/raid1/www/Hosts/bankrupt/TCR_Public/090930.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, September 30, 2009, Vol. 13, No. 270
Headlines
1031 TAX GROUP: BofA, Countrywide Balk at Chapter 11 Plan
201 ST LOUIS AVENUE: Voluntary Chapter 11 Case Summary
AFFILIATED COMPUTER: Fitch Puts 'BB' Rating on Positive Watch
AFFILIATED COMPUTER: Moody's Reviews 'Ba2' Corporate Family Rating
AFFILIATED COMPUTER: S&P Puts 'BB' Rating on Positive CreditWatch
ALTERNATIVE DISTRIBUTION: Auction Set for October 9
AMACORE GROUP: Sells Preferreds, Warrants to Vicis, Raises $6MM
AMERICAN ACHIEVEMENT: Expects to Report Lower Net Sales for FY2009
AMERICAN RAILCAR: Moody's Junks Corporate Family Rating From 'B2'
AMR CORP: Inks Supplemental Indenture with Wilmington Trust
APPLETON PAPERS: Moody's Affirms 'B2/LD' Corporate Family Rating
ARBIOS SYSTEMS: Reorganization Plan Effective on Sept. 21
ARENA FOOTBALL: Teams Transfer to New League
ASARCO LLC: Amends Suit for Subordination of AMC Claims
ASARCO LLC: Asbestos Claimants Expand Work of Charter Oak
ASARCO LLC: Court OKs Settlement with BNSF Railway on Claims
BARZEL INDUSTRIES: Can Hire Logan as Claims and Noticing Agent
BARZEL INDUSTRIES: Proposes Cole Schotz as Bankruptcy Counsel
BARZEL INDUSTRIES: Taps Kelly Drye as Special Corporate Counsel
BASELINE OIL: Court Confirms Prepackaged Chapter 11 Plan
BERNARD MADOFF: Judge Lifland Intends to Maintain Order
BERNARD MADOFF: Picard Plans to Sue Madoff Family
BIOLIFE SOLUTIONS: June 30 Balance Sheet Upside-Down by $7 Million
BION ENVIRONMENTAL: GHP Horwath Raises Going Concern Doubt
BPO MANAGEMENT: Posts $5MM Net Loss in Quarter Ended June 30
BROADSTRIPE LLC: Seeks January 27 Extension to File Plan
BRYAN SONG: Chapter 11 Case Summary & Unsecured Creditor
BSC DEV'T: Buyers Want 60-Day Extension to Close Sale Deal
BURLINGTON COAT: Moody's Gives Stable Outlook, Affirms 'B3' Rating
CABI DOWNTOWN: Proposes Settlement With Condo Unit Buyers
CALYPTE BIOMEDICAL: Saidmuradov, Yousefi Join Board of Directors
CANWEST MEDIA: Lenders Extend Forbearance Period
CAPITAL GROWTH: Remanco President Discloses 20.85% Equity Stake
CAPTAIN'S TABLE: Voluntary Chapter 11 Case Summary
CARPET CUSHION: Case Summary & 20 Largest Unsecured Creditors
CHRYSLER LLC: Daimler Wants Suit Dropped for Lack of Jurisdiction
CHRYSLER LLC: TARP Watchdog to Review Dealer Closings
CHRYSLER LLC: GMAC Financial Offers Incentives to Dealers
CHRYSLER LLC: Sterling Heights Plant to Stay in Operations
CIT GROUP: In Talks to Refinance $3-Bil. Loan, Rumors Say
COASTAL PLAINS PORK: Case Summary & 20 Largest Unsecured Creditors
COLONIAL BANCGROUP: Underwriters Want Dismissal of Class Suit
CRUSADER ENERGY: To Sell Working Interests Back to Gunn Oil
CRUSADER ENERGY: SandRidge to Pay $55 Million Cash Plus Stock
CYNERGY DATA: Creditors Panel Objects to Final Financing Approval
CYNERGY DATA: Committee Proposes Jager Smith as Counsel
CYNERGY DATA: Committee Wants Ashby & Geddes as Delaware Counsel
DEVELOPERS DIVERSIFIED: S&P Assigns 'BB' Rating on $300 Mil. Notes
DPAC TECHNOLOGIES: Posts $601,000 Net Loss in Qtr. Ended June 30
DREAMS INC: Posts $2 Million Net Loss in Six Months Ended June 30
EDWARD NEWMAN: Case Summary & 20 Largest Unsecured Creditors
ELECTRICAL SERVICE: Case Summary & 20 Largest Unsecured Creditors
EMI GROUP: Citigroup May Refuse Out-Of-Court Restructuring
FILENE'S BASEMENT: Liquidating Estate Has Deal With Former Owner
FLUID ROUTING: Case Converted to Chapter 7 Liquidation
FONTAINEBLEAU LV: Term Lenders Want Case Converted to Chapter 7
FRANKLIN CREDIT: June 30 Balance Sheet Upside-Down by $799 Million
GAMMA PHARMA: Posts $800,000 Net Loss in Quarter Ended June 30
GENARO MENDOZA: Sells Chancery Building to Chelsea Pacific
GENTEK INC: Moody's Reviews 'B1' Corporate Family Rating
GENTEK INC: S&P Puts 'B+' Corp. Rating on CreditWatch Developing
GEO GROUP: Moody's Affirms Senior Secured Rating at 'Ba3'
GENERAL GROWTH: Committee Members Get Nod to Trade Claims
GEORGIA GULF: Registers 31,148,503 Common Shares for Resale
GETRAG TRANSMISSION: Renewable Energy Firm Eyeing Tipton Site
GOLDEN NUGGET: S&P Downgrades Corporate Credit Rating to 'SD'
GREATER ATLANTIC: Seeks Dismissal of Litman Lawsuit
GREEN BUILDERS: June 30 Balance Sheet Upside-Down by $8.5 Million
HALCYON HOLDING: Movie Rights to 'Terminator' Put on Sale
HAWAII SUPERFERRY: To Seek Confirmation of Plan on Oct. 21
HEALTHSPORT INC: Posts $4.9MM Net Loss in Quarter Ended June 30
HEREFORD BIOFUELS: Bankruptcy Case Switched to Chapter 7
HOKU SCIENTIFIC: Inks Financial Agreement with Tianwei
HOLDINGS GAMING: S&P Downgrades Corporate Credit Rating to 'B-'
HOVNANIAN ENTERPRISES: Chairman Kevork Hovnanian Dies
IRIDIUM LLC: Wants Court to Dismiss Chapter 11 Cases
JOLT COMPANY: Files for Chapter 11 to Sell Business
JOLT COMPANY: Case Summary & 20 Largest Unsecured Creditors
KRISPY KREME: Registers 3MM Shares Under 2000 Incentive Plan
KRISPY KREME: S&P Changes Outlook to Stable, Affirms 'B-' Rating
LE-NATURE'S INC: Former CEO Faces Fraud Charges
LENNY DYKSTRA: Porsche Wants to Repossess 2009 Cayenne
LIFECARE HOLDINGS: Appoints Grant Asay as EVP of Operations
LODGENET INTERACTIVE: Moody's Affirms 'B3' Corporate Family Rating
MANCHESTER INC: Forum Selection Clause Had To Be Enforced
MARK IV INDUSTRIES: May Loss E-ZPass Contract
MBIA INSURANCE: Losses on SF Products Cue S&P's Rating Cut to BB+
MERRILL LYNCH: Ohio Attorney General Sues BofA Over Merger
METRO-GOLDWYN: Talks Between Owners and Lenders Contentious
METROMEDIA INT'L: Balks at Creditor's Bid for Chapter 11 Trustee
MICROMET INC: Omega Funds Unload Shares, Disclose 6.94% Stake
MIDWAY GAMES: Balks at TNA Plea for 2nd Hearing on San Diego Sale
MIDWAY GAMES: Wants October 30 Extension to File Plan
MITEK SYSTEMS: Posts $994,000 Net Loss in Nine Mos. Ended June 30
MONEYGRAM INT'L: Mulls Options in Western Union Patent Ruling
NATIONAL GAS: No Quantity Nixed Swap Agreement Treatment
NEW FRONTIER: Amends Form Annual Report to Correct Inconsistencies
NEUMANN HOMES: APC Wants Lift Stay to Respond to SBS Suit
NEUMANN HOMES: Sprovieri Wants Lift Stay to File Counterclaim
OPTI CANADA: Moody's Confirms Corporate Family Rating at 'Caa1'
OSCIENT PHARMA: Lupin Acquires Antara's US Marketing Rights
OXIS INTERNATIONAL: Posts $5,006,000 Net Loss in 2008
PALMDALE HILLS: SunCal Settles With Lehman over Competing Plans
PANAVISION INC: Moody's Cuts Corporate Family Rating to 'Caa3'
PAVELIC HOLDINGS: Voluntary Chapter 11 Case Summary
PILGRIM'S PRIDE: District Court to Estimate FLSA Claims
PILGRIM'S PRIDE: Cattle Producers Group Object to JBS Buy-Out
PILGRIM'S PRIDE: Seeks Approval of Stock Purchase Pact With JBS
PILGRIM'S PRIDE: To Seek Approval of Plan Disclosure on Oct. 20
PLEASANT VALLEY: Case Summary & 7 Largest Unsecured Creditors
PLIANT CORP: GE et al. Balks at Apollo Chapter 11 Plan
PNG VENTURES: Gets Temporary OK to Obtain Greenfield DIP Financing
PONY EXPRESS RV: Files Chapter 11 in Salt Lake Hometown
QUESTEX MEDIA: Moody's Withdraws 'Caa1' Corporate Family Rating
RAHAXI INC: Revenues May Be Insufficient to Fund Capital Needs
RADIENT PHARMACEUTICALS: Registers 2.7 Million Shares for Resale
RADIENT PHARMACEUTICALS: May Issue 5 Mil. Common Shares
RAFTER SEVEN: 10th Cir. BAP Says No Stay Damages for Partnership
UAL CORP: Board Grants Garvey 2,676.66 Units Under 2006 Plan
SANDAB COMMUNICATIONS: Cape Cod FM Radio Stations File Chapter 11
SANTA FE HOLDING: Ada Branch Not Closing
SCHWING AMERICAN: Files Chapter 11 in St. Paul; Has $10MM DIP Loan
SCHWING AMERICAN: Case Summary & 20 Largest Unsecured Creditors
SCIENTIFIC GAMES: Moody's May Take Action on 'Ba2' Rating
SEMGROUP LP: Gets Court Nod for BDO Seidman as Auditor
SEMGROUP LP: Gets Nod for Barclays to Arrange WhiteCliffs Loans
SEMGROUP LP: U.S. Court OKs Cross-Border Protocol
SHENANDOAH LP: Case Summary & 20 Largest Unsecured Creditors
SIRIUS XM: At Risk of Bankruptcy, Says Audit Integrity
SOPHOI INC: Files for Chapter 11 Bankruptcy Protection
SOUTH LOUISIANA: Gets Approval of $75,000 Interim Financing
SOUTHEAST TELEPHONE: Case Summary & 20 Largest Unsecured Creditors
STAMFORD INDUSTRIAL: Case Summary & 19 Largest Unsecured Creditors
STANFORD INT'L: SFG Receiver Stops Owner's Bid to Access Funds
STANFORD INT'L: Owner Moved to Federal Lockup in Houston
STAR TRIBUNE: Exits Chapter 11 Bankruptcy Protection
STATION CASINOS: CMBS Lenders, Usec. Creditors Oppose Examiner
STATION CASINOS: Gets Court Nod to Employ Milbank as Lead Counsel
STATION CASINOS: Gets Final Nod to Honor D&O Obligations
STATION CASINOS: Proposes Ernst & Young LLP as Tax Advisor
STEPHEN SCHIEFER: Case Summary & 18 Largest Unsecured Creditors
STEVEN SPENSLEY: Case Summary & 19 Largest Unsecured Creditors
STONE CONNECTION: Case Summary & 20 Largest Unsecured Creditors
TOUSA INC: Citicorp Wants Revolver Claims in Suit Removed
TOUSA INC: Court Approves LLV-1 Settlement Agreement
TOUSA INC: Obtains Approval of Settlement With Jasmine HOA
TRIBUNE CO: Alvarez & Marsal Charges $700,000 for July Work
TRIBUNE CO: Creditors Committee Has Deal With Rustic for Documents
TRIBUNE CO: Judge Defers Ruling on Manager Bonuses
TVT RECORDS: Pitbull Gets Out of Recording Contract
UAL CORP: Citadel Reports 4.85% Ownership of Common Stock
UAL CORP: Janus Capital Discloses 12.8% Equity Stake
UAL CORP: Terminated 290 Pilots as Part of Cost Cutting
UTGR INC: To Ask Court to Let Labor Dept. to Rule on Pay Dispute
US AIRWAYS: August Traffic Results Show RPMs Down 3.9%
US AIRWAYS: Ben Mitchell et al Seek Final Nod of PrimeFlight Deal
US AIRWAYS: E. Eberwein Acquired 10,000 Shares Sept. 10
VELOCITY EXPRESS: Asks Court to Approve $14-Mil. Burdale DIP Loan
VERMILLION INC: Stock Tops $13 After FDA Test Approval
W R GRACE: Proposes to Implement New Hires' Retirement Plan
W R GRACE: Proposes to Sell 5% Interest in ART to Chevron
W R GRACE: Settles BNSF Railway Environmental Claims
WARNER CHILCOTT: Moody's Assigns 'Ba3' Rating on Senior Facilities
WEYERHAEUSER COMPANY: Moody's Puts 'Ba1' Rating on $300 Mil. Notes
XEROX CORP: Affiliated Computer Deal Cues S&P's Negative Watch
* FDIC Board to Order Banks to Pay Advance 3 Years of Fees
* S&P's 2009 Global Corporate Default Tally at 216
* Moody's Changes U.S. Retail Industry Sector Outlook to Stable
* Upcoming Meetings, Conferences and Seminars
*********
1031 TAX GROUP: BofA, Countrywide Balk at Chapter 11 Plan
---------------------------------------------------------
Law360 reports that Bank of America NA and Countrywide Bank FSB,
accused of aiding The 1031 Tax Group LLC's $126 million Ponzi
scheme, have objected to the Debtor's latest Chapter 11 plan,
claiming the proposed reorganization runs roughshod over the
banks' crucial setoff rights.
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.
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.
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.
The Chapter 11 trustee said in its plan that it has pending
lawsuits against, or possible settlements with, JPS NH LLC,
Boulder Capital LLC, WH Hialeah Investors V, LLC, and Citibank,
N.A. The Chapter 11 trustee has also commenced an action against
Mr. Okun seeking a judgment in the amount of $150 million.
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.
201 ST LOUIS AVENUE: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: 201 St. Louis Avenue, LLC
15216 Watergate Road
Silver Spring, MD 20905
Bankruptcy Case No.: 09-28278
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
District of Maryland (Greenbelt)
Judge: Wendelin I. Lipp
Debtor's Counsel: Tate M. Russack, Esq.
Russack Associate, LLC
100 Severn Avenue, Suite 101
Annapolis, MD 21403
Tel: (410) 505-4150
Fax: (410) 510-1390
Email: Tate@russacklaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company says it does not have unsecured creditors who are non
insiders when they filed their petition.
The petition was signed by George J. Karvounis, manager of the
Company.
AFFILIATED COMPUTER: Fitch Puts 'BB' Rating on Positive Watch
-------------------------------------------------------------
Fitch Ratings has placed these ratings for Affiliated Computer
Services, Inc., on Rating Watch Positive subsequent to Xerox
Corporation's stated intent to acquire the company:
-- Issuer Default Rating 'BB';
-- Senior secured revolving credit facility 'BB';
-- Senior secured term loan 'BB';
-- Senior notes 'BB-'.
The rating action follows Xerox's proposed acquisition of ACS for
$9 billion, including $2.3 billion of assumed debt ($8.7 billion
net of cash acquired). The transaction is expected to close in
the first quarter of 2010 subject to shareholder and regulatory
approvals.
Fitch believes Xerox will refinance the vast majority of ACS'
existing debt, consisting primarily of $1.8 billion of borrowings
under ACS' credit facility, as the transaction triggers the change
of control provision in ACS' credit agreement. Fitch believes
Xerox is not legally obligated to redeem ACS' $250 million of
senior notes due in June 2010 and June 2015 prior to maturity.
The Positive Rating Watch will be resolved upon closing of the
acquisition. In conjunction with the resolution, Fitch expects to
upgrade ACS' IDR and senior unsecured debt rating to correspond to
Xerox's ratings.
AFFILIATED COMPUTER: Moody's Reviews 'Ba2' Corporate Family Rating
------------------------------------------------------------------
Moody's Investors Service placed the ratings of Affiliated
Computer Services under review for upgrade following the
announcement that Xerox Corporation has entered into a definitive
agreement to acquire ACS for approximately $6.4 billion plus the
assumption of $2 billion of ACS debt. Both boards of directors
have approved the transaction, which, subject to shareholder and
regulatory approval, as well as customary closing conditions, is
expected to close in the first quarter of 2010.
Ratings placed under review for possible upgrade include:
Affiliated Computer Services:
* Corporate Family Rating at Ba2
* Senior secured notes at Ba2
The existing Ba2 corporate family rating for ACS reflects the
concentrated voting control of ACS' chairman (who controls 42% of
share votes), which has raised concerns over the independence and
effectiveness of board oversight. Furthermore, the company has
shown an aggressive financial culture as evidenced by the aborted
attempt by the chairman and a private equity fund (Cerberus) to
buy the company in 2007. Post closing, these concerns will cease
to exist for the combined entity. Moody's expects that the ACS
notes will be refinanced, however, to the extent that they remain
outstanding, their new rating would depend on whether Xerox
guarantees the notes.
The last rating action for ACS was on January 28, 2008, when
Moody's confirmed the company's corporate family rating.
Headquartered in Dallas, Texas, ACS, with about $6.5 billion in
revenues for the fiscal year ended June 2009, is a leading
provider of business process outsourcing and information
technology outsourcing services to commercial clients as well as
to federal, state and local governments.
AFFILIATED COMPUTER: S&P Puts 'BB' Rating on Positive CreditWatch
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its ratings on
Dallas-based Affiliated Computer Services Inc., including the 'BB'
corporate credit rating, on CreditWatch with positive
implications. The CreditWatch follows the announced $6.4 billion
acquisition of ACS by higher rated Norwalk, Connecticut-based
Xerox Corp. (BBB/Watch Neg/--).
Under the terms of the agreement, ACS shareholders will receive a
total of $18.60 per share in cash plus 4.935 Xerox shares for each
ACS share they own. In addition, Xerox will assume ACS's debt of
$2 billion and issue $300 million of convertible preferred stock
to ACS's class B shareholders. S&P expects the transaction, which
has been approved by the Xerox and ACS boards of directors and ACS
special committee, to close in the first quarter of 2010, pending
regulatory and shareholder approval. ACS will operate as an
independent organization and will be led by Lynn Blodgett, who
will report to Ursula Burns.
"Upon successful completion of the acquisition, if ACS's rated
debt remains outstanding, S&P will likely raise the corporate
credit rating to 'BBB-'," said Standard & Poor's credit analyst
Martha Toll-Reed.
ALTERNATIVE DISTRIBUTION: Auction Set for October 9
---------------------------------------------------
Alternative Distribution Systems Inc. received approval from the
Bankruptcy Court to conduct an Oct. 9 auction for its assets, Bill
Rochelle at Bloomberg News reported. Secured lenders will serve
the stalking horse bidder with their offer to buy the business in
exchange for $21 million in secured debt. Competing bids are due
Oct. 8. The hearing for approval of the sale will be held Oct.
14.
Chesterton, Indiana-based Alternative Distribution Systems Inc. is
a leading provider of integrated transportation, distribution and
logistics services for the metals industry. It operates
facilities located in 14 states and Canada and has 280 employees.
Alternative Distribution together with two affiliates filed for
Chapter 11 on September 2, 2009 (Bankr. D. Del. Case No. 09-
13099). Attorneys at Proskauer Rose LLP serve as general
bankruptcy counsel. Attorneys at Cole, Schotz, Meisel, Forman &
Leonard, P.A., serve as local counsel. EVE Partners LLC is
financial advisor to the Debtors. BMC Group Inc. serves as claims
and notice agent.
AMACORE GROUP: Sells Preferreds, Warrants to Vicis, Raises $6MM
---------------------------------------------------------------
The Amacore Group, Inc., on September 21, 2009, entered into an
oral agreement with Vicis Capital Master Fund, its majority
stockholder, to sell to Vicis 600 shares of convertible preferred
stock and a warrant to purchase an aggregate of 67,500,000 shares
of the Company's Class A Common Stock, initially at an exercise
price of $0.375 per share, for an aggregate purchase price of
$6.0 million.
The Company anticipates that when issued, the Preferred Stock will
consist of shares of the Company's Series L Preferred Stock or a
new series of preferred stock with terms substantially similar to
the Series L Preferred Stock. The funds were received from Vicis
on September 21, 2009. However, a securities purchase agreement
and other related transaction documents are in the process of
being negotiated with Vicis and, accordingly, have not been
executed at this time. The shares of Preferred Stock and Warrant
will be issued to Vicis upon the execution of the Transaction
Documents.
While the Transaction Documents have not yet been negotiated or
executed, it is anticipated that the Transaction Documents will be
substantially similar to the transaction documents effective as of
June 29, 2009 that were executed in connection with Vicis' last
investment in the Company. Further, while the Company anticipates
that the Transaction Documents to be executed will reflect the
oral agreement discussed above and will be substantially similar
to the prior transaction documents, it is possible that the terms
of the agreement or the prior transaction documents will be
modified in the process of preparing the Transaction Documents and
that such modifications may be material.
About Amacore Group
Based in Tampa, Florida, The Amacore Group Inc. (OTC BB: ACGI) --
http://www.amacoregroup.com/-- provides health-related membership
benefit programs, insurance programs, and other innovative and
high-quality solutions to individuals, families and employer
groups nationwide.
Through its wholly owned subsidiary, LifeGuard Benefit Solutions
Inc., Amacore now has the ability to provide administrative and
back-office services to other healthcare companies in addition to
expanding its own call center capability through its wholly-owned
subsidiary, JRM Benefits Consultants LLC and US Heath Benefits
Group Inc., a call center-based marketing company. Zurvita Inc.,
Amacore's newly formed, wholly-owned subsidiary specializing in
direct to consumer multi-level marketing, provides yet another
channel for Amacore's ever-increasing range of healthcare and
healthcare-related products.
Amacore Group posted a net loss of $905,276 for the three months
ended June 30, 2009, from a net loss of $5,322,596 for the same
period in 2008. The Company posted net income of $951,146 for the
six months ended June 30, 2009, from a net loss of $18,673,719 for
the same period a year ago.
At June 30, 2009, the Company had $18,535,952 in total assets
against $21,828,742 in total liabilities, resulting in $3,292,790
in stockholders' deficit.
At March 31, 2009, the Company's balance sheet showed total assets
of $19.6 million and total liabilities of $23.1 million, resulting
in a stockholders' deficit of about $3.5 million.
Going Concern Doubt
McGladrey & Pullen, LLP, in Ft. Lauderdale, raised substantial
doubt about the Company's ability to continue as a going concern
after auditing the Company's financial results for the year
ended December 31, 2008. The auditors pointed that the Company
has suffered recurring losses from operations and has negative
working capital.
AMERICAN ACHIEVEMENT: Expects to Report Lower Net Sales for FY2009
------------------------------------------------------------------
AAC Group Holding Corp. and American Achievement Corporation
announced preliminary estimated operating results of American
Achievement Corporation for the fiscal year ended August 29, 2009:
American Achievement
(in millions)
Fiscal Year Ended
--------------------
08/29/09 08/30/08
-------- --------
Net sales $288 - $293 $313.4
Operating income from
continuing operations $35 - $37 $40.2
EBITDA from continuing
operations $60 - $63 $65.1
Adjusted EBITDA from
continuing operations $72 - $75 $74.2
The Company uses a 52/53 week fiscal year. Fiscal year 2009
consists of 52 weeks, whereas fiscal year 2008 consisted of 53
weeks. As a result, the current fiscal year reflects one week
less of net sales, expenses and operating income as compared to
the same period of the prior fiscal year. Additionally, the
decrease in sales is primarily a reflection of weak economic
conditions, which had an unfavorable impact on volumes and metal-
mix. The Company utilized productivity initiatives and cost
containment measures to partially offset the impact of lower sales
on operating income, EBITDA from continuing operations and
Adjusted EBITDA from continuing operations.
The Company made payments of $28.7 million on its Senior Credit
Facility term loan during the fiscal year ended August 29, 2009.
The Company does not have any outstanding borrowings under its
revolving credit facility as of August 29, 2009, and as of the
date hereof. The Company's total indebtedness was approximately
$328 million and $355.9 million, as of August 29, 2009, and
August 30, 2008, respectively. The Company's cash balance was
approximately $12 million and $9.7 million as of August 29, 2009
and August 30, 2008, respectively.
From time to time, the Company, its parent companies,
subsidiaries, affiliates and significant stockholders may seek to
retire or purchase its or its parent companies' outstanding debt
(including publicly issued debt) through cash purchases or
exchanges, in open market purchases, privately negotiated
transactions, by tender offer or otherwise. The repurchases or
exchanges, if any, will depend on prevailing market conditions,
liquidity requirements, contractual restrictions and other
factors. The amounts involved may be material.
American Achievement Group Holding Corp. is the indirect parent
company of American Achievement Corporation. American Achievement
Corporation is a provider of products that forever mark the
special moments of people's lives. As the parent company of
brands like ArtCarved(R), Balfour(R), Keepsake(R), and Taylor
Publishing, American Achievement Corporation's legacy is based
upon the delivery of exceptional, innovative products, including
class rings, yearbooks, graduation products and affinity jewelry
through in-school and retail distribution.
As reported by the Troubled Company Reporter on September 8, 2009,
Standard & Poor's Ratings Services raised its corporate credit
rating on American Achievement Corp. to 'B-' from 'SD' (selective
default). The rating outlook is stable.
As reported by the TCR on August 19, 2009, Moody's Investors
Service affirmed American Achievement Group's corporate family
rating at Caa1 while at the same time, changed the probability of
default rating from Caa2/LD to Caa2. The Senior PIK Note rating
was upgraded to Caa3 from Ca reflecting the changes to the capital
structure per Moody's LGD framework. The rating outlook is
stable.
AMERICAN RAILCAR: Moody's Junks Corporate Family Rating From 'B2'
-----------------------------------------------------------------
Moody's Investors Service has lowered the ratings of American
Railcar Industries, Inc., Corporate Family Rating to Caa1 from B2,
and its Probability of Default Rating to B3 from B2. The rating
of the company's $275 million senior unsecured notes has been
lowered to Caa1 from B3. The ratings have a negative outlook.
ARI has a Speculative Grade Liquidity Rating of SGL-2.
ARI's B3 Probability of Default Rating balances the company's good
near term liquidity profile against a prolonged weak business
outlook for railcars that could cause increasing financial stress
for the company over the intermediate term. With cash balances
exceeding outstanding debt levels and no required debt repayments
before 2014, Moody's believes the prospects for default are low
over the near term, which supports the PDR rating at a level above
the Caa1 Corporate Family Rating. The substantial cash balances
also support Moody's assessment of a good liquidity position which
supports the SGL-2 liquidity rating. However, absent a recovery
in market conditions, as ARI's notes approach maturity, the
probability of default is likely to increase, particularly if cash
balances deteriorate through a prolonged industry recession. The
Corporate Family Rating is positioned at Caa1 to reflect Moody's
assessment that in the event of default recovery would be
substantially restricted by the weak prospects for railcar
manufacturing that are likely to exist over the next 12 to 18
months.
With over 90% of 2008 revenues derived from railcar manufacturing
operations, the company's operating performance will be heavily
affected by the downturn in railroad freight volume that drives
demand for railcars. ARI's backlog has substantially weakened as
a result of this decrease in demand, and new car order levels are
not expected to rebound over the near term. ARI's revenue base is
expected to drop significantly going into 2010, with manufacturing
revenues at only a fraction of historical levels. In addition, a
substantial part of the company's backlog is associated with
orders from CIT Group, Inc., a distressed financial services
company that purchases rail cars for its equipment leasing
business. Any erosion of the backlog or reduced deliveries to CIT
would adversely affect ARI's operating performance. Moreover, the
company does not benefit to any material degree from product
diversity, part or services contracts, aftermarket sales, or, most
importantly, a captive leasing business that is resident in many
of its competitors' operations. In Moody's view, this illustrates
a key weakness in ARI's business model when compared to
manufacturing and leasing competitors. As a result of eroding
financial results that are expected to accompany the weaker sales
environment, Moody's believes that ARI's credit metrics will
deteriorate to levels that will map more closely to those of
companies in the Caa rating category. However, ARI's sound
liquidity profile and the high degree of flexibility in its cost
structure should provide the company with the ability to withstand
depressed market conditions during the near term.
The negative ratings outlook reflects concerns that a prolonged
period of weakness in the rail car sector will likely result in a
period of dramatically weaker revenues and operating losses. As
such, credit metrics are expected to deteriorate substantially.
This will eventually lead to modest but persistent negative free
cash flow generation, which could reduce the company's liquidity
profile over time by depleting the company's cash reserves.
Credit metrics are expected to be weak for the Caa1 rating at
least through 2010.
Ratings could be lowered if free cash flow uses result in a
persistent and material draw in the company's cash reserves, which
Moody's views as vital to the maintenance of company's current B3
Probability of Default Rating. Cash balances falling below
$250 million may prompt downward rating pressure. Ratings could
also be lowered if the company were to enter into a large
acquisition or investment program that will make substantial use
of the company's cash balances. The ratings outlook could be
stabilized, however, if new railcar orders resume to levels that
result in a backlog of at least 2,000 railcars, while revenue
growth and margin stability result in credit metrics more
appropriate for a Caa1 rating: Debt/EBITDA of less than 8 times
and EBIT/Interest approaching 1.0 time while demonstrating
approximately break even free cash flow or better.
Downgrades:
Issuer: American Railcar Industries, Inc.
-- Corporate Family Rating, Downgraded to Caa1 from B2
-- Probability of Default Rating, Downgraded to B3 from B2
-- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1
(LGD5, 71%) from B3
The last rating action was on May 26, 2009, when corporate family
rating was lowered to B2 from Ba3.
American Railcar Industries, Inc., headquartered in St. Charles,
Missouri, is a manufacturer of covered hopper and tank rail cars,
and also provides rail car repair and fleet management services.
AMR CORP: Inks Supplemental Indenture with Wilmington Trust
-----------------------------------------------------------
AMR Corporation and Wilmington Trust Company, as trustee, on
September 28, 2009, entered into the Supplemental Indenture,
supplemental to the Indenture, dated as of February 1, 2004,
between the Company and the Trustee, providing for the issuance by
the Company of $460,000,000 million aggregate principal amount of
its 6.25% Convertible Senior Notes due 2014. The Notes are
unconditionally guaranteed on a senior unsecured basis by American
Airlines, Inc., a wholly owned subsidiary of the Company, pursuant
to the Guarantee, dated as of September 28, 2009.
Interest on the Notes is payable semiannually in arrears on
October 15 and April 15 of each year, beginning on April 15, 2010.
The stated maturity date of the Notes is October 15, 2014. The
Notes are convertible by holders into shares of the Company's
Common Stock at an initial conversion rate of 101.0101 shares per
$1,000 principal amount of the Notes, equivalent to an initial
conversion price of roughly $9.90 per share, subject to adjustment
upon the occurrence of certain events specified in the Indenture,
at any time prior to the close of business on the business day
immediately preceding the stated maturity date of the Notes.
Maturity of the Notes may be accelerated upon the occurrence of
certain events of default, including failure by the Company (in
some cases after notice or the expiration of a grace period, or
both) to make payments under the Indenture when due, to deliver
shares of Common Stock upon conversion of the Notes or to comply
with certain covenants, as well as certain bankruptcy events.
The Notes and the Guarantee were registered for offer and sale
pursuant to the Securities Act of 1933, as amended, under the
Company's and American's shelf registration statement on Form S-3
(Registration Nos. 333-160646 and 333-160646-01). The Notes were
sold pursuant to the Underwriting Agreement, dated September 22,
2009, among the Company, American and the several underwriters
named therein.
On September 28, 2009, the Company completed its issuance and sale
of 48,484,849 shares of the Company's Common Stock, par value
$1.00 per share, at a public offering price of $8.25 per share.
The Company granted the underwriters of the offering a 30-day
option to purchase up to an additional 7,272,727 shares of Common
Stock to cover over-allotments. The shares were registered for
offer and sale pursuant to the Securities Act under the
Registration Statement. The shares were sold pursuant to the
Underwriting Agreement, dated September 22, 2009, among the
Company and the several underwriters named therein.
About AMR Corp.
Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. At the end of 2006, American provided scheduled jet
service to about 150 destinations throughout North America, the
Caribbean, Latin America, including Brazil, Europe and Asia.
American is also a scheduled airfreight carrier, providing
freight and mail services to shippers throughout its system.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
AMR Corp. reported a net loss of $390 million for the second
quarter of 2009, or $1.39 per share. At June 30, 2009, the
Company had $24.1 billion in total assets; $8.2 billion in total
current liabilities, $8.3 billion in long- term debt, less current
maturities, $572 million in obligations under capital leases, less
current obligations, $6.8 billion in pension and postretirement
benefits, and $3.1 billion in other liabilities, deferred gains
and deferred credits; resulting in a $3.0 billion stockholders'
deficit.
* * *
As reported by the Troubled Company Reporter on September 25,
2009, Fitch Ratings has assigned a rating of 'C' and a Recovery
Rating of 'RR6' to AMR's $400 million senior convertible note
issue. Fitch's current Issuer Default Rating for AMR is 'CCC'.
On September 24, the TCR said Standard & Poor's Ratings Services
assigned its 'CCC+' issue-level rating and '5' recovery rating to
AMR's $250 million senior convertible notes due 2014. In
addition, S&P placed the rating on CreditWatch with negative
implications, and will review it in conjunction with its
resolution of the CreditWatch listing on AMR.
Also on September 24, Moody's Investors Service affirmed its Caa1
corporate family and probability of default ratings of AMR.
Moody's changed the speculative grade liquidity rating to SGL-2
from SGL-3 and the outlook to stable from negative. Moody's also
affirmed the B2 rating of the first lien senior secured term loan
of American Airlines, AMR's wholly owned subsidiary, and lowered
its ratings on the company's 2001-1 Series of Enhanced Equipment
Trust Certificates.
APPLETON PAPERS: Moody's Affirms 'B2/LD' Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service affirmed Appleton Papers' corporate
family rating of B2 and changed its probability of default rating
to B2/LD from Caa3, following the company's announcement that its
tender offer, which was extended to all of its senior noteholders
on September 17, 2009, had expired on September 25, 2009.
Subsequent to the offer, approximately 84% of Appleton's
outstanding senior unsecured notes and 77% of its outstanding
senior subordinated notes were tendered at substantial discounts
to par. These transactions, considered together, constitute a
distressed exchange and a limited default by Moody's definition,
designated by the LD suffix on the probability of default rating.
After approximately three business days, Moody's will remove the
LD designation consistent with Moody's LGD framework.
The senior unsecured notes were downgraded to Caa1from B3 and the
senior subordinated notes were restored to their pre-tender offer
rating level of Caa1. The instrument-level ratings and loss given
default rates were revised in accordance with Moody's LGD
framework and reflect Appleton's capital structure on June 30,
2009, pro forma for the announced results of the tender offer.
The outlook remains negative.
Appleton's B2 corporate family rating reflects expected challenges
with respect to tight covenant compliance and weak liquidity;
eroding credit metrics; continued declines in the carbonless paper
segment; and the lower margins associated with a migration away
from the carbonless paper segment. The ratings also consider
Moody's expectation for less pressure on materials costs; higher
sales of thermal papers as a result of the recent capacity
expansion at the company's West Carrollton, Ohio mill; and the
company's strong market position within both the carbonless and
thermal paper segments.
The exchange offer benefits the company's debt maturity profile,
lowers debt levels by approximately $40 million, and provides
additional cushion within its financial covenants. Earlier in the
year, Appleton successfully renegotiated the financial covenants
in its bank debt, which should provide the company with improved
financial flexibility over the near to intermediate term. Per the
covenant amendments, Appleton relaxed its total leverage ratio
through June 2011, added a senior secured leverage ratio, and
replaced its interest coverage ratio with a fixed charge coverage
ratio. Despite the improved financial flexibility and proposed
transaction, Moody's expects the cushion under Appleton's
financial covenants to remain modest at best in 2009, and to erode
in 2010 as required covenant levels step down.
The negative outlook reflects Moody's expectation that further
volume declines in the company's carbonless segment will continue
to pressure margins, cash flow generation, and leverage.
The speculative grade liquidity rating looks ahead 12-18 months
and considers internal sources of liquidity (cash on hand plus
free cash flow generation), external sources of liquidity,
covenant compliance, and alternate sources of liquidity. The
company's SGL-4 rating indicates weak liquidity. While Appleton's
recent credit facility amendment provides the company with
increased flexibility under its financial covenants, Moody's
expects compliance to be challenging in 2009 and 2010. In
addition, Moody's expects the company to rely heavily on its
committed facilities to augment its small cash balance and limited
cash flow generation.
These ratings were affirmed:
* Corporate family rating, affirmed at B2;
* Senior secured revolving credit facility, affirmed at Ba3 (LGD2,
25%);
* Senior secured term loan B, affirmed at Ba3 (LGD2, 25%);
* Speculative grade liquidity rating affirmed at SGL-4;
These ratings were changed:
* Probability of default rating, changed to B2/LD from Caa3;
* Senior secured notes, changed to B3 (LGD4, 68%) from B3 (LGD5,
73%);
* Senior unsecured notes, lowered to Caa1 (LGD5, 86%) from B3
(LGD4, 67%);
* Senior subordinated notes, changed to Caa1 (LGD6, 94%) from Ca
(LGD3, 40%);
The last rating action on Appleton occurred on August 18, 2009,
when Moody's assigned a B3 rating to Appleton's proposed new
secured notes due 2015 and downgraded the company's existing
senior subordinated notes to Ca from Caa1. At the same time,
Moody's downgraded the company's probability of default rating to
Caa3 from B2.
Appleton Papers Inc., headquartered in Appleton, Wisconsin,
develops and manufactures specialty coated paper products,
including carbonless paper, thermal paper, and other specialty
papers. It also develops and manufactures flexible packaging
products.
ARBIOS SYSTEMS: Reorganization Plan Effective on Sept. 21
---------------------------------------------------------
Arbios Systems Inc.'s confirmed Chapter 11 Plan of Reorganization
became effective on September 21, 2009. Pursuant to the terms of
the Chapter 11 Plan, among other things, as of the effective date:
-- All of Arbios' currently existing equity (including, but not
limited to, all of its outstanding common and preferred
shares of stock, warrants, and options) were canceled as of
the effective date.
-- The Company issued to Arbios Acquisition Partners, LLC an
unrelated, privately held company, and its designees, who
were the funders under the Chapter 11 Plan, an aggregate of
45 million new shares of common stock representing 90% of
Arbios' newly issued shares.
-- The Company issued to the Company's existing shareholders an
aggregate of 5 million new shares of common stock equal to
10% of its newly issued shares pro rata, which replaces the
canceled shares of common stock. As a result, pursuant to
the Chapter 11 Plan, 1 newly issued share of Arbios common
stock replaced every 4.87 canceled shares of Arbios common
stock held by Arbios shareholders as of September 21, 2009.
The officers and directors prior to the effective date of the
Chapter 11 Plan resigned and new officers and directors were
elected.
In consideration for issuing the new shares to them, Arbios
Acquisition Partners and its designees paid the Company $800,000
in cash. Of the 45 million new shares of common stock issuable to
Arbios Acquisition Partners and its designees, Arbios Acquisition
Partners were 30 million shares as of the effective date of the
Chapter 11 Plan, representing 60% of the issued and outstanding
new shares of common stock for $533,333, and Arbios Acquisition
Partners' ten designees, none of which are affiliated with Arbios
Acquisition Partners, were issued 15 million shares for $266,667
as of the effective date of the Chapter 11 Plan, which has been
paid.
Arbios Acquisition Partners has advised the Company that the
remaining $200,000 called for under the Chapter 11 Plan will be
provided in the future on an as-needed basis on terms and
conditions to be determined.
Arbios believes that the funds used by Arbios Acquisition Partners
and its desginees to purchase their respective new shares of
common stock were raised by Arbios Acquisition Partners through
the private sale of Arbios Acquisition Partners membership
interests, and were personal funds of the designees, respectively.
Arbios Acquisition Partners, LLC was founded by Thomas J. Fagan to
fund Arbios in consideration for 90% of Arbios' new common stock
in connection with Arbios' reorganization as provided Arbios'
Chapter 11 Plan. Mr. Fagan is the sole Manager of Arbios
Acquisition Partners. Energex Systems, Inc., a developer,
manufacturer and marketer of patented medical technologies,
currently owns approximately 85% of the membership interests of
Arbios Acquisition Partners. Thomas Fagan is the Chairman of the
Board, President, Chief Executive Officer and a director and the
principal stockholder of Energex.
About Arbios Systems, Inc.
Arbios Systems, Inc. -- http://www.arbios.com/-- has been engaged
in the development of proprietary medical devices to enhance the
survival of millions of patients each year who experience, or are
at risk for, life-threatening episodes of liver failure. Arbios'
SEPET(TM) Liver Assist Device is a novel blood purification
therapy that provides enhanced "liver dialysis".
Arbios Systems on January 9 that it filed for protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No.
09-10082).
ARENA FOOTBALL: Teams Transfer to New League
--------------------------------------------
WNYT reports that new football league called Arena Football 1 has
been formed and 16 teams are already listed in the league,
including teams from both the former Arena Football League and
arenafootball2 leagues. WNYT relates that the Albany Firebirds
arena football team isn't on the list and is still one of the
eight teams being considered for Arena Football 1. Citing
sources, WNYT states that investors with Firebirds have until
October 9 to secure funds and join the new league.
The Arena Football League was founded in 1987 as an American
football indoor league by Jim Foster. It is played indoors on a
smaller field than American football, resulting in a faster and
higher-scoring game. Almost two months after the New Orleans
Voodoo folded on the league's owners chose to cancel the 2009
season to work on developing a long-term plan to improve its
economic model.
As reported by the TCR on August 14, 2009, Arena Football League
LLC was sent to Chapter 7 liquidation on August 7 by creditors
owed a total of $300,000. The involuntary petition was signed by
Gridiron Enterprises Inc., Johnson & Bell Ltd., and Sheraton New
Orleans Hotel. Gridiron is the largest of the three creditors,
with $272,000 owed to it. Attorney Richard Lauter of Freeborn &
Peters LLP in Chicago is representing the petitioners. The case
is In re Arena Football League LLC, 09-29024, U.S. Bankruptcy
Court, Northern District of Illinois (Chicago).
ASARCO LLC: Amends Suit for Subordination of AMC Claims
-------------------------------------------------------
ASARCO LLC filed its first amended complaint seeking subordination
of the Americas Mining Corporation and Asarco Incorporated's Claim
No. 18571, as amended by Claim No. 19214, which reduced the amount
claimed from $516,200,000 to $161,718,015. To the extent the
Court finds in the Claim Allowance Adversary that the Parent has a
Claim, whether administrative or general unsecured, that is not
disallowed under Section 502(d) of the Bankruptcy Code, ASARCO
asserts a complaint seeking the equitable subordination of the
Claim under Section 510(c) of the Bankruptcy Code.
To the extent the Parent has an allowable claim in any amount, the
Parent's entitlement to any portion of the Claim must be equitably
subordinated because the Parent has acted inequitably to the
detriment of ASARCO's creditors, argues Jack L. Kinzie, Esq., at
Baker Botts L.L.P., in Dallas, Texas. He points out that
"extraordinary circumstances" and "inequitable conduct" warranting
equitable subordination are present in the case.
ASARCO Objects to Consolidation
ASARCO LLC asks the Court to deny the Parent's request to
consolidate the equitable subordination adversary proceeding and
tax adversary proceeding, and to continue the final hearing on the
Debtors' objections to the Parent's Administrative Claim No.
18571.
Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas,
contends that the commencement of the Equitable Subordination
Adversary is not a valid basis for a continuance of the hearing on
the Claims Allowance Adversary. He asserts that the plain
language of Section 510(c)(1) of the Bankruptcy Code supports
proceeding with the hearing, which has been set for months and the
parties are prepared to proceed.
Parent Seeks Dismissal of Complaint
for Equitable Subordination
The Parent asks the Court to dismiss ASARCO LLC's original
complaint for equitable subordination due to the Debtor's failure
to plead a claim for which relief can be granted under Rule
12(b)(6) of the Federal Rules of Civil Procedure, and for failure
to plead allegations with sufficient particularity under Rule 8 of
the Federal Rules of Civil Procedure.
The Debtor's complaint should be dismissed for failure to state a
claim on which relief can be granted, asserts Charles A. Beckham,
Jr., Esq., at Haynes and Boone, LLP, in Houston, Texas. He
contends that allowing equitable subordination in the case would
plainly violate the underlying purpose of equitable subordination.
In support of its claim that the Parent engaged in inequitable
conduct warranting subordination, ASARCO relies only on the
liability and remedies opinions from another proceeding ?- the
Brownsville fraudulent transfer lawsuit, which found the Parent
liable for actual fraudulent transfer, aiding and abetting and
conspiracy, Mr. Beckham argues.
"But a judgment has been issued in the Brownsville Litigation, and
that judgment is fully secured pending appeal," Mr. Beckham tells
the Court. "Thus, in the event Parent's appeal to the Fifth
Circuit is unsuccessful, Debtor will be fully compensated for the
inequities alleged in the Brownsville Litigation," he insists.
Mr. Beckham further contends, among other things, that the Fifth
Circuit and many other courts have held that equitable
subordination is not available in circumstances like in this case,
when there is no uncompensated harm to offset, and subordination
would merely punish the alleged wrongdoer.
ASARCO Objects to Dismissal Request
ASARCO LLC asks the Court to deny the Parent's Dismissal Request
because (i) ASARCO has adequately pled every element of equitable
subordination, (ii) the Parent's arguments for dismissal are
premature, and (iii) the injury addressed by Judge Hanen's
judgment against AMC in favor of ASARCO in the SCC litigation is
only one of several injuries ASARCO has alleged and will prove in
support of its claim for equitable subordination.
The Parent has injured ASARCO and its creditors through continued
inequitable conduct, Mr. Kinzie alleges. Hence, he asserts,
subordination of Parent's claim is appropriate and the Court
should deny the Parent's Dismissal Request.
Parties Stipulate
Parties stipulate and agree that the deadline for filing proposed
findings of fact and conclusions of law in the consolidated
adversary proceeding will be extended from the previously agreed
September 15, 2009 deadline to 10 days after a confirmation order
has been issued and docketed in the Debtors' Chapter 11 cases by
the United States District Court for the Southern District of
Texas.
In another filing, ASARCO LLC submitted to the Court its proposed
findings of fact and conclusions of law with respect to the
consolidated adversary proceeding. A full-text copy of the
document is available for free at:
http://bankrupt.com/misc/ASARCO_ProposedFindings_082709.pdf
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)
ASARCO LLC: Asbestos Claimants Expand Work of Charter Oak
---------------------------------------------------------
The Official Committee of Asbestos Claimants in Asarco LLC's cases
and Robert C. Pate, Future Claims Representative, seek the Court's
authority to expand the scope of employment of their financial
advisors, Charter Oak Financial Consultants, LLC.
Since October 2008, Charter Oak and its professionals have been
providing financial advisory services to the Asbestos Committee
and the FCR in connection with all aspects of the bankruptcy cases
including helping the Asbestos Committee and the FCR to analyze
the treatment of asbestos claimants in the various plans of
reorganization proposed in the cases, as well as analyzing issues
surrounding the litigation over ASARCO's liability for the
asbestos-related liabilities of the Subsidiary Debtors.
In connection with the vast amount of discovery related to the
Alter Ego Estimation Proceeding, the Court authorized the
Subsidiary Committee and the Subsidiary FCR to enter into
contracts with The Common Source Incorporated for the purpose of
providing the Subsidiary Committee and the Subsidiary FCR with
confidential remote access to a central repository database, data
management, scanning and coding services.
Charter Oak has worked closely with the Subsidiary Committee and
the FCR in connection with reviewing and analyzing the documents
hosted by TCS on the central database, and has advised Asbestos
Committee and the FCR that it can provide substantially similar
services to the Asbestos Committee and the FCR on a more cost
effective basis. The Asbestos Committee and the FCR subsequently
notified TCS that they were terminating their contract with TCS.
Because TCS will no longer be providing database hosting and
management services to the Subsidiary Committee and the FCR, and
in light of the more cost effective services to be provided by
Charter Oak, the Asbestos Committee and the FCR seek to expand the
retention of Charter Oak to include the provision of data
management services to the Asbestos Committee and the FCR.
Charter Oak will be paid at its normal hourly rates. The
professionals expected to provide the Database Management Services
to the Asbestos Committee and the FCR and their hourly rates are:
Professional Position Hourly Rate
----------- -------- -----------
Robert H. Lindsay Managing Director $550
Position to be Filled Assistant Director $275 - $400
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)
ASARCO LLC: Court OKs Settlement with BNSF Railway on Claims
------------------------------------------------------------
ASARCO LLC obtained from the Bankruptcy Court approval of its
compromise and settlement with BNSF Railway Company regarding
certain of BNSF's claims pursuant to Section 363(b)(1) of the
Bankruptcy Code and Rule 9019 of the Federal Rules of Bankruptcy
Procedure.
By the parties' agreed order resolving the Debtors' objections
seeking disallowance of certain of BNSF's duplicate, amended,
replaced or superseded proofs of claim, Claim Nos. 18334 and
18335 became the sole surviving claims of BNSF in the bankruptcy
cases of the Debtors. By virtue of the Surviving Claims, BNSF
asserted certain claims that have not been the subject of a
Court-approved settlement agreement between BNSF and the Debtors
nor an estimation order issued by the Court.
Specifically, in the Surviving Claims, BNSF asserted three
claims:
(a) A $2,145,000 claim for alleged past and future remediation
costs with respect to BNSF-owned property at its
Globeville railyards in Denver, Colorado. BNSF alleged
that the BNSF-owned property is contaminated with lead and
arsenic, the source of which is historic airborne
emissions and contaminated dust originating from past lead
smelting operations at ASARCO LLC's former, nearby Globe
Plant. BNSF asserted that it has incurred and will incur
remediation costs to address the contamination;
(b) A $2,181,221 contribution claim with respect to alleged
settlement payments made by BNSF to the plaintiffs in two
toxic tort lawsuits filed in Oklahoma federal district
court that are related to the Tar Creek Superfund Site in
Oklahoma, which named BNSF as a third-party defendant.
BNSF alleged that ASARCO LLC is liable for contribution
for the settlement amounts, which BNSF paid to the
original plaintiffs in the lawsuits, even though ASARCO
LLC, which was named as an original defendant, had
previously settled with the plaintiffs; and
(c) A $118,503 contractual claim for alleged unpaid
prepetition freight and miscellaneous transportation
charges that BNSF alleges were related to rail shipments
on behalf of ASARCO.
Beginning in November 2008, the Parties engaged in negotiations
regarding BNSF's three claims, which aggregate $4,444,724. As a
result, the Parties have been able to resolve their disputes
without the necessity of an estimation hearing.
The Parties' Settlement Agreement provides that BNSF will have an
allowed general unsecured claim for $350,000 in settlement and
full satisfaction of the three Claims. The Settlement Agreement
also provides that Debtors and BNSF covenant not to sue or assert
claims or causes of action against each other, and provide mutual
releases with respect to the matters addressed in the Settlement
Agreement.
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)
BARZEL INDUSTRIES: Can Hire Logan as Claims and Noticing Agent
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Barzel Industries, Inc., and its debtor-affiliates to employ Logan
and Company, Inc., as claims, noticing and balloting agent.
Logan is expected to, among other things:
a. serve required notices in the Chapter 11 cases;
b. maintain all proofs of claim and proofs of interest filed in
the Chapter 11 cases; and
c. provide balloting and plan solicitation services related to
the Debtors' Chapter 11 plan.
Kathleen Logan, president of Logan, told the Court that the firm
received a $10,000 retainer.
Ms. Logan assured the Court that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Court.
About Barzel Industries
Norwood, Massachusetts-based Barzel Industries, Inc., processes
and distributes steel. The Company manufactures steel for the
construction and industrial manufacturing industries, and produces
finished commercial racking products.
Barzel recorded assets of $370,145,000 against debts of
$375,412,000 as of May 30, 2009.
Barzel Industries -- aka Novamerican Steel Inc. and Symmetry
Holdings Inc. -- and seven affiliates filed for Chapter 11 on
September 15, 2009 (Bankr. D. Del. Case No. 09-13204). Judge
Christopher S. Sontchi presides over the cases. J. Kate Stickles,
Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Wilmington,
Delaware, and Karen M. McKinley, Esq., and Norman L. Pernick,
Esq., at Cole Scholtz Meisel Forman Leonard, P.A., in Wilmington,
Delaware, serve as legal counsel.
On the same day, the Company filed applications for relief under
the Canadian Companies' Creditors Arrangement Act in the Ontario
Superior Court of Justice -- Commercial List.
Barzel Industries and substantially all of its U.S. and Canadian
subsidiaries have an Asset Purchase Agreement with Chriscott USA
Inc. and 4513614 Canada Inc. pursuant to which the Buyer will
purchase substantially all of the assets of the Sellers for
$65.0 million in cash, subject to certain adjustments, and assume
certain liabilities from the Sellers associated with the purchased
assets. The deal is subject to approval by both U.S. and Canadian
Courts.
