and Goldman Sachs entered into a non-binding Letter of Intent through which Goldman Sachs expressed interest in acquiring the Investment. The parties agreed that WMI Investment will reimburse Goldman Sachs for its reasonable out-of-pocket professional fees and expenses incurred in conducting due diligence, preparing and negotiating definitive documentation, and consummating the Transaction, in an amount not to exceed $300,000 in the aggregate, provided that the purchase price is greater than $15 million. The up-front Expense Reimbursement is standard practice in the marketplace for similar tax equity investments, and reasonable in comparison to the potential purchase price of the Wind Power Investment, according to Mr. Collins. WMI Investment's Expense Reimbursement obligation would cease if it enters into definitive agreements with Goldman Sachs with respect to the Wind Power Investment, and the transaction is not consummated as a result of Goldman Sachs' material breach. To the extent that Goldman Sachs and WMI Investment determine to consummate the Sale, the Debtors will seek the Court's approval of certain bidding procedures and any definitive documentation or "stalking horse" agreement with Goldman Sachs, subject to higher and better offers, which request will disclose the actual purchase price. The Letter of Intent also provides that Goldman Sachs will have the exclusive right to negotiate with WMI Investment with respect to the Wind Power Investment from and after the date of the Letter of Intent until the earliest to occur of any these defaults during which the "exclusive right" will automatically terminate: -- if the Court does not enter an order authorizing WMI Investment to enter into the Letter of Intent and approve the Expense Reimbursement by November 4, 2009; -- 60 sixty days after the Court authorizes WMI Investment to enter into the Letter of Intent and approves the Expense Reimbursement; -- if the purchase price that Goldman Sachs offers WMI Investment in respect of the Wind Power Investment, after taking into account any purchase price adjustments that may be agreed between the parties, is less than $15 million; and -- upon WMI Investment's receipt of written notice from Goldman Sachs that Goldman Sachs has elected not to proceed with the purchase of the Wind Power Investment. The terms of the Letter of Intent were negotiated in good faith and the preliminary, non-binding, terms and conditions of the proposed transaction are the most favorable of the proposals received by the Debtors to date, Mr. Collins tells Judge Walrath. Hence, in light of the potential benefits to the Debtors' estates from the proposed sale with Goldman Sachs or another bidder who makes a higher or better offer at an auction, the Debtors believe that it is appropriate to proceed with the sale. JPMC Wind Investment Entities Reserve Rights JPMC Wind Investment LLC and JPMC Wind Investment Portfolio LLC reserved their rights in connection with the Proposed Sale. Each of JPMC Wind Investment and WMI Investment holds an equal membership interest in the LLC, where JPMC Wind Investment is the "Managing Member" of the LLC and WMI Investment is the "Investor Member" of the LLC, Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, noted. The LLC and JPMC Wind Investment both have filed proofs of claim against WMI Investment asserting, among other things, claims for amounts that are or may be owing to the parties. Specifically, both the LLC and JPMC Wind Investment have asserted that WMI Investment is required to indemnify them from and against any and all losses resulting from a transfer of WMI Investment's interest in the LLC, Mr. Landis pointed out. Although neither JPMC Wind Investment nor the LLC has objected to the Debtors' solicitation of interest under the Letter of Intent, neither JPMC Wind Investment nor the LLC have, or will be deemed to have (i) consented to the transfer of WMI Investment's interest in the LLC to Goldman Sachs or any other purchaser or transferee, or (ii) waived any of their rights in the Claims or under bankruptcy and non-bankruptcy law. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). * CBS Broadcasting Denies Possible Bankruptcy --------------------------------------------- Joe Weisenthal at The Business Insider reports that CBS has objected to being included in the Audit Integrity's list of 10 major names at risk of going bankrupt. "Any suggestion that CBS is currently at risk of bankruptcy is absurd, with no basis in either fact or reason. The ironically- named firm Audit Integrity, uses three misleading models for its faulty calculation, two of which are wholly inappropriate for CBS and a third 'proprietary' model that was developed for commercial purposes. Based on the models they do reveal, the methodology uses out-of-date data and a host of invalid assumptions, including a point-in-time market capitalization for CBS that is $2 billion below where we are today. Contrary to Audit Integrity's 'findings,' CBS has an investment grade debt rating, low credit default risk, and a strong debt-to-equity ratio. We urge all credible media outlets and aggregators to report the issue fully, and to challenge Audit Integrity's flawed pseudo-analysis before blindly regurgitating their misinformation," The Business Insider quoted CBS as saying. CBS Broadcasting Inc. (CBS) is an American television network, one of television's original "big three", which also include NBC and ABC. Like