/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/091013.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, October 13, 2009, Vol. 13, No. 283 Headlines 523 BROAD STREET: Case Summary & 4 Largest Unsecured Creditors ACCEPTANCE INSURANCE: Appeals Court Dismisses Claim Against U.S. ACCURIDE CORP: Wants Schedules Filing Deadline Moved to Dec. 7 ACCURIDE CORP: Discloses Debt Restructuring Agreement ACCURIDE CORP: Obtains Lenders' Forbearance re Canadian Unit ACCURIDE CORP: Tinicum Discloses 8.5% Equity Stake ACCURIDE CORPORATION: Chapter 11 Cues Moody's to Withdraw Ratings AGRIPROCESSORS INC: Former Manager to be Tried for Fraud Charges ALL-AMERICAN SPORTPARK: Board Elects Cara Brunette as Director AMERICAN KEYSTONE: Insurer Ordered into Receivership AMERITYRE CORP: Common Stock Subject to Potential Delisting ARC PRESSURE DATA: Case Summary & 20 Largest Unsecured Creditors ARTHUR WILMER: Case Summary & 5 Largest Unsecured Creditors AURORA OIL: Gets Final Approval of BNP Paribas DIP Financing AWAL BANK: Seeks Chapter 15 After Bahrain Filing B-SWDE3: Voluntary Chapter 11 Case Summary BABY TREND INC: Case Summary & 7 Largest Unsecured Creditors BARZEL INDUSTRIES: JPM DIP Facility Requires Sale by Mid-November BARZEL INDUSTRIES: Amends List of Largest Unsec. Creditors BARZEL INDUSTRIES: Hires CB Richard as Exclusive Sales Agent BARZEL INDUSTRIES: Proposes Houlihan as Financial Advisor BASSETT FURNITURE: Posts $3.4-Mil. Loss, Gets Loan Deal Waiver BATH JUNKIE: Files for Chapter 11 Bankruptcy Protection BEAR STEARNS: Fraud Trial vs. Cioffi and Tannin to Start Today BEARINGPOINT INC: Perot Systems to Acquire China Consulting Unit BEDROCK INTERNATIONAL: Can Access Cash Collateral Until October 31 BENJAMIN VALENZUELA: Case Summary & 20 Largest Unsecured Creditors BERNARD MADOFF: Clawback Claim Against Cohmad Hiked to $245-Mil. BLUE CHALK CAFE: Case Summary & 20 Largest Unsecured Creditors BOMBARDIER INC: Moody's Upgrades Speculative Grade Liquidity BRAINTECH INC: Pays Royal Bank of Canada Loan in Full BRAZOS RIVER: Distressed Debt Exchange Cues S&P to Junk Ratings BRUCE POVALISH: Case Summary & 20 Largest Unsecured Creditors BTS MONTERREY: In Default Under Palms of Monterrey Note BUILDING MATERIALS: SelectBuild Settles Employee Suit for $241,000 CAMELOT SPORTS GROUP: Voluntary Chapter 11 Case Summary CANWEST GLOBAL: CCAA Restructuring Database CANWEST GLOBAL: U.S. Court Issues TRO Against Creditors CANWEST GLOBAL: Wins Nod From CCAA Court to Obtain C$100MM Loan CAPITAL CORP: Court Sets October 22 Disclosure Statement Hearing CENTERPOINT ENERGY: Fitch Takes Actions on Issuer and Debt Ratings CIT GROUP: Debt-Exchange Offer Gets Little Interest, Says Report CITIGROUP INC: Phibro Acquired by Occidental Petroleum CLARIENT INC: Amends License Deal with Prediction Sciences CLEAR CHANNEL: Hill's Tenure as Accounting Head to End March 2010 COINMACH SERVICE: S&P Downgrades Corporate Credit Rating to 'SD' COOPER-STANDARD: Committee Gets Nod for Bennett as Canada Attys. COOPER-STANDARD: Court Approves Kramer as Committee Counsel COOPER-STANDARD: Young Conaway Authorized as Committee Co-Counsel CORUS BANK: Sonoma Drive Purchases Monterrey Note at Discount CRUCIBLE MATERIALS: Union Reaches Pact with New Owner CRUSADER ENERGY: Court Approves SandRidge-Led Auction CYNERGY DATA: Wins Approval to Sell Assets to ComVest Group DOLLAR THRIFTY: NYSE to Delist Preferred Share Purchase Rights DUNE ENERGY: To Seek Shareholder OK of 1-for-5 Reverse Stock Split DUNE ENERGY: UBS AG Reports 43.99% Equity Stake EDGE PETROLEUM: Gets Initial Approval to Use Cash Collateral EDGE PETROLEUM: Nasdaq Delists Securities on Chapter 11 Filing EMMIS COMMUNICATIONS: Restates Annual & Quarterly Reports ENCHANTMENT LLC: Files for Chapter 11 Bankruptcy Protection ENCHANTMENT LLC: Voluntary Chapter 11 Case Summary ENVIRONMENTAL TECTONICS: Obtains Covenant Relief from PNC Bank EQUIPMENT FINDERS: Gets Temporary OK to Access Cash Collateral ESP PRINTING INC: Case Summary & 20 Largest Unsecured Creditors EVERGREEN ENERGY: Out of Compliance with NYSE Arca Listing Rules EXTENDED STAY: Wins Turnaround Plan Extension Amid Loan Probe F&H DEVELOPMENT CO INC: Case Summary & Unsecured Creditor FAIRPOINT COMMS: Bank Debt Trades at 22% Off in Secondary Market FIVE STAR OF CENTRAL: Case Summary & 20 Largest Unsec. Creditors FLEETWOOD ENTERPRISES: Can Use Cash Collateral Until January 31 FLYING J: Wants to Sell ERCs to Hydrogen Energy for $9.7 Million FM RIVERWALK: Voluntary Chapter 11 Case Summary FREEDOM COMMUNICATIONS: Creditors Slam Freedom's $7M Bonus Bid FREMONT GENERAL: Hearing on Plan Outlines to Continue Tomorrow FREMONT GENERAL: Terms of Creditors Committee's Revised Plan GALLERIA (USA): Affiliate's Deals May Have Gone Sour, Report Says GENCORP INC: Board Approves Amendments to Pension Plans GENCORP INC: Mulls Options on 4% Notes; In Talks with Lenders GENCORP INC: Posts $12.1 Million Net Income for Fiscal Q3 GENERAL MOTORS: Asbestos Claimants Oppose Remy Stay Request GENERAL MOTORS: Court OKs Payment of Ex-Directors' Attorneys Fees GENERAL MOTORS: GM, Tengzhong Reach Deal on Sale of Hummer Brand GENERAL MOTORS: PI Claimants Demand Info on Asbestos Liabilities GENERAL MOTORS: U.S. Trustee, Creditors Agree on Fee Examiner GEOEYE INC: Closes $400-Mil. Private Placement of 9.625% Notes GENTA INC: Warrell & Itri Disclose 27.4% Equity Stake GUARANTY FINANCIAL: NYSE Removes Common Stock From Listing GUIDED THERAPEUTICS: Receives $2.5MM Grant from Cancer Institute HARRAH'S OPERATING: Bank Debt Trades at 3.15% Off HEALTH MANAGEMENT: Bank Debt Trades at 7.11% Off HERMITAGE APARTMENTS: Case Summary & 20 Largest Unsec. Creditors HERMITAGE DEVELOPERS: C. Holland's Client Tries to Recoup $325,000 HISTORIC U.S. NATIONAL: Case Summary & 20 Largest Unsec. Creditors HYDRALOGIC SYSTEMS: Lender Agrees to Forbear Until Oct. 31 IDEARC INC: Bank Debt Trades at 58.33% Off in Secondary Market IMAGEWARE SYSTEMS: BET Funding Advances $300,000, Pledges $700,000 INFOLOGIX INC: Taps SSG to Explore Restructuring Options INTERMOST CORP: Albert Wong Raises Going Concern Doubt IRWIN FINANCIAL: NYSE Delists Securities Effective October 16 JAMES COBB: Case Summary & 20 Largest Unsecured Creditors JOHN STOKES: To Appeal Case Conversion, Rejection of Extension JOSEPH DELGRECO: Case Summary & 18 Largest Unsecured Creditors JOSEPH HAYES: Case Summary & 18 Largest Unsecured Creditors KB HOME: SEC Launches Probe on Accounting LANDAMERICA FIN'L: Details of Fine-Tuned Liquidating Plan LANDAMERICA FIN'L: PBGC Says Plan Has Inadequate Info on Pensions LANDAMERICA FIN'L: To Seek Approval of Disc. Statement Oct. 13 LANDAMERICA FIN'L: Various Parties Object to Plan Outline LAUREATE EDUCATION: Bank Debt at 8% Off in Secondary Market LEAR CORP: Bank Debt Trades at 7.58% Off in Secondary Market LEARNING CARE: S&P Junks Corporate Credit Rating From 'B-' LEHMAN BROTHERS: To Auction Art Collection on November 1 LEVI STRAUSS: Posts $40.7MM Net Income for August 30 Quarter LEWIS EQUIPMENT: Can Access Frost Cash Collateral until October 18 LEWIS EQUIPMENT: Wants to Sell Tower Cranes to Southwest Shipyards LIGHTHOUSE FINANCIAL: Wants to Use CapitalSource Cash Collateral LINDA SMITH: Case Summary & 16 Largest Unsecured Creditors LITHIUM TECHNOLOGY: Incurs $3-Mil. Net Loss in 2nd Quarter LIZ CLAIBORN: JC Penney Deal Won't Affect Moody's 'B2' Rating LNR PROPERTY: Bank Debt Trades at 24.6% Off in Secondary Market LODGIAN INC: Says Crowne Plaza and Merrill Lynch Loans in Default MAINLINE CONTRACTING: Wants Access to Cash Securing BB&T Loan MARGAUX WESTOVER: Files for Chapter 11, Blames Economic Woes MARK HILL: Case Summary & 20 Largest Unsecured Creditors MARTENSE NEW YORK: Case Summary & 16 Largest Unsecured Creditors MDWERKS INC: Chris Phillips Steps Down as Director MERIDIAN RESOURCE: Forbearance Pact Expires October 14 MERRILL LYNCH: To Surrender Docs on BofA Acquisition Advice METRO-GOLDWYN-MAYER: Bank Debt Trades at 43.2% Off METROPCS WIRELESS: Bank Debt Trades at 4.53% Off MICHAELS STORES: Bank Debt Trades at 12% Off in Secondary Market MORRIS PUBLISHING: Lenders Extend Waiver Until October 16 MSGI SECURITY: Delays Annual Report for Year Ended June 30 MT CARMEL MISSIONARY: Case Summary & 5 Largest Unsecured Creditors NCI BUILDING: Extends Exchange Offer to October 19 NCI BUILDING: Finalizes Terms of New $125 Million ABL Facility NEXT INC: Forbearance Pact Extended Until Oct. 30 NORTEL NETWORKS: Proposes to Hold Ciena-Led Auction for Ethernet NORTH END PROPERTIES: Voluntary Chapter 11 Case Summary NOVA CHEMICALS: S&P Assigns 'B-' Rating on US$500 Mil. Bonds NOVADEL PHARMA: Receives $111,665 From Sale of Shares to Seaside NTK HOLDINGS: $250MM ABL Facility Satisfies Forbearance Deal OMNIRELIANT HOLDINGS: KBL LLP Raises Going Concern Doubt ONE TWENTY NINE: Case Summary & 20 Largest Unsecured Creditors OPEN TEXT: S&P Raises Ratings on Senior Credit Facility From 'BB+' OSI RESTAURANT: Bank Debt Trades at 15.4% Off in Secondary Market OUTFITTER MANUFACTURING: Case Summary & 20 Largest Unsec Creditors OXIS INTERNATIONAL: Bristol Forbearance Permits Securities Sale PAC ORGANIC: Case Summary & 20 Largest Unsecured Creditors PALMDALE HILLS: Trustee to Release Funds for Property Maintenance PAMELA RIDLEY: Case Summary & 20 Largest Unsecured Creditors PAXTON REALTY: Case Summary & 5 Largest Unsecured Creditors PHILADELPHIA NEWSPAPERS: Asset Sale to Local Interests Nixed PHILADELPHIA NEWSPAPERS: To Auction Off Property in Philadelphia POLAROID CORPORATION: Can Use Cash Collateral Until December 31 PORTA SYSTEMS: Board, Shareholder OK 1-for-500 Reverse Split PREMIER ENTERTAINMENT: Liquidated Damages Clause Unenforceable PROTECTION ONE: Appoints Peter Ezersky to Board of Directors PTS CARDINAL: Bank Debt Trades at 13% Off in Secondary Market QUEST RESOURCE: Inks Amendment to Merger Agreement R & G PROPERTIES: Case Summary & 20 Largest Unsecured Creditors RAPTOR PHARMACEUTICAL: Dismisses Ernst & Young as Auditors REAL MEX: Commences Exchange Offer for 14% Senior Secured Notes REALOGY CORP: Bank Debt Trades at 17% Off in Secondary Market REALOGY CORP: S&P Affirms 'C' Rating on Second-Lien Term Loan RENEW ENERGY: Creditors, Bondholders Object to 'Rushed' Sale RENWOOD VINEYARD: Case Summary & 17 Largest Unsecured Creditors REVLON CONSUMER: S&P Puts 'B-' Rating on CreditWatch Positive RITE AID: Has Placed Bohemia, NY Distribution Center for Sale ROCKY BAY LLC: Case Summary & 9 Largest Unsecured Creditors SAMSONITE STORES: Files Amended Chapter 11 Plan SEA LAUNCH: Creditors Challenge Boeing's Top Status SELECT MEDICAL: Bank Debt Trades at 3.2% Off in Secondary Market SEQUENOM INC: Dr. Stylli Resigns From Board of Directors SIERRA KINGS: Voluntary Chapter 11 Case Summary SIMPLY MEDIA: First Circuit Frowns on Second Frivolous Appeal SINCLAIR BROADCAST: Commences Tender Offers for 3% & 4.875% Notes SINCLAIR BROADCAST: Moody's Reviews 'Caa2' Corporate Family Rating SMITTY'S BUILDING: Exits Chapter 11, Mulls Sale of Alexandria Unit SMURFIT-STONE: Creditors Transfer Ownership of 56 Claims SMURFIT-STONE: Deal on U.S. Bank Access to Funds Okayed SMURFIT-STONE: Has Request for 2nd Expansion of E&Y Work SMURFIT-STONE: Proposes KPMG LLP as Consultant SOUTHERN FARMLAND: Case Summary & 2 Largest Unsecured Creditors STANFORD FIN'L: Owner Can Use Lloyd's Insurance to Pay Lawyers STARCOACH INC: Case Summary & 13 Largest Unsecured Creditors STEGE CONTRACTING: Case Summary & 20 Largest Unsecured Creditors STEVE PAIGE: Internet Domain Name Was Property of the Estate STORABLES INC: Dana Park Objects to Reorganization Plan SUN-TIMES MEDIA: Tyree Sees Profit by First Half of 2010 SUNRISE SENIOR: Obtains Wells Fargo Forbearance Through Nov. 16 SUNRISE SENIOR: To Sell 21 Communities to Brookdale for $204MM SWIFT TRANSPORTATION: Bank Debt Trades at 11% Off TAN LIE: Trustee Counsel Can Be Paid for De Minimis Trustee Tasks TANA SEYBERT: Can Obtain $6.4 Million DIP Financing from HSBC TELLIGENIX CORPORATION: Case Summary & 20 Largest Unsec. Creditors TIGER PACIFIC: Enters into Forbearance Pact with Lenders TIMOTHY RICHARDS: Case Summary & 20 Largest Unsecured Creditors TODD'S CAR WASH: Case Summary & 20 Largest Unsecured Creditors TRAFFORD DISTRIBUTING: Set-Off Approved for Warehouse Customer TRAVELPORT LLC: Moody's Cuts Senior Facility Ratings to 'Ba3' TRIBUNE CO: Bank Debt Trades at 50% Off in Secondary Market TRIBUNE CO: Cubs Sent to Chapter 11 to Complete Sale to Rickets TRIBUNE CO: Updated Case Summary & 30 Largest Unsecured Creditors TRUE TEMPER: Seeks Approval of $90-Mil. of DIP Financing TRUE TEMPER: Taps Logan & Company as Claims Agent TRUE TEMPER SPORTS: Case Summary & 30 Largest Unsecured Creditors TRUMP ENTERTAINMENT: Lender Appeals Ruling Giving Up Exclusivity TXCO RESOURCES: Wants Until October 29 to File Chapter 11 Plan USI HOLDINGS: S&P Assigns 'B-' Rating on $100 Mil. Senior Loan VERMILLION INC: Gets Over Half-Million Dollars From Warrant Deals VINEYARD NATIONAL: Suspends SEC Financial Reports; KPMG Resigns VIRGIN MOBILE: Prudential Financial Unloads Equity Stake VISTEON CORP: Exclusive Plan Filing Period Moved to Dec. 10 VISTEON CORP: Gets Court Nod for Accommodations From GM VISTEON CORP: Interim Cash Collateral Use Extended Until Nov. 12 VISTEON CORP: Terms of $31MM Accommodation Agreement With Chrysler W R GRACE: Completes Divestiture of Two Product Lines W R GRACE: Dist. Court Reverses Ruling on $130MM Asbestos Claim W R GRACE: Wants Court to Bar Solomons Testimony at Plan Hearing WALKER RADIO: Voluntary Chapter 11 Case Summary WARREN MCDOWELL: S.D. Fla. Says Sanctions Can Be Discharged WAVERLY GARDENS: Court Extends Cash Collateral Use Until Dec. 1 WELLS JOHNSON COMPANY: Case Summary & 16 Largest Unsec. Creditors WEST COAST: Case Summary & 10 Largest Unsecured Creditors WEST HAWK: EnCana Oil Wants Cases Converted to Chapter 7 WILBERT RICHARDSON: Chapter 11 Case Summary & Unsecured Creditor WILLIAM BAYLES: Case Summary & 8 Largest Unsecured Creditors WILLIAM HOLMES: Daughter Indicted of Fraud WILTON BRANDS: Creditors Withdraw Involuntary Ch. 11 Petition WOOD RIVER: Case Summary & 12 Largest Unsecured Creditors YOUNG BROADCASTING: Bank Debt Trades at 47% Off * Automakers Restless About Ad Campaigns, Report Says * 'Fulcrum' Deals Rising To Prominence, Experts Say * Insurer Wants Evidence Barred In Firm's $75M Claim * Local Bankruptcies Rise; Manufacturers, Real Estate Hurt Most * Motor Vehicle Parts Suppliers Urge Action to Assist Industry * New Report from CFO Magazine Spots Credit Risks * Oklahoma Bankruptcy Filings Slightly Drop in 3rd Quarter * Smaller Bankruptcy Firms Booming as Business Failures Rise * Treasury's Strategy is 'Inadequate' to Address Foreclosures * Large Companies With Insolvent Balance Sheets ********* 523 BROAD STREET: Case Summary & 4 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: 523 Broad Street, LLC 253 Main Street Nashua, NH 03060 Bankruptcy Case No.: 09-13935 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Amherst Street, LLC 09-13936 Pine Hill Road Real Estate Development, LLC 09-13937 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court District of New Hampshire Live Database (Manchester) Judge: J. Michael Deasy Debtor's Counsel: Robert L. O'Brien, Esq. Attorney at Law P.O. Box 357 New Boston, NH 03070-0357 Tel: (603) 459-9965 Fax: (603) 250-0822 Email: robjd@mail2firm.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 4 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nhb09-13935.pdf The petition was signed by Vatche Manoukian, managing member of the Company. ACCEPTANCE INSURANCE: Appeals Court Dismisses Claim Against U.S. ---------------------------------------------------------------- Acceptance Insurance Companies, Inc., said in a regulatory filing that the U.S. Court of Appeals affirmed the dismissal of its claim against the United States of America. In 2003, the Company filed a complaint against the United States of America in the U.S. Court of Federal Claims, alleging that by not approving the proposed sale of certain insurance assets of one of the Company's subsidiaries, American Growers Insurance Company, to Rain and Hail L.L.C., the Risk Management Agency rendered valueless the insurance business of American Growers. The Company also alleged that in rejecting the proposed transaction between the Company and Rain and Hail, the RMA effected a taking of the Company's property for public use without just compensation in violation of the Fifth Amendment to the U.S. Constitution. On Sept. 25, 2008, the U.S. Court of Federal Claims granted the motion of the United States to dismiss, with prejudice, the Company's complaint for failure to state a claim upon which relief may be granted. AICI appealed the dismissal. The Company is evaluating available options in response to the Court of Appeals action. Headquartered in Council Bluffs, Iowa, Acceptance Insurance Companies, Inc. -- http://www.aicins.com/-- owns, either directly or indirectly, several companies, one of which is an insurance company that accounts for substantially all of the business operations and assets of the corporate groups. The Company filed for Chapter 11 protection on Jan. 7, 2005 (Bankr. D. Nebr. Case No. 05-80059). The Debtor's affiliates -- Acceptance Insurance Services, Inc., and American Agrisurance, Inc. -- each filed Chapter 7 petitions (Bankr. D. Nebr. Case Nos. 05-80056 and 05-80058) on January 7, 2005. John J. Jolley, Esq., at Kutak Rock LLP, represents the Debtor in its restructuring efforts. Lawyers at McGrath North Mullin & Kratz PC, LLO, represent the Official Committee of Unsecured Creditors in Acceptance Insurance's case. ACCURIDE CORP: Wants Schedules Filing Deadline Moved to Dec. 7 -------------------------------------------------------------- Accuride Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend until Dec. 7, 2009, the deadline to file their schedules of assets and liabilities, and statements of financial affairs. The Debtors tell the Court that they will be unable to complete their schedules and statements by the initial deadline due to the complexity and diversity of their operations. According to the Debtors, the extension of time would help ensure that their schedules and statements are as accurate as possible. A hearing is set for Nov. 2, 2009, at 12:00 noon, to consider the Debtors' request for extension. Objections, if any, are due Oct. 26, 2009, by 4:00 p.m. About Accuride Corp. Accuride Corporation (OTCBB: AURD) -- http://www.accuridecorp.com/ -- is one of the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America. Accuride's products include commercial vehicle wheels, wheel-end components and assemblies, truck body and chassis parts, seating assemblies and other commercial vehicle components. Accuride's products are marketed under its brand names, which include Accuride, Gunite, Imperial, Bostrom, Fabco, Brillion, and Highway Original. Accuride agreed to a balance sheet restructuring with the ad hoc committee of holders of its 8-1/2% senior subordinated notes and the steering committee of senior lenders under its credit agreement. To complete the proposed restructuring, Accuride's U.S. entities on October 8 filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code to seek approval of the prepackaged plan of reorganization (Bankr. D. Del. Case No. 09-13449). The Debtors have selected Latham & Watkins LLP as counsel; Young Conaway Stargatt & Taylor, LLP as co-counsel; MorrisAnderson as financial advisor; and The Garden City Group Inc. as claims agent. Accuride's petition listed assets of $682 million against debt totaling $847 million. Liabilities include a $304 million term loan and a $100 million revolving credit, plus the $275 million in subordinated notes. ACCURIDE CORP: Discloses Debt Restructuring Agreement ----------------------------------------------------- Accuride Corporation has agreed to a balance sheet restructuring with the ad hoc committee of holders of its 81/2% senior subordinated notes and the steering committee of senior lenders under its credit agreement. In the proposed debt restructuring transaction: -- Accuride will amend its existing credit agreement to modify certain financial covenants and extend its maturity through June 30, 2013. -- The Notes will be cancelled and noteholders will receive 98% of the common stock of the reorganized Accuride, subject to dilution, including dilution for stock issued upon conversion of the new notes and warrants. -- The reorganized Accuride will complete a $140 million rights offering of new senior unsecured convertible notes to current noteholders. The rights offering is fully backstopped by certain current Noteholders. The new notes will be convertible into 60% of the common stock of the reorganized Accuride. A portion of the proceeds from the rights offering will be used to repay the "last- out" term loan currently held by an affiliate of Sun Capital Partners, with the remainder to provide on-going liquidity for Accuride's business. -- Unsecured trade creditors will be unimpaired and their claims will be paid in full. -- Current stockholders will receive 2% of the common stock of the reorganized Accuride and two-year warrants exercisable for 15% of the common stock of the reorganized Accuride, subject to dilution, including dilution for stock issued upon conversion of the new notes. The warrants provide the opportunity for an additional recovery to the prepetition equity holders in the event that the Company reaches certain equity value targets during the two years following the warrants' issue. To complete the proposed restructuring, Accuride's U.S. entities filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code and are seeking approval for the proposed plan of reorganization. Accuride's Canadian and Mexican subsidiaries are not included in the bankruptcy filing. All operations will continue to operate "business as usual." With the prearranged agreement Accuride is hopeful that it will be able to emerge from bankruptcy on an expedited basis with a confirmed plan of reorganization. To ensure that Accuride will continue conducting its business in the ordinary course without interruption, the Company has secured a $50 million "debtor-in-possession" credit facility to be provided by certain of its senior lenders and noteholders. Such financing will provide peace of mind to Accuride's customers and suppliers and allow the Company to maintain or restore normal trade terms with suppliers. "Accuride's debt restructuring efforts are designed to create a sustainable capital structure that will support greater profitability and solidify the Company's position as the market leader in its product categories," said Bill Lasky, Accuride's President, CEO, and Chairman of the Board. "Accuride expects to quickly emerge from Chapter 11 having rationalized its capital structure and de-levered its balance sheet. I believe this restructuring transaction maximizes our financial flexibility and positions Accuride for future growth." About Accuride Corp. Accuride Corporation (OTCBB: AURD) -- http://www.accuridecorp.com/ -- is one of the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America. Accuride's products include commercial vehicle wheels, wheel-end components and assemblies, truck body and chassis parts, seating assemblies and other commercial vehicle components. Accuride's products are marketed under its brand names, which include Accuride, Gunite, Imperial, Bostrom, Fabco, Brillion, and Highway Original. Accuride agreed to a balance sheet restructuring with the ad hoc committee of holders of its 8-1/2% senior subordinated notes and the steering committee of senior lenders under its credit agreement. To complete the proposed restructuring, Accuride's U.S. entities on October 8 filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code to seek approval of the prepackaged plan of reorganization (Bankr. D. Del. Case No. 09-13449). The Debtors have selected Latham & Watkins LLP as counsel; Young Conaway Stargatt & Taylor, LLP as co-counsel; MorrisAnderson as financial advisor; and The Garden City Group Inc. as claims agent. Accuride's petition listed assets of $682 million against debt totaling $847 million. Liabilities include a $304 million term loan and a $100 million revolving credit, plus the $275 million in subordinated notes. ACCURIDE CORP: Obtains Lenders' Forbearance re Canadian Unit ------------------------------------------------------------ Accuride Corporation reports that in connection with its Chapter 11 filing, effective October 8, 2009, it entered into a Fourth Amendment and Canadian Forbearance Agreement with respect to the Company's Fourth Amended and Restated Credit Agreement, dated as of January 31, 2005, as amended, with Accuride Canada Inc., the lender parties, the administrative agent for the lenders, and the other agents party to the Credit Agreement. Pursuant to the Canadian Forbearance, the senior lenders have agreed to forbear from enforcing any remedies under the Credit Agreement against Accuride Canada with respect to any defaults specified therein. The Canadian Forbearance will remain effective until the termination of the Debtors' DIP Credit Agreement, subject to certain provisions that may lead to an earlier termination. A copy of the Fourth Amendment and Canadian Forbearance Agreement is available at no charge at http://ResearchArchives.com/t/s?46cd Restructuring Transaction Prior to making the Chapter 11 filings, on October 7, 2009, the Company entered into (i) a Restructuring Support Agreement with the holders of roughly 57% of the principal amount of the loans outstanding under the Company's Credit Agreement, (ii) a Restructuring Support Agreement with the beneficial holders of roughly 70% of the principal amount of the Company's 8.5% Senior Subordinated Notes due 2015, issued pursuant to the Indenture dated January 31, 2005, between the Company, the guarantors named therein and the Bank of New York Trust Company, N.A. as trustee, and (iii) a Convertible Notes Commitment Agreement with certain holders of the senior subordinated notes. Pursuant to the Restructuring Agreements, the parties have agreed to support a financial reorganization of the Debtors consistent with the terms and conditions set forth in the term sheets attached as Exhibit A to the Restructuring Support Agreements, and the senior lenders and noteholders have agreed to not transfer any claims except to a transferee who agrees to be bound by the applicable Restructuring Support Agreement. The terms of the Restructuring Transaction include: -- The Credit Agreement will be amended to (i) extend its maturity (except that of the "last-out" term loans) through June 30, 2013, (ii) amend the interest rate to LIBOR plus 6.75% (with a LIBOR floor of 3.00%) and (iii) eliminate all financial covenants except minimum liquidity and minimum EBITDA covenants. -- The senior subordinated notes will be cancelled and the holders will receive 98% of the common stock of the reorganized Company, subject to dilution, including dilution for common stock issued upon conversion of the new convertible notes and new warrants issued pursuant to the Restructuring Transaction. -- The reorganized Company will complete a $140 million rights offering of new senior unsecured convertible notes to current noteholders. The rights offering is fully backstopped by certain current noteholders. The new notes will be convertible into 60% of the common stock of the reorganized Company. -- A portion of the proceeds from the rights offering will be used to fully pay down the "last-out" term loans currently outstanding under the Credit Agreement and held by an affiliate of Sun Capital Partners with the remainder to provide ongoing liquidity for Debtors' businesses. -- The Company's common stock will be cancelled and the holders will receive 2% of the common stock of the reorganized Company and warrants exercisable for up to 15% of the common stock of the reorganized Company, subject to dilution, including dilution for stock issued upon conversion of the new convertible notes. The warrants provide the opportunity for additional recovery to the prepetition equity holders in the event that the reorganized Company reaches certain equity value targets during the two years following the warrants' issue. -- Unsecured trade creditors will be unimpaired and their claims will be paid in full. DIP Financing In connection with the Chapter 11 filings, Debtors filed a motion seeking the approval of the bankruptcy court for a superpriority secured ABL revolving credit facility of $25 million and a term loan first-in, last-out facility of $25 million, between the Company, Deutsche Bank Trust Company, as administrative agent for the lenders under the DIP Credit Agreement, and certain other agents and lenders party thereto. The $25 million of ABL loans under the DIP Credit Agreement would bear interest, at the election of the Company, at a rate of LIBOR plus 6.50% (with a LIBOR floor of 2.50%) or Base Rate plus 5.50% (with a Base Rate floor of 3.50%), and the $25 million of first-in, last-out term loans under the DIP Credit Agreement would bear interest, at the election of the Company, at a rate of LIBOR plus 7.50% (with a LIBOR floor of 2.50%) or Base Rate plus 6.50% (with a Base Rate floor of 3.50%). Unless otherwise extended, the DIP Credit Agreement would mature nine months from the commencement of the bankruptcy case, subject to certain provisions that may lead to an earlier termination. The use of proceeds under the DIP Credit Agreement would be limited to working capital and other general corporate purposes consistent with a budget that the Company presented to the administrative agent, including payment of costs and expenses related to the administration of the bankruptcy proceedings and payment of other expenses as approved by the bankruptcy court. As reported by the Troubled Company Reporter yesterday, the Bankruptcy Court granted the Debtors' interim access to $25 million of the Company's $50 million DIP loan. Accuride says the bankruptcy filing constituted an event of default under the Credit Agreement and the Indenture. As a result of the events of default, all amounts due under the Credit Agreement and the Indenture became immediately due and payable. As of October 7, 2009, the aggregate amount of the accelerated financial obligations under the Credit Agreement was roughly $359.6 million and the aggregate amount of the accelerated financial obligations under the Indenture was roughly $291.0 million. Accuride says the bankruptcy petitions may also result in defaults and acceleration under certain leases and other instruments of indebtedness. The ability of the creditors to seek remedies to enforce their rights under the Credit Agreement, the Indenture or other agreements is automatically stayed as a result of the filing of the bankruptcy cases, and the creditors' rights of enforcement are subject to the applicable provisions of the Bankruptcy Code. About Accuride Corp. Accuride Corporation (OTCBB: AURD) -- http://www.accuridecorp.com/ -- is one of the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America. Accuride's products include commercial vehicle wheels, wheel-end components and assemblies, truck body and chassis parts, seating assemblies and other commercial vehicle components. Accuride's products are marketed under its brand names, which include Accuride, Gunite, Imperial, Bostrom, Fabco, Brillion, and Highway Original. The Company and its affiliates filed for Chapter 11 protection on October 8, 2009 (Bankr. D. Del. Lead Case No. 09-13449). The Debtors select Latham & Watkins LLP as counsel; Young Conaway Stargatt & Taylor, LLP as co-counsel; MorrisAnderson as financial advisor; and The Garden City Group Inc. as claims agent. The Debtors said they have $682,263,000 in total assets and $847,020,000 in total liabilities as of Aug. 31, 2009. ACCURIDE CORP: Tinicum Discloses 8.5% Equity Stake -------------------------------------------------- Tinicum Capital Partners II, L.P.; Tinicum Capital Partners II Parallel Fund, L.P.; Tinicum Lantern II L.L.C.; Terence M. O'Toole; and Eric M. Ruttenberg hold an aggregate of 3,079,500 shares, or 8.5%, of the common stock of Accuride Corporation. On October 7, 2009, TCP II, Parallel Fund and Tinicum Capital Partners II Executive Fund L.L.C. entered into a Restructuring Support Agreement and Convertible Notes Commitment Agreement with the Company as part of the Company's proposed balance sheet restructuring with the ad hoc committee of holders of its 8-1/2 percent senior subordinated notes and the steering committee of senior lenders under its credit agreement. TCP Funds hold $15 million in aggregate principal amount of the Company's Notes and are members of the ad hoc committee of noteholders. As part of the proposed debt restructuring transaction: -- The Notes would be cancelled and noteholders, including TCP Funds solely in their capacity as noteholders, will receive 98% of the common stock of the reorganized Company, subject to dilution, including dilution for stock issued upon conversion of the new notes and warrants. -- The reorganized Company will complete a $140 million rights offering of new senior unsecured convertible notes to current noteholders, fully backstopped by certain current noteholders, including TCP Funds. The new notes will be convertible into 60% of the common stock of the reorganized Company. A portion of the proceeds from the rights offering will be used to repay the "last-out" term loan currently held by an affiliate of Sun Capital Partners, with the remainder to provide on-going liquidity for the Company's business. Pursuant to the backstop arrangements, TCP Funds may be required, severally and not jointly, to purchase up to 11.8% of the convertible notes at par. -- Current stockholders, including Tinicum solely in their capacity as stockholders of the Company, would receive their pro rata share of 2% of the common stock of the reorganized Company and two-year warrants exercisable for 15% of the common stock of the reorganized Company, subject to dilution, including dilution for stock issued upon conversion of the new notes. As part of the proposed restructuring, the Company would also make certain amendments to its existing credit agreement, however, Tinicum is not a party to these arrangements. To complete the proposed restructuring, the Company's U.S. entities filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code seeking approval for the proposed plan of reorganization. To ensure that the Company will continue conducting its business in the ordinary course without interruption, the Company has secured a $50 million "debtor-in- possession" credit facility to be provided by certain of its senior lenders and noteholders, including TCP Funds. The lenders and noteholders providing the "debtor-in-possession" financing will not receive any equity participation rights in connection therewith. Tinicum intends to support the Company's efforts in connection with the restructuring to the extent required by the agreements. About Accuride Corp. Accuride Corporation (OTCBB: AURD) -- http://www.accuridecorp.com/ -- is one of the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America. Accuride's products include commercial vehicle wheels, wheel-end components and assemblies, truck body and chassis parts, seating assemblies and other commercial vehicle components. Accuride's products are marketed under its brand names, which include Accuride, Gunite, Imperial, Bostrom, Fabco, Brillion, and Highway Original. Accuride agreed to a balance sheet restructuring with the ad hoc committee of holders of its 8-1/2% senior subordinated notes and the steering committee of senior lenders under its credit agreement. To complete the proposed restructuring, Accuride's U.S. entities on October 8 filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code to seek approval of the prepackaged plan of reorganization (Bankr. D. Del. Case No. 09-13449). The Debtors have selected Latham & Watkins LLP as counsel; Young Conaway Stargatt & Taylor, LLP as co-counsel; MorrisAnderson as financial advisor; and The Garden City Group Inc. as claims agent. Accuride's petition listed assets of $682 million against debt totaling $847 million. Liabilities include a $304 million term loan and a $100 million revolving credit, plus the $275 million in subordinated notes. ACCURIDE CORPORATION: Chapter 11 Cues Moody's to Withdraw Ratings ----------------------------------------------------------------- Moody's Investors Service withdrew the ratings of Accuride Corporation consistent with Moody's Withdrawal Policy. On October 8, 2009, Accuride announced that the company and its U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in order to facilitate a balance sheet restructuring. Accuride's Canadian and Mexican subsidiaries are not included in the bankruptcy filing. Please refer to Moody's Withdrawal Policy on moodys.com. Accuride announced that it has agreed to a balance sheet restructurings with the ad hoc committee of holders of its 8 1/2% percent senior subordinated notes and the steering committee of its senior lenders under its credit agreement. The company expects that it will continue operating "business as usual" and has secured a $50 million debtor-in-possession credit facility to support the restructuring process. Ratings Withdrawn: Accuride Corporation -- Ca/LD, Probability of Default Rating; -- Ca, Corporate Family Rating; -- Caa2 (LGD2, 23%) for the First-out senior secured bank credit facilities -- Ca (LGD4, 54%) for the Last-out senior secured bank credit facilities -- C (LGD5, 81%) for the Senior subordinated notes Accuride Canada, Inc. -- Caa2 (LGD2, 23%) for the First-out senior secured bank credit facility The last rating action on Accuride was on September 3, 2009, when the Probability of Default Rating and Corporate Family Rating were lowered to Ca\LD and Ca, respectively. Accuride Corporation, headquartered in Evansville, Indiana, is a diversified North American manufacturer and supplier of commercial vehicle components. Principal products include wheels, wheel-end components and assemblies, truck body and chassis parts, and seating assemblies. Revenues in 2008 were approximately $931 million. AGRIPROCESSORS INC: Former Manager to be Tried for Fraud Charges ---------------------------------------------------------------- Grant Schulte at The Des Moines Register reports that former Agriprocessors Inc. manager Sholom Rubashkin will go on trial to face 91 fraud-related charges, including cheating a bank, laundering more than $1 million, concealing months of fraud, and failure to pay livestock providers on time. Mr. Rubashkin, who has pleaded not guilty, could be imprisoned for life, says The Register. According to The Register, prosecutors also charged Mr. Rubashkin with 72 immigration-related charges for his alleged role in the scheme to hire illegal workers. The Register says that the immigration trial will start a week after the bank fraud trial concludes. Assistant U.S. Attorney Peter Deegan Jr. said in court documents that prosecutors will present evidence that Mr. Rubashkin ordered workers to create fake invoices so he could collect advances on a revolving $35 million bank loan. Mr. Rubashkin sent the false papers to First Bank Business Capital that overstated the value of the plant's collateral, The Register says, citing prosecutors. According to the report, Mr. Rubashkin was supposed to repay the bank with money from an "accounts receivable" fund, but he allegedly diverted the payments to keep the money. Mr. Rubashkin's lawyer, Guy Cook, said in court documents that others were responsible for routing the money. The Register relates that three lower-level managers -- Brent Beebe, Hosam Amara, and Zeev Levi -- also are named in the indictment with Agriprocessors itself. Messrs. Amara and Levi remain at large, while Mr. Beebe will stand trial in 2010 in Cedar Rapids, according to The Register. Headquartered in Postville, Iowa, Agriprocessors Inc. -- http://www.agriprocessor.com/-- operates a kosher meat and poultry packing processors located at 220 North West Street. The Company maintains an executive office with 50 employees at 5600 First Avenue in Brooklyn, New York. The Company filed for Chapter 11 protection on November 4, 2008 (Bankr. E.D.N.Y. Case No. 08-47472). The case, according to McClatchy-Tribune, has been transferred to Iowa. Kevin J. Nash, Esq., at Finkel Goldstein Rosenbloom & Nash, represents the Company in its restructuring effort. In its petition, the Company listed assets of $100 million to $500 million and debts of $50 million to $100 million. ALL-AMERICAN SPORTPARK: Board Elects Cara Brunette as Director -------------------------------------------------------------- The Board of Directors of All-American SportPark, Inc., elected on October 1, 2009, Cara Brunette to serve as a Director of the Company to fill the vacancy on the Board of Directors as a result of the death of Robert R. Rosburg in May 2009. Ms. Brunette has been employed by the Company as its Controller since June 18, 2009. Ms. Brunette worked for Delaware North Companies as a Catering Sales Manager from July 2008 to June 2009. Prior to that Ms. Brunette worked for the Company starting in 1997 as the Assistant Controller. In 1999 she began serving as the Executive Assistant to the President and Corporate Office Manager for the Company through June 2008. Ms. Brunette most recently attended Regis University working towards a Bachelor of Business Administration degree, focusing on Management. She is 47 years old. All-American Sportpark, Inc.'s operations consist of the management and operation of the Callaway Golf Center. The CGC includes a par 3 golf course fully lighted for night golf, a 110- tee two-tiered driving range, and a 20,000 square foot clubhouse which includes the Callaway Golf fitting center, Saint Andrews Golf Shop exclusively carrying Callaway Golf product and Back 9 Bar and Grill. CGC was listed as the number one driving range in America by Golf Digest Magazine in their August 2009 issue. On June 19, 2009, All-American Golf Center, Inc., a subsidiary of All-American SportPark, entered into a Customer Agreement with Callaway Golf Company and Saint Andrews Gold Shop, Ltd. The Company reported a $127,396 net loss for the three months ended June 30, 2009, a decrease of $46,813 from its previous year's loss of $174,209. At June 30, 2009, the Company had $967,153 in total assets against $9,915,690 in total liabilities, resulting in $8,948,537 in stockholders' deficit. At June 30, 2009, the Company had an accumulated deficit of $23,247,712. Also, the Company's current liabilities exceed its current assets by $7,762,675 as of June 30, 2009. The Company said these conditions have raised substantial doubt about the Company's ability to continue as a going concern. The Company said it needs to obtain additional financing to fund payment of obligations and provide working capital for operations. AMERICAN KEYSTONE: Insurer Ordered into Receivership ---------------------------------------------------- Leon County Circuit Court Judge John C. Cooper has ordered American Keystone Insurance Company into receivership for the purpose of liquidation. The Florida Department of Financial Services is appointed Receiver Floridians who have homeowners insurance with American Keystone should immediately contact their insurance agent to secure coverage with a new company. All policies will be cancelled effective 11:59 p.m. on November 8, 2009, unless otherwise terminated prior to that date. "Given that this liquidation order comes during hurricane season, it is imperative that homeowners who have coverage with American Keystone immediately contact their agents to secure new coverage," said Florida CFO Alex Sink. "We will continue working diligently to help make the transition as smooth as possible for policyholders." Consumers with questions relating to American Keystone policy and coverage issues should call the company's customer service department at 1-877-350-9777 until November 8. Questions relating to claims should be directed to the Florida Insurance Guaranty Association (FIGA) at 1-866-928-4310 or the policyholder's agent. Based in Ponte Vedra Beach, Florida, American Keystone, primarily wrote homeowners, condominium unit owners, personal inland marine, and residential condominium association policies in the state. The company has approximately 7,800 policies in force, including homeowners, commercial, residential and wind policies. AMERITYRE CORP: Common Stock Subject to Potential Delisting ----------------------------------------------------------- Amerityre Corporation said October 9 that the company was notified by NASDAQ on October 5, 2009, that it was out of compliance as of June 30, 2009, with the stockholders' equity requirement for continued listing set forth in Equity Standard Listing Rules 5550(b). Per the above rule, the Company's common stock is subject to potential delisting from the NASDAQ Capital Market because the Company does not have a minimum of $2,500,000 in stockholders' equity, $35,000,000 market value of listed securities, or $500,000 of net income from continuing operations for the most recently completed fiscal year or two of the three most recently completed fiscal years. On or before October 20, 2009, the Company is required to provide NASDAQ with a specific plan of how it will achieve and sustain compliance with NASDAQ Capital Market listing requirements, including a time frame for completion of such plan. The Company expects to provide a plan of action as required with the intention of returning to compliance with NASDAQ requirements. The Company anticipates that its implementation of cost cutting measures combined with anticipated increases in revenues and successful fundraising efforts will be sufficient to bring it back into compliance with the minimum stockholders' equity requirements. About Amerityre Corporation Amerityre Corporation (Nasdaq: AMTY) -- http://www.amerityre.com/ -- is engaged in the research and development of technologies related to the formulation of polyurethane compounds and the manufacturing process for producing tires from polyurethane. The Company's polyurethane material technology is based on two formulations: the closed-cell polyurethane foam, which is a lightweight material with high load-bearing capabilities for light-use applications, and Elastothane, a polyurethane elastomer with high load-bearing capabilities suitable for heavy-use applications. The Company is developing tires and treads for tires using Elastothane for a range of applications. In March 2008, the Company acquired molds and models from a manufacturer of polyurethane foam tires, Kik Technology, Inc. Going Concern Doubt As reported by the Troubled Company Reporter on Oct. 6, 2009, HJ & Associates, LLC, in Salt Lake City, Utah, expressed substantial doubt about Amerityre Corporation's ability to continue as a going concern after auditing the Company's financialstatements for the fiscal years ended June 30, 2009, and 2008. The auditor noted that the Company suffered recurring losses from operations that have resulted in an accumulated deficit. The Company's ability to continue as a going concern is dependent upon its ability to successfully accomplish the business plan, and attain profitable operations. The Company's balance sheet at June 30, 2009, showed total assets of $2,871,061, total liabilities of $1,028,650 and a stockholders' equity of $1,842,411. For fiscal year ended June 30, 2009, the Company posted a net loss of $3,623,899 compared with a net loss of $4,223,424 for the same period in 2008. ARC PRESSURE DATA: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: ARC Pressure Data, Inc. c/o Jackson Walker L.L.P. Attn: Kenneth Stohner, Jr. 901 Main Street, Suite 6000 Dallas, TX 75202 Bankruptcy Case No.: 09-36880 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Kenneth Stohner Jr., Esq. Jackson Walker, LLP 901 Main St., Suite 6000 Dallas, TX 75202-3797 Tel: (214) 953-5904 Fax: (214) 953-5822 Email: kstohner@jw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/txnb09-36880.pdf The petition was signed by Amy Turner, president of the Company. ARTHUR WILMER: Case Summary & 5 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Arthur W. Wilmer Foundation LLC 15710 Brandywine Rd. Brandywine, MD 20613 Bankruptcy Case No.: 09-29367 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Judge: Wendelin I. Lipp Debtor's Counsel: Christopher Hamlin, Esq. 6411 Ivy Lane, Suite 200 Greenbelt, MD 20770 Tel: (301) 441-2420 Email: chamlin@mhlawyers.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 5 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mdb09-29367.pdf The petition was signed by Bruce D. Chatman, managing member of the Company. AURORA OIL: Gets Final Approval of BNP Paribas DIP Financing ------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Michigan authorized, on a final basis, Aurora Oil & Gas Corporation and its debtor-affiliates to obtain debtor-in-possession credit with BNP Paribas, as administrative agent and issuing bank, and the lenders party thereto. Hudson Pipeline & Processing Co., LLC is a guarantor to the DIP Credit Agreement. Pursuant to the final DIP Order, the DIP Lenders will provide to the Debtors a multiple draw term loan facility in an aggregate principal amount of up to $3,000,000. The DIP Credit Agreement provides for letters of credit to be available for issuance under the DIP Facility, with the issuance of any letters of credit resulting in a reduction of availability under the DIP Facility on a dollar-for-dollar basis. Pursuant to the DIP Credit Agreement, the borrowings are to be used to (i) pay certain fees, costs, and expenses relating to the DIP Facility, (ii) support the working capital and general corporate purposes of the Debtors in accordance with a budget provided by the Company to the DIP Lenders, (iii) make any other payments permitted to be made in the DIP Credit Agreement or any other order of the Bankruptcy Court to the extent not prohibited by the DIP Credit Agreement, and (iv) make any other payment otherwise consented to by a majority of the DIP Lenders. The Company has the option to choose Alternate Base Rate loans or Eurodollar loans. Borrowings under ABR loans bear interest at a rate per annum equal to the greater of (i) the prime rate in effect, (ii) the Federal Funds Effective Rate in effect plus 0.50%, or (iii) 3.00%, plus 8.75%. Borrowings under Eurodollar loans bear interest at a rate per annum equal to the LIBO rate with a floor of 4.00% multiplied by the statutory reserve rate for the interest period in effect, plus 8.00%. Interest is payable on a monthly basis. Upon the occurrence and during the continuance of an event of default under the DIP Credit Agreement, interest will accrue at a rate per annum of 2.00% plus the rate applicable to ABR loans. The Company also will pay to (i) the DIP Agent, for the account of each DIP Lender, a participation fee with respect to its participation in letters of credit on behalf of the Company, which will accrue at a rate of 1.50% per annum on the average daily amount of the DIP Lender's letter of credit exposure until the DIP Lenders cease to have letters of credit exposure, (ii) the DIP Agent a fronting fee, which will accrue at a rate of 0.125% per annum on the average daily amount of the letters of credit exposure until there ceases to be any letters of credit exposure, and (iii) the DIP Agent for its own account, its standard fees with respect to issuance, amendment, renewal or extension of any letter of credit, as applicable, or processing of drawings thereunder. Borrowings under the DIP Credit Agreement, plus interest accrued and unpaid thereon, will be due and payable in full on the earlier of Jan. 7, 2010, or the date that all commitments under the DIP Credit Agreement terminate or the indebtedness is accelerated by the DIP Agent or the DIP Lenders upon occurrence of an event of default. The Company will pay to the DIP Agent for the account of each DIP Lender a commitment fee at a rate of 0.75% per annum on the average daily amount of the commitment of the DIP Lender unused, during the period from and including the date of the DIP Credit Agreement through the termination of the DIP Credit Agreement. A facility fee equal to 2.50% of each DIP Lender's commitment is due on October 7, 2009 and payable to the DIP Agent. An arranger fee equal to 0.50% of the Total Commitment is due on October 7, 2009 and payable to the DIP Agent. Administrative agent fees in the amount of $5,000 are due monthly and payable to the DIP Agent. The DIP Credit Agreement is subject to provisions regarding mandatory prepayments upon certain events, affirmative and negative covenants, financial covenants, certain budgeting requirements, events of default and other customary terms and conditions including representations and warranties made by the Company to the DIP Lenders. The DIP Credit Agreement contains a covenant that any new or revised budget provided by the Company to the DIP Lenders will not exceed a permitted variance from a budget previously approved by the DIP Agent and a majority of the DIP Lenders. A permitted variance is defined as a variance from the approved budget on a line-item basis that does not exceed 10% tested on a weekly basis. However, any unused amounts within a particular line-item for a particular week may be added on a cumulative basis to the amount provided for in the same line-item for succeeding weeks, so long as the succeeding weeks are not part of a subsequent budget period. The DIP Loans are secured by valid, enforceable and perfected first-priority priming and other liens and security interests on all of the Debtors' assets, with the liens and security interests having priority over any and all prepetition or postpetition liens and security interests, subject only to a carve-out for professional fees and expenses and certain tax and other pre- existing liens. The DIP Lenders are also entitled to a super- priority administrative expense claim, subject to the carve-out. A full-text copy of the DIP credit agreement dated Oct. 6, 2009, is available for free at http://ResearchArchives.com/t/s?46c4 A full-text copy of the DIP Guaranty and Collateral Agreement is available for free at http://ResearchArchives.com/t/s?46c3 A full-text copy of the Administrative Agent and Arranger Fee Letter is available for free at: http://ResearchArchives.com/t/s?46c2 About Aurora Oil & Gas Based in Traverse City, Michigan, Aurora Oil & Gas Corporation (Pink Sheets: AOGS) is an independent energy company focused on unconventional natural gas exploration, acquisition, development and production, with its primary operations in the Antrim Shale of Michigan, the New Albany Shale of Indiana and Kentucky. The Company and one affiliate filed for Chapter 11 protection on July 12, 2009 (Bankr. W.D. Mich. Case Nos. 09-08254 and 09-08255). Judge Scott W. Dales presides over the case. Stephen B. Grow, Esq., at Warner Norcross & Judd, LLP, in Grand Rapids, Michigan; and Joel H. Levitin, Esq., and Richard A. Stieglitz, Jr., at Cahill Gordon & Reindel LLP, in New York, serve as the Debtors' counsel. Aurora listed between $100 million and $500 million each in assets and debts. AWAL BANK: Seeks Chapter 15 After Bahrain Filing ------------------------------------------------ Tiffany Kary at Bloomberg News reports that Awal Bank, which is in administration in Bahrain, filed for Chapter 15 bankruptcy protection in the U.S. Charles Russell LLP will act as administrator of Awal Bank, owned by Saudi Arabia's Saad Group, the Manama-based central bank said in a statement to Bloomberg. Awal Bank is one of the largest banks in Bahrain. B-SWDE3: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: B-SWDE3, LLC 3455 Cliff Shadows Parkway, Suite 220 Las Vegas, NV 89129 Bankruptcy Case No.: 09-29051 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Georganne W. Bradley, Esq. Kaempfer Crowell Et Al. 3800 Howard Hughes Pkwy., Seventh Floor Las Vegas, NV 89169 Tel: (702) 792-7000 Fax: (702) 796-7181 Email: gbradley@kcnvlaw.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 Thomas J. DeVore. BABY TREND INC: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Baby Trend, Inc. 1607 South Campus Avenue Ontario, CA 91761 Case No.: 09-34090 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Sheri Bluebond Debtor's Counsel: Michael B. Reynolds, Esq. Snell & Wilmer LLP 600 Anton Blvd, Suite 1400 Costa Mesa, CA 92626 Tel: (714) 427-7000 Email: mreynolds@swlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Denny Tsai, the company's president. Debtor's List of 7 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Robert Gardner Judgement $8,100,000 c/o Steven R. Young Law Offices of Steven R. Young 600 Anton Boulevard, Suite 850 Costa Mesa, California 92626 Grand Pacific Trading Group Trade Debt $2,697,523 Jinglong Industrial Area, Qing Xi Town, Donguan City, Guangdong, China Childwell Enterprises Trade Debt $524,568 Yin Hu Industrial Zone Ching Shi Jen, Dongguan City Canton Province, China Zhejiang CH Lindo Co., Ltd. Trade Debt $122,983 Universal Plastic Mold Trade Debt $121,752 Continental Agency, Inc. Trade Debt $58,776 MDB Transportation Trade Debt $1,770 BARZEL INDUSTRIES: JPM DIP Facility Requires Sale by Mid-November ----------------------------------------------------------------- The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware authorized Barzel Industries Inc. to access $30 million in postpetition financing under a senior secured super-priority debtor-in-possession revolving credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Agent, and JPMorgan Chase Bank, N.A., and CIBC Inc., as lenders. Judge Sontchi said that the proceeds of the facility will only be used for these purposes: a) immediate repayment of the remaining outstanding prepetition credit agreement obligations so as to consummate the roll- up; and b) payment of the working capital needs, expenses; and the adequate protection payments. According to the Troubled Company Reporter on Sept. 18, 2009, the DIP Facility will provide the Company with liquidity during the pendency of the Chapter 11 cases and the parallel proceedings under the Canadian Companies' Creditors Arrangement Act pending the sale of substantially all of the Debtors' assets to Chriscott USA Inc. and 4513614 Canada Inc., or to the winning bidder at the auction. The DIP Lenders are the same parties as holders of the Company's 11.5% Senior Secured Notes due 2015 issued pursuant to that certain Indenture, dated as of November 5, 2007, among the Company, Barzel Finco Inc., and The Bank of New York Mellon f/k/a The Bank of New York, as Trustee and the same parties as the lenders under the senior secured credit agreement, dated as of November 15, 2007, among the Company, Barzel Finco Inc., Barzel Industries Canada Inc., the lenders party thereto, JPMorgan Chase Bank, as Administrative Agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Agent, and CIT Business Credit Canada Inc. and The CIT Group/Business Credit, Inc., as Syndication Agents, as amended. The DIP Agreement provides for a non-amortizing secured revolving credit facility in an aggregate principal amount not to exceed $30,000,000. The proceeds of the DIP Facility will be used to meet the working capital needs of the Company and its subsidiaries, pay expenses of the Company in the Bankruptcy Case and the Canadian Case (including professional fees and expenses) and to repay the outstanding and unpaid obligations under the Prepetition Agreement. U.S. borrowings under the DIP Facility will bear interest at (i) the greater of the (a) U.S. Prime Rate, (b) the Federal Funds Rate plus 1/2 of 1% and (c) 3%; (ii) plus 7%. Canadian borrowings under the DIP Facility will bear interest at Canadian prime lending rates, or similar market rates (not less than 3%), plus 7%. The DIP Facility matures on the earliest of (i) December 11, 2009; (ii) the consummation of any sale of all or substantially all of the Sellers' assets pursuant to Section 363 of the Bankruptcy Code; (iii) 30 days after the Petition Date if the Courts fail to enter orders approving the DIP Facility on a final basis within such time; and (iv) the acceleration of obligations under the DIP Facility and termination of the commitments under the DIP Facility upon the occurrence of an event of default under the terms of the DIP Agreement. The DIP Lenders' obligation to close on the DIP Facility is subject to various conditions including, among others, (i) the Courts having approved the DIP Facility on an interim basis no later than five days after the Petition Date; (ii) the Sellers' "first day" motions being in form and substance reasonably acceptable to the DIP Agent; (iii) all initial applications and filings in the Canadian Case being in form and substance reasonably acceptable to the DIP Agent; (iv) the Canadian Court having entered the Canadian financing order within five days of the filing date of the Canadian Case; (v) the DIP Agent having received a valid and perfected lien on and security interest in the DIP Agreement collateral on the basis and with the priority set forth in the DIP Agreement and the interim order; and (vi) Barzel having retained Wayne Day at Day Seckler LLP as Chief Restructuring Officer with the full authority generally vested in a chief restructuring officer, including without limitation, full authority and responsibility for all aspect of the Bankruptcy Case, the Canadian Case and the Asset Purchase. Milestones The Company's ability to obtain advances under the DIP Facility is subject to, among other things, compliance with certain milestones for a sale of the Sellers' assets pursuant to Section 363 of the Bankruptcy Code, including (i) a motion to approve the sale (including procedures governing the Auction) having been filed by no later than two business days after the Petition Date; (ii) orders approving auction and sale procedures having been entered by the Courts by no later than 18 days after the Petition Date; (iii) bids for the sale being due by no later than 35 days following the Petition Date; (iv) the Auction having occurred by no later than 40 days following the Petition Date; (v) a hearing to confirm the sale and orders approving the sale having been entered by no later than 45 days following the Petition Date; and (vi) the sale having been consummated by no later than 60 days following the Petition Date. Except for certain amounts reserved to pay administrative and wind-up expenses in the Bankruptcy Case and the Canadian Case, all proceeds of the Asset Purchase will be applied to repay amounts owed under the DIP Agreement, the Prepetition Notes and, to the extent applicable, the Prepetition Agreement. The Company's stockholders will not receive any proceeds from the Asset Purchase. Default The Company said the filing of the Bankruptcy Case and the Canadian Case constitutes an event of default under (i) the Prepetition Agreement; (ii) the Guarantee and Collateral Agreement, dated as of November 15, 2007, among the Company, Barzel Finco Inc., Barzel Industries Canada Inc., other subsidiaries of the Company identified therein, and JPMorgan Chase Bank, N.A., as Administrative Agent; (iii) the Canadian Guarantee and Collateral Agreement, dated as of November 15, 2007, among Barzel Industries Canada Inc., other subsidiaries of Barzel Industries Canada Inc. identified therein, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Agent; and (iv) the Prepetition Notes. The filing of the Bankruptcy Case and the Canadian Case resulted in the acceleration of all amounts due under the Prepetition Agreement and the Prepetition Notes. The automatic stay invoked by filing the Bankruptcy Case and the orders granted by the Canadian Court, effectively precludes any actions against the Company resulting from such acceleration. The ability of the creditors to seek remedies to enforce their rights under the Prepetition Agreement, the Collateral Agreements and the Prepetition Notes is automatically stayed as a result of the filing of the Bankruptcy Case and the orders granted by the Canadian Court, and the creditors' rights of enforcement are subject to the applicable provisions of the Bankruptcy Code. As of September 14, 2009, the aggregate principal amount outstanding under the Prepetition Notes was $315.0 million and the principal amount outstanding under the Prepetition Agreement was approximately $18.4 million. 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: Amends List of Largest Unsec. Creditors ---------------------------------------------------------- Barzel Industries Inc. filed an amended list of 20 largest unsecured creditors to change the amount of Severstal Sparrows Point LLC's claim from $514,627 to $576,995, and add Copper & Brass International, Penske Truck Leasing and Cotia Trading into the list. Entity Nature of Claim Claim Amount ------ --------------- ------------ J.P. Morgan Securities Inc. 11.5% senior $315,000,000 secured notes (allocated 2/3 JPM CIBC World Markets Inc. and 1/3 CIBC) Severstal Sparrows Point LLC trade debt $576,995 1430 Sparrows Point Blvd Sparrows Point, MD 21219 Clayton H. Landis Co, Inc. trade debt $215,515 Ansonia Copper & Brass Inc. trade debt $210,469 Freight Broker International trade debt $196,554 Dempsey Pipe & Supply trade debt $194,388 Copper & Brass International trade debt $130,669 Falls Township Tax Collector tax claim $122,714 Penske Truck Leasing trade debt $115,070 Ansam Metal Corp. trade debt $114,477 Cotia Trading (USA) Ltd. trade debt $108,387 Northstar Bluescope Steel trade debt $108,055 Thermatool Corp trade debt $102,533 Yarde Metal, Inc. trade debt $99,902 Mid Atlantic Crane trade debt $90,000 KPMG LLP Professional services $88,720 Nucor Steel Auburn trade debt $85,733 TMC Transportation trade debt $81,551 Aerotek Comemrcial Staffing services $81,413 CRST International, Inc. trade debt $73,762 North American Stainless trade debt $68,539 Blue Cross/ services $65,453 Blue Shield of Massachusetts Nucor Steel South Carolina trade debt $63,468 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). 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. Judge Christopher S. Sontchi presides over the Chapter 11 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. Logan & Company serves as claims and notice agent. Houihan Lokey Howard & Zukin Capital, Inc., has been tapped to help the Debtors with the sale process. BARZEL INDUSTRIES: Hires CB Richard as Exclusive Sales Agent ------------------------------------------------------------ Barzel Industries Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire CB Richard Ellis - N.E. Partners, L.P., as exclusive agent with respect to the sale of certain real property, effective Sept. 15, 2009. On March 3, 2009, debtor American Steel and Aluminum Corporation entered into an exclusive agency agreement with CBRE pursuant to which ASAC retained CBRE as its exclusive agent with the exclusive right to sell real property located at 1050-1080 University Avenue, Norwood, Massachusetts, and 425 Homestead Avenue, Hartford Connecticut. Pursuant to each agreement, ASAC agreed to pay CBRE a commission for a sale executed during the term of the agreement as follows: 5% of the gross purchase price of the Norwood Property for a direct deal with agent or 5% of the gross purchase price of the Norwood property if there is a cooperating broker. CBRE will provide services to the Debtors postpetition in accordance with the agency agreements. CBRE is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. 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). 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. Judge Christopher S. Sontchi presides over the Chapter 11 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. Logan & Company serves as claims and notice agent. Houihan Lokey Howard & Zukin Capital, Inc., has been tapped to help the Debtors with the sale process. BARZEL INDUSTRIES: Proposes Houlihan as Financial Advisor --------------------------------------------------------- Barzel Industries Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire Houlihan Lokey Howard & Zukin Capital, Inc., as financial advisors, effective Sept. 15, 2009. Houlihan Lokey will advise the Debtors during all phases of the Chapter 11 cases. Houlihan will, among other things, (i) develop, prepare and distribute information and other materials in an effort to create interest in and to consummate any "transaction", (ii) develop, structure and implement any transaction, including participating as an advisor of the Debtors in negotiations with creditors and other parties, and (iii) value the Debtors or their non-real estate assets or operations. The Debtors propose to pay Houlihan: (a) a monthly fee of $165,000, (b) a restructuring fee equal to (i) $2,750,000 if the restructuring transaction occurs in connection with a financing or (ii) $1,000,000 if the restructuring does not occur in conjunction with a financing, (c) upon closing of each sale transaction, a sale fee equal to: (i) the greater of $2 million and 2% of the aggregate gross consideration ("AGC") for an AGC up to $150 million. (ii) the sale fee in (i), plus 3.5% of the incremental AGC for an AGC from $150 million to $200 million. (iii) the sale fee in (i) and (ii) plus 5% of the incremental AGC for an AGC above $200 million. (d) upon closing of each financing transaction, a cash fee equal to (i) 2% of the gross proceeds for any indebtedness raised that is senior to the Company's other debt and secured by a first priority lien, (ii) 3% of the gross proceeds for any indebtedness raised that is secured by a lien, is unsecured or subordinated, and (iii) 6% of the gross proceeds of all equity or equity- linked securities placed; and (iv) a financing transaction fee for any debtor-in-possession financing that is raised of $1,000,000. Houlihan Lokey is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. 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). 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. Judge Christopher S. Sontchi presides over the Chapter 11 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. Logan & Company serves as claims and notice agent. Houihan Lokey Howard & Zukin Capital, Inc., has been tapped to help the Debtors with the sale process. BASSETT FURNITURE: Posts $3.4-Mil. Loss, Gets Loan Deal Waiver -------------------------------------------------------------- Bassett Furniture Industries, Inc., disclosed the results of operations for its fiscal quarter ended August 29, 2009. Sales for the quarter ended August 29, 2009, were $57.7 million as compared to $70.2 million for the quarter ended August 30, 2008, a decrease of 18%. Gross margins for the third quarter of 2009 and 2008 were 45.1% and 40.0%, respectively. The margin increase over 2008 results primarily from a greater mix of the Company's sales being through the retail segment. Selling, general and administrative expenses excluding bad debt and notes receivable valuation charges decreased $2.2 million for the third quarter of 2009 as compared to 2008 primarily due to lower spending. The Company also recorded $1.2 million of bad debt and notes valuation charges during the third quarter of 2009 as compared to $4.1 million for the third quarter of 2008, a $2.9 million decrease. The Company reported a net loss of $3.4 million, or $0.30 per share for the quarter ended August 29, 2009, as compared to a net loss of $2.7 million, or $0.23 per share, for the quarter ended August 30, 2008. The loss for the quarter ended August 29, 2009, included unusual pretax charges of $1.8 million associated with lease exit costs for two closed retail locations. The results for the quarter ended August 30, 2008, included two unusual pretax items consisting of a $0.2 million impairment charge associated with the write-off of leasehold improvements for a closed store and $0.6 million associated with lease exit costs for a closed store. Excluding these unusual items, the net loss for the quarters ended August 29, 2009, and August 30, 2008, would have been net losses of $1.7 million and $1.8 million, respectively. Please refer to the attached schedule which reconciles net loss as reported to net loss as adjusted. "We continued to experience weak order demand during the June through August quarter, historically our slowest period of the year," said Robert H. Spilman Jr., president and chief executive officer. "Recognizing that the current environment will likely persist for some time, we are focused on cash management and improving our wholesale and retail operations. We have now generated positive operating cash flow for two consecutive quarters, and continuing this trend will be our primary objective until we can see tangible signs of an economic turnaround." Wholesale Segment Net sales for the wholesale segment were $41.8 million for the third quarter of 2009 as compared to $59.5 million for the third quarter of 2008, a decrease of 30%. Approximately 51% of wholesale shipments during the third quarter of 2009 were imported products compared to 53% for the third quarter of 2008. Gross margins for the wholesale segment were 30.3% for the third quarter of 2009 as compared to 29.7% for the third quarter of 2008. This increase is primarily due to lower material costs as a result of negotiated price decreases from our vendors in addition to lower freight costs. Wholesale SG&A excluding bad debt and notes receivable valuation charges decreased $3.5 million during the third quarter of 2009 as compared to 2008 due primarily to lower sales and continued cost cutting measures. The Company recorded $1.2 million of bad debt and notes receivable valuation charges for the third quarter of 2009 as compared to $4.1 million for the third quarter of 2008. This significant decrease in charges is primarily due to the Company working diligently with its licensees to control increases in accounts receivable exposure. "Prior to bad debt charges in the quarter, wholesale operating margins were 3.6% compared to 5.1% last year, despite a $17.7 million sales decrease in the segment," Mr. Spilman further stated. "Upholstery margins improved slightly in the quarter while wood margins remained under pressure. For the first time ever, upholstery shipments outpaced wood shipments for the period. As previously discussed, we are concentrating on reducing wood inventory levels on our best sellers. To this end, wholesale wood inventory decreased by $2.2 million in the quarter." Retail Segment During the nine month period ended August 29, 2009, the Company acquired an additional eight stores from its licensees, one of which was acquired during the third quarter of 2009. In addition, the Company closed four under-performing stores. Total Company- owned store count as of August 29, 2009, was 35, of which 26 were comparable stores (stores open longer than one year). The total Company-owned store network had net sales of $28.5 million for the third quarter 2009, as compared to $24.0 million in the third quarter of 2008, an increase of 18.7%. Comparable store sales decreased 2.8%. These sales decreases have primarily resulted from the continued weak economic environment and corresponding weak consumer spending. Gross margins for the entire Company-owned fleet were essentially flat at 45.1% as compared to the third quarter of 2008. Gross margins as compared to the second quarter of 2009 decreased by 2.1 percentage points as the Company performed a fleet-wide inventory reduction sale which resulted in lower gross margins. As a percentage of sales, SG&A decreased 4.6 percentage points to 52.1% due to continued cost containment efforts during the quarter. Total retail operating losses decreased 29% from $2.9 million for the third quarter of 2008 to $2.0 million for the third quarter of 2009. On a comparable store basis, retail operating losses were reduced by 33% to $1.5 million, primarily due to cost containment efforts. "We remain encouraged by our efforts to stem corporate retail losses as evidenced by further improvement in our comparable store operating performance," Mr. Spilman continued. "Despite our decision to reduce retail inventories in the quarter through a system-wide inventory reduction event, our 26 comparable stores reduced their aggregate loss by 33%. Furthermore, we believe that adjustments to our retail pricing strategy will further enhance corporate store results in future quarters." Amended Revolving Credit Facility The Company's revolving credit facility contains, among other provisions, certain defined financial requirements including a minimum level of Tangible Net Worth, as defined in the credit agreement. As disclosed in the Company's Form 10-Q for the quarter ended February 28, 2009, the Company began discussions with its lender during the second quarter to amend its credit facility, due to the fact the Company was in violation of that covenant as of February 28, 2009. The Company successfully obtained a waiver of the default and an amendment to the credit facility on October 6, 2009. The amendment provides for a variable interest rate of LIBOR plus 2.75%, with a 4.25% minimum rate, and resets the Tangible Net Worth requirement to a minimum of $95.0 million for the remainder of fiscal 2009 and $90.0 million for fiscal 2010. It decreases the Company's total facility from $45.0 million to $30.0 million. Borrowings under the facility, which matures November 30, 2010, totaled $18.0 million and $19.0 million at August 29, 2009, and November 29, 2008, respectively, and are secured by a pledge of certain marketable securities and substantially all of the Company's receivables and inventories. The Company has $1.2 million available for borrowing under the facility, after deducting amounts for outstanding letters of credit and guarantees under the licensee loan program. Balance Sheet and Cash Flow The Company generated $0.9 million in operating cash flow during the third quarter of 2009 through its continued cost cutting efforts. Cash used in operating activities for the first nine months of 2009 was $1.8 million, as compared to $12.5 million operating cash used during the first nine months of 2008, an 86% decrease. The net cash usage for the year is primarily due to the continued difficult environment at retail resulting in lower collections on accounts receivable. The Company increased its overall cash position for the nine months ended August 29, 2009 by $13.4 million primarily through $16.0 million of investment redemptions and $2.8 million in dividends from the investment in the International Home Furnishings Center (IHFC), partially offset by the operating cash flow deficit, dividend payments of $1.1 million and net payments on the Company's revolving credit facility of $1.0 million. In addition to the $17.1 million of cash on-hand, the Company has investments of $18.5 million, consisting of $13.3 million in marketable securities and $5.2 million in the Alternative Asset Fund. The Company expects to receive additional redemptions from the Alternative Asset Fund of approximately $0.4 million over the remainder of the year. In addition, the Company expects to decrease its inventory levels over the next quarter through improved management and coordination with foreign suppliers. In anticipation of a debt refinancing for IHFC, it is likely that dividend distributions will decrease or be eliminated for the remainder of 2009. The Company does not believe that this will be materially detrimental to its overall liquidity. With the current level of cash on-hand coupled with the investment holdings and availability on the revolver, the Company believes it has sufficient liquidity to fund operations for the foreseeable future. Completion of SEC Accounting Review In July of 2009, the Company announced that it had received comment letters from the SEC as part of the Commission's triennial accounting review questioning, among other items, the Company's accounting policies and process related to its accounts and notes receivable reserves. As a result, the Company restated and reissued its Form 10-Q for the quarter ended February 28, 2009 and recently filed its response to the Commission's most recent comment letter. On October 8, 2009, the Company received a letter from the Commission informing the Company that there were no further comments. About Bassett Furniture For more than 100 years, Bassett Furniture Industries, Inc., (Nasdaq:BSET) has provided families with home furnishings. Bassett is a group of more than 130 stores located in the United States, Puerto Rico and Canada. Bassett stores offer furniture, lamps, rugs, mirrors and artwork. * * * As reported by the TCR on Aug. 21, 2009, Bassett restated its previously issued financial statements for the quarter ended February 28, 2009, resulting in a rise in net loss for the quarter by $3.3 million, to $12.0 million. As a result of the restatement, the Company violated the net worth covenant under its revolving credit facility for the quarter ended February 28, 2009. On July 22, 2009, the Company received a notification letter from the NASDAQ Stock Market dated July 14, regarding noncompliance with the rules for continued listing according to Listing Rule 5250(c)(1) as a result of the Company's failure to file its May 2009 Form 10-Q with the SEC within the required period. BATH JUNKIE: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------- Bath Junkie, Inc., has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Western District of Arkansas, listing $1 million to $10 million in assets and $1 million to $10 million in debts. Owners Judy Zimmer and Jocelyn Murray will still submit other documentation -- schedules listing real and personal property, inventory, income and expenses -- to the bankruptcy court by Friday, Lana F. Flowers at The Morning News reports, citing the owners' lawyer, Theresa Pockrus. Bath Junkie creditors include: -- Bank of Fayetteville, owed about $121,118; -- the franchise Bath Junkie Branson LLC, owed $95,000; -- Metropolitan National Bank, owed $66,000; -- Dell Financial Services, owed $56,722; and -- others who are owed $13,707 to $51,193. A creditors' meeting is scheduled for November 3. Fayetteville, Arkansas-based Bath Junkie, Inc., is owned by Judy Zimmer and Jocelyn Murray. Bath Junkie has more than 50 locations in the United States and Puerto Rico. The stores offer customized scents and colors of items like lotions and body washes. Jon and Judy Zimmer also filed for bankruptcy on September 15, 2009. BEAR STEARNS: Fraud Trial vs. Cioffi and Tannin to Start Today -------------------------------------------------------------- Amir Efrati at The Wall Street Journal reports that former Bear Stearns executives Ralph Cioffi and Matthew Tannin will defend themselves against securities-fraud charges by prosecutors in a trial that starts on October 13 in a Brooklyn, New York federal court. The Journal relates that Messrs. Cioffi and Tannin allegedly misled investors about the health of the two funds, testing the degree to which Wall Street should disclose bad news to investors. The Journal states that the lawyers of Messrs. Cioffi and Tannin will argue that their clients made honest mistakes but didn't intentionally mislead investors. The defendants' notebooks or computer equipment, in which they kept notations about their work, "suspiciously" disappeared after the funds collapsed, The Journal says, citing prosecutors. According to The Journal, Judge Frederic Block said that he was inclined not to let the government include such evidence. New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- was a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The investment bank collapsed in 2008 and was sold in a distressed sale to JPMorgan Chase in a transaction backed by the U.S. government. Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. were open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. BEARINGPOINT INC: Perot Systems to Acquire China Consulting Unit ---------------------------------------------------------------- Perot Systems Corporation will acquire BearingPoint Management Consulting (Shanghai) Ltd. This development follows the Sept. 21, 2009, announcement that Perot Systems will be acquired by Dell, a transaction that combines Perot Systems' services portfolio with Dell's global reach, significant existing services unit, and industry-leading hardware products. The overall combination will give enterprises in China access to a complete suite of IT, applications, business- process, and consulting services. "BearingPoint China Consulting is highly respected for its consultancy services, and we are pleased to add their complementary expertise to our existing global consulting services," said Peter Altabef, president and CEO of Perot Systems. "Dell, Perot Systems, and BearingPoint China Consulting all have successful track records of catering directly to the needs of clients. Unifying our service operations will significantly expand our reach and enhance our capabilities in China." Established in 2001, BearingPoint China Consulting provides deep industry and consultancy expertise to clients in China's energy, automotive, insurance, and financial services industries. As announced in June of 2009, Perot Systems recently has won key contracts in China's healthcare and manufacturing sectors. "We are pleased to be joining Perot Systems, particularly given their momentum with recent contract wins in China and the Dell announcement," said Ron Machan, chairman and CEO of BearingPoint China Consulting. "Our clients and our consultants will benefit from the deep industry expertise, mature global delivery model, and strong financial position of Perot Systems. Our clients can be assured that we will continue delivering world-class service to our clients, and we will have the backing of two world leaders with unprecedented leadership of entrepreneurship, innovation, and real values." The BearingPoint China Consulting operations will become part of the Perot Systems Commercial Solutions business unit. Steve Curts, president of Perot Systems Commercial Solutions, said, "We are committed to executing a smooth transition for our new clients and associates in China. The combined company will continue to work across a broad range of vendors and alliance partners to deliver efficient and effective solutions that address individual client needs." BearingPoint China Consulting has earned numerous industry awards. In 2008, the China Software Association and ERP world.net ranked the firm among the "Top 10 IT Consulting Firms" in China, and named CEO Machan among the "Top 10 People of the Year in the IT Industry" in China. The firm also was chosen as "Most Trusted Consulting Firm" in 2007 by the China Enterprise Confederation. Terms were not disclosed, and the transaction is subject to approval from the U.S. Bankruptcy Court and the Chinese government. About Perot Systems Perot Systems is a worldwide provider of information technology services and business solutions. Through its flexible and collaborative approach, Perot Systems integrates expertise from across the company to deliver custom solutions that enable clients to accelerate growth, streamline operations and create new levels of customer value. Headquartered in Plano, Texas, Perot Systems reported 2008 revenue of $2.8 billion. The company has more than 23,000 associates located in the Americas, Europe, Middle East and Asia Pacific. About BearingPoint Inc. BearingPoint, Inc. -- http://www.BearingPoint.com/-- was one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP - - has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next- generation" technology. BearingPoint, Inc., fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 protection on February 18, 2009 (Bankr. S.D.N.Y., Case No. 09-10691). Alfredo R. Perez, Esq., at Weil Gotshal & Manges LLP, in Houston; Marcia J. Goldstein, Esq., Ronit J. Berkovich, Esq., and Jose R. Alcantar, Esq., at Weil Gotshal & Manges LLP, in New York, represent the Debtors as restructuring counsel. AlixPartners, LLP, is the Debtors' restructuring advisors. Greenhill & Co., LLC, is the Debtor's financial advisor & investment banker. Jeffrey S. Sabin, Esq., at Bingham McCutchen LLP represents the Creditors' Committee as counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of September 30, 2008. BEDROCK INTERNATIONAL: Can Access Cash Collateral Until October 31 ------------------------------------------------------------------ The Hon. Dale L. Somers of the U.S. Bankruptcy Court for the District of Kansas authorized, on an interim basis, Bedrock International, LLC, to: -- access cash securing repayment of loan with First National Bank of Kansas; and -- grant adequate protection to the Bank. The Debtor related that as of the petition date, it owed the Bank $9,090,075, constituting all principal and accrued interest plus costs, accruing interest, and fees. As adequate protection for the postpetition use of cash collateral, the Bank is granted a valid and duly perfected security interest in and lien on and against the collateral and the types of property. As additional adequate protection, the Bank is granted adequate protection payments. The Debtor's access to the cash collateral will terminate on the earlier of Oct. 31, 2009 and the breach of any provision contained by the Debtor. About Bedrock International Lenexa, Kansas-based Bedrock International, LLC, operates a granite and marble natural retail business. The Debtor filed for Chapter 11 on Sept. 11, 2009 (Bankr. D. Kans. Case No. 09-22988). Jeffrey A. Deines, Esq., and Carl R. Clark, Esq., at Lentz Clark Deines PA, represent the Debtor in its restructuring effort. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. BENJAMIN VALENZUELA: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Joint Debtors: Benjamin Valenzuela Sara Valenzuela 6931 Amber Lane Carlsbad, CA 92009 Bankruptcy Case No.: 09-15336 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Southern District of California (San Diego) Judge: Louise DeCarl Adler Debtors' Counsel: Michael Jay Berger, Esq. Law Office Of Michael Jay Berger 9454 Wilshire Blvd. 6th Floor Beverly Hills, CA 90212-2929 Tel: (310) 271-6223 Fax: (310) 271-9805 Email: michael.berger@bankruptcypower.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/casb09-15336.pdf The petition was signed by the Joint Debtors. BERNARD MADOFF: Clawback Claim Against Cohmad Hiked to $245-Mil. ---------------------------------------------------------------- Law360 reports that Bernard H. Picard, the court-appointed trustee overseeing the liquidation of Bernard L. Madoff Investment Securities LLC, has raised the amount of allegedly fictitious profits he wants to claw back from Cohmad Securities Corp. from $213 million to $245 million. Irving H. Picard, the trustee for the liquidation of Bernard L. Madoff Investment Securities LLC, in June filed a complaint in Bankruptcy Court against Cohmad and a number of its principals, including Maurice "Sonny" Cohn, Marcia Cohn and Robert Jaffe, as well as other related defendants. The complaint seeks to avoid decades' worth of transactions through which BLMIS paid well over $100 million to Cohmad, Sonny Cohn and other Cohmad related individuals in exchange for Sonny Cohn, Marcia Cohn, Robert Jaffe and other Cohmad employees introducing victims to BLMIS and knowingly helping Madoff create, fund and maintain his massive Ponzi scheme. "Although Madoff stated he was operating alone, our investigation has yielded significant evidence that, in fact, a variety of other people helped Madoff prey on innocent victims," explained David Sheehan, counsel for the Trustee and a partner at Baker & Hostetler, the court appointed counsel for Mr. Picard. The SEC in June 2009 also charged Cohmad as well as its chairman Maurice J. Cohn, chief operating officer Marcia B. Cohn, and registered representative Robert M. Jaffe for actively marketing investment opportunities with Mr. Madoff while knowingly or recklessly disregarding facts indicating that Mr. Madoff was operating a fraud. The SEC's complaint against the Cohmad defendants alleges that while bringing investors to Mr. Madoff, they ignored and even participated in many suspicious practices that clearly indicated Mr. Madoff was engaged in fraud. For example, the SEC's complaint alleges that the Cohns and Cohmad filed false Forms BD and FOCUS reports that concealed Cohmad's primary business of bringing in investors for BMIS. This referral business comprised as much as 90% of Cohmad's revenue in some years, brought in more than 800 accounts, and billions of dollars into BMIS' advisory business, for which BMIS paid them more than $100 million. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC 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.). BLUE CHALK CAFE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Blue Chalk Cafe Corporation dba Left at Albuquerque dba Blue Chalk Cafe 6340 International Parkway, Suite 300 Plano, TX 75093 Bankruptcy Case No.: 09-36875 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: David L. Woods, Esq. McGuire, Craddock & Strother 500 N. Akard St., Suite 3550 Dallas, TX 75201 Tel: (214) 954-6847 Fax: (214) 954-6801 Email: dwoods@mcslaw.com James Griffin Rea, Esq. McGuire, Craddock & Strother, P.C. 500 N. Akard Street, Suite 3550 Dallas, TX 75201 Tel: (214) 954-6819 Fax: (214) 954-6850 Email: jrea@mcslaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/txnb09-36875.pdf The petition was signed by Mark Bromberg, president of the Company. BOMBARDIER INC: Moody's Upgrades Speculative Grade Liquidity ------------------------------------------------------------ Moody's Investors Service upgraded the speculative grade liquidity rating of Bombardier Inc. to SGL-2 from SGL-3, indicating "good" rather than "adequate" liquidity. The rating change follows the company's disclosure that it obtained a $500 million 2-year unsecured committed revolver for borrowing purposes. The previous absence of such a facility had been a key constraint to the company's liquidity rating. Moreover, the liquidity rating change reflects Bombardier's demonstrated ability to manage continuing pressures on its working capital position in recent quarters arising from weak demand for business jets. In conjunction with the ratings action, Moody's affirmed the company's Ba2 corporate family, Ba2 probability of default and Ba2 senior unsecured ratings. The ratings outlook remains stable. Upgrades: Issuer: Bombardier Inc. -- Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 Bombardier's Ba2 rating continues to reflect the persisting weak demand for business jets offset by Moody's belief that Bombardier's Transportation segment should continue to perform relatively well through the downturn. While pressures to the company's consolidated earnings and cash flows are likely to persist through the near term, the ratings outlook remains stable as Moody's expects Bombardier's key financial metrics to remain supportive of its rating through the downturn in its results. Bombardier's SGL-2 liquidity rating is supported by its sizeable consolidated cash balances and an unused $500 million committed revolver available to the company for its general working capital needs. While the bulk of the company's cash balances and cash generating ability are expected to be concentrated in the company's Transportation segment, Moody's believes these funds to be available and ample to support the expected cash needs of its Aerospace segment arising from working capital strains and increasing capital expenditures related to the development of the CSeries aircraft. Bombardier's liquidity rating further benefits from an absence of any material near term debt maturities and good financial covenant cushion under its various credit facilities. Moody's last rating action on Bombardier was on July 2, 2009, at which time Bombardier's rating outlook was changed to stable from positive and the company's liquidity rating was lowered to SGL-3 from SGL-2. Bombardier Inc., headquartered in Montreal, Quebec, is a diversified manufacturing company involved in the aerospace and transportation markets. BRAINTECH INC: Pays Royal Bank of Canada Loan in Full ----------------------------------------------------- Braintech, Inc., said its loan with Royal Bank of Canada was paid in full on October 6, 2009, using $1,464,266.67 drawn from the letters of credit provided by the Company's CEO, the Company's Founder, a director of the Company, and other parties in support of the RBC Loan. The LC Providers had instructed RBC to use these LC funds to pay off the RBC Loan. The RBC Loan is now fully paid. As a result, the Company owes the LC Providers $1,464,266.67, plus interest at a rate of 10% per annum until paid in full. The LC Providers have a first priority lien on all of the Company's assets, including its intellectual property. The Company has not yet finalized its anticipated new loan with Silicon Valley Bank. The Company anticipates that the parties will be able to close the SVB Loan soon, but there is no guarantee that the parties will do so. The Company intends to use the SVB Loan to pay the amounts due to the LC Providers and to provide working capital to the Company. If the Company fails to pay the amounts due to the LC Providers, the LC Providers could enforce their rights in default, and investors could lose their entire investment. Headquartered in North Vancouver, B.C., Canada, Braintech Inc. (OTC BB: BRHI) -- http://www.braintech.com/-- has four wholly owned subsidiaries: Braintech Canada Inc., a British Columbia corporation, Braintech Government & Defense Inc., a Delaware corporation, Braintech Consumer & Service Inc., a Delaware corporation, and Braintech Industrial Inc., a Delaware corporation. Braintech Canada Inc. carries out the Company's research and development activities, and employs a majority of the company's technical personnel. The Company generates the majority of its revenues from the sale of robotic vision software that it has developed. The Company's software sales have principally involved computerized vision systems used for the guidance of industrial robots performing automated assembly, material handling, and part identification and inspection functions. As reported in the Troubled Company Reporter on January 2, 2009, in a November regulatory filing with the Securities and Exchange Commission, Braintech noted that its history of losses and significant deficit raises substantial doubt about its ability to continue as a going concern. As of June 30, 2009, the Company had $987,831 in total assets and $5,437,772 in total liabilities. BRAZOS RIVER: Distressed Debt Exchange Cues S&P to Junk Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Brazos River Authority, Texas' revenue debt, issued for the DeCordova Bend project and supported by Energy Future Holdings Corp., four notches to 'CC' from 'B-'. The outlook is negative. The rating reflects the corporate credit rating of the bonds' obligor, Energy Future Holdings Corp., a subsidiary of Texas Competitive Electric Holdings Co. LLC. Standard & Poor's lowered its rating on Energy Future Holding and its unregulated subsidiaries to 'CC' on Oct. 5, 2009, due to a distressed debt exchange. The negative outlook reflects Texas Competitive Electric Holdings Co.'s outlook, which Standard & Poor's had revised to negative based on the likelihood Energy Future Holding might opt for payment-in-kind options for various notes coming due. Payments under a contract for water rights between the issuer and Texas Competitive Electric Holdings Co. secure the bonds. Texas Competitive Electric Holdings Co. has agreed to pay project operating and maintenance costs, including project debt service, for the bonds' life. The rating action affects approximately $1.96 million of revenue bonds outstanding. BRUCE POVALISH: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Bruce G. Povalish 793 Springer Drive Lombard, IL 60148 Bankruptcy Case No.: 09-37733 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Susan Pierson Debtor's Counsel: John J. Lynch, Esq. Law Offices of John J Lynch, P.C. 801 Warrenville Road, Suite 560 Lisle, IL 60532 Tel: (630) 960-4700 Fax: (630) 960-4755 Email: jjlynch@jjlynchlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of at least $1,689,332, and total debts of $2,543,858. A full-text copy of Mr. Povalish's petition, including a list of his 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ilnb09-37733.pdf The petition was signed by Mr. Povalish. BTS MONTERREY: In Default Under Palms of Monterrey Note ------------------------------------------------------- 15250 Sonoma Drive, LLC -- a joint venture formed between Behringer Harvard Palms of Monterrey, LLC, a wholly owned subsidiary of Behringer Harvard Opportunity OP II LP, the operating partnership of Behringer Harvard Opportunity REIT II, Inc. and DD-CTP, LLC, an entity formed between DeBartolo Development, LLC and Christian Tyler Properties, LLC -- on October 2, 2009, purchased, at a discount, a promissory note secured by a first lien mortgage and related loan documents for $25.4 million plus closing costs from the Federal Deposit Insurance Corporation as Receiver for Corus Bank, N.A., BHOR said in a regulatory filing. Behringer Harvard Palms of Monterrey, LLC, owns a 90% percentage interest in the joint venture and DD-CTP, LLC, an unaffiliated third party, owns the remaining 10% percentage interest and a carried interest after a preferred return to the members based their respective capital contributions. Behringer Harvard Palms of Monterrey, LLC is the managing member of the joint venture. The principal balance and accrued interest owed on the Palms of Monterrey Note at the date of purchase was $65.8 million. The investment was funded with proceeds from the Company's ongoing public offering. Corus originated the Palms of Monterrey Note on March 21, 2006, in the principal amount of $69 million for the purpose of acquiring a 408-unit multifamily complex known as "The Palms of Monterrey" located at 15250 Sonoma Drive in Fort Myers, Florida, and converting the multifamily complex into condominium residential units for sale. The borrower under the Palms of Monterrey Note is BTS Monterrey Holdings LLC. The Palms of Monterrey Note originally accrued interest at the greater of: (i) 6.75%, or (ii) LIBOR plus 3.75% and is secured by a first lien mortgage on The Palms of Monterrey property. BTS Monterrey LLC was the original parent entity of BTS and the borrower under a mezzanine loan in the original principal amount of $8.7 million from MTRY Funding, LLC, an unrelated third party, made in connection with the acquisition and proposed conversion of The Palms of Monterrey property by BTS. The Mezzanine Loan was secured by a pledge of the Original Parent's membership interest in BTS. The Original Parent defaulted on the Mezzanine Loan. In lieu of foreclosing on the pledge of membership interests, the Mezzanine Lender accepted an assignment of the membership interests in BTS and is now the sole legal and beneficial owner of BTS. Corus approved the assignment of membership interests in BTS to Mezzanine Lender and, as a condition of reinstating and amending the loan under the Palms of Monterrey Note as requested by Mezzanine Lender, Corus required Mezzanine Lender to cure the monetary defaults existing at such time under the Palms of Monterrey Note and to execute a non-recourse carve-out guaranty in favor of Corus. The Mezzanine Loan remains outstanding and is subordinate to the Palms of Monterrey Note. The Palms of Monterrey Note matured on March 19, 2008, but BTS failed to pay the outstanding principal and interest due under the Palms of Monterrey Note on the Original Maturity Date. BTS and Corus entered into a forbearance agreement whereby BTS was required to make certain payments of principal and interest as a condition precedent to a loan amendment which would, among other things, extend the term of the loan. BTS failed to make the principal and interest payments required under the forbearance agreement. BTS is currently in default under the Palms of Monterrey Note and the forbearance agreement. The loan amendment extending the loan was never executed. The conversion of The Palms of Monterrey property to condominium units was not completed, none of the units were sold, and it is currently operated as a multifamily complex. Sonoma is pursuing its remedies available under the Palms of Monterrey Note, at law and at equity, including enforcement of the first lien mortgage through judicial foreclosure, involuntary receivership, or accepting a deed-in-lieu of foreclosure of the property securing the loan. BUILDING MATERIALS: SelectBuild Settles Employee Suit for $241,000 ------------------------------------------------------------------ Residential construction workers in California, Nevada and Arizona will receive $241,301 in unpaid wages after settling a lawsuit against SelectBuild, a subsidiary of BMHC Corp., once the nation's largest residential construction contractor which supplied labor corporate homebuilding giants such as Pulte Homes. The lawsuit alleged SelectBuild systematically failed to pay workers for hours they worked, did not pay overtime rates and kept workers off-the-clock while traveling between jobsites and waiting for materials to arrive. Workers joined LIUNA in a press conference at the U.S. District Court in Los Angeles to announce the settlement. "I hope this victory shows my co-workers and all workers that when we join together and fight for better jobs, we can win," said Filemon Galvan, a construction worker in Santa Ana who will receive $5,750 in unpaid wages from SelectBuild. Last year, LIUNA released a report, The Newest Victims of the Housing Market Crisis: The Men and Women Who Build America's Homes, showing that wage and hour fraud is frequent and pervasive in the corporate homebuilding industry. According to the report, homebuilders -- led by Pulte Homes, the nation's largest corporate builder -- caused a "Wal-Martization" of the industry by pressuring contractors to reduce costs to the point where cutting wages was the only way for contractors to compete. The report estimated that construction workers could have been cheated out of $750 million in wages during the housing boom if as many as 1 million employees lost one hour overtime of per week at a $10 per hour. The problem is ongoing; just this past month Pulte released seven workers in Arizona after they asked to be paid for all the hours they worked. "Pulte Homes made record profits during the housing boom, but in doing so they put buyers at risk of foreclosure by pushing risky mortgages. Pulte, together with other large companies in its industry, collapsed the housing market by overbuilding, wrongfully withheld millions from workers' paychecks and left the construction industry with depression-level unemployment," said LIUNA President Terry O'Sullivan. "This settlement is a victory but only the first step for an unsustainable industry in serious need of reform -- reform that Pulte can either lead or continue to attempt to block." Of the 85 workers involved in the suit, 35 were from California, 24 were from Nevada and 26 were from Arizona. BMHC and all of its subsidiaries, including SelectBuild, filed for Chapter 11 bankruptcy on June 16. The suit was filed by Rothner, Segall, Greenstone & Leheny and Altshuler, Berzon LLP. The half-million members of LIUNA -- the Laborers' International Union of North America -- are on the forefront of the construction industry, a powerhouse of workers who are proud to build America. About Building Materials Building Materials Holding Corporation -- http://www.bmhc.com/-- is one of the largest providers of building materials and residential construction services in the United States. BMHC serves the homebuilding industry through two recognized brands: as BMC West, it distributes building materials and manufacture building components for professional builders and contractors in the western and southern states; as SelectBuild, it provides construction services to high-volume production homebuilders in key markets across the country. BMHC and 11 affiliates filed for bankruptcy on June 16, 2009 (Bankr. D. Del. Lead Case No. 09-12074). Judge Kevin J. Carey handles the case. Michael A. Rosenthal, Esq., and Matthew K. Kelsey, Esq., at Gibson, Dunn & Crutcher LLP; and Sean M. Beach, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as bankruptcy counsel. Paul Croci, at Peter J. Solomon Company, serves as financial advisor. Joseph Spano at Alvarez & Marsal North America, LLC, serves as restructuring advisor. The Debtors' tax consultant is KPMG LLP; tax advisor is PricewaterhouseCoopers LLP; and claims and notice agent is The Garden City Group, Inc. As of March 31, 2009, the Debtors had total assets of $480,148,000 and total debts of $481,314,000. CAMELOT SPORTS GROUP: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Camelot Sports Group, L.L.C. 11420 N. 19th Avenue Phoenix, AZ 85029 Bankruptcy Case No.: 09-25494 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Chief Judge James M. Marlar Debtor's Counsel: Patrick A. Clisham, Esq. Engelman Berger PC 3636 N Central Ave #700 Phoenix, AZ 85012 Tel: (602) 271-9090 Fax: (602) 222-4999 Email: pac@engelmanberger.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 David P. Marmorstein, managing member of the Company. CANWEST GLOBAL: CCAA Restructuring Database ------------------------------------------- Applicants filing petitions under the Companies' Creditors Arrangement Act: * Canwest Global Communications Corp. * CanwestMedia Inc. * MBS Productions Inc. * Yellow Card Productions Inc. * Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. * Canwest Television GP Inc. * Fox Sports World Canada Holdco Inc. * Global Centre Inc. * Multisound Publishers Ltd. * Canwest International Communications Inc. * Canwest Irish Holdings (Barbados) Inc. * Western Communications Inc. * Canwest Finance Inc./Financiere Canwest Inc. * National Post Holdings Ltd. * Canwest International Management Inc. * CanwestInternational Distribution Limited * Canwest MediaWorks Turkish Holdings (Netherlands) B.V. * CGS International Holdings (Netherlands) B.V. * CGS Debenture Holding (Netherlands) B.V. * CGS Shareholding (Netherlands) B.V. * CGS NZ Radio Shareholding (Netherlands) B.V. * 4501063 Canada Inc. * 4501071 Canada Inc. * 30109, LLC * CanWest MediaWorks (US) Holdings Corp. CCAA Petition Date: October 6, 2009 Canadian Court: Ontario Superior Court of Justice (Commercial List) Court File No: CV-09-08396-00CL Canadian Judge: Honorable Madam Justice Sarah E. Pepall CCAA Monitor: FTI Consulting Canada Inc. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- 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 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. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CANWEST GLOBAL: U.S. Court Issues TRO Against Creditors ------------------------------------------------------- Judge Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York, at the behest of FTI Consulting Canada Inc., as monitor and foreign representative, issued a temporary restraining order, on October 6, 2009, enjoining all persons from: (a) taking any action to obtain possession of property of the Debtors' estates or of property from the estate or to exercise control over the Debtors, their estates, or their businesses, pending further order of the U.S. Court; and (b) discontinuing, altering, failing to honor, interfering with, repudiating, ceasing to perform, or terminating any oral or written agreement, contract, license, or permit with a Chapter 15 Entity or statutory or regulatory mandate for the supply of goods or services, including all programming supply, computer software, communication and other data services, centralized banking services, payroll services, insurance, transportation services, utility or other services to the Debtors' businesses or a Chapter 15 Entity, on the basis of, or as a result of, the filing of the Chapter 15 cases, the Canadian Proceedings or any amounts outstanding as of the filing of the Chapter 15 cases, and the Chapter 15 Entities will be entitled to the continued use of their current premises, telephone numbers, facsimile numbers, internet addresses and domain names; provided, in each case, that the contractual prices or charges for all the goods or services received after the date of the Initial CCAA Order are paid by the Chapter 15 Entities in accordance with normal payment practices of the Chapter 15 Entities or other practices as may be agreed upon by the supplier or service provider, the relevant Chapter 15 Entity and the Monitor, or as may be ordered by the U.S. Court. FTI Consulting also asked the U.S. Court to issue a preliminary injunction extending the injunctive relief granted in the TRO to the full extent set forth in the Initial CCAA Order during the Canadian Proceedings. Jennifer Feldsher, Esq., at Bracewell & Giuliani LLP, in New York, related that substantially all of the Debtors' non-Canadian English-language television programming rights are purchased by the Television Partnership from major U.S. television studios, distributors and other suppliers operating in Canada including, among others, Sony Pictures Television Canada, Twentieth Century Fox/Incendo Television Distribution Inc., and CBS International Television Canada. While the Debtors and Television Partnership generally do business with the Canadian affiliates of the Providers and expect that those affiliates will participate in the Canadian Proceedings, given that most of the Providers have substantial operations in the U.S., the Debtors are particularly concerned that the Providers could attempt to gain an unfair advantage over other creditors by threatening to shut off service or to terminate their agreements with the Debtors under U.S. law. Given the immediate and irreparable harm that will be caused if any of the Providers were to shut down service or withhold the Debtors' regularly scheduled programming, the Debtors require the Injunctive Relief, on an emergency basis, Ms. Feldsher asserted. In an affidavit, Ms. Feldsher told the U.S. Court that creditors are not being asked to waive any rights and remedies by the requested Injunctive Relief. Rather, they are just being directed to the Canadian Court where they can seek an amendment of the Initial CCAA Order or pursue other remedies if they so choose. Pursuant to Rule 7065 of the Federal Rules of Bankruptcy Procedure, the security provisions of Rule 65(c) of the Federal Rules of Civil Procedures are waived. Rule 65(c) provides that a "court may issue a preliminary injunction or a temporary restraining order only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained. The United States, its officers, and its agencies are not required to give security." A hearing on the Monitor's request for a preliminary injunction will be held on October 15, 2009, at 10:00 a.m. (Eastern Time). Objections are due on October 14, 2009, at 12:00 p.m. (Eastern Time). Union's Statement on Bankr. Filing "Media workers at Canwest stations should not be forced to pay the price with their pension and severance payments for financial problems that are of the company's own making," says Peter Murdoch, Vice-President, Media for the Communications, Energy and Paperworkers Union of Canada. "Employees have done everything they can to sustain this company," says Murdoch. "Thousands have already lost their jobs, and there has been no wage increase for years. Though management salaries have been excessive -- $49 million to eight people from 2001 to 2008, while during that same period over 1,000 Canwest employees lost their jobs. "Those who are left are on pins and needles," he says, "including pensioners." Murdoch adds that governments, banks, and media conglomerates have all ignored the warnings about the dangers of massive media convergence and unsustainable debt. "CEP will be front and center to ensure that employees are first in line for company obligations." Murdoch also says the federal government should step up to the plate. "The federal government has been irresponsible in monitoring and policing pension plans, and where is it now to backstop this? "Yet another major company has filed for bankruptcy protection under Prime Minister Stephen Harper's watch," adds CEP President Dave Coles. "It's time for this government to stop congratulating itself and to take action to prevent more working people from falling victim to this recession," says Coles. "CEP represents more than 25,000 newspaper and broadcast employees across Canada, including workers at Global TV who are affected by today's announcement. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- 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 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. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CANWEST GLOBAL: Wins Nod From CCAA Court to Obtain C$100MM Loan --------------------------------------------------------------- The Honorable Madame Justice Sarah E. Pepall of the Ontario Superior Court of Justice (Commercial Division), in the Initial CCAA Order, approved the Credit Agreement, dated May 22, 2009, and recently amended on September 23, 2009, between CMI, the guarantors, and CIT Business Credit Canada, Inc., as agent and lender. The credit facility provided under the CIT Credit Agreement is converted into a debtor-in-possession financing arrangement provided that the aggregate principal amount of all borrowings under the CMI DIP Facility will not exceed C$100,000,000, unless approved by the CMI CRA and permitted by further order of the Canadian Court. The CMI DIP Facility will be used to finance the CMI Entities' working capital requirements and other general corporate purposes and capital expenditures as contemplated by the CMI DIP Definitive Documents. The CMI DIP Lender will be entitled to the benefit of and is granted a charge on the CMI Property, as security for any obligations of the CMI Entities under the CMI DIP Facility, which charge will not exceed the aggregate amount owed to the CMI DIP Lender advanced on or after October 6, 2009. The deposit accounts containing cash collateral pledged to The Bank of Nova Scotia will not form part of the CMI Property and will be excluded from any charges for the DIP Lender, the Key- Employee Retention Plan, the Directors and the Monitor, and will remain subject to the existing liens in favor of BNS in connection with the Applicants' obligations to BNS in an amount not to exceed $2,500,000. Notwithstanding the CCAA stay, the Canadian Court ruled that BNS is entitled to seize and dispose of any collateral on deposit in the excluded accounts and apply those proceeds to any outstanding BNS Cash Management Obligations. The CMI DIP Charge is in addition to the existing security in favor of CIBC Mellon Trust Company pursuant to the Intercreditor and Collateral Agency and Agreement dated October 13, 2005, among the CMI Entities and the Collateral Agent. All liabilities and obligations of the CMI Entities under the CIT Credit Agreement and the C$187,263,126 principal amount secured promissory note issued to Canwest Media Works Ireland Holdings by CMI will be secured by the Existing Security. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- 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 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. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CAPITAL CORP: Court Sets October 22 Disclosure Statement Hearing ---------------------------------------------------------------- Capital Corp of the West filed a plan of liquidation and an explanatory disclosure statement with the U.S. Bankruptcy Court for the Eastern District of California. The Bankruptcy Court has scheduled a hearing on October 22, 2009, to consider and rule on the adequacy of the information contained in the Disclosure Statement. Objections must be filed no later than October 19. The Plan provides for the orderly liquidation of the Debtor's business and assets and the distribution of the net proceeds to holders of allowed claims. The Debtor anticipates that the liquidation will occur over the period of at least nine months to one year, unless a compromise agreement is reached among the creditors. Depending on the amount available to distribute and the amount and priority of valid claims, the Debtor estimates that the recovery to non-governmental, non-subordinated creditors could range from approximately 8% to 29%. In the event a claim is made by certain governmental creditors and that claim is determined to be valid and has priority, the Debtor says that there is a chance that the recovery to non-governmental creditors could be zero. The Debtor believes that the net proceeds of the liquidation will be far greater under the plan than in a Chapter 7 case. In addition, the Debtor says that conversion of the case to Chapter 7 would add an additional layer of administrative expenses from the Chapter 7 case that does not already exist, which would further diminish the maximum flexibility for distribution to creditors. All shareholder interests in the Debtor are canceled by the Plan, as there are insufficient funds under any scenario to make a distribution to shareholders. Under the Plan, holders of secured claims under Class 2 will retain its liens securing the claims and will receive deferred cash payments totaling at least the allowed amount of their claims, of a value, as of the Effective Date of the Pan, of at least the value of each claimant's interest in the collateral. Holders of secured claims may file and assert a claim within Class 3 for any deficiency resulting from the abandonment and return of collateral. The Debtor does not believe there are any holders of Class 2 secured claims. All allowed unsecured claims under Class 3 will be paid or otherwise satisfied in full from any unencumbered funds from the liquidation of the Debtor's assets after all payment in full, or reservation for payment in full, of all administrative claims, priority claims, pre-petition tax claims, professional claims, and Class 1 claims, and after payment or reservation of sufficient funds to pay for all post-confirmation liquidation expenses. In the event there are sufficient unencumbered funds to do so, Class 3 claimants will be entitled to interest at the legal rate as of the Plan's Effective Date on their allowed unsecured claims from the petition date until paid in full. In the event there are insufficient funds, the holders of allowed unsecured claims in Class 3 will be paid on a pro rata basis. Subordinated general unsecured claims, if any, under Class 4, will not receive any distribution unless and until all Class 3 claims are paid in full including interest at the legal rate as of the Plan's Effective Date. Classification of Claims and Interests Class Description Status -------- --------------------------- ------------------- Class 1A Priority Employee Unsecured Unimpaired - Deemed Claims to Accept Class 1B Other Priority Unsecured Unimpaired - Deemed Claims to Accept Class 2 Secured Claims Impaired - Entitled to Vote Class 3 General Unsecured Claims Impaired - Entitled to Vote Class 4 Subordinated General Impaired - Entitled Unsecured Claims to Vote Class 5 Shareholders of the Debtor Take Nothing - Deemed to Reject A full-text copy of the disclosure statement accompanying Capital Corp of the West's plan of liquidation is available for free at: http://bankrupt.com/misc/capitalcorp.ds.pdf About Capital Corp. of the West Incorporated on April 26, 2005, Capital Corp of the West is a bank holding company whose primary asset and source of income is County Bank. County Bank is a community bank with operations located mainly in the San Joaquin Valley of Central California with additional business banking operations in the San Francisco Bay Area. The corporate headquarters of the Company and the Bank's main branch facility are located at 550 West Main Street, Merced, California. County Bank was closed February 6, 2009, by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Westamerica Bank, based in San Rafael, California, to assume all of the deposits of County Bank. As of February 2, 2009, County Bank had total assets of approximately $1.7 billion and total deposits of $1.3 billion. In addition to assuming all of the failed bank's deposits, including those from brokers, Westamerica Bank agreed to purchase all of County Bank's assets. According to Capital Corp, although County Bank made no "subprime mortgages," it had made substantial loans to developers for acquisition, development and construction of residential homes and condominiums throughout California's Central Valley. Overbuilding and an increase in foreclosures in the market resulted in rapidly declining real property values, and contributed to the rise in nonperforming loans. Capital Corp of the West filed for bankruptcy on May 11, 2009 (Bankr. E.D. Calif. Case No. 09-14298). Judge W. Richard Lee presides over the case. Paul J. Pascuzzi, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi, serves as the Debtor's bankruptcy counsel. Hagop T. Bedoyan, Esq., serves as counsel to the official committee of unsecured creditors. As of June 30, 2009, Capital Corp of the West had $6,684,645 in total assets and $57,734,000 in total liabilities. In its Chapter 11 petition, the Company disclosed $6,789,058 in total assets and $68,096,190 in total debts. CENTERPOINT ENERGY: Fitch Takes Actions on Issuer and Debt Ratings ------------------------------------------------------------------ Fitch Ratings has taken rating actions on the Issuer Default Ratings and outstanding debt ratings of CenterPoint Energy, Inc. and its subsidiaries: Fitch affirms these ratings: CNP -- Long-term IDR at 'BBB-'; -- Senior unsecured debt at 'BBB-'; -- Trust preferred debt/ZENS at 'BB+'; -- Short-term IDR at 'F3'; -- Commercial paper at 'F3'; -- Rating Outlook Stable. CenterPoint Energy Houston Electric, LLC -- Long-term IDR at 'BBB'; -- First mortgage bonds at 'A-'; -- Short-term IDR at 'F2'; -- Rating Outlook Stable. CenterPoint Energy Resources Corp. -- Long-term IDR at 'BBB'; -- Senior unsecured debt at 'BBB'; -- Convertible subordinated notes at 'BBB-'; -- Short-term IDR at 'F2'; -- Commercial paper at 'F2'; -- Rating Outlook Stable. Fitch upgrades these ratings: CEHE -- General mortgage bonds to 'A-' from 'BBB+'; -- Unsecured credit facility to 'BBB+' from 'BBB'; -- Rating Outlook Stable. Approximately $7.6 billion of debt is affected by the rating actions. The one-notch upgrades of CEHE's general mortgage bonds and unsecured credit facility adjust the notching of securities relative to the IDR to a more typical array for regulated utilities. CEHE's former notching was atypical relative to utility peers as a result of legacy stranded costs issues following the restructuring of the electricity industry in Texas, most of which no longer exists. CNP's ratings are supported by upstream dividend payments from its mostly regulated subsidiaries, a diverse business mix across electric and gas operations, and a conservative management strategy that limits exposure to commodity price movements. Approximately 81% of the consolidated operating income is generated by regulated electric and gas utilities and natural gas pipeline operations. Though this percentage is expected to decline to roughly 70% by 2013, most of the increase in the non- regulated operating income is accounted by contractual, fee-based businesses. CNP enhanced its capital structure by issuing 24.15 million shares in September 2009 with gross proceeds of $289.8 million. This combined with a completed continuous offering plan, sales of stock to the company's savings plan, and an ongoing DRIP program will lead to a total equity issuance of close to $500 million in 2009. Fitch expects the consolidated FFO coverage ratio to be around 3.4 times in 2009 and 3.2x in 2010. Fitch's primary credit concern for CNP is that, despite gradual improvement, the consolidated balance sheet remains highly leveraged and coverage ratios are weak relative to the rating guidelines as a result of the stranded costs incurred from generation asset divestitures in 2004 and other legacy issues resulting from the corporate restructuring and separation from RRI. Other concerns include disproportionate investment in higher-risk, commodity sensitive, non-regulated businesses and the potential for an unfavorable decision in the pending stranded cost litigation. CERC's ratings are supported by regulated and predictable cash flows from its pipeline and local distribution companies operations. The LDCs cash flows are stabilized through purchase gas adjustment mechanisms. Cash flows at CERC's field services segment, though non-regulated, are mainly tied to stable, fee- based revenue streams, thus, minimizing large exposure to movements in commodity prices. In its natural gas marketing segment, CERC takes no directional commodity risk and management is conservatively managing its working capital and collateral exposure. Fitch views favorably the recently announced Haynesville gathering project owing to its fee-based revenue structure and throughput guarantees with counterparties that are subsidiaries of the two largest investment grade producers, Shell and EnCana. CERC's credit ratios in 2009 are modestly lower than Fitch's rating guidelines but are projected to improve over the forecast period. Fitch would be concerned if management were to pursue a debt financed expansion strategy or disproportionately grow commodity sensitive, non-fee based businesses. Other concerns for CERC include sensitivity of operating income and collateral needs to a lower commodity environment. Ratings of CEHE are supported by predictable operating income and cash flows from its regulated transmission and distribution operations. CEHE has the ability to earn a return on its transmission investments without any material regulatory lag. Monthly surcharges on customers allow CEHE to recover investment being made in advanced metering system. Fitch views favorably the recent political and regulatory support to securitize Hurricane Ike's storm restoration costs as well as permit the utility to securitize costs incurred from storms in the future, which minimizes hurricane event risk. CEHE bears lower risk of default by Retail Electricity Providers, as compared to a year ago, driven by tighter certification and financing requirements for REPs, lower electricity prices, and the acquisition of CEHE's largest customer RRI's REP business by a stronger company, NRG. In addition, CEHE has the ability to create a regulatory asset for bad debt expenses resulting from a REP's default for recovery in future rate proceedings. Fitch's rating concerns for CEHE include rising operating costs during a base rate freeze that extends to mid-2010 and during such time that rate relief is approved, and the potential for an unfavorable decision in the stranded cost litigation. The Stable Rating Outlook for CNP, CERC and CEHE assumes that the electric and gas utilities, pipelines and field services businesses will continue to perform well and the sensitivity of cash flows and working capital needs to changes in commodity prices will remain low. The Stable Outlook also assumes that the regulated and non-regulated fee-based businesses will continue to contribute more than 90% of the consolidated operating income. Fitch expects capital spending needs to be reduced to a level that can be funded through internally generated cash flow beyond 2010. Improvement in leverage and coverage ratios through cash flow growth or any other means is key to any improvement in CNP's current ratings or Outlook. Potential causes for negative rating actions include: -- Disproportionate investment in higher-risk, commodity sensitive, non-regulated businesses. -- Rising costs at CEHE during the period of base rate freeze (till the middle of 2010) and delay and/or shortfall in subsequent rate relief. -- A negative outcome in the stranded cost litigation. Potential causes for positive rating actions include: -- Reduction of consolidated debt leverage through cash flow growth or any other means. -- A favorable decision by the Texas Supreme Court in the stranded cost case and subsequent consolidated leverage reduction using a securitized debt issue. CNP, through its subsidiaries, operates as a public utility company. CEHE provides regulated electric transmission and distribution services to REPs, municipalities, electric cooperatives, and other distribution companies that provide service to approximately two million customers in and around Houston, Texas. CERC owns and operates LDCs that serve 3.2 million customers in six states, 8,000 miles of interstate natural gas pipelines, gas gathering lines, processing and storage facilities, and engages in gas marketing to commercial and industrial customers. CIT GROUP: Debt-Exchange Offer Gets Little Interest, Says Report ---------------------------------------------------------------- CIT Group Inc.'s debt-exchange offer has received little interest from investors and the Company may pursue bankruptcy, Reuters reported, citing unidentified people familiar with the situation. Separately, investors in CIT securities said it is possible that the company will not find enough debtholder approval for a prepackaged bankruptcy, which requires sufficient support before the company files for protection from creditors, Reuters reported. Instead, CIT, according to the report, might have to aim for a pre-negotiated bankruptcy, which requires less support before the actual filing. 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 was required to adopt a restructuring plan acceptable by lenders starting October 1, 2009. CIT Group on October 1 announced that it has commenced a restructuring of its capital structure that has been approved by the Company's Board of Directors and by the Steering Committee of CIT's bondholders. The announcement is an important step in a comprehensive restructuring plan to enhance CIT's capital levels, improve its liquidity and return the Company to profitability. Under the plan, CIT Group Inc. and CIT Group Funding Company of Delaware LLC (Delaware Funding) are launching exchange offers for certain unsecured notes. Under CIT's restructuring plan, holders of $1,000 of old notes maturing in 2009 will receive $900 in New Notes and 0.40749 shares of new preferred stock; in 2010 will receive $850 in new notes and 1.22248 shares of new preferred stock; in 2011 and 2012 will receive $800 in new notes and 2.03746 shares of new preferred stock; in 2013 through 2017 and in 2036 will receive $700 in new notes and 3.25993 shares of new preferred stock; in 2018 will receive 4.07492 in shares of new preferred stock; and in 2067 will receive 2.03746 shares of new preferred stock. The Offers will expire at 11:59 p.m., (prevailing Eastern Time), on October 29, 2009. The Company said that if it does not achieve the objectives of the exchange offers, it may decide to initiate a voluntary filing under Chapter 11 of the U.S. Bankruptcy Code. Therefore, the Company is concurrently soliciting bondholders and other holders of CIT debt to approve a prepackaged plan of reorganization. The Company has been informed by advisors to the Steering Committee that, subject to review of the offering memorandum, approximately $10 billion of outstanding unsecured indebtedness have already indicated their intention to participate in the exchange offer or vote for the prepackaged plan of reorganization. About CIT Group Inc. CIT Group Inc. (NYSE: CIT) -- 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. CIT Group on October 1 announced a restructuring plan built upon exchange offers for certain unsecured notes. The Company said that if it does not achieve the objectives of the exchange offers, it may decide to initiate a voluntary filing under Chapter 11 of the U.S. Bankruptcy Code. Evercore Partners, Morgan Stanley and FTI Consulting are the Company's financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP and Sullivan & Cromwell LLP are legal counsel in connection with the restructuring plan. Houlihan Lokey Howard & Zukin Capital, Inc. serves as financial advisor, and Paul, Weiss, Rifkind, Wharton & Garrison LLP serves as legal counsel to the Steering Committee of CIT's bondholders. CITIGROUP INC: Phibro Acquired by Occidental Petroleum ------------------------------------------------------ Occidental Petroleum Corporation has signed an agreement to purchase Phibro LLC from Citigroup Inc., for approximately net asset value. Primarily a trader in oil and gas, Phibro's assets consist of cash, marketable securities and readily saleable commodity positions. Phibro does not trade in any exotic derivatives or hold any level three type assets. Occidental's net investment in Phibro is expected to be about $250 million. Phibro's management team, headed by Andrew Hall, and its employees will remain with the company after closing. The senior management team has agreed to make a significant investment in Phibro and receive returns dependent upon the company's future performance. Additionally, significant portions of current and future bonuses will be deferred and retained by Phibro and paid out in future years. These future payouts will be adjusted to reflect Phibro's results during that period. From 1997 until the second quarter of 2009, Phibro averaged approximately $200 million per year in pre-tax earnings, while over the last five years Phibro's earnings averaged $371 million per year. Phibro has been profitable each fiscal year since 1997, attaining profitability in 80 percent of all quarters. The transaction is expected to close by year end. Upon closing, Occidental will support the credit of Phibro. Phibro will become a part of Occidental's midstream segment which includes Occidental's natural gas liquids, power, pipeline and existing trading business. About Oxy Occidental Petroleum Corporation is an international oil and gas exploration and production company with operations in the United States, Middle East/North Africa and Latin America regions. Oxy is the fourth largest U.S. oil and gas company, based on equity market capitalization. Oxy's wholly owned subsidiary, OxyChem, manufactures and markets chlor-alkali products and vinyls. Occidental is committed to safeguarding the environment, protecting the safety and health of employees and neighboring communities and upholding high standards of social responsibility in all of the company's worldwide operations. About Citigroup Inc. Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. At June 30, 2009, Citigroup had total assets of $1.84 trillion and total liabilities of $1.69 trillion. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup, the third-biggest U.S. bank, received $52 billion in bailout aid. Other bailed-out banks, including Bank of America Corp., Wells Fargo & Co., have pledged to repay TARP money. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, repaid TARP funds in June. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CLARIENT INC: Amends License Deal with Prediction Sciences ---------------------------------------------------------- Clarient Inc. and Prediction Sciences, LLC, on October 5, 2009, entered into an amendment to the parties' license agreement which, among other things: -- increased the total number of fee shares issuable upon achievement of various tranches within five major milestones from 350,000 to 400,000 common shares, -- amended the criteria of certain milestones set forth in the License Agreement, and -- adjusted certain elements of the royalty structure set forth in the License Agreement. In addition, Clarient agreed to pay Prediction Sciences an amount not to exceed $130,000 for the purchase of certain breast cancer cohorts to perform additional studies to aid in the marketing of the Clarient Insight(R)Dx Breast Cancer Profile. Clarient entered into the License Agreement with Prediction Sciences on January 8, 2008, pursuant to which Prediction Sciences granted Clarient an exclusive license to use its mathematical algorithm in connection with Clarient's Insight(R)Dx Breast Cancer Profile, a multiple marker profile used in the clinical prognosis of breast cancer. As partial consideration for the License, Clarient agreed to pay Prediction Sciences an aggregate of $50,000 in cash and to issue Prediction Sciences an aggregate of up to 350,000 shares of Clarient's common stock -- Fee Shares -- upon the achievement of certain milestones set forth in the License Agreement. Of the milestones, $25,000 in cash was paid by Clarient to Prediction Sciences in January 2008, along with 25,000 shares of Clarient common stock. An additional $50,000 in cash was paid by Clarient to Prediction Sciences in May 2009 for certain of its related research and development activities for the benefit of Clarient. In addition, Clarient agreed to pay Prediction Sciences a royalty based upon net sales of Licensed Products in accordance with the royalty structure set forth in the License Agreement. The License Agreement commenced on January 8, 2008, will continue until January 8, 2015 and will thereafter automatically renew for successive one (1) year terms until either party provides written notice of such party's intent to terminate the License Agreement. Clarient did not deem the License Agreement to be a material agreement when it was originally entered. As a result of the Amendment and current likelihood of success in Prediction Sciences achieving certain milestones and resulting Fee Shares, Clarient deems the License Agreement, as amended, to be a material agreement. About Clarient Inc. Based in Aliso Viejo, California, Clarient Inc. (Nasdaq: CLRT) -- http://www.clarientinc.com/-- is an advanced oncology diagnostics services company. The Company's principal customers include pathologists, oncologists, hospitals and biopharmaceutical companies. At June 30, 2009, Clarient had $54.3 million in total assets; $13.8 million in total current liabilities, $982,000 in long-term capital lease obligations and $3.75 million in deferred rent and other non-current liabilities; and $35.6 million in stockholders' equity. Going Concern Doubt KPMG LLP in Irvine, California -- in its audit report dated March 19, 2009 -- raised substantial doubt about the Company's ability to continue as a going concern. KPMG cited the Company's recurring losses from operations and negative cash flows from operations, and working capital and net capital deficiencies. KPMG said it is not probable that the Company can remain in compliance with the restrictive financial covenants in its bank credit facilities. CLEAR CHANNEL: Hill's Tenure as Accounting Head to End March 2010 ----------------------------------------------------------------- CC Media Holdings, Inc., the indirect parent of Clear Channel Communications, Inc., and Herbert W. Hill Jr. agreed on October 5, 2009, that his service as Senior Vice President, Chief Accounting Officer and Assistant Secretary of the Company will end effective March 31, 2010. Following March 31, 2010, Mr. Hill has agreed to continue with the Company as Director of Special Accounting and Information Systems Operations for an additional year. As reported by the Troubled Company Reporter on October 9, 2009, Clear Channel's owners -- Bain Capital LLC and THL Partners -- denied a media report that the private equity firms have contacted banks in an effort to restructure Clear Channel loans, the New York Times reported. A spokesman for the partnership told the NYT that no effort to restructure the company's debt is currently under way. The New York Post reported that Clear Channel's private equity owners had approached banks to help them keep Clear Channel from defaulting on its loans. Citing sources, The NY Post stated that Clear Channel may default by year-end or early in 2010. Clear Channel Communications, Inc. -- http://www.clearchannel.com/ -- is a diversified media company with three primary business segments: radio broadcasting, outdoor advertising and live entertainment. Clear Channel Communications is the operating subsidiary of San Antonio, Texas-based CC Media Holdings, Inc. Clear Channel Communications, Inc.'s balance sheet at March 31, 2009, showed total assets of $22.0 billion and total liabilities of $25.4 billion, resulting in a members' deficit of $3.3 billion Clear Channel carries a 'Caa3' probability-of-default rating from Moody's. COINMACH SERVICE: S&P Downgrades Corporate Credit Rating to 'SD' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Coinmach Service Corp. to 'SD' from 'CCC+', and lowered its senior subordinated notes due 2015 to 'D' from 'CCC-'. The rating action followed the company's partial exchange of its subordinated notes to payment-in-kind preferred securities of its parent. At the same time, Standard & Poor's lowered its issue-level ratings on Coinmach's senior secured bank debt, consisting of a $50 million revolving credit facility due 2013, a $50 million delay draw term loan due 2014, and a $725 million term loan due 2014, to 'CCC+' from 'B-'. The recovery rating is '2', indicating S&P's expectation of substantial (70%-90%) recovery for lenders in the event of a payment default. In addition, S&P lowered the rating on the company's $175 million senior unsecured notes due 2015 to 'CC' from 'CCC-', with a recovery rating of '6', indicating S&P's expectation of negligible (0%-10%) recovery for note holders in the event of payment default. Immediately after, S&P raised its corporate credit rating on Coinmach to 'CCC' from 'SD' and withdrew the issue ratings on the company's senior unsecured notes and senior subordinate notes at the company's request. The outlook is developing. S&P estimates that Coinmach has about $1.2 billion of reported debt outstanding as of Sept. 30, 2009 (including $41.8 million of senior subordinated notes recently exchanged to17% PIK preferred securities). "The rating actions reflect S&P's reassessment of credit quality following the company's partial exchange of its senior subordinated notes due 2015," said Standard & Poor's credit analyst Chris Johnson. S&P lowered the corporate credit rating to 'SD' and the rating on the senior subordinated notes to 'D' after the company completed the partial exchange of the notes into PIK preferred securities of its parent, thereby, in S&P's opinion, not meeting the full cash interest obligation on the security that is payable on Nov. 15, 2009. "According to its criteria, S&P considers the exchange of the senior subordinated notes as tantamount to default," added Mr. Johnson. "It is S&P's understanding that the remaining outstanding balance of the subordinated notes continues to perform and accrue interest as scheduled, and therefore S&P believes there is no contractual default." The ratings on Coinmach reflect its highly leveraged financial profile (including S&P's estimate of debt to EBITDA in excess of 9x as of June 30, 2009) and near-term potential for declining liquidity due to tightening financial covenants and currently negative free cash flow (though improving given a lower interest burden following the exchange). S&P believes significant upcoming cash interest payments will strain the company's currently ample cash balances. The outlook is developing, reflecting S&P's concerns about the company's near-term liquidity, while recognizing the possibility for future changes to its capital structure, which may restore sufficient covenant cushion and improve its free cash flows. S&P could lower the ratings further if the company breaches its financial covenants or does not meet its future debt obligations. Alternatively, S&P could raise the ratings if Coinmach further improves its liquidity position and/or restores adequate cushion on its financial covenants. COOPER-STANDARD: Committee Gets Nod for Bennett as Canada Attys. ----------------------------------------------------------------- The Official Committee of Unsecured Creditors is hiring Toronto- based Bennett Jones LLP as its special counsel. In an application filed in Court, Patrick Healy of Wilmington Trust Company, chair of the Creditors Committee, obtained approval to employ Toronto-based Bennett Jones to monitor the insolvency proceeding of Cooper-Standard Automotive Canada Ltd., a unit of Cooper-Standard Holdings Inc. in Canada. "The Committee selected Bennett Jones primarily because [its] bankruptcy and restructuring department has extensive experience in the fields of bankruptcy and creditors' rights under Canadian insolvency law," Mr. Healy says. Bennett Jones will be paid for its services on an hourly basis and will be reimbursed of its expenses incurred. The firm's professionals will be paid at these hourly rates: Professionals Hourly Rates ------------- --------------- Partners CD$500 - $1,025 Associates CD$250 - $650 Paraprofessionals CD$140 - $350 Kevin Zych, Esq., at Bennett Jones, assures the Court that his firm is a "disinterested person" under section 101(14) of the Bankruptcy Code. About Cooper-Standard Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Michigan, is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) COOPER-STANDARD: Court Approves Kramer as Committee Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors of Cooper-Standard Holdings Inc. obtained the Court's approval to retain Kramer Levin Naftalis & Frankel LLP as its counsel effective August 13, 2009. Kramer Levin is a New York-based law firm that specializes in corporate and financial services, litigation and bankruptcy. The Creditors Committee selected the firm because of its extensive experience in the fields of bankruptcy and creditors' rights, according to Patrick Healy of Wilmington Trust Company, chair of the Creditors Committee. As counsel, Kramer Levin is tasked to provide these services: (1) the administration of the Debtors' bankruptcy cases and the exercise of oversight with respect to their affairs; (2) preparation of legal papers on behalf of the Creditors Committee; (3) appearances in Court and at statutory meetings of creditors to represent the interests of the Creditors Committee; (4) negotiation, formulation, drafting and confirmation of a plan or plans of reorganization and related matters; (5) investigation, as the Creditors Committee may desire, concerning the assets, liabilities, financial condition, sale of the Debtors' businesses and other issues concerning the Debtors; and (6) communications with the Creditors Committee's constituents and others at the direction of the panel. Kramer Levin will be paid for its services on an hourly basis and will be reimbursed of its expenses incurred in connection with its retention. The personnel designated to provide legal assistance to the Creditors Committee and their hourly rates are: Personnel Title Hourly Rates --------- ----- ------------ Kenneth Eckstein Partner $930 Thomas Moers Mayer Partner $930 Robert Schmidt Partner $735 Stephen Zide Associate $560 Yekaterina Chemyak Associate $485 Sarah Schindler-Williams Associate $440 Michael Makinde Paralegal $275 Robert Schmidt, Esq., at Kramer Levin, assures the Court that his firm does not hold or represent interest adverse to the Debtors' estates and is a "disinterested person" under Section 101(14) of the Bankruptcy Code. About Cooper-Standard Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Michigan, is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) COOPER-STANDARD: Young Conaway Authorized as Committee Co-Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors obtained the Court's authority to retain Young Conaway Stargatt & Taylor LLP as its bankruptcy co-counsel effective August 14, 2009. Based in Delaware, Young Conaway is one of the largest law firms in the state. The firm offers national corporate, bankruptcy, commercial and intellectual property practices, among other things. As the Creditors Committee's co-counsel, Young Conaway is tasked to: (1) assist and advise the Creditors Committee in its consultation with the Debtors and the U.S. Trustee relative to the administration of the Debtors' bankruptcy cases; (2) review, analyze and respond to pleadings filed by the Debtors and to participate in hearings on those pleadings; (3) assist and advise the Creditors Committee in examining and analyzing the conduct of the Debtors' affairs and financial condition; (4) assist the Creditors Committee in reviewing and analyzing the disclosure statement accompanying any plans of reorganization and asset acquisition proposal that may be filed; (5) take necessary action to protect the rights and interests of the Creditors Committee including reviewing and analyzing claims filed against the Debtors' estate; (6) represent the Creditors Committee in connection with the exercise of its powers and duties under the bankruptcy laws and in connection with the Debtors' cases; (7) prepare legal papers on behalf of the Creditors Committee; and (8) assist the Creditors Committee in reviewing, analyzing and negotiating any financing arrangements. Young Conaway will be paid on an hourly basis and will be reimbursed of its expenses incurred in connection with its retention. The firm's professionals designated to represent the Creditors Committee and their hourly rates are: Professionals Hourly Rates ------------- ------------ M. Blake Cleary $540 Erin Edwards $330 Jaime Luton $265 Troy Bollman $135 M. Blake Cleary, Esq., at Young Conaway, assures the Court that his firm does not have interest adverse to the Debtors' estates and that it is a "disinterested person" under Section 101(14) of the Bankruptcy Code. About Cooper-Standard Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Michigan, is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) CORUS BANK: Sonoma Drive Purchases Monterrey Note at Discount ------------------------------------------------------------- 15250 Sonoma Drive, LLC -- a joint venture formed between Behringer Harvard Palms of Monterrey, LLC, a wholly owned subsidiary of Behringer Harvard Opportunity OP II LP, the operating partnership of Behringer Harvard Opportunity REIT II, Inc., and DD-CTP, LLC, an entity formed between DeBartolo Development, LLC and Christian Tyler Properties, LLC -- on October 2, 2009, purchased, at a discount, a promissory note secured by a first lien mortgage and related loan documents for $25.4 million plus closing costs from the Federal Deposit Insurance Corporation as Receiver for Corus Bank, N.A., BHOR said in a regulatory filing. Behringer Harvard Palms of Monterrey, LLC owns a 90% percentage interest in the joint venture and DD-CTP, LLC, an unaffiliated third party, owns the remaining 10% percentage interest and a carried interest after a preferred return to the members based their respective capital contributions. Behringer Harvard Palms of Monterrey, LLC is the managing member of the joint venture. The principal balance and accrued interest owed on the Palms of Monterrey Note at the date of purchase was $65.8 million. The investment was funded with proceeds from the Company's ongoing public offering. Corus originated the Palms of Monterrey Note on March 21, 2006 in the principal amount of $69 million for the purpose of acquiring a 408-unit multifamily complex known as "The Palms of Monterrey" located at 15250 Sonoma Drive in Fort Myers, Florida, and converting the multifamily complex into condominium residential units for sale. The borrower under the Palms of Monterrey Note is BTS Monterrey Holdings LLC. The Palms of Monterrey Note originally accrued interest at the greater of: (i) 6.75%, or (ii) LIBOR plus 3.75% and is secured by a first lien mortgage on The Palms of Monterrey property. BTS Monterrey LLC was the original parent entity of BTS and the borrower under a mezzanine loan in the original principal amount of $8.7 million from MTRY Funding, LLC, an unrelated third party, made in connection with the acquisition and proposed conversion of The Palms of Monterrey property by BTS. The Mezzanine Loan was secured by a pledge of the Original Parent's membership interest in BTS. The Original Parent defaulted on the Mezzanine Loan. In lieu of foreclosing on the pledge of membership interests, the Mezzanine Lender accepted an assignment of the membership interests in BTS and is now the sole legal and beneficial owner of BTS. Corus approved the assignment of membership interests in BTS to Mezzanine Lender and, as a condition of reinstating and amending the loan under the Palms of Monterrey Note as requested by Mezzanine Lender, Corus required Mezzanine Lender to cure the monetary defaults existing at such time under the Palms of Monterrey Note and to execute a non-recourse carve-out guaranty in favor of Corus. The Mezzanine Loan remains outstanding and is subordinate to the Palms of Monterrey Note. The Palms of Monterrey Note matured on March 19, 2008, but BTS failed to pay the outstanding principal and interest due under the Palms of Monterrey Note on the Original Maturity Date. BTS and Corus entered into a forbearance agreement whereby BTS was required to make certain payments of principal and interest as a condition precedent to a loan amendment which would, among other things, extend the term of the loan. BTS failed to make the principal and interest payments required under the forbearance agreement. BTS is currently in default under the Palms of Monterrey Note and the forbearance agreement. The loan amendment extending the loan was never executed. The conversion of The Palms of Monterrey property to condominium units was not completed, none of the units were sold, and it is currently operated as a multifamily complex. Sonoma is pursuing its remedies available under the Palms of Monterrey Note, at law and at equity, including enforcement of the first lien mortgage through judicial foreclosure, involuntary receivership, or accepting a deed-in-lieu of foreclosure of the property securing the loan. About Corus Bank Corus Bank, N.A., was the banking subsidiary of Chicago, Illinois- based Corus Bankshares, Inc. (NASDAQ: CORS). Corus Bank was closed September 11 by regulators and the Federal Deposit Insurance Corporation was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with MB Financial Bank, National Association, Chicago, Illinois, to assume all of the deposits of Corus Bank. As of June 30, 2009, Corus Bank had total assets of $7 billion and total deposits of approximately $7 billion. MB Financial Bank will pay the FDIC a premium of 0.2 percent to assume all of the deposits of Corus Bank. In addition to assuming all of the deposits of the failed bank, MB Financial Bank agreed to purchase approximately $3 billion of the assets, comprised mainly of cash and marketable securities. The FDIC will retain the remaining assets for later disposition. CRUCIBLE MATERIALS: Union Reaches Pact with New Owner ----------------------------------------------------- Charley Hannagan at The Post-Standard reports that The United Steelworkers of America said that they have reached a contract agreement with Crucible Industries LLC, the new owner of one of the units of Crucible Materials Corp. No details available about the new contract, but Steelworkers subdistrict director Richard Knowles said that it will be explained to members of three local unions at informational meetings set for this week, says The Post- Standard. According to The Post-Standard, Crucible Industries will close on its acquisition of the Company on October 16. Mr. Knowles said that the agreement restored some of the wage concessions the workers made to BlackEagle Partners, and improves fringe benefits, The Post-Standard states. As reported by the Troubled Company Reporter on Sept. 22, Crucible conducted an auction on Sept. 21 where Allegheny Technologies Incorporated emerged as the winning bidder for its compaction metals and research divisions with its $40.95 million offer. The transaction is expected to close no later than October 31, 2009. Carpenter Technology Corp. was the stalking horse bidder for the compact metals and research divisions, with its $20 million offer. The Debtors also received the Bankruptcy Court's approval to sell (i) their specialty metals division located in Syracuse, New York, to Crucible Industries LLC, for $8 million, and (ii) their service center in Romeoville, Illinois, to Erasteel Inc., a unit of Eramet SA, for $2 million.] About Crucible Materials Based in Syracuse, New York, Crucible Materials Corporation -- aka Crucible Specialty Metals, Crucible Service Centers, Crucible Compaction Metals, Crucible Research and Trent Tube -- makes stainless and alloy steel for use in the aircraft, automotive, petrochemical, and other industries. The Company was employee- owned prior to its bankruptcy filing. Its Web site is http://www.crucible.com/ The Company and its affiliate, Crucible Development Corporation, filed for Chapter 11 protection on May 6, 2009 (Bankr. D. Del. Lead Case No. 09-11582). Mark Minuti, Esq., at Saul Ewing LLP represents the Debtors in their restructuring efforts. The Debtors engaged Duff & Phelps Securities LLP as investment banker; RAS Management Advisors LLC as business advisor; and Epiq Bankruptcy Solutions LLC as claims agent. Roberta A. DeAngelis, United States Trustee for Region 3, appointed five creditors to serve on the Official Committee of Unsecured Creditors. The Debtors listed assets and debts both ranging from $100 million to $500 million. CRUSADER ENERGY: Court Approves SandRidge-Led Auction ----------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Crusader Energy Group Inc. and its debtor- affiliates to sell substantially all assets at an auction where SandRidge Energy, Inc., would be the lead bidder. All bids for the Debtors' assets must be filed no later than 4:00 p.m., on Nov. 6, 2009, to Vinson & Elkins LLP at Trammell Crow Center, 2001 Ross Avenue, Suite 3700 in Dallas, Texas. In addition, bid must provide for an aggregate consideration valued as determined in the sole and absolute discretion of the Debtors, of at least $500,000 greater than the sum of (i) $7 million; (ii) the cash consideration under the stock purchase agreement; and (iii) $186 million. The Debtors will conduct an auction on Nov. 13, 2009, at 9:30 a.m. The Debtors agreed to pay a break-up fee of $7 million to SandRidge Energy, as stalking-horse bidder, if they consummate the sale to another party. According to the Troubled Company Reporter on Sept. 30, 2009, SandRidge Energy has agreed purchase all of the shares of common stock of reorganized Debtors, pursuant to the stock purchase agreement, for: -- $55 million in cash, subject to certain adjustments, including reduction by approximately $90,000 per day from and after Sept.r 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 Sept. 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. In addition, the Purchase Agreement may be terminated by either the Company or Crusader if the closing of the transaction has not occurred by Dec. 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. 