The Debtors intend to apply all proceeds of the Asset Purchase to
repay amounts owed under a DIP Credit Agreement with JPMorgan
Chase, the Prepetition notes and, to the extent applicable, the
Prepetition secured loan agreement. The Company's stockholders
will not receive any proceeds from the Asset Purchase.
BARZEL INDUSTRIES: Proposes Cole Schotz as Bankruptcy Counsel
--------------------------------------------------------------
Barzel Industries, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for authority to
employ Cole, Schotz, Meisel, Forman & Leonard, P.A., as bankruptcy
counsel.
Cole Schotz will, among other things:
a. advise the Debtors of their rights, powers and duties as
debtors-in-possession;
b. advise the Debtors regarding matters of the bankruptcy law;
and
c. represent the Debtors in proceedings and hearings in the
Court.
Norman L. Pernick, a member of Cole Schotz, tells the Court that
prior to the petition date, Cole Schotz received a $604,795
retainer for the planning, preparation of documents and its
proposed postpetition representation of the Debtors, and for the
Chapter 11 petition filing fees. After application of fees and
expenses, the remaining $254,815 constitutes an advance security
retainer.
The hourly rates Cole Schotz's personnel are:
Member $300 - $725
Special Counsel $335 - $415
Associates $195 - $365
Paralegals $140 - $230
Mr. Pernick assures the Court that Cole Schotz is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Mr. Pernick can be reached at:
Cole, Schotz, Meisel, Forman & Leonard,
500 Delaware Avenue, Suite 1410
Wilmington, DE 19801
Tel: (302) 652-3131
Fax: (302) 652-3117
About Barzel Industries
Norwood, Massachusetts-based Barzel Industries, Inc., processes
and distributes steel. The Company manufactures steel for the
construction and industrial manufacturing industries, and produces
finished commercial racking products.
Barzel recorded assets of $370,145,000 against debts of
$375,412,000 as of May 30, 2009.
Barzel Industries -- aka Novamerican Steel Inc. and Symmetry
Holdings Inc. -- and seven affiliates filed for Chapter 11 on
September 15, 2009 (Bankr. D. Del. Case No. 09-13204). Judge
Christopher S. Sontchi presides over the cases. J. Kate Stickles,
Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Wilmington,
Delaware, and Karen M. McKinley, Esq., and Norman L. Pernick,
Esq., at Cole Scholtz Meisel Forman Leonard, P.A., in Wilmington,
Delaware, serve as legal counsel.
On the same day, the Company filed applications for relief under
the Canadian Companies' Creditors Arrangement Act in the Ontario
Superior Court of Justice -- Commercial List.
Barzel Industries and substantially all of its U.S. and Canadian
subsidiaries have an Asset Purchase Agreement with Chriscott USA
Inc. and 4513614 Canada Inc. pursuant to which the Buyer will
purchase substantially all of the assets of the Sellers for
$65.0 million in cash, subject to certain adjustments, and assume
certain liabilities from the Sellers associated with the purchased
assets. The deal is subject to approval by both U.S. and Canadian
Courts.
The Debtors intend to apply all proceeds of the Asset Purchase to
repay amounts owed under a DIP Credit Agreement with JPMorgan
Chase, the Prepetition notes and, to the extent applicable, the
Prepetition secured loan agreement. The Company's stockholders
will not receive any proceeds from the Asset Purchase.
BARZEL INDUSTRIES: Taps Kelly Drye as Special Corporate Counsel
---------------------------------------------------------------
Barzel Industries, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for authority to
employ Kelly Drye & Warren LLP as special corporate counsel.
Kelly Drye will, among other things, provide services to the
extent necessary and as requested by the Debtors with respect to
corporate, transactional, corporate governance and securities
compliance matters, including negotiation of transactional
documents related to the Debtors' proposed sale of substantially
all of their assets, the negotiation of the Debtors' proposed
debtor-in-possession financing facility; and the preparation of
the public filings required during the cases pursuant to
applicable laws.
Kelly Drye will advise and assist Cole, Schotz, Meisel, Forman &
Leonard, P.A, the Debtors' proposed counsel, to protect the
Debtors' interests.
M. Ridgway Barker, a member at Kelly Drye, tells the Court that
the hourly rates of Kelly Drye's personnel are:
Partners $450 - $875
Counsel $505 - $820
Special Counsel $365 - $695
Associates $150 - $535
Law Clerks $100 - $150
Paraprofessionals $55 - $290
Mr. Barker adds that prior to Barzel Industries' petition date,
Kelly Drye received $1,851,821 on account of fees and
disbursements. As of the petition date, Kelly Drye was owed
$521,467 for services rendered. Kelly Drye agreed to waive its
claim with respect to the unpaid prepetition services and
disbursements.
Mr. Barker assures the Court that Kelly Drye is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Mr. Barker can be reached at:
Kelly Drye & Warren LLP
400 Atlantic Street
Stamford, CT 06901
About Barzel Industries
Norwood, Massachusetts-based Barzel Industries, Inc., processes
and distributes steel. The Company manufactures steel for the
construction and industrial manufacturing industries, and produces
finished commercial racking products.
Barzel recorded assets of $370,145,000 against debts of
$375,412,000 as of May 30, 2009.
Barzel Industries -- aka Novamerican Steel Inc. and Symmetry
Holdings Inc. -- and seven affiliates filed for Chapter 11 on
September 15, 2009 (Bankr. D. Del. Case No. 09-13204). Judge
Christopher S. Sontchi presides over the cases. J. Kate Stickles,
Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Wilmington,
Delaware, and Karen M. McKinley, Esq., and Norman L. Pernick,
Esq., at Cole Scholtz Meisel Forman Leonard, P.A., in Wilmington,
Delaware, serve as legal counsel.
On the same day, the Company filed applications for relief under
the Canadian Companies' Creditors Arrangement Act in the Ontario
Superior Court of Justice -- Commercial List.
Barzel Industries and substantially all of its U.S. and Canadian
subsidiaries have an Asset Purchase Agreement with Chriscott USA
Inc. and 4513614 Canada Inc. pursuant to which the Buyer will
purchase substantially all of the assets of the Sellers for
$65.0 million in cash, subject to certain adjustments, and assume
certain liabilities from the Sellers associated with the purchased
assets. The deal is subject to approval by both U.S. and Canadian
Courts.
The Debtors intend to apply all proceeds of the Asset Purchase to
repay amounts owed under a DIP Credit Agreement with JPMorgan
Chase, the Prepetition notes and, to the extent applicable, the
Prepetition secured loan agreement. The Company's stockholders
will not receive any proceeds from the Asset Purchase.
BASELINE OIL: Court Confirms Prepackaged Chapter 11 Plan
--------------------------------------------------------
The U.S. Bankruptcy Court confirmed Baseline Oil & Gas Corp.'s
Prepackaged Plan of Reorganization, according to
BankruptcyData.com.
The Bankruptcy Court held a combined hearing to consider approval
of the Plan and the explanatory disclosure statement.
Prior to filing for bankruptcy, Baseline Oil solicited votes on a
Chapter 11 plan from holders of 15% Senior Secured Notes due 2009
and 12.5% Senior Secured Notes due 2012. The Plan was accepted by
100% in number and 100% in aggregate principal amount of the
Prepetition Noteholders that returned ballots. Aside from voting
in favor of the Plan, the noteholders also agreed to make a $5
million exit facility available to the Company upon consummation
of the Plan.
The material terms of the Plan are:
-- Prepetition Noteholders Claims. The claims of the
Prepetition Noteholders (Class 4 under the Plan) are
impaired. Upon the later of (x) the Effective Date of the
Plan and (y) the date on which the claim of a class 4 claim
becomes an Allowed Claim under applicable law, each holder
of a Class 4 Allowed Claim will be entitled to receive
securities in the reorganized Debtor, consisting of: (i) new
10% Subordinated Secured Notes; (ii) shares of Junior
Preferred Stock; and (iii) shares of New Common Stock.
-- Exit Facility. All Prepetition Noteholders were offered the
opportunity to participate in an exit financing where
$5 million of new cash will be made available to the Company
on the Effective date. In addition to those securities, the
Exit Facility Lenders will also receive (i) new Series A 20%
Senior Secured Notes; (ii) new Series B 20% Senior Secured
Notes; and (iii) shares of Senior Preferred Stock.
-- Trade Creditors and Customers. The Debtor expects to
continue normal operations during the Chapter 11 Case. The
Plan contemplates payment in full of claims held by trade
creditors and uninterrupted performance of agreements with
customers in accordance with existing business terms.
-- Cancellation of Existing Equity; Cessation as Publicly
Reporting Company. On the Effective Date, all existing
equity in the Debtor will be cancelled for no consideration
and the Company will no longer file periodic and or other
reports with the Securities and Exchange Commission.
-- Administrative, Tax and other Priority Claims. These claims
are not impaired and each holder of an allowed
Administrative, Tax or other Priority Claim is to be paid in
full, in cash, under the Plan.
-- Royalty and other Secured Claims. These claims are not
impaired and each holder of an allowed Royalty or other
Secured Claim shall be paid in full, in cash under the Plan.
A copy of the Prepackaged Plan is available for free at:
http://researcharchives.com/t/s?43ac
About Baseline Oil & Gas Corp.
Baseline Oil & Gas Corp. is an independent oil and natural gas
company engaged in the exploration, production, development,
acquisition and exploitation of natural gas and crude oil
properties. The Company has interests in three core areas: the
Eliasville Field located in Stephens County in North Texas; the
Blessing Field in Matagorda County located onshore along the Texas
Gulf Coast, and the New Albany Shale play located in Southern
Indiana. Its core properties cover approximately 39,945 net
acres. As of December 31, 2008, the Company's proved reserves
were 60.2 billion cubic feet equivalent (Bcfe), of which 46.5%
were natural gas and 68.2% were proved developed. During the year
ended December 31, 2008, it produced 2.8 Bcfe and had a proved
reserve reduction of 6.7 Bcfe as a result of reserve revisions.
Baseline Oil filed a voluntary petition for reorganization under
Chapter on Aug. 28, 2009 (Bankr. S.D. Tex. Case No. 09-36291).
Attorneys at Thompson & Knight LLP represent Baseline Oil in its
restructuring effort.
BERNARD MADOFF: Judge Lifland Intends to Maintain Order
-------------------------------------------------------
WestLaw reports that the adversary claim by customers of an
investment company which, along with its principal, was the
subject of a liquidation proceeding under the Securities Investor
Protection Act that sought a declaration that the SIPA trustee had
to recognize their claims for distributions based upon their
investment account balances as of a certain date directly
contravened the claims procedure order entered in the case, and
thus failed to state a claim. The order applied to the adversary
claim, which related to the trustee's determination of the
customers' claims, and provided for the same relief, if warranted,
as that sought by the adversary complaint, and thus did not harm
the customers. The customers' failure to follow the approved
procedures, moreover, was fundamentally unfair to other objecting
customers, and allowing the adversary claim to proceed would wreak
havoc on the claims adjudication process. In re Bernard L. Madoff
Inv. Securities LLC, --- B.R. ----, 2009 WL 2882718 (Bankr.
S.D.N.Y.).
In this adversary proceeding (Bankr. S.D.N.Y. Adv. Pro. No. 09-
01272), Helen Davis Chaitman, Esq., at Phillips Nizer LLP, on
behalf of Plaintiffs Diane and Roger Peskin and Maureen Ebel,
sought to side-step Judge Lifland's Claims Procedures Order
entered on Dec. 23, 2008, governing advances to investors under
SIPA, and accelerate a decision on the so-called Net Equity Issue
(to figure out the amount of each investor's claim after taking
into account all investments, false profits, withdrawals, and the
time-value of money).
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L.
Madoff orchestrated the largest Ponzi scheme in history, with
losses topping US$50 billion.
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. The District Court's Protective Order (i) appointed
Irving H. Picard, Esq., as trustee for the liquidation of BLMIS,
(ii) appointed Baker & Hostetler LLP as his counsel, and (iii)
removed the SIPA Liquidation proceeding to the Bankruptcy Court
(Bankr. S.D.N.Y. Case No. 08-01789) (Lifland, J.).
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 in
United States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
BERNARD MADOFF: Picard Plans to Sue Madoff Family
-------------------------------------------------
Irving Picard, the trustee liquidating Bernard L. Madoff
Investment Securities LLC, plans to sue Madoff family members for
$198 million in payments, loans or transfers, Bloomberg News
reported. Mr. Picard, in an interview with CBS Corp.'s "60
Minutes", said his legal team "will pursue them as far as we can
pursue them, and if that leads to bankrupting them, then that's
what will happen."
Mr. Picard has already sued Mr. Madoff's wife, Ruth, to recover
$44,822,355 in funds that were transferred from BLMIS during the
past six years directly to Ms. Madoff or her own companies. In
the trustee's complaint, Mr. Picard details 111 transactions which
he alleges were fraudulent transfers or conveyances recoverable
under the Bankruptcy Code.
Mr. Picard has already sued a number of investors, including hedge
funds and investment firms that "knew or should have known" that
Mr. Madoff was engaged in fraud. Mr. Picard also said he is
pursuing avoidance actions or clawback suits against clients,
which included charities, that profited from the fraud at BLMIS,
even if they weren't aware of the $65 billion Ponzi scheme.
Mr. Picard has identified 2,336 account holders at BLMIS that
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 and Bernard L.
Madoff orchestrated the largest Ponzi scheme in history, with
losses topping US$50 billion.
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. The District Court's Protective Order (i) appointed
Irving H. Picard, Esq., as trustee for the liquidation of BLMIS,
(ii) appointed Baker & Hostetler LLP as his counsel, and (iii)
removed the SIPA Liquidation proceeding to the Bankruptcy Court
(Bankr. S.D.N.Y. Case No. 08-01789) (Lifland, J.).
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 in
United States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
BIOLIFE SOLUTIONS: June 30 Balance Sheet Upside-Down by $7 Million
------------------------------------------------------------------
BioLife Solutions, Inc.'s balance sheet at June 30, 2009, showed
total assets of $1,203,450 and total liabilities of $8,165,743,
resulting in a stockholders' deficit of $6,962,293.
For three months ended June 30, 2009, the Company posted a net
loss of 1,012,928 compared with a net loss of $662,494 for the
same period in 2008.
For six months ended June 30, 2009, the Company posted a net loss
$1,850,495 compared with a net loss of $1,308,020 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?45b3
BioLife Solutions, Inc. (OTC:BLFS) develops and markets
hypothermic storage and cryopreservation solutions for cells,
tissues and organs. The Company's HypoThermosol and CryoStor
biopreservation media products are marketed to companies,
laboratories and academic institutions engaged in research and
commercial clinical applications. The Company's line of serum-
free and protein-free biopreservation solutions are fully defined
and formulated to reduce preservation-induced, delayed-onset cell
damage and death. HypoThermosol is a family of cell-specific,
hypothermic (2-8 degree Celsius) biopreservation media that allows
for the preservation of biologic source material and manufactured
cell- and tissue-based clinical products.
Going Concern Doubt
On March 24, 2009, Peterson Sullivan LLP in Seattle, Washington,
expressed substantial doubt about BioLife Solutions' ability to
continue as a going concern after auditing the Company's financial
statements for the years ended Dec. 31, 2008, and 2007. The
auditor noted that the Company was unable to generate sufficient
income from operations in order to meet its operating needs.
Additionally, the Company used $2.10 million in cash for operating
activities during the year ended Dec. 31, 2008, and has an
accumulated deficit of $47.00 million at Dec. 31, 2008.
BION ENVIRONMENTAL: GHP Horwath Raises Going Concern Doubt
----------------------------------------------------------
On Sept. 23, 2009, GHP Horwath, P.C. in Denver, Colorado expressed
substantial doubt about Bion Environmental Technologies Inc.'s
ability to continue as a going concern after auditing the
Company's financial statements for fiscal years ended June 30,
2009, and 2008. The auditor noted that the Company has not
generated revenue and has suffered recurring losses from
operations.
The Company's balance sheet at June 30, 2009, showed total assets
of $2,291,885, total liabilities of $1,548,807 and a stockholders'
equity of $743,078.
For fiscal year ended June 30, 2009, the Company posted a net loss
of $1,311,857 compared with a net loss of $1,778,562 for the same
period in 2008.
A full-text copy of the Company's Form 10-K is available for free
at http://ResearchArchives.com/t/s?45ab
Bion Environmental Technologies Inc. (OTC BB: BNET) --
http://www.biontech.com/-- is currently focused on the completion
of the development of applications of its second-generation
technology which provides solutions for environmentally sound
clean-up of the waste streams of large-scale "confined animal
feeding operations" and creates economic opportunities for
integration of renewable energy production, ethanol production,
sustainable animal husbandry and organic soil/fertilizer and feed
production.
BPO MANAGEMENT: Posts $5MM Net Loss in Quarter Ended June 30
------------------------------------------------------------
BPO Management Services, Inc., posted a net loss of $5,039,055 for
three months ended June 30, 2009, compared with a net loss of
$931,335 for the same period in 2008.
For six months ended June 30, 2009, the Company posted a net loss
of $6,514,326 compared with a net loss of $2,703,405 for the same
period in 2008.
The Company's balance sheet at June 30, 2009, showed total assets
of $25,485,240, total liabilities of $23,228,472 and a
stockholders' equity of $2,256,768.
A full-text copy of the Company's Form 10-Q is available for free
at http://ResearchArchives.com/t/s?45cf
BPO Management Services, Inc. (OTC:HAXS) fka Healthaxis, Inc.,
provides business process outsourcing services to middle market
enterprises and governmental entities throughout North America.
Its four primary divisions, and the products and services include
human resources outsourcing, enterprise content management,
information technology outsourcing, and healthcare administration
and full accounts payable systems and services outsourcing. On
Dec. 30, 2008, Healthaxis Inc. completed a merger resulting in BPO
Management Services, Inc., becoming a wholly owned subsidiary of
Healthaxis. Legacy Healthaxis changed its name to BPO Management
Services, Inc. upon the closing of the Merger.
Going Concern Doubt
On March 31, 2009, Moore Stephens Wurth Frazer and Torbet, LLP, in
Orange, California, expressed substantial doubt about the
Company's ability to continue as a going concern after auditing
the financial statements for the fiscal years ended Dec. 31, 2008,
and 2007. The auditor noted that the Company has recurring
operating losses, a working capital deficit and an accumulated
deficit of $28,700,000 as of Dec. 31, 2008.
BROADSTRIPE LLC: Seeks January 27 Extension to File Plan
--------------------------------------------------------
Broadstripe LLC is asking the Bankruptcy Court to extend its
exclusive period to file a Chapter 11 plan until January 27, Bill
Rochelle at Bloomberg News reported. The Bankruptcy Court will
consider Broadstripe's request for a third extension at a hearing
on November 9.
Broadstripe already filed a reorganization plan to carry out an
agreement reached before the Chapter 11 filing with holders of the
first- and second-lien debt. But like in the previous extension
requests, Broadstripe noted that the official committee of
unsecured creditors has filed a lawsuit seeking to invalidate the
lenders' liens. Until the suit is resolved, the Committee won't
support a plan that recognizes the validity of the lenders'
claims.
About Broadstripe LLC
Headquartered in Chesterfield, Missouri, Broadstripe LLC --
http://www.broadstripe.com/-- provides videos and telephone
services to consumers and business in Maryland, Michigan,
Washington and Oregon. The Company and five of its affiliates
filed for Chapter 11 protection on January 2, 2009 (Bankr. D. Del.
Lead Case No. 09-10006). Attorneys at Ashby & Geddes, and Gardere
Wynne Sewell LLP represent the Debtors in their restructuring
efforts. The Debtors tapped FTI Consulting Inc. as their
restructuring consultant, and Epiq Bankruptcy Consultants LLC as
their claims agent. In its petition, Broadstripe listed assets
and debts between $100 million and $500 million.
BRYAN SONG: Chapter 11 Case Summary & Unsecured Creditor
--------------------------------------------------------
Debtor: Bryan J. Song
702 S Serrano Ave #701
Los Angeles, CA 90005
Bankruptcy Case No.: 09-36169
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Judge: Richard M. Neiter
Debtor's Counsel: Steve S. Kwon, Esq.
3450 Wilshire Blvd, Suite 777
Los Angeles, CA 90010
Tel: (213) 380 4291
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
$3,934,964 and total debts of $2,418,889.
The Debtor identified Bank of America with a cash advance debt
claim for $13,800 as its largest unsecured creditor. A full-text
copy of the Debtor's petition, including a list of its largest
unsecured creditor, is available for free at:
http://bankrupt.com/misc/cacb09-36169.pdf
The petition was signed by Mr. Song.
BSC DEV'T: Buyers Want 60-Day Extension to Close Sale Deal
----------------------------------------------------------
The Buffalo News reports that development group New Buffalo
Statler Development LLC is asking the bankruptcy court for a 60-
day extension to close a sale deal for Statler Towers, so they can
work out the complicated details of the transaction.
New Buffalo Statler won Statler Towers in an August 12 court-
ordered auction with a $1.3 million. New Buffalo Statler has
pledged a complete makeover of Statler Towers.
Buffalo attorney Daniel Sarzynski at Rupp Baase Pfalzgraf
Cunningham and Coppola LLC, the counsel for New Buffalo Statler,
said in court documents that unless the extension is granted for
the closing date, his clients may not be able to complete the
transaction.
James Fink at Business First of Buffalo relates that Bankruptcy
Court Chief Judge Carl Bucki will conduct a hearing on New Buffalo
Statler's request on September 29. The deal was initially
scheduled to close by September 28, but the date has been pushed
back until September 30 so that the court could hear arguments.
Business First quoted Mr. Sarzynski as saying, "In the event that
the purchaser is unable to close, the responsibility for the
Statler will revert to the trustee (Amherst attorney Morris
Horwitz). Upon information and belief, the trustee's cash assets
(for the Statler) are limited to $239,000 which is the deposit
that would be forfeited should the transaction not close. The
$239,000 is insufficient to carry the on-going costs of keeping
the building open and cover additional accrued costs. The
building will need to be closed down and its value will be greatly
diminished with no on-going revenue streams or funds to support
continued utilities necessary to protect and preserve the
structure and prevent it from freezing going into the winter
months."
Business First relates that New Buffalo Statler has paid $337,000
in advance fees and has agreed to pay the building's on-going
costs, which run an estimated $15,000 per week. According to
Business First, New Buffalo Statler agreed to front another
deposit totaling $261,000. New Buffalo Statler, says the report,
is negotiating with public sector groups and private sector
investors on financing packages for the complex project.
"For the building to have any value, it needs both promised public
support and a larger developer willing to assume all costs
associated with an $80 million to $120 million project," Business
First quoted Mr. Sarzynski as saying.
Contract Specialists International, Inc., Firstsource
Manufacturing, Inc., and Parklane Catering LLC filed a Chapter 11
bankruptcy petition for BSC Development BUF LLC, aka BSC Tower,
LLC, on April 13, 2009 (Bankr. W.D. N.Y. Case No. 09-11550).
BURLINGTON COAT: Moody's Gives Stable Outlook, Affirms 'B3' Rating
------------------------------------------------------------------
Moody's Investors Service changed Burlington Coat Factory
Warehouse Corp.'s rating outlook to stable from negative. All
other ratings -- including the company's B3 Corporate Family and
Probability of Default rating, its B3 senior secured rating, and
its Caa1 senior unsecured rating -- were affirmed.
The change in outlook to stable from negative acknowledges that
Burlington's cost reduction efforts have led to an improvement in
its earnings and credit metrics despite its negative comparable
store sales performance and the challenging economic environment.
The company's comparable store sales decline was 2.5% in fiscal
2009. However, the company was able to offset this decline by
successfully implementing a sizable expense reduction program.
Burlington's B3 corporate family rating reflects its weak credit
metrics and its second tier competitive position that is reflected
by its weaker overall operating performance compared to its off
price and discounter peers. While Burlington's cost reduction
initiatives have improved the operating margin, it is considerably
weaker than its main competitor, TJX, as well as the general
discount peer group. In addition, Burlington's negative
comparable store sales performance is significantly worse than the
largest off price retailer, TJX, who continues to post positive
comparable store sales. Positive ratings consideration is given
to the more resilient performance of the off-price retail segment
during the economic downturn, the company's adequate liquidity,
and national diversification.
These ratings are affirmed and LGD point estimates changed:
* Corporate Family Rating at B3;
* Probability of Default Rating at B3;
* $900 million senior secured term loan at B3 (to LGD 4, 50% from
LGD 3, 49%);
* $305 million of senior unsecured guaranteed notes at Caa1 (to
LGD 5, 70% from LGD 5, 73%); and
* Speculative grade liquidity rating at SGL-3.
The outlook was changed to stable from negative.
The last rating action on Burlington was on January 15, 2009, when
its Corporate Family Rating was changed to B3 from B2.
Burlington Coat Factory Warehouse Corp, headquartered in
Burlington, New Jersey, is a nationwide off price apparel retailer
that operates over 400 stores in 44 states and Puerto Rico.
Revenues are approximately $3.5 billion.
CABI DOWNTOWN: Proposes Settlement With Condo Unit Buyers
---------------------------------------------------------
Cabi Downtown LLC is asking the Bankruptcy Court to approve a
settlement of a dispute or "controversy" with condominium unit
purchasers, Carla Main at Bloomberg News reported. Cabi,
according to the report, has also asked the Court to establish
procedures for settling certain deposit claims and to authorize
disbursement of settlement funds held in escrow. The court has
ordered a hearing on the motion for Oct. 15.
Aventura, Florida-based Cabi Downtown, LLC, operates a real estate
Business and owns the 49-story Everglades on the Bay condominium
in Miami. The condominium project has 849 units in two towers,
with 60,000 square feet of retail space. The Company filed for
Chapter 11 on Aug. 18, 2009 (Bankr. S.D. Fla. Case No. 09-27168).
Mindy A. Mora, Esq., represents the Debtor in its restructuring
efforts. In its petition, the Debtor listed assets and debts both
ranging from $100,000,001 to $500,000,000.
CALYPTE BIOMEDICAL: Saidmuradov, Yousefi Join Board of Directors
----------------------------------------------------------------
Effective September 24, 2009, Shuhrat Saidmuradov and Tareq Al
Yousefi joined the Board of Directors of Calypte Biomedical
Corporation as directors of the Company. They have not been named
to any committees of the Board of Directors at this time. Messrs.
Saidmuradov and Al Yousefi were recommended to the Board of
Directors by David Khidasheli, on behalf of himself and as proxy
agent for other stockholders of the Company holding an aggregate
of almost 55% of the outstanding shares of common stock of the
Company.
Mr. Saidmuradov has lived and worked in Beijing, China, for the
past 12 years. He has been Chief Executive Officer of Beijing
Marr Bio-Pharmaceutical Co., Ltd., Calypte's subsidiary, since
September 2008, where he has also served as a director since July
2008. He is also Chief Operating Officer for Informap China Co.,
Ltd., since 2006, developer of geo-information technologies.
Informap is owned by David Khidasheli. From 2004 through 2006,
Mr. Saidmuradov was International Account Manager of IT Service
and System Integrator Group in China. Before that, he served as
Diplomat and as Consul General for the Embassy of Tajikistan in
Beijing and 3rd and 2nd Secretary for the Ministry of Foreign
Affairs of the Republic of Tajikistan in Tajikistan. Mr.
Saidmuradov holds an M.A. Degree in Linguistics from Tajik State
University, a Certificate in Debt and Finance Management from the
United Nations Institute for Training and Research in Kazakhstan
and an International Relations Certificate from the Centre for
Political and Diplomatic Studies in London, England. Mr.
Saidmuradov speaks Russian, Tajik, English, Arabic, Farsi and
Chinese.
Mr. Al Yousefi is an entrepreneur. Since 2005, he is the founder
and chief executive officer of Gulf Access LLC, a consultancy
company for petro chemical, real estate and industrial projects.
In addition, since 2006, he has been a partner in Polymer Access
Pvt. Ltd., which is also involved in petro chemical. Since 1999,
he has served as a market analyst to Borouge Pte. Ltd., a joint
venture between ADNOC and Borealis, a leading international petro
chemical company. Mr. Al Yousefi earned a B.A., Bachelors in
Aviation Maintenance Management from Embry Riddle Aeronautical
University in Florida. During his seven year stay in the United
States he earned a degree in Business Administration, a degree in
Aircraft Engineering and a private pilot's license. He started
his career as an United Arab Emirates air force officer and was
trained in the United Kingdom at RAF Cranwell. Mr. Al Yousefi
speaks English, Arabic and Urdu.
"I am very pleased to welcome Shuhrat and Tareq to the Calypte
board," said Mr. Karas. "I feel confident that Calypte will
benefit from their knowledge of the international business and
diplomatic landscape in underdeveloped countries. Their addition
to the board brings Calypte new blood and diversity which I expect
will greatly assist Calypte's strategic growth in those areas that
need the most help controlling the spread of HIV. Calypte looks
forward to their insights and experience as members of the Calypte
board."
Going Concern Doubt
As of April 3, 2009, the Company is in default under the 2005
Credit Facility, as amended, with Marr Technologies BV, its
largest stockholder, holding approximately 17% of its outstanding
capital stock as of April 20, 2009, and joint venture partner in
the People's Republic of China, and under its Secured 8%
Convertible Promissory Notes, as amended, issued to three note
holders, one of whom is Marr, pursuant to a Purchase Agreement
dated April 4, 2005. At maturity, the Company owed an aggregate
of $5.01 million under the Credit Facility and $5.96 million under
the Convertible Notes.
The Company has said it is discussing termination, reduction or
restructuring of its debt obligations under the Credit Facility
and the Convertible Notes with each of the secured creditors.
These defaults, coupled with its significant working capital
deficit and limited cash resources, put us in significant
financial jeopardy and place a high degree of doubt on its ability
to continue its operations.
Failure to obtain additional financing and to resolve the existing
defaults with respect to the Credit Facility and the Convertible
Notes will likely cause the Company to seek bankruptcy protection
under Chapter 7, which would have a material adverse effect on its
business, on its ability to continue its operations and on the
value of its equity.
On April 22, 2009, Odenberg, Ullakko, Muranishi & Co. LLP in San
Francisco, California expressed substantial doubt about Calypte
Biomedical Corporation's ability to continue as a going concern
after auditing the Company's financial statements fro the fiscal
years ended Dec. 31, 2008, and 2007. The auditor noted that the
Company suffered recurring operating losses and negative cash
flows from operations, and management believes that the Company's
cash resources will not be sufficient to sustain its operations
through 2009 without additional financing.
About Calypte Biomedical
Based in Portland, Calypte Biomedical Corporation (OTC BB: CBMC)
-- http://www.calypte.com/-- is a U.S.-based healthcare company
focused on the development and commercialization of rapid testing
products for sexually transmitted diseases like the Aware(TM)
HIV- 1/2 OMT test that are suitable for use at the point of care
and at home.
Calypte Biomedical's balance sheet at Dec. 31, 2008, showed total
assets of $6.54 million and total liabilities of $18.68 million,
resulting in a stockholders' deficit of about $12.14 million.
CANWEST MEDIA: Lenders Extend Forbearance Period
------------------------------------------------
Canwest Global Communications Corp. last week said its subsidiary,
CanWest MediaWorks Ireland Holdings, has entered into an agreement
with Macquarie Capital Advisers Limited for the sale of all of its
ownership interest in Ten Network Holdings Limited by means of a
block trade on a fully underwritten basis for gross proceeds of
approximately A$680 million (CN$634 million). The sale of the Ten
Holdings shares is expected to be completed on or about October 1,
2009 and is subject to customary closing conditions for securities
offerings in Australia.
In connection with the sale of the shares of Ten Holdings, Canwest
Media Inc. has agreed with its senior secured lenders and the
members of the ad hoc committee of holders of its US$761 million
aggregate principal amount of 8% senior subordinated notes (which
are guaranteed by several subsidiaries of CMI, including CMIH)
with respect to the use of the net proceeds of the sale.
Pursuant to the agreement, the net proceeds will be used as:
-- to repay in full all amounts outstanding under the 12%
senior secured notes of US$95 million (CN$102 million)
issued by CMI and Canwest Television Limited Partnership;
-- CN$85 million for general corporate and working capital
purposes, including to repay all outstanding borrowings
(other than letters of credit) under the senior secured
revolving asset-based loan facility with CIT Business
Credit Canada Inc., which facility will continue to remain
available to CMI after the repayment; and
-- to deposit US$398 million (CN$426 million) with the
trustee for the benefit of the holders of the 8% senior
subordinated notes.
The sale of the shares of Ten Holdings is expected to facilitate
continuing discussions with the Ad Hoc Committee regarding a
recapitalization transaction. CMI and the members of the ad hoc
committee have entered into a further extension agreement and
forbearance to October 6, 2009. CIT Business Credit Canada Inc.
has agreed to extend to October 15, 2009 certain milestones that
were to have been achieved by September 25, 2009.
The sale of the shares of Ten Holdings requires certain amendments
to the indenture governing the 8% senior subordinated notes.
Canwest further announced that members of the Ad Hoc Committee
holding approximately 70% of the outstanding principal amount of
the 8% senior subordinated notes, in excess of the majority
threshold required, have agreed with CMI to support the amendments
necessary to permit the sale of the shares of Ten Holdings.
Further, these members have agreed to cause the record owners
through which these members hold their 8% senior subordinated
notes to grant their consent to a supplemental indenture
implementing these amendments. CMI is launching a consent
solicitation process on September 24, 2009 to obtain these
necessary consents from the record owners. Unless the consent
solicitation is terminated by CMI, upon receipt of the requisite
record owner consents, CMI intends to effect the execution of a
supplemental indenture containing the amendments.
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'.
CAPITAL GROWTH: Remanco President Discloses 20.85% Equity Stake
---------------------------------------------------------------
David J. Lies, president of Remanco, Inc., is the beneficial owner
of 49,627,624 shares of common shares of Capital Growth Systems,
Inc. -- which includes warrants to purchase 14,556,471 shares of
common stock of Capital Growth -- representing 20.85% of the
outstanding common stock of Capital Growth. The amount excludes
500,000 shares of common stock held by Mr. Lies' wife, Linda M.
Lies.
Mr. Lies used personal funds to acquire the shares of common stock
he beneficially owns, except for the 113,225 shares of common
stock and warrants to purchase 48,525 shares of common stock
issued to Mr. Lies on July 31, 2009, in consideration for his
waiver and consent to Capital Growth issuing new debentures and
warrants in July 2009.
Mr. Lies acquired the common stock and the warrant shares for
investment purposes. Mr. Lies intends to evaluate his investment
in the Company on a continuing basis.
As of June 30, 2009, the Company had $52.1 million in total assets
and $86.7 million in total liabilities, resulting in $34.5 million
in shareholders' deficit. As of June 30, 2009, the Company's
current liabilities exceeded its current assets by $29.9 million.
Cash on hand at June 30, 2009, was $1.3 million -- not including
$500,000 restricted for outstanding letters of credit.
As reported by the Troubled Company Reporter on August 24, 2009,
the Company's net working capital deficiency, recurring operating
losses, and negative cash flows from operations raise substantial
doubt about its ability to continue as a going concern. However,
the Company said the successful delivery on major customer
contracts entered into since mid-2008 and continued success in
closing these types of contracts will move it into profitability.
In addition to those new contracts, management believes that the
inclusion of VDUL's business and cash flows will have a positive
impact on future results. At the same time, expenses are managed
closely and lower-cost outsource opportunities are given case-by-
case consideration.
On May 22, 2009, the Company received from ACF CGS, LLC, a formal
notification of certain covenant violations that occurred and
continue to exist under the Loan Agreement dated November 19,
2008, by and among the Company and its subsidiaries. The
Borrowers have timely paid all debt service obligations under the
Loan Agreement.
The Borrowers have agreed that the Forbearance Agreement
constitutes an additional "Loan Document" under the Loan
Agreement. Among other things, the Forbearance Agreement
contemplates that from May 1, 2009, until the date that the Agent
either waives all of the specified defaults or the parties
otherwise agree, the Loan will continue to bear interest at the
default rate of interest as specified in the Loan Agreement.
About Capital Growth Systems
Based in Chicago, Illinois, Capital Growth Systems Inc. (OTC BB:
CGSY) doing business as Global Capacity Group Inc., delivers
telecom integration services to systems integrators,
telecommunications companies, and enterprise customers worldwide.
It provides an integrated supply chain management system that
streamlines and accelerates the process of designing, building,
and managing customized communications networks. The Company also
provides connectivity services for network integrators who bundle
telecommunication solutions to enterprise customers; offers global
pricing and quotation software and management services for data
communications; and assists customers to reduce connectivity costs
and attain understanding and control of their deployed
communications network.
CAPTAIN'S TABLE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Captain's Table, Inc.
P.O. Box 110
Mobile, AL 36601
Bankruptcy Case No.: 09-14490
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
Southern District of Alabama (Mobile)
Debtor's Counsel: Irvin Grodsky, Esq.
P.O. BOX 3123
Mobile, AL 36652-3123
Tel: (251) 433-3657
Email: igpc@irvingrodskypc.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 John Word, president of the Company.
CARPET CUSHION: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Carpet Cushion Industries, LLC
4850 Statz Ave., Suite 103
North Las Vegas, NV 89081
Bankruptcy Case No.: 09-28043
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Linda B. Riegle
Debtor's Counsel: John J. Laxague, Esq.
Cane Clark LLP
3273 E. Warm Springs Rd.
Las VeGAS, NV 89120
Tel: (702) 312-6255
Fax: (702) 944-7100
Email: jlaxague@caneclark.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
$2,391,581, and total debts of $2,076,421.
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/nvb09-28043.pdf
The petition was signed by John Fink, manager of the Company.
CHRYSLER LLC: Daimler Wants Suit Dropped for Lack of Jurisdiction
-----------------------------------------------------------------
Daimler AG asks the U.S. Bankruptcy Court for the Southern
District of New York to dismiss the adversary proceeding commenced
by Chrysler Group LLC and Old Carco LLC, formerly known as
Chrysler LLC, against it because of lack of subject matter
jurisdiction.
Pursuant to Rule 9017 of the Federal Rules of Bankruptcy
Procedure, Daimler gives notice that if the adversary proceeding
were to survive the Dismissal Request, Daimler may raise issues in
the proceeding concerning the law of Germany. The motion to
dismiss, however, does not raise any of those issues, Sally
McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
in New York, tells Judge Gonzalez.
In a memorandum of law, Ms. Henry alleges that the action is an
attempt by Chrysler Group, a Non-Debtor, to use the Bankruptcy
Court to draft a new contract that is being negotiated between
Chrysler Group and Daimler.
"The Non-Debtor is bringing this suit even though the Bankruptcy
Court has no jurisdiction over a dispute regarding an assumed
contract between two non-debtors that could have no effect on the
estate," Ms. Henry argues. "Indeed, the Non-Debtor does not make
one allegation in the Complaint that a resolution of this dispute
will benefit the Debtors, their creditors or affect a
reorganization plan," she continues.
Because it is clear from the Complaint that the Court has no
jurisdiction over the dispute, Daimler says the Court should
dismiss the Complaint.
Ms. Henry also files a declaration to transmit to the Court
certain documents in connection with the Dismissal Request. Among
the documents are copies of the order approving the sale of the
Debtors' assets to Chrysler Group, and the order authorizing the
assumption and assignment of certain executory contracts and
unexpired leases in connection with that sale.
Daimler Files Corporate Ownership Statement
Pursuant to Rule 7007.1 of the Federal Rules of Bankruptcy
Procedure, Daimler AG notifies the Court and parties-in-interest
that there are no entities to report under Rule 7007.1(a).
About Chrysler LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge,
Mopar(R) and Global Electric Motors (GEM) brand vehicles and
products. With the resources, technology and worldwide
distribution network required to compete on a global scale, the
alliance builds on Chrysler's culture of innovation -- first
established by Walter P. Chrysler in 1925 -- and Fiat's
complementary technology -- from a company whose heritage dates
back to 1899.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's
product lineup features some of the world's most recognizable
vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram.
Fiat will contribute world-class technology, platforms and
powertrains for small- and medium-sized cars, allowing Chrysler
Group to offer an expanded product line including environmentally
friendly vehicles.
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: TARP Watchdog to Review Dealer Closings
-----------------------------------------------------
The inspector general for the Troubled Asset Relief Program, Neil
Barofsky, said he will review the decisions of Chrysler and
General Motors Corp. to terminate more than 2,000 dealers,
according to a report by The Associated Press.
Mr. Barofsky told the Senate Banking, Housing and Urban Affairs
Committee he will examine the process used by the automakers when
they decided to cut down their dealerships as part of their
restructuring process, the report said.
Chrysler cut down 789 dealers, leaving it with about 2,400 while
GM is terminating 2,400 out of its 6,000 dealers by the fall of
2010.
Chrysler and GM said the closures were necessary to reduce costs
and better align their business with lower consumer demand. The
closures, however, drew heavy criticisms from dealers and some
lawmakers. Senator John Rockefeller, chairman of the Commerce
Committee, in July asked for Mr. Barofsky to investigate into the
matter, saying there was confusion among dealers themselves as to
how the automakers selected dealerships to close.
Mr. Barofsky also said in written testimony to be delivered before
the Senate that his office plans to study governance issues at
companies in which the government holds large ownership stakes,
Reuters reported. Mr. Barofsky's testimony did not specifically
mention Chrysler or GM but the government owns 8% of Chrysler and
60% of GM.
About Chrysler LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge,
Mopar(R) and Global Electric Motors (GEM) brand vehicles and
products. With the resources, technology and worldwide
distribution network required to compete on a global scale, the
alliance builds on Chrysler's culture of innovation -- first
established by Walter P. Chrysler in 1925 -- and Fiat's
complementary technology -- from a company whose heritage dates
back to 1899.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's
product lineup features some of the world's most recognizable
vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram.
Fiat will contribute world-class technology, platforms and
powertrains for small- and medium-sized cars, allowing Chrysler
Group to offer an expanded product line including environmentally
friendly vehicles.
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: GMAC Financial Offers Incentives to Dealers
---------------------------------------------------------
GMAC Financial Services will offer incentives to U.S.-based
dealers of Chrysler Group LLC, according to Reuters.
GMAC spokeswoman Sue Mallino said the company plans to run the new
incentive program indefinitely in the U.S. and to offer a similar
program in Canada in the near future, says the report.
"We are looking to build long-term relationships with our dealers;
that has been our strength and we want to continue to do that,"
Reuters quoted Ms. Mallino as saying.
The program, called Ally Brand Rewards after the banking unit of
GMAC, will be similar to credit card rewards programs. Dealers
who use the full complement of GMAC services will be rewarded with
cash, remarketing services or other perks. The program will be
managed by GMAC's auto finance unit, according to report by
AutoLoanDaily.com.
GMAC is the preferred provider of financing to buyers of Chrysler
vehicles. It resumed leasing on Chrysler vehicles this month.
About Chrysler LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge,
Mopar(R) and Global Electric Motors (GEM) brand vehicles and
products. With the resources, technology and worldwide
distribution network required to compete on a global scale, the
alliance builds on Chrysler's culture of innovation -- first
established by Walter P. Chrysler in 1925 -- and Fiat's
complementary technology -- from a company whose heritage dates
back to 1899.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's
product lineup features some of the world's most recognizable
vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram.
Fiat will contribute world-class technology, platforms and
powertrains for small- and medium-sized cars, allowing Chrysler
Group to offer an expanded product line including environmentally
friendly vehicles.
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Sterling Heights Plant to Stay in Operations
----------------------------------------------------------
A person briefed on Chrysler's business plan said the automaker is
planning to improve its midsize cars and keep making them at its
plant in Sterling Heights, Michigan, for an undefined period,
according to The Associated Press.
The person, who requested anonymity because the plan is not yet
final, said the operations at the plant will be extended for an
undetermined time until Chrysler can design new midsize cars based
on a Fiat model, the report said.
The statement came after Chrysler's board of directors met last
week to discuss on the business plan for revamping the automaker's
product line-up, which was presented by Fiat S.p.A. Chief
Executive Sergio Marchionne.
Chrysler said it does not intend to comment on its product plans
until it issues a five-year business plan in November but the
automaker is expected to provide details of its plan to the Obama
administration's automotive task force this week, according to a
report by Reuters.
News about the possible extension, meanwhile, drew mixed reactions
from workers at the Sterling Heights Plant, MyFox Detroit
reported.
"When we hear a final announcement, I think is when we'll really
believe . . . that's true," MyFox Detroit quoted Bill Parker,
president of UAW Local 1700, as saying. "For the first time,
we're optimistic that could change and not just for an extension,
but really beyond that," he said.
Mr. Parker, together with about 500 workers, retirees and family
members, took to the streets last week while the nine-member board
was reviewing the business plan, demanding the board to reconsider
its decision to close the Sterling Heights plant, according to a
report by Detroit Free Press.
Chrysler LLC and Fiat, the Italy-based automaker which purchased
most of the assets of Chrysler LLC, excluded the Sterling Heights
plant and seven other factories from the sale. The plant, which
manufactures the automaker's Chrysler Sebring and Dodge Avenger
sedans, will be shut down by the end of next year.
Sales of the 2009 Sebring and Avenger made in Sterling Heights
have dropped by more than 50% through the first eight months of
the year.
Aaron Bragman, analyst with Global Insight, said continuing
production of the two cars at the Sterling Heights plant seems
like a logical move.
"We would expect that . . . Chrysler is going to keep the plant
open until they can get the next vehicle out the door, the next
mid-size car that they're hopefully developing," MyFox Detroit
quoted Mr. Bragman as saying.
"We hear some things that it may be developed in conjunction with
a Fiat platform, but to end production at Sterling Heights and
then not have a vehicle ready for that segment, that really
wouldn't make much sense," he said.
A Chrysler spokesperson, meanwhile, told FOX 2, "While we can't
comment on future product plans for Chrysler Sebring and Dodge
Avenger, we can say that these are currently important vehicles to
our company."
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)
CIT GROUP: In Talks to Refinance $3-Bil. Loan, Rumors Say
---------------------------------------------------------
Speculations arose that CIT Group Inc. is in talks with Citigroup
Inc. and Bank of America Corp. to refinance a $3 billion loan with
an $8 billion to $10 billion secured-loan facility, Pierre Paulden
at Linda Shen at Bloomberg reported. Repaying the $3 billion loan
with the new financing "gets management out from under the thumb
of the steering committee," analysts Adam Steer, David Hendler and
Jesse Rosenthal of CreditSights Inc. wrote Sept. 27, commenting on
the rumor.
According to a Sept. 28 report by Bloomberg, CreditSights said
that CIT Group's bonds maturing in November have rallied based on
the speculation. The lender's $500 million of 4.125 percent notes
due Nov. 3 have risen 5.25 cents to 83.625 cents on the dollar
since Sept. 21 according to Trace, the bond-price reporting system
of the Financial Industry Regulatory Authority. The bonds have
gained 14.125 cents since the start of September, Trace data show.
CIT Group continues to search for a line of credit to stave off
possible bankruptcy, but is not actively considering a merger at
the moment, The Wall Street Journal reported, citing sources
familiar with the company and its creditors.
CIT Group on July 29, 2009, entered into a credit agreement, with
Barclays Bank PLC, as administrative agent and collateral agent,
and the lenders party thereto, for loans of up to $3 billion. In
connection with the credit agreement, CIT Group stipulated that
it would use its best efforts to negotiate with the steering
committee of bondholders to have an approved restructuring plan
adopted by August 14, 2009. Unless extended by the steering
committee, the Company will adopt the restructuring plan by
October 1, 2009, and will comply with the plan at all times
thereafter.
A copy of the Credit Agreement is available for free at:
http://researcharchives.com/t/s?4572
Restructuring Plan
Since obtaining the $3-billion loan, CIT Group commenced a cash
tender offer -- $875 per $1,000 principal amount of the notes --
for its $1 billion outstanding floating-rate senior notes due
August 17, 2009. CIT Group also announced a plan designated to
protect the ability to utilize its net operating losses and other
tax assets.
The $3-billion credit facility requires management and the
steering committee of the bondholder group to develop a
comprehensive restructuring plan, aimed at enhancing capital and
liquidity positions while positioning CIT for sustainable
profitability. The Company said the restructuring plan includes
various scenarios, some of which reflect possible asset or
business sales.
CIT said it intends to pursue its restructuring plan outside of
the bankruptcy court. The Company, however, said it may need to
seek relief under the U.S. Bankruptcy Code if its restructuring
plan is unsuccessful, or if the steering committee of bondholders
is unwilling to agree to an out-of-court restructuring. This
relief may include (i) seeking bankruptcy court approval for the
sale of most or substantially all of our assets pursuant to
Section 363(b) of the Bankruptcy Code; (ii) pursuing a plan of
reorganization; or (iii) seeking another form of bankruptcy
relief, all of which involve uncertainties, potential delays and
litigation risks.
About CIT Group
CIT Group Inc. -- http://www.cit.com/-- is a bank holding company
with more than $60 billion in finance and leasing assets that
provides financial products and advisory services to small and
middle market businesses. Operating in more than 50 countries
across 30 industries, CIT provides an unparalleled combination of
relationship, intellectual and financial capital to its customers
worldwide. CIT maintains leadership positions in small business
and middle market lending, retail finance, aerospace, equipment
and rail leasing, and vendor finance. Founded in 1908 and
headquartered in New York City, CIT is a member of the Fortune
500.
As of June 30, 2009, CIT Group had total assets of $71,019,200,000
against total debts of $64,901,200,000.
As reported by the TCR on August 19, 2009, Fitch Ratings has
downgraded CIT Group Inc.'s Issuer Default Rating to Restricted
Default (RD) from 'C' following completion of the company's bond
tender offer, which covered the purchase of 59.81% of the
company's $1 billion floating rate senior secured notes.
For the same reason, Standard & Poor's Ratings Services lowered
its long-term counterparty credit rating on CIT Group Inc. to 'SD'
(selective default) from 'CC'.
COASTAL PLAINS PORK: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Coastal Plains Pork, LLC
791 Wallace Highway
Harrells, NC 28444
Case No.: 09-08367
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
Eastern District of North Carolina (Wilson)
Judge: Randy D. Doub
Debtor's Counsel: Terri L. Gardner, Esq.
Nelson Mullins Riley & Scarborough, LLP
4140 Parklake Avenue, Suite 200
Raleigh, NC 27612
Tel: (919) 329-3882
Fax: (919) 329-3799
Email: terri.gardner@nelsonmullins.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Greg Brown, the company's president.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Agro Bauer $50,951
Akey $16,242
Bartlett Grain Company $20,497
Birchwood $24,175
Bobcat Farms, LLC $100,849
C&J Farms, Inc. $14,332
c/o Chad Fykstra
Cargill $44,629
Cargill Pork $76,099
Cooperative Elevator $595,324
Association
333 S. Central Avenue
Hartley, IA 51346
Dan Kraft Trucking $28,968
Farm Plan $14,195
Farmers Co-op Society $918,000
c/o Gary & Dawn De Weerd
317 3rd Street, N.W.
Sioux Center, IA 51250
Feed Partners, LLC $157,193
Garrelts Lvst. Feeders, LLP $14,863
c/o David Garrelts
Ivesco $45,549
K&R Family Farms, Inc. $13,845
c/o Kelly Van Kalsbeek
Livestock Vet. Service $20,497
The Hanor Company $141,593
Triple C Express, LLC $14,420
c/o Jamie Siebrecht
Vanguard $16,000
c/o Ron Fedders
COLONIAL BANCGROUP: Underwriters Want Dismissal of Class Suit
-------------------------------------------------------------
Law360 reports that a group of defendants, including Charles
Schwab & Co. Inc., Credit Suisse Securities LLC and H&R Block
Financial Advisors, has asked the U.S. District Court for the
Middle District of Alabama to dismiss it from a consolidated
proposed securities class action alleging bankrupt Colonial
BancGroup Inc. misled investors about its subprime lending
practices.
Headquartered in Montgomery, Alabama, The Colonial BancGroup
(NYSE: CNB) provides diversified financial services, including
retail and commercial banking, wealth management services,
mortgage banking and insurance products. The BancGroup derives
substantially all of its income from Colonial Bank, N.A (Colonial
Bank) its banking subsidiary. Colonial bank --
http://www.colonialbank.com/-- operates 354 branches in Florida,
Alabama, Georgia, Nevada and Texas with over $26 billion in
assets.
On August 14, 2009, Colonial BancGroup's banking unit Colonial
Bank, Montgomery, AL, was closed by the Alabama State Banking
Department and the Federal Deposit Insurance Corporation was named
receiver. The FDIC sold most of the assets to Branch Banking and
Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion
in assets and assumed $20 billion in deposits of the Bank.
Colonial BancGroup filed for Chapter 11 bankruptcy protection on
August 25, 2009 (Bankr. M.D. Ala. Case No. 09-32303). W. Clark
Watson, Esq., at Balch & Bingham LLP and Rufus T. Dorsey IV,
Esq., at Parker Hudson Rainer & Dobbs LLP assist the Company in
its restructuring efforts. The Company listed $45,000,000 in
assets and $380,000,000 in debts in its bankruptcy filing.
CRUSADER ENERGY: To Sell Working Interests Back to Gunn Oil
-----------------------------------------------------------
Crusader Energy Group Inc. is seeking approval from the Bankruptcy
Court to sell its working interest in leases back to the Gunn Oil
Co. for $400,000 cash and the forgiveness of a $9.7 million
obligation, Bill Rochelle at Bloomberg News reports.
Crusader Energy purchased a 75% working interest in leases for
almost 131,000 net acres of properties in July 2008 from Gunn Oil
Co. and other sellers. Crusader has paid Gunn $12 million at the
outset and currently owes $9.7 million in deferred payment
obligations. Gunn contends that the $9.7 million debt is secured
under Texas law, given that the acreage in is several Texas
counties.
The proposed sale to Gunn will be subject to market test through
an auction. The Court will consider the bid procedures at a
hearing on Oct. 6.