NBC, CBS started out as a radio network. The name is derived from the initials of the network's former name, Columbia Broadcasting System. * Airline Outlook Improves While Fliers Face Fees, Packed Planes ---------------------------------------------------------------- U.S. airlines like Delta Air Lines Inc., AMR Corp. and UAL Corp. have more than doubled in U.S. trading since March as the travel slump starts to ease and bankruptcy concerns abate, Mary Jane Credeur and Mary Schlangenstein at Bloomberg reported. The Bloomberg U.S. Airlines Index has outperformed the Standard & Poor's 500 Index by 2-to-1 after a March 5 low as carriers chop flying and impose levies for services that once were free. However, the Bloomberg report notes the U.S. carriers, in order to cut losses, have increased luggage fees, eliminated freebies and charge for services that were previously free and crowding planes because of flight cuts, to the detriment of passengers. * Luxury Hotels in U.S. Risk Default, Says Realpoint ---------------------------------------------------- Luxury hotel owners risk defaulting on their debt as the recession cuts occupancies and the credit crunch constrains refinancing, Nadja Brandt Brandt at Bloomberg said, according to Realpoint LLC, a credit rating company that tracks commercial mortgage-backed securities. Realpoint said that loans secured by more than 1,500 hotels with a total outstanding balance of $24.5 billion may be in danger of default. According to David Loeb, an analyst at Robert W. Baird & Co., luxury hotels have been aggressively funded during the peak CBMS issuance years, thus, they are now crowding the watch list for defaults given the current market. According to Realpoint, real estate firm Millennium Partners LLC is 90 days delinquent on a $90 million loan secured by the Four Seasons San Francisco, a 277-room, five-star property, and foreclosure proceedings have begun. Surrey Hotel Associates LLC has deferred payments, and is seeking to restructure, a $100 million loan that is secured by The Dream Hotel, a 220-room hotel on West 55th Street in New York City. Pointe South Mountain Resort LLC, a Grossman Company Properties affiliate, is 90 days delinquent on a $190 million which had the 640-room Arizona Grand Resort as collateral. Realpoint also is monitoring a $1 billion loan taken by CNL Hotels and Resorts, a company acquired by a Morgan Stanley real estate fund. The loan is secured by five properties with 14 golf courses, including the Arizona Biltmore in Phoenix and the Grand Wailea Resort Hotel & Spa in Maui, Hawaii. Realpoint is a nationally recognized credit-rating agency that has earned a reputation for innovation and excellence in the structured finance market. Its goal is to increase market transparency and provide investors with the highest quality ratings and analysis by offering a wide array of securities research, surveillance services, data, and technology solutions. More than 200 institutional investment firms trust Realpoint to help them identify credit risk in structured finance investments. * FDIC's Bair Seeks Alternative for Replenishing Insurance Funds ---------------------------------------------------------------- Federal Deposit Insurance Corp. Chairman Sheila Bair said in an interview with Bloomberg News on September 24 that the agency is seeking alternatives to a second special assessment on banks to shore up its shrinking deposit fund. An option, asking banks to make advanced payments has a "lot of advantages," she said. According to Bloomberg, advance payments have emerged as least objectionable among options such as borrowing taxpayer dollars from the Treasury Department or taking loans from banks. Banks oppose paying more premiums that "may do more harm than good" and would prefer the FDIC avoid borrowing from the Treasury Department, ABA President Edward Yingling wrote in a Sept. 21 letter to FDIC Chairman Sheila Bair. Banks are ready to pay some obligations in advance, he said. "Prepaid premiums or borrowing from the industry show great promise and are preferred to borrowing from the Treasury," Mr. Yingling wrote to the FDIC. The FDIC's deposit insurance fund dwindled by $2.6 billion -- 20.3% -- during the second quarter to $10.4 billion. According to the FDIC, the reduction was primarily due to an $11.6 billion increase in loss provisions for bank failures. For 2009 through the end of the second quarter, 45 insured institutions with combined assets of $35.9 billion failed at an estimated current cost to the DIF of $10.5 billion. A total of 94 banks have failed this year. Meanwhile, Federal Reserve Bank of Chicago President Charles Evans said the U.S. financial system needs policy changes that include creation of an orderly and efficient process for winding down failing firms, according to a report by Bloomberg. The goal would be to "create a credible regulatory environment in which firms and their creditors would not expect rescues or bailouts," Mr. Evans said Sept. 24 at a conference hosted by his bank in Chicago. * Existing-Home Sales Ease Following Four Monthly Gains ------------------------------------------------------- Existing-home sales in August gave back some of their strong gain in July but remain above year-ago levels, according to the National Association of Realtors(R). Existing-home sales -- including single-family, townhomes, condominiums and co-ops -- declined 2.7% to a seasonally adjusted annual rate1 of 5.10 million