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: Wins Approval to Sell Assets to ComVest Group ----------------------------------------------------------- U.S. Bankruptcy Judge Kevin Gross has approved the sale of substantially all assets of Cynergy Data LLC to ComVest Group for about $81 million, Michael Bathon at Bloomberg News reported. ComVest was already under contract to buy Cynergy absent higher and better bids. ComVest will pay $81 million, including $14 million of subordinated debt, under the terms of the agreement. Before selling to ComVest, Cynergy solicited offers from other parties. According to the Court-approved auction procedures, an auction was to be held October 5 if a competing offer is received and ComVest would receive a break-up fee if it loses at the auction. The auction was cancelled because no bids were received by the October 2 deadline. "I believe the price is the highest and best" and the sale "is in the best interest" of the company, Gross said at an Oct. 7 hearing in which Cynergy sought approval of the sale. "We're very happy the sale will be able to proceed," Dennis Drebsky, a lawyer for Cynergy, said in an interview after the hearing. About The ComVest Group The ComVest Group is a private investment firm focused on providing debt and equitysolutions to middle-market companies with enterprise values of less than $350 million. Since 1988 ComVest 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 offers its portfolio companies total financial sponsorship, critical strategic support, and business development assistance. ComVest additionally owns controlling interest in Pipeline Data, CardAccept, AirCharge, SecurePay and Northern Merchant Services; all credit card merchant servicing organizations. For further information on ComVest, please contact Partner Daniel Nenadovic at (561) 727.2070 or via e-mail at danieln@comvest.com 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. DOLLAR THRIFTY: NYSE to Delist Preferred Share Purchase Rights -------------------------------------------------------------- The New York Stock Exchange notified the Securities and Exchange Commission of its intention to remove the Preferred Share Purchase Rights of Dollar Thrifty Automotive, Inc., from listing and registration on the Exchange at the opening of business on October 19, 2009, pursuant to the provisions of Rule 12d2-2 (a) 17 CFR 240.12d2-2 (a)(4). Pursuant to the terms of the Rights of Dollar Thrifty Automotive, Inc., the Rights expired and became null and void on August 3, 2009. The Exchange also notified the Commission that as a result of the indicated conditions the security was suspended from trading on August 3, 2009. About Dollar Thrifty Automotive Group Dollar Thrifty Automotive Group, Inc. -- http://www.dtag.com/, http://www.dollar.com/and http://www.thrifty.com/-- is a Fortune 1000 company headquartered in Tulsa, Oklahoma. The Company's brands, Dollar Rent A Car and Thrifty Car Rental, serve value- conscious travelers in more than 70 countries. Dollar and Thrifty have more than 700 corporate and franchised locations in the United States and Canada, operating in virtually all of the top U.S. and Canadian airport markets. The Company's roughly 6,800 employees are located mainly in North America, but global service capabilities exist through an expanding international franchise network. As of June 30, 2009, the Company had $2.58 billion in total assets and $2.35 billion in total liabilities. * * * The TCR said April 6, 2009, that Standard & Poor's Ratings Services lowered its ratings on DTAG, including the long-term corporate credit rating to 'CCC' from 'CCC+'. All ratings were removed from CreditWatch, where they were initially placed with negative implications on February 12, 2008, and subsequently lowered three times and maintained on CreditWatch. The outlook is now negative. DUNE ENERGY: To Seek Shareholder OK of 1-for-5 Reverse Stock Split ------------------------------------------------------------------ A Special Meeting of Stockholders of Dune Energy, Inc., will be held November 30, 2009, at 9:00 a.m. Central Time, at the Company's corporate offices, located at Two Shell Plaza, 777 Walker Street, Suite 2300, in Houston, Texas. The purpose of the meeting is to: -- to ratify and approve an amendment to the Company's Certificate of Incorporation to effect a reverse stock split of the Company's outstanding shares of common stock at a ratio of 1-for-5; and -- to ratify and approve an amendment to the Company's 2007 Stock Incentive Plan to increase the number of shares of the common stock of Dune Energy that may be issued under the plan from 7.0 million shares to 16.0 million shares, which number of shares shall be subject to the reverse stock split if approved by the Company's stockholders. Stockholders of record at the close of business on October 2, 2009, are entitled to cast a vote. A full-text copy of the preliminary proxy statement is available at no charge at http://ResearchArchives.com/t/s?46ce About Dune Energy Based in Houston, Texas, Dune Energy, Inc., is an independent energy company. Since May of 2004, it has been engaged in the exploration, development, acquisition and exploitation of natural gas and crude oil properties, with interests along the Louisiana/Texas Gulf Coast. Its properties cover 100,000 gross acres across 23 producing oil and natural gas fields. As of June 30, 2009, the Company had $382.3 million in total assets; and $355.6 million in total liabilities and $213.4 million in Redeemable convertible preferred stock; resulting in $186.7 million in stockholders' deficit. The Company had $252.0 million in accumulated deficit as of June 30, 2009. DUNE ENERGY: UBS AG Reports 43.99% Equity Stake ----------------------------------------------- UBS AG reports holding 110,840,743 shares or roughly 43.99% of the common stock of Dune Energy, Inc., as of October 8, 2009. UBS AG says the Common Shares consists 110,840,743 Common Shares underlying 10% Senior Redeemable Convertible Preferred Stock. As of October 8, 2009, each share of Preferred Stock converts into 571.43 Common Shares plus a make-whole premium as of October 8, 2009, amounted to an additional 615.3501 Common Shares for 1 share of Preferred Stock. The make whole premium is equal to the discounted net present value of future dividends (until June 2010) divided by the Volume Weighted Average Price of the common stock for the last 10 trading days prior to the conversion date discounted 10%. Therefore, the make whole premium fluctuates with the changes in the price of the Common Shares and the amount of future dividends. About Dune Energy Based in Houston, Texas, Dune Energy, Inc., is an independent energy company. Since May of 2004, it has been engaged in the exploration, development, acquisition and exploitation of natural gas and crude oil properties, with interests along the Louisiana/Texas Gulf Coast. Its properties cover 100,000 gross acres across 23 producing oil and natural gas fields. As of June 30, 2009, the Company had $382.3 million in total assets; and $355.6 million in total liabilities and $213.4 million in Redeemable convertible preferred stock; resulting in $186.7 million in stockholders' deficit. The Company had $252.0 million in accumulated deficit as of June 30, 2009. EDGE PETROLEUM: Gets Initial Approval to Use Cash Collateral ------------------------------------------------------------ The Hon. Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas authorized Edge Petroleum Corporation and its debtor-affiliates to use cash collateral securing repayment of secured loans to their prepetition lenders, pursuant to a 13-week budget. The Debtors told the Court that they have an immediate need to use cash collateral -- including cash proceeds -- to continue their ordinary course business operations and to maintain the value of their bankruptcy estates. Absent the use of the cash collateral, they will not able to pay costs and expenses, wages, salaries, professional fees, general and administrative operating expenses, the Debtors lament. A prepetition lender holds an interest in the Debtors' cash. In January 2007, Union Bank of California provided $750 million revolving credit facility to the Debtors, which is secured by all of the Debtors' assets. As of Sept. 30, 2009, about $226.5 million in total borrowing were outstanding under the credit facility. As adequate protection, Union Bank and other prepetition secured lenders will be granted valid and perfected additional and replacement security interest in and liens upon all of the Debtors' interest and assets. A final hearing is set for Oct. 27, 2009, at 2:00 p.m., to consider the Debtors' request. A full-text copy of the Debtors' cash collateral budget is available for free at http://ResearchArchives.com/t/s?46cc About Edge Petroleum Edge Petroleum Corporation (Nasdaq:EPEX) (Nasdaq:EPEXP) is a Houston-based independent energy company that focuses its exploration, production and marketing activities in selected onshore basins of the United States. At June 30, 2009, the Company's balance sheet showed total assets of $264,030,000, total liabilities of $252,492,000 and stockholders' equity of $11,538,000. Edge Petroleum filed for Chapter 11 on October 2, 2009 (Bankr. S.D. Tex. Case No. 09-20644). The Company has retained Akin Gump Strauss Hauer and Feld as legal counsel, and Parkman Whaling LLC as financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. EDGE PETROLEUM: Nasdaq Delists Securities on Chapter 11 Filing -------------------------------------------------------------- Edge Petroleum Corporation said October 8 that on October 2, 2009, it received notice from The Nasdaq Stock Market that the Company's common stock and 5.75% series A cumulative convertible perpetual preferred stock will be delisted from the Exchange at the opening of business on October 13, 2009, pursuant to the Exchange's Listing Rules 5100, 5110(b) and IM-5100-1, and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the Company's securities from listing and registration on the Exchange. According to the Notice, the determination to delist the Company's securities was based on (i) the announcement by the Company on October 2, 2009 that it and each of its subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code and the associated public interest concerns raised by such bankruptcy petitions; (ii) concerns regarding the residual equity interest of the existing listed securities holders; and (iii) concerns about the Company's ability to sustain compliance with all requirements for continued listing on the Exchange. The Company may appeal the Exchange's determination to a Hearings Panel, pursuant to the procedures set forth in the Exchange's Listing Rule 5800 Series. However, the Company does not intend to take any further action to appeal the Exchange's decision, and therefore it is expected that the Company's securities will be delisted and trading suspended at the opening of business on October 13, 2009. If the Company does not appeal the Exchange's decision, the Company's securities will not be immediately eligible to trade on the OTC Bulletin Board or in the "Pink Sheets." The Company's securities may become eligible if a market maker makes application to register in and quote the security in accordance with SEC Rule 15c2-11, and such application is cleared. About Edge Petroleum Edge Petroleum Corporation (Nasdaq:EPEX) (Nasdaq:EPEXP) is a Houston-based independent energy company that focuses its exploration, production and marketing activities in selected onshore basins of the United States. At June 30, 2009, the Company's balance sheet showed total assets of $264,030,000, total liabilities of $252,492,000 and stockholders' equity of $11,538,000. Edge Petroleum filed for Chapter 11 on October 2, 2009 (Bankr. S.D. Tex. Case No. 09-20644). The Company has retained Akin Gump Strauss Hauer and Feld as legal counsel, and Parkman Whaling LLC as financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. EMMIS COMMUNICATIONS: Restates Annual & Quarterly Reports --------------------------------------------------------- Emmis Communications Corporation filed an amendment to its Annual Report on Form 10-K for the year ended February 28, 2009, to amend and restate its financial statements and other financial information for the year then ended. The Company also filed an amendment to its Quarterly Report on Form 10-Q for the period ended May 31, 2009, to amend and restate financial statements for the quarter then ended. On October 8, 2009, the Audit Committee of the Board of Directors of Emmis, in consultation with the Company's management and independent registered public accounting firm, concluded that the consolidated financial statements included in the Annual Report, the related reports of the independent registered public accounting firm, and the condensed consolidated financial statements included in the Quarterly Report should no longer be relied upon due to an error in the Company's provision for income taxes. During the year ended February 28, 2009, the Company recorded a valuation allowance on substantially all of its domestic deferred tax assets as it was more likely than not that the domestic deferred tax assets would not be realized. In determining the valuation allowance of its deferred tax assets, the Company netted deferred tax assets related to indefinite-lived intangible assets and deferred tax liabilities related to indefinite-lived intangible assets. In accordance with generally accepted accounting principles, deferred tax assets and deferred tax liabilities associated with indefinite-lived intangible assets should not be netted because the timing of the reversal of the deferred tax liabilities is unknown. The Company recorded additional valuation allowance equal to the amount of deferred tax assets the Company had erroneously netted against deferred tax liabilities. As a result, the Company overstated the benefit for income taxes and understated deferred tax liabilities by $25.3 million. In connection with the restatement, the Company also increased the balance of a deferred tax liability related to an indefinite-lived intangible asset by $6.1 million, with a corresponding reduction to the beginning balance of retained earnings as this matter related to a prior period. The restatements have no effect on the Company's cash flows in any period. According to the Company, the correction of the error impacts its provision for income taxes for its fiscal quarter ended May 31, 2009. Thus, the Company restated its condensed consolidated financial statements for the three months ended May 31, 2009, to decrease provision for income taxes by $4.5 million. The Company's management and Audit Committee have discussed the matter with Ernst & Young LLP, its independent registered public accounting firm. A full-text copy of the Amended Annual Report is available at no charge at http://ResearchArchives.com/t/s?46cf A full-text copy of the Amended Quarterly Report is available at no charge at http://ResearchArchives.com/t/s?46d0 About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation owns and operates radio stations and magazine publications in the U.S. and in Europe. At May 31, 2009, the Company had $685,535,000 in total assets; $517,859,000 in total liabilities and $140,459,000 in Series A cumulative convertible preferred stock, resulting in $22,438,000 in shareholders' deficit. At May 31, the Company reported $49,655,000 in noncontrolling interests, resulting in $27,217,000 in total equity * * * As reported by the Troubled Company Reporter on June 22, 2009, Moody's Investors Service changed Emmis Communications' senior secured term loan rating to Caa2 from Ca following the completion of a series of Dutch auction transactions pursuant to a March 3, 2009 credit facility amendment. The revised rating reflects the Company's capital structure, pro-forma for an roughly $78 million reduction of term loan debt which has resulted from these transactions. In addition, Moody's removed the "/LD" designation previously appended to the Probability of Default rating on April 27, 2009. In April, Moody's cut its corporate family rating on the Company to 'Caa2'. In May, S&P raised its corporate credit rating on the Company to 'CCC+'. In June, S&P withdrew the 'CCC+' Corp. Credit Rating at the Company's request. ENCHANTMENT LLC: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------------- Enchantment LLC has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Middle District of Florida, listing $10 million to $50 million in assets and $10 million to $50 million in liabilities. Tampa Bay Business Journal said, citing court documents, Bank of America brought a lawsuit to foreclose on Enchantment's The Best Western Sea Wake Beach Resort in July. Enchantment LLC owns The Best Western Sea Wake Beach Resort on Clearwater Beach, in Florida. ENCHANTMENT LLC: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Enchantment, LLC dba Best Western Sea Wake Beach Resort 691 South Gulfview Blvd. Clearwater Beach, FL 33767-2643 Case No.: 09-22895 Type of Business: The Debtor operates a real estate business. It owns The Best Western Sea Wake Beach Resort on Clearwater Beach. Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Scott A. Stichter, Esq. Stichter, Riedel, Blain & Prosser 110 E. Madison Street, Suite 200 Tampa, FL 33602-4700 Tel: (813) 229-0144 Fax: (813) 229-1811 Email: sstichter.ecf@srbp.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. ENVIRONMENTAL TECTONICS: Obtains Covenant Relief from PNC Bank -------------------------------------------------------------- Environmental Tectonics Corporation reports that its $20,000,000 revolving line of credit with PNC Bank, National Association, was amended on October 1, 2009, to extend the loan maturity date to June 30, 2011. Additionally, the affirmative covenants were adjusted. The Consolidated Tangible Net Worth covenant was modified to reflect the impact on the Company's balance sheet of the so-called Lenfest Financing Transaction. Effective with each fiscal quarter ending after October 1, 2009, the Company must maintain a minimum Consolidated Tangible Net Worth of at least $10,000,000. The Earnings Before Interest, Taxes, Depreciation and Amortization covenant was changed for fiscal periods beginning after December 1, 2009. Beginning with the first fiscal quarter ending after December 1, 2009, and for each fiscal quarter ending thereafter, the Company must maintain a minimum aggregate EBITDA of $4,000,000 for the fiscal quarter then ending and the three preceding fiscal quarters. Lenfest Financing Transaction On April 24, 2009, the Company entered into a transaction with H.F. Lenfest that provided for the following upon the satisfaction of certain conditions, including the receipt of the approval of the Company's shareholders to certain components of the transaction: (i) a $7,500,000 credit facility provided by Lenfest to ETC; (ii) exchange of the Subordinated Note held by Lenfest, together with all accrued interest and warrants issuable under the Subordinated Note, and all Series B Preferred Stock and Series C Preferred Stock held by Lenfest, together with all accrued dividends thereon, for a new class of preferred stock, Series E Preferred Stock, of the Company; and (iii) the guarantee by Lenfest of all of ETC's obligations to PNC Bank in connection with an increase of the existing $15,000,000 revolving line of credit with PNC Bank to $20,000,000, and in connection with this guarantee, the pledge by Lenfest to PNC Bank of $10,000,000 in marketable securities. On July 2, 2009, the Company held its 2009 Annual Meeting of Shareholders, at which the Company obtained the Shareholder Approvals. Following the receipt of the Shareholder Approvals, the Series E Exchange and increase of the 2007 PNC Credit Facility have been completed. Lenfest Credit Facility As part of the Lenfest Financing Transaction, the Company established a credit facility in the maximum amount of $7,500,000 with Lenfest. According to the Company's Form 10-Q filing in July, the Lenfest Credit Facility is to be used to finance certain government projects that ETC is seeking to be awarded. The terms of the Lenfest Credit Facility are set forth in a Secured Credit Facility and Warrant Purchase Agreement between the Company and Lenfest, dated as of April 24, 2009. In connection with the Lenfest Credit Agreement, the Company has executed, and will in the future execute, promissory notes in favor of Lenfest, in the aggregate principal amount of up to $7,500,000. As a result of obtaining the Shareholder Approvals, each Lenfest Credit Facility Note issued under the Lenfest Credit Facility will accrue interest at the rate of 10% per annum (rather than the original interest rate of 15% per annum), payable in cash or, at the option of Lenfest, in shares of Series D Preferred Stock of the Company. In connection with the execution of the Lenfest Credit Agreement on April 24, 2009, the Company was initially entitled to drawdown $1,000,000 under the Lenfest Credit Agreement prior to obtaining the Shareholder Approvals and satisfying certain other conditions. In connection with obtaining the Shareholder Approvals, the Company entered into a letter agreement with Lenfest providing that the Company may draw down the Initial $1 Million Loan as part of the Lenfest Credit Facility without satisfying certain conditions. On July 2, 2009, in connection with the closing of the Lenfest Financing Transaction, the Company filed with the Department of State of the Commonwealth of Pennsylvania an Amendment to the Articles of Incorporation increasing the number of authorized shares of common stock from 20,000,000 to 50,000,000. Exchange of Existing Instruments for Series E Preferred Stock As part of the Lenfest Financing Transaction, the senior subordinated convertible promissory note in the original principal amount of $10,000,000 issued by ETC to Lenfest on February 18, 2003, together with all accrued interest and warrants issuable pursuant to the terms of the Subordinated Note, and all Series B Cumulative Convertible Preferred Stock of the Company and Series C Convertible Preferred Stock of the Company held by Lenfest, together with all accrued dividends thereon, would be exchanged for shares of a newly created class of Series E Convertible Preferred Stock of the Company. On July 2, 2009, following the receipt of the Shareholder Approvals, the Company filed with the Department of State of the Commonwealth of Pennsylvania a Statement with Respect to Shares of Series E Convertible Preferred Stock creating a new class of preferred stock consisting of 25,000 shares with a stated value of $1,000 per share and designated Series E Convertible Preferred Stock. Immediately thereafter, the Series E Exchange occurred and the Company issued 23,741 shares of Series E Preferred Stock to Lenfest. The shares of Series E Preferred Stock have a conversion price per share equal to $2.00 and would convert into 11,870,500 shares of ETC common stock. Increased PNC Bank Credit Facility and Issuance of New Guarantee On April 24, 2009, PNC Bank agreed to increase the amount of financing available under the 2007 PNC Credit Facility from $15,000,000 to $20,000,000 subject to the condition that Lenfest continues to personally guaranty all of ETC's obligations to PNC Bank and that Lenfest pledges $10,000,000 in marketable securities as collateral security for his guaranty. Following the receipt of the Shareholder Approvals, the 2007 PNC Credit Facility was increased from $15,000,000 to $20,000,000 on July 2, 2009. On July 2, 2009, ETC and PNC Bank entered into the Amended and Restated Credit Agreement and the Second Amended and Restated Reimbursement Agreement for Letters of Credit. The promissory note executed by ETC in favor of PNC Bank in connection with the 2007 PNC Credit Facility was cancelled and replaced with the Amended and Restated Promissory Note in the principal amount of $20,000,000. Lenfest executed and delivered to PNC Bank these agreements: (i) an Amended and Restated Guaranty Agreement, which replaced the Restated Guaranty executed by Lenfest in connection with the 2007 PNC Credit Facility, (ii) a Pledge Agreement, pursuant to which Lenfest made the Lenfest Pledge, and (iii) a Notification and Control Agreement. In connection with the execution of the 2009 PNC Financing Documents, ETC paid to Lenfest an origination fee of 100 shares of Series D Preferred Stock, which is equal to 1% of the market value of the $10,000,000 in marketable securites pledged by Lenfest to PNC Bank to secure ETC's obligations to PNC Bank. The 100 shares of Series D Preferred Stock have a stated value of $1,000 per share, or $100,000 in the aggregate. The shares of Series D Preferred Stock have a conversion price per share equal to $1.11, which price equals the average closing price of ETC common stock during the 120 days prior to the issuance of such shares, and would convert into 90,090 shares of ETC common stock. In consideration of Lenfest entering into the Amended and Restated Guaranty, ETC issued to Lenfest warrants to purchase 450,450 shares of ETC common stock, which shares equal in value to 10% of the amount of the $5,000,000 increase under the 2007 PNC Bank Credit Facility. The warrants are exercisable for seven years following issuance at an exercise price per share equal to $1.11, which price equals the average closing price of ETC common stock during the 120 days prior to the issuance of the warrant. A full-text copy of the Amendment to the 2007 PNC Credit Facility is available at no charge at http://ResearchArchives.com/t/s?46b5 Southampton, Pennsylvania-based Environmental Tectonics Corporation (AMEX: ETC) -- http://www.etcusa.com/-- designs, develops, installs and maintains aircrew training systems (aeromedical, tactical combat and general), disaster management training systems and services, entertainment products, sterilizers (steam and gas), environmental testing products, hyperbaric chambers and related products for domestic and international customers. The Company had total assets of $35,538,000 and total liabilities of $37,486,000, at May 29, 2009. EQUIPMENT FINDERS: Gets Temporary OK to Access Cash Collateral -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Tennessee authorized, on an interim basis, Equipment Finders of Tennessee, Inc., to: -- use cash collateral to pay ordinary course of business expenses pursuant to an approved budget; and -- grant adequate protection to the prepetition creditors. A final hearing on the Debtor's cash collateral motion will be held at 9:00 a.m. on Oct. 27, 2009, in Courtroom 2, Customs House, Nashville, Tennessee. Objections, if any, are due on Oct. 23, 2009, at 4:00 p.m. The Debtor has numerous creditors who assert purchase money security interests in certain equipment of the Debtor used a rental equipment in its business. Additionally, several creditors, including Woodhull Investments, Inc., assert a blanket lien on all of the Debtor's assets to secure indebtedness. The Debtor related that the proceeds from the collection of accounts, sale of inventory, and the rental of equipment constitute cash collateral. The Debtor will grant all creditors a replacement interest in all of the Debtor's postpetition accounts to the same extent and priority that the security existed prepetition. As adequate protection, Reliant Bank will also be granted adequate protection payments. Reliant Bank Objects Reliant Bank, through its counsel, Neal & Harwell, PLC, filed its limited objection with the Court relating that the proposed order does not provide adequate protection for the Bank's interest in the Debtor's property. About Equipment Finders of Tennessee Nashville, Tennessee-based Equipment Finders of Tennessee, Inc., filed for Chapter 11 on Sept. 11, 2009 (Bankr. M.D. Tenn. Case No. 09-10426). William L. Norton III, Esq., at Bradley Arant Boult Cummings LLP, represents the Debtor in its restructuring effort. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. ESP PRINTING INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: ESP Printing Inc. 19201 62nd Ave. S. Kent, WA 98032 Bankruptcy Case No.: 09-20560 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtor's Counsel: Donald A. Bailey, Esq. 1218 3rd Ave Suite 1808 Seattle, WA 98101 Tel: (206) 682-4802 Email: donald.bailey@shaferbailey.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 $2,218,669, and total debts of $6,458,375. 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/wawb09-20560.pdf The petition was signed by Mark Williams, secretary-treasurer of the Company. EVERGREEN ENERGY: Out of Compliance with NYSE Arca Listing Rules ---------------------------------------------------------------- Evergreen Energy Inc. said October 8 that it was notified by the New York Stock Exchange Arca Inc. (NYSE Arca) on Friday, October 2, 2009 that it was not in compliance with the NYSE Arca's continued listing standard for minimum share price under Rule 5.5(b)(2) of the NYSE Arca Equities Rules. The standard requires that the average closing price of any listed security not fall below $1.00 per share for any consecutive 30-day trading period. Evergreen is exploring alternatives for curing this deficiency and restoring compliance with the continued listing standards. The company's common stock will remain listed on the NYSE Arca exchange under the symbol "EEE," but will be assigned a ".BC" indicator by the NYSE Arca to show that the company is currently out of compliance with the NYSE Arca's continued listing standards. As required by Rule 5.5(b) of the NYSE Arca Equities Rules, Evergreen is required to notify formally the NYSE Arca within 10 business days from receipt of the notice of its intent to cure this deficiency and provide commentary on its ability to cure the deficiency and of the specific steps it is planning to take to regain compliance. Evergreen has six months from the notification date to comply with the NYSE Arca minimum share price standard. If it is not compliant by that date, its common stock will be subject to suspension and delisting by the NYSE Arca. About Evergreen Energy Inc. EverGreen Energy Inc. (NYSE Arca: EEE) -- http://www.evgenergy.com/-- is a vertically integrated, coal- based platform for delivering energy, with operations based principally in the United States. The Company serves the needs of public utility, industrial and international market customers by providing solutions to environmental emission standards. The K- Fuel process uses heat and pressure to physically and chemically transform high moisture, low- British thermal unit (low-Btu) coals, such as sub-bituminous coal and lignite, into lower- emission fuel. The Company's business segment comprise: the C- Lock segment, the Plant segment, the Mining segment and the Technology segment. EXTENDED STAY: Wins Turnaround Plan Extension Amid Loan Probe ------------------------------------------------------------- Extended Stay Inc. and its debtor affiliates ask the U.S. Bankruptcy Court for the Southern District of New York obtained a February 1 extension of their exclusive period to file a Chapter 11 plan. The Debtors had requested an April 13 extension. Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York, said the requested extension is justified given the "sheer magnitude of the Debtors' indebtedness" and the "complexity of their capital structure." The Debtors currently have total liabilities of more than $7.4 billion, consisting of $4.1 billion mortgage loans and $3.3 billion mezzanine loans. Ms. Marcus said in the request, a transition to a new controlling holder of the $4.1 billion is expected to take place "this week", and, that the identity of the controlling holder has to be known first before the Debtors could proceed with the negotiations regarding their plan of reorganization. Diana Adams, the U.S. Trustee for Region 2, has appointed Salt Lake City lawyer and former judge Ralph Mabey as examiner to probe claims that Extended Stay Hotels Inc. filed for bankruptcy in a scheme to push out junior debt holders. Ms. Adams requested for a probe on the structuring, negotiation and closing of the acquisition of the Debtors in 2007 by an investment consortium led by Lightstone Group LLC Chairman David Lichtenstein. Mr. Lichtenstein acquired the Debtors from Blackstone Group LP in April 2007 through a $7.4 billion secured loan he availed from Wachovia Bank N.A., Bank of America N.A, and Bear Stearns Commercial Mortgage Inc. The $7.4 billion loan consisted of a $3.3 billion "mezzanine" loan and a $4.1 billion mortgage loan. The U.S. Trustee's request came after some groups threw allegations of fraud and dishonesty against Mr. Lichtenstein and the lenders. Those groups, which include Line Trust Corporation Ltd. and Deuce Properties Ltd., accused the lenders of inducing Mr. Lichtenstein to put the Debtors in bankruptcy to push junior loan holders out of the money. In return, the lenders allegedly promised to indemnify Mr. Lichtenstein against $100 million in liabilities and provide another $5 million to fight claims that might be asserted by junior lenders. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). F&H DEVELOPMENT CO INC: Case Summary & Unsecured Creditor --------------------------------------------------------- Debtor: F&H Development Co., Inc. 679 Grants Ferry Road Flowood, MS 39232 Bankruptcy Case No.: 09-03557 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Southern District of Mississippi (Jackson Divisional Office) Judge: Neil P. Olack Debtor's Counsel: Eileen N. Shaffer, Esq. PO Box 1177 Jackson, MS 39215-1177 Tel: (601) 969-3006 Fax: (601) 949-4002 Email: enslaw@bellsouth.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor identified MDEQ with an unknown debt claim for $9,000 as its largest unsecured creditor. A list of the Company's largest unsecured creditor is available for free at: http://bankrupt.com/misc/mssb09-03557.pdf The petition was signed by Robert Houston, president of the Company. FAIRPOINT COMMS: Bank Debt Trades at 22% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which FairPoint Communications, Inc., is a borrower traded in the secondary market at 77.64 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.89 percentage points from the previous week, The Journal relates. The loan matures on March 31, 2015. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Caa1 rating while Standard & Poor's has assigned a default rating on the bank debt. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Headquartered in Charlotte, North Carolina, FairPoint Communications, Inc. -- http://www.fairpoint.com/-- owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television, and broadband services. FairPoint is traded on the New York Stock Exchange under the symbol FRP. On Sept. 29, Moody's Investors Service repositioned FairPoint Communications, Inc.'s Probability of Default Rating to Ca/LD from Ca to reflect the limited default that has occurred following non- payment of the principal due on its credit facility on Sept. 30, 2009. The "/LD" suffix will be removed after three business days. FIVE STAR OF CENTRAL: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Five Star of Central Florida, Inc. dba Daytona Village Apartments 2133 Korat Lane Maitland, FL 32751 Bankruptcy Case No.: 09-08544 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Judge: Chief Paul M. Glenn Debtor's Counsel: Walter J. Snell, Esq. Snell & Snell, P.A. 436 N Peninsula Drive Daytona Beach, FL 32118 Tel: (386) 255-5334 Email: snellandsnell@mindspring.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 $2,070,914, and total debts of $3,223,699. A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-08544.pdf The petition was signed by Surujnauth Bharrat, president of the Company. FLEETWOOD ENTERPRISES: Can Use Cash Collateral Until January 31 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved a stipulation reached by Fleetwood Enterprises, Inc., and its debtor-affiliates with Bank of America, as agent for itself and on behalf of the prepetition secured parties, extending the period during which the Debtors may use BofA's cash collateral until 5:00 p.m., PDT, on Jan. 31, 2010, and the effective date of a Plan of Liquidation. As reported in the Troubled Company Reporter on Aug. 20, 2009, BofA and the prepetition secured parties assert claims against the Debtors in the aggregate amount, as of March 6, 2009, of $61,690,980 in unpaid reimbursement obligations, plus interest and additional sums for reasonable costs and reasonable attorneys' fees, secured by substantially all of the personal property of each of the Debtors. Based in Riverside, California, Fleetwood Enterprises, Inc., together with 19 of affiliates, filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., and Solmaz Kraus, Esq., at Gibson, Dunn & Crutcher LLP, represent the Debtors in their restructuring efforts. FTI Consulting Inc. is the financial advisors to the Debtors. The Debtors tapped Greenhill & Co. LLC as its investment banker. FLYING J: Wants to Sell ERCs to Hydrogen Energy for $9.7 Million ----------------------------------------------------------------- Flying J Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to (i) sell certain emission reduction credits for Nitrogen Oxide and Sulfur Dioxide to Hydrogen Energy California LLC for $9,695,000; and (ii) transfer the Transferred ERCs as contemplated by the purchase and sale agreement, free of all liens, claims, interests, liabilities, and encumbrances; The sale does not contemplate a stalking horse bidder and public auction because there is a limited number of potential buyers fot the Debtors' ERCs. The Debtor proposes hearing on its motion on Oct. 15, 2009, at 9:30 a.m. (E.T.). Objections, if any, are due Oct. 12, 2009, at 4:00 p.m. (E.T.) Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. The fully integrated oil company employs approximately 14,700 people in the U.S. and Canada through its interstate operations, transportation, refining and supply, exploration and production, as well as its financial services and communications, divisions. Flying J and six of its affiliates filed for bankruptcy on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying J sought Chapter 11 protections after a precipitous drop in oil prices and disruption in the credit markets brought to bear significant short-term pressure on the company's liquidity position. Attorneys at Kirkland & Ellis LLP represent the Debtors as counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors' Delaware Counsel. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J listed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. FM RIVERWALK: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: FM Riverwalk, LP c/o Gary L. Hunter SDI Riverwalk, LLC 5105 DTC Parkway, Suite 240 Greenwood VIllage, CO 80111 Bankruptcy Case No.: 09-36878 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Debtor's Counsel: Robert Thomas DeMarco, Esq. DeMarco & Mitchell, P.C. 101 E. Park Blvd., 600 Plano, TX 75074 Tel: (972) 208-4600 Fax: (972) 208-4603 Email: bobdemarco@swbell.net 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 Gary L. Hunter. FREEDOM COMMUNICATIONS: Creditors Slam Freedom's $7M Bonus Bid -------------------------------------------------------------- According to Law360, Freedom Communications Holdings Inc.'s attempt to free up $7 million in cash for bonuses has triggered an outcry from the newspaper publisher's unsecured creditors, who claim the debtor is trying to plunder the estate for the benefit of wealthy company insiders. Freedom Communications, headquartered in Irvine, Calif., is a national privately owned information and entertainment company of print publications, broadcast television stations and interactive businesses. The company's print portfolio includes approximately 90 daily and weekly publications, including approximately 30 daily newspapers, plus ancillary magazines and other specialty publications. The broadcast company's stations -- five CBS, two ABC network affiliates and one CW affiliate -- reach more than 3 million households across the country. The Company's news, information and entertainment Web sites complement its print and broadcast properties. Freedom Communications filed for Chapter 11 on Sept. 1, 2009 (Bankr. D. Del. Case No. 09-13046). Attorneys at Young Conaway Stargatt & Taylor, and Latham & Watkins LLP serve as Chapter 11 counsel. Houlihan, Lokey, Howard & Zukin, Inc., serves as financial advisor while AlixPartners LLC is restructuring consultant. Logan & Co. serves as claims and notice agent. Freedom Communications had $757,000,000 in assets against debts of $1,077,000,000 as of July 31, 2009. FREMONT GENERAL: Hearing on Plan Outlines to Continue Tomorrow -------------------------------------------------------------- The Bankruptcy Court will convene another hearing on October 14, 2009, to consider approval of the respective disclosure statement explaining proposed Chapter 11 plans for Fremont General Corp. Fremont's management, the Official Committee of Unsecured Creditors and the Official Committee of Equity Holders have each filed a Chapter 11 plan for Fremonth. Approval of a disclosure statement would allow the plan proponent to begin soliciting votes on, then seek confirmation of, its plan. The Bankruptcy Court held a hearing on the disclosure statements on Sept. 17, 2009. The Court, however, continued the hearing to permit the Creditors Committee to make certain changes to its disclosure statement. The Equity Committee asserts that approval of the OCC Disclosure Statement should be denied because it fails to give adequate disclosure to the equity holders and creditors about what value they might realize under the OCC Plan. U.S. Bank National Association, as trustee, also filed an objection, specifically with respect to the notice to creditors of Fremont Reorganizing Corporation, f/k/a Fremont Investment & Loan ("FRC"). U.S. Bank asserts that the Creditors Committee, having chosen to make FRC creditors part of the audience receiving notice, has an obligation to provide them with disclosure and notice that meets the same requirements that apply to creditors of the Debtor. Wells Fargo also filed an objection similar to U.S. Bank's. The Creditors Committee asserts that the objections that have been filed all raise issues and could and should have been previously addressed by the parties (at the Sept. 17 hearing) and should be denied outright by the Court as untimely. The Equity Committee has also filed a revision to the disclosure statement explaining its proposed plan on Sept. 30, 2009. U.S. Bank says the document is deficient, as it failed to address the defects raised with respect to the Creditors Committee's plan with respect to the FRC notice, among other things. 3 Competing Plans In June, the Company filed a proposed Chapter 11 plan that offers to pay 100 cents on the dollar to general unsecured creditors through pro rata distribution of cash, until the claim has been satisfied, including payment of post-petition interest, as applicable. Holders of equity interests will also receive interests under the Plan. A full-text copy of the disclosure statement with respect to Fremont's Chapter 11 Plan is available for free at http://bankrupt.com/misc/Fremont.DS.pdf In July, the Equity Committee filed a proposed Chapter 11 plan for the Company. The Plan promises to pay all creditors in full with interest, unless they elect to give up interest in return for quicker payment. Debt includes $63 million in unsecured claims plus almost $274 million to holders of debt securities. The shareholders' plan would be financed with $27.9 million in cash that Fremont has on hand plus cash held in a nonbankrupt subsidiary. After the plan becomes effective, the shareholders say Fremont will have $90 million available. The equity holders intend to buy banks and use Fremont's tax loss carryforwards. A copy of the Equity Committee's disclosure statement, as revised September 30, is available for free at: http://bankrupt.com/misc/Fremont_EquityCommittee_DS_Sept30.pdf In July, the Creditors Committee also presented its own plan for Fremont. Under its Plan, holders of class 3 general unsecured claims are afforded the option of waiving their right to post- petition interest in exchange for payment in full of the amount owing to the holders on or before October 31, 2009, so long as sufficient cash is then available to make such payment. Holders of interests in the Debtor will retain those interests in the form of equity trust interests in an Equity Trust established under the Plan. A copy of the Creditors Committee's disclosure statement, as revised September 30, is available for free at: http://bankrupt.com/misc/Fremont_CredCommittee_DS_Sept30.pdf About Fremont General Based in Santa Monica, California, Fremont General Corp. (OTC: FMNTQ) -- http://www.fremontgeneral.com/-- was a financial services holding company with $8.8 billion in total assets at September 30, 2007. Fremont General ceased being a financial services holding company on July 25, 2008, when its wholly owned bank subsidiary, Fremont Reorganizing Corporation (f/k/a Fremont Investment & Loan) completed the sale of its assets, including all of its 22 branches, and 100% of its $5.2 billion of deposits to CapitalSource Bank. Fremont General filed for Chapter 11 protection on June 18, 2008, (Bankr. C.D. Calif. Case No. 08-13421). Robert W. Jones, Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at Stutman Treister & Glatt, represent the Debtor as counsel. Kurtzman Carson Consultants LLC is the Debtor's noticing agent and claims processor. Lee R. Bogdanoff, Esq., Jonathan S. Shenson, Esq., and Brian M. Metcalf, at Klee, Tuchin, Bogdanoff & Stern LLP, represent the Official Committee of Unsecured Creditors as counsel. Fremont's formal schedules showed $330,036,435 in total assets and $326,560,878 in total debts. FREMONT GENERAL: Terms of Creditors Committee's Revised Plan ------------------------------------------------------------ The official committee of unsecured creditors of Fremont General Corporation filed with the U.S. Bankruptcy Court for the Central District of California another revised version of the disclosure statement describing its Chapter 11 Plan for the Debtor on Sept. 30, 2009. The Court has set an October 14 hearing to approve the adequacy of the disclosure statement filed in support of the Creditors Committee's Chapter 11 Plan for the Debtor. The Plan provides for the merger of the Debtor, Fremont General Credit Corporation ("FGCC") and Fremont Reorganizing Corporation, f/k/a Fremont Investment & Loan ("FRC") on the Plan's Effective Date as a means of implementation of the Plan. FGCC will first be merged into the Debtor or the Reorganized Debtor (as applicable), and then FRC will be merged into the Debtor or the Reorganized Debtor (as applicable), with the resulting merged entity surviving as the Reorganized Debtor. Pursuant to the Plan, holders of interests in the Debtor will retain those interests in the form of Equity Trust Interests in an Equity Trust established under the Plan. Holders of interests will receive no distributions on account of the Equity Trust Interests unless and until holders of allowed non-note general unsecured claims, allowed senior note claims and allowed junior note claims are paid in full on account of their allowed claims (including post-petition interest). The Plan provides that holders of Class 3 general unsecured claims will receive payments on account of their allowed claims, including post-petition interest at the rates set forth in the Plan, from the initial cash distribution on the Plan's Effective Date (the Effective Date Cash Distribution) and available cash generated by the Reorganized Debtor over time. Although the Plan proposes to make a substantial payment of cash on account of general unsecured claims on the Plan's Effective Date, it is not expected that this payment will be sufficient to pay in full all of those claims. At a minimum, a substantial portion of the junior note claims will remain outstanding after the Plan's Effective Date distributions are made, and it is likely that a small portion of the non-note general unsecured claims will also remain outstanding. The Plan further provides that until senior note claims are paid in full, holders of general unsecured claims comprised of senior note claims and non-note general unsecured claims initially will be vested with the right to designate a majority of the members of the Board of Directors of the Reorganized Debtor. In light of the settlements and objections that have been resolved thus far, and the anticipated results of the claim reconciliation process, the Creditors' Committee estimates that the allowed claims against the estate should be as follows: -- Allowed priority tax claims will not exceed $11 million; -- Allowed non-note general unsecured claims should total approximately $77.2 million; -- Allowed senior note claims should total approximately $176.4 million (exclusive of postpetition interest); -- Allowed junior note claims should total approximately $107.4 million (exclusive of postpetition interest); and -- Allowed convenience claims should total up to approximately $100,000. The Creditors Committee does not believe that the estate currently faces any significant liabilities in respect of ordinary course administrative claims, non-ordinary course administrative claims, secured claims or priority claims. The Creditors Committee notes that on the Plan's Effective Date, and after giving effect to the Effective Date Cash Distribution, the Reorganized Debtor will have substantial cash (which the Creditors' Committee believes will total about $75.5 million net of accrued administrative liabilities), as well as other assets that may be liquidated for Cash. Significantly, under the Plan, the remaining Cash and assets of the Reorganized Debtor may only be distributed to satisfy remaining allowed unsecured claims to the extent there is available Cash, in other words, after providing for the liabilities of FGCC and FRC (i.e., the post-effective date merger claims) that will be assumed pursuant to the merger and the costs and expenses of operating and administering the Reorganized Debtor. In light of this substantial amount of Cash, and the Reorganized Debtor's other assets of significant value, the Creditors' Committee believes that the Reorganized Debtor should be able to satisfy in full all post-effective date merger claims and all allowed administrative claims, allowed priority tax claims, allowed secured claims, allowed priority claims, allowed non-note general unsecured claims, allowed senior note claims, allowed junior note claims and allowed convenience claims. Classification of Claims and Interests Class Description Status Treatment ----- ----------------- ---------- ------------------------ 1 Secured Claims Unimpaired Paid in Full. 2 Priority Claims Unimpaired Paid in Full. Other than Priority Tax Claims 3(A) Non-Note General Impaired To receive pro rata Unsecured Claims distributions of the Effective Date Cash Distribution until such holder has been paid in in full on account of its allowed claim (inclusive of post-petition interest). Thereafter, to receive pro rata share of the post-effective date distributable cash. 3(B) Senior Note Claims Impaired To receive pro rata distributions of the Effective Date Cash Distribution until such holder has been paid in in full on account of its allowed claim (inclusive of post-petition interest). Thereafter, to receive pro rata share of the post-effective date distributable cash. 3(C) Junior Note Claims Impaired To receive pro rata distribution of the Effective Date Cash Distribution until such holder has been paid in in full on account of its allowed claim (inclusive of post-petition interest). Thereafter, to receive pro rata share of the post-effective date distributable cash. 4 Convenience Claims Impaired To receive the full amount in cash on or before the latest of: (i) the Distribution Date and (ii) 15 days after the date on which such claim becomes an allowed convenience claim. 5 Subordinated Claims Impaired Deemed to have received Series B Equity Trust Interests in an amount equal to the allowed amount of said subordinated claims. 6 Exchanged Common Impaired Deemed to have received Series A Equity Trust Interests in an amount equal to the number of shares of the Debtor's common stock owned by said holder. A full-text copy of the Creditors Committee's disclosure statement accompanying its Chapter 11 Plan for Fremont General Corporation is available for free at: http://bankrupt.com/misc/fremontgeneral.creditorscommitteeDS.pdf Two Other Competing Plans In June, the Company filed a proposed Chapter 11 plan that offers to pay 100 cents on the dollar to general unsecured creditors through pro rata distribution of cash, until the claim has been satisfied, including payment of post-petition interest, as applicable. Holders of equity interests will also receive interests under the Plan. A full-text copy of the disclosure statement with respect to Fremont's Chapter 11 Plan is available for free at http://bankrupt.com/misc/Fremont.DS.pdf In July, the Equity Committee filed a proposed Chapter 11 plan for the Company. The Plan promises to pay all creditors in full with interest, unless they elect to give up interest in return for quicker payment. Debt includes $63 million in unsecured claims plus almost $274 million to holders of debt securities. The shareholders' plan would be financed with $27.9 million in cash that Fremont has on hand plus cash held in a nonbankrupt subsidiary. After the plan becomes effective, the shareholders say Fremont will have $90 million available. The equity holders intend to buy banks and use Fremont's tax loss carryforwards. A copy of the Equity Committee's disclosure statement, as revised September 30, is available for free at: http://bankrupt.com/misc/Fremont_EquityCommittee_DS_Sept30.pdf About Fremont General Based in Santa Monica, California, Fremont General Corp. (OTC: FMNTQ) -- http://www.fremontgeneral.com/-- was a financial services holding company with $8.8 billion in total assets at September 30, 2007. Fremont General ceased being a financial services holding company on July 25, 2008, when its wholly owned bank subsidiary, Fremont Reorganizing Corporation (f/k/a Fremont Investment & Loan) completed the sale of its assets, including all of its 22 branches, and 100% of its $5.2 billion of deposits to CapitalSource Bank. Fremont General filed for Chapter 11 protection on June 18, 2008, (Bankr. C.D. Calif. Case No. 08-13421). Robert W. Jones, Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at Stutman Treister & Glatt, represent the Debtor as counsel. Kurtzman Carson Consultants LLC is the Debtor's noticing agent and claims processor. Lee R. Bogdanoff, Esq., Jonathan S. Shenson, Esq., and Brian M. Metcalf, at Klee, Tuchin, Bogdanoff & Stern LLP, represent the Official Committee of Unsecured Creditors as counsel. Fremont's formal schedules showed $330,036,435 in total assets and $326,560,878 in total debts. GALLERIA (USA): Affiliate's Deals May Have Gone Sour, Report Says ----------------------------------------------------------------- Mark Mueller at that Orange County Business Journal reports that Galleria Inc. has reportedly been involved in at least $150 million worth of property sales and acquisitions since 2006 in Orange County and the Inland Empire, and deals made near the peak of the market may have gone sour. Affiliate Galleria (USA) recently filed for Chapter 11 bankruptcy protection, and it's unclear whether the filings are directly related to Galleria's real estate deals, Business Journal says. Wachovia Bank sued Galleria in July 2009 for being in default on its loans and in August 2009, a court-appointed receiver was put in charge of the company. Galleria (USA) manufactures home accents. It filed for bankruptcy in Santa Ana, California (Case No. 09-20651), following the filing of affiliate Galleria (Hong Kong) Ltd. Galleria (Hong Kong) Ltd. sought bankruptcy Sept. 29 (Bankr. C.D. Calif. Case No. 09-20414). Matthew A Lesnick, Esq., represents the Debtor in its restructuring effort. The petition says that assets and debts are $100,000,001 to $500,000,000. Bank of America filed a winding up petition against a company of the same name and with the same address in Hong Kong in July, Tiffany Kary at Bloomberg notes. GENCORP INC: Board Approves Amendments to Pension Plans ------------------------------------------------------- The Board of Directors of GenCorp Inc., upon the recommendation and approval of the Organization & Compensation Committee, approved certain amendments, effective October 6, 2009, to the Benefits Restoration Plan for Salaried Employees of GenCorp Inc. and Certain Subsidiary Companies, the 2009 Benefit Restoration Plan for the GenCorp Inc. 401(k) Plan, the 2009 Benefits Restoration Plan for the GenCorp Inc. Pension Plan, the Deferred Bonus Plan of GenCorp Inc. and Participating Subsidiaries, the GenCorp Inc. Deferred Compensation Plan for Nonemployee Directors, and the GenCorp Inc. 1996 Supplemental Retirement Plan for Management Employees. Pursuant to the amendments, the definition of "Change in Control" in each of the Company Plans has been amended to mean the occurrence of any of the following events (i) all or substantially all (meaning having a total gross fair market value at least equal to 50.1% of the total gross fair market value of all of the Company's assets immediately before such acquisition or acquisitions) of the assets of the Company are acquired by a person (during a 12-month period ending on the date of the most recent acquisition by such person); or (ii) the Company is merged, consolidated or reorganized into or with another corporation or entity during a 12-month period with the result that upon the conclusion of the transaction less than 50.1% of the outstanding securities entitled to vote generally in the election of directors or other capital interests of the surviving, resulting or acquiring corporation are beneficially owned (as that term is defined in Rule 13-d 3 under the Securities Exchange Act of 1934, as amended) by the shareholders of the Company immediately prior to the completion of the transaction. The purpose of the amendments was to make the definition of "Change in Control" consistent in each of the Company Plans. Also on October 6, 2009, the Board, upon the recommendation and approval of the Compensation Committee, approved certain amendments to the GenCorp Inc. 1999 Equity and Performance Incentive Plan and the GenCorp Inc. 2009 Equity and Performance Incentive Plan. The Incentive Plans have been amended, effective October 6, 2009, to (i) provide that in the event the number of options or performance shares would exceed the limits set forth in the 1999 Plan, as a result of a participant exceeding the specified targets set forth therein, such awards would be modified by the Compensation Committee and any excess would be granted under the 2009 Plan, and (ii) amend the definition of "Change in Control" in the same manner as the Company Plans have been amended. In its Form 10-Q filing with the Securities and Exchange Commission last week, the Company said as of August 31, 2009, the assets of its defined benefit pension plan were approximately $1.3 billion. The Pension Protection Act of 2006 will require underfunded pension plans to improve their funding ratios within prescribed intervals based on the level of their funded ratio as of the pension plan's year-end. The Company said the funded ratio as of November 30, 2008, under PPA for the Company's defined benefit pension plan was 93%, which was above the 92% ratio required under the PPA, as amended in 2008. Under the current law, the required ratio to be met as of the Company's November 30, 2009 measurement date is 94%. On November 25, 2008, the Company decided to amend its defined benefit pension and benefits restoration plans to freeze future accruals under such plans. Effective February 1, 2009 and July 31, 2009, future benefit accruals for current salaried employees and collective bargaining unit employees were discontinued, respectively. The Company said it may be required to make significant cash contributions in the future, a portion of which it may not be able to immediately charge through its government contracts. The Company also said it inadvertently failed to register with the SEC the issuance of certain of its common shares under its defined contribution 401(k) employee benefit plan. As a result, certain purchasers of securities pursuant to the Plan may have the right to rescind their purchases for an amount equal to the purchase price paid for the securities (or if such security has been disposed of, to receive consideration with respect to any loss on such disposition) plus interest from the date of purchase. The Company intends to make a registered rescission offer to eligible Plan participants which could result in the purchase of roughly 700,000 shares of common stock which will require an amendment to its Senior Credit Facility with Wachovia, as agent. GenCorp Inc. (NYSE: GY) -- http://www.GenCorp.com/-- is a technology-based manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the entitlement, sale and leasing of the Company's excess real estate assets. GENCORP INC: Mulls Options on 4% Notes; In Talks with Lenders ------------------------------------------------------------- GenCorp Inc. reports that, with the assistance of the Company's financial advisors, it is currently evaluating its options regarding possible required repurchase of its 4% Contingent Convertible Subordinated Notes and is in discussion with Wachovia Bank, National Association, as administrative agent for the Lenders under the Company's senior credit facility, to revise the amendment request to take the additional changes into consideration. The Company has engaged Imperial Capital, LLC, to facilitate its efforts to amend the Senior Credit Facility and to refinance the subordinated debt. The Company's 4% Notes that were issued in January 2004 provide the holders of the 4% Notes with the right to require the Company to repurchase for cash all or a portion of the outstanding $125.0 million 4% Notes on January 16, 2010, at a price equal to 100% of the principal amount, plus accrued and unpaid interest, including contingent interest and liquidated damages, if any. Additionally, the Company's 2-1/4% Convertible Subordinated Debentures that were issued in November and December 2004 provide the holders of the 2-1/4% Debentures with the right to require the Company to repurchase all or part of the outstanding $146.4 million 2-1/4% Debentures on November 20, 2011 at a price equal to 100% of the principal amount plus accrued and unpaid interest, including liquidated damages, if any, payable in cash, to but not including the repurchase date, plus, in certain circumstances, a make-whole premium, payable in common stock. In July 2008, the Company requested an amendment to its $280.0 million senior credit facility to, among other things, allow the Company to make a registered rescission offer to eligible participants in the Company's 401(k) plan. The lenders responded by requesting additional changes to the terms and conditions of the Senior Credit Facility. The Company decided not to accept the lenders' offer since intervening developments made it apparent that the Company would require additional changes to the Senior Credit Facility regarding the repurchase or refinancing of the Company's 4% Notes. The Company's Senior Credit Facility contains certain restrictions surrounding the ability of the Company to refinance its subordinated debt, including the 4% Notes and 2-1/4% Debentures, including provisions that, except on terms no less favorable to the Senior Credit Facility, the Company's subordinated debt cannot be refinanced prior to maturity. Furthermore, provided that the Company has cash and cash equivalents of at least $25 million after giving effect thereto, the Company may redeem (with funds other than Senior Credit Facility proceeds) the subordinated notes to the extent required by the mandatory redemption provisions of the subordinated note indentures. GenCorp says there can be no assurance that it will be able to obtain the consent of lenders under the Senior Credit Facility or that, as a condition to consent, the lenders will not require that the terms of the Senior Credit Facility be amended in a manner that is unfavorable and possibly unacceptable to the Company, including a possible increase in interest, fees, reduction in the amount of the funds available, and more restrictive covenants. In addition, the failure to pay principal on the 4% Notes when due is an immediate default under the Senior Credit Facility, and after the lapse of appropriate grace periods, causes a cross default on the outstanding $146.4 million 2-1/4% Debentures and $97.5 million 9-1/2% Senior Subordinated Notes. If the Company is unable to amend the Senior Credit Facility and obtain financing to repurchase the 4% Notes on terms favorable to the Company before January 2010, the Company may be required to redeem the 4% Notes on January 16, 2010, which is allowed under the existing Senior Credit Facility. Given the Company's current and forecasted liquidity through January 2010, in the event the 4% Notes are put to the Company, the Company believes it has the liquidity to immediately repay the holders of the 4% Notes. As reported by the Troubled Company Reporter on July 27, 2009, GenCorp has said given its current and forecasted liquidity through January 2010, in the event the 4% Contingent Convertible Subordinated Notes are put to the Company, the Company may not have the liquidity to immediately repay the holders of the 4% Notes. The Company had said if it is unable to amend the Senior Credit Facility and obtain financing to repurchase the 4% Notes on favorable terms before January 2010 this could raise a substantial doubt about the Company's ability to continue as a going concern. Senior Credit Facility The Senior Credit Facility provided for an $80.0 million Revolver and a $200.0 million credit-linked facility, consisting of a $125.0 million letter of credit subfacility and a $75.0 million term loan subfacility. On May 1, 2009, the Company entered into the first amendment and consent to the Credit Agreement. Snappon SA, a French subsidiary of the Company, that is neither a Credit Party nor Significant Subsidiary under the Credit Agreement and has no operations, has had legal judgments rendered against it under French law, aggregating $4.0 million related to wrongful discharge claims by certain former employees of Snappon. The Amendment provides for, among other things, the consent of the Required Lenders to allow Snappon to commence voluntary bankruptcy, insolvency or similar proceedings or to allow for an involuntary bankruptcy, insolvency or similar proceedings against Snappon. Under the Amendment, the Required Lenders agreed (i) that an event of default will not be triggered with respect to the legal judgments rendered against Snappon, unless the judgments equal or exceed $10.0 million and shall not have been paid and satisfied, vacated, discharged, stayed or bonded pending appeal within 30 days from entry of the ruling, and (ii) to consent to the commencement of voluntary or involuntary bankruptcy, insolvency or similar proceedings with respect to Snappon and that any such proceeding would not constitute an Event of Default under the Credit Agreement. Additionally, the Company agreed to temporarily reduce its borrowing availability under the Revolving Loan from $80.0 million to $60.0 million commencing on May 1, 2009 and ending on the earlier of (i) the date on which an amendment that permits the renewal, refinancing, or extension of the 4% Notes has been approved by the Required Lenders and (ii) the date on which the Company redeems the 4% Notes in accordance with the terms of the Credit Agreement. As of August 31, 2009, the borrowing limit under the Revolver was $60.0 million with all of it available. Also as of August 31, 2009, the Company had $84.5 million outstanding letters of credit under the $125.0 million letter of credit subfacility and had permanently reduced the amount of the term loan subfacility to the $68.4 million outstanding. The Senior Credit Facility is collateralized by a substantial portion of the Company's real property holdings and substantially all of its other assets. In addition, the Senior Credit Facility contains certain restrictions surrounding the ability to refinance the Company's subordinated debt, including the 4% Notes and 2-1/4% Debentures, including provisions that the Company's subordinated debt cannot be refinanced prior to maturity. The Company was in compliance with the financial and non-financial covenants as of August 31, 2009. GenCorp Inc. (NYSE: GY) -- http://www.GenCorp.com/-- is a technology-based manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the entitlement, sale and leasing of the Company's excess real estate assets. GENCORP INC: Posts $12.1 Million Net Income for Fiscal Q3 --------------------------------------------------------- GenCorp Inc. on October 8, 2009, reported results for the third quarter of 2009. Sales for the third quarter of 2009 totalled $201.4 million compared to $172.5 million for the third quarter of 2008. The increase in sales is primarily the result of growth in the various Standard Missile programs and increased deliveries on the Patriot Advanced Capability - 3 and Atlas V programs. Sales for the first nine months of 2009 totalled $555.3 million compared to $543.8 million for the first nine months of 2008. The Company reports its fiscal year sales under a 52/53 week accounting convention. Fiscal 2008 was a 53 week year with the extra week of sales totalling $19.1 million reported in the first quarter of that fiscal year. The Company reported a cash balance of $158.3 million at August 31, 2009, an increase of $65.6 million from November 30, 2008. The increase in cash is primarily due to improvements in the operating performance and working capital of the Aerospace and Defense operating segment and the receipt of $10.4 million from the grantor trust. Subsequent to August 31, 2009, the Company received $26.3 million of cash from federal income tax refunds, including interest of $2.1 million. Net income for the third quarter of 2009 was $12.1 million, or $0.20 diluted earnings per share on 66.6 million weighted average shares outstanding, compared to a net loss of $2.7 million, or $0.05 diluted loss per share on 57.4 million weighted average shares outstanding, for the third quarter of 2008. The increase in net income was primarily due to higher net sales and lower charges for future estimated environmental remediation obligations and retirement benefit costs in the third quarter of 2009 compared to the third quarter of 2008. Net income for the first nine months of 2009 was $44.3 million, or $0.72 diluted earnings per share on 66.5 million weighted average shares outstanding, compared to net income of $7.2 million, or $0.13 diluted earnings per share on 57.1 million weighted average shares outstanding, for the first nine months of 2008. Net income for the first nine months of 2009 includes an income tax benefit of $19.7 million, primarily as a result of new guidance clarifying which costs qualify for ten-year carryback of tax net operating losses for refund of prior years' taxes, and lower retirement benefit costs compared to 2008. Net income for the first nine months of 2008 included a $13.8 million charge related to the second amended and restated shareholder agreement (Shareholder Agreement) with respect to the election of Directors at the 2008 Annual Meeting and other related matters. "We are very pleased to report continued improvement in our quarterly and year-to-date results, said Scott Neish, GenCorp's interim chief executive officer. "Aerojet had another strong quarter in both its space and defense programs, and we continue to work on our re-zoning efforts in anticipation of a real estate market recovery," concluded Mr. Neish. The Company also disclosed retirement benefit plan expense, which is mostly non-cash, includes income of $3.5 million for the third quarter of 2009 and income of $8.4 million for the first nine months of 2009 compared to expense of $1.8 million in the third quarter of 2008 and expense of $5.7 million in the first nine months of 2008. The improvement is primarily related to the freeze of the defined benefit pension and benefit restoration plans as well as the increase in the discount rate used to determine benefit obligations, partially offset by lower expected investment returns. Corporate and other expenses decreased to $4.6 million for the third quarter of 2009 compared to $7.9 million for the third quarter of 2008 primarily due to lower charges for future environmental remediation obligations, partially offset by an increase in non-cash stock based compensation charges. Corporate and other expenses for the first nine months of 2009 were $13.3 million compared to $13.1 million for the first nine months of 2008. Total debt decreased to $438.7 million at August 31, 2009 from $440.6 million at November 30, 2008. As of August 31, 2009, the Company had $84.5 million in outstanding letters of credit issued under the $125.0 million letter of credit subfacility, and the Company's $80.0 million revolving credit facility, currently restricted to $60.0 million availability, was unused. As of August 31, 2009, the Company had $1.033 billion in total assets against $1.021 billion in total liabilities and $6.7 million in redeemable common stock, resulting in $5.0 million stockholders' equity. As of May 31, 2009, the Company had $1.015 billion in total assets; $1.013 billion in total liabilities and $7.0 million in redeemable common stock, resulting in $5.2 million of shareholders' deficit. A full-text copy of the Company's quarterly report is available at no charge at http://ResearchArchives.com/t/s?46ba GenCorp Inc. (NYSE: GY) -- http://www.GenCorp.com/-- is a technology-based manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the entitlement, sale and leasing of the Company's excess real estate assets. GENERAL MOTORS: Asbestos Claimants Oppose Remy Stay Request ----------------------------------------------------------- Remy International, Inc., formerly known as DRA Inc., has asked the U.S. Bankruptcy Court for the Southern District of New York to extend the automatic stay to prevent the prosecution of claims in various courts around the United States that seek monetary damage from Remy for personal injuries or wrongful death based on exposure to General Motors Corporation's manufactured products or GM-owned plants or facilities. The Ad Hoc Committee of Asbestos Personal Injury Claimants ask the U.S. Bankruptcy Court for the Southern District of New York to deny Remy International's Motion to Extend the GM Stay, saying that it incorporates in this objection, the arguments the Ad Hoc Committee has set forth in its objection to Detroit Diesel's Motion to Extend to Extend stay. Further, the Ad Hoc Committee asked the Court for leave for the Asbestos Plaintiffs to prosecute their claims. The Ad Hoc Committee's objection is joined in by the various individuals with mesothelioma or other cancer caused by exposure to asbestos. These individuals are represented by the law firm Simmons Browder Gianaris Angelides & Barnerd LLC. Late Response Remy International asks the Bankruptcy Court to strike the Ad Hoc Committee's Objection to the Motion to Extend for the reason that the Ad Hoc Committee's Objection was filed only after the October 1, 2009 Objection Deadline. The Ad Hoc Asbestos Committee counters that Remy's Motion to Strike is an improper request for injunction and adds that had Remy commenced an adversary proceeding as required by the rules, respondents would have been provided 30 days from issuance of the summons to answer. Instead, Remy provided respondents 15 days to respond to its motion. After Remy itself used an improper procedure to commence this proceeding, it should not be heard to complain that it is prejudiced by the Ad Hoc Committee's filing of its objection a mere 36 minutes after the deadline that was not even properly imposed, argued Ad Hoc Committee counsel Peter D'Apice, Esq., at Stutzman, Bromberg, Esserman & Plifka, A Professional Corporation, in Dallas, Texas. Remy International's Request Remy International asks the Bankruptcy Court to extend the automatic stay to prevent the prosecution of claims in various courts around the United States that seek monetary damage from Remy for personal injuries or wrongful death based on exposure to General Motors Corporation's manufactured products or GM-owned plants or facilities. If the Bankruptcy Court is not inclined to extend GM's automatic stay to Remy, Remy seeks a preliminary injunction preventing further prosecution of the PI cases as against Remy in order to avoid prejudice to GM's estate, and seek that the injunction become permanent at the time of approval of a plan of reorganization in GM's bankruptcy cases. Remy has been named in several lawsuits for the sole reason that it purchased the assets, including the name, of the Delco Remy division of GM, N. Kathleen Strickland, Esq., at Ropers, Majeski, Kohn & Bentley, in San Francisco, California, tells the Bankruptcy Court. The plaintiffs in those lawsuits have sued both GM and Remy. Ms. Strickland says in each of those lawsuits, GM has agreed to defend and indemnify Remy since the lawsuits are based on GM manufactured products or GM owned premises. In other words, any liability of Remy could only be derivative of GM and GM products or premises, she explains. Hence, since those lawsuits are now stayed as to GM pursuant to the automatic stay of the bankruptcy court, Remy only seeks to have that same stay extend to Remy since GM has been defending Remy in these cases due to GM's contractual obligations to Remy under an Asset Purchase Agreement by and among DR International, Inc., DRA, Inc., and General Motors Corporation dated July 13, 1994, Ms. Strickland states. According to Ms. Strickland, pursuant to the Agreement, GM retained certain liabilities relating to the assets being sold under that agreement. Among the "Retained Liabilities" are: (i) any liability or obligation of GM existing as a result of any act, failure to act or other state of facts or occurrence which constitutes a breach or violation of any of GM's representations, warranties, covenants or agreements contained in this Agreement; (ii) any product liability claim of any nature in respect of products of the Businesses [GM] manufactured on or prior to the Closing Date; (iii) any obligation or liability arising under any Contract, instrument or agreement that (a) is not transferred to Purchaser as part of the Purchased Assets; and (iv) liabilities in connection with any matter as to which GM has responsibility or liability under Article VIII [entitled 'Environmental Matters']. In conjunction with GM's retention of the "Retained Liabilities," in the Agreement, GM agreed to indemnify and hold Remy harmless from any damages relating to the Retained Liabilities, Ms. Strickland points out. Ms. Strickland says on July 16, 2009, GM, by way of the e-mail from Maynard Timm, a staff of GM, informed Remy that it did not intend to continue to honor the Agreement. With respect to GM's intention to not continue to honor the Agreement, MS. Strickland asserts that when certain "unusual circumstances" exist, the automatic stay may apply to actions against non-debtors "whose interest are so intimately intertwined with those of the debtor that the latter may be said to be the real party in interest," for all practical purposes, GM is Remy in these cases because these were GM products or GM facilities. Ms. Strickland further asserts that it is only just that the stay be extended as to Remy because by accepting the tender GM has admitted that it is responsible for those cases, not Remy. Certainly, where it can be said that debtor and the non-bankrupt party can be considered one entity or as having a unitary interest, a Section 362(a)(1) of the Bankruptcy Code stay may suspend the action against a non-bankrupt party, Ms. Strickland argues. Furthermore, Ms. Strickland contends that Remy is entitled to a preliminary injunction enjoining the GM Cases as against Remy. A finding against Remy in the cases may serve as a finding against GM, even though GM is no longer a party to those cases, and the finding could trigger additional claims by third parties against GM's Estate, she points out. Moreover, a finding against Remy would trigger an indemnification claim by Remy against GM's Estate pursuant to the APA, and would also trigger a claim by Remy against any of GM's applicable insurance policies, thus both causing Remy to file an amended, or increased, claim against GM's Estate, also in order to enforce the Agreement. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GENERAL MOTORS: Court OKs Payment of Ex-Directors' Attorneys Fees ----------------------------------------------------------------- Judge Robert E. Gerber of the United States Bankruptcy Court for the Southern District of New York granted the Debtors' request for authority to reimburse GM's Independent Directors for fees and expenses incurred as a result of their retention of Cravath, Swaine & Moore LLP as special counsel, nunc pro tunc to June 1, 2009. Judge Gerber ruled that Cravath is entitled to $280,413 as compensation for fees and expenses incurred by the Independent Directors since June 1, 2009, which amount will be paid from the balance of the retainer previously received by Cravath. Further, Judge Gerber directed Cravath to return to the Debtors $19,385 remaining of the retainer Cravath that previously received. In December 2006, the Independent Directors of Old GM retained Cravath Swaine to advise and represent them with respect to various corporate governance matters and in carrying out their duties as directors. Cravath was selected to represent the Independent Directors because of its extensive experience counseling corporations and their independent directors in connection with complex and sophisticated transactions and other matters requiring strategic planning and considerations. In connection with the Independent Directors' engagement of Cravath, Old GM agreed to pay Cravath's fees and expenses for representing the Independent Directors individually, thereby reimbursing the Independent Directors' expense of retaining counsel, independent of Old GM's counsel, for themselves in connection with their Board service. Cravath's work on behalf of the Independent Directors continued through the Petition Date and until the closing of the 363 Sale, at which time Cravath concluded its representation of the Independent Directors, except to the extent of any litigation against the Independent Directors. In this regard, the Debtors sought the Court's authority to reimburse, by direct payment, the Old GM former independent directors for legal fees and related expenses incurred by the Independent Directors through their retention of Cravath. In connection with the Representation, in December 2008, Cravath received a retainer of $1,000,000 that was applied monthly to fees and costs and expenses as they were incurred. Old GM replenished the retainer monthly to $1,000,000. Immediately before the Petition Date, Cravath applied $700,201 of the retainer in payment due from Old GM as compensation for professional services, including services performed in connection with the commencement of Old GM's Chapter 11 cases and the 363 Sale, as well as for the reimbursement of reasonable and necessary expenses incurred in connection therewith, leaving a retainer balance as of the Petition Date of $299,799. Since the Petition Date and through August 24, 2009, the Independent Directors have incurred more than $280,000 in fees and $413 in costs and expenses for work done by Cravath in connection with the Representation, including the 363 Sale and the matters required to assist counsel for Old GM in the preparation of the matter. The Debtors proposed to allow Cravath to use the retainer balance to satisfy the amounts owing to Cravath by the Independent Directors as of August 24, 2009, in the amount of $280,413. The remaining $19,385 of funds in the retainer would then be returned to the Debtors. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GENERAL MOTORS: GM, Tengzhong Reach Deal on Sale of Hummer Brand ---------------------------------------------------------------- General Motors and Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd., have entered into a definitive agreement that will allow Tengzhong to acquire GM's premium all-terrain HUMMER brand. Under the terms of the definitive agreement, the buyer will acquire the ownership of the HUMMER brand, trademark and tradenames, as well as specific IP license rights necessary for the manufacture of HUMMER vehicles. The buyer will also assume the existing dealer agreements relating to HUMMER's dealership network. Tengzhong intends to purchase HUMMER through an investment entity, in which it will hold an 80 percent stake. Mr. Suolang Duoji, a private entrepreneur with holdings that include the Hong Kong- listed thenardite producer Lumena, will hold the remaining 20 percent stake. Financial terms of the agreement were not disclosed. The transaction is subject to customary closing conditions and regulatory approvals and/or review by government agencies in the U.S. and China. The completion of the definitive agreement enables the companies to continue and further the overall regulatory review process. "HUMMER is a strong global niche brand and this agreement signifies another important milestone in writing the next chapter for both GM and HUMMER," said Fritz Henderson, GM President and CEO. "For HUMMER, the combination of its knowledgeable leadership team, vehicle design expertise and the capital financing of Tengzhong portend a successful future." Under the agreement, HUMMER would contract vehicle manufacturing, key components and business services from GM during a defined transitional time period. For example, GM's Shreveport assembly plant would continue to contract assemble the H3 and H3T and AM General's Mishawaka assembly plant will continue to assemble the H2. Both facilities will produce the specified vehicles until June 2011, with an optional one year extension until June 2012. The deal is expected to secure more than 3,000 jobs in the U.S. related to the sale and manufacturing of HUMMER vehicles. HUMMER will continue to be managed by members of its existing leadership team including James Taylor, who will remain in his current role as HUMMER's chief executive officer. Prior to joining HUMMER, Taylor was General Manager of Cadillac where he oversaw a reinvigoration of the brand, leading key innovations in design and technology as well as the development of new models. "We are fortunate to have a partner who understands and recognizes the importance of continuing investment in HUMMER's heritage as a U.S.-based and branded company with a view toward capitalizing on global opportunities," said Taylor. "Backed by a privately owned and well-capitalized company, we are going to be able to focus on providing customers with more efficient models that deliver HUMMER's promise of authentic, purpose-built design and engineering." Once the transaction is complete, HUMMER will become the first automaker to offer an alternative fuel powertrain in every model, with the addition of E85 FlexFuel capability in the 2010 H3 and H3T. HUMMER is also in the process of obtaining emissions certification for a diesel H3 that will be introduced in markets outside of North America. The brand's future product development will focus on improving efficiency and performance in current HUMMER models with alternative fuel powertrains, more efficient gas engines, 6-speed transmissions and diesel engines. "This transaction marks an exciting step for both Tengzhong and HUMMER, as we invest in a business that has significant opportunity in the U.S. and around the globe," said Yang Yi, chief executive officer of Tengzhong. "We are excited about some of the initiatives already underway at HUMMER that we believe our investment will be able to accelerate, particularly related to the creation of the next generation of more fuel-efficient vehicles to meet not only future regulations but also customer expectations." Credit Suisse is acting as exclusive financial advisor and Shearman & Sterling is acting as international legal counsel to Tengzhong on this transaction. Citi is acting as financial advisor to GM. For more information on the agreement go to http://www.transactioninfo.com/tengzhong About Sichuan Tengzhong The investment entity buying Hummer will be jointly owned by Tengzhong and private entrepreneur Suolang Duoji. Tengzhong will hold 80 percent of the entity and Mr. Suolang 20 percent. Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. is one of China's major privately owned engineering companies. Tengzhong is a manufacturer of heavy machinery equipment with a presence in special-use vehicles, road and bridge construction equipment and construction and energy industry equipment. Since its establishment, Tengzhong has quickly become a major manufacturer of machinery and construction components through a series of successful acquisitions. Tengzhong prides itself on its automated manufacturing equipment, its processing systems, significant research and development initiatives and commitment to innovation. Mr. Suolang Duoji, a private entrepreneur from Sichuan Province has holdings that include thenardite producer Lumena which was recently listed on the Hong Kong Stock Exchange. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GENERAL MOTORS: PI Claimants Demand Info on Asbestos Liabilities ---------------------------------------------------------------- After years of manufacturing and selling vehicles that contain asbestos products, General Motors Corp. and its units face tens of thousands of pending and future asbestos-related personal injury claims. The Debtors have estimated their asbestos liabilities, using expert consultants who have analyzed the tens of thousands of claimant files in the Debtors' records and databases to estimate current liability and forecast future claims. One analysis and forecast was prepared by Hamilton, Rabinovitz & Associates, Inc., in January 2009, for the Debtors' use in their Chapter 11 cases. Peter C. D'Apice, Esq., at Stutzman, Bromberg, Esserman & Plifka, in Dallas, Texas, relates that while this report has been produced to the Ad Hoc Committee of Personal Injury Asbestos Claimants, public filings by the Debtors indicate that previous analyses and forecasts have been prepared. Despite efforts to contact counsel to the Debtors to obtain that analyses and forecasts, the Ad Hoc Committee has not been provided with that information, he says. Thus, the Ad Hoc Committee seeks all reports of analyses and forecasts by the Debtors as to the scope of their present and projected asbestos liabilities, the back-up information for those reports, as well as insurance coverage available to cover those liabilities, so the Ad Hoc Committee can properly represent the interests of asbestos claimants in the Debtors' Chapter 11 cases. Accordingly, the Ad Hoc Committee asks the Court for an order pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure directing: (a) the production of documents, a list of which is available for free at: http://bankrupt.com/misc/GM_DocumentRequests.pdf (b) the oral examination of individuals designated by the Debtors to testify on their behalf as to the matters contained in the Document Requests. As a party-in-interest in the Debtors' Chapter 11 cases, the Ad Hoc Committee is entitled to determine the extent of the present and forecasted exposure to asbestos liabilities of the Debtors' and the extent of insurance covering that exposure, Mr. D'Apice . The answers to the Document Requests could entitle the Ad Hoc Committee members to assess and pursue a claim in the Debtors' Chapter 11 cases regarding any available insurance benefit, he insists. The Ad Hoc Committee also seeks the Court's authority to issue a subpoena to individuals designated by the Debtors to testify on Debtors' behalf regarding the matters mentioned in the Document Requests. The examinations will be conducted on no less than seven days' notice at a location to be determined by the Ad Hoc Committee. The Court will consider the Ad Hoc Committee's request on November 6, 2009. Objections are due November 3. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GENERAL MOTORS: U.S. Trustee, Creditors Agree on Fee Examiner ------------------------------------------------------------- In a letter addressed to Judge Gerber, Stephen Karotkin, Esq., at Weil Gotshal & Manges LLP, in New York, disclosed that his firm, and Kramer Levin Naftalis & Frankel LLP, as attorneys for the Official Committee of Unsecured Creditors, have been involved in discussions with the Office of the United States Trustee with respect to the U.S. Trustee' desire that a fee examiner be appointed in the Debtors' Chapter 11 cases. The Fee Examiner will be appointed "to review and prepare appropriate reports with respect to applications for allowances of compensation and reimbursement of expenses filed by retained professionals." Mr. Karotkin informed Judge Gerber that the parties have prepared a form of proposed Stipulation with respect to the appointment of a Fee Examiner. In this regard, the U.S. Trustee, Kramer and Weil Gotshal request for a chambers conference with the Court to discuss the proposed Stipulation. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GEOEYE INC: Closes $400-Mil. Private Placement of 9.625% Notes -------------------------------------------------------------- GeoEye, Inc., said October 9 the closing of its private placement offering of $400 million in aggregate principal amount of 9.625 percent Senior Secured Notes due 2015. The Notes were sold at a price equal to 97.262 percent of their face value, with an effective yield of 10.25 percent. The Notes were offered in a private placement to qualified institutional buyers pursuant to Rule 144A and outside the United States in compliance with Regulation S under the Securities Act of 1933, as amended. GeoEye also said that it had received tenders and consents from the holders of $249.5 million in aggregate principal amount, or approximately 99.8 percent, of its outstanding $250 million Senior Secured Floating Rate Notes due 2012 as of the expiration of its previously announced tender offer and consent solicitation. The Tender Offer expired at midnight October 8, 2009, New York City time. Based on the consents received in the Tender Offer, GeoEye and the trustee under the indenture for the 2012 Notes have entered into a supplemental indenture that will eliminate substantially all of the restrictive covenants and certain event of default provisions and modify certain other provisions of the indenture. The supplemental indenture became effective October 9 upon payment for 2012 Notes tendered and accepted for purchase by GeoEye pursuant to the Tender Offer. The net proceeds of the Notes Offering were used to fund the repurchase of the 2012 Notes in the Tender Offer. In accordance with its previously announced intentions, GeoEye also used a portion of the net proceeds satisfaction and discharge of the indenture governing the 2012 Notes and has called the remaining $500,000 in aggregate principal amount of 2012 Notes that remained outstanding after the Expiration Date, and remaining proceeds will be used for general corporate purposes, which may include funding a portion of the costs of constructing a new high-resolution satellite. The Notes offered by GeoEye in the Notes Offering have not been and will not be registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Matt O'Connell, GeoEye's Chief Executive Officer and President, said, "I am very pleased with the success of the Notes offering and the positive reception we received from the investment community. The proceeds from this offering provide the Company with the financial flexibility for future growth and development, including the continued development of our next satellite, GeoEye- 2." GeoEye, Inc. -- http://www.geoeye.com/CorpSite/-- is a provider of imagery, imagery information products and image processing services. The Company provides its products and services to the United States government, including the national security community, international customers, and North American commercial customers. The Company sells two types of products to its customers: basic imagery and imagery information products. The Company also provides two types of services to different customers: imagery collection services and imagery processing services. The Company sells rights to its imagery both through image collection orders and through its archive, which comprises over 300 million square kilometers. The Company offers three main satellite imagery products: Geo; GeoProfessional, and GeoStereo. * * * As reported by the Troubled Company Reporter on Sept. 21, 2009, Moody's upgraded GeoEye's corporate family rating to 'B1' from 'Caa1', and its probability of default rating to 'B1' from 'B3', as the company's credit profile has significantly improved. GENTA INC: Warrell & Itri Disclose 27.4% Equity Stake ----------------------------------------------------- Raymond P. Warrell, Jr., M.D., and Loretta M. Itri, M.D., Dr. Warrell's wife, disclosed their ownership of 60,492,095 shares or roughly 27.4% of Genta Incorporated common stock. Dr. Warrell is the Chief Executive Officer and Chairman of the Board of Directors of the Company. Dr. Itri is the President, Pharmaceutical Development and Chief Medical Officer of the Company. The Company shares beneficially owned by the couple have been acquired (i) in connection with the issuance of 15% senior secured convertible notes on June 9, 2008; and (ii) pursuant to equity awards made pursuant to the Company's stock incentive plans during the couple's service as an officer and director, if applicable, of the Company. As husband and wife sharing the same household, the couple may be deemed to have shared voting and dispositive power, either directly or indirectly, over all of the 60,492,095 shares. About Genta Incorporated Genta Incorporated -- http://www.genta.com/-- is a biopharmaceutical company with a diversified product portfolio that is focused on delivering innovative products for the treatment of patients with cancer. Two major programs anchor the Company's research platform: DNA/RNA-based Medicines and Small Molecules. Genasense(R) (oblimersen sodium) Injection is the Company's lead compound from its DNA/RNA Medicines program. The leading drug in Genta's Small Molecule program is Ganite(R) (gallium nitrate injection), which the Company is exclusively marketing in the U.S. for treatment of symptomatic patients with cancer related hypercalcemia that is resistant to hydration. The Company has developed G4544, an oral formulation of the active ingredient in Ganite, which has recently entered clinical trials as a potential treatment for diseases associated with accelerated bone loss. The Company is also developing tesetaxel, a novel, orally absorbed, semi-synthetic taxane that is in the same class of drugs as paclitaxel and docetaxel. Ganite and Genasense are available on a "named-patient" basis in countries outside the United States. At June 30, 2009, Genta had $10.2 million in total assets; and $12.1 million in total current liabilities and $2.46 million in total long-term liabilities, resulting in $4.33 million in stockholders' deficit. In its second quarter 2009 report on Form 10-Q, the Company said its recurring losses and negative cash flows from operation raise substantial doubt about its ability to continue as a going concern. GUARANTY FINANCIAL: NYSE Removes Common Stock From Listing ---------------------------------------------------------- The New York Stock Exchange LLC removed the entire class of Common Stock of Guaranty Financial Group Inc. from listing and registration on the Exchange at the opening of business on September 28, 2009, pursuant to the provisions of Rule 12d2-2(b), because, in the opinion of the Exchange, the Securities are no longer suitable for continued listing and trading on the Exchange. The action was taken in view of the fact that on August 21, 2009, Guaranty Bank, the Company's primary operating business and bank subsidiary, was closed by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with BBVA Compass, to assume all of the deposits of Guaranty Bank, excluding those from brokers. The Company was also late on the filing of its December 31, 2008 Form 10-K and certain of its outstanding 2009 Form 10-Qs. The Exchange, on August 24, 2009, determined that the Common Stock of the Company should be suspended immediately, and directed the preparation and filing with the Commission of this application for the removal of the Securities from listing and registration on the Exchange. The Company was notified by letter on August 24, 2009. The Company had a right to appeal to the Committee for Review of the Board of Directors of NYSE Regulation the determination to delist the Common Stock, provided that it filed a written request for such a review with the Secretary of the Exchange within ten business days of receiving notice of delisting determination. The Company did not file such request within the specified time period. Guaranty Financial Group Inc. -- http://www.guarantygroup.com/-- is based in Dallas, Texas. Guaranty Financial is a unitary savings and loan holding company. The Company's primary operating entities are Guaranty Bank and Guaranty Insurance Services, Inc. Guaranty Financial filed for bankruptcy after the Guaranty bank was seized by regulators and sent to receivership under the Federal Deposit Insurance Corporation. Before the bank was taken over, the balance sheet of the holding company had $15.4 billion in assets as of Sept. 30, 2008. Guaranty Financial together with affiliates filed for Chapter 11 on Aug. 27, 2009 (Bankr. N.D. Tex. Case No. 09-35582). Attorneys at Haynes & Boone, LLP, represent the Debtors. According to the schedules attached to its petition, the Company has assets of at least $24,295,000, and total debts of $323,413,428, including $305 million in trust preferred security. GUIDED THERAPEUTICS: Receives $2.5MM Grant from Cancer Institute ---------------------------------------------------------------- Guided Therapeutics, Inc., was awarded a $2.5 million matching grant by the National Cancer Institute to bring to market and expand the array features for its LightTouch(TM) non-invasive cervical cancer detection technology. The award provides resources to complete the regulatory process and begin manufacturing ramp up for the device and single-patient-use disposable. "This grant provides significant non-dilutive resources for us to begin manufacturing LightTouch devices and disposables for an international launch, as we simultaneously complete the U.S. Food and Drug Administration (FDA) pre-market approval (PMA) application process," said Mark L. Faupel, Ph.D., President and CEO of GT. Including the new award, the company has been awarded roughly $6 million in six consecutive grants from the NCI to develop the new, pain-free test for detecting cervical disease. "We believe that the grant validates the development of our cost effective cancer detection technology, as the NCI reviewed a combination of our technical approach, commercialization plan and clinical performance to date in making the award," said Shabbir Bambot, Ph.D., Vice-president of Research and Development for GT and principal investigator of the grant. "Additionally, we believe that our scientific approach and underlying intellectual property position were key factors in being awarded this grant." The GT LightTouch technology systematically and rapidly scans the cervix to identify cancer and pre-cancer painlessly and non- invasively, by analyzing the wavelengths of light reflected from cervical tissue. The technology distinguishes between normal and diseased tissue, by detecting biochemical and morphological changes at the cellular level. Unlike Pap or HPV tests, the LightTouch test does not require a tissue sample or laboratory analysis, and is designed to provide results immediately. The technology is designed as a device employing a single-use disposable patient interface. Since development of the technology began, more than 3,000 women have been tested with the LightTouch, including more than 1,900 women who were evaluated as part of the FDA pivotal clinical trial. According to studies published in the peer-reviewed Journal of Lower Genital Tract Disease, the non-invasive LightTouch test has the potential to be significantly more accurate when compared to tissue sample-based tests such as the Pap smear. As of June 30, 2009, the Company had $870,000 in total assets and $10,866,000 in total liabilities, resulting in total capital deficit of $9,996,000. As of June 30, 2009, the Company's current liabilities exceeded current assets by roughly $5,400,000 and it had a capital deficit due principally to its recurring losses from operations. As of June 30, 2009, the Company was past due on payments due under its Convertible Notes payable in the amount of roughly $635,000 and under a 90-day 17% convertible, unsecured note payable in the amount of $50,000. In December 2008, the Company issued $2,300,000 in 2008 Convertible Notes. Of this amount, $1,300,000 represents existing loans that were converted into 2008 Convertible Notes. During 2009 the Company has issued additional short term notes to fund operations. Bankruptcy Warning The Company said if sufficient capital cannot be raised at some point in the third quarter of 2009, it might be required to enter into unfavorable agreements or, if that is not possible, be unable to continue operations, and to the extent practicable, liquidate or file for bankruptcy protection. The Company said this effort is on-going. These factors raise substantial doubts about the Company's ability to continue as a going concern, it said. The Company also noted if funds are not obtained, it will have to curtail its operations and attempt to operate by only pursuing activities for which it has external financial support, such as under the Konica Minolta Optical, Inc. development agreement and additional National Cancer Institute or other grant funding. However, there can be no assurance that such external financial support will be sufficient to maintain even limited operations or that the Company will be able to raise additional funds on acceptable terms, or at all. The Company has been seeking a new strategic partner and on April 30, 2009, signed a one-year exclusive negotiation and development agreement of optimization of its microporation system for manufacturing, regulatory approval, commercialization and clinical utility with KMOT. The exclusive negotiation agreement will expire on April 29, 2010; however, it can be renewed for an additional year by consent between KMOT and the Company. The Company paid a $500,000 fee in this regard, with the balance of $250,000 payable by November 1, 2009. This agreement resulted in significant revenue for the Company a portion of which is deferred over the life of the contract. Currently, the Company is working on extending the agreement for an additional year and considering a long-term agreement with KMOT. Norcross, Georgia-based Guided Therapeutics, Inc. (Pink Sheets: GTHP) is a medical technology company focused on developing innovative medical devices that have the potential to improve health care. The Company is currently focused on completing the development of cervical cancer detection device. HARRAH'S OPERATING: Bank Debt Trades at 3.15% Off ------------------------------------------------- Participations in a syndicated loan under which Harrah's Operating Company, Inc., is a borrower traded in the secondary market at 96.85 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.97 percentage points from the previous week, The Journal relates. The loan matures on Oct. 23, 2016. The Company pays 750 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's and Standard & Poor's. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. As reported by the Troubled Company Reporter on Sept. 25, 2009, Moody's Investors Service assigned a Caa1 rating to the proposed $1.0 billion senior secured term loan to be issued by Harrah's Operating Company, Inc. Moody's also affirmed Harrah's Entertainment, Inc.'s Caa3 Corporate Family rating, Caa3 Probability of default rating and all of the long-term debt ratings of HET and HOC, Inc. The rating assignment and rating affirmations reflect very high leverage and a negative outlook for gaming demand over the next year. The continuing decline in gaming revenues across Harrah's largest markets -- Las Vegas and Atlantic City -- will continue to negatively impact the company's operating performance over through 2010. "Harrah's consolidated debt to EBITDA remains over 10 times -- a level Moody's believes is unsustainable over the intermediate term," said Moody's Senior Credit Officer, Peggy Holloway. On Sept. 24, 2009, The TCR reported that Standard & Poor's Ratings Services assigned its 'B-' issue-level rating to Las Vegas-based casino operator Harrah's Operating Co., Inc.'s proposed $750 million incremental first-lien senior secured term loan. In addition, S&P assigned the loan a recovery rating of '2', indicating S&P's expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default. Harrah's Operating Co., Inc., is a wholly owned subsidiary of Harrah's Entertainment, Inc. Proceeds from the term loan will be used to refinance or retire existing debt, including cash outflows associated with cash tender offers HET has announced in conjunction with the proposed term loan. Las Vegas, Nevada-based Harrah's Entertainment, Inc. -- http://www.harrahs.com/-- operates nearly 40 casinos across the United States, primarily under the Harrah's(R), Caesars(R) and Horseshoe(R) brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker(R). Private equity firms Apollo Global Management and TPG Capital LP acquired Harrah's in January for $31 billion. As of June 30, 2009, the Company had $30.7 billion in total assets and total current liabilities of $1.71 billion, long-term debt of $19.3 billion, deferred credits and other of $718.2 million, deferred income taxes of $5.74 billion, and preferred stock of $2.46 billion. As of March 31, 2009, the Company's consolidated condensed balance sheets showed total assets of $31.9 billion, total liabilities of $31.1 billion and preferred stock of $2.3 million, resulting to stockholders' deficit of $1.5 million. HEALTH MANAGEMENT: Bank Debt Trades at 7.11% Off ------------------------------------------------ Participations in a syndicated loan under which Health Management Associates is a borrower traded in the secondary market at 92.89 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.46 percentage points from the previous week, The Journal relates. The loan matures on Feb. 28, 2014. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's BB-rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Headquartered in Naples, Florida, Health Management Associates is an owner and operator of acute-care hospitals in non-urban settings. The company provides inpatient services such as general surgery, and oncology as well as outpatient services such as laboratory, x-ray and physical therapy services. In addition, some facilities also offer specialty services such as cardiology, radiation therapy and MRI scanning. Health Management carries a 'B1' long term corporate and probability of default ratings, with stable outlook, from Moody's, a 'B+' issuer credit ratings, with negative outlook, from Standard & Poor's, and a 'B+' long term issuer default rating, with stable outlook, from Fitch. HERMITAGE APARTMENTS: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Hermitage Apartments Midtown, LLC 1103 South Cooper, Apt. 1 Memphis, TN 38104 Bankruptcy Case No.: 09-31170 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Western District of Tennessee (Memphis) Judge: George W. Emerson, Jr. Debtor's Counsel: Russell W. Savory, Esq. 88 Union Avenue, 14th Floor Memphis, TN 38103 Tel: (901) 523-1110 Email: russell.savory@gwsblaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/tnwb09-31170.pdf The petition was signed by William A. Sparano, member of the Company. HERMITAGE DEVELOPERS: C. Holland's Client Tries to Recoup $325,000 ------------------------------------------------------------------ E. Thomas Wood at Nashvillepost.com reports that Walter G. Nollenberger has filed a claim in Probate Court to recover more than $325,000 that he claims the late Clyde Paul Holland persuaded him to lend to real estate entrepreneur J. Dwight Holland and his company, Hermitage Developers, Inc. Mr. Nollenberger claimed that Mr. Holland convinced him to lend a total of $425,000 to Hermitage Developers starting in 2002, court documents say. Mr. Nollenberger thought that the loans were secured by property Dwight Holland owned. Nashvillepost.com relates that when Clyde Holland died, Mr. Nollenberger learned that no deeds of trust exist to provide security on the loans. According to court documents, payments from the borrower haven't come in since 2007. Nashvillepost.com relates that Dwight Holland said that he was unaware that a lawsuit had been filed and denied that he was a relative of Clyde Holland, although the men were friends for 35 to 40 years. He admitted that his company "did owe Nollenberger $210,000", the report states. The report quoted Dwight Holland as saying, "We did a lot of work with him on things with Nollenberger, but I never did meet Nollenberger." Mr. Nollenberger sued Clyde Holland's estate last week in Davidson County Circuit and Chancery courts, says Nashvillepost.com. Hermitage, Tennessee-based Hermitage Developers, Inc. -- http://hermitageliving.com/-- builds houses. The Company filed for Chapter 11 bankruptcy protection on June 16, 2008 (Bankr. M.D. Tenn. Case No. 08-05050). Joseph P. Rusnak, Esq., at Tune Entrekin & White P.C. assists the Debtor in its restructuring efforts. The Debtor listed less than $50,000 in assets and $1 million to $10 million in liabilities. HISTORIC U.S. NATIONAL: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Historic U.S. National Bank Block LLC 115 SW Ash Street, Suite 500 Portland, OR 97204 Case No.: 09-38304 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court District of Oregon Judge: Randall L. Dunn Debtor's Counsel: Robert J. Vanden Bos, Esq. 319 SW Washington #520 Portland, OR 97204 Tel: (503) 241-4869 Email: vbcservice@yahoo.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by John P. Beardsley, the company's managing member. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Arcis Corp Trade Debt $10,220 City of Portland Delinquent License $500 Portland Business Alliance Fees First Response Inc. Trade Debt $1,077 Glumac International Trade Debt $622 Home Depot Trade Debt $1,020 Jennifer Reinhard Lawsuit-Slip and $44,000 c/o Erich H. Hoffmann, Esq. Fall, Negligence Norris & Stevens Inc. Property Management $7,500 Office Depot Trade Debt $1,425 PMA Consulting Trade Debt $1,500 Portland Lighting Trade Debt $521 Sprint PCS Utility/Telephone $535 Stoner Group, The Trade Debt $430 Tathwell Design-Assoc. Trade Debt $6,952 Thyssen Elevator Group Trade Debt $8,127 Tonkon Torp Legal $2,010 Trane Oregon Trade Debt $3,000 Tripwire Tenant Deposit Refund $25,064 Wells Fargo Bank NA Juneau Guarantee of $2,506,600 123 Seward St. Commercial Juneau, AK 99801 Mortgage on Hangar Witt, Dan Tax Preparation $1,700 Wumbler Trade Debt $15,733 dba Service Master HYDRALOGIC SYSTEMS: Lender Agrees to Forbear Until Oct. 31 ---------------------------------------------------------- HydraLogic Systems Inc. has entered into a forbearance agreement with CCM Master Qualified Fund, Ltd., relating to the previously disclosed breach of financial covenants in a September 5, 2008 investment agreement. Pursuant to the terms of the forbearance agreement signed October 8, 2009, the Lender agreed to forbear from exercising its rights and remedies, with respect to existing breach of covenants, until October 31, 2009. The Company agreed to a forbearance fee of US$325,000 to be paid at the time of repayment of the principal of US$2M due and payable to the Lender on October 31, 2009. The repayment plan could include the sale of strategic assets or a financing. "We appreciate the support of the Lender who agreed to enter into the forbearance agreement with the Company, which we believe gives us additional time and flexibility to continue negotiations with alternate capital facilities and asset purchase candidates", stated Michael Beckley, President and Chief Executive Officer of HydraLogic Systems Inc. "This standstill also allows us to continue focusing on our top priority, providing HLS Ecolo and Bug Defence customers with the quality products and service they expect from us. The Company continues to make significant bottom line progress which has helped significantly in our efforts to attract new investment and the ability to support our long-term strategic plan and business objectives." About HydraLogic Systems HydraLogic (TSX.V: HLS - OTC Pink Sheet: HYSYF) is an innovator of engineered misting systems and proprietary environmental chemistries with reoccurring revenue distribution platforms. The company strives to be market leaders in providing technologies, though turnkey distribution and service models into the multi- billion dollar mosquito and odour control industries as Bug Defence and HLS Ecolo respectively. IDEARC INC: Bank Debt Trades at 58.33% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Idearc, Inc., is a borrower traded in the secondary market at 41.67 cents-on-the- dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.69 percentage points from the previous week, The Journal relates. The loan matures on Nov. 17, 2014. The Company pays 200 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating while Standard & Poor's has assigned a default rating on the bank debt. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Headquartered in DFW Airport, Texas, Idearc, Inc. (NYSE: IAR) -- http://www.idearc.com/-- formerly known as Directories Disposition Corporation, provides yellow and white page directories and related advertising products in the United States and the District of Columbia. Products include print yellow pages, print white pages, Superpages.com, Switchboard.com and LocalSearch.com, the company's online local search resources, and Superpages Mobile, their information directory for wireless subscribers. Idearc is the exclusive official publisher of Verizon print directories in the markets in which Verizon is currently the incumbent local exchange carrier. Idearc uses the Verizon brand on their print directories in their incumbent markets, well as in their expansion markets. Idearc and its affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31828). Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represents the Debtors in their restructuring efforts. The Debtors have tapped Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their laims agent. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on an official committee of unsecured creditors of Idearc, Inc., and its debtor-affiliates. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co- counsel. The Debtors' financial condition as of Dec. 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. IMAGEWARE SYSTEMS: BET Funding Advances $300,000, Pledges $700,000 ------------------------------------------------------------------ BET Funding LLC on October 5, 2009, made to ImageWare Systems, Inc., an additional advance under the parties' credit facility of $300,000 and agreed to make additional advances under the Credit Facility of up to $700,000 upon the satisfaction of certain conditions. In connection therewith, BET Funding and ImageWare amended certain loan documents related to the Credit Facility and ImageWare issued to BET Funding a Stock Purchase Warrant to purchase 200,000 shares of ImageWare common stock at an exercise price of $0.60. On February 12, 2009, BET Funding agreed to provide a credit facility to ImageWare for a total of up to $5,000,000. BET Funding is using working capital to fund the Credit Facility. Also on February 12, BET Funding made to ImageWare an initial advance under the Credit Facility of $1,000,000. In connection therewith, ImageWare issued to BET Funding a Stock Purchase Warrant to purchase 4,500,000 shares at an exercise price of $0.50. On June 9, 2009, in connection with the amendment of certain loan documents related to the Credit Facility, ImageWare issued to BET Funding a Stock Purchase Warrant to purchase 1,000,000 shares at an exercise price of $0.50. On June 22, 2009, BET Funding made an additional advance under the Credit Facility of $350,000. In connection therewith, ImageWare issued to BET Funding a Stock Purchase Warrant to purchase 700,000 shares at an exercise price of $0.50. As of the close of business on October 5, 2009, BET Funding beneficially owned 6,400,000 shares of ImageWare common stock, constituting roughly 25.01% of the shares of common stock outstanding. As of the close of business on October 5, 2009, Bruce Toll, who is the majority owner of each of BET Funding and BRU Holding, beneficially owned 8,428,895 shares of ImageWare common stock, constituting roughly 32.94% of the shares of common stock outstanding. Headquartered in San Diego, ImageWare Systems Inc. (AMEX: IW) -- http://www.iwsinc.com/-- is a developer and provider of identity management solutions, providing biometric, secure credential, law enforcement and digital imaging technologies. ImageWare's identification products are used to manage and issue secure credentials including national IDs, passports, driver licenses, smart cards and access control credentials. ImageWare's digital booking products provide law enforcement with integrated mug shot, fingerprint Livescan and investigative capabilities. ImageWare also maintains offices in Washington, D.C. and Canada. ImageWare last filed a financial report with the Securities and Exchange Commission in September 2008. ImageWare filed its quarterly report on Form 10-Q for the period ended June 30, 2008. As of June 30, 2009, ImageWare had $7,937,000 in total assets against $7,611,000 in total liabilities. Going Concern Disclaimer Stonefield Josephson Inc., in Los Angeles, expressed substantial doubt about ImageWare Systems Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditng firm pointed to the company's substantial net losses since inception and substantial monetary liabilities as of Dec. 31, 2007. INFOLOGIX INC: Taps SSG to Explore Restructuring Options ---------------------------------------------------------------- InfoLogix, Inc., has retained SSG Capital Advisors, LLC, a nationally recognized investment bank based in West Conshohocken, Pennsylvania, to assist InfoLogix in exploring its private placement alternatives. SSG initiates, structures and negotiates financing transactions at virtually every level of the capital structure on behalf of growing businesses seeking capital to support their various expansion initiatives. The Company previously disclosed that it entered into a non- binding term sheet to restructure its obligations under a Loan Agreement with its senior lender, Hercules Technology Growth Capital, Inc. (NasdaqGS: HTGC). The Company continues in active discussions with Hercules about this restructuring. On September 30, 2009, InfoLogix and its subsidiaries and Hercules Technology entered into a fourth amendment to the Forbearance Agreement dated July 31, 2009, as amended August 14, 2009, August 20, 2009 and September 23, 2009, under which the Lender has agreed to forbear from exercising its rights and remedies with respect to an event of default under the Loan and Security Agreement between the Company and the Lender dated May 1, 2008, as amended. Pursuant to the Loan Agreement, the Company was required to pay to the Lender the remaining balance of a restructuring fee in the amount of $160,000 on the earliest of (i) September 30, 2009, (ii) the acceleration of the secured obligations under the Loan Agreement, or (iii) payment in full of the secured obligations. The Company did not pay the balance of the restructuring fee by the specified date, and as a result, an event of default occurred under the Loan Agreement. Under the fourth amendment to the Forbearance Agreement, the Lender agreed to forbear from exercising its rights and remedies under the Loan Agreement as a result of this event of default for the period and subject to the terms and conditions specified in the Forbearance Agreement. SSG is a nationally recognized investment bank that helps middle market companies raise capital during uncertain economic times. As a specialist in representing companies in the early stages of turnaround, SSG offers services its clients need in today's complex and fast-moving financial markets. About InfoLogix, Inc. InfoLogix Inc. (NASDAQ: IFLG) -- http://www.infologix.com/-- provides enterprise mobility solutions for the healthcare and commercial industries. InfoLogix uses the industry's most advanced technologies to increase the efficiency, accuracy, and transparency of complex business and clinical processes. With 19 issued patents, InfoLogix provides mobile managed solutions, on- demand software applications, mobile infrastructure products, and strategic consulting services to over 2,000 clients in North America including Kraft Foods, Merck and Company, General Electric, Kaiser Permanente, MultiCare Health System and Stanford School of Medicine. INTERMOST CORP: Albert Wong Raises Going Concern Doubt ------------------------------------------------------ Albert Wong & Co., in Hong Kong, expressed substantial doubt about Intermost Corporation's ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended June 30, 2009. The auditing firm pointed to the Company's recurring losses from operations and significant accumulated deficit. In addition, the auditing firm said that the Company continues to experience negative cash flows from operations. Intermost Corporation reported a net loss of $2,435,707 on net revenues of $4,023 for the year ended June 30, 2009, compared with a net loss of $1,557,054 on net revenues of $26,108 for the year ended June 30, 2008. Net revenues during fiscals 2009 and 2008 were derived principally from e-commerce solutions. The term "e- commerce solutions" includes web site design and development and web hosting. Loss from operations were $1,416,278 for 2009, compared with loss from operations of $1,605,192 for 2008. The Company's consolidated balance sheet at June 30, 2009, showed $2,868,671 in total assets, $525,429 in total liabilities, $446,361 in minority interests, and $1,896,881 in total stockholders' equity. Full-text copies of the Company's consolidated financial statements for the year ended June 30, 2009, are available for free at http://researcharchives.com/t/s?46bf Based in Hong Kong, Intermost Corporation was originally incorporated in the State of Utah on March 6, 1985, under the name Utility Communications International, Inc. The Company changed its name from Utility Communications International, Inc. to Intermost Corporation on October 23, 1998. In February 2003, the Company re-domiciled from the State of Utah to the State of Wyoming. On October 23, 1998, the Company acquired a 100% interest in Intermost Limited ("IL"), a company incorporated in the British Virgin Islands, by issuing 4,970,000 shares of its common stock with a par value of US$0.001 per share (after the redenomination of par value and a stock split) to the shareholders of IL. The acquisition of IL by the Company was treated as a reverse acquisition since IL was the continuing entity as a result of the exchange reorganization. The Company is engaged in providing, directly and through its subsidiaries and associated companies, business equity and financial consulting services in the People's Republic of China. IRWIN FINANCIAL: NYSE Delists Securities Effective October 16 ------------------------------------------------------------- The New York Stock Exchange LLC notified the Securities and Exchange Commission of its intention to remove the Common Stock and 8.70% Cumulative Trust Preferred Securities of Irwin Financial Corporation from listing and registration on the Exchange at the opening of business on October 16, 2009, pursuant to the provisions of Rule 12d2-2(b), because, in the opinion of the Exchange, the Securities are no longer suitable for continued listing and trading on the Exchange. The Exchange's action is being taken in view of the fact that on September 18, 2009, the Indiana Department of Financial Institutions closed the Company's state chartered bank subsidiary Irwin Union Bank and Trust Company and the Office of Thrift Supervision closed the Company's federal savings bank, Irwin Union Bank, F.S.B. The Federal Depository Insurance Corporation was appointed as receiver of both IUBT and IUBFSB. Subsequent to the closing of the Banks, First Financial Bank, National Association, located in Hamilton, Ohio, assumed all of the deposits and essentially all of the assets of the Banks in a transaction facilitated by the FDIC. The Exchange, on September 21, 2009, determined that the Securities of the Company should be suspended immediately, and directed the preparation and filing with the Commission of the application for the removal of the Securities from listing and registration on the Exchange. The Company was notified by letter on September 21, 2009. The Company had a right to appeal to the Committee for Review of the Board of Directors of NYSE Regulation the determination to delist the Securities, provided that it filed a written request for such a review with the Secretary of the Exchange within ten business days of receiving notice of delisting determination. On September 21, 2009, the Company stated it does not intend to contest the suspension or delisting. Given that Irwin Financial's principal assets are the capital stock of the Banks and that Irwin Financial does not expect to receive any recovery after the receivership and conservatorship processes are completed, on September 18, 2009, Irwin Financial filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code, instituting Case No. 09-13852-FJO before the United States Bankruptcy Court for the Southern District of Indiana, Indianapolis Division. Effective upon the Bankruptcy Filing, Irwin Financial's bylaws were amended to reduce the size of its board of directors to one director, with William I. Miller serving as the sole director. Also effective upon the Bankruptcy Filing, Irwin Financial's board of directors appointed these individuals as the Corporation's sole officers: Matthew F. Souza, Chief Administrative Officer; Gregory F. Ehlinger, Chief Financial Officer; Steven R. Schultz, Vice President; and Jody Littrell, Vice President. As of September 18, 2009, Irwin Financial had outstanding junior subordinated debentures in the principal amount of approximately $234.0 million. The chapter 7 filing constitutes triggering events under the terms of the Debentures that affect the holders of the Debentures. About Irwin Financial Based in Columbus, Indiana, Irwin(R) Financial Corporation (NYSE: IFC) -- http://www.irwinfinancial.com/-- was a bank holding company with a history tracing to 1871. The Corporation provided a broad range of banking services to small businesses and consumers in its branches in the Midwest and Southwest and to restaurant franchisees nationwide. The Company is represented by David M. Powlen, Esq., at Barnes & Thornburg. JAMES COBB: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Joint Debtors: James Wesley Cobb, Jr. dba New Metropolitan Management and Consulting Services, Inc. fdba James W. Cobb Associates, PC Sabrina Buice Cobb 11755 Pindell Chase Drive Fulton, MD 20759 Bankruptcy Case No.: 09-29260 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court District of Maryland (Baltimore) Debtors' Counsel: Robert Wiley King, Esq. King & Silverman LLC 4704 Hollywood Road College Park, MD 20740 Tel: (301) 441-9000 Email: bobking@silverkinglaw.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 $1,255,270, and total debts of $2,316,427. A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mdb09-29260.pdf The petition was signed by the Joint Debtors. JOHN STOKES: To Appeal Case Conversion, Rejection of Extension -------------------------------------------------------------- John Stokes said that he will take a bankruptcy court decision to the U.S. District Court of Appeals, Montana's News Station reports. As reported by the TCR on October 12, 2009, John Stokes failed to gain from his bid for a bankruptcy reorganization. The Hon. Ralph B. Kirscher of the U.S. Bankruptcy Court for the District of Montana denied John Stokes' request for an additional 20 days to prepare for his arguments, saying that legal paperwork critical to his case has remained locked inside the KGEZ station since he lost control of his assets and was ushered off the premises on September 24. The Court eventually converted Mr. Stokes' Chapter 11 reorganization case to Chapter 7 liquidation when the Debtor failed to accurately disclose his assets to the court, meet financial reporting requirements, pay filing fees, file state or federal income taxes for years. John Stokes owns a Kalispell radio station. He filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Montana. Mr. Stokes' bankruptcy filing includes his two unregistered corporations, Z-600 Inc. and Skyline Broadcasting. Mr. Stokes' radio station, KGEZ, has been shut down. Montana's News relates that Mr. Stokes said that he has hired attorney and former Georgia Congressman Bob Barr. According to the report, Mr. Stokes said that the Federal Communications Commission hasn't approved transfer or control, so he still owns his broadcast license. JOSEPH DELGRECO: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Joseph DelGreco & Company, Inc. dba DelGreco & Company dba DelGreco Textiles 232 E 59th St New York, NY 10022-1464 Bankruptcy Case No.: 09-16041 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Joel Martin Shafferman, Esq. Shafferman & Feldman, LLP 350 Fifth Avenue, Suite 2723 New York, NY 10118 Tel: (212) 509-1802 Fax: (212) 509-1831 Email: joel@shafeldlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 18 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nysb09-16041.pdf The petition was signed by Joseph DelGreco, president of the Company. JOSEPH HAYES: Case Summary & 18 Largest Unsecured Creditors ----------------------------------------------------------- Joint Debtors: Joseph J. Hayes Helen V. Hayes 62 West Street Lenox, MA 01240 Bankruptcy Case No.: 09-31792 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court District of Massachusetts (Springfield) Judge: Henry J. Boroff Debtors' Counsel: Steven Weiss, Esq. Shatz, Schwartz & Fentin, P.C. 1441 Main Street, Suite 1100 Springfield, MA 01103 Tel: (413) 737-1131 Email: sweiss@ssfpc.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of at least $1,040,422, and total debts of $1,049,068. A full-text copy of the Debtors' petition, including a list of their 18 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mab09-31792.pdf The petition was signed by the Joint Debtors. KB HOME: SEC Launches Probe on Accounting ----------------------------------------- James R. Hagerty and Dawn Wotapka at The Wall Street Journal report that KB Home said on Friday that the U.S. Securities and Exchange Commission is investigating its accounting. KB Home said in a filing with the SEC that the agency has issued a "formal order of investigation . . . regarding possible accounting and disclosure issues . . . . The staff [SEC] has stated that its investigation should not be construed as an indication by the SEC that there has been any violation of the federal securities laws." KB Homes said in the filing that it is cooperating with the investigation. The Journal notes that in recent years, KB Home also has faced scandals over manipulation of stock options paid to its chief executive and by federal charges that it engaged in improper mortgage lending. KB Home agreed in 2005 to pay some $3.2 million to settle the U.S. Department of Housing and Urban Development's allegations that its mortgage unit engaged in poor lending practices and made it possible for ineligible borrowers to get mortgages guaranteed by the Federal Housing Administration. In November 2006, Bruce Karatz resigned as KB Homes' CEO, after an internal probe found that he backdated his own stock option grants to increase his pay. In September 2008, Mr. Karatz agreed to pay more than $7 million to settle securities charges with the SEC, while not admitting any wrongdoing. KB Home -- http://www.kbhome.com/-- has delivered hundreds of thousands of quality homes for families since its founding in 1957. The Company is distinguished by its Built to Order(TM) homebuilding approach that puts a custom home experience within reach of its customers at an affordable price. Los Angeles-based KB Home was named the #1 homebuilder on FORTUNE (R) magazine's 2009 "World's Most Admired Companies" list. The Company trades under the ticker symbol "KBH," and was the first homebuilder listed on the New York Stock Exchange. The TCR reported on July 28, 2009, that Standard & Poor's Ratings Services assigned its 'BB-' rating to KB Home's new $265 million 9.100% senior unsecured notes due 2017. S&P also assigned a '4' recovery rating to the notes, indicating S&P's expectation for an average (30%-50%) recovery in the event of a payment default. According to the TCR on July 28, 2009, Moody's Investors Service assigned a B1 rating to KB Home's $265 million of 9.1% senior unsecured notes, net proceeds of which will be used to retire up to $250 million of the company's 6 3/8% senior unsecured notes due 2011. At the same time, Moody's affirmed all of the existing ratings of KB Home, including its B1 corporate family, probability of default, and senior notes' ratings. Moody's also affirmed the company's speculative grade liquidity rating at SGL-2. The outlook remains negative. As reported by the TCR on July 27, 2009, Fitch Ratings assigned a 'BB-' rating to KB Home's $265 million 9.100% senior notes due July 2017. The Rating Outlook is Negative. The issue will be ranked on a pari passu basis with all other senior unsecured debt, including KB Home's $650 million unsecured bank credit facility. KB Home intends to apply all or a portion of the net proceeds from the senior notes offering toward the payment of the purchase price in a tender offer for its outstanding 6 3/8% senior notes due 2011. LANDAMERICA FIN'L: Details of Fine-Tuned Liquidating Plan --------------------------------------------------------- As previously reported by the TCR, LandAmerica Financial Group, Inc., LandAmerica 1031 Exchange Services, Inc., LandAmerica Assessment Corporation, LandAmerica Title Company, Southland Title Corporation, Southland Title of San Diego, Southland Title of Orange County, and LandAmerica Credit Services, Inc., delivered to the U.S. Bankruptcy Court for the Eastern District of Virginia an Amended Joint Chapter 11 Plan and an accompanying Amended Disclosure Statement on October 2, 2009. The Amended Plan still maintains the primary purpose of selling substantially all of the Debtors' assets in an expeditious manner and thereafter effectuating the distribution of the sale proceeds to creditors. The Amended Plan is a non-substantively consolidated liquidating plan, which generally means that (1) it will effectuate the liquidation of LFG and its debtor subsidiaries, and that (2) the proceeds of the liquidation of each legal entity will be distributed to the creditors of that entity, rather than pooled together in one common fund for distribution to all creditors, according to G. William Evans, executive vice president and chief financial officer of LFG. The major modifications under the Amended Plan are (1) the inclusion of estimated claim amounts for each designated class of claims, and (2) an elaboration on the proposed treatment of the Class SD or Subsidiary Debtor Claims. The Debtors also filed the Amended Plan with exhibits on a liquidation analysis, a prepetition organization chart of the LandAmerica entities, and copies of their consolidated financial statements for the quarter ended September 30, 2009. Claim Recoveries Under The Amended Plan The Amended Plan provides for estimated claim recoveries for each of the designated classes of claims: Est. Amount Estimated Class Designation of Claims/Int. Recovery(%) ----- ----------- -------------- ----------- N/A Admin. Expense Claims $15,684,000 100.00% N/A Fee Claims $3,000,000 100.00% N/A U.S. Trustee Fees $0 100.00% N/A Priority Tax Claims $13,500,000 100.00% LES 1 LES Priority Non-Tax $0 N/A Claims LES 2 LES Secured Claims $0 N/A LES 3 LES Escrow Exchange $13,406,000 97.00% Claims LES 4 Segregated Exchange $71,368,000 81.40% Principal Claims LES 5 Note Exchange $8,373,000 80.30% Collectible Claims LES 6 LES Gen. Unsec. Claims $195,271,000 37.10% LES 7 LES Damages Claims TBD 0.00% LES 8 LES Equity Interests N/A 0.00% LFG 1 LFG Priority Non-Tax $500,000 100.00% Claims LFG 2 LFG Secured Claims $0 N/A LFG 3 LFG Gen. Unsec. Claims $829,655,000 28.30% LFG 4 LFG Exchange Guarantee $14,600,000 31.00% Claims LFG 5 LFG Securities Law Claims TBD 0.00% LFG 6 LFG Equity Interests N/A 0.00% SD 1 Subsidiary Priority $0 N/A LandAm Non-Tax Claims Credit SD 2 Subsidiary Secured $0 N/A LandAm Claims Credit SD 3 Subsidiary General $15,158,000 16.70% LandAm Unsecured Claims Credit SD 4 Subsidiary Equity N/A 0.00% LandAm Interests Credit SD 1 Subsidiary Priority $0 N/A LAC Non-Tax Claims SD 2 Subsidiary Secured $0 N/A LAC Claims SD 3 Subsidiary General $2,693,000 100.00% LAC Unsecured Claims SD 4 Subsidiary Equity N/A $952 LAC Interests SD 1 Subsidiary Priority $0 N/A LTC Non-Tax Claims SD 2 Subsidiary Secured $0 N/A LTC Claims SD 3 Subsidiary General $27,499,000 1.60% LTC Unsecured Claims SD 4 Subsidiary Equity N/A 0.00% LTC Interests SD 1 Subsidiary Priority $0 N/A STC Non-Tax Claims SD 2 Subsidiary Secured $0 N/A STC Claims SD 3 Subsidiary General $11,557,000 14.40% STC Unsecured Claims SD 4 Subsidiary Equity N/A 0.00% STC Interests SD 1 Subsidiary Priority $0 N/A STOC Non-Tax Claims SD 2 Subsidiary Secured $0 N/A STOC Claims SD 3 Subsidiary General $7,865,000 0.20% STOC Unsecured Claims SD 4 Subsidiary Equity N/A 0.00% STOC Interests SD 1 Subsidiary Priority $0 N/A STSD Non-Tax Claims SD 2 Subsidiary Secured $0 N/A STSD Claims SD 3 Subsidiary General $15,105,000 10.90% STSD Unsecured Claims SD 4 Subsidiary Equity N/A 0.00% STSD Interests The estimated recoveries, however, do not include proceeds from the ARS or the Auction Rate Securities Litigation or other litigations due to the inherent uncertainty in estimating proceeds from those litigations. Under the Original Plan, Classes SD 1 to 4 Claims provided for general claim treatments for all designated claims against the Subsidiary Debtors. The Amended Plan specifies the treatment of claims as to each Subsidiary Debtor, which are: Class Treatment ----- --------- Class SD1 Unimpaired Status. LandAmerica Assessment Corp. Each holder of Class SD1 LAC Claim Subsidiary Priority Non-Tax will receive Cash from the Claims applicable Post-Effective Date Entity in an amount equal to the Claims. Class SD 2 Unimpaired Status. LandAmerica Assessment Corp. Each holder of a Class SD2 LAC Subsidiary Secured Claims Claim will receive, at the election of the Debtors: (i) Cash in an amount equal to the Allowed Claim; or (ii) other treatment that will render the Secured Claim unimpaired pursuant to Section 1124 of the Bankruptcy Code. Class SD 3 Each holder of a Class SD 3 LAC LandAmerica Assessment Corp. Claim will receive its Pro Rata Subsidiary General Share of the relevant Subsidiary Unsecured Claims Debtor's SD Net Proceeds, until that holder's Allowed Subsidiary General Unsecured Claim is satisfied in full. Class SD 4 The Subsidiary Equity Interests LandAmerica Assessment Corp. will be cancelled, and each holder Subsidiary Equity Interests of Allowed Class SD 4 LAC Interests will receive that holder's Pro Rata Share of the relevant Subsidiary Debtors' SD Net Proceeds, if any, after the satisfaction of all the Debtors' Allowed SD General Unsecured Claims. Class SD 1 Unimpaired Status. LandAmerica Title Company Each holder of a Class SD 1 LTC Subsidiary Priority Non- Claim will receive Cash from the Tax Claims applicable Post-Effective Date Entity in an amount equal to the Claim. Class SD 2 Unimpaired Status. LandAmerica Title Company Each holder of a Class SD 2 LTC Subsidiary Secured Claims Claim will receive, at the election of the Debtors: (i) Cash in an amount equal to the Allowed Claim; or (ii) other treatment that will render the Secured Claim unimpaired pursuant to Section 1124 of the Bankruptcy Code. Class SD 3 Each holder of a Class SD 3 LTC LandAmerica Title Company Claim will receive that holder's Subsidiary General Pro Rata Share of the relevant Unsecured Claims Subsidiary Debtors' SD Net Proceeds, until that holder's Allowed Subsidiary General Unsecured Claim is satisfied in full. Class SD 4 The Subsidiary Equity Interests LandAmerica Title Company will be cancelled, and each holder Subsidiary Equity of Allowed Class SD 4 Interests Interests will receive that holder's Pro Rata Share of the relevant Subsidiary Debtors' SD Net Proceeds, if any, after the satisfaction of all the Debtor's Allowed SD General Unsecured Claims. Class SD 1 Unimpaired Status. Southland Title Cor. Each holder of a Class SD 1 STC Subsidiary Priority Non- Claim will receive Cash from the Tax Claims applicable Post-Effective Date Entity in an amount equal to the Claim. Class SD 2 Unimpaired Status. Southland Title Corp. Each holder of a Class SD 2 STC Subsidiary Secured Claim will receive, at the election Claims of the Debtors: (i) Cash in an amount equal to the Allowed Claim; or (ii) other treatment that will render the Secured Claim unimpaired pursuant to Section 1124. Class SD 3 Each holder of a Class SD 3 STC Southland Title Corp. Claim will receive that holder's Subsidiary General Pro Rata Share of the relevant Unsecured Claims Debtors' SD Net Proceeds, until that holder's Allowed Subsidiary General Unsecured Claim is satisfied in full. Class SD 4 The Subsidiary Equity Interests Southland Title Corp. will be cancelled, and each holder Subsidiary Equity of Allowed Class SD 4 Interests Interests will receive that holder's Pro Rata Share of the relevant Subsidiary Debtors' SD Net Proceeds, if any, after the satisfaction of all the Debtor's Allowed SD General Unsecured Claims. Class SD 1 Unimpaired Status. Southland Title of Each holder of a Class SD 1 STOC Orange County Claim will receive Cash from the Subsidiary Priority Non- applicable Post-Effective Date Tax Claims Entity in an amount equal to the Claim. Class SD 2 Unimpaired Status. Southland Title of Each holder of a Class SD 2 STOC Orange County Claim will receive, at the election Subsidiary Secured Claims of the Debtors: (i) Cash in an amount equal to the Allowed Claim; or (ii) other treatment that will render the Secured Claim unimpaired pursuant to Section 1124. Class SD 3 Each holder of a Class SD 3 STOC Southland Title of Claim will receive that holder's Orange County Pro Rata Share of the relevant Subsidiary General Subsidiary Debtors' SD Net Unsecured Claims Proceeds, until that holder's Allowed Subsidiary General Unsecured Claim is satisfied in full. Class SD 4 The Subsidiary Equity Interests Southland Title of will be cancelled, and each holder Orange County of Allowed Class SD 4 Interests Subsidiary Equity Interest will receive that holder's Pro Rata Share of the relevant Subsidiary Debtors' SD Net Proceeds, if any, after the satisfaction of all the Debtor's Allowed SD General Unsecured Claims. Class SD 1 Unimpaired Status. Southland Title of Each holder of a Class SD 1 STSD San Diego Claim will receive Cash from the Subsidiary Priority Non- applicable Post-Effective Date Tax Claims Entity in an amount equal to the Claim. Class SD 2 Unimpaired Status. Southland Title of Each holder of a Class SD 2 STSD San Diego Claim will receive, at the election Subsidiary Secured Claims of the Debtors: (i) Cash in an amount equal to the Allowed Claim; or (ii) other treatment that will render the Secured Claim unimpaired pursuant to Section 1124. Class SD 3 Each holder of a Class SD 3 STSD Southland Title of Claim will receive that holder's San Diego Pro Rata Share of the relevant Subsidiary General Subsidiary Debtors' SD Net Unsecured Claims Proceeds, until that holder's Allowed Subsidiary General Unsecured Claim is satisfied in full. Class SD 4 The Subsidiary Equity Interests Southland Title of will be cancelled, and each holder San Diego of a Class SD 4 Interests will Subsidiary Equity receive that holder's Pro Rata Interests Share of the relevant Subsidiary Debtors' SD Net Proceeds, if any, after the satisfaction of all the Debtor's Allowed SD General Unsecured Claims. Liquidation Analysis The Debtors' Liquidation Analysis assumes that their cases would convert to case under Chapter 7 of the Bankruptcy Code as of November 30, 2009. It is assumed that the Chapter 7 liquidation period would commence on the Conversion Date and be concluded six months thereafter. Under the liquidation process, an expedited marketing process would commence under the direction of Court- appointed Chapter 7 trustees for the Debtors and continue for three months, followed by a three month period to document and close the sale of the Debtors' assets, when the Cash proceeds, net of liquidation related costs, would be received. Included under the Liquidation Analysis are projected recoveries for certain subsidiaries of LandAmerica Financial Group, which currently are non-debtors, but which may file petitions under Chapter 11 of the Bankruptcy Code after October 2, 2009 and seek to liquidate under the Amended Plan. The Liquidation Analysis also established assumptions of certain items, like the Orange County Bancorp Interests, the Fidelity National Financial Note, the FNF Stock, the Auction Rate Securities and the corresponding ARS Litigation, in the scenario of a Chapter 7 liquidation process versus a Chapter 11 bankruptcy plan. Mr. Evans notes that the Liquidation Analysis indicates that (i) holders of Claims in Classes LES 4, LES 5, LES 6, LFG 3, and SD 3 would receive a greater recovery under the Plan than in a Chapter 7 liquidation scenario, and (ii) holders of Claims in the remaining Classes would receive the same recovery under the Plan as they would in a Chapter 7 liquidation scenario. There is no circumstance where any creditor's recovery under Chapter 7 exceeds that creditor's recovery under the Amended Plan. Thus, Mr. Evans maintains, the Amended Plan meets the Best Interest Test. A full-text copy of the Liquidation Analysis is available for free at http://bankrupt.com/misc/LandAm_LiquidationAnalysis.pdf Other Disclosures The Debtors also updated information in the Amended Disclosure Statement, including current activities they are undertaking under bankruptcy and current progress under their bankruptcy cases. Among others, the Debtors relate that they are actively marketing a wholly owned subsidiary, Orange County Bancorp, and its subsidiary, Centennial Bank. As of October 2, 2009, the Debtors estimate that the asset recovery in a Chapter 11 scenario from all their unsold assets, including the Auction Rate Securities, will range from $195.1 million to $281.3 million. They also estimate that projected value available to settle Unclassified and Classified Claims and Interests will range from $403.7 million to $490 million. The Debtors also disclosed that as of October 1, 2009, approximately 2,600 claims, aggregating more than $2.3 billion, have been asserted against them. They dispute a vast majority of the dollar amount of the asserted Claims. The LES Creditors Committee, with the Debtors' consent, has selected Gerard A. McHale, Jr., to serve as trustee of the LES Trust. Clean and redlined copies of the LandAmerica Amended Plan are available at http://bankrupt.com/misc/LandAm_AmendedPlan.pdf Clean and redlined copies of the LandAmerica Amended Disclosure Statement and the Plan exhibits are available free at: http://bankrupt.com/misc/LandAm_AmendedDS.pdf About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co- counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: PBGC Says Plan Has Inadequate Info on Pensions ----------------------------------------------------------------- The Pension Benefit Guaranty Corporation contends that the disclosure statement accompanying LandAmerica Financial Group Inc.'s Chapter 11 Plan fails to inform creditors of facts that may affect the value of their claims and therefore, does not provide adequate information as required by Section 1125 of the Bankruptcy Code. The PBGC notes that the Disclosure Statement indicates that the Cash Balance Plan was underfunded by about $26.8 million as of June 30, 2009; and that in the event of a distress or involuntary termination, the PBGC will have claims against the Debtors for the underfunding and for termination premiums. However, the PBGC points out, the Liquidation Analysis attached to the Disclosure Statement undermines this disclosure and thus could mislead creditors as to their recovery. The PBGC says that the assumption probably would be correct if the Cash Balance Plan were terminated in a standard termination. But the Cash Balance Plan does not provide that the Debtors will contribute the funds needed to complete a standard termination, nor does the Liquidation Analysis appear to account for that contribution, which by the Debtors' own estimates, should be in the range of $25 million to $30 million, Merrill D. Boone, Esq., in Washington D.C., the PBGC's counsel, points out. Mr. Boone adds that the Joint Chapter 11 Plan does not identify the entity that will sponsor the Cash Balance Plan after the Effective Date of the Plan. Unless this problem is corrected by amendment of the Plan, he says, the Disclosure Statement should disclose that lack of clarity regarding sponsorship might adversely affect creditors of each of the Debtors, because termination before the Effective Date might be necessary to preserve the PBGC's joint and several claims against each of the Debtors. Moreover, Mr. Boone says, the Plan has provisions regarding responsibilities and assets after the Effective Date that appear to be inconsistent with other Plan provisions. He cites, among others, that the liquidating trusts for both LFG and the Subsidiary Debtors other than LES are defined as having responsibility for the liquidation and winding up of each Subsidiary Debtor other than LES and its subsidiaries. "Apparent inconsistencies, if real, should be eliminated by amendment of the Plan; and if not, explained in the Disclosure Statement," Ms. Boone says. About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc., filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co- counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC, serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: To Seek Approval of Disc. Statement Oct. 13 -------------------------------------------------------------- Landamerica Financial Group Inc. and its units ask the Bankruptcy Court to approve the disclosure Statement accompanying the Amended Joint Chapter 11 Plan it submitted to the Court as containing adequate information pursuant to Section 1125 of the Bankruptcy Code. Paul V. Shalhoub, Esq., at Willkie Farr & Gallagher LLP, in New York, relates that under Section 1125, adequate information is defined as sufficient information that would enable a hypothetical reasonable investor typical of holders of claims or interests to make an informed judgment about the Amended Plan. Moreover, the Debtors urge the Court to (i) fix a voting record date for purposes of determining which holders of Claims against the Debtors are entitled to vote on the Amended Plan; (ii) approve solicitation materials and procedures for distribution of the Amended Disclosure Statement and the Amended Plan; (iii) approve the proposed forms of Ballots and establish procedures for voting on the Amended Plan; and (iv) schedule a hearing and establish notice and objection procedures with respect of confirmation of the Amended Plan. These are the dates proposed by the Debtors: * October 13, 2009 -- Voting Record Date * October 17, 2009 -- Commencement of Solicitation * October 22, 2009 -- Last Day for Debtors to Object to Claims for Voting Purposes * October 30, 2009 -- Last Day for Creditors to File a Claimant Voting Motion * November 10, 2009 -- Voting Deadline * November 10, 2009 -- Confirmation Objection Deadline * November 18, 2009 -- Confirmation Hearing Solicitation Package If the Court approves the Amended Disclosure Statement as containing adequate information pursuant to Section 1125, the Debtors propose to distribute to the appropriate creditors the Confirmation Hearing Notice and solicitation materials, which include: 1. A copy of the Disclosure Statement Order; 2. Either (i) a Ballot, together with a return envelope and the Amended Disclosure Statement, together with a copy of the Plan and related exhibits, or (ii) a Notice of Non- Voting Status, as applicable; 3. A letter of support from the Official Committee of Unsecured Creditors of LandAmerica 1031 Exchange Services, Inc., or Official Committee of Unsecured Creditors of LandAmerica Financial Group, Inc., if applicable, is to be included in the Solicitation Materials for holders of claims against Les or LFG; and 4. Other materials as the Court may direct. The Court will consider the Disclosure Statement Motion on October 13, 2009, at 10:00 a.m. Eastern Time. Objections are due no later than 4:00 p.m. Eastern Time, on October 8, 2009. Meyerstein Trust Responds Arnold H. Meyerstein, as trustee of the Meyerstein Trust, relates that the Disclosure Statement provides for to receive from the net proceeds of a certain note an initial cash distribution equal to the lesser of the pro rata share of the Net LES Cash or 70%. The Meyerstein Trust falls into Class LES 5 Note Exchange Collectible Claims. Mr. Meyerstein notes that the Solicitation Materials to be sent with the Disclosure Statement, however, include a Support Letter by the Official Committee of Unsecured Creditors that states, among other things, "The claims of exchangers whose exchange transaction included a note or similar instrument as some or all of the consideration will be addressed on an individualized basis." According to Kevin R. McCarthy, Esq., in McLean, Virginia, the Meyerstein Trust understands that the quoted language in the Support Letter by the LES Committee is more consistent with the results of mediation affecting note exchangers than the language of the Disclosure Statement. In any case, he points out, the Disclosure Statement language and the Support Letter language appear to be inconsistent, and this apparent inconsistency should be clarified. An additional material defect in the information provided in the Disclosure Statement and Support Letter in their current forms is the lack of any provision for a note exchanger like Meyerstein Trust that wishes to preserves its right to require LES and successors-in-interest to litigate ownership of the note that the Meyerstein Trust received as consideration in its transaction and obtain an adjudicated resolution of the ownership issue in litigation to which the Meyerstein Trust is a party, Mr. McCarthy contends. The Meyerstein Trust understands that nothing in the 1031 Exchange Adversary Case Protocol Order purported to bind non-parties to the Lead Cases. Yet the Disclosure Statement assumes that the results of the Lead Case Litigation at the trial court level may be used to do just that, Mr. McCarthy says. In a separate filing, Mr. Meyerstein ask the Court to grant his counsel, Kevin R. McCarthy, Esq., of McCarthy & White PLLC, leave to appear by telephone at the October 13 hearing in the Debtors' cases. The Plan and DS LandAmerica Financial Group and its affiliates filed with the Bankruptcy Court an amended joint chapter 11 plan and related disclosure statement. The primary purpose of the Plan is to sell substantially all of the Debtors' assets and to distribute the proceeds to creditors. General unsecured creditors of LandAmerica 1031 Exchange Services, Inc. are expected to recover 37.1% of their claims. Unsecured creditors of LFG will recover 28.3%. On the effective date, the stock of the Debtors will be cancelled and equity holders won't receive anything. A liquidating trust for each Debtor will be created to prosecute the legal causes of action held by the Debtors, and to administer the liquidation and distribution of the assets to creditors. The official committees of unsecured creditors for LFG Inc. and LandAmerica 1031 Exchange Services, Inc. support confirmation of the Plan and urge all holders of claims whose votes are being solicited to accept the Plan. Voting deadline is on November 10. The Bankruptcy Court is expected to begin hearings to consider confirmation of the Plan on November 18. A copy of the Amended Plan is available for free at: http://bankrupt.com/misc/LandAm_Amended_Plan.pdf A copy of the Disclosure Statement, which details the terms of the Amended Plan, is available for free at: http://bankrupt.com/misc/LandAm_Amended_DS.pdf About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co- counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: Various Parties Object to Plan Outline --------------------------------------------------------- Several of LandAmerican Financial Group Inc. and its affiliates' creditors filed objections to the Court voicing out their opposition to both the Original and Amended Joint Chapter 11 Plan of Reorganization: (a) Matthew B. Luxenberg Matthew B. Luxenberg, Trustee of the Matthew B. Luxenberg Revocable Family Trust dated May 28, 1998 and a Type A Test Case Plaintiff, opposes the Original and Amended Disclosure Statements on the basis that the Debtors filed and served the Amended Disclosure Statement, a 409-page document, at 10:00 p.m. on a Friday night with the objection deadline set for 4:00 p.m. the subsequent Monday. Despite best efforts, Mr. Luxenberg says, that timeline does not provide sufficient time for counsel to (i) analyze the Amended Disclosure Statement in comparison with the Original Disclosure Statement; (ii) review the new Exhibits filed with the Amended Disclosure Statement; (iii) determine whether any of the comments provided by the Debtors on the Original Disclosure Statement were incorporated into the Amended Disclosure Statement; and (iv) consult with him regarding the new documents. Mr. Luxenberg subsequently cites that the Second Disclosure Statement Notice sets forth a new objection deadline of October 8, 2009, at 4:00 p.m., which seemed reasonable in light of the late filing of the Amended Disclosure Statement. However, counsel for Luxenberg learned after 3:00 p.m. on October 5, 2009, that the Debtors are taking the position that the new deadline is applicable only to certain other documents filed by the Debtors on October 2, 2009, and the deadline of October 5, 2009, at 4:00 p.m. is still applicable to the Amended Disclosure Statement. Moreover, Mr. Luxenberg tells the Court that the Amended Disclosure Statement, as currently drafted, will not be read or understood by the overwhelming majority of LES creditors. He notes that exclusive of exhibits, the Amended Disclosure Statement is 136 pages long. (b) Angela M. Arthur, et al. Angela M. Arthur, as Trustee of the Arthur Declaration of Trust dated December 29, 1988; Leapin Eagle LLC, a limited liability company; Vivian R. Hays; Denise J. Wilson; Gerald R. Terry; Ann T. Robbins; and Jane T. Evans, urge the Court to decline, under Section 1125 of the Bankruptcy Code, to approve the Amended Disclosure Statement as it fails to satisfy the requirements of "adequate information." The Objecting Parties assert that the Amended Plan, if approved, would not impose a permanent injunction that is not only unconscionably and illegally broad in scope, but would also mandate that unsecured creditors, including them and all Commingled Exchangers, consent to the injunction against their third party claims in order to participate in any distribution of their own exchange funds under the Plan. The Amended Disclosure Statement, characterizing the permanent injunction against third party claims as a "channeling" injunction, is false and misleading, the Objecting Parties argue. They contend that a channeling injunction appears in a context where the claims of creditors are to be fully paid and the debtor seeks to control the fund from which payment will occur. The Objecting Parties further assert that the Amended Disclosure Statement relating to "Other Litigation" is inadequate because it does not disclose that a potential claim against officers and directors based on their decision to purchase Auction Rate Securities is patently inconsistent with its proposed ARS litigation against SunTrust and Citibank. The Amended Disclosure Statement, they add, does not discuss the impact of judicial estoppel. The Objecting Parties also argue that the Amended Disclosure Statement is inadequate because it provides no facts or justification for a broad injunction and release of liability to postpetition professionals, including attorneys, and fails to explain how or why a release, injunction and exculpation is necessary to effectuate the plan of reorganization. (c) Grunstead Family Limited Partnership The Grunstead Family Limited Partnership asserts that the Amended Disclosure Statement is incomplete in its discussion regarding pending litigation to which LES is a party. It omits any reference whatsoever to the status and disposition of approximately 100 adversary proceedings, including the Grunstead Adversary Proceeding, filed since the Petition Date by Section 1031 tax free exchangers, the Partnership points out. The Grunstead Partnership contends that to the extent the Debtors seek to justify a non-disclosure on any notion that the Grunstead Adversary Proceeding or the entire universe of Exchanger Adversary Proceedings is not material to the overall scheme of the Amended Plan and its confirmation, feasibility and implementation, then the Debtors should be required to so state in the Amended Disclosure Statement, with a brief explanation as to why the universe of those pending Adversary Proceedings is non-material. (d) William McIllwaine William McIllwaine Thompson, Jr. as Trustee of the W.M. Thompson, Jr. Revocable Trust, asserts that the Amended Disclosure Statement fails to discuss the terms of an intertrust agreement between the LES Trust and the LFG Trust which is to govern how the two trusts will cooperate. In particular, Mr. McIllwaine says, the Amended Disclosure Statement fails to discuss what steps, if any, will be taken if the LFG Trust or the LES Trust is not able to effectively prosecute an action against the officers and directors of LFG or LES because of defenses raised by insurance companies or others which may delay or preclude the effective prosecution of the action. The Amended Disclosure Statement also fails to discuss steps to ensure that if the LFG Trust or the LES Trust is unable to effectively prosecute the action, the applicable statutes of limitations will not expire before the Exchangers can bring actions on their own behalf, he notes. (e) Harvey Family Limited Partnership The Harvey Family Limited Partnership asserts that the Disclosure Statement lacks adequate information because (1) it does not accurately reflect the terms agreed upon by the parties at a mediation with regard to the treatment of the Harvey Family or other individuals who considered completing like-kind exchange transactions with LES involving promissory notes; (2) it does not inform the Harvey Family why it is "substantially similar" to the other claims or interests in its class as required by Section 1122 of the Bankruptcy Code; and (c) it does not provide, a mechanism for the Harvey Family to pursue, through litigation or otherwise, its ownership and property interests in the entirety of the Note and the Note Payments. (f) Paul Busse, et al. In separate filings, Paul Busse; and Anne Martin and Paul Hoffman assert that the Disclosure Statement does not contain information sufficient to make a informed decision as to whether or not to vote yes or no on the Plan. The Objectors note that the Disclosure Statement contains wonderful sounding platitudes and notions about 'waterfalls' and 'payouts' and 'sharing of proceeds.' "These are only words, not projections or mathematical predictions," the Objectors contend. "Nothing is quantified, not even in a wide range of figures." "These words give a false impression as to what an exchanger might be getting," Mr. Busses says. Ms. Martin and Mr. Hoffman also assert in a separate filing that the Disclosure Statement should not be approved or voted upon until full and complete and full disclosure is made of any Plan deficiencies. Among others, they assert that the Disclosure Statement should disclose each and every claims held by LES and LFG against its officers and directors, and each and every claim held by the 1031 Exchangers against the LES and LFG Officers and Directors. They also request that Clarkson McDow, the U.S. Trustee object to the "exculpation and channeling" clauses under the Plan as being against public policy in the Debtors' cases. (g) Louis J. De Maio, Esq. Louis J. De Maio, Esq. seeks a provision in the Plan that the allocation and distribution of any and all assets payable to the Internal Revenue Service under Claim No. 368 and Claim No. 154 be first applied to Claim No. 2326 in the full amount of $22,278,233. Mr. De Maio also seeks a provision in the Plan that any assets allocated and distributed to IRS under Claim Nos. 368 and 154, after the proceeds have been paid to his Claim No. 2326, be paid in satisfaction of the refund due to him in his pending claim for the federal income tax return for 2007. Mr. De Maio is a former career attorney with the IRS Estate and Gift Tax Division. (h) John Chiang, Controller of the State of California John Chiang, Controller of the State of California, complains that the Disclosure Statement omits even the most basic information necessary to evaluate whether to object to the Plan's treatment of Intercompany Claims, and the Disclosure Statement Motion proposes an overly aggressive timeline for objections to confirmation that forecloses any meaningful review of Intercompany Claims, particularly in the event that additional affiliates of the Debtors file for Chapter 11 relief before the Voting Deadline. Accordingly, the Controller asks the Court to deny the Disclosure Statement Motion; order the Debtors to come forward with adequate information concerning Intercompany Claims; and extend the timeline for objections to confirmation to allow the Controller and other claimholders to investigate and object to Intercompany Claims. (i) Chino Spectrum Center LLC, et al. Chino Spectrum Center LLC, Chino Wings, LLC, NMC Summit, LLC, Tower Summit Colorado, LLC, Westminster Peak L.P., and Westminster Summit, L.P. assert that the Amended Disclosure Statement should not be approved because it fails to contain adequate information as required by Section 1125. While the Debtors have already made numerous corrections to the original documents, the Chino Objectors maintain that the Debtors should make additional changes to clarify certain critical disclosure points. Otherwise, parties entitled to vote would not receive adequate information regarding the Plan before it is sent to creditors for the purpose of soliciting votes to accept or reject the plan. In a separate filing, the Chino Entities ask the Court to grant their counsel, Robert Friedman, Esq. of Kelly Drye & Warren LLP leave to appear by telephone at the October 13 hearing in the Debtors' cases. (j) Others In separate filings, Tracy A. Ralphs, Ming C. Wong, David Chen of DCRE Investments LLC, Roy and Susan Tanaka, and Rossanna Passantino, all individual 1031 exchangers, also voiced out their objections to the Court with respect to the Original and Amended Plan and Disclosure Statement. Messrs. Ralphs, Wong and Chen object to the "exculpation clause" as insofar as it releases Akin Gump, as counsel to the LES Committee for any ordinary negligence. They assert that the clause is far too vague and general. Messrs. Ralphs, Wong and Chen further object to any of the current LES Committee Member to be assigned to the LES Trust, asserting that they have not adequately fulfilled their duty to the 1031 exchangers by not keeping the exchangers as claim holders informed of the progress in the Debtors' cases. Instead, they inform the Court that these Exchangers have been nominated and have accepted the nomination to be on the new LES Liquidating Trust Committee: * Dr. Lorinda Price, Pediatrician, Florida * Col. Tracy Ralphs, Ret. US Army, Virginia * David and Deena Chen, investors, California * John Corrado, mechanical engineer (ret.), California * Robert Ritchie, investor, Virginia * Peter Schonberger, physicist, New York * W. McIlwaine "Mac" Thompson, attorney, Virginia * Marilyn Wallach, spouse of exchanger Kurt Wallach, Florida About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co- counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LAUREATE EDUCATION: Bank Debt at 8% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Laureate Education, Inc., is a borrower traded in the secondary market at 91.88 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.67 percentage points from the previous week, The Journal relates. The loan matures on Aug. 17, 2014. The Company pays 325 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's B rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Laureate Education, Inc., is based in Baltimore, Maryland, and operates a leading international network of accredited campus- based and online universities with 26 institutions in 15 countries, offering academic programs to about 311,000 students through 74 campuses and online delivery. Laureate offers a broad range of career-oriented undergraduate and graduate programs through campus-based universities located in Latin America, Europe, and Asia. Through online universities, Laureate offers the growing population of non-traditional, working-adult students the convenience and flexibility of distance learning to pursue undergraduate, master's and doctorate degree programs in major career fields including engineering, education, business, and healthcare. Laureate had revenues of approximately $1.4 billion in fiscal 2007. LEAR CORP: Bank Debt Trades at 7.58% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which Lear Corporation is a borrower traded in the secondary market at 92.42 cents-on- the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.42 percentage points from the previous week, The Journal relates. The loan matures on March 29, 2012. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's and Standard & Poor's. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of the Chapter 11 filing include Lear South Africa Limited, Lear Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear Mexican Holdings Corporation, and Lear South American Holdings Corporation. Attorneys at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP has been engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tapped as special counsel. Alvarez & Marsal North America, LLC, is the Debtors' restructuring advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Simpson Thacher & Bartlett LLP represents JP Morgan, as admin. agent for senior secured lenders and DIP lenders. As of May 30, 2009, Lear has assets of $1,270,800,000 against debts of $4,536,000,000. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) LEARNING CARE: S&P Junks Corporate Credit Rating From 'B-' ---------------------------------------------------------- Standard & Poor's Rating Services lowered its corporate credit rating on Learning Care Group (US) Inc. to 'CCC+' from 'B-'. The rating outlook is negative. In addition, S&P lowered the issue-level rating on Learning Care's $215 million senior secured credit facility to 'CCC+' (at the same level as the 'CCC+' corporate credit rating on the company) from 'B-'. The recovery rating on this debt remains unchanged at '3', indicating S&P's expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. Novi, Michigan-based Learning Care is the second-largest provider of early childhood education and child care in the U.S. Total debt was $294 million as of June 30, 2009. "The ratings downgrade reflects Standard & Poor's concern that Learning Care's weakening operating performance, slightly negative discretionary cash flow, thin interest coverage, and rising debt leverage could threaten its ability to comply with bank debt covenant levels over the next year," explained Standard & Poor's credit analyst Hal Diamond. The company had a thin margin of compliance with its total leverage covenant as of June 30, 2009, which steps downs quarterly beginning Dec. 31, 2009. S&P expects that the company's cost reductions, which its banks add back to EBITDA in calculating the financial covenants, will not be sufficient to offset revenue declines. S&P believes that the company will need an amendment and may not be able to absorb a potentially significant increase in interest rates, which could accompany an amendment under current market conditions. During the fiscal fourth quarter ended June 30, 2009, revenue and EBITDA (before international royalty and restructuring expenses) declined 9.1% and 13.6%, respectively, as lower enrollments and utilization rates more than offset tuition rate increases. S&P is concerned that rising unemployment will continue to undermine the company's profitability despite cost-cutting efforts. Also, Learning Care derives 22% of its revenues from state-subsidized programs, and S&P is concerned that strained state budgets will negatively affect these funds. Revenue visibility is limited, as customers pay tuition only one week in advance, and often give minimal advanced notice of withdrawing their children from center services, hampering the company's ability to plan further cost reductions. For the fiscal year ended June 30, 2009, lease-adjusted debt to EBITDA was high, at slightly over 7.8x (unadjusted 5.5x), versus a pro forma level of roughly 6.0x at the time of the company's June 2008 leveraged buyout. Lease-adjusted EBITDA coverage of interest expense declined to 1.3x from 2.3x over the same period. Discretionary cash flow was a deficit of roughly $3 million in fiscal 2009, as a result of weak profitability and cash restructuring costs, requiring a drawdown of cash balances to fund debt maturities. S&P believes that revenue and EBITDA will remain under pressure in the near term, and that negative discretionary cash flow could potentially increase in fiscal 2010. LEHMAN BROTHERS: To Auction Art Collection on November 1 -------------------------------------------------------- Lehman Brothers Holdings Inc. is scheduled to auction off its art collection on November 1, 2009. Lindsay Pollock at Bloomberg News says the 283-lot sale is estimated to tally up to $760,800 -- part of an estimated $1.1 million in artworks the bank is hawking this fall and winter. Bloomberg relates that the artworks are expected to sell at a discount, and works priced at less than $10,000 are being sold without a floor price. Bloomberg notes that Lehman is facing as much as $250 billion in claims. The sale includes Roy Lichtenstein's 1982 homage to the Statue of Liberty, "I Love Liberty," expected to fetch as much as $25,000. Appealing flower drawings and monotypes by Michael Mazur, whose works are owned by many American museums, is priced about $500. A black-and-white photograph by Joel Greenberg, "Brooklyn Bridge, Night," is estimated to sell for between $300 and $500. Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEVI STRAUSS: Posts $40.7MM Net Income for August 30 Quarter ------------------------------------------------------------ Levi Strauss & Co. posted lower net income of $40,703,000 for the three months ended August 30, 2009, from net income of $69,165,000 for the three months ended August 24, 2008. The Company also posted lower income of $84,644,000 for the nine months ended August 30, 2009, from net income of $166,973,000 for the nine months ended August 24, 2008. Levi Strauss recorded net revenues -- consisting of net sales and licensing revenue -- of $1,040,400,000 for the three months ended August 30, 2009, from $1,110,793,000 for the three months ended August 24, 2008. The Company booked net revenues of $2,896,382,000 for the nine months ended August 30, 2009, from $3,129,998,000 for the nine months ended August 24, 2008. The Company's reported results reflected the challenging global economy and the adverse effect of currency exchange rates compared to the prior year. Net revenues declined 6% for the quarter. On a constant currency basis, net revenues decreased 2%. Global revenues for the Levi's(R) brand increased on a constant currency basis compared to the same period last year. "It was a productive quarter in light of the tough market conditions worldwide," said John Anderson, president and chief executive officer. "We invested in our business by completing two acquisitions during the past three months. We are effectively managing our balance sheet and controlling costs. And sales of the Levi's(R) brand improved. Our teams are focused on strategies that we believe will build our brands, strengthen our competitiveness and drive future growth. This includes expanding our retail operations and further leveraging the efficiencies and diversity of our global footprint. We'll also concentrate our investments in the geographic markets that offer the greatest potential for return, and on market-leading innovations that will create great new products." As of August 30, 2009, the Company had $2,824,062,000 in total assets against $3,131,022,000 in total liabilities and $1,146,000 in temporary equity, resulting in $308,106,000 in stockholders' deficit. As of August 30, 2009, the Company had cash and cash equivalents totaling roughly $171.7 million, resulting in a net liquidity position (unused availability and cash and cash equivalents) of $386.1 million. In the first quarter of 2009, the Company decided to close its manufacturing facility in Hungary. This closure will result in the elimination of the jobs of approximately 549 employees through the fourth quarter of 2009. Charges in 2009 include estimated severance costs and an asset impairment charge reflecting the write-down of building, land and some machinery and equipment to their estimated fair values. The Company expects to incur additional restructuring charges related to this initiative of approximately $1.6 million, principally related to additional facility closure costs, which will be recorded as they are incurred. The Company's prior reorganization initiatives include organizational changes and distribution center closures in 2003- 2008, primarily in Europe and the Americas. The restructuring liability at August 30, 2009, of $4.2 million, primarily consists of lease loss liabilities. The Company does not expect to incur significant future additional restructuring charges related to these prior reorganization initiatives. A full-text copy of the Company's quarterly report on Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?46be About Levi Strauss & Co. Headquartered in San Francisco, California, Levi Strauss & Co. -- http://www.levistrauss.com/-- is one of the world's leading branded apparel companies. The Company designs and markets jeans, casual and dress pants, tops, jackets and related accessories, for men, women and children under the Levi's(R), Dockers(R) and Signature by Levi Strauss & Co.(TM). The Company markets its products in three geographic regions: Americas, Europe, and Asia Pacific. As reported by the Troubled Company Reporter on April 29, 2009, Moody's Investors Service affirmed Levi Strauss' Corporate Family and Probability of Default ratings at B1 and also continued its positive outlook on the company's ratings. Levi Strauss continues to carry Fitch Ratings' 'BB-' Issuer Default Rating. LEWIS EQUIPMENT: Can Access Frost Cash Collateral until October 18 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas authorized, on an interim basis, Lewis Equipment Company, Inc., and its debtor-affiliates to: -- access cash securing repayment of loan with Frost National Bank until Oct. 18, 2009; and -- grant adequate protection to Frost. A final hearing on the cash collateral motion is set for Oct. 14, 2009, at 10:30 a.m. The Debtors are authorized to use cash collateral only to pay the operating expenses of the Debtors that are the approved expenses listed in the budget within a 10% variance of the amounts set forth on the budget. The lender and the Debtors are parties to a $10,000,000 Working Capital Borrowing Base Line of Credit and $20,000,000 Equipment Bridge Borrowing Base Line of Credit. The Debtors will grant the lender a first-priority postpetition security interest in all cash collateral and all proceeds thereof. In addition, Frost is granted a superpriority administrative expense claim. The Debtors' authority to use cash collateral will terminate upon the earlier of the hearing on the motion to enter final order authorizing Debtors' use of cash collateral or until the later date and time that is agreed to by lender in writing and without further notice or order. The FWISD Objects The Fort Worth Independent School District, a subdivision of the State of Texas authorized to levy and assess ad valorem taxes on the value of property located within its taxing jurisdiction as of January 1 of each tax year, filed its objection to the Debtors' cash collateral motion to ensure that the Debtors do not intend to grant Frost liens with priority over the FWISD's first priority statutory liens. The FWISD requested the Court that any order entered on the motion clarify that the FWISD's liens will continue to attach to Debtors' property in the same priority, validity, and extent as they attached to Debtors' property as of the petition date. About Lewis Equipment Company Grand Prairie, Texas-based Lewis Equipment Company, Inc., operates a construction business. The Company and its affiliates filed for Chapter 11 on Sept. 18, 2009 (Bankr. N.D. Tex. Case No. 09-45785 to 09-45814). Davor Rukavina, Esq., at Munsch, Hardt, Kopf & Harr represents the Debtors in their restructuring efforts. In their petition, the Debtors listed assets and debts both ranging from $100,000,001 to $500,000,000. LEWIS EQUIPMENT: Wants to Sell Tower Cranes to Southwest Shipyards ------------------------------------------------------------------ Lewis Equipment Company, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Texas for authority to sell two tower cranes and related equipment to Southwest Shipyards, L.P., free and clear of liens, claims, interests, and encumbrances. The Debtors relate that part of its interim reorganization strategy is to liquidate excess equipment in an orderly fashion, in order to maximize the value thereof. To that end, the Debtors secured a sale of certain equipment to Southwest, pursuant to the Equipment Sales Agreement dated Oct. 1, 2009. In addition to the proposed sale, the Debtors would provide various services to Southwest, including erecting the tower cranes the subject of the proposed sale, and dismantling non-Lewis cranes presently on site. Southwest will pay $500,000. One half of the purchase price is payable and due prior to shipment of the subject equipment, and the other hand is due after erection of the subject equipment. Additionally, Southwest would pay the Debtors for various other items related to the subject equipment, including sales tax, freight, remote controls, etc. Separately, Southwest would pay the Debtors $281,650 for services related to erecting the Subject Equipment, including engineering services, foundation design, erection services, and dismantling services. About Lewis Equipment Company Grand Prairie, Texas-based Lewis Equipment Company, Inc., operates a construction business. The Company and its affiliates filed for Chapter 11 on Sept. 18, 2009 (Bankr. N.D. Tex. Case No. 09-45785 to 09-45814). Davor Rukavina, Esq., at Munsch, Hardt, Kopf & Harr represents the Debtors in their restructuring efforts. In their petition, the Debtors listed assets and debts both ranging from $100,000,001 to $500,000,000. LIGHTHOUSE FINANCIAL: Wants to Use CapitalSource Cash Collateral ---------------------------------------------------------------- Lighthouse Financial Group, Inc., and its debtor-affiliates ask the U.S. Bankruptcy for the Middle District of Florida for permission to: -- use cash collateral in which CapitalSource Finance, LLC, and various subordinated debtholders have an interest; and -- provide replacement liens to CapSource and the SubDebt Holders as adequate protection. The Debtors require immediate access to the cash collateral to continue it business enterprises as a going concern and the reorganization of financial aspects of business entities. The Debtors relate that CapSource will assert duly perfected and valid liens encumbering the cash collateral or portions of same in the approximate amount of $3,851,156. In addition, the Debtors owe the SubDebt Holders $5,319,905 pursuant to a loan and security agreements and amendments. The Debtors believe, however, the security interests of the SubDebt Holders are subject to avoidance pursuant to Bankruptcy Code, and other applicable law. In addition to the secured indebtedness, the Debtors owe additional sums to unsecured trade creditors as of the Petition date. CapitalSource Objects CapitalSource Finance LLC, in its capacity as the prepetition senior, secured lender to certain of the Debtors objected to the Debtors' cash collateral motion relating that: a. the Debtors have not presented any evidence of adequate protection, a cash forecast or budget, any valuation of the Debtors' collateral, or a proposed form of interim order; and b. the non-obligor Debtors must be prohibited from using any cash collateral as the non-obligor Debtors are not party to the credit agreement or the other loan documents, and the prepetition senior lender does not have a lien on any of the non-obligor Debtors' assets. About Lighthouse Financial Group Tampa, Florida-based Lighthouse Financial Group, Inc., and its affiliates filed for Chapter 11 on Sept. 14, 2009 (Bankr. M.D. Fla. Case Nos. 09-20530 to 09-20603). In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. LINDA SMITH: Case Summary & 16 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Linda Smith 741 Howard Ave Carson, CA 90746 Bankruptcy Case No.: 09-37350 Chapter 11 Petition Date: October 7, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Alan M. Ahart Debtor's Counsel: Perfisity Mcghee, Esq. Po Box 8040 Inglewood, CA 90308-8040 Tel: (310) 649-4117 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of Ms. Smith's petition, including a list of her 16 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-37350.pdf The petition was signed by Ms. Smith. LITHIUM TECHNOLOGY: Incurs $3-Mil. Net Loss in 2nd Quarter ---------------------------------------------------------- Lithium Technology Corporation filed with the Securities and Exchange Commission on Friday its quarterly reports for the period ended Jun 30, 2009, and March 31, 2009. Lithium Technology reported a net loss of $3,048,000 on products and services sales of $1,758,000 for the second quarter ended June 30, 2009, compared with a net loss of $5,343,000 on products and services sales of $1,728,000 for the same period in 2008. For the six months ended June 30, 2009, the Company reported a net loss of $5,582,000 on sales of $3,080,000, compared with a net loss of $1,822,000 on sales of $2,296,000 in the corresponding period of 2008. For the six months ended June 30, 2009, the Company reported a net loss of $5,582,000 on sales of $3,080,000, compared with a net loss of $1,822,000 on sales of $2,296,000 in the corresponding period of 2008. Lithium reported a net loss of $2,534,000 on products and services sales of $1,322,000 for the first quarter ended March 31, 2009, compared with net income of $3,521,000 on products and services sales of $568,000 for the same period in 2008. The Company attributes the increase in sales for both the six months and three months ended June 30, 2009, to increased sales efforts and fruition of some projects the Company is involved with. Loss from operations was $2,110,000 for the three months ended June 30, 2009, as compared to loss from operations of $2,979,000 in the comparable period last year. Loss from operations was $4,915,000 for the six months ended June 30, 2009, compared with loss from operations of $6,504,000 in the corresponding period of 2008. For the three months ended June 30, 2009, and 2008, the Company recognized losses of $4,000 and $2,344,000, respectively, related to changes in fair value of the warrants. For the six-month period ended June 30, 2009, the Company recognized a gain from changes in fair value of warrants in the amount of $143,000, as compared to a gain of $8,423,000 in the six month period ended June 30, 2008. At June 30, 2009, the Company's consolidated balance sheet showed $9,677,000 in total assets and $26,205,000 in total liabilities, resulting in a $16,528,000 stockholders' deficit. The Company's consolidated balance sheet at June 30, 2009, also showed strained liquidity with $2,739,000 in total current assets available to pay $15,528,000 in total current liabilities. Full-text copies of the Company's consolidated financial statements for the second quarter ended June 30, 2009, are available for free at http://researcharchives.com/t/s?46c1 Full-text copies of the Company's consolidated financial statements for the first quarter ended March 31, 2009, are available for free at http://ResearchArchives.com/t/s?46d4 Going Concern Doubt The June 11, 2009 audit report of Amper, Politziner & Mattia LLP, in Edison, New Jersey, raised substantial doubt about the Company's ability to continue as a going concern. The Company posted a net loss of $6,414,000 for the year ended December 31, 2008, from a net loss of $24,391,000 in 2007. As of December 31, 2008, the Company had total assets of $11,107,000, and total liabilities of $21,897,000, resulting in stockholders deficit' of $10,790,000. Based in Plymouth Meeting, Pennsylvania, Lithium Technology Corporation (OTC: LTHU) -- http://www.lithiumtech.com/-- is a global manufacturer and provider of rechargeable energy storage solutions for diverse applications. The Company designs and builds a limited amount of large format, cylindrical lithium-ion (Li-ion) rechargeable cells and engineers and builds lithium-ion (Li-ion) rechargeable batteries complete with battery management systems for use in transportation, military/national security and stationary power markets. LTC also manufactures its own unique large format, cylindrical cells. LIZ CLAIBORN: JC Penney Deal Won't Affect Moody's 'B2' Rating ------------------------------------------------------------- Moody's Investors Service said Liz Claiborne Inc.'s announcement that it has entered into long term licensing agreements with JC Penney Company Inc. for the Liz Claiborne and Claiborne brands and with QVC Inc. for the Liz Claiborne New York, designed by Isaac Mizrahi does not have an immediate impact on the company's B2 Corporate Family Rating which is currently under review for possible downgrade. Moody's last rating action on Liz Claiborne was on August 13, 2009, when the company's Corporate Family Rating was lowered to B2 from Ba3 and placed on review for further possible downgrade. Liz Claiborne Inc. is a designer and distributor of apparel and related accessories under brands including Liz Claiborne, Mexx, Juicy Couture, Lucky Brand, and Kate Spade. LNR PROPERTY: Bank Debt Trades at 24.6% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which LNR Property Corporation is a borrower traded in the secondary market at 75.40 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.60 percentage points from the previous week, The Journal relates. The loan matures on July 11, 2011. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. LNR Property Corporation -- http://www.lnrproperty.com/-- is a real estate investment and management company spun off from homebuilding giant Lennar in 1997. LNR owns and manages a portfolio of real estate properties and real estate finance investments (unrated and junk-grade commercial mortgage-backed securities and collateralized debt obligations, high-yield mortgage loans, and mezzanine financing). Its LandSource Communities Development joint venture with Lennar develops and sells homes as well as land for residential or commercial use; it owns Newhall Land and Farming. LandSource declared bankruptcy in 2008, a victim of the housing downturn. LNR is a subsidiary of Cerberus Capital Management, which owns a 75% stake in the company through LNR Property Holdings. As reported by the Troubled Company Reporter on Sept. 18, 2009, Moody's Investors Service downgraded the ratings of LNR Property Corporation's senior bank credit facility and corporate family rating to B3 from B2, and placed the ratings under review for possible downgrade. The downgrade reflects the accelerated deterioration in asset quality of the company's CMBS and real estate investments as a result of the pressures on commercial real estate fundamentals and the credit markets. LODGIAN INC: Says Crowne Plaza and Merrill Lynch Loans in Default ----------------------------------------------------------------- Lodgian Inc. disclosed in a filing with the Securities and exchange Commission that on Oct. 2, 2009, it failed to reach an agreement with the special servicer of $45.6 million of its mortgage indebtedness scheduled to mature on July 1, 2009, and is now in default on this debt. The maturity date of the debt was extended from July 1, 2009, to Oct. 1, 2009, pursuant to two previous short-term extensions. The mortgage indebtedness, which was originated in June 2004 by Merrill Lynch and securitized in the collateralized mortgage- backed securities market, is referred to by the Company as Merrill Lynch Fixed Rate Pool No. 3 and is secured by six hotels. The Company also stopped servicing $16.3 million of its mortgage indebtedness secured by the Crowne Plaza in Worcester, Massachusetts. Merrill Lynch Fixed Rate Pool 3 The Merrill Lynch Fixed Rate Pool 3, with a principal balance of $45.6 million, matured on Oct. 1, 2009. The loan bears interest at a fixed rate of 6.58%, is secured by six hotels, and is non- recourse to the company. Cash flow from the hotels securing this pool is insufficient to meet the related debt service obligations. The trailing twelve month aggregate Net Operating Income for the underlying properties was $2.4 million, while annual debt service is approximately $4.0 million. The company in discussions with the lender regarding extension and modification of the loan; however, no agreement has been reached at this time. The loan is now in default and the lender may accelerate repayment of the loan and begin foreclosure proceedings, although it has not yet done so. If no agreement is reached, the company intends to return the hotels to the lender in full satisfaction of the debt. Crowne Plaza Worcester On a trailing twelve month basis, the cash flow from the Crowne Plaza in Worcester was not sufficient to service the debt on the property. As a result, the company did not make the required debt service payment on Sept. 11, 2009. The company is now in default on this loan, and the lender may accelerate repayment of the loan. The hotel is encumbered by a $16.3 million, fixed-rate CMBS mortgage that bears interest at 6.04%. The mortgage matures in February 2011, and is non-recourse to the company. Annual debt service on the mortgage is approximately $1.3 million, while the trailing twelve month NOI for the property was $0.6 million. The company does not expect further negotiation with the special servicer and intends to convey the hotel to the lender in lieu of repayment. In addition, the Company is conducting an on-going review of its remaining portfolio and may determine to convey additional hotels securing certain indebtedness to the lenders in the future. The Company continues to focus on reducing costs, both within the corporate office and in the field. These cost reductions include corporate overhead initiatives anticipated to result in approximately $1.5 million of annualized reductions in 2009 and cost reductions in the field anticipated to result in annualized cost reductions of $3.7 million in 2009. About Lodgian Inc. Lodgian Inc. -- http://www.lodgian.com/-- is one of the nation's largest independent hotel owners and operators. The Company currently owns or manages a portfolio of 38 hotels with 7,078 rooms located in 22 states. Of the company's 38-hotel portfolio, 18 are InterContinental Hotels Group brands (Crowne Plaza, Holiday Inn, Holiday Inn Select and Holiday Inn Express), 12 are Marriott brands (Marriott, Courtyard by Marriott, SpringHill Suites by Marriott, Residence Inn by Marriott and Fairfield Inn by Marriott), two are Hilton brands, and five are affiliated with other nationally recognized franchisors including Starwood, Wyndham and Carlson. One hotel is an independent, unbranded property, which is currently closed and held for sale. MAINLINE CONTRACTING: Wants Access to Cash Securing BB&T Loan ------------------------------------------------------------- Mainline Contracting, Inc., asks the U.S. Bankruptcy Court for the Eastern District of North Carolina for authority to use cash collateral to make payment of its ordinary operating expenses including payroll, rent, and job associated expenses. The Debtor relates that Branch Banking and Trust Company claims to be owed $2.9 million on the line of credit. BB&T also has an equipment loan on which $12.2 Million is owed. The Debtor granted a security interest in its accounts receivable to Branch Banking and Trust in connection with a line of credit. The Debtor estimates that its cash collateral is valued in excess of the obligation it secures for BB&T. BB&T Objects Branch Banking and Trust Company, a secured creditor, through its counsel, Howard, Stallings, From & Hutson, P.A., objected to the Debtor's cash collateral motion relating that (a) it does not consent to the Debtor's use of its cash collateral or the a lien on Debtor's Borrower Investor's Deposit Account ending 7975; and (b) it must be provided adequate protection for the Debtor's use of cash collateral. About Mainline Contracting Durham, North Carolina-based Mainline Contracting, Inc., operates a construction company. The Company filed for Chapter 11 on Sept. 15, 2009 (Bankr. E.D.N.C. Case No. 09-07927). Everett Gaskins Hancock & Stevens, LLP, represents the Debtor in its restructuring effort. In its schedules, the Debtor listed total assets of $23,027,505 and total liabilities of $33,280,644. MARGAUX WESTOVER: Files for Chapter 11, Blames Economic Woes ------------------------------------------------------------ Margaux Westover Partners, Ltd. president and general partner Don Silverman has "reluctantly" filed for Chapter 11 bankruptcy protection, Sandra Baker at Star-Telegram reports. Margaux Westover listed $10 million to $50 million in liabilities, against $10 million to $50 million in assets. A related group, Margaux 24 North Partners, also filed for Chapter 11 bankruptcy protection, listing $1 million to $10 million in assets and $1 million to $10 million in liabilities. According to Star-Telegram, Mr. Silverman blames the economy for Margaux's bankruptcy filing. The report says that Margaux is trying to reorganize a couple of its real estate partnerships, including one that owns the Westover Village shopping center in Fort Worth. Margaux Westover leased 10 acres of the property to Chesapeake Energy Co. this year, but there has been no other movement on a planned shopping center for the site, Star-Telegram says, citing Mr. Silverman. Star-Telegram relates that Amegy Bank posted the 22.94-acre site for foreclosure the day the bankruptcy cases were filed. Dallas, Texas-based Margaux Westover Partners, Ltd., owns the 35- acre Westover Village at the southeast corner of Green Oaks Road and Texas 183. The Company also owned the almost 70 acres of land north of Ridgmar Mall since 2005. The Company is also developing the 250,000-square-foot Parkwood Shopping Center at the southwest corner of North Tarrant Parkway and U.S. 377 in north Fort Worth. MARK HILL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Joint Debtors: Mark W. Hill Lori A. Hill 1151 W. Deborah Street Upland, CA 91784 Bankruptcy Case No.: 09-33877 Chapter 11 Petition Date: October 7, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Sheri Bluebond Debtors' Counsel: Stephen R. Wade, Esq. The Law Offices of Stephen R. Wade 400 N Mountain Ave Suite 214B Upland, CA 91786 Tel: (909) 985-6500 Fax: (909) 985-2865 Email: dp@srwadelaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-33877.pdf The petition was signed by the Joint Debtors. MARTENSE NEW YORK: Case Summary & 16 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Martense New York Inc. 3317 Avenue N Brooklyn, NY 11234 Bankruptcy Case No.: 09-48910 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Carla E. Craig Debtor's Counsel: Kevin J. Nash, Esq. Goldberg Weprin Finkel Goldstein LLP 1501 Broadway, 22nd Floor New York, NY 10036 Tel: (212) 301-6944 Fax: (212) 422-6836 Email: KJNash@finkgold.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 $6,730,452, and total debts of $7,999,262. A full-text copy of the Debtor's petition, including a list of its 16 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nyeb09-48910.pdf The petition was signed by Yehuda Nelkenbaum, president of the Company. MDWERKS INC: Chris Phillips Steps Down as Director -------------------------------------------------- MDwerks, Inc., on October 6, 2009, received a letter of resignation from Chris Phillips, dated September 28, resigning as of the date of the letter as a Director of the Company, a position he had held since April 24, 2008. There were no disagreements with the registrant on any matter relating to the registrant's operations, policies, or practices. Based in Deerfield Beach, Florida, MDwerks Inc. (OTC BB: MDWK) -- http://www.mdwerks.com/-- provides healthcare professionals with automated electronic insurance claims management solutions and advance funding of medical claims. MDwerks's balance sheet at June 30, 2009, showed total assets of $5,629,909 and total liabilities of $14,293,458 resulting in a stockholders' deficit of $8,663,549. Going Concern Doubt On April 2, 2009, Sherb & Co., LLP, in Boca Raton, Florida, raised substantial doubt about MDwerks' ability to continue as a going concern after auditing its financial results for the periods ended December 31, 2008, and 2007. The auditors pointed that the Company has suffered recurring losses from operations; the Company has a stockholders' deficiency of $6,138,432 and a working capital deficiency of $1,504,676 at March 31, 2009. MERIDIAN RESOURCE: Forbearance Pact Expires October 14 ------------------------------------------------------ The Meridian Resource Corporation and certain of its subsidiaries entered into the First Amendment to Forbearance and Amendment Agreement, dated September 30, 2009, and the Second Amendment to Forbearance and Amendment Agreement, dated October 2, 2009 with Fortis Capital Corp., as administrative agent, and the other lenders and agents party to the Company's Amended and Restated Credit Agreement, dated as of December 23, 2004, as amended by the First Amendment to Credit Agreement dated as of February 25, 2008, and further amended by the Second Amendment to Credit Agreement dated as of December 19, 2008. The First Forbearance Amendment extended from September 30, 2009 to October 2, 2009, and the Second Forbearance Amendment further extended to October 7, 2009, the date by which the Fortis Forbearance Agreement will terminate if, by such date, the Company has not entered into a Transaction Agreement. Subsequently, the Lenders have agreed to further extend such date of termination to October 14, 2009. The Fortis Forbearance Agreement will terminate if, by such date, the Company has not entered into (a) a merger agreement pursuant to which it will merge with or into or be acquired by or transfer all or substantially all of its assets to another person; (b) a capital infusion agreement pursuant to which one or more persons will contribute subordinated debt or equity capital to the Company in an amount sufficient to enable it to pay to the Lenders an amount equal to 100% of its borrowing base deficiency; or (c) a purchase and sale agreement pursuant to which the Company agrees to sell one or more oil and gas properties for net proceeds sufficient to enable it to pay to the Lenders an amount equal to 100% of its borrowing base deficiency, plus any incremental borrowing base deficiency resulting from such sales. Concurrently with the execution of the Fortis Forbearance Agreement, the Company entered into (a) a Forbearance Agreement with Fortis Capital Corp. and Fortis Energy Marketing & Trading GP, (b) a Forbearance and Amendment Agreement with The CIT Group/Equipment Financing, Inc. and (c) a Forbearance and Amendment Agreement with Orion Drilling Company, LLC. The termination of the forbearance period under the Fortis Forbearance Agreement will also result in the termination of the forbearance periods under each of the Hedge Forbearance Agreement, the CIT Forbearance Agreement and the Orion Forbearance Agreement. The Company has said it is unlikely that, by the October 14 expiration of the forbearance periods, it will be able to enter into a Transaction Agreement or that it will otherwise be able to satisfy its obligations under the agreements to which the forbearance agreements relate, nor can it give any assurance that Lenders will grant it any further extensions under the Fortis Forbearance Agreement. About Meridian Resource The Meridian Resource Corporation, incorporated in 1990, is an independent oil and natural gas company. The Company explores for, acquires and develops oil and natural gas properties. As of December 31, 2008, it had proved reserves of 80 billion cubic feet (Bcfe). Sixty-three percent of its proved reserves were natural gas and approximately 64% were classified as proved developed. It owns interests in 19 fields and 100 producing wells, and operated approximately 96% of its total production during the year ended December 31, 2008. The Company's wholly owned subsidiary, TMR Drilling Corporation (TMRD), owns a rig which is used primarily to drill wells operated by the Company. At June 30, 2009, the Company's balance sheet showed total assets of $207.77 million, total liabilities of $152.61 million and stockholders' equity of $55.16 million. MERRILL LYNCH: To Surrender Docs on BofA Acquisition Advice ----------------------------------------------------------- Bank of America will turn over to regulators a substantial number of emails, memos, and other documents discussing the legal advice it received on its purchase of Merrill Lynch, to help settle various investigations in its acquisition of Merrill Lynch, The Wall Street Journal reports, citing people familiar with the matter. Mark Calvey at San Francisco Business Times relates that BofA had been resisting giving the documents to regulators, citing attorney-client privilege covered in the contents of the documents. BofA CEO Ken Lewis and other executives have told investigators that they depended on their attorneys' advice in deciding what disclosures to make to shareholders as they prepared to vote on the Merrill acquisition, Business Times says. 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-MAYER: Bank Debt Trades at 43.2% Off -------------------------------------------------- Participations in a syndicated loan under which Metro-Goldwyn- Mayer, Inc., is a borrower traded in the secondary market at 56.80 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.80 percentage points from the previous week, The Journal relates. The loan matures April 8, 2012. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt is not rated by either Moody's or Standard & Poor's. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Metro-Goldwyn-Mayer, Inc., is an independent, privately held motion picture, television, home video, and theatrical production and distribution company. The Company owns the world's largest library of modern films, comprising approximately 4,000 titles, and over 10,400 episodes of television programming. MGM is owned by an investor consortium, comprised of Providence Equity Partners, TPG Capital, Sony Corporation of America, Comcast Corporation, DLJ Merchant Banking Partners and Quadrangle Group. The Troubled Company Reporter said 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. METROPCS WIRELESS: Bank Debt Trades at 4.53% Off ------------------------------------------------ Participations in a syndicated loan under which MetroPCS Communications, Inc., is a borrower traded in the secondary market at 95.47 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.50 percentage points from the previous week, The Journal relates. The loan matures on Oct. 11, 2013. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. MetroPCS Communications, Inc., is a wireless communications provider that offers wireless broadband mobile services under the MetroPCS brand in selected metropolitan areas in the United States over its own licensed networks or networks of entities, in which the Company holds a substantial non-controlling ownership interest. The Company provides an array of wireless communications services to its subscribers on a no long-term contract, paid-in-advance, flat-rate, unlimited usage basis. As of Dec. 31, 2008, it had approximately 5.4 million subscribers in eight states. MetroPCs carries 'B' issuer credit ratings from Standard & Poor's. MICHAELS STORES: Bank Debt Trades at 12% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Michaels Stores, Inc., is a borrower traded in the secondary market at 88.17 cents- on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.01 percentage points from the previous week, The Journal relates. The loan matures on Oct. 31, 2013. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Headquartered in Irving, Texas, Michaels Stores, Inc., is the largest arts and crafts specialty retailer in North America. As of March 9, 2009, the Company operated 1,105 "Michaels" retail stores in the United States and Canada and 161 Aaron Brothers Stores. As of May 2, 2009, Michaels Stores had $1.61 billion in total assets and $4.49 billion in total liabilities. For the quarter ended May 2, 2009, the Company posted a $4 million net income on $852 million in net sales. MORRIS PUBLISHING: Lenders Extend Waiver Until October 16 ---------------------------------------------------------- Morris Publishing Group, LLC, said October 9 that its senior bank group has agreed to extend until October 16, 2009, the waiver of the cross defaults arising from the overdue interest payments on its senior subordinated notes. Morris Publishing previously obtained forbearance until October 16, 2009, with respect to the overdue interest payments from holders of over seventy-five percent of the senior subordinated notes. Morris Publishing Group, LLC -- http://morris.com/-- is a privately held media company based in Augusta, Ga. Morris Publishing currently owns and operates 13 daily newspapers as well as nondaily newspapers, city magazines and free community publications in the Southeast, Midwest, Southwest and Alaska. As of June 30, 2009, Morris Publishing had $167,632,000 in total assets and $475,434,000 in total liabilities. MSGI SECURITY: Delays Annual Report for Year Ended June 30 ---------------------------------------------------------- MSGI Security Solutions, Inc., has yet to file its annual report on Form 10-K for the period ending June 30, 2009. MSGI Security Solutions explained the compilation, dissemination and review of the information required to be presented in the Form 10-K could not be completed by September 28, 2009, without undue hardship and expense to the Company. MSGI Security Solutions said its Annual Report on Form 10-K will be filed as soon as practicable, and in no event later than the 15th calendar day following the prescribed due date. For the nine months ended March 31, 2009, the Company posted a net loss of $7,020,089 from a net loss of $16,116,338 for the same period a year ago. For the three months ended March 31, 2009, the Company posted a net loss of $1,506,275 from a net loss of $3,988,378 for the same period a year ago. At March 31, 2009, the Company had $2,646,828 in total assets against $10,804,893 in total current liabilities and $4,007,766 in total long-term liabilities, resulting in $12,165,831 in stockholders' deficit. The Company currently has limited capital resources, has incurred significant historical losses and negative cash flows from operations and has limited current period revenues. At March 31, 2009, the Company had roughly $964 in cash and no accounts receivable and a working capital deficit of $10.8 million. The Company believes that funds on hand combined with funds that will be available from its various operations will not be adequate to finance its operations and capital expenditure requirements and enable the Company to meet its financial obligations and payments under its convertible notes and promissory notes for the next 12 months. Certain promissory notes in the amount of $1,900,000 are due March 31, 2009, one promissory note in the amount of $960,000 was due on February 28, 2009, and others of $250,000 are due on June 17, 2009, as well as certain convertible notes in the amount of $1,000,000 are due December 13, 2009. Further, there is uncertainty as to timing, volume and profitability of transactions that may arise from the Company's relationship with Hyundai, Apro and others. Further, there can be no assurance as to the timing of when or if the Company will receive amounts due to it for products shipped to customers prior to June 30, 2008, which transactions have not yet been recognized as revenue. There are no assurances that any further capital raising transactions will be consummated. Although certain transactions have been successfully closed, failure of the Company's operations to generate sufficient future cash flow and failure to consummate the Company's strategic transactions or raise additional financing could have a material adverse effect on the Company's ability to continue as a going concern and to achieve its business objectives. These conditions raise substantial doubt about the Company's ability to continue as a going concern. About MSGI Security MSGI Security Solutions Inc. (Other OTC: MSGI) -- http://www.msgisecurity.com/-- provides of proprietary security products and services to commercial and governmental organizations worldwide. MSGI is developing a combination of innovative emerging businesses that leverage information and technology with a focus on encryption technologies for actionable surveillance and intelligence monitoring. The company is headquartered in New York City where it serves the needs of counter-terrorism, public safety, and law enforcement in the United States, Europe, the Middle East and Asia. MT CARMEL MISSIONARY: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Mt Carmel Missionary Baptist Church 2575 Vine Street Denver, CO 80205 Bankruptcy Case No.: 09-31178 Chapter 11 Petition Date: October 7, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Sidney B. Brooks Debtor's Counsel: John A. Meininger, Esq. 3773 Cherry Creek Drive North, Suite 575 Denver, CO 80209 Tel: (303) 228-3703 Email: JohnMeininger@hotmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 According to the schedules, the Company has assets of at least $1,214,545, and total debts of $939,483. A list of the Company's 5 largest unsecured creditors is available for free at: http://bankrupt.com/misc/cob09-31178.pdf The petition was signed by Jimmy McGee, pastor of the Company. NCI BUILDING: Extends Exchange Offer to October 19 -------------------------------------------------- NCI Building Systems, Inc., on October 8, 2009, extended its exchange offer to retire all of its existing 2.125% Convertible Senior Subordinated Notes due 2024. The Exchange Offer, previously scheduled to expire at 11:59 p.m., New York City time on October 7, will now expire at 11:59 p.m., New York City time on October 19, unless further extended or amended. As of 10:00 p.m., New York City time on October 7, 2009, holders of roughly $179.8 million -- roughly 99.9% -- of the aggregate principal amount of the Convertible Notes outstanding have delivered valid tenders pursuant to the Exchange Offer. The Company also announced that the voting deadline for the concurrent solicitation of acceptances of the prepackaged plan will also expire at 11:59p.m., New York City time on Monday, October 19, 2009. NCI also reported that as of October 8, it has received consents from lenders holding over two-thirds of its senior secured debt for the refinancing of its existing credit facility, assuming the amendments described below. The refinancing calls for the repayment of roughly $143 million and a modification of the terms and maturity of the remaining $150 million of debt. In connection with obtaining lock-up agreements with certain of the Company's term loan lenders, the Company will, if approved by 2/3 of the noteholders that are party to a prior lock-up agreement, modify the proposed terms of such term loan refinancing, to include, among other things, an increase of 1% in the amended interest rate; payment of the 2% consent fee on the full current outstanding balance of the term loan (rather than only on the remaining portion) to lenders that execute the restated credit agreement prior to the voting deadline; and certain additional provisions for principal amortization in 2010. On October 9, NCI said it has received approvals from over two- thirds of the noteholders that are party to a prior lock-up agreement to modify the proposed terms of the refinancing of its existing credit facility. "We have made great progress toward the completion of our comprehensive refinancing," said Norman C. Chambers, Chairman, President and Chief Executive Officer, on Friday. "We appreciate the cooperation we have received from our convertible noteholders and the vast majority of our bank lenders, as well as their recognition of our strong market position and our ability to benefit from improved business conditions over the next several years." "We are working diligently to obtain consent agreements from all of our bank lenders, which is a condition of the $250 million equity investment from CD&R," Mr. Chambers noted. "Assuming all of our lenders agree, we will be in position to close on the investment agreement with CD&R as early as October 20, 2009." Greenhill & Co., LLC, is acting as Dealer-Manager in connection with the Exchange Offer. Holders of the Convertible Notes may contact Greenhill with any questions they may have about the Exchange Offer. About NCI Building NCI Building Systems, Inc. (NYSE: NCS) is one of North America's largest integrated manufacturers of metal products for the nonresidential building industry. NCI is comprised of a family of companies operating manufacturing facilities across the United States and Mexico, with additional sales and distribution offices throughout the United States and Canada. NCI is proposing a financial restructuring to address an immediate need for liquidity in light of a potentially imminent default under, and acceleration of, its existing credit facility, which may occur as early as November 6, 2009 (which may, in turn, also lead to a default under, and acceleration of, its other indebtedness, including the $180.0 million in principal amount of 2.125% Convertible Senior Subordinated Notes due 2024, and the high likelihood that it will be required to repurchase the convertible notes on November 15, 2009, the first scheduled mandatory repurchase date under the convertible notes indenture A copy of NCI's Preliminary Prospectus/Disclosure Statement is available at no charge at http://ResearchArchives.com/t/s?4626 As of August 2, 2009, the Company had $627.63 million in total assets; and $624.23 million in total current liabilities and $21.62 million in total long-term liabilities. NCI BUILDING: Finalizes Terms of New $125 Million ABL Facility -------------------------------------------------------------- NCI Building Systems, Inc., reports that, in connection with, and subject to the terms and conditions of, its Investment Agreement, dated as of August 14, 2009, with Clayton, Dubilier & Rice Fund VIII, L.P., it has finalized with its lenders the form of agreement for a $125 million asset-based revolving credit facility with an additional $50 million accordion feature. The ABL Facility, which is a condition of the equity investment contemplated by the Investment Agreement, has a maturity of the earlier of 5 years or the scheduled maturity of the Company's term loan after giving effect to the refinancing of its existing credit facility, and includes borrowing capacity of up to $25 million for letters of credit and of up to $10 million for swingline borrowings. A form of the agreement relating to the ABL Facility will be filed as an exhibit to the Company's registration statement on Form S-4 filed in connection with the exchange offer by the Company to acquire all of the Company's outstanding 2.125% Convertible Senior Subordinated Notes due 2024, issued under that indenture, dated as of November 16, 2004, between the Company and The Bank of New York, as trustee, in exchange for cash and shares of Company common stock. While the Form of ABL Agreement has been agreed to in principle with the prospective lenders, because no loan commitment letter has been received by the Company from any prospective lender, the terms and conditions of the final agreement that will be executed in connection with the ABL Facility may change. There can be no assurances as to when, or if, the Company will be successful with respect to the consummation of the equity investment or any of the conditions thereto, including the ABL Facility, and no assurances as to the exact terms and conditions of the ABL Facility. The prospective lenders have indicated their willingness to enter into the Form of ABL Agreement in connection with the consummation of the equity investment contemplated by the Investment Agreement and have confirmed participation for the full availability under the ABL Facility. (A) Availability The Form of ABL Agreement provides for an asset-based revolving credit facility that would allow aggregate maximum borrowings by the Company of up to $125 million. As set forth in the Form of ABL Agreement, extensions of credit under the ABL Facility would be limited by a borrowing base calculated periodically based on specified percentages of the value of qualified cash, eligible inventory and eligible accounts receivable, less certain reserves and subject to certain other adjustments. Based on its discussions with prospective lenders, the Company expects that because of borrowing base constraints, initial availability under the ABL Facility, if it were consummated in the Form of ABL Agreement, will be substantially less than the $125 million commitment described above and may be as low as $45 million. Availability will be reduced by issuance of letters of credit as well as by borrowings. (B) Borrowers NCI's domestic subsidiaries, NCI Group Inc. and Robertson-Ceco II Corporation, would be borrowers under the ABL Facility as set forth in the Form of ABL Agreement. The Form of ABL Agreement does not contemplate that any other subsidiary of NCI will be a borrower at the closing of the ABL Facility. The borrowers under the ABL Facility, as set forth in the Form of ABL Agreement, would be jointly and severally liable for all loans outstanding thereunder. (C) Maturity The loans under the ABL Facility, as set forth in the Form of ABL Agreement, would mature on the earlier of the fifth anniversary of the closing date thereof and the scheduled maturity of the Company's term loan after giving effect to the refinancing of its existing credit facility. (D) Guarantees; Security The obligations of the borrowers under the ABL Facility, as set forth in the Form of ABL Agreement, would be guaranteed by us and each of our material domestic subsidiaries that is not a borrower under the ABL Facility. In addition, the ABL Facility, as set forth in the Form of ABL Agreement, and the guarantees thereof would be secured by a first priority lien on accounts receivable, inventory and associated intangibles of NCI, the borrowers and the guarantors, subject to certain exceptions, and a second priority lien on the assets securing the term loans under the amended credit agreement on a first-lien basis. (E) Pricing As set forth in the Form of ABL Agreement, the interest rates per annum applicable to borrowings under the ABL Facility would be based on a fluctuating rate of interest measured by reference to either (1) an adjusted London inter-bank offered rate or "LIBOR" or (2) an alternate base rate, in each case, plus a borrowing margin that will vary depending on the quarterly average excess availability under such facility. (F) Fees As set forth in the Form of ABL Agreement, the borrowers would pay (1) fees on the unused commitments of the lenders under the ABL Facility ranging from 0.75% to 1.00%, depending on the proportion of the loans that have been drawn under the ABL Facility and (2) other customary fees in respect of the ABL Facility. (G) Covenants The ABL Facility, as set forth in Form of ABL Agreement, would include a number of covenants that, among other things, would limit or restrict the ability of NCI, the borrowers and the other subsidiaries of NCI to dispose of assets, incur additional indebtedness, incur guarantee obligations, engage in sale and leaseback transactions, prepay other indebtedness, modify organizational documents and certain other agreements, create restrictions affecting subsidiaries, make dividends and other restricted payments, create liens, make investments, make acquisitions, engage in mergers, change the nature of their business and engage in certain transactions with affiliates. In addition, under the Form of ABL Agreement, the ABL Facility would include a minimum fixed charge coverage ratio of one to one, which would apply if the borrowers fail to maintain a specified minimum level of borrowing capacity. The borrowing capacity at which the financial covenant would apply is lower in the Form of ABL Agreement than in the ABL Term Sheet. (H) Events of Default The ABL Facility, as set forth in the Form of ABL Agreement, would contain customary events of default, including non-payment of principal, interest or fees, violation of covenants, material inaccuracy of representations or warranties, cross default and cross acceleration to certain other material indebtedness (including the term loan financing), certain bankruptcy events, certain ERISA events, material invalidity of guarantees, security interests or financing agreements, material suspension or discontinuation of business, certain material governmental orders, material judgments and change of control. (I) Incremental Commitments The Form of ABL Agreement also would provide that the borrowers have the right at any time to request up to $50 million of incremental commitments in the aggregate under one or more incremental term loan facilities. The lenders under the Form of ABL Agreement would not be under any obligation to provide any such incremental commitments, and any such addition of or increase in commitments would be subject to customary conditions precedent. The Company's ability to obtain extensions of credit under these incremental commitments would be subject to the same conditions as extensions of credit would be under the Form of ABL Agreement. About NCI Building NCI Building Systems, Inc. (NYSE: NCS) is one of North America's largest integrated manufacturers of metal products for the nonresidential building industry. NCI is comprised of a family of companies operating manufacturing facilities across the United States and Mexico, with additional sales and distribution offices throughout the United States and Canada. NCI is proposing a financial restructuring to address an immediate need for liquidity in light of a potentially imminent default under, and acceleration of, its existing credit facility, which may occur as early as November 6, 2009 (which may, in turn, also lead to a default under, and acceleration of, its other indebtedness, including the $180.0 million in principal amount of 2.125% Convertible Senior Subordinated Notes due 2024, and the high likelihood that it will be required to repurchase the convertible notes on November 15, 2009, the first scheduled mandatory repurchase date under the convertible notes indenture A copy of NCI's Preliminary Prospectus/Disclosure Statement is available at no charge at http://ResearchArchives.com/t/s?4626 As of August 2, 2009, the Company had $627.63 million in total assets; and $624.23 million in total current liabilities and $21.62 million in total long-term liabilities. NEXT INC: Forbearance Pact Extended Until Oct. 30 ------------------------------------------------- Next, Inc., on September 30, 2009, entered into a First Agreed Extension to Second Amendment to Forbearance Agreement with the guarantors named therein and National City Bank. The Extension Agreement amends the Forbearance Agreement dated effective as of January 31, 2009, as amended by the First Amendment to Forbearance Agreement dated effective as of May 1, 2009 and as further amended by the Second Amendment to Forbearance Agreement dated effective as of July 1, 2009. Under the terms of the Extension Agreement, the maturity date of the replacement promissory note evidencing the Company's previously disclosed line of credit facility with the Bank was extended to October 30, 2009. The Extension Agreement also provides that the interest rate on the daily unpaid principal balance of the Note will accrue at 10% per annum above the prime rate until the Maturity Date, after which time the any unpaid principal will accrue interest at a rate of 12% per annum above the prime rate. In addition, the Extension Agreement revises the definition of "Borrowing Base" to increase the amount of the line of credit available from inventory collateral to $2,500,000, which had previously been reduced to $1,500,000. The Extension Agreement was entered to permit further progression of current discussions between the Company and the Bank toward an alternative structuring of the Existing Credit Facility which would enable the Company to continue due diligence with an alternative lender and to pursue strategic business opportunities the Company has with its customers and strategic partners. Next, Inc. (OTC:NXTI) is a sales and marketing organization that designs, develops, markets and distributes licensed and branded imprinted sportswear primarily through key licensing agreements in addition to the Company's own designs. Products are imported, outsourced and embellished in-house via both the screenprint and embroidery processes. Next's products include 200 licenses and agreements to distribute its Cadre Athletic and Campus Traditions USA line for colleges and universities in the United States. It has licensing agreements with Chevrolet, Pontiac, Hummer, Cadillac, Buick, CorvetteC6, Dodge, GMC and Ford. The Company's designs include American Biker, American Wildlife, Ragtops Sportswear, Campus Traditions USA and Cadre Athletic. It also has licensing and distribution agreements with GRITS and Chuck E. Cheese. Next have two wholly owned subsidiaries: Next Marketing, Inc., and Choice International, Inc. At May 31, 2009, the Company's balance sheet showed total assets of $10,109,152, total liabilities of $9,103,197 and stockholders' equity of $1,005,955. NORTEL NETWORKS: Proposes to Hold Ciena-Led Auction for Ethernet ---------------------------------------------------------------- BankruptcyData reports that Nortel Networks filed a motion with the U.S. Bankruptcy Court seeking approval to enter into a stalking horse agreement with Ciena Corporation for the sale of certain assets of Nortel's Metro Ethernet Networks business. As stalkhing horse bidder, Ciena would be entitled to bid protections, including a break-up fee. Ciena(R) on October 7 announced that it has entered into agreements with Nortel to purchase substantially all of the optical networking and carrier Ethernet assets of Nortel's Metro Ethernet Networks (MEN) business for $390 million in cash and 10 million shares of Ciena common stock. The product and technology assets to be acquired include Nortel's long-haul optical transport portfolio; metro optical Ethernet switching and transport solutions; Ethernet transport, aggregation and switching technology; multiservice SONET/SDH product families; and network management software products. The proposed transaction would strengthen Ciena's global presence and bring together complementary technologies in switching and transport that will offer customers a practical path for transitioning to automated, optical Ethernet-based networking. Based on the closing price of Ciena's stock on Tuesday, October 6, 2009, the aggregate value of the shares to be issued by Ciena is approximately $131 million, bringing the value of the consideration to approximately $521 million. The assets to be acquired generated approximately $1.36 billion in revenue for Nortel in 2008 and $556 million (unaudited) in the first six months of 2009. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated, have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTH END PROPERTIES: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: North End Properties, LLC aka Northend Properties, LLC PO Box 96 Lexington, NC 27292 Bankruptcy Case No.: 09-52066 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Middle District of North Carolina (Winston-Salem) Judge: Bankruptcy Judge Thomas W. Waldrep, Jr. Debtor's Counsel: R. Bradford Leggett, Esq. Suite 700, 380 Knollwood St. P.O. Box 5129 Winston-Salem, NC 27113-5129 Tel: (336) 722-2300 Fax: (336) 722-8720 Email: rbleggett@allmanspry.