Crusader already has a deal to sell most of its assets. Crusader
Energy Group Inc. has entered into an agreement with SandRidge
Energy, Inc., pursuant to which SandRidge Energy will purchase all
shares of common stock of Crusader that will be issued upon the
effectiveness of the reorganization of Crusader and its wholly-
owned subsidiaries under Chapter 11.
Under a proposed plan of reorganization filed with the Bankruptcy
Court, all of the currently outstanding equity interests in
Crusader would be cancelled upon consummation of the SandRidge
transaction and Crusader and its wholly-owned subsidiaries would
become indirect, wholly-owned subsidiaries of SandRidge.
About Crusader Energy
Based in Oklahoma City, Oklahoma, Crusader Energy Group Inc. (Pink
Sheets: CKGRQ) -- http://www.ir.crusaderenergy.com/-- explores,
develops and acquires oil and gas properties, primarily in the
Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth
Basin in the United States. It has working interests in more than
1,000 wells.
Crusader Energy and its affiliates filed for Chapter 11
protection on March 30, 2009 (Bankr. N.D. Tex. Lead Case No.
09-31797). The Debtors' financial condition as of
September 30, 2008, showed total assets of $749,978,331 and
total debts of $325,839,980.
Beth Lloyd, Esq., Richard H. London, Esq., and William Louis
Wallander, Esq., at Vinson & Elkins, L.L.P., represent the
Debtors as counsel. Jefferies & Company, Inc. acts as financial
adviser to Crusader in its Chapter 11 reorganization. BMC Group
Inc. is claims and notice agent. Holland N. Oneil, Esq., Michael
S. Haynes, Esq., and Richard McCoy Roberson, Esq., at Gardere,
Wynne & Sewell, represent the official committee of unsecured
creditors as counsel.
CRUSADER ENERGY: SandRidge to Pay $55 Million Cash Plus Stock
-------------------------------------------------------------
SandRidge Energy, Inc., said in a regulatory filing that pursuant
to its Stock Purchase Agreement with Crusader Energy Group Inc.,
it will purchase all of the shares of common stock of reorganized
Crusader for:
-- $55 million in cash, subject to certain adjustments,
including reduction by approximately $90,000 per day from
and after September 1, 2009, up to but excluding the Closing
Date;
-- 13,015,797 shares of SandRidge common stock, par value
$0.001 per share, subject to certain adjustments; and
-- warrants to purchase an aggregate of 2.0 million shares of
SandRidge Common Stock at an exercise price of $15.00 per
share during an exercise period ending five years after the
closing date of the transactions contemplated under the
Purchase Agreement.
The Cash Consideration will be paid to the liquidating trust
created under the plan of reorganization filed by the Crusader
Entities in the Bankruptcy Court on September 22, 2009.
Recipients of the Stock Consideration and warrants will not be
permitted to dispose of such Stock Consideration or warrants for
180 days after the Closing Date.
If the total amount of the claims against the Crusader Entities
that are required to be paid or reserved for by the Liquidating
Trust under the Plan on the Closing Date exceeds the amount of the
Cash Consideration plus the Crusader Entities' cash assets on the
Closing Date (which cash will be transferred to the Liquidating
Trust), then SandRidge Exploration and Production, LLC will make a
loan to the Liquidating Trust to pay or reserve for such claims
equal to the amount of such excess, up to $30 million. In the
event of such a loan, a number of shares of SandRidge Common Stock
will be withheld and reserved from the shares required to be
issued on the Closing Date, with the number of reserved shares
equal to the amount of the loan divided by $13.4452.
The SandRidge Parties will be required to deliver the reserved
shares in accordance with the Purchase Agreement after 180 days
after the Closing Date if the loan is paid in full, with interest,
but the number of reserved shares that will be delivered will be
reduced if the loan is not repaid in full, with interest, within
180 days after the Closing Date, by the amount of the loan that
remains outstanding, plus accrued but unpaid interest thereon,
divided by $13.4452. In addition to the adjustment of the Stock
Consideration, the Stock Consideration may be reduced to address
certain litigation matters.
The closing of the transactions contemplated by the Purchase
Agreement is subject to customary conditions for transactions of
this kind. The consummation of the transactions is also subject
to approval of the Plan by the creditors of the Crusader Entities
and the Bankruptcy Court.
If, in accordance with its terms, the Purchase Agreement is
terminated by either the Company or Crusader because the
Bankruptcy Court approves an alternative transaction that is
consummated within 12 calendar months after the date of the
Purchase Agreement, then the Crusader Parties will be obligated to
pay the Company a termination fee.
In addition, the Purchase Agreement may be terminated by either
the Company or Crusader if the closing of the transaction has not
occurred by December 30, 2009, or by the Company if the Crusader
Entities do not satisfy certain deadlines.
Deutsche Bank Securities advised SandRidge on the transaction.
Jefferies & Company, Inc., advised Crusader.
SandRidge Energy
Headquartered in Oklahoma City, Oklahoma, SandRidge Energy Inc.
(NYSE: SD) -- http://www.sandridgeenergy.com/-- is a natural gas
and crude oil company with its principal focus on exploration and
production. SandRidge and its subsidiaries also own and operate
gas gathering and processing facilities and CO2 treating and
transportation facilities and conduct marketing and tertiary oil
recovery operations. In addition, Lariat Services, Inc., a wholly-
owned subsidiary of SandRidge, owns and operates a drilling rig
and related oil field services business. SandRidge focuses its
exploration and production activities in West Texas, the Cotton
Valley Trend in East Texas, the Gulf Coast, the Mid-Continent, and
the Gulf of Mexico.
About Crusader Energy
Based in Oklahoma City, Oklahoma, Crusader Energy Group Inc. (Pink
Sheets: CKGRQ) -- http://www.ir.crusaderenergy.com/-- explores,
develops and acquires oil and gas properties, primarily in the
Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth
Basin in the United States. It has working interests in more than
1,000 wells.
Crusader Energy and its affiliates filed for Chapter 11
protection on March 30, 2009 (Bankr. N.D. Tex. Lead Case No.
09-31797). The Debtors' financial condition as of
September 30, 2008, showed total assets of $749,978,331 and
total debts of $325,839,980.
Beth Lloyd, Esq., Richard H. London, Esq., and William Louis
Wallander, Esq., at Vinson & Elkins, L.L.P., represent the
Debtors as counsel. Jefferies & Company, Inc. acts as financial
adviser to Crusader in its Chapter 11 reorganization. BMC Group
Inc. is claims and notice agent. Holland N. Oneil, Esq., Michael
S. Haynes, Esq., and Richard McCoy Roberson, Esq., at Gardere,
Wynne & Sewell, represent the official committee of unsecured
creditors as counsel.
CYNERGY DATA: Creditors Panel Objects to Final Financing Approval
-----------------------------------------------------------------
The official committee of unsecured creditors objects to final
approval of a debtor-in-possession financing for Cynergy Data LLC.
The committee complains that the financing exposes the Debtors'
estates to a risk of administrative insolvency, particularly after
any asset sale, due to a potential insufficiency of the amounts of
the postpetition financing sought and the amount of allocated for
wind-down costs and expenses due to the absence of any funding for
confirming a plan of liquidation or a plan of reorganization. The
committee wants the lenders, who it says are converting pre-
bankruptcy loans into postbankruptcy debt and will be getting
liens from assets unencumbered prepetition, to pay for the
privilege of using Chapter 11 for their benefit.
As reported by the TCR on Sept. 22, 2009, Cynergy Data has
received approval from the Bankruptcy Court to conduct an
October 5 auction for its assets where the ComVest Group would be
lead bidder. Bids are due October 2. Hearing on the sale is on
October 7.
Cynergy Data has entered into an asset purchase agreement with
"stalking horse" bidder Cynergy Holdings, LLC, an investment
vehicle that is managed by The ComVest Group, a private investment
firm focused on providing debt and equity solutions to middle
market companies. ComVest will purchase the assets for $81
million, absent higher and better bids at the auction.
The U.S. Bankruptcy Court for the District of Delaware has already
authorized, on an interim basis, Cynergy Data, to:
-- obtain postpetition financing from Comerica Bank, as agent
to the Working Capital DIP Lenders and Wells Fargo Foothill,
LLC, and from Harris, N.A. and Moneris Solutions, Inc.; and
-- use cash collateral of the prepetition secured lenders.
The Bankruptcy Court will consider final approval of the DIP
financing and the cash collateral use at a hearing on Oct. 1,
2009, at 3:00 p.m. (Eastern Time).
Salient Terms of the DIP Facility
Borrower: Cynergy Data, LLC
Guarantor: Cynergy Data Holdings, Inc. and Cynergy
Prosperity Plus, LLC
Lenders: Comerica Bank; Wells Fargo Foothill, LLC;
Harris, N.A.; Moneris Solutions, Inc.;
Commitment: The Working Capital DIP Facility in an amount
equal to the lesser of (i) the amount of (A)
$9,000,000 less (B) the amount of the
outstanding prepetition senior lender
Forbearance Indebtedness as of the Petition
Date plus (C) the aggregate amount of payments
or proceeds of Collateral that are applied
after the petition date to reduce the amount
of prepetition senior lender Indebtedness and
(ii) $25,000,000; and
The Interchange DIP Facility in an aggregate
principal outstanding amount of up to
$7,500,000
Use of Proceeds: All proceeds of the DIP Facilities shall be
used solely for working capital, general
corporate and other financing needs of the
Debtors in accordance with the Budget and any
subsequent budgets and Orders.
Term: Upon entry of the Interim Order, the Debtors
may immediately request advances under the
Working Capital DIP Facility.
The Termination Date is the earlier of (A)
the date of consummation of a sale of
substantially all of the Debtors' assets, or
Oct. 16, 2009, unless other wise extended in
writing by the Prepetition Senior Agent,
Working Capital Lenders, and Interchange DIP
Lenders.
Interest Rate: Either LIBOR Based Rate or Prime Based Rate
plus, in each case, an applicable margin of
10%, all as further defined in the Working
Capital DIP Facility Notes
Default Interest: The non-default Interest Rate, plus 3%
Events of Default: Customary
As adequate protection, the Debtors will provide:
-- the Working Capital DIP lenders with superpriority claims
and replacement liens that are valid, binding enforceable
and fully perfected as of the date thereof;
-- the Interchange DIP lenders with superpriority claims and
replacement liens.
The Debtors are indebted to senior lenders pursuant to:
1. Master Revolving Note with Comerica on July 24, 2009, in the
principal of $4,316,807, and interest of $28,509;
2. Master Revolving Note with Wells Fargo on July 24, 2009, in
the principal of $4,683,192, and interest of $30,929;
3. Revolving Credit Note with Comerica on Dec. 15, 2008, in the
principal of $10,514,549, and interest of $130,993;
4. Revolving Credit Note with Wells Fargo on Dec. 15, 2008, in
the principal of $7,318,126, and interest of $91,171;
5. Certain Term Loan A Note with Comerica on Aug. 1, 2008, in
the principal of $9,155,772, and interest of $114,065;
6. Certain Term Loan A Note with Wells Fargo on Aug. 1, 2008,
in the principal of $13,154,845, and interest of $163,887;
7. Certain Term Loan B Facility in the principal of
$26,901,732, and interest of $429,867;
8. Revolving Credit Note dated Dec. 15, 2008, in the principal
of $9,050,000, and interest of $237,059; and
9. fees and cost associated therewith.
The prepetition senior lender Indebtedness is secured by all
assets of the Debtors. The prepetition subordinated indebtedness
is secured by third priority and continuing pledges, liens, and
security interests on and in the prepetition lender collateral.
About Cynergy Data
Launched in 1995, Cynergy Data is a merchant credit card
processing service provider that gives business owners excellent
customer support and unparalleled merchant services. The company
emphasizes honest, service-oriented business practices and
customer-friendly products and services. During the past 14
years, Cynergy Data has rapidly expanded from a two-person
operation to one that employs over 130 service-oriented team
members. Headquartered in New York City, Cynergy Data manages a
portfolio of nearly 80,000 merchants processing in excess of $10
billion annually.
The Company and two affiliates -- Cynergy Data Holdings, LLC,
and Cynergy Prosperity Plus, LLC -- filed for Chapter 11 on
September 1, 2009 (Bankr. D. Del. Case No. 09-13038).
The Company's legal advisor is Nixon Peabody LLP; its financial
and restructuring advisor is CM&D Management Services LLC; its
industry expert is Unicorn Partners, LLC; and its investment
bankers are Stifel, Nicolaus & Company and Peter J. Solomon
Company. Aside from Nixon peabody, Pepper Hamilton LLP has been
hired as bankruptcy and restructuring counsel. Charles D. Moore
of Conway MacKenzie, Inc., serves as chief restructuring officer.
Kurtzman Carson & Consultants LLC serves as claims and notice
agent.
Cynergy Data said that it had assets of $109,546,132 against debts
of $186,183,032 as of June 30, 2009.
Cynergy Data filed for Chapter 11 to complete the sale of all of
its assets to Cynergy Holdings, LLC, an affiliate of The
ComVest Group, which will serve as stalking horse bidder in an
auction.
CYNERGY DATA: Committee Proposes Jager Smith as Counsel
-------------------------------------------------------
The official committee of unsecured creditors of Cynergy Data LLC
and its affiliates seek approval from the U.S. Bankruptcy Court
for the District of Delaware to hire Jager Smith PC as counsel,
nunc pro tunc to Sept. 10, 2009.
The firm will, among other things, advise the Committee in
connection with proposals and pleadings submitted by the Debtors
and other parties to the Court, represent the Committee with
respect to any plans of reorganization or disposition of assets
proposed in the case, and attend hearings and draft pleadings that
further the interests of unsecured creditors.
The individuals presently designated to represent the Committee
are Bruce F. Smith, a partner whose hourly billing rate is $500,
Steven C. Reingold, a partner whose hourly billing rate is $400,
Michael J. Fencer, a partner whose hourly billing rate is $400,
and certain paralelgas who will charge $125 to $175 per hour.
The firm will also seek reimbursement of out-of-pocket expenses.
About Cynergy Data
Launched in 1995, Cynergy Data is a merchant credit card
processing service provider that gives business owners excellent
customer support and unparalleled merchant services. The company
emphasizes honest, service-oriented business practices and
customer-friendly products and services. During the past 14
years, Cynergy Data has rapidly expanded from a two-person
operation to one that employs over 130 service-oriented team
members. Headquartered in New York City, Cynergy Data manages a
portfolio of nearly 80,000 merchants processing in excess of $10
billion annually.
The Company and two affiliates -- Cynergy Data Holdings, LLC,
and Cynergy Prosperity Plus, LLC -- filed for Chapter 11 on
September 1, 2009 (Bankr. D. Del. Case No. 09-13038).
The Company's legal advisor is Nixon Peabody LLP; its financial
and restructuring advisor is CM&D Management Services LLC; its
industry expert is Unicorn Partners, LLC; and its investment
bankers are Stifel, Nicolaus & Company and Peter J. Solomon
Company. Aside from Nixon peabody, Pepper Hamilton LLP has been
hired as bankruptcy and restructuring counsel. Charles D. Moore
of Conway MacKenzie, Inc., serves as chief restructuring officer.
Kurtzman Carson & Consultants LLC serves as claims and notice
agent.
Cynergy Data said that it had assets of $109,546,132 against debts
of $186,183,032 as of June 30, 2009.
Cynergy Data filed for Chapter 11 to complete the sale of all of
its assets to Cynergy Holdings, LLC, an affiliate of The
ComVest Group, which will serve as stalking horse bidder in an
auction.
CYNERGY DATA: Committee Wants Ashby & Geddes as Delaware Counsel
----------------------------------------------------------------
The official committee of unsecured creditors of Cynergy Data LLC
and its affiliates seek approval from the U.S. Bankruptcy Court
for the District of Delaware to hire Ashby & Geddes, P.A. as
Delaware counsel, nunc pro tunc to Sept. 10, 2009.
The firm will render legal services to the Committee relating to
the administration and reorganization of the Chapter 11 cases and
to the issues that may arise out of the Debtors' businesses.
Professionals of Ashby & Geddes who will provide services to the
Committee are:
Professional Position Hourly Rate
------------ -------- -----------
Gregory A. Taylor Member $380
Karen B. Skomorucha Associate $295
Cathie J. Boyer Paralegal $180
The firm will also seek reimbursement of out-of-pocket expenses.
About Cynergy Data
Launched in 1995, Cynergy Data is a merchant credit card
processing service provider that gives business owners excellent
customer support and unparalleled merchant services. The company
emphasizes honest, service-oriented business practices and
customer-friendly products and services. During the past 14
years, Cynergy Data has rapidly expanded from a two-person
operation to one that employs over 130 service-oriented team
members. Headquartered in New York City, Cynergy Data manages a
portfolio of nearly 80,000 merchants processing in excess of $10
billion annually.
The Company and two affiliates -- Cynergy Data Holdings, LLC,
and Cynergy Prosperity Plus, LLC -- filed for Chapter 11 on
September 1, 2009 (Bankr. D. Del. Case No. 09-13038).
The Company's legal advisor is Nixon Peabody LLP; its financial
and restructuring advisor is CM&D Management Services LLC; its
industry expert is Unicorn Partners, LLC; and its investment
bankers are Stifel, Nicolaus & Company and Peter J. Solomon
Company. Aside from Nixon peabody, Pepper Hamilton LLP has been
hired as bankruptcy and restructuring counsel. Charles D. Moore
of Conway MacKenzie, Inc., serves as chief restructuring officer.
Kurtzman Carson & Consultants LLC serves as claims and notice
agent.
Cynergy Data said that it had assets of $109,546,132 against debts
of $186,183,032 as of June 30, 2009.
Cynergy Data filed for Chapter 11 to complete the sale of all of
its assets to Cynergy Holdings, LLC, an affiliate of The
ComVest Group, which will serve as stalking horse bidder in an
auction.
DEVELOPERS DIVERSIFIED: S&P Assigns 'BB' Rating on $300 Mil. Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating to
Developers Diversified Realty Corp.'s new $300 million 9.625%
senior unsecured notes due March 2016. The company is offering
the notes to investors at a price of 99.42% of par with a yield to
maturity of 9.75%. At the same time, S&P assigned a '3' recovery
rating to the new issue, reflecting S&P's expectation for a
meaningful recovery (50%-70%) in the event of default. The
company intends to use net proceeds from the offering to repay
shorter-maturity debt obligations and reduce credit line
borrowings.
The company recently completed a series of transactions that S&P
believes will have a modestly favorable impact on the company's
balance sheet. These transactions include the issuance of roughly
$217 million in new equity, $260 million in asset sales during the
third quarter of 2009, the tender of $250 million of senior
unsecured notes, and the repurchase of roughly $39 million in
convertible securities (due 2012). Further, S&P anticipates that
the company will unwind and resolve one of its large joint
ventures (that has meaningful near-term debt maturities) in the
fourth quarter. In addition, Developers Diversified's portfolio
remains well tenanted and productive, and the company's exposure
to development is receding.
Nonetheless, S&P's ratings and outlook reflect its concerns about
the company's more highly leveraged balance sheet, heavily (more
than 50%) drawn credit facility, and intermediate-term debt
maturities. S&P also believes the company's current lower debt
coverage measures will remain under pressure due to assumed higher
refinancing costs and the potential for further compression of
core cash flow.
Ratings List
Developers Diversified Realty Corp.
Corporate credit BB/Negative/--
Ratings Assigned
Developers Diversified Realty Corp.
$300 million 9.625% senior unsecured notes due March 2016 BB
Recovery rating 3
DPAC TECHNOLOGIES: Posts $601,000 Net Loss in Qtr. Ended June 30
----------------------------------------------------------------
DPAC Technologies Corp. posted a net loss of $377,757 for three
months ended June 30, 2009, compared with a net loss of $111,244
for the same period in 2008.
For six months ended June 30, 2009, the Company posted a net loss
of $601,360 compared with a net loss of $451,322 for the same
period in 2008.
The Company's balance sheet at June 30, 2009, showed total assets
of $9,851,332, total liabilities of $6,542,822 and a stockholders'
equity of $3,308,510.
The Company said that there is substantial doubt about its ability
to continue as a going concern. The Company noted that it
incurred a net loss for the second quarter of 2009 and for the six
months ended June 30, 2009, and ended the period with a cash
balance of $48,000 and a deficit in working capital of $1,076,000.
The Company incurred a net loss for 2008 and ended the year with a
cash balance of $9,000 and a deficit in working capital of
$805,000.
A full-text copy of the Company's Form 10-Q is available for free
at http://ResearchArchives.com/t/s?45cd
DPAC Technologies Corp. (OTC:DPAC) through its wholly owned
subsidiary, QuaTech, Inc., designs, manufactures, and sells device
connectivity and device networking solutions for a broad market.
QuaTech sells its products through a global network of
distributors, system integrators, value added resellers, and
original equipment manufacturers. The Company sells to customers
in both domestic and foreign markets. Customers include OEM's,
value added resellers and System Integrators, well as end-users in
many industries, including banking, retail/POS, access control,
building automation and security, and energy management. QuaTech
products can be categorized into two broad product lines Device
Connectivity products and Device Networking products.
DREAMS INC: Posts $2 Million Net Loss in Six Months Ended June 30
-----------------------------------------------------------------
Dreams, Inc., posted a net loss of $2,062,000 for six months ended
June 30, 2009, compared with a net loss of $1,399,000 for the same
period in 2008.
For three months ended June 30, 2009, the Company posted a net
loss of $1,073,000 compared with a net loss of $1,159,000 for the
same period in 2008.
The Company's balance sheet at June 30, 2009, showed total assets
of $54,544,000, total liabilities of $31,355,000 and a
stockholders' equity of $23,189,000.
The Company said that there is substantial doubt about its ability
to continue as a going concern. The Company noted that the
Company incurred a loss from operations, has a decrease in
operational cash flows, and as of Dec. 31, 2008, the Company was
not in compliance with its debt covenants.
Effective, June 30, 2009, the Company received its waivers from
its senior lender for performance covenant breaches in 2008 and
extended its revolving credit facility with its Bank through
June 2010. In addition, the management continues to implement
aggressive cost-cutting measures in order to reduce operating
costs and maintain future compliance with financial performance
covenants with its lender.
A full-text copy of the Company's Form 10-Q is available for free
at http://ResearchArchives.com/t/s?45cb
Dreams, Inc. (AMEX:DRJ) is engaged in the manufacturing,
distributing, retailing and selling of sports licensed products,
memorabilia and acrylic display cases via multiple channels. The
Company is also in the business of selling field of dreams retail
store franchises and operates retail stores, and Web sites selling
memorabilia and licensed sports products, well as athlete
representation and corporate marketing of individual athletes.
The Company's customers are located throughout the United States.
As of Dec. 31, 2008, the Company operated six FansEdge stores in
the greater Chicago, Illinois area.
EDWARD NEWMAN: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Edward G. Newman
1500 East Brainerd Street
Pensacola, FL 32503
Bankruptcy Case No.: 09-32016
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
Northern District of Florida (Pensacola)
Debtor's Counsel: C. Edwin Rude Jr., Esq.
C. Edwin Rude, Jr. Attorney at Law
211 E. Call Street
Tallahassee, FL 32301-7607
Tel: (850) 222-2311
Fax: (850) 222-2120
Email: edrudelaw@earthlink.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 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/flnb09-32016.pdf
The petition was signed by Mr. Newman.
ELECTRICAL SERVICE: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: The Electrical Service Company, Inc.
dba TESCO
8176 Telegraph Road, Suite E
Severn, MD 21144-3204
Bankruptcy Case No.: 09-28344
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
District of Maryland (Baltimore)
Judge: Robert A. Gordon
Debtor's Counsel: L. Jeanette Rice, Esq.
Walsh, Becker, Moody & Rice
14300 Gallant Fox Lane, Suite 218
Bowie, MD 20715
Tel: (301) 262-6000
Fax: (301) 262-4403
Email: riceesq@att.net
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/mdb09-28344.pdf
The petition was signed by Donna Boliek, president of the Company.
EMI GROUP: Citigroup May Refuse Out-Of-Court Restructuring
----------------------------------------------------------
Citigroup Inc., which loaned $4.73 billion to Terra Firma Capital
Partners to buy EMI Group Ltd., may prefer to push EMI into
bankruptcy than forgive part of the loan, the New York Post
reported.
According to The Post, Guy Hands's Terra has been injecting cash
to EMI to keep it in compliance with its cash flow to debt ratio
requirements but can't put in more money because of a contract
with investors. Terra is negotiating with Citi on a debt
restructuring, but the lender is "getting impatient" with
delinquent borrowers.
Citigroup, which is seeking to reduce the size of its balance
sheet, has forced delinquent borrowers including fashion house
Escada AG to file for bankruptcy and is "moving in that direction"
with Valentino Fashion Group SpA, The Post said.
EMI is the fourth largest record company in terms of market share
(behind Universal Music Group, Sony Music Entertainment, and
Warner Music Group). It houses recorded music segment EMI Music
and EMI Music Publishing. EMI Music distributes CDs, videos, and
other formats primarily through imprints and divisions such as
Capitol Records and Virgin, and sports a roster of artists such as
The Beastie Boys, Norah Jones, and Lenny Kravitz. EMI Music
Publishing, the world's largest music publisher, handles the
rights to more than a million songs. EMI Music operates through
regional divisions (EMI Music North America, International, and UK
& Ireland). Private equity firm Terra Firma owns EMI.
FILENE'S BASEMENT: Liquidating Estate Has Deal With Former Owner
----------------------------------------------------------------
Retail Ventures, Inc. and DSW Inc. on September 25, 2009, entered
into a settlement agreement with FB Liquidating Estate, Inc.,
formerly known as Filene's Basement, Inc., FB Services LLC and FB
Leasing Services LLC and the Official Committee of Unsecured
Creditors appointed in the Chapter 11 case for the Debtors.
The Settlement Agreement remains subject to approval of the
Bankruptcy Court for the District of Delaware presiding over the
Chapter 11 case for the Debtors.
The Debtors and the Committee have filed a motion with the court
requesting a hearing related to approval of the Settlement
Agreement on October 15, 2009.
According to a regulatory filing by Retail Ventures, the salient
terms of the Settlement Agreement are:
* the Company's claims against the Debtors in respect of
$52.6 million in notes receivable will be released (during
the quarter ended May 2, 2009, the Company recorded an
allowance to fully reserve for these notes receivable as a
result of the disposition of the Debtors to FB II Acquisition
Corp., a subsidiary of Buxbaum Holdings, Inc.);
* the Company will assume the rights and obligations related to
(and agree to indemnify Liquidating Filene's Basement with
regard to certain matters arising out of) the Liquidating
Filene's Basement defined benefit pension plan; and
* the Debtors and the Committee will allow certain general
unsecured claims for amounts owed to the Company and DSW. The
parties have also agreed to certain provisions affecting the
proper allocation of proceeds paid to the Company or
Liquidating Filene's Basement in connection with specified
third party litigation and to certain provisions related to
the Debtors' recovery from third parties that are the
beneficiaries of letters of credit or hold collateral related
to workers' compensation claims. The Settlement Agreement
also provides for certain mutual releases among the Debtors,
the Committee, the Company, DSW and other parties.
Although the Settlement Agreement, if approved by the court, would
provide that the Company and DSW will have certain allowed claims
against the Debtors, there can be no assurance as to whether the
Company or DSW will ultimately recover any amounts from the
Debtors in connection with these claims. No distributions from
the Debtors' estates will be made unless and until a plan of
reorganization of the Debtors is proposed, voted on and confirmed
by the court, and there can be no assurance as to when or whether
such events will occur. In addition, as a result of the releases
provided by the Settlement Agreement, the Company and DSW will
relinquish the right to pursue additional claims, which may
include unknown or unmatured claims, against the Debtors.
By agreeing to assume the Pension Plan, the Company will become
responsible for maintaining this plan effective upon Court
Approval, including the cost of contributions to satisfy the
minimum funding requirements of the Employee Retirement Income
Security Act of 1974, as amended, and the costs incident to the
normal administration of the plan and any possible deficiencies in
plan administration. Required annual contributions will depend in
part on changes in the fair market value of plan assets, as well
as changes in interest rates used in calculating the accumulated
benefit obligation, and such changes may be materially adverse
during periods of market instability or decline.
A full-text copy of the Settlement Agreement is available for free
at http://researcharchives.com/t/s?45de
About Filene's Basement
Massachusetts-based Filene's Basement, also called The Basement,
is the oldest off-price retailer in the United States. The
Basement focuses on high-end goods and is known for its
distinctive, low-technology automatic markdown system.
Filene's Basement first filed for Chapter 11 bankruptcy protection
in August 1999. Filene's Basement was bought by a predecessor of
Retail Ventures, Inc., the following year. Retail Ventures in
April 2009 transferred the unit to Buxbaum.
Filene's Basement, Inc. and its affiliates filed for Chapter 22 on
May 4, 2009, (Bankr. D. Del. Case No. 09-11525). James E.
O'Neill, Esq., Laura Davis Jones, Esq., Mark M. Billion, Esq.,
Michael Seidl, Esq., and Timothy P. Cairns, Esq. at Pachulski
Stang Ziehl & Jones LLP, represent the Debtors in their
restructuring effort. The Debtors listed $50,000,001 to
$100,000,000 in assets and $100,000,001 to $500,000,000 in debts.
The Debtor is now formally named FB Liquidating Estate, following
the sale of all of its assets to Syms Corp. in June 2009.
FLUID ROUTING: Case Converted to Chapter 7 Liquidation
------------------------------------------------------
Fluid Routing Solutions Inc., now known as Carolina Fluid
Handling, Inc., won approval from the Bankruptcy Court to convert
its bankruptcy case to a liquidation in Chapter 7, Bill Rochelle
at Bloomberg News reported. Fluid Routing has sold most of its
assets since filing for Chapter 11 in February. There being no
hope for rehabilitation, the Company, according to the report,
said there is a greater chance of paying costs of the Chapter 11
effort if the case is converted to Chapter 7.
Headquartered in Rochester Hills, Michigan, Fluid Routing
Solutions Inc. -- http://www.markivauto.com/-- made automobile
parts and accessories. The Company has manufacturing facilities
located in Lexington, Tennessee; Big Rapids, Michigan; Oscala,
Florida; and Easley, South Carolina. The Company's Detroit
facility closed in 2008. The Company was formed in May 2007 when
Sun Capital purchased the Dayco business from auto-parts
manufacturer Mark IV Industries Inc.
Fluid Routing Solutions and three affiliates filed for Chapter 11
on February 6, 2009 (Bank. D. Del. Lead Case No. 09-10384). Judge
Christopher Sonchi handles the case.
Attorneys at Morgan Lewis & Bockuis LLP, represented the Debtors
in their Chapter 11 effort. Attorneys at Young Conaway Stargatt &
Taylor LLP, served as Delaware counsel while Mesirow Financial
Interim Management, LLC, served as financial advisor. In its
bankruptcy petition, Fluid Routing listed assets of $10 million to
$50 million and debts of $50 million to $100 million.
The Debtors have sold, through a Court-sanctioned sale process,
their hose extrusion and fuel assembly service business to FRS
Holding Corp. for $11,000,000. Following the sale, Fluid Routing
Solutions changed its corporate name to Carolina Fluid Handling,
Inc.
FONTAINEBLEAU LV: Term Lenders Want Case Converted to Chapter 7
---------------------------------------------------------------
An ad hoc group of term lenders of Fontainebleau Las Vegas LLC
asks the Bankruptcy Court to convert the Company's bankruptcy case
to Chapter 7 liquidation.
Michael I. Goldberg, Esq., at Akerman Senterfitt, in Miami,
Florida, asserts the case should be converted as no meaningful
progress has been made, leaving no likelihood of rehabilitation.
The Debtors own an unfinished 63-story casino resort in Las Vegas.
However, according to the term lenders group, "With completion of
the project not possible, a sale of the project to a third party
and liquidation of the remaining assets is the only viable course
to realize any meaningful value for creditors."
The term lenders noted that the Debtors pinned their hopes for
reorganization on the success of litigation against the revolving
lenders but those hopes were dealt a major setback when the
district court, denied the Debtors' partial motion for summary
judgement.
The term lenders have noted that the Chapter 11 reorganization has
already depleted more than $16 million of their cash collateral.
About Fontainebleau Las Vegas
Fontainebleau Las Vegas Holdings, LLC --
http://www.fontainebleau.com/-- is constructing a luxury resort,
Fontainebleu Las Vegas, on the northern end of the Las Vegas
Strip.
Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas,
LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11
protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No.
09-21481). Judge A. Jay Cristol presides over the Debtors' cases.
Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP,
represents the Debtors in their restructuring efforts. The
Debtors' Financial Advisor are Moelis & Company LLC and Citadel
Derivatives Group LLC. The Debtors' Special Litigation Counsel is
David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman
LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and
Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors'
Claims Agent is Kurtzman Carson Consulting LLC. Attorneys at
Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP,
represent the Official Committee of Unsecured Creditors.
As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than
$1 billion in debt and a similar amount in assets, while each of
Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas
Holdings, LLC, listed less than $50,000 in assets and more than
$1 billion in debts.
Bankruptcy Creditors' Service, Inc., publishes Fontainebleau
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Fontainebleau Las Vegas Holdings, LLC, and its debtor-
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
FRANKLIN CREDIT: June 30 Balance Sheet Upside-Down by $799 Million
------------------------------------------------------------------
Franklin Credit Holding Corporation's balance sheet at June 30,
2009, showed total assets of $1,010,954,579 and total liabilities
of $1,809,845,202, resulting in a stockholders' deficit of
$798,890,623.
For three months ended June 30, 2009, the Company reported a net
income of $20,277,174 compared with a net loss of $281,437,149 for
the same period in 2008.
For six months ended June 30, 2009, the Company posted a net loss
of $342,107,112 compared with a net loss of $287,955,607 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 has been,
since the latter part of 2007, expressly prohibited by The
Huntington National Bank from acquiring or originating loans. In
addition, the Company's restructuring agreements with the Bank
contain affirmative covenants that the Company's servicing
subsidiary, Franklin Credit Management Corporation, be licensed,
qualified and in good standing, where required, and that it
maintain its licenses to service mortgage loans and real estate
owned properties serviced under the servicing agreement entered
into in connection with the Restructuring. Any event of default
under the March 31, 2009, Restructuring Agreements, or failure to
successfully renew these Restructuring Agreements or enter into
new credit facilities with Huntington prior to their scheduled
maturity, could entitle Huntington to declare the Company's
indebtedness immediately due and payable and result in the
transfer of the remaining loans pledged to Huntington to a third
party. Moreover, certain events of default under the
Restructuring Agreements, including defaults under provisions
relating to enforceability, bankruptcy, maintenance of collateral
and lien positions, and certain negative covenants typical for
agreements of this nature, or defaults under its Servicing
Agreement with the Bank or the Licensing Credit Agreement could
result in the transfer of the Company's sub-servicing contract as
servicer of its loans.
A full-text copy of the Company's Form 10-Q is available for free
at http://ResearchArchives.com/t/s?45c9
Franklin Credit Holding Corporation (OTC:FCMC) fka Franklin Credit
Management Corporation, is a specialty consumer finance company.
On Dec. 28, 2007, Franklin entered into a series of agreements
with The Huntington National Bank. In November 2007, Franklin
ceased to acquire or originate loans and, under the terms of the
Forbearance Agreements. As a result of the Forbearance Agreements
entered into, on Dec. 28, 2007, with the bank, the Company's
principal business and operational activity, during the year ended
Dec. 31, 2008, is the servicing of its acquired and originated
mortgage loans and real estate assets. On May 28, 2008, Franklin
entered into various agreements to service on a fee-paying basis
$245 million in residential home equity line of credit mortgage
loans for Bosco Credit LLC.
GAMMA PHARMA: Posts $800,000 Net Loss in Quarter Ended June 30
--------------------------------------------------------------
Gamma Pharmaceuticals, Inc., posted a net loss of $796,052 for
three months ended June 30, 2009, compared with a net loss of
$1,084,230 for the same period in 2008.
The Company's balance sheet at June 30, 2009, showed total assets
of $6,049,116, total liabilities of $1,452,580 and a stockholders'
equity of $4,596,536.
A full-text copy of the Company's Form 10-Q is available for free
at http://ResearchArchives.com/t/s?45ac
Gamma Pharmaceuticals, Inc. (OTC BB: GMPM.OB) -- http://www.gamma-
pharma.com/ -- operates as a marketing, brand management, and
product formulation company. The company focuses on the
formulation, marketing and sale of vitamins and nutriceuticals,
over the counter pharmaceutical products, and personal care
products in the Peoples Republic of China, Hong Kong, Taiwan, and
the United States. Its product formulations are based on its
proprietary Gel Delivery Technology' and are marketed and sold as
wellness products. The company offers products under the
BrilliantChoice, Savvy, Jugular Energy Products, and IceDrops. It
also manufactures house brands for retail accounts. The company,
formerly known as Sunburst Pharmaceuticals, Inc., was founded in
1993 and is headquartered in Las Vegas.
Going Concern
On July 14, 2009, L.L. Bradford & Company, LLC, in Las Vegas,
Nevada, expressed substantial doubt about Gamma Pharmaceuticals'
ability to continue after auditing the Company's financial
statements for the fiscal years ended March 31, 2009, and 2008.
The auditor noted that the Company's current liabilities exceed
current assets and has incurred significant losses during the
development stage.
GENARO MENDOZA: Sells Chancery Building to Chelsea Pacific
----------------------------------------------------------
Genaro Mendoza has sold his Chancery Building at 564 Market St. in
San Francisco to Chelsea Pacific Holdings LLC for $9.2 million,
court documents say.
Mr. Mendoza bought Chancery Building for $12.1 million in 2000.
According to court documents, Chelsea Pacific paid all cash for
Chancery Building. Court documents say that the purchase price
was enough to pay off a $7 million first deed of trust held by
Wells Fargo and a $1.1 million second deed of trust held by
Tamalpais Bank.
J.K. Dineen at San Francisco Business Times reports that Daniel
Cressman at Grubb & Ellis represented Mr. Mendoza along with Rick
Limpert and Mike Taquino, while Kevin Colombo at Retail West
represented Chelsea Pacific along with Dean Copans.
Petaluma, California-based Genaro Mendoza, aka George Mendoza and
Mendoza Investment, filed for Chapter 11 on June 3, 2009 (Bankr.
N.D. Calif. Case No. 09-11678). The Debtor listed $100 million to
$500 million in assets and 50 million to $100 million in debts.
GENTEK INC: Moody's Reviews 'B1' Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service placed the ratings of GenTek Inc. on
review for possible downgrade following the company's announcement
that it has entered into a definitive agreement to be acquired by
ASP GT Acquisition Corp., a wholly-owned subsidiary of investment
funds managed by American Securities LLC, a private equity firm.
Under the terms of the merger agreement, ASP will commence a
tender offer to purchase for cash all of the outstanding shares of
GenTek common stock at a price of $38.00 per share. The
transaction is valued at $673 million consisting of equity value
of approximately $411 million plus the assumption of net debt and
similar liabilities of approximately $262 million (including some
$212 million outstanding under an existing term loan agreement).
The equity tender offer is expected to commence on or before
October 9, 2009.
As the future capital structure and seller financing arrangements
have not been disclosed, Moody's review will focus on the ultimate
capital structure and its effects of the structure on GenTek's
credit metrics.
The Board of Directors of GenTek has unanimously approved the
merger agreement and the transaction contemplated by the merger
agreement, and has resolved to recommend that GenTek's
stockholders tender their shares in connection with the tender
offer contemplated by the merger agreement. Moody's expect that
shareholder approval will be forthcoming given the closely held
nature of the equity -- with the top nine shareholders holding
approximately 70% of the shares outstanding.
Moody's believe that the transaction, as announced, would activate
a change of control covenant in the credit facilities that may
trigger a possible refinancing of these facilities.
On Review for Possible Downgrade:
Issuer: GenTek Inc.
-- Corporate Family Rating, Placed on Review for Possible
Downgrade, currently B1
-- Probability of Default Rating, Placed on Review for Possible
Downgrade, currently B1
-- Senior Secured Bank Credit Facility, Placed on Review for
Possible Downgrade, currently Ba3
Outlook Actions:
Issuer: GenTek Inc.
-- Outlook, Changed To Rating Under Review From Stable
Moody's last rating action concerning GenTek was on May 6, 2009.
At the time the company's CFR was affirmed at B1, the SGL moved to
SGL-3 from SGL-2 and the outlook was moved to stable from
positive. These actions reflected Moody's concern with the
company's maturing credit facility and approaching debt
maturities.
GenTek Inc., headquartered in Parsippany, New Jersey, is a
manufacturer of specialty chemicals and engineered industrial
components. Revenues from continuing operations for the LTM
period ending June 31, 2009, were $566 million.
GENTEK INC: S&P Puts 'B+' Corp. Rating on CreditWatch Developing
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it placed all its
ratings on GenTek Inc., including the 'B+' corporate credit
rating, on CreditWatch with developing implications.
The CreditWatch listing follows the announcement that GenTek
entered into an agreement to be acquired by ASP GT Acquisition
Corp., a wholly owned subsidiary of American Securities LLC, a New
York-based private equity firm. Under the terms of the agreement,
ASP will commence a tender offer in early October to purchase for
cash all of the outstanding shares of GenTek's common stock at a
price of $38 per share. The transaction is valued at $673 million
consisting of equity value of approximately $411 million plus debt
and liabilities of approximately $262 million. S&P expects the
existing senior secured facilities to be refinanced in this
transaction.
"Based on the preliminary nature of the transaction and limited
information, S&P is placing all ratings on CreditWatch with
developing implications pending completion of a comprehensive
review of the transaction and its implications for credit
quality," said Standard & Poor's credit analyst Henry Fukuchi.
Parsippany, New Jersey-based GenTek is a provider of specialty
chemicals and valve actuation systems and components for the
automotive industry. GenTek derives about 65% of revenues from
its environmental and specialty chemical division and 25% from its
valve train products. GenTek's chemical division -- principally
focused on niche water treatment chemicals, sulfur regeneration
services, and related chemical intermediates -- tends to benefit
from relatively stable demand and moderate competition.
The CreditWatch listing will be resolved after details of the
financing plan are known and Standard & Poor's has met with
management to assess the company's business and financial profiles
following the potential transaction.
GEO GROUP: Moody's Affirms Senior Secured Rating at 'Ba3'
---------------------------------------------------------
Moody's Investors Service has affirmed the GEO Group's senior
secured rating at Ba3 and senior unsecured rating at B1. Moody's
also affirms the corporate family rating at Ba3. The rating
outlook has been revised to positive from stable to reflect the
company's growing cash flow, stronger fixed charge coverage ratios
and adequate liquidity.
The company has significantly increased operating cash flow to a
projected $139 million for full year 2009 from $46 million in 2006
as a result of growing revenues and improving operating margins.
Revenues are expected to grow to a projected $1,115 million in
2009 from $818 million for FY06. The revenue growth has been
achieved through acquisitions, development and expansion of
facilities during the last couple of years. In addition to its
corrections business, it is growing a platform in mental health
services representing 11% of revenue. GEO also has numerous
contracts to manage international facilities (12% of revenue)
Australia, the United Kingdom, South Africa, and Canada.
Operating margins have steadily improved to 15.6% as of 2Q09
compared to 11.2% as of 2Q06, however Moody's views margins in the
teens as still weak. Operating margins improved as the company
increased its ownership of facilities (versus leasing or
managing). The company achieved this by acquiring facilities it
had been leasing and also actively developing new and expanding
existing facilities. Owning facilities has contributed to higher
margins due to elimination of high leasing costs. Margins also
improved as GEO eliminated less profitable management contracts.
Stronger cash flow has improved coverage ratios. Interest
coverage improved to 5.4x at 2Q09 from 2.9x at 2Q06. All-in fixed
charge coverage also improved significantly to 1.7x from 1.3x for
the comparable period. All-in fixed charge coverage is defined as
EBITDAR/ interest expense including capitalized interest, plus
income taxes, principal amortization, capital leases and rent
expense.
GEO Group is considered to have adequate liquidity. The company's
$240 million secured credit facility matures in September 2010.
GEO is expected to complete its refinancing of the facility over
the next few weeks and anticipates upsizing the facility and
extending the maturity to September 2012. Given the company's
operating cash flow and expectations for a larger credit line, the
company is expected to be able to execute its strategy for growth
through expansion of existing facilities and new acquisitions.
The company is not required to pay a dividend and retains all cash
for reinvestment in its facilities.
Industry conditions currently favor private corrections operators,
as budget and bed space constraints at the local, state, and
federal levels are creating demand for privately-run beds to house
inmates. Moody's do not foresee a decline in this demand for
private bed space though some states with more severe budgetary
constraints may delay addressing these needs and temporarily
reduce the level of new contracts and/or reduce per diem usage of
existing contracts. Currently, there are discussions of policy
reform for the detention of undocumented immigrants in the U.S.
This also raises some uncertainty to GEO's contracts with ICE
(Immigration and Customs Enforcement) which represents 13% of
operating revenues. GEO's contracts with ICE are for undocumented
and also criminal alien populations. Reform may be viewed as an
opportunity for GEO to compete for new and larger facilities that
will consolidate a fragmented system of small and scattered
facilities.
The positive rating outlook reflects GEO Group's growing operating
cash flow and improving credit metrics. The positive outlook
incorporates Moody's view that despite concerns over state and
federal budget deficits, the GEO Group will manage expiring
contracts and likely obtain new contracts and customers due to an
overriding demand for its facilities.
Moody's would likely upgrade GEO Group should the firm achieve
gross operating margins closer to 20%, reduce secured debt
approaching 20% of gross assets, and consistently achieve
EBITDAR/fully loaded fixed charge coverage in excess of 1.5X, with
fully loaded fixed charge defined as interest expense including
capitalized interest, plus income taxes, principal amortization,
capital leases and rent expense. Conversely, a downgrade would
occur should GEO Group incur debt to EBITDA above 6X, sustain
secured debt to gross assets above 40%, or experience a stall in
revenue growth due to major tenant loss.
The rating outlook was changed to positive from stable for these
ratings:
* GEO Group, Inc. -- Ba3 senior secured; B1 senior unsecured; Ba3
corporate family.
Moody's last rating action with respect to GEO was on
September 22, 2006, when Moody's affirmed the ratings and stable
outlook.
The GEO Group, Inc., is based in Boca Raton, Florida, USA, and is
a provider of government-outsourced services specializing in the
management of correctional, detention and mental health and
residential treatment facilities in the United States, Australia,
the United Kingdom, South Africa, and Canada. As of June 30,
2009, GEO managed more than 60,000 beds and had an additional
7,000 beds under development.
GENERAL GROWTH: Committee Members Get Nod to Trade Claims
---------------------------------------------------------
General Growth Properties Inc.'s unsecured creditors committee
members received approval from Bankruptcy Judge Allan Gropper to
trade bank debt of, and claims against, General Growth once they
set safeguards to prevent employees from improperly using non-
public information.
Committee members Eurohypo AG, New York Branch; Calyon New York
Branch; and Fidelity Fixed Income Trust, Fidelity Strategic Real
Return Fund - Fidelity Investments, General Electric Capital
Corporation, and American High-Income Trust made the request
On behalf of Eurohypo, Brett H. Miller, Esq., at Morrison &
Foerster LLP, in New York, says the creditors will not violate
their fiduciary duties as members of the Creditors' Committee as
long as they establish and adhere to the information blocking
policies and procedures that are approved by the United States
Trustee for Region 2. The creditors said they will establish
"screening walls" to isolate trading activities from their
activities as members of the official committee.
Although members of the Committee owe fiduciary duties to the
creditors of the Debtors' estates, the creditors' personnel also
have fiduciary duties to maximize returns through trading
securities and other financial interests, Mr. Miller points out.
About General Growth
Based in Chicago, Illinois, General Growth Properties, Inc. --
http://www.ggp.com/-- is the second-largest U.S. mall owner,
having ownership interest in, or management responsibility for,
more than 200 regional shopping malls in 44 states, as well as
ownership in master planned community developments and commercial
office buildings. The Company's portfolio totals roughly ]
200 million square feet of retail space and includes more than
24,000 retail stores nationwide. General Growth is a self-
administered and self-managed real estate investment trust. The
Company's common stock is trading in the pink sheets under the
symbol GGWPQ.
General Growth Properties Inc. and its affiliates filed for
Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No.
09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq.,
Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil,
Gotshal & Manges LLP, have been tapped as bankruptcy counsel.
Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants
LLC has been engaged as claims agent. The Company also hired
AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC,
as investment bankers. The Debtors disclosed
$29,557,330,000 in assets and $27,293,734,000 in debts as of
December 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes General Growth
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Growth Properties Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
GEORGIA GULF: Registers 31,148,503 Common Shares for Resale
-----------------------------------------------------------
Georgia Gulf Corporation filed with the Securities and Exchange
Commission a prospectus relating to up to 31,148,503 shares of the
Company's common stock that may be offered for sale by
stockholders.
The selling stockholders may offer the shares from time to time
directly or, alternatively, through underwriters, broker-dealers
or agents. The shares may be sold in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, at
varying prices determined at the time of sale, or at a negotiated
price. The sales may be effected in transactions (which may
involve block transactions) on any national securities exchange or
quotation service on which the common stock may be listed or
quoted at the time of sale, in the over-the-counter market, in
transactions otherwise than on such exchanges or services or in
the over-the-counter market, through the writing of options or by
any other method.
Georgia Gulf will not receive any proceeds from the sale of the
shares.
Georgia Gulf will pay all expenses associated with the
registration of the shares. The selling stockholders will pay
underwriting discounts, commissions and transfer taxes, if any,
relating to their sale or disposition of the shares.
A full-text copy of the Company's prospectus is available at no
charge at http://ResearchArchives.com/t/s?45d6
About Georgia Gulf
Georgia Gulf Corporation (NYSE: GGC) is a manufacturer and
international marketer of two integrated chemical product lines,
chlorovinyls and aromatics. The Company's primary chlorovinyls
products are chlorine, caustic soda, vinyl chloride monomer (VCM),
vinyl resins and vinyl compounds. Its aromatics products are
cumene, phenol and acetone. The Company has four business
segments: chlorovinyls; window and door profiles, and moldings
products; outdoor building products, and aromatics.
At June 30, 2009, the Company's balance sheet showed total assets
of $1.62 billion and total $1.70 billion, resulting in a
stockholders' deficit of $85.46 million.
Georgia Gulf has said factors that gave rise to the substantial
doubt about the Company's ability to continue as a going concern
have been remediated. As of June 30, 2009, the Company is in
compliance with all required debt covenants.
In August 2009, Moody's Investors Service upgraded the Corporate
Family Rating of Georgia Gulf to B2 from Caa2 as a result of the
completion of the private debt-for-equity exchange offer and an
amendment to its credit facility that substantially improves the
company's liquidity. As reported by the Troubled Company Reporter
on September 7, 2009, Standard & Poor's Ratings Services raised
its ratings on Georgia Gulf, including its corporate credit rating
to 'B' from 'D'. The outlook is stable.
GETRAG TRANSMISSION: Renewable Energy Firm Eyeing Tipton Site
-------------------------------------------------------------
Robert Annis at The Indianapolis Star reports that an undisclosed
renewable energy corporation is considering acquiring the former
Getrag Transmission/Chrysler site in Tipton.
Indianapolis Star relates that the 106-acre site is on the market
for $46 million.
According to Indianapolis Star, Tipton County officials voted
unanimously on Monday to support offering the company, referred to
by the code-name Apex during the meeting, 10-year real and
personal property tax abatement and up to $13 million in
additional incentives from tax-increment financing bonds.
Indianapolis Star notes that if the undisclosed company decides to
move production to Tipton, it could mean up to 850 jobs for the
area. Indianapolis Star relates that the trust holding the
property would pay half of its estimated $600,000 property tax
bill for 2010.
The incentives were necessary to compete with other unidentified
communities for the business, which may invest as much as
$450 million in the area, and a public hearing and an additional
round of voting will be needed before the incentives become
official, Indianapolis Star states, citing Barnes and Thornburg
attorney Rick Hall.
Headquartered in Sterling Heights, Michigan, GETRAG Transmission
Manufacturing LLC -- http://www.getrag.de/-- designs and makes
dual clutch transmission its facility in Tipton, Indiana. The
company filed for Chapter 11 relief on November 17, 2008 (Bankr.
E.D. Mich. Case No. 08-68112). Jayson Ruff, Esq., Jeffrey S.
Grasl, Esq., and Stephen M. Gross, Esq., at McDonald Hopkins,
represent the Debtor as counsel. Matthew Wilkins, Esq., at Brooks
Wilkins Sharkey & Turco PLLC, represents the unsecured creditor's
committee as counsel. In its schedules, the Debtor listed total
assets of $690,071,505 and total debts of $582,208,616.
Getrag Transmission is a unit of Germany's Getrag Group. Based in
Untergruppenbach, Germany, GETRAG Corporate Group is an
independent automotive transmission manufacturer with 12,400
employees at 23 locations worldwide.
GOLDEN NUGGET: S&P Downgrades Corporate Credit Rating to 'SD'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Las Vegas-based Golden Nugget Inc. to 'SD' (selective
default) from 'CC'. S&P also lowered its issue-level rating on
the company's second-lien credit facility to 'D' from 'C'. The
recovery rating on the second-lien credit facility remains at '6',
indicating S&P's expectation of negligible recovery in the event
of a payment default.
"These rating actions follow the settlement of the company's
below-par debt tender offer, which Standard & Poor's views as
being tantamount to default given the distressed financial
condition of the company," explained Standard & Poor's credit
analyst Melissa Long.
The downgrade of the corporate credit rating to 'SD' reflects
S&P's view that the purchases were executed at a significant
discount to par and are tantamount to a default given the
distressed financial condition of the company. An unrestricted
subsidiary of the company repurchased $33.2 million of principal
of its $165 million second-lien term loan through a Dutch tender
auction and open market purchases at an average price of about $41
per $100.
S&P expects to raise the corporate credit rating for Golden Nugget
to 'CC' with a negative outlook within the next couple of days.
The rating on the second-lien credit facility will remain at 'D'
with a recovery rating of '6' until completion or termination of
the buyback period. The company's amendment to its second-lien
credit agreement allows it to conduct periodic repurchases of
second-lien debt through the end of 2010.
GREATER ATLANTIC: Seeks Dismissal of Litman Lawsuit
---------------------------------------------------
Members of the Board of Directors and certain officers of Greater
Atlantic Financial Corp. received a demand letter on August 14,
2009, from Richard C. Litman, who claims to be a shareholder of
the Company, stating the alleged basis for a stockholder
derivative action and demanding the persons take immediate action
to protect the interests of common stockholders of the Company.
On August 26, 2009, Mr. Litman filed a stockholder derivative
lawsuit (Case Number CA4837-VCP) in the Delaware Court of Chancery
against the Company and certain other defendants.
The Board of Directors of the Company has carefully considered the
Demand and has received the advice of independent Delaware legal
counsel with respect to the Demand. After reviewing the Demand
with legal counsel, as well as the allegations contained in the
Complaint as if those allegations had been included as part of the
Demand, the Board of Directors has determined that the allegations
of the Demand lack merit and that any action in furtherance of the
Demand would not be in the Company's interest. Accordingly, on
September 22, 2009, the Board of Directors unanimously resolved to
refuse the Demand. Further, on September 25, 2009, the Company
filed in the Delaware Court of Chancery a motion to dismiss the
Complaint.
As reported by the Troubled Company Reporter, Greater Atlantic on
June 15, 2009, entered into a merger agreement with MidAtlantic
Bancorp, Inc., and GAF Merger Corp. Pursuant to the merger
agreement, MidAtlantic will acquire and recapitalize Greater
Atlantic Bank, Greater Atlantic's wholly owned subsidiary.
About Greater Atlantic
Greater Atlantic Financial Corp. is a bank holding company whose
principal activity is the ownership and management of Greater
Atlantic Bank. The bank originates commercial, mortgage and
consumer loans and receives deposits from customers located
primarily in Virginia, Washington, D.C. and Maryland. The bank
operates under a federal bank charter and provides full banking
services.
As of June 30, 2009, the Company had $204,596,000 in total assets
and $216,209,000 in total liabilities, resulting in $11,613,000 in
stockholders' deficit.
Going Concern Doubt
The Troubled Company Reporter reported on January 21, 2009, that
BDO Seidman, LLP, in Richmond, Virginia, in a letter dated
January 12, 2009, to the Board of Directors and Stockholders of
Greater Atlantic Financial Corp. expressed substantial doubt about
the company's ability to continue as a going concern. The firm
audited the consolidated statements of financial condition of
Greater Atlantic Financial Corp. and its subsidiaries as of
September 30, 2008, and 2007 and the related consolidated
statements of operations, stockholders' equity (deficit),
comprehensive income (loss) and cash flows for each of the two
years in the period ended September 30, 2008.
GREEN BUILDERS: June 30 Balance Sheet Upside-Down by $8.5 Million
-----------------------------------------------------------------
Green Builders Inc.'s balance sheet at June 30, 2009, showed total
assets of $34,059,150 and total liabilities of $42,538,712,
resulting in a stockholders' deficit of $8,479,562.
For three months ended June 30, 2009, the Company posted a net
loss of $5,678,253 compared with a $2,022,705 for the same period
in 2008.
For nine months ended June 30, 2009, the Company posted a net loss
of $8,745,910 compared with a net loss of $6,025,505 for the same
period in 2008.
A full-text copy of the Company's Form 10-Q/A is available for
free at http://ResearchArchives.com/t/s?45ca
Headquartered in Austin, Texas, Green Builders Inc. (AMEX:GBH) --
http://www.greenbuildersinc.com/-- fka Wilson Holdings Inc., is a
real estate development and homebuilding company. The company is
focused on the acquisition of undeveloped land. It commenced its
homebuilding operations in June 2007 with the purchase of Green
Builders Inc. The company was engaged in the sale of developed
lots to homebuilders, including national homebuilders.
Going Concern Doubt
As reported in the Troubled Company Reporter on Feb. 17, 2009,
the Company has experienced significant losses and expects to
continue to generate negative cash flows from operations. This
raises substantial doubt about its ability to continue as a going
concern. The Company's ability to continue as a going concern
will depend upon its ability to restructure its existing debt and
obtain additional capital. Failure to restructure and obtain
additional capital would result in a depletion of its available
funds.
HALCYON HOLDING: Movie Rights to 'Terminator' Put on Sale
---------------------------------------------------------
Ben Fritz at The Los Angeles Times reports that Halcyon Holding
Group LLC owners Derek Anderson and Victor Kubicek have put the
rights to "Terminator" up for sale.
According to a statement, Halcyon Holding has engaged financial
advisory firm FTI Capital Advisors, pending approval by U.S.
Bankruptcy Court in Los Angeles, to "evaluate strategic
alternatives".
LA Times quoted FTI senior managing director Kevin Shultz as
saying, "We're going to be contacting a variety of studios and
independent companies. We think the values are considerably in
excess of the purchase price."
Mr. Anderson said in court documents that the "Terminator" rights
were worth more than $60 million, more than double what he and Mr.
Kubicek paid. LA Times relates that Mr. Shultz said that FTI
would conduct its own analysis.
Halcyon had received expressions of interest in purchasing the
"Terminator" rights from several companies, including Sony
Pictures, which distributed "Salvation" overseas, LA Times says,
citing Mr. Anderson.
Halcyon Holding Group LLC is the company that proiduced
"Terminator Salvation," a film that generated $369 million in box
office receipts. Halcyon Holding Group LLC and two affiliated
companies filed Chapter 11 petitions on Aug. 17 in Los Angeles,
California (Bankr. C.D. Calif. Case No. 09-31854). Halcyon said
it has between $50 million and $100 million in both assets and
debts.
HAWAII SUPERFERRY: To Seek Confirmation of Plan on Oct. 21
----------------------------------------------------------
HSF Holding, Inc., and Hawaii Superferry, Inc., will present their
joint plan of liquidation for confirmation on October 21.
Hawaii Superferry Inc. obtained approval from Judge Peter Walsh to
surrender its ships to lenders owed $158.8 million for their
construction. The Plan provides that all remaining assets will be
liquidated and distributed to creditors in accordance with the
relative priorities set forth in the Bankruptcy Code.
The explanatory disclosure statement shows the estate as having
almost $1 million cash, of which $870,000 is earmarked to pay fees
of lawyers and other professionals.
Guggenheim Corporate Funding LLC, a secured creditor of the
holding company with a $51.7 million claim, recovered about $7.5
million that was held in escrow. Guggenheim won't recover
anything on account of the deficiency since the Superferry stock
against which it asserts a lien is being cancelled and has no
value. Holders of general unsecured claims against HSF Holding
will receive a pro rata share of the net proceeds of any causes of
action held and realized by HSF Holding.
Holders of general unsecured claims against Hawaii Superferry will
receive a pro rata share of available cash after full satisfaction
of, or the establishment of an appropriate reserve for, allowed
administrative expense and secured claims.
The Debtors estimate that the total amount of Hawaii Superferry
general unsecured claims is $25,020,114. The Debtors anticipate
that $509,175, or approximately 2% of allowed claims, may be
available as of September 30, 2009, for distribution to holders of
allowed Hawaii Superferry general unsecured claims.
A copy of the explanatory disclosure statement with respect to HSF
Holding, Inc. and Hawaii Superferry, Inc.'s Joint Plan of
Liquidation is available for free at:
http://bankrupt.com/misc/HSF.ds.pdf
Wilmington, Delaware-based HSF Holding Inc. operates as the parent
company of Hawaii Superferry, Inc., a Hawaiian inter-island ferry
service expected to commence operations in early 2007. The
Company is planning to use the latest generation of large, high-
speed roll-on/roll-off catamaran ferries. The ferries will be
used to transport travellers from island to island as well as
transport agricultural and bulk goods.
The Company and its affiliate filed for Chapter 11 on May 30,
2009 (Bankr. D. Del. Case Nos. 09-11901 and 09-11902). David B.
Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton
LLP represent the Debtors in their restructuring efforts. Craig
A. Wolfe, Esq., at Kelley Drye & Warren LLP, is the Committee's
proposed lead counsel. Adam Hiller, Esq., Brian Arban, Esq., and
Michelle Berkeley-Ayres, Esq., at Atlantic Law, is the Committee's
proposed local counsel. When the Debtors sought protection from
their creditors, they listed between $100 million and $500 million
each in assets and debts.
HEALTHSPORT INC: Posts $4.9MM Net Loss in Quarter Ended June 30
---------------------------------------------------------------
HealthSport Inc. posted a net loss of $4,867,154 for three months
ended June 30, 2009, compared with a net loss of $2,992,368 for
the same period in 2008.
For six months ended June 30, 2009, the Company posted a net loss
of $5,653,464 compared with a net loss of $6,062,712 for the same
period in 2008.
The Company's balance sheet at June 30, 2009, showed total assets
of $26,413,596, total liabilities of $4,031,280 and a
stockholders' equity of $22,382,316.
A full-text copy of the Company's Form 10-Q is available for free
at http://ResearchArchives.com/t/s?45ce
Based in Charlotte, North Carolina, HealthSport Inc. is focused
exclusively on the development, manufacturing, distribution and
marketing of edible film strip technology. This technology system
provides rapid dissolution and release of active ingredients when
the strip comes in contact with saliva in the mouth. HealthSport
is publicly traded on the bulletin board market under the ticker
symbol "HSPO.OB."
Going Concern Doubt
As reported in the Troubled Company Reporter on April 28, 2009,
Creason & Associates, P.L.L.C., in Tulsa, Oklahoma,has expressed
substantial doubt on the ability of HealthSport Inc. as a going
concern.
At Dec. 31, 2008 and 2007, the Company had current assets of
$1,799,604 and $2,411,410; current liabilities of $4,527,706 and
$2,066,125; and a working capital deficit of $2,728,102 and
working capital of $345,285, respectively. The Company incurred a
loss of $8,953,121 during 2008, which included depreciation and
amortization of $1,366,451 and amortization of non-cash stock
compensation of $2,823,530.
HEREFORD BIOFUELS: Bankruptcy Case Switched to Chapter 7
--------------------------------------------------------
Hereford Biofuels LP, a subsidiary of Panda Ethanol Inc., won an
order from the Bankruptcy Court converting its bankruptcy case to
a liquidation in Chapter 7, Bill Rochelle at Bloomberg News said.
On June 11, 2009, the sale of the Debtors' ethanol plant in
Hereford, Texas to Ethanol Acquisition, LLC was consummated, and
substantially all of Hereford's assets other than the proceeds of
certain assets pursuant to the settlement agreement with the
official committee of unsecured creditors, and Societe Generale,
as agent for the prepetition lenders, were transferred to the
purchaser.
The Debtors said conversion of their cases is in the best interest
of their estates because the principal assets have been sold and
that a Chapter 7 trustee will be better able to efficiently and
effectively liquidate any remaining assets and distribute the
proceeds to stakeholders.
Hereford Biofuels and three of its debtor-affiliates filed
separate petitions for Chapter 11 relief of January 23, 2009
(Bankr. N.D. Tex. Lead Case No. 09-30453). Dan B. Prieto, Esq.,
Gregory M. Gordon, Esq., and Robert J. Jud, Esq., at Jones Day,
represent the Debtors as counsel. Joseph M. Coleman, Esq., and
Joseph A. Friedman, Esq., at Kane, Russell, Coleman & Logan,
represent the official committee of unsecured creditors as
counsel. When the Debtor filed for protection from its creditors,
it listed between $50 million and $100 million in assets and
between $100 million and $500 million in debts.
HOKU SCIENTIFIC: Inks Financial Agreement with Tianwei
------------------------------------------------------
Hoku Scientific, Inc., and Tianwei New Energy Holdings Co., Ltd.,
have signed a definitive agreement providing for a majority
investment in Hoku by Tianwei and debt financing by Tianwei and
China Construction Bank for the construction and development of
Hoku's polysilicon production facility in Pocatello, Idaho.
The transaction will involve the conversion of $50 million of an
aggregate of $79 million in secured prepayments previously paid by
Tianwei to Hoku under certain polysilicon supply agreements into
shares of Hoku's common stock and related warrants, plus the
provision of $50 million in initial debt financing for Hoku,
together with a commitment from Tianwei to assist Hoku in
obtaining additional financing that may be required by Hoku to
construct and operate the Pocatello facility.
The conversion of the $50 million in secured prepayments will be
reflected in amendments to Hoku's existing supply agreements with
Tianwei that the parties intend to sign upon the closing of the
transaction. Over the term of the two supply agreements, the
cancellation of the $50 million in prepayments will reduce the
price at which Tianwei purchases polysilicon by approximately 11%
per year.
Hoku confirmed that the $50 million in debt, plus prepayments from
its existing customers, is expected to be sufficient to complete
construction to the point where it could commence shipments to
customers, and it intends to delay any additional financing until
such time. On the basis of these funding sources, Hoku reported
it is preparing to issue orders to resume full scale plant
construction at an accelerated pace upon closing of the financing,
which is expected to occur in October 2009.
In exchange for the value being provided by Tianwei, Hoku will
issue to Tianwei 33,379,287 newly-issued shares of its common
stock, which will represent 60% of Hoku's fully-diluted
outstanding shares. Hoku will also grant Tianwei warrants to
purchase an additional 10 million shares of Hoku's common stock at
a price per share equal to $2.52.
At closing, Hoku's current shareholders will continue to own 40%
of the voting shares, and Hoku will continue to be traded publicly
on Nasdaq. Additionally, Tianwei has agreed to a one year lock-up
of 70% of its shares, further affirming its commitment to Hoku's
long-term success.
As a result of the transaction, Tianwei will become Hoku's
majority shareholder, and will have the right to nominate a
majority of the members serving on Hoku's Board of Directors.
Effective upon closing, Hoku will increase the size of its Board
from five to seven members, three of whom will be selected from
Hoku's existing Board, and four of whom will be selected by
Tianwei. Tianwei will have the right to appoint the chairperson
of the Board.
Subject to the receipt of requisite Chinese governmental approvals
and other customary closing conditions, the transaction is
expected to close in October 2009.
The Nasdaq Listing Rules would normally require Hoku to obtain
shareholder approval with respect to the announced transaction.
Hoku has obtained an exception from Nasdaq from this requirement,
in reliance on Nasdaq Listing Rule 5365(f) which provides that an
exception may be granted when:
(i) the delay in securing shareholder approval would seriously
jeopardize the financial viability of the enterprise; and
(ii) reliance on the exception has been expressly approved by
the audit committee comprised solely of independent,
disinterested directors.
The audit committee of Hoku has expressly approved such reliance.
Pursuant to this exception, Hoku will mail to all shareholders not
later than ten days before the closing, a letter notifying them of
its receipt of the exception from the requirement to seek
shareholder approval, and setting forth the terms of the financing
agreement with Tianwei and its reliance on the financial viability
exception.
Going Concern Doubt
In March 31, 2009 and June 30, 2009, the Company reported that
without new polysilicon customers making additional prepayments,
or new debt or equity financing, it would have insufficient cash
to continue as a going concern through March 31, 2010 and June 30,
2010, respectively. Throughout 2009, Hoku has sought to secure
additional customers and related prepayments and strategic
investors or financing sources that would allow the Company to
complete construction and procurement of its polysilicon plant.
Hoku retained Deutsche Bank Securities Inc. as its financial
advisor to identify investment and financing sources, as well as a
potential acquirer of the Company. The Company has also
considered other actions, including a restructuring, and
liquidation of assets. Hoku's Board of Directors has concluded
that the announced transaction with Tianwei is the only viable
option to avoid a Chapter 7 bankruptcy and liquidation of the Hoku
Materials polysilicon business.
"With very limited financing choices available, the agreement with
Tianwei is a significant step forward toward our goal of becoming
a top-tier global provider of clean energy solutions," said Dustin
Shindo, chairman and chief executive officer of Hoku. "This
transaction is expected to alleviate the financing challenges we
have experienced during these difficult macroeconomic times,
allowing us to focus on execution in all areas of our business,"
Mr. Shindo said. "Specifically, with the polysilicon plant
financing in place, we will be able to concentrate our efforts on
meeting our contractual delivery obligations. We look forward to
providing our current and future polysilicon customers with
stable, long-term supplies of low cost, high quality polysilicon."
Hoku confirmed it was in ongoing discussions with prospective
customers regarding potential new long-term polysilicon sales
agreements.
"This strategic investment allows both companies to draw on each
others' strengths, and creates a world-class vertically-integrated
partnership that will have exceptional cost control throughout the
entire solar value chain," said Mr. Ding Qiang, Chairman of
Tianwei Group. "Hoku's entrepreneurial approach and clean energy
expertise nicely complement Tianwei's strategy, financial position
and experience. We are convinced that this combination will allow
both Hoku and Tianwei to expand their respective market shares and
accelerate their growth in the renewable energy industry."
"Considering the rapidly expanding domestic solar power markets in
both China and the U.S., we are pleased by the prospect of a
closer strategic relationship with the Tianwei family of
companies. A strong, combined presence in the U.S. and in China
will allow both Hoku and Tianwei improved, reciprocal access to
these key markets," said Mr. Shindo. "All things considered, this
transaction with Tianwei will enable us to fulfill our commitments
to our creditors, vendors, customers, and employees, while
retaining a meaningful percentage of the company for our existing
shareholders."
The companies confirmed their intention to maintain Hoku's
headquarters in Hawaii, citing the diverse and expanding
opportunities for implementing renewable power in the state, as
well as Honolulu's inherent geographic advantage as a business hub
for both the Asian and North American clean energy markets. Hoku
indicated that it had no plans to lay-off any of its current
employees, and instead, expects to accelerate hiring in the coming
months as it prepares for polysilicon production.
"We have been deeply impressed by Mr. Shindo's strategic vision
for Hoku, and by the team he has assembled," said Mr. Ding. "Hoku
has a strong, positive corporate culture, evidenced plainly by the
company's many successes over the past eight years. The current
leadership team has Tianwei's complete confidence and we look
forward to many years of innovation, collaboration and growth."
Commenting on the strategic implications of the transaction,
Mr. Shindo said, "Given the pace and scale of projected expansion
in the PV market, Hoku had concluded that organic growth alone
would not have allowed us to increase scale sufficiently fast
enough to become a significant player in the U.S. and global
markets. In view of the current austerity in the global financial
marketplace, we also realized that the clean energy companies who
will ultimately succeed are those who can convert today's
opportunities into a foundation for strategic growth and vertical
integration. In other words, a strong balance sheet provides
strategic advantage that simply cannot be financed under current
market conditions."
Mr. Shindo continued, "As a result, we determined that success in
achieving our long-term goals hinged on finding the right
strategic partner today. We are very pleased by the opportunities
afforded by our partnership with the Tianwei Group and look
forward to continuing to strengthen Hoku's position within the
global clean energy industry."
About Tianwei New Energy
Based in Chengdu, China, Tianwei New Energy Holdings Co., Ltd. is
a subsidiary of Baoding Tianwei Group Co., Ltd, a manufacturer of
power transmission equipment and green energy products.
About Hoku Scientific
Headquartered in Honolulu, Hawaii, Hoku Scientific, Inc.,
(NASDAQ:HOKU) -- http://www.hokucorp.com/-- is a materials
science company focused on clean energy technologies. The Company
has three operating business units in two industries: Fuel Cell
and Solar. The Fuel Cell industry is comprised of the fuel cell
segment. The Solar industry is comprised of the photovoltaic (PV)
system installation business unit (Hoku Solar) and polysilicon
production business unit (Hoku Materials). Hoku Materials focuses
on manufacturing, marketing and selling polysilicon for the solar
market from its plant, which is under construction in Pocatello,
Idaho. Hoku Solar is marketing and installing photovoltaic
systems in Hawaii. Hoku Fuel Cells has developed fuel cell
membranes and membrane electrode assemblies for stationary and
automotive proton exchange membrane fuel cells.
HOLDINGS GAMING: S&P Downgrades Corporate Credit Rating to 'B-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating and all issue-level ratings on Holdings Gaming Borrower
L.P. by one notch; the corporate credit rating was lowered to 'B-'
from 'B'. S&P also placed these ratings on CreditWatch with
negative implications.
"The rating downgrade reflects the weak operating performance at
the borrower's recently completed slot-gaming facility and the
need for a quick ramp-up in operating performance in order to
generate sufficient coverage of fixed obligations and avoid a
financial covenant violation," noted Standard & Poor's credit
analyst Michael Listner.
Although the borrower's recently completed gaming facility located
in Pittsburgh (Rivers Casino) was completed on time and on budget,
S&P is concerned that the company's limited interest reserve
allocation necessitates a significant improvement in operating
performance from that observed to-date in order to provide the
company with sufficient liquidity to honor its debt service
obligations.
Because the first-lien interest reserve account will be depleted
during the first-quarter of 2010, Standard & Poor's is concerned
that the property will be challenged to ramp-up quickly enough to
a level of EBITDA that is sufficient to accommodate fixed charges.
In addition to required amortization and cash interest charges,
the borrower has agreed to make additional payments to local
organizations for the benefit of the Pittsburgh community,
including payments to support the development and construction of
a sports arena. With consideration given to reserves that will
support the payment of cash interest and credit enhancement fees
on the company's term loans, S&P expects that the company will
face cash charges in excess of $55 million during 2010. In
addition, the company's credit agreements contain financial
maintenance covenants scheduled for their initial measurements for
the quarter ending Dec. 31, 2009. S&P believes there is some risk
that the company may violate the minimum EBITDA covenant in the
first-lien credit agreement. The agreement provides for equity
cure provisions, which the owners could utilize, if necessary, to
maintain compliance with financial covenants. The company does
not publicly disclose its financial information; however, revenue
reported by the Commonwealth of Pennsylvania has been meaningfully
below S&P's initial expectations.
In resolving the CreditWatch listing, Standard & Poor's will
continue to monitor the property's revenue generating ability and
evaluate the company's cost structure, as there is a general
tendency for margins to be depressed at a project's opening and
shortly thereafter. In addition, S&P's analysis will focus on the
company's liquidity position and its ability to meet its growing
fixed obligations and maintain compliance with financial
covenants.
HOVNANIAN ENTERPRISES: Chairman Kevork Hovnanian Dies
-----------------------------------------------------
Hovnanian Enterprises, Inc.'s founder and chairman of the board,
Kevork S. Hovnanian, passed away on September 24, 2009, at New
York Presbyterian Hospital. Mr. Hovnanian founded the Company in
1959. He led the Company as President until 1988 and as CEO until
1997, when his son, Ara, succeeded him as President and CEO. Mr.
Hovnanian continued to serve as Chairman of the Board. He was 86
years old.
James R. Hagerty and Dawn Wotapka at The Wall Street Journal
report that a spokesperson declined to comment on when a new
chairman will be named or how the death might affect the family's
controlling stake in Hovnanian, which took on more debt and made
more acquisitions near the top of the housing bubble than most of
its rivals. The Journal notes that Hovnanian is struggling to
return to profitability in time to pay down debt and take
advantage of potential bargains as banks unload foreclosed land.
"The Company is caught in a tough spot," The Journal quoted UBS
Investment Bank analyst David Goldberg as saying.
The Journal relates that early last week, Hovnanian, to ease its
debt burden, offered to repurchase as much as $759 million of debt
that was due to be repaid over the next eight years. Citing
Barclays Capital analyst Vincent Foley, The Journal states that
Hovnanian is likely to issue new bonds maturing in eight to 10
years to finance the purchases. The Journal notes that this would
leave Hovnanian's debt at high levels but let it delay repayments
of the bulk of its debt that otherwise would have occurred in
2013.
According to The Journal, research firm Zelman & Associates CEO
Ivy Zelman said that the debt restructuring gives Hovnanian a lot
more time and some flexibility, but the Company still "won't have
nearly as much dry powder to put to work" on land purchases
compared to most of its big rivals.
The Journal reports that Hovnanian's net debt stood at 109% of
total capital as of July 31, 2009, above the average of 26% for
the 12 big home builders tracked by Zelman & Associates.
About Hovnanian Enterprises
Hovnanian Enterprises, Inc. (NYSE: HOV) founded in 1959 by Kevork
S. Hovnanian, Chairman, is headquartered in Red Bank, New Jersey.
The Company is one of the nation's largest homebuilders with
operations in Arizona, California, Delaware, Florida, Georgia,
Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York,
North Carolina, Ohio, Pennsylvania, South Carolina, Texas,
Virginia and West Virginia. The Company's homes are marketed and
sold under the trade names K. Hovnanian(R) Homes(R), Matzel &
Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes,
Oster Homes, First Home Builders of Florida and CraftBuilt Homes.
As the developer of K. Hovnanian's(R) Four Seasons communities,
the Company is also one of the nation's largest builders of active
adult homes.
* * *
Hovnanian carries S&P's "CCC" corporate credit rating; Moody's
"Caa1" corporate family rating; and Fitch's "CCC" Issuer Default
Rating.
IRIDIUM LLC: Wants Court to Dismiss Chapter 11 Cases
----------------------------------------------------
BankruptcyData.com reports that Iridium LLC and Iridium
Promotions, Inc., filed with the U.S. Bankruptcy Court a motion
to:
* approve an administrative expense claim in favor of the
Internal Revenue Service and a distribution on account of
such claim;
* authorize and direct the plan administrator for Iridium
Operating LLC to file all tax returns on behalf of the parent
and to take such other steps as the plan administrator deems
appropriate to wind-up the business of the parent;
* approve the dismissal of the Chapter 11 cases of Iridium LLC
and Iridium Promotions, Inc.;
* grant related relief.
According to the report, the motion states, "...subject to
confirmation of the Plan for Operating, Parent's estate will be
comprised of $1,224,000 in cash. While there are a substantial
number of claims filed against Parent (approximately 170), Parent
does not believe that it has incurred any other administrative
expenses during the course of the bankruptcy proceedings...nor
that any of the filed claims against it that purport to be secured
claims were secured by the Reston Lease or any interest of Parent
in the proceeds thereof. In light of the foregoing, the relief
sought hereby is in the best interests of Parent's creditors and
estate"
The Court scheduled an Oct. 28, 2009, hearing to consider the
motion, the report notes.
Headquartered in Bethesda, Maryland, Iridium LLC, was a global
telecommunications services company, which filed for Chapter 11
bankruptcy on Aug. 13, 1999. Iridium LLC terminated the
provision of commercial service on March 17, 2000. The U.S.
Bankruptcy Court for the Southern District of New York approved
use by the company of its secured lenders' cash collateral to
commence the wind down of its operations and the sale of its
assets. In December 2000, Dan Colussy, an aviation industry
veteran, purchased the assets of Iridium LLC, for about
$25 million. Iridium Satellite LLC resumed service in March 2001,
with cheaper prices. Among other customers, the U.S. Department
of Defense has signed a multi-year contract for unlimited airtime
for up to 20,000 government users.
JOLT COMPANY: Files for Chapter 11 to Sell Business
---------------------------------------------------
The Jolt Co., maker of the caffeinated drink of the same name, has
filed for Chapter 11 protection in Rochester, New York.
According to Christopher Scinta, Jolt blamed tight credit and a
burdensome packaging supply agreement with Rexam for its
bankruptcy filing.
"During 2009, the economic environment continued to weaken --the
energy drink industry in particular -- as its products are
relatively more expensive than other beverage products," Jolt
Chief Executive Officer Robert Clamp said in a statement,
according to Bloomberg.
Jolt intends to sell its assets under 11 U.S.C. Sec. 363. It
proposes a sale process where New York-based private equity
investor Emigrant Capital Corp. is lead bidder with its
$1.73 million offer. Jolt will seek approval of the auction
results Nov. 25.
Jolt, doing business as Wet Planet Beverages, filed for Chapter 11
on Sept. 28 (Bankr. W.D. N.Y. Case No. 09-22531). The petition
says Jolt had less than $10 million in both assets and debt. Rexam
Beverage Can Co., of Chicago, was named as the largest unsecured
creditors with a disputed claim of $2.1 million.
JOLT COMPANY: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: The Jolt Company, Inc.
dba WET PLANET BEVERAGES
130 Linden Oaks, Suite C
Rochester, NY 14625
Bankruptcy Case No.: 09-22531
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
Western District of New York (Rochester)
Judge: John C. Ninfo II
Debtor's Counsel: William Irwin Kohn, Esq.
Benesch Friedlander Coplan & Aronoff LLP
200 Public Square, Suite 2300
Cleveland, OH 44114-2378
Tel: (216) 363-4182
Fax: (216) 363-4588
Email: wkohn@beneschlaw.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/nywb09-22531.pdf
The petition was signed by Robert Clamp, CEO of the Company.
KRISPY KREME: Registers 3MM Shares Under 2000 Incentive Plan
------------------------------------------------------------
Krispy Kreme Doughnuts, Inc., filed with the Securities and
Exchange Commission a Registration Statement in accordance with
the requirements of Form S-8 under the Securities Act of 1933, as
amended, to register an additional 3,000,000 shares of common
stock authorized for issuance under the Company's 2000 Stock
Incentive Plan, as amended.
A registration statement on Form S-8 (File No. 333-47326) was
filed with the SEC on October 4, 2000, covering the registration
of 1,000,000 shares authorized for issuance under the 2000 Stock
Incentive Plan -- which, pursuant to Rule 416 under the Securities
Act, increased to 4,000,000 shares upon the effectiveness of the
Company's two-for-one stock splits effective March 19, 2001 and
June 14, 2001. A subsequent registration statement on Form S-8
(File No. 333-97787) was filed with the Commission on August 7,
2002, covering the registration of an additional 5,500,000 shares
of common stock under the 2000 Stock Incentive Plan approved for
issuance at the Company's annual meeting of shareholders held on
June 5, 2002 and 496,000 shares of common stock authorized under
the Krispy Kreme Doughnut Corporation 1998 Stock Option Plan.
The current registration of 3,000,000 shares will increase the
number of shares registered under the 2000 Stock Incentive Plan
from 9,996,000 shares to 12,996,000 shares.
About Krispy Kreme
Based in Winston-Salem, North Carolina, Krispy Kreme Doughnuts
Inc. (NYSE: KKD) -- http://www.KrispyKreme.com/-- is a retailer
and wholesaler of doughnuts. The company's principal business,
which began in 1937, is owning and franchising Krispy Kreme
doughnut stores where over 20 varieties of doughnuts are made,
sold and distributed and where a broad array of coffees and other
beverages are offered.
As of August 2, 2009, KKDI had total assets of $175.4 million and
total current liabilities of $37.9 million, long-term debt, less
current maturities, of $53.2 million, deferred income taxes of
$106,000 and other long-term obligations of $22.2 million,
resulting in shareholders' equity of $61.9 million.
Kremeworks, LLC, which is 25%-owned by KKDI, has failed to comply
with certain financial covenants related to its indebtedness, a
portion of which matured, by its terms, in January 2009.
Kremeworks has requested that the lender waive the loan defaults
resulting from the covenant violations and refinance the maturing
indebtedness. In the event the lender is unwilling to do so and
declares the entire indebtedness immediately due and payable, the
Company could be required to perform under its guarantee.
Krispy Kreme Doughnuts said Kremeworks could have insufficient
cash flows from its business to service the indebtedness even if
it is refinanced, which might require capital contributions to
Kremeworks by the Company and the majority owner of Kremeworks --
which has guarantees of the Kremeworks indebtedness roughly
proportionate to those of the Company -- for Kremeworks to comply
with the terms of the any new loan agreement.
* * *
As reported in the Troubled Company Reporter on April 17, 2009,
Krispy Kreme Doughnuts, Inc., said it has reached an agreement
with lenders on amendments to its credit facilities that should
enable the Company to remain in compliance with the agreements and
continue to provide backup sources of liquidity.
KRISPY KREME: S&P Changes Outlook to Stable, Affirms 'B-' Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it revised its
ratings outlook on Winston-Salem, North Carolina-based Krispy
Kreme Doughnuts Inc. to stable from negative. The outlook
revision incorporates S&P's expectation that the company will have
adequate liquidity in the near term based on S&P's expectation of
its performance in the near term, its current cash position, and
covenant cushion. S&P is affirming the 'B-' corporate credit
rating. While the sales pressure will continue, S&P expects the
declines to decelerate and profitability to somewhat stabilize or,
at the very least, allow the company to remain covenant compliant
in the current and next fiscal year.
"The ratings on Krispy Kreme Doughnuts Inc. reflect the company's
vulnerable business risk profile and S&P's belief that the intense
competition in the breakfast and snack food segments of the
restaurant industry will effectively inhibit material
improvements," said Standard & Poor's credit analyst Charles
Pinson-Rose.
The company saw a domestic same-store sales increase 5.9% in the
second quarter, despite weak economic conditions. However,
overall revenues declined 12.2%, and domestic company store
revenue declined 8.0%, which was largely a result of store
closures. The rate of store closures has declined and so the rate
of sales declines should abate somewhat going forward. S&P
expects that the company will have effectively maintained its
store count or experience only modest declines going forward. As
such, S&P expects that the rate of revenue declines will
decelerate next year.
Overall profitability improved in the quarter ended Aug. 2, 2009,
because of significant margin improvement. Direct operating
expense declined 7.6% as a percentage of sales and was largely a
result lower food costs and gas prices. The company will get
further cost benefits in the near term, and next year S&P does not
expect meaningful increases in food costs and other inputs and the
company should maintain gross margins. Therefore, overall
profitability and credit metrics should be roughly commensurate
with current levels in the near term.
Liquidity is adequate and should be provided by internal sources.
At the end of its second quarter (Aug. 2, 2009), the company had
$19.6 million of cash and has been generating positive free
operating cash flow in recent years. On a last-12-months' basis
the company generated $9.6 million of FOCF; while, it made minimal
capital investments, Krispy Kreme is now increasing capital
expenditures year over year. S&P still expects cash flows from
operations to adequately fund capital spending and the company
should be at least cash-flow neutral. The company currently has
adequate cushion over financial covenants, and at current covenant
levels would be in compliance for the current and next two fiscal
years.
LE-NATURE'S INC: Former CEO Faces Fraud Charges
-----------------------------------------------
The Associated Press reports that a federal grand jury has accused
former Le-Nature's Inc. CEO Gregory Podlucky and four others
connected to the Company of $806 million bank fraud
According to The AP, the jury alleged that much of the money went
to Mr. Podlucky and his family.
Citing U.S. Attorney Mary Beth Buchanan, The AP relates that Mr.
Podlucky provided financial institutions and equipment suppliers
with false financial statements to get equipment leases and loans
for Le-Nature's.
The AP states that Mr. Podlucky and his four co-defendants were
arrested on Monday. The defendants, according to the report,
appeared before a federal magistrate and were released pending
trial. The report says that the other defendants who had been
arrested are:
-- former company director Andrew Murin Jr.;
-- former company director Robert B. Lynn; and
-- Jonathan Podlucky, Mr. Podlucky's Gregory's brother.
The AP reports that authorities had a warrant to arrest the fifth
defendant, Donald Pollinger, a financial broker hired by Le-
Nature's.
Headquartered in Latrobe, Pennsylvania, Le-Nature's Inc. --
http://www.le-natures.com/-- makes bottled waters, teas, juices
and nutritional drinks. Its brands include Kettle Brewed Ice
Teas, Dazzler fruit juice drinks and lemonade, and AquaAde
vitamin-enriched water.
Four unsecured creditors of Le-Nature's filed an involuntary
Chapter 7 petition against the company on Nov. 1, 2006 (Bankr.
W.D. Pa. Case No. 06-25454). On Nov. 6, 2006, two of Le-Nature's
subsidiaries, Le-Nature's Holdings Inc., and Tea Systems
International Inc., filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code. Judge McCullough converted Le
Nature's Inc.'s case to a Chapter 11 proceeding. The Debtors'
cases are jointly administered. The Debtors' schedules filed with
the Court showed $40 million in total assets and $450 million in
total liabilities.
Douglas Anthony Campbell, Esq., Ronald B. Roteman, Esq., and
Stanley Edward Levine, Esq., at Campbell & Levine, LLC, represents
the Debtors in their restructuring efforts. The Court appointed
R. Todd Neilson as Chapter 11 Trustee. Dean Z. Ziehl, Esq.,
Richard M. Pachulski, Esq., Stan Goldich, Esq., Ilan D. Scharf,
Esq., and Debra Grassgreen, Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub LLP, represent the Chapter 11 Trustee.
David K. Rudov, Esq., at Rudov & Stein, and S. Jason Teele, Esq.,
and Thomas A. Pitta, Esq., at Lowenstein Sandler PC, represent the
Official Committee of Unsecured Creditors. Edward S. Weisfelner,
Esq., Robert J. Stark, Esq., and Andrew Dash, Esq., at Brown
Rudnick Berlack Israels LLP, and James G. McLean, Esq., at Manion
McDonough & Lucas represent the Ad Hoc Committee of Secured
Lenders. Thomas Moers Mayer, Esq., and Matthew J. Williams, Esq.
at Kramer Levin Naftalis & Frankel LLP, represent the Ad Hoc
Committee of Senior Subordinated Noteholders.
In July 2008, the Chapter 11 plan of liquidation for Le-Nature's
took effect.
LENNY DYKSTRA: Porsche Wants to Repossess 2009 Cayenne
------------------------------------------------------
Porsche Financial Services is asking the Bankruptcy Court to lift
the automatic stay so that it can repossess an $80,000 Porsche
Cayenne from Lenny Dykstra. According to Bill Rochelle at
Bloomberg, Porsche Financial Services says Dykstra hasn't made
payments on the leased car since May and owes more than $75,000.
The car has a market value of $59,400, says Porsche Financial.
The proposal is scheduled for hearing on October 6.
The Chapter 11 trustee for Lenny Dykstra is conducting an
investigation into the disposition of personal property both
before and after the Chapter 11 filing in July.
Mr. Dykstra has lost control of his Chapter 11 bankruptcy, with
the management of his financial affairs being handed over to the
trustee. The appointment of the trustee automatically ended
Mr. Dykstra's exclusive right to propose a plan. The trustee was
appointed after creditors alleged Mr. Dykstra improperly disposed
of property.
Westlake Village, California-based Lenny Dykstra is a former Major
League Baseball All-Star. He was center fielder for the New York
Mets and Philadelphia Phillies. He filed for Chapter 11
bankruptcy protection on July 7, 2009 (Bankr. C.D. Calif. Case No.
09-18409). M Jonathan Hayes, Esq., at the Law Office of M
Jonathan Hayes, in Northridge, California, assists the Debtor in
his restructuring effort. The Debtor listed up to $50,000 in
assets and $10,000,001 to $50,000,000 in debts.
LIFECARE HOLDINGS: Appoints Grant Asay as EVP of Operations
-----------------------------------------------------------
LifeCare Holdings, Inc., on September 22, 2009, appointed Grant B.
Asay, 50, as Executive Vice President of Operations.
Mr. Asay previously served as Regional Senior Vice President of
Operations from June 2006 through September 2009. From 2002 until
June 2006, Mr. Asay served as a Regional Director for Select
Medical Corporation, a provider of specialty health care. In
connection with the appointment as the Company's Executive Vice
President of Operations, the Company and its parent company, LCI
Holding Company, Inc., entered into an employment agreement with
Mr. Asay that amended and restated Mr. Asay's existing employment
agreement with a subsidiary of the Company.
Mr. Asay's employment agreement provides for an initial term of
one year, subject to automatic one year renewals thereafter unless
the agreement is terminated in accordance with its terms, and
provides that Mr. Asay will serve as the Executive Vice President
of Operations of LCI Holding. Pursuant to the employment
agreement, Mr. Asay is entitled to receive an annual base salary
of $285,000 and is eligible for an annual bonus based on
achievement of performance objectives established by the Board.
The target amount of the annual bonus is 60% of Mr. Asay's base
salary. If Mr. Asay is terminated other than for cause or resigns
voluntarily for good reason, he will be entitled to receive
continued salary and bonus for one year, with the amount of the
annual bonus equal to the lesser of 60% of Mr. Asay's base salary
in effect on the date of termination or the annual bonus paid to
him in respect of the immediately preceding fiscal year. Mr. Asay
will be subject to non-competition, non-solicitation and certain
confidentiality provisions for a period of one year following the
termination of his employment.
In addition, LCI Holding and the Company entered into an amended
and restated transaction bonus agreement with Mr. Asay increasing
the amount of the one-time bonus opportunity available to Mr. Asay
under the agreement in connection with a change of control
transaction, as a multiple of his base salary, from a range of
approximately 1x to 5x to a range of approximately 1x to 7.5x.
The actual amount to be earned will be based upon the value
associated with the Company upon a change of control.
The Company reported a net loss of $2,171,000 for the three months
ended June 30, 2009, from a net loss of $4,127,000 for the same
period a year ago. It posted a net loss of $348,000 for the six
months ended June 30, 2009, from a net loss of $7,044,000 for the
same period a year ago.
At June 30, 2009, the Company had $476,027,000 in total assets and
$496,764,000 in total liabilities, resulting in $20,737,000 in
stockholders' deficit.
Based in Plano, Texas, LifeCare Holdings, Inc. --
http://www.lifecare-hospitals.com/-- operates 20 long-term acute
care hospitals located in 10 states. Long-term acute care
hospitals specialize in the treatment of medically complex
patients who typically require extended hospitalization.
LifeCare Holdings operates long-term acute care hospitals in the
United States. As of June 30, 2009, it operated 20 hospitals
located in 10 states, consisting of nine "hospital within a
hospital" facilities (29% of beds) and 11 freestanding facilities
(71% of beds). Through the 20 long-term acute care hospitals, it
operated a total of 1,079 licensed beds and employed about 3,200
people, the majority of whom are registered or licensed nurses and
respiratory therapists.
LifeCare Holdings is a wholly owned subsidiary of LCI Holdco, LLC.
Holdco is a wholly owned subsidiary of LCI Holding Company, Inc.,
which is owned by an investor group that includes affiliates of
The Carlyle Group and members of the board of directors. The
investor group acquired Holdings pursuant to a merger that
occurred on August 11, 2005. Subsequent to the merger in late
August 2005, the impact of Hurricane Katrina forced the closure of
three hospitals the Company operated in the New Orleans market.
At the time of their closure, the three hospitals had combined
annual revenues of roughly $44 million.
LODGENET INTERACTIVE: Moody's Affirms 'B3' Corporate Family Rating
------------------------------------------------------------------
Moody's Investors Service upgraded LodgeNet Interactive
Corporation's speculative grade liquidity rating to SGL-3
(indicating adequate liquidity) from SGL-4 (indicating poor
liquidity) while revising the outlook for all ratings to stable
from negative. Concurrently, Moody's also affirmed LodgeNet's B3
corporate family rating and Caa1 probability of default rating.
The outlook and SGL rating actions stem primarily from recent debt
reduction initiatives and the significant easing of covenant
compliance pressure. While the covenant compliance cushion may
still be somewhat modest, LodgeNet is now expected to remain in
compliance with financial maintenance covenants through the next
four quarters despite step-downs scheduled in late 2009 and 2010.
The company's June preferred share issue, which raised
$57.5 million ($28 million of which was utilized to prepay its
outstanding term loan) augmented earlier steps to enhance
financial flexibility, including a prepayment of $6.6 million and
opportunistic repurchase of $31.5 million of its term loan at sub-
par prices in Q4/08 and Q1/09. In combination, these steps have
significantly eased the company's liquidity and covenant
compliance pressures while reducing the absolute debt burden. In
addition, a sharp cutback in capital expenditures coupled with
rationalization of the company's cost base allows LodgeNet to be
free cash flow positive despite ongoing weakness in macro-economic
conditions. Lastly, but notably, the company has stated its
intent to apply free cash flow towards debt reduction as it moves
towards a recalibrated capital structure involving a longer-term
Debt/EBITDA leverage target of below 3.0x (company-defined).
As LodgeNet's financial results are directly correlated to general
economic conditions and are potentially vulnerable as
technological changes enable alternative news and entertainment
delivery mechanisms, Moody's remains cautious as to the company's
ability to drive sustainable improvement in its profile even at
more conservative financial metrics. The stable outlook balances
these mid- to long-term concerns with the impact of the company's
recent positive steps to enhance its liquidity profile.
Ratings and Outlook Actions:
Issuer: Lodgenet Interactive Corporation
-- Corporate family rating, unchanged at B3
-- Probability of default rating, unchanged at Caa1
-- Senior secured credit facility, unchanged at B3 (LGD3, 33%)
-- Speculative Grade Liquidity Rating, Upgraded to SGL-3 from
SGL-4
-- Outlook, Changed To Stable From Negative
Moody's most recent rating action concerning LodgeNet was taken on
June 8, 2009, at which time the company's B3 CFR and Caa1 PDR were
affirmed along with the company's SGL-4 speculative grade
liquidity rating.
LodgeNet's ratings were assigned by evaluating factors Moody's
believes are relevant to the credit profile of the issuer, such as
i) the business risk and competitive position of the company
versus others within its industry, ii) the capital structure and
financial risk of the company, iii) the projected performance of
the company over the near to intermediate term, and iv)
management's track record and tolerance for risk. These
attributes were compared against other issuers both within and
outside of LodgeNet's core industry and LodgeNet's ratings are
believed to be comparable to those of other issuers of similar
credit risk.
LodgeNet Interactive Corporation, headquartered in Sioux Falls,
South Dakota, provides cable, video-on-demand and video game
entertainment services to the lodging industry.
MANCHESTER INC: Forum Selection Clause Had To Be Enforced
---------------------------------------------------------
WestLaw reports that the forum selection clause appearing in the
contracts between the sellers of a used car business and the
debtor-buyer, which provided for any litigation to be brought in
New York courts, had to be enforced in an adversary proceeding
brought against the sellers for, inter alia, breach of contract
and the avoidance of prepetition transfers, given the failure of
the litigation trustee in the debtor's Chapter 11 case to show
that enforcement of the clause would be unreasonable. The clause
was not procured through fraud or overreaching. Moreover, there
was no reason why the trustee, who lived in Illinois, could not
litigate the claims in New York, as the debtor had agreed, rather
than in the Texas bankruptcy court in which the debtor's case was
pending. The application of New York law would not effectively
deprive the trustee of a remedy, furthermore, and the enforcement
of the forum selection clause would not contravene a strong public
policy, including the goal of centralizing litigation in the
bankruptcy court in which the debtor's case was pending, given the
substantial consummation of the debtor's confirmed plan. In re
Manchester, Inc., --- B.R. ----, 2009 WL 1533614, 51 Bankr. Ct.
Dec. 206 (Bankr. N.D. Tex.).
About Manchester
Based in Dallas, Texas, Manchester Inc. (OTCBB: MNCS) --
http://www.manchesterinc.net/-- is in the Buy-Here/Pay-Here
auto business. Buy-Here/Pay-Here dealerships sell and finance
used cars to individuals with limited credit histories or past
credit problems, generally financing sales contacts ranging from
24 to 48 months. It operates six automotive sales lots, which
focus on the Buy-Here/Pay-Here segment of the used car market.
The company and its seven affiliates filed for Chapter 11
protection on Feb. 7, 2008 (Bankr. N.D. Tex. Case No.08-30703).
Winston & Strawn LLP represents the Debtors in their
restructuring efforts. Eric A. Liepins, Esq., is the Debtors'
local counsel. The U.S. Trustee for Region 6 appointed creditors
to serve on an Official Committee of Unsecured Creditors in these
cases. Powell Goldstein LLP represents the Committee as counsel.
As of the Debtors' bankruptcy filing, it listed total assets of
$131,582,157 and total debts of $123,881,668.
Manchester nka as Navigator Holdings LLC and its subsidiaries,
emerged from Chapter 11 bankruptcy protection effective as of
June 23, 2008. Pursuant to the terms of the Company's Third
Amended Chapter 11 Plan confirmed on June 17, 2009, Manchester's
senior lender, Palm Beach Multi-Strategy Fund, LLC, now owns
100% of the new stock in the Company.
MARK IV INDUSTRIES: May Loss E-ZPass Contract
---------------------------------------------
According to the New York Post, Mark IV Industries Inc.'s contract
to manufacture the E-ZPass transponders and receivers expires
August 2010 and is up for bidding. The Post relates that Mark IV
is in jeopardy of losing its contract because of its dated
technology and financial woes.
The report relates that while Mark IV has manufactured the E-ZPass
technology since 1994, an electronic toll-collection service run
by Roper Industries' TransCore unit is gaining ground.
Mark IV filed for bankruptcy in April but has recently obtained
approval of a reorganization plan that slashes debt by
$800 million and transfer ownership of the company to secured
lenders. But to bid for the E-ZPass contract, companies must show
financial stability, The Post points out. According to The Post,
creditors who take over a company often resell pieces of the
business, and government agencies are concerned that the division
that makes E-ZPass transponders would be sold.
E-ZPass serves 10 million users in 14 states from Maine to
Virginia.
According to The Post, TransCore this month won the contract for
Georgia's toll system and is charging $1.59 for each sticker tag.
Mark IV presently sells transponders for around $20 apiece.
About Mark IV
Headquartered in Amherst, New York, Mark IV Industries, Inc., --
http://www.mark-iv.com/-- is a privately held leading global
diversified manufacturer of highly engineered systems and
components for vehicles, transportation infrastructure and
equipment. The company's systems and components are designed to
promote a cleaner and safer environment and include power
transmission, air admission and cooling, advanced radio frequency,
and information display technologies. The company has a
geographically diverse innovation, marketing and manufacturing
footprint, and employs 4,200 people across 18 manufacturing and 20
distribution/technical centers in 16 countries.
Mark IV filed voluntary petitions for reorganization on April 30,
2009 (Bankr. S.D.N.Y. Lead Case No. 09-12795). Attorneys at
Skadden, Arps, Slate, Meagher & Flom LLP, served as the Debtors'
counsel. Personnel at Zolfo Cooper served as restructuring
advisors. Houlihan Lokey served as Investment bankers and
financial advisors and Sitrick and Company was tapped as public
relations advisor. Steven M. Fuhrman, Esq., at Simpson Thacher &
Bartlett LLP, represented JPMorgan Chase Bank, N.A., the First
Lien Agent and the DIP Agent. Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C., represented the
Creditors' Committee.
The Debtors disclosed $100 million to $500 million in assets and
more than $1 billion in debts when they filed for bankruptcy.
MBIA INSURANCE: Losses on SF Products Cue S&P's Rating Cut to BB+
-----------------------------------------------------------------
On Sept. 28, 2009, Standard & Poor's Ratings Services lowered its
counterparty credit, financial strength, and financial enhancement
ratings on MBIA Insurance Corp. to 'BB+' from 'BBB'. At the same
time, Standard & Poor's lowered its counterparty credit rating on
MBIA Inc., the group holding company, to 'BB-' from 'BB'. The
outlook on MBIA and the holding company is negative.
In addition, Standard & Poor's affirmed its 'A' counterparty
credit, financial strength, and financial enhancement ratings on
MBIA affiliate National Public Finance Guarantee Corp. (National).
The outlook on National remains developing.
S&P downgraded MBIA and the holding company because macroeconomic
conditions continue to contribute to losses on the group's
structured finance products. Losses on MBIA's 2005-2007 vintage
direct RMBS and CDO of ABS could be higher than S&P had expected.
However, the downgrade also reflects potentially increased losses
in other asset classes, including but not limited to CMBS and --
for other years prior to 2005 -- within RMBS.
S&P affirmed its ratings on National, which assumed MBIA's U.S.
public finance business, because it is not exposed to structured
products. The rating on National reflects S&P's view of both its
uncertain business and capital-raising prospects. Management's
stated goals are to raise additional capital to bolster National's
current resources and effectively ring-fence National from MBIA
and its more volatile book of business. However, the ring-fencing
actions it has taken so far have had limited impact in that S&P
views National as no more or less ring-fenced than any typical
bond insurance subsidiary operating in a consolidated group. In
addition, the legal challenges the company faces as a result of
its restructuring are, in S&P's opinion, an impediment to both
business prospects and capital-raising efforts.
The negative outlook on MBIA and the holding company reflects
S&P's view that adverse loss development on the structured finance
book could continue. In the next few years, liquidity will likely
be adequate to meet debt-service and holding-company obligations
(including operating expenses). However, increased losses and
earnings volatility could still occur. S&P expects that the
company will maintain a sufficient number of experienced staff
members to support surveillance and remediation efforts within the
various business segments, with a focus on liquidity risk
management. Considering the runoff nature of the franchise, it is
unlikely that S&P would raise the rating. Alternatively, if there
were increased losses within the investment portfolio, potential
reserve charges, or diminished liquidity, S&P could take a
negative rating action.
The outlook on National is developing. S&P could raise the rating
if there is a favorable resolution of the current litigation,
which in turn could facilitate capital-raising efforts and lead to
more tangible separation of National from MBIA and MBIA Inc.
Improving business acceptance could be an outgrowth of these
developments, which could lead to a rating in the 'AA' category.
Alternatively, an ongoing lack of market acceptance and continued
weak financial flexibility could result in a downgrade to the
'BBB' category.
Downgraded
MBIA Insurance Corp.
MBIA Assurance S.A.
Capital Markets Assurance Corp.
Counterparty Credit Rating
To From
-- ----
Local Currency BB+/Negative/-- BBB/Negative/--
MBIA Insurance Corp.
MBIA U.K. Insurance Ltd.
MBIA Assurance S.A.
Capital Markets Assurance Corp.
Financial Strength Rating
To From
-- ----
Local Currency BB+/Negative/-- BBB/Negative/--
MBIA Insurance Corp.
MBIA U.K. Insurance Ltd.
MBIA Assurance S.A.
Financial Enhancement Rating
To From
-- ----
Local Currency BB+/--/-- BBB/--/--
MBIA Inc.
Counterparty Credit Rating
To From
-- ----
Local Currency BB-/Negative/-- BB/Negative/--
MBIA Insurance Corp.
To From
-- ----
Senior Unsecured B+ BB
Preferred Stock B+ BB
MBIA Global Funding LLC
To From
-- ----
Senior Secured BB+ BBB
Senior Unsecured BB+ BBB
MBIA Inc.
To From
-- ----
Senior Unsecured BB- BB
Ratings Affirmed
Municipal Bond Insurance Assn.
National Public Finance Guarantee Corp
Counterparty Credit Rating
Local Currency A/Developing/--
Financial Strength Rating
Local Currency A/Developing/--
National Public Finance Guarantee Corp
Financial Enhancement Rating
Local Currency A/--/--
MERRILL LYNCH: Ohio Attorney General Sues BofA Over Merger
----------------------------------------------------------
Marshall Eckblad at The Wall Street Journal reports that Ohio
Attorney General Richard Cordray has filed a lawsuit in the U.S.
District Court in New York against Bank of America Corp.,
including CEO Kenneth Lewis, over its handling of the purchase of
Merrill Lynch & Co.
According to The Journal, Mr. Cordray said that his office could
soon seek "billions". The Journal relates that the lawsuit was
filed on behalf of five pension funds, alleging that BofA, its
directors, and four executives concealed widening losses at
Merrill Lynch before the December shareholder vote to approve the
deal. The funds want to recoup losses they sustained when BofA's
share price fell after its purchase of Merrill Lynch, the report
says.
The Journal states that these BofA executives were also included
in the lawsuit:
-- Chief Financial Officer Joe Price,
-- accounting chief Neil Cotty, and
-- John Thain, the former Merrill chairman and CEO who was
pushed out by Mr. Lewis shortly after the takeover was
completed.
The Journal quoted BofA spokesperson as saying, "We are confident
we disclosed all that was required and look forward to presenting
our position to the court."
The Journal relates that the pension funds had previously filed
individual complaints, but joined their lawsuits on Friday after a
judge granted Mr. Cordray's office lead-plaintiff status.
About Merrill Lynch
Based in Charlotte, North Carolina, Bank of America --
http://www.bankofamerica.com/-- is one of the world's largest
financial institutions, serving individual consumers, small and
middle market businesses and large corporations with a full range
of banking, investing, asset management and other financial and
risk-management products and services. The Company serves more
than 59 million consumer and small business relationships with
more than 6,100 retail banking offices, nearly 18,700 ATMs and
online banking with nearly 29 million active users. Following the
acquisition of Merrill Lynch on January 1, 2009, Bank of America
is among the world's leading wealth management companies and is a
global leader in corporate and investment banking and trading
across a broad range of asset classes serving corporations,
governments, institutions and individuals around the world. Bank
of America offers support to more than 4 million small business
owners. The Company serves clients in more than 150 countries.
Bank of America Corporation stock is a component of the Dow Jones
Industrial Average and is listed on the New York Stock Exchange.
The bank needed the government's financial help in completing its
acquisition of Merrill Lynch.
Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth
management, capital markets and advisory companies with offices in
40 countries and territories. As an investment bank, it is a
leading global trader and underwriter of securities and
derivatives across a broad range of asset classes and serves as a
strategic advisor to corporations, governments, institutions and
individuals worldwide. Merrill Lynch owns approximately half of
BlackRock, one of the world's largest publicly traded investment
management companies with more than $1 trillion in assets under
management. Merrill Lynch's operations are organized into two
business segments: Global Markets and Investment Banking (GMI) and
Global Wealth Management (GWM).
As reported by the Troubled Company Reporter on March 27, 2009,
Moody's Investors Service lowered the senior debt rating of Bank
of America Corporation to A2 from A1, the senior subordinated debt
rating to A3 from A2, and the junior subordinated debt rating to
Baa3 from A2. The preferred stock rating was downgraded to B3
from Baa1. The holding company's short-term rating was affirmed
at Prime-1.
METRO-GOLDWYN: Talks Between Owners and Lenders Contentious
-----------------------------------------------------------
The New York Post, citing multiple sources said that discussions
between debtholders and equity owners on a restructuring of Metro-
Goldwyn-Mayer's massive debt load have begun on a contentious
note, with both sides threatening to force MGM into bankruptcy in
order to gain leverage and extract better terms from the other.
According to The Post, a half-dozen sources described the calls,
led by Zolfo Cooper restructuring specialist Stephen Cooper, as
openly antagonistic, with some debtholders like Leon Black's
Apollo Management and Stark Capital Partners threatening to push
MGM into involuntary bankruptcy if their terms weren't met.
Until MGM defaults on one of its loans or funding obligations,
however, the debtholders, who are being represented by JPMorgan
Chase, can't liquidate the studio because equity owners -- Texas
Pacific Group and Providence Equity Partners the most prominent
among them -- are in control, The Post says.
DeadlineHollywood has reported that MGM needs $20 million in short
term and another $150 million to get through the end of 2009.
Bloomberg also said that MGM is in talks to skip interest payments
and restructure $3.7 billion in bank loans. MGM asked creditors
to waive $12 million monthly interest payments until February 15
2010.
About Metro-Goldwyn-Mayer
Metro-Goldwyn-Mayer, Inc., is an independent, privately held
motion picture, television, home video, and theatrical production
and distribution company. The Company owns the world's largest
library of modern films, comprising approximately 4,000 titles,
and over 10,400 episodes of television programming. MGM is owned
by an investor consortium, comprised of Providence Equity
Partners, TPG Capital, Sony Corporation of America, Comcast
Corporation, DLJ Merchant Banking Partners and Quadrangle Group.
The Troubled Company Reporter said on May 22, that Metro-Goldwyn-
Mayer hired Moelis & Co. to help refinance $3.7 billion debt and
was in talks with a steering committee of 140 creditors led by
JPMorgan Chase & Co. as part of the process. Sue Zeidler at
Reuters said the studio "was exploring options for optimizing its
capital structure and has begun talks with a steering committee of
its lenders as part of the process." Ms. Zeidler said bankers
estimate MGM is paying north of $250 million a year in interest on
debt due in 2012. Sources told Reuters MGM was potentially
seeking a way to make the loan due later, or reduce it in size.
Comcast paid about $5 billion in debt and equity in September 2004
to buy MGM from majority owner Kirk Kerkorian. According to
Reuters, merger specialists have said MGM could be worth
$2 billion to $2.5 billion. MGM, however, has reiterated its
commitment to staying independent.
METROMEDIA INT'L: Balks at Creditor's Bid for Chapter 11 Trustee
----------------------------------------------------------------
Metromedia International Group Inc. fired back at creditors
pushing for the appointment of a Chapter 11 trustee and the
termination of its exclusivity period, denying allegations that it
filed for bankruptcy in bad faith and attempted to devalue its
assets, according to Law360.
The official committee of unsecured creditors in MIG Inc.'s
Chapter 11 case has requested the Bankruptcy Court to terminate
the Debtor's exclusivity to file a plan due to the "gross
mismanagement" of the Debtor's operations.
The Committee earlier requested that the Bankruptcy Court appoint
a Chapter 11 trustee or dismiss the case, citing that the Debtor's
Chapter 11 case is being used "for the naked purpose" of obtaining
a stay of a US$188 million judgment from the Delaware Chancery
Court resulting from an appraisal action following MIG's
acquisition in 2007. The Committee also contended that MIG had
US$40 million transferred to the account of a non-bankrupt
subsidiary in advance of the Chapter 11 filing.
As reported by the TCR on July 3, Judge Kevin Gross of the U.S.
Bankruptcy Court for the District of Delaware allowed MIG Inc. to
continue an appeal of a decision in bankruptcy court that issued a
USUS$188.4 million judgment against the Company.
MIG was bought in October 2007 by CaucusCom Ventures LP for
USUS$1.80 a share, or about USUS$170 million, according to data
compiled by Bloomberg. A group of preferred shareholders asked
Judge William B. Chandler of the Delaware Chancery Court to
evaluate the value of their shares at the time of the merger.
Judge Chandler ruled that each share was worth USUS$47.47, or a
total of about USUS$188.4 million. MIG appealed the ruling. But
unable to post a bond enabling an appeal, MIG filed for Chapter
11.
MIG asked the Bankruptcy Court to permit the appeal and to allow
the plaintiff to take a cross appeal, while preventing the
plaintiff from collecting a judgment. MIG believes the amount of
the judgment is "substantially overstated." MIG also believes
that the assets will turn out to be worth much more than the
judgment, even though the assets currently are illiquid.
About MIG Inc.
Based in Charlotte, North Carolina, MIG Inc. (PINK SHEETS: MTRM,
MTRMP) -- http://www.metromedia-group.com/-- through its wholly
owned subsidiaries, owns interests in several communications
businesses in the country of Georgia. The Company's core
businesses include Magticom Ltd., a mobile telephony operator
located in Tbilisi, Georgia, Telecom Georgia, a long distance
telephony operator, and Telenet, which provides Internet access,
data communications, voice telephony and international access
services.
MIG, Inc., fka Metromedia International Group, Inc., filed for
Chapter 11 bankruptcy protection on June 18, 2009 (Bankr. D. Del.
Case No. 09-12118). Scott D. Cousins, Esq., at Greenberg Traurig
LLP assists the Company in its restructuring efforts. Debevoise &
Plimpton LLP is the Company's special corporate counsel, while
Potter Anderson & Corroon LLP is the Company's special litigation
counsel. The official committee of unsecured creditors of MIG,
Inc., has retained Baker & McKenzie LLP as its bankruptcy
counsel, nunc pro tunc to June 30, 2009.
In its petition, the Company said it had US$100 million to
US$500 million in assets and US$100 million to US$500 million in
debts. In its formal schedules, the Company said it had assets of
US$54,820,681 against debts of US$210,183,657.
MICROMET INC: Omega Funds Unload Shares, Disclose 6.94% Stake
-------------------------------------------------------------
Omega Fund Management Limited and Sigma Holding Limited disclosed
that their Omega Fund I sold in the aggregate 106,871 shares of
Micromet, Inc. Common Stock and Omega Fund III sold in the
aggregate 53,629 shares of Micromet Common Stock in a series of
sales beginning on September 17, 2009, and ending September 24,
2009. All of the sales were effected pursuant to a Rule 10b5-1
trading plan adopted by Omega Fund Management Limited on June 10,
2009.
Omega Fund and Sigma Holding disclosed holding 4,763,552 shares or
roughly 6.94% of Micromet Common Stock.
Sharon Rose Alvarez-Masterton also disclosed holding 4,763,552
shares or roughly 6.94% of Micromet Common Stock. Ms. Alvarez-
Masterton is a director of each of (i) Omega Fund GP, Ltd., which
is the general partner of Omega I, (ii) Omega Fund III G.P., Ltd.,
which is the general partner of Omega Fund III GP, L.P., the
general partner of Omega III, (iii) Omega Fund Management Limited,
which is the sole shareholder of Omega GPLtd and Omega III GPLtd
and (iv) Sigma Holding, which is the sole shareholder of Omega
Management. Ms. Alvarez-Masterton disclaims beneficial ownership
of the reported securities except to the extent of her pecuniary
interest therein.
About Micromet Inc.
Micromet Inc. (Nasdaq: MITI) -- http://www.micromet-inc.com/-- is
a biopharmaceutical company developing novel, proprietary
antibodies for the treatment of cancer, inflammation and
autoimmune diseases. Four of its antibodies are currently in
clinical trials, while the remainder of the product pipeline is in
preclinical development.
As of June 30, 2009, the Company had $69.8 million in total
assets; and $30.5 million in total current liabilities,
$7.31 million in deferred revenue, and $2.05 million in other non-
current liabilities; and $29.9 million stockholders' equity. The
Company had $212.4 million in accumulated deficit as of June 30,
2009.
Going Concern Doubt
In its annual report on Form 10-K for the year ended December 31,
2008, Micromet said that as of December 31, it had an accumulated
deficit of $198,200,000, and it expects to continue to incur
substantial, and possibly increasing, operating losses for the
next several years. "The conditions create substantial doubt
about our ability to continue as a going concern," the Company
said.
However, Ernst & Young LLP, in McLean, Virginia, the Company's
independent accountants, did not include a going concern language
in its March 16, 2009 audit report.
MIDWAY GAMES: Balks at TNA Plea for 2nd Hearing on San Diego Sale
-----------------------------------------------------------------
Midway Games Inc. has objected to a request by TNA Entertainment
LLC for a new trial concerning Midway's request for permission to
sell certain assets related to its San Diego studio, Carla Main at
Bloomberg reported, citing court records.
According to the report, Midway argued that TNA had previously
objected to the sale of the San Diego assets by claiming that
better offers could have been obtained for the assets and that the
sale violated antitrust laws, according to court files. TNA's
objections to the sale "lacked merit" and "were disputed" at the
first trial and a second trial is unnecessary, Midway pointed out.
Midway Games is seeking approval of a private sale to THQ Inc. of
substantially all of the remaining assets used in connection with
and arising out of the operation of Midway Home Entertainment's
video game design and development business conducted at the studio
located in San Diego, California. THQ has agreed to pay $200,000
cash and offer employment to not less than 40 employees of the San
Diego studio.
Following the recent sale of key assets to Warner Brothers
Entertainment Inc., the Debtors have been in the process of
marshaling and managing remaining assets. The business conducted
at the San Diego studio, which remained after the WBEI sale,
consisted primarily of the design and development team working on
the TNA Wrestling video game.
Although several parties expressed interest in an acquisition of
the business in San Diego, none of these parties had progressed to
the point of any certainty that a transaction could be completed.
Therefore, on July 1, 2009, the Debtors gave the required 60-day
notice under the federal Worker Adjustment and Retraining
Notification Act of 1988 to the design team at the studio and
certain other employees totaling 99 employees.
About Midway Games
Headquartered in Chicago, Illinois, Midway Games Inc. (OTC Pink
Sheets: MWYGQ) -- http://www.midway.com/-- with offices
throughout the world, is a leading developer and publisher of
interactive entertainment software for major videogame systems and
personal computers.
The Company and nine of its affiliates filed for Chapter 11
protection on February 12, 2009 (Bankr. D. Del. Lead Case No.
09-10465). Michael D. DeBaecke, Esq., Jason W. Staib, Esq, and
Victoria A. Guilfoyle, Esq., at Blank Rome LLP, in Wilmington,
Delaware; and Marc E. Richards, Esq., and Pamela E. Flaherty,
Esq., at Blank Rome LLP, in New York, represent the Debtors in
their restructuring efforts. Attorneys at Milbank, Tweed, Hadley
& McCloy LLP and Richards, Layton & Finger, P.A. represent the
official committee of unsecured creditors as counsel. Epiq
Bankruptcy Solutions, LLC, is the Debtors' claims, noticing, and
balloting agent.
On July 10, 2009, Midway and certain of its U.S. subsidiaries
completed the sale of substantially all of their assets to
Warner Bros. Entertainment Inc. in a sale approved by the Court.
The aggregate gross purchase price is roughly $49 million,
including the assumption of certain liabilities. Midway is
disposing of its remaining assets.
At June 30, 2009, the Debtors had $1.39 billion in total assets
and $1.59 billion in total liabilities. A full-text copy of the
Debtors' monthly operating report for the month ended June 30, is
available at http://researcharchives.com/t/s?41c1
MIDWAY GAMES: Wants October 30 Extension to File Plan
-----------------------------------------------------
Midway Games Inc. is asking the Bankruptcy Court to extend its
exclusive period to file a Chapter 11 plan by 30 days, until
October 30, 2009. Midway's request for a third extension is
scheduled for hearing on October 20.
According to Bill Rochelle at Bloomberg, Midway says it's
discussing a Chapter 11 plan with creditors. Midway says it is
holding $43 million cash, has no substantial secured claims. The
sticking point for the plan talks, Mr. Rochelle relates, seems to
be the allocation of the cash among creditors of the various
Midway companies.
About Midway Games
Headquartered in Chicago, Illinois, Midway Games Inc. (OTC Pink
Sheets: MWYGQ) -- http://www.midway.com/-- with offices
throughout the world, is a leading developer and publisher of
interactive entertainment software for major videogame systems and
personal computers.
The Company and nine of its affiliates filed for Chapter 11
protection on February 12, 2009 (Bankr. D. Del. Lead Case No.
09-10465). Michael D. DeBaecke, Esq., Jason W. Staib, Esq, and
Victoria A. Guilfoyle, Esq., at Blank Rome LLP, in Wilmington,
Delaware; and Marc E. Richards, Esq., and Pamela E. Flaherty,
Esq., at Blank Rome LLP, in New York, represent the Debtors in
their restructuring efforts. Attorneys at Milbank, Tweed, Hadley
& McCloy LLP and Richards, Layton & Finger, P.A. represent the
official committee of unsecured creditors as counsel. Epiq
Bankruptcy Solutions, LLC, is the Debtors' claims, noticing, and
balloting agent.
On July 10, 2009, Midway and certain of its U.S. subsidiaries
completed the sale of substantially all of their assets to
Warner Bros. Entertainment Inc. in a sale approved by the Court.
The aggregate gross purchase price is roughly $49 million,
including the assumption of certain liabilities. Midway is
disposing of its remaining assets.
At June 30, 2009, the Debtors had $1.39 billion in total assets
and $1.59 billion in total liabilities. A full-text copy of the
Debtors' monthly operating report for the month ended June 30, is
available at http://researcharchives.com/t/s?41c1
MITEK SYSTEMS: Posts $994,000 Net Loss in Nine Mos. Ended June 30
-----------------------------------------------------------------
Mitek Systems, Inc., posted a net loss of $85,677 for three months
ended June 30, 2009, compared with a net income of $41,864 for the
same period in 2008.
For nine months ended June 30, 2009, the Company posted a net loss
of $993,704 compared with a net loss of $461,512 for the same
period in 2008.
The Company's balance sheet at June 30, 2009, showed total assets
of $1,789,615, total liabilities of $1,359,668 and a stockholders'
equity of $429,947.
A full-text copy of the Company's Form 10-Q is available for free
at http://ResearchArchives.com/t/s?45cc
Mitek Systems, Inc., is primarily engaged in the development and
sale of software solutions. During its most recent completed
fiscal year, its business was primarily focused on document image
processing and image analytics. The Company's business also
focuses on intelligent character recognition and forms processing
technology, products and services used in the financial services
markets. The Company also develops fraud detection and prevention
products, which find signatures on any document and, using
patented algorithms, convert them into compact numeric codes,
which are then compared against one or more reference codes of
trusted signatures for highly accurate signature verification.
Most recently, the Company has been expanding its business focus
to include a software product that captures and reads data from
mobile devices using its proprietary technology. This software
product is called Mobile Capture. Mobile Capture technology
converts a camera-equipped mobile phone into a mobile scanner that
has the ability to read and extract data from any digital photo or
video image.
Going Concern Doubt
As reported in the Troubled Company Reporter on Jan. 21, 2009,
Mayer Hoffman McCann P.C. in San Diego, California, expressed
substantial doubt about the Company's ability to continue as a
going concern after auditing the Company's financial statements
for the fiscal years ended Sept. 30, 2008, and 2007. Mayer
Hoffman pointed out that the company has incurred recurring
operating losses and negative cash flows from operations.
MONEYGRAM INT'L: Mulls Options in Western Union Patent Ruling
-------------------------------------------------------------
The U.S. District Court for the Western District of Texas, Austin
Division, on September 24 returned a verdict in a suit brought by
Western Union:
-- finding MoneyGram International infringed on certain
patents relating to enabling customers to send
transactions without the use of written send forms, and
-- awarding $16.5 million dollars to Western Union.
"Clearly, we are disappointed with the jury's verdict. We are
evaluating the decision, determining next steps required, and
reviewing our legal options, including post-verdict motions and
appeals," said Carolyn Eshleman, vice president and associate
general counsel at MoneyGram International.
About MoneyGram International
MoneyGram International -- http://www.moneygram.com/-- is a
global payment services company, helping consumers pay bills
quickly and safely send money around the world in as little as 10
minutes. Its global network is comprised of 180,000 agent
locations in nearly 190 countries and territories. MoneyGram's
network includes retailers, international post offices and
financial institutions.
The Company posted a net loss of $3,317,000 for the three months
ended June 30, 2009, from net income of $15,161,000 for the same
quarter a year ago.
As of June 30, 2009, the Company had $6,221,272,000 in total
assets and $6,244,573,000 in total liabilities, resulting in
$823,388,000 in stockholders' deficit.
NATIONAL GAS: No Quantity Nixed Swap Agreement Treatment
--------------------------------------------------------
WestLaw reports that given that the contractual arrangements
between a customer and a Chapter 11 debtor-natural gas company did
not provide for the delivery of a fixed quantity of natural gas,
or anything even close to a fixed quantity, the agreements did not
qualify as "commodity forward agreements" so as to bring them
within the Bankruptcy Code's definition of "swap agreement" and
the protection from avoidance under the Code's safe harbor for
swap agreements. The customer's choice to receive physical
delivery without specifying a set quantity did not negate the
quantity requirement for commodity forward agreements. In re
National Gas Distributors, LLC, --- B.R. ----, 2009 WL 2873169
(Bankr. E.D.N.C.) (Small, J.).
This decision arose in the context of one of a score of adversary
proceedings the chapter 11 trustee filed against National Gas'
former customers. The Chapter 11 Trustee is attempting to avoid,
pursuant to 11 U.S.C. Secs. 548(a)(1)(A) and (a)(1)(B), transfers
made by the debtor, and to recover those transfers from the
defendants pursuant to Sec. 550(a)(1). The gist of the trustee's
complaints is that National Gas, as part of a fraudulent scheme,
sold natural gas to some of its customers at below market prices.
The trustee is attempting to recover the difference between the
market price of each sale and the below market price at the time
of each sale.
About National Gas Distributors
National Gas Distributors LLC -- http://www.gaspartners.com/--
supplied natural gas, propane, and oil to industrial, municipal,
military, and governmental facilities. As of mid-December 2005,
the company effectively ceased business operations due to
inadequate remaining capital and its inability to arrange for the
purchase and delivery of natural gas to its customers. The
company filed for bankruptcy on Jan. 20, 2006 (Bankr. E.D.N.C.
Case No. 06-00166). Ocie F. Murray, Jr., Esq., at Murray
Craven & Inman LLP represented the Debtor. Richard M. Hutson,
II, serves as the Chapter 11 Trustee, and is represented by
Emily C. Weatherford, Esq., and John A. Northen, Esq., at
Northen Blue LLP. When the Debtor filed for bankruptcy,
it estimated between $1 million to $10 million in assets and
$10 million to $50 million in debts.
NEW FRONTIER: Amends Form Annual Report to Correct Inconsistencies
------------------------------------------------------------------
New Frontier Energy Inc. posted a net loss of $12,469,361 for the
fiscal year ended Feb. 28, 2009, compared with a net loss of
6,402,002 for the same period in 2008.
The Company's balance sheet at Feb. 28, 2009, showed total assets
of $16,782,892, total liabilities of $5,213,604 and a
stockholders' equity of $11,569,288.
The Company amended its Form 10-K for the fiscal year ended
Feb. 28, 2009, in response to the Securities and Exchange
Commission's comment letter dated July 13, 2009. In this amended
report the Company made certain revisions to its disclosures, as
originally filed to respond to the comments from the SEC and to
correct inconsistencies and typographical errors included in the
Form 10-K. Except for these amendments, no other changes were
made to the Form 10-K.
A full-text copy of the Company's FORM 10-K/A is available for
free at http://ResearchArchives.com/t/s?45ad
New Frontier Energy Inc. (OTC:NFEI) is a domestic energy company
engaged in the exploration for, and development of, oil and
natural gas reserves in the continental United States. The
Company operates in two business segments: oil and gas exploration
and gas gathering. It explores for, produces and gathers oil and
natural gas.
Going Concern Doubt
On May 20, 2009, Stark Winter Schenkein & Co., LLP, in Denver,
Colorado, raised substantial doubt about New Frontier Energy,
Inc.'s ability to continue as a going concern after auditing the
Company's financial results for the years ended February 28, 2009,
and Feb. 29, 2008. The auditors noted the Company's significant
losses from operations and its working capital deficiency.
NEUMANN HOMES: APC Wants Lift Stay to Respond to SBS Suit
---------------------------------------------------------
Another Plumbing Company LLC seeks authority from the U.S.
Bankruptcy Court for the Northern District of Illinois to defend
itself in a lawsuit filed by Stock Building Supply LLC against
Neumann Homes Inc.
APC was named a defendant in the lawsuit by virtue of its
mechanics liens on Neumann Homes' properties, which Stock
Building seeks to foreclose through the lawsuit. APC asserts
liens on the properties on account of the materials and services
it provided to Neumann Homes for the Debtor's various
construction projects in Illinois.
About Neumann Homes
Headquartered in Warrenville, Illinois, Neumann Homes Inc. --
http://www.neumannhomes.com/-- develops and builds residential
real estate throughout the Midwest and West US. The company is
active in the Chicago area, southeastern Wisconsin, Colorado, and
Michigan. The Company has built more than 11,000 homes in some
150 residential communities. The Company offers formal business
training to employees through classes, seminars, and computer-
based training.
The Company filed for Chapter 11 protection on November 1, 2007
(Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at
Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the
Debtors to represent them in these cases. The Official Committee
of Unsecured Creditors has selected Paul, Hastings, Janofsky &
Walker LLP, as its counsel in these bankruptcy proceeding. When
the Debtors filed for protection from its creditors, they listed
assets and debts of more than $100 million.
(Neumann Bankruptcy News; Bankruptcy Creditors' Services Inc.
http://bankrupt.com/newsstand/or 215/945-7000)
NEUMANN HOMES: Sprovieri Wants Lift Stay to File Counterclaim
-------------------------------------------------------------
Sprovieri Custom Counters Inc. seeks permission from the U.S.
Bankruptcy Court for the Northern District of Illinois to file a
counterclaim in lawsuits filed against Neumann Homes Inc.
Neumann Homes is a defendant of several cases filed by Bank of
America N.A. and Stock Building Supply LLC, which seek
foreclosure of Neumann Homes' properties. Sprovieri was
implicated in the lawsuits as it holds a lien on those properties
on account of labor and materials it provided for Neumann Homes'
residential development projects.
About Neumann Homes
Headquartered in Warrenville, Illinois, Neumann Homes Inc. --
http://www.neumannhomes.com/-- develops and builds residential
real estate throughout the Midwest and West US. The company is
active in the Chicago area, southeastern Wisconsin, Colorado, and
Michigan. The Company has built more than 11,000 homes in some
150 residential communities. The Company offers formal business
training to employees through classes, seminars, and computer-
based training.
The Company filed for Chapter 11 protection on November 1, 2007
(Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at
Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the
Debtors to represent them in these cases. The Official Committee
of Unsecured Creditors has selected Paul, Hastings, Janofsky &
Walker LLP, as its counsel in these bankruptcy proceeding. When
the Debtors filed for protection from its creditors, they listed
assets and debts of more than $100 million.
(Neumann Bankruptcy News; Bankruptcy Creditors' Services Inc.
http://bankrupt.com/newsstand/or 215/945-7000)
OPTI CANADA: Moody's Confirms Corporate Family Rating at 'Caa1'
---------------------------------------------------------------
Moody's Investors Service confirmed OPTI Canada Inc.'s Caa1
Corporate Family Rating, B1 C$350 million senior secured first
lien revolver rating, and Caa1 $1.75 billion second lien notes
rating. Moody's also changed OPTI's outlook to negative. This
concludes the review of OPTI that began on June 5, 2009.
The confirmation of OPTI's ratings reflect the enhancement to its
liquidity following an equity offering that raised net proceeds of
C$142 million and the revision of its first lien revolver
covenants that afforded the company interim relief from a covenant
default that was likely to occur at September 30, 2009 had the
first lien debt to EBITDA covenant not been amended. The enhanced
liquidity enabled OPTI to pay down significant revolver
outstandings and provides additional available liquidity. OPTI
has significant cash payment requirements including capex, and
interest expense that totals US$141.6 million per annum for the
notes plus interest on the revolver.
The negative outlook reflects the ongoing operating challenges at
the Long Lake steam assisted gravity drainage and bitumen upgrader
joint venture and the fact that the currently higher available
liquidity and covenant room will dissipate relatively quickly
absent meaningful cash flow contribution from Long Lake.
The Caa1 Corporate Family Rating considers OPTI's very high debt
level and ongoing cash payment requirements and the minimal cash
flow derived from the Long Lake SAGD project given its difficult
and protracted development and ramp up.
Outlook Actions:
Issuer: OPTI Canada Inc.
-- Outlook, Changed To Negative From Rating Under Review
Confirmations:
Issuer: OPTI Canada Inc.
-- Corporate Family Rating, Confirmed at Caa1
-- Senior Secured Bank Credit Facility, Confirmed at B1, LGD1,
04%
-- Senior Secured Regular Bond/Debenture, Confirmed at Caa1
OPTI's ratings have been assigned by evaluating factors that
Moody's believes are relevant to the company's risk profile, such
as the company's (i) business risk and competitive position
compared with others within the industry; (ii) capital structure
and financial risk; (iii) projected performance 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 OPTI's core industry.
The last rating action on OPTI was on June 5, 2009 when its
ratings were placed under review for possible downgrade.
OPTI Canada Inc., headquartered in Calgary, Alberta, holds a 35%
interest in Long Lake, an in-situ oil sands development in
Alberta.
OSCIENT PHARMA: Lupin Acquires Antara's US Marketing Rights
-----------------------------------------------------------
The Economic Times reports that a Lupin Ltd. official said that
the company has acquired the U.S. marketing rights and inventory
for cholesterol-lowering drug Antara from Oscient Pharmaceuticals
Corp. for $39 million.
Lupin, an Indian generic drugmaker, outbid Akrimax Pharmaceuticals
LLC at a court-supervised auction. New Jersey based Akrimax was
the lead bidder with a $20 million offer and eventually raised its
offer to $35.4 million including a break-up fee and royalty
payments.
Oscient won approval from the Bankruptcy Court to sell commercial
rights to antibiotic Factive to Cornerstone Therapeutics Inc.
Cornerstone agreed to pay $5,000,000 plus an amount for purchased
inventory.
Based in Waltham, Massachusetts, Oscient Pharmaceuticals
Corporation (OSCIQ.PK) -- http://www.antararx.com/and
http://www.factive.com/-- markets two FDA-approved products in
the United States: ANTARA(R) (fenofibrate) capsules, a
cardiovascular product and FACTIVE(R) (gemifloxacin mesylate)
tablets, a fluoroquinolone antibiotic. ANTARA is indicated for
the adjunct treatment of hypercholesterolemia (high blood
cholesterol) and hypertriglyceridemia (high triglycerides) in
combination with diet. FACTIVE is approved for the treatment of
acute bacterial exacerbations of chronic bronchitis and community-
acquired pneumonia of mild to moderate severity. ANTARA accountsi
for over 80% of the Debtors' 2008 revenues. The Company also has
a late-stage antibiotic candidate, Ramoplanin, for the treatment
of Clostridium difficile-associated disease.
As of December 31, 2008, Oscient's audited consolidated financial
statements reflected total assets of $174 million and total
liabilities of $255 million.
Oscient Pharmaceuticals together with an affiliate filed for
Chapter 11 on July 13, 2009 (Bankr. D. Mass. Case No. 09-16576).
Judge Henry J. Boroff presides over the case. Charles A. Dale
III, Esq., at K&L Gates LLP, represents the Debtors. The Debtors
also hired Ropes & Gray LLP as special litigation counsel, and
Broadpoint Capital Inc. as financial advisor. In its petition,
Oscient listed assets ranging from $50,000,001 to $100,000,000,
and debts ranging from $100,000,001 to $500,000,000.
OXIS INTERNATIONAL: Posts $5,006,000 Net Loss in 2008
-----------------------------------------------------
Oxis International Inc. on Friday filed with the Securities and
Exchange Commission its annual report on Form 10-K for the year
ended December 31, 2008.
As of December 31, 2008, Oxis had no employees. All of the
business of the Company was conducted by consultants who reported
to the Board of Directors. One consultant was Oxis' principal
executive officer although he was not an employee. None of its
employees during 2007 and 2008 were or are now currently subject
to a collective bargaining agreement. Oxis believes its
relationship with employees is good, and it has never experienced
an employee-related work stoppage.
Oxis incurred net losses of $5,006,000 in 2008 and generated net
income of $471,000 in 2007. The net loss in 2008 was primarily
affected by the loss on disposition of a subsidiary of $2,978,000,
as well as interest expense associated with notes payable of
$1,657,000. Net income in 2007 was primarily affected by non-cash
income relating to a decrease in warrant and derivative
liabilities.
As of December 31, 2008, Oxis had $590,000 in total assets and
$4,270,000 in total liabilities, resulting in $3,680,000
stockholders' deficit.
Oxis said it has incurred an accumulated deficit of $74,854,000
through December 31, 2008. Its cash holdings were $22,000 at
December 31, 2008. Oxis will need to seek additional debt or
equity financing to pay for basic operating costs, to expand
operations, implement its marketing campaign, or hire additional
personnel. However, it may not successfully obtain debt or equity
financing on terms acceptable to it, or at all, that will be
sufficient to finance operating costs in 2009 and its other goals.
If additional financing is not available or is not available on
acceptable terms, Oxis will have to curtail operations.
As of August 31, 2009, Oxis was 31 months behind in payments under
its secured convertible debentures. The Company said it did not
have and currently does not have the financial capability to make
the required payments.
A full-text copy of the Annual Report is available at no charge
at http://ResearchArchives.com/t/s?45d7
On May 20, 2009, Oxis' stock was removed from quotation on the
Over-the-Counter Bulletin Board due to delayed filings of
documents with the Securities and Exchange Commission and lack of
market markers required for Over-The-Counter Bulletin Board
status. On May 20, 2009, Oxis' stock was quoted on the Pink
Sheets under the symbol "OXIS". The Company is taking steps to
regain OTCBB trading status, but there is no assurance of when, or
if, this goal will be achieved.
OXIS International, Inc., is currently engaged in the development
of neutraceutical products for sale to general consumers. This
activity had minimal sales during 2008. Thus, most of the
financial performance discussion relates to products and product
lines not owned or engaged in by Oxis for much of 2008 and these
operations are not a part of the on-going business into 2009.
PALMDALE HILLS: SunCal Settles With Lehman over Competing Plans
---------------------------------------------------------------
SunCal Cos., and Lehman Brothers Holdings Inc., part-owner and
lender of SunCal, reached a settlement, Bill Rochelle at Bloomberg
News reported, citing court records.
SunCal and Lehman were proposing competing Chapter 11 plans for
Palmdale Hills Property LLC and its units -- projects of SunCal
Cos. that are in bankruptcy. The Palmdale Debtors are contesting
a $2 billion claim filed by Lehman Brothers Holdings Inc.
According to Bloomberg News, SunCal, based in Irvine, California,
is trying to prevent LBHI from using its $2 billion claim as a
secured creditor to bid for eight of the properties. SunCal
prefers the cash offer by the investment firm D.E. Shaw & Co., a
partner on other company projects, which would give preferential
treatment to unsecured creditors over Lehman. Shaw's $195 million
offer for nine projects would be subject to higher bids.
Bankruptcy Judge Erith A. Smith will issue a ruling by Oct. 15.
About SunCal Companies
SunCal Companies is a California developer. Palmdale Hills
Property LLC and other units were formed to develop various
residential real estate projects located throughout the western
United States.
Lehman Brothers Holdings Inc. and an affiliate committed to SunCal
on a $2.3 billion funding for the development of various
residential real estate projects. The amounts were secured by,
among other things, first priority trust deeds on the projects,
which include oceanlots in San Clemente, in California. LBHI
stopped funding after it filed for bankruptcy in
September 15, 2008.
Palmdale together with affiliates, which include SunCal Bickford,
and LBL-SunCal Northlake LLC, filed for Chapter 11 protection
before the U.S. Bankruptcy Court for the Central District of
California on Nov. 6, 2008 (Case No. 08-17206).
In its petition, Palmdale estimated assets and debts of between
$100,000,001 to $500,000,000. Paul J. Couchot, Esq., at Winthrop
Couchot PC, represents the Debtors in their restructuring effort.
PANAVISION INC: Moody's Cuts Corporate Family Rating to 'Caa3'
--------------------------------------------------------------
Moody's Investors Service downgraded the corporate family and
probability of default ratings for Panavision Inc. to Caa3 from
Caa1 based on further erosion of the company's liquidity profile
and heightened concerns over the sustainability of its capital
structure, intensified by the March 2011 maturity of Panavision's
term loan (approximately $250 million outstanding) and revolver.
The downgrades also incorporate the potential that Panavision's
cost cutting will be insufficient to offset industry challenges
impacting its camera rental business, such as a reduction in the
number of feature films and decline in commercial advertising
spend, which could cause this business to remain depressed over at
least the next year, in Moody's opinion.
Of note, Panavision has maintained compliance with its bank
financial covenants through credit agreement-permitted equity
cures, as well as the retirement of a small amount of debt
(approximately $17 million) by its financial sponsor. In addition
to the equity cures, which provided cash and increased credit
agreement-defined EBITDA, several other exceptional events
(including license fees related to the Panavision Imaging
acquisition) boosted both reported EBITDA and free cash flow in
the first half of 2009. Panavision's ability to remain covenant
compliant and to continue servicing its debt load absent these
exceptional events remains highly uncertain, in Moody's opinion.
The rating outlook is negative, reflecting the potential for
further downward rating migration should the company pursue a pre-
emptive restructuring in advance of an actual payment default. A
summary of the actions and Moody's current ratings is:
Panavision Inc.
-- Corporate Family Rating, Downgraded to Caa3 from Caa1
-- Probability of Default Rating, Downgraded to Caa3 from Caa1
-- Senior Secured First Lien Bank Credit Facility, Downgraded to
Caa2, LGD3, 32% from B3, LGD3, 33%
-- Senior Secured Second Lien Bank Credit Facility, Downgraded
to Ca, LGD5, 84% from Caa3, LGD5, 84%
-- Outlook, Changed To Negative From Stable
Continued challenges in operations have eroded Panavision's
already weak liquidity, which compounds considerable refinancing
risk given the March 2011 maturity of approximately $250 million
of term loans as well as the $35 million revolver, and the Caa3
corporate family rating reflects these concerns. Furthermore,
Panavision's core camera rental business exhibits some volatility,
lack of visibility, and sensitivity to economic conditions,
creating a high level of business risk. Panavision's industry-
leading market share, strong brand image, and reasonably high
EBITDA margins lend support to ratings.
The most recent rating action for Panavision occurred September 4,
2008, when Moody's downgraded the corporate family rating to Caa1
from B3.
Panavision'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 Panavision's core industry and Panavision's ratings are
believed to be comparable to those of other issuers of similar
credit risk.
Headquartered in Woodland Hills, California, Panavision
manufactures and rents camera systems and lighting equipment to
motion picture and television producers worldwide. Its revenue
for the twelve months ended June 30, 2009 was approximately
$260 million.
PAVELIC HOLDINGS: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Pavelic Holdings 2 LLC
3401 Barham Bklvd # 5
Los Angeles, CA 90068
Bankruptcy Case No.: 09-36097
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Judge: Richard M. Neiter
Debtor's Counsel: Brian R. Linnekens, Esq.
Law Offices of Brian Linnekens
806 Idaho Ave
Santa Monica, CA 90403
Tel: (818) 854-4245
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
$3,150,267, and total debts of $2,337,927.
The Company says it does not have unsecured creditors who are non
insiders when they filed their petition.
The petition was signed by Ante K. Pavelic, officer of the
Company.
PILGRIM'S PRIDE: District Court to Estimate FLSA Claims
-------------------------------------------------------
Pilgrim's Pride Corp. and plaintiffs to a lawsuit alleging Fair
Labor Standard Act violations by Pilgrim's filed an agreed motion
ask the U.S. Bankruptcy Court for the Northern District of Texas,
Forth Worth Division, to transfer the estimation proceedings to
the U.S. District Court for the Western District of Kansas to the
Honorable Harry F. Barnes.
Presently, the Debtors' goal is to emerge from Chapter 11 by the
end of 2009. Considering this, the need for liquidation of the
MDL Claims for the efficient administration of the estate, and
the Debtors estimation that resolving the MDL Claims would take
at least 18 months if left to a trial or trials in federal
district court the Debtors and the FLSA MDL Plaintiffs have
agreed to have the MDL Claims estimated pursuant to Section
502(c) of the Bankruptcy Code.
Due to the familiarity of Judge Barnes with the FLSA MDL
litigation, the Debtors and the FLSA MDL Plaintiffs concur with
the suggestion of Judge Michael Lynn of the Bankruptcy Court and
ask that the estimation proceedings regarding the MDL Claims be
transferred to Judge Barnes under the interests-of-justice
provisions of Section 1412 of Title 28 of the U.S. Code. The
Debtors and the FLSA MDL Plaintiffs note that the MDL Plaintiffs'
collective action complaint has been pending before Judge Barnes
for more than two years, during which time Judge Barnes entered
three case management orders and presided over the commencement of
discovery. Further, Judge Barnes has agreed to estimate the MDL
Claims pursuant to Section 502(c) in a timely fashion, consistent
with the Debtors' need to know their liability, if any, to the
MDL Plaintiffs prior to an anticipated confirmation hearing in
November or December 2009.
The estimation process, according to Stephen A Youngman, Esq., at
Weil, Gotshal & Manges LLP, in Dallas, Texas will be highly
simplified inasmuch as the parties have agreed and the Bankruptcy
Court has directed that the action be resolved based on limited
discovery.
In a report and recommendation, Northern Texas Bankruptcy Court
Judge Lynn recommend that the reference be withdrawn with respect
to the FLSA Claims Estimation Motion and related proceedings and
that the Venue Transfer Motion be granted by the U.S. District
Court for the Northern District of Texas and the Estimation
Motion and related proceedings be transferred to the Arkansas
Court.
About Pilgrim's Pride
Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- employs
roughly 41,000 people and operates chicken processing plants and
prepared-foods facilities in 14 states, Puerto Rico and Mexico.
The Company's primary distribution is through retailers and
foodservice distributors.
Pilgrim's Pride Corp. and six other affiliates filed Chapter 11
petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No.
08-45664). The Debtors' operations in Mexico and certain
operations in the United States were not included in the filing
and continue to operate as usual outside of the Chapter 11
process.
Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A.
Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges
LLP, as bankruptcy counsel. The Debtors have also tapped Baker &
McKenzie LLP as special counsel. Lazard Freres & Co., LLC, is the
company's investment bankers and William K. Snyder of CRG Partners
Group LLC as chief restructuring officer. The Company's claims
and noticing agent is Kurtzman Carson Consulting LLC.
A nine-member committee of unsecured creditors has been appointed
in the case.
As of December 27, 2008, the Company had $3,215,103,000 in total
assets, $612,682,000 in total current liabilities, $225,991,000 in
total long-term debt and other liabilities, and $2,253,391,000 in
liabilities subject to compromise.
Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
of Pilgrim's Pride Corp. and its various affiliates.
PILGRIM'S PRIDE: Cattle Producers Group Object to JBS Buy-Out
-------------------------------------------------------------
A cattle producers group said it has asked the U.S. Justice
Department to block the acquisition of Pilgrim's Pride
Corporation by JBA SA, Karen Robinson-Jacobs at The Dallas Morning
News reported on September 25. The cattle producers group's
objection is one of the first formal challenges to a deal that
anchors the effort of Pilgrim's Pride to emerge from bankruptcy,
the report said.
Bill Bullard, chief executive of R-CALF USA, a Montana-based
nonprofit group that represents cattle producers, argued in a
prepared statement that cattle demand and prices are influenced
by the supply and price of competing proteins like pork and
poultry. "With the acquisition of . . . Pilgrim's Pride, which
controls over 20 percent of U.S. poultry production, JBS could
further manipulate the competing protein market in the United
States," the report quoted Mr. Bullard as saying.
In 2007, JBS purchased Swift & Co., then the U.S.'s third-largest
beef packer. In 2008, JBS purchased Smithfield Beef Group and
tried to buy National Beef Packing Co. but the U.S. Justice
Department found the latter acquisition would have lessened
competition among packers, the report related.
About Pilgrim's Pride
Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- employs
roughly 41,000 people and operates chicken processing plants and
prepared-foods facilities in 14 states, Puerto Rico and Mexico.
The Company's primary distribution is through retailers and
foodservice distributors.
Pilgrim's Pride Corp. and six other affiliates filed Chapter 11
petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No.
08-45664). The Debtors' operations in Mexico and certain
operations in the United States were not included in the filing
and continue to operate as usual outside of the Chapter 11
process.
Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A.
Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges
LLP, as bankruptcy counsel. The Debtors have also tapped Baker &
McKenzie LLP as special counsel. Lazard Freres & Co., LLC, is the
company's investment bankers and William K. Snyder of CRG Partners
Group LLC as chief restructuring officer. The Company's claims
and noticing agent is Kurtzman Carson Consulting LLC.
A nine-member committee of unsecured creditors has been appointed
in the case.
As of December 27, 2008, the Company had $3,215,103,000 in total
assets, $612,682,000 in total current liabilities, $225,991,000 in
total long-term debt and other liabilities, and $2,253,391,000 in
liabilities subject to compromise.
Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
of Pilgrim's Pride Corp. and its various affiliates.
PILGRIM'S PRIDE: Seeks Approval of Stock Purchase Pact With JBS
---------------------------------------------------------------
Pilgrim's Pride Corp. and its affiliates' Proposed Plan of
Reorganization is premised on a transaction -- the "Plan Sponsor
Transaction" -- between Pilgrim's Pride Corporation and JBS S.A.
unit JBS USA Holdings, Inc., that upon the Debtors' emergence from
bankruptcy, all outstanding shares of PPC's common stock will be
canceled, and the reorganized PPC will issue shares of common
stock in reorganized PPC. Pursuant to the Plan Sponsor
Transaction, JBS USA, the Plan Sponsor, will purchase 64% of the
Reorganized PPC Stock for $800 million in cash
By this motion, the Debtors seek the Court's permission to enter
into the Stock Purchase Agreement with JBS USA and consummate the
Plan Sponsor Transaction as part of the Court's confirmation of
the Debtors' Proposed Plan.
The Debtors also seek approval of certain specified provisions of
the SPA prior to the confirmation of the Proposed Plan, including
a provision that requires the Debtors to pay the Plan Sponsor a
$45 million Termination Fee and a $5 mill Expense Reimbursement
in the event the Debtors terminate the SPA because they enter
into an agreement with a superior proposal.
Under the SPA, the parties agree that PPC will, until the
Effective Date of the Plan, conduct its business in a manner
consistent with past practice.
Additionally, the SPA calls for prior written consent from the
Plan Sponsor in matters concerning, among others:
* new commitments for any capital expenditures in excess of
$5,000,000 individually;
* amendments or modifications of certain types of contracts
that are material to the Debtors' business;
* payment or receipt in excess of $2,500,00 individually in
connection with the settlement of any claim;
* sale, transfer, lease, sublease or disposal of any properties
or assets with a value in excess of $2,000,000 individually,
other than the sale of inventory in the ordinary course of
business consistent with past practice;
* new indebtedness
* issuance or sale of any equity securities of PPC;
* termination, discontinuance, closure or disposal of any plan,
facility or other business operation, or the laying off of
employees other than layoffs of less than 100 employees in
the ordinary course of business;
* hiring or employees in the position of Executive Vice
President or above, or the termination of employment of
employees in the position of Executive Vice President of
above other than for "cause;" and
* any material change in any material method of accounting or
accounting practice or policy, other than the changes
required by GAAP or other accounting requirements applicable
to PPC or any or its subsidiaries.
The SPA also provides that all contracts of the Debtors not
already assumed or rejected by the Debtors pursuant to an order
of the Court, and not specifically assumed by the Debtors
pursuant to the Proposed Plan will be deemed rejected by the
Debtors as of the Effective Date. The SPA also requires the
Debtors to provide the Plan Sponsor a draft of the list of
contracts to be assumed pursuant to the Proposed Plan as soon as
practicable after the entry of an order approving the Proposed
Disclosure Statement.
A full-text copy of the Stock Purchase Agreement is available for
free at http://bankrupt.com/misc/PPC_JBS_SPAexec.pdf
At the Debtors' behest, the Court will convene a hearing to
consider this motion on October 6, 2009 at 10:30 a.m.
About Pilgrim's Pride
Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- employs
roughly 41,000 people and operates chicken processing plants and
prepared-foods facilities in 14 states, Puerto Rico and Mexico.
The Company's primary distribution is through retailers and
foodservice distributors.
Pilgrim's Pride Corp. and six other affiliates filed Chapter 11
petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No.
08-45664). The Debtors' operations in Mexico and certain
operations in the United States were not included in the filing
and continue to operate as usual outside of the Chapter 11
process.
Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A.
Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges
LLP, as bankruptcy counsel. The Debtors have also tapped Baker &
McKenzie LLP as special counsel. Lazard Freres & Co., LLC, is the
company's investment bankers and William K. Snyder of CRG Partners
Group LLC as chief restructuring officer. The Company's claims
and noticing agent is Kurtzman Carson Consulting LLC.
A nine-member committee of unsecured creditors has been appointed
in the case.
As of December 27, 2008, the Company had $3,215,103,000 in total
assets, $612,682,000 in total current liabilities, $225,991,000 in
total long-term debt and other liabilities, and $2,253,391,000 in
liabilities subject to compromise.
Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
of Pilgrim's Pride Corp. and its various affiliates.
PILGRIM'S PRIDE: To Seek Approval of Plan Disclosure on Oct. 20
---------------------------------------------------------------
Pilgrim's Pride Corp. ask Judge D. Michael Lynn of the
United States Bankruptcy Court for the Northern District of
Texas, Fort Worth Division, to approve the Disclosure Statement
explaining their Joint Plan of Reorganization as containing
adequate information as defined in Section 1125 of the Bankruptcy
Code.
The Proposed Plan leaves classes 1 through 9 and 10(b) through
10(g) unimpaired. These are the holders of the Non-Voting
Classes which are deemed are deemed to accept the Proposed Plan
and are not entitled to vote. The Proposed Plan impairs Class
10(a) - Holders of Equity Interests in PPC, the "Voting Class."
The members of the Voting Class are entitled to vote.
Judge D. Michael Lynn will convene a hearing to consider the
adequacy of the Debtors' Proposed Disclosure Statement on
October 20, 2009 at 10:30 a.m., Central Time. Responses will be
due on October 13.
About Pilgrim's Pride
Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- employs
roughly 41,000 people and operates chicken processing plants and
prepared-foods facilities in 14 states, Puerto Rico and Mexico.
The Company's primary distribution is through retailers and
foodservice distributors.
Pilgrim's Pride Corp. and six other affiliates filed Chapter 11
petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No.
08-45664). The Debtors' operations in Mexico and certain
operations in the United States were not included in the filing
and continue to operate as usual outside of the Chapter 11
process.
Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A.
Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges
LLP, as bankruptcy counsel. The Debtors have also tapped Baker &
McKenzie LLP as special counsel. Lazard Freres & Co., LLC, is the
company's investment bankers and William K. Snyder of CRG Partners
Group LLC as chief restructuring officer. The Company's claims
and noticing agent is Kurtzman Carson Consulting LLC.
A nine-member committee of unsecured creditors has been appointed
in the case.
As of December 27, 2008, the Company had $3,215,103,000 in total
assets, $612,682,000 in total current liabilities, $225,991,000 in
total long-term debt and other liabilities, and $2,253,391,000 in
liabilities subject to compromise.
Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
of Pilgrim's Pride Corp. and its various affiliates.
PLEASANT VALLEY: Case Summary & 7 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Pleasant Valley Properties, Inc.
2067 Glenwood Terrace
Huntington, WV 25701
Bankruptcy Case No.: 09-30748
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
Southern District of West Virginia (Huntington)
Debtor's Counsel: Marshall C. Spradling, Esq.
100 Capitol Street, Suite 703
Charleston, WV 25301
Tel: (304) 343-2544
Fax: (304) 343-2546
Email: marshallspradling@wvdsl.net
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
7 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/wvsb09-30748.pdf
The petition was signed by Larry Ellis, president of the Company.
PLIANT CORP: GE et al. Balks at Apollo Chapter 11 Plan
------------------------------------------------------
General Electric Capital Corp., GE Capital Markets Inc., and GE
Capital Corporation, and Tredegar Film Products Corporation,
Tredegar Film Products Lake Zurich LLC, Tredegar Film Products
(US) LLC, and Tredegar Performance Films Inc. object to the joint
Chapter 11 plan of reorganization for Pliant Corporation and its
debtor-affiliates proposed by Apollo Management VI LP on behalf of
various Apollo affiliates, arguing that the Plan is not
confirmable unless the alternative financing fee, which is an
administrative claim, is paid on the effective date.
According to Law360, General Electric et al. has asked for a
$1.35 million fee to be carved out for it from Pliant Corp. should
the bankruptcy court approve the Debtor's plan to switch its exit
financier of choice from GE to Barclays Capital.
The Court will hold a hearing Oct. 6, 2009, at 2:00 p.m.
(Prevailing Eastern Time), to consider confirmation of the joint
plan of reorganization for the Debtors.
The Court approved the disclosure statement explaining the Joint
Plan on August 17, 2009.
Contribution of Berry Assets
On the Plan Effective Date, Reorganized Pliant and Berry Plastics
Corporation -- which is 79%-owned by Apollo Investment Fund VI,
L.P. and Apollo Investment Fund V, L.P. collectively -- will enter
into an Intercompany Services Agreement. Berry will contribute
assets related to its Stretch Films business to the applicable
Reorganized Debtors in exchange for (a) the issuance to Berry or
its designated subsidiary of 20% of Reorganized Pliant Common
Stock and (b) subject to the satisfaction of certain performance-
based thresholds, the obligation to issue to Berry or its
designated subsidiary additional shares of New Common Stock
representing 5% of the New Common Stock on a fully-diluted basis.
The Stretch Films business produces both hand and machine-wrap
stretch films, which are used by end users to wrap products and
packages for storage and shipping. The stretch films products are
sold to distributors and retail and industrial end users under the
MaxTech(R) and PalleTech(R) brands.
Issuance of Securities
On the Effective Date, the authorized capital stock of Reorganized
Pliant will consist of 5,350,000 shares of capital stock, of which
up to 5,000,000 shares will be New Common Stock, and up to 350,000
shares will be New Preferred Stock. Reorganized Pliant will also
issue in exchange for claims $250,000,000 aggregate principal
amount of 11-1/2% Senior Secured Notes due 2015 under an
indenture, and 1,930,000 Rights to purchase New Common Stock in a
Rights Offering.
Specifically, Reorganized Pliant expects to issue:
(a) a total of 514,666 shares of New Common Stock to Berry,
members of Berry management (or an entity owned by them)
and a total of 1,930,00 shares of New Common Stock to
Apollo and the other Holders of Second Lien Notes Claims
exercising their Rights pursuant to the Rights Offering,
(b) up to a total of 262,400 shares of New Preferred Stock to
holders of Second Lien Notes Claims,
(c) an aggregate of $250.0 million of 11-1/2% Senior Secured
Notes due 2015 to Holders of First Lien Notes Claims, and
(d) a total of 1,930,000 Rights to purchase all or a portion
of its Pro Rata share of the Rights Allocation to holders
of Holder of an Allowed Second Lien Notes Claim. The
Rights represent the right to acquire 75% of the issued
and outstanding shares of New Common Stock, immediately
upon consummation of the Plan, subject to dilution in the
event Reorganized Pliant issues management compensatory
stock options or other compensatory awards denominated in
shares of New Common Stock.
Pliant filed an Application for Qualification on Form T-3 with the
Securities and Exchange Commission in connection with the issuance
of New Senior Secured Notes. A full-text copy of the Form T-3 is
available at no charge at http://ResearchArchives.com/t/s?43b7
On the Effective Date, affiliates of Apollo are expected to own at
least 57.5% of the new Common Stock of Pliant.
Treatment and Recovery of Claims
As of August 28, 2009, Pliant's capitalization consisted of:
Title Amount Amount
of Class Authorized Outstanding
-------- ---------- -----------
Common Stock, $0.01 par 100,050,000 97,348 shares
value per share shares
Series AA Preferred Stock, 335,650 334,894 shares
par value $.01 per share shares
Series M Preferred Stock, 8,000 shares 8,000 shares
par value $.01 per share
18% Senior Subordinated $24,000,000 $26,500,000
Notes due 2012
11-1/8% Senior Secured unlimited $262,400,000
Notes due 2009
11-5/8% Senior Secured unlimited $393,800,000
Notes due 2009 and
11-1/8% Senior Secured
Notes due 2009
Capitalization of Pliant as of the Effective Date:
Title Amount Amount
of Class Authorized Outstanding
-------- ---------- -----------
Common stock, par value 5,000,000 2,444,666 shares
$0.001 per share -- shares
New Common Stock
Series A Cumulative 350,000 up to a total of
Perpetual Redeemable Shares 262,400 shares
Preferred Stock,
par value $.01 per share
11-1/2% Senior Secured $250,000,000 $250,000,000
Notes due 2015
The Plan provides that:
-- the First Lien Notes Claims will receive $100.0 million in
Cash and $250.0 million of New Senior Secured Notes to be
issued pursuant to the Plan,
-- the Second Lien Notes will receive, in respect of each
$1,000 of Allowed Claims, at the Holder's option either
(a) $87.50 in cash and $87.50 in liquidation preference of
New Preferred Stock if such Holder elects to receive cash
and New Preferred Stock or if such Holder does not make an
election on the Ballot, or (b) a Pro Rata share of the
Rights allocation if such Holder elects to receive Rights,
-- General Unsecured Claims will receive at the Holders'
option either (a) $0.175 on the dollar in cash or (b) the
amount in cash it would have received as a member of the
Small Claims Class,
-- Small Claims under or reduced to $3,000 will be paid in
full in cash,
-- the DIP Facility Claims and Prepetition Credit Facility
Claims will be paid in full in cash, and
-- Claims and Interests of Pliant's existing equity holders
will be extinguished.
Treatment and recovery under the Apollo Plan:
Estimated
Allowed Estimated
Class Claim/Interest Treatment Amount Recovery
----- -------------- --------- ---------- ---------
N/A Admin Expense Unimpaired 18,800,000 100%
N/A DIP Facility Unimpaired 40,000,000 100%
N/A Priority Tax Unimpaired 3,900,000 100%
1 Priority Non-Tax Unimpaired N/A 100%
2 Other Secured Unimpaired 20,800,000 100%
3 Prepetition Credit
Facility Unimpaired 145,030,000 100%
4 First Lien Notes Impaired 393,840,000 89%
5 Second Lien Notes Impaired 262,400,000 17.5%
6 General Unsecured Impaired 11,300,000 17.5%
7 Senior Subordinated
Notes Impaired 26,500,000 0%
8 Small Claims Unimpaired 1,100,000 100%
9 Intercompany Unimpaired N/A N/A
10 Section 510(b) Impaired -- N/A
11 Pliant Preferred
Stock Interests Impaired N/A N/A
12 Pliant Outstanding
Common Stock
Interest Impaired N/A N/A
13 Subsidiary
Interests Unimpaired N/A N/A
Reorganization Value
The Plan Proponents have not prepared an independent valuation for
the Reorganized Debtors with the addition of the contributed Berry
Assets, synergies and Intercompany Services Agreement. However,
based upon the proposed contribution to the Reorganized Debtors
through the Rights Offering, the Proponents have determined that
the implied total enterprise value for the Reorganized Debtors
with the addition of the contributed Berry Assets is roughly
$612.7 million.
The implied total enterprise value reflects the sum of:
-- The implied total equity value of the Reorganized Debtors
of roughly $257.3 million, which is derived from the
contribution of $193.0 million in cash under the Plan in
exchange for 75% of the equity of the Reorganized Debtors
(subject to dilution in the event Reorganized Pliant
issues management compensatory stock options or other
compensatory awards denominated in shares of New Common
Stock); and
-- Net debt and preferred stock at emergence of roughly
$355.4 million, which is comprised of a revolving credit
facility balance of $74.5 million, $250.0 million of New
Senior Secured Notes, capital leases of $24.5 million, New
Preferred Stock of $11.4 million, and cash of $5.0
million. The revolving credit facility balance does not
reflect certain bankruptcy-related costs paid post-
emergence.
Exit Facility
Pursuant to a Commitment Letter dated as of June 24, 2009,
Barclays Capital has committed to provide a senior secured asset-
backed revolving credit facility as exit facility to Reorganized
Pliant. The Exit Facility will provide borrowing availability
equal to the lesser of $175 million or the borrowing base, which
is a function, among other things, of Reorganized Pliant's and its
guarantor subsidiaries' accounts receivables and inventory.
The borrowing base is, at any time of determination, an amount
(net of reserves) equal to the sum of: up to 85% of the value of
eligible accounts receivable plus the lesser of up to 85% of the
net orderly liquidation value of eligible inventory and up to 65%
of the cost of eligible inventory. The Exit Facility includes
borrowing capacity available for letters of credit and for
borrowings on same-day notice, referred to as swingline loans, and
matures on the third anniversary of the closing date.
Amounts outstanding under the Exit Facility will bear interest at
a rate equal to, at Reorganized Pliant's option, a base rate plus
3.50% per annum or an adjusted LIBOR rate plus 4.50% per annum.
Reorganized Pliant will also be required to pay a commitment fee
to the lenders under the Exit Facility in respect of the
unutilized commitments thereunder at a rate equal to 1.00% per
annum and a customary letter of credit fees and agency fees.
Reorganized Pliant's obligations under the Exit Facility will be
guaranteed by certain of Reorganized Pliant's subsidiaries and
will be secured by a first-priority security interest in
Reorganized Pliant's and its guarantor subsidiaries' accounts
receivable and other rights to payment (including with respect to
the Berry Assets), inventory (including with respect to the Berry
Assets), all documents, instruments and general intangibles
(including intellectual property) relating to accounts receivable
and inventory, deposit accounts, cash and cash equivalents
(including with respect to the Berry Assets), all of the equity
interests held by Reorganized Pliant and its guarantor
subsidiaries (provided that such pledge will not include the
equity interests of any foreign subsidiary other than a pledge of
65% of the equity interests of each first-tier foreign subsidiary
of Reorganized Pliant and each such guarantor subsidiary) and all
products and proceeds of the foregoing, and a second priority
security interest in substantially all of Reorganized Pliant's and
its guarantor subsidiaries' other assets, subject to certain
customary exceptions and carveouts.
The Exit Facility will contain a number of customary covenants and
is subject to customary closing conditions, including a
requirement that after giving effect to all borrowings incurred
under the Exit Facility on the closing date, there shall be at
least $35.0 million of remaining availability under the Exit
Facility.
A full-text copy of the Joint Plan proposed by Apollo is available
at no charge at http://ResearchArchives.com/t/s?43b9
A full-text copy of the Disclosure Statement is available at no
charge at http://ResearchArchives.com/t/s?43b8
Counsel to Apollo:
Wachtell, Lipton, Rosen & Katz
Philip Mindlin, Esq.
Douglas K. Mayer, Esq.
Andrew J. Nussbaum, Esq.
51 West 52nd Street
New York, NY 10019
Tel: (212) 403-1000
Fax: (212) 403-2000
-- and --
Morris, Nichols, Arsht & Tunnell LLP
Derek Abbott, Esq.
1201 North Market Street
P.O. Box 1347
Wilmington, DE 19899-1347
Tel: (302) 658-9200
Fax: (302) 658-3989
About Pliant
Headquartered in Schaumburg, Illinois, Pliant Corporation produces
polymer-based films and flexible packaging products for food,
beverage, personal care, medical, agricultural and industrial
applications. The Company has operations in Australia, New
Zealand, Germany, and Mexico.
Pliant and 10 of its affiliates filed for Chapter 11 protection on
January 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F.
Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor,
represented the Debtors in their restructuring efforts. The
Debtors tapped McMillan Binch Mendelsohn LLP, as Canadian counsel.
As of September 30, 2005, the Company had $604.3 million in total
assets and $1.19 billion in total debts. The Debtors emerged
from Chapter 11 on July 19, 2006.
Pliant Corp. and its affiliates again filed for Chapter 11 after
reaching terms of a pre-packaged restructuring plan. The
voluntary petitions were filed February 11, 2009 (Bank. D. Del.
Case Nos. 09-10443 through 09-10451). The Hon. Mary F. Walrath
presides over the cases. Jessica C.K. Boelter, Esq., at Sidley
Austin LLP, in Chicago, Illinois, and Edmon L. Morton, Esq., at
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware, provide bankruptcy counsel to the Debtors.
Epiq Bankruptcy Solutions LLC acts as claims and noticing agent.
The U.S. Trustee for Region 3 appointed five creditors to serve on
an official committee of unsecured creditors. The Creditors
Committee selected Lowenstein Sandler PC as its counsel. As of
September 30, 2008, the Debtors had $688.6 million in total assets
and $1.03 billion in total debts.
PNG VENTURES: Gets Temporary OK to Obtain Greenfield DIP Financing
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized,
on an interim basis, PNG Ventures, Inc., and its debtor-affiliates
to:
-- obtain $2,000,000 postpetition financing from Greenfield
Commercial Credit, LLC;
-- use cash collateral; and
-- grant adequate protection to secured lenders.
A final hearing on the DIP financing and cash collateral motion is
set for Oct. 8, 2009, at 2:00 p.m. E.T. before the Court.
Objections, if any, are due on Oct. 1, 2009, at 4:00 p.m. E.T.
As of Sept. 2, 2009, the Debtors owe Greenfield $816,573 pursuant
to the existing financing agreements. The loan is secured by
valid, perfected, enforceable and non-avoidable first priority
security interests and liens granted by ALT/Arizona Debtors.
The Debtors are also indebted to Fourth Third, LLC in the amount
$37,454,789, as of Aug. 21, 2009, pursuant to a senior secured
credit facility. The loan is secured by a first priority lien on
all of the Debtors' assets, except for the prepetition Greenfield
collateral on which it holds a second priority lien.
The Debtors owe $63,000 to BFI, an affiliate who was in direct and
indirect control of PNG. The loan is secured by all of the
Debtors' assets, subject to a subordination and intercreditor
agreement with Medley as to the senior secured credit facility.
The Debtors believed that BFI is an unsecured creditor.
The Debtors do not have sufficient available sources of working
capital to operate their businesses in the ordinary course of
business without the financing. The Debtors were unable to
procure financing in the form of unsecured credit.
Greenfield agreed to extend loans, certain loans, advances and
other financial accommodations.
Salient Terms of DIP Financing
Borrowers: Applied LNG Technologies USA, LLC and Arizona
LNG, LLC
DIP Lender: Greenfield Commercial Credit, LLC
Commitment: The DIP Facility will consist of advances of
under DIP funds on Debtors' accounts receivable
Facility constituting postpetition financing up to an
aggregate principal amount of $2 million,
inclusive of outstanding prepetition Greenfield
Obligations, as limited by the Budget, and
subject to the terms and conditions of the
Existing Financing Agreements as amended and
restated in the Ratification Agreement and the
Maximum Loan Amount of no greater than
$1 million, inclusive of prepetition Greenfield
Obligations, during the Interim Order period and
$2 million after entry of a Permanent Financing
Order.
Terms and March 1, 2010, on the occurrence of an event of
Final Maturity default or the automatic stay has been lifted or
Date: modified.
Interest Rate: Prime plus interest at an annual rate of LIBOR
plus 7%, with LIBOR subject to a floor of 2%.
Commitment The Lender shall be paid a DIP Facility Fee (as
Fee: of $20,000.
Carve-Out: The liens and superpriority claims granted to
Greenfield pursuant to the Ratification Agreement
and Interim Order will not be subject and
subordinate to a carve out.
Events of (i) Debtors' failure to perform, in any respect,
Default: any of the terms, conditions or covenants or
their obligations under the Interim Order; or
(ii) An Event of Default under the Ratification
Agreement which occurs after the date of the
Interim Order.
The Debtors are also authorized to use cash collateral of
Medley and Greenfield, each of whom has consented to the Debtors'
use of cash collateral.
About PNG Ventures, Inc.
Through its Applied LNG Technologies and other subsidiaries, the
Company engages in the production, distribution, and sale of
liquefied natural gas to customers consisting of public utilities,
industrial end-users and other fleet customers within the
transportation, manufacturing, distribution, and municipal
markets, primarily in California, Arizona, and Nevada. The Company
also offers turnkey fuel solutions, including delivery, equipment
storage, fuel dispensing equipment, and fuel loading facilities.
PNG Ventures and its affiliates filed for Chapter 11 on
September 10, 2009 (Bankr. D. Del. Case No. 09-13162). Attorneys
at Fox Rothschild LLP represent the Debtors in their restructuring
effort. Logan & Co. serves as claims and notice agent.
As of June 30, 2009, PNG had total assets of $41,416,000 against
total debts of $47,519,000.
PONY EXPRESS RV: Files Chapter 11 in Salt Lake Hometown
-------------------------------------------------------
Pony Express RV Resort LLC, a 15-acre RV park near Salt Lake City,
filed for Chapter 11 protection in its hometown. The petition
says assets are less than $10 million with debt exceeding $10
million.
Pony Express RV Resort LLC is a 15-acre RV park near
Salt Lake City. It filed for Chapter 11 on Sept. 24 (Bankr. D.
Utah Case No. 09-30365). Chad C. Shattuck, Esq., at Zoll &
Tycksen, and Steven C. Tycksen, Esq., at Tycksen & Shattuck, LC,
represents the Debtor in its restructuring effort.
QUESTEX MEDIA: Moody's Withdraws 'Caa1' Corporate Family Rating
---------------------------------------------------------------
Moody's Investors Service has withdrawn all the credit ratings of
Questex Media Group, Inc., because Moody's believes it lacks
adequate information to maintain a rating.
These ratings were withdrawn:
* Corporate Family Rating, Caa1
* Probability of Default Rating, Caa1
* $30 million first lien revolving credit facility due 2012, B2
(LGD3 / 30%)
* $148 million first lien term loan due 2014, B2 (LGD3 / 30%)
* $55 million second lien term loan due 2014, Caa2 (LGD5 / 78%)
The previous rating action occurred on December 12, 2008, when
Moody's downgraded the Corporate Family Rating to Caa1 from B3 and
changed the outlook to negative. Questex'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 Questex's core industry and
Questex's ratings are believed to be comparable to those of other
issuers of similar credit risk.
Questex Media Group, Inc., is a diversified business-to-business
integrated media and information provider headquartered in Newton,
Massachusetts. Questex serves multiple industries including
technology, telecommunications, beauty, spa, travel, hospitality,
leisure, abilities, home entertainment, landscape design, building
services and natural resources.
RAHAXI INC: Revenues May Be Insufficient to Fund Capital Needs
--------------------------------------------------------------
Management of Rahaxi Inc. plans to take steps it believes will be
sufficient to provide the Company with the ability to continue as
a going concern. Management intends to raise financing through
the sale of its stock in private placements to individual
investors.
Management may also raise funds in the public markets.
The Company warned in a filing with the U.S. Securities and
Exchange Commission in August its anticipated revenues from
operations will be insufficient to satisfy its ongoing capital
requirements for the next 12 months. Rahaxi's fiscal year ends
June 30. It has not yet filed its annual report for the fiscal
year ended June 30, 2009.
If its financial resources are insufficient, the Company will
require additional financing to execute its operating plan and
continue as a going concern. The Company cannot predict whether
the additional financing will be in the form of equity or debt, or
be in another form. The Company may not be able to obtain the
necessary additional capital on a timely basis, on acceptable
terms, or at all. In any of these events, the Company may be
unable to implement its current plans for expansion, repay its
debt obligations as they become due, or respond to competitive
pressures, any of which circumstances would have a material
adverse effect on its business, prospects, financial condition and
results of operations.
Management believes that with this financing, the Company will be
able to generate additional revenues that will allow the Company
to continue as a going concern. This will be accomplished by
hiring additional personnel and focusing sales and marketing
efforts on the distribution of product through key marketing
channels currently being developed by the Company. The Company
may also pursue the acquisition of certain strategic industry
partners where appropriate, and may also seek to raise funds
through debt and other financings.
In August, Rahaxi reported to the U.S. Securities and Exchange
Commission a net loss of $3,675,124 and $12,226,686 for the three
and nine months ended March 31, 2009, and $23,150,901 for the year
ended June 30, 2008, and had an accumulated deficit of
$109,796,498 as of March 31, 2009.
As of March 31, 2009, the Company had $3,014,871 in total assets
against $5,165,092 in total liabilities, all current, and $539,013
in non-controlling interest; resulting in $2,689,234 in
stockholders' deficit.
Last week, Rahaxi filed an amendment to its Articles of
Incorporation with the Secretary of State of Nevada to increase
the Company's authorized Common Stock to 1,000,000,000 shares and
increase the Company's authorized Preferred Stock to 10,000,000
shares.
The amendment was approved by holders of a majority of the
outstanding shares of the Company through a Proxy Statement --
written consent solicitation -- that was previously mailed to
stockholders on August 10, 2009, and filed with the Securities and
Exchange Commission.
The amendment to the Company's Articles of Incorporation was filed
with the Secretary of State of Nevada on September 21, 2009, and
became effective upon filing.
About Rahaxi
Rahaxi, Inc., formerly FreeStar Technology Corporation, provides
payment services and processing. Its principal offices are in
Dublin, Ireland; the Company also has offices in Helsinki,
Finland; Stockholm, Sweden; Geneva, Switzerland; and Santo
Domingo, the Dominican Republic. On November 21, 2008, it filed a
Certificate of Amendment to its Articles of Incorporation with the
Nevada Secretary of State changing its name to "Rahaxi, Inc." and
implementing a one-for-three reverse stock split of its common
stock.
RADIENT PHARMACEUTICALS: Registers 2.7 Million Shares for Resale
----------------------------------------------------------------
Radient Pharmaceuticals Corporation, fka AMDL Inc., filed with the
Securities and Exchange Commission a prospectus relating to shares
of common stock that may be offered for sale for the account of
St. George Investments, LLC, as selling stockholder. Radient said
the selling stockholder may offer and sell from time to time up to
2,767,579 shares of common stock, which will be issued to the
selling stockholder pursuant to the St. George Agreements.
The selling stockholder may sell all or any portion of their
shares of common stock in one or more transactions on the NYSE
Amex, in private, negotiated transactions or a combination of such
methods. Each selling stockholder will determine the prices at
which it sells its shares. Although Radient will incur expenses
in connection with the registration of the common stock, Radient
will not receive any of the proceeds from the sale of the shares
of common stock by the selling stockholder. However, Radient will
receive gross proceeds of up to approximately $325,000 from the
exercise of outstanding warrants by the selling stockholder, if
and when they are exercised.
On September 25, 2009, there were 16,632,074 shares of Radient
common stock outstanding. Radient's common stock is listed on the
NYSE Amex and traded under the symbol "RPC." On September 25,
2009, the closing price of Radient's common stock on the NYSE Amex
was $0.62 per share.
Radient may amend or supplement the prospectus from time to time
by filing amendments or supplements as required.
A full-text copy of the Company's prospectus is available at no
charge at http://ResearchArchives.com/t/s?45d8
As reported by the Troubled Company Reporter, on September 15,
2009, AMDL entered into a Note and Warrant Purchase Agreement with
St. George Investments, LLC. AMDL issued and sold to the Investor
(1) a 12% promissory note in the principal amount of $555,555.56,
which is convertible into the Company's common stock at 80% of the
five day volume weighted average of the closing price of the
common stock, subject to a floor price of no less than $0.64 and
on the terms and the conditions specified in the Note; and (2) a
warrant to purchase 500,000 shares of the Company's common stock,
$0.001 par value per share, at a exercise price of $0.65 per
share, subject to certain anti-dilution adjustments.
AMDL also entered into a Registration Rights Agreement with the
Investor which requires the Company to prepare and file a
registration statement for the sale of the common stock issuable
to the Investor under the Note and the Warrant before
September 25, 2009, and to use its best efforts to cause the
effectiveness of the registration statement which is no later than
the earlier of (i) five days after oral or written notice by the
SEC that it may declared effective, or (ii) November 15, 2009.
In connection with the financing, AMDL paid a $25,000 fee to
Galileo Asset Management, S.A.
Going Concern Qualification
On April 15, 2009, AMDL filed with the SEC an Annual Report on
Form 10-K in which included an audit opinion with a "going
concern" explanatory paragraph which expresses doubt, based upon
current financial resources, as to whether AMDL can meet its
continuing obligations without access to additional working
capital. The Company intends to raise additional capital and
pursue expense reductions to ensure its ongoing financial
viability. This disclosure is in compliance with the NYSE
Alternext US Company Guide Rule 610(b) requiring a public
announcement of the receipt of an audit opinion that contains a
going concern qualification and does not reflect any change or
amendment to the consolidated financial statements as filed.
Further information regarding the going concern qualification is
contained in AMDL's Annual Report on Form 10-K for the year ended
December 31, 2008.
About Radient Pharmaceuticals
Headquartered in Tustin, CA with operations in China, Radient
Pharmaceuticals, fka AMDL Inc., along with its subsidiary, JPI, is
a pharmaceutical company devoted to the research, development,
manufacturing, and marketing of diagnostic, pharmaceutical,
nutritional supplement, and cosmetic products. The Company
employs over 510 people in the U.S. and China.
The Company had assets of $35,240,702 against debts of $7,727,742
as of June 30, 2009.
RADIENT PHARMACEUTICALS: May Issue 5 Mil. Common Shares
-------------------------------------------------------
Radient Pharmaceuticals Corporation filed with the Securities and
Exchange Commission a preliminary prospectus in connection with
its plan to issue shares of common stock. From time to time,
Radient may offer up to 5,000,000 shares of common stock, either
in one or more offerings in amounts, at prices and on the terms
that we will determine at the time of offering.
Each time Radient sells securities, it will provide specific terms
of the securities offered in a supplement to this prospectus. The
prospectus supplement may also add, update or change information
contained in this prospectus. Radient will specify in any
accompanying prospectus supplement the terms of any offering.
Radient will sell these securities directly to stockholders or to
other purchasers, through agents, dealers or underwriters as
designated from time to time, or through a combination of these
methods. If any agents, dealers or underwriters are involved in
the sale of any of these securities, the applicable prospectus
supplement will provide the names of such agents, dealers or
underwriters and any applicable fees, commissions or discounts.
Radient will use the net proceeds received from the sale of the
shares for general corporate purposes.
Going Concern Qualification
On April 15, 2009, AMDL filed with the SEC an Annual Report on
Form 10-K in which included an audit opinion with a "going
concern" explanatory paragraph which expresses doubt, based upon
current financial resources, as to whether AMDL can meet its
continuing obligations without access to additional working
capital. The Company intends to raise additional capital and
pursue expense reductions to ensure its ongoing financial
viability. This disclosure is in compliance with the NYSE
Alternext US Company Guide Rule 610(b) requiring a public
announcement of the receipt of an audit opinion that contains a
going concern qualification and does not reflect any change or
amendment to the consolidated financial statements as filed.
Further information regarding the going concern qualification is
contained in AMDL's Annual Report on Form 10-K for the year ended
December 31, 2008.
About Radient Pharmaceuticals
Headquartered in Tustin, CA with operations in China, Radient
Pharmaceuticals, fka AMDL Inc., along with its subsidiary, JPI, is
a pharmaceutical company devoted to the research, development,
manufacturing, and marketing of diagnostic, pharmaceutical,
nutritional supplement, and cosmetic products. The Company
employs over 510 people in the U.S. and China.
The Company had assets of $35,240,702 against debts of $7,727,742
as of June 30, 2009.
RAFTER SEVEN: 10th Cir. BAP Says No Stay Damages for Partnership
----------------------------------------------------------------
WestLaw reports that the Tenth Circuit Bankruptcy Appellate Panel
has held that a bankrupt limited partnership was not an
"individual," of a kind entitled to seek damages for willful
violations of the automatic stay. Disagreeing with contrary
decisions out of the Third and Fourth Circuit, the BAP held that
the term "individual," as used in a bankruptcy statute providing
for an award of damages to any individual injured by a willful
violation of the automatic stay, includes only natural persons and
not business entities. In re Rafter Seven Ranches L.P., ---B.R.--
--, 2009 WL 2965003 (10th Cir. BAP (Kan.)).
UAL CORP: Board Grants Garvey 2,676.66 Units Under 2006 Plan
------------------------------------------------------------
The Board of Directors of UAL Corporation appointed Jane Garvey to
serve on the Board, effective September 23, 2009.
On September 25, 2009, the Board approved a grant of 2,676.66
share units to Ms. Garvey pursuant to the UAL Corporation 2006
Director Equity Incentive Plan. Each share unit represents the
economic equivalent of one share of UAL common stock. The share
units are fully vested and will be settled in cash in January of
the year following the year in which Ms. Garvey ceases to be a
director.
About UAL Corporation
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) --
http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest air
carrier. The airline flies to Brazil, Korea and Germany.
The Company filed for Chapter 11 protection on December 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven
R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in
their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. Judge Eugene
R. Wedoff confirmed the Debtors' Second Amended Plan on
January 20, 2006. The company emerged from bankruptcy protection
on February 1, 2006.
(United Airlines Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported by the TCR on June 12, 2009, Fitch Ratings has
downgraded the issuer debt rating to 'CCC' from 'B-' for UAL Corp.
and its principal operating subsidiary United Airlines, Inc.
The downgrade reflects Fitch's view that the airline's credit
profile is likely to weaken further, as extreme pressure in the
revenue environment continues to undermine the positive cash flow
impact of lower jet fuel prices in 2009.
SANDAB COMMUNICATIONS: Cape Cod FM Radio Stations File Chapter 11
-----------------------------------------------------------------
Sandab Communications LP II filed a Chapter 11 petition in Boston
along with affiliates that operate four FM radio stations, a Web
site and a classical music network on Cape Cod, according to Bill
Rochelle at Bloomberg News.
An affiliate is providing $500,000 in financing for the
reorganization effort. The secured lender is Manufacturers &
Traders Trust Co.
Sandab and its affiliates filed for Chapter 11 on Sept. 23 (Bankr.
D. Mass. Case No. 09-19044). The petition says debt exceeds
$10 million.
SANTA FE HOLDING: Ada Branch Not Closing
----------------------------------------
The Ada branch of the Santa Fe Cattle Company steak house,
restaurant, and bar wouldn't be closing down, Randy Mitchell at
Ada Evening News reports, citing a spokesperson for the Ada
branch. Santa Fe Holding Company Inc.'s bankruptcy filing led to
a rumor that the branch was closing, Ada Evening News relates.
Brentwood, Tennessee-based Santa Fe Holding Company, Inc., and its
affiliates filed for Chapter 11 on July 15, 2009 (Bankr. M.D.
Tenn. Case No. 09-07856). Tristan Manthey, Esq., and William H.
Patrick III, Esq., at Heller Draper Hayden Patrick & Horn LLC,
represent the Debtors in their restructuring effort. In its
petition Santa Fe listed assets and debts both ranging from
$10,000,001 to $50,000,000.
SCHWING AMERICAN: Files Chapter 11 in St. Paul; Has $10MM DIP Loan
------------------------------------------------------------------
Schwing American Inc. filed a Chapter 11 petition in its hometown
of St. Paul, Minnesota, listing assets of $131 million against
debt totaling $90.9 million.
The Company's German parent, Schwing GmbH, is providing debtor-in-
possession financing of $10.3 million.
According to Bill Rochelle at Bloomberg, Schwing said the
recession in construction caused sales to plummet from
$276 million in 2007 to $183 million in 2008. This year, Schwing
expects sales to total $64 million.
Schwing American is a manufacturer of concrete-pumping equipment.
The Company filed for Chapter 11 on Sept. 28 (Bankr. D. Minn. Case
No. 09-36760).
SCHWING AMERICAN: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Schwing American, Inc.
5900 Centerville Road
St. Paul, MN 55127
Case No.: 09-36760
Type of Business: The Debtor operates a construction business.
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
District of Minnesota (St Paul)
Judge: Chief Judge Nancy C. Dreher
Debtor's Counsel: Michael L. Meyer, Esq.
Ravich Meyer Kirkman McGrath Nauman
4545 IDS Center, 80 South Eighth St.
Mineapolis, MN 55402
Tel: (612) 317-4745
Fax: (612) 332-8302
Email: mlmeyer@ravichmeyer.com
Estimated Assets: $100,000,001 to $500,000,000
Estimated Debts: $50,000,001 to $100,000,000
The petition was signed by Brian Mogensen, the Company's chief
financial officer.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Con Forms Division Trade Debt $409,909
777 Maritime Drive
PO Box 308
Port Washington,
WI 53074-0308
SNR Walzlager GMBH Trade Debt $377,255
PO Box 330410
Dusseldorf, Germany 40437
Ryerson Trade Debt $298,102
23387 Network Place
Chicago, IL 60673-1244
Dynamic Engineering Trade Debt $205,713
Kolstad Company Trade Debt $191,872
Engineered Chassis Trade Debt $188,037
Systems LLC
Briggs & Morgan Professional $179,200
Services
Neufab Specialty Fab Trade Debt $140,902
HDI NI Dortmund Insurance Premium $123,480
Deutz Corporation Trade Debt $122,688
Hudson Machine & Tool Trade Debt $120,750
Saga Advertising Trade Debt $116,546
Praetorian Insurance Company Insurance Settlement $103,102
Twin Cities Mack & Volvo Trade Debt $98,631
Freeman Trade Debt $95,044
Flatiron Capital Goods and Services $92,422
Hecker Werke GMBH & Co KG Trade Debt $85,831
Sentry Insurance Workers Comp Claim $63,434
Parker Hannifin Corp Trade Debt $63,061
Bosch Rexroth Elchingen Trade Debt $62,454
SCIENTIFIC GAMES: Moody's May Take Action on 'Ba2' Rating
---------------------------------------------------------
Moody's Investors Service stated that ratings for Scientific Games
Corporation (rated Ba2/stable) and Lottomatica S.p.A. (rated
Baa3/stable) could by impacted should the companies increase
leverage materially as a result of debt incurred in connection
with a bid to win renewal for the Italian lottery. Moody's said
the ratings of Lottomatica have some room to absorb near term
deterioration in credit metrics. SGC's ratings could face
downward pressure since credit metrics are weak for the rating.
SGC and Lottomatica own 20% and 63% respectively of a consortium,
Consorzio Lotterie Nazionali. CLN is the sole operator of the
Italian Gratta e Vinci instant lottery pursuant to a concession
expiring in 2010 with the Italian Monopoli di Stato. As the
existing concession is expiring, the Monopoli di Stato's recently
issued a request for proposal and intends to award new multi-year
concessions by mid-November 2009.
The last rating action on Lottomatica was on March 26, 2007 when
Moody's affirmed the company's Baa3 senior unsecured ratings.
The last rating action on SGC was on May 18, 2009 when Moody's
assigned a Ba3 rating to senior subordinated notes issued by
Scientific Games International, Inc., a wholly owned subsidiary of
SGC.
Lottomatica is the market leader in the Italian gaming industry
and is one of the largest lottery operators in the world based on
total wagers. Lottomatica Group is majority owned (60%) by the De
Agostini Group, a publishing, media, and financial services
company.
Scientific Games Corporation is a provider of services, systems,
and products to lottery industry, the wide area gaming inudstry
and the pari-mutuel wagering industry. The company operates in
three business segments: Printed Products, Lottery Systems, and
Diversified Gaming. The company generates about $1.1 billion of
annual revenues.
SEMGROUP LP: Gets Court Nod for BDO Seidman as Auditor
------------------------------------------------------
SemGroup LP and its affiliates obtained the Bankruptcy Court's
consent to employ BDO Seidman, LLC, as their consolidated
financial statements auditor, nunc pro tunc to May 29, 2009.
As the Debtors' auditor, BDO Seidman has agreed to perform these
services:
(a) auditing the consolidated balance sheets of the Debtors as
of December 31, 2007 and the date of the Debtors'
emergence from bankruptcy and the related consolidated
statements of operations and comprehensive income, changes
in partners' capital, and cash flows for those time
periods, in accordance with the standards of the Public
Company Accounting Oversight Board in the United States of
America;
(b) performing reviews of unaudited condensed quarterly
financial statements to be included in Form 10-Qs filed
with the United States Securities and Exchange Commission
and to be submitted to stockholders, for the quarter
ending September 30, 2009;
(c) auditing the consolidated financial statements for
inclusion in the Annual Report for submission to the SEC
and reading all other information to be included in the
Annual Report; and
(d) certain tax consulting services and other related services
as the Debtors may from time to time request from BDO
Seidman.
The Debtors will pay BDO Seidman's professionals according to
their customary hourly rates:
Title Rate per Hour
----- -------------
Partner $400 to $650
Senior Manager $300 to $375
Experienced Manager $225 to $300
New Manager $200 to $225
Experienced Senior $170 to $225
New Senior $150 to $170
Experienced Staff $140
New Staff $125 to $130
Intern $100 to $120
The Debtors will reimburse BDO Seidman for expenses incurred.
BDO Seidman will seek payment of fees and reimbursement of
expenses pursuant to Sections 330 and 331 of the Bankruptcy Code.
Wayne L. Williams, Jr., a partner at BDO Seidman, disclosed that
his firm and Bank of America, N.A., are involved in litigation
unrelated to the Debtors' Chapter 11 cases. Notwithstanding that
fact, he maintains that BDO Seidman is a "disinterested person"
as the term is defined under Section 101(14) of the Bankruptcy
Code. He adds that BDO Seidman does not hold an interest
materially adverse to the Debtors, their creditors, and equity
holders for the matters for which BDO Seidman is to be employed.
About SemGroup L.P.
SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream
service company that provides diversified services for end users
and consumers of crude oil, natural gas, natural gas liquids and
refined products. Services include purchasing, selling,
processing, transporting, terminalling and storing energy.
SemGroup serves customers in the United States, Canada, Mexico and
Wales.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. is the Debtors' claims agent. The Debtors' financial
advisors are The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
November 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts. In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by SemGroup L.P. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-700)
SEMGROUP LP: Gets Nod for Barclays to Arrange WhiteCliffs Loans
---------------------------------------------------------------
Semcrude Pipeline, LLC, its parent, SemGroup, L.P., and certain
direct and indirect subsidiaries of SemGroup, obtained the Court's
permission to enter into an engagement letter between SemCrude
Pipeline and Barclays Capital, the investment banking division of
Barclays Bank PLC, and to perform under the Engagement Letter,
including payment of related costs.
SemCrude owns, indirectly through SemCrude Pipeline, a 99.17%
interest in White Cliffs Pipeline, L.L.C. As of the Petition
Date, SemCrude Pipeline and General Electric Credit Corporation,
as administrative agent for certain lenders, entered into a
Credit Agreement, comprising of a $60 million revolving credit
facility and a $60 million term loan facility. The Debtors'
Third Amended Joint Plan of Reorganization and accompanying
Disclosure Statement provide that to satisfy the holders of
claims relating the White Cliffs Credit Agreement, the Debtors
propose to refinance the White Cliffs Credit Agreement by
entering into a $125 million secured facility between SemCrude
Pipeline and the existing lenders of the White Cliffs Credit
Agreement. Thus, the Debtors ran a competitive process to gauge
the interest of financial institutions with the wherewithal to
provide or arrange the White Cliffs Financing. Ultimately, the
Debtors determined that the proposal submitted by Barclays
Capital provided the most favorable terms for the Debtors.
Subsequently, the Debtors and Barclays entered into the
Engagement Letter.
Pursuant to the Engagement Letter, Barclays Capital agrees to act
as the sole lead arranger, sole bookrunner and sole syndication
to SemCrude Pipeline in connection with the White Cliffs
Financing. In those capacities, Barclays Capital may appoint co-
agents and form a syndicate of lenders in line with the White
Cliffs Financing. The Engagement Letter further provides that,
in consideration, for Barclays Capital's execution of the
Engagement Letter, SemCrude Pipeline will pay Barclays Capital:
-- a market rate financing fee based upon the aggregate
principal amount of the White Cliffs Financing on the
closing date; and
-- reasonable and documented out-of-pocket costs.
Barclays Capital further ask that a $150,000 expense deposit
towards the Out-of-Pocket Costs be paid by the Debtors upon
approval by the Court.
Moreover, SemCrude Pipeline will indemnify Barclays Capital,
Barclays Bank and their employees from and against all claims
that may be brought against SemCrude Pipeline relating to the
Engagement Letter and, upon demand, will pay each indemnified
person for legal fees and expenses.
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, notes the if the Court confirms the Plan,
the Debtors must secure the White Cliffs Financing on or before
the effective date of the Plan to satisfy the White Cliffs
Claims. To induce Barclays Capital to continue to devote its
time and resources and secure the White Cliffs Financing prior to
the Effective Date, the Debtors have agreed to pay the Out-of-
Pocket Costs to Barclays, he explains. More importantly, absent
the approval of the Engagement Letter, it is unclear whether the
Debtors will be able to secure the White Cliffs Financing prior
to the Effective Date, he maintains.
In a related request, the Debtors sought and obtained the Court's
authority to file under seal the Engagement Letter, citing that
public disclosure of the Engagement Letter, which contains
commercially sensitive information regarding the Financing Fee,
could harm Barclays Capital's and Debtors' ability to finalize the
White Cliffs Financing.
About SemGroup L.P.
SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream
service company that provides diversified services for end users
and consumers of crude oil, natural gas, natural gas liquids and
refined products. Services include purchasing, selling,
processing, transporting, terminalling and storing energy.
SemGroup serves customers in the United States, Canada, Mexico and
Wales.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. is the Debtors' claims agent. The Debtors' financial
advisors are The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
November 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts. In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by SemGroup L.P. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-700)
SEMGROUP LP: U.S. Court OKs Cross-Border Protocol
-------------------------------------------------
Judge Linnehan Shannon approved the cross-border protocol
governing the reorganization proceedings of SemGroup LP under the
U.S. Bankruptcy Code and the insolvency proceedings under the
Canadian Companies' Creditors Arrangement Act.
SemCanada Crude Company, SemCams ULC, SemCanada Energy Company,
A.E. Sharp Ltd., CEG Energy Options, Inc., 3191278 Nova Scotia
Company and 1380331 Alberta ULC previously asked the Honorable
Madame Justice Romaine in the Court of Queen's Bench of Alberta,
in the Judicial District of Calgary, Canada, to approve and
implement a cross-border protocol. Madame Justice Romaine entered
an order approving the Cross-Border Protocol on May 22, 2009,
citing that the Cross-Border Protocol will become effective upon
its approval by the United States Bankruptcy Court for the
District of Delaware.
The salient terms of the Cross-Border Protocol are:
* The Bankruptcy Court and the Canadian Court may communicate
with one another with respect to any procedural matter
relating to the CCAA Proceedings and the Chapter 11 Cases,
including jurisdictional matters;
* The Bankruptcy Court and the Canadian Court may coordinate
activities in the CCAA Proceedings and the Chapter 11 cases
in that, if appropriate, the subject matter of any
particular action, suit, request, application or other
proceeding is determined in a single court;
* The Bankruptcy Court and the Canadian Court may conduct
joint hearings with respect to any cross-border matter or
the interpretation or implementation of the Cross-Border
Protocol where both the Bankruptcy Court and the Canadian
Court consider a joint hearing to be necessary. Those joint
hearings are subject to procedural guidelines as set forth
in the Cross-Border Protocol.
* Any estate representatives, including trustees or examiners
appointed in the Debtors' Chapter 11 Cases will be subject
to the sole and exclusive jurisdiction of the Court.
Similarly, any estate representatives, including the
monitor, appointed in the Canadian Proceedings will be
subject to the sole and exclusive jurisdiction of the
Canadian Court.
* The Chapter 11 Debtors, their creditors and other parties-
in-interest in their Chapter 11 cases will have the right to
appear and be heard in the Canadian Proceedings. The
Canadian Court will have jurisdiction over the Debtors and
their representatives with respect to the matters they will
appear before the Canadian Court. Moreover, the Bankruptcy
Court will have jurisdiction over the Canadian Debtors with
respect to matters they will appear before the Bankruptcy
Court.
* Notice of any motion, application, or other pleading filed
in the Chapter 11 Cases or the Canadian Proceedings relating
to matters addressed by the Cross-Border Protocol will be
provided to certain parties identified in the Cross-Border
Protocol.
* The Bankruptcy Court will recognize the validity of stay
proceedings before the Canadian Court. Similarly, the
Canadian Court will recognize the validity of stay
proceedings before the Bankruptcy Court.
* Disputes arising from the application of the Cross-Border
Protocol will be resolved pursuant to the Cross-Border
Protocol.
A full-text copy of the Cross-Border Protocol is available for
free at:
http://bankrupt.com/misc/semgroup_cross-borderprotocol.pdf
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, notes that a cross-border protocol is
needed to ensure that (i) the Canadian Proceedings and the
Debtors' Chapter 11 cases are coordinated to avoid inconsistent
or conflicting activities; (ii) all parties are provided
sufficient notice of key issues in both the Canadian Proceedings
and the Debtors' Chapter 11 cases; (iii) the substantive rights
of all parties are protected; and the jurisdictional integrity of
each of the Bankruptcy Court and the Canadian Court is preserved
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)
SHENANDOAH LP: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Shenandoah, LP
405 Atlantic Road, Suite B
Cape Canaveral, FL 32920
Bankruptcy Case No.: 09-72443
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
Western District of Virginia (Roanoke)
Judge: William F. Stone, Jr.
Debtor's Counsel: Alton B. Prillaman, Esq.
Osterhoudt, Prillaman, Natt, Helscher,
Yost, Maxwell & Ferguson, PLC
3140 Chaparral Dr., Suite 200-C
Roanoke, VA 24018
Tel: (540) 725-8188
Email: aprillaman@opnlaw.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/wvb09-72443.pdf
The petition was signed by James Kincaid, managing partner of the
Company.
SIRIUS XM: At Risk of Bankruptcy, Says Audit Integrity
------------------------------------------------------
Radio Business Report says that independent research firm Audit
Integrity has included Sirius XM Radio Inc. in its list of 20
public companies with a high risk of filing for bankruptcy in the
coming 12 months.
According to RBR, Audit Integrity said that Sirius XM has a 9.04%
possibility of going bankrupt.
RBR says that the list was based on a mathematical model which
analyzed thousands of publicly traded companies for risk factors,
including liquidity, leverage, profitability, how the market
values the company and whether there appears to be any risk of
fraud in the financial data disclosed by the company.
Based in New York, SIRIUS XM Radio Inc. broadcasts in the United
States music, sports, news, talk, entertainment, traffic and
weather channels for a subscription fee through proprietary
satellite radio systems. Subscribers can also receive certain
music and other channels over the Internet. The Company's
satellite radios are primarily distributed through automakers,
retailers and the Company's Web sites. The Company has
agreements with every major automaker to offer SIRIUS or XM
satellite radios as factory or dealer-installed equipment in their
vehicles. SIRIUS and XM radios are also offered to customers of
rental car companies.
SOPHOI INC: Files for Chapter 11 Bankruptcy Protection
------------------------------------------------------
Sophoi, Inc., has filed for Chapter 11 bankruptcy protection in
the U.S. Bankruptcy Court for the Central District of California.
socalTECH.com relates that Sophoi had been backed by $17.5 million
in funding from Oracle, which invested in the Company in May 2007.
Sophoi Inc. is based in Los Angeles, California.
SOUTH LOUISIANA: Gets Approval of $75,000 Interim Financing
-----------------------------------------------------------
South Louisiana Ethanol LLC has received interim approval from the
Bankruptcy Court to borrow $75,000 from KFS Investors LLC, an
existing lender, Bill Rochelle at Bloomberg News reported.
South Louisiana Ethanol LLC is the owner of a non-operating
ethanol plant in Belle Chasse, Louisiana. South Louisiana
purchased the non-operating plant in 2006 with plans for
rebuilding. When financing fell through, it shut down the
construction project in September 2007.
The Company filed for Chapter 11 on August 25, 2009 (Benk. E.D.
La. Case No. 09-12676). Emile L. Turner Jr., Esq., represents the
Debtor in its restructuring effort. In its petition, the Debtor
listed 10,000,001 to $50,000,000 in assets and $50,000,001 to
$100,000,000 in debts.
SOUTHEAST TELEPHONE: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: SouthEast Telephone, Inc.
P.O. Box 1001
Pikeville, KY 41501
Case No.: 09-70731
Type of Business: The Debtor operates a telecommunication
business.
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
Eastern District of Kentucky (Pikeville)
Debtor's Counsel: Jamie L. Harris, Esq.
200 North Upper Street
Lexington, KY 40507
Tel: (859) 231-5800
Email: jharris@wisedel.com
Laura Day DelCotto, Esq.
Wise DelCotto PLLC
200 North Upper St
Lexington, KY 40507
Tel: (859) 231-5800
Fax: (859) 281-1179
Email: delcottobk@wisedel.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
According to the schedules, the Company has assets of at least
$15,573,655, and total debts of $31,423,707.
The petition was signed by Carla Reichelderfer, the company's
chief operating officer and chief financial officer.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
AT&T Trade Debt/ $24,073,155
600 North Pointe Parkway alleged damages
Alpharetta, GA 30005
Lightyear Network Solutions Trade Debt $347,577
PO Box 740050
Cincinnati, OH 45274-0050
ANPI Trade Debt $171,081
dba Anderson Auto Parts
Hogan & Hartson LLP legal fees $136,803
Windstream Communications Trade Debt $120,856
Inc.
c/o Bank of America
Attn: CABS
Windstream Ky East, Inc. Trade Debt $100,837
Budget/Bluebird Trade Debt $91,738
National Farmers Union Trade Debt $69,176
Corp. Accts Div
Straight Line Cable Trade Debt $66,000
Qwest Trade Debt $53,204
Kentucky Employers Mutual Ins. Insurance $43,841
Smart Telecom Concepts, LLC Trade Debt $19,000
Rogers Self-Serve Pikeville Trade Debt $18,245
Xelex Trade Debt $18,000
NEC Unified Solutions, Inc. Trade Debt $18,033
TW Telecom Trade Debt $15,911
JBS Communications LLC Trade Debt $15,900
Kellye Drye & Warren LLP Legal Fees $14,646
Wispnet LLC Trade Debt $11,768
Acorn Telephone Trade Debt $11,338
STAMFORD INDUSTRIAL: Case Summary & 19 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Stamford Industrial Group, Inc.
dba Net Perceptions, Inc.
One LandmarkSquare, 22nd Floor
Stamford, CT 06901
Bankruptcy Case No.: 09-43669
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
Northern District of Ohio (Youngstown)
Debtor's Counsel: James Michael Lawniczak, Esq.
1400 KeyBank Center
800 Superior Ave.
Cleveland, OH 44114
Tel: (216) 622-8200
Email: jlawniczak@calfee.com
Estimated Assets: $50,001 to $100,000
Estimated Debts: $10,000,001 to $50,000,000
A list of the Company's 19 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/ohnb09-43669.pdf
The petition was signed by Jonathan LaBarre, chief financial
officer of the Company.
STANFORD INT'L: SFG Receiver Stops Owner's Bid to Access Funds
--------------------------------------------------------------
Stanford Financial Group court-appointed receiver, Ralph Janvey,
told U.S. District Judge David Godbey that Robert Allen Stanford,
the financier accused of orchestrating a multi-billion scheme,
tried to access insurance funds to pay his lawyers at a hearing in
a London Chancery court, Laurel Brubaker Calkins at Bloomberg News
reports. The report relates Mr. Janvey said Mr. Stanford is
trying "a blatant attempt to end run this court" by asking the
U.K. court to order the insurer to pay over the receiver's
objections.
According to the report, Judge David Godbey ordered Mr. Stanford
to withdraw his petition from the London court. "It appears that
Mr. Stanford is purporting to seek relief before another tribunal
relating to the policies," the report quoted Judge Godbey as
saying. "Such actions by Stanford both violate the terms of this
court's prior orders, as well as threaten to interfere with this
court's jurisdiction over the policies," Judge Godbey added.
Bloomberg News notes that Mr. Janvey has been fighting Mr.
Stanford's efforts to unlock frozen assets or access his Lloyd's
of London liability insurance to hire lawyers to defend him
against civil and criminal cases.
"The court's order is entirely appropriate," Mr. Janvey said in a
statement issued by his spokeswoman, Kristie Blumenschein, the
report points out. "It is very unfortunate that Mr. Stanford and
his attorneys continue to engage in conduct which needlessly
increases the costs of litigation to the receivership," Mr. Janvey
added.
About Stanford International Bank
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 February 16 order, as amended March 12, 2009,
directs the Receiver to, among other things, take control and
possession of and to operate the Receivership Estate, and to
perform all acts necessary to conserve, hold, manage and preserve
the value of the Receivership Estate.
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).
STANFORD INT'L: Owner Moved to Federal Lockup in Houston
--------------------------------------------------------
U.S. District Judge David Hittner has agreed to move Robert Allen
Stanford, the financier accused of orchestrating a multi-billion
fraud, to the Federal Detention Center in Houston by October 1 and
will be housed there until his trial, Gina Keating at Reuters
reports. The report relates that move made so that Mr. Stanford
will be closer to his attorneys.
Mr. Stanford is currently housed in the Conroe, Texas, jail since
his arrest on June 18.
According to the report, in his order, Judge Hittner wrote that a
transfer was appropriate "because of the unique circumstances
. . . in the case," including the "gravity of the charges, the
hundreds of thousands of records involved, and the enormous amount
of time . . . necessary to review them."
Reuters notes that federal prosecutors did not oppose the motion.
Mr. Stanford's next court appearance is set for October 14.
About Stanford International Bank
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 February 16 order, as amended March 12, 2009,
directs the Receiver to, among other things, take control and
possession of and to operate the Receivership Estate, and to
perform all acts necessary to conserve, hold, manage and preserve
the value of the Receivership Estate.
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).
STAR TRIBUNE: Exits Chapter 11 Bankruptcy Protection
----------------------------------------------------
The Star Tribune said it has emerged from bankruptcy Sept. 28 with
new ownership and reduced debt.
The Star Tribune is now primarily owned by its senior secured
lenders, who hold approximately 95% of the stock. The Company's
debt is $100 million, down from $480 million on January 15, 2009,
the date it commenced its chapter 11 restructuring.
On September 17, 2009, Judge Robert Drain confirmed the company's
plan of reorganization, which was overwhelmingly supported by the
company's creditors.
"Symbolically and operationally, this is an important day for the
Star Tribune," said Michael T. P. Sweeney, chairman of the board
of the Star Tribune. "It marks a fresh start with reduced debt,
lower costs and new ownership. The company has moved very quickly
through financial restructuring and is very well poised to be an
agile competitor going forward. One thing that did not change in
this process is the Star Tribune's position as the leading news
and information provider in the Twin Cities -- a position we are
committed to holding."
As part of the reorganization, The Star Tribune Company will
become Star Tribune Media Company LLC.
The Star Tribune was advised in its restructuring by Davis Polk &
Wardwell LLP and Blackstone Advisory Services L.P.
Jeff Baenen at The Associated Press reports that a steering
committee of main lenders has already named four new board
members, including:
-- Michael Sweeney Sweeney, the new board chairman at Star
Tribune;
-- former Wall Street Journal publisher L. Gordon Crovitz;
and
-- Michael E. Reed, chief of GateHouse Media Inc.
The AP states that Chris Harte, Star Tribune's current publisher,
will step down. A new publisher is yet to be announced, says The
AP. Chris Newmarker Minneapolis/St. Paul Business Journal relates
that a new CEO is yet to be appointed.
Star Tribune is considering charging readers for access to some or
all stories on the Internet and in October, it will launch a
Minnesota Vikings premium package for $19.95 a year with photos,
chat sessions, and other football coverage not available on the
free part of the Web site, The AP reports.
About Star Tribune
Headquartered in Minneapolis, Minnesota, The Star Tribune Company
-- http://www.startribune.com/-- operates the largest newspaper
in the state of Minnesota and published seven days each week in an
edition for the Minneapolis-Saint Paul metropolitan area.
The Company and its affiliate, Star Tribune Holdings Corporation,
filed for Chapter 11 protection on January 15, 2009 (Bankr.
S.D.N.Y. Lead Case No. 09-10244). Attorneys at at Davis Polk &
Wardwell, represented the Debtors in their restructuring effort.
Blackstone Advisory Services L.P. served as financial advisor.
The Garden City Group, Inc., served as noticing and claims agent.
Attorneys at Lowenstein Sandler PC, represented the official
committee of unsecured creditors. In its bankruptcy petition,
Star Tribune listed assets and debts between $100 million and $500
million each.
STATION CASINOS: CMBS Lenders, Usec. Creditors Oppose Examiner
--------------------------------------------------------------
Bank of Hawaii, BNP Paribas and other prepetition lenders
designating themselves as the Independent Lenders to Station
Casinos, Inc., have asked the Bankruptcy Court to appoint an
examiner in the Debtors' Chapter 11 cases, pursuant to Section
1104(c)(2) of the Bankruptcy Code.
The Debtors, the CMBS Lenders, the Official Committee of
Unsecured Creditors, and Deutsche Bank Trust Company Americas, in
its capacity as duly appointed administrative agent for the
lenders to the Credit Agreement, dated November 7, 2007, conveyed
objections to the Independent Lenders' request for the appointment
of an examiner.
In a 195-page opposition, the Debtors complain that although the
Independent Lenders take aim at many different "targets," they
end up hitting none. The Motion simply reveals that the
Independent Lenders are embroiled in intercreditor disputes, not
the victims of any conflicts of interest allegedly residing with
the Debtors, Mr. Aronzon argues.
Moreover, the Debtors aver, the Motion contains several other
equally short-sighted and ill-conceived assertions about what the
Independent Lenders believe should occur in the Cases. The
simple reality, however, is that the Independent Lenders are not
fiduciaries for anyone, let alone the OpCo estate, and thus their
views as to what OpCo should be doing are merely the self-
interested views of one minority group of the OpCo lenders.
Furthermore, the Debtors assert that everything that the
Independent Lenders want the examiner to do -- review and
analysis of all options with respect to the Master Lease, review
and analysis of how the Debtors are deploying cash collateral,
review and analysis of amount and propriety of professional fee
payments -- is already being done by the Debtors in the exercise
of their fiduciary duties and under the watchful eyes of the
Court, the OpCo and PropCo lender groups, the Official Committee
of Unsecured Creditors, and all of the other interested parties
in the Cases, including the Independent Lenders themselves. An
examiner would simply not add any value to this already highly
scrutinized situation, the Debtors say.
Richard J. Haskins, executive vice president, general counsel,
and secretary of Station Casinos, Inc., filed a declaration in
support of the opposition raised by the Debtors.
The Debtors have sought and obtained from the Court an order to
expand the page limit from 20 pages to 30 pages within which to
file a responsive pleading against the Independent Lenders'
Motion for a Chapter 11 examiner. The Debtors relates that their
counsel have obtained consent from counsel to the Independent
Lenders to extend the page limit to 30 pages.
Rule 9014(e) of the Local Rules of United States Bankruptcy Court
for the District of Nevada provides, in part, that "briefs and
points and authorities in support of, or in response to, motions
are limited to 20 pages." Under the Local Rules and common
practice in the District of Nevada, the Court may waive the
limitation.
(b) CMBS Lenders
German American Capital Corporation as Collateral Agent for
itself and JP Morgan Chase as lenders to Debtor FCP PropCo, LLC,
say they will not address the merits of the Motion at length
because it appears that the request for an examiner relates to
the OpCo estate, and not to the PropCo estate.
Nonetheless, the CMBS Lenders relate that they are compelled to
observe that the Examiner Motion is essentially an attempt by
certain OpCo Lenders, which could not even sway the majority of
their own lender group, to have the Court appoint an examiner to
second guess the Debtors' business judgment, based largely on a
series of incorrect premises.
Shalom L. Kohn, Esq., at Sidley Austin LLP, in New York, relates
that although there is some lack of clarity in the Motion, it
appears that the Independent Lenders are seeking the appointment
of an examiner only as to OpCo, but not as to Propco. On the
other hand, the areas of investigation outlined by the
Independent Lenders refer to topics that purport to benefit OpCo
only, Mr. Kohn says.
According to Mr. Kohn, under any view of the facts or the law,
Section 1104(c)(2) does not provide a basis for the appointment
of an examiner for the benefit of PropCo because the Independent
Lenders have not, and cannot, satisfy their burden of showing the
necessary liquidated unsecured debt in that estate. Therefore,
even if an examiner is appointed to investigate OpCo, none of the
costs and fees associated with the investigation may be borne by
PropCo's estate.
Given the lack of legal or economic merit for the Independent
Lenders' theories, it is hard to see why any of the estates
should have to bear the costs and complications of appointing an
examiner to investigate them, Mr. Kohn asserts.
Moreover, Mr. Kohn argues, Section 1104(c)(2) provides for the
appointment of an examiner only if "the debtor's fixed,
liquidated, unsecured debts -- other than trade debt, taxes or
insider debt -- exceed $5,000,000." PropCo does not have any
fixed, liquidated unsecured debt, Mr. Kohn reveals. Nor are the
Independent Lenders parties-in-interest, as required by Section
1104(a), with respect to any of the PropCo entities. As a
result, an examiner cannot be appointed on behalf of the PropCo
debtors or their estates.
German American Capital Corporation, JP Morgan, Deutsche Bank,
and the Independent Lenders have agreed that the due date for the
CMBS Lenders' and the Prepetition Agent's opposition to the
Motion, currently set for September 21, 2009, will be extended to
5:00 p.m. (Pacific Time) on September 23, 2009. The CMBS Lenders
and the Prepetition Agent filed their responses on the due date.
(c) Creditors' Committee
The Creditors' Committee asserts that the Examiner Motion is
unfortunate and ill considered. Unfortunate because it distracts
the Committee, the Debtors and the Court from pressing matters
regarding the administration of the estates. Ill considered,
because the Independent Lenders, who are admittedly oversecured,
stand to gain nothing from the appointment of an examiner in the
Chapter 11 cases.
The Committee argues that there is no justification for the
breadth and scope of the relief sought by the Independent
Lenders. Not only is it expensive and burdensome to the Debtors
and their estates, but it is also completely duplicative of
matters within the mandate of the Committee and inquiries and
investigations already commenced by the Committee. The
Independent Lenders have not, and indeed cannot, suggest that the
Committee is not capable of pursuing these matters.
Moreover, the Committee avers that the Court should deny the
Motion pursuant to Section 105(a) because it has been brought for
improper purpose, or pursuant to 1104(c) because the
Independent Lenders have failed to show that, given the
Committee's status and its ongoing work, an investigation by an
examiner of the matters listed in the Examiner Motion is
appropriate.
Bonnie Steingart, Esq., at Fried, Frank, Harris, Shriver &
Jacobson, LLP, in New York, filed a declaration in support of the
Committee's objection.
(d) Administrative Agent
Deutsche Bank, as duly appointed administrative agent for the
lenders to the Credit Agreement, dated November 7, 2007, argues
that appointing an examiner will force the Debtors estates to
incur unnecessary expenses. According to the Administrative
Agent, the vast majority of stakeholders in the Cases, including
the Administrative Agent, the steering committee of Lenders and
the Committee, oppose the appointment of an examiner.
In the event that the Court grants the Independent Lenders'
request, the Administrative Agent asks the Court that the scope
of an examiner's investigation should be narrowly focused. The
Court possesses broad discretion to determine the nature, extent
and duration of an examiner's investigation, the Administrative
Agent says. Accordingly, the Administrative Agent submits that
an examiner's role should be limited to a review and examination
of all of the mounting professional expenses being paid by the
Debtors.
Independent Lenders' Request for Examiner
The Independent Lenders noted that Station Casinos has three
separate divisions with conflicting economic interest and
different lenders. They assert that those divisions,
known as the OpCo, PropCo and LandCo companies, have different
revenue steams that should be kept separate now that Station
Casinos is in bankruptcy.
BNP Paribas, et al., assert that their interests are being
unfairly sacrificed to benefit Deutsche Bank Trust of America and
other creditors.
The Independent Lenders note that while Station Casinos' "three
stack" debt structure probably worked well when each "stack" was
solvent back in 2007, it no longer works in today's environment,
when each "stack" is insolvent, and common management has the
ability to move value among the different "stacks." It notes that
the creditors for the three stacks are different.
Counsel to the Independent Lenders, Isaac M. Pachulsi, Esq., at
Stutman, Treister & Glatt P.C., contends that an examiner is
needed so that an independent, non-conflicted third party can
investigate and report on whether the economic interests of the
"OpCo" entities and their real economic stakeholders are being
sacrificed for the benefit of the "PropCo" and "LandCo" entities
and their creditors, as well as for the benefit of the out-of-the-
money equity holders who control the Debtors' board of directors,
as a result of the common management and control of the OpCo,
PropCo and LandCo. He says, among other subjects, an examiner is
needed to investigate and report on the following:
* Whether the Master Lease between Station Casinos, Inc
and PropCo should be rejected or renegotiated.
* Whether OpCo should seek to recharacterize the Master
Lease as a secured transaction, thereby rendering
inapplicable the requirements of 11 U.S.C. Section 365, and
enabling the Master Lease to be recharacterized as an
undersecured claim that can be bifurcated into secured and
unsecured portions, and treated accordingly under a plan.
* Whether OpCo should be paying current interest on the
LandCo Loan - a loan secured by undeveloped land in which
there is no equity for the benefit of LandCo's lenders,
which include Deutsche Bank, the Agent for the OpCo secured
lenders, and which may be using its role in that position
to cause OpCo to keep paying interest on the "underwater"
Land Loan.
* Whether (and to what extent) OpCo should be funding the
massive capital expenditures and development costs provided
for in its budge
The Independent Lenders are:
-- Bank of Hawaii,
-- BNP Paribas,
-- First Tennessee Bank National Association,
-- General Electric Capital Corporation,
-- Genesis CLO, Natixis,
-- Castlerigg Master Investments Ltd.,
-- The Bank of Nova Scotia,
-- Union Bank, N.A., and
-- U.S. Bank N.A.
Parties Stipulate on Discovery
The Independent Lenders relate that on September 10, 2009, the
Debtors propounded discovery in connection with the Motion to
appoint a Chapter 11 examiner, including Requests for the
Production of Documents, Deposition Notices, and Interrogatories.
The Debtors and the Independent Lenders wish to avoid the
expense, delay, and inconvenience associated with discovery
motions pending further discussions, have entered into a Court-
approved stipulation agreeing that:
(a) The hearing on the Motion currently scheduled for
September 30, 2009, will proceed as a non-evidentiary status
conference only;
(b) At the September 30, 2009 status conference, the parties
will request that the Court schedule a continued hearing
date for the Motion, which date will be acceptable to the
Debtors and the Independent Lenders;
(c) The parties agree to a standstill on all discovery and
discovery related motion practice, which standstill will
extend through September 30, 2009;
(d) Between now and September 30, 2009, counsel for The
Independent Lenders and counsel for the Debtors will meet
and confer in good faith regarding (ii) the scope, extent,
and nature of discovery related to the Motion, and (ii)
possible means of resolving the issues raised by the
Motion; and
(e) If Debtors and The Independent Lenders are unable to reach
an agreement regarding the Discovery Requests, Debtors may
move to compel, and Independent Lenders may move for a
protective order, any time after September 30, 2009.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: Gets Court Nod to Employ Milbank as Lead Counsel
-----------------------------------------------------------------
The Bankruptcy Court has authorized Station Casinos Inc. and its
affiliates to employ Milbank, Tweed, Hadley & McCloy LLP as their
attorneys nunc pro tunc to the Petition Date in accordance with
Milbank's normal hourly rates and disbursement policies.
Milbank will be paid in accordance with the procedures set forth
in Sections 330 and 331, applicable Federal Rules of Bankruptcy
Procedure, Local Rules, and Orders of the Court, guidelines
established by the Office of the United States Trustee for the
District of Nevada, and other procedures as may be fixed by Order
of the Court.
As lead counsel to the Debtors, Milbank has agreed to:
(a) advise the Debtors of their rights, powers, and duties as
debtors and debtors in possession in the continued
management of their business and properties;
(b) assist the Debtors in reviewing and consummating any
transactions contemplated during the Cases;
(c) assist the Debtors in reviewing, estimating, and resolving
claims asserted against their estates;
(d) commence and conduct any litigation necessary or
appropriate to assert rights held by the Debtors or to
defend the Debtors, protect assets of their estates, or
otherwise further the goal of completing a successful
reorganization;
(e) advise the Debtors concerning actions that they might take
to collect and recover property for the benefit of their
estates;
(f) prepare on behalf of the Debtors all necessary and
appropriate applications, motions, draft orders, other
pleadings, notices, schedules, and other documents, and
review all financial and other reports to be filed in the
Debtors' Cases;
(g) advise the Debtors concerning, and prepare responses to,
applications, motions, other pleadings, notices, and other
papers that may be filed and served in the Debtors' Cases;
(h) review the nature and validity of any liens asserted
against the Debtors' property and advise the Debtors
concerning the enforceability of the liens;
(i) advise and assist the Debtors in connection with any
potential asset dispositions;
(j) advise the Debtors concerning executory contract and
unexpired lease assumptions, assignments and rejections;
(k) advise and assist the Debtors in connection with the
formulation and confirmation of a plan of reorganization
and related documents; and
(l) perform all other necessary legal services in connection
with the Debtors' Cases and other general corporate and
litigation matters.
The Debtors may, from time to time, ask Milbank to undertake
specific matters beyond the scope of services to be rendered.
Should Milbank agree, in its sole discretion, to undertake any
the specific matters, the Debtors seek authority to employ
Milbank for the matters, in addition to the proposed services,
without further order of the Court.
The Debtors will pay and reimburse Milbank for fees and out-of-
pocket expenses incurred by Milbank in the Debtors' Cases.
Milbank's hourly rates are:
Professional Hourly Rate
------------ -----------
Partners $740 - $995
Counsel $700 - $905
Associates and
Senior attorneys $285 - $685
Legal assistants $160 - $345
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: Gets Final Nod to Honor D&O Obligations
--------------------------------------------------------
The Bankruptcy Court has permitted Station Casinos Inc. and its
affiliates on a final basis, to honor on a current basis their
postpetition indemnification and reimbursement obligations to
their present and future directors in accordance with SCI's
articles of incorporation, bylaws, policies, board resolutions and
applicable law, including, but not limited to, postpetition
obligations to reimburse directors for legal fees and expenses --
and provide additional retainer deposits, if SCI determines to do
so in its business judgment incurred in furtherance of their
duties as directors.
The obligations include the Debtors' obligations to reimburse
directors for professional fees and expenses incurred postpetition
in furtherance of their duties as directors, with the fees and
expenses to be paid by application of the fees and expenses
against retainers advanced prepetition for the purpose or, with
respect to Dr. James E. Nave, DVM, the sole independent director
of Debtor Station Casinos, Inc., in accordance with a
reimbursement agreement.
SCI is authorized to assume the reimbursement agreement between
SCI and Dr. James E. Nave and maintain a retainer on deposit.
Pursuant to the reimbursement agreement with Dr. Nave, Station
Casinos, Inc., will reimburse the fees and expenses incurred by
Dr. Nave with respect to counsel he employed to advise him in
connection with the Debtors' bankruptcy cases and pursuant to
which SCI advanced retainers to Dr. Nave's counsel in the amount
of $750,000, $500,000 to Skadden, Arps, Slate, Meagher & Flom LLP
and $250,000 to Jones Vargas.
The automatic stay of Section 362 of the Bankruptcy Code is
modified to the limited extent necessary to permit SCI's
directors and officers to access the Debtors' directors and
officers' insurance policies in the ordinary course of business.
Prior to the entry of the Court's order, the Debtors submitted to
the Court a revised order adding this provision which was later
approved by the Court:
"The payment disgorgement provisions set forth in (i)
Section 5 of Article IV of the Second Amended and
Restated Articles of Incorporation of SCI, dated as of
November 7, 2007 and (ii) Section 8.1(a)(ii) of Article
VIII of the Amended and Restated Bylaws as enacted on or
about November 7, 2007 and as amended as of February 28,
2009, in each case in the form quoted in the Supplemental
Memorandum, are adopted as the order of the Court as if
set forth in the Order at length."
In the Debtors' request for approval to honor their D&O
Obligations, Paul S. Aronzon, Esq., at Milbank, Tweed, Hadley &
McCloy LLP, in Los Angeles, California, related that the D&O
Obligations are firmly rooted in the Debtors' operative corporate
governance documents. Indeed, as of the Petition Date, the
Debtors' charter, bylaws, and policies provided for the Debtors
to indemnify and reimburse its directors, including for legal
expenses related to their duties as directors.
The Debtors have advanced certain retainers for professional fees
and expenses incurred by the Debtors' directors in the course of
carrying out their directorial duties. In addition, the Debtors
have entered into certain agreements to indemnify independent
directors. The Debtors also maintain certain policies in
furtherance of the governance arrangements.
Mr. Aronzon pointed out that the Debtors can ultimately only
operate through the directors of Station Casinos, Inc. He adds
that the directors of the other Debtors have responsibility for
making crucial determinations about those Debtors. To retain the
services of the directors, it is essential that the Debtors
continue to honor their obligations to the directors in the
ordinary course of business, he asserts.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: Proposes Ernst & Young LLP as Tax Advisor
----------------------------------------------------------
Station Casinos Inc. and its affiliates ask the Court for
permission to employ Ernst & Young LLP as their independent
auditor and tax advisor nunc pro tunc to the Petition Date.
The Debtors desire to employ E&Y LLP as their independent auditor
and tax advisor, pursuant to the terms and conditions set forth
in these agreements comprising the Engagement Letters:
(a) the agreement for benefit plan audit services;
(b) the agreement for consolidated financial statement and
internal controls audit services;
(c) the agreement for quarterly review services - the Audit
Engagement Letters - and
(d) the master tax services agreement and these incorporated
statements of work:
* the statement of work for 1120 review services,
* the statement of work for IRS audit assistance, and
* the statement of work for routine on call tax advice.
The Debtors initially did not file an application to employ E&Y
LLP as they believed E&Y LLP would be employed as an ordinary
course professional under the Debtors' initial motion for
authority to retain professionals in the ordinary course of
business. Recently, however, the Debtors determined to employ
E&Y LLP as a Section 327 professional pursuant to the
Application.
E&Y LLP has agreed to provide, certain audit and tax services in
connection with the chapter 11 cases, subject to approval by the
Court of the Engagement Letters. These are the summaries of
descriptions of the Services:
(A) Audit Services:
(a) Under the Benefit Plan Audit Engagement Letter, E&Y LLP
will audit and report on the financial statements and
supplemental schedules of the Station Casinos, Inc. 401(k)
Retirement Plan for the year ended December 31, 2008.
(b) Pursuant to the Financial Statement and Internal Controls
Audit Engagement Letter, E&Y LLP will: (i) audit the
consolidated financial statements and effectiveness of
internal control over financial reporting for Station
Casinos, Inc. for the year ended December 31, 2009; (ii)
audit the financial statements of Green Valley Ranch
Gaming, LLC, Barley's Casino and Brewing Company and
Aliante Gaming, LLC for the year ended December 31, 2009
and (iii) issue combining financial statements for Station
Casinos, Inc.'s Nevada properties required pursuant to
Regulation 6.080 of the Nevada Gaming Control Board and
compliance reports required pursuant to NGCB Regulation
6.090 and 6.105.
(c) Under the Quarterly Review Engagement Letter, E&Y LLP will
perform a quarterly review of the unaudited interim
financial information before the company files its
form 10-Q.
(B) Tax Services:
(d) Pursuant to the 2008 1120 Review SOW, E&Y LLP will perform
limited review procedures with respect to Station Casinos,
Inc.'s U.S. federal income tax return for the taxable year
ended December 31, 2008.
(e) Under the 2007 IRS Audit SOW, E&Y LLP will provide
assistance and advice concerning the audit of Station
Casinos, Inc.'s income tax filings for the year ended
December 31, 2007.
(f) Under the On-Call SOW, E&Y LLP will provide assistance
with services, upon request, in addressing general tax
questions and projects that are not covered by a separate
SOW and do not involve any significant tax planning or
projects and are expected, at the beginning of the
specific project, to involve total professional time with
respect to the project not to exceed $25,000 in fees.
The Debtors will pay and reimburse E&Y LLP for fees and out-of-
pocket expenses E&Y LLP incurred the Chapter 11 cases.
E&Y LLP's applicable hourly rates for the Audit Services are:
Professional Hourly Rate
------------ -----------
Partners/Principals $483 - $516
Executive Directors $420 - $450
Senior Managers $420 - $438
Managers $330 - $366
Seniors $210 - $235
Staff $145 - $170
E&Y LLP's applicable hourly rates for the Tax Services are:
Professional Hourly Rate
------------ -----------
National Partners/Principals/
Executive Directors $610 - $760
Partners/Principals $483 - $585
Executive Directors $420 - $495
Senior Managers $420 - $490
Managers $330 - $400
Seniors $210 - $370
Staff $145 - $190
During the 90 days before the Petition Date, E&Y LLP received
from the Debtors $547,995 for services rendered to the Debtors.
E&Y LLP is holding retainers in the amount of $150,350 as of the
Petition Date, which amounts will be applied to postpetition
services as the amounts are permitted to be paid in accordance
with the Bankruptcy Code, Federal and Local Bankruptcy Rules and
orders of the Court.
The Debtors and E&Y LLP have agreed to caps on fees for the
respective Audit Services -- provided that the caps do not apply
to work related to bankruptcy requirements the as employment and
compensation-related work -- as follows: (a) E&Y LLP's fees for
the work under the Benefit Plan Audit Engagement Letter will not
exceed $30,440; (b) E&Y LLP's fees for the work under the
Financial Statement and Internal Controls Audit Engagement Letter
will not exceed $940,000; and (c) E&Y LLP's fees for the work
under the Quarterly Review Engagement Letter will not exceed
$20,350.
Thomas M. Friel, Executive Vice President, Chief Accounting
Officer, and Treasurer Of Station Casinos, Inc., assures the
Court that E&Y LLP does not hold or represent any interest
adverse to the Debtors' estates. The Debtors believe that E&Y
LLP is a "disinterested person," as defined in Section 101(14) of
the Bankruptcy Code as modified by Section 1107(b).
Thomas M. Roche, a partner of Ernst & Young LLP, discloses that
E&Y LLP is currently a party or participant in certain litigation
matters involving parties-in-interest in the Chapter 11 cases.
Moreover, E&Y LLP has thousands of professional employees and it
is possible that certain employees of E&Y LLP may have business
associations with parties in interest in the Cases or hold
securities of the Debtors or interests in mutual funds or other
investment vehicles that may own securities of the Debtors.
Certain entities that are parties in interest are lenders to E&Y
LLP: Barclays Bank PLC, Citibank, NA, JP Morgan Chase Bank, NA,
The Royal Bank of Scotland PLC, Wachovia Bank NA and Wells Fargo
Bank, NA are participants in E&Y LLP's Revolving Credit Program
and E&Y LLP has borrowed long-term debt from New York Life
Insurance Company, Metropolitan Life Insurance Company,
Prudential Life Insurance Company of America, Nationwide Life and
Annuity Insurance Company, Westchester Fire Insurance Company and
Fidelity & Deposit Company of Maryland.
Mr. Roche says that E&Y LLP may perform services for its clients
that relate to the Debtors merely because the clients may be
creditors or counterparties to transactions with the Debtors and
the clients' assets and liabilities may thus be affected by the
Debtors' status.
A full-copy of the engagement letter is available for free at:
http://bankrupt.com/misc/SC_E&YAgreement.pdf
E&Y LLP delivered to the Court lists of professionals which have
in the past or are currently providing services to E&Y LLP, and
parties-in-interest involved in litigation with E&Y LLP, a copy
of which is available for free at:
http://bankrupt.com/misc/SC_E&YPartiesDisc.pdf
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STEPHEN SCHIEFER: Case Summary & 18 Largest Unsecured Creditors
---------------------------------------------------------------
Joint Debtors: Stephen Joseph Schiefer
Leslie Gloria Lopez-Schiefer
161 Bradford Street
San Francisco, CA 94110
Bankruptcy Case No.: 09-32894
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
Northern District of California (San Francisco)
Debtors' Counsel: Kenneth R. Graham, Esq.
Law Office of Kenneth R. Graham
171 Mayhew Way #208
Pleasant Hill, CA 94523
Tel: (925) 932-0170
Email: KRG@ELAWS.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 18 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/canb09-32894.pdf
The petition was signed by the Joint Debtors.
STEVEN SPENSLEY: Case Summary & 19 Largest Unsecured Creditors
--------------------------------------------------------------
Joint Debtors: Steven G. Spensley
dba Spensley Grain Inc.
Mary D. Spensley
239 Highland Street
Belmont, WI 53510
Bankruptcy Case No.: 09-16561
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
Western District of Wisconsin,
http://www.wiw.uscourts.gov(Madison)
Judge: Chief Judge Robert D. Martin
Debtors' Counsel: Galen W. Pittman, Esq.
300 N. 2nd Street, Suite 210
P.O. Box 668
La Crosse, WI 54602-0668
Tel: (608) 784-0841
Email: galenpittman@centurytel.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 Debtors' petition, including a list of
their 19 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/wiwb09-16561.pdf
The petition was signed by the Joint Debtors.
STONE CONNECTION: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Stone Connection, Inc.
3045 Business Park Drive
Norcross, GA 30071-1427
Case No.: 09-85337
Chapter 11 Petition Date: September 28, 2009
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Debtor's Counsel: G. Frank Nason IV, Esq.
Lamberth, Cifelli, Stokes Ellis & Nason
Suite 550, 3343 Peachtree Rd., NE
Atlanta, GA 30326
Tel: (404) 262-7373
Email: FNason@LCSENlaw.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
According to the schedules, the Company has assets of at least
$11,483,480, and total debts of $12,500,002.
The petition was signed by Barry W. Robinson, the company's
president.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
GMC Spa $161,106
Imetame Granitos Ltda. $130,313
Pedras, Marmores e Granitos $72,366
Rua Principal S/N
Granite Quarries, USA $48,276
Vitoria Stone Industria E $34,247
Comercio
Rua Atalydes Moreira de Souza
Savino Del Bene USA, Inc. $34,043
Emigran $33,866
Av. Marginal Luiza BodaniFarnetani
Dane Si Spedizioni SRL $27,065
Crealogix $24,981
Legora Export $21,084
Av Mauro Miranda Madureira
Vigui Granitos Ltda $16,343
Serra Norte Granitos Ltda. $14,069
Emporium Granitos Do Brasil Ltda $13,893
Tracomal USA Corp. $11,456
Marbrasa $10,050
Parqie Industrial Melvin Jones
Jacigua Marmores e Granitos $8,985
Rod. Gumercino Moura Nunes
Prologis $6,301
Minaco do Brasil $1,691
Cintas Corp #085 $1,243
Cintas Corp #200 $892
TOUSA INC: Citicorp Wants Revolver Claims in Suit Removed
---------------------------------------------------------
Citicorp North America, Inc., as administrative agent under the
Second Amended and Restated Revolving Credit Agreement, and the
Revolver Lenders:
(i) seek the Court's permission to intervene in the action
commenced by the Official of Unsecured Creditors against
the Debtors' prepetition lenders for the limited purpose
of filing a motion to strike; and
(ii) subsequently, ask the Court to strike the references in
the Proposed Findings of Facts and Conclusions of Law
filed by the Creditors Committee asserting claims against
the Revolver Parties.
To recall, the Creditors Committee has commenced an adversary
proceeding against the Debtors' prepetition lenders. It claims
that Tousa's operating subsidiaries were required to guarantee and
pledge their assets for an $800 million loan that gave them no
benefit. The Committee alleged that certain TOUSA Subsidiaries
were rendered insolvent by agreeing to guarantee the loans TOUSA
obtained and used to acquire the homebuilding assets of
Transeastern Properties, Inc, in July 2007.
Allan E. Wulbern, Esq., at Smith Hulsey & Busey, in Jacksonville,
Florida, relates that on February 4, 2009, the Creditors Committee
filed its Third Amended Complaint, which completely dismissed the
Revolver Lenders as parties to the Committee Action. In an
abundance of caution, Citicorp's counsel, Chadbourne & Parke LLP
sent a letter to the Court on February 6, 2009, to confirm that
the Third Amended Complaint is not intended to assert any claims
directed at the Revolver Facility, either against the Revolver
Lenders or Citicorp as the revolver agent. On February 25, 2009,
the Court entered a Final Dismissal Order, dismissing all the
Committee's claims under the Revolver Facility.
Meanwhile, CitiCorp, as administrative agent for First Lien Term
Loan, and the First Lien Term Loan Lenders, is asserting
affirmative defenses with respect to claims in the Committee
Complaint. On behalf of Citicorp, Thomas J. Hall, Esq.,
at Chadbourne & Parke LLP, in New York, points out that the
Committee's preference claim is foreclosed by Section 547(b)(5) of
the Bankruptcy Code's requirement that a party seeking to avoid a
transfer as preferential must prove by a preponderance of the
evidence that the transfer enabled the transferee to receive more
than it would have received in a hypothetical Chapter 7
liquidation on the Petition Date. He argues that the Committee
has not offered any evidence of the liquidation values of the
Debtors' estates as of the Petition Date.
About Tousa Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08-
10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta,
Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at
Berger Singerman, to represent them in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.
TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.
Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by TOUSA Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TOUSA INC: Court Approves LLV-1 Settlement Agreement
----------------------------------------------------
TOUSA Homes Inc. has obtained approval from the Bankruptcy Court
to enter into its Settlement Agreement with LLV-1, LLC.
In June 2005, LLV-1, LLC, and TOUSA Homes Inc. entered into a
purchase agreement and escrow instructions, whereby TOUSA Homes
agreed to purchase certain real property in Henderson, Nevada, at
the Lake Las Vegas Resort for $81 million. The Property was
divided into two phases for purposes of sale, each phase with a
total purchase price of $40.5 million. Pursuant to the Purchase
Agreement, TOUSA Homes deposited $4,050,000 into an escrow
account held by First American Title Company with half of the
escrowed amount applied to the two Phases. As of September 2,
2009, the balance of the Escrowed Funds was $2,232,930.
The Purchase Agreement, as amended, required LLV-1 to fully
complete a project design in connection with requirements
established by the City of Henderson Local Improvement District
T-16 by December 31, 2007. The Amendment further provided that
if LLV-1 failed to complete the LID Project Design by the
December 31, 2007 deadline, LLV-1 would owe TOUSA Homes damages
of $20,000 per day. The Per Diem Damages were to be satisfied
from the Escrowed Funds.
In 2007, TOUSA Homes decided not to develop Phase Two of the
Property and as required under the Purchase Agreement, TOUSA
Homes delivered a termination notice to LLV-1 exercising its
option not to purchase Phase Two of the Property. Subsequently,
LLV-1 tried to obtain release of the Escrowed Funds relating to
Phase Two of the Property. TOUSA Homes believes that LLV-1 is
not entitled to the Escrowed Funds because the LID Project Design
was not fully completed as of December 31, 2007, and LLV-1 had
not satisfied its requirement to pay TOUSA Homes the Per Diem
Damages, Paul Steven Singerman, Esq., at Berger Singerman, P.A.,
in Miami, Florida, relates.
Against this backdrop, in May 2007, LLV-1 filed a complaint in
the Eight Judicial District Court for Clark County, Nevada,
alleging various claims based on the Purchase Agreement,
including breach of contract and seeking specific performance
against TOUSA Homes. In July 2008, LLV-1 filed with the United
States Bankruptcy Court for the District of Nevada a voluntary
petition under Chapter 11. By December 2008, the State Court
Action was removed to the Nevada Bankruptcy Court in LLV-1's
bankruptcy case and assigned Adversary Proceeding No. 08-01418.
In January 2009, LLV-1 amended its adversary complaint against
TOUSA Homes, seeking declaratory relief, injunctive relief and
turnover of estate property held in escrow against TOUSA Homes.
Separate from its Adversary Complaint, TOUSA Homes also filed
proofs of claim in LLV-1's bankruptcy case, which include:
(i) Claim No. 123 for $5,985,000 related to the LLV Adversary
Complaint and Escrowed Funds;
(ii) Secured Claim No. 122 for $8,542,588;
(iii) Unsecured Claim No. 233 for $76,022,329 asserted in
Adversary Proceeding No. 09-01064 pending before the
Nevada Bankruptcy Court. Adv. Proceeding No. 09-01064
refers to a complaint commenced by TOUSA Homes in LLV-1's
bankruptcy case, asserting a claim against LLV for
amounts owed to TOUSA Homes for the construction work
performed by TOUSA Homes as general contractor at the Lake
Las Vegas Resort.
After engaging in extensive negotiations to resolve their
disputes, LLV-1 and TOUSA Homes entered into a settlement, the
salient terms of which are:
(a) The Escrowed Funds will be distributed as: (i) First
American Title will retain any escrow fees and costs
provided for in the parties' escrow instructions and
agreement; (ii) First American Title will distribute to
TOUSA Homes $1,135,000 less one-half of the Escrow Fees;
and (iii) First American Title will distribute to LLV-1
the remaining balance of the Escrowed Funds for $1,097,930
less one-half of the Escrow Fees.
(b) Upon disbursement of the Escrowed Funds, the parties agree
to dismiss all claims asserted in the Action. TOUSA Homes
will withdraw Claim No. 123 and Claim No. 122. In
addition, TOUSA Homes agrees not to file and prosecute any
further claims and the withdrawn proofs of claim; however,
the dismissal of the Action will not impact Claim No. 233.
(c) Upon receipt of the escrowed funds, TOUSA Homes and LLV-1
will forever release claims against each other arising out
of the Action.
(d) The Settlement Agreement is subject to approval of the
U.S. Bankruptcy Court for the Southern District of Florida
and the Nevada Bankruptcy Court, and approval of LLV-1's
DIP Lenders. The Settlement Agreement will be null and
void if the approval orders are not entered or, if
entered, are subject to automatic stay, as of November 30,
2009.
Mr. Singerman says the benefits of the Settlement Agreement
outweigh the benefit of further litigating the Action. At best,
the Settlement Agreement permits the Debtors to avoid the costs,
risk and distraction associated with litigating the merits of the
Action, he maintains.
About Tousa Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08-
10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta,
Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at
Berger Singerman, to represent them in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.
TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.
Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by TOUSA Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TOUSA INC: Obtains Approval of Settlement With Jasmine HOA
----------------------------------------------------------
Tousa Inc. and its affiliates obtained approval from the
Bankruptcy Court to settle with Jasmine Homeowners Association.
The Jasmine Ranch Condominiums Project in Las Vegas, Nevada,
consists of 296 condominium units. The project was originally
commenced by Jasmine Valley, LLC, which hired Bramble Development
Group, Inc., as the Project's general contractor. Among
Bramble's obligations was to obtain insurance for the Project,
and Bramble did obtain a project-specific Owner-Controlled
Insurance Program policy issued by Clarendon American Insurance
Company with a completed operations limit of $3 million. When
the Project was partially completed, Jasmine Valley sold it to
TOUSA Homes, Inc.
At the time of the sale, Jasmine Valley had sold 33 Project units
to customers. After the sale, TOUSA Homes contracted with
Bramble to complete the construction of 63 additional units and
sold those units to customers as well. Aside from constructing
96 units, Bramble also constructed common elements for the
Project, including landscaping and fencing. After completion of
the Bramble Work, TOUSA Homes went on to construct 200 additional
units at the Project, along with additional appurtenances.
However, the Jasmine Homeowners Association and "Doe Homeowners 1
through 100" filed a complaint versus Jasmine Valley LLC and
other entities on June 12, 2006, in the Eighth Judicial District
Court, Clark County, Nevada, designated as Case No. A523205. The
complaint named Bramble and TOUSA Homes as defendants and seeks
damages for alleged construction defects related to the Project.
Subsequently, the Debtors sought and obtained authority from the
Bankruptcy Court in May 2008 to enter into a settlement agreement
with Jasmine Valley, Bramble and the Jasmine Homeowners
Association. The Court also modified the automatic stay to allow
the parties to implement the Settlement Agreement. Under the
Settlement, the Jasmine HOA, Jasmine Valley, Bramble and TOUSA
Homes, Inc. resolved claims, involving 96 units, and related
facilities in the Jasmine Valley and the Bramble Property for
$2,437,432. The claims involving the TOUSA Homes Property were
not released in the Bramble Settlement.
Moreover, in June 2008, the Jasmine HOA filed a first amended
complaint, which named TOUSA Homes, Inc., doing business as
Trophy Homes, and Engle Homes Nevada, as defendants and
eliminated Bramble and Jasmine Valley as defendants. By
September 2008, the Jasmine HOA amended its complaint for the
second time, naming TOUSA Homes' subcontractors as direct
defendants.
Accordingly, after engaging in arm's-length negotiations and to
avoid protracted litigation with respect to the remaining issues
in the pending complaint, the Jasmine HOA and TOUSA Homes have
reached a settlement of all claims against TOUSA Homes, with
respect to the TOUSA Homes Property. The salient terms of the
Settlement Agreement are:
(a) In full and complete settlement of all claims against
TOUSA Homes with respect to the TOUSA Homes Property,
Clarendon American Insurance Company will pay to the
Jasmine HOA $562,568.
(b) Upon receipt of the Settlement Amount, the Jasmine HOA
will dismiss the Complaint and its amendments as to TOUSA
Homes.
(c) In further consideration for the Settlement, the Jasmine
HOA will fully and finally release TOUSA Homes from any
liability arising out of the Complaint as to the TOUSA
Homes Property.
(d) The Jasmine HOA further agrees to indemnify TOUSA Homes
against all claims or liability arising out of any
subrogation action involving the TOUSA Homes Property by
any insurer of the Jasmine HOA relating to any claims made
by the Jasmine HOA before the execution of the Settlement
Agreement.
By entering into the Settlement Agreement, the Debtors will avoid
the costly and time-consuming process of litigating the Jasmine
HOA Action with respect to the TOUSA Homes Property, Paul Steven
Singerman, Esq., at Berger Singerman, P.A. in Miami, Florida,
points out. He adds that the Settlement Agreement requires no
out-of-pocket from the Debtors; rather, the claims as to TOUSA
Homes with respect to the TOUSA Homes Property will be satisfied
from the remaining limits of the Clarendon Insurance Policy.
About Tousa Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08-
10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta,
Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at
Berger Singerman, to represent them in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.
TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.
Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by TOUSA Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Alvarez & Marsal Charges $700,000 for July Work
-----------------------------------------------------------
Pursuant to Sections 330 and 331 of the Bankruptcy Code, these
professionals hired in Tribune Co.'s bankruptcy cases filed
interim fee applications:
A. Debtors' Professionals
Professional Period Fees Expenses
------------ ------ ---- --------
Paul, Hastings, Janofsky 7/01/09-
& Walker LLP 7/31/09 $66,906 $1,308
Alvarez & Marsal North 7/01/09-
America, LLC 7/31/09 700,890 7,170
Alvarez & Marsal North 8/01/09-
America, LLC 8/31/09 598,529 1,976
Lazard Freres & Co. LLC 6/01/09-
6/30/09 200,000 6,392
Jones Day 7/01/09-
8/31/09 24,092 28
Dow Lohnes PLLC 8/01/09-
8/31/09 188,557 1,223
Lazard Freres & Co. LLC 6/01/09-
6/30/09 200,000 6,392
Paul Hastings is the Debtors' special counsel for general real
estate. Alvarez & Marsal is the Debtors' restructuring advisor.
Lazard Freres serves as the Debtors' investment banker and
financial advisor.
The Debtors said they received no objections as to these
professionals' monthly fee applications:
Professional Period
------------ ------
Jones Day 6/01/09-6/30/09
Alvarez & Marsal North America, LLC 6/01/09-6/30/09
Reed Smith LLP 6/01/09-6/30/09
Stuart Maue 7/01/09-7/31/09
Sidley Austin LLP 7/01/09-7/31/09
Deloitte & Touche LLP 7/01/09-7/31/09
PricewaterhouseCoopers LLP 6/01/09-6/30/09
Reed Smith LLP 7/01/09-7/31/09
Cole, Schotz, Meisel, Forman & Leonard, P.A. 7/01/09-7/31/09
B. Official Committee of Unsecured Creditors' Professionals
Professional Period Fees Expenses
------------ ------ ---- --------
Moelis & Company LLC 7/01/09-
7/31/09 $200,000 $11,286
AlixPartners, LLP 8/01/09-
8/31/09 604,033 3,317
Committee Members 8/01/09-
8/31/09 5,044
Moelis & Company serves as the Committee's investment banker.
The Committee said it has received no objection as to these
professionals' fee applications:
Professional Period
------------ ------
Chadbourne & Parke LLP 7/01/09-7/31/09
Committee Members 7/01/09-7/31/09
Landis Rath & Cobb LLP 7/01/09-7/31/09
AlixPartners, LLP 7/01/09-7/31/09
In a separate filing, Stuart Maue, in its capacity as fee
examiner, submitted with the Court its final report with respect
to the First Interim Fee Application of Landis Rath & Cobb LLP
for the period from December 18, 2008 through February 28, 2009.
Stuart Maue recommends the approval of fees totaling $141,780,
which amount reflects a reduction by $3,558. Stuart Maue further
recommends reimbursement to Landis Rath for $10,854, which amount
represents a reduction by $16.
In support of the application of Downey, Smith & Fier for
allowance and payment of contingency fee for services rendered to
Debtor Los Angeles Times Communications, LLC, Scott Smith
discloses that the $160,008 identified as Accounts Payable Audit
Assessment reflects the California Use Tax identified by
California State Board of Equalization. Mr. Smith explains that
the auditor assessed the tax on purchases of tangible personal
property made by the Los Angeles Times that lacked sufficient
documentation exempting the purchase from California Use Tax.
According to Mr. Smith, a portion of the total refund was offset
by the assessment and the Refund Check reflects an offset taken
by the BOE because of the auditor's finding that the Los Angeles
Times' underpaid California Use Tax. This offset, Mr. Smith
notes, was unrelated to the services performed by DSF, and
therefore, was added back to the net refund to compute the total
value provided by DSF.
* * *
Judge Carey authorized Debtor Los Angeles Times to pay Downey,
Smith & Fier the contingency fee totaling $526,944.
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: Creditors Committee Has Deal With Rustic for Documents
------------------------------------------------------------------
The Official Committee of Unsecured Creditors in Tribune Co.'s
cases and Rustic Canyon Partners ask the Court to issue an order
directing Rustic Canyon to produce documents and respond to the
Committee's request for production in connection with analysis of
the 2007 leveraged buyout of Tribune.
In a stipulation, Rustic Canyon agrees to locate and produce
documents responsive to the Request by sending them to the
Committee's counsel in New York in electronic form by
September 30, 2009. Rustic Canyon has advised the Committee that
it needs to confer with counsel for Goldman Sachs with regard to
production of certain documents created by Goldman Sachs and in
the possession of Rustic Canyon that may be responsive to the
Request. Rustic Canyon relates that it will produce those
documents unless there is an objection by Goldman Sachs to the
production, in which case Rustic Canyon will notify the Committee
of the objection and will meet and confer with the Committee on
how best to resolve the objection in the most efficient manner.
The Creditors' Committee and Rustic Canyon have entered into a
Confidentiality Agreement to govern Rustic Canyon's production of
the Documents. All production of the Documents will be without
any waiver of attorney-client or any other privilege, or of work-
product protection.
A full-text copy of the Confidentiality Agreement is available
for free at:
http://bankrupt.com/misc/Tribune_CommitteeAgreement.pdf
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: Judge Defers Ruling on Manager Bonuses
--------------------------------------------------
The bankruptcy judge said he would rule later on whether Tribune
Co. can pay bonuses to managers.
According to Bill Rochelle at Bloomberg, bankruptcy judges usually
rule in court at the end of a hearing for approval of bonus
programs. Waiting to issue an opinion sometimes indicates the
judge intends to give reasons in writing for denying bonuses. Or,
it can also mean the judge believes there will be an appeal and
wants to provide extensive reason for approving bonuses.
Tribune Co. asked the Bankruptcy Court at the hearing on
September 25, 2009, to approve its request to dole out up to
$67 million in bonuses as motivation for top managers working to
keep the Debtors alive in a difficult environment for the media
industry.
Testifying before the Court, Chief Financial Officer Chandler
Bigelow III said the bonuses would help "incentivize our key
managers to battle all of the intense challenges that
unfortunately our local media businesses are facing," the
Associated Press reported. Mr. Bigelow noted that Tribune Co.'s
advertising revenue in publishing is down 29% compared with 2008,
and broadcasting revenue is off 23%.
The money would be paid to the 720 top editors, television station
managers and executives should the company end the year with $424
million in operating cash flow, company attorney Jonathan D.
Lotsoff said during the hearing. About half of the bonuses, $32
million, would go to the top 21 corporate officers.
The proposed bonuses are opposed by company unions representing
some of Tribune's reporters and other employees. Union officials
say the maximum bonus amount is almost $70 million when smaller,
discretionary bonuses are added.
"The Debtors cannot justify a $69.9 million payout to seven
hundred-plus executives, including the top ten, while
simultaneously pleading financial difficulties to the lower level
workers who report and write the stories, sell the adds, produce
the paper, and handle the broadcasts," Christopher P. Simon,
Esq., at Cross & Simon, LLC, in Wilmington, Delaware, wrote for
the Washington-Baltimore Newspaper Guild.
Mr. Simon added in a court filing that the proposed bonuses to the
top executives are excessive and may, in fact, have a detrimental
effect on motivating others who contribute to the bottom line.
"Indeed, the payment of disproportionate bonuses to a select group
of executives may have the opposite effect on the rank-and-file
employees," he further argues.
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.
TVT RECORDS: Pitbull Gets Out of Recording Contract
---------------------------------------------------
Miami Daily Business Review reports that rapper Pitbull's three
lawyers, Coralee Penabad, Andrew Hellinger, and Angela N.
Martinez, have helped him get out of his recording contract with
TVT Records in the Bankruptcy Court in Manhattan by focusing on
the Company's inability to reorganize in bankruptcy.
Melanie Cohen posted at The Wall Street Journal blog, Bankruptcy
Beat, that Pitbull's troubles with TVT Records began after the
Company lost a $9 million lawsuit in 2007 to recording label Slip-
n-Slide, which had rights to some of Pitbull's earlier recordings.
Citing Ms. Penabad, Bankruptcy Beat says that TVT Records
President Steve Gottlieb had blamed Pitbull and refused to promote
his CD when the label started struggling. According to Bankruptcy
Beat, Pitbull wasn't given permission to appear on other artists'
records.
Pitbull, along with TVT's clients, objected to a sale of some of
the Company's assets to digital-music distributor Orchard in June
2008. Bankruptcy Beat states that Pitbull even pushed for a
conversion of the Company's Chapter 11 reorganization case to
Chapter 7 liquidation. TVT's Chapter 11 case was converted to
Chapter 7 in October 2008.
About TEEVEE Toons
Headquartered in New York City, TEEVEE Toons Inc. dba T.V.T.
Records -- http://www.tvtrecords.com/-- is an American record
label. The Debtor filed for Chapter 11 petition on February 19,
2008 (Bankr. S.D.N.Y. Case No. 08-10562). The Official Committee
of Unsecured Creditors has selected Sonnenschein Nath & Rosenthal
LLP as its counsel. Alec P. Ostrow, Esq., and Constantine
Pourakis, Esq., at Stevens & Lee, P.C., represent the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed estimated assets of between
$10 million and $50 million and debts of between $10 million and
$50 million.
UAL CORP: Citadel Reports 4.85% Ownership of Common Stock
---------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission dated August 13, 2009, Citadel Limited Partnership
disclosed that it beneficially owns 7,067,768 shares of UAL
Corporation common stock, representing 4.85% of UAL's total
outstanding shares.
UAL has 145,779,390 shares of common stock outstanding as of
July 17, 2009.
Citadel Limited does not have the sole power to dispose of or to
direct the disposition of 7,067,768 shares.
Moreover these entities have shared power to dispose of or to
direct the disposition of 7,067,768 shares:
* Citadel Investment Group, L.L.C.
* Citadel Equity Fund Ltd.
* Citadel Investment Group II, L.L.C.
* Citadel Holdings II LP
* Citadel Advisors LLC
* Citadel Derivatives Trading Ltd.
* Kenneth Griffin
* Citadel Convertible Opportunities Ltd.
* Citadel Global Equities Master Fund Ltd.
* Citadel Securities LLC
Citadel Holdings is majority owned by Citadel Kensington Global
Strategies Fund Ltd. Citadel Equity Fund is majority owned by
Citadel Holdings. Neither Citadel Kensington nor Citadel Holdings
have control over the voting or disposition of securities held by
Citadel Equity. Citadel Derivatives is majority owned by CLP
Holdings LLC. CLP Holdings does not have control over the voting
or disposition of securities by Citadel Derivatives. Citadel
Securities is majority owned by Citadel Group Investors LLC.
Citadel Derivatives Group does not have control over the voting or
disposition of securities of Citadel Securities.
About UAL Corporation
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) --
http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest air
carrier. The airline flies to Brazil, Korea and Germany.
The Company filed for Chapter 11 protection on December 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven
R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in
their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. Judge Eugene
R. Wedoff confirmed the Debtors' Second Amended Plan on
January 20, 2006. The company emerged from bankruptcy protection
on February 1, 2006.
(United Airlines Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported by the TCR on June 12, 2009, Fitch Ratings has
downgraded the issuer debt rating to 'CCC' from 'B-' for UAL Corp.
and its principal operating subsidiary United Airlines, Inc.
The downgrade reflects Fitch's view that the airline's credit
profile is likely to weaken further, as extreme pressure in the
revenue environment continues to undermine the positive cash flow
impact of lower jet fuel prices in 2009.
UAL CORP: Janus Capital Discloses 12.8% Equity Stake
----------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission dated September 11, 2009, Janus Capital Management LLC
reported that it beneficially owns 18,485,635 shares of UAL
Corporation's common stock, representing 12.8% of UAL's total
outstanding shares.
UAL has 145,779,390 shares of common stock outstanding as of
July 17, 2009.
Janus Capital has the sole power to dispose of or to direct the
disposition of 18,435,163 shares. Moreover, Janus Capital has
shared power to vote or to direct disposition of 472 shares.
Janus Capital has a direct 91.5% ownership stake in INTECH
Investment Management and a direct 77.8% ownership stake in
Perkins Investment Management LLC. Due to this ownership
structure, holdings for Janus Capital, Perkins and INTECH are
aggregated for purposes of the disclosure. Janus Capital, Perkins
and INTECH are investment advisers, each furnishing investment
advice to various investment companies under Section 8 of the
Investment Company Act of 1940 and to individual and institutional
clients.
As a result of its role as investment adviser or sub-adviser to
the Managed Portfolios, Janus Capital may be deemed to be the
beneficial owner of 18,485,163 shares or 12.8% of the shares
outstanding of UAL common stock held by the Managed Portfolios.
However, Janus Capital does not have the right to receive any
dividends from, or the proceeds from the sale of, the securities
held in the Managed Portfolios, and disclaims any ownership
associated with those rights.
Similarly, as a result of its role as investment adviser or sub-
adviser to the Managed Portfolios, Perkins may be deemed to be the
beneficial owner of 472 shares or 0.0% of the shares outstanding
of UAL Common Stock held by those Managed Portfolios. However,
Perkins does not have the right to receive any dividends from, or
the proceeds from the sale of, the securities held in the Managed
Portfolios and disclaims any ownership associated with those
rights.
About UAL Corporation
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) --
http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest air
carrier. The airline flies to Brazil, Korea and Germany.
The Company filed for Chapter 11 protection on December 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven
R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in
their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. Judge Eugene
R. Wedoff confirmed the Debtors' Second Amended Plan on
January 20, 2006. The company emerged from bankruptcy protection
on February 1, 2006.
(United Airlines Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported by the TCR on June 12, 2009, Fitch Ratings has
downgraded the issuer debt rating to 'CCC' from 'B-' for UAL Corp.
and its principal operating subsidiary United Airlines, Inc.
The downgrade reflects Fitch's view that the airline's credit
profile is likely to weaken further, as extreme pressure in the
revenue environment continues to undermine the positive cash flow
impact of lower jet fuel prices in 2009.
UAL CORP: Terminated 290 Pilots as Part of Cost Cutting
-------------------------------------------------------
United Air Lines, Inc., has furloughed 290 pilots as the carrier
shrinks capacity and cuts down costs, Bloomberg News reported on
September 22, 2009.
The Air Line Pilots Association told Bloomberg that United's
management's inability to properly run an airline led to the
furloughs.
As of September 22, 2009, United furloughed a total of 1,164
pilots, with 6,436 pilots remaining in active service with United,
Bloomberg News said.
About UAL Corporation
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) --
http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest air
carrier. The airline flies to Brazil, Korea and Germany.
The Company filed for Chapter 11 protection on December 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven
R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in
their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. Judge Eugene
R. Wedoff confirmed the Debtors' Second Amended Plan on
January 20, 2006. The company emerged from bankruptcy protection
on February 1, 2006.
(United Airlines Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported by the TCR on June 12, 2009, Fitch Ratings has
downgraded the issuer debt rating to 'CCC' from 'B-' for UAL Corp.
and its principal operating subsidiary United Airlines, Inc.
The downgrade reflects Fitch's view that the airline's credit
profile is likely to weaken further, as extreme pressure in the
revenue environment continues to undermine the positive cash flow
impact of lower jet fuel prices in 2009.
UTGR INC: To Ask Court to Let Labor Dept. to Rule on Pay Dispute
----------------------------------------------------------------
Paul Grimaldi at projo.com reports that the lawyers of UTGR Inc.
and the state Department of Labor and Training have agreed to ask
U.S. Bankruptcy Court Judge Arthur N. Votolato to let the
Department of Labor issue a ruling in the two party's pay dispute.
According to projo.com, the agreement could open the way for 56
security guards to receive overtime pay. Workers filed a claim in
March 2008 with the Department of Labor seeking overtime pay for
working on Sundays at the Twin River slot parlor, but federal
bankruptcy filings put most related legal matters on hold,
including the security workers' case. projo.com relates that the
Department of Labor had held a hearing on the claim, but had yet
to issue a ruling when UTGR filed for bankruptcy June 23.
UTGR Inc. is the operator of the Twin River racetrack-casino in
Lincoln, Rhode Island. UTGR filed for Chapter 11 on June 23
(Bankr. D. Rhode Island Case No. 09-12418). The Debtors selected
Jager Smith P.C. as counsel, and Winograd, Shine & Zacks P.C. as
their co-counsel. It also hired Zolfo Cooper LLC as bankruptcy
consultants and special financial advisors. In its bankruptcy
petition, the Company estimated assets of less than $500 million
and debt exceeding $500 million.
US AIRWAYS: August Traffic Results Show RPMs Down 3.9%
------------------------------------------------------
US Airways Group, Inc., announced August and year-to-date 2009
traffic results. Mainline revenue passenger miles (RPMs) for the
month were 5.5 billion, down 3.9 percent versus August 2008.
Capacity was 6.4 billion available seat miles (ASMs), down 3.8
percent versus August 2008. Passenger load factor for the month
of August was 85.7 percent, or flat versus August 2008.
US Airways President Scott Kirby said, "Our August consolidated
(mainline and Express) passenger revenue per available seat mile
(PRASM) decreased approximately 15 percent versus the same period
last year while total revenue per available seat mile decreased
approximately 13 percent on a year-over-year basis. We remain
encouraged that recent booking and yield improvement trends are
continuing into September."
For the month of August, US Airways' preliminary on-time
performance as reported to the DOT was 81.4 percent with a
completion factor of 99.0 percent.
These summarizes US Airways Group's traffic results for the
month and year-to-date ended August 31, 2009 and 2008, consisting
of mainline operated flights as well as US Airways Express
flights operated by wholly owned subsidiaries PSA Airlines and
Piedmont Airlines.
US Airways Mainline
August
2009 2008 % Change
Mainline Revenue Passenger Miles (000)
Domestic 3,950,821 4,342,517 (9.0)
Atlantic 1,208,761 1,016,103 19.0
Latin 338,014 362,729 (6.8)
--------- ---------
Total 5,497,596 5,721,349 (3.9)
Mainline Available Seat Miles (000)
Domestic 4,581,590 5,026,191 (8.8)
Atlantic 1,435,871 1,213,197 18.4
Latin 397,989 432,904 (8.1)
--------- ---------
Total 6,415,450 6,672,292 (3.8)
Mainline Load Factor (%)
Domestic 86.2 86.4 (0.2) pts
Atlantic 84.2 83.8 0.4 pts
Latin 84.9 83.8 1.1 pts
--------- ---------
Total Mainline Load Factor 85.7 85.7 - pts
Mainline Enplanements
Domestic 3,960,745 4,338,040 (8.7)
Atlantic 295,315 260,956 13.2
Latin 275,399 301,766 (8.7)
--------- ---------
Total Mainline Enplanements 4,531,459 4,900,762 (7.5)
YEAR TO DATE
2009 2008 % Change
Mainline Revenue Passenger Miles (000)
Domestic 30,388,742 33,195,591 (8.5)
Atlantic 6,396,427 5,951,967 7.5
Latin 3,201,402 3,162,750 1.2
---------- ----------
Total 39,986,571 42,310,308 (5.5)
Mainline Available Seat Miles (000)
Domestic 35,953,958 39,977,019 (10.1)
Atlantic 8,213,284 7,559,768 8.6
Latin 4,082,272 3,794,114 7.6
---------- ----------
Total 48,249,514 51,330,901 (6.0)
Mainline Load Factor (%)
Domestic 84.5 83.0 1.5 pts
Atlantic 77.9 78.7 (0.8) pts
Latin 78.4 83.4 (5.0) pts
---------- ----------
Total 82.9 82.4 0.5 pts
Mainline Enplanements
Domestic 30,844,785 33,805,656 (8.8)
Atlantic 1,624,983 1,525,706 6.5
Latin 2,581,433 2,572,237 0.4
---------- ----------
Total 35,051,201 37,903,599 (7.5)
US Airways Express
(Piedmont Airlines, PSA Airlines)
August
2009 2008 % Change
Express Revenue Passenger Miles (000)
Domestic 192,724 201,941 (4.6)
Express Available Seat Miles (000)
Domestic 276,252 290,111 (4.8)
Express Load Factor (%)
Domestic 69.8 69.6 0.2 pts
Express Enplanements
Domestic 715,430 729,137 (1.9)
YEAR TO DATE
2009 2008 % Change
Express Revenue Passenger Miles (000)
Domestic 1,425,072 1,493,709 (4.6)
Express Available Seat Miles (000)
Domestic 2,111,314 2,202,791 (4.2)
Express Load Factor (%)
Domestic 67.5 67.8 (0.3) pts
Express Enplanements
Domestic 5,273,602 5,335,459 (1.2)
Consolidated US Airways Group, Inc.
August
2009 2008 % Change
Consolidated Revenue Passenger Miles (000)
Domestic 4,143,545 4,544,458 (8.8)
Atlantic 1,208,761 1,016,103 19.0
Latin 338,014 362,729 (6.8)
---------- ----------
Total 5,690,320 5,923,290 (3.9)
Consolidated Available Seat Miles (000)
Domestic 4,857,842 5,316,302 (8.6)
Atlantic 1,435,871 1,213,197 18.4
Latin 397,989 432,904 (8.1)
---------- ----------
Total 6,691,702 6,962,403 (3.9)
Consolidated Load Factor (%)
Domestic 85.3 85.5 (0.2) pts
Atlantic 84.2 83.8 0.4 pts
Latin 84.9 83.8 1.1 pts
---------- ----------
Total 85.0 85.1 (0.1) pts
Consolidated Enplanements
Domestic 4,676,175 5,067,177 (7.7)
Atlantic 295,315 260,956 13.2
Latin 275,399 301,766 (8.7)
---------- ----------
Total 5,246,889 5,629,899 (6.8)
YEAR TO DATE
2009 2008 % Change
Consolidated Revenue Passenger Miles (000)
Domestic 31,813,814 34,689,300 (8.3)
Atlantic 6,396,427 5,951,967 7.5
Latin 3,201,402 3,162,750 1.2
---------- ----------
Total 41,411,643 43,804,017 (5.5)
Consolidated Available Seat Miles (000)
Domestic 38,065,272 42,179,810 (9.8)
Atlantic 8,213,284 7,559,768 8.6
Latin 4,082,272 3,794,114 7.6
---------- ----------
Total 50,360,828 53,533,692 (5.9)
Consolidated Load Factor (%)
Domestic 83.6 82.2 1.4 pts
Atlantic 77.9 78.7 (0.8) pts
Latin 78.4 83.4 (5.0) pts
---------- ----------
Total Consolidated Load Factor 82.2 81.8 0.4 pts
Consolidated Enplanements
Domestic 36,118,387 39,141,115 (7.7)
Atlantic 1,624,983 1,525,706 6.5
Latin 2,581,433 2,572,237 0.4
---------- ----------
Total 40,324,803 43,239,058 (6.7)
US Airways is also providing a brief update on notable company
accomplishments during the month of August:
* Announced a transaction with Delta Air Lines that will
allow US Airways to expand service at Ronald Reagan
Washington National Airport (DCA), and enter key business
centers in Brazil and Japan. US Airways will obtain 42
pairs of Delta's slots at DCA and acquire the rights to
expand to Tokyo, Japan and Sao Paulo, Brazil.
Simultaneously, US Airways will transfer 125 pairs of its
slots to Delta at New York's LaGuardia Airport (LGA). The
Company anticipates that the transaction will improve
profitability by more than $75 million annually. The
transaction is subject to regulatory approval.
* Announced the first nonstop Caribbean destination from US
Airways' Phoenix hub to Montego Bay, Jamaica. This
seasonal service is set to begin Dec. 17 and will run
through April 12, 2010. The flights will be operated using
Airbus A319 aircraft with seating for 12 in First Class and
112 in the main cabin.
About US Airways
US Airways, along with US Airways Shuttle and US Airways Express,
operates more than 3,200 flights per day and serves more than 200
communities in the U.S., Canada, Europe, the Middle East, the
Caribbean and Latin America. The airline employs more than 33,000
aviation professionals worldwide and is a member of the Star
Alliance network, which offers its customers more than 17,000
daily flights to 916 destinations in 160 countries worldwide. And
for the eleventh consecutive year, the airline received a Diamond
Award for maintenance training excellence from the Federal
Aviation Administration (FAA) for its Charlotte, North Carolina
hub line maintenance facility. For more company information,
visit http://www.usairways.coM/
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. In the Company's second
bankruptcy filing, it listed $8,805,972,000 in total assets and
$8,702,437,000 in total debts.
The USAir II bankruptcy plan became effective on September 27,
2005. The Debtors completed their merger with America West on the
same date. (US Airways Bankruptcy News; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported by the TCR on Sept. 25, 2009, Moody's affirmed US
Airways' Corporate Family and Probability of Default Ratings at
'Caa1'. US Airways Group carries a 'CCC' issuer default rating
from Fitch.
As of June 30, 2009, reorganized US Airways had total assets of
$7,858,000,000 against debts of $8,194,000,000, for a
stockholders' deficit of $336,000,000.
US AIRWAYS: Ben Mitchell et al Seek Final Nod of PrimeFlight Deal
-----------------------------------------------------------------
The U.S. District Court for the District of Massachusetts
previously granted preliminary approval of Ben Mitchell et
al.'s proposed class action settlement reached with one of the
defendants, Prime Flight Aviation Services, Inc. Following that
approval, Plaintiffs' counsel sent notices to the class and have
received claim forms back from 435 class members, accounting for
85% of the class settlement proceeds.
"This is an extraordinary response rate for a case spanning a
national class, particularly of low wage employees," says counsel
for Ben Mitchell et al., Shannon Liss-Riordan, Esq., at Lichten &
Liss-Riordan, P.C., in Boston, Massachusetts.
According to Ms. Liss-Riordan, no class members opted out of the
settlement.
Thus, Ben Mitchell et al., now request that the Court grant final
approval to the settlement. The plaintiffs reiterate their
explanation from the preliminary approval motion as to why the
settlement is fair, adequate, and reasonable.
The plaintiffs assert that each of these factors demonstrates
that the proposed settlement is fair, reasonable, and adequate to
the members of the class, and should be approved by the Court:
(a) With respect to the complexity, expense and duration of
litigation, it is clear that the prosecution of the case
will be lengthy and expensive. By resolving claims
against one defendant, the PrimeFlight skycaps will be
able to receive some recovery now and simplify and focus
their claims against the remaining defendant, US Airways.
(b) With respect to the amount of the proposed settlement
compared to the amount at issue, the proposed settlement
is based upon an aggregate amount of approximately one
half of the federal minimum wage claims for all
PrimeFlight skycaps. Given the challenges that the
skycaps would have faced in prevailing on this claim,
this is a favorable settlement.
(c) With respect to the reaction of the class to the
settlement, the class reacted overwhelmingly favorably to
the settlement. Class members were informed on their
claim forms what the minimum amount would be for their
individual settlement shares, and more than 400 class
members submitted claim forms to receive their payments.
In countless discussions Plaintiffs' counsel's staff have
had with class members, the skycaps have been extremely
appreciative and excited about the settlement.
(d) With respect to the stage of proceedings and the amount of
discovery completed, the Plaintiffs obtained voluminous
data discovery from PrimeFlight allowing them to estimate
the aggregate class damages for the minimum wage claim,
and thus allowing them to assess the fairness of the
settlement. The parties are now almost finished with
discovery of their claims against US Airways, and there
has already been substantial briefing of legal issues. It
is clear that a settlement with one defendant will allow
the plaintiffs to simplify the case and focus their
energies on their claims against the other defendant, US
Airways.
(e) With respect to the plaintiffs' likelihood of success on
the merits and recovering damages on their claims,
Plaintiffs believe they have raised strong claims against
PrimeFlight but recognize hurdles they would have faced
had these claims continued in litigation. Most
significantly, they would have been met with the challenge
of proving a common policy of skycaps being required to
make up "shortages" for unpaid bag charges out of their
tips. Also, by narrowing their claims against US
Airways, they will not need to prove a joint employment
relationship between US Airways and PrimeFlight. Through
this settlement, they will have received some recovery for
their minimum wage claim and can now focus primarily on
their claims for recovery of the $2 per bag charges and on
their claim against US Airways for ending skycap services
following the filing of this lawsuit.
(f) With respect to whether the agreement provides benefits
which the Plaintiffs could not achieve through protracted
litigation, the settlement provides the benefit of a
prompt partial resolution and the avoidance of delay in
the PrimeFlight skycaps receiving compensation for their
minimum wage claims.
(g) With respect to whether the settlement was reached as the
result of good faith dealings and the absence of
collusion, it is clear that this is the case.
Class Members Object to Settlement
Class Members Corey Eaddy, Timothy Robinson, Marshal Glass,
Clarence Glaster and Anthony Walter object to the proposed
settlement of the class action. The Objectors assert that the
Motion and the Settlement Agreement fail to explain how the
Action, with Plaintiffs from seven states, satisfies the standing
requirements for a nationwide class. The Objectors relate that
in addition to attempting to settle claims on behalf of an overly
broad class, the settlement also attempts to release claims
against parties that are not part of the settlement, as well as
releasing claims that are not contemplated by the provisions of
the settlement and therefore lack any consideration warranting
their release.
The Objectors add that the Motion fails to address the
requirements of certification in any manner, and even neglects to
define the proposed class. Instead, the Objectors note, the
Motion requests that the Court approve the Settlement Agreement,
through which the parties attempt to circumvent having to meet
the certification requirements by merely stipulating that the
action be certified for settlement purposes.
Moreover, the Objectors point out that the Notice of Proposed
Settlement of Class Action Lawsuit is misleading. Significantly,
they note, the Notice contains false statements informing class
members that the Settlement will only affect claims against
PrimeFlight and not the claims against the air carriers.
Tip Income to Be Reported on Tax Returns
Defendant US Airways asks the Court to compel Plaintiffs to
report wages/tip income on their tax returns and to compel
Plaintiffs to answer questions at their depositions.
US Airways explains that:
* Plaintiffs are tipped employees of defendant Prime Flight
Aviation Services, Inc.
* The complaint puts Plaintiffs' tax filings directly at-
issue, in that they claim "as a result [of the $2 baggage
check-in charge], skycaps' compensation has decreased
dramatically.
* Plaintiffs admit that the records PrimeFlight has of their
tipped income are not accurate and, further, that their W-2
forms are not accurate.
About US Airways
US Airways, along with US Airways Shuttle and US Airways Express,
operates more than 3,200 flights per day and serves more than 200
communities in the U.S., Canada, Europe, the Middle East, the
Caribbean and Latin America. The airline employs more than 33,000
aviation professionals worldwide and is a member of the Star
Alliance network, which offers its customers more than 17,000
daily flights to 916 destinations in 160 countries worldwide. And
for the eleventh consecutive year, the airline received a Diamond
Award for maintenance training excellence from the Federal
Aviation Administration (FAA) for its Charlotte, North Carolina
hub line maintenance facility. For more company information,
visit http://www.usairways.coM/
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. In the Company's second
bankruptcy filing, it listed $8,805,972,000 in total assets and
$8,702,437,000 in total debts.
The USAir II bankruptcy plan became effective on September 27,
2005. The Debtors completed their merger with America West on the
same date. (US Airways Bankruptcy News; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported by the TCR on Sept. 25, 2009, Moody's affirmed US
Airways' Corporate Family and Probability of Default Ratings at
'Caa1'. US Airways Group carries a 'CCC' issuer default rating
from Fitch.
As of June 30, 2009, reorganized US Airways had total assets of
$7,858,000,000 against debts of $8,194,000,000, for a
stockholders' deficit of $336,000,000.
US AIRWAYS: E. Eberwein Acquired 10,000 Shares Sept. 10
-------------------------------------------------------
Elise R. Eberwein, EVP of People Communications of US Airways
Group Inc., discloses with the U.S. Securities and Exchange
Commission that she acquired 10,000 shares of common stock of the
Company on September 10, 2009. At the end of the transaction,
Ms. Eberwein beneficially owned 31,550 shares.
The amount of stocks acquired by Ms. Eberwein represents a grant
of restricted stock units that will vest in increments of one
third each of September 10, 2010, September 10, 2011 and
September 10, 2012. The restricted stock units entitle the
holder one share of common stock per unit upon vesting.
The stock appreciation right vests in increments of one third on
each of September 10, 2010, September 10, 2011, and September 10,
2012.
About US Airways
US Airways, along with US Airways Shuttle and US Airways Express,
operates more than 3,200 flights per day and serves more than 200
communities in the U.S., Canada, Europe, the Middle East, the
Caribbean and Latin America. The airline employs more than 33,000
aviation professionals worldwide and is a member of the Star
Alliance network, which offers its customers more than 17,000
daily flights to 916 destinations in 160 countries worldwide. And
for the eleventh consecutive year, the airline received a Diamond
Award for maintenance training excellence from the Federal
Aviation Administration (FAA) for its Charlotte, North Carolina
hub line maintenance facility. For more company information,
visit http://www.usairways.coM/
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. In the Company's second
bankruptcy filing, it listed $8,805,972,000 in total assets and
$8,702,437,000 in total debts.
The USAir II bankruptcy plan became effective on September 27,
2005. The Debtors completed their merger with America West on the
same date. (US Airways Bankruptcy News; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported by the TCR on Sept. 25, 2009, Moody's affirmed US
Airways' Corporate Family and Probability of Default Ratings at
'Caa1'. US Airways Group carries a 'CCC' issuer default rating
from Fitch.
As of June 30, 2009, reorganized US Airways had total assets of
$7,858,000,000 against debts of $8,194,000,000, for a
stockholders' deficit of $336,000,000.
VELOCITY EXPRESS: Asks Court to Approve $14-Mil. Burdale DIP Loan
-----------------------------------------------------------------
Velocity Express Corporation and all of its United States
subsidiaries on September 24, 2009, entered into a Postpetition
Agreement with Burdale Capital Finance, Inc., as administrative
agent and lender, to provide liquidity to the Sellers for use of
the operation of Sellers' business during their chapter 11 cases
pending the sale of substantially all of their assets.
The DIP Agreement modifies the Loan and Security Agreement among
certain of the Sellers and certain of their subsidiaries as
borrowers and guarantors, and Burdale as the Agent and the lender,
dated as of March 13, 2009, as amended. The DIP Facility provides
the Sellers with up to a $14 million revolving line of credit,
whereas the maximum amount of advances under the Loan Agreement
was limited to $12 million. The obligations of the borrowers and
the guarantors under the DIP Facility are joint and several and
are secured by substantially all of the assets of the borrowers
and guarantors.
The interest rate applicable to revolving loans made under the DIP
Facility will bear a per annum interest rate equal to the sum of
6% plus the base rate under the Loan Agreement. The base rate is
the highest of (a) rate of interest announced from time to time by
JPMorgan Chase Bank as its prime rate, (b) the weighted average of
the rates on overnight Federal Funds transactions with members of
the Federal Reserve System arranged by Federal Funds brokers on
such day, as published by the Federal Reserve Bank of New York on
the Business Day next succeeding such day, plus one-half of one
percentage point, (c) the London Interbank Offered Rate for a one
month interest period plus one percentage point and (d) 4.25%.
In addition to paying interest on outstanding borrowings under the
DIP Facility, the borrowers are also required to pay a letter of
credit fee that accrues at a rate equal to 6% per annum multiplied
by the average daily balance of the undrawn amount of all
outstanding letters of credit and a fee on the unutilized portion
of the revolver equal to 1.0% per annum. The borrowers paid a
closing fee of $175,000 and are also required to pay certain fees,
costs and expenses of Burdale arising in connection with the DIP
Facility and the related documents, transactions and agreements.
The DIP Facility contains a number of customary covenants that,
among other things, restrict the borrowers' and guarantors'
ability to incur additional debt, create liens on assets, sell
assets, pay dividends, engage in mergers and acquisitions, change
the business conducted by the borrowers or guarantors, or engage
in transactions with affiliates. The DIP Facility also includes
specified financial covenants.
As reported by the Troubled Company Reporter, Velocity Express on
September 24, 2009, and its subsidiaries entered into an Asset
Purchase Agreement with ComVest Velocity Acquisition I, LLC, a
Delaware limited liability company pursuant to which the Purchaser
will purchase substantially all of the assets of the Sellers for
an aggregate purchase price of $9,773,740 evidenced by the Credit
Bid plus the outstanding Obligations under the DIP Credit
Agreement and the Burdale Credit Agreement, Determined Cure Costs
and cash in an amount equal to $50,000. The Purchaser will assume
certain liabilities from the Sellers associated with the purchased
assets and pay cure costs of assumed contracts subject to a
$250,000 cap.
The Asset Purchase Agreement and the DIP Facility are subject to
approval by the United States Bankruptcy Court for the District of
Delaware.
A full-text copy of the DIP Agreement is available at no charge
at http://ResearchArchives.com/t/s?45c7
About ComVest
The ComVest Group is a 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 its extensive financial resources and broad network of
industry experts, ComVest is able to offer its 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.
ComVest Velocity Acquisition I, LLC, buyer of the Debtors' assets,
is represented in the case by Kenneth G. Alberstadt, Esq., at
Akerman Senterfitt LLP in New York.
DIP Lender Burdale is represented in the case by Jonathan M.
Cooper, Esq., Randall L. Klein, Esq., and Sarah J. Risken, Esq.,
at Goldberg Kohn Bell Black Rosenbloom & Moritz, LTD., in Chicago,
Illinois.
VERMILLION INC: Stock Tops $13 After FDA Test Approval
------------------------------------------------------
The U.S. Food and Drug Administration has cleared Vermillion
Inc.'s OVA1 test that can help detect ovarian cancer in a pelvic
mass that is already known to require surgery. The test helps
patients and health care professionals decide what type of surgery
should be done and by whom.
Since the Company filed for Chapter 11 in March, the stock had
been trading for a few cents. Following the announcement of FDA
approval for the test on Sept. 11, the stock began rising and
closed Sept. 28 at $13.50, up $5.05 in over-the-counter trading,
Bloomberg's Bill Rochelle said.
To avoid running out of cash, Vermillion filed a motion
last week for approval of $1.5 million in financing from Quest
Diagnostics Inc. The motion also asks for ratification of the
pre-bankruptcy agreement under which Quest has the exclusive
right to market the test in the U.S. for three years.
Headquartered in Fremont, California, Vermillion, Inc. --
http://www.vermillion.com/-- engages in the development and
commercialization of diagnostic tests to aid physicians diagnose
and treat results for patients. The Company filed for Chapter 11
on March 30, 2009 (Bankr. D. Del. Case No. 09-11091). Francis A.
Monaco Jr., Esq., and Mark L. Desgrosseilliers, Esq., at Womble
Carlyle Sandridge & Rie, PLLC, represent the Debtor as counsel.
At September 30, 2008, the Debtor had $7,150,000 in total assets
and $32,015,000 in total liabilities.
W R GRACE: Proposes to Implement New Hires' Retirement Plan
-----------------------------------------------------------
Preceding the Petition Date and continuing, newly hired salaried
employees of the Debtors in the United States automatically
commence participation in the W. R. Grace Salaried Retirement Plan
effective one year after the Eligible Employees' hire date.
The Salaried Retirement Plan is a defined benefit pension plan,
qualified under Section 401(a) of the Internal Revenue Code, which
generally provides each retired vested participant with a specific
monthly pension benefit for life, calculated based on the
participant's final average compensation, years of credited
service with the Debtors, and other criteria specified in the
Plan, David M. Bernick, Esq., at Kirkland & Ellis LLP, in New
York, relates.
Mr. Bernick says the Salaried Retirement Plan is the largest
defined benefit plan maintained by, and requires the largest
amount of contributions from, the Debtors, which amounted to
approximately $35.1 million as of 2009. The benefits under the
Salaried Retirement Plan are paid through a qualified retirement
plan trust that, in turn, is funded by contributions from the
Debtors.
Highly paid Eligible Employees, whose benefits under the Salaried
Retirement Plan are limited under the Internal Revenue Code, are
also entitled to monthly pension payments under the Grace
Supplemental Executive Retirement Plan. The SERP is a non-
qualified defined benefit retirement plan, which generally mirrors
the provisions of the Salaried Retirement Plan, except that the
SERP pays benefits on the portion of the compensation paid to
highly paid Eligible Employees that exceeds the limits imposed by
the Code, according to Mr. Bernick.
By this motion, the Debtors seek the Court's authority to
establish a new defined contribution retirement arrangement, to
replace the current defined contribution arrangement, for eligible
employees of the Debtors hired on or after January 1, 2010.
The Debtors will continue, however, to maintain the existing
defined benefit retirement arrangement for current U.S. eligible
salaried employees and any other employees hired on or prior to
December 31, 2009.
Provisions of New Arrangement
The New Arrangement will include a New Defined Contribution
Retirement Plan that will be qualified under Section 401 (a) of
the Internal Revenue Code, as well as a Supplemental Non-qualified
Defined Contribution Plan that will provide defined contribution
benefits attributable to the covered compensation received by
highly paid Eligible Employees in excess of the Code limits
applicable to the New Qualified DC Plan, Mr. Bernick explains.
Current Eligible Employees and other Eligible Employees hired
before January 1, 2010, (i) will continue to participate in, and
receive credited service under, the Salaried Retirement Plan and
the SERP, as appropriate, on and after January 1, 2010, and (ii)
will not be covered by the New Qualified DC Plan or the
Supplemental DC Plan.
The New Qualified DC Plan, which Grace's Board of Directors
approved during its meeting on July 1, 2009, includes these
provisions:
(1) An account will be established for each Eligible Employee
hired on or after January 1, 2010, under the New Qualified
DC Plan.
(2) The Debtors will commence contributions to that account
for the Eligible Employee as of the month following the
month in which the Employee is hired.
(3) The Debtors will contribute an amount equal to 4% of the
covered compensation paid to each Eligible Employee, up to
the compensation and contribution limits imposed by the
Internal Revenue Code.
(4) Eligible Employees will become 100% vested in their
accounts under the New Qualified DC Plan, after 3 years of
service with the Debtors.
(5) Each Eligible Employee with an account balance under the
New Qualified DC Plan will be entitled to invest the
balance in a range of mutual funds and other investments
permitted under the Plan. The Debtors will not make
investment decisions for these Eligible Employees.
(6) An Eligible Employee who terminates service with the
Debtors at the time that he or she has a vested balance in
his or her account will be entitled to receive that
balance at the time, and in any of the payment forms,
available under the New Qualified DC Plan.
(7) Forfeitures from accounts of unvested, terminated
participants will be used to offset administrative fees
and future contributions under the New Qualified DC Plan.
The provisions of the Supplemental DC Plan include:
(1) A "notional", unfunded account will be established under
the Supplemental DC Plan, with respect to each Eligible
Employee who receives covered compensation that exceeds
the applicable Code limit or whose contributions are
otherwise limited solely as a result of the Code's
contribution limits.
(2) An amount equal to 4% of any covered compensation paid to
an Eligible Employee, above the limits imposed by the
Code, will be credited to an account under the
Supplemental DC Plan for the Eligible Employee.
(3) The vesting provisions of the Supplemental DC Plan will be
the same as those under the New Qualified DC Plan.
(4) The balance of the "notional" account will be credited
with a specific interest rate, which will be equal to the
"prime rate."
(5) An Eligible Employee who terminates service with the
Debtors at the time that he or she has a vested balance in
his or her notional account under the Supplemental DC Plan
will receive that balance as a lump sum as of the month
following the month of termination. That balance will be
paid from the general assets of the Debtors.
The principle cost of implementing the New Arrangement will
generally equal 4% of the covered compensation of newly hired
Eligible Employees, less forfeitures, Mr. Bernick notes.
While the Debtors do not have a targeted objective with respect to
new hires during the next several years, they estimate that they
may hire approximately 200 Eligible Employees in 2010 and 2011,
with an average salary of approximately $87,000. The hiring
estimates result in these projected cash cost of implementing the
New Arrangement for the next two calendar years:
Year Cash Cost Estimate
-------------- --------
2010 $371,000
2011 $1,074,000
Mr. Bernick reasons out that implementation of the New Arrangement
for new hires and maintaining the Existing Arrangement for current
employees addresses the concerns of the Debtors' creditors because
these steps will:
-- begin to reduce the increases in liabilities under the
Debtors' Defined Benefit Arrangement;
-- provide competitive retirement benefits to attract new
Hires; and
-- help retain current salaried employees, as well as
encourage their engagement and maintain their morale, by
satisfying their retirement plan expectations.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing is
scheduled to continue on October 13 and 14.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W R GRACE: Proposes to Sell 5% Interest in ART to Chevron
---------------------------------------------------------
W.R. Grace & Co., Inc. and its affiliates seek the Court's
permission to sell 5% of the limited liability company interests
in Advanced Refining Technologies LLC to Chevron U.S.A., Inc., for
a sale price of $4 million.
ART is a limited liability company that develops, markets and
sells hydro-processing catalysts, which are used to upgrade heavy
oils into lighter, more useful products. Grace is the primary
manufacturer of ART's products. In 2008, ART's revenues were
approximately $355 million, according to Theodore L. Freedman,
Esq., at Kirkland & Ellis LLP, in New York.
Grace owns 55% of the Company's Interests, while Chevron owns 45%.
ART's business and affairs, which have been operating since March
2001 in the ordinary course of business, are governed by the
Limited Liability Company Agreement dated March 1, 2001, between
Grace and Chevron.
Under the LLC Agreement, Grace and Chevron jointly manage ART,
with all actions by the ART Executive Committee requiring the
approval of both Grace and Buyer. The LLC Agreement also provides
Grace cannot sell the Sale Asset without Chevron's consent, and
Chevron is not willing to consent to a sale to a third party, Mr.
Freedman relates.
In connection with the Sale, the parties also agreed to the amend
the terms of the LLC Agreement, to (i) reflect the Sale related to
the modification of the LLC Interests and contains certain
additional amendments related to the operation of ART, and (ii)
reduce Grace's commitment to $20.25 million, or 50% of the
aggregate commitments of Grace and Chevron Capital to ART.
According to Mr. Freedman, ART's revenues and results of
operations are included in the consolidated revenues and results
of operations of W. R. Grace & Co., which also reports Chevron's
interest in ART as a non-controlling interest in consolidated
results.
When ART began business prior to the Petition date, the ART
structure reflected Grace's judgment that consolidating ART's
sales into the Grace Parent Group's financial reporting would be
advantageous for the business and was also appropriate for
accounting purposes. ART subsequently grew from an $80 million to
a $350 million business with greater financing requirements.
After substantial analysis, Mr. Freedman says, Grace determined
because of the differences in scale resulting from ART's
substantial growth, ART should be restructured and the
consolidation is no longer advantageous because:
* Under the arrangement, Grace disproportionately funds ART by
Funding maintenance capital and providing the majority of
the revolving credit commitments to ART.
* As long as ART remains consolidated with the Grace Parent
group, any borrowing by ART under the Chevron-ART Credit
Agreement may trigger a cap on interest tax deductions by a
non-Debtor Grace subsidiary that could eliminate a
substantial portion of the deductions and resulting tax
savings. The deductions carry over into subsequent years,
but remain subject to the deduction cap in those years.
* ART's sales are volatile because they generally involve
large purchases by petroleum refiners as the result of
competitive bidding arrangements, at intervals that
generally are both several years in length and difficult to
predict.
Amendments to Related Grace-ART Agreements
In connection with their business relationship, Grace and ART are
parties among other things to:
* Hydro-processing Catalyst Supply Agreement dated March 1,
2001, as amended, under which Grace sells hydro-processing
catalysts to ART; and
* Credit Agreement dated March 1, 2001, as amended, under
which Grace has committed to provide ART with up to
$24.75 million of revolving credit loans on an unsecured
basis.
Grace's $24.75 million loan commitment is 55% of the total loan
commitments, and Chevron Capital's $20.25 million loan commitment
is 45% of the total loan commitments. Pursuant to the Sale, the
Credit Agreement Amendment reduces Grace's loan commitments to ART
from $24.75 million to $20.25 million, which is the same amount as
Chevron's commitments
The Catalyst Supply Agreement provides that ART will pay a
manufacturing surcharge to Grace on the price of purchased
catalysts equal to the amount of (i) depreciation on the items
purchased with the Capital Loans, plus (ii) interest payments on
the Capital Loans, which Grace has not previously obtained.
Accordingly, Grace seeks for the Court's approval of any Capital
Loan in any subsequent fiscal year -- from 2010 through 2014,
inclusive -- in amounts not to exceed $6.0 million in any single
year.
A summary of the Transactions contemplated by the Sale is
available for free at:
http://bankrupt.com/misc/WRGrace_ARTSaleSummary.pdf
The Debtors have concluded that the Sale is a "reconsideration
event" that, under accounting rules, would allow Grace to
deconsolidate ART. Moreover, the restructuring steps embodied in
the Transactions would reduce the cash burden on Grace. After
restructuring, ART management will have greater responsibility for
ART's cash management, which Grace believes will lead to "a
proportionately distributed and effective management of ART's
business," Mr. Freedman tells Judge Fitzgerald.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing is
scheduled to continue on October 13 and 14.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W R GRACE: Settles BNSF Railway Environmental Claims
----------------------------------------------------
BNSF Railway company, formerly known as Burlington Northern Santa
Fe, filed several proofs of claim for unspecified amounts,
including Claim Nos. 8250, 8251, 8252, 15518 and 17095 on account
of environmental remediation in real properties located in Minot,
North Dakota; Denver Colorado; and Libby, Montana. The Debtors
objected to the BNSF Claims on several grounds.
To resolve the disputes, the Debtors and BNSF have entered into
the a stipulation allows Claim Nos. 8252, 15518 and 17095 as
General Unsecured Claims for $2,952,761, plus interest which will
begin to accrue from and after the these accrual dates:
Allowed Allowed
Claim No. Accrual Date Claim Amount
--------- ------------ ------------
8252 May 9, 2006 $17,300
15518 May 9, 2006 $1,017,106
17095 August 20, 2007 $1,918,355
Claim Nos. 8250 and 8251 will be disallowed and expunged for all
purposes.
Theodore L. Freedman, Esq., at Kirkland & Ellis LLP, in New York,
says that the Stipulation is in light of the Environmental
Protection Agency Multi-site Agreement reached between the Debtors
and the United States in June 2008.
According to Mr. Freedman, the EPA Multi-Site Agreement provides
that certain claimants who qualify as a "PRP Group/Entity," as
defined in the Debtors' Chapter 11 Plan of Reorganization, are
entitled to receive payments or distributions from the Debtors if,
by the effective date of the Plan, the Claimants agree that all
liabilities and obligations against the Debtors with respect to
the sites are discharged and satisfied by allowed claims.
The terms and Settlement Amounts provided in the Stipulation are
fair and reasonable, well within the reasonable range of
litigation possibilities and are implementing the terms of the EP
A Multi-Site Agreement. In addition, the Stipulation serves an
important public interest by resolving environmental remediation
liability issues at the three Sites, and should therefore be
approved, Mr. Freedman contends.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing is
scheduled to continue on October 13 and 14.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
WARNER CHILCOTT: Moody's Assigns 'Ba3' Rating on Senior Facilities
------------------------------------------------------------------
Moody's Investors Service assigned a rating of Ba3 to the proposed
new senior secured credit facilities of Warner Chilcott
Corporation, Warner Chilcott Company, LLC and WC Luxco S.a r.l.
At the same time, Moody's assigned a B3 rating to the proposed new
senior unsecured notes to be co-issued by Warner Chilcott Company,
LLC, and Warner Chilcott Finance LLC. Each of the borrowers under
the senior secured credit facilities and co-issuers of the senior
unsecured notes is a subsidiary of Warner Chilcott plc, which,
together with its subsidiaries, are collectively referred to as
"Warner Chilcott". At the same time, Moody's withdrew the
ratings on Warner Chilcott's former senior secured credit
facilities.
In addition, Moody's affirmed Warner Chilcott's B1 Corporate
Family Rating, B1 Probability of Default Rating, B3 senior
subordinated rating and SGL-1 Speculative Grade Liquidity Rating.
The rating outlook is stable.
Proceeds of the new senior unsecured notes offering and senior
secured credit facilities are expected to be used to fund Warner
Chilcott's pending acquisition of The Procter & Gamble Company's
pharmaceuticals business for $3.1 billion.
Warner Chilcott's B1 Corporate Family Rating reflects the
company's good position in the women's health pharmaceuticals
business, offset by its relatively limited scale. The pending
acquisition of PGP will significantly improve Warner Chilcott's
scale, but will result in higher financial leverage and high
product concentration risk in the PGP products Actonel and Asacol.
Following the very recent sale of two dermatology products,
Moody's anticipates pro forma debt to EBITDA of approximately 2.4
to 2.8 times. Although this leverage ratio is not excessive, risk
factors include declining sales of Actonel, a patent challenge on
Asacol, and a growth strategy that appears in transition,
potentially resulting in higher leverage in the future.
The proposed new senior secured bank facilities are rated Ba3
[LGD3, 37%], one notch higher than the B1 Corporate Family Rating
because of the support provided by $380 million of existing senior
subordinated notes rated B3 [LGD6, 94%], and $450 million of
proposed senior unsecured notes rated B3 [LGD5, 85%]. These
rating remains subject to final transaction terms and amounts, and
changes in the capital structure could result in rating changes
based on the application of Moody's Loss Given Default Rating
Methodology. For instance, in a scenario with a reduced amount of
senior unsecured notes, the Ba3 rating on the proposed senior
secured bank facilities could be lowered.
The SGL-1 Speculative Grade Liquidity rating reflects Moody's view
that liquidity will remain very good after the close of the PGP
transaction based on strong free cash flow, good availability
under the revolving credit agreement and ample headroom under
financial covenants. A potential put from Sanofi-Aventis related
to Actonel rights could require a large cash outlay by Warner
Chilcott, but under most scenarios liquidity should remain very
strong based on availability through a delayed draw feature of the
new term loans.
Ratings assigned:
* Warner Chilcott Corporation, Warner Chilcott Company, LLC and WC
Luxco S.a r.l. (Borrowers)
* Ba3 [LGD3, 37%] senior secured Term Loan A of $1.0 billion due
2014
* Ba3 [LGD3, 37%] senior secured Term Loan B of $1.5 billion due
2015
* Ba3 [LGD3, 37%] senior secured revolving credit facility of
$250 million due 2014
* Warner Chilcott Company, LLC and Warner Chilcott Finance LLC
(Co-Issuers)
* B3 [LGD5, 85%] senior unsecured notes of $450 million due 2017
Ratings affirmed:
Warner Chilcott Company, LLC
* B1 Corporate Family Rating
* B1 Probability of Default Rating
* SGL-1 Speculative Grade Liquidity Rating
Rating affirmed with LGD point estimate revisions:
Warner Chilcott Corporation
* B3 [LGD6, 94%] senior subordinated notes of $380 million due
2015
Ratings withdrawn:
Warner Chilcott Corporation, Warner Chilcott Company, LLC and
Warner Chilcott Holdings Company III, Limited (Former Borrowers)
* Ba3 [LGD3, 36%] revolving credit facility due 2011
* Ba3 [LGD3, 36%] Term Loan B due 2012
* Ba3 [LGD3, 36%] Term Loan C due 2012
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 plc is a
specialty pharmaceutical company currently focused on the women's
healthcare and dermatology segments of the U.S. pharmaceuticals
market. For the first six months of 2009, the company reported
total revenue of approximately $497 million.
WEYERHAEUSER COMPANY: Moody's Puts 'Ba1' Rating on $300 Mil. Notes
------------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Weyerhaeuser
Company's proposed $300 million senior notes offering. The rating
outlook is stable. The expected use of proceeds from the note
offering is the refinancing of outstanding debt. The new notes
will be unsecured and will rank equally in right of payment with
all of the company's existing senior unsecured indebtedness.
Weyerhaeuser's Ba1 corporate family rating reflect the company's
extensive timberland holdings which provide long term debt
reduction capability and liquidity, the dominant position and
scale in forest products and cellulose fibers which provide
operational flexibility, and the manageable debt maturity profile
and strong current cash position. Weyerhaeuser's credit profile
is also influenced by its negative free cash flow position and
weak debt protection measures in the midst of the protracted U.S.
housing downturn. Financial and operating performance across all
four of Weyerhaeuser's business segments of timber harvesting,
cellulose fibers, wood products and home building are expected to
remain weak over the near term, notwithstanding actions taken by
the company to reduce costs and curtail higher cost production.
The company's SGL-1 liquidity rating indicates that Weyerhaeuser
has strong liquidity supported by its large cash balance, its
unencumbered asset base that can be used to augment liquidity
(most notably the timberland holdings), a manageable level of
near-term debt maturities and significant unused borrowing
capacity under its bank lines. Moody's expects 2009 cash flow
shortfalls to be accommodated by Weyerhaeuser's cash position.
The company recently reduced the size of its March 2010 revolving
credit facility to $400 million and made several amendments to
both credit facilities including a reduced net worth covenant test
to provide for additional headroom. The stable rating reflects
Moody's expectations that Weyerhaeuser has the liquidity to
weather the current industry conditions and that the company's
financial performance will gradually improve to generate credit
protection metrics in line with its Ba1 rating.
Assignments:
Issuer: Weyerhaeuser Company
-- Senior Unsecured Regular Bond/Debenture, Assigned Ba1, LGD4,
52%
Withdrawals:
Issuer: Weyerhaeuser Company
-- Senior Unsecured Bank Credit Facility, Withdrawn, previously
rated Ba1, LGD4, 52%
Moody's last rating action was on May 6, 2009, when Moody's
downgraded Weyerhaeuser's senior unsecured ratings to Ba1 from
Baa2 and assigned a Ba1 corporate family rating.
Headquartered in Federal Way, Washington, Weyerhaeuser Company is
one of the world's largest integrated forest products companies
with operations in the growing and harvesting of timber; the
manufacture, distribution and sale of forest products; and real
estate construction, development and related activities.
XEROX CORP: Affiliated Computer Deal Cues S&P's Negative Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its ratings on
Norwalk, Connecticut-based Xerox Corp. on CreditWatch with
negative implications. The CreditWatch placement follows Xerox's
announcement of a definitive agreement to acquire Affiliated
Computer Services Corp. in a cash and stock transaction valued at
$63.11 per share or $6.4 billion. Xerox will also assume ACS's
debt of $2 billion.
At the same time, S&P placed its 'BB' corporate credit and other
ratings on ACS on CreditWatch with positive implications, as S&P
expects to equalize any debt outstanding with the Xerox rating
upon closing. S&P expects to resolve both CreditWatch placements
following the close of the transaction, which is likely in the
first quarter of 2010.
Under the terms of the agreement, ACS shareholders will receive a
total of $18.60 per share in cash plus 4.935 Xerox shares for each
ACS share they own. In addition, Xerox will assume ACS's debt of
$2 billion and issue $300 million of convertible preferred stock
to ACS's class B shareholders, which will be treated like debt for
analytical purposes. S&P expects the transaction, which has
received approval by the Xerox and ACS boards of directors and ACS
special committee, to close in the first quarter of 2010, pending
regulatory and shareholder approval.
"We view the acquisition as an enhancement to Xerox's existing
business profile, given ACS's good position in state and local
government, diversified customer base, and recurring revenue
stream," explained Standard & Poor's credit analyst Lucy
Patricola. Still, pro forma for the acquisition-related debt,
leverage will increase and S&P expects fully adjusted debt to
EBITDA of about 3.3x as of Dec. 31, 2009. Combined, the companies
should generate solid levels of discretionary cash flow, which
could reduce leverage rapidly.
"If the transaction closes in accordance with the proposed terms,
S&P would likely lower Xerox's corporate credit rating to 'BBB-'
and assign a stable outlook," added Ms. Patricola.
S&P will evaluate the final terms of the acquisition, operating
trends for the second half of 2009 and management's commitment to
debt reduction following the transaction to determine the final
ratings for Xerox and ACS.
* FDIC Board to Order Banks to Pay Advance 3 Years of Fees
----------------------------------------------------------
The board of the Federal Deposit Insurance Corporation will be
asking banks to pay three years' worth of its fees in advance.
The FDIC board confirmed in a statement Sept. 29 that it has
adopted a Notice of Proposed Rulemaking that would require insured
institutions to prepay their estimated quarterly risk-based
assessments for the fourth quarter of 2009 and for all of 2010,
2011 and 2012. The FDIC estimates that the total prepaid
assessments collected would be approximately $45 billion. The
FDIC Board also voted to adopt a uniform three-basis point
increase in assessment rates effective on January 1, 2011, and
extend the restoration period from seven to eight years.
FDIC Chairman Sheila C. Bair said, "First and foremost, bank
customers should know that their insured deposits have and always
will be 100 percent safe, no matter what. This commitment to
depositors is absolute. The decision today is really about how
and when the industry fulfills its obligation to the insurance
fund. It's clear that the American people would prefer to see an
end to policies that look to the federal balance sheet as a remedy
for every problem. In choosing this path, it should be clear to
the public that the industry will not simply tap the shoulder of
the increasingly weary taxpayer. This proposal is a vote of
confidence for the banking industry's resilience, and it will
continue to recover its strength as we work through the
significant challenges ahead."
Prepayment of assessments will allow the industry to strengthen
the cash position of the Deposit Insurance Fund (DIF) immediately,
while allowing the capital impact of deposit insurance assessments
to be felt gradually over time as the industry improves its own
financial position. The banking industry has substantial
liquidity to prepay assessments. As of June 30, FDIC-insured
institutions held more than $1.3 trillion in liquid balances, or
22% more than they did a year ago. Prepaying assessments will put
the industry's liquid balances to good use in conserving capital
and helping to maintain the capacity of banks to lend while they
rebuild the DIF. FDIC analysis indicates that this arrangement is
much less likely to impair bank lending than a one-time special
assessment.
The FDIC board met Tuesday to discuss options to replenish the
agency's insurance reserves. Among other options by the FDIC for
replenishing its DIF is a second special assessment on banks to
shore up its shrinking deposit fund, and borrowing taxpayer
dollars from the Treasury Department or taking loans from banks.
The agency on Tuesday rejected options for a second special fee or
borrowing from the Treasury Department, according to Bloomberg.
Banks are opposing paying a second assessment and prefer prepaying
their premiums.
The insurance fund will have a negative balance as of Sept. 30
after 120 banks were shut in the past two years, and will be
positive by 2012, the FDIC said, according to Bloomberg. Banks
failures may cost $100 billion through 2013 with half the cost
already incurred, the FDIC stated.
According to a report last month by the FDIC, its 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. However, since the end of the second quarter,
50 more banks have closed.
* S&P's 2009 Global Corporate Default Tally at 216
--------------------------------------------------
One global corporate issuer defaulted on the week of September 18
to 24, bringing the 2009 year-to-date tally to 216 issuers --
nearly 4x the 62 defaults at this time in 2008, said an article
published Sept. 25 by Standard & Poor's.
Last week's defaulter was based in Japan, bringing the default
tallies by region to 155 issuers in the U.S., 13 in Europe, 34 in
the emerging markets, and 14 in the other developed region
(Australia, Canada, Japan, and New Zealand), according to the
article, titled "Global Corporate Default Update (Sept. 18 - 24,
2009) (Premium)."
The latest default resulted from a payment suspension after the
issuer, Aiful Corp., successfully applied for alternative dispute
resolution (ADR) procedures. S&P views this as a selective
default ('SD').
"Selective defaults have accounted for 75 defaults this year, the
majority of which were distressed exchanges," said Diane Vazza,
head of Standard & Poor's Global Fixed Income Research Group.
"Missed interest payments come in second, accounting for 74
defaults in 2009." Bankruptcy filings also have surged, with 54
issuers so far this year having filed for bankruptcy protection,
which surpasses the full-year 2008 total of 49 bankruptcy-related
defaults.
"Despite unprecedented turbulence in the credit markets and
record-high default volume since 2008, the ability of corporate
credit ratings to serve as an effective measure of relative
default risk remains intact," said Ms. Vazza.
This is evidenced by several factors, such as 87% of the issuers
that have defaulted this year were rated speculative grade ('BB+'
and lower) prior to default, investment-grade-rated issuers ('BBB-
' and above) have a 99% survival rate within a one-year time
horizon, and the majority of defaults this year stem from the
lowest rungs of the credit spectrum, known as weakest links.
Globally, 278 issuers are weakest links (entities rated 'B-' and
lower with a negative outlook or ratings on CreditWatch negative),
and the regional distribution of weakest links closely mirrors the
default experience so far this year.
Of the global corporate defaulters so far this year, 40% of issues
with available recovery ratings had recovery ratings of '6'
(indicating our expectation for negligible recovery of 0%-10%),
16% of issues had recovery ratings of '5' (modest recovery
prospects of 10%-30%), 12% had recovery ratings of '4' (average
recovery prospects of 30%-50%), and 11% had recovery ratings of
'3' (meaningful recovery prospects of 50%-70%). And for the
remaining two rating categories, 11% of issues had recovery
ratings of '2' (substantial recovery prospects of 70%-90%) and 10%
of issues had recovery ratings of '1' (very high recovery
prospects of 90%-100%).
* Moody's Changes U.S. Retail Industry Sector Outlook to Stable
---------------------------------------------------------------
Moody's Investors Service on Sept. 29 changed the Industry Sector
Outlook for the U.S. retail industry to stable from negative. The
change in outlook to stable reflects Moody's belief that the
fundamental credit conditions across the broad retail industry
will be generally stable over the next 12 to 18 months, and are
unlikely to either materially erode or improve. While the many
pressures on the consumer may result in the U.S. retail industry
having further sales and earnings declines in the current quarter,
Moody's believes that the overall credit profile of the broad
retail industry will remain relatively stable for the remainder of
2009 and for 2010.
It is important to note that, while Moody's believes industry
conditions are stable, they are at very weak levels, Moody's
pointed out. "Consumers continue to face many pressures including
high unemployment, low housing prices, and a reduction in
available installment credit" stated Maggie Taylor, Senior Credit
Officer at Moody's. "In addition, we believe the current consumer
trend towards saving and repaying debt will continue over the
intermediate term. This will likely make it challenging for
industry conditions to materially improve from their very weak
levels."
Moody's also notes that -- given the very diverse nature of the
retail universe -- there will be some specific sub-sectors that
demonstrate strength while others demonstrate weakness, with the
overall medium term profile being one of stability. The stable
outlook considers the sizable portion of the US retail industry
represented by the relatively stable discount, supermarket, and
drug store sectors. Although certain sectors -- such as the
department stores and specialty retailers -- are likely to
experience further earnings pressure, the level of deterioration
in these sectors is likely to moderate to a level that will not
materially impact overall US retail credit profile over the medium
term. In addition, the stable outlook also considers the sizable
portion of retail sales that are generated by the larger retail
chains which are likely to be more stable. Moody's believes that
many smaller "mom and pop" retailers will continue to experience
sales and earnings declines.
The stable Retail Industry Sector Outlook also reflects the
success the industry has had at reducing costs in response to the
weak consumer spending environment. While third quarter 2009
earnings of many retailers will continue to show declines from the
prior year, this trend will likely flatten in the fourth quarter
as the companies begin to anniversary the losses they incurred in
late 2008 to mark down inventories and as their sales demonstrate
more stability.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Oct. 2, 2009
AMERICAN BANKRUPTCY INSTITUTE
ABI/GULC "Views from the Bench"
Georgetown University Law Center, Washington, D.C.
Contact: http://www.abiworld.org/
Oct. 7-9, 2009
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Desert Ridge, Phoenix, Arizona
Contact: 312-578-6900; http://www.turnaround.org/
Oct. 20, 2009
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Paris Las Vegas, Las Vegas, Nev.
Contact: http://www.abiworld.org/
Dec. 3-5, 2009
AMERICAN BANKRUPTCY INSTITUTE
21st Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
Feb. 21-23, 2010
INSOL
International Annual Regional Conference
Madinat Jumeirah, Dubai, UAE
Contact: 44-0-20-7929-6679 or http://www.insol.org/
Apr. 29-May 2, 2010
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 17-20, 2010
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
July 7-10, 2010
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Ocean Edge Resort, Brewster, Massachusetts
Contact: 1-703-739-0800; http://www.abiworld.org/
July 14-17, 2010
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Conference
The Ritz-Carlton Amelia Island, Amelia, Fla.
Contact: http://www.abiworld.org/
Aug. 5-7, 2010
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 6-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
Dec. 2-4, 2010
AMERICAN BANKRUPTCY INSTITUTE
22nd Annual Winter Leadership Conference
Camelback Inn, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 31-Apr. 3, 2011
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa
Traverse City, Michigan
Contact: http://www.abiworld.org/
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
Last Updated: August 10, 2009
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
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assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
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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
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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.
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*** End of Transmission **