units in August from a pace of 5.24 million in July, but remain 3.4% above the 4.93 million-unit level in August 2008. In the previous four months, sales had risen a total of 15.2%. Lawrence Yun, NAR chief economist, said the tax credit is working. "Home sales retrenched from a very strong improvement in July but continue to be much higher than before the stimulus. The first- time buyer tax credit is having the intended impact of bringing buyers into the market, allowing them to take advantage of very favorable affordability conditions," he said. "Some of the give- back in closed sales appears to result from rising numbers of contracts entering the system, with some fallouts and a backlog contributing to a longer closing process, but the decline demonstrates we can't take a housing rebound for granted." According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.19% in August from 5.22% in July; the rate was 6.48% in August 2008. An NAR practitioner survey shows first-time buyers purchased 30% of homes in August, and that distressed homes accounted for 31% of transactions; both were unchanged from July. "The recent trend shows broad improvement in most of the country, but with an expected rise in foreclosures over the next 12 months we need to maintain a healthy level of ready buyers to absorb the inventory. An extension of the tax credit is critical to preserve incentives for financially qualified buyers to enter the market," Yun said. He added that many buyers had been on the sidelines during the past few years, waiting for signs of stabilization. "Now that the market is showing some momentum, we have an opportunity to achieve a more rapid and broader stabilization in home prices. Extending and expanding the tax credit also would help to keep other families from becoming upside down in their mortgages or risk foreclosure," Yun said. "When home prices show sustained gains, credit will become more widely available to other sectors because Wall Street will be able to price risks confidently. Stable home values will also allow more families to purchase consumer products and provide a strong boost for the broader economy." NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said time is running very short for the existing tax credit. "Because it's generally taking 60 days to close on a home after a contract is offered, buyers have little time to act to complete a purchase by the November 30 deadline," he said. "There's no guarantee what Congress might do, so there's really no time to waste. Since Realtors(R) have unparalleled knowledge of local markets, they can also advise first-time buyers on any additional state or local programs that might be able to offer them financial assistance, and help them close on a home before the tax credit expires." Total housing inventory at the end of August fell 10.8% to 3.62 million existing homes available for sale, which represents an 8.5-month supply at the current sales pace, down from a 9.3- month supply in July. Unsold inventory totals are 16.4% lower than a year ago. The national median existing-home price3 for all housing types was $177,700 in August, down 12.5% from August 2008. Distressed properties continue to downwardly distort the median price because they generally sell for 15% to 20% less than traditional homes. Single-family home sales fell 2.8% to a seasonally adjusted annual rate of 4.48 million in August from a level of 4.61 million in July, but are 2.5% higher than the 4.37 million-unit pace in August 2008. The median existing single-family home price was $177,500 in August, down 12.1% from a year ago. Existing condominium and co-op sales slipped 1.6% to a seasonally adjusted annual rate of 620,000 units in August from a spike of 630,000 in July, but are 10.1% higher than the 563,000-unit level a year ago. The median existing condo price was $179,300 in August, which is 15.7% below August 2008. Regionally, existing-home sales in the Northeast declined 2.2% to an annual pace of 910,000 in August, but are 5.8% above August 2008. The median price in the Northeast was $241,100, which is 10.5% below a year ago. Existing-home sales in the Midwest fell 6.6% in August to a level of 1.14 million but are unchanged from a year ago. The median price in the Midwest was $149,900, down 10.4% from August 2008. In the South, existing-home sales were down 3.1% to an annual pace of 1.89 million in August but are 1.6% above August 2008. The median price in the South was $157,400, which is 11.0% below a year ago. Existing-home sales in the West declined 2.7% to an annual rate of 1.16 million in August but are 7.4% higher than a year ago. The median price in the West was $220,500, down 12.2% from August 2008. The National Association of Realtors(R), "The Voice for Real Estate," is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries. * U.S. Newspapers Need Immediate Access to Cash, Group Says ----------------------------------------------------------- U.S. newspaper publishers, suffering advertising and circulation drops, may need government help to survive as their cash reserves dwindle, the Newspaper Association of America told Congress Sept. 24, according to reporting by Greg Bensinger at Bloomberg. Congress could help through proposals to allow newspapers to become nonprofits or to alter how they are taxed for net operating losses, John Sturm, president of the group said. Many newspapers have ceased publication and many more are struggling due to declining advertising sales and subscription. At least five publishers, including Tribune Co., have sought bankruptcy protection from creditors since December. * Nonprofits Across U.S. May Collapse, Says Norman Silber --------------------------------------------------------- Stephanie Strom at The New York Times reports that Hofstra University law professor Norman I. Silber calls the rising debt of nonprofits a calamity. The NY Times quoted Mr. Silber as saying, "If my analysis is correct, over the next several years nonprofits across the country will have to renegotiate bond covenants, reduce services, cut staff or actually default and face foreclosures, repossessions, and in some cases, even bankruptcy." According to The NY Times, many nonprofits engaged in what some experts call risky financial behavior. "They did auction-rate securities, interest-rate arbitrage, complex swaps -- which backfired on them the same way it would backfire on any hedge fund or asset manager. Organizations got to be all fancy-pants with their financial management," the report quoted Clara Miller, CEO of the Nonprofit Finance Fund, as saying. The NY Times notes that while debt is the not primary reason for these institutions' woes, the need to service it eats into their dwindling financial resources. According to the report, Ms. Miller said, "Debt is the fourth horseman of the nonprofit apocalypse. Add it to the failure of governments to fulfill contracts, declining donated revenues and a surge in demand for nonprofit services, and suddenly a lot of nonprofits are faced with some very hard choices." The NY Times relates that much of the nonprofits' debt is in the form of tax-exempt bonds, with the number of charities issuing such bonds more than doubled from 1993 to 2006. The NY Times says that charities used the money from bonds to acquire real estate and build facilities. * BOOK REVIEW: Megamergers - Corporate America's Billion-Dollar Takeovers --------------------------------------------------------------- Author: Kenneth M. Davidson Publisher: Beard Books Hardcover: 427 pages Listprice: $34.95 Review by Henry Berry Megamergers are nothing new to the business world. One of the first occurred in 1901, when Carnegie Steel merged with several rival steel corporations, resulting in the billion-dollar United States Steel. Since then, megamergers have been a part of American business. However, the author notes that megamergers have historically "occurred sporadically and been understandable" on face value. By contrast, in recent decades there has been a "current wave of large mergers [that] is unprecedented." In Megamergers - Corporate America's Billion-Dollar Takeovers, Davidson looks at the unprecedented number of megamergers occurring today and considers whether this signals a change in the thinking of U.S. business leaders. Legislators, corporate executives, mergers specialists, and anyone else involved in, or affected by, megamergers will find this book enlightening. An announcement of a merger is usually accompanied with the pronouncements that it will result in greater synergies, operational efficiencies, and improved servicing of markets. Davidson questions whether this has, in fact, been the case. He analyzes the subsequent financial performance of the corporate behemoths produced by these megamergers and concludes that the majority of them were not justifiable nor, ultimately, productive. Mr. Davidson is an admitted skeptic about the value of mergers to the overall economy and to employees, stockholders, and consumers. He is critical of the overly optimistic rationales prevalent in today's business climate that lead many businesspersons into mergers. For the most part, though, he keeps his biases in check. He rejects many of the common criticisms of mergers. For example, he finds unpersuasive the argument that mergers should be rejected on the ground that they undermine market competitiveness. Nor, does he say, is it worthwhile to revisit the ongoing debate over whether "risk arbitrageurs are good guys or bad guys." The author states that his "first intention [is] to paint a picture of what is happening [to] clarify the issues involved and areas of dispute." He offers a balanced examination of the megamerger phenomenon, particularly as it pertains to the energy and financial services industries. He goes beyond seeing megamergers only as phenomena of contemporary corporate culture, and his analyses go beyond mere statistics. Megamergers have their roots not only in business ambitions and current trends, but also in human nature. Recognizing this, the author also addresses the psychology underlying megamergers. As noted in the section "The Acquisition Imperative," mergers present a temptation to the decision-making executives of successful companies "look[ing] beyond their product and consider[ing] the disposal of excess profits." Mr. Davidson explains why a merger appears to many executives to be a better option than distributing profits to shareholders, starting new businesses, or investing in securities. The informed perspective Mr. Davidson offers in this book, first published in 2003, is just as relevant today. It is a book that brings new wisdom to old ways of thinking about megamergers. An attorney for the U. S. Federal Trade Commission for 25 years, Kenneth M. Davidson has also been a corporate attorney and a visiting law professor. ********* 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 **