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 $3,056,028, and total debts of $2,748,602. The Company says it does not have unsecured creditors who are non insiders when they filed their petition. The petition was signed by Robbie M. Watson, managing member of the Company. NOVA CHEMICALS: S&P Assigns 'B-' Rating on US$500 Mil. Bonds ------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'B-' debt rating to commodity chemical producer, NOVA Chemicals Corp.'s proposed US$500 million senior unsecured bonds. S&P is also assigning a recovery rating of '4' to the debt, indicating S&P's expectations of average (30%-50%) in the event of default. S&P expects the proceeds to be used to repay debt outstanding and for general corporate purposes. All the ratings on the company are on CreditWatch with positive implications, where they were placed Oct. 7, 2009. "As S&P previously stated, there is a high likelihood that S&P could raise the ratings by one or two notches if NOVA Chemicals can refinance upcoming debt maturities or if there is evidence of additional financial support from parent International Petroleum Investment Co.," said Standard & Poor's credit analyst Jatinder Mall. The ratings on NOVA Chemicals reflect what S&P view as the company's highly leveraged capital structure, upcoming large debt maturity, exposure to volatile commodity chemicals, and weak styrene business. These weaknesses are counterbalanced in S&P's opinion by NOVA Chemicals' cost-competitive olefins/polyolefins business, which generates good cash flow through the cycle; and the one-notch increase in the corporate credit rating on the company based on parental support from International Petroleum Investment Co. (AA/Stable/A-1+). Ratings List NOVA Chemicals Corp. Corporate credit rating B-/Watch Pos/-- Rating Assigned Senior unsecured debt B-/Watch Pos Recovery rating 4 NOVADEL PHARMA: Receives $111,665 From Sale of Shares to Seaside ---------------------------------------------------------------- NovaDel Pharma Inc., on September 25, 2009, had its sixth closing of an offering pursuant to which Seaside 88 LP purchased 500,000 shares of the Company's Common Stock at a price per share of $0.23 having an aggregate value of roughly $116,665, and, the Company received net proceeds of roughly $111,665, after deducting commissions and $1,500 in non-accountable expenses, pursuant to the terms of a Common Stock Purchase Agreement. On June 30, 2009, NovaDel Pharma entered into the Common Stock Purchase Agreement with Seaside 88, whereby the Company agreed to issue and sell to Seaside 500,000 shares of the Company's common stock, $0.001 par value per share, once every two weeks for 26 closings over a 52-week period. Pursuant to the terms of the Agreement, at the initial closing, the offering price of the Common Stock equalled 87% of the volume weighted average trading price of the Common Stock during the trading day immediately prior to the initial closing date. At each subsequent closing, on each 14th day thereafter, the offering price of the Company's Common Stock will equal 87% of the volume weighted average trading price of the Common Stock for the 10-day trading period immediately preceding each subsequent closing date. If, with respect to any subsequent closing, the volume weighted average trading price of the Company's Common Stock for the three trading days immediately prior to such closing is below $0.25 per share, then the particular subsequent closing will not occur and the aggregate number of Shares to be purchased shall be reduced by 500,000 shares of Common Stock. About Novadel Pharma Flemington, New Jersey-based NovaDel Pharma Inc. (NYSE AMEX: NVD) -- http://www.novadel.com/-- is a specialty pharmaceutical company developing oral spray formulations for a broad range of marketed drugs. The Company's proprietary technology offers, in comparison to conventional oral dosage forms, the potential for faster absorption of drugs into the bloodstream leading to quicker onset of therapeutic effects and possibly reduced first pass liver metabolism, which may result in lower doses. Oral sprays eliminate the requirement for water or the need to swallow, potentially improving patient convenience and adherence. As of June 30, 2009, the Company had $2,358,000 in total assets and $9,146,000 in total liabilities, resulting in $6,788,000 in stockholders' deficit. The Company filed with the Securities and Exchange Commission its Annual Report for the year ended December 31, 2008, which included an audit opinion with a "going concern" explanatory paragraph. The going-concern explanatory paragraph from NovaDel's independent registered public accounting firm -- J.H. Cohn LLP in Roseland, New Jersey -- expressed substantial doubt, based upon current financial resources, as to whether NovaDel can continue to meet its obligations beyond 2009 without access to additional working capital. NTK HOLDINGS: $250MM ABL Facility Satisfies Forbearance Deal ------------------------------------------------------------ Nortek Inc., certain of its subsidiaries and the lenders under the Nortek asset-based line of credit, dated as of May 20, 2008, as amended, on September 3, 2009, entered into a forbearance agreement, pursuant to which the Lenders agreed to forbear from exercising rights and remedies against Nortek that may exist as a result of Nortek's failure to make an interest payment on its 8-1/2% Senior Subordinated Notes due 2014. On September 30, 2009, Nortek, certain of its subsidiaries and the Lenders entered into a letter agreement amending the Forbearance Agreement to extend from September 30, to October 2, 2009, the time by which Nortek is required to have entered into arrangements in respect of postpetition financing or use of cash collateral and emergence financing arrangements. A full-text copy of the Initial Extension Letter is available at no charge at http://ResearchArchives.com/t/s?46d1 On October 2, 2009, Nortek, certain of its subsidiaries and the Lenders entered into a letter agreement further amending the Forbearance Agreement to extend from October 2 to October 9 the time by which Nortek is required to have entered into arrangements in respect of postpetition financing or use of cash collateral and emergence financing arrangements. A full-text copy of the Subsequent Extension Letter is available at no charge at http://ResearchArchives.com/t/s?46d2 On October 9, 2009, Nortek said it has secured a commitment for a $250-million asset-based revolving credit facility in conjunction with its prepackaged plan, which includes an undertaking to use commercially reasonable efforts to form a syndicate of lenders to increase the facility to $300 million. As reported by the Troubled Company Reporter, the credit facility, which will be available upon consummation of the Prepackaged Plan, will be provided by a group of lenders including Bank of America, N.A.; GE Capital, Restructuring Finance; Wells Fargo Foothill LLC; Wells Fargo Foothill Canada ULC; and PNC Bank National Association. Nortek said proceeds from the credit facility will be used primarily to replace the existing facility, and for payment of certain fees and expenses in connection with the transaction, working capital, and other general corporate purposes. NTK Holdings and its affiliates on September 18, 2009, commenced a solicitation of votes on joint chapter 11 plans of reorganization from the Companies' creditors. A full-text copy of the Disclosure Statement is available at no charge at http://ResearchArchives.com/t/s?4526 The Company had funded debt at July 4, 2009 of $2.27 billion, consisting of: (in millions) ------------- NTK Holdings' 10 3/4% Senior Discount Notes due 2014, net of unamortized discount of approximately $6.9 million $396.1 NTK Holdings' senior unsecured loan facility due 2014, including approximately $69.9 million of debt accretion related to the PIK option 271.7 Nortek's 10% Senior Secured Notes due 2013, net of unamortized discount of $6.5 million 743.5 Nortek's 8 1/2% Senior Subordinated Notes due 2014 625.0 Nortek's ABL Facility 165.0 Nortek's long-term notes, mortgage notes and other indebtedness 36.9 Nortek's short-term bank obligations 18.4 Nortek's 9 7/8% Senior Subordinated Notes due 2011, including unamortized premium 10.0 --------- Consolidated debt at July 4, 2009 $2,266.6 About NTK Holdings NTK Holdings Inc., the parent company of Nortek Holdings and Nortek Inc., is a diversified global manufacturer of branded residential and commercial ventilation, HVAC and home technology convenience and security products. NTK Holdings and Nortek offer a broad array of products including range hoods, bath fans, indoor air quality systems, medicine cabinets and central vacuums, heating and air conditioning systems, and home technology offerings, including audio, video, access control, security and other products. As reported by the TCR on Sept. 4, 2009, NTK Holdings, Inc., and Nortek, Inc. entered into a restructuring and lockup agreement with bondholders to effectuate a comprehensive restructuring of the Company's debt under Chapter 11. When concluded, the Agreement will eliminate approximately $1.3 billion in total indebtednes by, among other things, exchanging debt to bondholders for equity in the Company. The Company will file its bankruptcy petition, together with a pre-packaged Chapter 11 plan following the conclusion of the solicitation period. The Company has tapped Blackstone Group and Weil, Gotshal & Manges to aid in its restructuring effort. NTK Holdings and its units have assets of $1,655,200,000, against debts of $2,778,100,000 as of July 4, 2009. OMNIRELIANT HOLDINGS: KBL LLP Raises Going Concern Doubt -------------------------------------------------------- KBL LLP, in Tampa, Florida, expressed substantial doubt about OmniReliant Holdings, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended June 30, 2009. The auditing firm reported that the Company has incurred significant recurring losses from operations since inception and is dependent on outside sources of financing for continuation of its operations. OmniReliant Holdings, Inc. reported a net loss of $2,625,964 on product sales of $9,552,892 for the year ended June 30, 2009, compared with a net loss of $15,403,790 on products sales of $420,813 for the year ended June 30, 2008. The Company attributed the increase in product sales to its maturation in identifying new retail products to sell through its media distribution networks. Loss from operations increased by $1,744,895 (or 76%) to $4,029,680 for the year ended June 30, 2009, compared to loss from operations of $2,284,785 for the year ended June 30, 2008. Advertising and marketing expense increased to $5,050,558 for the year ended June 30, 2009, as compared to $283,526 for the year ended June 30, 2008. Commencing in the current fiscal year the Company began engaging for the production of infomercials related to its Retail Products Business, which it says is expected to be an increasing activity and cost. At June 30, 2009, the Company's consolidated balance sheet showed $15,086,198 in total assets, $9,029,197 in total liabilities, $197,114 in minority interest, and $45,969,634 in redeemable preferred stock, resulting in a $40,109,747 stockholders' deficit. Full-text copies of the Company's consolidated financial statements for the year ended June 30, 2009, are available for free at http://researcharchives.com/t/s?46c0 Cash Flows From Operating Activities The Company used cash of $5,859,217 and $1,032,937 for operating activities during the years ended June 30, 2009, and 2008, respectively. Cash and cash equivalents amounted to $2,005,702 as of June 30, 2009, compared to $4,435,814 at June 30, 2008. The Company has working capital of $454,249 as of June 30, 2009, and a working capital deficiency of $1,685,811 at June 30, 2008. Based in Clearwater, Florida, OmniReliant Holdings, Inc. (OTC Bulletin Board: ORHI) -- http://www.omnireliant.com/-- engages in the creation, design, distribution, and sale of various product lines, both proprietary and licensed. The Company specializes in celebrity and lifestyle brands including beauty, fitness, spa, fragrance and home. The Company has a portfolio of companies that utilizes direct response to build brands. Products are sold through domestic and international direct marketing channels, web and licensing agreements. Products are also sold through web sites operated by the live shopping networks that agree to carry the Company's products. ONE TWENTY NINE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: One Twenty Nine, LLC 5801 South Dixie Highway, Suite B West Palm Beach, FL 33405 Bankruptcy Case No.: 09-31688 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtor's Counsel: Michael A. Kaufman, Esq. 1655 Palm Beach Lakes Blvd # 900 West Palm Beach, FL 33401 Tel: (561) 478-2878 Fax: (561) 584-5555 Email: michael@mkaufmanpa.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 $8,686,437, and total debts of $6,601,203. 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/flsb09-31688.pdf The petition was signed by Edward C. Cury. OPEN TEXT: S&P Raises Ratings on Senior Credit Facility From 'BB+' ------------------------------------------------------------------ Standard & Poor's Ratings Services said it raised the issue-level ratings and revised the recovery ratings on Waterloo, Ontario- based enterprise software provider Open Text Corp.'s senior secured credit facility. The ratings on the revolving credit facility and term loan have been raised to 'BBB-' (two notches higher than the corporate credit rating on the company) from 'BB+'. S&P also revised the recovery ratings to '1' from '2'. A '1' recovery rating indicates S&P's expectation for very high (90%-100%) recovery in the event of a payment default. At the same time, S&P affirmed the 'BB' long-term corporate credit rating on the company. The outlook is stable. At June 30, Open Text had US$310 million of reported debt outstanding. "The revision to the recovery ratings, which drove the upgrade of the issue-level debt, was the result of two things," said Standard & Poor's credit analyst Madhav Hari. "One reason was S&P's reassessment of the company's capital structure in light of the growth in the company's EBITDA base by about US$20 million since S&P's last review with no corresponding increase in debt, and the other is S&P's belief that recent acquisitions will be accretive to medium-term EBITDA," Mr. Hari added. The ratings on Open Text reflect what S&P view as the combination of a "weak" business risk profile and a "significant" financial risk profile. In S&P's opinion, the ratings are constrained by the highly competitive and consolidating technology marketplace in which Open Text operates, characterized by large, more-integrated suppliers; the prospect of moderating organic growth, owing to what S&P considers weakened economic conditions; and an aggressive financial policy given the company's acquisitive growth strategy. S&P believes these factors are partially offset by the company's sizable market position within a niche segment of the broader software industry; ongoing demand for compliance-driven content management solutions; Open Text's improving scale; a large base of recurring software maintenance revenue; reasonable customer and geographic diversity; and a history of generating healthy free cash flow. The stable outlook reflects what Standard & Poor's views as steady near-term demand for ECM software, improved scale, and traction with key channel partners such as SAP, which should help sustain the company's profitability and cash flow. The ratings also reflect S&P's assumption that Open Text will remain acquisitive in the medium term and that adjusted debt leverage will not materially exceed 3x. While less likely in the near term, given the economic slowdown and presumably volatile demand for enterprise software, S&P could consider revising the outlook to positive (or upgrading the company) in the medium term as Open Text's market share and scale of operations improve and the company demonstrates that it can manage its growth aspirations by keeping debt leverage below 3x. Alternatively, Should Open Text's operating performance weaken materially from S&P's expected levels, or if it loses significant market share, resulting in a deterioration of profitability and adjusted debt leverage weakening to the high 3x, S&P could revise the outlook to negative or lower the rating. OSI RESTAURANT: Bank Debt Trades at 15.4% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which OSI Restaurant Partners, Inc., is a borrower traded in the secondary market at 84.60 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.40 percentage points from the previous week, The Journal relates. The loan matures May 9, 2014. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. OSI Restaurant Partners, Inc., is the #3 operator of casual-dining spots (behind Darden Restaurants and Brinker International), with more than 1,400 locations in the U.S. and 20 other countries. Its flagship Outback Steakhouse chain boasts more than 950 locations that serve steak, chicken, and seafood in Australian-themed surroundings. OSI also operates the Carrabba's Italian Grill chain, with about 240 locations. Other concepts include Bonefish Grill, Fleming's Prime Steakhouse, and Cheeseburger In Paradise. Most of the restaurants are company owned. A group led by chairman Chris Sullivan took the company private in 2007. As reported by the Troubled Company Reporter on Feb. 24, 2009, Moody's Investors Service downgraded OSI Restaurant's Probability of Default rating to Ca from Caa1 and lowered the rating on its $550 million 10% senior unsecured notes to C from Caa3. Moody's also placed OSI's Corporate Family and senior secured ratings on review for possible downgrade. The review was prompted by the recent announcement that OSI continues to experience a substantial decline in earnings and store traffic to levels worse than Moody's previously expected. The company also announced that it will likely need to take an impairment charge of between $480 and $540 million for goodwill due to a reduction in its projected results for future periods as a result of poor overall economic conditions. OUTFITTER MANUFACTURING: Case Summary & 20 Largest Unsec Creditors ------------------------------------------------------------------ Debtor: Outfitter Manufacturing, Inc. 4002 North Valley Drive Longmont, CO 80504 Bankruptcy Case No.: 09-31298 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Howard R Tallman Debtor's Counsel: Cynthia T. Kennedy, Esq. 308 1/2 E. Simpson St. Lafayette, CO 80026 Tel: (303) 604-1600 Email: ctk@kandkatlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/cob09-31298.pdf The petition was signed by Brian M. Ward, president of the Company. OXIS INTERNATIONAL: Bristol Forbearance Permits Securities Sale --------------------------------------------------------------- Oxis International, Inc., entered into and closed agreements with several accredited investors to purchase Convertible Debentures and Warrants representing $2.0 million in gross proceeds. On October 1, 2009, Oxis International entered into a financing arrangement with several accredited investors, pursuant to which it sold various securities in consideration of a maximum aggregate purchase price of $2,000,000. In connection with the October 2009 Financing, the Company issued these securities to the October 2009 Investors: * 0% Convertible Debentures in the principal amount of $2,000,000 due 24 months from the date of issuance, convertible into shares of the Company's common stock at a per share conversion price equal to $0.05 per share; * Series A warrant to purchase such number of shares of the Company's common stock equal to 50% of the principal amount invested by each investor resulting in the issuance of Class A Warrants to purchase 20,000,000 shares of common stock of the Company. * Series B warrant to purchase such number of shares of the Company's common stock equal to 50% of the principal amount invested by each investor resulting in the issuance of Class B Warrants to purchase 20,000,000 shares of common stock of the Company. The full principal amount of the Debentures is due upon default under the terms of the Debentures. The Class A Warrants and Class B Warrants are exercisable for up to five years from the date of issue at a per share exercise price equal to $0.0625 and $0.075 for the Class A Warrants and the Class B Warrants, respectively, on a cash or cashless basis. The Company and the October 2009 Investors have agreed to place the proceeds from the October 2009 Financing in escrow. On a monthly basis, the Company and the nominee for the October 2009 Investors will send a joint statement, subject to settlement with existing creditors, to the escrow agent for the release of funds, In connection with the sale of the October 2009 Securities by the Company, the Company and Bristol Investment Fund, Ltd. entered a Standstill and Forbearance Agreement, pursuant to which Bristol agreed to refrain and forbear from exercising certain rights and remedies with respect to (i) certain convertible debentures, issued pursuant to that certain Securities Purchase Agreement, dated October 25, 2006 and (ii) demand notes issued by the Company on October 8, 2008, March 19, 2009, April 7, 2009, April 28, 2009, May 21, 2009 and June 25, 2009x. In connection with the sale of the October 2009 Securities by the Company, the Company and Bristol have also entered into a waiver agreement pursuant to which Bristol waived certain rights with respect to the October 2006 Debentures and Bridge Notes. The conversion price and the exercise price will be subject to full ratchet anti-dilution adjustment in the event that the Company issues, after the closing date, common stock or common stock equivalents at a price per share less than the conversion price associated with the Debentures or the exercise price associated with the Warrants and to other normal and customary anti-dilution adjustment upon certain other events. From October 12 until such time the Debentures are no longer outstanding, if the Company effects a subsequent financing, the October 2009 Investors may elect, in their sole discretion, to exchange all or some of the October 2009 Debentures (but not the Warrants) for any securities or units issued in a subsequent financing on a $1.00 for $1.00 basis or to have any particular provisions of the subsequent financing legal documents apply to the documents utilized for the October 2009 Financing. The Company will determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others, then it shall include the shares of common stock underlying the Securities on such registration statement. The Company will file a proxy or information statement with the Commission no later than 30 days from the Closing Date and use its best efforts to obtain, on or before October 31, 2009, such approvals of the Company's stockholders as may be required to issue all of the shares of common stock issuable upon conversion or exercise of the Debentures and the Warrants. Upon obtaining the Stockholder Approval and complying with the required filing, the Company shall file a certificate of amendment to its certificate of incorporation with the State of Delaware. The October 2009 Investors have contractually agreed to restrict their ability to convert the Debentures and exercise the Warrants and receive shares of our common stock such that the number of shares of the Company common stock held by an October 2009 Investor and its affiliates after such conversion or exercise does not exceed 4.9% of the Company's then issued and outstanding shares of common stock. In discussing the financing and outlook for the Company, Chairman and CEO Tony Cataldo stated, "OXIS has long been known for its unique and patented science. We are now beginning our transition from a company with strong Intellectual Property (IP) to a company with multiple products in selective channels. This new financing from strategic investors, led by Theorem Capital, LLC, will allow us to begin our transition into the consumer products marketplace. Our efforts will be focused on high quality products taking advantage of the IP that Oxis has developed during its 45 year life." About OXIS International OXIS International, Inc. (OXIS:PK) is engaged in the development of neutraceutical products for sale to general consumers. The Company focuses on the research, development and marketing of neutraceutical products in the field of oxidative stress reduction. The Company's products are to reduce the damage from free radicals and reactive oxygen species. Its neutraceutical products include L-Ergothioneine (ERGO) as a component. Its products include approximately 45 research reagents and 26 assays to measure markers of oxidative stress. On October 1, 2008, Bristol Investment Fund, Ltd purchased 2% of the BioCheck shares held by Oxis. The Company developed, commercialized and marketed product line that provides several types of tools for researchers to identify and measure the balance between oxidative, nitrosative, antioxidant and inflammatory biomarkers in biological samples. 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. PAC ORGANIC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: PAC Organic Fruit, LLC 17200 Frenchman Hills Road Quincy, WA 98848 Bankruptcy Case No.: 09-05657 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Eastern District Of Washington (Spokane/Yakima) Judge: Frank L. Kurtz Debtor's Counsel: Timothy J. Carlson, Esq. Carlson Boyd & Bailey PLLC 230 S 2nd St Suite 202 Yakima, WA 98901 Tel: (509) 834-6611 Fax: (509) 834-6610 Email: tcarlson@cbblawfirm.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/waeb09-05657.pdf The petition was signed by Greg Holzman, principal member of the Company. PALMDALE HILLS: Trustee to Release Funds for Property Maintenance ----------------------------------------------------------------- SunCal said in a statement to the City of Oakland officials that "contingent upon the [bankruptcy] court's approval, the trustee has agreed to release funds for property-wide weed abatement, cleaning up wood piles and repairing of perimeter fences. In addition, there would be a team of armed security guards on duty 24 hours per day to help secure the property from trespassers." David Howard at Examiner.com reports that residents were worried on the potential fire hazard posed by the stalled SunCal Oak Knoll redevelopment project. Donald Mitchell, on behalf of Oakland residents living near the site, filed in September a claim for $115 million with the bankruptcy court to get money for fire hazard abatement at the site, and potential damages in the event of a fire. Examiner.com quoted Mr. Mitchell as saying, "SunCal's offer is completely disingenuous, blatantly transparent, and an insult to the community. A year after abandoning their neighbors at Oak Knoll, and refusing to even return phone calls, SunCal's P.R. hacks are working overtime along with Lehman Brothers after we recently proved that Lehman Brothers is, literally, criminally guilty for their abandonment of Oak Knoll. In an attempt to conveniently rekindle an old flame in Oakland, and curry favor with their new neighbors at Alameda Point, SunCal is obviously grasping in order to further their own agenda at the expense of both Oakland and Alameda." According to Examiner.com, SunCal and its new financing partner, DE Shaw, are pushing forward with a ballot initiative in Alameda with regards to the Alameda Point redevelopment project. 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. PAMELA RIDLEY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Pamela Miller Ridley 28860 Selfridge Drive Malibu, CA 90265 Bankruptcy Case No.: 09-23305 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Debtor's Counsel: Kirk A. Laron, Esq. Law Offices of Frazee Laron 123 N Lake Ave Pasadena, CA 91101 Tel: (626) 744-0263 Fax: (626) 744-0548 Email: kirk@frazeelaron.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/cacb09-23305.pdf The petition was signed by Ms. Ridley. PAXTON REALTY: Case Summary & 5 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Paxton Realty L.P. 61 Harrison Avenue, Apt 1R Brooklyn, NY 11211 Bankruptcy Case No.: 09-23872 Chapter 11 Petition Date: October 7, 2009 Court: United States Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Mark A. Frankel, Esq. Backenroth Frankel & Krinsky, LLP 489 Fifth Avenue New York, NY 10017 Tel: (212) 593-1100 Fax: (212) 644-0544 Email: mfrankel@bfklaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of at least $3,141,600, and total debts of $5,050,431. A full-text copy of the Debtor's petition, including a list of its 5 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nysb09-23872.pdf The petition was signed by David Simcha Goldwasser. PHILADELPHIA NEWSPAPERS: Asset Sale to Local Interests Nixed ------------------------------------------------------------ Law360 reports that the judge overseeing the Chapter 11 proceedings of Philadelphia Newspapers LLC has struck down a proposed sale of substantially all the Philadelphia Inquirer publisher's assets to a consortium of local interests, citing objections from the U.S. trustee and a representative from virtually every creditor group, but noted the sale could be approved if amended. As reported by the TCR on October 13, 2009, U.S. Bankruptcy Judge Stephen Raslavich ruled in a 26-page opinion that Philadelphia Newspapers LLC must allow secured lenders to use money owed to them as part of their bid for the Company's assets. Court documents say that the lenders could make a credit bid in the auction of the Philadelphia Newspapers' dailies, using some of the $300 million owed to senior lenders. Because the proposed stalking horse bidder Bruce E. Toll is an insider, Judge Raslavich also ruled that the buyer isn't entitled to a break-up fee if it loses at the auction. Judge Raslavich allowed Philadelphia Newspapers to submit new bid procedures that would allow for credit bidding and would delete a break-up fee for Mr. Toll. The bankruptcy judge didn't rule on the auction procedures following a hearing on October 1 due to the parties' disputes as to credit bidding. Philadelphia Newspapers opposed a credit bid by lenders owed more than $400 million, saying that it would have a "chilling effect" on competing bidders. A credit bid would top the stalking-horse bid submitted by a group of local investors, including Bruce E. Toll, vice chairman of homebuilder Toll Brothers Inc. Creditors, on the other hand, accused the current owners of Philadelphia Newspapers of trying to "game" the bankruptcy system to keep insiders in control. The Company is contemplating an October 22 auction, wherein a group of local investors, including Bruce E. Toll, would be lead bidder for its business. The Debtors have filed a proposed Chapter 11 plan built around the sale of the business to Mr. Toll or to the highest bidder. Philadelphia Newspapers filed a Chapter 11 plan of reorganization on August 20. The Plan provides for the sale of substantially all of the Debtors' assets to Mr. Toll-led Philly Papers, LLC, absent higher and better bids at an auction. Under the deal, Philly Papers is expected to pay over $41,000,000, after payment of approximately $6,000,000 in administrative and priority claims. According to the disclosure statement explaining the Plan, holders of secured claims, including $66 million, senior secured claims, will recover 100 cents on the dollar. Holders of $350 million prepetition unsecured debt claims will recover less than 1% of their claims. Holders of prepetition unsecured trade claims will recover up to 6%. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/PhillyNews_DiscStatement.pdf A copy of the Insider Plan is available for free at: http://bankrupt.com/misc/PhillyNews_Ch11Plan.pdf Senior lenders, including CIT Group Inc., have proposed their own reorganization plan that would allow the Company to emerge from bankruptcy with about $60 million in debt. Led by Citizens Bank of Pennsylvania, as agent, senior lenders would own about 95% of the Company with the remainder going to unsecured mezzanine debt holders. Other unsecured creditors will recover up to 10% of their claims in cash. About Philadelphia Newspapers Philadelphia Newspapers -- http://www.philly.com/-- owns and operates numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications are the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its debtor-affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa. Case No. 09-11204). Proskauer Rose LLP is the Debtors' bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth Paxson LLP is the local counsel. The Debtors' financial advisor is Jefferies & Company Inc. The Garden City Group, Inc., serves as claims and notice agent. Philadelphia Newspapers listed assets and debts of $100 million to $500 million in its bankruptcy petition. PHILADELPHIA NEWSPAPERS: To Auction Off Property in Philadelphia ---------------------------------------------------------------- The Hon. Stephen Raslavich of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania procedures governing the sale of certain property of Philadelphia Newspapers LLC and its debtor- affiliates. The property up for sale is located at 400 North Broad Street and certain adjacent parcels in Philadelphia. This property will be transferred to Citizens Bank, as agent for certain senior secured lenders, under the Debtors' joint Chapter 11 plan. Bids for the Debtors' assets, together with a good faith deposit of $3 million, must be submitted by Oct. 20, 2009, at 5:00 p.m., to Sonenshine Partners at 400 Park Avenue, 17th floor in New York. The Debtors will provide a break-up fee of $1 million and expense reimbursement of $500,000 if they consummate the sale not another party. An auction will take place at the offices of Proskauer Rose LLP at 1585 Broadway in New York, on Oct. 22, 2009, at 11:00 a.m. About Philadelphia Newspapers Philadelphia Newspapers -- http://www.philly.com/-- owns and operates numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications are the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its debtor-affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa. Case No. 09-11204). Proskauer Rose LLP is the Debtors' bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth Paxson LLP is the local counsel. The Debtors' financial advisor is Jefferies & Company Inc. The Garden City Group, Inc., serves as claims and notice agent. Philadelphia Newspapers listed assets and debts of $100 million to $500 million in its bankruptcy petition. POLAROID CORPORATION: Can Use Cash Collateral Until December 31 --------------------------------------------------------------- The Hon. Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota authorized PBE Corporation, fka Polaroid Corporation, and its affiliated debtors to use cash collateral until Dec. 31, 2009. The Trustee is also authorized to use cash collateral to pay postconversion expenses estimated to be $1.46 million. The Debtors will grant replacement liens in all its assets as adequate protection for its use of cash collateral in which the Asserted Secured Claimants, well as RWB Services, LLC and Ritchie Capital Management, LLC, Ritchie Special Credit Investments, Ltd., Rhone Holdings II, Ltd., Yorkville Investments I, LLC, and Ritchie Capital Structure Arbitrage Trading, Ltd., claim or may claim an interest, including the Debtors' previous use of Settlement Proceeds in the amount of $700,000 in which Acorn was granted a postpetition replacement lien as adequate protection of its interests, if any. Polaroid Corporation -- http://www.polaroid.com/-- makes and sells films, cameras, and other imaging products. Polaroid Corp., together with 11 affiliates, filed voluntary petitions for Chapter 11 on December 18, 2008 (Bankr. D. Minn., Lead Case No. 08-46617). Judge Gregory F. Kishel handles the Chapter 22 case. George H. Singer, Esq., James A. Lodoen, Esq., and Sandra S. Smalley-Fleming, Esq., at Lindquist & Vennum P.L.L.P, are counsel to the Debtors. Cass Weil, Esq., James A. Rubenstein, Esq., and Sarah E. Doerr, Esq., at Moss & Barnett, have been tapped as special counsel. The law firms of Baker & McKenzie and C&A Law represent the Debtors as special foreign legal counsel. Paul Hastings, Janofsky & Walker LLP, and Faegre & Benson LLP represent the Committee. According to the Company, the financial structuring process and the bankruptcy filing are the result of events at Petters Group Worldwide, which has owned Polaroid since 2005. This was the Company's second bankruptcy filing. The Company first filed for bankruptcy on October 12, 2001 (Bankr. D. Del. Lead Case No. 01-10864). PORTA SYSTEMS: Board, Shareholder OK 1-for-500 Reverse Split ------------------------------------------------------------ Porta Systems Corp. said its board of directors and the holder of 70% of its common stock have approved a one-for-500 reverse split of the common stock. As part of the reverse split, Porta Systems will pay cash for fractional shares. As result, Porta Systems will have fewer than 300 record owners of its common stock and will, as soon as practical after the effectiveness of the reverse split, terminate its registration under the Securities Exchange Act of 1934. The board of Porta Systems believes that the reverse split is necessary, among other reasons, to enable Porta Systems to reduce the significant legal, accounting and other expenses resulting from its status as a public corporation, as well as the significant expenses associated with complying with the Sarbanes- Oxley Act. Further, over the past few months there has been virtually no trading in the company's stock, and when traded, it has traded at a very low price. The consent was given by Gates Systems Holding LTD, a wholly owned subsidiary of Cheyne Special Situations Fund, L.P., the holder of Porta Systems's senior debt. The Company has a large number of stockholders who own small quantities of its common stock, and more than 70% of its stock is owned by Gates Systems. On September 28, 2009, the date on which the Company received consent, there were 9,954,569 shares of common stock, par value $0.01 per share, outstanding. The reverse split will become effective roughly 20 days after an information statement describing the reverse split is mailed to stockholders. Porta Systems plans to file the information statement with the Securities and Exchange Commission by October 7, 2009. Stockholder approval was given by the written consent of Gates Systems Holding LTD, a wholly-owned subsidiary of Cheyne Special Situations Fund, L.P., which is the holder of Porta Systems' senior debt. Porta Systems will pay cash for fractional shares based on the fair value of the common stock, which was determined by the board of directors to be $48.25 per share after giving effect to the reverse split. This value was based on the average of the daily closing bid and asked prices for the common stock for the month of September 2009, which was $0.0965, multiplied by 500. Upon the filing of the notice of termination of registration under the Securities Exchange Act, Porta Systems will no longer be subject to the reporting obligations under the Securities Exchange Act, and its common stock will no longer be traded on the OTC Bulletin Board. Once Porta Systems is no longer a reporting company, any trading of its common stock would be on the pink sheets. Porta Systems also obtained stockholder consent to these actions: -- The election of six directors to serve until the next annual meeting of stockholders and until their successors are elected and qualified; William V. Carney, Marco M. Elser, Warren H. Esanu, Herbert H. Feldman, Edward B. Kornfeld, Michael A. Tancredi; -- The approval of the Company's 2009 long-term incentive plan; -- The approval of an amendment to the Company's certificate of incorporation which (i) effects a one-for-500 reverse split of the Company's common stock and (ii) reduces the Company's authorized capital stock to 100,000 shares of preferred stock and 100,000 shares of common stock; and -- The approval of the selection of BDO Seidman, LLP as the Company's independent registered public accounting firm for the year ending December 31, 2009. About Porta Systems Syosset, New York-based Porta Systems Corp. (OTCBB: PORT) designs, manufactures, markets and supports communication equipment used in telecommunications, video and data networks worldwide. Porta Systems said in an August 2009 regulatory filing it expects to continue to engage in negotiations to divest assets. "During the past several years we have, on a number of occasions, engaged in negotiations with respect to the sale of one or more of our divisions. None of our discussions resulted in an agreement. We expect to continue to engage in such negotiations in the future," Porta Systems said. "We cannot give any assurance that we would be able to effect any sale of our business or that such a sale would not be part of bankruptcy reorganization," Porta Systems added. "Further, our senior debt is secured by a lien on substantially all of our and our subsidiaries' assets, and substantially all, if not all, of the proceeds from any sale may be required to be paid to our debt holders, principally the holder of our senior debt. Porta Systems said its only source of funds other than normal operations is its senior lender, Cheyne Special Situations Fund, L.P. Porta Systems noted Cheyne has advised it would not advance new funds to the Company. "If we are not able to generate sufficient revenue to enable us to meet our obligations or obtain financing from Cheyne, we would not be able to continue in business, and it would be likely that we would seek protection under the Bankruptcy Code," Porta Systems said. On July 31, 2008, the Company implemented a trouble debt restructuring plan which restructured and reduced its senior and subordinated debt. As part of the debt restructuring, the Company issued to Cheyne, as the holder of the senior debt, 7,038,236 shares of common stock, which represents 70% of the outstanding common stock. For the six months ended June 30, 2009, the Company paid senior and subordinated debt of $410,000 of which $124,000 was paid in the second quarter. The Company paid fees related to its financing arrangements with Lloyds of $42,000 during the June 2009 Period, of which $26,000 were incurred in the second quarter. At June 30, 2009, the Company had $13,459,000 in total assets against $30,209,000 in total liabilities, resulting in $16,750,000 stockholders' deficit. At June 30, 2009, the Company had cash and cash equivalents of $375,000 compared with $292,000 at December 31, 2008, and a working capital deficit of $441,000, as compared with working capital of $827,000 at December 31, 2008. PREMIER ENTERTAINMENT: Liquidated Damages Clause Unenforceable -------------------------------------------------------------- WestLaw reports that the actual damages sustained by the lessor of a parking area due to the termination of the lease were readily ascertainable by multiplying the lease payment amount by the number of months left on the lease. Therefore, the lease's liquidated damages provision was unenforceable under Mississippi law. Furthermore, the proper measure of the lessor's damages, in the debtor-lessees' jointly administered Chapter 11 cases, was the actual damages suffered from the lease termination, as capped by the Bankruptcy Code's statutory formula. In re Premier Entertainment Biloxi, LLC, --- B.R. ----, 2009 WL 1230795, 51 Bankr. Ct. Dec. 219 (Bankr. S.D. Miss.) (Olack, J.). Based in Biloxi, Miss., Premier Entertainment Biloxi LLC dba Hard Rock Hotel & Casino Biloxi -- http://www.hardrockbiloxi.com/-- owns and operates hotels. On Aug. 29, 2005, Hurricane Katrina struck the Mississippi Gulf Coast, just two days prior to the scheduled opening of the Debtors' facility. The Debtors' facility was substantially destroyed. In the aftermath of Hurricane Katrina, 1,300 of the Debtors' employees lost their jobs. The company filed for Chapter 11 protection on Sept. 19, 2006 (Bankr. S.D. Miss. Case No. 06-50975). Nicholas Van Wiser, Esq., and Robert Alan Byrd, Esq., at Byrd & Wiser, represent the Debtors. Corby Davin Boldissar, Esq., at Locke Liddell & Sapp, LLP, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $252,862,215 in assets and $226,069,921 in debts. The debtor emerged from chapter 11 on Aug. 10, 2007, under a Joint Plan of Reorganization that paid all creditors in full. PROTECTION ONE: Appoints Peter Ezersky to Board of Directors ------------------------------------------------------------ Peter R. Ezersky was appointed to the Board of Directors of Protection One, Inc., and Protection One Alarm Monitoring, Inc., and Alex Hocherman was appointed to the Company's Compensation Committee on October 5, 2009, to fill the vacancies created by Jeffrey S. Nordhaus's resignation on September 28. Mr. Ezersky and Mr. Hocherman are designees of POI Acquisition, LLC, the Company's largest stockholder and an affiliate of Quadrangle Group LLC, pursuant to the terms of the amended and restated stockholders agreement, dated as of April 2, 2007, among the Company, Quadrangle and affiliates of Monarch Alternative Capital LP. Protection One, Inc., is principally engaged in the business of providing security alarm monitoring services, including sales, installation and related servicing of security alarm systems for residential and business customers. The Company also provides monitoring and support services to independent security alarm dealers on a wholesale basis. Affiliates of Quadrangle Group LLC and Monarch Alternative Capital LP own roughly 70% of the Company's common stock. Protection One posted lower net loss of $2,535,000 for the three months ended June 30, 2009, from a net loss of $9,090,000 for the same period a year ago. Protection One posted a net loss of $5,336,000 for the six months ended June 30, 2009, from a net loss of $32,168,000 for the same period a year ago. At June 30, 2009, the Company had $632,025,000 in total assets against $715,763,000 in total liabilities, and $83,738,000 in stockholders' deficiency. PTS CARDINAL: Bank Debt Trades at 13% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which PTS Cardinal Health is a borrower traded in the secondary market at 86.95 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.45 percentage points from the previous week, The Journal relates. The loan matures April 10, 2014. The Company pays 225 basis points to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. In April 2007, Cardinal Health completed the sale of its Pharmaceutical Technologies and Services segment to The Blackstone Group for approximately $3.3 billion. PTS provides advanced technologies and outsourced services for the pharmaceutical, biotechnology and consumer health industry. PTS develops, manufactures and packages pharmaceutical and other products. QUEST RESOURCE: Inks Amendment to Merger Agreement -------------------------------------------------- Quest Resource Corporation -- QRCP; New Quest Holdings Corp., n/k/a PostRock Energy Corporation; Quest Midstream Partners, L.P. -- QMLP; Quest Energy Partners, L.P. -- QELP; Quest Midstream GP, LLC -- QMGP; Quest Energy GP, LLC -- QEGP; Quest Resource Acquisition Corp., a wholly owned direct subsidiary of PostRock -- QRAC; Quest Energy Acquisition, LLC, a wholly owned direct subsidiary of QRCP -- QEAC; Quest Midstream Holdings Corp., a wholly owned direct subsidiary of PostRock -- QMHC; and Quest Midstream Acquisition, LLC, a wholly owned direct subsidiary of QRCP -- QMAC -- on July 2, 2009, entered into an Agreement and Plan of Merger, pursuant to which, after the completion of the transactions, QRCP, QELP and the successor to QMLP will become wholly-owned subsidiaries of PostRock, a new, publicly traded corporation. Pursuant to the Original Agreement, these events were to occur: 1. QRAC will merge with and into QRCP -- QRCP Merger -- with QRCP surviving the QRCP Merger as a wholly owned direct subsidiary of PostRock and each outstanding share of common stock of QRCP will entitle the holder thereof to the right to receive 0.0575 shares of PostRock common stock; 2. QEAC will merge with and into QELP -- QELP Merger -- with QELP surviving the QELP Merger and (i) each outstanding common unit of QELP (other than any common units owned by QRCP) will entitle the holder thereof to the right to receive 0.2859 shares of PostRock common stock, (ii) all of the outstanding general partner units of QELP held by QEGP will be converted into one general partner unit and (iii) all of the outstanding incentive distribution rights and subordinated units of QELP will be cancelled for no consideration; 3. QMAC will merge with and into QMLP -- QMLP Merger -- with QMLP surviving the QMLP Merger and (i) each outstanding common unit of QMLP will entitle the holder thereof to the right to receive 0.4033 shares of PostRock common stock, (ii) all of the outstanding general partner units of QMLP will be converted into (x) one general partner unit of QMLP and (y) a number of shares of PostRock common stock equal to the product obtained by multiplying the aggregate number of shares of PostRock common stock issued to holders of QMLP common units in the QMLP Merger and 0.30612%, and (iii) all of the outstanding incentive distribution rights and subordinated units of QMLP will be cancelled for no consideration; 4. Following the QELP Merger, PostRock and QEGP will convert QELP into a Delaware limited liability company -- OGLLC -- with OGLLC becoming a wholly-owned direct subsidiary of PostRock; 5. Following the QMLP Merger, QMHC and QMGP will convert QMLP into a Delaware limited liability company -- PLLC -- with PLLC becoming a wholly-owned direct subsidiary of QMHC; 6. Following the conversion of QMLP into PLLC, QMGP will merge with and into QRCP -- QMLP GP Merger -- and each outstanding QMGP unit held by persons other than QRCP will entitle the holder thereof to the right to receive a number of shares of PostRock common stock equal to the quotient obtained by dividing the number of shares of PostRock common stock to be received by QMGP in the QMLP Merger by the total number of QMGP units outstanding and held by persons other than QRCP; and 7. Following the QMLP GP Merger, QEGP will merge with and into QRCP -- QELP GP Merger -- and each outstanding QEGP unit will be cancelled for no consideration. On October 2, 2009, the parties entered into a First Amendment to the Agreement and Plan of Merger. Under the terms of the Merger Agreement Amendment: -- certain technical changes were made to the Original Agreement to reflect an internal restructuring that resulted in QELP Merger Sub being a wholly owned direct subsidiary of QRCP (not PostRock) and QMLP Merger Sub being a wholly owned direct subsidiary of QRCP (not QMHC); -- rather than QMAC merging with and into QMLP, QMLP will merge with and into QMAC, with QMAC surviving the QMLP Merger; additionally, by virtue of the QMLP Merger, as revised, all of the outstanding general partner units of QMLP will be converted into a number of shares of PostRock common stock equal to the product obtained by multiplying the aggregate number of shares of PostRock common stock issued to holders of QMLP common units in the QMLP Merger, as revised, and 0.30612%; -- the conversion of QMLP into PLLC was removed as a step of the Recombination; -- rather than QMGP merging with and into QRCP, QMGP will merge with and into QMLP Merger Sub as the surviving entity of the QMLP Merger; and -- rather than QEGP merging with and into QRCP, QEGP will merge with and into OGLLC. Under the Original Agreement, the nine-member PostRock board of directors at the closing of the Recombination was expected to consist of William H. Damon III, Jon H. Rateau, Gary M. Pittman, Mark A. Stansberry, J. Philip McCormick, Daniel Spears, Duke R. Ligon, Edward Russell and David C. Lawler. The Merger Agreement Amendment substituted Gabriel Hammond for Edward Russell as one of the PostRock board members to be designated by the board of directors of QMGP. The Merger Agreement Amendment added a new provision providing that each share of PostRock common stock held by QRCP will be cancelled for no consideration immediately following the closing of the Recombination and clarified the provisions relating to PostRock's obligation to provide directors' and officers' liability insurance for the existing and certain former directors and officers of QRCP, QEGP and QMGP after the closing of the Recombination. Shortly before the signing of the Original Agreement, one of the QMLP investors had abandoned its QMLP common units. The abandoned QMLP common units were inadvertently included in calculating the QMLP exchange ratio contained in the Original Agreement. The Merger Agreement Amendment therefore also permitted QMLP to make a distribution of additional common units to its common unitholders in order to increase the number of outstanding common units to match, as closely as practicable, the number set forth in the Original Agreement. The effect of the distribution was to preserve the relative ownership percentages of PostRock agreed to by the parties without the need to amend the QMLP exchange ratio. Amendment to Support Agreement On October 2, 2009, the Support Agreement, dated as of July 2, 2009, among QRCP, QMLP, QELP and certain unitholders of QMLP was amended by the First Amendment to the Support Agreement to add Alerian Opportunity Partners IX, LP and Alerian Opportunity Partners IV, LP, who are QMLP common unitholders, as parties to the Support Agreement. Accordingly, including Alerian, the holders of roughly 73% of the outstanding QMLP common units have agreed, subject to the terms of the Support Agreement, to, among other things, vote in favor of the approval and adoption of the Merger Agreement and the QMLP Merger. With the addition of Alerian as a party to the Support Agreement, the requisite QMLP unitholder approval is assured unless the Support Agreement (as amended) is terminated prior to such approval in accordance with its terms. The Support Agreement Amendment also provided that Alerian, as holder of 7.5% of the outstanding membership interests of QMGP, will approve the QMLP GP Merger and take all actions and execute and deliver all documents necessary to effectuate the QMLP GP Merger. The Support Agreement also adjusted the scheduled number of QMLP common units held by each QMLP common unitholder party thereto to reflect the pro rata distribution of QMLP common units to all QMLP common unitholders. About Quest Resource Quest Resource Corporation -- http://www.qrcp.net/, http://www.qelp.net/, and http://www.qmlp.net/-- is a fully integrated E&P company that owns producing properties and acreage in the Appalachian Basin of the northeastern United States; 100% of the general partner and a 57% limited partner interest in Quest Energy Partners, L.P.; and 85% of the general partner and a 36.4% of the limited partner interests in the form of subordinated units in Quest Midstream Partners, L.P. Quest Resource operates and controls Quest Energy Partners and Quest Midstream Partners through its ownership of their general partners. As reported by the Troubled Company Reporter on June 23, 2009, the report of UHY LLP, in Houston, Texas, the Company's independent registered public accounting firm, on its financial statements for the fiscal year ended December 31, 2008, includes an explanatory paragraph regarding the Company's ability to continue as a going concern. The factors contributing to this concern include QRCP's recurring losses from operations, stockholders' accumulated deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations. QRCP does not anticipate being able to make its next quarterly principal payment due September 30, 2009, under its Amended and Restated Credit Agreement with Royal Bank of Canada, as administrative agent and collateral agent. As reported by the Troubled Company Reporter on October 6, 2009, Quest Cherokee, LLC, Quest Energy Partners, L.P., and Quest Cherokee Oilfield Service, LLC, on September 30, 2009, entered into a Third Amendment to Second Lien Senior Term Loan Agreement to extend the maturity date of the Second Lien Senior Term Loan Agreement, as amended, from September 30, 2009 to October 31, 2009. The Third Amendment is among Quest Cherokee, as borrower, the Partnership and QCOS, as guarantors, Royal Bank of Canada, as administrative agent and collateral agent, KeyBank National Association, as documentation agent, Societe Generale, as documentation agent, and the lenders party thereto. In July 2009, QRCP's lenders led by RBC agreed to waive the interest coverage ratio and leverage ratio covenants for the fiscal quarter ended June 30, 2009; and defer until September 30, 2009, interest payment due on June 30, 2009. R & G PROPERTIES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: R & G Properties 5680 N. Elston Ave. Chicago, IL 60646 Bankruptcy Case No.: 09-37463 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: A. Benjamin Goldgar Debtor's Counsel: Eugene Crane, Esq. Crane Heyman Simon Welch & Clar 135 S Lasalle Suite 3705 Chicago, IL 60603 Tel: (312) 641-6777 Fax: (312) 641-7114 Email: ecrane@craneheyman.com Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ilnb09-37463.pdf The petition was signed by George Michael, partner of the Company. RAPTOR PHARMACEUTICAL: Dismisses Ernst & Young as Auditors ---------------------------------------------------------- Raptor Pharmaceutical Corp., reports that on September 29, 2009 -- immediately after the effective time of its merger with TorreyPines Therapeutics, Inc. -- the board of directors of Raptor approved the dismissal of Ernst & Young LLP as Raptor's independent registered public accounting firm. The audit report of E&Y with respect to TorreyPines' fiscal year ended December 31, 2008, did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principle, except that the audit report included an uncertainty paragraph raising substantial doubt about TorreyPines' ability to continue as a going concern. On September 29, 2009, immediately after the effective time of the Merger, the board of directors of Raptor engaged Burr, Pilger & Mayer, LLP, Rap Pharma's independent registered public accounting firm for the fiscal year ending August 31, 2009, as Raptor's independent registered public accounting firm for the fiscal year ending August 31, 2010. As reported by the Troubled Company Reporter, Raptor Pharmaceuticals and TorreyPines Therapeutics, Inc., completed their merger on September 30, 2009. The combined company is named "Raptor Pharmaceutical Corp." and commenced trading on the NASDAQ Capital Market under the ticker symbol "RPTP" on September 30. Pursuant to NASDAQ's regulations, for the first 20 trading days the ticker symbol will be "RPTPd". The Companies' stockholders approved the proposals to complete the merger at its annual meeting of stockholders held September 28, 2009. The aggregate market value of Raptor's outstanding common equity held by non-affiliates on October 6, 2009, was approximately $55.5 million. The combined company is headquartered in Novato, California, and managed by Raptor's existing management team. On July 27, 2009, Raptor and TorreyPines entered into a definitive merger agreement. Under terms of the merger agreement, Raptor will be merged with and into a wholly owned subsidiary of TorreyPines upon closing. TorreyPines will issue, and Raptor stockholders will receive, shares of TorreyPines common stock such that Raptor stockholders will own 95%, and TorreyPines stockholders will own 5%, of the combined company. About TorreyPines TorreyPines Therapeutics, Inc. -- http://www.tptxinc.com/-- is a biopharmaceutical company that aims to develop product candidates each capable of treating a number of acute and chronic diseases and disorders such as migraine and chronic pain. The company currently has two ionotropic glutamate receptor antagonist clinical stage product candidates. As of June 30, 2009, TorreyPines had $1.42 million in total assets and $149,000 in total liabilities. As of June 30, 2009, the Company's accumulated deficit was $121.9 million. Without additional sources of cash, it said existing working capital is not sufficient to meet the cash requirements necessary to fund its planned operating expenses and working capital requirements through December 31, 2009. TorreyPines had indicated if it cannot complete the merger with Raptor in a timely manner, or otherwise obtain sufficient funding in the short-term, it may be forced to file for bankruptcy, cease operations or liquidate and dissolve the Company. The audit report of Ernst & Young LLP, independent registered public accounting firm, included in TorreyPines Therapeutics' Annual Report on Form 10-K for the year ended December 31, 2008, contained an explanatory paragraph describing conditions that raise substantial doubt about TorreyPines Therapeutics' ability to continue as a going concern. About Raptor Pharmaceutical Based in Novato, California, Raptor Pharmaceutical Corp. -- http://www.raptorpharma.com/-- is dedicated to speeding the delivery of new treatment options to patients by working to improve existing therapeutics through the application of highly specialized drug targeting platforms and formulation expertise. The Company focuses on underserved patient populations where it can have the greatest potential impact and currently has product candidates in clinical development designed to treat nephropathic cystinosis, non-alcoholic steatohepatitis, Huntington's Disease, aldehyde dehydrogenase deficiency and a non-opioid solution designed for chronic pain. The Company's preclinical programs are based upon bioengineered novel drug candidates and drug-targeting platforms derived from the human receptor-associated protein and related proteins that are designed to target cancer, neurodegenerative disorders and infectious diseases. The audit report of Burr, Pilger & Mayer, LLP, independent registered public accounting firm, included in Raptor Pharmaceuticals' Annual Report on Form 10-K for the year ended August 31, 2008, contained an explanatory paragraph describing conditions that raise substantial doubt about Raptor's ability to continue as a going concern. REAL MEX: Commences Exchange Offer for 14% Senior Secured Notes --------------------------------------------------------------- Real Mex Restaurants, Inc., is offering to exchange an aggregate principal amount of $130,000,000 of registered 14% Senior Secured Notes due 2013 -- new notes -- for any and all of the Company's unregistered 14% Senior Secured Notes due 2013 -- old notes -- that were issued in a private offering on July 7, 2009. The old notes are, and the new notes will be, jointly and severally guaranteed on a senior secured basis by the Company's parent and each of its existing and future domestic restricted subsidiaries. Terms of the exchange offer: -- Real Mex will exchange all old notes that are validly tendered and not withdrawn prior to the expiration of the exchange offer. -- Holders may withdraw tenders of old notes at any time prior to the expiration of the exchange offer. -- Real Mex believes that the exchange of old notes will not be a taxable event for U.S. federal income tax purposes. -- Real Mex will not receive any proceeds from the exchange offer. -- The exchange notes are substantially identical to the original notes, except that the exchange notes will be registered under the Securities Act of 1933, as amended, or the "Securities Act," and will not bear any legend restricting their transfer. -- Real Mex does not intend to apply for listing of the notes on any securities exchange or for inclusion of the notes in any automated quotation system. -- The exchange offer expires at 5:00 p.m., New York City time, on November 9, 2009. Wells Fargo Bank, National Association, is serving as the exchange agent in connection with the exchange offer. A full-text copy of the prospectus is available at no charge at: http://ResearchArchives.com/t/s?46d3 Real Mex Restaurants, Inc., owns and operates restaurants, primarily under the names El Torito(R), Acapulco Mexican Restaurant Y Cantina(R) and Chevys Fresh Mex(R). At December 28, 2008, the Company, primarily through its major subsidiaries (El Torito Restaurants, Inc., Chevys Restaurants LLC and Acapulco Restaurants, Inc.), owned and operated 190 restaurants, of which 157 were in California and the remainder in 12 other states. The Company's other major subsidiary, Real Mex Foods, Inc., provides internal production, purchasing and distribution services for the restaurant operations and manufactures specialty products for sales to outside customers. At March 29, 2009, the company's balance sheet showed total assets of $287.3 million, total liabilities of $272.9 million and stockholders' equity of about $14.4 million. The Company's Senior Secured Notes and senior unsecured credit facility each mature in 2010 and the Company will require additional financing to meet this obligation. The Company is currently evaluating its options to raise the necessary funds. No assurance can be given that the Company will be able to refinance any of its indebtedness on commercially reasonable terms or at all. * * * As reported by the Troubled Company Reporter on July 15, 2009, Moody's Investors Service upgraded Real Mex Restaurant's Speculative Grade Liquidity rating to SGL-3 from SGL-4, recognizing its improved liquidity as a result of the recently completed refinancing. Moody's also revised the rating on the company's newly issued $130 million 14% 2nd lien senior secured notes due 2012 to B3 from the initial provisional rating of (P)B3, upon closing of the transaction. Proceeds from the issuance were mainly used to refinance the 10% 2nd lien senior secured notes due April 1, 2010. The Caa2 Corporate Family Rating remains unchanged, while the rating outlook is revised to stable from developing. The TCR said July 8, 2009, Standard & Poor's Ratings Services affirmed the ratings on Real Mex Restaurants, including its 'B-' corporate credit rating. This action comes after the company priced $130 million of the senior secured notes at a 17.98% yield with a 14% coupon and 90% original issue discount. REALOGY CORP: Bank Debt Trades at 17% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Realogy Corporation is a borrower traded in the secondary market at 82.92 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.33 percentage points from the previous week, The Journal relates. The loan matures on Sept. 30, 2013. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Caa1 rating and Standard & Poor's CCC- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Realogy Corporation is one of the largest real estate service companies in the United States with reported revenues of about $4.7 billion for the year ended Dec. 31, 2008. Realogy was incorporated in January 2006 to facilitate a plan by Cendant Corporation to separate Cendant into four independent companies - one for each of Cendant's real estate services, travel distribution services, hospitality services (including timeshare resorts), and vehicle rental businesses. The separation became effective July 2006. Headquartered in Parsippany, N.J., Realogy is owned by affiliates of Apollo Management, L.P., a leading private equity and capital markets investor. Realogy fully supports the principles of the Fair Housing Act. At March 31, 2009, Realogy had $8.62 billion in total assets, $9.62 billion in total liabilities, and $997 million in stockholders' deficit. REALOGY CORP: S&P Affirms 'C' Rating on Second-Lien Term Loan ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Realogy Corp.'s second-lien term loan, following the company's closing on the previously announced $135 million aggregate principal amount delayed-draw portion of the loan, which brings the total amount of the loan to $650 million. S&P affirmed the issue-level rating at 'C' and the recovery rating at '6', indicating S&P's expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default. The corporate credit rating on Realogy is 'CC' and the rating outlook is negative. Ratings List Realogy Corp. Corporate Credit Rating CC/Negative/-- Second-Lien Loan C Recovery Rating 6 RENEW ENERGY: Creditors, Bondholders Object to 'Rushed' Sale ------------------------------------------------------------ Law360 reports that bondholders and unsecured creditors of Renew Energy LLC have objected to the company's proposal for selling its assets, saying the proposal -- which does not include a stalking horse bidder or require an auction -- is premature and vague. Headquartered in Jefferson, Wisconsin, Renew Energy LLC -- http://www.renewenergyllc.com/-- operates an ethanol plant facility. The Company filed for Chapter 11 on January 30, 2009 (Bankr. W.D. Wis. Case No. 09-10491). Christopher Combest, Esq., at Quarles & Brady LLP, represents the Debtor in its restructuring efforts. William T. Neary, the United States Trustee for Region 11, appointed five creditors to serve on an Official Committee of Unsecured Creditors. The Debtor disclosed $188,953,970 in total assets and $194,410,573 in total debts. RENWOOD VINEYARD: Case Summary & 17 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Renwood Vineyard Properties, Ltd. 10461 Old Placerville Rd #150 Rancho Cordova, CA 95827 Case No.: 09-41962 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Robert S. Bardwil Debtor's Counsel: Julia P. Gibbs, Esq. 1329 Howe Ave #205 Sacramento, CA 95825-3363 Tel: (916) 646-2800 Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of at least $14,685,000, and total debts of $8,335,111. The petition was signed by Robert I. Smerling, the company's president and chairman of the board. Debtor's List of 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Renwood Winery, Inc. $736,850 12225 Steiner Road Plymouth, CA 95669 Amador County Tax Collector $16,955 Collateral: $6,800,000 Unsecured: $16,955 Mid Valley Agricultural $15,784 Whitney Davis, Esq. $10,807 Richard Hyde Law Offices $9,345 Aqua Sierra Controls, Inc. $8,838 Hunt & Sons $5,149 Sacramento For Tractor $3,585 Jackson Tire, Inc. $2,804 Wilkinson Portables, Inc. $815 Sierra Foothill Lab, Inc. $774 ATI Parts-Sutter Creek $695 Geotechnical Research & $652 Development Dellavalle, Inc. $248 Laboratory, Inc. Farm Plan $243 Safeguard Pest Control $230 Riebes Auto Parts $62 REVLON CONSUMER: S&P Puts 'B-' Rating on CreditWatch Positive ------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B-' corporate credit rating on Revlon Consumer Products, and its issue-level ratings on the company, on CreditWatch with positive implications, meaning the ratings could be raised or affirmed following the completion of S&P's review. The CreditWatch placement follows Revlon Inc.'s announcement that it completed its previously announced offer to stockholders (other than MacAndrews & Forbes Holdings Inc. and its affiliates) to exchange, on a voluntary basis, its Class A common stock for newly issued shares of Revlon Inc. preferred stock. The consummation of this exchange offer extended the maturity of the senior subordinated term loan owed to MacAndrews & Forbes by RCPC (a portion of which was contributed to Revlon). The contributed loan of $ 48.6 million will mature in October 2013 and the remaining $ 58.4 million balance will mature in October 2014. As a result of this transaction, Revlon will not have any scheduled debt maturities until 2011. S&P believes Revlon's operating and financial trends have improved from historical levels. To resolve the CreditWatch listing, S&P's analysis will focus on the underlying business trends, the effect of foreign exchange exposure, and the company's operating and financial policies. S&P could raise the ratings if the company is able to sustain its positive operating momentum and improved credit measures, and if underlying business trends do not deteriorate. S&P could affirm the ratings if the underlying business trends weaken or if the company is not able to sustain improved credit measures. RITE AID: Has Placed Bohemia, NY Distribution Center for Sale ------------------------------------------------------------- Rite Aid Corporation reports that during the 13-week period ended August 29, 2009, the Company has placed its Bohemia, New York distribution center facility for sale. On Wednesday, Rite Aid filed with the Securities and Exchange Commission its quarterly report on Form 10-Q for the 13 and 26 weeks ended August 29, 2009. Rite Aid posted a net loss of $116,012,000 for the 13 weeks ended August 29, 2009, from a net loss of $221,997,000 for the same period ended August 30, 2008. Rite Aid booked revenues of $6,321,870,000 for the 13 weeks ended August 29, 2009, from $6,500,244,000 for the same period ended August 30, 2008. Rite Aid posted a net loss of $214,458,000 for the 26 weeks ended August 29, 2009, from a net loss of $378,637,000 for the same period ended August 30, 2008. Rite Aid booked revenues of $12,853,048,000 for the 26 weeks ended August 29, 2009, from $13,113,100,000 for the same period ended August 30, 2008. Revenues decreased during the quarter due to store closures and decreases in front-end same store sales, driven by the continued recessionary environment partially offset by an increase in pharmacy same store sales. The Company expects front-end sales to continue to be pressured during the remainder of fiscal 2010 due to the current economic environment, which is causing consumers to spend less on non- essential items and be more aggressive about searching for promotional sales. At August 29, 2009, the Company had $8,052,678,000 in total assets against $9,453,207,000 in total liabilities, resulting in $1,400,529,000 in stockholders' deficit. In its Form 10-Q report, Rite Aid said, "We are highly leveraged. Our high level of indebtedness: (i) limits our ability to obtain additional financing; (ii) limits our flexibility in planning for, or reacting to, changes in our business and the industry; (iii) places us at a competitive disadvantage relative to our competitors with less debt; (iv) renders us more vulnerable to general adverse economic and industry conditions; and (v) requires us to dedicate a substantial portion of our cash flow to service our debt. Based upon our current levels of operations and planned improvements in our operating performance, we believe that cash flow from operations together with available borrowings under the senior secured credit facility, sales of accounts receivable under our securitization agreements and other sources of liquidity will be adequate to meet our requirements for working capital, debt service and capital expenditures for the next twelve months. We will continue to assess our liquidity position and potential sources of supplemental liquidity in light of our operating performance, and other relevant circumstances. Should we determine, at any time, that it is necessary to obtain additional short-term liquidity, we will evaluate our alternatives and take appropriate steps to obtain sufficient additional funds. There can be no assurance that any such supplemental funding, if sought, could be obtained or if obtained, would be on terms acceptable to us." A full-text copy of the Company's quarterly report is available at no charge at http://ResearchArchives.com/t/s?4697 About Rite Aid Corporation Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is one of the nation's leading drugstore chains. On September 26, 2009, the company operated 4,809 stores compared to 4,922 stores in the like period a year ago. * * * Rite Aid carries a 'Caa2' probability of default and corporate family ratings from from Mody's, 'B-' issuer default rating from Fitch, and 'B-' issuer credit ratings from Standard & Poor's. ROCKY BAY LLC: Case Summary & 9 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Rocky Bay, LLC PO Box 6311 Ketchikan, AK 99901 Bankruptcy Case No.: 09-00735 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Alaska (Ketchikan) Judge: Donald MacDonald IV Debtor's Counsel: David H. Bundy, Esq. 3201 C Street, Suite 301 Anchorage, AK 99503 Tel: (907) 248-8431 Fax: (907) 248-8434 Email: dhb@alaska.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 9 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/akb09-00735.pdf The petition was signed by Donald G. Munhoven, member of the Company. SAMSONITE STORES: Files Amended Chapter 11 Plan ----------------------------------------------- Samsonite Company Stores LLC delivered to the U.S. Bankruptcy Court for the District of Delaware a first amended disclosure statement describing its first amended Chapter 11 plan of reorganization that provides the payment in full of all claims. The plan will be funded from the Debtor's existing cash balances and their parent, Samsonite LLC. Several retail landlords including Birch Run Outlets II LLC, Coral Isle Factory Shops Limited Partnership and Gaffney Outlets LLC said that the Debtor's plan did not state when the administrative expenses are to be paid, which include claims for any postpetition rent. The claims are to be paid in full without interest, if they are allowed, the landlords note. A full-text copy of the amended disclosure statement is available for free at http://ResearchArchives.com/t/s?46c6 A full-text copy of the amended Chapter 11 plan is available for free at http://ResearchArchives.com/t/s?46c7 A full-text copy of the blacklined amended disclosure statement is available for free at http://ResearchArchives.com/t/s?46c8 A full-text copy of the blacklined amended plan is available for free at http://ResearchArchives.com/t/s?46c9 About Samsonite Company Stores Samsonite Corp. is the worldwide leader in superior travel bags, luggage and accessories, combining notable style with the latest design technology and the utmost attention to quality and durability. In 2006 and 2007, the Company had sales of $1.1 billion and $1.2 billion, respectively. Offering superior travel bags, luggage and accessories, under the Samsonite, Samsonite Black Label, and American Tourister brands, Samsonite Company Stores LLC operates full-price and outlet stores in 38 states across the U.S. The Company is a wholly-owned subsidiary of Samsonite Corporation. As of July 31, 2009, Company Stores leased 173 retail stores in the United States located in 38 states. It employs approximately 650 people and had sales of $112 million and $108.1 million in 2007 and 2008, respectively. As of July 31,2009, it had $233 million in total assets and $1.5 billion in total liabilities. Samsonite Company Stores filed for Chapter 11 on September 2, 2009 (Bankr. D. Del. Case No. 09-13102). Attorneys at Young Conaway Stargat & Taylor LLP and Paul, Wess, Rifkin, Wharton & Garrison LLP serve as bankruptcy counsel to the Debtor. Hilco Merchant Resources LLC is liquidation agent. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The case has been assigned to Judge Peter J. Walsh. SEA LAUNCH: Creditors Challenge Boeing's Top Status --------------------------------------------------- According to Law360, the unsecured creditors committee in the bankruptcy proceedings for Sea Launch Co. LLC has asked the Bankruptcy Court for standing to sue Boeing Commercial Space Co. to get Boeing recharacterized as an equity holder rather than a substantial creditor to Sea Launch. Sea Launch Co. is a satellite-launch services provider that offers commercial space launch capabilities from the Baikonur Space Center in Kazakhstan. Its owners include Boeing Co., RSC Energia, and Aker ASA. Sea Launch Company, L.L.C., filed for Chapter 11 on June 22, 2009 (Bankr. D. Del. Case No. 09-12153). Joel A. Waite, Esq., and Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtor's counsel. At the time of the filing, the Company said its assets range from $100 million to $500 million and debts are at least $1 billion. SELECT MEDICAL: Bank Debt Trades at 3.2% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Select Medical Corporation is a borrower traded in the secondary market at 96.80 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.76 percentage points from the previous week, The Journal relates. The loan matures on Feb. 24, 2012. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba2 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Headquartered in Mechanicsburg, Pennsylvania, Select Medical Corporation -- http://www.selectmedicalcorp.com/-- is an operator of specialty hospitals in the United States. Select operates 89 long-term acute care hospitals and four acute medical rehabilitation hospitals in 26 states. Select is also an operator of outpatient rehabilitation clinics in the United States, with approximately 1,106 locations in 37 states and the District of Columbia. Select also provides medical rehabilitation services on a contract basis at nursing homes, hospitals, assisted living and senior carecenters, schools and worksites. Moody's Investor Services placed Select Medical Corp.'s bank loan debt rating at 'Ba2' and senior unsubordinated debt rating at 'B3' in March 2007. The ratings still hold to date with a stable outlook. SEQUENOM INC: Dr. Stylli Resigns From Board of Directors -------------------------------------------------------- Sequenom, Inc., reports that Harry Stylli, Ph.D., submitted his resignation as director effective immediately on September 28, 2009. As reported by the Troubled Company Reporter, the Company on September 28, 2009, terminated the employment of Dr. Stylli as president and chief executive officer, and its senior vice president of research and development, Elizabeth Dragon, Ph.D., effective immediately. In connection with the termination of his employment, the Company's board of directors requested that Dr. Stylli resign as a director. On September 25, 2009, Paul Hawran informed the Company that he is resigning as its chief financial officer effective immediately. The Company's board of directors has appointed Harry F. Hixson, Jr., Ph.D., to serve as its interim chief executive officer effective September 28, 2009. Dr. Hixson who is 71 years old has been the Company's chairman of the board of directors since 2003. He also currently serves as the chairman of the board of directors of BrainCells, Inc., a biopharmaceutical company focused on central nervous system drug development that he co-founded, where he was chief executive officer from September 2004 until September 2005. Dr. Hixson served as chief executive officer of Elitra Pharmaceuticals, Inc., a biopharmaceutical company focused on anti-infective drug development, from February 1998 until May 2003. He joined Amgen, Inc. in 1985 and served as president and chief operating officer and as a member of its board of directors from 1988 to 1991. Prior to Amgen, Dr. Hixson held various management positions with Abbott Laboratories, including vice president of its diagnostic products business group and vice president of research and development in its diagnostics division. Dr. Hixson also is a director of Arena Pharmaceuticals, Inc., Infinity Pharmaceuticals, Inc., and Novabay Pharmaceuticals. Dr. Hixson received his Ph.D. in physical biochemistry from Purdue University and his M.B.A. from the University of Chicago. Dr. Hixson's annual salary for service as the Company's interim chief executive officer has been set at $475,000. The target level for Dr. Hixson's annual bonus was set at 50% of his base salary although his bonus for 2009 has been prorated and will be paid provided he continues as chief executive officer through the end of 2009. Dr. Hixson has been added to the Company's change in control severance benefit plan as a Tier I participant. Dr. Hixson has not been granted an equity award in connection with his appointment, but the Company anticipates that the compensation committee of the board of directors will meet to consider and approve an equity award no later than the next regularly scheduled meeting of the Company's board of directors in October. The Company's board of directors has appointed Ronald M. Lindsay, Ph.D., to serve as its interim senior vice president of research and development effective September 28, 2009. Dr. Lindsay who is 61 years old has been a director since 2003. He currently operates Milestone Consulting, a biopharmaceutical consulting firm. Dr. Lindsay served as vice president, research and development, and chief science officer of diaDexus Inc., a biotechnology company, from 2000 to January 2004. From 1997 through 2000, Dr. Lindsay served in various senior management roles with Millennium Pharmaceuticals, Inc., a biopharmaceutical company. From 1989 to 1997, Dr. Lindsay served in various roles with Regeneron Pharmaceuticals Inc., of which he was a founding scientist. He is a director of Arqule Inc., and HistoRx Inc. Dr. Lindsay received his Ph.D. in biochemistry from the University of Calgary. Dr. Lindsay's annual salary for service as interim senior vice president of research and development has been set at $325,000. The target level for Dr. Lindsay's annual bonus was set at 25% of his base salary although his bonus for 2009 has been prorated and will be paid provided he continues as senior vice president of research and development through the end of 2009. Dr. Lindsay has been added to the Company's change in control severance benefit plan as a Tier II participant. Dr. Lindsay has not been granted an equity award in connection with his appointment, but the Company anticipates that the compensation committee will meet to consider and approve an equity award no later than the next regularly scheduled meeting of the Company's board of directors in October. The Company's board of directors has designated Justin J. File as its principal financial and accounting officer effective September 28, 2009. Mr. File who is 39 years old has been the Company's controller since March 2007. He was assistant controller at Applied Micro Circuits Corporation, a communications semiconductor company, from November 2005 until March 2007. Mr. File was employed by Siegfried Resources, LLC, a provider of accounting and finance professionals on a temporary basis, from January 2005 until November 2005. He was controller, manager of finance and administration and treasurer of ESI U.S. Holdings, a provider of digital simulation software for prototyping and manufacturing processes, from July 2003 until January 2005. Mr. File is a certified public accountant. About Sequenom Inc. Sequenom, Inc. (NASDAQ:SQNM) is a diagnostic testing and genetics analysis company. The Company is focused on providing products, services, diagnostic testing, applications and genetic analysis products that translate the results of genomic science into solutions for biomedical research, translational research, molecular medicine applications, and agricultural, livestock and other areas of research. At June 30, 2009, the Company's balance sheet showed total assets of $113.8 million, total liabilities of $26.3 million and stockholders' equity of $87.5 million. The Company added that there is substantial doubt about its ability to continue as a going concern. Although the Company related that its cash, cash equivalents and current marketable securities will be sufficient to fund its operating expenses and capital requirements through 2010, it will require significant additional financing in the future to fund its operations. SIERRA KINGS: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Sierra Kings Health Care District 372 W. Cypress Avenue Reedley, CA 93654 Bankruptcy Case No.: 09-19728 Chapter 11 Petition Date: October 8, 2009 Court: Eastern District of California (Fresno) Debtor's Counsel: Riley C. Walter, Esq. 8305 N Fresno St #410 Fresno, CA 93720 Tel: (559) 435-9800 Estimated Assets: Less than $50,000 Estimated Debts: Less than $50,000 A full-text copy of the Debtor's petition together with the list of 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/califeb09-19728.pdf The petition was signed by Sanford Haskins, chief executive officer. SIMPLY MEDIA: First Circuit Frowns on Second Frivolous Appeal ------------------------------------------------------------- WestLaw reports that deficiencies in the appellate brief of a debtor and his wife rendered their appeal of a judgment in favor of the creditor and the bankruptcy trustee frivolous. The brief failed to adequately present any issue for review, left unclear what claims were being advanced and what facts bore on what claims, cited only three cases unrelated to the appeal, did not seriously engage with any precedents that had bearing on any issue in the appeal, rarely provided citations to the record, and offered only occasional quotations from the trial transcript that did not support the bulk of the brief's factual assertions. In re Simply Media, Inc., --- F.3d ----, 2009 WL 3210591 (1st Cir. (N.H.)). "We addressed these issues in the prior appeal, In re: Simply Media, Inc., 566 F.3d at 236, and explained why the briefing did not develop law or facts in support of the claims and why they were facially unpersuasive," the First Circuit panel said in its ruling. Coverage of the First Circuit's prior ruling appeared in the Troubled Company Reporter on May 20, 2009. "Given the deficiencies of the present briefing," the First Circuit panel continues, "we dismiss this appeal, Reyes-Garcia v. Rodriguez & Del Valle, Inc., 82 F.3d 11, 15-16 (1st Cir. 1996), and order [Mrs.] Brown's counsel of record to show cause by written response within 14 days as to why the court should not order payment by him personally of attorney's fees, double costs or both for a brief that renders the appeal frivolous. See Fed. R. App. P. 38; 1st Cir. R. 38.0." SINCLAIR BROADCAST: Commences Tender Offers for 3% & 4.875% Notes ----------------------------------------------------------------- Sinclair Television Group, Inc., a wholly owned subsidiary of Sinclair Broadcast Group, Inc., is commencing cash tender offers for any and all of the Company's outstanding 3.0% Convertible Senior Notes due 2027 (CUSIP No. 829226AW9) and 4.875% Convertible Senior Notes due 2018 (CUSIP No. 829226AU3). The holders of the 3.0% Notes and 4.875% Notes are entitled to require the Company to repurchase such Notes at 100% of their principal amount in May 2010 and January 2011, respectively. Approximately $294.3 million of the 3.0% Notes and $143.5 million of the 4.875% Notes are currently outstanding. The Company also has entered into a Memorandum of Understanding with Cunningham Broadcasting Corporation. The MOU is contingent upon the refinancing of the Notes. The Company also intends to issue second lien notes in a private placement to finance the tender offers, the terms of which are different than the terms negotiated with the ad hoc committee representing certain holders of the Notes, as previously disclosed. The ad hoc committee supports the terms of the tender offers. Under the terms of the tender offers, any 3.0% Notes validly tendered and not validly withdrawn on or prior to the expiration date will be purchased at a purchase price of $980 per $1,000 in principal amount and any 4.875% Notes validly tendered and not validly withdrawn on or prior to the expiration date will be purchased at a purchase price of $980 per $1,000 in principal amount. Tendering holders will also receive accrued and unpaid interest from the last interest payment date to the settlement date. The tender offers will be conditioned on, among other things, receipt of sufficient proceeds from the unregistered, private placement of the second lien notes to fund the tender offers and an amendment of Sinclair's senior secured credit facility to allow the issuance of the second lien notes. If any of the conditions is not satisfied, Sinclair is not obligated to accept for payment, purchase or pay for, and may delay the acceptance for payment of, any tendered notes, in each event subject to applicable laws, and may terminate the tender offers. The tender offers are not conditioned on the tender of a minimum principal amount of Notes. Sinclair intends to fund the cash tender offers, and all related costs and expenses, with the net proceeds from the unregistered, private placement of second lien notes and, if needed, a draw on the revolving line of credit under its senior secured credit facility or cash on-hand. The tender offers will expire at 12:00 midnight, New York City time, on Thursday, November 5, 2009, unless extended or earlier terminated by Sinclair. Payment of the purchase price for the Notes validly tendered and not validly withdrawn on or prior to the expiration date will be made as promptly as practicable, which is expected to be the second New York City business day after the expiration date. MacKenzie Partners, Inc., serves as Information Agent for the tender offers. It may be reached at (212)-929-5500. J.P. Morgan Securities Inc. is acting as Dealer Manager for the tender offers. Questions concerning the tender offers may be directed to J.P. Morgan Securities Inc. at (800) 245-8812 or collect at (212) 270-3394. U.S. Bank National Association has been appointed to act as the depositary for the tender offers. A full-text copy of the Offer to Purchase, dated October 8, 2009, filed with the Securities and Exchange Commission, is available at no charge at http://ResearchArchives.com/t/s?46bb A full-text copy of the Letter of Transmittal is available at no charge at http://ResearchArchives.com/t/s?46bc A full-text copy of the Tender Offer Statement is available at no charge at http://ResearchArchives.com/t/s?46bd None of Sinclair and the Company, including the Board of Directors of each, the Information Agent, the Dealer Manager, the Depositary or any other person, has made or makes any recommendation as to whether holders of the Notes should tender, or refrain from tendering, all or any portion of their Notes pursuant to the tender offers, and no one has been authorized to make such a recommendation. Holders of the Notes must make their own decisions as to whether to tender their Notes. Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches approximately 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT, and CW affiliates. As of June 30, 2009, the Company had $1.60 billion in total assets and $1.75 billion in total liabilities. Sinclair carries Moody's Investors Service's Caa2 Corporate Family Rating and Caa3 Probability of Default Rating; and Standard & Poor's Ratings Services' 'B-' corporate credit rating. SINCLAIR BROADCAST: Moody's Reviews 'Caa2' Corporate Family Rating ------------------------------------------------------------------ Moody's Investors Service placed Sinclair Broadcast Group, Inc.'s Caa2 Corporate Family Rating, Caa3 Probability of Default Rating and the debt instrument ratings of Sinclair and its subsidiary, Sinclair Television Group, Inc., on review for possible upgrade. The review follows Sinclair's announcement that STG has commenced a tender offer for Sinclair's 3.0% and 4.875% Convertible Senior Notes putable in May 2010 and January 2011, respectively, and entered into a non-binding memorandum of understanding with Cunningham Broadcasting Corporation to amend the terms of their local marketing agreement. The rating actions supersede the review for possible downgrade initiated on July 13, 2009, and reflect Moody's increased level of confidence that a better projected revenue environment and improved credit market conditions will allow Sinclair to access markets at sufficiently economic terms to address its near-term liquidity needs and sustain the existing capital structure. The progress that Sinclair has made in negotiating terms of financing arrangements and the potential resolution of material negative contingencies relating to Cunningham and the LMA are also key considerations. Moody's also updated the loss given default estimates on the existing instruments to reflect the current debt mix. On Review for Possible Upgrade: Issuer: Sinclair Broadcast Group, Inc. -- Corporate Family Rating, Placed on Review for Possible Upgrade, currently Caa2 -- Probability of Default Rating, Placed on Review for Possible Upgrade, currently Caa3 -- 4.875% Senior Subordinated Notes, Placed on Review for Possible Upgrade, currently Caa2 (no change to LGD4 - 59%) Issuer: Sinclair Television Group, Inc -- Senior Secured Bank Credit Facility, Placed on Review for Possible Upgrade, currently B1 (no change to LGD1 - 5%) -- 8% Senior Subordinated Notes, Placed on Review for Possible Upgrade, currently Caa3 (changed to LGD3 - 31% from LGD3 - 32%) STG plans to utilize the proceeds from new second lien notes to fund the tender offer for the putable notes at 98% of par. The proposed adjustments to the LMA would result in Sinclair having to fund the repayment of Cunningham's $33.5 million credit facility over the next three years, and result in an adjustment to Sinclair's LMA fee beginning in October 2012 to the greater of $5 million or 3% of net broadcast revenue ($2.1 million based on $70 million of LTM 6/30/09 revenue contributed by the Cunningham stations). Cunningham's lenders have tentatively agreed to extend the term of the facility (currently maturing on 10/31/09) if Cunningham can demonstrate an ability to repay the principal balance within three years. Such an extension would resolve a potentially material negative contingency for Sinclair whereby a default by Cunningham on its credit facility would trigger a cross default under STG's credit facility. Under the MOU terms, Cunningham has indicated that it will not seek to reject its LMA agreements with Sinclair in a bankruptcy proceeding until such time as the parties have had reasonable time to negotiate. The amendments to the LMA are contingent upon completing the tender offers for the putable notes. Sinclair disclosed in its July 10, 2009 Form 8-K that Cunningham's direct contribution to Sinclair's 2009 broadcast cash flow was approximately $26.2 million with an additional $24-34 million of indirect BCF contribution due to synergies. The risk of losing access to that material share of Sinclair's cash flow was a key consideration in the prior review for downgrade. Moody's estimates that Sinclair can absorb the incremental cash requirements under the amended LMA terms within its projected free cash flow over the next three years. This, along with the now higher likelihood that the LMA and Cunningham's credit facility will continue to remain in place, contributes to the review for upgrade. In the review, Moody's will consider Sinclair's ability to place a sufficient amount of second lien notes to fund the tender of the putable notes and close the amendment to the LMA. Moody's will also evaluate Sinclair's plans to fund any putable notes that are not tendered and its material subsequent maturities through September 2012, as well as amend the financial covenants in STG's credit facility to accommodate the increase in secured debt. In addition, Moody's will review Sinclair's likely liquidity position following the completion of the proposed transactions including its ability to fund the step-up in STG's required term loan amortization and maintain a reasonable cushion under STG's financial covenants. Moody's will review the effect that the revised LMA terms and increased interest costs associated with the issuance of new second lien notes will have on Sinclair's free cash flow generation. Finally, Moody's will review the notching implications that a higher level of senior secured debt would have on the individual debt instrument ratings, which in particular could prevent or limit the extent to which junior ranking instruments are upgraded if the CFR is raised. Given the company's debt-to-EBITDA leverage (approximately 6.9x LTM 6/30/09 incorporating Moody's standard adjustments), Moody's would consider a multi-notch CFR upgrade if Sinclair can resolve its refinancing needs, maintain an adequate projected liquidity position to get through the current advertising downturn, and continue to generate meaningful free cash flow after absorbing the incremental LMA and interest costs. Moody's also anticipates that the PDR would return to a level in line with the CFR if an improvement in Sinclair's liquidity position reduces near-term default risk, which would in turn result in adjustments to the loss given default assessments. The last rating action was on July 13, 2009, when Moody's downgraded Sinclair's CFR to Caa2 from B3 and PDR to Caa3 from Caa1. Sinclair, headquartered in Baltimore, Maryland, is a television broadcaster, operating 58 television stations in 35 markets. Sinclair generated revenue of approximately $687 million for the trailing twelve months ended June 30, 2009. SMITTY'S BUILDING: Exits Chapter 11, Mulls Sale of Alexandria Unit ------------------------------------------------------------------ Tucker Echols at Washington Business Journal reports that Smitty's Building Supply Inc. will close and sell its Alexandria location and consolidate its operations in Manassas, after emerging from Chapter 11 bankruptcy protection. The sale of the Alexandria property would help sustain the business, Business Journal says, citing Smitty's Building. According to Business Journal, leaders of Smitty's Building said that functional obsolescence and a consumer migration to big-box home improvement centers prevented the Alexandria location from being a viable part of the Company's post-bankruptcy plans. The unit, says the report, is scheduled to closed by December 1. Headquartered in Alexandria, Virginia, Smitty's Building Supply Inc. supplies building materials in Washington, D.C. The Company and three of its affiliates filed for Chapter 11 protection on Jan. 5, 2009 (Bankr. D. Del. Lead Case No. 09-10040). Andrew J. Currie, Esq., Lawrence A. Katz, Esq., Kristen Burgers, Esq., and Abby W. Clifton, Esq., at Venable LLP, represent the Debtors in their restructuring efforts. Epiq Bankruptcy Solutions LLC serves as the Debtors' claims agent. The U.S. Trustee has appointed an official committee of unsecured creditors in the case. LeClairRyan represents the Creditors Committee as counsel. When the company filed for protection from their creditors, they listed assets and debts between $10 million and $50 million each. The U.S. Bankruptcy Court for the Eastern District of Virginia in Alexandria confirmed Smitty's Building's Chapter 11 plan in June 2009. SMURFIT-STONE: Creditors Transfer Ownership of 56 Claims -------------------------------------------------------- From September 30, 2009, to October 6, 2009, more than 50 claims were transferred by various creditors to various entities, including Fair Harbor Capital LLC, Liquidity Solutions, Inc., and Sierra Liquidity Fund LLC. Among the claims transferred were the claims of: Transferor Amount ---------- ------ Kadant Black Clawson, Inc. $286,439 Perimeter Industries Ltd. 140,675 Fil Mor Express, Inc. 102,236 Kadant Webt Systems, Inc. 63,041 Atlas North LLC 37,074 Double E Company LLC 27,137 Richard L. Schuetze, Inc. 23,314 Extreme Industrial Coatings LLC 14,757 Har Adhesive Technologies 13,682 Knight Ind. Supplies, Inc. 11,936 In separate filings, Northland-Willette, Inc., withdrew the transfer of its claims to Sierra Liquidity Fund. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Deal on U.S. Bank Access to Funds Okayed ------------------------------------------------------- On behalf of Smurfit-Stone Container Corp., James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, tells the Court that the Debtors and U.S. Bank Trust National Association entered into discussions regarding U.S. Bank's request to confirm that the automatic stay is not applicable to certain indenture funds. As a result of the discussions, the Parties agreed that U.S. Bank will only be authorized to apply or disburse any monies or other proceeds held as indenture funds for the payment of interest on certain bonds and U.S. Bank's costs and expenses, including, but not limited to fees and expenses of counsel and other professionals. The Parties' agreement is incorporated in a proposed order which is available for free at http://bankrupt.com/misc/SmrfPropUSB.pdf Judge Shannon signed the proposed stipulated order previously submitted by the Debtors and U.S. Bank Trust National Association which authorizes U.S. Bank to apply or disburse any amounts or other proceeds held as indenture funds for the payment of interest on certain bonds and U.S. Bank's costs and expenses, including, but not limited to fees and expenses of counsel and other professionals. U.S. Bank's Request Prior to discussions with the Debtors, U.S. Bank Trust National Association, as Indenture Trustee for the Village of Hodge Louisiana Combined Utility System Bonds, filed a request with the Court, asking for confirmation that the automatic stay is not applicable to certain indenture funds. In the alternative, U.S. Bank asked that the automatic stay be terminated to permit the use of the Indenture Funds in accordance with the bond documents. According to Daniel S. Bleck, Esq., at Mintz Levin Cohn Ferris Glovsky and Popeo P.C., in Boston, Massachusetts, U.S. Bank's request is filed against a backdrop of various defaults under the relevant documents that relate to the Indenture Funds, including, without limitation, a default in the payment of amounts. Pursuant to the documents underlying the Bonds, the Indenture Trustee has rights to apply the Indenture Funds to satisfy amounts due and payable on account of the Bonds, Mr. Bleck relates. He notes that U.S. Bank files its request as a precaution as the Indenture Funds are held in trust and are not otherwise "property of the estate" and are not protected by the automatic stay. The Bonds were issued by the Village of Hodge, Louisiana, which operates a combined water, sewerage and electric utility system in Louisiana. The Debtor's Hodge, Louisiana manufacturing facility is the largest single user of these outputs and services. Mr. Bleck contends that U.S. Bank's request should be allowed because the Indenture Funds are not property of the Debtors' estate and are only held in trust. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Has Request for 2nd Expansion of E&Y Work -------------------------------------------------------- Smurfit-Stone Container Corp. submitted a second application to further expand the scope of Ernst & Young LLP' scope of employment. Specifically, the Debtors note that they need E&Y to perform additional services consisting of "fresh start" accounting consultation services, which involves the allocation of the reorganization value to the Debtors' assets in conformity with purchase price allocations under financial accounting standards. Fees for the additional accounting services will be based on E&Y's applicable hourly rates: Senior & National Partner $600 Partner, principal, and director 575 Senior manager 430 Manager 395 Senior 270 Staff 190 E&Y will also be reimbursed for reasonable and necessary expenses incurred in connection with the Additional Audit Services. Daniel J. Nolan, a partner at E&Y, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Proposes KPMG LLP as Consultant ---------------------------------------------- Smurfit-Stone Container Corp. and its affiliates ask the Court for authority to employ KPMG LLP as their fresh start valuation consultant, nunc pro tunc to October 2, 2009. Craig A. Hunt, Esq., the Debtors' senior vice president, secretary and general counsel, relates that prior to the Petition Date, the Debtors employed KPMG in the ordinary course to perform general accounting and asset valuation work. Shortly after the Debtors commenced their Chapter 11 cases, they filed a motion to approve the retention and employment of professionals, including KPMG, in the ordinary course. On October 2, 2009, the Debtors engaged KPMG to perform the necessary investigation and analyses to determine the fair market value of their assets in order to assist them in meeting their fresh start valuation and financial reporting requirements. Mr. Hunt tells the Court that in providing services to the Debtors since 2008, KPMG's professionals have worked closely with the Debtors' management, internal staff, and other professionals. Given KPMG's experience and understanding of the Debtors' businesses, the Debtors believe that KPMG will be both efficient for their business operations and cost-effective for their estates. In general, the Debtors anticipate that KPMG will perform, among others, these services: A. Phase I * Investigating, analyzing and determining the fair market value of the Debtors' tangible property including, but not limited to, land, buildings, machinery and equipment, and leasehold improvements; * Investigating, analyzing, and determining the fair market value of the Debtors' intangible property including, but not limited to, customer relationships, patents/technology, trademarks/trade names, leasehold interests, licenses, in-process research and development, and noncompete agreements; * Conducting interviews with the Debtors' personnel, meeting with independent auditors to validate the approach; and * Advising and assisting the Debtors in the management and control of cash disbursements; B. Phase II * Prepare certain Statements of Financial Accounting Standards including, but not limited to, SFAS No. 157, 141R and 142 and Statement of Position No. 90-7; and * Completing and delivering valuation reports to the Debtors in the timeframe required. Mr. Hunt tells the Court that KPMG's services as fresh start valuation consultant will not duplicate services provided by any of the Debtors' other professionals. He says that the Debtors will monitor KPMG's services to ensure that all parties make every reasonable effort to avoid any duplication that might arise between the fresh start valuation consulting services provided by KPMG and the services provided by Ernst & Young LLP, or any other professionals employed by the Debtors. The Debtors will pay KPMG's fees according to these hourly rates in addition to reimbursement of reasonable and necessary expenses incurred: Partner $463 Managing Director 438 Senior Manager 400 Manager 325 Sr. Associate 213 Associate 163 Brian Morris, the managing director of KPMG, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. SOUTHERN FARMLAND: Case Summary & 2 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Southern Farmland Properties, Inc. 17301 Muskrat Avenue Adelanto, CA 92301-2259 Bankruptcy Case No.: 09-14165 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Western District of Tennessee (Jackson) Debtor's Counsel: C. Jerome Teel Jr., Esq. Teel, McCormack & Maroney, PLC 425 East Baltimore Street Jackson, TN 38301 Tel: (731) 424-3315 Fax: (731) 424-3501 Email: lianne@tennesseefirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 According to the schedules, the Company has assets of $1,197,077, and total debts of $722,688. A full-text copy of the Debtor's petition, including a list of its 2 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/tnwb09-14165.pdf The petition was signed by William (Bill) H. Lohman, president of the Company. STANFORD FIN'L: Owner Can Use Lloyd's Insurance to Pay Lawyers -------------------------------------------------------------- Laurel Brubaker Calkins and Andrew M. Harris at Bloomberg News report that U.S. District Judge David Godbey of Dallas has ruled that Robert Allen Stanford, the financier accused of orchestrating a multi-billion Ponzi scheme, can use corporate insurance policy proceeds to pay defense lawyers. The report relates that Mr. Stanford and other Stanford Group executives can draw from Lloyds of London officers' and directors' coverage said to be worth at least US$50 million. "The court finds it in the interest of fairness to allow directors and officers to access insurance proceeds to which they are entitled for several reasons," the report quoted Judge Godbey as saying. "The potential harm to them if denied coverage is not speculative but real and immediate; they may be unable to defend themselves in civil actions in which they do not have a right to court-appointed counsel," Judge Godbey added. As reported in the Troubled Company Reporter-Latin America on September 22, 2009, Reuters said U.S. District Judge David Hittner has ordered the Public Defender's Office to take the case of Mr. Stanford, following the financier's statements that he could not afford to pay lawyers' fees since his assets still remain frozen. According to the report, Michael Sokolow from the Federal Public Defender's Office in Houston will be Mr. Stanford's lead attorney as he replaces Houston attorney Dick DeGuerin, who asked to withdraw in July after failing to secure a guarantee of payment. The report related that Robert Luskin, Esq., at Patton Boggs in Washington, DC, said he and a team of lawyers were prepared to take over Mr. Stanford's defense but that payment was also an issue. Bloomberg News related that Judge Hittner also approved the addition of private practitioner Kent Schaffer. According to Bloomberg News, Mr. Luskin said he may continue helping Mr. Stanford appeal the denial of his bail, praised the ruling although he said he's still digesting it. Mr. Schaffer told Bloomberg in a phone interview that while he's pleased with the ruling, he's not sure how it will affect his ability to continue representing Mr. Stanford. Stanford Financial Group court-appointed receiver, Ralph Janvey, the report relates, said that as many as 60 Stanford executives and employees are seeking to use the directors' and officers' coverage to defray their legal bills. The coverage may be worth as much as US$90 million, Mr. Janvey added. Bloomberg News notes that lawyers of SFG Chief Investment Officer, Laura Pendergest-Holt, asked the criminal case judge, David Hittner, to order Lloyd's underwriters to pay the Stanford defendants' legal bills. The report relates that while Judge Hittner hasn't ruled on Ms. Pendergest-Holt's request, court filings indicate he made direct inquiries to both Mr. Janvey and Lloyd's about whether anything prevented the insurer from paying the defendants' legal bills. Meanwhile, the report relates that David Finn, a lawyer for SFG Co. Chief Financial Officer, James M. Davis, said that Judge Godbey's ruling will allow him to continue representing the government's key cooperating witness. "It means I will not have to file a motion to withdraw," Mr. Finn said in an e-mail obtained by the news agency. "I am relieved because I will not have to keep digging into my pocket for expenses not knowing if I'd ever get paid," Mr. Finn 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). STARCOACH INC: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Starcoach, Inc. aka Starcoach Buses 153 Maxwell Lane Marrero, LA 70072 Bankruptcy Case No.: 09-13415 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtor's Counsel: Robert L. Marrero, Esq. Robert Marrero, LLC 3520 General DeGaulle Drive, Suite 1035 New Orleans, LA 70114 Tel: (504) 366-8025 Fax: (504) 366-8026 Email: marrero1035@bellsouth.net 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 $1,209,300, and total debts of $1,773,641. A full-text copy of the Debtor's petition, including a list of its 13 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/laeb09-13415.pdf The petition was signed by Henry Elton Smith, director of the Company. STEGE CONTRACTING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Stege Contracting Corporation dba Stege Contracting Corp. Suite 201, 7110 Beech Ridge Trail Tallahassee, FL 32312 Bankruptcy Case No.: 09-40933 Chapter 11 Petition Date: October 7, 2009 Court: United States Bankruptcy Court Northern District of Florida (Tallahassee) Judge: Lewis M. Killian, Jr. Debtor's Counsel: Mark Freund, Esq. Igler & Dougherty, P.A. Suite 1010, 500 North Westshore Blvd. Tampa, FL 33609 Tel: (813) 289-1020 Fax: (813) 289-1070 Email: mf@idlaw.biz 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/flnb09-40933.pdf The petition was signed by James E. Stege II, president of the Company. STEVE PAIGE: Internet Domain Name Was Property of the Estate ------------------------------------------------------------ WestLaw reports that a Chapter 11 debtor exercised dominion and control over a domain name and, thus, it was property of the estate on the petition date and at relevant times pre-and postpetition, a Utah bankruptcy court has ruled. The domain name was registered in the debtor's personal name for the five-year period ending just prior to the petition date, and the debtor was personally invoiced for its initial registration and renewal fees, which he paid with his personal credit card. Although the registration was transferred to another individual after the debtor entered into a joint venture agreement, this other individual testified that he never had an ownership interest in the domain name. The separation agreement ending the joint venture, which stated that the domain name was to be transferred "back to [debtor's affiliate]" meant back to the debtor personally, the court found. The debtor's affiliate never owned or exercised control over the domain name. The debtor, moreover, continued to exercise control over the domain name postpetition and was treated as its owner by others, regardless of who was listed as the domain name's registrant. In re Paige, --- B.R. --- -, 2009 WL 2591335 (Bankr. D. Utah). The Internet domain name at issue is freecreditscore.com -- which, the Honorable William T. Thurman indicates, was registered in 2000 and now estimated to be worth between $350,000 and $200 million in the course of a 19-day trial in Jubber, et al., v. Search Market Direct, Inc., et al. (Bankr. D. Utah Adv. Pro. No. 06-02299), about whether or not the domain name was property of Mr. Paige's estate. Steve Zimmer Paige sought chapter 7 protection (Bankr. D. Utah Case No. 05-34474) on Sept. 16, 2005, and the case was subsequently converted to a chapter 11 proceeding on Oct. 6, 2006, after the U.S. Trustee's Office, acting on an anonymous tip from THIRSTY 4 JUSTICE objected to Mr. Paige's general discharge for failure to disclose ownership of the domain name in his Schedules of Assets and Liabilities. Gary Jubber serves as the Liquidating Trustee under a joint Chapter 11 plan he and ConsumerInfo.com, Inc., proposed on May 23, 2007, which was confirmed over Mr. Paige's objection by Judge Thurman on Oct. 18, 2008. STORABLES INC: Dana Park Objects to Reorganization Plan ------------------------------------------------------- Jeff Manning at The Oregonian reports that Dana Park LLC, owner of a Mesa, Arizona shopping center that housed a Storables Inc., has rejected the Company reorganization plan and has threatened to sue the Company over $1.4 million in payments it made last fall to certain executives and to a company partly owned by the Debtor's founder, Dodd Fischer, in the months leading up to the Company's bankruptcy. Dana Park said in court documents, "This conduct represents a terrible abuse of bankruptcy jurisdiction." According to The Oregonian, Dana Park claimed it spent more than $900,000 preparing space for Storables, only to have the retailer demand rent concessions three months later. The complaint is off base, The Oregonian says, citing Mr. Fischer. According to the report, Mr. Fischer did confirm that Storables in September 2008 did lend money to a company in which he has an interest and paid $400,000 to senior managers to redeem company stock. Portland-based Storables, Inc. -- http://www.storables.com/-- is a 27-year-old retailer that specializes in home and office organization products. It operates miscellaneous home furnishings stores. The Company filed for Chapter 11 bankruptcy protection on April 1, 2009 (Bankr. D. Ore. Case No. 09-32252). Albert N. Kennedy, Esq., at Tonkon Torp LLP assists the Debtor in its restructuring efforts. The Debtor listed $1,000,001 to $10,000,000 in assets and $500,001 to $1,000,000 in liabilities. SUN-TIMES MEDIA: Tyree Sees Profit by First Half of 2010 -------------------------------------------------------- James Tyree, who won the auction for Sun-Times Media Group Inc., said the newspaper publisher may be profitable by the end of next year's first half. "If revenue performs well, we'll be profitable in the first two quarters," Mr. Tyree said in a telephone interview October 9, according to Bloomberg's Greg Bensinger. "I am really not talking about advertising going up. I am talking about it going down less," Mr. Tyree said. The U.S. Bankruptcy Court for the District of Delaware on October 8 approved the sale of substantially all of the assets of Sun-Times Media Group to STMG Holdings, LLC, a private investor group led by Chicago businessman James C. Tyree. The total transaction is valued at approximately $25 million and is expected to close by the end of October 2009. The closing remains contingent upon approvals by two of the Company's 16 bargaining units of amendments to their collective bargaining agreements. Those agreements are expected to be reached in the coming days. About Sun-Times Media Sun-Times Media Group, Inc. (Pink Sheets: SUTMQ) -- http://www.thesuntimesgroup.com/-- (Pink Sheets: SUTM) owns media properties including the Chicago Sun-Times and Suntimes.com and 58 suburban newspaper titles and corresponding Web sites. The Company and its affiliates conduct business as a single operating segment which is concentrated in the publishing, printing, and distribution of newspapers in greater Chicago, Illinois, metropolitan area and the operation of various related Web sites. The Company also has affiliates in Canada, the United Kingdom, and Burma. Sun-Times Media's balance sheet at September 30, 2008, showed total assets of $479.9 million, total liabilities of $801.7 million, resulting in a stockholders' deficit of roughly $321.8 million. The Company and its affiliates filed for Chapter 11 bankruptcy protection on March 31, 2009 (Bankr. D. Del. Case No. 09-11092). James H.M. Sprayregan, P.C., James A. Stempel, Esq., David A. Agay, Esq., and Sarah H. Seewer, Esq., at Kirkland & Ellis LLP, assist the Debtors in their restructuring efforts. Sun-Times Media's investment banker is Rothschild Inc. and its estructuring advisor is Huron Consulting Group. Kurtzman Carson Consultants LLC is the Debtors' claims agent. As of November 7, 2008, the Debtors listed $479,000,000 in assets and $801,000,000 in debts. SUNRISE SENIOR: Obtains Wells Fargo Forbearance Through Nov. 16 --------------------------------------------------------------- Sunrise Pasadena CA Senior Living, LLC, and Sunrise Pleasanton CA Senior Living, L.P., on October 1, 2009, entered into a letter agreement with Wells Fargo Bank, National Association regarding the Loan Agreement dated September 28, 2007, by and between the Sunrise Land Borrowers and Wells Fargo. Both Sunrise Land Borrowers are subsidiaries of Sunrise Senior Living, Inc. Sunrise Pasadena owns undeveloped land located in Pasadena, California, and Sunrise Pleasanton owns undeveloped land located in Pleasanton, California. Pursuant to the Letter Agreement, among other matters, Wells Fargo agreed to (i) extend the maturity date of the Loan Agreement from October 1, 2009, to November 16, 2009, and (ii) forbear from enforcing its rights or remedies with respect to breaches of certain financial covenants contained in the Loan Agreement until the earlier to occur of (x) the Extended Maturity Date and (y) any other default under the Loan Agreement. As of October 1, 2009, there was approximately $22 million in outstanding borrowings under the Loan Agreement. The Sunrise Land Borrowers' obligations under the Loan Agreement are secured by mortgages on the real property owned by the Sunrise Land Borrowers and are guaranteed by Sunrise. Meanwhile, The Guardian Life Insurance Company of America, Guardian Investor Services LLC, RS Investment Management Co. LLC, and RS Value Fund disclosed that they no longer hold shares of Sunrise Senior Living. The Guardian Life Insurance Company of America is an insurance company and the parent company of Guardian Investor Services LLC and RS Investment Management Co. LLC. Guardian Investor Services LLC is a registered investment adviser, a registered broker- dealer, and the parent company of RS Investment Management Co. LLC. Bankruptcy Warning Sunrise Senior Living said it has no borrowing availability under its bank credit facility, and it has significant scheduled debt maturities in 2009 and significant long-term debt that is in default. Sunrise is endeavoring to extend debt maturity dates, re-finance debt and obtain waivers from applicable lenders. It is engaged in discussions with various venture partners and third parties regarding the sale of certain assets with the purpose of increasing liquidity and reducing obligations to enable the Company to continue operations. Sunrise expects that its cash balances and expected cash flow are sufficient to enable it to meet operating obligations through December 2, 2009. If it is not able to achieve these objectives, it will not have sufficient financial resources to meet financial obligations and it could be forced to seek reorganization under the U.S. Bankruptcy Code. As of June 30, 2009, the Company had $1.14 billion in total assets and $1.09 billion in total liabilities. Sunrise had $37.0 million and $29.5 million of unrestricted cash at June 30, 2009 and December 31, 2008, respectively. As of June 30, 2009, Sunrise and its consolidated subsidiaries had debt of $614.5 million, of which $99.1 million of debt is scheduled to mature in 2009, along with $69.2 million of draws on the Bank Credit Facility. Long-term debt that is in default totals $360.4 million, including $190.2 million of debt that is in default as a result of the failure to pay principal and interest to the lenders of Sunrise's German communities, and $170.2 million of debt that is in default as a result of Sunrise's failure to meet certain financial covenants. About Sunrise Senior Living Sunrise Senior Living, Inc., a McLean, Va.-based company -- http://www.sunriseseniorliving.com/-- employs roughly 40,000 people. As of June 30, 2009, Sunrise operated 415 communities in the United States, Canada, Germany and the United Kingdom, with a combined unit capacity of roughly 42,750 units. Sunrise offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing and rehabilitative services. Sunrise's senior living services are delivered by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents. SUNRISE SENIOR: To Sell 21 Communities to Brookdale for $204MM -------------------------------------------------------------- Sunrise Senior Living, Inc., reports that on October 7, 2009, 21 of its wholly owned subsidiaries entered into a Purchase and Sale Agreement and a First Amendment to Purchase and Sale Agreement to sell the assets of 21 assisted living communities to BLC Acquisitions, Inc., an affiliate of Brookdale Senior Living Inc. The aggregate purchase price for the Portfolio is $204 million. The Company expects that it will receive approximately $60 million in proceeds after payment or assumption by the Purchaser of certain mortgage loans, the posting of required escrows and payment of transaction expenses by the Company, but prior to the use of any such funds to repay a portion of the outstanding amounts under the Company's bank credit facility. In connection with the execution of the Purchase and Sale Agreement, Purchaser has placed into escrow an earnest money deposit of $5 million toward the purchase price. The deposit is non-refundable except in the event that (a) the requisite lenders under the Company's bank credit facility do not approve the transaction by October 19, 2009, or such approval is no longer in effect any time prior to the closing or (b) Sellers refuse to consummate the transaction despite the fulfillment of all of Sellers' conditions to closing. Upon closing of the transaction, Purchaser intends to assume certain mortgage loans currently encumbering 15 of the properties included in the Portfolio. Purchaser may elect to assume additional loans encumbering the remaining properties included in the Portfolio. Purchaser shall be solely responsible for obtaining the applicable lender's consent for any assumption of debt and for obtaining a release of Sellers' and their respective affiliates' obligations under such debt. Sellers have agreed to cause all mortgages and monetary liens affecting the properties and indebtedness secured by the properties (other than any debt assumed by Purchaser) to be satisfied and released by using the applicable portion of the transaction proceeds for such purpose. Purchaser has the right to conduct additional due diligence for a limited period of time. In the event that Purchaser identifies certain due diligence matters by October 30, 2009 -- or, with respect to certain types of matters, by October 17, 2009 -- Purchaser shall have the right to request that Sellers cure such matter. If such matter is not cured within 30 days, Purchaser may terminate the Purchase and Sale Agreement. In the Purchase and Sale Agreement, Sellers made customary covenants, representations and warranties for transactions of this type. Sellers' liability to Purchaser following closing for all covenants, representations, warranties and indemnities is capped at $5 million in the aggregate. Sellers will deposit $2.5 million in cash in an escrow account on the closing date in respect of any such obligations. Sellers retain responsibility for all liabilities and obligations to third parties with respect to the Portfolio accrued or incurred prior to closing and all liabilities and obligations arising from each Seller's operations prior to closing, whether or not accrued or disclosed. Sellers and Purchaser have agreed to negotiate in good faith clarifications and updates to the Purchase and Sale Agreement requested by Purchaser that shall have no economic effect on the transaction. At closing, the parties will enter into appropriate arrangements to effectuate a bridging of the licenses and management agreements for the operation of the facilities included in the Portfolio, pending Purchaser's receipt of its own licenses. The closing date of the transaction is currently scheduled for November 16, 2009, but the closing is subject to (i) the receipt of approvals by the requisite lenders under the bank credit facility, (ii) the assumption by Purchaser of the Assumed Debt and the issuance of releases of the obligations of the Company and Sellers under the Assumed Debt by the applicable lender; and (iii) other customary closing conditions for transactions of this type. In the event that the transaction does not close, Sellers are entitled to retain the $5 million earnest money deposit as liquidated damages unless the failure to close resulted from either (a) the failure of the requisite lenders under the Company's bank credit facility to approve the transaction by October 19, 2009, or such approval is no longer in effect any time prior to the closing or (b) Sellers' refusal to consummate the transaction despite the fulfillment of all of Sellers' conditions to closing. In the event that the transaction does not close due to a default of Sellers, Purchaser may seek specific performance or elect to terminate the Purchase and Sale Agreement, in which case Sellers shall reimburse Purchaser for its out-of-pocket costs and expenses, up to a maximum of $500,000. "This is another important step in our restructuring process and provides us with needed funds to pay down our bank line and with additional working capital," said Mark Ordan, Sunrise's chief executive officer. "We are particularly pleased that our residents and team members in these communities will join a fine and committed operator like Brookdale." Sunrise was advised on the sale by Goldman, Sachs and Co. Bankruptcy Warning Sunrise Senior Living said it has no borrowing availability under its bank credit facility, and it has significant scheduled debt maturities in 2009 and significant long-term debt that is in default. Sunrise is endeavoring to extend debt maturity dates, re-finance debt and obtain waivers from applicable lenders. It is engaged in discussions with various venture partners and third parties regarding the sale of certain assets with the purpose of increasing liquidity and reducing obligations to enable the Company to continue operations. Sunrise expects that its cash balances and expected cash flow are sufficient to enable it to meet operating obligations through December 2, 2009. If it is not able to achieve these objectives, it will not have sufficient financial resources to meet financial obligations and it could be forced to seek reorganization under the U.S. Bankruptcy Code. As of June 30, 2009, the Company had $1.14 billion in total assets and $1.09 billion in total liabilities. Sunrise had $37.0 million and $29.5 million of unrestricted cash at June 30, 2009 and December 31, 2008, respectively. As of June 30, 2009, Sunrise and its consolidated subsidiaries had debt of $614.5 million, of which $99.1 million of debt is scheduled to mature in 2009, along with $69.2 million of draws on the Bank Credit Facility. Long-term debt that is in default totals $360.4 million, including $190.2 million of debt that is in default as a result of the failure to pay principal and interest to the lenders of Sunrise's German communities, and $170.2 million of debt that is in default as a result of Sunrise's failure to meet certain financial covenants. About Sunrise Senior Living Sunrise Senior Living, Inc., a McLean, Va.-based company -- http://www.sunriseseniorliving.com/-- employs roughly 40,000 people. As of June 30, 2009, Sunrise operated 415 communities in the United States, Canada, Germany and the United Kingdom, with a combined unit capacity of roughly 42,750 units. Sunrise offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing and rehabilitative services. Sunrise's senior living services are delivered by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents. SWIFT TRANSPORTATION: Bank Debt Trades at 11% Off ------------------------------------------------- Participations in a syndicated loan under which Swift Transportation Co., Inc., is a borrower traded in the secondary market at 89.33 cents-on-the-dollar during the week ended Friday, Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.67 percentage points from the previous week, The Journal relates. The loan matures on March 15, 2014. The Company pays 325 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Swift Transportation Co., Inc. -- http://www.swifttrans.com/-- hauls freight such as building materials, paper products, and retail merchandise throughout the US and in Mexico. The Company operates a fleet of about 18,000 tractors and 48,000 trailers from a network of about 40 terminals. Its services include dedicated contract carriage, in which drivers and equipment are assigned to a customer long-term. Besides standard dry ans, Swift's fleet includes refrigerated, flatbed, and other specialized trailers, as well as about 5,800 intermodal containers. Chairman and CEO Jerry Moyes owns the company, which he founded in 1966, took public, and took private again in 2007. TAN LIE: Trustee Counsel Can Be Paid for De Minimis Trustee Tasks ----------------------------------------------------------------- WestLaw reports that reductions were warranted in the fees sought by a Chapter 11 trustee's attorneys based upon the improper delegation of trustee tasks to the attorneys, such as for compiling and drafting a final report or for "securing" the eviction of the debtor's adult son from property that the trustee wished to sell. However, no reduction was warranted for de minimis entries, mostly in 0.1 hour increments, for time that attorneys spent in receiving telephone calls or e-mails that should have been directed to the trustee. It was more efficient for the attorneys to deal with these matters directly than to refer the caller or the e-mailer to the trustee. In re Tan, Lie Hung & Mountain States Investments, LLC, --- B.R. ----, 2009 WL 2869935 (Bankr. D. Ore.) (Radcliffe, J.). Tan, Lie Hung & Mountain States Investments, LLC, sought protection (Bankr. D. Ore. Case No. 04-61694) from its creditors under Chapter 7, and the case was converted to a Chapter 11 proceeding on Sept. 17, 2004. Kim Short was appointed to serve as the Chapter 11 trustee in June, 2005, undertaking a multi-year liquidation of a considerable amount of real estate. TANA SEYBERT: Can Obtain $6.4 Million DIP Financing from HSBC ------------------------------------------------------------- The U.S. Bankruptcy Court Southern District of New York authorized, on an final basis, Tana Seybert LLC and its affiliates to: -- use cash collateral to provide financing for working capital purposes of the Debtors; -- grant HSBC Bank USA, N. A., as the prepetition lender (i) a replacement lien; and (ii) an adequate protection claim; subject and subordinate to any liens and superpriority claim granted to HSBC. -- obtain advances from HSBC up to an aggregate principal amount of $6.4 million, on a revolving basis. The prepetition lender asserts a secured claim in the amount of $9.5 million, exclusive of certain interest, fees and charges; and all cash in the Debtors' possession or in which the Debtors have an interest on and after the petition date, together with all proceeds thereof, constitutes cash collateral in which the prepetition lender has an interest. In order to complement the use of cash collateral, and to ensure continued operations of their businesses pending the asset sale, the Debtors have negotiated the terms of a secured $6.4 million asset based financing facility through HSBC. HSBC agreed to advance an additional $1 million under the current $5.4 million revolver. In addition, HSBC has agreed, subject to the Budget, to permit the Debtors to use collections of accounts receivable to fund the operations of the business pending the asset sale. The Debtors' use of cash collateral will terminate on (a) 180 days after the petition date, subject to further extension between the Debtors and the prepetition lender; (b) Unimac Tana Seybert LLC terminates sale agreement or fails to close on the agreement; (c) the date that the final order ceases to be in full force and effect or is stayed in any respect; (d) conversion to Chapter 7; and (d) dismissal of the Bankruptcy Case. About Tana Seybert New York City-based Tana Seybert LLC and its affiliates filed for Chapter 11 on Sept. 11, 2009 (Bankr. S. D. N.Y. Case No. 09- 15478). Alan D. Halperin, Esq., at Halperin Battaglia Raicht LLP represents the Debtors in their restructuring efforts. The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. In their petition, the Debtors listed assets and debts both ranging from $10,000,001 to $50,000,000. TELLIGENIX CORPORATION: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Telligenix Corporation 7414 Kingspointe Parkway Orlando, FL 32819 Bankruptcy Case No.: 09-15238 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Judge: Karen S. Jennemann Debtor's Counsel: R Scott Shuker, Esq. Latham Shuker Eden & Beaudine LLP Post Office Box 3353 Orlando, FL 32802 Tel: (407) 481-5800 Fax: (407) 481-5801 Email: bankruptcynotice@lseblaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-15238.pdf The petition was signed by Anthony Vergopia, president of the Company. TIGER PACIFIC: Enters into Forbearance Pact with Lenders -------------------------------------------------------- Tiger Pacific Mining Corp. has entered into a forbearance and loan agreement with a director, a related party and a third party. Under the terms of the Agreement, (i) the Lenders agreed to extend the time for repayment of existing indebtedness due to the Lenders totaling $592,1656 until after two months from Tiger Pacific's reinstatement on either the NEX Exchange or the TSX Venture Exchange; and (ii) the Lenders agreed to lend an additional $3,000 to Tiger Pacific at 10% per annum due on demand after two months from the Reinstatement. Tiger Pacific will close the transaction as soon as possible following receipt of NEX approval. Tiger Pacific considers any abridging of time requirements necessary and reasonable in the circumstances because the new loans are de minimus in amount and are required immediately to meet its ongoing financial obligations, and the granting of security is a pre-condition to the new loans. In addition, Tiger Pacific has entered into a general security agreement with the Lenders in respect of the above indebtedness and its advisors for unpaid fees. The closing of the transaction as described above is subject to the approval of NEX. Tiger Pacific is a mining company engaged in the exploration and development of metals and minerals. TIMOTHY RICHARDS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Joint Debtors: Timothy J. Richards Susan Richards 49 Spruce Road Ocean City, NJ 08226-2647 Bankruptcy Case No.: 09-36921 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court District of New Jersey (Camden) Debtors' Counsel: Paul J. Winterhalter, Esq. Law Offices of Paul J Winterhalter, P.C. One Greentree Center, Suite 201 Rte 73 & Greentree Road Marlton, NJ 08053 Tel: (856) 797-8400 Fax: (856) 797-8405 Email: pwinterhalter@pjw-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtors did not file a list of their 20 largest unsecured creditors when they filed their petition. The petition was signed by the Joint Debtors. TODD'S CAR WASH: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Todd's Car Wash, LLC 5505 Johnston St. Lafayette, LA 70503 Bankruptcy Case No.: 09-51469 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court Western District of Louisiana (Lafayette/Opelousas) Judge: Robert Summerhays Debtor's Counsel: Thomas E. St. Germain, Esq. 1414 NE Evangeline Thruway Lafayette, LA 70501 Tel: (337) 235-4001 Fax: (337) 235-4020 Email: ecf@weinlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of at least $1,591,465, and total debts of $2,560,258. 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/lawb09-51469.pdf The petition was signed by Todd Lemaire, managing member of the Company. TRAFFORD DISTRIBUTING: Set-Off Approved for Warehouse Customer -------------------------------------------------------------- WestLaw reports that damages sustained by a warehouse customer as the result of a bankruptcy trustee's rejection of a fulfillment warehouse contract were deemed to have occurred pre-petition. Thus, the customer could set-off damages arising from the removal of its property from the warehouse against the amounts it owed the debtor. However, the customer could not assert a recoupment claim. In re Trafford Distributing Center, Inc., --- B.R. ----, 2009 WL 2826124 (Bankr. S.D. Fla.) (Olson, J.). Trafford Distributing Center, Inc., a/k/a Trafford Distribution Center, Inc., sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 08-17980) on June 13, 2008. Soneet R. Kapila serves as the Chapter 11 trustee. TRAVELPORT LLC: Moody's Cuts Senior Facility Ratings to 'Ba3' ------------------------------------------------------------- Moody's Investors Service lowered Travelport LLC's senior secured credit facility ratings to Ba3 from Ba2. The downgrade of the instrument ratings reflects changes to the overall capital structure as a result of the significant debt repurchases made by the company during the year. Approximately $835 million of the $1.1 billion PIK loan due 2012 held at Travelport Holdings Ltd. (the indirect parent company of Travelport LLC) has been repurchased by the holding company, funded primarily by distributions from Travelport Limited (the parent company of Travelport LLC, which is the primary debt issuing subsidiary). The significant reduction of the PIK loan, which has an outstanding balance of $535 million, results in less junior debt in the overall liability structure. The lower amount of junior ranking debt has the effect of reducing the up notching of the senior secured debt instruments relative to the B2 corporate family rating in accordance with Moody's Loss Given Default Methodology. Accordingly, the senior secured credit facility ratings have been downgraded to Ba3, which is two notches above the CFR. The rating outlook remains negative in light of Moody's negative industry sector outlooks for global airlines and U.S. lodging. Moody's expect global travel demand to remain weak into 2010 due to the economic recession, rising unemployment, and low consumer confidence. While the company has achieved significant cost savings and has benefited from the waiver of airline booking fees at the major online travel companies, Moody's believes that a prolonged downturn in the global travel market could offset the benefits of these cost reductions and delay its ability to de- leverage from its current level of mid 6x (Moody's adjusted debt to EBITDA). These ratings were downgraded/assessments revised: -- $300 million revolving credit facility due 2012 downgraded to Ba3 (LGD 2, 25%) from Ba2 (LGD 2, 21%); -- $150 million synthetic letter of credit facility due 2013 downgraded to Ba3 (LGD 2, 25%) from Ba2 (LGD 2, 21%); -- $2.19 billion term loan facility due 2013 downgraded to Ba3 (LGD 2, 25%) from Ba2 (LGD 2, 21%); -- $150 million term loan C facility due 2013 downgraded to Ba3 (LGD 2, 25%) from Ba2 (LGD 2, 21%) These assessments were revised: -- Euro 235 million senior unsecured notes due 2014 - B3 (LGD 5, 74% from LGD4, 63%); -- $150 million floating rate senior unsecured notes due 2014 - B3 (LGD 5, 74% from LGD4, 63%); -- $450 million fixed senior unsecured notes due 2014 - B3 (LGD 5, 74% from LGD4, 63%); -- $300 million subordinated notes due 2016 - Caa1 (LGD5, 88% from 78%); -- Euro 160 million subordinated notes due 2016 - Caa1 (LGD5, 88% from 78%) The last rating action was on June 4, 2009, when Moody's withdrew the rating for Travelport Holdings Limited's $1.1 billion PIK loan due 2012. Headquartered in New York, New York, Travelport, with approximately $2.3 billion of revenues for the twelve months ended June 30, 2009, provides travel services, including those through its global distribution system and GTA, its group travel and wholesale hotel business. TRIBUNE CO: Bank Debt Trades at 50% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Tribune Co. is a borrower traded in the secondary market at 49.96 cents-on-the- dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.52 percentage points from the previous week, The Journal relates. The loan matures May 17, 2014. Tribune pays 300 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt, while it is not rated by Standard & Poor's. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. 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 Dec. 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. As of Dec. 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: Cubs Sent to Chapter 11 to Complete Sale to Rickets --------------------------------------------------------------- The Chicago Cubs filed for bankruptcy as part of a plan by owner Tribune Co. to sell the baseball team for more than $700 million to the family of TD Ameritrade Holding Corp.'s founder, Joe Ricketts. Chicago National League Ball Club LLC listed assets and debts of more than $1 billion October 12 in documents in U.S. Bankruptcy Court in Wilmington, Delaware. The transfer has been approved by Major League Baseball's other owners, Bloomberg News reported. "Having Major League Baseball sign off on a sale will certainly take care of a major obstacle for the Cubs," bankruptcy attorney Tom Salerno said in an interview with Bloomberg. As reported by the TCR on Sept. 25, 2009, Tribune Co. received permission from the Bankruptcy Court to sell the Chicago Cubs, paving the way for the baseball team to file bankruptcy to make the transaction final. Under the sale process approved by Judge Kevin Carey at the end of August, the National League Ball Club, LLC, Tribune's affiliate directly owning the Cubs, will file for Chapter 11 as soon as the Bankruptcy Court approves Tribune's proposal and in order to effectuate the sale. Tribune will be selling the Chicago Cubs baseball team to the family of TD Ameritrade Holding Corp. founder Joe Ricketts, for a consideration expected to bring $740 million in cash for creditors. Aside from approval from the Bankruptcy Court, transfer of the Cubs team requires approval by Major League Baseball, an unincorporated association of 30 member clubs in North America. Because the transaction was a so-called leveraged partnership, it will enable Tribune to avoid paying about $300 million in taxes, Steven Church at Bloomberg said, citing tax consultant Robert Willens, who teaches a class on tax law at the business school at Columbia University. The structure, however, probably will prompt questions from the U.S. Internal Revenue Service, Mr. Willens said. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. Attorneys at Landis Rath & Cobb LLP, and Chadbourne & Parke LLP, represent the Official Committee of Unsecured Creditors. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Updated Case Summary & 30 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Tribune Company fka Times Mirror Corporation 435 N. Michigan Avenue Chicago, IL 60611 Bankruptcy Case No.: 08-13141 Chapter 11 Petition Date: Dec. 8, 2008 Debtor-affiliates filing separate Chapter 11 petitions on Dec. 8, 2008: Entity Case No. ------ -------- 435 Production Company 08-13142 5800 Sunset Productions Inc. 08-13143 Baltimore Newspaper Networks, Inc. 08-13144 California Community News Corporation 08-13145 Candle Holdings Corporation 08-13146 Channel 20, Inc. 08-13147 Channel 39, Inc. 08-13148 Channel 40, Inc. 08-13149 Chicago Avenue Construction Company 08-13150 Chicago River Production Company 08-13151 Chicago Tribune Company 08-13152 Chicago Tribune Newspapers, Inc. 08-13153 Chicago Tribune Press Service, Inc. 08-13154 Chicagoland Microwave Licensee, Inc. 08-13155 Chicagoland Publishing Company 08-13156 Chicagoland Television News, Inc. 08-13157 Courant Specialty Products, Inc. 08-13159 Direct Mail Associates, Inc. 08-13160 Distribution Systems of America, Inc. 08-13161 Eagle New Media Investments, LLC 08-13162 Eagle Publishing Investments, LLC 08-13163 Forsalebyowner.com corp. 08-13165 Forsalebyowner.com Referral Services, LLC 08-13166 Fortify Holdings Corporation 08-13167 Forum Publishing Group, Inc. 08-13168 Gold Coast Publications, Inc. 08-13169 Greenco, Inc. 08-13170 Heart & Crown Advertising, Inc. 08-13171 Homeowners Realty, Inc. 08-13172 Homestead Publishing Co. 08-13173 Hoy, LLC 08-13174 Hoy Publications, LLC 08-13175 Insertco, Inc. 08-13176 Internet Foreclosure Service, Inc. 08-13177 Juliusair Company, LLC 08-13178 JuliusAir Company II, LLC 08-13179 KIAH Inc. 08-13180 KPLR, Inc. 08-13181 KSWB Inc. 08-13182 KTLA Inc. 08-13183 KWGN Inc. 08-13184 Los Angeles Times Communications LLC 08-13185 Los Angeles Times International, Ltd. 08-13186 Los Angeles Times Newspapers, Inc. 08-13187 Magic T Music Publishing Company 08-13188 NBBF, LLC 08-13189 Neocomm, Inc. 08-13190 New Mass. Media, Inc. 08-13191 New River Center Maintenance Association, Inc. 08-13192 Newscom Services, Inc. 08-13193 Newspaper Readers Agency, Inc. 08-13194 North Michigan Production Company 08-13195 North Orange Avenue Properties, Inc. 08-13196 Oak Brook Productions, Inc. 08-13197 Orlando Sentinel Communications Company 08-13198 Patuxent Publishing Company 08-13200 Publishers Forest Products Co. of Washington 08-13201 Sentinel Communications News Ventures, Inc. 08-13202 Shepard's Inc. 08-13203 Signs of Distinction, Inc. 08-13204 Southern Connecticut Newspapers, Inc. 08-13205 Star Community Publishing Group, LLC 08-13206 Stemweb, Inc. 08-13207 Sun-Sentinel Company 08-13208 The Baltimore Sun Company 08-13209 The Daily Press, Inc. 08-13210 The Hartford Courant Company 08-13211 The Morning Call, Inc. 08-13212 The Other Company LLC 08-13213 Times Mirror Land and Timber Company 08-13214 Times Mirror Payroll Processing Company, Inc. 08-13215 Times Mirror Services Company, Inc. 08-13216 TMLH 2, Inc. 08-13217 TMLS I, Inc. 08-13218 TMS Entertainment Guides, Inc. 08-13219 Tower Distribution Company 08-13220 Towering T Music Publishing Company 08-13221 Tribune Broadcast Holdings, Inc. 08-13222 Tribune Broadcasting Company 08-13223 Tribune Broadcasting Holdco, LLC 08-13224 Tribune Broadcasting News Network, Inc. 08-13225 Tribune California Properties, Inc. 08-13226 Tribune Direct Marketing, Inc. 08-13227 Tribune Entertainment Company 08-13228 Tribune Entertainment Production Company 08-13229 Tribune Finance, LLC 08-13230 Tribune Finance Service Center, Inc. 08-13231 Tribune License, Inc. 08-13232 Tribune Los Angeles, Inc. 08-13233 Tribune Manhattan Newspaper Holdings, Inc. 08-13234 Tribune Media Net, Inc. 08-13235 Tribune Media Services, Inc. 08-13236 Tribune Network Holdings Company 08-13237 Tribune New York Newspaper Holdings, LLC 08-13238 Tribune NM, Inc. 08-13239 Tribune Publishing Company 08-13240 Tribune Television Company 08-13241 Tribune Television Holdings, Inc. 08-13242 Tribune Television New Orleans, Inc. 08-13244 Tribune Television Northwest, Inc. 08-13245 Valumail, Inc. 08-13246 Virginia Community Shoppers, LLC 08-13247 Virginia Gazette Companies, LLC 08-13248 WATL, LLC 08-13249 WCWN LLC 08-13250 WDCW Broadcasting, Inc. 08-13251 WGN Continental Broadcasting Company 08-13252 WLVI Inc. 08-13253 WPIX, Inc. 08-13254 WTXX Inc. 08-13255 Debtor-affiliates filing separate Chapter 11 petitions on Oct. 13, 2009: Entity Case No. ------ -------- Chicago National League Ball Club, LLC 09-13496 fka Chicago National League Ball Club, Inc. dba Chicago Cubs Type of Business: Tribune 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. See: http://www.tribune.com/ Court: District of Delaware (Delaware) Judge: Kevin J. Carey Debtors' Delaware Counsel: Norman L. Pernick, Esq. bankruptcy@coleschotz.com Cole, Schotz, Meisel, Forman & Leonard, PA 1000 N. West Street,Suite 1200 Wilmington, DE 19801 Tel: (302) 295-4829 Fax: (302) 652-3117 Debtors' counsel: Sidley Austion LLP One South Dearborn Street Chicago, Illinois 60603 Financial Advisor: Lazard Ltd. 190 LaSalle Street, 31st Floor Chicago, Illinois 60603 -- and -- 30 Rockfeller Plaza New York, New York 10020 Financial Advisor: Alvarez & Marsal North Americal LLC 55 West Monroe Street, Suite 4000 Chicago, Illinois 60603 Claims Agent: Epiq Bankruptcy Solutions LLC 757 Third Avenue, 3rd Floor New York, New York 10017 The Debtors' financial condition as of December 8, 2008: Total Assets: $7,604,195,000 Total Debts: $12,972,541,148 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ JP Morgan Chase Bank NA senior facility $8,571,040,000 Attn: Shadia Aminu 1111 Fannin, 10th Floor Houston, Texas 77002 Tel: (713) 750-7933 Fax: (713) 750-2358 Largest holders of the senior facility: Merrill Lynch Capital bridge loan $1,600,000,000 Corporation as agent Attn: Sharon Hawkins 600 E. Las Colinas Rd. Suite 1300 Irving, TX 75039 Tel: (972) 401-8572 Fax: (972) 869-4818 JPMorgan Chase Bank NA $1,045,833,000 Attn: Miriam Kulnis Tel: (212) 622-4526 Deutsche Bank AG $737,543,000 Angelo Gordon & Co LLP $324,460,000 Attn: Gavin Baiern Tel: (212) 692-0217 KKR Financial Corppration $239,701,000 Attn: Jeremiah Lane Tel: (415) 315-6513 Fax: (415) 391-3077 Viking Global Performance LLC $231,279,000 Attn: Mina Faltas Tel: (203) 863-5011 Fax: (203) 625-8706 Highland Capital Management LP $230,965,000 Tel: (972) 628-4100 Fax: (972) 628-4147 Davidson Kempner Capital $203,943,000 Management LLC Attn: Jamie Donath Tel: (212) 371-3000 Fax: (212) 371-4318 Avenue Advisors LLC $212,273,000 Attn: Trent Spiridelis Tel: (212) 905-5240 Fax: (212) 878-3559 Goldman Sachs Group Inc. $208,588,000 Attn: Scott Bynum Tel: (212) 902-8060 Fax: (212) 902-3757 Taconic Capital Advisors LLC $207,877,000 Tel: (212) 209-3100 Largest holders of the bridge loan facility: JPMorgan Chase Bank NA $437,371,428 Attn: Miriam Kulnis Tel: (212) 622-4526 Merrill Lynch Capital $437,371,428 Corporation Attn: Michael O'Brien Tel: (212) 449-0948 Fax: (212) 738-1186 Citicorp North America $326,380,952 Inc. Attn: Tim Dillworth Tel: (212) 723-9641 Fax: (646) 375-1606 Banc fo America Bridge LLC $242,685,714 Attn: Bill Bowen Tel: (704) 388-3465 Deutsche Bank National Trust exchangeable $900,000,000 as trustee subordinated Attn: David Contino, VP debentures Company Global Transaction notes due 2029 Banking Trust & Securities Services 25 DeForest Avenue Mail Stop: SUM01-0105 Summit, New Jersey 07901 Tel: (908) 608-3183 Fax: (732) 578-4635 Deutsche Bank National Trust 4.875% unsecured $450,000,000 as trustee unsecured notes Attn: David Contino, VP due 2010 Company Global Transaction Banking Trust & Securities Services 25 DeForest Avenue Mail Stop: SUM01-0105 Summit, New Jersey 07901 Tel: (908) 608-3183 Fax: (732) 578-4635 Deutsche Bank National Trust 5.25% unsecured $330,000,000 as trustee unsecured notes Attn: David Contino, VP due 2015 Company Global Transaction Banking Trust & Securities Services 25 DeForest Avenue Mail Stop: SUM01-0105 Summit, New Jersey 07901 Tel: (908) 608-3183 Fax: (732) 578-4635 Deutsche Bank National Trust 7.25% debentures $148,000,000 as trustee due 2096 Attn: David Contino, VP Company Global Transaction Banking Trust & Securities Services 25 DeForest Avenue Mail Stop: SUM01-0105 Summit, New Jersey 07901 Tel: (908) 608-3183 Fax: (732) 578-4635 Barclays Capital Inc. interest rate $142,923,000 Attn: US Client Valuations swaps Group 200 Park Avenue New York, NY 10166 Tel: (973) 576-3616 Fax: (973) 576-3766 Deutsche Bank National Trust 7.5% debentures $98,750,000 as trustee due 2023 Attn: David Contino, VP Company Global Transaction Banking Trust & Securities Services 25 DeForest Avenue Mail Stop: SUM01-0105 Summit, New Jersey 07901 Tel: (908) 608-3183 Fax: (732) 578-4635 Deutsche Bank National Trust 6.61% debentures $84,960,000 as trustee due 2027 Attn: David Contino, VP Company Global Transaction Banking Trust & Securities Services 25 DeForest Avenue Mail Stop: SUM01-0105 Summit, New Jersey 07901 Tel: (908) 608-3183 Fax: (732) 578-4635 Deutsche Bank National Trust 7.25% debentures $82,083,000 as trustee due 2013 Attn: David Contino, VP Company Global Transaction Banking Trust & Securities Services 25 DeForest Avenue Mail Stop: SUM01-0105 Summit, New Jersey 07901 Tel: (908) 608-3183 Fax: (732) 578-4635 Deutsche Bank National Trust medium term $69,550,000 as trustee notes (series E) Attn: David Contino, VP due 2008 Company Global Transaction Banking Trust & Securities Services 25 DeForest Avenue Mail Stop: SUM01-0105 Summit, New Jersey 07901 Tel: (908) 608-3183 Fax: (732) 578-4635 Warner Bros. Television trade debt $23,691,000 Attn: Ken Werner 400 Warner Boulevard Burbank, CA 91522 Tel: (818) 954-6000 Fax: (818) 954-7226 Mark Willes retirement & $11,229,000 4353 Sheffield Drive deferred Comp Provo, UT 84604 Twentieth Television Inc. trade debt $8,051,000 Attn: Bob Cook 2121 Avenue of the Stars 21st Floor Los Angeles, CA 90067 Tel: (310) 369-1000 Fax: (310) 369-3899 Buena Vista Entertainment Inc. trade debt $6,220,000 c/o Disney/ABC Domestic television Attn: Janice Marinelli 2300 Riverside Drive Burbank, CA 91506 Tel: (818) 460-6017 Fax: (818) 560-1930 SP Newsprint Company trade debt $5,153,000 c/o White Birch Paper Company Attn: Christopher Brandt 80 Field Point Road Greenwich, CT 06830 Tel: (203) 661-3344 Fax: (203) 661-3349 NBC Universal Domestic trade debt $4,936,000 Television Distribution Attn: Barry Wallach 30 Rockfeller Plaza New York, NY 10112 Tel: (212) 664-6167 Fax: (212) 664-5998 Robert Erburu retirement & $4,352,000 1518 Blue Jay Way deferred Los Angeles, CA 90069 comp Abitibi Consolidated trade debt $4,192,000 (Abitibi Bowater Inc.) Attn: David J. Paterson 1155 Metcafe Street Suite 800 Montreal, Quebec H3B 2H2 Canada Tel: (514) 875-2160 Fax: (864) 282-9482 Tower JK LLC subordinated $3,323,632 Attn: Philip Tinkler promissory Two North Riverside Plaza notes due 2018 Chicago, IL 60606 Tel: (312) 454-0100 Fax: (312) 454-0157 Tower MS LLC subordinated $2,812,500 c/o Equity Group Investments promissory Two North Riverside Plaza notes 2018 Chicago, IL 60606 Raymond Jansen Jr. retirement & $2,770,000 24 Dockside Lane deferred Comp Box 422 Key Largo, FL 33037 Bowater Inc. trade debt $2,700,000 (Abitibi Bowater Inc.) Attn: David Paterson 1155 Metcalfe Street, Suite 800 Montreal, Quebec H3B 5H2 Canada Tel: (514) 875-2160 Fax: (864) 282-9482 Horst Bergman retirement & $2,681,000 4261 Preserve Parkway South deferred comp Greenwood, CO 80121 Tower EH LLC subordinated $2,658,915 Attn: Philip Tinkler promissory notes c/o Equity Group Investments Two North Riverside Plaza Chicago, IL 60606 Tel: (312) 454-0100 Fax: (312) 454-0157 Tower EH LLC subordinated $2,357,142 Attn: Philip Tinkler promissory notes c/o Equity Group Investments Two North Riverside Plaza Chicago, IL 60606 Tel: (312) 454-0100 Fax: (312) 454-0157 Tower EH LLC subordinated $2,250,000 Attn: Philip Tinkler promissory notes c/o Equity Group Investments Two North Riverside Plaza Chicago, IL 60606 Tel: (312) 454-0100 Fax: (312) 454-0157 Sony Pictures Television trade debt $2,161,000 Attn: Steve Mosko 10202 W. Washington Boulevard Culver City, CA 90232 Tel: (310) 244-4000 Fax: (310) 244-2626 Nielsen Media Research Inc. trade debt $1,874,000 Attn: Susan Whiting 700 Broadway New York, NY 10003 Tel: (646) 654-8300 Fax: (330) 856-8480 Paramount Pictures trade debt $1,691,000 Corporation Attn: Brad Grey 5555 Melrose Ave., Suite 121 Hollywood, CA 90038 Tel: (323) 956-5000 Fax: (310) 369-1283 The petition was signed by senior vice president & chief financial officer Chandler Bigelow III. TRUE TEMPER: Seeks Approval of $90-Mil. of DIP Financing -------------------------------------------------------- True Temper Sports filed with the U.S. Bankruptcy Court a motion to approve its debtor-in-possession financing agreement. BankruptcyData reports that, under the DIP facility, lenders will provide (1) the D.I.P. revolving credit facility of up to $10 million, inclusive of a letter of credit sub-facility in an aggregate amount of $5 million, of which $6 million will be available during the interim period, and (2) the D.I.P. roll-up loan in which $80 million of existing obligations owed in respect of the first lien credit facility will be deemed satisfied. According to the report, General Electric Capital Corporation will serve as revolving DIP administrative agent and co-collateral agent and Credit Suisse, acting through its Cayman Island Branch, will serve as roll-up DIP administrative agent. Interest will accrue on outstanding obligations under the D.I.P. revolving credit facility at a rate equal to LIBOR for interest periods of 1, 2 or 3 months (subject to a 3% floor) plus 8% per annum. Interest on outstanding obligations under the roll-up loans will accrue at a rate equal to the alternate base rate plus 4.25% annum. Prepackaged Plan True Temper announced on Sept. 30 that secured lenders, bondholders and shareholders agreed on the prepackaged plan that would reduce funded debt by 80%, from $275 million to less than $40 million. The plan support agreement requires True Temper to emerge from bankruptcy by December 15. Debt holders and stockholders are injecting $70 million cash that will be used pay down first-lien debt totaling $105.6 million. The remainder of the first-lien debt will be converted into a new term loan under the plan. The $45 million in second-lien debt is to have 11.4% of the new stock. Most of the remainder goes to the investors. While trade suppliers are to be paid in full, other unsecured creditors are to receive nothing. The holders of $125 million in subordinated debt are to receive nothing on account of the debt. The investors providing $70 million financing for the plan hold 45.5% of the subordinated debt. The Debtors have approximately $275 million of indebtedness under the first lien credit facility, second lien credit facility, and the senior subordinated notes. According to Jason A. Jenne, vice president and CFO of True Temper, a series of recent and unforeseen events severely impacted the Debtors' ability to continue servicing their substantial indebtedness and ultimately led to the Debtors' decision to seek to restructure through a prepackaged chapter 11 plan of reorganization. Those events include: (a) the deep recession in the United States (and international) economy, (b) the resulting deterioration in the Debtors' financial performance in 2009, and (c) the Debtors' defaults under the first lien credit facility, second lien credit facility, and the senior subordinated notes A copy of the Plan is available for free at: http://bankrupt.com/misc/TrueTemper_PrepackPlan.pdf A copy of the disclosure statement explaining in detail the terms of the Plan is available for free at: http://bankrupt.com/misc/TrueTemper_PrepackDS.pdf About True Temper True Temper is the leading manufacturer of golf shafts in the world, and is consistently the number one shaft on all professional tours globally. The Company markets a complete line of shafts under the True Temper(R), Grafalloy(R) and Project X(R) shaft brands, and sells these brands in more than 30 countries throughout the world. True Temper is proudly represented by more than 800 individuals in ten facilities located in the United States, Europe, Japan, China and Australia. As of June 28, 2009, the Company had $180.4 million in total assets and $319.0 million in total liabilities, resulting in stockholders' deficit of $138.5 million. True Temper filed for Chapter 11 on Oct. 8, 2009 (Bankr. D. Del Case No. 09-13446). Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represents the Debtor in its restructuring effort. Logan & Company serves as claims and notice agent. Bankruptcy Judge Peter J. Walsh handles the case. TRUE TEMPER: Taps Logan & Company as Claims Agent ------------------------------------------------- True Temper Sports Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Logan & Company Inc. as their claims, noticing and balloting agent. The firm has agreed to provide administrative support services to the Court, the Debtors and other parties-in-interest in these Chapter 11 cases, including: a) serve required notices; b) maintain all proofs of claim and proofs of interests filed; c) docket all the claims; d) maintain and transmit to the clerk the official claims registers; e) maintain current mailing lists of all entities that have filed claims and notices of appearance; f) provide the public access for examination to all claims at its premises during regular business hours and without charge; g) record all transfers of claims; and h) provide balloting and plan solicitation services related to the Debtors' Chapter 11 plan. The firm's standard hourly rates: Principal $270 Court Testimony $300 Statement & Schedule Preparation $200 Account Executive Support $185 Public Website Design & Maintenance $185 Programming Support $150 Project Coordinator $125 Data Prep Analysis $100 Data Entry $70 Clerical $45 The Debtors assure the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. TRUE TEMPER SPORTS: Case Summary & 30 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: True Temper Sports, Inc. dba Alpha Q dba Grafalloy dba Royal Precision dba RP dba True Temper dba True Temper Company dba True Temper Corporation dba True Temper Sports dba True Temper Sports, Inc. dba True Temper Sports, Incorporated dba TT dba TTC dba TTS dba TTSI 8275 Tournament Drive, Suite 200 Memphis, TN 38125 Case No.: 09-13446 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- True Temper Corporation Walsh 09-13447 True Temper Sports-PRC Holdings, Inc. 09-13448 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge Peter J. Walsh Debtor's Counsel: Marion M. Quirk, Esq. Norman L. Pernick, Esq. Cole, Schotz, Meisel, Forman & Leonard 500 Delaware Avenue, Suite 1410 Wilmington, DE 19801 Tel: (302) 652-3131 Fax: (302) 652-3117 Email: bankruptcy@coleschotz.com Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $100,000,001 to $500,000,000 The petition was signed by Donald L. Silverman, the Company's president. True Temper Sports, Inc.'s List of 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Bank of New York, 8.375% Unsecured $125,000,000 as Trustee Notes Due 2011 100 Ashford Center North Suite 520 Atlanta, GA 30338 Newport Composites Trade Payable $444,550 1822 Reynolds Ave. Irvine, CA 92614-5714 U-Known Composite Limited Trade Payable $407,517 5701 Whistling Winds Walk Clarksville, MD 21029 Steel Technologies, Inc. Trade Payable $383,633 15166 Collections Center Drive Chicago, IL 60693 Steel Warehouse Co. Inc. Trade Payable $241,584 City of Armory Utilities Utility Payable $205,000 Atmos Energy Utility Payable $185,000 Atotech USA Inc. Trade Payable $133,405 MSCO Trade Payable $46,235 Lann Chemical & Supply Trade Payable $37,903 Tenn-Tom Pallet Co. Inc. Trade Payable $37,258 Century Chemical Trade Payable $33,397 Cast Urethane Products, Inc. Trade Payable $25,344 Toray Composite America Trade Payable $22,895 Reed Exhibitions Trade Payable $21,000 Fuchs Lubricants Company Trade Payable $19,680 Hoerner Boxes, Inc. Trade Payable $19,379 Awot Global Trade Payable $18,659 George A. Mitchell Company Trade Payable $18,079 Turnstile Publishing Trade Payable $17,000 Keyence Corp. of America Trade Payable $16,160 ALG Labels & Graphic Corp. Trade Payable $15,763 Perfection Servo Hydraulics Trade Payable $14,525 Inc. White Oil Co., & Tire Center Trade Payable $13,891 Inc. Harcros Chemicals Inc. Trade Payable $13,352 Meng & Associates, Inc. Trade Payable $13,140 Tiger Direct Trade Payable $13,095 Springfield Label & Tape Co. Trade Payable $12,794 Waste Management Inc. Utility Payable $12,488 Pension Benefit Guaranty Underfunded Pension Unknown Corporation (PBGC) Liability TRUMP ENTERTAINMENT: Lender Appeals Ruling Giving Up Exclusivity ---------------------------------------------------------------- Law360 reports that in an intensifying grudge match over the restructuring of Trump Entertainment Resorts Inc., Beal Bank, the first-lien lender, has appealed the Bankruptcy Court's decision to let a group of investors horn in on the Chapter 11 proceeding and submit a competing plan of reorganization. Beal Bank is a co- proponent to a plan sponsored by management and Donald Trump. As reported by the TCR on Oct. 9, 2009, creditors of Trump Entertainment Resorts will be choosing between two competing plans, after Bankruptcy Judge Judith Wizmur gave the Donald Trump- backed Debtors and their noteholders permission to solicit acceptances for their competing plans, after their plan outlines were approved. The two parties have upped their restructuring proposals for Trump Entertainment, with Donald Trump and a bank offering to pitch in an additional $13.9 million for creditors and the noteholders offering $50 million more in fresh capital. Donald Trump and Beal Bank would invest $100 million, with Beal raising the interest rate while extending the maturity of a $486 million loan from 2012 to December 2020. As reported by the TCR on August 6, 2009, Trump Entertainment Resorts Inc. filed a Chapter 11 plan built around the proposed sale of the company to shareholder Donald Trump. Under the original plan, Donald J. Trump and BNAC, Inc., an affiliate of Beal Bank Nevada, will invest $100 million cash in the newly private company and become its owners. The original plan provides for a 94% recovery for Beal Bank, the secured creditor, and a wipe out for lower ranked creditors. The Ad Hoc Committee of Holders of the 8.5% Senior Secured Notes Due 2015 filed a competing plan, which originally offered a capital contribution of $175 million in new equity capital in the form of a rights offering backstopped by certain holders of the Senior Secured Notes. That plan would allow second lien noteholders and general unsecured claimants to receive their pro rata share of (a) 5% of the common stock of the reorganized Debtors, and (b) subscription rights to acquire 95% of the New Common Stock. The second lien noteholders are offering $225 million through a rights offering while selling one of the three casinos for $75 million to Coastal Marina LLC, a company controlled by Richard T. Fields. The second lien noteholders' plan would pay the first- lien debt in full by giving them new debt plus proceeds from the Marina sale and cash from the rights offering. The second lien noteholders and allowed general unsecured creditors would receive 95% of the new stock. The participants in the $225 million rights offering will receive 75% of the new stock while the noteholders who will backstop the offering will receive 25% of the new stock as backstop fee. About Trump Entertainment Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The Company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the Company and, as its non- executive Chairman, is not involved in the daily operations of the Company. The Company is separate and distinct from Mr. Trump's privately held real estate and other holdings. Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other affiliates filed for Chapter 11 on February 17, 2009 (Bankr. D. N.J., Lead Case No. 09-13654). The Company has tapped Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the Company's auditor and accountant and Lazard Freres & Co. LLC is the financial advisor. Garden City Group is the claims agent. The Company disclosed assets of $2,055,555,000 and debts of $1,737,726,000 as of December 31, 2008. Trump Hotels & Casino Resorts, Inc., filed for Chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Trump Hotels' obtained the Court's confirmation of its Chapter 11 plan on April 5, 2005, and in May 2005, it exited from bankruptcy under the name Trump Entertainment Resorts Inc. TXCO RESOURCES: Wants Until October 29 to File Chapter 11 Plan -------------------------------------------------------------- TXCO Resources Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Western District of Texas to further extend their exclusive periods to: * file a Chapter 11 plan until Oct. 29, 2009; and * solicit acceptances of that pan until Nov. 30, 2009. The Debtors' current exclusive plan filing and solicitation periods expire on Oct. 14, 2009, and Nov. 13, 2009, respectively. The Debtors relate that the extension of time will help facilitate further meaningful discussion regarding plan treatment for the various creditor constituencies and, at a minimum, narrow and focus the issues which must be addressed through the plan confirmation process. The extension, the Debtors add, is expected to provide more time for the financial advisor of the Official Committee of Unsecured creditors to analyze the plan and confirmation issues. According to the request, the Debtors' debtor-in-possession lenders agree to extend the maturity date of the credit agreement until Feb. 15, 2010, if the extension of time is approved. About TXCO Resources TXCO Resources Inc. is an independent oil and gas enterprise with interests in the Maverick Basin, the onshore Gulf Coast region and the Marfa Basin of Texas, and the Midcontinent region of western Oklahoma. TXCO's business strategy is to acquire undeveloped mineral interests and internally developing a multi-year drilling inventory through the use of advanced technologies, such as 3-D seismic and horizontal drilling. It accounts for its oil and gas operations under the successful efforts method of accounting and trades its common stock on Nasdaq's Global Select Market under the symbol "TXCO." The Company and its affiliates filed for Chapter 11 protection on May 17, 2009 (Bankr. W.D. Tex. Case No. 09-51807). The Debtors hired Deborah D. Williamson, Esq., and Lindsey D. Graham, Esq., at Cox Smith Matthews Incorporated, as general restructuring counsel; Fulbright and Jaworski, L.L.P., as corporate counsel & conflicts counsel; Albert S. Conly as chief restructuring officer and FTI Consulting Inc. as financial advisor; Goldman, Sachs & Co. as financial advisor for assets sale; Global Hunter Securities, LLC, as financial advisors and investment bankers; and Administar Services Group LLC as claims agent. Gardere Wynne Sewell LLP represents the Committee. As reported in Troubled Company Reporter on July 6, 2009, in their schedules of assets and liabilities, the Debtors have $357,855,952 in total assets and $331,422,792 in total liabilities USI HOLDINGS: S&P Assigns 'B-' Rating on $100 Mil. Senior Loan -------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B-' (the same as the 'B-' counterparty credit rating) senior secured debt rating to USI Holdings Corp.'s planned $100 million incremental senior secured term loan due in May 2014. The recovery rating is '3', indicating S&P's expectation of meaningful (50%-70%) recovery for lenders in the event of a payment default. (These ratings are based on preliminary terms and conditions.) At the same time, Standard & Poor's revised its recovery rating on USI's existing senior secured credit facilities, which consist of a $550 million senior secured term loan B and a $100 million revolving credit facility, to '3' from '2'. As a result, Standard & Poor's lowered its ratings on these loans to 'B-' (the same level as the 'B-' counterparty credit rating on the company) from 'B', in accordance with S&P's notching criteria for a recovery rating of '3'. The revised recovery rating reflects the higher amount of first-lien debt outstanding in S&P's simulated default scenario than that used in S&P's previous analysis because of the new incremental senior secured term loan. This has resulted in less expected recovery to USI's secured lenders. S&P also affirmed the 'CCC' (two notches lower than the counterparty credit rating) issue-level rating on USI's unsecured credit facilities, which consist of senior floating-rate notes and senior subordinated notes. The recovery rating on this debt remains at '6', indicating S&P's expectation of negligible (0%- 10%) recovery for lenders in the event of a payment default. Borrowings under the incremental term loan ($200 million accordion feature) will be approximately $100 million. S&P anticipate that the incremental term loan's pricing will be approximately LIBOR plus 500 basis points. The new term loan will stand pari passu with the company's existing senior secured credit facility and will be subject to the same financial covenant maintenance performance. "We do not believe that the new debt issuance will alter the company's debt-servicing capabilities materially," said Standard & Poor's credit analyst Julie Herman. The company has said it will use more than half of the bank loan proceeds to pay down the balance outstanding ($56 million as of August 2009) on its $100 million revolving credit line. It will likely use the remaining proceeds for extraordinary liquidity uses in early 2010, including significant earnout payments as well as potential costs related to an approximately $19 million jury verdict against USI, which the company is appealing. VERMILLION INC: Gets Over Half-Million Dollars From Warrant Deals ----------------------------------------------------------------- Ron Leuty at San Francisco Business Times reports that Vermillion, Inc., has received more than a half-million dollars from holders of warrants that it issued three and four years ago. Business Times relates that about 7,320 warrants with an exercise price of $12.60, issued in 2006, were exercised. Citing Vermillion, Business Times says that an undisclosed number of other warrants, from 2007 and with an exercise price of $9.25 were also exercised. According to Business Times, Vermillion issued 623,053 shares of common stock in connection with the warrant exercises -- 219,810 restricted shares and 403,243 freely tradeable shares. Business Times states that Vermillion received $505,703 from the warrant holders. 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. VINEYARD NATIONAL: Suspends SEC Financial Reports; KPMG Resigns --------------------------------------------------------------- Vineyard National Bancorp on October 2, 2009, was notified of the resignation of its independent registered public accounting firm, KPMG LLP), effective that date. The Company's Audit Committee Chairman accepted the resignation of KPMG upon receipt of the notification. During the period in which the Company is unable to file reports which comply with the requirements of the Securities Exchange Act of 1934, as amended, the Company intends in lieu thereof to file copies of its Chapter 11 Monthly Operating Reports which are required to be submitted to the Office of the United States Trustee under cover of Current Reports on Form 8-K. As a result, the Company will not seek to hire a new independent public accounting firm. During the two fiscal years ended December 31, 2007, and the subsequent interim period through October 2, 2009, there were no: (1) disagreements with KPMG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to their satisfaction would have caused them to make reference in connection with their opinion on the subject matters of the disagreement, or (2) reportable events, except that KPMG advised the Company of the material weaknesses. The audit reports of KPMG on the Company's consolidated financial statements as of December 31, 2007 and December 31, 2006 for the years then ended, which were the last reports provided by KPMG in connection with the Company's Annual Reports filed on Form 10-K with the Securities Exchange Commission, did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. The audit reports of KPMG on the effectiveness of internal control over financial reporting as of December 31, 2007 and 2006 did not contain an any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles, except that KPMG's report indicates that the Company did not maintain effective internal control over financial reporting as of December 31, 2007 because of the effect of material weaknesses on the achievement of the objectives of the control criteria and contains an explanatory paragraph that states that the following material weaknesses have been identified and included in management's assessment: -- The Company's control environment. -- The Company's risk assessment process and its policies and procedures to determine the valuation of the loan portfolio were not effective. -- Ineffective process for the selection and application of accounting and disclosure policies. -- Inadequate policies and procedures to prevent a breach of information technology security policies by employees. -- Ineffective policies, procedures and controls for the detection or prevention of unauthorized or potentially fraudulent transactions related to expense reimbursement. About Vineyard National Bancorp Vineyard National Bancorp (NASDAQ: VNBC) (AMEX: VXC.PR.D) -- http://www.vineyardbank.com/-- was the financial holding company, which provides a variety of lending and depository services to businesses and individuals through its wholly owned subsidiary, Vineyard Bank, National Association. Vineyard Bank was closed July 17 by regulators, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with California Bank & Trust, San Diego, California, to assume all of the deposits of Vineyard Bank, N.A., excluding those from brokers. As of March 31, 2009, Vineyard Bank, N.A. had total assets of $1.9 billion and total deposits of approximately $1.6 billion. In addition to assuming all of the deposits of the failed bank, California Bank & Trust agreed to purchase approximately $1.8 billion of assets. The FDIC will retain the remaining assets for later disposition. California Bank & Trust purchased all deposits, except about $134 million in brokered deposits, held by Vineyard Bank, N.A. Vineyard National Bancorp filed for Chapter 11 on June 21 (Bankr. C.D. Calif. Case No. 09-26401). VIRGIN MOBILE: Prudential Financial Unloads Equity Stake -------------------------------------------------------- Prudential Financial, Inc., has ceased to be deemed the beneficial owner of more than 5% of the outstanding Common Stock of Virgin Mobile USA, Inc. Prudential Financial said it no longer holds any Virgin Mobile shares. About Virgin Mobile USA Virgin Mobile USA, Inc. (NYSE:VM) is a mobile virtual network operator, commonly referred to as an MVNO, offering prepaid, or pay-as-you-go, and, following the acquisition of Helio LLC in August 2008, postpaid wireless communications services, including voice, data, and entertainment content, without owning a wireless network. The Company uses the "Virgin Mobile" name and logo under license from Virgin Enterprises Ltd. The Company offers its services over the nationwide Sprint PCS network under the terms of the PCS Services Agreement between the Company and Sprint Nextel Corporation. On July 28, 2009, Sprint Nextel and the Company announced that their boards of directors have approved a definitive agreement for Sprint Nextel to acquire the Company in an all equity deal. Each of the Company's stockholders, except for the Virgin Group and SK Telecom, will receive the equivalent of $5.50 in Sprint Nextel common shares for each share of the Company's Class A common stock, but in no event will the exchange ratio be less than 1.0630 or greater than 1.3668. The Virgin Group and SK Telecom will receive 93.09% and 89.84%, respectively, of that received by the Company's other stockholders. The transaction is subject to the approval of the Company's stockholders as well as customary conditions and regulatory approvals. Sprint Nextel and the Company expect the transaction to close in the fourth quarter of 2009 or early 2010. At June 30, 2009, the Company had $320.68 million in total assets and $577.35 million in total liabilities. At June 30, 2009, the Company had $267.16 million in stockholders' deficit attributable to Virgin Mobile USA Inc., $10.49 million in non-controlling interest, and $256.66 million in total deficit. VISTEON CORP: Exclusive Plan Filing Period Moved to Dec. 10 ----------------------------------------------------------- Bankruptcy Judge Christopher Sontchi has extended the deadline by which Visteon Corp. and its affiliates file their plan of reorganization through December 10, 2009, and the time by which the Debtors may solicit votes for that plan through February 10, 2010. The Court extended the Debtors' Exclusivity by about 2 1/2 months, a reduction of the 5-month extension the Debtors initially suggested. The Debtors originally sought extension of their Exclusive Plan Filing Period through February 22, 2010, and a corresponding extension of their Exclusive Solicitation Period through April 23, 2010. The Court's ruling came after certain creditors filed responses to the exclusivity request, which include Ford Motor Company and the Official Committee of Unsecured Creditors filed responses to the Debtors' Exclusivity request. Ford is one of the Debtors' prepetition lenders under the Prepetition ABL Credit Agreement dated August 2006. Ford noted in its response that it is now the sole ABL lender to the Debtors as it acquired the Debtors' First Lien Revolving Credit Facility or otherwise referred to as "ABL" shortly before the Petition Date to address the Debtors' liquidity problems. Karen C. Bifferato, Esq., at Connolly Bove Lodge & Hutz LLP, in Wilmington, Delaware, Ford's counsel, noted that the Ad Hoc Committee of the Debtors' term lenders conditioned its support for the Exclusivity Motion on the establishment of certain deadlines, referred to as the "Term Lender Trigger Events." A Term Lender Trigger Event will occur if: (i) the Debtors fail to file with the Court a Chapter 11 plan and an accompanying disclosure statement on or before November 2, 2009; (ii) the Court's hearing on approval of the Disclosure Statement does not occur on or before December 15, 2009; or (iii) the Court's hearing on confirmation of the Plan of Reorganization does not commence on or before February 15, 2010. Ford asserted that any order approving the Debtors' Exclusivity request be subject to the Term Lender Trigger Events being treated as deadlines or milestones to achieve. Ford also asked the Court to recognize the right of not only the Term Lenders, but also Ford and other parties-in-interest, to object to a continuation of the exclusivity period if the Debtors fail to meet any of the milestones. For its part, the Committee asserted that the Exclusivity Extension Motion is a troubled pleading. On the one hand, it seeks a remarkably long extension of each of the Debtors' Exclusivity Periods where if granted, no other party would be enabled to file a plan until the end of April 2010. On the other hand, the Committee noted, the Exclusivity Motion proposes to give the Debtors' prepetition bank lenders a super-judicial veto of any Court-sanctioned Exclusivity extension. The Committee noted that the super-judicial veto may be triggered, at the Term Lenders' sole option, in less than one-month's time. The Committee said it concurs with the fact that the Debtors are healing quite nicely in bankruptcy, but much work needs to be done before they are ready to exit. Thus, the Committee maintained that Exclusivity should be extended, but not to what is tantamount in bankruptcy to ad infinitum. The Committee asserted that a three-month extension of each of the Debtors' Exclusivity Periods is appropriate under the circumstances, affording the Debtors effective plan control through the end of February 2010, but establishing a year-end case-status checkpoint. Regarding the proposed Term Lender "Trigger Events", the Committee contended that the Debtors did not offer a word of argument or factual rationale. The Debtors instead stated that they "may still seek to maintain exclusivity by filing a motion within five business days after passing of that milestone date to be heard at the Court's next available hearing. The Committee said it does not agree with the proposal for these reasons: (a) It calls for an inappropriate shifting of the burdens of proceeding, proof, and persuasion from the Terms Lenders to the Debtors; (b) The "Trigger" preordains the "hasty" plan filing that the Debtors otherwise predict could be "detrimental to all parties-in-interest;" and (c) The proposed Trigger casts a pall over plan negotiations and case process. In response to the Committee's contentions, the Debtors averred that the Committee misinterprets the milestones and overestimates the trigger events. The Debtors asserted that the milestones were the product of discussions with the Term Lender Group and are entirely consistent with their business imperative of filing a Chapter 11 plan in the near term and starting the emergence process. The Debtors refuted the Committee's assertions and maintained that they have not ceded control of the plan process to the Term Lender Group by agreeing to milestones and trigger features. The Debtors reiterated that the Term Lender Group can waive any of the trigger events without a further court hearing. Thus, the Debtors noted that contrary to the Committee's suggestion, the triggers are not attempts to wrestle control of their cases by the term lenders. With regards to Ford's response, the Debtors contended that Ford's request that the proposed milestones be treated as mandatory deadlines would make their failure to meet a milestone or trigger event deadline more punitive than what is intended with their agreement with the Term Lender Group. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Gets Court Nod for Accommodations From GM ------------------------------------------------------- Visteon Corp. and its affiliates obtained Court's authority to enter into a customer accommodation agreement with General Motors Corporation, providing for the re-sourcing and transition of certain GM lines of business; the sale of inventory, equipment, and tooling related to those lines of business; accommodations for retained business; and other benefits, along with an access and security agreement. Reko Tool & Mould (1987), Inc., objected to the Accommodation Agreement, with respect to the proposal to sell certain unspecified tooling to GM, free and clear of liens as part of resourcing efforts by that manufacturer. Reko asserted that it attached, perfected, and continues to maintain a first priority lien on tooling it supplied to Visteon, and thus it should be paid for any tooling transferred to GM. Reko subsequently withdrew its objection. Ford Motor Company filed a response to the proposal, but specified it does not object to the Debtors' request to enter into an Accommodation Agreement with GM. However, Ford noted that the GM Agreement impairs its collateral rights as Asset-Based lender without any consideration to itself in exchange for the substantial impairment of its collateral. Ford also asserted that the GM Agreement does not provide any form of adequate protection despite, among other things, the grant to GM of a security interest in the ABL collateral. The Debtors maintain that, putting aside the substance of Ford's reservation itself from a secured creditor perspective, Ford's reservation has caused considerable confusion in the marketplace and among Visteon's customer base and requires these clarifications: (a) Ford states that "(t)he four major customers of U.S. manufacturing plants of the Debtors are all discontinuing . . . ." While it is true that the Debtors are continuing to rationalize their U.S. manufacturing footprint (which has been substantially reduced over the years with more than 85% of Visteon's manufacturing locations resident outside of the U.S.), Ford's statements do not reflect the substantial engineering and design, sales, and revenue generating presence that Visteon intends to maintain in the U.S. as it continues to execute on its business plan. To be clear, while Visteon is executing its business plan by addressing certain U.S. manufacturing locations, it continues to retain supply contracts with all of its key customers. (b) Ford asserts that the Accommodation Motion impairs Ford's collateral rights without any consideration and implies that the filing contravenes the ABL Cash Collateral Order. The Debtors disagree. The Accommodation Agreement will in no way impair Ford's rights and interest in its collateral. The collateral subject of the Motion will generate cash proceeds in which Ford's valid liens would follow. Thus, there has been no default under the ABL Cash Collateral Order nor has Ford notified Visteon of a default under the procedures set forth in the ABL Cash Collateral Order in the two weeks since the Motion was filed. (c) Ford states that the Accommodation Agreement anticipates royalty payments to the term lenders in exchange for intellectual property licenses granted to GM under the Accommodation Agreement. This is simply not true, according to the Debtors. The Accommodation Agreement does not contemplate any direct payments from GM to the term lenders. Any royalty payments made in accordance with the Accommodation Agreement will be made to Visteon and then treated in accordance with the ABL Cash Collateral Order and the Term Loan Adequate Protection Stipulation. Indeed, the term lenders provided the Debtors with proposed language that both the Debtors and GM accepted, obviating the need for the term lenders to file any objection. Terms of Accommodation Agreement The Debtors relate that they executed the Accommodation Agreement with GM on September 15, 2009. Prior to the execution of the Accommodation Agreement, GM issued the Debtors certain supply agreements or purchase orders pursuant to which the Debtors agreed to manufacture component parts for GM. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, tells the Court that the Debtors present the Accommodation Agreement to address their liquidity needs, exit lines of business that no longer fit into their strategic business plan, and maintain a business relationship with GM with respect to other promising lines of business. The Accommodation Agreement obligates GM to provide: (1) an $8 million cash surcharge payment above the purchase order price for component parts produced by Visteon's interior and fuel tank product groups; (2) up to $10 million to fund consolidation of Visteon's InterAmerican and Carplastic Mexican facilities, enhancing productivity at the Carplastics facility, which will continue to source GM component parts; (3) $4.425 million to reimburse Visteon for upfront engineering, design, and development support that it has dedicated to the manufacture of GM's climate component parts; (4) significant liquidity enhancement from the acceleration of payment terms on outstanding purchase orders from the GM standard payment terms, which results in payment in 47 days on average to a payment of net 15 days; (5) payment for purchase of certain excess inventory relating to re-sourced component parts and equipment tooling owned by Visteon that is exclusively used to manufacture GM component parts; (6) reimbursement of costs associated with wind-down of GM interior and fuel tank component part production including fixed over-head costs and certain employee costs; (7) $8.2 million as cure payment in connection with the assumption and assignment of its purchase orders with Visteon in the GM Chapter 11 case; (8) limitations on its ability to set off against accounts receivable owing to Visteon; and (9) forbearance from re-sourcing certain promising lines of Business, including lighting component part production at Visteon's Carplastics, Autopal, and European facilities and certain other critical GM programs. In exchange for these benefits from GM, the Debtors will continue to produce and deliver component parts to GM during the term of the Accommodation Agreement as well as provide considerable assistance to GM in re-sourcing certain unprofitable production to other suppliers. The Debtors have also agreed to build an inventory bank for GM, provided that GM will pay for that inventory bank parts on an accelerated basis, and will also cover the Debtors' out-of-pocket expenses in maintaining and handling the inventory. The parties acknowledge that because GM operates on a "just-in- time" delivery method, it cannot easily or quickly re-source production to another supplier. If GM does not obtain component parts from the Debtors during the term of the Accommodation Agreement, it would shortly run out of inventory, thereby effectively shutting down production lines that utilize Visteon parts. Thus, the Debtors aver, the Accommodation Agreement prevents potentially ruinous disruption to GM's operations. The Debtors add that the Accommodation Agreement also provides GM with an access right to their facilities if they fail to keep up the critical element of their end of the bargain -- and that is, the continuity of supply -- by ceasing production. In a separate filing, the Debtors seek the Court's authority to file under seal the Accommodation Agreement. The Debtors assert that the Agreement contains certain specific component parts pricing and program information that if revealed to their competitors, may give those competitors an advantage in negotiating terms with GM to the Debtors' detriment. Furthermore, the Debtors note, the Accommodation Agreement itself prohibits them from publicly disclosing the information. A redacted copy of Visteon-GM Letter Agreement is available for free at: http://bankrupt.com/misc/VisteonGM_redactedLetterAgrmt.pdf About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Interim Cash Collateral Use Extended Until Nov. 12 ---------------------------------------------------------------- Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware allowed Visteon Corporation and its debtor affiliates to continue using the cash collateral of their Prepetition Lenders through: (a) November 12, 2009, or other date to which the Prepetition ABL Lenders who hold amounts of the Prepetition ABL Obligations sufficient to issue a consent pursuant to the Prepetition ABL Credit Agreement, may consent in writing; or (b) the date specified as the expiration date in any notice of an Event of Default delivered by the Prepetition ABL Agent to the Debtors, the Prepetition Term Agent, the Office of the U.S. Trustee, and Official Committee of Unsecured Creditors, which Expiration Date must be at least three business days after the delivery of that notice. The Prepetition ABL Lenders continue to be entitled, under Section 363(e) of the Bankruptcy Code, to adequate protection of their interest in the Prepetition ABL Collateral to the extent of diminution in value, including for the use of Cash Collateral. A final hearing will be held on November 12, 2009, at 2:00 p.m. Visteon Corp. has requested a delay in the final cash collateral hearing. The ABL Agent has consented to the delay. The Debtors had approximately $2.7 billion of outstanding debt on a consolidated basis. The debt amount is comprised of: Debt Amount Facility Outstanding -------- ----------- Prepetition ABL Credit Agreement among the Debtors, JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders, including Ford Motor Company entered in August 2006 *Draws under the ABL Credit Pact $89,000,000 *Reimbursement obligations for letters of credit under the ABL Credit Pact $58,000,000 Prepetition Term Credit Agreement $1,500,000,000 among Visteon, JPMorgan Chase Bank N.A., as administrative agent, and certain lenders entered into in April 2007. U.S. bond debt $862,000,000 Debt on account of other credit facilities, capital leases for affiliates, swaps, and other miscellaneous obligations $214,000,000 To secure their Prepetition Obligations under the ABL Facility and the Term Loan Facility, the Debtors granted to the Prepetition Debtors (1) a first priority lien on certain of Visteon assets and (2) a second priority lien on the remaining Visteon assets. The Term Lenders and the Revolver Lenders are also parties to an Intercreditor Agreement dated June 13, 2006, among the Prepetition ABL Agent, the predecessor to the Prepetition Term agent, and certain of the Debtors. Under the Intercreditor Agreement provides that in the context of a Chapter 11 case, the Prepetition ABL Lenders consent to the use of cash collateral or to provide postpetition financing secured by the ABL Priority Collateral, the Prepetition Term Lenders will be deemed to have consented to cash collateral use or financing and will heave no right to seek adequate protection or relief in connection with the cash collateral use or financing. The Debtors' cash, including all cash and other amounts on deposit maintained in any account subject to "control" in favor of the Prepetition Lenders are referred to as "Cash Collateral." Accordingly, the Debtors have proposed to provide the Prepetition ABL Lenders with three primary forms of adequate protection to the extent of any diminution in value of the ABL Lenders' interest in the Prepetition ABL Collateral: 1. Adequate protection liens on all of the Debtors' rights, title and interest to all of the Debtors' property and proceeds, subject to the Carve-Out. 2. Superpriority claim against each of the Debtors to the extent provided by Section 207(b) of the Bankruptcy Code, subject to the Carve-Out. 3. Adequate protection payments, including payment of interest on the Prepetition ABL Obligations and payment of fees and expenses of the Prepetition ABL Lenders. Moreover, despite the Prepetition Term Lenders' deemed consent and waiver, the Debtors seek to provide those Term Lenders adequate protection in the form of replacement liens. Carve Out refers to the sum of (i) all unpaid fees to the Court Clerk and to the U.S. Trustee; (ii) fees and expenses up to $25,000 incurred by a trustee under Section 726(b) of the Bankruptcy Code; (iii) to the extent allowed, all unpaid fees and expenses incurred by persons or firms retained by the Debtors pursuant to Sections 327 Bankruptcy Code; (iii) after the delivery of a Carve Out Trigger Notice, to the extent allowed, the payment of professional fees of up to $10,000,000. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Terms of $31MM Accommodation Agreement With Chrysler ------------------------------------------------------------------ Visteon Corp. and its affiliates seek the Court's authority to enter into a customer accommodation agreement with Chrysler Group LLC, providing for the re-sourcing and transition of certain Chrysler lines of business; the sale of inventory, equipment, and tooling related to those lines of business, accommodations for retained business; and other related benefits, as well as a related access and security agreement. Before the Petition Date, pursuant to various purchase orders issued by Chrysler and accepted by Visteon, Chrysler has ordered from Visteon certain component parts, service parts and assembled goods. The Debtors tell the Court that they executed the Accommodation Agreement in order to address their liquidity needs, exit lines of business that no longer fit into their strategic business plan, and maintain a business relationship with Chrysler with respect to other significant lines of business. The parties' Accommodation Agreement obligates Chrysler to provide: -- surcharge payments to the Debtors above the purchase order price for Chrysler component parts produced by Visteon for $13,000,000; -- a cash payment to the Debtors for $5,237,400 for the purchase of certain tooling used at Visteon's Saltillo, Mexico facility to manufacture Chrysler component parts; -- a cash payment for the purchase of certain designated equipment and tooling exclusively used to manufacture Chrysler component parts at Visteon's Highland Park, Michigan and Saltillo, Mexico facilities; -- payment at 100% of Visteon's actual and documented costs for raw materials and 100% of the purchase order price for finished goods specifically to re-sourced Chrysler component part production; -- awards of new business to the Debtors, the transition of certain lines of business to non-debtor affiliates of the Debtors, and accommodations on retained lines of business; -- reimbursement to the Debtors of costs associated with the wind-down of certain lines of Chrysler component part production, including fixed overhead costs and certain employee-related costs; -- limitations on its liability to set off against accounts payable owing to Visteon; -- $13,077,265 to the Debtors for a cure payment in connection with the assumption and assignment to Chrysler of its purchase orders with Visteon in the Old Carco LLC Chapter 11 case; -- payment to the Debtors in respect of accounts payable arising from shipments of component parts by Visteon on accelerated net 15-day payment terms until the termination of the agreement; and -- a release of certain commercial claims against Visteon, including those claims that may arise from the payments or other accommodations set forth in the Accommodation Agreement. In exchange for these benefits, Visteon will continue to produce and deliver component parts to Chrysler during the term of the Accommodation Agreement, as well as provide assistance to Chrysler in re-sourcing certain lines of production that are no longer part of Visteon's business plan to other suppliers. As part of the re-sourcing assistance, Visteon will provide Chrysler with certain intellectual property licenses and sublicenses related to the re-sourced Chrysler production lines. Visteon has also agreed to build an inventory bank for Chrysler, provided that Chrysler will pay for those parts in accordance with agreed payment terms and will cover Visteon's incremental costs incurred in the production of those parts to the extent that costs exceed purchase order prices. Visteon will also grant Chrysler an option to purchase certain machinery and equipment used exclusively to manufacture Chrysler component parts. The Debtors assert that if Chrysler does not obtain component parts from them during the term of the Accommodation Agreement, it could run out of inventory, negatively affecting production lines that utilize Visteon parts. Thus, the Debtors aver, the Accommodation Agreement prevents potential disruption to Chrysler's operations by providing continuity of supply through the Termination Date. A full-text copy of the Visteon-Chrysler Accommodation Agreement is available for free at: http://bankrupt.com/misc/Visteon_ChryslerAccommodation.pdf About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) W R GRACE: Completes Divestiture of Two Product Lines ----------------------------------------------------- W. R. Grace & Co. announced that it has completed the sale of two product lines in separate transactions during September 2009. Total cash proceeds from the two transactions were approximately $27 million. Grace expects to report a total pre-tax gain from the two transactions of approximately $22 million in its third quarter ending September 30, 2009. "These divestitures sharpen our product focus, and help ensure we are using our investment capital to best effect," said Fred Festa, Grace's Chairman, President and Chief Executive Officer. Grace sold the membranes product line, a component of Grace Davison's Specialty Technologies product group, to a strategic buyer for approximately $22 million. The membranes product line manufactures and sells polymer-based membranes used in natural gas separation. Grace sold the firestopping and abatement product line, a component of Grace Construction Products' Specialty Building Materials product group, to another strategic buyer for approximately $5 million. Firestop products compartmentalize and contain fire and smoke within a building and abatement products are used for the abatement of asbestos and lead paint. Together, sales of these product lines account for significantly less than 1% of Grace's sales. Grace is a leading global supplier of catalysts and other products to petroleum refiners; catalysts for the manufacture of plastics; silica-based engineered and specialty materials for a wide range of industrial applications; sealants and coatings for food and beverage packaging, and specialty chemicals, additives and building materials for commercial and residential construction. Founded in 1854, Grace has operations in over 40 countries. For more information, visit Grace's web site at http://www.grace.com 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: Dist. Court Reverses Ruling on $130MM Asbestos Claim --------------------------------------------------------------- Granting the appeal of State of California Department of General Services, Judge Ronald L. Buckwalter, S.J., of the U.S. District Court for the District of Delaware reversed the Bankruptcy Court's order disallowing CDGS' claims against the Debtors aggregating $130,000,000. CDGS' claims are on account of damages caused to 16 California buildings allegedly contaminated with asbestos, in connection with the Debtors' business operations. The District Court however, denied CDGS' request for oral argument on the Appeal. As previously reported, the Bankruptcy Court ruling dated October 10, 2008, held that the Claims are barred by the three- year statute of limitations of the States of California and Delaware, despite the fact that the Claims may concern different buildings. Judge Fitzgerald further noted that CDGS had actual knowledge of the alleged asbestos contamination, and were on inquiry notice of any other contamination in their buildings, in 1990, at the latest, but CDGS waited too long to file their Claims. Moreover, the State of California, together with 29 other states, filed a complaint with the U.S. Supreme Court in Alabama against 26 asbestos manufacturers, including Grace in 1990. Under California Law, the statute of limitations began to run at that time, according to the Bankruptcy Court. A statute of limitations "is accepted with all its accoutrements, including laws of accrual," Judge Buckwalter related in his 31- page opinion, citing Plumb v. Cottle, 492 F. Supp. 1330, 1336 (D. Del. 1980) (quoting Frombach v. Gilbert Assoc., 236 A.2d 363 (Del. 1967)). In this regard, the Bankruptcy Court failed to note that California's "laws of accrual with respect to asbestos claims are more clearly defined by existing jurisprudence." Accordingly, resolution of the issue relating to the choice of law is imperative, Judge Buckwalter said. The District Court further related that Grace has produced no other evidence that contamination of the 16 buildings at issue occurred more than three years prior to the Petition Date. Because the Debtors bear the burden of proof in asserting the statute of limitations defense, it is questionable whether the buildings suffered "appreciable harm" prior to March 28, 2000. Judge Buckwalter also disagreed with the Bankruptcy Court's finding that the Alabama Action was the State of California's admission that it suffered property damage from asbestos in its buildings as of the date of that complaint. On the contrary, the Complaint sought nothing more than abatement and restitution costs due to the presence of asbestos in its buildings, and did not suggest the discovery of any release of asbestos fibers or actual property damage, he said. A genuine issue of fact remains as to when the contamination occurred in the 16 buildings, as asserted by CDGS. Absent a showing of when contamination occurred, the discovery rule has no bearing on the Claims. Accordingly, summary judgment on the grounds of statute of limitations is not appropriate, the District Court opined. Judge Buckwalter remanded the CDGS Claims to the Bankruptcy Court for further proceedings. 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: Wants Court to Bar Solomons Testimony at Plan Hearing ---------------------------------------------------------------- W. R. Grace & Co. and its units ask the Court to preclude A. Gibson Solomons, Esq., at Speights & Runyan, in Hampton, South Carolina, from testifying for Anderson Memorial Hospital S.C., at the Phase II Plan Confirmation Hearing. David C. Bernick, Esq., at Kirkland & Ellis LLP, in New York, relates, on behalf of the Debtors, that Mr. Solomons' statements during a deposition in September 2009 offer "a swearing contest" that would only further highlight a false accusation that is completely collateral to any issue for the Confirmation Hearing. "The real and sole purpose for which the testimony is offered is to attack counsel for Grace . . . [and] should not be admitted," Mr. Bernick argues. In response, Anderson complains that the Debtors' request is "untimely," to the extent that the deadline for filing requests to strike testimonies for the Confirmation Hearing expired on August 14, 2009. Anderson also tells the Court that it retained William M. Ewing in anticipation that the Plan Proponents would attempt to quantify their traditional property damage liability for feasibility purposes, which evidence was not provided. If the Plan Proponents do not present the evidence, Anderson will not call Mr. Ewing as a witness. Subsequently, the Debtors informed the Court that they have circulated to Anderson copies of their requests to preclude Mr. Solomons and Mr. Ewing from testifying during the Phase II Confirmation Hearings. As previously reported, the Debtors noted that the testimony of Mr. Ewing, as Anderson's industrial hygiene expert witness, should be barred. Court Junks Anderson's Request to Compel Debtors' Deposition Answers Judge Fitzgerald determined that Hudson LaForce and Pamela Zilly provided testimonies that "lack sufficient information" with respect to the calculations of the amounts asserted as asbestos- related property damages against the Debtors. The Court further ruled that the deposition of Grace's General Counsel Mark Shelnitz, Esq., in August 2009, involved projections of future asbestos property damage claims to which Mr. Shelnitz is likely not to be the sole percipient witness. Insufficient cause has been shown to require Mr. Shelnitz to testify in lieu of another competent witness, the Court said. In the event that the witness who responds is someone other than Mr. Shelnitz, the Court reserves ruling on whether additional discovery will be warranted from that witness. If, however, no witness is able to answer to a particular question in the Discovery, the question will be answered by Mr. Shelnitz as the person to whom it was directed, Judge Fitzgerald held. Prior to the Court's ruling, Anderson filed under seal its response to the Debtors' opposition to its request. Plan Schedule W.R. Grace & Co. and its debtor affiliates stated in a regulatory filing with the U.S. Securities and Exchange Commission that hearings for the confirmation of their First Amended Joint Plan of Reorganization are scheduled to continue on October 13 and 14, 2009. Following completion of evidentiary testimony, the Plan proponents and objectors will submit post-trial briefs in November 2009. Due to the schedule of the U.S. Bankruptcy Court for the District of Delaware, Grace expects that closing arguments will not take place until early January 2010. As a result, Grace does not expect to receive a confirmation opinion from Judge Judith K. Fitzgerald until 2010, Grace Assistant Secretary Michael W. Conron said. The Phase II Plan Confirmation Hearing commenced on September 8, 2009 and lasted until September 17. The Phase I Hearings were held from June 22 to 23. 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) WALKER RADIO: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Walker Radio Inc. 6890 E Sunrise Dr., #120 Tucson, AZ 85750 Bankruptcy Case No.: 09-25343 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court District of Arizona (Tucson) Judge: Eileen W. Hollowell Debtor's Counsel: Eric Slocum Sparks, Esq. 110 S Church Ave #2270 Tucson, AZ 85701 Tel: (520) 623-8330 Fax: (520) 623-9157 Email: eric@ericslocumsparkspc.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 James R. Walker. WARREN MCDOWELL: S.D. Fla. Says Sanctions Can Be Discharged ----------------------------------------------------------- WestLaw reports that a sanctions award which was entered against an individual Chapter 11 debtor in civil litigation based on the frivolous nature of the positions taken, as an award that was payable to the opposing party in this litigation, did not qualify as a fine, penalty or forfeiture "payable to and for the benefit of a governmental unit," within meaning of the dischargeability exception. It did not matter that the award may have been entered to vindicate the dignity of the court, where it was payable, not to the court, but to a private party. A split of authority on this issue was noted. In re McDowell, --- B.R. ----, 2008 WL 4000625, 21 Fla. L. Weekly Fed. B 364 (Bankr. S.D. Fla.) (Hyman, J.). Warren C. McDowell was sued in New York Supreme Court for breach of contract, fraud, and breach of fiduciary duty by Judith Stein and David S.J. Neufeld. In a January 4, 2007, Memorandum Decision the New York Court stated that "[a]s a result of [Mr. McDowell's] opprobrious behavior . . . he shall pay the costs of this action, including the victor's attorney's fees. Given the length of this litigation and the extent of plaintiffs representation, this will be [a] great burden and serve . . . to dissuade others from emulating his example." On January 12, 2007, following a bench trial, the New York Supreme Court entered an Order and Judgment in favor of the Plaintiffs and sanctioned Mr. McDowell $585,033.30. The Judgment and Order, entered on February 23, 2007, awarded the Sanction Award for "counsel fees and disbursements," payable to Ms. Stein and Mr. Neufeld. On March 14, 2007, Mr. McDowell sought chapter 11 protection (Bankr. S.D. Fla. Case No. 07-11728). A copy of Mr. McDowell's Chapter 11 petition is available at http://bankrupt.com/misc/flsb07-11728.pdfat no charge. WAVERLY GARDENS: Court Extends Cash Collateral Use Until Dec. 1 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Tennessee approved a stipulation reached by Waverly Gardens of Memphis, LLC, and Kirby Oaks Integra, LLC, with First Tennessee Bank National, extending the Debtors' access to cash collateral until Dec. 1, 2009. As reported in the TCR on March 20, 2009, First Tennessee said that it is owed $8,494,044 by the Debtors. As security, the Debtors conveyed to First Tennessee a security interest in substantially of their assets, including cash collateral. As adequate protection, First Tennessee is granted a postpetition security interest in (a) all proceeds from the disposition of any of the cash collateral, and (b) any and all of the Debtors' goods, property, assets and interests in property now existing and hereafter acquired. As additional adequate protection, First Tennessee is granted an allowed superpriority administrative claim pursuant to Section 507(b) of the Bankruptcy Code. About Waverly Garden Memphis, Tennessee-based Waverly Gardens of Memphis, LLC and Kirby Oaks Integra, LLC -- http://www.waverlygardens.com/-- operate two senior living facilities consisting of a total of 248 units. Waverly Gardens consists of 196 rental units and is located at 6539 Knight Arnold Road, Memphis, Tennessee 38115. Kirby Oaks consists of 52 rental units and is located at 6551 Knight Arnold Road, Memphis, Tennessee 38115. The Debtors filed separate petitions for Chapter 11 relief on Oct. 2, 2008 (Bankr. W. D. Tenn. Lead Case No. 08-30218). Michael P. Coury, Esq., and Robert Campbell Hillyer, Esq., at Butler, Snow, O'Mara, Stevens & Cannada, represent the Debtors as counsel. When Waverly Gardens filed for protection from its creditors, it listed assets of between $10 million to $50 million, and debts of $1 million to $10 million. When Kirby Oaks filed for protection from its creditors, it listed between $1 million and $10 million each in assets and debts. WELLS JOHNSON COMPANY: Case Summary & 16 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Wells Johnson Company dba Foundation For The Advancement Of Med Ed. dba American Academy Of Cosmetic Physicians dba American Academy Of Cosmetic Gynecology 8000 S Kolb Rd Tucson, AZ 85756 Bankruptcy Case No.: 09-25397 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court District of Arizona (Tucson) Judge: Eileen W. Hollowell Debtor's Counsel: Albert Blankenship Jr., Esq. 2912 N. Tucson Blvd. Tucson, AZ 85716 Tel: (520) 881-2300 Fax: (520) 326-3599 Email: azal@azgalaxyonline.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 $4,682,427, and total debts of $1,945,041. A full-text copy of the Debtor's petition, including a list of its 16 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb09-25397.pdf The petition was signed by John F. Wells. WEST COAST: Case Summary & 10 Largest Unsecured Creditors --------------------------------------------------------- Debtor: West Coast Interventional Pain Medicine, Inc., a California Corporation P.O. Box 1966 Highland, IN 46322 Bankruptcy Case No.: 09-24379 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- San Diego Pain Management Consultants, Inc. 09-24381 Surgical Leasing Company, Inc., a California Corp 09-24389 CV Surgical Management, Inc., a California Corp 09-24391 The Pain Management Group, Inc. 09-24392 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court Northern District of Indiana (Hammond Division) Judge: J. Philip Klingeberger Debtor's Counsel: Jeffrey C. Dan, Esq. David K. Welch, Esq. Crane, Heyman, Simon, Welch & Clar 135 South LaSalle Street, Suite 3705 Chicago, IL 60603-4297 Tel: (312) 641-6777 Email: jdan@craneheyman.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A full-text copy of the Debtors' petition, including a list of their 10 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/innb09-24379.pdf The petition was signed by Paul Kevin Barkal M.D. WEST HAWK: EnCana Oil Wants Cases Converted to Chapter 7 -------------------------------------------------------- EnCana Oil & Gas (USA) Inc. asks the Bankruptcy Court to enter an order converting the Chapter 11 cases of West Hawk Energy (USA), LLC, and WHE Holdings LLC to liquidation under Chapter 7 or, in the alternative, enter an order appointing Chapter 11 trustees. EnCana asserts the two Debtors in the jointly-administered case have grossly misrepresented their corporate and financial affairs to the Court, creditors, and parties in interest in the course of their business, in verified documents filed in these cases, and in sworn testimony. "They have admittedly misused their corporate forms and failed to keep adequate books and records. Their tenure as Chapter 11 fiduciaries should end immediately so that one or more independent trustees may put an end to the confusion and ensure conflicts of interest are not further multiplied," EnCana adds. appoint Chapter 11 trustees. About West Hawk Energy USA, LLC Headquartered in Englewood, Colorado, West Hawk Energy USA, LLC -- http://www.westhawkdevelopment.com/-- provides energy products (e.g. oil and gas) from a variety of sources. Assets under development include the figure four natural gas property located in the Piceance Basin, Colorado, being developed under a drilling and development agreement; and the Groundhog coal property located in northwest British Columbia. The Company filed for Chapter 11 on Dec. 18, 2008 (Bankr. D. Colo. Case No. 08-30241). Cecilia Kupchik, Esq., at Kupchik Rossi LLC represents the Debtor in its restructuring effort. The Debtor did not file a list of 20 largest unsecured creditors. In its petition, the Debtor listed assets and debts both ranging from $10 million to $50 million. WILBERT RICHARDSON: Chapter 11 Case Summary & Unsecured Creditor ---------------------------------------------------------------- Debtor: Wilbert Richardson 4902 S Vermont Los Angeles, CA 90037 Bankruptcy Case No.: 09-37610 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Ernest M. Robles Debtor's Counsel: Khachik Akhkashian, Esq. Burt & Akhkashian LLP 3055 Wilshire Bl., 12th fl Los Angeles, CA 90010 Tel: (213) 384-2220 Fax: (213) 384-2296 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor identified Wescom Credit Union with unsecured credit obligation claim for $4,752 as its largest unsecured creditor. A full-text copy of the Debtor's petition, including the creditors list, is available for free at: http://bankrupt.com/misc/cacb09-37610.pdf The petition was signed by Mr. Richardson. WILLIAM BAYLES: Case Summary & 8 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: William H. Bayles, Jr. P.O. Box 1238 New Canaan, CT 06840-1238 Bankruptcy Case No.: 09-52029 Chapter 11 Petition Date: October 9, 2009 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Douglas S. Skalka, Esq. Neubert, Pepe, and Monteith 195 Church Street, 13th Floor New Haven, CT 06510 Tel: (203) 821-2000 Fax: (203) 821-2009 Email: dskalka@npmlaw.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 8 largest unsecured creditors is available for free at: http://bankrupt.com/misc/ctb09-52029.pdf The petition was signed by William H. Bayles Jr. WILLIAM HOLMES: Daughter Indicted of Fraud ------------------------------------------ The U.S. Attorney Joseph P. Russoniello said that William P. Holmes' daughter, Myra Holmes, was indicted by a federal grand jury with concealment of assets and bank fraud, The indictment, which was issued on September 23, remained under seal until October 6, when Ms. Holmes was arrested in Vallejo. Ms. Holmes made her initial appearance in federal court in San Jose on October 6 before U.S. Magistrate Judge Patricia V. Trumbull. The indictment accuses Ms. Holmes of enriching herself by convincing her father to convey to her, without consideration and without notifying or obtaining the permission of the bankruptcy court or the bankruptcy trustee, his interest in the Vallejo property where she lived. The indictment further alleges that after Ms. Holmes obtained her father's interest in the property she withdrew the equity from the property through a refinancing mortgage loan, which she procured with a fraudulent refinancing application. According to the indictment, as a result of her fraudulent refinancing application, Ms. Holmes received a refinanced mortgage, which increased the outstanding mortgage on the Vallejo property from approximately $180,000 to approximately $338,000; received approximately $130,000 wired to her personal bank account; and arranged for a title company to write several checks out of escrow funds to settle personal debts that Holmes owed- including payments to Neiman Marcus, Lord & Taylor, Macy's and Spiegel. By the end of April 2006, Ms. Holmes had spent on personal expenses virtually all of the approximately $130,000 that she had fraudulently received as a result of the November 2005 refinancing of the Vallejo property. To date, Ms. Holmes has not repaid the bankruptcy estate for the funds she took out of the Vallejo property in the November 2005 refinancing. Ms. Holmes was released after executing a co-signed bond of $50,000. The defendant's next scheduled appearance is at 9 a.m. on Oct. 28 for an initial appearance before United States District Court Judge Jeremy Fogel. Joseph Fazioli is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Jeanne Carstensen. The indictment is the result of an investigation by the Federal Bureau of Investigation. Gates Mills, Ohio-based William P. Holmes, aka Willaim Holmes, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Ohio (Bankr. N.D. Ohio Case No. 09-18813). Dennis J. Kaselak, Esq., who ha an office in Chardon, Ohio. The Debtor listed $1,000,001 to $10,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. WILTON BRANDS: Creditors Withdraw Involuntary Ch. 11 Petition ------------------------------------------------------------- Wilton Brands Inc. on Oct. 12 announced that its parent company, Wilton Holdings Inc., and its subsidiaries have consummated the previously announced agreement with their largest creditors, an affiliate of TowerBrook Capital Partners L.P. and Deutsche Bank Trust Company Americas, to recapitalize Wilton Holdings. As a result of this agreement, TowerBrook Capital Partners L.P. and Deutsche Bank Trust Company Americas have withdrawn the involuntary Chapter 11 petition filed against Wilton Holdings on July 17, 2009 with the United States Bankruptcy Court for the District of Delaware. The completion of this recapitalization provides Wilton Holdings with an improved capital structure, a reduced debt burden, the ability to continue delivering great products and quality service to customers every day and the opportunity to focus on growth over the long term. As a result of this agreement, affiliates of TowerBrook Capital Partners L.P. and Deutsche Bank Trust Company Americas are the new majority owners of Wilton Holdings. Affiliates of GTCR Golder Rauner II, L.L.C. will continue to hold a minority share of the business. About Wilton Brands Inc. Wilton Brands Inc. -- http://www.wilton.com/-- based in Woodridge, Illinois, has united multiple creative consumer products companies to produce a market leader with a strategic focus on product innovation and quality. Wilton's product portfolio includes food crafting, scrapbooking, and other craft products. Wilton has the number one position in cake decorating, bakeware and tea kettles. It offers the industry's most comprehensive and innovative selection of baking, cake decorating, candy making, cookie making, wedding and seasonal products. In addition, the company is the leader in scrapbooking as well as a marketer of some of the craft industry's most respected brands of embellishments, stickers, and punches through the E K Success and K & Company product lines. The company also launched the Martha Stewart Crafts line in May 2007. WOOD RIVER: Case Summary & 12 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Wood River Woods, LLC 1111 Bayside Square, Suite 111 Corona del Mar, CA 92625 Case No.: 09-20534 Type of Business: The Debtor operates a real estate business. Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Thomas T. Glover Debtor's Counsel: Mark D. Northrup, Esq. Pier 70 2801 Alaskan Wy, Suite 300 Seattle, WA 98121-1128 Tel: (206) 340-9628 Email: mnorthrup@grahamdunn.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Lawrence Kates, the company's manager and sole member. Debtor's List of 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ North Region Corporation $836,841 Evergreen Pacific Inc. trade $94,845 Water Environment Services trade $12,000 Waste Management of Oregon trade $5,360 Sunrise Water trade $3,951 For Rent Advertising trade $2,200 HD Supply Facilities trade $1,600 Maintenance Venturi Technoligies Inc. trade $550 Sherwin Williams trade $540 Office Depot trade $450 Totem Lake West trade $189 Comcast trade $71 YOUNG BROADCASTING: Bank Debt Trades at 47% Off ----------------------------------------------- Participations in a syndicated loan under which Young Broadcasting, Inc., is a borrower traded in the secondary market at 53.20 cents-on-the-dollar during the week ended Friday, Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.70 percentage points from the previous week, The Journal relates. The loan matures on Nov. 3, 2012. The Company pays 225 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating while Standard & Poor's has assigned a default rating on the bank debt. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/-- owns 10 television stations and the national television representation firm, Adam Young, Inc. Five stations are affiliated with the ABC Television Network (WKRN-TV -Nashville, TN, WTEN-TV - Albany, NY, WRIC-TV -Richmond, VA, WATE-TV - Knoxville, TN, and WBAY-TV - Green Bay, WI), three are affiliated with the CBS Television Network (WLNS-TV - Lansing, MI, KLFY-TV - Lafayette, LA and KELO-TV - Sioux Falls, SD), one is affiliated with the NBC Television Network (KWQC-TV - Davenport, IA) and one is affiliated with MyNetwork (KRON-TV - San Francisco, CA). In addition, KELO- TV- Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. The Company and its affiliates filed for Chapter 11 protection on February 13, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-10645). Jo Christine Reed, Esq., at Sonnenschein Nath & Rosenthal LLP, represents the Debtors in their restructuring efforts. Andrew N. Rosenberg, Esq., at Paul Weiss Rifkind Wharton & Harrison LLP, represents the official committtee of unsecured creditors as counsel. The Debtors selected UBS Securities LLC as consultant; Ernst & Young LLP as accountant; Epiq Bankruptcy Solutions LLC as claims agent; and David Pauker chief restructuring officer. The Debtors listed total assets of $575,600,070 and total debts of $980,425,190. * Automakers Restless About Ad Campaigns, Report Says ----------------------------------------------------- Suzanne Vranica at The Wall Street Journal reports that car makers are restless about adv campaigns. According to The Journal, Autodata Corp. said that U.S. auto sales have continued to drop, falling 23% in September 2009, from a year earlier. The automakers, with sales under such pressure, are hoping fresh campaigns can give them a competitive edge, says The Journal. Car makers "have reduced costs in some areas like manufacturing and distribution, and now they are having a close look at marketing," The Journal quoted marketer Ian Beavis as saying. The Journal relates that new corporate leaders often want to re-evaluate old ad relationships and bring in agencies they are more familiar with. The report states that due to the economic downturn, car companies have cut back on their ad spending and on the fees they pay their agencies. * 'Fulcrum' Deals Rising To Prominence, Experts Say --------------------------------------------------- Law360 reports that as companies mired in debt continue to seek refuge in bankruptcy court, popularity is growing in so-called fulcrum investing, a risky bet placed on debt securities bought on the cheap and expected to be converted into equity holdings through the restructuring process, attorneys and other observers said. * Insurer Wants Evidence Barred In Firm's $75M Claim ---------------------------------------------------- Law360 reports that in the latest slap in back-and-forth litigation with bankruptcy law firm Weinstein & Riley PS, Westport Insurance Corp. has asked a court to bar the firm from introducing evidence of the $75 million it released in a settlement of underlying breach of contract litigation. * Local Bankruptcies Rise; Manufacturers, Real Estate Hurt Most --------------------------------------------------------------- Kristin Burke at WIFR reports that local business bankruptcies continue to increase as economic woes deepen, although many economists recently said that the economy is recovering. According to WIFR, manufacturers and companies dealing with real estate and construction are suffering the most. WIFR says that escalating job losses, weakening consumer confidence, and declining home values have pushed many local companies into bankruptcy court. WIFR states that tighter lending standards by banks caused the increase in business collapses. * Motor Vehicle Parts Suppliers Urge Action to Assist Industry -------------------------------------------------------------- Dave Andrea, vice president, industry analysis & economics, Original Equipment Suppliers Association, testified before the Senate Banking, Housing, and Urban Affairs Subcommittee on Economic Policy. The testimony for the hearing, entitled "Restoring Credit to Manufacturers," focused on the current state of the parts supplier sector, the need for greater access to capital, and the importance of long-term programs to support technology and innovation. Mr. Andrea represented the Motor & Equipment Manufacturers Association and its affiliates, OESA, the Automotive Aftermarket Suppliers Association and the Heavy Duty Manufacturers Association. Specifically, the testimony encouraged Congress and the Administration to: -- Assure sufficient capital for restructuring, consolidating, and diversifying the industry; -- Address specific needs of small suppliers for sufficient capital for ongoing operations; -- Create technology funding programs that support long-term innovation. "Bankruptcies are happening, and will continue to happen," said Neil De Koker, president and CEO, OESA. "Suppliers continue to struggle under the weight of this economic crisis, and we are eager to work with the members of the Subcommittee in a coordinated effort to preserve the industry's employment base and technology innovation going forward." The groups are urging an increase in the limits for loan programs within the Small Business Administration as current limits typically do not cover the investments suppliers make to assist with the design, engineering and tooling for a component on a new vehicle program. Suppliers are also encouraging Congress to pass legislation like the IMPACT Act (S. 1617) and the Advanced Vehicle Technology Act (H.R. 3246) to provide both original equipment and aftermarket suppliers with greater access to funding for investment in research and development and retooling. "The supplier industry remains at a crossroads," said Bob McKenna, president and CEO, MEMA. "It will require the conscious efforts of the industry, lending institutions, and federal and state governments to provide a stable environment in which the industry can restructure." About MEMA MEMA represents motor vehicle parts suppliers, the nation's largest manufacturing sector, employing nearly 686,000 people across the country. Suppliers are also the largest manufacturing employer in eight states. These jobs contribute to 3.29 million private sector jobs across the country. Suppliers manufacture the parts and technology used in domestic production of new cars and trucks produced each year, and the aftermarket products necessary to repair and maintain more than 247 million vehicles on the road today. MEMA supports its members through its three affiliate associations, Automotive Aftermarket Suppliers Association, Heavy Duty Manufacturers Association, and Original Equipment Suppliers Association. MEMA represents more than 650 member companies with global motor vehicle parts sales exceeding $600 billion and 65 percent of North American automotive supplier sales. * New Report from CFO Magazine Spots Credit Risks ------------------------------------------------- A new CFO Financial Benchmarks report examines the creditworthiness of midcap companies and finds that one in seven poses a potential risk to its suppliers and business partners. The 2009 Credit Risk Benchmarking Report, available for $50 at http://www.cfo.com/creditrisk,provides suppliers with a quick way to gauge which of 550 companies within the CFO Midcap 1500 warrant closer scrutiny. A complete list of companies named in the report also is available free of charge. According to recent CFO magazine survey, 40% of CFOs plan to monitor customer credit more closely -- even after an economic recovery. "Despite signs of a recovery, at least 14% of companies have been badly strained by nearly two years of recession and more than a year of limited access to credit," says Karlo Bustos, director of financial analysis and benchmarking at CFO. "And companies that struggle to pay their bills on time or are in danger of bankruptcy pose a risk to their suppliers." The report measures each company on three factors: cash as a percent of revenue, days payable outstanding (DPO), and DPO relative to the DPO of that company's industry. The last of these measures is intended to expose which companies are underperforming regardless of the economic condition of their industry as a whole. A company that gets poor marks in all three areas is a potential credit risk. An article in the October issue of CFO magazine, called "Credit Check," summarizes how companies performed within the 36 different industries studied. The industries with the highest percentage of troubled companies include pharmaceuticals (46%), biotech (35%), and media (26%). Across all industries, the study found that an average of 14% of companies pose a potential credit risk to their suppliers. As with all financial benchmarks, many factors can affect a company's performance, and this report should be used only as a guide. CFO magazine, CFO.com, CFO Conferences, and CFO Research Services together make up CFO Publishing Corporation, which is an Economist Group business. CFO Financial Benchmarks is an editorial product of CFO, the leading business publication for C-level and senior financial executives. * Oklahoma Bankruptcy Filings Slightly Drop in 3rd Quarter ---------------------------------------------------------- Citing Automated Access to Court Electronic Records, Tony Pugh at Miami Herald relates that commercial bankruptcy filings dropped 4.5% to 22,710 in the third quarter from 23,782 in the second quarter. Automated Access is an Oklahoma City bankruptcy management and data company. Miami Herald note that the decline in the bankruptcy filings doesn't mark an end to the recession, but when coupled with rising home mortgage applications and a slowdown in new jobless benefit claims, the bankruptcy slowdown offers more hope that the economy is starting to stabilize. * Smaller Bankruptcy Firms Booming as Business Failures Rise ------------------------------------------------------------ Lisa van der Pool at Boston Business Journal reports that small bankruptcy law firms have been quietly cashing in on bankruptcy as business collapses and workouts increase, unlike large law firms, which have been pummeled by the recession and forced to fire lawyers and entirely rethink established business practices. Business Journal notes that large law firms are conflicted out of handling some cases because they also work with large financial institutions. According to Business Journal, only a few of bankruptcy boutiques in Boston specialize in business bankruptcies. Business Journal relates that small firms that have substantial bankruptcy practices include Craig and Macauley PC, Hanify & King PC, and Cohn Whitesell & Goldberg LLP. * Treasury's Strategy is 'Inadequate' to Address Foreclosures ------------------------------------------------------------- The Congressional Oversight Panel, in its October oversight report, "An Assessment of Foreclosure Mitigation Efforts after Six Months", expressed concern about the limited scope and scale of the Making Home Affordable program and questions whether Treasury's strategy will lead to permanent mortgage modifications for many homeowners. Rising unemployment, weak home prices, and impending mortgage rate resets still threaten to cast millions of Americans out of their homes, with devastating effects on families, local communities, and the broader economy. One in eight mortgages is currently in foreclosure or default, and this crisis is estimated to produce 10 to 12 million foreclosures. While Treasury is still in the early stages of implementing its centerpiece foreclosure mitigation program, called the Home Affordable Modification Program (HAMP), the Panel has three concerns with the current approach. The Panel found, "It increasingly appears that HAMP is targeted at the housing crisis as it existed six months ago, rather than as it exists right now." The program is limited to certain mortgage configurations. Many of the coming foreclosures are likely to be payment option adjustable rate mortgage and interest-only loan resets, many of which exceed HAMP eligibility limits. Treasury's strategy also makes no provision for foreclosures due to unemployment, which now appear to be one of the biggest drivers of foreclosure. Foreclosures continue every day as Treasury ramps up the program, with foreclosure starts outpacing new HAMP trial modifications at a rate of more than two to one. Some homeowners who would have qualified for modifications may have lost their homes before the program could reach them. Even once the program is fully operational, Treasury's own projections indicate, in the best case, fewer than half of the predicted foreclosures would be avoided. The Panel found that "the result for many homeowners could be that foreclosure is delayed, not avoided." HAMP modifications are often not permanent: For many homeowners, payments will rise after five years, and although the program is still in its early stages, only a very small proportion of trial modifications have converted into longer term modifications. The Panel is also concerned about homeowners who face negative equity or are "underwater" -- that is, the value of the loan exceeds the value of their home. For many borrowers, HAMP modifications increase negative equity, a factor that appears to be associated with increased rates of re- default. The Congressional Oversight Panel was created to oversee the expenditure of the Troubled Asset Relief Program (TARP) funds authorized by Congress in the Emergency Economic Stabilization Act of 2008 (EESA) and to provide recommendations on regulatory reform. The Panel members are: former Securities and Exchange Commissioner Paul S. Atkins, Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Associate General Counsel of the AFL-CIO and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ ------- ------- ABSOLUTE SOFTWRE ABT CN 117 1 35 ACCO BRANDS CORP ABD US 1100 -107 135 AFC ENTERPRISES AFCE US 142 -26 12 AMER AXLE & MFG AXL US 1920 -736 -1119 AMR CORP AMR US 24138 -3000 -3129 ARBITRON INC ARB US 220 0 2 ARVINMERITOR INC ARM US 2627 -846 3 AUTOZONE INC AZO US 5318 -433 -145 BIOSPECIFICS TEC BSTC US 12 6 9 BIOTIME INC BTIM US 5 0 0 BLOUNT INTL BLT US 474 -36 151 BOARDWALK REAL E BEI-U CN 2377 -22 N.A. BOARDWALK REAL E BOWFF US 2377 -22 N.A. BP PRUD BAY-RTU BPT US 9 8 0 BURCON NUTRASCIE BU CN 4 3 2 CABLEVISION SYS CVC US 9307 -5284 -198 CARDTRONICS INC CATM US 468 -10 -50 CENTENNIAL COMM CYCL US 1455 -948 180 CENVEO INC CVO US 1459 -231 186 CHENIERE ENERGY CQP US 1920 -436 27 CHOICE HOTELS CHH US 357 -141 -22 CINCINNATI BELL CBB US 2009 -623 -19 CLOROX CO CLX US 4576 -175 -757 DEXCOM DXCM US 65 1 37 DISH NETWORK-A DISH US 7265 -1519 -240 DOMINO'S PIZZA DPZ US 461 -1372 113 DUN & BRADSTREET DNB US 1623 -719 -147 DYAX CORP DYAX US 68 -37 32 EASTMAN KODAK EK US 7105 -109 1100 EINSTEIN NOAH RE BAGL US 150 -4 -47 ELECTRO-OPTICAL MELA US 8 7 6 ENERGY COMPOSITE ENCC US 0 0 0 EPICEPT CORP EPCT SS 16 -3 7 EXELIXIS INC EXEL US 333 -123 29 EXTENDICARE REAL EXE-U CN 1719 -47 111 FORD MOTOR CO F US 204327 -9418 -39573 FORD MOTOR CO F BB 204327 -9418 -39573 GENCORP INC GY US 1015 1 -8 GLG PARTNERS INC GLG US 494 -271 166 GLG PARTNERS-UTS GLG/U US 494 -271 166 GOLD RESOURCE CO GORO US 7 6 5 HEALTHSOUTH CORP HLS US 1888 -662 -77 HOVNANIAN ENT-A HOV US 2285 -73 1524 HOVNANIAN ENT-B HOVVB US 2285 -73 1524 HUMAN GENOME SCI HGSI US 670 -55 117 IMAX CORP IMX CN 270 -18 55 IMAX CORP IMAX US 270 -18 55 IMMUNOMEDICS INC IMMU US 53 1 -20 IMS HEALTH INC RX US 2030 -22 318 INCYTE CORP INCY US 159 -291 101 INSULET CORP PODD US 99 -3 63 INTERMUNE INC ITMN US 165 -80 98 IPCS INC IPCS US 553 -34 68 JAZZ PHARMACEUTI JAZZ US 108 -88 -17 JUST ENERGY INCO JE-U CN 457 -652 -369 KNOLOGY INC KNOL US 639 -44 37 LIN TV CORP-CL A TVL US 781 -187 14 LINEAR TECH CORP LLTC US 1421 -266 963 LODGENET INTERAC LNET US 594 -64 46 LOGMEIN INC LOGM US 47 7 1 MANNKIND CORP MNKD US 267 -19 0 MAP PHARMACEUTIC MAPP US 65 1 24 MAXLIFE FUND COR MXFD US 0 0 0 MEAD JOHNSON-A MJN US 1926 -808 466 MEDIACOM COMM-A MCCC US 3707 -426 -265 MODAVOX INC MDVX US 5 3 -1 MOODY'S CORP MCO US 1873 -749 -404 NATIONAL CINEMED NCMI US 603 -499 91 NAVISTAR INTL NAV US 9383 -1294 180 NPS PHARM INC NPSP US 144 -219 80 OCH-ZIFF CAPIT-A OZM US 1854 -157 N.A. OMNOVA SOLUTIONS OMN US 326 0 81 ONCOGENEX PHARMA OGXI US 7 3 4 ONCOLYTICS BIO ONC CN 12 9 9 OSIRIS THERAPEUT OSIR US 129 2 64 OTELCO INC-IDS OTT-U CN 349 9 24 OTELCO INC-IDS OTT US 349 9 24 OVERSTOCK.COM OSTK US 129 -3 33 PALM INC PALM US 793 -454 -269 PDL BIOPHARMA IN PDLI US 217 -306 140 PERMIAN BASIN PBT US 10 0 9 PETROALGAE INC PALG US 7 -32 -16 POTLATCH CORP PCH US 916 0 N.A. QWEST COMMUNICAT Q US 20226 -1051 260 REGAL ENTERTAI-A RGC US 2647 -228 -40 RENAISSANCE LEA RLRN US 58 0 -6 REVLON INC-A REV US 797 -1074 87 SALLY BEAUTY HOL SBH US 1464 -645 420 SANDRIDGE ENERGY SD US 2364 -91 114 SELECT COMFORT C SCSS US 86 -46 -82 SEMGROUP ENERGY SGLP US 314 -131 -11 SIGA TECH INC SIGA US 8 -13 -4 SINCLAIR BROAD-A SBGI US 1606 -148 -342 SONIC CORP SONC US 828 -22 75 SPECIALTY PRODUC SPIE US 53 9 10 STANDARD PARKING STAN US 230 4 -13 STEREOTAXIS INC STXS US 43 -10 -3 SUCCESSFACTORS I SFSF US 165 -5 1 SUN COMMUNITIES SUI US 1192 -81 N.A. SYNERGY PHARMACE SGYP US 4 1 1 TALBOTS INC TLB US 855 -206 -25 TAUBMAN CENTERS TCO US 2858 -289 N.A. TENNECO INC TEN US 2767 -263 240 THERAVANCE THRX US 206 -159 144 UAL CORP UAUA US 18805 -2628 -2345 UNITED RENTALS URI US 3918 -46 316 US AIRWAYS GROUP LCC US 7857 -336 -548 VECTOR GROUP LTD VGR US 757 2 158 VENOCO INC VQ US 725 -165 -3 VIRGIN MOBILE-A VM US 320 -256 -126 WARNER MUSIC GRO WMG US 3988 -142 -680 WEIGHT WATCHERS WTW US 1085 -791 -309 WORLD COLOR PRES WC CN 2641 -1735 479 WORLD COLOR PRES WC/U CN 2641 -1735 479 WR GRACE & CO GRA US 3815 -351 977 YRC WORLDWIDE IN YRCW US 3418 -72 -696 ZYMOGENETICS INC ZGEN US 271 -14 85 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission **