/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/091028.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, October 28, 2009, Vol. 13, No. 298 Headlines AFFINITY GROUP: Institutional Lenders Move Payment Date to Oct. 30 ALLIED CAPITAL: Fitch Puts 'B+' Issuer Rating on Positive Watch ALLIED CAPITAL: S&P Puts 'BB+' Ratings on CreditWatch Positive ARES CAPITAL: Moody's Reviews 'Ba1' Issuer Rating for Possible Cut BACCHUS DEV'T: Hopes on 2010 Real Estate Rebound for Ch. 11 Exit BARRIERS INC: Files for Chapter 11 Bankruptcy Protection BARZEL INDUSTRIES: Committee Taps McDonald Hopkins as Counsel BARZEL INDUSTRIES: Files Schedules of Assets and Liabilities FLYING J: Puts North Salt Crude-Oil Refinery Up for Sale FONIX CORP: Issues Shares to CJK for Payment of License Fees CAPE FEAR: Files First Amended Plan of Liquidation CAPMARK FINANCIAL: Chapter 11 Filing Cues S&P's 'D' Rating CAPMARK FINANCIAL: Fitch Downgrades Issuer Default Rating to 'D' CAPMARK FINANCIAL: Wants Dec. 24 Extension for Schedules Filing CEQUEL COMMUNICATIONS: S&P Assigns 'B-' Rating on $400 Mil. Notes CHRYSLER LLC: Daimler Wants Amended Suit Dismissed CHRYSLER LLC: New Chrysler to Partly Pay Jones Day's Fees CHRYSLER LLC: New Chrysler to Rely Heavily on Vehicles From Fiat CIT GROUP: Icahn Offers Alternative $4.5-Bil. Financing CIT GROUP: Icahn Asks Smaller Noteholders to Reject Plan CIT GROUP: Sean Egan Urges Rejection of Tender Offer/Prepack CITIGROUP INC: To Issue 5,000 MSCI Brazil Index-Linked Notes COLONIAL BANCGROUP: Plaintiffs Seek to Limit Use of $15M Policy CONTINENTAL AIRLINES: To Issue $644MM EETCs to Finance Jets COOPER-STANDARD: S&P Puts 'BB' Rating on $175-Mil. DIP Loan COUNTRY COACH: Court Rejects Dismissal of Reorganization Case COYOTES HOCKEY: Not Getting Enough Media Exposure, Fans Say DANKA BUSINESS: Weiss Holds 13.8% of American Depository Shares DBSD NORTH AMERICA: Judge Gerber Rules He Will Confirm Plan DELPHI CORP: Congress Labor Committee to Hear Retiree Concerns DELPHI CORP: DPH Holdings Deregisters Old Securities DELPHI CORP: DPH Holdings Files Closing Chapter 11 Report DELTA AIR LINES: Flights Under Probe for Safety Lapses DELTA AIR LINES: Inks Lease Extension at Atlanta Airport DELTA AIR LINES: Opposes AFL-CIO'S Proposed Voting Changes DENNY NOLEN: Files for Ch 11 Bankruptcy to Keep Property DOLLAR THRIFTY: Posts $30.1-Mil. Net Income for Third Quarter DUNE ENERGY: Fails to Comply with NYSE Amex Listing Rule DUNE ENERGY: Receives Non-Compliance Notice From NYSE Amex EDGE PETROLEUM: Wants December 1 Claim Bar Date ERICKSON RETIREMENT: Court to Hear Auction Rules on October 29 ERICKSON RETIREMENT: Proposes $20 Mil. Financing From ERC Funding ERICKSON RETIREMENT: U.S. Trustee Wants Health-Care Status Hearing ERICKSON RETIREMENT: To Continue Intercompany Transactions EVEREST HOLDINGS: Wants New $30MM Loan From Hypo Real Estate EXACT SCIENCES: Has Technology License Agreement With Hologic EXTENDED STAY: Files Bankruptcy Rule 2015.3 Reports EXTENDED STAY: Lichtenstein Appeals Court Decision on BofA Suit EXTENDED STAY: Panel Gets Nod to Hire BMC as Info Agent FAIRPOINT COMMS: Wants Dec. 15 Extension for Schedules Filing FAIRPOINT COMMS: Bankruptcy Triggers Default of Debt Obligations FAIRPOINT COMMS: Fin'l Projections Provided to Noteholders FAIRPOINT COMMS: Reminds Parties of Automatic Stay FAIRPOINT COMMS: Restructuring Cues Moody's 'D' Rating FINLAY ENTERPRISES: Noteholders Oppose Creditors' Discovery Bid FLEXTRONICS INT'L: Posts Second Quarter Results FONIX CORP: Issues Shares to CJK for Payment of License Fees FT REAL ESTATE: S&P Reinstates 'BB-' Debt Rating on Pref. Stock FLEETWOOD ENTERPRISES: Seeks to Fend Off Formaldehyde Claimants FOOTHILLS TEXAS: Seeking Approval of Disclosure Statement FORUM HEALTH: Must Send Bidding Rules to Creditors by October 30 G-I HOLDINGS: Circ. Lets Hartford Off Hook in D&O Coverage Suit GENERAL MOTORS: Delays Signing of Magna-Opel Sale Deal GENERAL MOTORS: ENCORE's Schedules & Statements GENERAL MOTORS: New GM Completes Holding Company Reorganization GENERAL MOTORS: Product Liability Claimants' Appeal Draws Fire GENERAL MOTORS: Proposes Settlement With IUE-CWA & USW GENERAL MOTORS: REALM's Schedules & Statements GENERAL MOTORS: Weil Gotshal to Provide Services to New GM GHOST TOWN: Disclosure Statement Hearing on November 24 GKL LLC: Case Summary & 3 Largest Unsecured Creditors GPX INTERNATIONAL: Files for Chapter 11 Reorganization GPX INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors GRAY TELEVISION: Fidelity Funds Disclose 11.335% Stake GREENSTONE RESOURCES: Erin Ventures Acquires Santa Rosa Gold Mine HANGER ORTHOPEDIC: Net Income Up 31.4% to $2.3-Mil. in Q3 HAWAIIAN AIRLINES: Pilots Want Out of Mediations HCA INC: KKR Millennium Holds 97.3% Stake Thru Hercules Holding ILLINOIS FINANCE: Fitch Affirms 'BB-' Rating on $80.5 Mil. Bonds IRVINE SENSORS: Says FY2009 Operating Income Meets Nasdaq Rule JETBLUE AIRWAYS: Moody's Affirms 'Caa2' Corporate Family Rating JOHNSONDIVERSEY INC: Launches Tender Offer for 9.625% Notes KB TOYS: Lead Suit Settlement With California Gets Approval LAUREL SWORD COMPANY: Voluntary Chapter 11 Case Summary LEAP WIRELESS: Cricket Launches Exchange Offer for 7.75% Notes LEAP WIRELESS: Morgan Stanley Discloses 5.3% Equity Stake LEVEL 3: HyperCube Files Complaint Over Non-Payment of Services LEXINGTON PRECISION: Wants to Use Cash Collateral Until Dec. 31 LYONDELL CHEMICAL: Court OKs Appointment of Examiner MAGNA ENTERTAINMENT: To Ask Court OK to Auction Golden Gate Fields MATRIX DEV'T: Wachovia Wants to Foreclose on Taralon, Villebois MAX & ERMA'S: Files for Chr 11 Bankr. to Fend Off National City MBIA ASSURANCE: S&P Corrects Ratings to 'NR' From 'BB+' MERCER INT'L: Plans to Sell Up to $200,000,000 in Securities MERUELO MADDUX: Calif. Bank Opposes Bid to Hire DLA Piper MORGANS HOTEL: Posts $27.8 Mln Net Loss in Third Quarter 2009 MUZAK HOLDINGS: Court Approves Disclosure Statement MUZAK HOLDINGS: Wants Cash Collateral Access Until January 19 NATIONAL GAS: U.S. Army Gas Supply Contracts Not Avoidable NAVISTAR INT'L: CEO to Present at Gabelli Symposium on Nov. 2 NCI BUILDING: Discloses Management Changes Due to CD&R Deal NCI BUILDING: Repays Wachovia Debt; Secures $125MM ABL Facility NCL CORP: Moody's Assigns 'B3' Corporate Family Rating NCL CORP: S&P Assigns Corporate Credit Rating at 'B' NEIMAN MARCUS: Swings to $668MM Net Loss for Aug. 1 Fiscal Year NEIMAN MARCUS: To Issue of 9%/9-3/4%, 10-3/8% & 7.125% Notes NEUMANN HOMES: Bracewell Tapped to Pursue Potential Claims NEUMANN HOMES: Plan Outline Hearing Continued to October 28 NEUMANN HOMES: Proposes to Employ Keating as Special COunsel NEWARK GROUP: Cancels Registration of 9-3/4% Sr. Sub Notes NOVA HOLDING: Court Approves Sale of All Assets to Clinton County NOVA HOLDING: Court OKs DIP Facility Increase to $2.6 Million NTK HOLDINGS: Gets Interim Nod to Use Cash Collateral NTK HOLDINGS: To Honor Prepetition Customer Obligations NTK HOLDINGS: To Honor Prepetition Employee Obligations PDCC DEV'T: City Council Make Move to Remove Fire Hazards PHILADELPHIA NEWSPAPERS: Committee Wants More Details on Sale PHOENIX WORLDWIDE: Access to C3 Capital Cash Collateral Denied PILLOWTEX CORP: "Subsequent New Value" Need Not Remain Unpaid PIONEER INSURANCE: ASB Admits Mistake of Denying Bankr. Move PLCP LP: Court to Rule on Reorganization Plan on Nov. 18 PROLIANCE INT'L: Has Sole Rights to File Plan Until January PROTECTION ONE: Moody's Affirms 'B2' Corporate Family Rating QUESTEX MEDIA: Get Court Approval to Access CSCIB $15MM Facility RADIO SYSTEMS: S&P Gives Stable Outlook, Affirms 'B' Rating RAPID LINK: Inks Share Exchange Agreement With Blackbird REGAL CINEMAS: Launches Exchange Offer for 8.625% Senior Notes R.H. DONNELLEY: Brualdi Law Firm Files Class Suit for Investors RIVERVIEW VENTURES: Blames Chapter 11 on Economic Downturn ROUNDY'S SUPERMARKETS: Moody's Assigns 'B1' Rating on Bank Loans ROYAL HAWAIIAN: To Get $150,000 Infusion From Japan Sports SALTY DISPOSAL: Files for Chapter 11 Bankruptcy Protection SCO GROUP: To Pursue Lawsuits Against IBM & Novell SEALY CORP: KKR Entities Hold 75.5% Equity Interest SEMGROUP LP: Creditors Get Consent to Sue PwC, et al. SEMGROUP LP: Creditors Get Nod to Probe Vess, Murfin Entities SEMGROUP LP: Ex-Executive Settles SEC Insider Trading Suit SENTINEL MANAGEMENT: GAMAG's Claim Unenforceable in Bankruptcy SEQUENOM INC: Appoints Paul V. Maier as Interim CFO SL GREEN: Incurs $2.5 Million Net Loss in Third Quarter SONIC AUTOMOTIVE: Posts $15.59MM Net Income for Q3 2009 SOUTH FINANCIAL GROUP: DBRS Downgrades Rating to 'B' SOUTHWEST CHARTER: Reorganization Case Converted to Chapter 7 SPANSION INC: Court Won't Order Appointment of Equity Committee SPANSION INC: Debt Recovery, Argo Partners Buy Claims SPANSION INC: Proposes Skadden Arps for Cross-Border Transactions SPANSION INC: Puts SP1 Fab Up for Sale STALLION OILFIELD: S&P Retains 'D' Rating on Senior Unsec. Debt STINSON PETROLEUM: GCBC Withdraws Motion to Appoint Examiner SUN-TIMES MEDIA: James Tyree Completes Acquisition of Assets SUPER 88: Ch. 11 Filing Puts Sale on Hold, Buyer Still Hopeful SYNOVUS FINANCIAL: $423 Mil. Loss Won't Affect S&P's 'BB-' Rating TAYLOR BEAN: Judge Lets Deutsche Bank Open Taylor Bean Books TRIPLE CROWN: Can Solicit Votes for Amended Chapter 11 Plan TRIPLE CROWN: Files Schedules of Assets and Liabilities TROPICANA ENT: Adamar of NJ Proposes Amended Deal for Assets Sale TROPICANA ENT: Gets Jan. 31 Extension for Plan Consummation TROPICANA ENT: OpCO Debtors Want to Amend Sale Deal TROPICANA ENT: OpCo's Non-Material Changes to Plan UNIGENE LABORATORIES: Gets 25% Stake in Tarsa Under License Deal UNIVERSAL CITY: S&P Downgrades Corporate Credit Rating to 'B' USA SPRINGS: Secured Permits to Be Transferred VERASUN ENERGY: Court Confirms Chapter 11 Plan of Liquidation VISTEON CORP: Moves to Sell Nissan Parts Plants to Haru WABASH NATIONAL: Delays Effective Date of Registration Statement WEIGHT WATCHERS: Morgan Stanley Discloses 4.8% Stake WOLVERINE TUBE: Cancels Registration of Shares for Resale WOLVERINE TUBE: Files Annual Report for Savings Plans * Chapter 7 Bankruptcy Filings Up 12.5% in First Nine Months * Equity Fund Managers See No Sudden Boom in Deal Flow Volume * House Oversight Committee Targets Big Mortgage Lenders * PBGC Announces Maximum Insurance Benefit for 2010 * Epiq Systems Posts Third Quarter 2009 Results * Focus Management Launches Dallas Regional Office * Upcoming Meetings, Conferences and Seminars ********* AFFINITY GROUP: Institutional Lenders Move Payment Date to Oct. 30 ------------------------------------------------------------------ Affinity Group Holding, Inc., on September 14, 2009, received consent letters from certain institutional holders of its 10-7/8% Senior Notes Due 2012 holding in the aggregate $65,835,969 principal amount of the AGHI Notes outstanding and consent letters from certain non-institutional holders of the AGHI Notes holding in the aggregate $46,555,946 principal amount of the AGHI Notes outstanding. The aggregate principal amount of the AGHI Notes outstanding is $113,648,603 so the holders executing the Consents held 98.9% of the outstanding principal amount of the AGHI Notes. The Company has engaged in discussions with the holders of the AGHI Notes regarding a refinancing or restructuring of the indebtedness of the Company and its subsidiary, Affinity Group, Inc. As part of those discussions, the Company did not pay the interest on the AGHI Notes that was due on August 15, 2009, but the indenture governing the AGHI Notes provides a 30-day grace period for the payment of interest that was to have been paid on that date. Pursuant to the Institutional Consents, the Company has agreed to pay the legal fees for a law firm to represent the holders who signed the Institutional Consents in connection with such discussions and has paid a $150,000 retainer to that law firm. In addition, the Company has paid a consent fee equal to 1/4 of 1% of the principal amount to the holders who signed the Institutional Consents or an aggregate of $164,600. The Institutional Consents extended the most recent interest payment date on their AGHI Notes until October 1, 2009. The Other Consents extended the most recent interest payment date on their AGHI Notes until October 29, 2009, and no consent fees were paid to those holders. As of October 23, 2009, the holders who signed the Institutional Consents have agreed to extend the interest payment date on their AGHI Notes to October 30, 2009. On September 14, 2009, the Company paid the interest on the remaining $1,256,688 principal amount of AGHI Notes that are outstanding and for which an Institutional Consent or an Other Consent was not obtained. About Affinity Group Affinity Group Holding, Inc., is a large member-based direct marketing company, targeting North American recreational vehicle owners and outdoor enthusiasts. The company reported net revenue of $506 million for the LTM period ended March 31, 2009. As of June 30, 2009, AGHI had $301,734,000 in total assets and $587,933,000 in total liabilities, resulting in $286,199,000 in stockholders' deficit. Affinity Group carries a 'Caa1' long term corporate family rating from Moody's and a 'CCC' issuer credit rating from Standard & Poor's. ALLIED CAPITAL: Fitch Puts 'B+' Issuer Rating on Positive Watch --------------------------------------------------------------- Fitch Ratings has placed these ratings of Allied Capital Corporation on Rating Watch Positive following the announcement of its merger agreement with Ares Capital Corporation: -- Long-term Issuer Default Rating 'B+'; -- Senior secured debt 'BB/RR1'; and -- Senior unsecured debt 'B+/RR4'. Approximately $1.6 billion of debt is affected by these actions. Ares has agreed to purchase Allied in an all stock transaction for $648 million, which represents a 27.3% premium to its closing stock price on Oct. 23, 2009, but a 51.7% discount to its June 30, 2009 book value. The transaction is expected to close by the end of the first quarter of 2010, subject to shareholder approval and certain lender consent. The Rating Watch Positive reflects Fitch's belief that Allied's debt holders will benefit from Ares' superior credit profile, improved funding flexibility, and the enhanced liquidity of the combined entity. The additional investment capital will provide an opportunity to better support Allied's legacy portfolio investments and the ability to maximize portfolio returns. At June 30, 2009, Ares had a debt-to-equity ratio of 0.81 times, had balance sheet cash of $46.3 million, and had over $300 million of available borrowing capacity on its secured revolving facilities (including the $200 million revolving facility closed in July 2009), subject to borrowing base and covenant limitations. Furthermore, Ares was able to access the equity markets in August 2009, netting $109.6 million of proceeds. Fitch expects Allied's asset sales and debt repayments will continue over the near-term, so that the debt-to-equity ratio of the combined entity will be between 0.65x and 0.75x at closing. Should the achievement of this leverage ratio necessitate negotiations with Allied's note holders, Fitch would need to consider the terms of any such restructuring in the context of its criteria for coercive debt exchanges. Still, Fitch does not anticipate any material reduction in terms, as it expects Ares would seek to maximize its ability to maintain and improve funding flexibility over the long-term. In a separate transaction, Allied has agreed to sell its interests in the Senior Secured Loan Fund LLC (formerly known as the Unitranche Fund) to Ares for $165 million in cash. This fund was formed in December 2007 to invest in unitranche securities of middle market companies and currently holds loans totaling approximately $900 million. The fund is co-managed by an affiliate of General Electric Capital Corporation. Should the merger transaction between Allied and Ares not be completed, Fitch does not believe the sale of the fund will materially alter the credit profile of Allied as a stand alone entity. Sale proceeds are expected to be used for the repayment of debt. ALLIED CAPITAL: S&P Puts 'BB+' Ratings on CreditWatch Positive -------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its 'BB+' long-term counterparty credit rating and its 'BB' senior unsecured debt ratings on Allied Capital Corp. on CreditWatch with positive implications. At the same time, S&P placed its 'BBB' long-term counterparty credit rating on Ares Capital Corp. on CreditWatch with negative implications. "The rating actions follow Ares's announcement that it has agreed to acquire Allied in an all-stock transaction currently valued at $648 million. S&P does not expect the acquisition, which is subject to regulatory and shareholder approval, to close before the end of first-quarter 2010," said Standard & Poor's credit analyst Jeffrey Zaun. The CreditWatch Positive on Allied reflects S&P's opinion that Allied will benefit from combining with a stronger partner, as management of the combined company will seek to reposition Allied's portfolio into higher-yielding assets while reducing that firm's currently high leverage. S&P believes Allied will continue to sell assets to reduce debt as part of the acquisition. The CreditWatch Negative on Ares reflects execution risk that S&P believes is common in all acquisitions. S&P note the strategic advantages that such a combination would bring, as it would form a stronger combined company, with $11 billion in committed capital under management. However, Ares would also be acquiring a portfolio that has a significant number of weaker-quality assets. Allied's financial profile in the past 12 to 18 months has weakened as credit quality in its loan portfolio has deteriorated, resulting in high leverage and pressure on earnings. S&P could raise the ratings on Allied if its acquisition contributes to rapid delevering of its balance sheet, and an improvement in the quality and performance of its portfolio. S&P could affirm the ratings on Ares if it is successful in integrating Allied's business without undue pressure on its financial profile. In contrast, if Ares's acquisition of Allied results in deterioration in its financial profile -- specifically, if Ares cannot reduce the higher leverage it acquires with Allied and stabilize Allied's loan portfolio -- S&P could change the outlook to negative. ARES CAPITAL: Moody's Reviews 'Ba1' Issuer Rating for Possible Cut ------------------------------------------------------------------ Moody's Investors Service placed Ares Capital Corporation's Ba1 issuer rating on review for possible downgrade. In a related action, Moody's placed Allied Capital Corporation's B1 issuer and senior unsecured ratings on review for possible upgrade. These rating actions follow Ares' announcement that it has agreed to acquire 100% of Allied in an all stock transaction. The transaction is expected to close in the first quarter of 2010. As a result, Ares will inherit Allied's significant short-term maturities and troubled investment portfolio, putting pressure on its credit profile. On the positive side, Ares will substantially increase its scale and is acquiring Allied at a substantial discount to GAAP book value. During its review, Moody's will focus on the Ares' and Allied's ability to mitigate the refinancing risks that the combined firm would face either 1) by substantially pre-paying (or pre-funding) 2010 maturities through investment portfolio liquidations and/or new equity issuance prior to the transaction closing or 2) by Allied extending the maturity schedule of its debt through a partial or full restructuring. Based on June 30, 2009 data, Allied has $304 million of debt maturing in 2010 and Ares $400 million (however Ares raised $109 million of equity in the third quarter that could have been used to pay down debt). Allied also has $574 of debt maturing in July 2011. Moody's will also focus on the company's ability to achieve its targeted combined debt to equity ratio of 0.65 times to 0.75 times (this is equivalent to an asset coverage ratio of approximately 230% to 250%) at closing. Additionally, the quality of Allied's investment portfolio is very poor. Its fair value represented 59% of amortized cost and nonaccrual loans were equal to 36% of total loans at June 30, 2009. Ares will need to manage this troubled portfolio while at the same time maintaining vigilance over its current portfolio, and this represents a significant uncertainty. Positively, this transaction will result in a gain to Ares' capital base. The $648 million purchase price represents 48% of Allied's June 30, 2009 GAAP book value. As a result Moody's estimates that Ares could recognize a bargain purchase gain of greater than $550 million upon closing the transaction. This gain, should it occur, would substantially reduce the leverage of the combined company. The primary risk to this gain not occurring is Allied's assets' value being substantially below reported value. Allied's ratings were placed under review for upgrade as its creditors should benefit from being part of Ares, a higher rated firm that has performed substantially better than Allied through the credit cycle. Moody's will focus on completion of the proposed transaction, and its structure, including the structural subordination of unsecured creditors. Ares ratings could be confirmed at their current level if the firm is able to reduce the refinancing risk that the combined firm would face and if it is able to achieve its targeted debt to equity ratio as discussed above. Additionally, a confirmation would require Moody's belief that any anticipated decline in the quality of Ares or Allied investment portfolio performance be manageable. The last rating action on Ares was on March 4, 2009, when Moody's downgraded the company to Ba1 from Baa3 with a negative outlook. The last rating action on Allied was on March 2, 2009, when Moody's downgraded the company to B1 from Ba2 with a negative outlook. Ares Capital Corporation is based in New York and reported total assets of $2.0 billion at June 30, 2009. Allied Capital Corporation is based in Washington DC and reported total assets of $3.2 billion at June 30, 2009. On Review for Possible Downgrade: Issuer: Ares Capital Corporation -- Issuer Rating, Placed on Review for Possible Downgrade, currently Ba1 Outlook Actions: Issuer: Ares Capital Corporation -- Outlook, Changed To Rating Under Review From Negative On Review for Possible Upgrade: Issuer: Allied Capital Corporation -- Issuer Rating, Placed on Review for Possible Upgrade, currently B1 -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently B1 Outlook Actions: Issuer: Allied Capital Corporation -- Outlook, Changed To Rating Under Review From Negative BACCHUS DEV'T: Hopes on 2010 Real Estate Rebound for Ch. 11 Exit ---------------------------------------------------------------- Mark Mueller at Orange County Business Journal reports that Bacchus Development is hoping for a 2010 turnaround in Orange County's commercial real estate market will help sell three of its Irvine Spectrum office condominium projects and help it get out of bankruptcy, but its main lender, Union Bank, has doubts. Bacchus fell behind on payments to Union Bank for almost $55 million in loans. Business Journal says that much of the troubled loans are tied to the two most recent developments built in the Spectrum by Bacchus -- Jeffrey Office Park and the Bacchus Signature Series. According to Business Journal, Bacchus has filed a preliminary reorganization plan in bankruptcy court in Santa Ana to pay off its debts to Union Bank and is expecting to file a more detailed plan soon. Bacchus Development is based in Irvine, California. The Company filed for Chapter 11 bankruptcy protection on September 4, 2009 (Bankr. C.D. Calif. Case No. 09-19457). The Company's affiliates, Bacchus Investment Group, LLC, and Bacchus Commercial, LLC, also filed for bankruptcy protection. Marc J. Winthrop, Esq., who has an office in Newport Beach, California, assists Bacchus Development in its restructuring efforts. The Company listed $1,000,001 to $10,000,000 in assets and $500,001 to $1,000,000 in liabilities. BARRIERS INC: Files for Chapter 11 Bankruptcy Protection -------------------------------------------------------- Barriers Inc. has filed for Chapter 11 bankruptcy protection, listing, $938,788 in liabilities and $2,815,582 in assets. Wichita Eagle Blogs relates that Mary Ellen Barrier said that she can't say whether the bankruptcy means the store will close or sell, but Barriers is in the process of planning its next steps. Barriers is getting ready for an in-store sale, the report says, citing Ms. Barrier. Wichita, Kansas-based Barrier Inc is the longtime jewelry store at Douglas and Oliver. BARZEL INDUSTRIES: Committee Taps McDonald Hopkins as Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors of Barzel Industries Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ McDonald Hopkins LLC as their counsel. The firm has agreed to, among other things: a) monitor the Debtors' Chapter 11 cases and legal activities and advise the Committee on the legal ramifications of such actions; b) provide the Committee advice on its obligations and duties; c) assist with the Committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and of the operation of the Debtors' businesses, as well as the validity, expense, priority and perfection of the liens and security interest of the Debtors' secured creditors; d) review and analyze all applications, orders, statements of operations and schedules filed with the Court and advise the Committee as to their propriety; and e) execute Committee decisions by filing motions, objections or other documents with the Court. The current hourly rates charges by the firm for professionals and paraprofessionals are: Members $285-$625 Of Counsel $275-$550 Associates $185-$360 Paralegals $120-$225 Law Clerks $80-$120 The Committee assures the Court that the firm is a "disinterested person" as defined in Section 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). 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. BARZEL INDUSTRIES: Files Schedules of Assets and Liabilities ------------------------------------------------------------ Barzel Industries Inc. delivered to the U.S. Bankruptcy Court for the District of Delaware it schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property B. Personal Property ($46,066,905) C. Property Claimed as Exempt D. Creditors Holding Unliquidated Secured Claims E. Creditors Holding Unsecured Priority Claims Unliquidated F. Creditors Holding Unsecured Non-priority Claims $0 ----------- ------------- TOTAL ($46,066,905) Unliquidated Assets resulted to a negative after Barzel scheduled Barzel Holdings Inc.'s 100% equity ownership with a net book value of negative $46,070,617. Barzel scheduled these unliquidated secured claims: * CIBC World Markets Inc. and JPMorgan Securities Inc. on account of 11.5% senior secured notes due 2015 of which $315,000,000 in principal and $33,166 interest is owing. * CIBC World Markets Inc. and JPMorgan on account of senior secured credit agreement dated Nov. 15, 2007. The obligations under the Notes are secured by a second priority lien on the cash, accounts and inventory of Barzel and other units. The obligations under the Credit Facility are secured by perfected first priority security interests in all cash, accounts and inventory of Barzel. Creditors holding unsecured priority claims, all of them scheduled with unliquidated claims, include the City of New York, the Commonwealth of Massachusetts and Internal Revenue Service. A full-text copy of the Debtor's schedules is available for free at http://ResearchArchives.com/t/s?477f The Debtor's affiliates also filed with the Court separate schedules of assets and liabilities. 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. FLYING J: Puts North Salt Crude-Oil Refinery Up for Sale -------------------------------------------------------- Steven Oberbeck at The Salt Lake Tribune reports that Flying J Inc. has put its crude-oil refinery in North Salt Lake City up for sale, in hopes of generating additional cash to help hasten the Company's emergence from Chapter 11 bankruptcy. "Only time will tell if they can find a buyer . . . . If they [Flying J] want to sell, it may have to be at a discount from the price they would have gotten when the market was a lot stronger a few years ago," The Tribune quoted Caris & Co. analyst Ann Kohler as saying. Ms. Kohler said that the Utah refinery is one of 10 such facilities that now are on the market nationwide, the report states 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. FONIX CORP: Issues Shares to CJK for Payment of License Fees ------------------------------------------------------------ Fonix Corporation filed a registration statement with the Securities and Exchange Commission to register 6,000,000 shares of Class A Common Stock, $0.0001 par value per share. The Proposed Maximum Aggregate Offering Price is $120,000. The Registration Statement also covers an indeterminate number of Common Shares that may be issuable by reason of stock splits, stock dividends or similar transactions in accordance with Rule 416 under the Securities Act of 1933, as amended. According to the regulatory filing, the shares are to be granted to a consultant to the Company, pursuant to a Share Payment Agreement dated October 9, 2009, between the CJK Dictionary Institute, Inc., in Saitama, Japan, and Fonix Speech Inc. CJK and Fonix entered into a Licensing Agreement dated October 16, 2007, as amended by amendments dated April 18, 2008 and June 19, 2008, pursuant to which CJK granted Fonix a world-wide, non- exclusive, perpetual right to incorporate into Fonix products a Chinese Lexical Database, a Japanese Lexical Database, and a Korean Lexical Database. Pursuant to the License, CJK was entitled to a licensing fee after delivery of the CJK Databases. During November 2007, CJK delivered the CJK Databases to Fonix. CJK has agreed to accept shares of Fonix Common Stock as payment of the Fee. Fonix agrees to pay the Fee earned by CJK in November 2007 by issuing to CJK shares of Class A common stock of Fonix Corp. having a value of $85,000 as of the date of issuance, with the number of Shares to be issued being determined by dividing $85,000 by the per share market price of Fonix's common stock on the day immediately prior to issuance. In the event that CJK observes the conditions of Section 2 of the Agreement, and sale of the Shares does not result in realization of $85,000 in sales proceeds, Fonix agrees to issue additional shares to CJK until the full $85,000 has been realized from the sale of Fonix shares. However, in the event CJK observes the conditions of Section 2 of the Agreement, and the sale of the Shares results in realization of more than $85,000 in sales proceeds, CJK agrees to return to Fonix: (a) all sales proceeds in excess of $85,000; and (b) all unsold Shares. Section 2 provides restriction on the sale of the Shares. CJK agrees that it is will not allow its agent to sell more than $1,500 worth of Shares on any given day to maintain a market for Fonix stock. CJK agrees that if it breaches this provision, it will forfeit all rights to, and shall return to Fonix, all of the Shares that are not sold as of the date of the breach. Fonix Corporation said in an August regulatory filing its cash resources, limited to collections from customers, sales of equity and debt securities and loans, have not been sufficient to cover operating expenses. As a result, some payments to vendors have been delayed. As of June 30, 2009, the Company had $3,994,000 in total assets and $50,480,000 in total liabilities, all current, resulting in $46,486,000 in stockholders' deficit. As of June 30, 2009, the Company had an accumulated deficit of $288,644,000; negative working capital of $47,216,000; derivative liabilities of $37,404,000 related to the issuance of Series P Preferred Stock, Series L Preferred Stock, Series M Preferred stock, Series N Preferred Stock, Series O Preferred Stock, Series E Convertible Debentures and Series B Preferred Stock of its subsidiary; accrued liabilities of $8,435,000; accounts payable of $2,315,000; tax payable of $27,000; deferred tax liabilities of $250,000; related party notes payable of $843,000; and deferred revenues of $445,000. The Company expects to continue to incur significant losses and negative cash flows from operating activities at least through December 31, 2009, primarily due to expenditure requirements associated with continued marketing and development of the Company's speech-enabling technologies. The Company said there is substantial doubt about its ability to continue as a going concern. Management plans to fund further operations of the Company from cash flows from future license and royalty arrangements and with proceeds from additional issuance of debt and equity securities. There can be no assurance that management's plans will be successful. If additional financing is not obtained in the near future, the Company said it will be required to more significantly curtail operations or seek protection under bankruptcy laws. Based in Lindon, Utah, Fonix Corporation's operations are managed through its two wholly owned subsidiaries, Fonix Speech, Inc., and Fonix GS Acquisition Co., Inc. Fonix Speech provides value-added speech-enabling technologies, speech interface development tools, and speech solutions and applications, including automated speech recognition and text-to- speech that empower consumers to interact conversationally with information systems and devices. Fonix GS was formed on June 27, 2008, to facilitate the acquisition of Shanghai Gaozhi Software Systems Limited, a Chinese software developer and solutions provider in second-generation and third-generation telecommunication operation support systems in China and throughout the Asian Pacific region. Gaozhisoft is a qualified competitor for telecommunication operation supports systems. GaozhiSoft's products are designed to increase data transferring speed, reduce telecommunications data loss and provide network management, billing accuracy and improved implementation techniques to telecom carriers. CAPE FEAR: Files First Amended Plan of Liquidation -------------------------------------------------- BankruptcyData reports that Cape Fear Bank filed with the U.S. Bankruptcy Court a First Amended Plan of Liquidation and related Disclosure Statement. The Plan contemplates the Company's liquidation. The disclosure statement explaining the Plan says, "The Debtor initiated this Chapter 11 case in an effort to wind down its operations under the supervision of the Court, and bring all claims and potential claimants to one forum so that all assets could be distributed to all known and unknown claimants." According to the report, the Debtor's Plan proposes to distribute its assets pro rata to all of its creditors, in accordance with the priorities of claims, the priorities of the Bankruptcy Code. The Debtor's current board of directors and officers will continue to manage the Debtor's affairs until such time as the Debtor's Plan is consummated." About Cape Fear Bank Based in Raleigh, North Carolina, Cape Fear Bank Corporation, fdba Bank of Wilmington Corporation, filed for Chapter 11 bankruptcy protection on June 23, 2009 (Bankr. E.D.N.C. Case No. 09-05179). Judge J. Rich Leonard presides over the case. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., in New Bern, North Carolina, serves as the Debtor's counsel. In its petition, the Debtor disclosed $473,852 in total assets and $10,560,000 in total debts As reported by the Troubled Company Reporter on April 13, Cape Fear Bank was closed April 10 by the North Carolina Office of Commissioner of Banks, which then appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Federal Savings and Loan Association of Charleston, Charleston, South Carolina, to assume all of the deposits of Cape Fear Bank. Cape Fear intends to liquidate and distribute all of its assets to its creditors pro rata, under the supervision of the Bankruptcy Court, through a Plan of Liquidation filed simultaneously with its bankruptcy case. Cape Fear Bank Corp.'s primary asset consisted of its stock in Cape Fear Bank, which was lost after the FDIC was appointed as the receiver for the bank. As of March 31, 2009, Cape Fear Bank had total assets of approximately $492 million and total deposits of $403 million. In addition to assuming all of the deposits of the failed bank, First First Federal agreed to purchase approximately $468 million in assets. The FDIC retained the remaining assets for later disposition. CAPMARK FINANCIAL: Chapter 11 Filing Cues S&P's 'D' Rating ---------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings on Capmark Financial Group Inc., including the local currency counterparty credit rating on the company, to 'D' from 'CC'. At the same time, S&P removed the ratings from CreditWatch, where S&P placed them with negative implications on Sept. 4, 2009. "The rating action follows the firm's announcement that it had filed for Chapter 11 bankruptcy protection," said Standard & Poor's credit analyst Jeffrey Zaun. "The bankruptcy filing will entail a default on substantially all of the firm's rated debt." It will not, however, result in a default by Capmark Bank and certain other affiliates, including the firm's investment adviser, broker-dealer, and Asian, Indian, and European subsidiaries. S&P had expected the bankruptcy filing since September 2009, when Capmark Financial Group entered into an asset put agreement that gave it the right to sell its North American servicing and mortgage-banking businesses. S&P expects the firm to sell these, and possibly other, assets, through bankruptcy proceedings. "We will reassess S&P's rating on Capmark Financial Group when S&P can better determine the results of the firm's bankruptcy and asset sales, factoring into S&P's assessment the new liability structure, cash flow projections, and business strategy," said Mr. Zaun. CAPMARK FINANCIAL: Fitch Downgrades Issuer Default Rating to 'D' ---------------------------------------------------------------- Fitch Ratings has downgraded the long-term Issuer Default Ratings of Capmark Financial Group to 'D' from 'C' following the company's filing of a voluntary petition seeking relief under Chapter 11 of the U.S. Bankruptcy Code. Approximately $8.5 billion of debt is affected by this action. The ratings of Capmark Bank and Capmark Commercial Funding Asia K.K. are unaffected at this time. As per the company's announcement, certain subsidiaries may file for Chapter 11 or other applicable protection in the future. On Oct. 2, 2009, Capmark Bank entered into a Cease & Desist Order with the Federal Deposit Insurance Corporation and the Utah Department of Financial Institutions, which requires maintenance of certain leverage ratios, submission of a capital plan within 45 days and applies certain other restrictions. Under terms of the company's proposed debt restructuring, it is seeking to re- capitalize Capmark Bank through a contribution in an amount up to $1.4 billion to enable the company to manage and monetize the Bank's existing portfolio and avoid potential actions by the FDIC that could adversely affect the Bank's liquidity position in the medium-term and limit the amount of any FDIC claim under the Capital Maintenance Agreement. A $600 million contribution was made on Sept. 30, 2009 with additional contributions anticipated to be made in the future. Going forward, Fitch will evaluate the level of information and transparency in maintaining ratings on Capmark and its related entities and may withdraw the ratings in the future. These ratings were downgraded: Capmark Financial Group Inc. -- Long-term IDR to 'D' from 'C'; -- Short-term IDR to 'D' from 'C'. These ratings were unaffected: Capmark Financial Group Inc. -- Senior unsecured debt 'C/RR5' -- Term secured bank facility 'CC/RR3'; -- Revolving credit facility 'C/RR5'; -- Term Bank facility 'C/RR5'. Capmark Bank -- Long-term IDR 'CC' -- Short- Term IDR 'C' -- Individual 'E' -- Long-term Deposits 'CCC' -- Short-term Deposits 'C' -- Support '5' Capmark Commercial Funding Asia K.K. (Japan) -- Long-term IDR 'C' -- Short-term IDR 'C' In addition, these ratings are withdrawn: Capmark Commercial Mortgage Funding, PLC -- Long-term IDR 'C'; -- Short-term IDR 'C'; -- Senior unsecured debt 'C/RR5'. CAPMARK FINANCIAL: Wants Dec. 24 Extension for Schedules Filing --------------------------------------------------------------- Capmark Financial Group Inc. and its units ask the Bankruptcy Court to extend the time for them to file schedules of assets and liabilities, executory contracts and unexpired leases, current income and expenditures, and statements of financial affairs, through December 24, 2009. Section 521 of the Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure require the Debtors to file, among other things, the Schedules within 15 days after the Petition Date, unless the Court orders otherwise. Rule 1007-1(b) of the Delaware Local Rule extends the filing deadline for the Schedules to 30 days if the bankruptcy petition is accompanied by a list of all the debtor's creditors and their addresses and if the total number of creditors in a debtor's case exceeds 200. The Debtors relate that they have filed a list of creditors which reflects that the total number of their creditors exceed 200. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates that due to the size and complexity of the Debtors' operations, they will be unable to complete their Schedules in the 30-day period. According to Mr. Collins, while the Debtors are mobilizing their employees to work diligently and expeditiously to prepare the Schedules, the Debtors' resources are limited. In view of the amount of work entailed in completing the Schedules and the competing demands upon the Debtors' employees and professionals to assist in efforts to stabilize business operations during this critical initial position period, the Debtors will not be able to properly and accurately complete the Schedules within the 30-day time period, Mr. Collins avers. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684) Capmark's financial advisors are Lazard FrŠres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC is the claims and notice agent. Capmark has total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Bankruptcy Creditors' Service, Inc., publishes Capmak Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CEQUEL COMMUNICATIONS: S&P Assigns 'B-' Rating on $400 Mil. Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B-' issue-level and '6' recovery ratings to St. Louis-based cable operator Cequel Communications Holdings I LLC's proposed $400 million of senior secured notes due 2017, to be issued with co-issuer Cequel Capital Corp. The '6' recovery rating indicates expectations for negligible (0%-10%) recovery in the event of a payment default. Proceeds will be used to repay $250 million of first-lien debt and $150 million of second-lien debt, as well as transaction fees and expenses. S&P also assigned a 'B+' corporate credit rating and stable outlook to Cequel Communications Holdings I LLC. These changes reflect the new capital structure with Cequel Communications Holdings I LLC as an issue. S&P also affirmed the existing issue ratings at Cequel Communications LLC, including the 'BB-' issue rating on its first- lien debt and 'B-' issue rating on its second-lien debt. The '2' recovery rating on the first lien debt and the '6' recovery rating on the second-lien debt remain unchanged. "The ratings on Cequel reflect mature revenue growth prospects for basic video services, competitive pressure on the video customer base from direct-to-home satellite TV providers, and the potential for increased competition in high-speed data and video services from the local telephone companies," said Standard & Poor's credit analyst Catherine Cosentino. A highly leveraged financial profile is another factor. Partly tempering those factors are the company's position as the dominant provider of pay TV services in its markets and revenue growth opportunities from advanced video services, HSD, and voice over Internet protocol telephony. CHRYSLER LLC: Daimler Wants Amended Suit Dismissed -------------------------------------------------- Daimler AG asks the Court to dismiss the amended complaint filed by Chrysler Group LLC and Old Carco LLC on September 29, 2009. Pursuant to Rule 9017 of the Federal Rules of Bankruptcy Procedure, Daimler also notifies the Court and parties-in-interest that if the proceeding were to survive its dismissal request, Daimler may raise issues in the proceeding concerning the law of Germany. Sally McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, contends in a memorandum supporting the request that the action is an attempt by Chrysler Group, a non- debtor, to use the Bankruptcy Court to draft new contracts that are being negotiated between Chrysler Group and Daimler. She notes that the Non-Debtor is bringing the amended complaint even though the Bankruptcy Court has no jurisdiction over a dispute regarding contracts being negotiated between two non-debtors that could have no effect on the bankruptcy estate. Ms. Henry also files a declaration in further support of Daimler's dismissal request. "Indeed, the Non-Debtor does not make one allegation in the Amended Complaint that a resolution of this dispute will benefit the Debtors, their creditors or affect a reorganization plan," Ms. Henry contends. "Moreover, a resolution of this dispute could not even give the Non-Debtor the relief that it wants, namely, new contracts with Daimler," she insists. Because it is clear from the Amended Complaint that the Court has no jurisdiction over this dispute, the Court should dismiss the complaint, Ms. Henry points out. She adds that any judgment against Daimler can only inure to the benefit of a Non-Debtor purchaser at a sale and not to the Debtors' bankruptcy estates, and therefore, the matter has no effect on the estates and is not related to the bankruptcy cases. Ms. Henry further contends that the Plaintiffs lack standing to bring the Amended Complaint because (i) the complaint does not allege any injury in fact, but rather speculates about future injuries, (ii) even if there were injury to the Non-Debtor, it is impossible to conclude that the injury complained of -- Daimler's and the Non-Debtor not reaching agreement on new supply contracts -- arises but for Daimler's alleged wrongful conduct, and (iii) the relief sought will not remedy any of the Non-Debtor's purported injuries. About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: New Chrysler to Partly Pay Jones Day's Fees --------------------------------------------------------- Corinne Ball, Esq., at Jones Day, in New York, counsel to Old CarCo LLC, formerly Chrysler LLc, relates that New Chrysler, the Fiat S.p.A. owned entity that bought the key assets of Chrysler LLC, has agreed that it will fund Jones Day's fees and expenses for any joint efforts of the Debtors and New Chrysler relating to the enforcement of the Court's order approving the sale of substantially all of the Debtors' assets and the order rejecting certain dealerships in response to the legislative or rulemaking activities of certain states. Ms. Ball assures the Court that Jones Day is representing, and will continue to represent, only the Debtors in connection with the State Enforcement Matter as New Chrysler is represented by a separate counsel and will separately account for its time and expenses relating to the State Enforcement Matter in a separate billing matter number. To date, Jones Day has not presented an invoice to New Chrysler for any amounts, Ms. Ball notes. She says that Jones Day will include all of the fees and expenses incurred in connection with the State Enforcement Matter in its monthly fee statements and interim and final fee applications. Furthermore, Jones Day will not seek to collect payment from New Chrysler until the Court has given its approval pursuant to the Debtors' applicable interim or final fee application. In a separate filing, Jones Day tells the Court that in order to timely provide responses on behalf of the Debtors in the most efficient manner possible, it utilized the services of 24 contract attorneys during the week ending May 16, 2009, and 10 contract attorneys during the week ending May 23, 2009, for a cost totaling $82,918. The Contract Attorney Expense was included in Jones Day's Monthly Statement of Services Rendered and Expenses Incurred by Jones Day for the Period July 1, 2009, through July 31, 2009, which was filed with the Court and served on certain notice parties on August 20, 2009, in compliance with the Interim Compensation Order. Further, in accordance with the Interim Compensation Order, the Debtors reimbursed Jones Day for 100% of the Contract Attorney Expense on September 18, 2009, after the expiration of the objection deadline provided in the Interim Compensation Order. Jones Day believes that it does not represent, and has not represented, any interest adverse to the Debtors or their estates. Jones Day, thus, believes that it continues to be a "disinterested person," as defined in Section 101(14) of the Bankruptcy Code. About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: New Chrysler to Rely Heavily on Vehicles From Fiat ---------------------------------------------------------------- Kate Linebaugh and Neal E. Boudette at The Wall Street Journal report that Chrysler Group LLC will unveil on November 4 a product road map that relies heavily on vehicles from Fiat SpA. According to The Journal, people familiar with the matter said that the plan involves the return of Fiat's premium, sporty Alfa Romeo brand to the U.S. beginning in 2012. The Journal relates that Chrysler will also launch Fiat's tiny car 500. Citing people familiar with the matter, The Journal states that Fiat and Chrysler also are working on several new vehicles with Fiat technology for the U.S. The Journal says that Chrysler is also preparing to phase out many current models, including some Dodge cars, the Dodge Grand Caravan minivan, and several Jeeps. Chrysler Group, LLC, aka FiatChrysler, is an American automobile manufacturer headquartered in the Detroit suburb of Auburn Hills, Michigan. Chrysler was first organized as the Chrysler Corporation in 1925. About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIT GROUP: Icahn Offers Alternative $4.5-Bil. Financing ------------------------------------------------------- Carl C. Icahn sent a letter to CIT Group Inc., pursuant to which certain of his affiliates have committed to provide a new $4.5 billion term loan to CIT as an alternative to the loan currently being arranged by Bank of America, N.A.: Mr. Ichan said the term loan would be structured as an expansion of CIT's existing $3.0 billion first lien term loan and would be conditioned upon CIT's receipt of amendments from its existing lenders to allow Icahn entities to share collateral on a pari passu basis with them. "It is our understanding that all of the terms and conditions for this loan are identical to the expansion first lien loan that is currently being agented by Bank of America, with two exceptions: 1) the upfront fees to the company would be 2.50% in the Company's loan versus 5.00% under the BOA loan, for a total savings to CIT of approximately $112.5 million, and 2) allocations of the Company's term loan will not be conditioned on a vote for or against the company's Exchange Offer/Plan of Reorganization," Mr. Icahn said. Mr. Icahn says CIT has indicated that existing first lien lenders are willing to provide an amendment to allow for an expansion of the existing loan currently being agented by BOA. According to Mr. Icahn, "It is our understanding that that loan is being provided primarily by the largest lenders in the existing secured term loan, who also happen to be some or all of the members of the Steering Committee of the unsecured bondholders of CIT. We believe that Steering Committee members, who are influencing a significant degree of control over the company, have a responsibility to act in the best interests of the company and the other bondholders, and therefore should be willing to grant us the same amendments they are willing to grant themselves. The fact that they have agreed to provide an amendment to allow for the incremental debt in the BOA loan indicates that they are comfortable with the increased debt from a credit perspective. Therefore, it would be reprehensible to deny us the same amendment so that they can earn over $100 million in extra fees while at the same time being complicit in the manipulation of the vote for the Exchange Offer/Plan of Reorganization." CIT Restructuring CIT Group, on July 29, 2009, entered into a credit agreement, with Barclays Bank PLC, as administrative agent, and the lenders party thereto, for loans of up to $3 billion. CIT Group was required to adopt a restructuring plan acceptable by lenders starting October 1, 2009. Under the plan, CIT Group Inc. and CIT Group Funding Company of Delaware LLC (Delaware Funding) launched exchange offers for certain unsecured notes. The Offers will expire at 11:59 p.m., (prevailing Eastern Time), 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. The Company is concurrently soliciting bondholders and other holders of CIT debt to approve a prepackaged plan of reorganization. CIT on October 16 amended its restructuring plan to further build bondholder support. The amended terms of the restructuring plan include, among others: * A comprehensive cash sweep mechanism to accelerate the repayment of the new notes; * The shortening of maturities by six months for all new notes and junior credit facilities; * An increased amount of equity offered to subordinated debt holders reflecting agreements with holders of the majority of its senior and subordinated debt; * The inclusion of the notes maturing after 2018 that had previously not been solicited as part of the exchange offer or plan of reorganization; * An increase in the coupon on Series B Notes, to 9% from 7%, being issued by CIT Delaware Funding; and * Provided preferred stock holders contingent value rights in the plan of reorganization, and modified the allocation of common stock in the recapitalization after the exchange offers, as part of an agreement with the United States Department of Treasury. Carl Icahn sent a letter to CIT Group's board of directors on October 19, complaining that CIT is "shamelessly offering" large unsecured bondholders the opportunity to purchase $6 billion in secured loans in the company at well below fair market value -- at the expense of thousands of smaller bondholders who will not be given the same opportunity. As an alternative, Mr. Icahn has offered to underwrite a $6 billion loan which would save the company as much as $150 million in fees to prospective lenders under the company's proposed financing. More importantly, Icahn's offer would not force bondholders to vote for the current plan which Icahn claims would entrench current board members and give them releases for a range of past acts. CIT Group modified its amended Offering Memorandum dated October 16, 2009 through a supplement dated October 23, 2009. The supplement reflects changes that are expected to build additional bondholder support. The supplement to the Amended Offering Memorandum, Disclosure Statement and Solicitation of Acceptances of a Prepackaged Plan of Reorganization includes. A full-text copy of the amended Offering Memorandum, which includes the proposed Plan of reorganization is available at http://researcharchives.com/t/s?477c About CIT Group 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: Icahn Asks Smaller Noteholders to Reject Plan -------------------------------------------------------- Carl C. Icahn announced October 27 that he is providing downside protection for smaller CIT Group noteholders if they are willing to support him in his opposition to the company's pre-packaged bankruptcy plan. The protection will take the form of a 30 day tender offer at 60% of par value. Through this offer, Mr. Icahn will essentially provide a free put option to small noteholders, assuring them a floor price in the event the notes trade lower, while allowing them to benefit if the notes trade higher -- and thus will seek to neutralize the variety of scare tactics designed by CIT to coerce noteholders into supporting the company's plan. Mr. Icahn believes that the pre-packaged plan being promoted by the company will result in the destruction of value at CIT -- with the current Board of Directors retaining control of the company -- and must be defeated. In making the tender offer, Mr. Icahn stated that "smaller noteholders have been disadvantaged by the restructuring process and completely ignored by CIT and its advisors, as well as by those purportedly representing them." Mr. Icahn went on to say that "it is very important that the smaller holders realize that their vote matters greatly because, under applicable bankruptcy law, CIT's pre-packaged plan -- which would entrench the Board at the noteholders' expense -- requires, among other things, 50% in number of those voting to approve the plan. This means that whether you own 1 note or 1,000 notes, your vote counts the same in determining whether the 50% in number is achieved. Let us show CIT once and for all that the small noteholder is the wrong group to ignore. Our tender offer provides downside protection to those noteholders willing to stand up to the company and reject their plan in the face of the scare tactics being used by the company." "Time is of the essence. To defeat the company's pre-packaged plan, you must not participate in the company's exchange offer and you must vote to reject the company's pre-packaged plan prior to the 11:59 p.m. deadline on Thursday, October 29(th). In order to qualify for our offer, you must select Option 3 on CIT's ballot -- which states that you are not participating in the company's exchange offer and that you are voting to reject the company's pre-packaged plan -- and when you tender, you must certify to us that you voted in that manner. If you have already tendered your notes into CIT's exchange offer, you have until the Thursday deadline to withdraw your notes and change your vote to reject the company's pre-packaged plan. If you have not received a ballot from CIT or you have any other questions, please contact Vincent Intrieri at (212) 702-4328 or Stephen Mongillo at (212) 702-4343 immediately." "If a broker or financial advisor is acting for you, they will be paid $5.00 for each $1,000 in principal amount of notes tendered to us for assisting their clients in casting their votes as we have described." Specifics of the plan In the event that the pre-packaged plan of reorganization/exchange offer currently being proposed by CIT fails, certain of Mr. Icahn's affiliated entities will commence a tender offer to purchase for cash any and all of the outstanding CIT notes listed on the attached schedule, in each case at a price of $600 for each $1,000 in principal amount of such Notes validly tendered. Noteholders will have 30 days from the date the tender offer is made to determine whether or not they wish to tender and may withdraw tendered Notes until the expiration of the offer. The terms and conditions of the Offer will be set forth in an Offer to Purchase, Letter of Transmittal and other related materials to be distributed to holders of the Notes. The Offer will terminate immediately and be of no further effect in the event that CIT announces that it has received the requisite votes necessary to approve the pre-packaged plan/exchange offer that the company is promoting. The Offer will not be subject to any financing condition and there will be no conditions to the Offer based on any aggregate principal amount of Notes being tendered. Other than the foregoing, the Offer will be subject only to customary conditions. In announcing the plan, Mr. Icahn also included the following letter to smaller CIT noteholders. AN OPEN LETTER TO SMALLER CIT NOTEHOLDERS To the smaller holders: As you are undoubtedly aware, CIT has been driven to the brink of bankruptcy by a management team and Board of Directors who have made a series of disastrous decisions while running your company. Now, in a final act of desperation, the company has put forth a pre-packaged bankruptcy plan which would leave the same Board of Directors and their successors in charge of the company after it emerges from bankruptcy. The company's plan provides no protections against the same types of decisions which got us to where we are in the first place. The company will generate billions of dollars in cash flow over the next few years -- cash that rightfully belongs to the noteholders. However, rather than returning our money to us, the company's plan allows management to hold on to our cash, with virtually no restrictions on how the company uses the money. The company's plan will allow for business as usual with the same leadership that got us into trouble in the first place. I believe I am the largest holder of CIT notes and have been opposing CIT's solicitation for approval of its Prepackaged Plan of Reorganization because I believe that it is contrary to the interests of the holders of CIT notes. While I would be supportive of a well-structured pre-packaged bankruptcy, I believe that CIT's offer as currently structured provides no protection for noteholders going forward and is likely to result in the deterioration of value and business as usual for the current Board of Directors and management. We are not against CIT continuing to have a bank and using its platforms through the bank to make loans to small businesses. What we are very much against is the pre- packaged plan being offered by the company, which would entrench the very board members who have gotten us into this mess in the first place and would put our assets in harm's way. In light of this, I believe that a more rational plan structured through the auspices of a traditional bankruptcy process would result in better long term value for noteholders. CIT, on the other hand has said that it would be disastrous for the company to file for bankruptcy without an approved Plan of Reorganization -- painting a doomsday scenario in which the "estimated recovery value for general unsecured claims in an accelerated liquidation is between 6 - 37 cents per $1.00." I believe that CIT is trying to use scare tactics to get you to vote for their Plan. I am not afraid of a non-prepackaged bankruptcy for CIT. I don't believe that a traditional bankruptcy would be worse for us than the result of the company's proposed prepackaged Plan, which will result in the current Board of Directors and their successors still running the company after it emerges from bankruptcy. This Board has been the overseer of the precipitous ruination of CIT, so why continue it in power? Since we released our open letter to noteholders on Friday, we have received numerous calls from noteholders supporting our position. Many of the callers are smaller holders who believe that they have been effectively shut out of the process by CIT, its advisors and Houlihan Lokey, purportedly an advisor to noteholders. As I indicated above, they have been using a variety of scare tactics to try to convince noteholders that a traditional bankruptcy -- or a "free-fall bankruptcy" as the company calls it -- would be a disaster. On the contrary, we are so confident in the underlying value of the company's assets if properly managed, and so concerned about the potential for value destruction under the company's current plan, that we are effectively willing to provide a "floor price" of 60% of par -- compared to CIT's estimate of between 6% and 37% in an accelerated liquidation scenario -- for 30 days for those holders willing to stand up to the company. This in effect provides small noteholders with a free put right. What you have to do is tell me that you voted all of your Notes against CIT's pre-packaged plan and that you marked on the ballot that you were not participating in the company's exchange offer. Don't forget that CIT's pre-packaged plan needs to be approved by both a majority in number of holders of notes and holders of two- thirds of the principal amount of notes. That requirement of bankruptcy law is the great leveler. It means that the vote of the "little guy" counts as much as the vote of those holding billions of dollars worth of CIT notes. We believe that the small noteholder is being taken advantage of by CIT and also by those purporting to represent the interests of all noteholders. It is not too late to stand up and be counted. Don't be fooled by the company's scare tactics. If you wish to participate in our tender offer, it is important that you vote now or instruct your broker immediately to vote to reject CIT's plan. Votes must be cast by 11:59 p.m. on Thursday, October 29(th). If you have any inquiries, please contact Vincent Intrieri at (212) 702-4328 or Stephen Mongillo at (212) 702-4343 immediately. Noteholders with questions about the Offer may also call Innisfree M&A Incorporated, the Information Agent, toll-free at 888-750-5834 (banks and brokers may call collect at 212-750-5833). CIT NOTES SUBJECT TO THE OFFER Title of Notes CUSIP/ISIN 3.85% Notes due November 15, 2009 12557WJP7 4.63% Notes due November 15, 2009 12557WLV1 5.05% Notes due November 15, 2009 12557WPC9 5.00% Notes due November 15, 2009 12557WB26 5.00% Notes due November 15, 2009 12557WB59 5.00% Notes due November 15, 2009 12557WB83 3.95% Notes due December 15, 2009 12557WJV4 4.80% Notes due December 15, 2009 12557WMB4 4.70% Notes due December 15, 2009 12557WPL9 4.85% Notes due December 15, 2009 12557WPU9 6.25% Notes due December 15, 2009 12557WSJ1 6.50% Notes due December 15, 2009 12557WSM4 4.05% Notes due February 15, 2010 12557WKE0 5.15% Notes due February 15, 2010 12557WQC8 5.05% Notes due February 15, 2010 12557WQL8 6.50% Notes due February 15, 2010 12557WSX0 4.30% Notes due March 15, 2010 12557WKL4 5.05% Notes due March 15, 2010 12557WMH1 5.15% Notes due March 15, 2010 12557WMP3 4.90% Notes due March 15, 2010 12557WQU8 4.85% Notes due March 15, 2010 12557WRC7 6.50% Notes due March 15, 2010 12557WTL5 4.45% Notes due May 15, 2010 12557WKS9 5.25% Notes due May 15, 2010 12557WMV0 4.30% Notes due June 15, 2010 12557WKX8 4.35% Notes due June 15, 2010 12557WLE9 5.30% Notes due June 15, 2010 12557WNB3 4.60% Notes due August 15, 2010 12557WLL3 5.45% Notes due August 15, 2010 12557WNH0 5.50% Notes due August 15, 2010 12557WA92 4.25% Notes due September 15, 2010 12557WLS8 5.25% Notes due September 15, 2010 12557WNR8 5.05% Notes due November 15, 2010 12557WLY5 5.25% Notes due November 15, 2010 12557WNZ0 5.25% Notes due November 15, 2010 12557WC33 5.25% Notes due November 15, 2010 12557WC74 5.00% Notes due December 15, 2010 12557WME8 5.05% Notes due December 15, 2010 12557WPH8 4.90% Notes due December 15, 2010 12557WPR6 5.25% Notes due December 15, 2010 12557WSE2 6.50% Notes due December 15, 2010 12557WSR3 6.50% Notes due January 15, 2011 12557WSV4 5.15% Notes due February 15, 2011 12557WPZ8 5.15% Notes due February 15, 2011 12557WQH7 6.60% Notes due February 15, 2011 12557WTB7 5.05% Notes due March 15, 2011 12557WML2 5.00% Notes due March 15, 2011 12557WQR5 4.90% Notes due March 15, 2011 12557WQZ7 5.00% Notes due March 15, 2011 12557WRH6 6.75% Notes due March 15, 2011 12557WTJ0 6.50% Notes due March 15, 2011 12557WTQ4 5.15% Notes due April 15, 2011 12557WMS7 5.40% Notes due May 15, 2011 12557WMY4 5.35% Notes due June 15, 2011 12557WNE7 5.35% Notes due August 15, 2011 12557WNM9 5.20% Notes due September 15, 2011 12557WNV9 5.20% Notes due November 15, 2011 12557WPD7 5.25% Notes due November 15, 2011 12557WB34 5.25% Notes due November 15, 2011 12557WB67 5.25% Notes due November 15, 2011 12557WB91 4.85% Notes due December 15, 2011 12557WPM7 5.00% Notes due December 15, 2011 12557WPV7 5.25% Notes due February 15, 2012 12557WQD6 5.15% Notes due February 15, 2012 12557WQM6 7.25% Notes due February 15, 2012 12557WSY8 7.00% Notes due February 15, 2012 12557WTF8 5.00% Notes due March 15, 2012 12557WQV6 5.00% Notes due March 15, 2012 12557WRD5 7.25% Notes due March 15, 2012 12557WTM3 5.75% Notes due August 15, 2012 12557WA68 5.50% Notes due November 15, 2012 12557WC41 5.50% Notes due November 15, 2012 12557WC82 5.50% Notes due December 15, 2012 12557WSF9 7.00% Notes due December 15, 2012 12557WSK8 7.25% Notes due December 15, 2012 12557WSN2 7.30% Notes due December 15, 2012 12557WSS1 6.15% Notes due January 15, 2013 12557WAZ4 6.25% Notes due January 15, 2013 12557WBC4 6.15% Notes due January 15, 2013 12557WBF7 6.25% Notes due January 15, 2013 12557WBJ9 7.50% Notes due January 15, 2013 12557WSW2 6.25% Notes due February 15, 2013 12557WBM2 6.20% Notes due February 15, 2013 12557WBQ3 6.00% Notes due February 15, 2013 12557WBT7 7.60% Notes due February 15, 2013 12557WTC5 6.15% Notes due February 15, 2013 12557WBW0 7.75% Notes due March 15, 2013 12557WTK7 7.90% Notes due March 15, 2013 12557WTN1 7.25% Notes due March 15, 2013 12557WTR2 6.00% Notes due March 15, 2013 12557WBZ3 6.00% Notes due March 15, 2013 12557WCC3 6.10% Notes due March 15, 2013 12557WCF6 6.25% Notes due March 15, 2013 12557WCJ8 6.15% Notes due April 15, 2013 12557WCM1 6.15% Notes due April 15, 2013 12557WCQ2 6.05% Notes due April 15, 2013 12557WCT6 6.05% Notes due May 15, 2013 12557WCW9 4.95% Notes due May 15, 2013 12557WCZ2 4.95% Notes due May 15, 2013 12557WDC2 4.88% Notes due June 15, 2013 12557WDF5 4.85% Notes due June 15, 2013 12557WDJ7 4.60% Notes due June 15, 2013 12557WDM0 4.45% Notes due June 15, 2013 12557WDQ1 5.05% Notes due July 15, 2013 12557WEF4 4.65% Notes due July 15, 2013 12557WDT5 4.75% Notes due July 15, 2013 12557WDW8 5.00% Notes due July 15, 2013 12557WDZ1 4.75% Notes due July 15, 2013 12557WEC1 5.30% Notes due August 15, 2013 12557WEJ6 5.50% Notes due August 15, 2013 12557WEM9 5.50% Notes due August 15, 2013 12557WEQ0 5.40% Notes due September 15, 2013 12557WET4 5.50% Notes due September 15, 2013 12557WEW7 5.25% Notes due September 15, 2013 12557WEZ0 5.20% Notes due September 15, 2013 12557WFC0 5.20% Notes due October 15, 2013 12557WFF3 5.20% Notes due October 15, 2013 12557WFJ5 5.25% Notes due October 15, 2013 12557WFM8 5.30% Notes due November 15, 2013 12557WFQ9 5.10% Notes due November 15, 2013 12557WFT3 5.20% Notes due December 15, 2013 12557WFZ9 5.10% Notes due January 15, 2014 12557WGC9 4.85% Notes due January 15, 2014 12557WGF2 5.00% Notes due February 15, 2014 12557WGJ4 4.90% Notes due February 15, 2014 12557WGM7 7.85% Notes due February 15, 2014 12557WSZ5 7.65% Notes due February 15, 2014 12557WTG6 4.80% Notes due March 15, 2014 12557WGQ8 4.60% Notes due March 15, 2014 12557WGT2 7.85% Notes due March 15, 2014 12557WTS0 4.80% Notes due April 15, 2014 12557WGW5 5.10% Notes due April 15, 2014 12557WGZ8 5.25% Notes due May 15, 2014 12557WHC8 5.80% Notes due May 15, 2014 12557WHF1 5.70% Notes due June 15, 2014 12557WHJ3 5.75% Notes due June 15, 2014 12557WHM6 5.75% Notes due June 15, 2014 12557WRU7 5.85% Notes due June 15, 2014 12557WRX1 6.00% Notes due June 15, 2014 12557WSA0 5.65% Notes due July 15, 2014 12557WHQ7 5.30% Notes due July 15, 2014 12557WHT1 5.20% Notes due August 15, 2014 12557WHW4 5.30% Notes due August 15, 2014 12557WHZ7 6.00% Notes due August 15, 2014 12557WA27 6.00% Notes due August 15, 2014 12557WA76 5.25% Notes due September 15, 2014 12557WJC6 5.05% Notes due September 15, 2014 12557WJF9 4.90% Notes due October 15, 2014 12557WJJ1 5.10% Notes due October 15, 2014 12557WJM4 5.05% Notes due November 15, 2014 12557WJQ5 5.125% Notes due December 15, 2014 12557WJT9 5.10% Notes due December 15, 2014 12557WJW2 5.05% Notes due January 15, 2015 12557WJZ5 4.95% Notes due February 15, 2015 12557WKC4 4.90% Notes due February 15, 2015 12557WKF7 7.90% Notes due February 15, 2015 12557WTD3 5.10% Notes due March 15, 2015 12557WKJ9 5.05% Notes due March 15, 2015 12557WKM2 5.375% Notes due April 15, 2015 12557WKQ3 5.25% Notes due May 15, 2015 12557WKT7 5.30% Notes due May 15, 2015 12557WKW0 5.10% Notes due June 15, 2015 12557WKZ3 5.05% Notes due June 15, 2015 12557WLA7 5.20% Notes due June 15, 2015 12557WLF6 5.30% Notes due August 15, 2015 12557WLJ8 5.375% Notes due August 15, 2015 12557WLM1 5.25% Notes due September 15, 2015 12557WLQ2 5.10% Notes due September 15, 2015 12557WLT6 5.50% Notes due November 15, 2015 12557WLW9 5.80% Notes due November 15, 2015 12557WLZ2 5.75% Notes due December 15, 2015 12557WMC2 5.80% Notes due December 15, 2015 12557WMF5 5.85% Notes due March 15, 2016 12557WMJ7 5.80% Notes due March 15, 2016 12557WMM0 6.00% Notes due March 15, 2016 12557WMQ1 5.88% Notes due April 15, 2016 12557WMT5 6.05% Notes due May 15, 2016 12557WMW8 6.15% Notes due May 15, 2016 12557WMZ1 6.10% Notes due June 15, 2016 12557WNC1 6.10% Notes due June 15, 2016 12557WNF4 6.20% Notes due August 15, 2016 12557WNJ6 6.13% Notes due August 15, 2016 12557WNN7 6.05% Notes due September 15, 2016 12557WNS6 5.95% Notes due September 15, 2016 12557WNW7 6.00% Notes due November 15, 2016 12557WPA3 5.95% Notes due November 15, 2016 12557WPE5 5.80% Notes due December 15, 2016 12557WPJ4 5.65% Notes due December 15, 2016 12557WPN5 5.70% Notes due December 15, 2016 12557WPS4 5.70% Notes due December 15, 2016 12557WPW5 5.85% Notes due February 15, 2017 12557WQA2 5.95% Notes due February 15, 2017 12557WQE4 5.85% Notes due February 15, 2017 12557WQJ3 5.80% Notes due February 15, 2017 12557WQN4 5.75% Notes due March 15, 2017 12557WQS3 5.75% Notes due March 15, 2017 12557WQW4 5.70% Notes due March 15, 2017 12557WRA1 5.65% Notes due March 15, 2017 12557WRE3 5.75% Notes due March 15, 2017 12557WRJ2 5.75% Notes due May 15, 2017 12557WRL7 5.80% Notes due May 15, 2017 12557WRN3 5.80% Notes due May 15, 2017 12557WRQ6 6.00% Notes due June 15, 2017 12557WRS2 6.00% Notes due June 15, 2017 12557WRV5 6.10% Notes due June 15, 2017 12557WRY9 6.25% Notes due June 15, 2017 12557WSB8 6.25% Notes due August 15, 2017 12557WA35 6.25% Notes due November 15, 2017 12557WB42 6.25% Notes due November 15, 2017 12557WB75 6.25% Notes due November 15, 2017 12557WC25 6.40% Notes due November 15, 2017 12557WC58 6.50% Notes due November 15, 2017 12557WC90 6.50% Notes due December 15, 2017 12557WSG7 7.50% Notes due December 15, 2017 12557WSL6 7.75% Notes due December 15, 2017 12557WSP7 7.80% Notes due December 15, 2017 12557WST9 6.25% Notes due August 15, 2021 12557WNP2 6.35% Notes due August 15, 2021 12557WNK3 6.15% Notes due September 15, 2021 12557WNX5 6.25% Notes due September 15, 2021 12557WNT4 6.10% Notes due November 15, 2021 12557WPF2 6.25% Notes due November 15, 2021 12557WPB1 5.85% Notes due December 15, 2021 12557WPP0 5.875% Notes due December 15, 2021 12557WPT2 5.90% Notes due December 15, 2021 12557WPX3 6.00% Notes due December 15, 2021 12557WPK1 5.95% Notes due February 15, 2022 12557WQP9 6.00% Notes due February 15, 2022 12557WQB0 6.00% Notes due February 15, 2022 12557WQK0 6.05% Notes due February 15, 2022 12557WQF1 5.85% Notes due March 15, 2022 12557WQX2 5.85% Notes due March 15, 2022 12557WRB9 5.85% Notes due March 15, 2022 12557WRF0 5.90% Notes due March 15, 2022 12557WQT1 5.95% Notes due March 15, 2022 12557WRK9 6.00% Notes due May 15, 2022 12557WRM5 6.00% Notes due May 15, 2022 12557WRP8 6.00% Notes due May 15, 2022 12557WRR4 6.15% Notes due June 15, 2022 12557WRT0 6.20% Notes due June 15, 2022 12557WRW3 6.25% Notes due June 15, 2022 12557WRZ6 6.50% Notes due June 15, 2022 12557WSC6 6.50% Notes due August 15, 2022 12557WA43 6.50% Notes due August 15, 2022 12557WA84 6.70% Notes due November 15, 2022 12557WC66 6.75% Notes due November 15, 2022 12557WSD4 6.75% Notes due December 15, 2022 12557WSH5 6.25% Notes due February 15, 2010 12557WTE1 5.40% Notes due December 15, 2013 12557WFW6 CIT Sets the Record Straight CIT Group Inc. issued a statement correcting "important inaccuracies" contained in an open letter from Carl Icahn to smaller CIT bondholders. According to the Company statement, Mr. Icahn is seeking to convince smaller bondholders to vote against the Company's proposed restructuring plan now in exchange for his ill-defined promise that some of Mr. Icahn's unidentified "affiliated entities" will eventually deliver on that vague promise. Over the last several months, CIT has worked together with a diverse group of bondholders in developing a comprehensive restructuring plan to position CIT for future success. The successful completion of either the exchange offers or plan of reorganization will generate significant capital and liquidity. CIT and many of its bondholders believe this plan maximizes franchise value. CIT says that under its plan all bondholders within the same class, large and small, are treated equally. According to CIT, Mr. Icahn has also misrepresented the fundamental economics of the Company's restructuring plan. As described in CIT's plan of reorganization, senior unsecured bondholders would receive consideration of $700 in new secured bonds for every $1,000 of existing bonds, in addition to equity consideration which would allow for participation in future value created by the Company. In addition, under the Company's plan, bondholders would receive substantially all of the equity of CIT. CIT also clarified several facts that were misrepresented in Mr. Icahn's letter related to its corporate governance and use of cash, both of which are detailed in the Amended Offering Memorandum. First, CIT's Board of Directors will be comprised of a majority of new independent members, a significant number of whom will be proposed by the Company's bondholders. In addition, CIT Chairman and Chief Executive Officer Jeffrey M. Peek has announced his resignation effective December 31st. Second, with regard to restrictions on the use of cash, contrary to Mr. Icahn's assertions, CIT has incorporated into its plan a cash control process that places restrictions on the reinvestment of cash into the business and ensures that certain cash flows are used to accelerate the repayment of debt. Through the restructuring and substantial deleveraging featured in CIT's plan, whether completed in or out of court, the Company is confident that CIT will emerge as a strong bank holding company with improved capital, liquidity and earnings potential. CIT remains fully committed to serving its small business and middle market customers, as it has for more than 100 years. The CIT Group Inc. exchange offers expire at 11:59 p.m., New York City time, on Thursday, October 29, 2009, with the exception of the additional notes maturing after 2018 for which there is an early acceptance date of October 29, 2009 and expiration date of November 13, 2009. The Delaware Funding Offers expire at 11:59 p.m. New York City time on Thursday, November 5, 2009 and have an Early Tender Date of October 29, 2009. Tendered securities may be validly withdrawn at any time prior to the expiration, early acceptance or early tender dates. CIT Restructuring CIT Group, on July 29, 2009, entered into a credit agreement, with Barclays Bank PLC, as administrative agent, and the lenders party thereto, for loans of up to $3 billion. CIT Group was required to adopt a restructuring plan acceptable by lenders starting October 1, 2009. Under the plan, CIT Group Inc. and CIT Group Funding Company of Delaware LLC (Delaware Funding) launched exchange offers for certain unsecured notes. The Offers will expire at 11:59 p.m., (prevailing Eastern Time), 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. The Company is concurrently soliciting bondholders and other holders of CIT debt to approve a prepackaged plan of reorganization. CIT on October 16 amended its restructuring plan to further build bondholder support. The amended terms of the restructuring plan include, among others: * A comprehensive cash sweep mechanism to accelerate the repayment of the new notes; * The shortening of maturities by six months for all new notes and junior credit facilities; * An increased amount of equity offered to subordinated debt holders reflecting agreements with holders of the majority of its senior and subordinated debt; * The inclusion of the notes maturing after 2018 that had previously not been solicited as part of the exchange offer or plan of reorganization; * An increase in the coupon on Series B Notes, to 9% from 7%, being issued by CIT Delaware Funding; and * Provided preferred stock holders contingent value rights in the plan of reorganization, and modified the allocation of common stock in the recapitalization after the exchange offers, as part of an agreement with the United States Department of Treasury. Carl Icahn sent a letter to CIT Group's board of directors on October 19, complaining that CIT is "shamelessly offering" large unsecured bondholders the opportunity to purchase $6 billion in secured loans in the company at well below fair market value -- at the expense of thousands of smaller bondholders who will not be given the same opportunity. As an alternative, Mr. Icahn has offered to underwrite a $6 billion loan which would save the company as much as $150 million in fees to prospective lenders under the company's proposed financing. More importantly, Icahn's offer would not force bondholders to vote for the current plan which Icahn claims would entrench current board members and give them releases for a range of past acts. CIT Group modified its amended Offering Memorandum dated October 16, 2009 through a supplement dated October 23, 2009. The supplement reflects changes that are expected to build additional bondholder support. The supplement to the Amended Offering Memorandum, Disclosure Statement and Solicitation of Acceptances of a Prepackaged Plan of Reorganization includes. A copy of the amended Offering Memorandum, which includes the proposed Plan of reorganization is available at http://researcharchives.com/t/s?477c About CIT Group 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: Sean Egan Urges Rejection of Tender Offer/Prepack ------------------------------------------------------------ Egan-Jones Ratings Company President Sean Egan said that bond investors should reject the CIT Group's effort to save itself from bankruptcy, as well as CIT's ready-made backup plan for bankruptcy, Matthew Craft at Forbes reports. According to Forbes, Mr. Egan said that both would leave the current management team in place and give bondholders a smaller payout than if CIT was forced to sell off its assets. CIT should be able to sell its loans and leases for at least 80% of book value, Forbes states, citing Mr. Egan. Forbes relates that senior unsecured bondholders could recover 90 cents on the dollar for their investments, a better deal than what CIT has offered. Mike Spector posted at The Wall Street Journal blog, Deal Journal, that Tanja Aalto, who helped craft CIT's restructuring plan at Houlihan Lokey, has moved to Barclays as a managing director in that bank's restructuring group. 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. CITIGROUP INC: To Issue 5,000 MSCI Brazil Index-Linked Notes ------------------------------------------------------------ Citigroup Inc. filed with the Securities and Exchange Commission a final pricing supplement in connection with Citigroup Funding Inc.'s planned issuance of 5,000 Stock Market Upturn NotesSM Based Upon the iShares(R) MSCI Brazil Index Fund Due October 27, 2011, at $1,000.00 per Note. A full-text copy of the final pricing supplement is available at no charge at: http://ResearchArchives.com/t/s?4795 Citigroup also filed with the Commission a free writing prospectus discussing CitiFirst's Structured Investments. A full-text copy of the free writing prospectus is available at no charge at: http://ResearchArchives.com/t/s?4794 Citigroup also filed a Form 8-A to register its 2% Minimum Coupon Principal Protected Notes Based Upon the Russell 2000(R) Index Due 2014 with NYSE Arca. About Citigroup 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. COLONIAL BANCGROUP: Plaintiffs Seek to Limit Use of $15M Policy --------------------------------------------------------------- Law360 reports that plaintiffs in a consolidated securities lawsuit against Colonial BancGroup Inc. have asked a bankruptcy judge to put limits on the efforts of financial company's principals to access funds to provide them a defense under a $15 million insurance policy. Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc. (NYSE: CNB) provides diversified financial services, including retail and commercial banking, wealth management services, mortgage banking and insurance products. The BancGroup derives substantially all of its income from Colonial Bank, N.A (Colonial Bank) its banking subsidiary. Colonial bank -- http://www.colonialbank.com/-- operates 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. On August 14, 2009, Colonial BancGroup's banking unit Colonial Bank, Montgomery, AL, was closed by the Alabama State Banking Department and the Federal Deposit Insurance Corporation was named receiver. The FDIC sold most of the assets to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion in assets and assumed $20 billion in deposits of the Bank. Colonial BancGroup filed for Chapter 11 bankruptcy protection on August 25, 2009 (Bankr. M.D. Ala. Case No. 09-32303). W. Clark Watson, Esq., at Balch & Bingham LLP and Rufus T. Dorsey IV, Esq., at Parker Hudson Rainer & Dobbs LLP assist the Company in its restructuring efforts. The Company listed $45,000,000 in assets and $380,000,000 in debts in its bankruptcy filing. CONTINENTAL AIRLINES: To Issue $644MM EETCs to Finance Jets ----------------------------------------------------------- Continental Airlines, Inc., has increased the size of its 2009-2 EETC transaction from $579,273,000 to $644,437,000 to finance more aircraft. Continental intends to issue Class A Pass Through Certificates, Series 2009-2 in the face amount of $527,625,000; and Class B Pass Through Certificates, Series 2009-2, in the face amount of $116,812,000. Continental seeks to finance 19 aircraft, which will consist of eight Boeing aircraft currently owned by Continental and 11 new Boeing aircraft. The eight currently owned aircraft consist of three Boeing 737-824 aircraft, three Boeing 757-224 aircraft, one Boeing 767-424ER aircraft and one Boeing 777-224ER aircraft. The 11 new aircraft consist of nine Boeing 737-824 aircraft scheduled for delivery from January to June 2010, and two Boeing 777-224ER aircraft scheduled for delivery in April and May 2010. Continental on Tuesday filed a free writing prospectus with the Securities and Exchange Commission in connection with its planned offering of $579,273,000 of Pass Through Certificates, Series 2009-2, in two classes: -- Class A of $474,273,000; and -- Class B of $105,000,000 Later that day, Continental filed a second free writing prospectus setting forth the corresponding material changes to Continental's preliminary prospectus supplement. In its first prospectus, Continental said the proceeds from the offering will be used to: -- finance the purchase of 2 new Boeing 777-200ER aircraft and 7 new Boeing 737-800 aircraft to be selected from a pool of 9 Boeing 737-800 aircraft, which are scheduled for delivery in the first half of 2010 -- refinance 8 aircraft originally delivered new to Continental in 1999-2000: * 3 Boeing 737-800s * 3 Boeing 757-200s * 1 Boeing 767-400ER * 1 Boeing 777-200ER The Joint Bookrunners and Joint Structuring Agents are Morgan Stanley, Goldman Sachs and Credit Suisse A full-text copy of the first free writing prospectus is available at no charge at http://ResearchArchives.com/t/s?47ac A full-text copy of the second free writing prospectus is available at no charge at http://ResearchArchives.com/t/s?47af About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://www.continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,500 daily departures throughout the Americas, Europe and Asia, serving 133 domestic and 134 international destinations. With more than 41,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries approximately 63 million passengers per year. Continental ended the third quarter of 2009 with $2.54 billion in unrestricted cash, cash equivalents and short-term investments. At September 30, 2009, Continental had $12.5 billion in total assets against total current liabilities of $4.26 billion, long- term debt and capital leases of $5.29 billion, deferred income taxes of $180 million, accrued pension liability of $1.36 billion, accrued retiree medical benefits of $241 million, and other liabilities of $806 million; against stockholders' equity of $446 million. * * * As reported by the Troubled Company Reporter on September 4, 2009, Standard & Poor's Ratings Services lowered its issue-level ratings on all senior unsecured debt of Continental to 'CCC+' from 'B-' and revised the recovery ratings on certain unsecured debt issues, excluding industrial revenue bonds, to '6' from '5'. At the same time, S&P affirmed its 'B' corporate credit rating and secured debt ratings on Continental. The ratings on Continental's unsecured debt are based principally on declining aircraft values caused by the global aviation downturn. This could result in reduced asset protection for unsecured creditors if Continental were to file for bankruptcy. Continental continues to carry Moody's Investors Service's B2 corporate family and Fitch Ratings' 'B-' Issuer Default Rating and 'CC/RR6' from 'CCC/RR6' senior unsecured rating. COOPER-STANDARD: S&P Puts 'BB' Rating on $175-Mil. DIP Loan ----------------------------------------------------------- Standard & Poor's Ratings Services said it has assigned its 'BB' rating to auto supplier Cooper-Standard Automotive Inc.'s debtor- in-possession term loan of $175 million. This DIP loan rating is a point-in-time rating. Accordingly, the rating is effective only for the date of this report, and S&P will not review, modify, or provide ongoing surveillance of the rating. Documents used in S&P's analysis include the DIP credit agreement dated Aug. 3, 2009, and the final DIP order by the U.S. Bankruptcy Court dated Sept. 2, 2009, and by the Canadian court on Aug. 6, 2009. S&P's rating reflects S&P's assumption that the entire $175 million of committed DIP financing will be outstanding at the time of Cooper-Standard's emergence from bankruptcy or in the event that the case converts to liquidation. S&P's rating also reflects S&P's view of the DIP loan's exposure to risks of lending to the pre-emergence company, as well as these additional factors: * Risks of weak global automotive production volumes; * Exposure to the highly competitive, price-sensitive, and cyclical global light-vehicle market; * Product mix heavily weighted toward light-truck platforms, which have had weak sales recently; and * Dependence on production volumes of the Michigan-based original equipment manufacturers that accounted for 45% of the company's global 2008 sales. S&P believes all of these factors could contribute to continued pressure on revenues, EBITDA, and cash flow generation and could undermine the company's prospects for emergence, as well as for financial performance of the post-emergence company should it emerge from bankruptcy. In addition, the company has yet to obtain committed emergence financing, given its fairly recent bankruptcy filing. In S&P's opinion, Cooper-Standard's largest challenges to emergence are the weak demand in the global auto markets and the uncertain state of the capital markets for post-petition financing. Should the company's revenues not recover in the next six months, the company's liquidity and financing prospects could prove inadequate for reorganization. Still, S&P believes reorganization and emergence are the more likely outcomes based on the company's competitive position as a Tier 1 supplier to the global auto market. The company's heavy debt burden, resulting from its late 2004 leveraged buyout, was a significant factor prompting the bankruptcy filings, and the company and its lenders are negotiating to address this issue. The company has indicated that a primary objective of its restructuring is a significant reduction in the company's pre- petition debt, which in S&P's view would increase its likelihood of emergence. In S&P's view, Cooper-Standard had achieved operating efficiencies since 2004 and improved its potential operating leverage from previous restructuring actions. S&P believes a significant amount of necessary operational restructuring was, therefore, complete before the filings. Cooper-Standard closed or restructured 11 facilities since late 2004, saving more than $55 million per year at a cost of $127 million, according to the company. In addition, the company discontinued certain product lines and reduced salaried headcount by 34% in the past 12 months. S&P currently do not expect the company to undertake any major facility closings or additional operational restructuring during bankruptcy. Still, if the weak state of demand in the global auto markets persists and the company's revenue does not recover in the short term, S&P believes the company may undertake further operational restructuring. Prior to filing for bankruptcy, Cooper-Standard had also reorganized the geographic footprint of its product lines, gaining positions in low-cost areas and proximity to customers; according to the company, this yielded savings of $47.2 million. The company had also meaningfully reduced its variable costs, especially in North America, in addition to reducing discretionary capital expenditures and aligning inventory levels with the current low production volumes. The company has also concluded certain pricing and long-term agreement issues with customers and renegotiated three of five union contracts. In S&P's opinion, pension and other postretirement employee benefits obligations, given their relatively small amount, are not likely to be a significant focus of the reorganization. S&P believes the most significant obstacle to obtaining financing for emergence will be revenue and cash flow erosion stemming from a worsening global economy. In addition, S&P expects the company's exposure to the Michigan-based automakers (about 45% of the company's 2008 global sales) to limit improvement in Cooper- Standard's earnings and cash flow expansion in the year ahead because these companies are struggling financially. Also, the company's vehicle platform exposure remains highly vulnerable to sales of light trucks and SUVs, which S&P believes would be hurt if gasoline prices were to rise materially from current levels. S&P's ratings reflect the uncertainty and potential risk to liquidity related to pending legal proceedings against the company by former parent Cooper Tire & Rubber Co. (B/Positive/--). Although S&P does not have a view about the outcome of this litigation, S&P believes these proceedings, if concluded adversely, would reduce the company's current liquidity and complicate emergence financing. Pursuant to a 2004 stock purchase agreement with the company, Cooper Tire is seeking $60 million related to federal tax refunds that Cooper-Standard recently received, or expects to receive in the near term, from the Canadian government. If Cooper Tire prevails, in addition to a current adverse effect on liquidity, S&P believes emergence negotiations could be complicated because Cooper-Standard likely would need to fund additional debt in the emergence capital structure. S&P believes lenders could achieve higher recoveries in the event of a successful reorganization as a going concern, but for the purposes of the DIP loan rating, S&P assesses collateral coverage under a liquidation scenario. If the company was to liquidate rather than reorganize, S&P believes the DIP lenders should realize near-full recovery of principal. S&P's analysis is based on unaudited balance sheet data reported at June 30, 2009. COUNTRY COACH: Court Rejects Dismissal of Reorganization Case ------------------------------------------------------------- Laura Rillos at KVAL News reports that Bankruptcy Judge Albert Radcliffe has rejected a request by Rebecca Kamitsuka, an attorney for the U.S. Trustee, to dismiss Country Coach LLC's Chapter 11 proceedings. Dismissal of the Chapter 11 bankruptcy case wouldn't benefit anyone, KVAL says, citing Judge Radcliffe. According to KVAL, Ms. Kamitsuka said that Country Coach has continued to lose money since reopening with a skeleton crew earlier this year. KVAL relates that Country Coach's Chief Financial Officer Mark Andersen had testified that the Company has failed to meet sales and manufacturing goals set forth when it reopened. Country Coach has lost almost $8 million since then, KVAL notes. KVAL states that Country Coach got several votes of confidence from its workers, creditors, and investors, who believe that the Company can get back on its feet. KVAL relates that the attorneys for Country Coach's unsecured creditors and Wells Fargo, which had sued Country Coach earlier this year to recover $8.5 million, wanted to see the Company's bankruptcy proceedings to continue. KVAL quoted as saying, "The debtor [Country Coach] has overwhelming support, certainly from employees, unsecured creditors, investors." According to the report, Country Coach spokesperson Matt Howard said that the Company plans to exit bankruptcy in mid-February. Country Coach, LLC -- http://www.countrycoach.com/-- is a Highline motorcoach builder. Country Coach was founded in 1973 and has a 508,000 square feet manufacturing facility in Junction City, Oregon. Country Coach was sent to Chapter 11 less than two months after its owner, National R.V. Holdings Inc., reorganized in court. National R.V., had its reorganization plan approved by a judge in December. The Perris, California based company sought Chapter 11 protection in November 2007, listing assets of $54.4 million against debt of $30.1 million. In September, Country Coach completed a restructuring plan aimed at stemming a sharp decline in sales volume to due market pressures. In its eight-month restructuring, Country Coach cut its size by 50%, reduce staffing and inventory. Country Coach LLC's key investors, led by Bryant Riley, also reaffirmed their commitment towards the company. "Adding to the millions of dollars this group has invested in Country Coach since February 2007, the investing partners have committed an additional $6 million in new cash to ensure the company can maintain an aggressive position relative to product quality, lean manufacturing initiatives and new R & D projects like the exciting new Veranda line of coaches," a September 2008 release said. COYOTES HOCKEY: Not Getting Enough Media Exposure, Fans Say ----------------------------------------------------------- Mike Sunnucks at Phoenix Business Journal reports that Phoenix Coyotes hockey fans have complained that the Valley and national news media don't pay attention to the National Hockey League, and they say that's part of the struggle in boosting attendance and interest in Phoenix Coyotes. ESPN says that Phoenix Coyotes is averaging 11,400 fans per game so far. Mike Sunnucks at Phoenix Business Journal relates that those numbers were boosted by the ticket discounts for the home- opener October 10. Business Journal states that The New York Islanders have the league's second-worst average attendance: 12,200. According to Business Journal, Fox Sports Arizona said that it would broadcast eight more Coyotes games this season than initially planned. Business Journal says that the games will be on tape delay due to scheduling conflicts, but will be added to the 49 live games FSAZ originally planned to televise on cable. The Arizona Republic, Business Journal states, is continuing its practice of not sending Coyotes beat reporter Jim Gintonio on road games. Business Journal reports that Coyotes personnel and fans at Jobing.com Arena hopes the team's 6-2 start, including Thursday's overtime win over the Detroit Red Wings, will help boost attendance. The report states that fans at the Coyotes-Red Wings game also wanted to see the team offer more discounts and make lower-level seats less expensive in general. Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. DANKA BUSINESS: Weiss Holds 13.8% of American Depository Shares --------------------------------------------------------------- Weiss Asset Management LLC, Weiss Capital LLC, and Andrew M. Weiss, Ph.D., disclose holding 8,923,028 units or 13.8% of American Depository Shares of Danka Business Systems PLC -- representing 35,692,112 ordinary shares. One Danka ADS represents 4 Ordinary Shares. Danka Business Systems PLC is in members' voluntary liquidation. It has not filed its Annual Report on Form 10-K for the fiscal year ended March 31, 2009 by the required filing date of June 29, 2009. In a filing on June 30, 2009, the Company cited: -- limited resources following the sale on June 27, 2008 of the Company's U.S. operating subsidiary, Danka Office Imaging Company, to Konica Minolta Business Solutions U.S.A., Inc., which sale of DOIC constituted the disposition of the Company's remaining operations, and -- its subsequent entry into a members' voluntary liquidation on February 19, 2009, following shareholder approval of the MVL at an extraordinary general meeting of shareholders held on the same date. Since the sale of DOIC in June 2008, the Company has not engaged in any business activities except those necessary for the purpose of preserving the value of the Company's assets, prosecuting and defending suits against the Company or its subsidiaries and making certain U.S. and foreign tax filings. During the period following the sale of DOIC until entry into the MVL in February 2009, the Company had approximately three employees. Upon entry into the MVL, Jeremy Spratt and Finbarr O'Connell of KPMG LLP were appointed joint liquidators for the purposes of the voluntary winding up of the Company. In connection with the MVL, among other things, the Company's ordinary shares have been delisted from the London Stock Exchange and the Company's stock transfer books have been closed, the Company has ceased to have any employees, and, in accordance with English law governing the MVL, the Company maintains limited accounting records. Since entry into the MVL, the joint liquidators have begun the process to realize the Company's assets and inquired into the existence and value of creditors' claims against the Company. Once the process is completed and all valid claims against the Company have been settled or provided for in full, the joint liquidators will begin distributing any surplus assets to Danka shareholders. Pursuant to the Company's articles of association, the holders of the Company's 6.50% convertible participating shares are entitled to all of the surplus assets of Danka; however, pursuant to the terms of an agreement between the Company and the convertible participating shareholders, the joint liquidators have been instructed to first distribute to holders of ordinary shares, including holders of American Depositary Shares an amount equal to $0.03 per ordinary share (or $0.12 per ADS) prior to any distribution to convertible participating shareholders. Any remaining surplus assets will then be distributed over time to the convertible participating shareholders. While the joint liquidators continue to assess the value of creditors' claims against the Company, the joint liquidators believe that such cash will be available to ensure that the holders of ordinary shares (and ADSs) will receive the distribution described. As a result of the sale of DOIC and entry into the MVL as well as the lack of personnel available to prepare the Form 10-K, in particular the inability to prepare consolidated financial statements for the fiscal year ended March 31, 2009, the Company is unable to timely file its Form 10-K without unreasonable effort or expense. Given the continuing winding down of the Company and absence of employees with the necessary expertise and capacity to prepare the Form 10-K, the Company does not anticipate that the Form 10-K and future periodic reports will be filed going forward. The Company believes that due to, among other things, the fixed amount of the distribution to ordinary (and ADS) shareholders, the benefits to shareholders of filing the Form 10-K and future periodic reports are outweighed by the costs to the Company of preparing such reports, even if preparing such reports were practicable. In place of full reporting, the Company intends to timely disclose to public investors any material developments relating to the MVL, the disposition of assets and winding up of the Company. Danka Business Systems PLC (LON: DNK) -- http://www.danka.com/-- offered document solutions including office imaging equipment: digital and color copiers, digital and color multifunction peripherals printers, facsimile machines, and software in the United States. It also provided a range of contract services, including professional and consulting services, maintenance, supplies, leasing arrangements, technical support and training, collectively referred to as Danka Document Services. DBSD NORTH AMERICA: Judge Gerber Rules He Will Confirm Plan ----------------------------------------------------------- Judge Robert E. Gerber wrote a bench decision saying he will confirm the Chapter 11 plan of reorganization for DBSD North America and its subsidiaries despite objections to the feasibility of the Plan. The Plan seeks, principally through substantial deleveraging and realignment of operations, to focus on the Debtors' core operations, to capitalize on opportunities in the future. The Debtors will reduce their funded debt and other financial obligations by converting all of their Second Lien Debt and general unsecured claims into equity of the reorganized Debtors. The Plan provides for the Debtors to continue to operate as a pre- revenue enterprise, implementing cost-saving initiatives until the Debtors obtain strategic partnerships with entities that are able to complement the Debtors' satellite offerings or obtain additional capital to continue funding the enterprise. There is, however, no current funding for expanding operations, and there are no present alternatives in place for deriving revenue. Any means of generating substantial revenue, other than the leasing of spectrum, has significant associated costs. On the Effective Date, the Reorganized Debtors plan to enter into a $57.25 million exit financing facility, the proceeds of which will be used to pay cash amounts required under the Plan, and to fund the reorganized Debtors' expected cash burn. Certain of the Senior Noteholders have agreed to backstop the exit financing facility in the form of the New Credit Facility, participation in which will be offered to all Senior Noteholders. The New Credit Facility will be at an interest rate of 20%, with a 2% commitment fee, a 2% closing fee, with warrants to acquire up to 20% of the New Common Stock and a lien on all assets that are subject to the First Lien Lender's liens, junior to those liens. On September 18, 2009, the Debtors filed a commitment letter for the New Credit Facility. Under the Plan, the First Lien Debt will be satisfied with debt issued under an amended credit facility. The Second Lien Debt will be satisfied with the issuance of approximately 95% of New Common Stock not issued to general unsecured creditors or distributed as the New Credit Facility shares, for an estimated recovery of 51%-73%. Under the Plan, the Debtors will be deleveraged by over $600 million. The Plan currently contemplates that the Debtors will have $81 million in total debt at the Effective Date, and the total indebtedness can be projected to be in the range of $260 million by 2013. Objections to Confirmation Confirmation is supported by the bulk of the holders of the Debtors' second lien secured debt, including an ad hoc committee of those holders, and the Official Committee of Unsecured Creditors. But confirmation is opposed by first lien creditor DISH Network, which bought up all of the first lien secured debt in July, at par, and for strategic reasons unrelated to a creditor's normal desire for the maximization of its recovery on its claims. The Plan also is opposed by unsecured creditor Sprint-Nextel Corporation, which has pending claims -- subject to asserted defenses -- against Debtor New DBSD Satellite Services G.P., one of the Debtors. DISH claims that the Plan fails to satisfy the feasibility requirements of 11 U.S.C. Sec. 1129(a)(11). Judge Gerber, however, held that the Debtors' reorganization plan is feasible despite the fact that the Debtors are still in a developmental stage. While their satellite has been launched, and is operational, the Debtors have no current source of revenue. The Debtors presently estimate that over the next four years, they will lose $25 million per year in startup costs. The Debtors have a funding commitment from an initial 5 financial institutions for up to $52.75 million -- a commitment that will provide the necessary funding for approximately 2 years. The Debtors haven't obtained commitment though for financing to pay a balloon obligation of $82.6 million under a credit facility and to repay junior debt. Nonetheless, the Debtors submitted evidence saying that Given that it has sufficient asset value, it will be able to raise capital even if it has no revenue. The Debtors submitted evidence of the success of other companies in the mobile satellite industry competitors -- two main competitors, SkyTerra Communications, Inc. -- and TerreStar Corporation in entering into transactions of that nature. Judge Gerber was not persuaded by DISH's arguments that it should have higher interest on its for the extended first lien credit facility. The Amended Facility will have a principal equal to the allowed claim on account of the Prepetition Facility, a four year maturity date, PIK interest at a rate of 12.5% per annum, and, as a result, no cash payments of principal or interest until maturity. The Prepetition Facility effectively paid cash interest after 13 months, whereas the Amended Facility will pay cash interest upon maturity in 48 months. "Despite the extension of the term of the loan, I find that risk of nonpayment of the Amended Facility has not increased so as to make a 12.5% interest rate -- even as a PIK interest rate -- insufficient to give DISH the present value of its allowed secured claim on account of the Prepetition Facility," Judge Gerber held. DISH says the Plan fails to satisfy the "best interests of creditors requirement". Sprint likewise raises a best interests of creditors objection, and says the Plan violates the absolute priority rule. Despite DISH's objections to the Plan, Jjudge Gerber held the Plan is confirmable under the cramdown provisions, noting that (i) by classifying secured claims based on the collateral held (the customary way of treating secured claims under a plan), the Plan doesn't discriminate unfairly, and (ii) the Plan is fair and equitable as DISH would be provided with the indubitable equivalent of its claim. However, Judge Gerber agrees with the plan supporters' contentions that the "Gifting" Doctrine -- under which senior secured creditors voluntarily offer a portion of their recovered property to junior stakeholders (as the Senior Noteholders did here) -- defeats Sprint's Absolute Priority Rule objection. "In fact, but for that gift, Sprint itself would receive nothing. The Gifting Doctrine permits creditors, if they wish, to 'gift' part of the distributions to which they'd otherwise be entitled to junior classes or interests, even if that gift results in unequal distributions to classes that would otherwise be pari passu, or if the gift makes distributions to a class when a more senior class has not been paid in full," Judge Gerber points out. A copy of Judge Gerber's decision containing his Findings of Fact and Conclusions of Law is available for free at: http://bankrupt.com/misc/DBSD_Plan_Decision.pdf About DBSD North America Headquartered in Reston, Virginia, DBSD North America Inc. aka ICO Member Services Inc. offers satellite communications services. It has launched a satellite, but is in the developmental stages of creating a satellite system with components in space and on earth. It presently has no revenues. The Company and nine of its affiliates filed for Chapter 11 protection on May 15, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-13061). James H.M. Sprayregen, Esq., Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, in New York; and Marc J. Carmel, Esq., Sienna R. Singer, Esq., at Kirkland & Ellis LLP, in Chicago, serve as the Debtors' counsel. Jefferies & Company is the proposed financial advisors to the Debtors. The Garden City Group Inc. is the court-appointed claims agent for the Debtors. When the Debtors sought for protection from their creditors, they listed between $500 million and $1 billion each in assets and debts. DELPHI CORP: Congress Labor Committee to Hear Retiree Concerns -------------------------------------------------------------- The Committee on Education and Labor of the U.S. House of Representatives Committee will conduct a hearing relating to Delphi Corporation's health care and pension benefit cuts, Business Journal Daily reported, citing a public statement made by U.S. Representative Tim Ryan of Ohio. Delphi salaried retirees may be invited to join the hearing, which will bring their concerns to a national forum, Mr. Ryan said, Business Journal Daily noted. Mr. Ryan further disclosed that the hearing is another step in a series of action to help workers affected by the healthcare and pension cuts. While a final date for the hearing has yet to be scheduled, Mr. Ryan expects it to be after the Committee on Health, Education, Labor and Pensions of the U.S. Senate takes up similar issues at an October 29, 2009 hearing, according to Business Journal Daily. In a separate matter, the United States of Labor publicly stated on October 22, 2009 that 4,500 workers in certain states are eligible to apply for Trade Adjustment Assistance. Eligible to apply for the TAA are workers from Delphi Packard Electrical operations at Clinton and Brookehaven, Mississippi. Eligible workers for TAA will receive 130 weeks of cash payments and training packages, The Clarion-Ledger related in a separate report. Delphi previously announced that it will shut down the Clinton Plant by December 31, 2009, affecting 280 workers, due to high property taxes. The Labor Department also offers a Re-employment Trade Adjustment Assistance for workers aged 50 years old and above. If a worker obtains new employment at wages less than $55,000 and less than those earned in adversely affected employment, the RTAA program will pay 50% of the difference between the old wage and the new wage, up to $12,000 over a two-year period. Retirees Appeal to Court In letters for the period from September 25 to October 26, 2009, Michael Wszola and Bonita Hill urged the Court to rule that all non-UAW union retirees be given equal treatment, citing that retirees like them rely on pension and health care that they've worked hard for while working for Delphi. About Delphi Corp Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- was a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi had approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on January 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On October 6, 2009, Delphi Corp.'s Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) DELPHI CORP: DPH Holdings Deregisters Old Securities ---------------------------------------------------- Delphi Corporation previously filed a Registration Statement on Form S-3 with the U.S. Securities and Exchange Commission on September 3, 2003, registering $1,500,000,000 of Delphi securities, consisting of: -- an unspecified amount of debt securities; -- Delphi's preferred stock having a par value of $.01 per share; -- Delphi's common stock having a par value of $.01 per share; -- depository shares representing a fractional interest in a share of a particular series of Preferred Stock; -- warrants for the purchase of Debt Securities, Preferred Stock or Common Stock, stock purchase contracts and equity units; -- trust preferred securities; and -- related debt securities and guarantees. In October 2003, a $250,000,000 aggregate liquidation preference amount of 8 1/4% Cumulative Trust Preferred Securities were issued under the Registration Statement. In November 2003, another $150,000,000 aggregate liquidation preference amount of Adjustable Rate Trust Preferred Securities were issued under the Registration Statement. On October 6, 2009, Delphi's Modified First Amended Joint Plan of Reorganization became effective and all outstanding securities were cancelled. Accordingly, DPH Holdings Corp. filed Post-Effective Amendment No. 1 on Form S-8 on October 21, 2009, to remove from registration all Securities registered pursuant to the Old Delphi Registration Statement that remains unsold as of October 21, 2009. DPH Holdings President, Secretary and Treasurer John C. Brooks said that as of October 21, 2009, securities in the aggregate principal amount of $1,100,000,000 were registered pursuant to the Registration Statement. Moreover, Delphi previously registered for issuance shares of its common stock pursuant to these employee plans: Employee Plan Common Stock Shares ------------- ------------------- Delphi Automotive Systems 50,000,000 Classified Salary and Hourly Stock Option Plan Delphi Corporation Stock 85,000,000 Incentive Plan Delphi Corporation Long-Term 36,500,000 Incentive Plan Delphi Automotive Systems 15,000,000 Deferred Compensation Plan For Executive Employees In separate post-effective date amendments to Registration Statements on Forms S-8 dated October 21, 2009, DPH Holdings disclosed that it intends to deregister all the remaining unissued issues under the Employee Plans. J. Germain Makes Queries In a letter addressed to the Court on October 13, 2009, Jacqueline Germain, holder of 100 shares of Delphi's common stock, inquired on whether she will receive a new kind of shares in replacement of the cancelled Delphi common stock shares on October 6, 2009. About Delphi Corp Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- was a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi had approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on January 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On October 6, 2009, Delphi Corp.'s Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) DELPHI CORP: DPH Holdings Files Closing Chapter 11 Report --------------------------------------------------------- Delphi Corporation and its debtor affiliates consummated the transactions contemplated under their Modified First Amended Joint Plan of Reorganization and emerged from bankruptcy as DPH Holdings Corp. and affiliates on October 6, 2009. Against this backdrop, Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings will remain responsible for the post- Effective Date administration and eventual closing of the Chapter 11 cases as well as the disposition of certain retained assets and payment of certain retained liabilities as provided under the Modified Plan. None of the Reorganized Debtors and none of the businesses acquired by DIP Holdco 3 LLC or GM Components is named Delphi Corporation. Thus, to avoid confusion, the Reorganized Debtors ask the Court to approve a modified official joint case caption of their jointly administered Chapter 11 cases. Meanwhile, in a regulatory filing with the Securities and Exchange Commission on October 7, 2009, DPH Holdings President, Secretary and Treasurer John C. Brooks disclosed that on the Plan Effective Date and pursuant to the Modified Plan, these outstanding debt securities of Delphi were cancelled, and the indentures governing the debt securities were terminated: * 7-1/8% Debentures due May 1, 2029; * 8.25% Cumulative Trust Preferred Securities of Delphi Trust I; * 6.50% Notes due August 15, 2013; and * Adjustable Rate Trust Preferred Securities, with a five-year rate of 6.197% of Delphi Trust II. All of Delphi's outstanding stock was cancelled, including (1) Delphi's common stock, (2) Old Delphi Stock issued under any incentive or bonus plans, and (3) the associated Preferred Share Purchase Rights relating to Delphi's Stockholder Rights Plan. In place of the cancelled stock, 100 new shares of new common stock were issued to a Post-Confirmation Reorganized DPH Holdings Share Trust, the sole stockholder of Reorganized Delphi. Holders of Old Delphi Stock or Debt Securities received no recovery under the Modified Plan. Termination of DIP Agreement & Other Contracts Claims under Delphi's existing Amended and Restated DIP Credit Facility were satisfied in full and as a result, the Amended and Restated DIP Credit Facility was terminated as of the Plan Effective Date along with the related DIP Accommodation Agreement, according to Mr. Brooks. The existing liquidity agreement between Delphi and General Motors Company as assignee of Motors Liquidation Company, formerly known as General Motors Corporation, was also terminated as of the Effective Date. All of Delphi's executory contracts were assumed by the applicable Reorganized Debtor as of the Effective Date. All compensatory plans, contracts or arrangements, including those with directors and officers are no longer applicable to Reorganized Delphi as of the Effective Date. Consummation of MDA Moreover, under the Master Disposition Agreement among Delphi, General Motors Company, GM Components Holdings LLC, Motors Liquidation Company and DIP Holdco 3 LLC, GM acquired substantially all of Delphi's global steering business and certain facilities in Kokomo, Indiana; Rochester, New York; Lockport, New York; and Grand Rapids, Michigan. DIP Holdco 3 acquired substantially all of Delphi's global core businesses. The consideration paid by GM Components for the Delphi assets includes: -- the assumption of certain liabilities, and the assumption or payment of the applicable cure amounts associated with the contracts and leases to be assigned to GM; -- the waiver by each of New GM and Old GM of its prepetition claims, administrative claims and future claims in the Debtors' bankruptcy cases, including any claims pursuant to a Global Settlement Agreement, as amended, effective as of September 29, 2008, and each of the GM-Delphi Liquidity Agreements; -- the payment to JP Morgan Chase Bank, N.A., on behalf of the DIP Lenders, of an amount equal to $291 million plus DIP Priority Payments pursuant to the Master Disposition Agreement; -- the payment to Delphi of up to $50 million to cover certain expenses consistent with a wind down budget attached as an exhibit to the Master Disposition Agreement; and -- up to $15 million in professional fees, plus the costs of solicitation of approval for the Modified Plan not exceeding $12 million; provided that the sum of the fees, plus applicable cure amounts paid or assumed by the GM Buyers does not exceed $148 million. DIP Holdco 3's consideration includes: -- the assumption of certain liabilities; -- the assumption or payment of the applicable Cure Amounts associated with the contracts and leases to be assigned to DIP Holdco 3; -- the Credit Bid; -- up to $15 million of professional fees; and -- deferred cash consideration, to the extent payable following the effective date of the Modified Plan and pursuant to the DIP Holdco 3 operating agreement, to the holders of allowed general unsecured claims, in an amount not to exceed $300 million. Delphi Automotive LLP, which has acquired Delphi's global core businesses, has considered Europe as its largest market, Detroit Free Press reported on October 9, 2009. Delphi Automotive intended for North America, Asia and Europe to account 30% of its sales with South America to account for 10%, the news source related. Thus, no single customer of Delphi Automotive will account for more than 15% of Delphi Holdings' total sales, he report disclosed. GM made a $1.7 billion investment in Delphi Automotive, but will not be considered a long-time investor, Detroit Free Press added. Reorganized Delphi's Officers Nine directors of Delphi resigned from their posts in connection with the Company's emergence from Chapter 11. They are: -- Rodney O'Neal, -- Robert S. Miller, -- Oscar de Paula Bernardes Neto, -- John D. Englar, -- David N. Farr, -- Raymond J. Milchovich, -- Craig G. Naylor, -- John H. Walker, and -- Martin E. Welch III. John D. Sheehan, the Company's principal financial officer, and Thomas S. Timko, the Company's principal accounting officer, also stepped down from their posts in Delphi. John C. Brooks was elected to the Board of Directors of New Delphi to serve as the sole officer of Reorganized Delphi. Pursuant to the Modified Plan, Reorganized Delphi also filed an amended and restated certificate of incorporation and amended its by-laws. The Amended and Restated Certificate of Incorporation provides that the authorized capital stock of Reorganized Delphi consists of: * 1,000 shares of common stock designated as common stock, par value $0.01 per share; and * 1,000 shares of preferred stock, par value $0.01 per share. A full-text copy of the Amended and Restated Certificate of Incorporation dated October 6, 2009, is available for free at: http://ResearchArchives.com/t/s?473b A full-text copy of the Amended and Restated By-Laws of DPH Holdings Corp. dated October 6, 2009 is accessible for free at: http://ResearchArchives.com/t/s?473c DPH Holdings Files Closing Report On behalf of DPH Holdings, John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, delivered to the Court on October 21, 2009, a closing report in the Debtors' Chapter 11 cases. Mr. Butler presented a breakdown of fees and expenses expended since the Petition Date in the Debtors' Chapter 11 cases: Category Amount -------- ------------- Allowed and pending fees and expenses for 24 legal professionals employed by the Debtors pursuant to Section 327 of the Bankruptcy Code $140,980,778 Allowed and pending fees and expenses for other professionals $241,031,641 Mr. Butler explained that the $241,031,641 amount included amounts paid to financial and other non-legal professionals retained by the Debtors under Section 327, plus the allowed fees and expenses of retained professionals for the Official Committee of Unsecured Creditors, the Official Committee of Equity Security Holders, and the fee committee. As set forth in the Disclosure Statement accompanying the Modified Plan, the estimated amount of fees and expenses for Other Professionals for the seventh interim fee application period is $29,840,793, which is reflected in the Other Professionals Fees. With respect to dividends to be paid, Mr. Butler said that if a Company Buyer makes distributions to its members in accordance with a Company Buyer Operating Agreement pursuant to the Master Disposition Agreement exceeding $7.2 billion, an amount equal to $32.50 for every $67.50 so distributed exceeding $7.2 billion will be distributed to holders of General Unsecured Claims. However, distribution under the Modified Plan to the holders of General Unsecured Claims will not exceed $300 million in the aggregate. Distribution to the holders of General Unsecured Claims, if any, is unlikely to exceed 4.2% of the Allowed Claims, Mr. Butler added. Mr. Butler further disclosed that initial distributions under the Modified Plan were completed on October 6, 2009. About Delphi Corp Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- was a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi had approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on January 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On October 6, 2009, Delphi Corp.'s Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) DELTA AIR LINES: Flights Under Probe for Safety Lapses ------------------------------------------------------ The National Transportation Safety Board is investigating whether pilots of Northwest Airlines Corp. Flight 188 "dozed off or were simply distracted" when they fell out of contact with air-traffic controllers for 78 minutes on October 21, 2009, and overshot their destination by 150 miles, Andy Pasztor of The Wall Street Journal reports. As part of routine procedure, losing contact with the pilots for more than an hour prompted the Federal Aviation Administration and military officials to consider fighter jets to intercept the twin-jet Airbus A320 that airlifted 149 passengers, said Mr. Pasztor. Northwest Flight 188, which took off from San Diego, was flying at an altitude of 37,000 feet when its pilots lost contact. Eventually, it circled back and landed safely in Minneapolis, reporting no injuries to the 147 passengers and the unspecified number of crew members. The pilots reported that the oversight resulted from a "heated discussion over airline policy and they lost situational awareness," according to the Journal. The Northwest Flight 188 incident follows a safety lapse on October 19, 2009, involving a Delta Air Lines, Inc. Boeing 767 cockpit crew. The Delta Flight, en route from Brazil, landed on Taxiway M, a two-mile-long strip of concrete parallel to Runway 27 Right at the Hartsfield-Jackson International Airport in Atlanta, rather than on the parallel runway. No injuries to any of the 182 passengers or 11 crew members were reported. The NTSB disclosed that the approach lights for the runway "weren't turned on, but the lights on the runway surface were illuminated." A source told the Journal that a third pilot aboard the Delta aircraft fell ill during the flight and "was relocated to the cabin" before landing. The remaining crew may have been distracted as they cleaned up a cockpit that had been soiled, the unnamed source said. The incident ignited the issue of "pilot fatigue" -- which has long been regarded as one of the most serious safety issues confronting commercial aviation -- as well as debates on possibly applying changes to rules regarding a pilots' duty on a 24-hour period. The FAA thinks it may be reasonable to take into account "time of day pilots work, the number of takeoffs they perform and the internal body clocks of crew members" in pilots' flying schedules, according to the report. Investigators will also review data from the Northwest plane's digital flight-data recorder. Delta, Northwest's parent company, stated that the pilots involved in the Delta and Northwest flights have been put on leave pending the completion of the investigations, says the report. About Delta Air Lines With its acquisition of Northwest Airlines, Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- became the world's largest airline following merger with Northwest Airlines in 2008. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to more than 376 destinations worldwide in 66 countries and serves more than 170 million passengers each year. The merger closed on October 29, 2008. Northwest and 12 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). * * * Delta Air Lines has $44,480,000,000 in assets against total debts of $43,500,000,000 in debts as of June 30, 2009. Delta Air Lines and Northwest Airlines carry a 'B/Negative/--' corporate ratings from Standard & Poor's. They also continue to carry 'B2' corporate family ratings from Moody's. DELTA AIR LINES: Inks Lease Extension at Atlanta Airport -------------------------------------------------------- In a statement issued October 5, 2009, Delta Air Lines CEO Richard Anderson announced that the Company reached an agreement with the city of Atlanta to extend the airline's lease at Hartsfield-Jackson Atlanta International Airport through 2017. As previously reported, Hartsfield-Jackson's 30-year contracts that govern airline operations, including Delta's, are set to expire in 2010. "Delta is pleased to have reached an agreement with the City of Atlanta on a lease extension at Hartsfield-Jackson that will maintain the airport's position as the leading airport in the world and ensure the continued growth of air service in Atlanta, Mr. Anderson said. According to Mr. Anderson, Atlanta and Delta are successful "because we have worked hand-in-hand for nearly 70 years to distinguish our hometown airport as one known for its convenience, efficiency and competitive costs," adding that they have worked "with a long line of visionary leaders including Mayors Hartsfield, Young, Jackson and Franklin who understood that Atlanta's economic prosperity and growth is directly tied to Hartsfield-Jackson's more than $20 billion annual economic impact." "We look forward to working with the city administration and the city council on finalizing the legislation and moving forward with the development of the Maynard Holbrook Jackson, Jr. International Terminal," Mr. Anderson added. The airport had said it planned to add a 12-gate international terminal to ease congestion and allow Delta to handle more passengers. Delta, the airport's largest tenant, previously disputed the terminal budget of $1.68 billion and threatened to switch flights to other hubs including Memphis, Tennessee, or Cincinnati unless the proposed terminal cost was cut. Subsequently, the cost was trimmed by about 20 percent to $1.35 billion in July 2009. Deal Gets Flak from FAA The Federal Aviation Administration notes that that the proposed new lease agreement between Atlanta airport and Delta "has potentially anti-competitive terms . . . [as] it appears [to] limit the city's ability to accommodate a new entrant or existing carrier that wishes to expand at the airport," the Atlanta Journal-Constitution reports. In response, Mayor Shirley Franklin acknowledged that while the Lease Extension may not be perfect, "it builds on a successful model." "Some people say it's a partnership that will retard development, but Atlanta's experience has been the reverse," Mayor Franklin emphasized, speaking before the Atlanta City Council. The New Lease Agreement is subject to the finalization of definitive documents and approval by the Council and Delta's Board of Directors. About Delta Air Lines With its acquisition of Northwest Airlines, Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- became the world's largest airline following merger with Northwest Airlines in 2008. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to more than 376 destinations worldwide in 66 countries and serves more than 170 million passengers each year. The merger closed on October 29, 2008. Northwest and 12 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). * * * Delta Air Lines has $44,480,000,000 in assets against total debts of $43,500,000,000 in debts as of June 30, 2009. Delta Air Lines and Northwest Airlines carry a 'B/Negative/--' corporate ratings from Standard & Poor's. They also continue to carry 'B2' corporate family ratings from Moody's. DELTA AIR LINES: Opposes AFL-CIO'S Proposed Voting Changes ---------------------------------------------------------- To recall, Delta Air Lines, Inc., has opposed certain modifications proposed by the American Federation of Labor and Congress of Industrial Organizations relating to union representation voting, which may cause an essential change in Delta's election scenario. The proposal, which AFL-CIO submitted to the National Mediation Board on September 2, 2009, provides for the unionization of workers with majority approval of those voting. Under NMB's current rules, a majority of all workers in a class, not just those voting, must approve. In a message posted at Freep.com, Delta CEO Richard Anderson, Board member Jerry Grinstein, and former Delta CEO Dave Garrett expressed concern over the "delay" being posed by the labor unions to Delta's progress. "This year, Delta Air Lines celebrated its 80-year anniversary. It's been quite a journey from our origins as a crop-dusting operation to our current status as the world's largest airline through our merger with Northwest. Delta's success is built on a long record of cooperation -- from a very successful merger with Western Airlines and acquisition of international Pan Am routes, to working today with the FAA to obtain a single operating certificate combining the Delta and Northwest operations. We are just weeks away from the one-year anniversary of the merger. We've invested millions to combine our technology platforms, our reservation systems and our fleet. Soon, Northwest will be completely integrated and customers will interact with one seamless operation. However, politics now appears to be threatening our continued progress toward a single workforce. This affects more than 4,100 Delta employees in the Detroit area alone, who are still waiting to resolve their union representation status. Many employee workgroups at the new Delta have already had the opportunity to make the important decision of whether or not they want to unionize. Having union elections behind them gives employees certainty about pay, benefits and work rules going forward. After months of delay, the Association of Flight Attendants and the International Association of Machinists finally filed for union elections this summer. Then, just weeks later, they asked the National Mediation Board -- the agency that oversees airline labor relations -- to change the election rules. As a result, more than 50,000 Delta flight attendants and ground employees remain in limbo, simply because the unions are trying to change the rules in the middle of the process to improve their chances of winning an election. Of more immediate importance is the delay this is causing for Delta employees who are ready to cast their ballots about representation. The rule change request should not be holding up the elections already underway at Delta. A group of U.S. senators voiced a similar concern in a recent letter urging the NMB to proceed with Delta elections. The delay also is unfair when you consider that the NMB is allowing elections at other airlines to proceed under the current voting rules -- even when those election requests were filed after the filings for Delta employees. The unions argue that the size of Delta's workforce is to blame. But in our democracy, we don't subject California or New York to one set of voting rules because they have large populations, while setting other rules for Wyoming or Rhode Island. There is no reason for delaying Delta's elections and we see no reason for the NMB to discriminate against Delta employees. Our customers are benefiting as we become a seamless integrated airline. Our employees should not be left behind. It's time Delta employees are given the chance to have representation issues resolved in a timely, fair and consistent way." The NMB has already recognized Delta as a single entity in labor negotiations. Delta is meshing its post-merger employees to obtain a single operating certificate from the Federal Aviation Administration by the end of 2009. About Delta Air Lines With its acquisition of Northwest Airlines, Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- became the world's largest airline following merger with Northwest Airlines in 2008. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to more than 376 destinations worldwide in 66 countries and serves more than 170 million passengers each year. The merger closed on October 29, 2008. Northwest and 12 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). * * * Delta Air Lines has $44,480,000,000 in assets against total debts of $43,500,000,000 in debts as of June 30, 2009. Delta Air Lines and Northwest Airlines carry a 'B/Negative/--' corporate ratings from Standard & Poor's. They also continue to carry 'B2' corporate family ratings from Moody's. DENNY NOLEN: Files for Ch 11 Bankruptcy to Keep Property -------------------------------------------------------- Denny Nolen and his wife, Terry, have filed for Chapter 11 bankruptcy protection, listing at least $1 million in assets and $1 million in liabilities. The Debtors also listed monthly income of $3,400. Josh Brodesky at Arizona Daily Star reports that Mr. Nolen's attorney, Jeffrey H. Greenberg, said that his client filed for Chapter 11 to preserve his assets while he works toward an agreement with lot owners and bring the Ruby Star Airpark property into compliance. The Real Estate Department fined Mr. Nolen $150,000 in 2007 and ordered him to bring his Ruby Star Airpark into compliance. The Pima County Board of Supervisors asked the state's Attorney General's Office in March 2009 to pursue criminal and civil investigations into Mr. Nolen's operation after property owners claimed that they were deceived and that the Debtor stacked the homeowners association board to his benefit. Arizona Daily says that Pima County has sued Mr. Nolen to comply with code on the development. Arizona Daily relates that a group of property owners also sued Mr. Nolen, seeking damages. Denny Nolen is a developer whose fly-in project Ruby Star Airpark was created through an alleged series of illegal lot splits. Ruby Star Airpark is set near the base of the Sierrita Mountains, west of Sahuarita. DOLLAR THRIFTY: Posts $30.1-Mil. Net Income for Third Quarter ------------------------------------------------------------- Dollar Thrifty Automotive Group, Inc., reported results for the third quarter ended September 30, 2009. Net income for the 2009 third quarter was $30.1 million, or $1.29 per diluted share, compared to net income of $18.9 million, or $0.87 per diluted share, for the comparable 2008 quarter. The net income for the third quarter of 2009 included income of $0.15 per diluted share, compared to a loss of $0.02 per diluted share in last year's third quarter, both of which related to changes in fair value of derivatives. Non-GAAP net income for the 2009 third quarter was $26.8 million, or $1.15 per diluted share, compared to non-GAAP net income of $19.3 million, or $0.89 per diluted share for the 2008 third quarter. Non-GAAP net income (loss) excludes the (increase) decrease in fair value of derivatives, net of related tax impact. Corporate Adjusted EBITDA for the third quarter of 2009 was $54.7 million, compared to $43.4 million in the third quarter of 2008. Reconciliations of non-GAAP to GAAP results are included in Tables 3 and 4. "In spite of the difficult economic environment, we achieved our third consecutive quarter of year-over-year improvement in both non-GAAP net income (loss) and Corporate Adjusted EBITDA," said Scott L. Thompson, Chief Executive Officer and President. "The difficult steps we have taken over the past twelve months to maximize profitability and cashflow, combined with improvements in residual values, positively impacted this quarter. We expect both of these factors will continue to benefit future operating results." For the quarter ended September 30, 2009, the Company's total revenue was $438.9 million, as compared to $500.6 million for the comparable 2008 period. The decline in revenue was primarily driven by a 21.3 percent decrease in rental days, partially offset by an 11.5 percent improvement in revenue per day. Excluding the impact of location closures, rental days were down approximately 17 percent on a same store basis. The third quarter average fleet was down approximately 20 percent compared to last year's third quarter. "Revenue for the quarter was in line with our expectations and consistent with our strategy of enhancing profitability by maintaining an optimal balance between transaction volume and pricing," said Mr. Thompson. "During the month of September, we experienced rental revenue declines of only 3% compared to September 2008, and we currently expect year-over-year rental revenue growth for the month of October as increases in RPD are expected to fully offset volume declines, making October the first month since May of 2008 that the Company would experience year- over-year growth in rental revenue. These trends, augmented by our visibility into forward reservations, indicate to us that we may have seen the worst of the rental revenue declines for this business cycle." Per vehicle depreciation cost of $315 per month in the third quarter of 2009 was approximately 3 percent lower than the comparable quarter of 2008. On a sequential basis, per vehicle depreciation costs declined approximately 14 percent as a result of improved residual values, longer hold periods, mix optimization and more effective remarketing. Vehicle utilization, a measure of fleet efficiency, was 84.2 percent, down 100 basis points from last year's third quarter. On a sequential basis, utilization was up 360 basis points from 80.6 percent in the second quarter of 2009. Direct vehicle and operating expenses and selling, general and administrative expenses were lower in the third quarter of 2009 compared to the same quarter in 2008 as a result of transaction declines and cost reduction initiatives. Interest expense for the third quarter of 2009 declined as debt was reduced by $873 million, or approximately 33 percent, from September 2008 levels. Nine Month Results For the nine months ended September 30, 2009, net income was $33.6 million, or $1.47 per diluted share, compared to a net loss of $268.2 million, or $12.57 loss per diluted share for the comparable period in 2008. The net income for the nine months ended September 30, 2009 included income of $0.53 per diluted share related to an increase in fair value of derivatives, compared to a loss of $0.06 per diluted share for the nine months ended September 30, 2008, related to a decrease in fair value of derivatives. In addition, the net loss for the nine months ended September 30, 2008 included non-cash charges of $12.42 per diluted share related to the impairment of goodwill and long-lived assets. Non-GAAP income per diluted share for the nine months ended September 30, 2009, was $0.96, compared to a non-GAAP loss per diluted share of $0.09 for the same period in 2008. Non-GAAP net income (loss) excludes the (increase) decrease in fair value of derivatives and the non-cash charges related to the impairment of goodwill and long-lived assets, net of related tax impact. Liquidity and Capital Resources As of September 30, 2009, the Company had $306 million in cash and cash equivalents and an additional $562 million in restricted cash and investments primarily available for the purchase of vehicles and/or repayment of vehicle financing obligations. The Company's tangible net worth at the end of the third quarter of 2009 was $237.3 million, and the Company is in full compliance with all of the financial covenants under its various financing arrangements with lenders. Outlook The Company expects low single-digit declines in rental revenue during the fourth quarter of 2009, in line with the Company's previously announced guidance for an annual decline in rental revenue of 8 to 10 percent for 2009 compared to 2008. The Company also expects to realize year-over-year improvements in rate per day and vehicle depreciation costs per unit per month during the fourth quarter of 2009. The Company's operating results in the fourth quarter 2009 are expected to be significantly improved from the same period last year. The Company expects the operating environment in 2010 to improve slightly as conditions in the overall economy and credit markets continue to recover. The Company expects to realize single-digit growth in rental revenues in 2010, and believes fleet costs will be below $350 per unit per month throughout 2010. About Dollar Thrifty Automotive Group Dollar Thrifty Automotive Group, Inc. -- http://www.dtag.com/, http://www.dollar.com/and http://www.thrifty.com/-- is headquartered in Tulsa, Oklahoma. The Company's brands, Dollar Rent A Car and Thrifty Car Rental, serve value-conscious travelers in over 70 countries. Dollar and Thrifty have over 600 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 approximately 6,400 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. * * * As reported in the Troubled Company Reporter-Europe on Oct. 26, 2009, Standard & Poor's Ratings Services placed its long-term ratings, including the 'CCC' corporate credit rating, on Tulsa, Oklahoma-based Dollar Thrifty Automotive Group Inc. on CreditWatch with positive implications. DUNE ENERGY: Fails to Comply with NYSE Amex Listing Rule -------------------------------------------------------- Dune Energy, Inc., on October 26 said that on October 20, 2009, the Company received notice from the NYSE Amex that it failed to comply with Section 301 of the NYSE Amex Company Guide, that requires a listed company to obtain Exchange approval prior to issuing additional shares of a listed security. Such failure occurred as a result of the Company issuing shares of its common stock in connection with an unexpectedly large number of conversions of its senior redeemable convertible preferred stock during mid-September. Although the failure to have obtained prior listing approval for the issuance of such shares could jeopardize the Company's continued listing status, based on the Company's current listing status, the Exchange has determined to treat its notice as a warning letter pursuant to Section 1009(a)(i) of the Company Guide. The Company has subsequently filed an application with the Exchange seeking approval for the listing of additional shares of common stock underlying its convertible preferred stock. Approval of the application by the Exchange will remedy the deficiency noted in the warning letter. On October 21, 2009, the Company received a second letter from the Exchange stating that it had regained compliance with respect to the Exchange's continued listing requirements set forth in Sections 1003(a)(i), (ii) and (iii) of the Company Guide. The Exchange noted that the Company's Plan Period will remain open until it has been able to demonstrate compliance with the continued listing requirements for two consecutive quarters. If the Company does not demonstrate compliance for two consecutive quarters and/or by the end of the Plan Period, June 15, 2010, the Exchange may initiate delisting procedures. Until such time as the Exchange approves the Company's application for the listing of additional shares as set forth above, the Company's stock trading symbol will continue to be subject to the indicator ".bc" to denote its noncompliance. 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: Receives Non-Compliance Notice From NYSE Amex ---------------------------------------------------------- Dune Energy, Inc., on October 20, 2009, received notice from the NYSE Amex that it failed to comply with Section 301 of the NYSE Amex Company Guide, that requires a listed company to obtain Exchange approval prior to issuing additional shares of a listed security. The failure occurred as a result of the Company issuing shares of its common stock in connection with an unexpectedly large number of conversions of its senior redeemable convertible preferred stock during mid-September. Although the failure to have obtained prior listing approval for the issuance of such shares could jeopardize the Company's continued listing status, based on the Company's current listing status, the Exchange has determined to treat its notice as a warning letter pursuant to Section 1009(a)(i) of the Company Guide. The Company has subsequently filed an application with the Exchange seeking approval for the listing of additional shares of common stock underlying its convertible preferred stock. Approval of the application by the Exchange will remedy the deficiency noted in the warning letter. On October 21, 2009, the Company received a second letter from the Exchange stating that it had regained compliance with respect to the Exchange's continued listing requirements set forth in Sections 1003(a)(i), (ii) and (iii) of the Company Guide. The Exchange noted that the Company's Plan Period will remain open until it has been able to demonstrate compliance with the continued listing requirements for two consecutive quarters. If the Company does not demonstrate compliance for two consecutive quarters and/or by the end of the Plan Period, June 15, 2010, the Exchange may initiate delisting procedures. Until such time as the Exchange approves the Company's application for the listing of additional shares as set forth, the Company's stock trading symbol will continue to be subject to the indicator ".bc" to denote its noncompliance. 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: Wants December 1 Claim Bar Date ----------------------------------------------- Edge Petroleum Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Texas to set Dec. 1, 2009, as the deadline for creditors to file proofs of claim. The Debtors propose March 30, 2010, as the last day for all governmental units to file proofs of claim. Original proofs of claim must be delivered to: Edge Petroleum Corp. Claims Processing c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, California 90245 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. 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. ERICKSON RETIREMENT: Court to Hear Auction Rules on October 29 -------------------------------------------------------------- Erickson Retirement Communities LLC and its units seek the Court's permission to enter into a master sale and purchase agreement with Redwood-ERC Senior Living Holdings, LLC, Redwood-ERC Management, LLC, Redwood-ERC Development, LLC, Redwood-ERC Properties, LLC and Redwood-ERC Kansas, LLC, which contemplates the sale of substantially all of their assets for $100 million, subject to higher bids. Before the Petition Date, the Debtors, with the assistance of financial advisors Houlihan, Lokey, Howard & Zukin Capital, Inc., marketed their assets to over 80 potential investors, Vincent P. Slusher, Esq., at DLA Piper LLP, in Dallas, Texas, relates. Among the parties that expressed interest in the Assets, the Debtors determined that the offer of the "Redwood Purchasers" was the best proposal on the table. To that end, the Debtors executed a letter of intent on September 17, 2009, with the Redwood Purchasers to act as potential purchasers and Plan sponsors. The Debtors' board of directors approved the proposed transaction on September 19, 2009. Subsequently, on October 19, 2009, the Debtors and Redwood Purchasers entered into a Master Purchase and Sale Agreement contemplating the sale of substantially all of the Debtors' assets to Redwood, free and clear of all liens. The salient terms of the MSPA are: 1. Redwood would purchase substantially all of the Debtors' assets in exchange for consideration of $100,000,000. The $75,000,000 portion of the Purchase Price will be paid in cash at the closing, and the remaining $25,000,000 will be represented by a promissory note and payable solely to the newly formed Management Co., secured by a first-priority lien on the assets of Management Co. having a five-year amortization and three-year maturity with an automatic two- year extension based on specific mutually-agreed debt service coverage covenants being satisfied. The Purchase Price will be reduced by the amount, if any, by which the cash and cash equivalents included in the Assets are less than $10,000,000. 2. Redwood would assume campus-level debt of $500 million. 3. Redwood will commit $50 million in new capital for future development and working capital and certain other consideration. Moreover, the Redwood MSPA provides for certain protections to Redwood for agreeing to serve as the stalking horse bidder, including: (i) Redwood will be entitled to a $1,500,000 commitment fee. The amount will actually be paid on the entry of an order approving the bid procedures and will be credited against a break-up fee; and (ii) Redwood will be entitled to a $1,500,000 break-up fee upon the occurrence of certain triggering events, which include instances where: -- Redwood terminates the Redwood MSPA on account of a breach by the Debtors; -- Redwood terminates the Redwood MSPA pursuant to applicable provisions under the Redwood MSPA; or -- Any alternative transaction is consummated on or before September 12, 2010. The Break-Up Fee will be increased by $1,500,000 if the Debtors close a transaction relating to the acquisition of all or a material portion of their assets by any party other than Redwood, whether through direct purchase, merger, consolidation or other business combinations before September 12, 2010. Pursuant to Section 503(b)(1) of the Bankruptcy Code, the Break-Up Fee will be allowed and paid as an administrative expense claim. Pursuant to the Redwood LOI and in anticipation of the Debtors' Chapter 11 cases, the Debtors have paid Redwood $500,000 for the firm's reasonable, documented out-of-pocket expenses. A full-text copy of the Redwood MSPA is available for free at: http://bankrupt.com/misc/ERC_MSPA.pdf Proposed Timeline As part of the marketing process, the Debtors and their professionals have met with several potential purchasers. They intend to continue to market the Debtors' assets postpetition to determine if a higher and better offer may be obtained. In line with this marketing plan, the Debtors ask the Court to approve this proposed timeline governing the asset sale: Event Deadline ----- ------ Plan and Disclosure Not more than 10 days after Statement filed entry of an order approving the Motion to Sell End of the Debtors' Marketing 20 days after the filing of Period and Bid Deadline the Plan and Disclosure Statement Consent must be Obtained from Two days prior to the Auction National Senior Campuses, Inc. and the Lenders for Qualified Bidders Announcement of Qualified A day prior to the Auction and Lead Bids by the Debtors Auction Date 10 days after the Bid Deadline Amended Disclosure Statement Five days after the Auction and Plan Date Filing of a cure schedule 10 days after the Amended by the Debtors Disclosure Statement and Plan are filed Disclosure Statement To be determined Objection Deadline Disclosure Statement To be determined Reply Date Deadline Disclosure Statement Hearing To be determined Commencement of Solicitation To be determined Voting Deadline To be determined Plan Confirmation To be determined Objection Deadline Plan Confirmation To be determined Reply Date Deadline Plan Confirmation Hearing To be determined The Debtors aim to file a plan of reorganization 10 days after the entry of an order approving the Motion to Sell to implement the Redwood transaction or other higher or better offers that may be received through the marketing process. Bidding Procedures Moreover, the Debtors ask the Court to approve these proposed bidding procedures for the sale of substantially all of their assets: (a) By the Bid Deadline, a potential bidder that desires to make a bid is required to deliver copies of its bid to (i) Erickson Retirement Communities, LLC; (ii) the Debtors' counsel, DLA Piper LLP, (iii) the Debtors' financial advisor, Houlihan Lokey; and (iv) the Debtors' restructuring advisor, Alvarez & Marsal Healthcare Industry, LLC. The Debtors will deliver to Redwood copies of all bids submitted for the purchase of any of the Assets. (b) The Debtors may afford any potential bidder the opportunity to conduct a reasonable due diligence review. Should any potential bidder desire additional or further information, that potential bidder will be required to enter into a confidentiality agreement satisfactory to the Debtors. (c) All bids must include: -- an offer to acquire the assets in the form of the Redwood MSPA and Redwood Plan, marked to show any Proposed changes, including all proposed schedules and exhibits; -- an agreement that the potential bidder's offer is binding and irrevocable and the potential bidder agrees to be a Next Best Bidder until closing of a purchase of Assets by the Successful Bidder, through a plan of reorganization, to another person or entity pursuant to the Bidding Procedures; -- a higher and better offer that provides aggregate consideration that is $4,000,000 greater than the Redwood MSPA; and -- conditions that are not less favorable to the Debtors than those provided for the Redwood MSPA. (d) Bids must be accompanied by: -- written evidence of available cash; -- a commitment for financing or ability to timely obtain a satisfactory commitment if selected as the Successful Bidder and other evidence of ability to consummate the transaction; -- a stipulation or evidence that submission of the bid, execution, delivery and closing on the Marked Agreements is duly authorized and the proposed bidder has all requisite approvals from its board of directors; and -- a certified check for $5,000,000. Bids may not seek any transaction or break-up fee, expense reimbursement or any similar type of payment. (e) The Good Faith Deposit of all Qualified Bidders will be held in a separate interest-bearing account for the Debtors' benefit until closing of a purchase of Assets by the Successful Bidder. If a Successful Bidder fails to consummate an approved sale of the Assets because of a breach or failure to perform on the part of the Successful Bidder, that Successful Bidder's Good Faith Deposit will be held by the Debtors subject to a ruling by the Bankruptcy Court that the Debtors should be permitted to retain the Good Faith Deposit on account of any damages caused by that Successful Bidder's breach. All other deposits will be returned promptly after the closing of the sale of the Assets to the Successful Bidder. (f) Each potential bidder must obtain consents from National Senior Campus and the prepetition corporate revolver lenders and the senior secured project lenders to enter into a sale of the Assets and plan of reorganization by two days prior to the Auction to be a Qualified Bidder. (g) The Debtors and their professionals, in consultation with NSC, the Not-for-Profit Community Operators, the Lenders, and any statutory committees, will review each bid received from a potential bidder to ensure that it meets the requirements. A bid received from a potential bidder that meets the requirements and subject to the business judgment of the Debtors will be considered a "Qualified Bid." The Redwood MSPA is a Qualified Bid and Redwood is a Qualified Bidder. (h) Only Redwood and each Qualified Bidder will be eligible to participate at the Auction. At least a day before the Auction, each potential bidder that has submitted a Qualified Bid must inform the Debtors whether it intends to participate in the Auction. The Debtors will promptly inform each potential bidder that has expressed its intent to participate in the Auction of the identity of all other potential bidders that may participate in the Auction. If the Seller does not receive any Qualified Bids other than from Redwood, it will not hold an Auction and Redwood will be named the Successful Bidder. (i) If more than one Qualified Bid is received, the Debtors will conduct an Auction for the sale of the Assets and plan sponsorship. The Debtors propose that the Auction take place at 10:00 a.m. 10 days after the Bid Deadline at the offices of DLA Piper LLP (US), or at a later time or place. The bidding will start at the amount offered in the highest Qualified Bid, plus $500,000 and will continue in increments of at least $500,000, in cash, until the bidding ceases. Redwood has the right to credit bid $3,500,000, which equals the sum of the Break-Up Fee and the maximum Expense Reimbursement. (j) After determining the Successful Bid, the Debtors may determine, in consultation with NSC, the NFPs, the Lenders, and any statutory committees, which Qualified Bid is the next best bid. If the Successful Bidder does not close the sale by the date agreed to by the Debtors and the Successful Bidder, then the Debtors will be authorized, to close with the party that submitted the Next Best Bid without further Court order. (k) Within five days after the Auction, the Debtors will announce the Successful Bidder and the Debtors and the Successful Bidder will file an amended Plan and Disclosure Statement. If Redwood is the Successful Bidder and no material changes have been made to the Plan and Disclosure Statement, no amendment will be filed. The Debtors believe that the proposed Bidding Procedures provide an appropriate framework for proposing a plan of reorganization that will result in the sale of substantially all of their Assets. More importantly, Mr. Slusher points out that entering into a stalking horse agreement is in the best interest of the Debtors' estates because it ensures an expedited sale to a contractually committed buyer at a purchase price that is fair and reasonable. "The speed at which the Debtors are able to locate a seller and exit bankruptcy is of the utmost importance to the retiree residents and future of the Debtors' operations," he insists. "A longer marketing period would create greater uncertainty among the Debtors' residents and prospective residents, delay the reorganization and would likely decrease the value of the Debtors' estates." Accordingly, the Debtors seek the Court's authority to offer Redwood a Break-Up Fee of $3,000,000 and Expense Reimbursement of up to $500,000, and pay Redwood a Commitment Fee of $1,500,000. Contract Assumption Pursuant to the proposed Asset Sale, the Debtors also intend to assume and assign certain executory contracts and unexpired leases to the Successful Bidder. Within 10 days after the Successful Bidder is named, the Debtors will file a schedule listing the cure amounts for each contract and lease they intend to assume and assign to the Successful Bidder and will serve the Cure Schedule on the counterparties to those contracts and leases. Upon request by a party to a contract or lease proposed to be assigned to the Successful Bidder, the Debtor will provide evidence of the Successful Bidder's ability to provide adequate assurance of future performance on those contracts or leases. Any objection to the assumption and assignment of any contract or lease identified on the Cure Schedule, including the cure amount or the adequacy of the assurance of future performance, may be filed with the Court and served ERC, the Debtors' counsel, the Debtors' financial advisor, and the Debtors' restructuring advisor no later than 20 days after the filing of the Cure Schedule. If no objections are timely filed, then the cure amounts set forth in the Cure Schedule will constitute a final determination of total cure amounts required to be paid by the Debtors in connection with the assumption and assignment of contracts or leases to the Successful Bidder. If a counterparty fails to timely object to the proposed contract assumption and assignment, it will be forever barred from objecting to the contract assumption and assignment. If a timely objection is filed and an objection cannot be resolved by the parties, the Court may hear that objection at the Disclosure Statement Hearing or at a later hearing. If the Debtor and the Successful Bidder elect to close prior to the hearing, the cure amount as set forth on the Cure Schedule will be deposited into escrow. A pending dispute on the cure amounts will not prevent or delay the closing of any sale of the Assets or confirmation of a plan of reorganization, including the assumption and assignment of contracts and leases not subject to an objection. At the Debtors' behest, Judge Jernigan has scheduled an expedited hearing for October 29, 2009, to consider the Sale Motion. Before the Court scheduled the expedited hearing, PNC Bank, National Association, as administrative agent for the Debtors' Secured Lenders, opposed the hearing request, asserting that the Debtors did not specify the scope of relief they want considered on October 29. PNC further argued that the Court should refrain from approving any bidding or sale procedures until the parties have had an opportunity to fully present the issues. PNC instead urged the Court to schedule a status conference on October 29 to set briefing and hearing schedules on the Sale Motion. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ERICKSON RETIREMENT: Proposes $20 Mil. Financing From ERC Funding ----------------------------------------------------------------- Erickson Retirement Communities LLC and its units aver that postpetition financing is vital to their ability to operate their businesses while in bankruptcy. The Debtors insist that if they are unable to properly finance their business, they risk being forced to cease all operations. To this end, the Debtors relate that they engaged in good faith negotiations with their prepetition lenders and ERC Funding Co. LLC, among others. While the prepetition lenders refused to extend liquidity support, ERC Funding has committed to extend a revolver facility of up to $20 million to the Debtors, according to Vincent P. Slusher, Esq., at DLA Piper LLP, in Dallas, Texas. The essential terms of the postpetition financing facility agreed to by the Debtors and ERC Funding are: Borrowers: Hingham Campus, LLC, Lincolnshire Campus, LLC and Naperville Campus, LLC, as non-debtor entities; Erickson Retirement Communities, LLC, Ashburn Campus, LLC, Columbus Campus, LLC, Concord Campus GP, LLC, Concord Campus, LP, Dallas Campus GP, LLC, Dallas Campus, LP, Erickson Construction, LLC, Erickson Group, LLC, Houston Campus, LP, Kansas Campus, LLC, Littleton Campus, LLC, Novi Campus, LLC, Senior Campus Services, LLC, Warminster Campus GP, LLC, Warminster Campus, LP, as debtors and debtors in possession DIP Lender: ERC Funding Co. LLC DIP Facility: A revolving credit facility made available to the Borrowers in a principal amount of up to $20,000,000, of which up to $5,000,000 will be available during the period from the Closing Date through the entry of the Final Order approved on a final basis by the Bankruptcy Court . All loans outstanding under the Facility will become due and payable on the Maturity Date. On two business days' written notice, and not more frequently than twice per calendar week, the Borrowers will be permitted to request a borrowing under the DIP Facility. Maturity Date: The maturity date will be the earlier to occur of: (i) 60 days after the date on which a bidder other than Redwood Capital Investments, LLC is selected as the purchaser and/or plan sponsor of substantially all of the Debtors' assets/operations pursuant to an auction process envisioned in the Master Purchase and Sale Agreement, provided that if the Redwood Purchasers are not selected on or before December 16, 2009, another bidder will be deemed to have been selected as of that date; or (ii) the effective date of a plan of reorganization under Chapter 11 in a bankruptcy proceeding in which the Debtors are debtors and debtors-in-possession; or (iii) February 16, 2010, with the right to extend that maturity date for an additional 60 days subject to payment of an extension fee of 3.0% of the outstanding principal balance of the Loans as of February 16, 2010. In no event will the Maturity Date be extended beyond April 17, 2010; however, any extension of the Maturity Date may only be exercised if there is no Event of Default other than the occurrence of the Maturity Date in (iii), and Redwood Purchasers will have been announced as the winner bidder. Closing Date: To be determined Purpose/Use of Proceeds: Proceeds of the Loans under the DIP Facility will be used solely in accordance with the Borrowers' cash flow projections showing anticipated cash receipts and disbursements on a weekly basis for the periods required under the loan documentation and in form and substance satisfactory to the DIP Lender, which will include these payments: * interest, fees, and expenses with respect to the DIP Facility to the DIP Lender in accordance with the DIP Facility loan documentation; * funding of the Borrowers' postpetition operating expenses incurred in the ordinary course of business; * funding of the postpetition operating expenses of the affiliated Not-For-Profit Organizations in the ordinary course of business, pursuant to a Working Capital Loan between the respective NFP and a Debtor Landowner; and * certain other costs and expenses of administration of the Debtors' Chapter 11 cases. Rate: The Loans will bear interest at the Applicable Margin, plus the LIBOR Rate, payable at the end of the relevant interest period. "LIBOR Rate" means the higher of (i) 2.5% or (ii) the then current LIBOR Rate for interest periods of one month. "Applicable Margin" means 7.5% per annum. Interest will be calculated on the basis of the actual number of days elapsed in a 360-day year. Default Rate: Effective immediately upon the occurrence and during the continuance of an Event of Default, Loans will bear interest at an additional 3.0% per annum. Unused Line Fee: From and after the Closing Date, a non-refundable unused commitment fee of 0.5% per annum will accrue as a percentage of the daily average unused portion of the DIP Facility, payable monthly in arrears and on the Maturity Date. Upfront Commitment Fee: On the Closing Date, the Borrowers will pay a fee of 3.0% of the DIP Facility amount. Exit Fee: On the Maturity Date, the Borrowers will pay a fee of 2.0% of the DIP Facility amount. Optional Commitment Reductions: The Borrowers may permanently and irrevocably reduce the commitments under the DIP Facility upon at least five business days' notice; provided that each reduction will be in an amount of $250,000 or multiples of $250,000 in excess thereof and any mandatory prepayment. Mandatory Repayments: Mandatory repayments of the Loans under the DIP Facility will be required in an amount equal to (i) 100% of the net sale proceeds from non-ordinary course asset sales, including a sale of substantially all of the Debtors' assets; (ii) 100% of extraordinary receipt proceeds; (iii) 100% of the proceeds of the incurrence of any indebtedness other than in the ordinary course of business; and (iv) 100% of insurance and condemnation proceeds, in each case received by the Borrowers. Mandatory repayments will result in a permanent reduction of the DIP Facility. Voluntary Prepayments: Upon three business days' written notice and not more frequently than once per calendar week, permitted in whole or in part, with prior written notice but without premium or penalty, subject to limitations as to minimum amounts of prepayments and customary indemnification. Those repayments will only be in increments of $250,000. Repayment at Maturity: The DIP Facility will be repaid in full at the Maturity Date. If the DIP Facility is not repaid on the Maturity Date with the Collateral or other proceeds, the DIP Lender will have the option to seek to surcharge the cash and cash equivalents of ERC in the amount of the unpaid DIP Facility. The DIP Lender will have the right to credit bid the amount outstanding on the DIP Facility against the purchase price to be paid by the Redwood Purchasers of the sale transaction, provided that the credit bid amount will equal 110% of the amount outstanding under the DIP Facility as of the date of the Auction. Priority: Subject to the Carve Out, all amounts owing by the Borrowers under the DIP Facility will be joint and several as to each Debtor and: (i) will be entitled to superpriority claim status pursuant to Section 364(c)(1) of the Bankruptcy Code with priority over any or all administrative expense claims, and (ii) will be secured by a perfected security interest pursuant to Sections 364(c)(2), 364(c)(3) and 364(d) with priority over the security interest securing the Borrowers' existing senior secured credit facilities pursuant to Section 3645(d)(1) of the Bankruptcy Code in all of the assets of the Borrowers or the "Collateral." The Collateral does not include cash and cash equivalents held by ERC in an approximate amount equal to $35,700,000 or the "Separate Funds". The relative priority of all amounts owed under the DIP Facility will be subject only to a carve-out for (i) the Debtors' professional fees incurred in the Chapter 11 Cases in an amount acceptable to the DIP Lender, (ii) other professional fees incurred in the Chapter 11 Cases in an amount acceptable to the DIP Lender, (iii) the payment of fees pursuant to 28 U.S.C. Section 1930, and (iv) costs and administrative expenses permitted to be incurred by any chapter 7 trustee under Section 726(b) of the Bankruptcy Code pursuant to an order of the Bankruptcy Court following any conversion of the Chapter 11 Cases pursuant to Section 1112 of the Bankruptcy Code in an amount not to exceed $100,000. No portion of the Carve-Out, any cash collateral or proceeds of the DIP Facility may be used for the payment of the fees and expenses of any person incurred challenging, or in relation to the challenge of the DIP Lender liens or in any way that is materially adverse to the DIP Lender's rights under the DIP Facility. Separate Cash Account: The proceeds of the DIP Facility and all other cash from operation of the Borrowers, other than the Separate Funds will be maintained in a segregated account over which the DIP Lender will have a Lien. The Borrowers will also enter into an account control agreement with respect to that account. Collateral: All amounts owing by the Borrowers under the DIP Facility will be secured by a first priority perfected security interest in and lien on all assets of the Borrowers or the "Collateral," subject only to the Carve-Out. Collateral will include all initial entrance deposits or IEDs. Adequate Protection: The lenders under the Existing Facilities will consent or the Bankruptcy Court will find otherwise pursuant to the DIP Orders that the Prepetition Lenders are adequately protected by: (i) the preservation of the cash and cash equivalents held by ERC as of the Closing Date and/or (ii) the preservation of the enterprise value of the Borrowers, jointly and severally. Conditions Precedent to Closing: Customary conditions to closing, which include that (i) All fees and expenses required to be paid to the DIP Lender on or before the Closing Date will been paid, and the Borrowers will fund a $250,000 deposit to cover those fees and expenses; (ii) All motions to be filed to the Bankruptcy Court in connection with the DIP Facility and the approval are in the form and substance reasonably satisfactory to the DIP Lender; (iii) The DIP Lender will have received approval of the Budget; and (iv) Approval of bidding procedures for the asset sale to the Redwood Purchasers. Events of Default: Customary events of default, which include failure to make payments when due; non-compliance of covenants; and dismissal of the Chapter 11 Cases or conversion to Chapter 7 cases, among others. Indemnification: The Borrowers will jointly and severally provide customary indemnifications for the DIP Lender and its representatives. Expenses: The Borrowers will pay all customary and reasonable costs and expenses of the DIP Lender and, and upon Bankruptcy Court approval, will fund a deposit of $250,000 to cover actual costs and expenses. A full-text copy of the ERC Revolver Facility Term Sheet is available for free at: http://bankrupt.com/misc/ERC_DIPFacilityTermSheet.pdf ERC Funding, as DIP Lender, is represented by Michael J. Baader, Esq., of Venable LLP, with business address located at 750 E. Pratt Street, Suite 900, in Baltimore, Maryland 21202. By this motion, the Debtors seek the Court's permission to obtain financing from ERC Funding on a senior secured superpriority basis and accordingly, grant adequate protection to their Prepetition Secured Lenders. Mr. Slusher maintains that the proposed adequate protection is fair and reasonable and will protect the Prepetition Senior Lenders from diminution in value of their interests in the Collateral. "Approval of the DIP Facility will provide the Debtors with immediate and ongoing access to funds to pay its current and ongoing operating expenses, including postpetition wages and salaries and vendor costs," Mr. Slusher says. "Cash collateral is insufficient to fund those expenditures." The Debtors ask the Court to set an expedited hearing on their request no later than October 29, 2009, to allow them access of up to $5,000,000 of the loan proceeds under the DIP Facility, on an interim basis. The Debtors remind the Court that the Prepetition Lenders have not agreed to the use of the cash collateral for more than two weeks after the Petition Date. Court Sets Interim Hearing; PNC Bank Reacts to Hearing Request Judge Jernigan has scheduled an interim hearing on the DIP Motion on October 29, 2009, at 9:30 a.m. Before the Court entered the hearing schedule, PNC Bank, National Association, filed a response on the expedited hearing request. PNC Bank said it does not object to the expedited treatment of the DIP Motion on an interim basis. But PNC Bank contended that the Court should anticipate numerous objections to the proposed financing facility, which contemplates that the proposed financing would be cross-collateralized between projects, and that the proposed financing would also prime existing lenders. According to PNC, a lengthy evidentiary hearing on the relief sought seems necessary. PNC Bank is the administrative agent bank for secured lenders that provided construction financing for four of the Debtors' projects -- Houston Campus, LP, Concord Campus, LP, Kansas Campus, LLC, and Ashburn Campus, LLC. PNC Bank is also the Senior Secured Project Lender that has provided construction financing for the Novi Campus, LLC facility. Collectively, about $300 million is owed on account of the construction financing for the five facilities. Moreover, PNC has loaned additional money to the Debtors as a lender in the prepetition corporate revolving loan facility. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ERICKSON RETIREMENT: U.S. Trustee Wants Health-Care Status Hearing ------------------------------------------------------------------ Erickson Retirement Communities LLC and its units currently manage and have varying interests in 20 continuing care retirement communities in 11 states. The CCRCs, which are in various stages of completion or development, are large campus style communities offering seniors a full life cycle of retirement services from independent living though skilled nursing. On behalf of William T. Neary, as United States Trustee for Region 6, Nancy Sue Resnick, Esq., in Dallas, Texas, notes that the definition of "health care business" under Section 101(27)(A) of the Bankruptcy Code is sufficiently broad to determine whether the Debtors' operations falls within the definition of "health care business." Moreover, Section 333 of the Bankruptcy Code provides that if the Debtor under Chapter 11 is a health care business, the Court will order, no later than 30 days after the Petition Date, the appointment of an ombudsman to monitor the quality of patient care and to represent the interests of the patients of the health care business unless the Court finds that the appointment is not necessary. Thus, the U.S. Trustee asks the Court to schedule a hearing to: (i) assess the nature of the Debtors' business under Section 101(27)(A) and (B); and (ii) determine the application of Section 333 to warrant appointment of a Patient Care Ombudsman to insure appropriate protections for the residents of the continuing care retirement communities. Ms. Resnick tells the Court that the U.S. Trustee has conferred with the Debtors' counsel regarding the appointment of a Patient Care Ombudsman. She notes that the Debtors believe that their business is not in the health care business, or if the Court determines otherwise, that the facts do not warrant the appointment of an ombudsman. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ERICKSON RETIREMENT: To Continue Intercompany Transactions ---------------------------------------------------------- In the ordinary course of business, funds may flow back and forth from Erickson Retirement Communities, LLC's Cash Management System and an individual Debtor Landowner's Cash Management System to cover certain operating costs, like payments to subcontractors or other vendors. These intercompany transfers are made between ERC, Erickson Construction LLC and individual Landowners on an as-needed basis. No intercompany transfers occur between individual Landowners. At the Debtors' behest, the Court permits the Debtors, on an interim basis, to continue to make intercompany transfers among their existing bank accounts in the ordinary course of their business through the Cash Management System. The Debtors told the Court that the Cash Management System permits them to centrally manage and track the collection and transfer of funds, including intercompany transfers, which reduces administrative burden and expense and maximizes interest income. The Court has yet to schedule a final hearing with respect to the Debtors' Motion to Continue Intercompany Transactions. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) EVEREST HOLDINGS: Wants New $30MM Loan From Hypo Real Estate ------------------------------------------------------------ Paula Moore at Denver Business Journal reports that 7677 East Berry Avenue Associates, L.P., has sought the court's permission to secure a new, $30 million loan from the project's construction lender to finance continuing operations. A hearing was set on Monday on the Company's request, says Business Journal Citing lawyers at the hearing, Business Journal states that some holders of mechanic's and other liens against 7677 East Berry's The Landmark have concerns about the new loan. The lawyers said that the creditors fear that if the loan from Hypo Real Estate Capital Corp. goes into default, there wouldn't be sufficient protection for lienholders in the loan document and the lienholders won't get what's owed them, Business Journal reports. 7677 East Berry said in court documents that the loan would be secured by "substantially all of the debtor's assets." According to Business Journal, Judge Romero asked for final settlement agreement by noon of October 28, and said that the next day would be reserved for dealing with open issues. 7677 East Berry is also asking the court's approval to use cash collateral to fund operations, Business Journal relates. Nevada, Texas-based Everest Holdings, LLC, operates a real estate business. It filed for Chapter 11 bankruptcy protection on August 30, 2009 (Bankr. D. Colo. Case No. 09-27906). Its affiliates, EDC Denver I, LLC, and 7677 East Berry Avenue Associates, L.P., also filed for bankruptcy. Daniel J. Garfield, Esq., and Michael J. Pankow, Esq., who both have offices in Denver, Colorado, assist Everest Holdings in its restructuring efforts. Everest Holdings listed $100,000,001 to $500,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. EXACT SCIENCES: Has Technology License Agreement With Hologic ------------------------------------------------------------- Exact Sciences Corporation reports that on October 14, 2009, entered into a technology license agreement with Hologic, Inc. and Third Wave Technologies, Inc., a wholly owned subsidiary of Hologic. Hologic granted the Company an exclusive, worldwide license within the field of human stool based colorectal cancer and pre-cancer detection or identification with regard to certain Hologic patents and improvements, including Hologic's Invader detection chemistry. The Invader chemistry, which is being commercialized by Third Wave Technologies, is a highly accurate, easy-to-use and rapid molecular detection platform that is easily combined with polymerase chain reaction, or PCR. Under the License Agreement, the Company is obligated to make commercially reasonable efforts to bring products covered by the licenses to market. Under the License Agreement, the Company is required to make certain up-front, milestone and royalty payments to Hologic. The License Agreement requires the Company to pay Hologic specified royalties based on sales of products or services covered by the licensed intellectual property. At June 30, 2009, Exact Sciences had $28,942,000 in total assets against total current liabilities of $7,355,000, third party royalty obligation, less current portion of $965,000, and deferred revenue of $13,654,000, resulting in stockholders' equity of $6,968,000. At December 31, 2008, the Company had $5,898,000 in total assets against total current liabilities of $5,031,000, third party royalty obligation, less current portion of $1,950,000, and deferred revenue of $1,350,000, resulting in stockholders' deficit of $2,433,000. The audit opinion with respect to the company's consolidated financial statements for the year ended December 31, 2007, issued by its independent registered public accounting firm included an explanatory paragraph to emphasize that there is substantial doubt about the company's ability to continue as a going concern. On March 6, 2009, EXACT Sciences Corporation received a letter from The NASDAQ Stock Market for non-compliance of NASDAQ rules. If the Company does not regain compliance with the Rule by June 4, 2009, NASDAQ will provide the Company with written notification that the Company's common stock will be delisted from the NASDAQ Capital Market. In its quarterly report for the period ended June 30, 2009, the Company said, "We expect that cash, cash equivalents and marketable securities on hand at June 30, 2009 will be sufficient to fund our current operations for at least the next twelve months, based on current operating plans. This projection is based on our currently anticipated cost structure and operating assumptions and does not provide for the full funding of our current strategic plan, the centerpiece of which is the commercialization of our sDNA technology through completion of the development an FDA-approved in vitro diagnostic test for sDNA colorectal pre-cancer and cancer screening. We do not expect that product royalty payments or milestone payments from LabCorp will materially supplement our liquidity position in the next twelve months, if at all. "Since we have no current sources of material ongoing revenue, we believe that we will need to raise additional capital to complete our strategic plan. If we are unable to obtain sufficient additional funds to enable us to fund our operations through the completion of such plan, our results of operations and financial condition would be materially adversely affected and we may be required to delay the implementation of our plan and otherwise scale back operations. Even if we successfully raise sufficient funds to continue the implementation of our strategic plan, we cannot assure you that our business will ever generate sufficient cash flow from operations to become profitable." On June 11, 2009, the Company completed a private placement transaction pursuant to which it sold 4,315,792 shares of common stock at a per share price of $1.90 for net proceeds of $8.1 million after issuance costs. As of June 30, 2009, the Company had approximately $12.3 million in unrestricted cash and cash equivalents, $0.6 million in restricted cash, which has been pledged as collateral for an outstanding letter of credit in connection with the lease for its Marlborough, Massachusetts facility, and approximately $15.5 million in investments in marketable securities. All of the Company's investments in marketable securities are comprised of fixed income investments and all are deemed available-for-sale. About EXACT Sciences EXACT Sciences Corporation was incorporated in February 1995. The company has developed proprietary DNA-based technologies for use in the detection of cancer. The company has selected colorectal cancer as the first application of its technologies. The company has licensed certain of its technologies, including improvements to such technologies, on an exclusive basis through December 2010 to Laboratory Corporation of America(R) Holdings for use in a commercial testing service for the detection of colorectal cancer developed by LabCorp. The company has devoted the majority of its efforts to date on research and development and commercialization support of its colorectal cancer detection technologies. EXTENDED STAY: Files Bankruptcy Rule 2015.3 Reports --------------------------------------------------- Extended Stay Inc. and its affiliated debtors filed in Court a report on the value, operations and profitability of companies in which they hold a substantial or controlling interest as required by Rule 2015.3 of the Federal Rules of Bankruptcy Procedure. The report shows that the Debtors' estates hold a substantial or controlling interest in these companies: Company Name Interest of the Estate ------------ ---------------------- ESA International Inc. 100% ESA West Inc. 100% ESA Spartanburg LLC 100% ESA 2005 Holdings L.L.C. 100% ESA TXGP L.L.C. 100% ESA P Portfolio TXNC GP L.L.C. 100% ESH/MSTX GP L.L.C. 100% ESH/TXGP L.L.C. 100% ESH/TN Member Inc. 100% ES-NAV LLC 100% HVI(2) LLC 100% BHAC Capital IV LLC Ownership of A-3 and B 12 Series Units The Debtors also filed balance sheets and other financial documents for the companies, copies of which are available for free at http://bankrupt.com/misc/ESI_Rule2015.3ReportsJOct13.pdf 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). EXTENDED STAY: Lichtenstein Appeals Court Decision on BofA Suit --------------------------------------------------------------- Lightstone Group LLC Chairman David Lichtenstein appealed to the U.S. District Court for the Southern District of New York a decision of the Bankruptcy Court overseeing the Chapter 11 cases of Extended Stay Inc. and its affiliated debtors. Mr. Lichtenstein made the move after Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York ordered to remand to the New York Supreme Court a lawsuit filed by Bank of America N.A. and six other entities against him and Lightstone. Judge Peck ordered for a remand of the lawsuit after determining that it is "not a core proceeding." In a 20-page document issued on October 7, 2009, Judge Peck said the lawsuit is a "standard contract case between two non-debtors that arises under New York law" and not under the bankruptcy laws and thus, held that the case does not present bankruptcy issues. "It is clear that [BofA's] claim in the state law action is entirely independent of any claims [BofA] may have against the Debtors," the Bankruptcy Court opined. Judge Peck also held that the Debtors' motion to intervene in the lawsuit does not need to be considered in light of his ruling to transfer the lawsuit. BofA, et al., sued Mr. Lichtenstein and his company after the defendants, as guarantors, allegedly did not pay $100 million to the plaintiffs pursuant to certain guaranty agreements. The lawsuit was initially filed in the Supreme Court but was eventually transferred to the Bankruptcy Court following the Debtors' Chapter 11 filing. BofA, et al., however, asked Judge Peck to move the case to the Supreme Court, arguing that it is not related to the Debtors' bankruptcy proceedings. 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). EXTENDED STAY: Panel Gets Nod to Hire BMC as Info Agent ------------------------------------------------------- The Official Committee of Unsecured Creditors in Extended Stay Inc.'s cases obtained the Court's authority to hire BMC Group Inc. as its information agent. The Creditors Committee wants to tap the services of BMC Group in order to comply with its obligations, which include providing creditors access to information, and soliciting and receiving comments from creditors. As information agent, BMC Group will be tasked to establish and maintain an Internet-accessed Web site that provides a link or other forms of access to the Web site maintained by the Debtors' claims agent, and information, including highlights of significant events in the Debtors' bankruptcy cases. The firm will also be tasked to distribute updates regarding the Debtors' cases for creditors that have registered for such service on the Creditors Committee's Web site. BMC Group will be paid for its services with respect to case management at these hourly rates: Data Entry/Administrative Support $25 to $45 Analysts $80 to $110 Consultants $110 to $140 Project Managers $175 to $225 Principal/Director $250 A copy of the list detailing BMC Group's fees and other charges is available for free at http://bankrupt.com/misc/ESIBMCFees.pdf Tinamarie Feil, president for Client Services at BMC, assures the Court that her firm does not have interests adverse to the interests of the Debtors' estates, and that her firm is a "disinterested person" under section 101(14) of the Bankruptcy Code. 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). FAIRPOINT COMMS: Wants Dec. 15 Extension for Schedules Filing ------------------------------------------------------------- Pursuant to Section 521 of the Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure, FairPoint Communications, Inc., and its debtor affiliates are required to file their (i) schedules of assets and liabilities, (ii) schedules of executory contracts and unexpired leases, and (iii) statements of financial affairs within 15 days after the Petition Date. Pursuant to Bankruptcy Rule 1007(a)(3), the Debtors are required to file a list of all equity security holders within 15 days after the Petition Date. Pursuant to Bankruptcy Rule 2002(d), unless otherwise ordered by the Court, the Debtors are also required to give notice of the commencement of their Chapter 11 cases to all equity security holders. By this motion, the Debtors ask the Court to: (i) extend the 15-day period to file the Schedules through December 25, 2009, without prejudice to the Debtors' right to seek additional time should it become necessary; and (ii) waive the requirements to file the Equity List and provide the Notice of Commencement to all equity security holders. Luc A. Despins, Esq., at Paul, Hastings, Janofsky & Walker LLP, in New York, relates that due to the complexity and diversity of their operations and the burdens occasioned by preparing for their Chapter 11 cases, the Debtors anticipate that they will be unable to complete their Schedules in the mere 15 days provided under Bankruptcy Rule 1007(c). In view of the amount of work entailed in completing the Schedules and the competing demands on their employees and professionals to assist in efforts to stabilize business operations during the initial postpetition period, the Debtors aver that they will not be able to properly and accurately complete the Schedules within the 15-day period following the Petition Date. About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry leading provider of communications services to communities across the country. FairPoint 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 symbols FRP and FRP.BC. Fairpoint and its affiliates filed for Chapter 11 on October 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, Fairpoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FAIRPOINT COMMS: Bankruptcy Triggers Default of Debt Obligations ---------------------------------------------------------------- The filing of Chapter 11 cases of FairPoint Communications Inc. and its affiliate constitutes an event of default under these debt instruments through which the FairPoint are parties to: 1. The Indenture, dated as of July 29, 2009, by and between FairPoint and U.S. Bank National Association, as trustee, relating to the New Notes, the aggregate principal amount of outstanding of which as of October 25, 2009, was approximately $476.0 million. 2. The Credit Facility dated as of March 31, 2008, among FairPoint, Northern New England Spinco Inc. and certain lenders. The aggregate principal amount of loans outstanding under the Credit Facility as of October 25, 2009, was approximately $2.0 billion. 3. The ISDA Master Agreement with Wachovia Bank, N.A., dated as of December 12, 2000, as amended and restated as of February 1, 2008, and the ISDA Master Agreement with Morgan Stanley Capital Services Inc., dated as of February 1, 2005. FairPoint estimates that the fair market value of the Swaps under Statement of Financial Accounting Standards No. 157 as of October 25, 2009, was approximately $88.3 million. Under the terms of the Indenture, as a result of the filing of the Chapter 11 Cases, all of the outstanding New Notes became due and payable without further action or notice. Under the terms of the Credit Facility, upon the filing of the Chapter 11 Cases, all commitments under the Credit Facility were terminated and all loans, with accrued interest, and all other amounts outstanding under the Credit Facility became immediately due and payable. In addition, as a result of the filing of the Chapter 11 Cases, an early termination event occurred under the Swaps. FairPoint maintains that any efforts to enforce payment under these obligations are stayed as a result of the filing of their Chapter 11 Cases. About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry leading provider of communications services to communities across the country. FairPoint 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 symbols FRP and FRP.BC. Fairpoint and its affiliates filed for Chapter 11 on October 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, Fairpoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FAIRPOINT COMMS: Fin'l Projections Provided to Noteholders ---------------------------------------------------------- FairPoint Communications Inc. related in a regulatory filing with the U.S. Securities and Exchange Commission that subject to the terms of confidentiality agreements, it furnished noteholders certain projected financial information in connection with discussions among the Company, the Holders and their advisors regarding a Restructuring Plan for the Company's business. Accoding to the Projections, the Debtors would have net revenue of $1.18 billion, for the year 2009, $1.16 billion for 2010, and $1.21 billion for 2011. EBITDA from operations would be $245.2 million in 2009, $302.65 for 2010 and $413.7 million in 2011. The company expects restructuring costs of $20.9 million in 2009 and $28.38 million in 2010. FairPoint CFO Alfred Giammarino reported that the Projections were prepared under the direction of the Company's management in connection with its negotiations with its creditors. The Projections reflect numerous assumptions, including, among other things, with respect to (i) trends in access lines, high-speed data subscribers and other customer metrics, (ii) the success of the next generation data network build-out in northern New England and the subsequent introduction of new IP-based services, (iii) the elimination of integration and cutover related costs incurred in 2009 and (iv) the reduction in certain operating expenses, including certain expenses covered under collective bargaining agreements. In addition, the Projections reflect various other assumptions, including, among other things, regarding (i) the Company's anticipated future performance after the consummation of the Restructuring Plan, (ii) general business and economic conditions, (iii) competitive forces and (iv) the actions of regulatory agencies and governmental bodies. Many of these assumptions are beyond the Company's control and some or all of the assumptions may not materialize, Mr. Giammarino maintained. Unanticipated events and circumstances with regard to any of the above assumptions or other matters may also affect the Company's actual financial results in the future, he added. "The Projections are based upon an analysis of the data available to the Company at the time of the Projections and are not guarantees of future performance," Mr. Giammarino says. The Company related that it does not, as a matter of course, make public projections of its anticipated results of operations, financial position or cash flows. Accordingly, the Company disclaims any obligation to furnish updated projections to reflect any changed circumstances, including actual industry performance or the general economic or business climate or other matters affecting the Projections that differ from those upon which the Projections have been based. A copy of the Projected Financial Information is available for free at http://ResearchArchives.com/t/s?479b About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry leading provider of communications services to communities across the country. FairPoint 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 symbols FRP and FRP.BC. Fairpoint and its affiliates filed for Chapter 11 on October 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, Fairpoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FAIRPOINT COMMS: Reminds Parties of Automatic Stay -------------------------------------------------- As a result of the commencement of Fairpoint Communications Inc.'s Chapter 11 cases and by operation of law pursuant to Section 362 of the Bankruptcy Code, the automatic stay enjoins all entities from, among other things: (i) commencing or continuing any judicial, administrative or other action or proceeding against the Debtors that was or could have been initiated before the Petition Date; (ii) recovering a claim against the Debtors that arose before the Petition Date; (iii) enforcing a judgment against the Debtors or any of their estate property that was obtained before the Petition Date; or (d) taking any action to collect, assess, or recover a claim against the Debtors that arose before the Petition Date, Luc A. Despins, Esq., at Paul, Hastings, Janofsky & Walker LLP, in New York, relates. Similarly, Section 365 of the Bankruptcy Code prohibits any party to an executory contract or unexpired lease with the Debtors from, among other things, modifying or terminating a contract or lease, or any right or obligation under a contract or lease, at any time after the Petition Date solely because of a provision in that contract or lease that is conditioned on (i) the insolvency or financial condition of the Debtors at any time before the closing of the Debtors' Chapter 11 cases, (ii) the commencement of the Debtors' Chapter 11 cases, or (iii) the appointment of a trustee in the Debtors' Chapter 11 cases, Mr. Despins maintains. Accordingly, any action by a third party to modify or terminate an executory contract or unexpired lease or enforce their terms against the Debtors is prohibited absent Court approval. Thus, a third party must continue to perform under an executory contract or unexpired lease until it is assumed or rejected. Furthermore, Section 525 of the Bankruptcy Code provides that "a governmental unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to [or] discriminate with respect to that grant against . . . a debtor," Mr. Despins asserts. In this regard, in order to obtain some "breathing space" that is essential to their ability to successfully resolve their liabilities and to be relieved of the financial pressures that drove them into bankruptcy, the Debtors ask the Court: (a) to enforce the stay imposed under Section 362; (b) to enforce the anti-termination and anti-modification provisions of Section 365(e)(1); and (c) to affirm the protections against discriminatory treatment contained in Section 525. About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry leading provider of communications services to communities across the country. FairPoint 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 symbols FRP and FRP.BC. Fairpoint and its affiliates filed for Chapter 11 on October 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, Fairpoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FAIRPOINT COMMS: Restructuring Cues Moody's 'D' Rating ------------------------------------------------------ Moody's Investors Service downgraded FairPoint Communications, Inc.'s probability of default rating to D from Ca following the company's announcement that it had reached an agreement on a comprehensive restructuring plan with the requisite senior secured lenders and has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The rating outlook was changed from negative to stable. Moody's plans to withdraw all ratings for the company over the near-term consistent with its business practice for companies operating under the purview of the bankruptcy courts wherein information flow typically becomes much more limited. This summarizes the rating actions taken by Moody's: Downgrades: Issuer: FairPoint Communications, Inc. -- Probability of Default Rating, Downgraded to D from Ca -- Corporate Family Rating, Downgraded to Ca from Caa3 -- Senior Secured Bank Credit Facility, Downgraded to a range of Caa3, LGD3, 38% from Caa2, LGD2, 27% -- Senior Unsecured Regular Bond/Debenture, Downgraded to LGD6, 100% from LGD5, 77% Outlook Actions: Issuer: FairPoint Communications, Inc. -- Outlook, Changed To Stable From Negative Moody's most recent rating action for FairPoint was on October 1, 2009. At that time, Moody's respositioned FairPoint's Probability of Default Rating to Ca/LD from Ca to reflect the limited default that occurred following the company not paying scheduled principal and interest on its debt obligations. Fairpoint, headquartered in Charlotte, NC, is the eight largest wireline telecommunications company in the US, serving about 1.4 million access lines in primarily rural areas and small- and medium-sized cities. FINLAY ENTERPRISES: Noteholders Oppose Creditors' Discovery Bid --------------------------------------------------------------- Law360 reports that Harbinger Capital Partners Special Situations Fund LP, a senior noteholder of jeweler Finlay Enterprises Inc., and HSBC Bank USA National, trustee for a group of noteholders, have objected to a motion by Finlay's unsecured creditors to examine Harbinger, HSBC, Finlay and others in connection with a prebankruptcy debt restructuring. Finlay Enterprises, Inc. (OTC Bulletin Board: FNLY) through its wholly owned subsidiary, Finlay Fine Jewelry Corporation, is a retailer of fine jewelry operating luxury stand-alone specialty jewelry stores and licensed fine jewelry departments in department stores throughout the United States and achieved sales of $754.3 million in fiscal 2008. The number of locations at the end of the second quarter ended August 1, 2009, totaled 182, including 67 Bailey Banks & Biddle, 34 Carlyle and four Congress specialty jewelry stores and 77 licensed departments with The Bon Ton. The Company and seven affiliates filed for Chapter 11 on August 5, 2009 (Bankr. S. D. N.Y. Case No. 09-14873). Weil, Gotshal & Manges LLP, serves as bankruptcy counsel. Alvarez & Marsal North America, LLC, is engaged as restructuring advisor in the Chapter 11 case, and the firm's David Coles is appointed as chief restructuring officer. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. Judge James Peck presides over the case. In its bankruptcy petition, Finlay Enterprises disclosed assets of $331,824,000 against debts of $385,476,000 as of July 4, 2009. As of the petition date, Finlay owes $38 million outstanding under a first lien credit agreement, $24.7 million under second lien notes, $176.6 million outstanding under third lien notes (in addition to $17.5 million to secured vendors), and $40.6 million under remaining unsecured obligations under the senior notes. On September 25, 2009, the Bankruptcy Court appointed Gordon Brothers Retail Partners, LLC, as agent for Finlay Enterprises and its affiliates and subsidiaries to conduct "store closing" or similar sales of merchandise located at all of the Company's retail store locations and the Company's two distribution centers. The transaction is expected to be completed by February 28, 2010. Gordon Brothers bid 85.75 cents on the dollar for inventory valued at an estimated $116 million for closings sales of 49 Finlay stores. Gordon had a prepetition contract to conduct store closings sales for 55 other stores. FLEXTRONICS INT'L: Posts Second Quarter Results ----------------------------------------------- Flextronics disclosed results for its second quarter ended October 2, 2009: (US$ in millions, except EPS) Three Month Periods Ended ------------------------- October 2, July 3, 2009 2009 ---- ---- Net sales $5,832 $5,783 GAAP operating income $123 $10 Adjusted operating income $149 $90 GAAP net income (loss) $20 $(154) Adjusted net income $104 $63 GAAP EPS $0.02 $(0.19) Adjusted EPS $0.13 $0.08 Second Quarter Results Net sales for the second quarter ended October 2, 2009, were $5.8 billion, an increase of 1%, compared to net sales for the first quarter ended July 3, 2009. Adjusted operating income for the second quarter was $149 million, an increase of 66%, compared to the first quarter adjusted operating income of $90 million. Adjusted operating margin for the second quarter was 2.6% compared to 1.6% for the first quarter. Adjusted net income for the second quarter was $104 million and adjusted EPS was $0.13 compared to $63 million and $0.08, respectively, for the prior quarter. Cash and cash equivalents totaled $2.0 billion at October 2, 2009, an increase of $289 million from the prior quarter end. During the second quarter, Flextronics generated $312 million of operating cash flow and $270 million of free cash flow (defined as net cash provided by operating activities, less purchases of property & equipment, net of dispositions). Net debt, which is total debt less total cash, was further reduced in the current quarter by $483 million to $587 million. Net debt has decreased by approximately $1.1 billion from one year ago. Adjusted ROIC improved to 22.2% for the quarter. "During the second quarter, Flextronics posted solid financial progress across all aspects of our business, reflecting our efforts to re-size our business to adapt to current market conditions. We are very pleased with the healthy expansion of our adjusted gross margin, which rose by 90 basis points sequentially," said Paul Read, chief financial officer of Flextronics. "In addition, we achieved a cash conversion cycle of 15 days, generated free cash flow of $270 million and our significantly reduced net debt position of $587 million is comparable with the period prior to our Solectron acquisition." In connection with its previously announced restructuring plans, during the second quarter, Flextronics recognized $13 million of pretax restructuring charges comprised of $9 million of cash charges primarily related to employee severance costs and $4 million of non-cash asset impairment charges. The Company remains confident that it is on track to realize the expected annualized savings between $230 million and $260 million upon the completion of its restructuring activities, which will be completed by the end of Fiscal 2010. During the second quarter the Company received proceeds of $255 million from the sale of a non-core investment and note receivable and recorded non-cash charges to impair certain other non-core investments and notes receivable amounting to $92 million. Also during the quarter, the Company recognized approximately $60 million of non-cash tax benefits as a result of settlements in various tax jurisdictions. "The improvement of our financial performance this quarter was a real positive and we are seeing signs of strengthening in the economy and a general improvement in business conditions," said Mike McNamara, chief executive officer, Flextronics. Guidance For the third quarter ending December 31, 2009, revenue is expected to be in the range of $6.0 billion to $6.4 billion and adjusted EPS is expected to be in the range of $0.14 to $0.16 per share. GAAP earnings per share are expected to be lower than the guidance provided herein by approximately $0.07 per diluted share for estimated restructuring activities, quarterly intangible amortization, stock-based compensation expense and non-cash interest expense. About Flextronics Headquartered in Singapore, Flextronics International Ltd. (NasdaqGS: FLEX; Singapore Reg. No. 199002645H) -- http://www.flextronics.com/-- is an Electronics Manufacturing Services provider focused on delivering design, engineering and manufacturing services to automotive, computing, consumer digital, industrial, infrastructure, medical and mobile OEMs. Flextronics helps customers design, build, ship, and service electronics products through a network of facilities in over 30 countries on four continents. * * * Flextronics International Ltd. continues to carry Moody's "Ba1" probability of default and long-term corporate family ratings with a negative outlook. The company also carries Standard & Poor's "BB+" long-term local and foreign issuer credit ratings with a negative outlook. Fitch Ratings in September affirmed an Issuer Default Rating at 'BB+' and hiked the outlook to stable for Flextronics. FONIX CORP: Issues Shares to CJK for Payment of License Fees ------------------------------------------------------------ Fonix Corporation filed a registration statement with the Securities and Exchange Commission to register 6,000,000 shares of Class A Common Stock, $0.0001 par value per share. The Proposed Maximum Aggregate Offering Price is $120,000. The Registration Statement also covers an indeterminate number of Common Shares that may be issuable by reason of stock splits, stock dividends or similar transactions in accordance with Rule 416 under the Securities Act of 1933, as amended. According to the regulatory filing, the shares are to be granted to a consultant to the Company, pursuant to a Share Payment Agreement dated October 9, 2009, between the CJK Dictionary Institute, Inc., in Saitama, Japan, and Fonix Speech Inc. CJK and Fonix entered into a Licensing Agreement dated October 16, 2007, as amended by amendments dated April 18, 2008 and June 19, 2008, pursuant to which CJK granted Fonix a world-wide, non- exclusive, perpetual right to incorporate into Fonix products a Chinese Lexical Database, a Japanese Lexical Database, and a Korean Lexical Database. Pursuant to the License, CJK was entitled to a licensing fee after delivery of the CJK Databases. During November 2007, CJK delivered the CJK Databases to Fonix. CJK has agreed to accept shares of Fonix Common Stock as payment of the Fee. Fonix agrees to pay the Fee earned by CJK in November 2007 by issuing to CJK shares of Class A common stock of Fonix Corp. having a value of $85,000 as of the date of issuance, with the number of Shares to be issued being determined by dividing $85,000 by the per share market price of Fonix's common stock on the day immediately prior to issuance. In the event that CJK observes the conditions of Section 2 of the Agreement, and sale of the Shares does not result in realization of $85,000 in sales proceeds, Fonix agrees to issue additional shares to CJK until the full $85,000 has been realized from the sale of Fonix shares. However, in the event CJK observes the conditions of Section 2 of the Agreement, and the sale of the Shares results in realization of more than $85,000 in sales proceeds, CJK agrees to return to Fonix: (a) all sales proceeds in excess of $85,000; and (b) all unsold Shares. Section 2 provides restriction on the sale of the Shares. CJK agrees that it is will not allow its agent to sell more than $1,500 worth of Shares on any given day to maintain a market for Fonix stock. CJK agrees that if it breaches this provision, it will forfeit all rights to, and shall return to Fonix, all of the Shares that are not sold as of the date of the breach. Fonix Corporation said in an August regulatory filing its cash resources, limited to collections from customers, sales of equity and debt securities and loans, have not been sufficient to cover operating expenses. As a result, some payments to vendors have been delayed. As of June 30, 2009, the Company had $3,994,000 in total assets and $50,480,000 in total liabilities, all current, resulting in $46,486,000 in stockholders' deficit. As of June 30, 2009, the Company had an accumulated deficit of $288,644,000; negative working capital of $47,216,000; derivative liabilities of $37,404,000 related to the issuance of Series P Preferred Stock, Series L Preferred Stock, Series M Preferred stock, Series N Preferred Stock, Series O Preferred Stock, Series E Convertible Debentures and Series B Preferred Stock of its subsidiary; accrued liabilities of $8,435,000; accounts payable of $2,315,000; tax payable of $27,000; deferred tax liabilities of $250,000; related party notes payable of $843,000; and deferred revenues of $445,000. The Company expects to continue to incur significant losses and negative cash flows from operating activities at least through December 31, 2009, primarily due to expenditure requirements associated with continued marketing and development of the Company's speech-enabling technologies. The Company said there is substantial doubt about its ability to continue as a going concern. Management plans to fund further operations of the Company from cash flows from future license and royalty arrangements and with proceeds from additional issuance of debt and equity securities. There can be no assurance that management's plans will be successful. If additional financing is not obtained in the near future, the Company said it will be required to more significantly curtail operations or seek protection under bankruptcy laws. Based in Lindon, Utah, Fonix Corporation's operations are managed through its two wholly owned subsidiaries, Fonix Speech, Inc., and Fonix GS Acquisition Co., Inc. Fonix Speech provides value-added speech-enabling technologies, speech interface development tools, and speech solutions and applications, including automated speech recognition and text-to- speech that empower consumers to interact conversationally with information systems and devices. Fonix GS was formed on June 27, 2008, to facilitate the acquisition of Shanghai Gaozhi Software Systems Limited, a Chinese software developer and solutions provider in second-generation and third-generation telecommunication operation support systems in China and throughout the Asian Pacific region. Gaozhisoft is a qualified competitor for telecommunication operation supports systems. GaozhiSoft's products are designed to increase data transferring speed, reduce telecommunications data loss and provide network management, billing accuracy and improved implementation techniques to telecom carriers. FT REAL ESTATE: S&P Reinstates 'BB-' Debt Rating on Pref. Stock --------------------------------------------------------------- Standard & Poor's Ratings Services said that it has reinstated a 'BB-' debt rating to the preferred stock of FT Real Estate Securities Co. Inc., a subsidiary of First Tennessee Bank N.A. Memphis (BBB/Negative/A-2). The rating had been withdrawn in error on Feb. 24, 2009. Ratings List New Rating FT Real Estate Securities Co. Inc. Preferred Stock BB- FLEETWOOD ENTERPRISES: Seeks to Fend Off Formaldehyde Claimants --------------------------------------------------------------- According to Law360, Fleetwood Enterprises Inc. has beseeched a bankruptcy judge to enforce an insurance policy pollution exclusion it says protects it from liability for claims over formaldehyde levels in emergency housing provided to hurricane victims. Founded in 1950, Fleetwood Enterprises, Inc. (NASDAQ: FLE) and its various subsidiaries produce, distribute, and service recreational vehicles and manufactured housing. Fleetwood employed 2,100 people in 14 plants located in 10 states. Based in Riverside, California, Fleetwood Enterprises, Inc., together with 19 of affiliates, filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., and Solmaz Kraus, Esq., at Gibson, Dunn & Crutcher LLP, represent the Debtors in their restructuring efforts. FTI Consulting Inc. is the financial advisors to the Debtors. The Debtors tapped Greenhill & Co.. LLC as its investment banker. Fleetwood was authorized in June to sell its recreational vehicle business for $53 million to private-equity investor American Industrial Partners. FOOTHILLS TEXAS: Seeking Approval of Disclosure Statement --------------------------------------------------------- Foothills Texas, Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Texas to approve a disclosure statement with respect to their Joint Chapter 11 Plan of Reorganization. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, the Plan provides for one of the prepetition lenders, Regiment Capital Special Situations Fund III LP , to acquire the Debtors by accepting stock in Reorganized Foothills Resources in lieu of cash or collateral on account of a portion of its secured prepetition loans to the Debtors, and for all the prepetition common and preferred stock interest in Foothills Resources, to be cancelled, but will remain outstanding, all of which interests will continue to be owned directly by Reorganized Foothills Resources. The other claims will be paid in cash derived from the exit facility to be executed in accordance with the plan, with notes or with beneficial interests issued in connection with the Trust. A full-text copy of the Company's Disclosure Statement is available for free at: http://bankrupt.com/misc/FoothillsTexas_DS.pdf Foothills Texas, Inc. -- http://www.foothills-resources.com/-- sought protection under Chapter 11 (Bankr. D. Del. Case No. 09- 10452) on February 11, 2009. Charles R. Gibbs, Esq., David F. Staber, Esq., and Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in Dallas, Tex., and Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Wilmington, Del., represent the Debtor. In its Chapter 11 petition, the Debtor disclosed $89.5 million in assets and $78.8 million in liabilities, of which $71.2 million is owed to secured lenders. Regiment Capital Special Situations Fund III LP provided $2.5 million of postpetition financing. FORUM HEALTH: Must Send Bidding Rules to Creditors by October 30 ---------------------------------------------------------------- William K. Alcorn at the Vindicator reports that Forum Health must submit by October 30 a draft-form purchase agreement and bidding procedures to creditors. Forum Health, in the cash-collateral document filed and approved by U.S. Bankruptcy Judge Kay Woods, must submit to its major creditors by November 1 written evidence that Western Reserve Care System (Northside) and the Western Reserve Health Foundation will achieve financial and operational separation by November 30. Forum Health's ability to use cash collateral on hand to operate has been extended through January 14, 2010. The Vindicator reports that the new cash-collateral agreement between Forum Health and its major creditors contains the separation of Northside Medical Center from the rest of the health-care system, although creditors say that the most likely scenario is the reorganization or sale of the Company as a whole. According to the Vindicator, Forum Health spokesperson Vince Bevacqua said that the new consensual cash-collateral agreement is the same as the original agreement reached in April. "In checking with Forum lawyers, the only difference in the filing [Thursday] is that the dates have been changed to November 1 and November 30 for plan filing and activation, respectively," the report quoted Mr. Bevacqua as saying. The Vindicator relates that Lance Ignon,the spokesperson for Forum Health's major creditors, said that options remain on the table to ensure that the Company has the most flexibility to pursue its goals. According to the report, Mr. Ignon said, "By far the most likely outcome is either reorganization or an acquisition of the entire system, either one of which would put Forum on a more stable footing, rather than a separation of assets. No one wins if any part of Forum fails. The community, the employees and the creditors are better off if Forum remains intact, keeping in mind that each of its facilities have to show the ability to be profitable." According to the Vindicator, bids from potential buyers must be submitted by November 13, and by by November 30, Forum Health must achieve agreement with creditors on whether it will follow a merger/acquisitions or reorganization path. Based in Warren, Ohio, Forum Health -- http://www.forumhealth.org/ -- offers health care services. The primary service area consists of the northeast Ohio counties of Mahoning, Trumbull and Columbiana; and northeast Ohio counties of Ashtabula, Geauga and Portage and the Pennsylvania counties of Mercer and Lawrence. Forum Health and its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. N.D. Ohio Lead Case No. 09-40795). Paul W. Linehan, Esq., and Shawn M Riley, Esq., at McDonald Hopkins LLC, serve as lead counsel to the Debtors. The Debtors have also tapped Michael A. Gallo, Esq. at Nadler Nadler & Burdman Co., LPA as co- counsel; Kurtzman Carson Consultants LLC as claims, noticing and balloting agent; and Huron Consulting Services LLC as financial advisors. Alston & Bird LLP represents the official committee of unsecured creditors formed in the Chapter 11 cases. At the time of its filing, Forum Health estimated that it had assets and debts both ranging from $100 million to $500 million. G-I HOLDINGS: Circ. Lets Hartford Off Hook in D&O Coverage Suit --------------------------------------------------------------- Law360 reports that a federal circuit panel has upheld a district court's ruling letting Hartford Fire Insurance Co. off the hook in a case regarding directors and officers coverage for G-I Holdings Inc., in a dispute stemming from the liquidation of Reliance Insurance Co. Based in Wayne, New Jersey, G-I Holdings, Inc., is a holding company that indirectly owns Building Materials Corporation of America, a manufacturer of premium residential and commercial roofing products. The Company filed for Chapter 11 protection on January 5, 2001 (Bankr. D. N.J. Case No. 01-30135). An affiliate, ACI, Inc., filed its own voluntary Chapter 11 petition on August 3, 2001. The cases were consolidated on October 10, 2001. Martin J. Bienenstock, Esq., Irena Goldstein, Esq., and Timothy Q. Karcher, Esq., at Dewey & Leboeuf LLP, represent the Debtors as counsel. Dennis J. O'Grady, Esq., and Mark E. Hall, Esq., at Riker, Danzig, Scherer, Hyland, represent the Debtors as co- counsel. Lowenstein Sandler PC represents the Official Committee of Unsecured Creditors. Judson Hamlin was appointed by the Court as the Legal Representative for Present and Future Holders of Asbestos Related Demands. Keating, Muething & Klekamp, P.L.L., is the principal counsel to the Legal Representative of Present and Future Asbestos-Related Demands. GENERAL MOTORS: Delays Signing of Magna-Opel Sale Deal ------------------------------------------------------ Chris Reiter at Bloomberg News reports that General Motors Co. delayed the signing of a final agreement to sell its Opel unit to Magna International Inc. until next month at the earliest so its board can respond to a European Union review of the deal. Bloomberg relates John Smith, GM's lead negotiator on the sale, wrote Friday in a blog the U.S. carmaker's board will use its Nov. 3 regular meeting to consider changes to the proposal from Magna and partner OAO Sberbank. Bloomberg recalls Magna and Sberbank have agreed to invest EUR500 million in Opel in exchange for a 55% stake. According to Bloomberg, GM will also examine a letter from German Economy Minister Karl-Theodor zu Guttenberg that said Germany's financial backing for Opel's restructuring wasn't reserved for Magna. Bloomberg says the European Commission wants GM to confirm that it picked Magna without political influence before the Brussels-based regulator would approve the deal. 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: ENCORE's Schedules & Statements ----------------------------------------------- A. Real Property Owned Vacant Land South of Van Born; Belleville, Michigan 48111 $1,281,631 Tonawanda Landfill; Tonawanda, New York 14207 106,853 Leeds Assembly Land; Kansas City, Missouri 64129 0 B. Personal Property B.1 Cash on hand 0 B.2 Bank Accounts Citibank, N.A. 1,748,538 B.9 Interests in insurance policies undetermined See at http://bankrupt.com/misc/encore_salb9.pdf TOTAL SCHEDULED ASSETS $3,137,022 ========================================================== C. Property Claimed as Exempt $0 D. Creditors Holding Secured Claims U.S. Treasury and Export Development Canada 1,175,000,000 E. Creditors Holding Unsecured Priority Claims Priority Claims - Taxing Authorities 0 See at http://bankrupt.com/misc/encore_salE1.pdf F. Creditors Holding Unsecured Non-priority Claims Trade Payables 1,924,951 See at http://bankrupt.com/misc/encore_salf1.pdf Environmental Liabilities Non-superfund Missouri Department of Natural Resources Undetermined New York State Department of Environmental Conservation Undetermined U.S. Environmental Protection Agency, Region 7 Undetermined U.S. Environmental Protection Agency, Region II Undetermined Superfund U.S. Environmental Protection Agency, Region 5 Undetermined TOTAL SCHEDULED LIABILITIES $1,176,924,951 ========================================================== Environmental Corporate Remediation Company, Inc., discloses that it has earned income other than from operation of its business during the two years immediately preceding the Petition Date: Year Income ---- ------ 2007 $74,939 2008 24,306 2009 757 The Debtor made payments aggregating $7,275 to creditors within 90 days immediately preceding the Petition Date. A schedule of the payments is available for free at: http://bankrupt.com/misc/encore_sofa3b.pdf David F. Head, vice president and assistant treasurer of the Debtor, says that ENCORE's former officers were employed by its parent, Motors Liquidation Company. The Insiders' support of the Debtor was generally a small percentage of their overall commitment to Motors Liquidation. Salary and other related payments to the Insiders were made by Motors Liquidation, and thus, those payments are not listed in ENCORE's Statement of Financial Affairs, he notes. Mr. Head reports that the Debtor routinely incurs losses as casualty or lawsuits in the ordinary course of business and is not aware of any material losses within one year immediately preceding the Petition Date or since the Petition Date. The Debtor routinely setoffs from third parties during the ordinary course of business, including setoffs or mutual prepetition obligations between a Debtor and a counterparty (a) that have been consented to by a Debtor in the ordinary course of business as part of a periodic reconciliation of accounts between them and (b) as to which the counterparty has paid in full all amounts due to the Debtor relating to those accounts. These normal setoffs are consistent with the ordinary course of business in the Debtor's industry and can be particularly voluminous, making it unduly burdensome and costly for the Debtors to list them all normal setoffs. Thus, the normal setoffs are not listed in the Debtor's Statement of Financial Affairs, Mr. Head relates. The Debtor says it has received notice from New York State Department of Environmental Conservation, Division of Environmental Remediation, Region 9 at 270 Michigan Ave., Buffalo, New York 14203 regarding Tonawanda Landfill, adjacent to GM Tonawanda Engine Plant in 2995 River Road, Buffalo, New York. Moreover, the Debtor provided notice to Missouri Department of Natural Resources in Jefferson City, Missouri regarding former Leeds Assembly Plant in land south of 6817 Stadium Drive, Leeds, Missouri. The Debtor also discloses that it is a party to administrative proceedings relating to environmental laws. A schedule of the Proceedings is available for free at: http://bankrupt.com/misc/encore_sofa17c.pdf James Selzer, vice president and treasurer, is the Debtor's current bookkeeper supervising books and records of the Debtor. Nicholas S. Cyprus, chief accounting officer served as the Debtors' bookkeeper from December 1, 2006 to July 9, 2009. Deloitte & Touche LLP has audited the Debtor's books and records within two years immediately preceding the Petition Date. At the end of each of their fiscal quarters and fiscal years and upon the occurrence of significant events, the Debtor's parent filed with the U.S. Securities and Exchange Commission Forms 10-K, 10-Q, and 8-K, which contain financial information relating to the Debtors. Since the SEC Filings are publicly available, the Debtors do not maintain records of the parties who requested or obtained copies of any of the SEC Filings from the SEC or Debtors. The Debtors have also historically provided certain parties, like banks, auditors, potential investors, customers and financial advisors, financial statements that may not be part of a public filing. As the Debtors do not maintain complete lists to track those disclosures, they have not provided lists of these parties in the Statement of Financial Affairs, Mr. Head points out. The Debtor's current officers are: Name Title ---- ----- Albert A. Koch President Edward J. Stenger, Jr. Executive Vice President James Selzer Vice President and Treasurer A. Kyle Braden Vice President and Secretary James Redwine Vice President David F. Head Vice President and Assistant Treasurer Scott Haeger Assistant Secretary The Debtor's former officers are: Name Title ---- ----- Adil F. Mistry Vice President Anne T. Larin Assistant Secretary Anthony P. Thrubis General Counsel Barbara A. Lister-Tait Secretary Daniel J. Gerard Director Deanna Petkoff Assistant Secretary Edward E. Peterson Vice President Jean E. Caulfield Vice President John K. Blanchard Vice President and Director John W. Lancaster Director Kelly K. Francis Treasurer and Comptroller Laura R. Fitzpatrick General Counsel Marilyn J. Dedyne Vice President Marvin L. Swanson Vice President Maurita Sutedja Assistant Secretary Norma J. Early Assistant Comptroller Randell W. Outen Director Raymond Wexler Chief Tax Officer Robert W. Hare Vice President William J. Mcfarland President and Director 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: New GM Completes Holding Company Reorganization --------------------------------------------------------------- General Motors Company disclosed in a regulatory filing with the U.S. Securities and Exchange Commission on October 23, 2009, that it completed its holding company reorganization. New GM Vice President, Controller and Chief Accounting Officer Nick S. Cyprus related that the reorganization was conducted to implement a new holding company structure that is intended to provide greater financial and organizational flexibility. Under the Reorganization, all of the outstanding shares of common stock and Series A Fixed Rate Cumulative Perpetual Preferred Stock of the prior General Motors Company were exchanged on a one-for- one basis for shares of common stock and Series A Fixed Rate Cumulative Perpetual Preferred Stock of a newly organized Delaware corporation that now bears the name General Motors Company. Mr. Cyprus explained that the New HoldCo securities were issued solely in exchange for the securities of Prior GM in connection with a merger pursuant to an agreement and plan of merger dated October 15, 2009, among Prior GM, HoldCo, and GM Merger Subsidiary Inc. He said that the new HoldCo securities have the same economic terms and provisions as the corresponding Prior GM securities and are held by HoldCo securityholders in the same class evidencing the same proportional interest in HoldCo as the securityholders held in Prior GM. Mr. Cyprus related that the only asset currently owned by HoldCo is a 100% ownership interest in General Motors Holdings LLC. As a result of the Merger, Prior GM became a direct wholly-owned subsidiary of Intermediate HoldCo. Moreover, in connection with the Reorganization: * Prior GM was converted into a limited liability company and renamed General Motors LLC. * HoldCo and Prior GM entered into amended and restated warrant agreements assigning to HoldCo all of Prior GM's rights, duties and obligations under the three separate warrant agreements originally executed by Prior GM in July 2009 in connection with its acquisition of substantially all of the assets of Motors Liquidation Company. The operative provisions of the amended and restated warrant agreements are substantially identical to the original warrant agreements, only that the amended and restated warrant agreements provide that the warrants issued to Motors Liquidation and the UAW Retiree Medical Benefits Trust are now exercisable for HoldCo common stock rather than Prior GM common stock. * HoldCo entered into an agreement with Motors Liquidation and Prior GM relating to that certain Amended and Restated Master Sale and Purchase Agreement dated June 26, 2009, as amended, among Motors Liquidation, MLCS, LLC, MLCS Distribution Corporation, MLC of Harlem, Inc. and Prior GM, which provides that in the event that Prior GM becomes obligated under the Purchase Agreement to issue any adjustment shares to Motors Liquidation in the form of Prior GM common stock, HoldCo would instead issue any adjustment shares to Motors Liquidation in the form of an equivalent number of shares of HoldCo common stock. * HoldCo, the United States Department of the Treasury, the New Voluntary Employee Beneficiary Association, 7176384 Canada Inc. and Prior GM entered into a Stockholders Agreement dated October 15, 2009. The New Stockholders Agreement is substantially identical to the original stockholders agreement entered into by Prior GM, the Treasury Department, the New VEBA and Canada Holdings on July 10, 2009, except that the New Stockholders Agreement contains a provision terminating the original stockholders agreement. * HoldCo, Prior GM and Intermediate HoldCo entered into assignment and amendment agreements with each of the U.S. Treasury and the New VEBA whereby Prior GM assigned its obligations (i) as borrower under the Second Amended and Restated Secured Credit Agreement dated August 12, 2009 with the U.S. Treasury, and (ii) as issuer under the Amended and Restated Secured Note Agreement dated August 14, 2009 with the New VEBA to Intermediate HoldCo. Pursuant to the assignment and amendment agreements, the UST Credit Agreement and the VEBA Note Agreement were amended to reflect the post-Reorganization corporate structure of HoldCo and its subsidiaries. Moreover, under applicable assignment and amendment agreements, certain of the representations and warranties, affirmative and negative covenants and events of default will also apply to HoldCo under each of the UST Credit Agreement and the VEBA Note Agreement and HoldCo's activities will be limited to those incidental to the ownership of its subsidiaries, subject to certain exceptions. * General Motors of Canada Limited, a subsidiary of Prior GM, entered into an amendment to its Second Amended and Restated Loan Agreement dated July 10, 2009 with Export Development Canada. The EDC Amendment approved the Reorganization and made certain other modifications to reflect the post- Reorganization corporate structure of HoldCo and its subsidiaries. The EDC Amendment also incorporated certain amendments made to the UST Credit Agreement and VEBA Note Agreement in August 2009 so that the EDC Amendment would be consistent with the corresponding provisions in the UST Credit Agreement and the VEBA Note Agreement. An Event of Default under the UST Credit Agreement by Holdco is an Event of Default under the EDC Loan Agreement. In addition, Prior GM ratified its obligations as a guarantor of GMCL's obligations under the EDC Loan Agreement and Intermediate Holdco entered into a guarantee of GMCL's obligations under the EDC Loan Agreement. Prior GM's guarantee of GMCL's obligations is secured by a first priority lien on 35% of its ownership interest in GMCL and a second priority lien on 65% of its ownership interests in GMCL. Intermediate Holdco's guarantee of GMCL's obligations will be secured by a first priority lien on 35% of Intermediate Holdco's ownership interest in GMCL and a second priority lien on 65% of Intermediate Holdco's ownership interest in GMCL when the ownership interests in GMCL are transferred by Prior GM to Intermediate Holdco, which is expected to occur on or about November 2, 2009. Prior GM continues to employ all U.S.-based personnel and operate the U.S. automotive business. Mr. Cyprus disclosed that the provisions of HoldCo's certificate of incorporation and bylaws are substantially identical to those of Prior GM as in effect prior to the Merger. The board of directors and officers of HoldCo are the same individuals who were members of the board of directors and officers of Prior GM prior to the Merger, he added. 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: Product Liability Claimants' Appeal Draws Fire -------------------------------------------------------------- According to Law360, Motors Liquidation Co. -- what's left of the former General Motors Corp. in bankruptcy -- has urged a federal judge to reject an appeal from product liability claimants who say a bankruptcy court should not have allowed General Motors LLC, or "New GM," to buy the bankrupt automaker's assets free and clear of their tort claims. 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: Proposes Settlement With IUE-CWA & USW ------------------------------------------------------ Pursuant to Section 363(b) of the Bankruptcy Code and Rule 9019 of the Federal Rule of Bankruptcy Procedure, Motors Liquidation Co. and its units ask Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement agreement they entered into with: (1) the GMCo/MLC-International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers - Communications Workers of America; and (2) the United Steel Workers regarding Retiree Health Care, Life Insurance, Pension Top-Up. Pursuant to the provisions of Section 1114 of the Bankruptcy Code, Motors Liquidation Co. is continuing to pay GM's Retiree Benefit Obligations, subject to its rights to modify or terminate these obligations in accordance with the provisions and procedures set forth in Section 1114. The monthly payments attributable to the Retiree Benefit Obligations aggregate approximately $23 million. In connection with the payment of those benefits, MLC also has reserved all of its rights under the settlement agreement in the class action entitled IUE-CWA et al., v. General Motors Corp., including its position that the Retiree Benefit Obligations are vested only through September 14, 2011, and thereafter could be terminated unilaterally by MLC, without regard to the provisions of Section 1114. Subsequent to the entry of the order approving the sale of substantially all of the Debtors' assets, MLC, General Motors Company, and the Unions, serving as the authorized representatives for purposes of Section 1114 of those persons receiving retiree benefits pursuant to collective bargaining agreements between MLC and each of the Unions, entered into negotiations with respect to the continued payment of Retiree Benefit Obligations and all other causes of action and any claim that could be asserted in the Debtors' Chapter 11 cases with respect to the Retiree Benefit Obligations. Pursuant to the Settlement Agreement, MLC and GMCo have agreed to provide certain ongoing medical benefits at a reduced level to those IUE-CWA and USW retirees and surviving spouses who are not eligible for Medicare benefits. MLC and GMCo also agreed to provide certain life insurance benefits to IUE-CWA and USW retirees at a reduced level. With respect to retirees who are eligible for Medicare, MLC is granting the IUE-CWA, the USW and any additional listed union that agrees to the applicable terms of and agrees to participate in the Settlement Agreement, an allowed prepetition, general unsecured claim in MLC's Chapter 11 case in an amount equal to the union's "Percentage Share" of the aggregate amount of $1,000,000,000. The Allowed Claim is in full settlement of all claims that the Union's representatives have or may have against the Debtors and their affiliates arising out of collective bargaining agreements relating to retiree healthcare benefits, life insurance benefits and all other benefits and claims. The Settlement Agreement also provides for the withdrawal of IUE-CWA's Appeal on GM's sale of its assets to Motors Liquidation Co. A full-text copy of the Settlement Agreement is available for free at http://bankrupt.com/misc/GM_Unions_Pact2009.pdf The Court will convene a hearing to consider this motion on November 12, 2009 at 2:00 p.m. Easter Time. Objections will be due by November 6. 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: REALM's Schedules & Statements ---------------------------------------------- A. Real Property Textile Road Land, et al., Salina, NY $5,809,952 Greenpoint Landfill, et al., Saginaw, Michigan 991,777 Summerfield Land, et al., Mt. Morris, Michigan 547,919 Others 1,214,660 B. Personal Property B.2 Bank Accounts Citibank, N.A. - New Castle, Delaware 317,773 JPMorgan Chase - New York, New York 34,517 JPMorgan Chase - New York, New York 10,916 JPMorgan Chase - New York, New York 1,030 B.9 Interests in Insurance Policies Undetermined A full-text copy of REALM's interests in insurance policies is available at: http://bankrupt.com/misc/realm_salb9.pdf TOTAL SCHEDULED ASSETS $8,928,544 ========================================================= D. Creditors Holding Secured Claims U.S. Treasury & Export Development Canada $1,175,000,000 E. Creditors Holding Secured Claims Charter Twp. Of Genesee 23,468 Charter Township of Ypsilanti 14,461 Charter Township of Flint 5,477 Washtenaw County Treasurer 4,523 Town of Framingham 2,403 City of Saginaw, Treasurer 734 City of Mt. Morris 525 F. Creditors Holding Unsecured Non-priority Claims Trade Claim - Conestoga-Rovers & Assoc. 380,998 Trade Claim - Arcadis BBL 150,135 Others 131,980 A list of REALM'S Unsecured Non-Priority Creditors -- consisting of claimants asserting Trade Payables, Environmental Liabilities and Other Unsecured Liabilities -- is available at no charge at: http://bankrupt.com/misc/realm_salf.pdf TOTAL SCHEDULED LIABILITIES $1,175,714,704 =========================================================== Schedules of the executory contracts and unexpired leases to which REALM is a party is available for free at: http://bankrupt.com/misc/realm_salg1.pdf During the two years immediately preceding the Petition Date, Remediation And Liability Management Company, Inc., generated income from employment or the operation of its business in these amounts: Year-to-Date 2007 2008 (08/31/09) ---- ---- ------------ Other Income $2,314,479 $795,886 $83,246 Within 90 days to the Petition Date, REALM paid an aggregate of $1,023,992 to 15 creditors, a schedule of which is available for free at http://bankrupt.com/misc/realm_sofa3b.pdf REALM'S former officers or insiders were employed by the Debtor's parent, Motors Liquidation Company. The Insiders' support of the Debtor was generally a small percentage of their overall commitment to MLC. Compensation or salary and other related Payments to the Insiders were made by MLC, according to David F. Head, vice president and assistant treasurer at REALM. Mr. Head adds that the REALM routinely incurs losses, including casualty or lawsuits in the ordinary course of business. The Debtor is not aware of any material losses within the one year immediately preceding the Petition Date or since the Petition Date. In addition, the Debtors routinely incur setoffs from third parties during the ordinary course of business. Setoffs in the ordinary course can result from various items, including setoffs of mutual prepetition obligations between a Debtor and a counterparty (i) that have been consented to by a Debtor in the ordinary course of business as part of a periodic reconciliation of accounts between them, and that did not involve cross-affiliate or triangular setoffs, and (ii) as to which the counterparty has paid in full all amounts due to the Debtor relating to the Accounts. "These Normal Setoffs are consistent with the ordinary course of business in the Debtor's industry and can be particularly voluminous, making it unduly burdensome and costly for the Debtor to list all them," Mr. Head discloses. On July 31, 2007, REALM had received notice from MDEQ Waste and Hazardous Materials Division in Lansing, Michigan, that it may be potentially liable for environmental law. Within the period from October 1992 to August 2007, the Debtor provided notice to these governmental units regarding release of hazardous materials. Mr. Head notes that REALM is a party to the judicial or administrative proceedings relating to these sites: * 59 Linden Road Landfill 1200 South Linden Road Flint, Michigan * Bay City Middleground Landfill 2300 Evergreen Drive Bay City, Michigan * Coldwater Road Fmr Wwtp 6220 Horton Street Flint, Michigan 48505 * Delphi Chassis-Livonia Groundwater 12950 Eckles Road Livonia, Michigan 8150 * Former GM Foundry Landfill aka Danville Landfill I 74 & G Street Danville, Illinois 61832 * Gmpt - Bay City/Crotty Street aka Bay City Powertrain 100 Fitzgerald Street Bay City, Michigan 48708-5460 * Green Point/Saginaw Malleable Iron 77 West Center Street Saginaw, Michigan * Ley Creek Pcb Dredgings Site Subsite of Onondaga Lake Superfund Site, Factory Avenue Salina, New York 13209 * Peregrine-Coldwater Rd. (Plant) Aka Coldwater Road Landfill 1245 E. Coldwater Rd. Flint, Michigan * Textile Road Site Bunton & Textile Roads Ypsilanti Twp, Michigan James Selzer and Nicholas S. Cyprus, as bookkeepers and accountants, kept or supervised the keeping of REALM's books and records within two years prior to the Petition Date. Mr. Selzer, was in possession of the Debtor's books and records as of the Petition Date. Deloitte & Touch LLP, with address at 600 Renaissance Center, Suite 900 in Detroit, Michigan, audited the Debtor's books and records, or prepared a financial statement for the Debtor within two years immediately preceding the Petition Date. Mr. Head explains that at the end of each of their fiscal quarters and fiscal years and upon the occurrence of significant events, the MLC, as the REALM's Parent, prepared and filed with the U.S. Securities and Exchange Commission Forms 10-K, 10-Q, and 8-K, containing financial information relating to the Debtor. Because the SEC Filings are publicly available, the Debtor does not maintain records of the parties who requested or obtained copies of any of the Filings from the SEC or Debtors. In addition, the Debtor has also historically provided banks, auditors, potential investors, customers and financial advisors, financial statements that may not be part of a public filing. The Debtors do not maintain complete lists to track such disclosures, according to Mr. Head. These stockholders at REALM directly or indirectly own, control, or hold 5 percent of more of the voting or equity securities of the corporation: Name Title ---- ----- Albert A. Koch President Edward J. Stenger, Jr. Executive Vice President James Selzer Vice President, Treasurer A. Kyle Braden Vice President, Secretary James Redwine Vice President David F. Head Vice President, Assistant Treasurer Scott Haeger Assistant Secretary Within one year to the Petition Date, these officers or directors terminated their relationship with REALM: Name Former Title ---- ------------ Adil F. Mistry Vice President Anne T. Larin Assistant Secretary Anthony P. Thrubis General Counsel Barbara A. Lister-Tait Secretary Daniel J. Gerard Director Edward E. Peterson Vice President Jean E. Caulfield Vice President John K. Blanchard Vice President John K. Blanchard Director John W. Lancaster Director Kelly K. Francis Treasurer Kelly K. Francis Comptroller Laura R. Fitzpatrick General Counsel Marilyn J. Dedyne Vice President Marvin L. Swanson Vice President Maurita Sutedja Assistant Secretary Norma J. Early Assistant Comptroller Randell W. Outen Director Raymond Wexler Chief Tax Officer Robert W. Hare Vice President William J. Mcfarland President William J. Mcfarland Director 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: Weil Gotshal to Provide Services to New GM ---------------------------------------------------------- Motors Liquidation Co., formerly General Motors Corp., previously hired Weil, Gotshal & Manges LLP, as counsel in its Chapter 11 cases. Stephen A. Karotkin, Esq., a member of Weil, Gotshal & Manges LLP, in New York, in his second supplemental affidavit, tells the Court that in view of WG&M's unique knowledge base and experience by reason of its historical representation of the Debtors and in connection with the closing of the 363 Transaction, General Motors LLC, formerly General Motors Company, desires to engage WG&M to continue to perform professional services relating to the ongoing enterprise that are not adverse to the Debtors and may enhance the value of GM LLC and, thereby, inure to the benefit of the Debtors as the owners of 10% of the equity interests in GM LLC and warrants to require additional equity. WG&M also would continue to serve as attorneys for the Debtors and perform all professional services required by the Debtors in connection with the administration of the Debtors' Chapter 11 cases. GM LLC would be responsible for the costs and expenses of its engagement of WG&M. The principal matters as to which WG&M has performed services relating to GM LLC in connection with the consummation of the 363 Transaction as well as those areas where it is contemplated that WG&M will continue to perform legal services to GM LLC on an ongoing basis are: A. Services Related to Consummation of 363 Transaction * Financing arrangements relating to GM LLC entered into in connection with the closing of the 363 Transaction including (a) an approximate $7 billion secured facility representing a portion of the Debtors' debtor in possession financing facility assumed by GM LLC, (b) an approximate $1.288 billion secured facility representing a portion of loans previously made by Economic Development Canada to General Motors of Canada Limited and assumed by GM LLC and its subsidiaries, (c) an approximate $3.887 billion credit facility provided by EDC to GMCL; and (d) a $2.5 billion secured note agreement with the UAW Retiree Medical Benefits Trust; * Issues in connection with the assumption and assignment of executory contracts and unexpired leases under the MPA, including resolution of cure amount disputes and other related matters; and * All matters relating to Delphi Corporation, including the purchase of assets from Delphi and the resolution of its Chapter 11 cases; B. Ongoing Services Projected to be Provided to GM LLC * Continued representation with respect to the 363 financing transactions, including covenant monitoring, reporting, amendments and various post-closing matters; * Potential new financings or refinancings of GM LLC and/or its affiliates; * Participation in the automotive supplier liquidity program; * All matters relating to Delphi; * Executory contracts and unexpired leases to be assumed and assigned to GM LLC under the MPA; * Representation of GM LLC in connection with the structure and placement of directors' and officers' insurance and related coverage; * The implementation of the MPA, including any litigation with third parties in connection therewith; * GM LLC's international operations; and * Other matters specifically requested by GM LLC from time to time which are not adverse to the Debtors. Mr. Karotkin reiterates that WG&M is as "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. WG&M does not hold or represent interest adverse to the Debtors or their estates in the matter upon which WG&M is to be employed, Mr. Karotkin maintains. 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). GHOST TOWN: Disclosure Statement Hearing on November 24 ------------------------------------------------------- The Hon. George R. Hodges of the U.S. Bankruptcy Court for the Western District of North Carolina has set a hearing to consider approval of the disclosure statement explaining Ghost Town Partners, LLC's Chapter 11 Plan on Nov. 24, 2009 at 09:30 a.m. The hearing will be held at the U.S. Courthouse, Main Courtroom, First Floor, 100 Otis Street, Asheville, North Carolina. Objections, if any, are due on Nov. 17, 2009. According to the Disclosure Statement, the Plan provides for the distribution to creditors of the Debtors' assets and revenue from ongoing operations as a going concern, including all proceeds from normal park operations, any additional third party revenue through joint ventures or strategic alliances well as advertising revenue. Additionally, although unable to predict outcome of any recovery of company assets both monetary and nonmonetary arising from potential claims or causes of action pending, any and all realized recovery will be to the further benefit of the plan participants and park operations as a whole. The Debtor proposes to pay administrative claims, priority tax claims and other priority claims and secured claims in full or otherwise satisfied appropriately. Other classes will be treated as detailed in the Plan. A full-text copy of the Company's Disclosure Statement is available for free at: http://bankrupt.com/misc/GhostTownpartners_DS.pdf A full-text copy of the Company's Chapter 11 Plan is available for free at: http://bankrupt.com/misc/GhostTownpartners_Plan.pdf Based in Waynesville, North Carolina, Ghost Town Partners, LLC, operates an amusement park. The Debtor filed for Chapter 11 protection on March 11, 2009 (Bankr. W.D.N.C. Case No. 09-10271). David G. Gray, Esq., at Westall, Gray, Connolly & Davis, P.A., and William E. Cannon, Jr., at Brown, Ward & Haynes P.A., represent the Debtor in its restructuring efforts. In its bankruptcy petition, the Debtor listed total assets of $13,035,300 and total debts of $12,305,672. GKL LLC: Case Summary & 3 Largest Unsecured Creditors ----------------------------------------------------- Debtor: GKL, LLC 3905 Northlake Blvd. West Palm Beach, FL 33403 Bankruptcy Case No.: 09-33095 Chapter 11 Petition Date: October 25, 2009 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtor's Counsel: Barry P. Gruher, Esq. 200 E Broward Blvd., # 1110 Ft Lauderdale, FL 33301 Tel: (954) 453-8000 Email: bgruher@gjb-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flsb09-33095.pdf The petition was signed by Kevin W. Dalton, managing member of the Company. GPX INTERNATIONAL: Files for Chapter 11 Reorganization ------------------------------------------------------ GPX International Tire Corporation announced October 27 that it has filed for reorganization under Chapter 11 of the United States Bankruptcy Code. The court filing will only affect GPX and not its foreign subsidiaries. Dynamic Tire Corp.; GPX Tyre South Africa (Pty.); Starbright Group, Inc.; Hebei Starbright Tire Co., Ltd.; and EastStar Global Tianjin, Inc. are not filing bankruptcy and will continue to operate in the normal course. The purpose of the reorganization is to separate the Company's operations into three distinct businesses in order to facilitate the sales of those businesses in transactions which will allow 95 percent of the Company's current North American workforce to remain employed. Some job eliminations may arise from redundancies in corporate functions. As a result of the reorganization, the Company will wind down its European operations. During the Chapter 11 proceedings, GPX will continue to manufacture and distribute tires and service its valued customers. The strategic buyers identified by the Company are established entities in the global tire industry. The Company expects to complete the sales by December 31, 2009, pending approval by the bankruptcy court. During the reorganization, GPX intends to seek court approval to sell the company's businesses in three transactions: * Alliance Tire Corporation will acquire GPX's U.S. operations, including its assets, customer relationships, warehouse footprint, worldwide rights to the Galaxy and Primex brands, the Company's medium radial truck tire distribution business and the Company's South African entity, GPX Tyre South Africa (Pty.). Alliance is a global leader specializing in the development, manufacture and sale of highly engineered agricultural, forestry, construction and earthmover tires worldwide. Alliance manufactures in Israel and has recently completed a state of the art factory in India. Alliance will continue to market Galaxy, Primex, other GPX brands, and medium radial truck tires to GPX's customer base. GPX customers will benefit from the complementary strengths of the Alliance and GPX product lines, particularly in the agricultural and construction tire segments. Alliance will continue to source products from GPX's valued network of manufacturers in China and elsewhere. The combination of the Alliance and GPX manufacturing resources provides Alliance with a large, diverse, and highly flexible global sourcing platform that is capable of providing competitive products in all segments of the off-the-road tire industry in North America and throughout the world. * Dynamic Tire Corp., the company's Canadian subsidiary, will become a separate entity engaged in the sale and distribution in Canada of Galaxy and Primex brand off-the-road tires, the sale and distribution of medium radial truck and passenger car tires, and private label sourcing. It will be acquired by a management buyout team led by Robert Sherkin and Peter Koszo. Once the Dynamic sale has been approved by the courts, Dynamic intends to continue to market Galaxy, Primex, other GPX/Dynamic brands, and medium radial truck tires in Canada. Dynamic will continue to operate this business, purchase tires from longstanding suppliers and provide customers with a high level of customer service as it has done in the past. * The Company also intends to pursue the sale of its Solid Tire business as well as its Gorham, ME; Red Lion, PA; and Hebei, China manufacturing facilities subject to approval by the bankruptcy court. GPX intends to continue to operate this business unit pending its sale. The Company is actively working with a potential buyer for this business and expects to have definitive agreements in place prior to closure of the other sales. The Chapter 11 filing comes after a Department of Commerce (Commerce) Antidumping/Countervailing Duty (AD/CVD) inquiry commenced in June 2007 that resulted in crippling (44%) duties levied against GPX's Starbright facility while leaving all other major Chinese off-the-road tire manufacturers with nominal or manageable duties. After vigorously responding to Commerce's inquiry and filing an appeal of the final duties, the U.S. Court of International Trade ruled on September 18, 2009, that Commerce's application of its AD/CVD methodologies in calculating Starbright's duties was "unreasonable" and therefore "unlawful." Furthermore, the Court ruled that Commerce's decision "was arbitrary and capricious and unsupported by substantial evidence." Even though the U.S. Court of International Trade ruled in favor of GPX on appeal, the high level of duties set by Commerce in September 2008 had a devastating and irreversible financial impact on the Starbright manufacturing facility and on GPX as a whole. Accordingly, GPX does not have the ability to wait for a final decision on the duties before completing the sale process. "The U.S. government's decision to impose extraordinarily punitive AD/CVD duties on GPX's Starbright manufacturing facility in China has prompted the difficult decision to sell GPX's business to third parties," said Craig Steinke, President and CEO of GPX. "The buyers we have identified are well established in the global tire industry and are positioned to further invest in these brands, grow the business and provide exceptional service to our customer base. The Company's longstanding tradition of innovation through research and development, superior level of service, and product quality will continue with these new owners. We feel very confident that this will be a positive and smooth transition for our employees, customers and suppliers." Management expects these transactions to be finalized before the end of 2009. About GPX International GPX International Tire Corporation is one of the largest independent global providers of specialty "off-the-road" tires for the agricultural, construction, materials handling and transportation industries. GPX is a worldwide company, headquartered in Malden, Massachusetts, with operations in North America, China, Canada, and Germany. A third generation family- owned business, GPX and its predecessor companies have been in business since 1922. GPX is represented in U.S. Bankruptcy Court by attorneys Harry Murphy of Hanify & King, P.C. and Peggy Farrell of Hinckley Allen & Snyder LLP as corporate counsel. TM Capital Corp. serves as investment banker to GPX in connection with these transactions and Argus Management Corporation serves as restructuring advisor to GPX. GPX INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: GPX International Tire Corporation 730 Eastern Avenue P.O. Box 70 Malden, MA 0214 Bankruptcy Case No.: 09-20170 Type of Business: The Debtor makes and distribute tires. See http://www.gpxtire.com/ Chapter 11 Petition Date: October 26, 2009 Court: District of Massachusetts (Boston) Judge: Joan N. Feeney Debtor's Counsel: Harold B. Murphy, Esq. bankruptcy@hanify.com Christian J. Urbano, Esq. cju@hanify.com Hanify & King, P. C. One Beacon Street, 21st Floor Boston, MA 02108 Tel: (617) 423-0400 Fax: (617)556-8985 Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ US Customs and Border Protection $5,662,973 301 E. Ocean Blvd. Ste. 620 Long Beach, CA 90802 Tel: (562) 628-7900 Tainjin United Tire and Rubber $1,756,303 The 3rd Floor, Gate 4 Nanpu Building Pukou Road Hexi District Tianjin 300203 China Tel: 86-22-23022731 Airboss of America Corp. $1,411,748 101 Glasgow Street Kitchener Ontario N2G4X8, Canada Tel: (519) 576-5565 Huaian Lingxing Steel Wheel MA $278,354 Sutong CTR Inc. $223,605 Duro Tire Corporation $222,768 Denman Tire Corp. $160,741 Guizhou Tyre I/E Corp. $115,004 Changzhou Yangs Mould Co. Ltd. $94,721 Handway (HK) Consolidation $60,818 Coim USA Inc. $48,239 Chemtura Corporation $45,760 Jiangsu Changzhou Wujin Sunan $37,082 Qingdao Seagift International $35,403 Eastern Fire Protection $31,851 Fedex National LTL $31,649 Sunburst Truck Lines Inc. $29,354 KW Receivables $28,641 Carpenter Co. $28,603 OTR Wheel Engineering $26,843 The petition was signed by Craig Steinke, president and chief executive officer. GRAY TELEVISION: Fidelity Funds Disclose 11.335% Stake ------------------------------------------------------ Fidelity Management & Research Company in Boston, Massachusetts, a wholly owned subsidiary of FMR LLC and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 4,858,397 shares or 11.335% of the Common Stock outstanding of Gray Television Inc. as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. The ownership of one investment company, Fidelity Leveraged Company Stock Fund, amounted to 2,401,344 shares or 5.603% of the Common Stock outstanding. Fidelity Leveraged Company Stock Fund has its principal business office at 82 Devonshire Street, Boston, Massachusetts 02109. Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, and the funds each has sole power to dispose of the 4,858,397 shares owned by the Funds. Gray Television, Inc. -- http://www.gray.tv/-- is a television broadcast company headquartered in Atlanta, GA. Gray currently operates 36 television stations serving 30 markets. Each of the stations are affiliated with either CBS (17 stations), NBC (10 stations), ABC (8 stations) or FOX (1 station). In addition, Gray currently operates 38 digital second channels including 1 ABC, 4 Fox, 7 CW, 16 MyNetworkTV and 1 Universal Sports Network affiliates plus 8 local news/weather channels and 1 "independent" channel in certain of its existing markets. Potential Covenant Breach Gray Television has warned that based on its financial projections it is likely not to be in compliance with the leverage ratio under its senior credit facility as of March 31, 2010. Effective as of March 31, 2009, the Company amended its senior credit facility. The terms of the amended senior credit facility include, but are not limited to, an increase in the maximum ratio allowed under the leverage ratio covenant for the year ending December 31, 2009, a general increase in the restrictiveness of the remaining covenants and increased interest rates. Gray said without the amendment, it would not have been in compliance with the leverage ratio covenant and such noncompliance would have caused a default under the agreement. This amendment increased Gray's cash interest rate by 2% per annum (200 basis points) and beginning April 1, 2009, requires an additional 3% per annum (300 basis point) facility fee. For the period beginning April 4, 2009 and ending April 30, 2010, the annual facility fee for the term loan and the revolving loan will accrue and be payable on the respective term loan and revolving loan maturity dates. For the period beginning after April 30, 2010, and for the remaining term of the senior credit facility, the annual facility fee will be payable in cash on a quarterly basis and interest will accrue at an annual rate of 6.5% on the facility fee balance accrued as of April 30, 2010. Series D Perpetual Preferred Stock The Company did not fund the Series D Perpetual Preferred Stock cash dividend payments due on January 15, 2009, April 15, 2009 or July 15, 2009, that had accumulated for the three-month periods ended December 31, 2008, March 31, 2009 and June 30, 2009. Dividends on the Series D Perpetual Preferred Stock accrued at 12.0% per annum through December 31, 2008 after which the dividend rate increased to 15.0% per annum. The accrued Series D Perpetual Preferred Stock dividend balance as of June 30, 2009, was $10.5 million. The deferral of dividend payments is allowable under the terms of the Series D Perpetual Preferred Stock. The Company said it can provide no assurances when any future cash payments will be made on any accumulated and unpaid Series D Perpetual Preferred Stock cash dividends presently in arrears or that become in arrears in the future. The Series D Perpetual Preferred Stock has no mandatory redemption date but may be redeemed at the stockholders' option on or after June 30, 2015. The deferral of paying cash dividends on the Series D Perpetual Preferred Stock and the corresponding suspension of paying cash dividends on the common and Class A common stock was made to reallocate cash resources to support the Company's ability to pay increased interest costs or fees associated with the amendment to its senior credit facility. GREENSTONE RESOURCES: Erin Ventures Acquires Santa Rosa Gold Mine ----------------------------------------------------------------- Erin Ventures Inc. has entered into an agreement to purchase majority control of the assets of the Santa Rosa Gold Mine in Panama. The Santa Rosa Mine was opened for commercial production by Greenstone Resources Ltd. in 1996 and operated through 1998. Gold production at Santa Rosa during this period totaled 109,002 ounces at an average cash operating cost of approximately US$285 per ounce. Greenstone's production facilities were designed to operate at a capacity of 60,000 ounces per year using standard open pit mining methods and heap leach processing methods. A combination of low gold prices, a substantial debt load, and multiple underperforming projects, resulted in the orderly shutdown of the Santa Rosa Mine early in 1999 and the eventual bankruptcy of Greenstone. At shutdown, Greenstone calculated the remaining resource in place at Santa Rosa to be in excess of 900,000 ounces of gold at a grade averaging approximately 1.3 grams per tonne, using a gold price of $350 per ounce. The main terms of the agreement are: 1. Erin in conjunction with Pageland Minerals Ltd agree to collectively purchase 100% of the assets of the Santa Rosa Mine, including the land title, mineral rights, buildings, equipment and historic exploration and production data from Canazas Mining Company, a Panamanian Corporation comprised of former workers at the Santa Rosa Mine, for a total of US$1,550,000. 2. Erin will retain an undivided 75% interest and Pageland will retain an undivided 25% interest in the Santa Rosa Mine, with each partner responsible for their prorata share of the purchase price and the payments and expenditures going forward. 3. Erin shall act as operator of the mine. 4. A US$75,000 down payment was made to Canazas at the time of signing of the agreement. 5. A second payment of $75,000 is due upon the completion of transfer of land title at Santa Rosa. 6. US$500,000 becomes due and payable when the mineral rights and mining permits associated with the Santa Rosa Mine have been reestablished by the Panamanian government and granted exclusively to Canazas. 7. A second payment of US$500,000 is payable 90 days after the first payment of $500,000. 8. A final payment of US $400,000 is payable 180 days after the first payment of $500,000. 9. Canazas will receive the 10% of the net profits of the operations of Santa Rosa Mine. Net profits are defined as gross revenues less direct and indirect operating, recovery, mining and smelting costs, general and administrative expenses, interest, taxes and royalties and all other expenses relating to operating of Santa Rosa Mine. 10. Erin agrees to transfer title to the land back to Canazas when mining operations are complete. Erin intends to use a due diligence period to advance the project to a NI-43-101 compliant resource, and to develop plans to bring the project back into production, building on Greenstone's historic production. Erin intends to pay a finder fee in connection with this transaction of 1,000,000 shares, subject to TSX approval. Santa Rosa Mine The Santa Rosa gold deposit is located near the village of Canazas in Veraguas Province, Panama, approximately 300 kilometres southwest of Panama City. Access to the site is via paved road from the paved Pan American Highway. These roads are suitable for the transportation of major project components. Canazas itself is 15 kilometres north of the Pan American Highway and 300 kilometres southwest of Panama City. The Santa Rosa project (the "Santa Rosa Mine") has two components: the Santa Rosa deposit and the Alto de la Mina ("ADLM") deposit. Project feasibility was completed in October 1993 for gold production using heap leach methods on the ore produced by open pit mining methods. Construction of the project occurred during 1994 and 1995. Commercial production at Santa Rosa was achieved in the second quarter of 1996. About Greenstone Resources Headquartered in Toronto, Ontario, Greenstone Resources Ltd. (Nasdaq:GRERF.PK) owned gold operations in Honduras and Nicaragua. At a meeting of the company's creditors held on Jan. 25, 2007, to consider the amended consolidated plan of arrangement, the required majority of the company's creditors present and voting at the meeting accepted the plan of arrangement. Shimmerman Penn Title & Associates Inc., trustee of the bankruptcy estate of Greenstone Resources Ltd., advised that the implementation of the plan of arrangement is subject to various conditions, including obtaining certain regulatory approvals. HANGER ORTHOPEDIC: Net Income Up 31.4% to $2.3-Mil. in Q3 --------------------------------------------------------- Hanger Orthopedic Group, Inc. reported net sales of $192.3 million for the quarter ended September 30, 2009, an increase of $13.6 million, or 7.6%, from $178.7 million in the prior year. Earnings per share for the third quarter of 2009 were $0.30 per diluted share compared to $0.23 per diluted share for the same period in 2008. The $13.6 million, or 7.6%, sales increase for the quarter ended September 30, 2009 was primarily the result of a $6.7 million, or 4.3%, increase in same-center sales in our patient care centers, a $2.1 million, or 10.0%, increase in sales of the Company's distribution segment and a $4.8 million increase principally related to sales from acquired entities. The combination of increased sales and effective expense management resulted in income from operations increasing $3.5 million, or 17.4%, to $23.8 million for the third quarter of 2009, compared to last year. Net income increased $2.3 million, or 31.4%, to $9.6 million in the third quarter of 2009 from $7.3 million last year. In addition to improved income from operations, net income benefited from lower variable interest cost in the third quarter of 2009. Net sales for the nine months ended September 30, 2009 increased by $37.4 million, or 7.2%, to $555.0 million from $517.6 million last year. The sales increase was principally the result of a $19.2 million, or 4.3%, increase in same-center sales in our patient care centers, a $5.0 million, or 8.1%, increase in sales of the Company's distribution segment and a $13.2 million increase principally related to sales from acquired entities. As was the case for the quarter, the growth in sales and expense management helped increase income from operations by $7.2 million, or 12.9%, to $63.0 million for the nine months ended September 30, 2009 compared to the same period last year. Operating income as a percentage of sales increased to 11.4% for the nine months ended September 30, 2009 compared to 10.8% in the same period of 2008. Net income applicable to common stock for the nine months ended September 30, 2009 increased by 27.9% to $24.2 million, or $0.76 per diluted share, compared to pro forma net income applicable to common stock of $18.9 million, or $0.60 per diluted share, in the prior year. In addition to improved income from operations, net income benefited from lower variable interest costs during 2009. The pro forma results for the nine months ended September 30, 2008 assume that the one-time, in-kind preferred stock dividend described below occurred and the preferred stock was converted to common stock at the beginning of the period. Net income applicable to common stock for the nine months ended September 30, 2008 on a GAAP basis was $13.2 million, or $0.52 per diluted share. Cash from operations for the three months ended September 30, 2009 was $25.4 million, a $3.1 million, or 13.9% increase, compared to 2008. The improvement was primarily the result of improved operating results and a $0.8 million decrease in working capital. Days sales outstanding were reduced by 3 days to a record low of 47 days as of September 30, 2009 from 50 days as of September 30, 2008. As of September 30, 2009, $76.1 million, or 18.6%, of the Company's total debt of $409.7 million was subject to variable interest rates. The Company had total liquidity of $131.2 million, comprised of $78.4 million of cash and $52.8 million available under its revolving credit facility at September 30, 2009. On October 23, 2009, Barclays Bank replaced $10.0 million of the $17.8 million defaulted Lehman commitment under the revolving credit facility, which increases the current amount available under the credit facility to $62.8 million. The Company believes that it has sufficient liquidity to conduct its normal operations and fund its acquisition plans in 2009. The Company is reaffirming its full year 2009 sales guidance of $750 to $760 million and increasing its 2009 diluted EPS guidance of $1.02 to $1.04 to $1.05 to $1.07. "We are very pleased with our third quarter results, as they exceeded our expectations, represented solid operational execution and generated strong cash flow," commented Thomas F. Kirk, President and Chief Executive Officer of Hanger Orthopedic Group. Mr. Kirk added, "Patient care centers revenues grew at 6.6% and our efforts on expense management continue to be reflected in our results. Since the third quarter of last year, we have improved operating margins for the quarter by 100 basis points to 12.4%. We are also extremely pleased with the added commitment to our revolver and liquidity, because it reflects the confidence our lenders have in our consistent execution. I am proud of our teams' efforts in this economic environment and we are actively monitoring the proposed health care reforms and how they could impact our future prospects." In June 2008, the Company's common stock performance triggered an acceleration of preferred stock dividends as a result of the Company's average closing price of its common stock price exceeding the Company's forced conversion price of the Series A Convertible Preferred Stock by 200% for a 20-trading day period. This event accelerated the payment of these dividends due from the time of the event through May 26, 2011. The accelerated dividends were paid in the form of increased stated value of preferred stock, in lieu of cash. As a result, the Company recorded an in- kind dividend on its preferred stock of $5.3 million in the quarter ended June 30, 2008, which represented 0.7 million additional common shares on an as-converted basis. About Hanger Orthopedic Headquartered in Bethesda, Maryland, Hanger Orthopedic Group Inc. (NYSE: NYSE: HGR) -- http://www.hanger.com/-- is a provider of orthotic and prosthetic patient care services. Hanger owns and operates 636 patient care centers in 45 states and the District of Columbia, with over 3,500 employees including 1060 practitioners. * * * As reported by the Troubled Company Reporter on Aug. 4, 2009, Moody's Investors Service upgraded the ratings of Hanger Orthopedic Group, Inc., including the Corporate Family Rating and Probability of Default Rating to B1 from B2. Moody's also upgraded the senior secured credit facility to Ba2 from Ba3 and the unsecured notes to B3 from Caa1. Moody's also changed the outlook to stable from positive. HAWAIIAN AIRLINES: Pilots Want Out of Mediations ------------------------------------------------ Hawaiian Airlines pilots represented by the Air Line Pilots Association, Int'l (ALPA), declared that they believe their contract negotiations are at an impasse and asked the federal government to release them from mediation, a process that could start the clock for a future pilots' strike at the airline. In a letter sent to the National Mediation Board on behalf of the Hawaiian pilots, ALPA President John Prater outlined three years of stalled negotiations where HAL management has repeatedly demanded contract concessions from its workers while the airline soared to unprecedented profits and richly rewarded its senior executives. "The company continues to insist that its present business plan requires significant sacrifice from pilots and other employees. That position is not justified by either the competitive environment, the Company's place in the industry, or its present financial condition," Mr. Prater said. "There is simply no reason to believe that the Company will change its position without the imposition of a deadline and the possible release from mediation. The Association believes that further mediation is not likely to lead to an agreement and that further bargaining, in the absence of a proffer, will be futile." ALPA formally requested that the NMB end its mediation efforts and issue a Proffer of Arbitration to both parties. If the Board makes a proffer and either ALPA or Hawaiian declines to enter binding arbitration, the two sides would be released from mediation and will enter a 30-day cooling-off period after which the parties are free to take self-help. At that point Hawaiian's pilots could strike. Capt. Eric Sampson, chairman of ALPA's Hawaiian group, said the final straw came last week, when the company announced a $30.7 million net profit for the 3rd quarter of 2009 at the same time they asked pilots, in large part, to fund pay increases with productivity savings and work rule changes. The company continued its track record as one of the most successful airlines in the United States and put it on target to record over a $100 million profit for the year. With that profit, like last year, company executives will share millions of dollars in bonus money -- enough, in fact, to fund the contract improvements ALPA is seeking. The bonuses and awards that Hawaiian gave to just its top five executives in 2008 are almost double the amount ALPA has asked for in 2010 pay raises for its more than 400 HAL pilots. HAL CEO Mark Dunkerley alone received a 42 percent increase in his total compensation in 2008. "Our pilots have worked under a bankruptcy-era contract for almost five years, while the airline made more and more money. Every time the Company needed help, we stepped up to the plate," Mr. Sampson said. "We helped them emerge from bankruptcy, we made acquiring new Airbus A-330s possible by agreeing to fly those larger planes for the same rate we fly our current Boeing aircraft, and we waived work rules to fly more hours so the Company could fill the void left when Aloha and ATA stopped flying." "To us, 'ohana' and 'aloha' aren't just company marketing slogans. They mean something. We've had enough and we're stating simply that pilots and other employees have to be rewarded the same way that management rewards itself for the Company's unprecedented success and extraordinary financial performance," Mr. Sampson stated. In a strike authorization vote taken earlier this fall, 98 percent of participating HAL pilots gave their leadership the go-ahead to declare a strike if the NMB releases ALPA to self-help. It would be the first walkout in Hawaiian's 80-year history. Founded in 1931, ALPA -- http://www.alpa.org.-- is the world's largest pilot union, representing nearly 54,000 pilots at 36 airlines in the United States and Canada, including more than 400 Hawaiian pilots. About Hawaiian Airlines Hawaiian Airlines, Inc. -- http://www.hawaiianair.com/-- a subsidiary of Hawaiian Holdings Inc. (Amex: HA), provides passenger air service between the U.S. mainland and Hawaii. The company also offers nonstop service to Hawaii from more U.S. gateway cities than any other airline, as well as service to the Philippines, Australia, American Samoa, and Tahiti. Hawaiian also provides approximately 145 daily jet flights among the Hawaiian Islands. Hawaiian Airlines filed for bankruptcy in 2003 (Bankr. D. Hawaii. Case No. 03-00827). It emerged from Chapter 11 in June 2005. HCA INC: KKR Millennium Holds 97.3% Stake Thru Hercules Holding --------------------------------------------------------------- KKR Millennium Fund L.P. and various affiliates disclose holding beneficial ownership of 91,845,692 shares or roughly 97.3% of HCA Inc. common stock as of October 1, 2009. The shares held represents the aggregate number of shares of common stock of HCA Inc. held by Hercules Holding II, LLC, the parent of HCA Inc. The units of Hercules Holding II are held by a private investor group, including affiliates of each of Bain Capital Investors, LLC, Kohlberg Kravis Roberts & Co. L.P. and Merrill Lynch Global Private Equity and affiliates of Dr. Thomas F. Frist, Jr., the founder of HCA Inc., all of whom are parties to the limited liability company agreement of Hercules Holding II. On January 1, 2009, Merrill Lynch & Co., Inc., the parent of Merrill Lynch Global Private Equity, was acquired by Bank of America Corporation. Prior to the acquisition of Merrill Lynch & Co., Inc. by Bank of America, affiliates of Bank of America also held certain units of Hercules Holding II and were parties to the limited liability company agreement of Hercules Holding II. KKR Millennium Fund L.P. directly owns 9,313,725, or 10.1%, of the units of Hercules Holding II. KKR 2006 Fund L.P. directly owns 8,642,157, or 9.4%, of the units of Hercules Holding II, LLC. OPERF Co-Investment LLC directly owns 196,078, or 0.2%, of the units of Hercules Holding II, LLC. KKR PEI Investments, L.P., directly owns 3,949,873.017, or 4.3%, of the units of Hercules Holding II. Headquartered in Nashville, Tennessee, HCA, Inc. -- http://www.hcahealthcare.com/-- is the nation's leading provider of healthcare services. As of June 30, 2008, HCA operated 169 hospitals and 107 freestanding surgery centers, including eight hospitals and eight freestanding surgery centers operated through equity method joint ventures. As of June 30, 2009, HCA had $24.2 billion in total assets; total current liabilities of $3.39 billion, long-term debt of $26.3 billion, professional liability risks of $1.11 billion, income taxes and other liabilities of $1.71 billion and equity securities with contingent redemption rights of $155 million. Stockholders' deficit attributable to HCA Inc. is $9.48 billion as of June 30, 2009. As reported by the TCR on Aug. 4, 2009, Moody's Investors Service assigned a 'Ba3' (LGD3, 32%) rating to HCA, Inc.'s proposed offering of $750 million of first lien senior secured notes. Moody's also affirmed the existing ratings of HCA, including the 'B2' Corporate Family and Probability of Default Ratings. The outlook for the ratings is stable. ILLINOIS FINANCE: Fitch Affirms 'BB-' Rating on $80.5 Mil. Bonds ---------------------------------------------------------------- Fitch Ratings has affirmed the 'BB-' rating on the $80.5 million Illinois Finance Authority, Illinois revenue bonds, series 2005A&B (Friendship Village of Schaumburg). Fitch has revised the Rating Outlook to Evolving from Stable. The Outlook revision to Evolving reflects Friendship Village of Schaumburg's intention to refinance the $30 million series 2005C bonds variable-rate demand bonds on an unenhanced basis. Bank of America, N.A., has stated its intention not to renew its letter of credit on the series 2005C bonds, which expires on Sept. 30, 2010. Thus, a refinancing is subject to market conditions and investor acceptance. An inability to refinance its series 2005C bonds or a refinancing which materially increases FVS' cost of capital could have a negative impact on FVS' rating. On the other hand, successful refinancing of the series 2005C with permanent capital that would not significantly increase FVS' annual debt service costs could have a positive or neutral effect on the rating. The affirmation at 'BB-' encompasses FVS' steady occupancy gains and improving operating performance, which is tempered by FVS' capital structure risk. Overall occupancy of FVS' 657 independent living units has improved to 83% (545 units) on Aug. 31, 2009 from 79.4% (522 units) on Nov. 30, 2008. Lead generation remains solid and recent marketing initiatives have been successful. Moreover, the sales velocity of the Bridgegate apartments has improved with 44 net sales through the five-month interim period ended Aug. 31, 2009, as compared to 37 in the year earlier period. Fitch believes the pace of sales of the Bridgegate apartments should accelerate as the new Bridgewater Place apartments approach stabilized occupancy. In response to the difficult operating environment, management has been successfully controlling expenses and improving operating results as demonstrated by net operating margins of (-8.2%), (-0.4%) and 5.8% in FY 2008, FY 2009 and the five-month interim period. Liquidity remains light. On Aug. 31, 2009, FVS had $21.2 million of unrestricted cash and investments which includes $10.3 million of initial entrance fees in the entrance fee reserve account. Under the master trust indenture, amounts in the entrance fee reserve account are considered to be unrestricted for ratio calculations and have been incorporated by Fitch in calculating various liquidity ratios. Thus, FVS' days cash on hand, cushion ratio and percentage of cash to debt on Aug. 31, 2009, are 190, 3.0 times and 19%, respectively. The weakness in the local residential real estate market continues to be the biggest challenge in converting sales to move-ins. The recent bankruptcy announcement by Sedgebrook and Monarch Landing (both Erickson Retirement developments) is not expected to negatively impact FVS and may help in marketing given FVS' long history of successful operations and solid occupancy. Friendship Village of Schaumburg is a Type B continuing care retirement community currently consisting of 629 independent living apartments, 28 independent living cottages, 99 assisted living units (including 23 dementia units) and 248 skilled nursing beds. The facility is located in Schaumburg, IL, approximately 30 miles northwest of downtown Chicago. In fiscal 2009, FVS had total revenues of $39 million. Under its Continuing Disclosure Agreement, FVS' is required to provide annual audited financial statements within 150 days of each fiscal years end and quarterly unaudited financial statements with 45 days of each fiscal quarter-end. Disclosure to date has been excellent and includes regularly scheduled investor calls. IRVINE SENSORS: Says FY2009 Operating Income Meets Nasdaq Rule -------------------------------------------------------------- Irvine Sensors Corporation on Monday released an unaudited condensed statement of operations for the Company's 2009 fiscal year, which ended September 27, 2009. Pursuant to a continuing listing extension granted by a Nasdaq Listing Qualifications Panel, the Company was required to evidence unaudited net income from continuing operations of greater than $500,000 for fiscal 2009 on or before October 27, 2009, or to demonstrate compliance with one of Nasdaq's alternative listing criteria by that date, to maintain its listing on the Nasdaq Capital Market. The condensed unaudited statement of operations indicates that the Company's income from continuing operations for fiscal 2009 was $755,100, subject to audit, an amount in excess of the minimum requirement set forth by the Listing Panel. For the Fiscal Year Ended September 27, 2009, the Company posted net income of $813,500 on total revenues of $11,536,200. The Company made an ($834,300) provision for litigation judgment and posted a $2,242,500 gain from reduction in pension liability. About Irvine Sensors Headquartered in Costa Mesa, California, Irvine Sensors Corporation (NASDAQ: IRSN) -- http://www.irvine-sensors.com/-- is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating such products and research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications. As of June 28, 2009, Irvine Sensors had total assets of $6,627,800 and total liabilities of $11,999,000, resulting to stockholders' deficit of $5,371,200. Optex Systems, Inc., a Texas corporation and a wholly owned subsidiary of Irvine Sensors, on September 21, 2009, filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court in California. * * * Grant Thornton LLP in Irvine, California, in a letter dated January 9, 2009, pointed out that the Company incurred net losses of $21.6 million, $22.1 million, and $8.4 million for the years ended September 28, 2008, September 30, 2007, and October 1, 2006, respectively, and the Company has a working capital deficit of $16.1 million at September 28, 2008. "These factors, among others, raise substantial doubt about the company's ability to continue as a going concern." JETBLUE AIRWAYS: Moody's Affirms 'Caa2' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service affirmed the Caa2 corporate family and probability of default ratings of JetBlue Airways Corp., the Ca senior unsecured rating on the 3.75% Senior Convertible Notes due 2035 and its ratings on the company's three outstanding series of Enhanced Equipment Trust Certificates. Moody's also assigned an SGL-3 Speculative Grade Liquidity rating to JetBlue and changed the ratings outlook to stable from negative. "The stabilization of the outlook recognizes the improvements in liquidity and credit metrics that JetBlue has achieved in 2009, which Moody's anticipates JetBlue can mostly preserve through the upcoming seasonally-slow winter months," said Moody's Vice President, Jonathan Root. Unrestricted cash has increased by almost $400 million since December 31, 2008, albeit mainly from capital market transactions executed during the first half of 2009. Moody's is forecasting modestly positive free cash flow in 2009 and modest expansion of free cash flow in 2010 because of incrementally better revenue per available seat mile ("RASM") performance versus 2009 levels and relatively low capital expenditures that follow deferrals of the Airbus A320 and Embraer 190 delivery schedules. This also assumes that JetBlue's per gallon price of jet fuel remains below $2.25 per gallon and no unplanned material reduction in the flight schedule. The Caa2 long term rating considers that JetBlue remains exposed in the near term to potentially challenging market conditions. Any combination of higher than anticipated fuel prices, high unemployment or a wide-spread outbreak of the H1N1 virus in upcoming months could cause yields and operating cash flows to trail expectations, leading to a reversal of the recent improvements in its credit profile. The SGL-3 speculative grade liquidity rating reflects Moody's view that JetBlue maintains adequate liquidity. Cash to revenue in excess of 25% and expectations of positive free cash flow are the key factors supporting Moody's assessment. While capital expenditures for aircraft will be relatively low in the near term, the order book remains large, potentially leading to higher debt and more leverage as aircraft deliveries resume in 2011. This highlights the need for JetBlue to achieve and sustain robust positive free cash flow generation in order to avoid erosion in credit metrics when deliveries resume, and will be a key consideration in assessing the sustainability of near-term strengthening of the company's credit profile. The ratings could be upgraded if JetBlue maintains unrestricted cash above $700 million without relying on additional capital market transactions to do so. Operating profitably through the upcoming seasonally weak winter months could also lead to an upgrade of the ratings as could maintaining Debt to EBITDA below 7.0 times and/or FFO + Interest to Interest at about 2.5 times. The outlook could be returned to negative or the ratings downgraded if operating results trail expectations such that unrestricted cash approaches $500 million. Debt to EBITDA in excess of 8.5 times, FFO + Interest to Interest below 1.8 times or EBITDA margin below 15% could also lead to a negative rating action. The last rating action was on July 23, 2008, when Moody's downgraded the corporate family and probability of default ratings to Caa2 from Caa1. Assignments: Issuer: JetBlue Airways Corp. -- Speculative Grade Liquidity Rating, Assigned SGL-3 Outlook Actions: Issuer: JetBlue Airways Corp. -- Outlook, Changed To Stable From Negative Withdrawals: Issuer: JetBlue Airways Corp. -- Senior Secured Enhanced Equipment Trust, Withdrawn, previously rated B3 JetBlue Airways Corp., based in Forest Hills, New York, operates a low-cost, point-to-point airline from a hub in New York. JOHNSONDIVERSEY INC: Launches Tender Offer for 9.625% Notes ----------------------------------------------------------- JohnsonDiversey, Inc., and JohnsonDiversey Holdings, Inc., on October 26 announced that JohnsonDiversey has commenced cash tender offers for (i) any and all of the euro 225.0 million aggregate principal amount of its outstanding 9.625% Senior Subordinated Notes due 2012 (CUSIP No. 479269AD4, ISIN Nos. US479269AD49, XS0153495907, XS0147085020) and (ii) any and all of the $300.0 million aggregate principal amount of its outstanding 9.625% Senior Subordinated Notes due 2012 (CUSIP No. 479269AB8, ISIN No. US479269AB82) and JohnsonDiversey Holdings has commenced a cash tender offer for any and all of the approximately $406.3 million aggregate principal amount at maturity of its outstanding 10.67% Senior Discount Notes due 2013 (CUSIP No. 47926PAB2, ISIN No. US47926PAB22). JohnsonDiversey and JohnsonDiversey Holdings also announced concurrent consent solicitations for proposed amendments to the indentures under which the related Notes were issued. The tender offers and the consent solicitations are being made on the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated October 26, 2009 and the related Letter of Transmittal and Consent. Holders that tender their Notes pursuant to any of the tender offers will be deemed to have consented to the proposed amendments to the applicable indenture. Each tender offer will expire at midnight, New York City time, on November 23, 2009, unless extended or earlier terminated. In order to be eligible to receive the applicable total consideration for tendered Notes, holders must validly tender and not validly withdraw their Notes at or prior to 5:00 p.m., New York City time, on November 6, 2009, unless extended or earlier terminated. The tender offers and consent solicitations are subject to the satisfaction or waiver of certain conditions as described in the Offer to Purchase, including (1) the consummation of certain transactions described in the Offer to Purchase and (2) the receipt by JohnsonDiversey of proceeds from one or more financings generating net proceeds sufficient to repurchase the Notes tendered. The total consideration for each euro 1,000 principal amount of Euro Notes, each $1,000 principal amount of Dollar Notes and each $1,000 principal amount at maturity of Holdings Notes validly tendered and not validly withdrawn and accepted for payment pursuant to the applicable tender offer will be an amount equal to euro 1,018.54, $1,018.54 and $1,020.28, respectively, plus accrued and unpaid interest on such Notes from the last interest payment date to, but not including, the applicable payment date for Notes purchased. The applicable total consideration set forth above includes a consent payment of euro 30.00 per euro 1,000 principal amount of Euro Notes, $30.00 per $1,000 principal amount of Dollar Notes and $30.00 per $1,000 principal amount at maturity of Holdings Notes, as in each case, payable to holders that validly tender and do not validly withdraw their Notes and validly deliver and do not validly revoke their consents at or prior to the applicable Consent Deadline. Holders of Notes validly tendered after the applicable Consent Deadline will not receive a consent payment. Notes validly tendered at or prior to the applicable Consent Deadline may be validly withdrawn and the related consents may be revoked at any time at or prior to the Consent Deadline. Tendered Notes and delivered consents may not be validly withdrawn or validly revoked after the applicable Consent Deadline, except under certain limited circumstances as described in the Offer to Purchase. The proposed amendments to the indentures governing the Notes would eliminate substantially all of the restrictive covenants (other than, among other covenants, the covenant to pay interest and premium, if any, on, and principal or accreted value of, the Notes when due), certain events of default and substantially all of the restrictions on the ability of JohnsonDiversey or JohnsonDiversey Holdings, as the case may be, to merge, consolidate or sell all or substantially all of their properties or assets contained in the indentures and the Notes, and would waive certain defaults as described in the Offer to Purchase. Holders may not deliver consents to the proposed amendments without validly tendering the related Notes in the applicable tender offer and may not revoke their consents without withdrawing the previously tendered Notes to which they relate. JohnsonDiversey and JohnsonDiversey Holdings have engaged Goldman, Sachs & Co. and Goldman Sachs International as Dealer Managers and Solicitation Agents for the tender offers and consent solicitations. Persons with questions regarding the tender offers or the consent solicitations should contact Goldman, Sachs & Co. toll-free at (800) 828-3182 or collect at (212) 902-5183. Requests for documents should be directed to Global Bondholder Services Corporation, the Information Agent and Depositary for the tender offers and consent solicitations, at (212) 430-3774 (for banks and brokers) or (866) 952-2200 (for Noteholders). JohnsonDiversey, Inc., is a leading global supplier of cleaning, hygiene, and sanitizing products, equipment and related services to the institutional and industrial cleaning and sanitation markets. Fitch Ratings currently rates JohnsonDiversey -- Issuer Default Rating 'B-'; -- Senior secured bank credit facilities 'BB-/RR1'; -- Subordinated debt rating 'B-/RR4'. In addition, Fitch rates JohnsonDiversey Holdings Inc.: -- IDR 'B-'; -- Senior discount notes 'CCC/RR6'. KB TOYS: Lead Suit Settlement With California Gets Approval ----------------------------------------------------------- Law360 reports that a bankruptcy judge has signed off on a $100,000 settlement between KB Toys Inc. and the state of California over the Golden State's lawsuit accusing the retailer of polluting drinking water with lead toy blocks and other products that were recalled in 2007. Headquartered in Pittsfield, Massachusetts, KB Toys, Inc. -- http://www.kbtoys.com/-- operates a chain of retail toy stores. On Jan. 14, 2004, the Debtor and 69 of its affiliates filed for protection under Chapter 11 of the Bankruptcy Code, which were administratively consolidated under Case No. 04-10120. Two of the 200 bankruptcy cases remain open, KB Toys Inc. and KB Toy of Massachusetts Inc. In connection with the emergence of KB Toys from bankruptcy in August 2005, and the subsequent organizational restructuring, the assets and operations of many of these prior debtors were transferred among then existing debtor entities and consolidated with KB Toys Group. Furthermore, most of the entities involved were either dissolved or were merged into surviving entities, and several of them changed their names. The company, together with eight of its affiliates, again filed for Chapter 11 on December 11, 2008 (Bankr. D. Del. Lead Case No. 08-13269). Joel A. Waite, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Wilmer Cutler Pickering Hale and Dorr LLP as their co-counsel, FTI Consulting Inc. as financial and restructuring advisor, and Epiq Bankruptcy Solutions LLC as claims and noticing agent. According to Bloomberg, KB listed assets of $241 million against debt totaling $362 million in its Chapter 11 petition filed on December 11. The debts include $143 million in unsecured claims; and $200 million in secured claims, including $95.1 million owed to first-lien creditors where General Electric Capital Corp. serves as agent; and $95 million owed to second-lien creditors. As reported by the Troubled Company Reporter on December 22, 2008, the Hon. Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware allowed KB Toys Inc. to start going-out-of-business sales. LAUREL SWORD COMPANY: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Laurel Sword Company 2301 Milford Road East Stroudsburg, PA 18301 Bankruptcy Case No.: 09-08316 Chapter 11 Petition Date: October 24, 2009 Court: United States Bankruptcy Court Middle District of Pennsylvania (Wilkes-Barre) Judge: John J. Thomas Debtor's Counsel: Philip W. Stock, Esq. 706 Monroe Street Stroudsburg, PA 18360 Tel: (570) 420-0500 Fax: (570) 338-0920 Email: pwstock@ptd.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Patrick Forney, general partner of the Company. LEAP WIRELESS: Cricket Launches Exchange Offer for 7.75% Notes -------------------------------------------------------------- Leap Wireless International, Inc.'s subsidiary Cricket Communications, Inc., offers to exchange up to $1,100,000,000 aggregate principal amount of its new 7.75% Senior Secured Notes due 2016, which have been registered under the Securities Act of 1933, for any and all of its outstanding unregistered 7.75% Senior Secured Notes due 2016. Cricket issued the old notes on June 5, 2009 in a transaction not requiring registration under the Securities Act of 1933. Cricket is offering the new notes, with terms substantially identical to those of the old notes, in exchange for old notes to satisfy its registration obligations from that previous transaction. As of June 30, 2009, Cricket and the Guarantors had approximately $2,760,300,000 of consolidated indebtedness outstanding, including the notes. The validity of the new notes and guarantees offered has been passed upon for the Company by Latham & Watkins LLP, San Diego, California. A full-text copy of the prospectus is available at no charge at: http://ResearchArchives.com/t/s?47a0 Leap Wireless International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/-- provides wireless services in 29 states and holds licenses in 35 of the top 50 U.S. markets. Cricket offers customers a choice of unlimited voice, text, data and mobile Web services. As of June 30, 2009, the Company had $5.42 billion in total assets; and $3.55 billion in total liabilities and $77.8 million in redeemable non-controlling interests; resulting in $1.79 billion in stockholders' equity. As of June 30, 2009, the Company had $323.9 million in accumulated deficit. * * * According to the Troubled Company Reporter on April 29, 2009, Standard & Poor's Ratings Services revised its outlook on Leap Wireless International Inc. to positive from stable. At the same time, S&P affirmed its ratings on the San Diego-based wireless carrier, including the 'B-' long-term corporate credit rating and 'B+' secured bank loan rating on subsidiary Cricket Communications Inc. LEAP WIRELESS: Morgan Stanley Discloses 5.3% Equity Stake --------------------------------------------------------- Morgan Stanley discloses being the beneficial owner of 4,125,612 shares or roughly 5.3% of the common stock of Leap Wireless International Inc. Leap Wireless International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/-- provides wireless services in 29 states and holds licenses in 35 of the top 50 U.S. markets. Cricket offers customers a choice of unlimited voice, text, data and mobile Web services. As of June 30, 2009, the Company had $5.42 billion in total assets; and $3.55 billion in total liabilities and $77.8 million in redeemable non-controlling interests; resulting in $1.79 billion in stockholders' equity. As of June 30, 2009, the Company had $323.9 million in accumulated deficit. * * * According to the Troubled Company Reporter on April 29, 2009, Standard & Poor's Ratings Services revised its outlook on Leap Wireless International Inc. to positive from stable. At the same time, S&P affirmed its ratings on the San Diego-based wireless carrier, including the 'B-' long-term corporate credit rating and 'B+' secured bank loan rating on subsidiary Cricket Communications Inc. LEVEL 3: HyperCube Files Complaint Over Non-Payment of Services --------------------------------------------------------------- HyperCube LLC on October 26 said that it has filed complaints against Level 3 Communications due to Level 3's unlawful refusal to pay for tariffed access services performed by HyperCube in connection with Level 3's provision of toll-free calls that originate and terminate in New York and in Texas. The complaints were filed October 26 with the New York Public Service Commission and the Public Utility Commission of Texas, respectively. As of October 7, 2009, Level 3 owes HyperCube approximately $22 million for interstate and intrastate calls. This amount grows each month as HyperCube continues to satisfy its statutory duty as a common carrier to provide services to Level 3 despite its illegal refusal to pay HyperCube's approved tariffed rates for the work it performs for Level 3. "Unfortunately, our attempts to find a fair and sensible solution to this matter have been rebuffed by Level 3 and, as a result, we were compelled to take this action," said Ronald R. Beaumont, President and CEO of HyperCube. "Level 3's decision to stop paying HyperCube for services provided at approved tariff rates is a violation of state tariffs and state law and signals competitive retribution and unreasonable discrimination in violation of the Telecom Act. We are also concerned that Level 3's refusal to pay may in part be due to an inability to pay. We look forward to resolving these matters expeditiously." From November 2005 through November 2007, Level 3 paid HyperCube for access services pursuant to HyperCube's valid intrastate and interstate tariffs. But shortly after announcing that the company was sharply reducing guidance for its financial performance in November 2007, Level 3 unilaterally began refusing to pay HyperCube, despite the fact that it continues to receive, accept, and benefit from intrastate access services and database query services provided by HyperCube. On May 8, 2009, HyperCube commenced a similar action to those announced October 26, filing a complaint before the California Public Utility Commission aimed at requiring Level 3 to pay its outstanding debt in that state as well. Most recently, HyperCube filed a motion to compel Level 3 to place approximately $5.3 million in escrow with a third party agent pending resolution of the current action between HyperCube and Level 3 before the CPUC. The complaint cites a number of examples in the public record that suggest Level 3 has been and continues to be in financial trouble. HyperCube believes these financial troubles may be the reason Level 3 is refusing to pay its bills. On December 28, 2008, Standard & Poor's rating agency downgraded the corporate credit ranking of Level 3's parent to "selective default." In addition, a number of groups representing Level 3 shareholders have filed securities fraud complaints against Level 3's parent, which were consolidated in federal court on February 27, 2009. Given the current state of the economy and the public record on Level 3's financial difficulties, HyperCube continues to believe that its request for Level 3 to place the money it owes HyperCube into an escrow account is reasonable. (Mon)day's filings come in the wake of what appears is becoming a pattern with Level 3. Papers filed recently with the Indiana Utility Regulatory Commission reveal that Level 3 is involved in a national billing dispute with Verizon that likely totals millions of dollars. About HyperCube HyperCube LLC -- http://www.hypercube-llc.com/-- is a leading provider of local and national tandem switching services to wireless, wireline, cable and VOIP carriers. About Level 3 Broomfield, Colorado, Level 3 Communications, Inc. (NASDAQ: LVLT) -- http://www.Level3.com/-- provides fiber-based communications services. Level 3 offers a portfolio of metro and long-haul services, including transport, data, Internet, content delivery and voice. At June 30, 2009, the Company had $9.2 billion in total assets and $8.4 billion in total liabilities. * * * LVLT, along with its wholly owned subsidiary Level 3 Financing, Inc., has a 'B-' Issuer Default Rating and a Positive Rating Outlook. LEXINGTON PRECISION: Wants to Use Cash Collateral Until Dec. 31 --------------------------------------------------------------- Lexington Precision Corporation and Lexington Rubber Group, Inc., ask the U.S. Bankruptcy Court for the Southern District of New York for permission to continue using cash collateral of the prepetition senior lenders through the earlier of either Dec. 31, 2009, or until the occurrence of a "termination event." This is the Debtor's sixth application for an extension in their cash collateral use. As reported in the Troubled Company Reporter on Aug. 19, 2009, the Debtors will use cash collateral for (a) working capital and capital expenditures, (b) other general corporate purposes of the Debtors, and (c) the costs of administration of the bankruptcy cases, in accordance with a budget. The prepetition senior lenders are: -- CapitalSource Finance LLC, as lender and revolver agent for itself and other lenders, and co-documentation agent, and Webster Business Credit Corporation, as lender and co- dumentation agent under that certain Credit and Security Agreement, dated May 31, 2006. -- CSE Mortgage LLC, as lender and collateral agent for itself and each other lender, and DMD Special Situations Funding LLC, as lender under that certain Loan and Security Agreement, dated May 31, 2006. The Debtors relate that as of Oct. 1, 2009, they were obligated to the prepetition secured lenders in the principal amount of $31.5 million, plus accrued and unpaid interest in the amount of $5,000. The value of the assets encumbered by the prepetition secured lenders' liens significantly exceeds the aggregate amount of the obligations owed under the prepetition credit agreements. The Debtors add that the prepetition secured lenders have not yet responded to the Debtors' request. The Debtors hope that they will be able to reach a consensual resolution of the motion. The Debtor further said that the only alternative to continued use of cash collateral is a sale of a portion of the Debtors' core business. TCR reported that as adequate protection, the prepetition senior lenders will be granted (a) continued replacement security interests upon all of the Debtors' assets, (b) first priority security interests in all unencumbered assets of the Debtors, and (c) liens on all encumbered assets that were not otherwise subject to the prepetition senior lenders' liens as of the commencement date. About Lexington Precision Headquartered in New York, Lexington Precision Corp. -- http://www.lexingtonprecision.com/-- manufactures tight-tolerance rubber and metal components for use in medical, automotive, and industrial applications. As of February 29, 2008, the Company employed about 651 regular and 22 temporary personnel. The Company and its affiliate, Lexington Rubber Group Inc., filed for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead Case No.08-11153). Christopher J. Marcus, Esq., and Victoria Vron, Esq., at Weil, Gotshal & Manges, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Systems - Bankruptcy Solutions LLC as claims agent. The U.S. Trustee for Region 2 appointed six creditors to serve on an official committee of unsecured creditors. Paul N. Silverstein, Esq., and Jonathan Levine, Esq., at Andrews Kurth LLP, represent the Committee as counsel. On June 30, 2008, the Debtors filed with the Bankruptcy Court a plan of reorganization. It was amended twice, the latest amendment dated December 8, 2008. The Debtors currently plan to complete the liquidation of their connector-seal business before seeking approval of the Amended Plan. LYONDELL CHEMICAL: Court OKs Appointment of Examiner ---------------------------------------------------- Brett Clanton at Houston Chronicle reports that Judge Robert Gerber has granted the Committee of Unsecured Creditors in Lyondell Chemical Co. to allow an independent examiner to investigate allegations that the Company isn't acting in the best interests of creditors, though the scope of the examiner's investigation would be narrower than what the creditors had sought. According to Houston Chronicle, the committee accused Lyondell of a conflict of interest in choosing an affiliated firm to sponsor a stock offering to help fund the Company's turnaround, which the Company denies. Houston Chronicle says that a trial is set for December 1. The examiner must produce a report within 30 days after a person is named to fill the spot, Houston Chronicle states. LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MAGNA ENTERTAINMENT: To Ask Court OK to Auction Golden Gate Fields ------------------------------------------------------------------ Eric Young and Blanca Torres at San Francisco Business Times report that Magna Entertainment Corp. will seek the bankruptcy court's permission on October 27 to sell East Bay horse racing track Golden Gate Fields at auction in early 2010. Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J. Finnegan, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent for the Debtors. Magna Entertainment Corp. had total assets of US$1.054 billion and total liabilities of US$947.3 million based on unaudited consolidated financial statements as of Dec. 31, 2008. MATRIX DEV'T: Wachovia Wants to Foreclose on Taralon, Villebois --------------------------------------------------------------- Ryan Frank at The Oregonian reports that Wachovia Financial Services has filed a lawsuit against Matrix Development Corp. in federal court to foreclose on the Company's Taralon subdivision in Happy Valley and some raw land in the Villebois subdivision in Wilsonville. The Taralon subdivision, The Oregonian says, covers 159 lots and about 140 of the lots would go back to Wachovia. According to The Oregonian, Legend Homes President Jim Chapman said that the company agreed to give back the projects, and several others, as part of Matrix Development's Chapter 11 reorganization. The report quoted Mr. Chapman as saying, "We didn't see a business plan. We couldn't build enough units at enough of a profit to pay the interest cost." The Oregonian relates that Matrix Development will also give back raw land in its Phase 2 project at Villebois because it already has its work cut out selling its Villebois Phase 1. According to the report, Mr. Chapman said, "There's no point in paying interest on the property which takes money away from everything else." Wachovia said in court documents that it is seeking to recoup about $3.9 million for the Taralon loan and $7.1 million for the Villebois loan. Matrix Development, says The Oregonian, has given back or will give back eight projects -- including ones in Albany, Corvallis, Bend, Clark County and Riverside -- to its lenders. Headquartered in Portland, Oregon, Matrix Development Corp. aka Legend Homes -- http://www.legendhomes.com/-- designs and builds homes and condominiums. The Company filed for Chapter 11 protection on June 10, 2008 (Bankr. D. Ore. Case No. 08-32798). David A. Foraker, Esq., and Sanford R. Landress, Esq., at Greene & Markley P.C.; and Stephen T. Boyke, Esq, at the Law Office of Stephen T. Boyke, represent the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed between $100 million and $500 million each in assets and debts. MAX & ERMA'S: Files for Chr 11 Bankr. to Fend Off National City --------------------------------------------------------------- Max & Erma's has filed for Chapter 11 petition in U.S. Bankruptcy Court in Pittsburgh, listing $1 million to $10 million in assets against $1 million to $10 million in debts owed to 200 to 999 creditors. Thomas Olson at Pittsburgh Tribune-Review reports that Robert Lampl, Max & Erma's lawyer, said that the Company filed for bankruptcy mainly to fend off its main bank creditor, National City Bank, whom the Company owes about $16 million. According to Tribune-Review, National City took legal steps to put Max & Erma's in receivership. Tribune-Review relates that Mr. Lampl hopes to work out with National City a cash collateral agreement that would let Max & Erma's use money taken in at the restaurants to pay its bills. According to court documents, Max Erma's creditors include FFCA, which is owed $1.7 million; and the Ohio Department of Taxation, which is owed about $1.1 million. Max & Erma's owns a chain of 106 restaurants around Pittsburgh. The restaurants are mainly in Pennsylvania, Ohio, and Michigan, with a few in Chicago, Washington, Atlanta, and Kentucky. About 79 are company-owned and operated, while 27 belong to franchisees. Max & Erma's is owned by G&R Acquisitions, North Side. The chain started operating in 1972, taking the Max & Erma's name from two owners of a bar. MBIA ASSURANCE: S&P Corrects Ratings to 'NR' From 'BB+' ------------------------------------------------------- Standard & Poor's Ratings Services said that it corrected its financial strength, issuer credit, and financial enhancement ratings on MBIA Assurance S.A. to 'NR' from 'BB+'. The outlook was negative. S&P is withdrawing the rating as the company is no longer active, and has not retained any underwriting insurance risk. MERCER INT'L: Plans to Sell Up to $200,000,000 in Securities ------------------------------------------------------------ Mercer International Inc. filed with the Securities and Exchange Commission a shelf registration statement and preliminary prospectus in connection with its plan to offer and sell, from time to time, up to $200,000,000 of any combination of Common Stock, Preferred Stock and Debt Securities in one or more offerings. Mercer will provide specific terms of the securities in one or more supplements to the prospectus. The prospectus may not be used to consummate a sale of securities unless accompanied by a prospectus supplement. Mercer's common stock is listed on the NASDAQ Global Market under the symbol "MERC" and listed in U.S. dollars on the Toronto Stock Exchange under the symbol "MRI.U". On October 16, 2009, the last reported sale price of the common stock on the NASDAQ Global Market, our primary trading market, was $3.20 per share. Mercer currently intends to use the net proceeds from the sale of the securities that it may offer and sell from time to time by this prospectus: -- for general corporate and working capital purposes; -- to repay, refinance, repurchase or otherwise retire existing indebtedness; -- for capital expenditures; and -- as otherwise disclosed in any supplement to the prospectus. The prospectus supplement for a particular offering will provide a more detailed description of the use of net proceeds from such offering. In connection with the filing of the registration statement on Form S-3, Mercer filed a Current Report on Form 8-K with the SEC to update the Company's audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC on March 2, 2009, to reflect, for all periods presented, the retrospective adoption, effective January 1, 2009, of Financial Accounting Standards Board Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB No. 51. A full-text copy of the prospectus is available at no charge at: http://ResearchArchives.com/t/s?47a1 A full-text copy of Financial Statements and Supplementary Data from Mercer International Inc.'s Annual Report on Form 10-K for the year ended December 31, 2008, is available at no charge at: http://ResearchArchives.com/t/s?47a2 Vancouver-based Mercer International Inc. (Nasdaq: MERC, TSX: MRI.U) -- http://www.mercerint.com/-- is a global pulp manufacturing company. As reported by the Troubled Company Reporter on September 29, 2009, Standard & Poor's Ratings Services affirmed its 'CC' corporate credit and senior unsecured ratings on Mercer International. The outlook is negative. MERUELO MADDUX: Calif. Bank Opposes Bid to Hire DLA Piper --------------------------------------------------------- Law360 reports that California Bank & Trust has urged the Bankruptcy Court to reject a request from Meruelo Maddux Properties Inc. to hire DLA Piper LLP as special counsel nunc pro tunc to the end of March, claiming that the Debtor is trying to retain the firm as a second set of general counsel. Based in Los Angeles, California, Meruelo Maddux Properties, Inc. -- http://www.meruelomaddux.com/-- together with its affiliates, engage in residential, commercial and industrial development. Meruelo Maddux and its affiliates filed for Chapter 11 protection on March 26, 2009 (Bankr. C.D. Calif. Lead Case No. 09-13356). Aaron De Leest, Esq., John J. Bingham, Jr., Esq., and John N. Tedford, Esq., at Danning Gill Diamond & Kollitz, represent the Debtors in their restructuring efforts. Peter C. Anderson, the United States Trustee for Region 16, appointed five creditors to serve on the Creditors Committee. Asa S. Hami, Esq., Tamar Kouyoumjian, Esq., and Victor A. Sahn, Esq., at SulmeyerKupetz, A Professional Corporation, represent the Creditors Committee as counsel. The Debtors' financial condition as of December 31, 2008, showed estimated assets of $681,769,000 and estimated debts of $342,022,000. MORGANS HOTEL: Posts $27.8 Mln Net Loss in Third Quarter 2009 ------------------------------------------------------------- Morgans Hotel Group Co. reported financial results for the third quarter ended September 30, 2009. -- On October 15, 2009, MHG announced that an affiliate of The Yucaipa Companies, LLC invested $75 million in MHG in the form of preferred securities. The capital infusion will significantly strengthen MHG's balance sheet and provide long-term financing for growth. Combined with the recent amendment to MHG's credit line in August 2009, MHG has added approximately $200 million of liquidity in the last two months. -- On October 15, 2009, MHG announced that it has entered into an agreement with one of its lenders to effectively extend the mezzanine loan on the Hudson hotel property in New York City. -- On August 5, 2009, MHG announced the successful amendment of its revolving credit facility. This includes, among other things, the elimination of the leverage test, a reduction of the debt service coverage ratio to 0.90x from 1.75x, and an adjustment to the borrowing base test that is expected to allow MHG to access substantial liquidity for the life of the credit facility. -- Revenue per available room for System-Wide Comparable Hotels decreased 30.6% in constant dollars in the third quarter from the comparable period in 2008. Adjusted EBITDA for the third quarter was $9.4 million, a decrease of 55.7% from the comparable period in 2008. -- As a result of cost reduction plans, EBITDA at System-Wide Comparable Hotels during the third quarter declined at a rate of 1.9 times the related RevPAR percentage change, beating industry norms. -- MHG achieved a 16.2% reduction in operating expenses at System-Wide Comparable Hotels and a 30.3% reduction in corporate expenses in the third quarter of 2009 from the comparable period in 2008. -- In July, Hard Rock opened the new Paradise Tower, consisting of 490 rooms. The casino expansion, pool expansion and south tower, consisting of 374 suites, are projected to open in late 2009 or early 2010. -- Boston Ames and Mondrian SoHo are currently targeted to open in November 2009 and the middle of 2010, respectively. Fred Kleisner, CEO of Morgans Hotel Group, said, "We are confident that Morgans Hotel Group is well positioned to continue to navigate the current economic challenges through 2009 and beyond, and will benefit from improving demand. We have made great progress in cleaning up our balance sheet and adding approximately $200 million in liquidity. We have irreplaceable assets in 24- hour gateway markets that we believe will rebound faster and stronger as a recovery emerges. While we cannot predict when the recovery will come, we do know that historically, the 24-hour gateway markets on which this company is built have come back stronger than other markets. We have a clear growth strategy to extend our portfolio of properties with high-margin, long-term management agreements. We will continue to be diligent about taking the steps necessary to strengthen the Company, and most importantly, to build long-term shareholder value." Third Quarter 2009 Operating Results RevPAR at System-Wide Comparable Hotels decreased by 32.2% (30.6% in constant dollars) in the third quarter of 2009 compared to the third quarter of 2008. Occupancy declined by 8.9% and average daily rate declined by 25.5% (23.8% in constant dollars) compared to the same period in the prior year. MHG recorded a net loss of $27.8 million in the third quarter of 2009, which includes non-cash impairment charges of $29.1 million. Excluding impairment charges, net of $11.6 million of tax, our net loss was $10.3 million compared to a net loss of $9.3 million in the third quarter of 2008. Given the current economic environment, MHG recorded non-cash impairment charges of $29.1 million consisting of $17.2 million related to MHG's investment in the Las Vegas joint venture at Echelon and $11.9 million related to the property across the street from Delano in South Beach. The costs related primarily to the plans and drawings for these development projects. While MHG has not made any formal decisions regarding the future of these projects, we do not expect to develop these projects in the near future. Balance Sheet and Liquidity As of September 30, 2009, consolidated debt excluding the Clift lease obligation was $661.3 million and cash and cash equivalents were $34.1 million. MHG's pro forma liquidity position as of September 30, 2009, giving effect to the net proceeds of $71.0 million from the Yucaipa transaction as if it had occurred on that date, was approximately $195.0 million. This is comprised of a pro forma cash balance of approximately $105.1 million and $89.9 million of availability under the revolving credit line, which is net of $23.5 million of outstanding borrowings and $9.8 million of letters of credit posted under the line. On August 5, 2009, MHG announced that it had successfully completed an amendment to its existing line of credit. Among other things the amendment: -- Eliminated the corporate leverage test; -- Reduced the corporate fixed charge coverage test to 0.90x from 1.75x; -- Amended the borrowing base tests so that, among other changes, a minimum of 35% of appraised value on the New York properties securing the facilities will be available; and -- Modified a variety of other provisions at the subsidiary level that could have triggered technical defaults. The facility's size was reduced from $220 million to $125 million. MHG believes that, without the amendment, it would have had limited availability, if any, under the facility for the remainder of the term. The facility is secured by three of MHG's hotels: Delano, Royalton and Morgans. The interest rate is LIBOR plus 3.75% with a LIBOR floor of 1.0% and the maturity is October 5, 2011. On October 15, 2009, MHG issued to Yucaipa $75 million of preferred securities. The preferred securities have an 8% dividend rate for the first five years, a 10% rate for years six through seven, and a 20% rate for years thereafter. MHG has the option to accrue any and all dividend payments. MHG also has the option to redeem the preferred securities at any time without any pre-payment penalty. In addition, MHG issued to Yucaipa warrants to purchase 12.5 million shares of MHG's common stock at an exercise price of $6.00 per share, subject to certain anti-dilution adjustments, and exercisable utilizing a cashless exercise method only, resulting in a net share issuance. As a result of the cashless exercise method, the number of shares issuable on exercise will depend on the price of the common stock at that time. Based on the shares of MHG's common stock outstanding October 26, the maximum number of shares issuable under these warrants would never represent more than 29.99% of MHG's outstanding shares. These warrants will expire in 7.5 years. Also on October 15, 2009, MHG announced that it had entered into an agreement with one of its lenders which holds, among other loans, the mezzanine loan on MHG's Hudson hotel property in New York City. The Hudson mezzanine loan was to mature on July 12, 2010 and provided for a 15-month extension at MHG's option, subject to satisfaction of certain conditions. Under the new agreement, MHG paid an aggregate of $11.2 million to (i) reduce the principal balance of the mezzanine loan from $32.5 million to $26.5 million, (ii) acquire interests in $4.5 million of certain of MHG's other debt obligations, (iii) pay fees, and (iv) obtain a forbearance from the mezzanine lender until October 12, 2013, from exercising any remedies resulting from a maturity default, subject only to maintaining certain interest rate caps and making an additional aggregate payment of $1.3 million to purchase additional interests in certain of our other debt obligations prior to October 11, 2011. MHG believes these transactions will have the practical effect of extending the Hudson mezzanine loan by three years and three months beyond its scheduled maturity of July 12, 2010. The mezzanine lender also has agreed to cooperate with MHG in its efforts to seek an extension of the $217 million Hudson mortgage loan, which is also set to mature on July 12, 2010, and to consent to certain refinancings and other modifications of the Hudson mortgage loan. In June 2009, the $40 million non-recourse mortgage and mezzanine loans at Mondrian Scottsdale matured and were not repaid. MHG is continuing to operate Mondrian Scottsdale and is discussing various options with the lenders. MHG does not intend to commit significant monies toward the repayment or restructuring of the loans or the funding of operating deficits. As of September 30, 2009, MHG estimates that its total future capital commitments for development projects for the next 12 months are approximately $11 million, primarily to fund the outstanding letters of credit at Hard Rock. Additionally, MHG intends to utilize its tax net operating losses of approximately $114 million to offset future income, including potential gains on the sale of assets or interest therein as part of its long-term strategy to reduce its ownership interests in hotels. Development Activity MHG's projects currently under construction are the Hard Rock expansion, the Boston Ames and the Mondrian SoHo, all of which are expected to be completed between the fourth quarter of 2009 and the middle of 2010. In September 2009, MHG announced that it had secured a long-term management agreement for the San Juan Water and Beach Club Hotel, a 78 room beachfront hotel in Isla Verde, Puerto Rico. The owners intend to obtain development rights to build a Morgans branded hotel including a 30,000 square foot casino. MHG assumed management of the property as of October 18, 2009. San Juan Water and Beach Club Hotel will remain open and operating as an independent hotel until it ultimately becomes a Morgans Hotel Group branded property. 2009 Outlook The global economic downturn has had a significant adverse impact on the hotel industry, particularly since the middle of September 2008. Given the continuing uncertainty about the depth and duration of the economic crisis, we are not comfortable defining a specific RevPAR target or range for the year. However, we can provide a framework for Adjusted EBITDA given certain RevPAR declines. For example, if RevPAR for the year were to decline on average 25-30%, we would expect 2009 Adjusted EBITDA to be between $40-50 million. This is based on a ratio of EBITDA percentage decline to RevPAR percentage decline between 1.5 and 2.0 times, which is consistent with the ratio we have achieved over the past four quarters. About Morgans Hotel Group Morgans Hotel Group Co. -- http://www.morganshotelgroup.com/-- operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in Miami, Mondrian in Los Angeles, Mondrian in Scottsdale and Mondrian in South Beach, Clift in San Francisco, and Sanderson and St Martins Lane in London. MHG and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. MHG has other property transactions in various stages of completion, including projects in SoHo, New York; Las Vegas, Nevada; Palm Springs, California; Boston, Massachusetts; and Dubai, UAE. As reported by the TCR on Oct. 19, 2009, Morgans Hotel Group Co. has entered into an agreement with one of its lenders which holds, among other loans, the mezzanine loan on the Company's Hudson Hotel property in New York City. The Hudson mezzanine loan was to mature on July 12, 2010 and provided for a 15-month extension at the Company's option, subject to satisfaction of certain conditions. Under the agreement announced October 15, the mezzanine lender has agreed to forbear until October 12, 2013 from exercising any remedies resulting from a maturity default, subject only to maintaining certain interest rate caps and making cash payments within the control of MHG. MUZAK HOLDINGS: Court Approves Disclosure Statement --------------------------------------------------- Muzak Holdings LLC and certain of its subsidiaries on October 27 announced that the United States Bankruptcy Court for the District of Delaware has approved the Disclosure Statement filed in connection with the Company's proposed Plan of Reorganization and authorized Muzak to solicit approval of the Plan of Reorganization from its creditors. The Court has scheduled a hearing to consider the approval of Muzak's Plan of Reorganization on January 12, 2010. The Company has made substantial progress in its ongoing restructuring efforts and it intends to continue working closely with all of its stakeholders to position Muzak for a successful future. The Plan is supported by Muzak's largest secured and unsecured creditor, Silver Point Capital Advisors L.P., the official committee of unsecured creditors and an ad hoc committee of the Company's senior unsecured noteholders. In addition, the Company continues its efforts to procure exit financing to satisfy the claims of the senior secured lenders in full, in cash, as contemplated under the Plan. The Chapter 11 Plan The Plan will be funded from the proceeds of the exit facility, which will be used to pay the secured term loan claims in full in cash on the plan's effective date. A portion of the facility may be used to fund the Reorganized Debtors' working capital needs. As of Aug. 31, 2009, the Debtors had about $40.4 million cash on hand, which will fund all other cash payments under the plan and working capital needs. According to the Disclosure Statement, the Plan reflects a financial resolution of the Debtors' estates that is supported by Silver Point Capital Advisors L.P., the Debtors' largest secured and unsecured creditor, the statutory committee of unsecured creditors and an ad hoc group of Holders of the Debtors' Senior Notes. The Debtors said that they are one step closer to achieving their ultimate goal -- a confirmed chapter ii plan of reorganization that memorializes a restructuring that will enable Muzak to operate efficiently and effectively in a competitive market place. The Plan contemplates, among other things: -- secured lenders under the Prepetition Credit Agreement with a principal amount outstanding of $95,537,500 will receive, in full and final satisfaction of the Secured Term Loan Claims, payment in full in cash with proceeds of the Exit Facility; -- the holders of the Debtors' $220 million 10% senior notes will receive: a) new senior notes at $135 million face amount with a 15% coupon (8% cash and 7% payment-in-kind), a 4.5-year maturity and prepayable at par immediately with no change in control or call premium; and b) new redeemable PIK preferred stock in an amount of $85 million, with dividends accruing at 10% and increasing 1% per year (capped at 15%) and a 7-year maturity; -- the holders of the Debtors' $115 million 9.875% senior subordinated notes will receive 100% of the new common stock of Reorganized Muzak subject to dilution for up to 10% on account of a management incentive plan and warrants; -- the holders of the Debtors $24.2 million 13% senior discount notes will receive warrants for 7.5% of the outstanding New Common Shares -- excluding management shares -- at market value based upon an enterprise value to be determined with a term of five years; and -- the holders of general unsecured claims shall be paid in full in cash within 15 days after the Plan's effective date. Furthermore, the plan offers to pay between 5.8% and 62.4% to holders of senior subordinated notes claims, and 100% recovery to the general unsecured creditors. About Muzak Holdings Headquartered in Fort Mill, South Carolina, Muzak Holdings LLC -- http://www.muzak.com/-- creates a variety of music programming from a catalog of over 2.6 million songs and produces targeted custom in-store and on-hold messaging. Through its national service and support network, Muzak designs and installs professional sound systems, digital signage, drive-thru systems, commercial television and more. The Company and 14 affiliates filed for Chapter 11 protection on February 10, 2009 (Bankr. D. Del. Lead Case No. 09-10422). Moelis & Company is serving as financial advisor to the Company. Kirkland & Ellis LLP is the Debtors' counsel. Klehr Harrison Harvey Branzburg & Ellers has been tapped as local counsel. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. Muzak's petition listed assets of $324 million against debt of $465 million, including $101 million owed on a senior secured credit facility, $220 million in senior notes and $115 million in subordinated notes. MUZAK HOLDINGS: Wants Cash Collateral Access Until January 19 ------------------------------------------------------------- Muzak Holdings LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authorization to further amend the stipulated final order (i) authorizing the use of cash collateral of the prepetition secured lenders; and (ii) granting adequate protection to the prepetition lenders. The Debtors relate that they continue their efforts to obtain an exit financing facility and need additional time to move forward in the process and secure a commitment. To facilitate the efforts, the required lenders have consented to a further extension of the milestones consistent with the terms set forth in the second amendment to the cash collateral order. Specifically, the terms of the second amended order are: a) The Debtors have until Nov. 21, 2009, to obtain approval of a disclosure statement, which is extended from Oct. 21, 2009. b) The Debtors have until Jan. 15, 2010, to obtain a final order confirming a plan, which is extended from Dec. 16, 2009. c) No later than Nov. 1, 2009, the Debtors and the required lenders will agree to a cash collateral budget for the period Nov. 20, 2009, through Jan. 16, 2010. Once agreement is reached on the second supplemental budget, all references in the cash collateral order to the Budget will be deemed to be references to the second supplemental budget. d) The specified period during which the Debtors may use cash collateral will continue through the earliest to occur of the expiration of the remedies notice period or Jan. 19, 2010, which is extended from Nov. 20, 2009). e) The Debtors will not further modify the Modified Plan and Modified Disclosure Statement in a manner that does not result in the satisfaction of the prepetition lenders' claims in full in cash on the effective date without providing the prepetition lenders at least 30 days notice of the hearing to approve any further modified disclosure statement with respect to further modified plan. About Muzak Holdings Headquartered in Fort Mill, South Carolina, Muzak Holdings LLC -- http://www.muzak.com/-- creates a variety of music programming from a catalog of over 2.6 million songs and produces targeted custom in-store and on-hold messaging. Through its national service and support network, Muzak designs and installs professional sound systems, digital signage, drive-thru systems, commercial television and more. The Company and 14 affiliates filed for Chapter 11 protection on February 10, 2009 (Bankr. D. Del. Lead Case No. 09-10422). Moelis & Company is serving as financial advisor to the Company. Kirkland & Ellis LLP is the Debtors' counsel. Klehr Harrison Harvey Branzburg & Ellers has been tapped as local counsel. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. Muzak's petition listed assets of $324 million against debt of $465 million, including $101 million owed on a senior secured credit facility, $220 million in senior notes and $115 million in subordinated notes. NATIONAL GAS: U.S. Army Gas Supply Contracts Not Avoidable ---------------------------------------------------------- WestLaw reports that with the exception of certain spot purchases, wherein the contracts were entered into after delivery was to be made, the agreements between the Chapter 11 debtor, a natural gas distributor, and its former customer, the United States Army, were "commodity forward agreements." Therefore, they fell within the Army's "swap agreement" defense to the trustee's avoidance proceeding. The price and quantities were fixed in both the strip and the spot contracts, the bankruptcy court found. The existence of minor discrepancies as to the amount of natural gas contracted for and the amount of natural gas actually delivered did not change the fact that there were contracts for fixed quantities. Moreover, all of the transactions were part of the Army's energy cost hedging program. In re National Gas Distributors, LLC, --- B.R. ----, 2009 WL 2767113 (Bankr. E.D.N.C.) (Small, J.). This decision arose in the context of one of a score of adversary proceedings the chapter 11 trustee filed against National Gas' former customers. The Chapter 11 Trustee is attempting to avoid, pursuant to 11 U.S.C. Secs. 548(a)(1)(A) and (a)(1)(B), transfers made by the debtor, and to recover those transfers from the defendants pursuant to Sec. 550(a)(1). The gist of the trustee's complaints is that National Gas, as part of a fraudulent scheme, sold natural gas to some of its customers at below market prices. The trustee is attempting to recover the difference between the market price of each sale and the below market price at the time of each sale. As reported in the Troubled Company Reporter on Sept. 30, 2009, Judge Small reached the opposite conclusion about the avoidability of a contract that did not provide for delivery of a fixed quantity. About National Gas Distributors National Gas Distributors LLC -- http://www.gaspartners.com/-- supplied natural gas, propane, and oil to industrial, municipal, military, and governmental facilities. As of mid-December 2005, the company effectively ceased business operations due to inadequate remaining capital and its inability to arrange for the purchase and delivery of natural gas to its customers. The company filed for bankruptcy on Jan. 20, 2006 (Bankr. E.D.N.C. Case No. 06-00166). Ocie F. Murray, Jr., Esq., at Murray Craven & Inman LLP represented the Debtor. Richard M. Hutson, II, serves as the Chapter 11 Trustee, and is represented by Emily C. Weatherford, Esq., and John A. Northen, Esq., at Northen Blue LLP. When the Debtor filed for bankruptcy, it estimated between $1 million to $10 million in assets and $10 million to $50 million in debts. NAVISTAR INT'L: CEO to Present at Gabelli Symposium on Nov. 2 ------------------------------------------------------------- Navistar International Corporation says Daniel C. Ustian, its Chairman, President and Chief Executive Officer, will discuss business opportunities and other matters related to the Company during the 33rd Annual Gabelli & Company Auto Aftermarket Symposium in Las Vegas on November 2 at 3:25 PM PDT. Live audio web casts will be available for the presentation at http://ir.navistar.com/events.cfm Investors are advised to log on to the Web site at least 15 minutes prior to the presentation to allow sufficient time for downloading any necessary software. The web cast will be available for replay at the same address approximately three hours following its conclusion, and will remain available for a period of 12 months or such earlier time as the information is superseded or replaced by more current information. Meanwhile, Navistar on Monday filed with the Securities and Exchange Commission: -- a final prospectus supplement in connection with its issuance of $1,000,000,000 of 8.25% Senior Notes Due 2021 See http://ResearchArchives.com/t/s?4796 -- a final prospectus supplement in connection with its issuance of $550,000,000 of 3.00% Senior Subordinated Convertible Notes due 2014 See http://ResearchArchives.com/t/s?4797 About Navistar Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. At July 31, 2009, the Company had $9.38 billion in total assets and $10.66 billion in total liabilities, resulting in $1.35 billion in stockholders' deficit. Navistar reported $9.65 billion in total assets and $11.09 billion in total liabilities as of April 30, 2009, resulting in $1.44 billion in stockholders' deficit. * * * Navistar continues to carry Standard & Poor's Ratings Services' 'BB-' corporate credit ratings and 'BB-' issue-level rating. Navistar caries Moody's Investors Service's 'B1' Corporate Family Rating, 'B1' Probability of Default; and SGL-2 Speculative Grade Liquidity rating. NCI BUILDING: Discloses Management Changes Due to CD&R Deal ----------------------------------------------------------- NCI Building Systems, Inc., reports that on October 20, 2009 -- as of the closing of the Company's $250 million equity investment agreement with Clayton, Dubilier & Rice Fund VIII, L.P. -- William D. Breedlove, Philip J. Hawk, Larry D. Edwards, Ed L. Phipps, W. Bernard Pieper, John K. Sterling and Max L. Lukens resigned from the Board of Directors of the Company. Pursuant to the Investment Agreement and the Stockholders Agreement, the CD&R Funds have the right to appoint a number of directors to the Board that is equivalent to their percentage interest in the Company. Effective as of the Closing Date, the Board appointed three representatives designated by the CD&R Fund VIII -- James G. Berges, Lawrence J. Kremer and Nathan K. Sleeper, as directors. Mr. Berges has been named as Chairman of the Executive Committee of the Board and of the Nominating and Corporate Governance Committee of the Board. Mr. Kremer has been named to the Audit Committee of the Board and the Affiliate Transactions Committee of the Board. Mr. Sleeper has been named to the Executive Committee of the Board, the Nominating and Corporate Governance Committee of the Board and the Compensation Committee of the Board. Messrs. Sleeper, Berges and Kremer will receive the same compensation as other non-employee directors on the Board of the Company. Each of Messrs. Sleeper and Berges may assign all or any portion of the compensation he would receive for his services as a director to CD&R, Inc. or the successor to its investment management business or their respective affiliates. Indemnification Agreements On the Closing Date, the Company entered into director indemnification agreements with each of Messrs. Forbes, Martinez, Chambers, Sleeper, Berges and Kremer. Under the director indemnification agreements, the Company has agreed to indemnify each of Messrs. Forbes, Martinez, Chambers, Sleeper, Berges and Kremer for his activities and expenses as a director of the Company to the fullest extent permitted by law, and to cover the director under directors and officers liability insurance obtained by the Company. On October 19, 2009, the Company filed a Certificate of Designations with the Delaware Secretary of State for the purpose of amending its Restated Certificate of Incorporation to fix the designations, preferences, limitations and relative rights of the Preferred Stock. On the Closing Date, the Company filed a Certificate of Elimination with the Secretary of State for the purpose of amending its Restated Certificate of Incorporation to eliminate 600,000 authorized shares of Series A Junior Participating Preferred Stock. The Company also filed a Certificate of Increase with the Secretary of State to increase the number of authorized shares of Preferred Stock from 400,000 shares to 825,000 shares. Effective as of the Closing Date, the Company amended and restated its by-laws to reflect certain rights of the CD&R Funds under the Stockholders Agreement. New provisions of the by-laws include, but are not limited to, requirements consistent with the Stockholders Agreement relating to Board and committee composition, the removal of directors and filling of vacancies on the Board and committees, certain consent rights and the CD&R Funds' right to designate the Chairman of the Executive Committee of the Board or the Lead Director. On October 19, 2009, the Board approved the amendment and restatement of the Company's Code of Business Conduct and Ethics, effective as of the closing of the Equity Investment, amending the Company's Code of Business Conduct and Ethics as in effect prior to the Closing Date to provide that directors employed by CD&R, Inc. or any other affiliate of the CD&R Funds will not be deemed in violation of the Company's Code of Business Conduct and Ethics as a result of any investments by the CD&R Funds or affiliate transaction involving the CD&R Funds or any sharing of information with the CD&R Funds, insofar as such investment, affiliate transaction and information access is not prohibited under the terms of the Stockholders Agreement and is otherwise in accordance with the Company's certificate of incorporation, by-laws and the laws of the State of Delaware. 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: Repays Wachovia Debt; Secures $125MM ABL Facility --------------------------------------------------------------- NCI Building Systems, Inc., reports that on October 20, 2009 -- concurrent with the closing of the Company's $250 million equity investment agreement with Clayton, Dubilier & Rice Fund VIII, L.P.: -- NCI entered into an amendment to its credit agreement as in effect prior to such date with Wachovia Bank, National Association, as administrative agent; and -- the subsidiaries of the Company, NCI Group, Inc. and Robertson-Ceco II Corporation and the Company entered into a loan and security agreement for a $125.0 million asset- based loan facility, with Wells Fargo Foothill, LLC, as administrative agent and co-collateral agent, and Bank of America, N.A. and General Electric Capital Corporation, as co-collateral agents and the other parties thereto. On the Closing Date, the Company closed the Equity Investment and issued 250,000 Preferred Shares in the aggregate to CD&R Fund VIII and CD&R FF Fund VIII for an aggregate purchase price of $250.0 million in cash. Term Loan Refinancing Pursuant to the Amended Credit Agreement, NCI repaid roughly $143.3 million of the $293.3 million in principal amount of term loans outstanding under the credit agreement and modified the terms and maturity of the remaining $150.0 million balance. The agents and lenders under the Amended Credit Agreement have performed commercial banking, investment banking and advisory services for us from time to time, including services provided by an affiliate of Wachovia Bank, in its capacity as the counterparty to NCI's swap agreement, for which they have received customary fees and reimbursement of expenses. The agents and lenders may, from time to time, engage in transactions with and perform services for NCI in the ordinary course of their business for which they may receive customary fees and reimbursement of expenses. In addition, some of the agents and lenders are lenders, and in some cases agents or managers for the lenders, under the Loan and Security Agreement. The term loans under the Amended Credit Agreement will mature four years and six months from the Closing Date and, prior to such date, will amortize in nominal quarterly installments equal to one percent of the aggregate principal amount thereof per annum. The term loans under the Amended Credit Agreement are prepayable at NCI's option at any time without premium or penalty (other than customary breakage costs). NCI also has the ability to repurchase a portion of the term loans under the Amended Credit Agreement subject to certain terms and conditions set forth in the Amended Credit Agreement. Subject to certain exceptions, the term loans under the Amended Credit Agreement are subject to mandatory prepayment and reduction in an amount equal to: -- the net cash proceeds of (1) certain asset sales, (2) certain debt offerings and (3) certain insurance recovery and condemnation events; -- 50% of annual excess cash flow for any fiscal year ending on or after October 31, 2010, unless a specified leverage ratio target is met; and -- the greater of $10.0 million and 50% of certain 2009 tax refunds received by the Company. The Amended Credit Agreement contains a number of covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, 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 Amended Credit Agreement, the Company and its consolidated subsidiaries are subject to a financial covenant that requires NCI to maintain a specified consolidated debt to EBITDA leverage ratio for specified periods (the requirement for this ratio varies throughout the term of the term loans under the Amended Credit Agreement) beginning with the four fiscal quarter period ending October 30, 2011. NCI will, however, not be subject to this financial covenant if certain prepayments or repurchases of the term loans under the Amended Credit Agreement are made in the specified period. The Amended Credit Agreement contains 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 ABL Financing), certain bankruptcy events, certain ERISA events, material invalidity of guarantees or security interest, material judgments and change of control. The Amended Credit Agreement also provides that the Company has the right at any time to request up to $50.0 million of incremental commitments in the aggregate under one or more incremental term loan facilities. The lenders under the Amended Credit Agreement will not be under any obligation to provide any such incremental commitments, and any such addition of or increase in commitments will be subject to pro forma compliance with an incurrence-based financial covenant and customary conditions precedent. NCI's ability to obtain extensions of credit under these incremental commitments will be subject to the same conditions as extensions of credit would be under the Amended Credit Agreement. The members of the lending syndicate are: * WACHOVIA BANK, NATIONAL ASSOCIATION, Individually, as a Lender and as Administrative Agent and Collateral Agent, * AIB DEBT MANAGEMENT, LIMITED, as Lender, * AMEGY BANK NATIONAL ASSOCIATION, as Lender, * ARES ENHANCED LOAN INVESTMENT STRATEGY IR LTD., * ARES ENHANCED CREDIT OPPORTUNITIES FUND LTD., * ARES VIII CLO LTD., * ARES VIR CLO LTD., * ARES VR CLO LTD., * BANK OF AMERICA, N.A., as Lender, * LONGHORN CDO (CAYMAN) LTD. as Lender, * CAPITAL ONE LEVERAGE FINANCE CORP., as Lender, * DEL MAR CLO I, LTD., * CC ARBITRAGE, LTD., as Lender, * CENTAUR LOWLEV ARBITRAGE FUND LTD., as Lender, * OLYMPIC CLO I, as Lender, * SAN GABRIEL CLO I, as Lender, * SHASTA CLO I, as Lender, * CREDIT INDUSTRIEL ET COMMERCIAL, as Lender, * COMMERCIAL BANK, as Lender, * MERCANTIL COMMERCEBANK, NA, as Lender, * BIG SKY III SENIOR LOAN TRUST,by Eaton Vance Management as Investment Advisor, as Lender, * EATON VANCE CDO IX, LTD., by Eaton Vance Management as Investment Advisor, as Lender, * EATON VANCE CDO VIII, LTD., by Eaton Vance Management as Investment Advisor, as Lender, * EATON VANCE FLOATING RATE INCOME TRUST, by Eaton Vance Management as Investment Advisor, as Lender, * EATON VANCE INSTITUTIONAL SENIOR LOAN FUND, by Eaton Vance Management as Investment Advisor, as Lender, * EATON VANCE LIMITED DURATION INCOME FUND, by Eaton Vance Management as Investment Advisor, as Lender, * EATON VANCE SENIOR FLOATING RATE INCOME TRUST, by Eaton Vance Management as Investment Advisor as Lender, * EATON VANCE VT FLOATING-RATE INCOME FUND, by Eaton Vance Management as Investment Advisor, as Lender, * GRAYSON & CO, by Boston Management and Research as Investment Advisor, as Lender, * SENIOR DEBT PORTFOLIO, by Boston Management and Research as Investment Advisor, as Lender, * FULLERTON CAPITAL PARTNERS, L.P., as Lender, * GE BUSINESS FINANCIAL SERVICES INC., (FORMERLY KNOWN AS MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.), as Lender, * GENERAL ELECTRIC CAPITAL CORPORATION, AS ADMINISTRATOR FOR, GE COMMERCIAL LOAN HOLDING LLC, as Lender, * GENERAL ELECTRIC CAPITAL CORPORATION, as Lender, * GENERAL ELECTRIC CAPITAL CORPORATION AS ADMINISTRATOR FOR, MERRITT CLO HOLDING LLC, as Lender, * SYCAMORE OPPORTUNITIES FUND, L.P., as Lender, * GUARANTY BANK (ACQUIRED BY BBVA COMPASS), as Lender, * HARRIS, N.A., as a Lender, * HIGHLAND LEGACY LIMITED, * LOAN FUNDING IV LLC, * LOAN FUNDING VII LLC, * ROCKWALL CDO II LTD., * ING INVESTMENT MANAGEMENT CLO I, LTD., * ING INVESTMENT MANAGEMENT CLO II, LTD., * ING INVESTMENT MANAGEMENT CLO III, LTD., * ING INVESTMENT MANAGEMENT CLO IV, LTD., * ING INVESTMENT MANAGEMENT CLO V, LTD., * JMB CAPITAL PARTNERS MASTER FUND, L.P., * LUXOR CAPITAL LLC, as Lender, * MARATHON CLO I LTD., as Lender, * MARATHON CLO II LTD., as Lender, * VENTURE III CDO LIMITED, as Lender, * VENTURE IV CDO LIMITED, as Lender, * VENTURE IX CDO LIMITED, as Lender, * VENTURE V CDO LIMITED, as Lender, * MORGAN STANLEY INVESTMENT MANAGEMENT CROTON, LTD., as Lender, * CONFLUENT 3 LIMITED, as Lender, * QUALCOMM GLOBAL TRADING, INC., as Lender, * NATIONAL CITY BANK, as Lender, * THE NORINCHUKIN BANK, NEW YORK BRANCH, through State Street Bank and Trust Company N.A. as Fiduciary Custodian, as Lender, * BOSTON HARBOR CLO-2004-1, LTD., as Lender, * COOPERATIVE CENTRALE RAIFFEINSEN-BOERENLEENBANK, B.A. "RABOBANK NEDERLAND", NEW YORK BRANCH, as Lender, * SIERRA CLO II, as Lender, * THE SUMITOMO TRUST & BANKING CO., LTD., NEW YORK BRANCH, as Lender, * TRUSTMARK NATIONAL BANK, as Lender, * UBS AG, STAMFORD BRANCH, as Lender, * WELLS FARGO BANK, N.A., as Lender, The ABL Financing The agents and lenders under the Loan and Security Agreement have performed commercial banking, investment banking and advisory services for the Company from time to time, including services provided by an affiliate of Wachovia Bank, National Association, in its capacity as the counterparty to our swap agreement, for which they have received customary fees and reimbursement of expenses. The agents and lenders may, from time to time, engage in transactions with and perform services for us in the ordinary course of their business for which they may receive customary fees and reimbursement of expenses. In addition, some of the agents and lenders are lenders, and in some cases agents or managers for the lenders, under the Amended Credit Agreement. The Loan and Security Agreement provides for an asset-based revolving credit facility which allows aggregate maximum borrowings by the Company of up to $125.0 million. Initial availability under the ABL Financing is approximately $67.0 million. Availability will be reduced by issuance of letters of credit as well as by borrowings. The loans under the ABL Financing will mature on the earlier of the fifth anniversary of the closing date thereof and the maturity of the term loans under the Amended Credit Agreement. The borrowers will pay (1) fees on the unused commitments of the lenders under the Loan and Security Agreement ranging from 0.75% to 1.00%, depending on the proportion of the loans that have been drawn under the Loan and Security Agreement and (2) other customary fees in respect of the ABL Financing. The ABL Financing contains a number of covenants that, among other things, limit or restrict the ability of the Company, the borrowers and the other subsidiaries of the Company 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, the Loan and Security Agreement includes a minimum fixed charge coverage ratio of one to one, which will apply if the borrowers fail to maintain a specified minimum level of borrowing capacity. The Loan and Security Agreement contains 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. The Loan and Security Agreement also provides that the borrowers have the right at any time to request up to $50.0 million of incremental commitments in the aggregate under one or more incremental term loan facilities. The lenders under the Loan and Security Agreement will not be under any obligation to provide any such incremental commitments, and any such addition of or increase in commitments will be subject to customary conditions precedent. Our ability to obtain extensions of credit under these incremental commitments will be subject to the same conditions as extensions of credit under the Loan and Security Agreement. The members of the lending syndicate are: * WELLS FARGO FOOTHILL, LLC, serves as Administrative Agent and Co-Collateral Agent, * BANK OF AMERICA, N.A., and GENERAL ELECTRIC CAPITAL CORPORATION, serve as Co-Collateral Agents, * WELLS FARGO FOOTHILL, LLC, and BANK OF AMERICA, N.A., as Joint Lead Arrangers, and * WELLS FARGO FOOTHILL, LLC, BANK OF AMERICA, N.A. and GENERAL ELECTRIC CAPITAL CORPORATION as Joint Lead Bookrunners Intercreditor Agreement The liens securing the obligations under the Amended Credit Agreement, the permitted hedging agreements and the guarantees thereof are first in priority (as between the term loan refinancing and the ABL Financing) with respect to stock, material real property and assets other than accounts receivable, inventory, certain deposit accounts, associated intangibles and certain other property of the Company and the guarantors, subject to certain exceptions. The liens are second in priority (as between the term loan refinancing and the ABL Financing) with respect to accounts receivable, inventory, certain deposit accounts, associated intangibles and certain other property of the Company and the guarantors, subject to certain exceptions. The details of the collateral rights between lenders under the Amended Credit Agreement and lenders under the Loan and Security Agreement are governed by an intercreditor agreement, dated as of the Closing Date, among the borrowers, the term loan administrative agent, the ABL administrative agent and the other parties thereto. A full-text copy of the Amended and Restated Credit Agreement, dated as of October 20, 2009, among the Company, as borrower, Wachovia Bank, National Association, as administrative agent and collateral agent and the several lenders party thereto, is available at no charge at http://ResearchArchives.com/t/s?478e A full-text copy of the Loan and Security Agreement, dated as of October 20, 2009, by and among NCI Group, Inc. and Robertson-Ceco II Corporation, as borrowers, the Company and Steelbuilding.Com, Inc., as guarantors, Wells Fargo Foothill, LLC, as administrative and co-collateral agent, Bank of America, N.A. and General Electric Capital Corporation, as co-collateral agents and the lenders and issuing bank party thereto, is available at no charge at http://ResearchArchives.com/t/s?478f A full-text copy of the Intercreditor Agreement, dated as of October 20, 2009, by and among the Company, as borrower or guarantor, certain domestic subsidiaries of the Company, as borrowers or guarantors, Wachovia Bank, National Association, as term loan agent and term loan administrative agent, Wells Fargo Foothill, LLC, as working capital agent and working capital administrative agent and Wells Fargo Bank, as control agent, is available at no charge at http://ResearchArchives.com/t/s?4790 A full-text copy of the Guarantee and Collateral Agreement, dated as of October 20, 2009 by the Company and certain of its subsidiaries in favor of Wachovia Bank, National Association as administrative agent and collateral agent, is available at no charge at http://ResearchArchives.com/t/s?4791 A full-text copy of the Guaranty Agreement, dated as of October 20, 2009 by NCI Group, Inc., Robertson-Ceco II Corporation, the Company and Steelbuilding.com, Inc., in favor of Wells Fargo Foothill, LLC as administrative agent and collateral agent, is available at no charge at http://ResearchArchives.com/t/s?4792 A full-text copy of the Pledge and Security Agreement, dated as of October 20, 2009, by and among the Company, NCI Group, Inc. and Robertson-Ceco II, to and in favor of Wells Fargo Foothill, LLC in its capacity as administrative agent and collateral agent, is available at no charge at http://ResearchArchives.com/t/s?4793 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. NCL CORP: Moody's Assigns 'B3' Corporate Family Rating ------------------------------------------------------ Moody's Investors Service assigned a B3 Corporate Family Rating and Probability of Default Rating to NCL Corporation Ltd. Moody's also assigned a B3 rating to NCL's proposed $450 million senior secured guaranteed notes and a SGL-3 Speculative Grade Liquidity rating. Proceeds from the Notes and a new $750 million bank facility will be used to refinance existing debt. The Notes will be issued by NCL, guaranteed by four separate ship operating entities, and secured by the cruise ship owned by each subsidiary. The company's proposed $750M bank facility will share the same security package as the Notes. NCL's rating reflects the company's high leverage and modest interest coverage, the challenging macro-economic operating environment that could derail the company's ability to increase net revenue yields, and thin availability under the company's revolving credit facility. Additionally, NCL needs to absorb delivery of its new 4,200 berth ship, the Norwegian EPIC, which will cause metrics to materially deteriorate in 2010. The ratings also consider the good quality of the company's fleet of cruise ships that will enable it to effectively compete against it larger rivals, its well known brand, and Moody's expectation that NCL will generate positive free cash that can be deployed toward debt repayment in 2011 and beyond. The SGL-3 Speculative Grade Liquidity rating reflects adequate liquidity. NCL is expected to generate sufficient cash flow to meet its fixed charges and maintenance capital spending needs. However, if NCL only achieves 50% of its projected net revenue yield improvement, Moody's estimate that cash flow from operations would be insufficient to cover maintenance capital spending and mandatory amortizations. This would require the company to draw on its revolving credit facility thereby eroding the company's already thin liquidity cushion. Ratings assigned * Corporate Family Rating at B3 * Probability of Default Rating at B3 * $450 million Senior Secured Notes due 2016 at B3 (LGD 4, 50%) The last rating action with regard to NCL occurred on April 29, 2009, when Moody's withdrew the company's B2 Corporate Family Rating and B3 senior unsecured bond rating. NCL Corporation Limited, headquartered in Miami operates 10 cruise ships that offer itineraries in North and South America as well as Europe. NCL CORP: S&P Assigns Corporate Credit Rating at 'B' ---------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B' corporate credit rating to NCL Corp. Ltd. At the same time, S&P assigned its 'B+' issue-level rating to NCL's proposed $450 million senior secured notes due 2016 with a recovery rating of '2', indicating S&P's expectation for substantial (70%-90%) recovery for lenders in the event of a payment default. NCL plans to use the proceeds of the notes, in addition to proceeds from a proposed $750 million senior secured revolver ranking pari passu with the notes, to repay debt balances. The proposed notes and revolver are secured by mortgages on four NCL ships: Norwegian Spirit, Norwegian Star, Norwegian Sun, and Norwegian Dawn. The outlook is negative. "The rating reflects very high leverage and weak coverage of interest expense over the next two years due to high levels of planned debt-financed capital spending," said Standard & Poor's credit analyst Emile Courtney, "and a liquidity profile that S&P expects to be constrained by high amortization payments starting in 2011." These are offset partly by NCL's fair business position as the third-largest cruise company serving the North American market (behind Carnival and Royal Caribbean), an increase in EBITDA margin over the past 12 months during a period of significant economic challenge in the cruise industry and in the leisure space broadly, and the expectation that the addition of the company's newest ship, Norwegian Epic, will add significant capacity and cash flow to NCL in 2010 and 2011. NEIMAN MARCUS: Swings to $668MM Net Loss for Aug. 1 Fiscal Year --------------------------------------------------------------- Neiman Marcus, Inc., swung to a net loss of $668,046,000 for the fiscal year ended August 1, 2009, from net earnings of $142,813,000 for the fiscal year ended August 2, 2008. Neiman Marcus' revenues in fiscal year 2009 were significantly impacted by a lower level of customer demand. Its revenues for fiscal year 2009 were $3,643,300,000, a decrease of 20.8% as compared to fiscal year 2008 reflecting a decline in comparable revenues of 21.4%. Comparable revenues decreased in fiscal year 2009 for both Neiman Marcus' Specialty Retail stores and Direct Marketing operation. At August 1, 2009, the Company had $5,581,026,000 in total assets against total current liabilities of $563,493,000 and total long- term liabilities of $4,098,698,000. At August 1, 2009, the Company had $400,846,000 in retained deficit and $918,835,000 stockholders' equity. Neiman Marcus' cash provided by its operating activities was $210,800,000 in fiscal year 2009, a decrease of $74,500,000 from the prior fiscal year as a result of lower revenues and earnings. Despite the decrease in cash provided by operating activities, Neiman Marcus held cash balances of $323,400,000 at August 1, 2009, compared to $239,200,000 at August 2, 2008. At August 1, 2009, Neiman Marcus had no borrowings outstanding under its Asset- Based Revolving Credit Facility, $32,800,000 of outstanding letters of credit and $468,500,000 of unused borrowing availability. At October 3, 2009, Neiman Marcus had $507,200,000 of unused borrowing availability. Given the dislocation in the financial markets and the uncertainty as to when reasonable conditions will return, Neiman Marcus has elected to pay PIK Interest for the three quarterly interest periods ending October 14, 2009, and to make such interest payments with the issuance of additional Senior Notes at the PIK Interest rate of 9.75% instead of paying interest in cash. As a result, the original principal amount of Senior Notes of $700,000,000 increased by $17,100,000 on April 14, 2009, and $17,400,000 on July 14, 2009, and will increase by $18,100,000 on October 14, 2009. After October 15, 2010, Neiman Marcus is required to make all interest payments on the Senior Notes entirely in cash. Highly Leveraged Neiman Marcus admits to being highly leveraged. As of August 1, 2009, the principal amount of Neiman Marcus Group's total indebtedness was roughly $2,984,900,000, the unused borrowing availability under the $600,000,000 Asset-Based Revolving Credit Facility was $468,500,000 and the outstanding letters of credit were $32,800,000. NMG's substantial indebtedness, combined with its lease and other financial obligations and contractual commitments, could have other important consequences: -- make it more difficult for NMG to satisfy its obligations with respect to its indebtedness and any failure to comply with the obligations of any of its debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the agreements governing NMG's indebtedness; -- make NMG more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; -- require NMG to dedicate a substantial portion of its cash flow from operations to payments on its indebtedness, thereby reducing the availability of cash flows to fund working capital, capital expenditures, acquisitions and other general corporate purposes; -- limit NMG's flexibility in planning for, or reacting to, changes in NMG's business and the industry in which it operates; -- place NMG at a competitive disadvantage compared to its competitors that are less highly leveraged; -- limit NMG's ability to obtain credit from its vendors and/or the vendors' factors; and -- limit NMG's ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements, execution of its business strategy or other purposes. Preliminary Results On September 3, 2009, Neiman Marcus announced preliminary total revenues and comparable revenues of approximately $241.0 million and $237.0 million, respectively, for the four-week period ended August 29, 2009. In the four-week August period of fiscal year 2010, total revenues decreased 15.3% and comparable revenues decreased 16.6% compared to the four-week August period of fiscal year 2009. Comparable revenues decreased 19.6% in Neiman Marcus' Specialty Retail stores and increased 0.1% in its Direct Marketing operation for the four-week August period of fiscal year 2010. On October 8, 2009, Neiman Marcus announced preliminary total revenues and comparable revenues of approximately $353.5 million and $344.2 million, respectively, for the five-week period ended October 3, 2009 and $594.5 million and $581.2 million, respectively, for the nine-week period ended October 3, 2009. In the five-week September period of fiscal year 2010, total revenues decreased 14.8% and comparable revenues decreased 16.9% compared to the five-week September period of fiscal year 2009. Comparable revenues decreased 17.6% in Neiman Marcus' Specialty Retail stores and 13.6% in Neiman Marcus' Direct Marketing operation for the five-week September period of fiscal year 2010. In the nine-week September period of fiscal year 2010, total revenues decreased 15.0% and comparable revenues decreased 16.8% compared to the nine-week September period of fiscal year 2009. Comparable revenues decreased 18.4% in Neiman Marcus' Specialty Retail stores and 8.3% in Neiman Marcus' Direct Marketing operation for the nine-week September period of fiscal year 2010. Outlook Neiman Marcus expects retail demand and revenues will remain weak for an extended period of time. Neiman Marcus will continue to align its inventory levels and purchases with anticipated lower customer demand. Despite the anticipated continuation of current economic conditions, Neiman Marcus believes the cash generated from its operations along with its available sources of financing will enable the Company to meet its cash obligations for fiscal year 2010. A full-text copy of the Company's annual report is available at no charge at http://ResearchArchives.com/t/s?479c About Neiman Marcus Neiman Marcus Group, Inc., headquartered in Dallas, Texas, operates 40 Neiman Marcus stores, 2 Bergdorf Goodman stores, 27 clearance centers, and a direct business. Total revenues are about $3.9 billion. The Company carries a 'Caa1' Corporate Family Rating and 'Caa1' Probability of Default Rating from Moody's Investors Service. NEIMAN MARCUS: To Issue of 9%/9-3/4%, 10-3/8% & 7.125% Notes ------------------------------------------------------------ The Neiman Marcus Group, Inc., filed documents with the Securities and Exchange Commission regarding a planned issuance of 9%/9-3/4% Senior Notes due 2015 and 10-3/8% Senior Subordinated Notes due 2015. The notes will mature October 15, 2015. The 9%/9-3/4% Senior Notes due 2015 will be the Company's unsecured, senior obligations and will rank equally in right of payment with all of its existing and future senior indebtedness, senior to all of its existing and future subordinated indebtedness, including the senior subordinated notes, and effectively junior to all of its existing and future secured indebtedness, including its senior secured credit facilities and its 7.125% senior debentures due 2028, to the extent of the collateral securing such obligations. The 10-3/8% Senior Subordinated Notes due 2015 will be the Company's unsecured, senior subordinated obligations and will rank junior in right of payment to all of its existing and future senior indebtedness, including its senior secured credit facilities, its 2028 debentures and the senior notes. Neiman Marcus, Inc., NMG's parent company, and each of its wholly owned domestic subsidiaries that has guaranteed the senior secured credit facilities, unconditionally guarantees the senior notes with guarantees that will rank equal in right of payment to all of the senior indebtedness of such guarantor, and unconditionally guarantees the senior subordinated notes with guarantees that will be subordinated in right of payment to all existing and future senior indebtedness of such guarantor. Prior to October 15, 2010, the Company may redeem some or all of the notes at a redemption price equal to the "make whole" amount for notes of the relevant series set forth. On or after October 15, 2010, the Company may redeem some or all of the notes at the redemption prices for notes of the relevant series set forth. A full-text copy of the preliminary prospectus is available at no charge at http://ResearchArchives.com/t/s?479d 7.125% Senior Debentures Due 2028 Neiman Marcus Group also filed documents regarding a planned issuance of 7.125% Senior Debentures due 2028. The notes will mature June 1, 2028. The 2028 debentures are Neiman Marcus' senior obligations and rank equal in right of payment with all of its existing and future senior indebtedness, senior to all of its existing and future subordinated indebtedness, and effectively junior to all of its existing and future indebtedness that is secured by collateral that does not also secure the 2028 debentures, to the extent of the value of such assets securing such other obligations. The 2028 debentures were unsecured when originally issued, but were granted security pursuant to the requirements of the negative pledge covenant contained in the indenture governing the 2028 debentures, as a result of Neiman Marcus' incurrence of secured indebtedness in the Transactions. The 2028 debentures are currently equally and ratably secured by a first lien security interest on specified collateral that also secures Neiman Marcus' senior secured credit facilities. Because the 2028 debentures' security interest on the specified collateral has been granted only for purposes of compliance with the negative pledge covenant contained in the indenture governing the 2028 debentures, the 2028 debentures are secured only for so long as the senior secured credit facilities (or other secured indebtedness subject to the 2028 debentures' negative pledge clause) and the liens thereunder remain in existence and the specified collateral is subject to release under the senior secured credit facilities without the consent of holders of the 2028 debentures. The 2028 debentures are redeemable, in whole or in part, at Neiman Marcus' option, at any time, at a redemption price equal to the greater of (a) 100% of the principal amount of such debentures and (b) the sum of the present values of the remaining scheduled payments, discounted on a semiannual basis at the treasury rate determined as described in the prospectus plus 20 basis points, plus accrued interest to the date of redemption. The 2028 debentures are represented by global debentures registered in the name of The Depository Trust Company. Neiman Marcus Inc. has unconditionally guaranteed the 2028 debentures with a guarantee that ranks equal in right of payment to all of its senior indebtedness. A full-text copy of the preliminary prospectus is available at no charge at http://ResearchArchives.com/t/s?479e According to the Company, the prospectus will be used by Credit Suisse Securities (USA) LLC in connection with offers and sales in market-making transactions at negotiated prices related to prevailing market prices. There is currently no public market for the securities. The Company does not intend to list the securities on any securities exchange. Credit Suisse Securities (USA) LLC has advised the Company that it is currently making a market in the securities; however, it is not obligated to do so and may stop at any time. Credit Suisse Securities (USA) LLC may act as principal or agent in any such transaction. The Company will not receive the proceeds of the sale of the securities but will bear the expenses of registration. About Neiman Marcus Neiman Marcus Group, Inc., headquartered in Dallas, Texas, operates 40 Neiman Marcus stores, 2 Bergdorf Goodman stores, 27 clearance centers, and a direct business. Total revenues are about $3.9 billion. The Company carries a 'Caa1' Corporate Family Rating and 'Caa1' Probability of Default Rating from Moody's Investors Service. NEUMANN HOMES: Bracewell Tapped to Pursue Potential Claims ---------------------------------------------------------- Neumann Homes Inc. and its affiliated debtors ask the U.S. Bankruptcy Court for the Northern District of Illinois to approve a supplemental agreement it entered into with Bracewell & Giuliani LLP, governing the terms of employment of the firm as their special counsel. The Debtors tapped the services of Bracewell to pursue potential claims on behalf of their estates, including claims against their former executive, Kenneth Neumann and his wife, and disputes involving properties in NeuDearborn Station, one of the Debtors' residential development projects. Under the Supplemental Agreement, Bracewell will be tasked to evaluate claims, including those relating to the Debtors' residential development known as Mountain Shadows in Colorado, Tadian Holdings and any person or property that is subject to potential recovery. The Supplement Agreement also provides that Bracewell's compensation for pursuing the claims against the NeuDearborn Properties will be a contingency fee of 40% of the net sum recovered from those claims, unless Bracewell and the Debtors agree that the firm's compensation should be either some contingency percentage less than 40% of the net sum recovered, or payment on an hourly basis at the rates stated in the parties' Employment Agreement. The Debtors' retention and employment of Bracewell will also be non-exclusive and that the Debtors may engage other counsel to provide the services, as noted under the Supplemental Agreement. About Neumann Homes Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The Company has built more than 11,000 homes in some 150 residential communities. The Company offers formal business training to employees through classes, seminars, and computer- based training. The Company filed for Chapter 11 protection on November 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors has selected Paul, Hastings, Janofsky & Walker LLP, as its counsel in these bankruptcy proceeding. When the Debtors filed for protection from its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) NEUMANN HOMES: Plan Outline Hearing Continued to October 28 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois further adjourned the hearing to consider approval of the disclosure statement explaining the Joint Plan of Liquidation filed by Neumann Homes Inc. and its affiliated debtors to October 28, 2009. Initial hearings for the consideration of the adequacy of the Disclosure Statement were held on September 24 and October 14, 2009. The Debtors utilized both hearings to apprise the Court of developments affecting their Plan and Disclosure Statement. The Debtors aim to use the extra time afforded by the Court to address Plan-related concerns of parties-in-interest. The Disclosure Statement Hearing was originally set for September 23, 2009. The Debtors filed their Joint Plan of Liquidation and Disclosure Statement on August 26, 2009. The Plan provides for the liquidation of the Debtors' assets and the distribution of the net proceeds to creditors in order of the relative priority for distribution. The Plan contemplates and is predicated upon entry of an order, which may be the confirmation order, that would substantively consolidate the Debtors' estates and their bankruptcy cases for purposes of all actions associated with confirmation and consummation of the Plan. Claims against and interests in the Debtors are divided into 12 classes under the Plan. Administrative claims and priority tax claims are to be paid in full. About Neumann Homes Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The Company has built more than 11,000 homes in some 150 residential communities. The Company offers formal business training to employees through classes, seminars, and computer- based training. The Company filed for Chapter 11 protection on November 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors has selected Paul, Hastings, Janofsky & Walker LLP, as its counsel in these bankruptcy proceeding. When the Debtors filed for protection from its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) NEUMANN HOMES: Proposes to Employ Keating as Special COunsel ------------------------------------------------------------ Neumann Homes Inc. and its affiliated debtors seek permission from the U.S. Bankruptcy Court for the Northern District of Illinois to employ Keating & Shure Ltd. as their special counsel. The Debtors want to tap the services of Chicago-based Keating & Shure to pursue claims and causes of action on behalf of their estates, including preference and turnover actions against third parties not handled by other legal professionals they have employed. As special counsel to the Debtors, Keating & Shure will be tasked to: (1) assist and advise the Debtors in analyzing the claims and causes of action against certain third parties; (2) prepare and file pleadings to pursue the Debtors' claims and causes of action to recover the value of certain tax refunds, preferential transfers and other assets; (3) conduct examinations of witnesses, claimants and other parties in connection with the litigation; (4) represent the Debtors in any proceedings affecting the Debtors' claims and causes of action; (5) collect any judgment that may be entered in the litigation related to the claims and causes of action; and (6) handle any appeals that may result from the litigation. Keating & Shure will be paid for its services a contingency fee of 40% of the net sum received from the claims and causes of action, unless the firm and the Debtors agree that on a certain matter, Keating & Shure should be paid its standard hourly rate of $325. Mark Shure, Esq., at Keating & Shure, assures the Court that his firm does not have interest adverse to the interest of the Debtors' estate or any class of creditors and equity holders, and that his firm is a "disinterested person" under Section 101(14) of the Bankruptcy Code. About Neumann Homes Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The Company has built more than 11,000 homes in some 150 residential communities. The Company offers formal business training to employees through classes, seminars, and computer- based training. The Company filed for Chapter 11 protection on November 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors has selected Paul, Hastings, Janofsky & Walker LLP, as its counsel in these bankruptcy proceeding. When the Debtors filed for protection from its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) NEWARK GROUP: Cancels Registration of 9-3/4% Sr. Sub Notes ---------------------------------------------------------- The Newark Group, Inc., filed a Form 15 with the Securities and Exchange Commission to terminate the registration of its 9-3/4% Senior Subordinated Exchange Notes due 2014. As reported by the Troubled Company Reporter on September 1, 2009, Newark Group, Wachovia Bank, National Association, and the requisite lenders under Newark Group's asset-based senior secured revolving credit facility on August 7, 2009, entered into an extension of the parties' Forbearance Agreement, effective as of July 31, 2009, to further extend the forbearance expiration period to October 31, subject to there being no further defaults. On February 20, 2009, Newark Group, Wachovia, and the requisite lenders completed the execution and delivery of a Forbearance Agreement pursuant to which, among other things, the ABL Lenders agreed to forbear from exercising certain rights as a result of the occurrence of certain events of default under the Company's asset-based senior secured revolving credit facility. The Forbearance Agreement was amended twice to extend the forbearance period to July 31, 2009. The extended forbearance period is designed to give the Company additional time to negotiate changes to its loan facilities and capital structure with the ABL Lenders, the lenders under the Company's credit-linked loan facility, and the holders of the Company's 9-3/4% Senior Subordinated Notes due 2014 issued pursuant to an Indenture dated as of March 12, 2004. Neither the ABL Lenders nor the lenders under the CL Facility nor the holders of the Notes have taken any action to accelerate the obligations due under their respective credit agreements. About Newark Group The Newark Group, Inc. -- http://www.newarkgroup.com/-- is an integrated producer of 100% recycled paperboard and paperboard products. The Company primarily manufactures core board, folding carton (predominantly uncoated) and industrial converting grades of paperboard. It is a major North American producer of tubes, cores and allied products, and is a producer of laminated products and graphic board in both North America and Europe. It also collects, trade and process recovered paper in North America. The Newark Group, Inc. supplies its products to the paper, packaging, stationery, book printing, construction, plastic film, furniture and game industries. The Company operates in three reportable segments: Paperboard, Converted Products, and International and its products are categorized into five product lines: recovered paper; 100% recycled paperboard; laminated products and graphicboard; tubes, cores and allied products, and solidboard packaging. In May 2009, Moody's Investors Service downgraded the Corporate Family Rating of The Newark Group Inc. to Ca from Caa3 and changed the Probability of Default Rating to Ca/LD from Caa3. Concurrently, the rating on the senior secured credit-linked facility was lowered to Caa2 from Caa1 and the rating on the senior subordinated notes was lowered to C from Ca. Moody's affirmed the SGL-4 Speculative Grade Liquidity rating. The ratings outlook remains negative. The Company has yet to file its quarterly report for the period ended January 31, 2009. As of October 31, 2008, the Company had $554,960,000 in total assets and $ 463,334,000 in total liabilities. NOVA HOLDING: Court Approves Sale of All Assets to Clinton County ----------------------------------------------------------------- The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware approved the sale of all or substantially all of Nova Holding Clinton County LLC. and its debtor-affiliates' assets, including the sale of Nova Biofuels Clinton County, LLC's assets to Clinton County Bio Energy, LLC. As reported in the Troubled Company Reporter on Aug. 5, 2009, the assets to be sold consist of: (i) Nova Seneca, LLC's assets; (ii) Nova Biofuels Clinton County, LLC's assets; and (iii) the proprietary, patented process technology utilized by the Debtors in the production of biodiesel and owned by Nova Biosource Technologies, LLC. Clinton owns and operates the Clinton County, Iowa refinery, while Seneca owns the Seneca, Illinois refinery, the Debtors' flagship refinery. WestLB AG (New York Branch) holds prepetition liens in all of the Seneca assets and postpetition liens on all sale assets. As consideration for the Clinton assets, Clinton County Bio Energy, the buyer, has offered to pay cash at closing of $1,200,000 plus (A) pre-paid expenses, and (B) the dollar amount of any sales tax, use tax or similar tax attributable to the sale or transfer of the purchased assets and exclusive of Bio Energy's payment of cure amounts. Bio Energy has also agreed to assume all of Sellers' liabilities arising from and after the closing date under the Clinton executory contracts and unexpired leases, and the cure amounts. The sale of the Debtors' assets will be on an "as is, where is" basis. About Nova Holding Clinton County Based in Seneca, Illinois, Nova Holding Clinton County, LLC, makes industrial organic chemicals and biological products. Nova Holding and certain affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. D. Del. Lead Case No. 09-11081). Michael B. Schaedle, Esq., Melissa S. Vongtama, Esq., and Josef W. Mintz, Esq., at Blank Rome LLP, in Philadelphia, represent the Debtors as counsel. David W. Carickhoff, Esq., at Blank Rome LLP, is Delaware counsel to the Debtors. The Debtors listed between $10 million and $50 million each in assets and debts. NOVA HOLDING: Court OKs DIP Facility Increase to $2.6 Million ------------------------------------------------------------- The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware granted Nova Holding Clinton County LLC and its debtor-affiliates authorization to enter into the second DIP amendment, increasing the aggregate commitment to $2,600,000. As reported in the Troubled Company Reporter on July 8, 2009, the Court granted the Debtors, authorization, on a final basis, to obtain $2,030,000 senior secured postpetition financing from WestLB AG (New York Branch). The Debtors' authority to use the proceeds of the DIP facility will terminate automatically upon, and the Borrowers will pay any outstanding portion of the DIP facility in full, to the DIP agent in immediately available funds on the earliest of (i) either: (x) Oct. 30, 2009, or (y) the closing of the transactions contemplated by the asset purchase agreement, dated as of Sept. 23, 2009, between Seneca and Technologies as sellers and REG Seneca as purchaser; (ii) the date of acceleration of any outstanding portion of the DIP facility; (iii) the first business day on which either the final DIP order or this order expire; (iv) conversion or dismissal of the case; and (v) effective date of the plan of reorganization. Based in Seneca, Illinois, Nova Holding Clinton County, LLC, makes industrial organic chemicals and biological products. Nova Holding and certain affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. D. Del. Lead Case No. 09-11081). Michael B. Schaedle, Esq., Melissa S. Vongtama, Esq., and Josef W. Mintz, Esq., at Blank Rome LLP, in Philadelphia, represent the Debtors as counsel. David W. Carickhoff, Esq., at Blank Rome LLP, is Delaware counsel to the Debtors. The Debtors listed between $10 million and $50 million each in assets and debts. NTK HOLDINGS: Gets Interim Nod to Use Cash Collateral ----------------------------------------------------- NTK Holdings, Inc., and its debtor affiliates seek authority from Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to use the cash collateral securing their prepetition indebtedness under the Credit Agreement dated May 20, 2008, and the Indenture dated May 20, 2008. The Debtors seek authority to use the Cash Collateral for the operation of their business in the ordinary course, provided that the Debtors will not be entitled to use Cash Collateral if, at the time of any measurement, (i) total liquidity is less than $100 million or (ii) total liquidity is less than $125 million and the Debtors' aggregate cash disbursements, on a cumulative basis, exceed 120% of the aggregated projected amount of all total cash disbursements as provided in the Debtors' 13-week projections. The Debtors seek to use Cash Collateral for the period from the Petition Date through the date which is the earliest to occur of (a) entry of an order granting the request on a final basis, (b) the expiration of the Remedies Notice Period, or (c) the occurrence of an event of default. The Events of Default include: (a) the Debtors' obtaining after the Petition Date of credit or the incurring of indebtedness that is (i) secured by a security interest, mortgage or other lien on any portion of the Collateral equal or senior to any security interest, mortgage or other lien of the Prepetition Administrative Agent and the Prepetition Secured Lenders, or (ii) entitled to priority administrative status equal or senior to that granted to the Prepetition Administrative Agent and Prepetition Secured Lenders; (b) the entry of an order by the Court, other than the Interim Cash Collateral Order, granting relief from or modifying the automatic stay (i) to allow any creditor to execute upon or enforce a lien on or security interest in any Collateral with a value in excess of $25,000,000 in the aggregate during the pendency of the Debtors' Cases, or (ii) with respect to any lien of or the granting of any lien on any Collateral to any state or local environmental or regulatory agency or authority, which in either case would have a material adverse effect on the business, operations, property, assets, or condition, financial or otherwise, of the Debtors; (c) dismissal of the Chapter 11 Cases or conversion of the Chapter 11 Cases to cases under Chapter 7 of the Bankruptcy Code, or appointment of a Chapter 11 trustee or examiner with enlarged powers or other responsible person; (d) the sale after the Petition Date of any portion of any of the Debtors' assets that constitute Collateral with a value in excess of $5,000,000 in the aggregate during the pendency of the Cases outside the ordinary course of business without an order of the Court; (e) upon written notice from either of the Prepetition Agents, the material failure to make Adequate Protection Payments or other payments to the Prepetition Administrative Agent and Prepetition Secured Lenders when due; (f) the Debtors' failure to obtain an order of the Court within 10 days after the Petition Date scheduling a hearing for confirmation of the Debtors' Prepackaged Plan; and (g) the Debtors' failure to obtain entry of the Final Cash Collateral Order within 45 days after the Petition Date. Immediately upon the occurrence and during the continuation of an Event of Default, the Prepetition Administrative Agent may declare a termination, reduction or restriction on the ability of the Debtors to use Cash Collateral. In order to protect the Prepetition Lenders from any Diminution in Value of their respective interest in the Cash Collateral, the Debtors propose to grant adequate protection, in the form of liens, claims, and postpetition payments, to the Prepetition Lenders: -- the Prepetition Administrative Agent will receive (a) the Senior Adequate Protection Liens; (b) the Senior Adequate Protection Superpriority Claim; (c) the Senior Adequate Protection Payments; (d) current payments of interest at the non-default rate set forth in the Prepetition Credit Documents, fees and other amounts due under the Prepetition Credit Documents; and (e) ongoing payment of the reasonable fees, costs and expenses of the Prepetition Administrative Agent and the Prepetition Secured Lenders under the Prepetition Credit Documents. -- the Prepetition Indenture Trustee, for the benefit of itself and the 10% Noteholders, will receive (a) the Senior Adequate Protection Liens; (b) the Senior Adequate Protection Superpriority Claim; (c) the Senior Adequate Protection Payments; (d) current payments of interest at the non-default rate set forth in the Prepetition Indenture Documents, fees and other amounts due under the Prepetition Indenture Documents; and (e) ongoing payment of the reasonable fees, costs and expenses of the Prepetition Indenture Trustee under the Prepetition Indenture Documents. -- the Prepetition Indenture Trustee, for the benefit of itself and the 10% Noteholders, will receive (a) the Junior Adequate Protection Liens and (b) the Junior Adequate Protection Superpriority Claim. -- the Prepetition Administrative Agent, for the benefit of itself and the Prepetition Secured Lenders will receive with respect to its prepetition second liens on the Noteholder First Lien Collateral (a) the Junior Adequate Protection Liens and (b) the Junior Adequate Protection Superpriority Claim. The "Carve Out" means these expenses: (a) statutory fees payable to the Court or to the United States Trustee pursuant to Section 1930(a)(6) of the Judiciary and Judicial Procedure; (b) the accrued and unpaid professional fees and disbursements incurred for any professionals of any statutory committee or the Debtors retained by final order of the Court under Sections 327, 328, 363 or 1102 of the Bankruptcy Code incurred prior to the Termination Declaration Date, to the extent allowed or later allowed by order of the Court under Sections 328, 330 or 331 and any interim compensation procedures order, and (c) after the Termination Declaration Date, the fees and expenses of Case Professionals in an amount not to exceed $3 million. According to Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, the Debtors do not have available sources of working capital and financing to carry on the operation of their businesses without the use of Cash Collateral. The Debtors' ability to maintain business relationships with their vendors, suppliers and customers and to meet payroll and other operating expenses, he asserts, is essential to the Debtors' continued viability and the value of their businesses as going concerns. Mr. Holtzer avers that the use of Cash Collateral is therefore critical to the preservation and maintenance of the going concern value of the Debtors, as well as the value of the Collateral. "Without the liquidity provided by the use of Cash Collateral, the Debtors will simply be unable to conduct normal business operations, will be unable to pay basic expenses, including payroll, utilities, and supplier payments, and will suffer a precipitous loss of value to the detriment of all parties in interest," Mr. Holtzer asserts. * * * The Court has authorized the Debtors to use their Cash Collateral on an interim basis. The Debtors may use the Cash Collateral for the period from the Petition Date through the date that is the earliest to occur of (a) entry of the Final Order, (b) the expiration of the Remedies Notice Period, or (c) the occurrence of an Event of Default. On or before October 27, 2009, the Debtors will serve, by United States mail, first-class postage prepaid, notice of the entry of the Interim Order and of the Final Hearing, together with a copy of this Interim Order and the Motion, on: (a) the parties having been given notice of the Interim Hearing; (b) any palty which has filed prior to the date a request for notices with the Court; (c) counsel for any Statutory Committee; (d) the 30 largest unsecured creditors of the Debtors on a consolidated basis; and (e) any additional parties required to be served pursuant to Local Rule 2002-1 (b). The Final Hearing to consider entry of the Final Order on the Cash Collateral is scheduled for December 4, 2009, at 10:00 a.m. (Eastem time). Objections to the Final Order are due on November 23, 2009, at 4:00 p.m. (Eastem time). A full-text copy of the Interim Cash Collateral Order is available for free at: http://bankrupt.com/misc/NTK_IntCashCollOrd1023.pdf 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. NTK Holdings Inc., together with affiliates, including Nortek International, Inc. and Nortek Holdings, Inc., filed for Chapter 11 with a prepackaged plan accepted by all impaired creditors on October 21, 2009 (Bankr. D. Del. Case No. 09-13611). The Company has tapped Blackstone Group and Weil, Gotshal & Manges to aid in its restructuring effort. Mark D. Collins, Esq., at Richards Layton & Finger P.A., serves as local counsel. Epiq Bankruptcy Solutions is claims and notice agent. An Ad Hoc Committee of Nortek noteholders is being represented by Andrew N. Rosenberg, Esq., and Brian N. Hermann, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP; and William Derrough, Esq., and Adam Keil, Esq., at Moelis & Company. NTK Holdings and its units have assets of $1,655,200,000, against debts of $2,778,100,000 as of July 4, 2009. Bankruptcy Creditors' Service, Inc., publishes NTK Holdings Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Nortek Holdings Inc., Nortek Internationa Inc., and their affiliates (http://bankrupt.com/newsstand/or 215/945-7000). NTK HOLDINGS: To Honor Prepetition Customer Obligations ------------------------------------------------------- Pursuant to Sections 105(a), 362(d), 363(b), and 503(b)(l) of the Bankruptcy Code, NTK Holdings Inc. and its units sought and obtained from the Court an order authorizing them to honor and continue certain prepetition customer programs. Prior to the Petition Date, in the ordinary course of business, and as is customary in the building products manufacturing industry, the Debtors instituted and engaged in certain activities to develop and sustain a positive reputation and relationship with their customers. To that end, the Debtors implemented various customer programs and policies designed to ensure customer satisfaction, drive sales, meet competitive pressures, develop and sustain customer relationships and loyalty, improve profitability, and generate goodwill for the Debtors and their products and services. According to Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, the Customer Programs are integral to the Debtors' efforts to stabilize and restore vitality to their businesses and ultimately deliver the most value to all stakeholders in the Debtors' Chapter 11 cases. The Debtors believe that they must promptly assure customers of their continued ability to satisfy prepetition and postpetition obligations under the Customer Programs to maintain their valuable customer base, and myriad other important benefits derived there from, following the commencement of their Cases. Due to the diverse range of customers for whom the Debtors provide product and the diverse range of products the Debtors produce, many contracts between the Debtors and their customers are unique and many include customer-specific incentives. There are six general types of Customer Programs that the Debtors use in their businesses and which exist, or may come to exist, in many of the Debtors' customer contracts: (a) warranty programs, (b) volume-based rebate programs, (c) cooperative advertising and other marketing-related rebate programs, (d) customer indemnity programs, (e) programs involving back charges, retainage, contract changes and deposits, and (f) programs involving customer refunds, returns and allowances for credit, exchanges, billing, shipping and other normal course customer obligations. These Customer Programs permit the Debtors to cater flexibly to the needs of their diverse customer base, Mr. Holtzer said. The Debtors believe that the continuation of the Customer Programs constitute "ordinary course of business" practices, and, therefore, does not require Court approval. However, out of an abundance of caution, the Debtors seek authorization, but not direction, to continue, renew, replace, implement, modify, or terminate the Customer Programs as they deem appropriate, and to honor their undisputed prepetition obligations, in the ordinary course of business, without interruption, in accordance with prepetition practices. At the Debtors' behest, the Court authorizes and directs all applicable banks and other financial institutions to receive, process, honor and pay any and all checks drawn or electronic funds transferred to pay obligations under the Customer Programs, whether the checks were presented prior to or after the Petition Date. The Debtors estimate that the cost of honoring prepetition obligations under their Customer Programs will be approximately $114.4 million, and the cost of honoring the programs during the two months following the Petition Date to be approximately $27.7 million. The Debtors estimate that the cost of honoring their Customer Programs in the 20 days after the Petition Date to be approximately $11.2 million. 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. NTK Holdings Inc., together with affiliates, including Nortek International, Inc. and Nortek Holdings, Inc., filed for Chapter 11 with a prepackaged plan accepted by all impaired creditors on October 21, 2009 (Bankr. D. Del. Case No. 09-13611). The Company has tapped Blackstone Group and Weil, Gotshal & Manges to aid in its restructuring effort. Mark D. Collins, Esq., at Richards Layton & Finger P.A., serves as local counsel. Epiq Bankruptcy Solutions is claims and notice agent. An Ad Hoc Committee of Nortek noteholders is being represented by Andrew N. Rosenberg, Esq., and Brian N. Hermann, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP; and William Derrough, Esq., and Adam Keil, Esq., at Moelis & Company. NTK Holdings and its units have assets of $1,655,200,000, against debts of $2,778,100,000 as of July 4, 2009. Bankruptcy Creditors' Service, Inc., publishes NTK Holdings Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Nortek Holdings Inc., Nortek Internationa Inc., and their affiliates (http://bankrupt.com/newsstand/or 215/945-7000). NTK HOLDINGS: To Honor Prepetition Employee Obligations ------------------------------------------------------- NTK Holdings Inc. and its units obtained the Court's authority to (a) pay, in their sole discretion, wages, salaries, compensation, employee benefits, bonuses and severance obligations and (b) maintain and continue to honor their practices, programs, and policies for their employees as they were in effect on the Petition Date. The Debtors also ask the Court to authorize and direct the Debtors' banks and financial institutions to honor and process checks and electronic funds transfers related to the obligations. In the ordinary course of their businesses, the Debtors incur payroll and various other obligations and provide other benefits to their employees for the performance of services. As of the Petition Date, the Debtors employ approximately 4,542 full-time employees, of which: -- approximately 1,420 are salaried employees; -- approximately 3,011 are non-union employees paid on an hourly basis; and -- approximately 111 employees are employed pursuant to an independent collective bargaining agreement between the Debtors and the Sheet Workers' International Association, Local Union Number 16 and paid on an hourly basis. The Debtors also employ approximately 306 part-time employees who are paid on an hourly basis. Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that the Debtors have incurred obligations to their Employees in the period prior to the Petition Date. Certain of those costs and obligations are outstanding, due and payable, while others will become due and payable in the ordinary course of the Debtors' businesses after the Petition Date. The Employee Obligations are generally categorized as: Unremitted or Unpaid As Of Employee Obligations Petition Date -------------------- ------------- A. Wages, Salaries, Commissions, and Incentive Programs (a) Wage and salary obligations $6,300,000 (b) Payroll Taxes 1,800,000 (c) Deductions 500,000 (d) Garnishments 54,000 (e) Obligations in respect of payroll processing service 130,000 (f) Reimbursement of expenses 300,000 (g) Commission and incentive obligations 2,900,000 B. Employee Benefits Programs (a) Self-Insured Plans 4,500,000 (b) Third-Party Insured Plans 1,000,000 (c) Company-Sponsored Employee Benefits 11,400,00 Mr. Holtzer asserts that absent an order granting the request, the Employees could suffer undue hardship and, in many instances, serious financial difficulties, as the amounts in question may be needed to enable certain of the Employees to meet their own personal financial obligations. Without the request, the stability of the Debtors will be undermined, perhaps irreparably, by the distinct possibility that otherwise loyal Employees will seek other employment alternatives, he further asserts. In addition, it would be inequitable to require the Employees to bear personally the cost of any business expenses they incurred prepetition on behalf of the Debtors with the understanding that they would be reimbursed, he contends. Mr. Holtzer avers that the Debtors simply cannot risk the substantial damage to their businesses that would inevitably attend any decline in their Employees' morale. Moreover, because the Prepackaged Cases are advancing under a compressed schedule and because general unsecured claims are unimpaired under the Prepackaged Plan, paying the Employees in the ordinary course of business will enable the Debtors to operate smoothly during the Cases. The request allows the Debtors to focus on consummating the Prepackaged Plan for the benefit of their estates and creditors. Under the circumstances, approval of the request is appropriate, Mr. Holtzer says. In addition, the Debtors believe it is necessary to continue payment of administrative fees to the administrators of the Debtors' Employee Obligations and to the administrators of programs related to Employee Benefits. Without the continued service of these administrators, the Debtors will be unable to continue to honor their obligations under these programs in an efficient and cost-effective manner. * * * The Court authorizes, but not requires, the Debtors to satisfy all Prepetition Employee Obligations in accordance with the Debtors' stated policies, on an interim basis. The Court also authorizes and directs the banks or other financial institutions to process, honor, and pay any checks drawn or electronic funds transfers requested on the Debtors' account to pay the Employee Obligations, and the costs and expenses incident thereto, whether those checks or electronic funds transfer requests were presented prior to or after the Petition Date. Pending entry of a final order, payments made on account of Commission and Incentive Obligations and Severance Payment will not exceed $10,950 for any individual. The Final Hearing, if necessary, on the Motion is scheduled for November 17, 2009 at 1:30 p.m. (Eastern Time), and any objections or responses to the Motion must be filed and served upon the Notice Parties on or before November 10, 2009. If no objections are filed to the Motion, the Court may enter a final order without further notice or hearing. 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. NTK Holdings Inc., together with affiliates, including Nortek International, Inc. and Nortek Holdings, Inc., filed for Chapter 11 with a prepackaged plan accepted by all impaired creditors on October 21, 2009 (Bankr. D. Del. Case No. 09-13611). The Company has tapped Blackstone Group and Weil, Gotshal & Manges to aid in its restructuring effort. Mark D. Collins, Esq., at Richards Layton & Finger P.A., serves as local counsel. Epiq Bankruptcy Solutions is claims and notice agent. An Ad Hoc Committee of Nortek noteholders is being represented by Andrew N. Rosenberg, Esq., and Brian N. Hermann, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP; and William Derrough, Esq., and Adam Keil, Esq., at Moelis & Company. NTK Holdings and its units have assets of $1,655,200,000, against debts of $2,778,100,000 as of July 4, 2009. Bankruptcy Creditors' Service, Inc., publishes NTK Holdings Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Nortek Holdings Inc., Nortek Internationa Inc., and their affiliates (http://bankrupt.com/newsstand/or 215/945-7000). PDCC DEV'T: City Council Make Move to Remove Fire Hazards --------------------------------------------------------- K Kaufmann at The Desert Sun reports that the Palm Desert City Council voted in closed session on Thursday to send its own crews to the Palm Desert Country Club course to remove several piles of dried grass and branches that city inspectors said are fire hazards, more than a week after the bankruptcy court approved a $300,000 loan to the club's owners. The Desert Sun quoted City Manager John Wohlmuth as saying, "We gave Palm Desert Country Club a notice to abate the fire hazard 10 days ago. At this point, the city's going to do it." Citing Mr. Wohlmuth, The Desert Sun says that the council authorized around $2,300 for the job, which city officials hope to recover from the owners. According to the report, Palm Desert Country club general manager Dave Simmons said, "We have no problem with the city coming and removing this stuff," as the club's owners weren't able to get the job done as the loan has taken longer than expected to finalize. Palm Desert, California-based PDCC Development LLC, dba Palm Desert Country Club, filed for Chapter 11 bankruptcy protection on June 19, 2009 (Bankr. C.D. Calif. Case No. 09-23674). The Desert Sun says that Palm Desert Country Club listed more than $6.4 million in assets and more than $18.6 million in liabilities. PHILADELPHIA NEWSPAPERS: Committee Wants More Details on Sale ------------------------------------------------------------- The Official Committee of Unsecured Creditors of Philadelphia Newspapers LLC and its debtor-affiliates objects to the disclosure statement explaining the joint Chapter 11 plan of reorganization for Philadelphia Newspapers, arguing that it does not contain adequate information concerning crucial aspects of the Plan that are necessary for creditors. The Committee relates that the plan provides for the sale of substantially all of the Debtors' assets to maximize the distributions to holders of claims and interests but it failed to describe basic information about the stalking horse bidder, the equity in the stalking horse bidder that the Debtors' plan proposed to distribute to creditors, and the uncertainty inherent in the sale process. The Plan is based upon a sale of all of the Debtors' business to Bruce E. Toll-led Philly Papers LLC. General unsecured trade creditors holding $4 million in claim are expected to recover 6% of their claims under the Plan. The group led by Bruce E. Toll, vice chairman of homebuilder Toll Brothers Inc., has recently raised its offer by $20 million to buy Philadelphia Newspapers LLC. The Toll group's offer would now give the secured lenders $86.5 million, including a $20 million note, $37 million cash, and real estate worth $29.5 million. In addition, the lenders would share half of adjusted cash flow over five years. The Toll group, which includes current investors in the Debtors' newspapers, says its offer is now worth $112 million, plus a $17 million letter of credit. In addition to the payment for the banks, the buyers would pay $25 million toward the costs of the Chapter 11 exercise. 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. PHOENIX WORLDWIDE: Access to C3 Capital Cash Collateral Denied -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida denied Phoenix Worldwide Industries, Inc.'s motion to: -- access cash securing repayment of loan with Banex Capital, LLC, or C3 Capital Partners, L.P., and C3 Capital Partners II, L.P.; and -- grant postpetition liens and replacement security interests liens as adequate protection to the lenders' interests in the Debtors' use of cash collateral. As reported in the Troubled Company Reporter on July 16, 2009, C3 Capital asserts an interest in cash collateral pursuant to a security agreement between C3 Capital and the Debtor. C3 Capital provided $500,000 loan the Debtor. The Debtor's access to use cash collateral under the second interim order expired on Oct. 7, 2009, and that the Debtor does not have additional cash collateral on hand. The Court said that the Debtor may refile its emergency request for authorization to use cash collateral. The Court will consider the request on its earliest available calendar. About Phoenix Worldwide Industries Miami, Florida-based Phoenix Worldwide Industries, Inc. -- http://www.phoenixworldwide.com/-- dba Phoenix Worldwide Industries, Inc.- Forensic Vehicle Division and Phoenix IVS Division develops surveillance technologies for government and law enforcement agencies. The Company filed for Chapter 11 on June 29, 2009 (Bankr. S. D. Fla. Case No. 09-23201). Jeffrey P. Bast, Esq., at Bast Amron LLP represents the Debtor in its restructuring efforts. The Debtor has assets and debts both ranging from $10 million to $50 million. PILLOWTEX CORP: "Subsequent New Value" Need Not Remain Unpaid ------------------------------------------------------------- WestLaw reports that a bankruptcy judge in Delaware has held that it is not a prerequisite to a creditor's successfully asserting a "subsequent new value" defense to a preference claim that this new value must remain unpaid, as long as the new value has not been repaid with an otherwise unavoidable transfer. To successfully assert a "subsequent new value" defense to a preference claim, a transferee must establish: (1) that new value was extended after the preferential transfer sought to be avoided; (2) that this new value is not secured by otherwise an unavoidable security interest; and (3) that the new value has not been repaid with an otherwise unavoidable transfer. In re Pillowtex Corp., --- B.R. - ---, 2009 WL 3334064 (Bankr. D. Del.) (Carey, J.). John Wahoski, serving as the Liquidating Trustee under Pillowtex Corporation's confirmed Chapter 11 plan, sued American & Efrid, Inc., and Xymid, LLC (Bankr. D. Del. Adv. Pro. Nos. 05-52131 and 05-30238) to avoid alleged preferential payments by the debtor. The transferees asserted a "subsequent new value" defense based on fact that they had continued to ship goods to the debtor after receiving challenged payments. An issue arose as to whether transferees had to establish that they had not received payment for these subsequent shipments in order to successfully assert their "subsequent new value" defense. About Pillowtex Corp. Based in Dallas, Texas, Pillowtex Corporation -- http://www.pillowtex.com/-- sold top-of-the-bed products to virtually every major retailer in the U.S. and Canada. The company filed for Chapter 11 protection on November 14, 2000 (Bankr. Del. Case No. 00-4211), emerged from bankruptcy under a Chapter 11 plan, and filed a second time on July 30, 2003 (Bankr. Del. Case No. 03-12339). The second chapter 11 filing triggered sales of substantially all of the company's assets. The Honorable Peter J. Walsh confirmed a Joint Plan of Liquidation for Pillowtex in 2007 under which John Wahoski was appointed as the Liquidating Trustee. David G. Heiman, Esq., at Jones Day, and William H. Sudell, Jr., Esq., at Morris Nichols Arsht & Tunnel, represent the Debtors. Jason W. Staib, Esq., and Mark J. Packel, Esq., at Blank Rome LLP represent the Official Committee of Unsecured Creditors. On July 30, 2003, the company listed $548,003,000 in assets and $475,859,000 in debts. PIONEER INSURANCE: ASB Admits Mistake of Denying Bankr. Move ------------------------------------------------------------ Phil Kitchin at The Dominion Post reports that the ASB Bank has admitted that it made a mistake by saying it wasn't seeking to bankrupt John Gifford and Rob Elvidge -- who lost their business, Pioneer Insurance, when former manager and jailed Blair Fitzsimons stole $3 million from a supposedly secure company bank account. As reported by the TCR on October 19, 2009, ASB took bankruptcy action against Messrs. Gifford and Elvidge and their lives. According to The Dominion Post, an ASB spokesperson denied the report. According to The Dominion Post, Messrs. Gifford and Elvidge said that it seemed ASB didn't know what its credit team and lawyers were doing. ASB's lawyers had served the paperwork two months before the newspaper's article appeared on October 10, court documents say. PLCP LP: Court to Rule on Reorganization Plan on Nov. 18 -------------------------------------------------------- Matthew Wilde at WCFcourier.com reports that the bankruptcy court will rule on Pine Lake Corn Processors reorganization plan on November 18. Steamboat Rock, Iowa-based PLCP, L.P., Pine Lake's general partner, filed for Chapter 11 protection on Dec. 4, 2008 (Bankr. N. D. Iowa Case No. 08-02680). Bradley R. Kruse, Esq., who has an office at Des Moines, Iowa, represents the company in its restructuring effort. The company listed assets of $10,000,000 to $50,000,000 and debts of $10,000,000 to $50,000,000. PROLIANCE INT'L: Has Sole Rights to File Plan Until January ----------------------------------------------------------- The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods of Proliance International Inc. and its debtor-affiliates to: * file a Chapter 11 plan until Jan. 31, 2010; and * solicit acceptances of that plan until March 31, 2010. The Debtors said the extension will give them time needed to continue working with their constituents and complete the tasks necessary to develop, file and seek confirmation of a Chapter 11 plan. Based in New Haven, Connecticut, Proliance International, Inc. -- http://www.pliii.com/-- aka Godan makes automobile parts. The Company and its affiliates filed for Chapter 11 on July 2, 2009 (Bankr. D. Del. Lead Case No. 09-12278). Christopher M. Samis, Esq., and Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger PA, represent the Debtors in their restructuring efforts. The Debtors' financial condition as of June 22, 2009, showed total assets of $160.3 million and total debts of $133.5 million. The sale of Proliance's North American assets to Centrum Equities XV, LLC, was consummated under the provisions of Section 363 of the Bankruptcy Code on August 14, 2009. PROTECTION ONE: Moody's Affirms 'B2' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service affirmed Protection One Alarm Monitoring, Inc.'s B2 corporate family rating following the company's proposed refinancing of its capital structure. Moody's also assigned a Ba3 rating to the proposed revolving credit facility and amended/extended senior secured term loan. In regards to the term loan, the company is seeking to amend the terms of the existing term loan, extending the maturity to 2014 from 2012 and issuing an incremental $75 million term loan. The company plans to use proceeds from the incremental term loan and balance sheet cash to redeem the $115 million 2nd priority senior secured notes due 2011. As part of this action, Moody's lowered the rating on the existing senior secured term loan to Ba3 from Ba2 due to the reduction in support of junior debt (reflecting the planned redemption of the 2nd priority senior secured notes), as per Moody's Loss Given Default Methodology. The ratings outlook is stable. The ratings are subject to review of final documentation. Moody's favorably views this proposed transaction as it improves Protection One's debt maturity profile, refinances the existing revolving credit facility that is set to expire in April 2010, and reduces overall debt levels. The affirmation of the B2 corporate family rating and stable ratings outlook reflects Moody's view that pro forma credit metrics, albeit improved, are still appropriate for the ratings category. These ratings were assigned: * Senior secured revolving credit facility due 2013 at Ba3 (LGD2, 22%); * Amended senior secured term loan due 2014 at Ba3 (LGD2, 22%). These ratings were affirmed: * Corporate Family Rating at B2; * Probability-of-Default Rating at B3. This rating was lowered: * Existing senior secured term loan due 2012 to Ba3 (LGD2, 22%) from Ba2 (LGD2, 13%). Rating to be withdrawn: * Senior secured revolving credit facility due 2010 at Ba2 (LGD2, 13%); * 2nd priority senior secured notes due 2011 at B3 (LGD4, 50%). The last rating action was on March 17, 2008, when Moody's affirmed Protection One's B2 corporate family rating and lowered the probability-of-default rating to B3 from B2. Headquartered in Lawrence, Kansas, Protection One Alarm Monitoring, Inc. provides security alarm monitoring services, which include sales, installation and related servicing of security alarm systems for residential and business customers. The company reported revenues of approximately $373 million for the twelve months ended June 30, 2009. QUESTEX MEDIA: Get Court Approval to Access CSCIB $15MM Facility ---------------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware authorized Questex Media Group Inc. and its debtor-affiliates to access, on a final basis, $15 million postpetition financing from Credit Suisse Cayman Islands Branch, as administrative and collateral agent. The Debtors provided an initial cash flow budget from Oct. 9, 2009, to Jan. 1, 2010. According to the Troubled Company Reporter on Oct. 8, 2009, the DIP facility will incur interest at the alternate base rate plus the applicable margin or the adjusted LIBO rate plus the applicable margin. The alternate base rate is, for any day, the great of (i) 4%; (ii) the prime rate in effect on such; (iii) the federal funds rate in effect for such day plus 0.5%; and (iv) the adjusted LIBO rate for a one-month interest in effect on such day plus 1%. The applicable rate is (i) 9% for any ABR loan and (ii) 10% for any Eurodollar loan. Default rate interest is 2% per annum plus the rate otherwise applicable. All obligations with respect to the DIP loan incurred by the Debtors will be at all times constitute allowed superpriority administrative expense claims, having priority over all administrative expenses. The DIP facility is subject to a $250,000 carve-out to pay fees and expenses incurred by professionals of the Debtors'. The DIP facility contains appropriate and customary events of default. Prepetition Indebtedness The Debtors said that they have approximately $242 million in total funded secured debt that stems from two financing agreements: * a first lien credit agreement made up of a $30 million first lien revolving credit facility and a $150 million first lien term loan; and * a second lien credit agreement made up of a $55 million second lien term loan. The Debtors' obligations under the senior secured credit facilities are secured by substantially all of their assets. The Debtors added that they have about $41 million outstanding on account of unsecured notes, and approximately $18.5 million in accrued outstanding and unpaid "earnout" payments owed to former principals of acquired entities. The Debtors said that they incur regular trade debt and other obligations in the ordinary course of business, primarily during the second half of the year. A full-text copy of the initial cash flow budget is available for free at http://ResearchArchives.com/t/s?4673 About Questex Media Questex Media Group, Inc. -- http://www.questex.com/-- provides media and telecommunication services. Its media properties include 23 trade publications and 150 digital publications. The cCmpany was formed in 2005 by Audax Group Inc, a private equity firm based in Boston, which bought business units from Advanstar Holdings Inc for $185 million. Questex Media and its affiliates filed for Chapter 11 on Oct. 5 (Bankr. D. Del. Lead Case No. 09-13423). James Stempel, Esq., and Erik Chalut, Esq., at Kirkland & Ellis LLP, and Michael Nestor, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. The Company says it has assets of $299 million against debts of $321 million. RADIO SYSTEMS: S&P Gives Stable Outlook, Affirms 'B' Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Radio Systems Corp. to stable from negative, and affirmed all of its ratings on the company, including the 'B' corporate credit rating and 'B+' senior secured bank facility rating. The recovery rating on the senior secured bank facility remains '2', indicating S&P's expectation for substantial (70% to 90%) recovery in the event of a payment default or bankruptcy. "The outlook revision to stable reflects RSC's better-than- expected liquidity and credit measures following cost-cutting initiatives that have partially offset the drop in demand," said Standard & Poor's credit analyst Jerry Phelan. The ratings on RSC reflect its narrow business focus and discretionary product offering, exposure to technology risk, some customer concentration, and risks related to outsourcing substantially all of its manufacturing to third parties. RSC benefits from its leading market share in the niche pet containment and training industry, long-time relationships with customers and suppliers, and patent protection. RSC has a narrow product focus in the highly competitive pet supplies industry. Pet containment and training products accounted for about 85% of sales in fiscal 2008, with pet door and pet sport products accounting for the balance. Before the economic downturn, industry growth was in the mid-single-digit area, supported by positive demographic and social trends that resulted in increased pet ownership. However, the reduction in consumer spending has led to less demand for RSC's products, most of which are discretionary in nature. Year-to-date sales, excluding acquisitions, have declined by more than 15%, with third-quarter September 2009 sales, excluding acquisitions, declining by almost 25%. S&P believes the majority of this sales decline reflects tighter inventory controls at several of the company's largest retail customers. Nevertheless, consumer demand remains weak, partly due to trade downs to less expensive products. In addition, S&P believes there has been a slight decline in the number of U.S. households that report owning a pet. Increased unemployment, high home foreclosure activity, and low consumer confidence have all hurt demand for discretionary pet products. S&P expects RSC's sales, and to a lesser extent EBITDA, to remain weak given uncertainty surrounding end user demand and the likelihood of continued low retailer inventory levels. Despite the large sales decline, performance has been better than expected due to meaningful cost reductions. Despite meaningfully reduced demand for the company's products, S&P believes Radio Systems' cash flow, liquidity, and credit measures are better than expected, primarily due to aggressive cost cutting. S&P could revise the outlook to negative if cash flow declines, if credit measures worsening materially, or if the cushion under the company's covenants declines to less than 10%. This could occur if the company's cost reductions are not sustainable and demand remains weak. S&P estimate that a high single-digit sales decline in 2010 and a 300 basis-point decline in EBITDA margin from the current 25% level would reduce covenant cushion below 10%. S&P could revise the outlook to positive if demand for the company's products begins to grow, which could occur if consumer spending rebounds and retailers increase inventories, if liquidity remains satisfactory, and if leverage remains near current levels. RAPID LINK: Inks Share Exchange Agreement With Blackbird -------------------------------------------------------- Rapid Link, Incorporated, as of October 13, 2009, entered into a Share Exchange Agreement with Blackbird Corporation, certain Rapid Link shareholders, and certain principal shareholders of Blackbird with regards to the acquisition by Rapid Link of all or substantially all of the outstanding shares of capital stock of Blackbird which would result in Blackbird becoming an operating subsidiary of Rapid Link. In consideration for the Blackbird shares, Rapid Link will issue an aggregate of 520,000,000 shares of its common stock to the Blackbird Shareholders, which will constitute approximately 80% of Rapid Link's then-issued and outstanding shares of common stock. The parties expect the Transaction to close on or prior to March 31, 2009. As part of the Transaction, Telenational Communications, Inc., Rapid Link's wholly owned subsidiary, intends to transfer certain of its assets and liabilities to Blackbird or another wholly owned subsidiary of Rapid Link and its remaining assets and liabilities to other third parties, and Rapid Link intends to sell or otherwise transfer Telenational to a third party. Each party agreed to customary representations and warranties regarding its organization, capitalization, financial statements, and other matters set forth in the Share Exchange Agreement. Rapid Link and Blackbird's obligations to close the Transaction will be subject to certain conditions of the other party that must be satisfied or waived. Any party terminating this Agreement pursuant to the failure of certain closing conditions or breach of the Share Exchange Agreement by the other party, shall be entitled to receive from the other party, within three business days of such termination, the sum of $250,000 as reimbursement for the terminating party's costs, expenses and time incurred in connection with the evaluation and negotiation of the Share Exchange. Each of Rapid Link and Blackbird have agreed not to, (a) initiate contact with, solicit, encourage or respond to any inquiries or proposals by, or (b) enter into any discussions or negotiations with, or disclose, directly or indirectly, any information concerning such party, as applicable, to, or afford any access to the properties, books and records of such party, as applicable, thereof to, any third party in connection with any possible proposal for the acquisition (directly or indirectly, whether by purchase, merger, consolidation or otherwise) of all or substantially all of the assets, business or capital stock of such party or its affiliates; provided that the officers and directors are otherwise required in order to comply with applicable fiduciary duties. In addition, Blackbird and Rapid Link have entered into a management agreement pursuant to which representatives designated by Blackbird shall manage the Transferred BusinessCore Business for the period between the execution of the Share Exchange Agreement and the Closing. Rapid Link, Incorporated's balance sheet at July 31, 2009, showed total assets of $9,788,627 and total liabilities of $17,508,548, resulting in a stockholders' deficit of $7,719,921. Rapid Link, Incorporated, and its subsidiaries have served as facilities-based, communication companies providing various forms of voice and data services to customers around the world. Rapid Link provides a multitude of communication services targeted to small and medium sized businesses, as well as individual consumers. These services include the transmission of voice and data traffic over public and private networks. The Company also sells foreign and domestic termination of voice traffic into the wholesale market. Going Concern Doubt On Jan. 27, 2009, KBA GROUP LLP in Dallas, Texas, expressed substantial doubt about Rapid Link, Incorporated's ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended Oct. 31, 2008, and 2007. The auditor noted that the Company suffered recurring losses from continuing operations during each of the last two fiscal years. Additionally, at Oct. 31, 2008, the Company's current liabilities exceeded its current assets by $2,100,000 and the Company has a shareholders' deficit totaling $2,900,000. REGAL CINEMAS: Launches Exchange Offer for 8.625% Senior Notes -------------------------------------------------------------- Regal Cinemas Corporation is offering to exchange all of its outstanding unregistered $400,000,000 8.625% senior notes due 2019, for registered $400,000,000 8.625% senior notes due 2019. The terms and conditions of the Exchange Offer are detailed in a prospectus and accompanying letter of transmittal, a copy of which is available at no charge at http://ResearchArchives.com/t/s?4780 Material Terms of the Exchange Offer: -- This exchange offer will expire at 5:00 p.m., New York City time, on _______, 2009, unless extended. -- Upon expiration of the exchange offer, all outstanding notes that are validly tendered and not withdrawn will be exchanged for an equal principal amount of exchange notes. -- The noteholder may withdraw tendered outstanding notes at any time prior to the expiration of the exchange offer. -- The exchange offer is not subject to any minimum tender condition, but is subject to customary conditions. -- The exchange of the exchange notes for outstanding notes will not be a taxable exchange for U.S. Federal income tax purposes. -- The Company is offering the exchange pursuant to a registration rights agreement entered into in connection with the issuance of the outstanding notes. Material Terms of the Exchange Notes: -- The terms of the exchange notes and the guarantees thereof are substantially identical to the terms of the outstanding notes and the guarantees thereof, except that the transfer restrictions, registration rights and additional interest provisions relating to the outstanding notes will not apply to the exchange notes. -- The exchange notes will be fully and unconditionally guaranteed on a joint and several senior unsecured basis by the Company's indirect parent, Regal Entertainment Group, and by all of the Company's existing and future domestic restricted subsidiaries that guarantee the Company's other indebtedness. -- There is no existing public market for the outstanding notes or the exchange notes. The Company does not intend to list the exchange notes on any securities exchange or quotation system. On October 13, 2009, Regal Entertainment Group filed a Current Report on Form 8-K to reflect certain required accounting adjustments and reclassifications with respect to the financial information contained in the Company's Annual Report on Form 10-K for the fiscal year ended January 1, 2009, filed on March 2, 2009. The Company's 6-1/4% Convertible Senior Notes issued on March 10, 2008 and due March 15, 2011 and the 3-3/4% Convertible Senior Notes issued May 28, 2003 and due May 15, 2008 are within the scope of FSP APB 14-1. As a result, the retrospective application of FSP APB 14-1 affects years 2003 through 2008; the Company is required to record the debt portions of the 6-1/4% Convertible Senior Notes and the 3-3/4% Convertible Senior Notes at their fair values as of the dates of issuance and amortize the discount into interest expense over the life of the debt during the periods in which the debt instruments are outstanding. There will be no effect, however, on the Company's cash interest payments. About Regal Cinemas Regal Cinemas operates the largest and most geographically diverse theatre circuit in the United States, consisting of 6,778 screens in 549 theatres in 39 states and the District of Columbia as of July 2, 2009, with over 245 million annual attendees for the 53 week fiscal year ended January 1, 2009. Its geographically diverse circuit includes theatres in all of the top 32 and 44 of the top 50 United States designated market areas. Regal Cinemas operates multi-screen theatres and, as of July 2, 2009, had an average of 12.3 screens per location, which is well above the North American motion picture exhibition industry 2008 average of 6.7 screens per location. Regal Cinemas develops, acquires and operates multi-screen theatres primarily in mid-sized metropolitan markets and suburban growth areas of larger metropolitan markets throughout the United States. Regal Cinemas also has an investment in National CineMedia, LLC, which primarily concentrates its efforts on in-theatre advertising and creating complementary business lines that leverage the operating personnel, asset and customer bases of its theatrical exhibition partners, which includes Regal Cinemas, AMC Entertainment, Inc. and Cinemark, Inc. National CineMedia operates the largest digital in-theatre network in North America and utilizes its in-theatre digital content network to distribute pre-feature advertising, cinema and lobby advertising and entertainment programming content. As of April 2, 2009, Regal Entertainment Group had $2,563,000,000 in total assets and $2,809,900,000 in total liabilities. * * * As reported by the Troubled Company Reporter on July 13, 2009, Moody's Investors Service rated Regal Cinemas' new $300 million 10-year senior unsecured notes B1. On July 14, 2009, the TCR said Standard & Poor's Ratings Services revised its recovery rating on Regal Cinemas's debt to '2', indicating S&P's expectation of substantial (70% to 90%) recovery for secured lenders in the event of a payment default, from '3'. In addition, S&P raised the issue-level rating on this debt to 'BB-' (one notch higher than the 'B+' corporate credit rating on the company) from 'B+', in accordance with S&P's notching criteria for a '2' recovery rating. On July 15, 2009, the TCR said Fitch Ratings assigned a 'B+/RR4' rating to Regal Cinemas' $400 million 8.625% senior unsecured notes. The notes are expected to rank senior to Regal Cinemas' existing 9.375% senior subordinated notes and junior to the secured bank facility. In addition, the $400 million in notes are structurally senior to RGC's 6.25% convertible notes. R.H. DONNELLEY: Brualdi Law Firm Files Class Suit for Investors --------------------------------------------------------------- The Brualdi Law Firm, P.C., disclosed that a lawsuit has been commenced in the United States District Court for the District of Delaware on behalf of purchasers of R.H. Donnelley Corporation stock during the period between July 26, 2007, through May 28, 2009, for violations of the federal securities laws. "No class has yet been certified in the above action. Until a class is certified, you are not represented by counsel unless you retain one. If you purchased RH Donnelley common stock during the Class Period, and wish to move the court for appointment of lead plaintiff, you must do so by December 22, 2009. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. The lead plaintiff will be selected from among applicants claiming the largest loss from investment in the Company during the Class Period. You do not need to seek appointment as a lead plaintiff in order to share in any recovery." "To be a member of the class you need not take any action at this time, and you may retain counsel of your choice. If you wish to discuss this action or have any questions concerning this Notice or your rights or interests with respect to these matters." Sue Lee The Brualdi Law Firm, P.C. 29 Broadway, Suite 2400, New York, New York 10006 (877) 495-1187 (212) 952-0602 slee@brualdilawfirm.com The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results. Defendants caused the Company to fail to properly account for its bad debt expense and timely write down its impaired goodwill. As a result of defendants' false and misleading statements, RH Donnelley's stock traded at artificially inflated prices during the Class Period, trading as high as US$66.67 in July 2007. However, beginning in February 2008, defendants began to acknowledge problems in the Company's operations and with its financial results. On March 12, 2009, RH Donnelley announced that it had retained a financial advisor to assist in the evaluation of its capital structure, including various balance sheet restructuring alternatives. Then, on May 29, 2009, RH Donnelley filed for bankruptcy. The stock now trades at around six cents per share. About R.H. Donnelley Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. Dex Media East, LLC, is a publisher of the official yellow pages and white pages directories for Qwest Communications International Inc. (Qwest) in the states, where Qwest is the primary incumbent local exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09- 11833 through 09-11852), after missing a $55 million interest payment on its senior unsecured notes due April 15. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, Illinois represent the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' financial advisor is Deloitte Financial Advisory Services LLP while its investment banker is Lazard Freres & Co. LLC. The Garden City Group, Inc., is claims and noticing agent. As of March 31, 2009, the Company had $929,829,000 in total assets and $1,023,526,000 in total liabilities, resulting in $93,697,000 in total shareholders' deficit. Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of R.H. Donnelley Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) RIVERVIEW VENTURES: Blames Chapter 11 on Economic Downturn ---------------------------------------------------------- Riverview Ventures, Inc., dba DeSears Appliance & Home Entertainment and DeSears Appliance & Television, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Middle District of Florida. Michael Braga at Herald-Tribune quoted DeSears operations vice president Winston Ferguson as saying, "With the downturn in the economy, it became more difficult to repay our legacy debts. Though we were able to renegotiate with some of our creditors at 10 to 15 cents on the dollar, we were not able to renegotiate with all of them." Herald-Tribune notes that the sharp decline in the economy, made worse by the drop of new home sales, forced DeSears to shut down its Palmetto store. DeSears, says Herald-Tribune, opened a St. Petersburg store shortly after. According to Herald-Tribune, Mr. Ferguson said changes are coming to DeSears, but he declined to elaborate, except to say that the changes will focus on inventory management. Herald-Tribune relates that instead of stocking brands at its stores, DeSears will keep some brands in one and some in the other. For 61 years, Riverview Ventures, Inc., dba DeSears Appliance & Home Entertainment and DeSears Appliance & Television, was a privately owned, Bradenton-based company that came to specialize in selling refrigerators, stoves, washer-dryers, televisions and stereos. In 2007, Appliance World, a five-store chain based in Denver, went on an expansion spree. It first bought a two-store chain in New Mexico and then gobbled up DeSears. ROUNDY'S SUPERMARKETS: Moody's Assigns 'B1' Rating on Bank Loans ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Roundy's Supermarkets, Inc., and assigned B1 ratings to the proposed amended and extended portions of its bank credit facilities. The rating outlook remains stable. The B2 Corporate Family Rating reflects Roundy's high leverage, little ability to maintain operating profit and cash flow in the event of any decline in sales, small size relative to the overall supermarket universe, and its geographic concentration. The rating also recognizes Roundy's position as the leading supermarket operator in Wisconsin, the company's private label and commissary growth, and the long term stability of management. Roundy's operating margins are thin, as is typical for its sector, but compare well against supermarket peers. The B1 ratings on Roundy's bank credit facilities, one notch above the company's CFR, reflect the facilities' first lien position as well as the material amount of liabilities that are contractually and effectively subordinated to the secured bank credit facilities. Among other things, the company's senior secured credit facilities are being amended to extend the maturities of up to $125 million of the revolving credit commitment to November 2012 from November 2010 and up to $600 million of the term loan B to November 2013 from November 2011. If the amounts extended are materially less than anticipated in affirming the ratings, this could have a negative impact on the ratings or outlook. These ratings were affirmed: * Corporate Family Rating at B2 * Probability of Default rating at B3 * Senior secured revolver due 2010 at B1 (LGD 2, 27%) * Senior secured term loan B due 2011 at B1 (LGD 2, 27%) These ratings were assigned: * Senior secured revolver due 2012 at B1 (LGD 2, 27%) * Senior secured term loan B due 2013 at B1 (LGD 2, 27%) The last rating action for Roundy's was on September 16, 2009 when Moody's affirmed the company's credit ratings and changed the rating outlook to stable from negative. Roundy's Supermarkets, Inc., headquartered in Milwaukee, Wisconsin, operates 153 retail grocery stores primarily under the Pick 'n Save, Copps, and Rainbow banners. Annual sales approximate $3.9 billion. The company is 90% owned by Willis Stein Funds. ROYAL HAWAIIAN: To Get $150,000 Infusion From Japan Sports ---------------------------------------------------------- Nina Wu at Starbulletin.com reports that U.S. Bankruptcy Judge Robert Faris has allowed Royal Hawaiian Showroom LLC will get an infusion of $150,000 from the Company's partner, Japan Sports Management, until another hearing scheduled for November 24. Starbulletin.com says that the money is needed for Royal Hawaiian to remain open on the top floor of the Royal Hawaiian Center. According to Starbulletin.com, the Level 4 Nightclub & Ultra Lounge will remain open, without utilities being shut off; vendors will continue to be paid on a cash-on-delivery basis; and payroll for workers will continue through a contract with Altres. The "Heartbeat Hawaii," an action-musical show that had been playing six nights a week since July, ended on Sunday, Starbulletin.com states. Honolulu, Hawaii-based Royal Hawaiian Showroom LLC is owned by producer Roy Tokujo. It is located in the Royal Hawaiian Center, a Waikiki shopping complex owned by Kamehameha Schools, aka Bishop Estate. The Company filed for Chapter 11 bankruptcy protection on October 6, 2009 (Bankr. D. Hawaii Case No. 09-02334). Jerrold K. Guben, Esq., at Reinwald O'Connor & Playdon assists the Company in its restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. SALTY DISPOSAL: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------- Salty Disposal Wells LP and Salty's Manufacturing Ltd. have filed for Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. Salty Disposal listed $500 million to $1 billion in assets and $500 million to $1 billion in liabilities. Salty Disposal Wells LP is based in Houston, Texas. SCO GROUP: To Pursue Lawsuits Against IBM & Novell -------------------------------------------------- Edward Cahn, the trustee now running the SCO Group, told U.S. Bankruptcy Judge Kevin Gross that the Company will aggressively pursue lawsuits against IBM and Novell, after the 10th U.S. Circuit Court of Appeals turned down last week Novell's request to reconsider a recent decision that allowed for a trial on SCO's claims, Tom Harvey at The Salt Lake Tribune reports. SCO sued IBM in 2003 alleging that the source code of the Company's Unix operating system was used as a model to make Linux a commercially viable product, which in turn led to decreasing sales for Unix. The IBM case has been stalled since SCO filed for bankruptcy in 2007. SCO filed a lawsuit against Novell, which had alleged that it and not SCO owned the copyrights to Unix code. According to The Tribune, it was unclear whether Judge Gross still will have to approve SCO's continuing to pursue the two lawsuits. The Tribune relates that Mr. Cahn also recommended that Gross approve the settlement of a third lawsuit that involved AutoZone Inc., whom SCO sued in 2004 in federal court in Nevada on allegations that it was using Unix-copyrighted software code in its Linux software. Mr. Cahn, according to the report, negotiated a settlement of that case. Litigation would be "costly and the results uncertain," and "further review and/or litigation would likely yield minimal addition benefit to creditors," Mr. Cahn said in court documents. Judge Gross gave Mr. Cahn approval to hire Ocean Park Advisors of Los Angeles, a company specializing in restructuring technology companies, The Tribune states. The SCO Group (SCOXQ.PK) -- http://www.sco.com/-- is a leading provider of UNIX software technology. Headquartered in Lindon, Utah, SCO has a worldwide network of resellers and developers. SCO Global Services provides reliable localized support and services to partners and customers. The Company and its affiliate, SCO Operations Inc., filed for Chapter 11 protection on September 14, 2007 (Bankr. D. Del. Lead Case No. 07-11337). Paul Steven Singerman, Esq., and Arthur Spector, Esq., at Berger Singerman P.A., represent the Debtors in their restructuring efforts. James O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, are the Debtors' Delaware and conflicts counsel. Epiq Bankruptcy Solutions LLC, acts as the Debtors' claims and noticing agent. The United States Trustee failed to form an Official Committee of Unsecured Creditors in the Debtors' cases due to insufficient response from creditors. As of January 31, 2009, the Company had $8.78 million in total assets and $13.2 million in total liabilities, resulting in $4.51 million in stockholders' deficit. SEALY CORP: KKR Entities Hold 75.5% Equity Interest --------------------------------------------------- Sealy Holding LLC; KKR Millennium Fund L.P.; KKR Associates Millennium L.P.; KKR Millennium GP LLC; KKR Fund Holdings L.P.; KKR Fund Holdings GP Limited; KKR Group Holdings L.P.; KKR Group Limited; KKR & Co. L.P.; KKR Management LLC; Henry R. Kravis and George R. Roberts may be deemed to beneficially own 140,473,671 shares or roughly 75.5% of Sealy Corporation common stock as of October 1, 2009. Sealy Holding directly held 46,625,921 shares of Common Stock on October 1, 2009, representing 50.5% of the outstanding Common Stock. Sealy Holding may be deemed to beneficially own an additional 93,847,750 shares of Common Stock, which is subject to issuance upon conversion of Sealy Corp. Convertible Notes that it holds. The 93,847,750 shares of Common Stock issuable upon conversion of Convertible Notes combined with the 46,625,921 shares of Common Stock directly owned would constitute approximately 75.5% of the Common Stock outstanding upon such conversion. Each of KKR Millennium Fund L.P. (as the senior member of Sealy Holding LLC); KKR Associates Millennium L.P. (as the sole general partner of KKR Millennium Fund L.P.); KKR Millennium GP LLC (as the sole general partner of KKR Associates Millennium L.P.); Fund Holdings (as the designated member of KKR Millennium GP LLC); Fund Holdings GP (as a general partner of Fund Holdings); Group Holdings (as a general partner of Fund Holdings and the sole shareholder of Fund Holdings GP); Group Limited (as the sole general partner of Group Holdings); KKR & Co. (as the sole shareholder of Group Limited); KKR Management (as the sole general partner of KKR & Co.) and Henry R. Kravis and George R. Roberts (as the designated members of KKR Management) may be deemed to have or share beneficial ownership of the shares of Common Stock beneficially owned by Sealy Holding LLC. KKR Partners III, L.P. is also a member of Sealy Holding LLC. Sealy Holding was formed solely for the purpose of investing in Sealy Corp. and has not engaged in any material activities other than incident to its ownership of shares of Common Stock and Convertible Notes. About Sealy Corp. Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) -- http://www.sealy.com/-- is the largest bedding manufacturer in the world with sales of $1.5 billion in fiscal 2008. The Company manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), including SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns & Foster(R), and Bassett(R) brands. Sealy operates 25 plants in North America, and has the largest market share and highest consumer awareness of any bedding brand on the continent. In the United States, Sealy sells its products to roughly 3,000 customers with more than 7,000 retail outlets. As of August 30, 2009, the Company had $1.03 billion in total assets against total current liabilities of $242.86 million, long- term obligations, net of current portion, of $837.83 million, Other liabilities of $59.58 million and Deferred income tax liabilities of $6.5 million, resulting in stockholders' deficit of $115.14 million. * * * Sealy Corp. carries Standard & Poor's 'B' corporate credit rating, 'BB-' issue-level ratings on its senior secured credit facilities, and 'CCC+' issue-level rating on its senior subordinated notes; and Moody's Investors Service's "B2" corporate family rating and probability-of-default rating, "Ba3" senior secured notes rating and "Caa1" senior subordinated notes rating. SEMGROUP LP: Creditors Get Consent to Sue PwC, et al. ----------------------------------------------------- The Official Committee of Unsecured Creditors asks the Court to approve a stipulation it entered with the Debtors that confer standing to the Creditors' Committee to prosecute any complaint asserting claims on behalf of the Debtors' estates against: -- PricewaterhouseCoopers L.L.P.; -- Barclays Bank, PLC; -- Hall, Estill, Hardwick, Gable, Golden & Nelson; -- Carlyle/Riverstone Global Energy and Power Fund II, L.P.; -- Ritchie Capital Management, LLC; -- J. Aron & Company; -- Goldman Sachs & Co.; -- Gavilon L.L.C., formerly ConAgra Trade Group, Inc.; -- Bank of Oklahoma, N.A.; -- Prudential Bache Commodities, LLC; -- Magellan G.P., L.L.C. and Magellan Midstream Partners, L.P.; -- David L. Murfin, Murfin, Inc., and Murfin Drilling Company, Inc.; and -- J. Michael Vess and Vess Oil Corporation. Based on the findings contained in Louis J. Freeh, Esq., the appointed examiner of the Chapter 11 cases of the Debtors' report, the Creditors' Committee served to the entities document requests under Rule 2004 of the Federal Rules of Bankruptcy Procedure. Under the stipulation, the Creditors' Committee is also conferred with standing to commence any preference actions on behalf of the Debtors' estates. The Creditors' Committee asks the Court to shorten notice with respect to the Motion to Approve Stipulation and schedule a hearing on the Motion to Approve Stipulation for October 26, 2009, with an objection deadline on October 23. About SemGroup L.P. SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Creditors Get Nod to Probe Vess, Murfin Entities ------------------------------------------------------------- Based on the Court's directive at an October 8, 2009 hearing, the Official Committee of Unsecured Creditors served to the Court agreed proposed orders directing production of documents by (i) J. Michael Vess and Vess Oil Corporation and (ii) David L. Murfin, Murfin, Inc., and Murfin Drilling Company, Inc., pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure. In separate orders, the Court authorized the Creditors' Committee to compel production of documents as to the Vess Entities and Murfin Entities. The Court entered another order enforcing compliance of PricewaterhouseCoopers, L.L.P., with the Rule 2004 Order and compelling PwC's production of its audit manuals and internal guidance materials relevant or applicable to the audit services it performed for SemGroup, L.P., and its affiliates between 2005 and the Petition Date. However, the Creditors' Committee's request for production of all PwC correspondence, communications, notes, memoranda, and desk and working files for the time period from January 1, 2005, through December 31, 2006, is denied without prejudice to the Creditors' Committee's right to request production from the 2005/2006 Papers with respect to specific areas of inquiry. Moreover, the Creditors' Committee and Magellan G.P., L.L.C., and Magellan Midstream Partners, L.P., have entered into a stipulated protective order to facilitate the exchange of documents and address certain potential confidentiality concerns among the parties. About SemGroup L.P. SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Ex-Executive Settles SEC Insider Trading Suit ---------------------------------------------------------- Law360 reports that former SemGroup LP executive Don N. Spaugy has agreed to pay more than $138,000 to settle regulators' allegations that he engaged in insider trading to avoid losses as the energy company angled toward bankruptcy in 2008. SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SENTINEL MANAGEMENT: GAMAG's Claim Unenforceable in Bankruptcy -------------------------------------------------------------- WestLaw reports that a company that entered into a portfolio management agreement that authorized an investment services company both to open an account on its behalf with a future commissions merchant (FCM) and to provide all administrative and other services with respect to that account was not an "intended third-party beneficiary" of a separate investment advisory agreement between this investment services company and the FCM. This agreement did not refer to the first company either explicitly or implicitly, nor did it grant the first company any right to enforce the agreement against the FCM. Thus, a proof of claim that the first company filed in a Chapter 11 case commenced by this FCM, for allegedly failing to properly segregate customer funds, had to be disallowed as unenforceable under applicable nonbankruptcy law. In re Sentinel Management Group, Inc., --- B.R. ----, 2009 WL 3110818 (Bankr. N.D. Ill.) (Squires, J.). Based on this decision, Judge Squires has disallowed claim number 90 in the amount of $646,350 filed by GAMAG Black & White, Ltd. (a holding company of hedge funds that was organized under the laws of the Bahamas), without prejudice to GAMAG's claim in the so- called Lake Shore Proceedings, Case No. 07 C 3598 (N.D. Ill.), initiated by the United States Commodity Futures Trading Commission in which Robb Evans & Associates LLC serves as the Receiver. Based in Northbrook, Illinois, Sentinel Management Group Inc. -- http://www.sentinelmgi.com/-- was a full service firm offering a variety of security solutions. The Company filed a voluntary Chapter 11 petition on August 17, 2007 (Bankr. N.D. Ill. Case No. 07-14987). Ronald Barliant, Esq., Randall Klein, Esq., and Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black Rosenbloom & Moritz, Ltd., represent the Debtor as counsel. Quinn, Emanuel Urquhart Oliver & Hedges, LLP, represents the Official Committee of Unsecured Creditors as counsel. DLA Piper US LLP is the Committee's co-counsel. When the Debtor sought bankruptcy protection, it listed assets and debts of more than $100 million. On August 28, 2007, the Court approved Frederick Grede as the Debtor's Chapter 11 Trustee. Marc I. Fenton, Esq., at DLA Piper US LLP, and Vincent E. Lazar, Esq, at Jenner & Block LLP, represent the Chapter 11 Trustee as counsel. As reported in the Troubled Company Reporter on January 2, 2009, the Court confirmed a plan of liquidation for Sentinel on December 15, 2008, and Mr. Grede is managing the liquidation. A copy of the Plan is available for free at: http://bankrupt.com/misc/SentinelManagement_4thAmendedPlan.pdf SEQUENOM INC: Appoints Paul V. Maier as Interim CFO --------------------------------------------------- SEQUENOM, Inc., reports that on October 21, 2009, its board of directors appointed Paul V. Maier as interim chief financial officer effective November 10, 2009. Mr. Maier will serve as a consultant to the Company until November 10, 2009. Mr. Maier, 61, has been an independent financial consultant since February 2007. Mr. Maier served as senior vice president and chief financial officer of Ligand Pharmaceuticals Incorporated, a commercial, integrated biopharmaceutical company, from 1992 until January 2007. Mr. Maier currently serves as a director of Hana Biosciences, Inc., Pure Bioscience, and International Stem Cell Corporation. Mr. Maier received his M.B.A. from Harvard University. As interim chief financial officer, Mr. Maier will receive a base salary of $315,000 per year and will be eligible for an annual cash bonus of up to 30% of his base salary. While Mr. Maier provides consulting services to the Company, he will be paid at the rate of $26,250 per month. Mr. Maier has been granted restricted stock units covering 25,000 shares of the Company's common stock which will vest in four equal quarterly installments. Mr. Maier will also receive other benefits generally provided to the Company's executive employees. Justin J. File will continue as the Company's principal financial and accounting officer until the effective date of Mr. Maier's appointment as interim chief financial officer. Mr. File will remain as controller. On October 21, 2009, Harry F. Hixson, Jr., Ph.D., the Company's interim chief executive officer, was granted pursuant to the Company's 2006 Equity Incentive Plan two stock options, each with an exercise price per share equal to $3.39, which was the fair market value of the Company's common stock on the date of grant. The first is an option to purchase 187,500 shares, vesting in 12 equal monthly installments beginning September 28, 2009, so long as Dr. Hixson provides service to the Company. The second is an option to purchase 187,500 shares, vesting in 12 equal monthly installments beginning September 28, 2010, so long as Dr. Hixson is serving as the Company's chief executive officer. Dr. Hixson was also promised an additional stock option to be granted on or after September 28, 2010. This additional stock option will have an exercise price equal to the fair market value of our common stock on the date of grant and will be for a number of shares equal to the difference between 187,500 and the number determined by multiplying the fully diluted shares outstanding on the date of grant by the percentage that 187,500 shares represented of the fully diluted shares outstanding on October 21, 2009. On October 21, 2009, Ronald M. Lindsay, Ph.D., the Company's interim senior vice president of research and development, was granted an option to purchase 150,000 shares pursuant to the Company's 2006 Equity Incentive Plan, with an exercise price per share equal to $3.39. The option vests in 12 equal monthly installments beginning September 28, 2009, so long as Dr. Lindsay provides service to the Company. Dr. Lindsay was also promised an additional stock option to be granted on or after September 28, 2010. This additional stock option will have an exercise price equal to the fair market value of the Company's common stock on the date of grant and will be for a number of shares equal to the difference between 150,000 and the number determined by multiplying the fully diluted shares outstanding on the date of grant by the percentage that 150,000 shares represented of the fully diluted shares outstanding on October 21, 2009. Drs. Hixson and Lindsay have also been promised restricted stock units covering 225,000 and 90,000 shares, respectively, which will vest upon the achievement of specific performance-based milestones in accordance with a program for all of the Company's employees, to be finalized by the compensation committee of the Company's board of directors. 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. SL GREEN: Incurs $2.5 Million Net Loss in Third Quarter -------------------------------------------------------- SL Green Realty Corp. reported third quarter results: -- Third quarter FFO totaled $0.98 per share (diluted) compared to $1.37 per share (diluted) for the third quarter of 2008. -- Net loss for the third quarter of 2009 totaled $0.03 share (diluted) compared to net income of $0.49 per share (diluted) in the same period in the prior year. -- Recognized combined same-store GAAP NOI growth of 5.9% for the third quarter, including 5.6% from the consolidated same-store properties and 6.5% from the unconsolidated joint venture same-store properties. For the first nine months of 2009, combined same-store GAAP NOI growth was 3.5%, including 3.3% from the consolidated same-store properties and 4.1% from the unconsolidated joint venture same-store properties. -- Signed 28 Manhattan office leases totaling 251,888 square feet with average starting rents of $47.31 per rentable square foot during the third quarter. Average Manhattan office starting rents increased by 5.2% on these leases over previously fully escalated rents. -- Maintained Manhattan occupancy rate of 95.7% with increases in occupancy at 100 Park Avenue, 625 Madison Avenue, 750 Third Avenue and 1515 Broadway. -- Amended the 2007 unsecured revolving credit facility to provide the company with the ability to acquire a portion of the loans outstanding under the facility. A subsidiary of the company subsequently repurchased $48.0 million of the total commitment at a discount, and the company realized a $7.1 million gain on the early extinguishment of debt. -- Repurchased approximately $33.0 million of the company's unsecured notes and exchangeable bonds since July 1, 2009, realizing gains on early extinguishment of debt aggregating approximately $1.2 million. Since October 2008, the Company has repurchased approximately $757.3 million of its debt for approximately $557.2 million, which resulted in gains on early extinguishment of approximately $155.7 million. -- Closed on a $145.0 million refinancing of 420 Lexington Avenue with a new lender. This financing, provided at a 7.5% fixed interest rate, matures in 2016 and features two one-year extension options. This transaction resulted in a $36.9 million increase in the indebtedness secured by the property and generated approximately $22.7 million in net cash proceeds. Proceeds from the refinancing were used in part to repay the former mortgage of $108.1 million. -- Closed on a $215.0 million refinancing of 100 Park Avenue with new lenders. This financing, provided at a 6.64% fixed interest rate, matures in 2014 and features two one-year extension options. The refinancing enabled the joint venture to retire the former $175.0 million mortgage. -- Amended the construction financing at 1551-1555 Broadway with the existing lenders by extending the maturity date to October 2011 and fully drawing down the loan. This loan, which has a one-year extension option, carries a variable interest rate of 400 basis points over the 30-day LIBOR. -- Successfully restructured the 100 Church structured finance investment resulting in control being obtained by the company and its co-lender with full beneficial ownership expected to occur in the first quarter of 2010. Summary SL Green Realty Corp. reported funds from operations, or FFO, of $78.1 million, or $0.98 per share (diluted), for the quarter ended September 30, 2009, a decrease of 28.5% compared to $83.1 million, or $1.37 per share (diluted), for the same quarter in 2008. Net loss attributable to common stockholders totaled $2.5 million, or $0.03 per share (diluted), for the quarter ended September 30, 2009, compared to net income of $28.8 million, or $0.49 per share (diluted), for the same quarter in 2008. Operating and Leasing Activity For the third quarter of 2009, the Company reported revenues and EBITDA of $249.6 million and $141.7 million, respectively, a decrease of $18.7 million, or 7.0%, and $9.0 million, or 6.0%, respectively, compared to the same period in 2008. The decrease is primarily due to lower investment income and greater loan loss reserves in 2009 compared to 2008. Same-store GAAP NOI on a combined basis increased by 5.9% for the third quarter when compared to the same quarter in 2008, with the consolidated properties increasing 5.6% to $133.3 million and the unconsolidated joint venture properties increasing 6.5% to $53.1 million. For the first nine months of 2009, combined same- store GAAP NOI growth was 3.5%, including 3.3% from the consolidated same-store properties and 4.1% from the unconsolidated joint venture same-store properties. Occupancy for the Manhattan portfolio at September 30, 2009, was 95.7%. During the quarter, the company signed or commenced 36 leases in the Manhattan portfolio totaling 278,819 square feet, of which 28 leases and 251,888 square feet represented office leases. Average starting Manhattan office rents of $47.31 per rentable square foot on the 251,888 square feet of leases signed or commenced during the third quarter represented a 5.2% increase over the previously fully escalated rents. The average lease term was 9.6 years and average tenant concessions were 6.9 months of free rent with a tenant improvement allowance of $56.19 per rentable square foot. Average starting Suburban office rents of $29.46 per rentable square foot for the third quarter represented a 5.7% decrease over the previously fully escalated rents. Occupancy for the Suburban portfolio was 90.4% at September 30, 2009, compared to 90.3% at June 30, 2009. During the quarter, the Company signed 28 leases in the Suburban portfolio totaling 158,580 square feet, of which 24 leases and 155,960 square feet represented office leases. During the quarter, the Company had solid leasing activity at 100 Park Avenue, 420 Lexington Avenue, 750 Third Avenue, 1515 Broadway, all in New York City, and 140 Grand Street and the Meadows in the suburbs. Leases which were signed or commenced during the third quarter included: -- New lease with Marcum & Kliegman, LLP for approximately 67,152 square feet at 750 Third Avenue. -- New lease with Syska Hennessy Group, Inc. for approximately 64,788 square feet at 1515 Broadway. -- New lease with ECT Capital LLC for approximately 20,626 square feet at 100 Park Avenue. -- Renewal with The County of Westchester for approximately 17,800 square feet at 140 Grand Street, Westchester. -- New lease with Wilson Elser Moskowitz Edelman for approximately 16,056 square feet at 1010 Washington Boulevard, CT. Marketing, general and administrative, or MG&A, expenses for the quarter ended September 30, 2009 was approximately $18.9 million down from $20.9 million for the quarter ended September 30, 2008. Real Estate Investment Activity In August 2009, the Company sold 399 Knollwood, CT for $20.7 million, which included approximately $1.9 million of cash and the assumption of mortgage financing of $18.5 million. The sales price of $142.00 per square foot represents a capitalization rate of 8.3%. The company recorded a loss on the sale of approximately $11.4 million. In August 2009, the Company entered into a sale and purchase agreement to sell a 49.5% interest in Green 485 JV LLC, or the Joint Venture, the owner of 485 Lexington Avenue, to a partnership comprised of Optibase Ltd. (OBAS 1.20, -0.03, -2.44%) and Gilmor USA LLC, or the Purchasers. The transaction results in an implied asset valuation of approximately $504.2 million for the property. Upon closing, the Purchasers will pay us approximately $20.8 million for a 49.5% interest in the Joint Venture and will also make a $20.0 million non-recourse loan to us maturing in 2021 which will be secured by a pledge by us of an additional 49.5% interest in the Joint Venture, with our retaining an unencumbered 1% interest in the Joint Venture. In addition, the Purchasers will also acquire an option based in general on fair market value, exercisable generally until 2022 subject to certain limitations, to purchase our 49.5% pledged ownership interests in the Joint Venture, subject to certain limitations. Prior to closing, we will also make a $12.2 million, 9.0% loan due in 2013, to the Joint Venture. The existing $450.0 million mortgage will remain an obligation of the Joint Venture. The transaction is subject to certain conditions, including the existing lender's approval of the transfer of ownership in Green 485 JV LLC and such lender's approval of substitute guarantors under the loan. There is no assurance that the conditions precedent contemplated in the sale- purchase agreement will be fulfilled or that the transaction will be consummated at such time or at all. Financing and Capital Activity The Company repurchased approximately $33.0 million of its exchangeable bonds since July 1, 2009, realizing gains on early extinguishment of debt aggregating approximately $1.2 million. In August 2009, the company amended the 2007 unsecured revolving credit facility to provide it with the ability to acquire a portion of the loans outstanding under the facility. During the third quarter, a subsidiary of the Company repurchased $48.0 million of the total commitment at a discount, and the company realized a $7.1 million gain on the early extinguishment of debt. In August 2009, the company closed on the refinancing of 420 Lexington Avenue with a new lender. This $145.0 million financing, provided at a 7.5% fixed interest rate, matures in 2016 and features two one-year extension options. It enabled the Company to prepay the $108.1 million outstanding on the former mortgage. In connection with this financing, the company incurred a defeasance charge of approximately $10.5 million, which is included in interest expense for the third quarter. In September 2009, the company, along with its joint venture partner Prudential Real Estate Investors, closed on a financing at 100 Park Avenue with new lenders. The $215.0 million financing, provided at a 6.64% fixed interest rate, matures in 2014 and features two one-year extension options. It enabled the joint venture to retire the former $175.0 million mortgage. Also in September 2009, the company, along with its joint venture partner Jeff Sutton, closed on an amendment to the financing at 1551-1555 Broadway with the existing lenders. At closing, the loan was fully drawn to the reduced committed amount of $133.6 million. The maturity date was extended to October 2011, has a one-year extension option and carries a variable interest rate of 400 basis points over the 30-day LIBOR. The property is net leased to American Eagle Outfitters. In July 2009, the company closed on a $40.0 million upsize to the financing secured by 625 Madison Avenue. The amortizing loan, which is co-terminus with the existing mortgage, resulted in a blended fixed interest rate of 7.22% on the combined $136.2 million loan. Structured Finance Activity The Company's structured finance investments totaled approximately $614.5 million at September 30, 2009 (excluding approximately $1.0 million of structured finance investments which were classified as held for sale at September 30, 2009), a decrease of approximately $132.4 million from the balance at December 31, 2008. During the third quarter, the Company closed on a $16.1 million structured finance investment secured by a New York City property. Also during the third quarter, the company recorded approximately $16.1 million in additional loan loss reserves against its structured finance investments. The structured finance investments currently have a weighted average maturity of 3.7 years and a weighted average yield for the quarter ended September 30, 2009, of 10.2%, exclusive of loans totaling $59.1 million which are on non-accrual status. Dividends During the third quarter of 2009, the Company declared quarterly dividends on its outstanding common and preferred stock as follows: -- $0.10 per share of common stock. Dividends were paid on October 15, 2009 to stockholders of record on the close of business on September 30, 2009. -- $0.4766 and $0.4922 per share on the Company's Series C and D Preferred Stock, respectively, for the period July 15, 2009, through and including October 14, 2009. Dividends were paid on October 15, 2009, to stockholders of record on the close of business on September 30, 2009, and reflect regular quarterly dividends, which are the equivalent of annualized dividend of $1.90625 and $1.96875, respectively. About SL Green SL Green Realty Corp. -- http://www.slgreen.com-- is a self- administered and self-managed real estate investment trust, or REIT, that predominantly acquires, owns, repositions and manages Manhattan office properties. The company is the only publicly held REIT that specializes in this niche. As of September 30, 2009, the Company owned interests in 29 New York City office properties totaling approximately 23,211,200 square feet, making it New York's largest office landlord. In addition, at September 30, 2009, SL Green held investment interests in, among other things, eight retail properties encompassing approximately 374,812 square feet, three development properties encompassing approximately 399,800 square feet and two land interests, along with ownership interests in 31 suburban assets totaling 6,804,700 square feet in Brooklyn, Queens, Long Island, Westchester County, Connecticut and New Jersey. * * * As reported in the Troubled Company Reporter on June 22, 2009, Fitch assigned 'BB+' ratings to SLG and SL Green Operating Partnership, L.P., and affirmed the 'BB+' rating on Reckson Operating Partnership, L.P., on May 22, 2009. The Rating Outlook is Negative. Fitch's current ratings for SLG (NYSE: SLG) and its subsidiary, SL Green Operating Partnership, L.P., are: SL Green Realty Corp. -- Issuer Default Rating 'BB+'. -- Perpetual preferred stock 'BB-'. SL Green Operating Partnership, L.P. -- IDR 'BB+'; -- Revolving credit facility 'BB+'; -- Senior unsecured notes 'BB+'; SONIC AUTOMOTIVE: Posts $15.59MM Net Income for Q3 2009 ------------------------------------------------------- Sonic Automotive, Inc., posted net income of $15.59 million on total revenues of $1.52 billion for the third quarter ended September 30, 2009, from a net loss of $26.96 million on total revenues of $1.61 billion for the same period a year ago. The Company posted net income of $17.29 million on total revenues of $4.18 billion for the nine months ended September 30, 2009, from a net loss of $5.12 million on total revenues of $5.11 billion for the same period a year ago. The Company reported that 2009 third quarter earnings from continuing operations were $0.22 per diluted share which includes an after-tax gain of $0.01 per diluted share, related to the Company's repurchase of convertible notes. This compares to a loss from continuing operations of $0.38 per diluted share, in the prior year quarter. The results for the prior year quarter include the after-tax effect of impairment charges, lease exit accruals and hurricane damage of $0.53 per diluted share. As of September 30, 2009, the Company had total assets of $2.00 billion against total current liabilities of $988.30 million, long-term debt of $556.24 million, and other long-term liabilities of $109.56 million, resulting in stockholders' equity of $350.65 million. Business Overview -- Strong operating results and improved capital structure B. Scott Smith, the Company's President, said, "We are pleased with what we were able to accomplish this quarter at Sonic Automotive. In addition to continuing to post strong operating results we completed a very successful public refinancing of our 2010 debt obligations. The offering in late September allowed us to de-lever our balance sheet, remove some extremely dilutive convertible debt from our capital structure and mitigate future refinancing risk in the near term. This also paves the way for what we believe will be a successful refinancing of our upcoming syndicated credit facility. This offering would not have been possible without the strong fundamentals of our business model which is evident in our consistent operating performance and cash flow generation throughout this business cycle." New Vehicles -- Strongest year-over-year market share performance to date Commenting on the Company's new car sales, Mr. Smith noted, "The combination of increased customer traffic from the CARS program and the continued execution of our e-Commerce strategies resulted in Sonic posting its strongest year-over-year new vehicle performance so far this year. We have now had eight consecutive months of new car market share gains. In addition to the improved unit volume, our new vehicle retail margins were up 70 basis points to 7.6% and our new vehicle days supply was at 39 days." Used Vehicles -- Used vehicle volume up 25% Overall used vehicle unit volume was up 25% and total used vehicle revenue was up over 18% for the third quarter of 2009 compared to the third quarter of 2008. Jeff Dyke, the Company's EVP of Operations, stated, "Our used vehicle volume continued to grow throughout the quarter despite the heavy emphasis on new vehicle sales stemming from the CARS program. Our used-to-new ratio, which has continued to improve throughout the year, was at 80% for the third quarter. Our certified pre-owned business, which has been a consistent strength for Sonic, remains strong at 34% of our overall used vehicle volume. We are growing our used vehicle business by continuing to expand our presence across the entire spectrum of the used vehicle market." Parts and Service -- Margin expansion continues with stable revenues Sonic's parts and service revenue for the third quarter was flat with the prior year quarter while the gross margin at 50.6% represents an improvement over the prior year third quarter margin of 49.6% and the second quarter 2009 margin of 50.3%. Mr. Dyke stated, "Our parts and service business continues to add a substantial amount of stability to our results of operations. We have steadily grown our fixed operations margin every quarter this year as a result of the pricing, merchandising and other strategies being implemented with the rollout of our parts and service playbook. We have every reason to expect this trend will continue as the rollout progresses." Presentation materials for the Company's October 27, 2009 earnings conference call at 11:00 A.M. (Eastern) are available at no charge at http://ResearchArchives.com/t/s?47ab About Sonic Automotive Headquartered in Charlotte, North Carolina, Sonic Automotive, Inc. (NYSE: SAH) -- http://www.sonicautomotive.com/-- is the nation's third-largest automotive retailer, operating 153 franchises. As of June 30, 2009, it operated 154 dealership franchises, representing 31 different brands of cars and light trucks, at 131 locations and 30 collision repair centers in 15 states. Its dealerships provide comprehensive services including sales of both new and used cars and light trucks, sales of replacement parts, performance of vehicle maintenance, manufacturer warranty repairs, paint and collision repair services, and arrangement of extended service contracts, financing, insurance and other aftermarket products for customers. * * * As reported by the Troubled Company Reporter on September 22, 2009, Moody's Investors Service affirmed the Caa1 Corporate Family and Probability of Default ratings of Sonic Automotive and changed the outlook to positive from negative. The TCR said September 18, 2009, that Standard & Poor's Ratings Services placed its 'CCC+' corporate credit rating and related issue ratings on Sonic Automotive on CreditWatch with positive implications. At the same time, S&P assigned its 'CCC-' issue rating and a '6' recovery rating to the company's proposed $125 million convertible notes due 2029. SOUTH FINANCIAL GROUP: DBRS Downgrades Rating to 'B' ---------------------------------------------------- DBRS has downgraded the ratings for The South Financial Group, Inc. (The South or the Company) and its related entities, including its Issuer & Senior Debt rating to B from BB. At the same time, DBRS downgraded The South's banking subsidiary's Deposit & Senior debt rating to BB (low) from BB (high) and maintained its Short-term Instruments rating at R-4. All ratings were placed Under Review with Negative Implications. The downgrade follows a much larger than expected $341 million quarterly net loss available to common shareholders, which reflected higher credit costs and the negative impact of a sizeable $200 million valuation allowance against its $203 million deferred tax assets. DBRS notes that the results are preliminary and the loss could increase following the completion of the Company's on-going goodwill impairment analysis, which should be completed in early November. The downgrade reflects The South's weakened tangible common equity position, severe asset quality deterioration, moderate core earnings capacity, and DBRS's expectation of sustained elevated credit costs and expenses over the near term. The significant Q3 2009 quarterly (preliminary) loss negatively impacted The South's capital position. Indeed, the significant decrease of tangible common equity more than overshadowed the moderate decline in regulatory capital, as regulatory capital already largely excluded deferred tax assets as of Q4 2008 and was not impacted by the sizeable valuation allowance. DBRS believes that The South's lower tangible common equity position further reduces its financial flexibility. DBRS notes that further material contraction in the Company's tangible common equity position will likely result in negative rating actions. DBRS comments that the Company's asset quality deterioration remains steep, and credit costs high. Although there appears to be some indication of stabilization in the credit metrics, it is DBRS's perception that substantial amounts of potential losses remain embedded in the Company's loan portfolios, especially given still declining real estate valuations and rising unemployment. Finally, the Company's core earnings capacity (income before provisions and taxes), provides only a moderate level of loss absorption capacity, especially when compared to recent quarterly net charge-offs, and are likely to remain pressured over the near term, due to high credit expenses. DBRS's review will focus on The South's ability to raise additional capital to offset anticipated near term credit costs and expenses. DBRS notes that the quarter's results place considerable strain on the Company's financial flexibility, and perhaps its ability to raise future capital. DBRS notes that the inability of the Company to strengthen its capital position over the near term, could result in further rating actions. The South's Florida exposures, especially its acquisition, construction and development portfolio, represent the bulk of its troubled loans. During Q3 2009, NPAs on an absolute basis contracted by $16 million; however, the Company's NPA ratio increased to a high 6.05% of loans versus 5.94% at June 30, 2009, reflecting a 4.6% decrease in period end loans. Meanwhile, NCOs for Q3 2009 increased to a high 7.31% of average loans, from 4.91% for the prior quarter. DBRS notes that the large increase in The South's NCOs reflects a $60 million charge related to the sale of $163 million of problematic loans. Reflecting the steep decline in the housing markets, roughly 49% of net charge-offs were CRE related, the majority of which were Florida and South Carolina based residential acquisition and development loans. Meanwhile, 67% of Q3 2009 nonaccrual loans were CRE, of which 55% were in Florida. DBRS comments that The South's CRE portfolio represents a challenging concentration, constituting approximately 42% (excluding owner-occupied loans) of total loans and 5.9 times (x) tangible common equity. DBRS comments that the Company's reserves to non-performing assets improved, yet were still relatively moderate at 62%. Reflecting the loss for the quarter, the Company's tangible common equity ratio narrowed to 5.25%, from 6.07% at June 30, 2009, indicating the reduction in the common equity resources available to absorb elevated losses. The Company's estimated Tier 1 and Total risk based capital ratios were 11.19% and 12.49%, respectively, down from 12.36% and 13.65%, respectively, at June 30, 2009, and includes $347 million in TARP capital. DBRS notes that the Company's liquidity position is adequate, yet remains pressured by its large wholesale funding reliance of 43% (as of June 30, 2009). The South's sound securities portfolio, which represents 18% of total assets, access to the FHLB and Federal Reserve Discount Window, round out its liquidity profile. Furthermore, The South's parent's fundamentals remain solid, punctuated by a sizeable cash position. SOUTHWEST CHARTER: Reorganization Case Converted to Chapter 7 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona approved the motion filed by Arizona Bank and Trust, a secured creditor and party-in-interest in Southwest Charter Lines Incorporated's Chapter 11 case, to convert the Debtor's case to a Chapter 7. AZBT related that conversion is appropriate because of substantial and continuing loss to and diminution of the estate, the absence of any reasonable possibility of rehabilitation, gross mismanagement of the estate, unauthorized use of cash collateral, failure to comply with Court-approved stipulations, failure to pay postpetition taxes and failure to timely file a plan or disclosure statement. Headquartered in Gilbert, Arizona, Southwest Charter Lines Inc. -- http://www.swcl.com/-- operates, rents, and leases buses, trucks, trailers, and modular buildings. The company filed for Chapter 11 bankruptcy protection on May 29, 2008 (Bankr. D. Ariz. Case No. 08-06252). Donald W. Powell, Esq. at Carmichael & Powell PC, represents the Debtor as bankruptcy counsel. When the Debtor filed for Chapter 11 restructuring, it listed total assets of $12,907,933 and total debts of $12,352,275. SPANSION INC: Court Won't Order Appointment of Equity Committee --------------------------------------------------------------- The Bankruptcy Court o has rejected an investor's attempt to form a committee of equity holders to represent stockholders in the Chapter 11 cases. Spansion Inc.'s counsel, Sommer L. Ross, Esq., at Duane Morris, LLP, in Wilmington, Delaware, submitted with the Court a certification of counsel regarding an order dismissing the motion for the appointment of an equity security holders committee filed by Philip Mathers. Ms. Ross relates that at the hearing held on October 2, 2009, the Court dismissed the motion with prejudice due to Dr. Mathers' failure to prosecute, and barred Dr. Mathers from filing any pleadings, motions or papers in the Debtors' Chapter 11 cases without leave from the Court. Bankruptcy Judge Kevin Carey signed the order dismissing the request. Philip Mathers, a party-in-interest and equity security holder of 2,000,000 class A common stock of Spansion Inc., has asked the U.S. Bankruptcy Court for the District of Delaware to appoint an Official Committee of Equity Security Holders to assure a timely and appropriate representation of equity security holders and the orderly and proper administration of the estate. About Spansion Inc. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) SPANSION INC: Debt Recovery, Argo Partners Buy Claims ----------------------------------------------------- In separate Court filings for the period October 14, 2009, to October 20, 2009, 13 of Spansion Inc.'s creditors disclosed that they intend to transfer each of their claims against the Debtors: Transferor Transferee Amount ---------- ---------- ------ Aehr Test Systems Fulcrum Credit Partners LLC $11,363,980 Partners LLC Opportunities Fund Ltd. 9,091,184 Nexlogic Inc. Argo Partners 22,333 Intest Silicon Valley Corporation Argo Partners 47,846 MCSB Systems(PG)SDN BHD Argo Partners 8,018 Fulcrum Credit Drawbridge Special Plastic Card ID Sierra Liquidity Fund, LLC 656 American Chiller Service Inc. United States Debt Recovery LLC 870 Alpha-Probes, Inc. United States Debt Recovery LLC 870 Ambius, Inc. United States Debt Recovery LLC 739 Audio Electronics, Inc. United States Debt Recovery LLC 456 Teledyne Storm Products, Inc. United States Debt Recovery LLC 1,830 EDSG, Environmental Data United States Debt Recovery LLC 975 About Spansion Inc. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) SPANSION INC: Proposes Skadden Arps for Cross-Border Transactions ----------------------------------------------------------------- Pursuant to Section 327(e) of the Bankruptcy Code, the Debtors seek the Court's authority to employ Skadden, Arps, Slate, Meagher & Flom LLP as their special, counsel nunc pro tunc to September 30, 2009. The Debtors selected Skadden Arps because of the firm's extensive experience in the areas in which the firm will provide advice, including, in particular, complex litigation involving cross-border commercial transactions. As special litigation counsel, Skadden Arps will: (a) advise the Debtors in connection with the matters, allegations, and litigation, administrative and other claims asserted in or related to GE Financial Services Corporation's motion for allowance of administrative claim; (b) advise the Debtors in connection with the relationship between Spansion Japan and the Debtors, particularly as they relate to the GE Motion and GEFSC; (c) advise and assist the Debtors and general bankruptcy counsel in connection with all litigation matters involving GEFSC and its affiliates for which the Debtors request that assistance; (d) attend meetings with third parties and participate in negotiations; (e) appear before the Court, any district or appellate courts, and the Office of the U.S. Trustee; (f) participate in insolvency proceedings involving Spansion Japan to the extent they relate to litigation or negotiation with GEFSC and its affiliates; and (g) perform the full range of services normally associated with matters as the Debtors' special counsel which the firm is in a position to provide. The Debtors will pay Skadden Arps based on the firm's current hourly rates: Professional Rate/Hour ------------ --------- Partners $725-$995 Associates $355-$680 Paralegals $170-$285 The Debtors will also reimburse the firm for its out-of-pocket expenses. Van C. Durrer, II, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, tells the Court that his firm is not required to comply with any of the "disinterestedness" criteria applicable to Section 327(a) of the Bankruptcy Code. However, he notes, in the interest of providing as complete record as readily possible, the firm makes the disclosures regarding professional relationships. According to Mr. Durrer, Skadden, Arps currently represents these entities: (a) The Royal Bank of Scotland plc, Mitsubishi UFJ Lease & Finance Company Limited, affiliates of NTT Finance Corporation, affiliates of Showa Leasing Co., Ltd., and affiliates of Sumitomo Mitsui Finance and Leasing Company, Limited; and (b) Rambus Inc., creditor of the Debtors. About Spansion Inc. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) SPANSION INC: Puts SP1 Fab Up for Sale -------------------------------------- Spansion Inc. has put its 300-mm fab, dubbed SP1, up for sale, Mark LaPedus at EE Times reports, citing people familiar with the matter. Spansion said in a statement, "SP1 is an asset of Spansion Japan Ltd. and they are weighing all possible options to help advance the reorganization process. We continue to work closely with Spansion Japan and are fully supporting customer requirements through our internal and external manufacturing resources." According to EE Times, Spansion said that set-top box OEMs in Asia are adopting its MirrorBit SPI Multi-I/O Flash memory, which is aimed to simplify designs, help reduce form factors, and enable lower overall system costs in many of their new models. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) STALLION OILFIELD: S&P Retains 'D' Rating on Senior Unsec. Debt --------------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery rating on Stallion Oilfield Services Ltd.'s (D/--/--) senior unsecured debt to '5', indicating expectations for modest recovery (10%-30%) in the event of a payment default, from '4'. The issue-level rating on this debt remains 'D'. Additionally, S&P maintained the recovery rating of '1' on the company's senior secured debt, indicating very high recovery (90%-100%) in the event of a payment default. The issue-level rating on the senior secured debt remains 'D'. "Our recovery ratings reflect S&P's view that Stallion's business model remains viable, following reorganization, albeit with reduced revenue and profitability prospects," said Standard & Poor's credit analyst Kenneth Cox. "S&P believes the recent default was primarily a result of high leverage and the severity of current downturn in natural gas prices. However, S&P believes it may take years for profitability to return to recent levels, following the expanded capacity built up in the oilfield services sector in recent years." The corporate credit rating on Stallion is 'D', reflecting the Houston-based oilfield services provider's failure to make its Aug. 1, 2009, and Aug. 6, 2009, required interest payments on its senior unsecured notes and on its senior unsecured term loan. Ratings List Stallion Oilfield Services Ltd. Corporate Credit Rating D/--/-- Rating Unchanged/Recovery Revised Stallion Oilfield Services Ltd. To From -- ---- Senior Unsecured D D Recovery Rating 5 4 STINSON PETROLEUM: GCBC Withdraws Motion to Appoint Examiner ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Mississippi approved the agreement reached by Gulf Coast Bank & Trust Company, a party-in-interest in Stinson Petroleum Company, Inc.'s Chapter 11 case, and the Debtor in relation to GCBC's withdrawal of its motion to appoint an examiner. GCBC and the Debtor agreed to expand the duties of Jabez, Inc., the analyst, to include assisting Stinson's in developing postpetition accounting records and postpetition reporting practices. The analyst will be entitled to receive reasonable compensation and to receive reimbursement of actual, necessary expenses for postpetition additional services. The Court also ordered that the duties of the analyst will also be expanded to include (i) reconciliation of discrepancies noted in the analyst's account receivable summary; and (ii) a determination of the disposition of the proceeds of GCBC' account's receivable, provided that the expense for the services will be exclusively borne by GCBC. Previously, GCBC asked the Court to appoint an examiner because it wants the value of the receivables that it purchased, and Stinson's management abilities and accounting activities investigated. About Stinson Petroleum Company Laurel, Mississippi-based Stinson Petroleum Company, Inc., filed for Chapter 11 on Aug. 4, 2009 (Bankr. S. D. Miss.Case No. 09- 51663). The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. Harris Jernigan & Geno, PPLC, represents the Debtor in its restructuring efforts. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. SUN-TIMES MEDIA: James Tyree Completes Acquisition of Assets ------------------------------------------------------------ Sun-Times Media Holdings, LLC, has completed the acquisition of substantially all of the assets formerly owned by Sun-Times Media Group, for a total transaction value of approximately $26.5 million. With the closing of this transaction, the Chicago Sun-Times and its sister daily and weekly newspapers move out from under the shadow of the bankruptcy proceedings affecting their prior owner and begin a new era as a locally owned and managed media conglomerate. "Our investor team believes there is tremendous opportunity and untapped potential in Sun-Times Media portfolio of newspapers and Web sites, which combined serve an impressive 3.7 million readers each week, more than any of our competitors," said James C. Tyree, lead investor in Sun-Times Media Holdings. "We are proud that these distinguished newspaper titles will be locally owned and locally managed. We are committed to continuing the publications' excellent tradition of superior service to our advertisers and our readers. On the business, side, our intentions are to grow the company by seeking new revenue opportunities, to adapt and lead change in the rapidly transforming news industry, and to become profitable." "This is a new beginning and a great day for our advertisers, readers and employees of the Chicago Sun-Times and our distinguished suburban newspaper network of print and online publications," said Jeremy L. Halbreich, Chief Executive Officer and Vice Chairman of Sun-Times Media Holdings. "We are pleased to have been able to find new ownership and new investment in our award-winning, highly regarded publications, many of which have been serving their communities for decades and some even more than a century. We look forward to a long, prosperous future with our new owners." 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. SUPER 88: Ch. 11 Filing Puts Sale on Hold, Buyer Still Hopeful -------------------------------------------------------------- Five companies tied to George and Peter Luu's three-store business, Super 88, has filed for Chapter 11 bankruptcy protection, listing $10 million to $50 million in liabilities, Donna Goodison at BostonHerald.com reports, citing the Company's lawyer, Frank Kirby. Court documents say that Super 88 has $1 million to $10 million in assets. According to BostonHerald.com, the bankruptcy filing has put on hold a contentious sale of Super 88. Citing Mr. Kirby, BostonHerald.com says that Super 88's three stores in Dorchester, Allston, and Malden will remain open for business. BostonHerald.com states that the Luus had seemingly conflicting plans to sell their remaining assets. BostonHerald.com relates that Wincent International Inc. and Gary Wong, who claimed deals for individual stores in Dorchester and Allston, sued Super 88 in August 2009 to stop a $9 million sale of the entire chain to New York's Hong Kong Supermarket Inc. Boston Globe says that Wincent International said it had a deal to buy the Dorchester Super 88, while Mr. Wong claimed a $3.2 million agreement to acquire the Allston store. A Suffolk Superior Court judge's preliminary injunction in September 2009 stopped the sale to Hong Kong Supermarket, according to the report. Hong Kong Supermarket's lawyer, Hayes Young, said that his client will continue to pursue an acquisition of Super 88, BostonHerald.com says. Super 88 is a supermarket chain that had six locations before closing the Cheng Kwong Sea Food Market in Chinatown and stores in the South End and Quincy. The chain also owns a warehouse. SYNOVUS FINANCIAL: $423 Mil. Loss Won't Affect S&P's 'BB-' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Synovus Financial Corp. (BB-/Negative/--) remain unchanged following the company's announcement of a $423 million third- quarter loss, its fifth consecutive quarterly loss. S&P believes that Synovus's significant credit risk will continue to manifest itself in elevated credit losses, especially due to its portfolio of construction loans in Atlanta and Florida. S&P expects nearly $2.5 billion in total credit losses during 2009- 2010 due to weak economic conditions across Synovus's footprint. S&P believes the asset-quality trends will result in further net losses into 2010 because the franchise's ability to generate sufficient earnings is fundamentally weaker after its spin-off of Total System Services Inc. in 2007. S&P views Synovus's upsizing its third-quarter common stock issuance to $600 million from $350 million favorably. This action strengthens the firm's tangible common equity-to-tangible assets ratio to 6.28% from 5.94% in the second quarter. If Synovus's credit losses exceed S&P's current expectations, or further net losses erode its capital position faster than S&P expect, S&P could lower the ratings. TAYLOR BEAN: Judge Lets Deutsche Bank Open Taylor Bean Books ------------------------------------------------------------ Law360 reports that the Bankruptcy Court has given Deutsche Bank AG a green light to begin probing the paper trail behind the bankruptcy of Taylor Bean & Whitaker Mortgage Corp. in response to Deutsche Bank's fears that it may lose more money to the fallen mortgage lender than first thought. Taylor Bean, the 12th largest U.S. mortgage lender and servicer of loans, filed for bankruptcy protection on Aug. 24 after being suspended from doing business with U.S. agencies and Freddie Mac, the government-supported mortgage company. Taylor has blamed probes into one of its banks for the suspensions. Taylor Bean filed for Chapter 11 on August 24 (Bankr. M.D. Fla. Case No. 09-07047). Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Florida, represents the Debtor. Troutman Sanders LLP is special counsel. BMC Group Inc. serves as claims agent. Taylor Bean has more than $1 billion of both assets and liabilities, and between 1,000 and 5,000 creditors, according to the bankruptcy petition. TRIPLE CROWN: Can Solicit Votes for Amended Chapter 11 Plan ----------------------------------------------------------- The Hon. Brenda L. Shannon of the U.S. Bankruptcy Court for the District of Delaware approved a disclosure statement explaining a first amended joint Chapter 11 plan of reorganization filed by Triple Crown Media Inc. and its debtor-affiliates on Oct. 16, 2009. A hearing is set for Dec. 8, 2009, at 10:00 a.m., to consider confirmation of the plan. Judge Shannon set Nov. 24, 2009, as deadline for creditors to vote for the Debtors' plan. The plan provides for, among other things: (i) the reduction of more than $20 million of the Debtors' secured obligations and the distribution of no less than 90% of the equity of Reorganized Debtors to the second lien lenders, and (ii) participation rights by the holders of preferred stock equity interests and by the management of reorganized Debtors By the plan's effective date, Reorganized Debtors will issue: i) 94.74% of the new common stock to the holders of allowed second lien credit facility claims, and ii) 5.26% of the new common stock to holders of allowed preferred stock equity interests, provided that class 11 votes to accept the Plan. In addition, Reorganized Debtors will reserve 5% of the new common stock for a management incentive plan. A full-text copy of the disclosure statement is available for free at http://ResearchArchives.com/t/s?478b A full-text copy of the amended Chapter 11 plan is available for free at http://ResearchArchives.com/t/s?478c Triple Crown Media, Inc., derives revenue from its Newspaper Publishing operations. The Company's Newspaper Publishing operations derive revenue primarily from three sources: retail advertising, circulation and classified advertising. TCM's Newspaper Publishing operations' advertising revenues are primarily generated from local advertising. TCM sold its GrayLink Wireless segment on June 22, 2007. The Company sold its Host Collegiate Marketing segment and Host Association Management Services segment on November 15, 2007. TCM's sole remaining operating segment consists of its Newspaper Publishing business. This consists of the ownership and operation of six daily newspapers and one weekly newspaper with a total daily circulation as of June 30, 2008, of approximately 95,200 and a total Sunday circulation as of June 30, 2008 of approximately 131,850. Its newspapers are characterized by their focus on the coverage of local news and local sports. Triple Crown Media Inc., together with affiliates, filed for Chapter 11 on Sept. 14 (Bankr. D. Del. Case No. 09-13181). Attorneys at Morris, Nichols, Arsht & Tunnel, represent the Debtors in their restructuring effort. Triple Crown had assets of $36,431,000 against debts of $88,296,000 as of March 31, 2009. TRIPLE CROWN: Files Schedules of Assets and Liabilities ------------------------------------------------------- Triple Crown Media Inc. and Gray Publishing LLC delivered to the U.S. Bankruptcy Court for the District of Delaware an amended schedule of assets and liabilities, disclosing: Total Total Assets Liabilities ----------- ----------- Triple Crown $3,250,705 $73,839,142 Gray Publishing $27,087,740 $75,120,694 A full-text copy of Triple Crown's schedule is available for free at http://ResearchArchives.com/t/s?4781 A full-text copy of Gray Publishing's schedule is available for free at http://ResearchArchives.com/t/s?4782 Triple Crown Media, Inc., derives revenue from its Newspaper Publishing operations. The Company's Newspaper Publishing operations derive revenue primarily from three sources: retail advertising, circulation and classified advertising. TCM's Newspaper Publishing operations' advertising revenues are primarily generated from local advertising. TCM sold its GrayLink Wireless segment on June 22, 2007. The Company sold its Host Collegiate Marketing segment and Host Association Management Services segment on November 15, 2007. TCM's sole remaining operating segment consists of its Newspaper Publishing business. This consists of the ownership and operation of six daily newspapers and one weekly newspaper with a total daily circulation as of June 30, 2008, of approximately 95,200 and a total Sunday circulation as of June 30, 2008, of approximately 131,850. Its newspapers are characterized by their focus on the coverage of local news and local sports. Triple Crown Media Inc., together with affiliates, filed for Chapter 11 on Sept. 14 (Bankr. D. Del. Case No. 09-13181). Attorneys at Morris, Nichols, Arsht & Tunnel, represent the Debtors in their restructuring effort. Triple Crown had assets of $36,431,000 against debts of $88,296,000 as of March 31, 2009. TROPICANA ENT: Adamar of NJ Proposes Amended Deal for Assets Sale ----------------------------------------------------------------- Adamar of New Jersey Inc., and its units ask the Bankruptcy Court to approve an amended and restated version of the Agreement on the sale of substantially all of their assets, free and clear of all liens, claims, encumbrances, and interests. The New Jersey Debtors also seek the Court's authority to assume and assign certain executory contracts and unexpired leases related to the Asset Sale. As previously reported, the New Jersey Debtors, Justice Gary S. Stein, the TE Debtors -- Aztar Corporation and Tropicana Entertainment, LLC -- Ramada New Jersey Holdings Corporation, Atlantic-Deauville, Inc., Adamar Garage Corporation, Ramada New Jersey, Inc., and Credit Suisse as the OpCo Agent entered into an Asset Purchase Agreement on April 29, 2009. The Court has approved the Original Agreement and the Original Sale Motion. However, shortly after the Original Agreement was approved, the steering committee of the OpCo Lenders requested that the Sellers -- Tropicana Entertainment, Ramada Holdings, Atlantic-Deauville, Adamar Garage, Ramada New Jersey, the New Jersey Debtors, and Justice Stein -- amend and restate the Original Agreement to enable the OpCo Lenders to effectuate a "G Reorganization" pursuant to Section 368(a)(1)(G) of the Internal Revenue Code, Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, New Jersey, relates. The primary benefit of a "G Reorganization" is that a business can be acquired with a historic tax basis rather than a tax basis determined by reference to the amount of a credit bid. A "G Reorganization" by definition is a transfer by a corporation of all or part of its assets to another corporation in a Title 11 or similar case; but only if, in pursuance of the reorganizational plan, stock or securities of the corporation to which the assets are transferred are distributed in a transaction which qualifies under Section 354, 355 or 356 of the Internal Revenue Code, Mr. Sirota explains. Amended Agreement Following extensive negotiations, the parties have agreed on the terms of an Amended and Restated Purchase Agreement. The OpCo Agent also advised the New Jersey Debtors that, upon the direction of "Required Lenders" and on behalf of the Secured Parties, it will designate Reorganized Tropicana; "Newco," an unspecified direct wholly owned subsidiary of Reorganized Tropicana; and "Newco Sub," an unspecified direct wholly owned subsidiary of Newco -- Specified Parties -- as the "Buyer" under the Original Agreement, according to Mr. Sirota. Rather than executing a joinder to the Original Agreement, the Specified Parties will be signing the Amended Agreement, he notes. Mr. Sirota informs the Court that the material modifications to the Original Agreement are: (a) The New Jersey Debtors will sell all their rights, title and interest in and to the Company Assets to Reorganized Tropicana which, in turn, will direct the New Jersey Debtors to transfer, assign, convey and deliver the Company Assets to Newco. As set forth in the Original Agreement and the Amended Agreement, the Non-Conservatorship Sellers will sell, transfer, assign, convey and deliver the remaining Acquired Assets to Newco Sub. The transfers of the Acquired Assets will be free and clear of Encumbrances, except for certain Permitted Encumbrances. (b) In exchange for the sale, transfer, assignment, conveyance and delivery of the Acquired Assets to the applicable Specified Party, each Seller will receive a specified number of shares of Reorganized Tropicana Stock. In turn, each Seller will sell, transfer and deliver the Reorganized Tropicana Stock to be received by the Seller to the Secured Parties, free and clear of all Encumbrances and adverse claims, in exchange for which the OpCo Agent, on behalf of the Secured Parties and at the direction of the Required Lenders, will surrender $200,000,000 of the principal amount of the obligations secured by the Original Collateral Agreement. (c) The Sellers are not obligated to pay Cure Amounts relating to Intercompany Obligations. A blacklined copy of the Amended Agreement is available for free at http://bankrupt.com/misc/TropiA_AmendedAPA100709.pdf ACE Entities' Limited Objection ACE American Insurance Company and its affiliate, Westchester Supply Lines Insurance Company, on behalf of themselves and their affiliated insurers and reinsurers, ask the Court to deny the New Jersey Debtors' request for an approval of an amended Asset Purchase Agreement for the sale of substantially all of their assets. The New Jersey Debtors and the ACE Entities are parties to certain prepetition and postpetition insurance policies. The ACE Policies are executory contracts in that each of them requires both parties to continue performance, and failure of either party to complete performance would constitute a material breach excusing performance of the other party, according to Helen Heifets, Esq., at Bazelon Less & Feldman, P.C., in Philadelphia, Pennsylvania. The Amended and Restated Purchase Agreement provides that if executory contracts, including the ACE Policies, are assumed by the New Jersey Debtors, they will be assigned to one of the "Specified Parties" on the terms set forth in the Amended Agreement, Ms. Heifets notes. She points out that the Amended Agreement fails to disclose whether the New Jersey Debtors propose to assume and assign the ACE Policies. According to Ms. Heifets, in the event the New Jersey Debtors propose to assume and assign the ACE Policies, the ACE Parties object to the assignment for these reasons: (a) The Amended Agreement does not provide for the fulfillment and satisfaction of the New Jersey Debtors' obligations under the ACE Policies by the assignee and does not disclose the identity of the proposed assignee; (b) The ACE Parties have no knowledge or information whether the assignee has the financial resources to perform the obligations of the New Jersey Debtors under the ACE Policies; and (c) Certain provisions of the Amended Agreement potentially conflict with the ACE Parties' rights and obligations under the ACE Policies. In the alternative, the ACE Entities seek that: (i) the New Jersey Debtors be directed to disclose to the ACE Entities whether they propose to assume and assign the ACE Policies; and (ii) in the event the New Jersey Debtors propose to assume and assign the ACE Policies, as a condition precedent to the ACE Entities' consent to the assignment, the New Jersey Debtors should be directed to (x) provide information regarding the identity of the proposed assignee and its financial condition, (y) provide a valid and acceptable written commitment from the proposed assignee to fully perform the New Jersey Debtors' obligations under the ACE Policies, and (z) include in the Amended Agreement certain provision that nothing will "impair the legal, equitable or contractual rights and defenses of the insureds or insurers with respect to the ACE Policies, and that such rights and obligations shall be determined under the ACE Policies . . ." About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The Company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana have emerged from bankruptcy pursuant to a reorganization plan. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have emerged from Chapter 11 via a separate Chapter 11 plan. On April 29, 2009, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711). Judge Judith H. Wizmur presides over the cases. Adamar and Manchester Mall or the New Jersey Debtors are both affiliates of Tropicana Entertainment LLC. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. The New Jersey Debtors own and operate one of the largest, and one of the most established, destination casino resorts in Atlantic City, New Jersey, known as Tropicana Casino and Resort - Atlantic City, which ranks third in gaming positions among Atlantic City's 11 casino properties. The New Jersey Debtors initiated the Chapter 11 cases to effectuate a sale of substantially all their assets in accordance with a mandate issued by the New Jersey Casino Control Commission pursuant to the New Jersey Casino Control Act. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the Chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: Gets Jan. 31 Extension for Plan Consummation ----------------------------------------------------------- The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana, obtained an order extending the deadline by which all conditions to the consummation of the OpCo Chapter 11 Plan must be satisfied or waived through and including January 31, 2010. The OpCo Debtors have made significant headway in satisfying the conditions precedent to the consummation of the confirmed OpCo Plan, Zachary I. Shapiro, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, tells the Court. In particular, he points out, the OpCo Debtors are working with their counsel and key constituents to complete the process for the registration of the securities to be issued under the OpCo Plan, to obtain all necessary regulatory approvals in the jurisdictions in which they operate, and to finalize the terms of their exit facility. Indeed, the OpCo Debtors aver that they anticipate completing those tasks and emerging from Chapter 11 protection in the coming months. However, the period provided under the OpCo Plan for the satisfaction or waiver of all conditions to Consummation of the OpCo Plan will expire on November 1, 2009. Despite the OpCo Debtors' moving expeditiously to consummate the OpCo Plan, they will not be in a position to declare the OpCo Plan effective by the Current Effective Date Deadline, Mr. Shapiro tells the Court. Mr. Shapiro notes that the OpCo Debtors recently negotiated and obtained Court approval for a third amendment to their postpetition credit facility, which will allow them to extend maturity of the DIP Facility through January 31, 2010, if necessary. While the amendment of the DIP Facility gives the OpCo Debtors the financial flexibility they need to consummate the OpCo Plan, the looming Current Effective Date Deadline threatens to jeopardize the OpCo Debtors' efforts to consummate the OpCo Plan, Mr. Shapiro contends. Under the current circumstances, therefore, the OpCO Debtors believe it is in the best interests of their creditors and estates to extent the Current Effective Date Deadline through January 31, 2010. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The Company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana have emerged from bankruptcy pursuant to a reorganization plan. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have emerged from Chapter 11 via a separate Chapter 11 plan. On April 29, 2009, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711). Judge Judith H. Wizmur presides over the cases. Adamar and Manchester Mall or the New Jersey Debtors are both affiliates of Tropicana Entertainment LLC. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. The New Jersey Debtors own and operate one of the largest, and one of the most established, destination casino resorts in Atlantic City, New Jersey, known as Tropicana Casino and Resort - Atlantic City, which ranks third in gaming positions among Atlantic City's 11 casino properties. The New Jersey Debtors initiated the Chapter 11 cases to effectuate a sale of substantially all their assets in accordance with a mandate issued by the New Jersey Casino Control Commission pursuant to the New Jersey Casino Control Act. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the Chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: OpCO Debtors Want to Amend Sale Deal --------------------------------------------------- The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana, ask the Bankruptcy Court to authorize the "Delaware Parties" comprising of (i) the Tropicana Parties, which consist of the OpCo Debtors Ramada New Jersey, Inc., Ramada New Jersey Holdings Corporation, Atlantic-Deauville, Inc., Adamar Garage Corporation -- the Non-Conservatorship Sellers -- and Tropicana Entertainment, LLC; and (ii) Tropicana Entertainment Inc., or Reorganized OpCo Corporation, to enter into an Amended Agreement for the sale, transfer, conveyance, assignment, and delivery of certain Acquired Assets by the Non-Conservatorship Sellers, and the sale, transfer, and delivery of a certain amount of Reorganized OpCo Common Stock, free and clear of all liens, claims, encumbrances, and interests in connection with the sale of the Tropicana Casino and Resort - Atlantic City and the Acquired Assets of the New Jersey Debtors. A direct and wholly owned subsidiary of the Reorganized OpCo Corporation, Newco, is to be formed in accordance with the Amended and Restated Purchase Agreement, and a direct and wholly owned subsidiary of Newco -- the Newco Sub -- is to be formed in accordance with the Amended Agreement, by and among the New Jersey Debtors, Justice Gary S. Stein, the Delaware Parties, and Credit Suisse, as administrative agent and collateral agent of the Debtors' credit agreement, Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates. The OpCo Debtors also ask the Court to authorize the Delaware Parties, Newco, Newco Sub, and the Administrative Agent to consummate the modified transactions contemplated by the proposed order and the Amended Agreement. The New Jersey Debtors filed a motion on October 7, 2009, with the New Jersey Court seeking approval of the Amended Agreement, which is set for hearing on October 29, 2009. The Amended Agreement has also been submitted to the New Jersey Casino Control Commission for consideration at its next meeting on October 28, 2009. The OpCo Debtors have confirmed a plan of reorganization and are in the process of obtaining the necessary state regulatory approvals for their casino operations; completing the registration process in order to become a reporting company under the Exchange Act; and finalizing the terms of their exit financing. The OpCo Debtors anticipate completing these tasks and emerging from Chapter 11 in the coming months. In addition, the NJ Commission recently ruled that Reorganized OpCo Corporation can be a holding company, as the owner and operator of the Tropicana Atlantic City, in connection with an application for casino licensure by Newco, according to Mr. Kaufman. As previously reported, the OpCo Steering Committee has also obtained approval to recombine or reintegrate Tropicana Atlantic City into the OpCo Debtors' operations upon emergence, which will allow the parties to realize certain transactional efficiencies and will enhance the value of the OpCo Debtors' reorganized business. In light of this development, the OpCo Steering Committee has determined that it would be beneficial to effectuate a "G- Reorganization" pursuant to Section 368(a)(1)(G) of the Internal Revenue Code in connection with the sale and transfer of Tropicana Atlantic City. The primary benefit of a G- reorganization is that a business can be acquired with a historic tax basis rather than a tax basis determined by reference to the amount of a credit bid, according to Mr. Kaufman. By definition, a G-Reorganization is "a transfer by a corporation of all or part of its assets to another corporation in a title 11 or similar case; but only if, in pursuant of the plan, stock or securities of the corporation to which the assets are transferred are distributed in a transaction which qualifies under section 3654, 355, or 356 [of the Internal Revenue Code]," Mr. Kaufman notes. To accomplish these goals, the parties have prepared the Amended Agreement, which incorporates changes to the structure of the transactions contemplated by the Original Agreement, and the parties are proposing certain immaterial modifications to the OpCo Plan to implement the transaction contemplated under the Amended Agreement, Mr. Kaufman says. Amended Agreement The Amended Agreement contemplates that two newly formed subsidiaries of Reorganized OpCo Corporation will receive the assets and in exchange, the Sellers will receive a certain number of shares of Reorganized OpCo Common Stock from Reorganized OpCo Corporation and Newco Sub. The Sellers will direct Reorganized OpCo Corporation and Newco Sub to deliver the Reorganized OpCo Common Stock, on behalf of the Sellers, to certain Secured Parties on account of their $200,000,000 credit bid, according to Mr. Kaufman. The Amended Agreement also includes changes to address, among other things, (i) the treatment of intercompany cure payments on the Acquired Contracts, (ii) the treatment of certain tax-related matters, (iii) certain conditions to the closing of the Amended Agreement, and (iv) provisions preserving the right of the parties to proceed with the Original Agreement in the event that the Amended Agreement is terminated under certain conditions. The Amended Agreement also includes certain modifications to the Original Agreement, including that the Sellers are not obligated to pay cure amounts relating to Intercompany Obligations. A blacklined version of the Amended Agreement, showing changes between the Original Agreement and the Amended Agreement, is available at no charge at: http://bankrupt.com/misc/Tropi_AmendedTropACAPA_100709.pdf Proposed Modifications to the OpCo Plan The OpCo Debtors further ask the Court to approve corresponding immaterial modifications to their First Amended Joint Plan of Reorganization. The OpCo Plan Modifications will not materially and adversely impact any creditors or the distributions they may be entitled to receive under the Modified OpCo Plan. The OpCo Plan Modifications merely serve to incorporate expressly the transfer of the Tropicana Atlantic City and the Non-Conservatorship Sellers' Assets into the Modified OpCo Plan, which was previously contemplated by the Original OpCo Plan, according to Mr. Kaufman. The OpCo Steering Committee reiterates that this will allow certain Specified Parties to realize the tax benefits of the G- Reorganization, and ultimately benefit the Secured Parties, as they will receive Reorganized OpCo Common Stock. According to Mr. Kaufman, the OpCo Plan Modifications include: (a) Certain definitions have been added to incorporate concepts contained in the Amended Agreement; (b) The treatment of Intercompany Claims has been revised to reflect that the reinstatement of certain Intercompany Claims is subject to the terms of the Amended Agreement; (c) Two of the provisions for implementation of the Modified OpCo Plan have been revised to reflect that a certain amount of Reorganized OpCo Common Stock will be issued in accordance with the Amended Agreement in partial satisfaction of the OpCo Credit Facility Claims; (d) One of the revisions for implementation of the Modified OpCo Plan has been revised to reflect that, with certain exceptions, the OpCo Credit Facility will be fully released and discharged upon the later of the Modified OpCo Plan Effective Date or the closing of the Transactions; (e) Three of the provisions for implementation of the Modified OpCo Plan have been revised to reflect the fact that the Closing of the Amended Agreement and the Transactions are not part of the implementation of the Modified OpCo Plan; and (f) One of the procedures for resolving Disputed Claims has been revised to correct a cross reference. A redlined version showing the changes between the Original OpCo Plan and the Modified OpCo Plan is available at no charge at: http://bankrupt.com/misc/Tropi_ModifiedOpCoPlan_101609.pdf The Motion does not affect the LandCo Plan, the Liquidating LandCo Debtors, or New LandCo, Mr. Kaufman assures the Court. Mr. Kaufman adds that certain Restructuring Transactions have been modified to incorporate the Transactions contemplated under the Amended Agreement. A redlined copy showing the changes between the Restructuring Transactions and the Modified Restructuring Transactions is available at no charge at: http://researcharchives.com/t/s?478d About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The Company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana have emerged from bankruptcy pursuant to a reorganization plan. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have emerged from Chapter 11 via a separate Chapter 11 plan. On April 29, 2009, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711). Judge Judith H. Wizmur presides over the cases. Adamar and Manchester Mall or the New Jersey Debtors are both affiliates of Tropicana Entertainment LLC. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. The New Jersey Debtors own and operate one of the largest, and one of the most established, destination casino resorts in Atlantic City, New Jersey, known as Tropicana Casino and Resort - Atlantic City, which ranks third in gaming positions among Atlantic City's 11 casino properties. The New Jersey Debtors initiated the Chapter 11 cases to effectuate a sale of substantially all their assets in accordance with a mandate issued by the New Jersey Casino Control Commission pursuant to the New Jersey Casino Control Act. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the Chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: OpCo's Non-Material Changes to Plan -------------------------------------------------- The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana, are seeking the Court's authority to enter into an Amended and Restated Purchase Agreement in connection with the sale of the Tropicana Casino and Resort - Atlantic City and the Acquired Assets of the New Jersey Debtors. In line with this development, the OpCo Debtors made corresponding immaterial modifications to their First Amended Joint Plan of Reorganization. The OpCo Plan Modifications will not materially and adversely impact any creditors or the distributions they may be entitled to receive under the Modified OpCo Plan, the OpCo Debtors aver. The OpCo Plan Modifications merely serve to incorporate the transfer of the Tropicana Atlantic City and the Non-Conservatorship Sellers' Assets into the Modified OpCo Plan, which was previously contemplated by the Original OpCo Plan, Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, clarifies on behalf of the OpCo Debtors. The OpCo Steering Committee believes that the recent Plan Modifications will allow certain Specified Parties to realize the tax benefits of the G-Reorganization, and ultimately benefit those secured parties, as they will receive Reorganized OpCo Common Stock, Mr. Kaufman adds. According to Mr. Kaufman, the OpCo Plan Modifications are: (a) Certain definitions have been added to incorporate concepts contained under the Amended Purchase Agreement; (b) The treatment of Intercompany Claims has been revised to reflect that the reinstatement of certain Intercompany Claims is subject to the terms of the Amended Agreement; (c) Two of the provisions for implementation of the Modified OpCo Plan have been revised to reflect that a certain amount of Reorganized OpCo Common Stock will be issued in accordance with the Amended Agreement in partial satisfaction of the OpCo Credit Facility Claims; (d) One of the revisions for implementation of the Modified OpCo Plan has been revised to reflect that, with certain exceptions, the OpCo Credit Facility will be fully released and discharged on the later of the Modified OpCo Plan Effective Date or the closing of the Transactions; (e) Three of the provisions for implementation of the Modified OpCo Plan have been revised to reflect the fact that the Closing of the Amended Agreement and related Transactions are not part of the implementation of the Modified OpCo Plan; and (f) One of the procedures for resolving Disputed Claims has been revised to correct a cross reference. A redlined version showing the changes between the Original OpCo Plan and the Modified OpCo Plan is available at no charge at: http://bankrupt.com/misc/Tropi_ModifiedOpCoPlan_101609.pdf About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The Company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana have emerged from bankruptcy pursuant to a reorganization plan. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have emerged from Chapter 11 via a separate Chapter 11 plan. On April 29, 2009, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711). Judge Judith H. Wizmur presides over the cases. Adamar and Manchester Mall or the New Jersey Debtors are both affiliates of Tropicana Entertainment LLC. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. The New Jersey Debtors own and operate one of the largest, and one of the most established, destination casino resorts in Atlantic City, New Jersey, known as Tropicana Casino and Resort - Atlantic City, which ranks third in gaming positions among Atlantic City's 11 casino properties. The New Jersey Debtors initiated the Chapter 11 cases to effectuate a sale of substantially all their assets in accordance with a mandate issued by the New Jersey Casino Control Commission pursuant to the New Jersey Casino Control Act. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the Chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) UNIGENE LABORATORIES: Gets 25% Stake in Tarsa Under License Deal ---------------------------------------------------------------- Unigene Laboratories, Inc., has licensed its Phase III oral calcitonin program to Tarsa Therapeutics, Inc., a new company formed by a syndicate of three venture capital funds specializing in the life sciences: MVM Life Science Partners, Quaker BioVentures and Novo A/S. Simultaneously, Tarsa announced the closing of a $24 million Series A financing from the investor syndicate. As part of the agreement, Unigene will own 25% of Tarsa on a fully diluted basis and will be eligible to receive milestone payments based on the achievement of certain sales benchmarks, as well as royalties on product sales. Tarsa will be solely responsible for the costs of the global Phase III clinical program that has recently been initiated and also has reimbursed Unigene for its Phase III expenditures to date. Calcitonin is approved for the treatment of osteoporosis, but its use has been limited as it is currently available only in intranasal and injectable forms. The oral formulation that Unigene has licensed to Tarsa has been shown in prior clinical studies to deliver the desired blood levels of calcitonin and reduce levels of plasma CTx-1, an established marker of bone resorption. It has the potential to offer a new therapeutic option for osteoporosis patients as the first FDA-approved and commercially available oral formulation of calcitonin. Tarsa also announced that David Brand has joined the company as President, CEO and Director. He brings over 30 years of global pharmaceutical experience in product development, acquisitions, marketing and operational management with GlaxoSmithKline (GSK), its predecessor companies, and most recently served as President and CEO of Cardiokine Inc. Mr. Brand stated, "Calcitonin has been proven safe and effective in the treatment of osteoporosis in large numbers of patients over many years, and current worldwide sales are estimated at about half a billion dollars. The broader use of calcitonin, however, has been limited by its availability solely in injectable and intranasal forms. Tarsa's unique, once-daily oral calcitonin tablet has the potential to offer patients the proven safety and efficacy of calcitonin, with the significant advantage of easier administration and enhanced long-term compliance." While at GSK, Mr. Brand held senior management positions in marketing, business development and international operations. He led the launch activities for the blockbuster products Paxil(R) and Kytril(R) and subsequently was responsible for pre-launch commercial development plans for Coreg(R), Hycamtin(R) and Requip(R). He also led the business units that launched Requip and Avandia(R). As CEO of Cardiokine Mr. Brand assembled a management and development team that closed a $50 million financing round and completed a worldwide development and marketing agreement for lead product lixivaptan with Biogen Idec. "The new company assembled by this investor syndicate includes an outstanding group of professionals who have the knowledge and experience to ensure that the value of this asset is fully realized," noted Dr. Ronald S. Levy, Executive Vice President of Unigene. "We have always believed that this program has substantial commercial potential. Accordingly, it was important for us to retain a significant portion of that value for Unigene's shareholders, and this structure enables us to accomplish that. The oral calcitonin program will be Tarsa's number one priority, and they intend to commit their substantial resources and considerable expertise to successfully advancing the Phase III program in the shortest possible time frame." "We view Tarsa as a creative partnership between the management team, Unigene and this investor group, committed to completing the Phase III program and enabling registration and commercialization of a compelling new therapy in a focused and efficient manner," added Dr. Eric Bednarski of MVM Life Science Partners. Dr. James P. Gilligan, Unigene's Vice President of Product Development, will become Tarsa's Chief Scientific Officer while retaining certain responsibilities at Unigene. The Board of Directors of Tarsa will be headed by Chairman Dr. Bednarski and includes Unigene's Dr. Levy, Tarsa CEO Mr. Brand, Dr. Matthew Rieke, Partner at Quaker BioVentures and Dr. Martin Edwards, Senior Partner at Novo A/S. Tarsa will be based in Philadelphia, PA. About MVM Life Science Partners LLP MVM Life Science Partners LLP -- http://www.mvmlifescience.com/-- is a venture capital firm, founded in 1997, which manages three funds totaling more than $500 million and invests in companies that discover, develop and commercialize innovations in biotechnology, pharmaceuticals and medical devices for the life science and healthcare markets. MVM has offices in both London and Boston, making investments predominantly in Western Europe and the Eastern US, and has a growing team with wide-ranging experience across the life science and private equity markets. About Quaker BioVentures Quaker BioVentures -- http://www.quakerbio.com/-- is dedicated to investing in life science companies in the Mid-Atlantic region and contiguous states. The firm leads investments in companies across the spectrum of the life science industry, including biopharmaceuticals, medical devices, human diagnostics, specialty pharmaceuticals, and healthcare services. Quaker BioVentures invests in companies at all stages of development from early stage businesses to public companies. Founded in 2003, the firm manages over $700 million in committed capital and is currently investing Quaker BioVentures II, a $420 million fund formed in 2007. About Novo A/S Novo A/S is an active and independent company in its support of biotech ventures. The aspiration is to bring together the best of both worlds: industry insight and network from our pharma/biotech inheritance combined with a venture capital mindset that focuses on results and value creation. Novo has invested in more that 50 portfolio companies. There is considerable diversity in the portfolio across technologies, products and financial stages. The portfolio is international, currently with more than half the invested capital in North American companies and the rest in Denmark and Europe. About Tarsa Therapeutics Newly formed Tarsa Therapeutics is developing an oral formulation of calcitonin, a peptide hormone for the treatment of osteoporosis that slows the rate of bone destruction. Availability of an oral formulation is expected to generate wider use of this established osteoporosis treatment, which currently is available only in injectable and intranasal formulations. Tarsa's oral calcitonin has generated promising data in Phase II studies and the global Phase III clinical program is now underway. Tarsa will be based in Philadelphia, PA. About Unigene Unigene Laboratories, Inc. (OTCBB: UGNE) -- http://www.unigene.com/-- is a biopharmaceutical company focusing on the oral and nasal delivery of large-market peptide drugs. Due to the size of the worldwide osteoporosis market, Unigene is targeting its initial efforts on developing calcitonin and PTH- based therapies. Fortical(R), Unigene's nasal calcitonin product for the treatment of postmenopausal osteoporosis, received FDA approval and was launched in 2005. Unigene has licensed the U.S. rights for Fortical(R) to Upsher-Smith Laboratories, worldwide rights for its oral PTH technology to GlaxoSmithKline and worldwide rights for its calcitonin manufacturing technology to Novartis. Unigene's patented oral delivery technology has successfully delivered, in preclinical and/or clinical trials, various peptides including calcitonin, PTH and insulin. Unigene's patented manufacturing technology is designed to cost-effectively produce peptides in quantities sufficient to support their worldwide commercialization as oral or nasal therapeutics. * * * "We need additional cash from increases in Fortical(R) sales or royalties, milestones from existing agreements or upfront payments from new agreements or from financings in order to meet our near- term obligations. These factors, among others, raise substantial doubt about our ability to continue as a going concern," Unigene Laboratories, Inc., warned in a regulatory filing in August 2009. At June 30, 2009, the Company had $27,691,179 in total assets and $52,563,482 in total liabilities, resulting in $24,872,303 in stockholders' deficit. At June 30, 2009, the Company had cash and cash equivalents of $4,599,000, a decrease of $3,985,000 from December 31, 2008 primarily due to expenditures related to its upcoming Phase III clinical trial for oral calcitonin. The Company had working capital of $10,468,000. UNIVERSAL CITY: S&P Downgrades Corporate Credit Rating to 'B' ------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Orlando, Florida-based Universal City Florida Holdings Co. I to 'B' from 'B+'. The outlook is stable. At the same time, S&P assigned its 'B' corporate credit rating to Universal City's operating subsidiary Universal City Development Partners Ltd. The outlook is stable. In addition, S&P assigned its issue-level and recovery ratings to the proposed $975 million senior secured credit facilities, $400 million senior notes due 2015, and $225 million senior subordinated notes due 2016. The credit facilities consist of a $75 million revolving credit facility due 2013 and a $900 million term loan B due 2014. S&P rated the credit facilities 'B+' (one notch above than the 'B' corporate credit rating on UCDP) with a recovery rating of '2', indicating S&P's expectation of substantial (70%-90%) recovery for lenders in the event of a payment default. S&P rated the senior notes and the senior subordinated notes being issued by Universal City Development Partners Ltd. and UCDP Finance Inc. at 'CCC+' (two notches lower than the 'B' corporate credit rating) with a recovery rating of '6', indicating S&P's expectation of minimal (0%-10%) recovery for lenders in the event of a payment default. Transaction proceeds will be used to refinance the existing debt of UCDP and Universal City. S&P will withdraw its existing corporate credit, issue-level, and recovery ratings on Universal City following a successful closing of the transaction. "The one-notch downgrade of the corporate credit rating reflects Universal City's higher debt leverage and increased cash interest burden from the recapitalization," said Standard & Poor's credit analyst Andy Liu. Pro forma for the transaction, total debt to EBITDA increased to 5.9x from 5.6x for the period ended Sept. 30, 2009. USA SPRINGS: Secured Permits to Be Transferred ---------------------------------------------- The permits that USA Springs secured after a contentious and tenacious battle will be transferred, and the entity that acquires the Company wouldn't have to start from scratch, Bob Sanders at New Hampshire Business Review reports, citing the New Hampshire Department of Environmental Services. Some may expire due to USA Springs' long detour into bankruptcy, says Business Review. As reported by the TCR on October 12, 2009, an undisclosed company already agreed to buy almost two-thirds of USA Springs' assets for $55 million. USA Springs' lawyer Alan L. Braunstein said that the new company, referred to as NewCo and represented by Boston attorney Daniel S. Bleck, would continue to work with the Debtor to finish the bottling plant. Creditors should be paid in fall if the deal goes through before Christmas. NewCo's identity will be kept secret from the public until next month. Based in Nottingham, New Hampshire, USA Springs Inc. filed for Chapter 11 bankruptcy protection on June 27, 2008 (D. N.H. Case No. 08-11816). Armand M. Hyatt, Esq., at Hyatt & Flynn, PLLC, and Earl D. Munroe, Esq., at Muroe & Chew, represent the Debtor in its restructuring efforts. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee's counsel is Terrie Harman, Esq., at Harman Law Offices. In its schedules, the Debtor disclosed $127,000,335 in assets and $13,913,901 in liabilities. VERASUN ENERGY: Court Confirms Chapter 11 Plan of Liquidation ------------------------------------------------------------- Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware confirmed on October 23, 2009, the Chapter 11 Plan of Liquidation filed by VeraSun Energy Corporation and its debtor affiliates after finding that the Plan satisfies the confirmation requirements of Section 1129(a)(1) of the Bankruptcy Code. VeraSun and the Official Committee of Unsecured Creditors submitted to the U.S. Bankruptcy Court for the District of Delaware on July 31, 2009, a joint Chapter 11 plan of liquidation and an accompanying disclosure statement. The Plan provides for the distribution of substantially all of the assets of the Debtors to various creditors and to subsequently wind up the Debtors' corporate affairs. Judge Shannon ruled that: (a) the Plan satisfies Section 1129(a)(1) of the Bankruptcy Code because the Plan: * properly designated 65 classes of claims and 11 classes of interests. The Claims and Interests placed in each Class are substantially similar to other Claims or Interests in each Class. Valid business, factual and legal reasons exist for separately classifying the various Classes of Claims and Interests created under the Plan, and the Classes do not unfairly discriminate between Holders of Claims or Interests. Thus, the Plan satisfies Sections 1122 and 1123(a)(1) of the Bankruptcy Code; * the Plan specifies the Classes of Claims and Interests that are unimpaired. Thus, the Plan satisfies Section 1123(a)(2) of the Bankruptcy Code; * the Plan specifies the Classes of Claims and Interests that are impaired and specifies their treatment. Thus, the Plan satisfies Section 1123(a)(3) of the Bankruptcy Code; * the Plan provides for the same treatment for each Claim in each Class unless the Holder of a particular Claim has agreed to less favorable treatment. Thus, the Plan satisfies section 1123(a)(4) of the Bankruptcy Code; * the Plan sets forth numerous provisions to facilitate its implementation, like the continued corporate existence of the Reorganized Debtors, the revesting of all property of the Estates in the Reorganized Debtors, generally allowing for all corporate action to effectuate the Plan, the appointment, rights and obligations of the Plan Administrator, the establishment, rights and obligations of the Plan Committee, cancellation of securities, instruments and agreements evidencing Claims and Interests, and the settlement of certain Intercompany Claims. Thus, the Plan satisfies Section 1123(a)(5) of the Bankruptcy Code; * the Plan provides that the certificate of incorporation and by-laws of each Debtor, among other things, will prohibit the issuance of non-voting equity securities to the extent prohibited by Section 1123(a)(6) of the Bankruptcy Code. Thus, the requirements of Section 1123(a)(6) of the Bankruptcy Code are satisfied; * the Plan properly and adequately discloses or otherwise identifies the procedures for determining the identities and affiliations of all individuals or entities proposed to serve on or after the Effective Date as officers and directors of the Reorganized Debtors. Specifically, section 7.4 of the Plan provides that the Plan Administrator, to be selected by the Creditors' Committee, will serve as the sole officer and director or manager, as applicable, of each of the Reorganized Debtors. Section 7.5 of the Plan provides great detail regarding the Plan Administrator as well as the Plan Administrator's rights, powers and duties. The provisions are consistent with the interests of the creditors and interest holders and with public policy. Thus, Section 1123(a)(7) of the Bankruptcy Code is satisfied; * the Plan's provisions are appropriate and consistent with the applicable provisions of the Bankruptcy Code, including, without limitation, provisions for: -- Distributions to Holders of Claims and Interests; -- the disposition of Executory Contracts and Unexpired Leases; -- the retention of, and right to enforce, sue on, settle or compromise certain claims or causes of action against third parties, to the extent not waived and released under the Plan; -- indemnification obligations; -- releases by the Debtors and Debtors-in- Possession; and -- releases by Holders of Claims and Interests; * the Plan is dated and identifies the entities submitting it, thereby satisfying Rule 3016(a) of the Federal Rules of Bankruptcy Procedure; (b) the Debtors have complied with the applicable provisions of the Bankruptcy Code, thereby satisfying Section 1129(a)(2) of the Bankruptcy Code. Specifically, the Debtors are proper debtors under Section 109 of the Bankruptcy Code the Debtors and the Creditors' Committee are and proper proponents of the Plan under Section 1121(a) of the Bankruptcy Code. The Debtors have complied with the applicable provisions of the Bankruptcy Code, including as provided or permitted by orders of the Court. The Debtors complied with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules for the United States Bankruptcy Court for the District of Delaware, and the Solicitation Procedures Order in transmitting the Plan, the Disclosure Statement, the Ballots and related documents and notices, and in soliciting and tabulating votes on the Plan; (c) the Debtors have proposed the Plan in good faith and not by any means forbidden by law, thereby satisfying Section 1129(a)(3) of the Bankruptcy Code. In determining that the Plan has been proposed in good faith, the Court has examined the totality of the circumstances surrounding the filing of the Chapter 11 Cases and the formulation of the Plan and found out that the Plan was proposed with the legitimate and honest purposes of maximizing the recovery to Holders of Claims and Interests under the circumstances of the Chapter 11 Cases; (d) the Court-appointed professionals in the Chapter 11 Cases are subject to the requirements of Sections 330 and 331 of the Bankruptcy Code and, therefore, have been approved by, or are subject to approval of the Court as reasonable. Further, the Plan provides that all unpaid Professional Fees incurred prior to the Effective Date will be subject to final allowance or disallowance upon application to the Bankruptcy Court pursuant to Sections 330 or 503(b)(4) of the Bankruptcy Code; (e) the Debtors have complied with Section 1129(a)(5) of the Bankruptcy Code and have disclosed the initial officers of the Reorganized Debtors. The Plan Administrator will serve as the sole officer and director or manager, as applicable, of each of the Reorganized Debtors. The Plan Administrator will be selected by the Creditors' Committee. Through a Plan supplement the Debtors have disclosed publicly the identity and any affiliation of the Plan Administrator, KDW Restructuring & Liquidation Services LLC. KDW is not an insider of the Debtors and its employment as the sole officer and director or manager, as applicable, of the Reorganized Debtors is consistent with the interests of Holders of Claims against and Interests in the Debtors and with public policy; (f) Section 1129(a)(6) of the Bankruptcy Code is satisfied because the Plan does not provide for any change in rates over which a governmental regulatory commission has jurisdiction; (g) the Plan satisfies the requirements of Section 1129(a)(7) of the Bankruptcy Code. Article XI of the Disclosure Statement and the other evidence proffered or adduced at the Confirmation Hearing (i) are persuasive and credible, (ii) have not been controverted by other evidence or have not been challenged, (iii) are based upon reasonable and sound assumptions; and (iv) establish that each Holder of an impaired Claim or Interest either has accepted the Plan or will receive or retain under the Plan, on account of the Claim or Interest, property of a value, as of the Effective Date, that is not less than the amount that the Holder would receive or retain if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code on the date; (h) Section 1129(a)(8) of the Bankruptcy Code requires that, with respect to each class of claims or interests, each class has either accepted the plan or is unimpaired under the plan. Based on the tabulation of votes done by the Debtors' claims and balloting agent, Kurtzman Carson Consultants LLC, Classes 2E and 4E through 10E, 2F, 6F, 7F, 10F, 1G through 4G, 6G through 8G, 10G, 11G, and 3H have voted to accept the Plan. Classes 8F, 5G and 9G voted to reject the Plan. Classes II through III will neither receive nor retain any property under the Plan and, therefore, are deemed to have rejected the Plan. In addition, no Holder of a Claim in Classes 11E, 4F, 9F, and 11F timely submitted a Ballot. The Debtors have met the "cramdown" requirements in Section 1129(b) of the Bankruptcy Code with respect to the Non-Accepting Classes necessary to obtain Confirmation of the Plan. Amount % of Amount Amount % of Amount Class Accepting Voted Rejecting Voted ----- ---------- ----------- --------- ---------- 2E $49,546,651 100 $0 0 4E 12,513,475 100 0 0 5E 19,830,978 100 0 0 6E 33,747,101 100 0 0 7E 29,182,303 100 0 0 8E 16,206,382 100 0 0 9E 11,499,183 100 0 0 10E 10,474,449 100 0 0 11E 0 0 0 0 10F 193,825 100 0 0 11F 0 0 0 0 1F 0 0 0 0 2F 22,980,904 100 0 0 3F 0 0 0 0 4F 0 0 0 0 5F 0 0 0 0 6F 364,438 100 0 0 7F 318,773 100 0 0 8F 0 0 17,554 100 9F 0 0 0 0 10G 448,659 94.82 24,489 5.18 11G 374,567 98.92 4,101 1.08 1G Notes 61,834,322 94.32 3,723,696 5.68 1G Claims 281,638,026 99.96 103,906 0.04 2G 145,269,801 99.88 168,676 0.12 3G 9,236,071 100 0 0 4G 86,658 100 0 0 5G 251,743 47.60 277,156 52.40 6G 174,542 95.01 9,166 4.99 7G 465,528 98.54 6,910 1.46 8G 1,128,701 90.84 113,842 9.16 9G 1,124,137 14.54 6,604,560 85.46 3H 133,453,874 100 0 0 Number % of Amount Number % of Amount Class Accepting Voted Rejecting Voted ----- --------- ----------- --------- ----------- 2E 6 100 0 0 4E 1 100 0 0 5E 1 100 0 0 6E 1 100 0 0 7E 1 100 0 0 8E 1 100 0 0 9E 1 100 0 0 10E 1 100 0 0 11E 0 0 0 0 10F 1 100 0 0 11F 0 0 0 0 1F - - - - 2F 1 100 0 0 3F - - - - 4F 0 0 0 0 5F - - - - 6F 1 100 0 0 7F 1 100 0 0 8F 0 0 1 100 9F 0 0 0 0 10G 20 83.33 4 16.67 11G 18 94.74 1 5.26 1G Notes 266 89.56 31 10.44 1G Claims 30 97 1 3 2G 48 87.27 7 12.73 3G 6 100 0 0 4G 16 100 0 0 5G 26 76.47 8 23.53 6G 12 92.31 1 7.69 7G 24 88.89 3 11.11 8G 14 82.35 3 17.65 9G 23 88.46 3 11.54 3H 1 100 0 0 A full-text copy of the Solicitation and Tabulation Results is available for free at: http://bankrupt.com/misc/vsevoteresults.pdf (i) the treatment of Administrative Claims and Non-Tax Priority Claims under the Plan satisfies the requirements of Section 1129(a)(9)(A) and (B) of the Bankruptcy Code, and the treatment of Tax Priority Claims under the Plan satisfies the requirements of section 1129(a)(9)(C) of the Bankruptcy Code; (j) Classes 2E and 4E through 10E, 2F, 6F, 7F, 10F, 1G through 4G, 6G through 8G, 10G, 11G, and 3H are each Impaired Classes of Claims or Interests that have voted to accept the Plan and, to the best of the Debtors' knowledge, do not contain "insiders" of any significant magnitude. Thus, Section 1129(a)(10) of the Bankruptcy Code is satisfied; (k) the Plan satisfies Section 1129(a)(11) of the Bankruptcy Code. The Plan is feasible because the proceeds the Debtors realized from the sale of substantially all of their assets will be sufficient to satisfy the Reorganized Debtors' very limited post-Effective Date obligations. Apart from the distribution obligations to Holders of Allowed Claims and Administrative Claims, the Reorganized Debtors will have few financial obligations. Thus, the Plan is feasible and confirmation is not likely to be followed by the need for further financial reorganization of the Reorganized Debtors; (l) the Debtors have paid or, pursuant to Section 14.4 of the Plan, will pay by the Effective Date bankruptcy professionals' fees, thereby satisfying Section 1129(a)(12) of the Bankruptcy Code; (m) the Debtors have not obligated themselves to provide retiree benefits to any person. Accordingly, the requirements of Section 1129(a)(13) of the Bankruptcy Code are satisfied. The Court also ruled that substantive consolidation of the ASA Debtors and the VSE Debtors will (i) facilitate and maximize prompt distribution to creditors and (ii) permit creditors to avoid the harm that likely would result absent substantive consolidation and confirmation of the Plan embodying it. All Professionals and other entities requesting compensation or reimbursement of Fee Claims pursuant to Sections 327, 328, 330, 331 or 503(b) of the Bankruptcy for services rendered prior to the Effective Date will file an application for final allowance of compensation and reimbursement of expenses no later than 60 days after the Effective Date, unless otherwise ordered by the Court. The Bar Date for filing administrative claims, including requests under Section 503(b) of the Bankruptcy Code, by any entity for making a substantial contribution in the Chapter 11 cases, will be 30 days after the Confirmation Date, except with respect to the Fee Claims. Objections Overruled The Court, in the Confirmation Order, ruled that all objections to confirmation of the Plan that have not been withdrawn, waived, settled, or addressed in the Plan or in the Confirmation Order are overruled on the merits. Prior to the Distribution Date, the Plan Administrator will fund the Administrative Claims Reserve with Cash of the VSE Debtors in an amount equal to $84,000 representing asserted interest, costs and counsel fees related to Claim No. 2258 filed by Southern Minnesota Construction and Claim No. 2972 filed by Weerts Construction. Notwithstanding anything to the contrary in the Disclosure Statement, the Plan, any other Plan document, or the Confirmation Order, nothing in the Plan Documents will in anyway operate to impairing the legal, equitable or contractual rights of the Debtors or Liberty Mutual Insurance Company and its affiliates with respect to any insurance policies and any agreements related to the policies entered into by Liberty and the Debtors. Prior to the Distribution Date, the Plan Administrator will fund the Administrative Claims Reserve with Cash of the VSE Debtors in an amount equal to $400,000 representing all or a portion of Liberty's potential claims and interests. First National Bank of Omaha will retain (i) all liens, pledges or other security interests in any and all of the Debtors' or Reorganized Debtors' FNBO Accounts, (ii) all rights of setoff, subrogation or recoupment, and (iii) all other related claims. To resolve FNBO's objection, the Debtors agreed to pay FNBO $350,767, which represents the undisputed fees and expenses due and owing to FNBO. With respect to the remaining balance of fees and expenses addressed by FNBO in the amount of $50,851, the Debtors and FNBO reserve all rights they have in connection with the Disputed Fees, and FNBO does not waive any claims to recover the Disputed Fees at any time, including after confirmation of the Plan. The possessory lien, if any, of A&B Process Systems Corp. on any property of the Debtors or Reorganized Debtors that is in possession of A&B will continue following the Effective Date and will attach to any proceeds of the Alleged Collateral. A&B may liquidate the Alleged Collateral in a commercially reasonable manner. Nothing will (1) affect the ability of the Internal Revenue Service and the ATTB to pursue any non-debtors for any liabilities that may be related to any federal tax liabilities owed by the Debtors; and (2) to the extent that the Priority Tax Claims of the IRS and ATTB are not paid in full in cash on the Effective Date, the IRS and ATTB allowed Priority Tax Claims will be paid in equal quarterly installments commencing on the Effective Date and interest will accrue on those claims from the Effective Date at the rate and method set forth in Sections 6621 and 6622 of Title 26 of the U.S. Code. A full-text copy of the Confirmation Order is available for free at http://bankrupt.com/misc/vseplanorder.pdf Amended Plan Prior to the entry of the Confirmation Order, on October 21, 2009, the Debtors submitted to the Court an amended Plan, which specified, among others that the Plan Administrator will file a certification after the Debtors' assets are exhausted and final distributions of cash have been made under the Plan. Upon the filing of the Certificate, the Debtors will be deemed dissolved without the necessity for any other or further actions to be taken by or on behalf of the Reorganized Debtors or payments to be made in connection therewith other than the filing of a motion for final decree with respect to a particular Debtor. In addition, the October 21 Plan provided that the Debtors may, subject to the consent of the Official Committee of Unsecured Creditors, assume any and all of their insurance policies. The Debtors, prior to the entry of the Confirmation Order, also submitted a memorandum maintaining that the Plan should be confirmed because it complies with the requirements for confirmation under Section 1129 and does not discriminate unfairly with respect to the non-accepting classes. The Debtors also submitted a proposed finding of fact and conclusions of law and confirmation order in support of their arguments. Judge Shannon approved the proposed order. In the support documents, the Debtors addressed all the objections raised against the Plan, especially the objections raised by Liberty Mutual, FNBO, and A&B Process Systems. The resolution of those objections are incorporated in the Confirmation Order. Mark Dickey, Esq., the Debtors' senior vice president, general counsel and secretary, in further support of the Plan, certified that the October 21 Plan maximizes value for all stakeholders and incorporates fair and reasonable settlements of claims against the Debtors. Accordingly, he submits that the October 21 Plan is in the Debtors' best interests and urged the Court to confirm it. Subsequent to the Debtors' filing of the Proposed Confirmation Order, FNBO and the U.S. Trustee sought modifications to the Proposed Confirmation Order. FNBO asked that the Proposed Findings of Fact and Order to specify that FNBO will retain all liens, pledges, or other security interests in any and all of the Debtors or Reorganized Debtors' FNBO accounts. The U.S. Trustee asked to have this language regarding professional fees stricken out: "All fees payable by the Debtors under [Section 1930 of the Bankruptcy Code] shall be paid on, or as soon as reasonably practical after, the Effective Date, and neither the Debtors, their Estates nor the Reorganized Debtors shall thereafter be liable for the payment of any additional fees under [Section 1930] other than with respect to these Chapter 11 Cases." The Debtors submitted the October 21 Plan to address these modification requests. A blacklined version of the October 21 Plan is available for free at: http://bankrupt.com/misc/VerS1021PlBlk.pdf About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.com/or http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The Company and certain affiliates filed for Chapter 11 protection on October 31, 2008 (Bankr. D. Del. Case No. 08-12606). Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun closed on April 1, 2009, the sale of substantially all of its assets to Valero Renewable Fuels, a subsidiary of Valero Energy Corporation, North America's largest petroleum refiner and marketer. The purchased assets included five ethanol production facilities and a development site. The facilities are located in Aurora, South Dakota; Fort Dodge, Charles City, and Hartley, Iowa; and Welcome, Minnesota, and the development site is in Reynolds, Indiana. Valero paid $350 million for the ethanol production facilities in Aurora, Fort Dodge, Charles City, Hartley and Welcome, in addition to the Reynolds site. Valero also successfully bid $72 million for the Albert City facility and $55 million for the Albion facility. The purchase price also includes working capital and other certain adjustments. VeraSun also completed on April 9 the sale to AgStar Financial Services PCA of substantially all of the assets relating to the company's production facilities in Dyersville, Iowa; Hankinson, North Dakota; Janesville, Minnesota; Central City and Ord, Nebraska; and Woodbury, Michigan. AgStar released the USBE Subsidiaries from their obligations under $319 million of existing indebtedness and assumed certain liabilities relating to the AgStar Facilities. On April 13, US BioEnergy Corporation and US Bio Marion LLC completed the sale to Marion Energy Investments LLC, as assignee of Dougherty and First Bank & Trust, of substantially all of the assets relating to the Debtors' production facility in Marion, South Dakota. The consideration for the acquired assets consisted of release of US Bio Marion from its obligations under approximately $93 million of existing indebtedness to the Marion Buyers, payment by MEI of $934,861 in cash and assumption by the Marion Purchasers of certain liabilities relating to the Marion facility. (VeraSun Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). VISTEON CORP: Moves to Sell Nissan Parts Plants to Haru ------------------------------------------------------- Law360 reports that Visteon Corp. has asked for court approval to sell four manufacturing facilities to Haru Holdings LLC for more than $11 million in an agreement that also involves Nissan North America Inc., which uses parts from the plants. 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) WABASH NATIONAL: Delays Effective Date of Registration Statement ---------------------------------------------------------------- Wabash National Corporation delayed the effective date of the Registration Statement it filed relating to an offer and sale from time to time of up to 24,762,636 shares of its common stock by Trailer Investments, LLC, or its donees, pledgees, transferees or other successors-in-interests. Wabash National said the shares of common stock being sold are originally issuable upon the exercise of a warrant held by Trailer Investments as selling stockholder, or its donees, pledgees, transferees or other successors-in-interests. Wabash National will not receive any of the proceeds from the sale of these shares, but will incur expenses in connection with the offering. On July 17, 2009, Wabash National entered into a Securities Purchase Agreement with Trailer Investments. Trailer Investments agreed to invest $35 million in the Company. On August 3, 2009, pursuant to the Securities Purchase Agreement, Wabash National issued to Trailer Investments 20,000 shares of its Series E redeemable preferred stock, 5,000 shares of its Series F redeemable preferred stock, and 10,000 shares of its Series G redeemable preferred stock, and a warrant that is exercisable at $0.01 per share for 24,762,636 newly issued shares of its common stock representing on August 3, 2009, the date the warrant was delivered, 44.21% of its issued and outstanding common stock after giving effect to the issuance of the shares underlying the warrant, subject to upward adjustment for an aggregate purchase price of $35,000,000. On July 17, 2009, Wabash National also entered into a Third Amended and Restated Loan and Security Agreement, which was effective August 3, by and among Wabash National and certain of its subsidiaries, Bank of America, N.A., as a lender and as agent, and the other lenders parties thereto. The proceeds from the Transaction were used by Wabash National to reduce the outstanding balance under its Amended Facility and to pay the costs of the Transaction. Wabash National's common stock trades on the New York Stock Exchange under the symbol "WNC." On October 12, 2009, the last reported sales price of its common stock on the New York Stock was $2.73 per share. A full-text copy of the registration statement dated October 13, 2009, as amended, is available at no charge at: http://ResearchArchives.com/t/s?477e As reported by the Troubled Company Reporter, Wabash on July 17, 2009, entered into a Third Amended and Restated Loan and Security Agreement, which was effective August 3, 2009, with Bank of America, N.A., as a lender and as agent and the other lender parties. The Credit Agreement has a maturity date of August 3, 2012. The Amended Facility has a capacity of $100 million, subject to a borrowing base, and borrowings outstanding totaled $25.5 million at August 3, 2009. The lenders waived certain events of default that had occurred under the previous credit facility and waived the right to receive default interest during the time the events of default had continued. About Wabash National Headquartered in Lafayette, Indiana, Wabash National Corporation is one of the leading manufacturers of semi-trailers in North America. Established in 1985, the company specializes in the design and production of dry freight vans, refrigerated vans, flatbed trailers, drop deck trailers, dump trailers, truck bodies and intermodal equipment. Its innovative core products are sold under the DuraPlate(R), ArcticLite(R), FreightPro(TM) Eagle(R) and Benson(TM) brand names. The company operates two wholly owned subsidiaries; Transcraft (R) Corporation, a manufacturer of flatbed, drop deck, dump trailers and truck bodies; and Wabash National Trailer Centers, trailer service centers and retail distributors of new and used trailers and aftermarket parts throughout the U.S. WEIGHT WATCHERS: Morgan Stanley Discloses 4.8% Stake ---------------------------------------------------- Morgan Stanley discloses it has ceased to be the beneficial owner of more than 5% of the class of securities of Weight Watchers International Inc. As of September 30, 2009, Morgan Stanley held 3,671,865 shares or roughly 4.8% of the Company's common stock. Weight Watchers is scheduled to make $81.3 million in debt payments for the remainder of 2009, and $215.0 million in fiscal year 2010, which ends January 1, 2011. Weight Watchers currently plan to meet its long-term debt obligations by using cash flows provided by operating activities and opportunistically using other means to repay or refinance its obligations as it determines appropriate. In a Form 10-Q filing with the Securities and Exchange Commission in August, Weight Watchers said it believes cash flows from operating activities, together with borrowings available under its credit revolver, will be sufficient for the next 12 months to fund currently anticipated capital expenditure requirements, debt service requirements and working capital requirements. About Weight Watchers International Weight Watchers International, Inc. (NYSE: WTW) provides weight management services, operating globally through a network of Company-owned and franchise operations. Weight Watchers holds over 50,000 weekly meetings where members receive group support and learn about healthy eating patterns, behavior modification and physical activity. WeightWatchers.com provides innovative, subscription weight management products over the Internet and is the leading Internet-based weight management provider in the world. In addition, Weight Watchers offers a wide range of products, publications and programs for those interested in weight loss and weight control. As of July 4, 2009, the Company had $1.08 billion in total assets; $1.87 billion in total liabilities; and $792.8 million in total deficit. On March 20, 2008, Standard & Poor's affirmed its "BB+" rating on the WWI Credit Facility. On March 30, 2009, Moody's affirmed its "Ba1" rating for the WWI Credit Facility. WOLVERINE TUBE: Cancels Registration of Shares for Resale --------------------------------------------------------- Wolverine Tube, Inc., has withdrawn from registration its Registration Statement on Form S-1, as amended, Registration No. 333-141815, initially filed in April 2007. The Company has determined not to proceed with the offer of any securities made the subject of such registration statement and requests withdrawal. No securities have been sold in connection with the proposed offering to which the registration statement relates. The Registration Statement relates to the resale, from time to time, of up to 9,148 shares of its Series A Convertible Preferred Stock, par value $1.00 per share, and up to 5,603 shares of its Series B Convertible Preferred Stock, par value $1.00 per share and the shares of its common stock, par value $0.01 per share, issuable upon the conversion of the preferred stock, by selling stockholders. The Company originally issued 50,000 shares of its Series A Convertible Preferred Stock in a private placement on February 16, 2007, and an additional 4,494 shares of Series A Convertible Preferred Stock on January 25, 2008. On March 20, 2008, the Company issued in a private placement 10,000 shares of its Series B Convertible Preferred Stock. A full-text copy of the latest version of the Company's Preliminary Prospectus, dated June 12, 2008, is available at no charge at http://ResearchArchives.com/t/s?4798 Wolverine Tube, Inc., is a global manufacturer and distributor of copper and copper alloy tube, fabricated products, and metal joining products. As of July 5, 2009, the Company had $201,105,000 in total assets and $241,483,000 in total liabilities. Wolverine Tube said in its quarterly report for the period ended July 5, 2009, the uncertainty about the Company's ability to achieve its projected results, the absence of such credit or capital commitments and the uncertainty about the future price of copper, which has a substantial impact on working capital, raises substantial doubt about the Company's ability to continue as a going concern. The Company expects to continue to actively manage and optimize its cash balances and liquidity, working capital, operating expenses and product profitability, although there can be no assurances the Company will be able to do so. WOLVERINE TUBE: Files Annual Report for Savings Plans ----------------------------------------------------- Wolverine Tube Inc. filed with the Securities and Exchange Commission an annual report for the fiscal year ended December 31, 2008, with respect to its: -- Wolverine Tube, Inc. Savings Plan Net assets available for benefits under the Savings Plan is $27,304,587. See http://ResearchArchives.com/t/s?4799 -- Wolverine Tube Savings Plan for the Carrollton and Jackson Locations Net assets available for benefits under the Plan is $2,395,904. See http://ResearchArchives.com/t/s?479a Wolverine Tube, Inc., is a global manufacturer and distributor of copper and copper alloy tube, fabricated products, and metal joining products. As of July 5, 2009, the Company had $201,105,000 in total assets and $241,483,000 in total liabilities. Wolverine Tube said in its quarterly report for the period ended July 5, 2009, the uncertainty about the Company's ability to achieve its projected results, the absence of such credit or capital commitments and the uncertainty about the future price of copper, which has a substantial impact on working capital, raises substantial doubt about the Company's ability to continue as a going concern. The Company expects to continue to actively manage and optimize its cash balances and liquidity, working capital, operating expenses and product profitability, although there can be no assurances the Company will be able to do so. * Chapter 7 Bankruptcy Filings Up 12.5% in First Nine Months ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Georgia said that Chapter 7 business bankruptcy filings increased 12.5% in the first nine months of 2009, compared to the full-year 2008, Lance Piper at Bills.com reports. * Equity Fund Managers See No Sudden Boom in Deal Flow Volume ------------------------------------------------------------- The majority (76%) of private equity executives do not expect deal flow volume to return to 2007 highs until 2011 or later, according to a new study by BDO Seidman, LLP, one of the nation's leading accounting and consulting firms. Despite early indications that the economy is beginning a slow recovery, PE executives, regardless of fund size, anticipate closing the same number of deals next year as they did this year. Three-fourths (76%) of respondents report closing between one and five new deals between Q3 2008 and Q3 2009 -- and 82% expect to close between one and five new deals during the next year. The good news is that while 11% of respondents did not close any deals between Q3 2008 and Q3 2009, just 2% anticipate closing no deals in the next year. "While all signs currently point to private equity firms completing more deals in 2010 than they did in 2009, executives expect deal flow to remain in the one to five range for at least the next year," said Mat Wood, Partner with BDO Seidman's Private Equity Practice Group. "The lack of senior debt available, combined with pricing concerns, means funds will continue to face significant challenges as they work to source and close deals. Even so, executives are confident a change will come, and they're rearing to go when it does." Funds Take Steps to Mitigate Losses -- Worst is Behind Them? According to BDO Seidman's new study, half (51%) of executives surveyed say the overall value of their portfolio has decreased during the past year, and 56% say that more than 20% of their portfolio is performing below forecast or expectations. "There's no question that private equity has been hit hard by the downturn, but as executives look forward to a more hospitable deal climate, they've taken steps to remedy their battered portfolios, positioning them for growth once the economy turns around," added Mr. Wood. Nine in ten (93%) report reducing headcount at their portfolio companies, 81% have renegotiated debt and 83% have reassessed their market strategy. Nearly three in ten (28%) have declared bankruptcy for one or more portfolio companies, and 38% have engaged a turnaround professional. However, the majority of executives believe that the worst is now behind them and remain committed to their primary investment strategies. Just 17% have asked their LPs to allow them to change investment strategies to broaden opportunities, and only 8% will do so moving forward. During the past 12 months, 86% of respondents said they reduced professional staff headcount at the operating company level, but only 40% believe they will need to do so in the coming year. Seeking Bigger Deals in 2010 Despite anecdotal evidence pointing to more, but smaller, deals on the table now, PE executives are hopeful that they will be able to deploy more capital in 2010 than they did in 2009. Nearly half (48%) of respondents report investing less than $29 million through new deals and add-on acquisitions between Q3 2008 and Q3 2009, and 30% report investing between $30 and $100 million. The tables turn when they look ahead: 38% expect to invest less than $29 million, and 39% expect to invest between $30 and $100 million in the coming year. Funds that invested $101 million or more in the last year expect to invest about the same amount of capital between Q3 2009 and Q3 2010. These findings are from the inaugural BDO Seidman PErspective Private Equity Study, which examined the opinions of nearly 100 senior executives at private equity firms throughout the U.S. The study, which was conducted from September through October 2009, consisted of telephone interviews with senior level executives at private equity funds ranging from $10 million to more than $1 billion of committed capital. Some of the major findings from the BDO Seidman PErspective Private Equity Study: Opportunities in Asia . . . : Overwhelmingly, PE executives believe that other than North America, Asia still holds the greatest opportunities for new investments during the next 12 months (66%). PE executives are split when it comes to other locations, and count South and Central America (9%), the Middle East and Africa (9%), Continental Europe (8%) and Eastern Europe (7%) as potential geographical targets. . . . and Healthcare: Despite recent buyout activity in the tech space, PE executives see the greatest opportunity in the healthcare (35%) and manufacturing (21%) industries, followed by natural resources (17%), financial services (12%) and technology (10%). Just 3% of executives believe there are opportunities in media, and even fewer (2%) see opportunity in retail. More Capital Directed through New Deals Last Year, Add-ons Not Far Behind: More than half (56%) of capital invested between Q3 2008 and Q3 2009 went to new deals, while a sizeable portion (27%) went to add-on acquisitions and restructuring debt (10%). Among middle market funds -- with active fund value of $101 million to $1 billion -- the percentage of capital going to new deals was even greater (62%). One in five (21%) respondents from funds with less than $100 million deployed capital through restructuring debt. Despite Economy, Execs Bring in a 3.5 GPA: When asked to give a letter grade to their firm's performance in closing quality deals, nearly half (47%) give it a "B," and 30% say their firms deserve an "A." One in five (21%) believe their performance warrants a "C." Financial Risks: Sixty-seven percent of executives interviewed say that quality of earnings and cash flows are the biggest financial risk to their next acquisition, followed by structure and leverage (33%). The BDO Seidman PErspective Private Equity Study is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to senior private equity executives, using a telephone survey conducted within a sample of private equity funds (ranging from $10 million to more than $1 billion). About BDO Seidman, LLP Strategically-focused and remarkably responsive, the experienced, multi-disciplinary partners and directors of BDO Seidman's Private Equity practice provide value-added assurance, tax and consulting services for all aspects of a fund's cycle, wherever private equity firms are investing. * House Oversight Committee Targets Big Mortgage Lenders -------------------------------------------------------- ABI reports that the House Oversight and Government Reform Committee is investigating the role of mortgage lenders in the financial crisis and is seeking information from some of the biggest U.S. companies to determine whether they used deceptive practices to lure borrowers into the housing boom. * PBGC Announces Maximum Insurance Benefit for 2010 --------------------------------------------------- The Pension Benefit Guaranty Corporation said the maximum insurance benefit for participants in underfunded pension plans terminating in 2010 will be $54,000 per year for those who retire at age 65. The amount is higher for those who retire later and lower for those who retire earlier or elect survivor benefits. The PBGC maximum insurance benefit is indexed to a contribution and benefit base in Social Security law. Because that amount does not increase for 2010, the PBGC maximum insurance benefit is unchanged from 2009. If a pension plan terminates in 2010 but a participant does not begin collecting benefits until a future year, the 2010 maximum insurance limits still apply. For plans that terminate while the plan sponsor is in bankruptcy proceedings, the Pension Protection Act of 2006 provides that the maximum benefit payable is determined by the legal limits in force on the date the plan sponsor filed for bankruptcy and not on the date of plan termination. The maximum insurance benefit is set by law. Two additional legal limits on PBGC's insurance coverage can also affect participants' benefits. The first prohibits the PBGC from guaranteeing benefits that exceed the amount payable at the plan's normal retirement age. The second limits PBGC's guarantee of benefit increases made within the five years prior to plan termination, or the date the sponsor filed for bankruptcy, if the sponsor is in bankruptcy when the plan terminates. For more information, see PBGC's fact sheet "Pension Guarantees" http://ResearchArchives.com/t/s?47a6 The overwhelming majority of the participants in plans taken over by the agency face no reduction in benefits due to the legal limits on coverage, PBGC research shows. The largest reductions occur in cases where participants earn pensions that 1) significantly exceed the maximum insurance benefit, or 2) provide generous early retirement subsidies. Under the PBGC's single-employer insurance program, retirees sometimes can receive more than the maximum guaranteed benefit. In general, three conditions must apply: 1) the participant earned a benefit in excess of the maximum guaranteed amount; 2) the participant retired or was eligible to retire at least three years prior to plan termination; and 3) the plan had sufficient assets to pay benefits above the guaranteed amount. The following chart shows the 2010 annual and monthly maximum benefit guarantees for retirees from age 75 to 45. The maximum amount is lower for benefits commencing at ages below 65, reflecting the fact that younger retirees receive more monthly pension checks over a longer expected remaining lifespan. The maximum amount is higher for benefits commencing at ages above 65, reflecting the fact that older retirees receive fewer monthly pension checks over their expected remaining lifespan. Monthly Joint Annual Monthly & 50% Survivor Age Maximum Maximum Maximum* --- -------- ------- -------------- 75 $164,160.00 $13,680.00 $12,312.00 74 $149,256.00 $12,438.00 $11,194.20 73 $134,352.00 $11,196.00 $10,076.40 72 $119,448.00 $9,954.00 $8,958.60 71 $104,544.00 $8,712.00 $7,840.80 70 $89,640.00 $7,470.00 $6,723.00 69 $80,460.00 $6,705.00 $6,034.50 68 $72,360.00 $6,030.00 $5,427.00 67 $65,340.00 $5,445.00 $4,900.50 66 $59,400.00 $4,950.00 $4,455.00 65 $54,000.00 $4,500.00 $4,050.00 64 $50,220.00 $4,185.00 $3,766.50 63 $46,440.00 $3,870.00 $3,483.00 62 $42,660.00 $3,555.00 $3,199.50 61 $38,880.00 $3,240.00 $2,916.00 60 $35,100.00 $2,925.00 $2,632.50 59 $32,940.00 $2,745.00 $2,470.50 58 $30,780.00 $2,565.00 $2,308.50 57 $28,620.00 $2,385.00 $2,146.50 56 $26,460.00 $2,205.00 $1,984.50 55 $24,300.00 $2,025.00 $1,822.50 54 $23,220.00 $1,935.00 $1,741.50 53 $22,140.00 $1,845.00 $1,660.50 52 $21,060.00 $1,755.00 $1,579.50 51 $19,980.00 $1,665.00 $1,498.50 50 $18,900.00 $1,575.00 $1,417.50 49 $17,820.00 $1,485.00 $1,336.50 48 $16,740.00 $1,395.00 $1,255.50 47 $15,660.00 $1,305.00 $1,174.50 46 $14,580.00 $1,215.00 $1,093.50 45 $13,500.00 $1,125.00 $1,012.50 * Both spouses the same age. PBGC is a federal corporation created under ERISA. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 30,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and investment returns. * Epiq Systems Posts Third Quarter 2009 Results ----------------------------------------------- Epiq Systems, Inc., posted results of operations for the third quarter of 2009 with operating revenue (total revenue before operating revenue from reimbursed direct costs) of $51.1 million compared to $51.8 million for the same period last year. September 30, 2009 year-to-date operating revenue was $160.9 million, up 5% compared to $152.7 million for the prior year. Operating revenue reflects record Bankruptcy segment results, led by Chapter 11 year-to-date growth of 156% compared to the prior year, as well as the expected impact in the Settlement Administration segment of the wind down of the major analog-to- digital television conversion contract that was substantially completed during the second quarter of 2009. Net income for the third quarter of 2009 was $4.9 million, $0.12 per share, up 22% compared to $4.0 million, $0.10 per share, for the year ago quarter. September 30, 2009 year-to-date net income was $11.0 million, $0.28 per share, up 13% compared to $9.8 million, $0.26 per share, for the prior year. Bankruptcy segment operating revenue, which carries the highest non-GAAP adjusted EBITDA margin of all segments at 52% year-to-date, increased to 42% of 2009 year-to-date operating revenue compared to 26% last year, resulting in higher profit levels and improved operating margins in 2009 versus the prior year. Third quarter 2009 net cash provided by operating activities was $6.5 million, up 123% compared to $2.9 million for the year ago quarter. September 30, 2009 year-to-date net cash provided by operations was $27.5 million, up 52% compared to $18.1 million for the prior year. A condensed consolidated cash flow statement is attached. Epiq Systems' management also evaluates the following non-GAAP financial measures: (i) non-GAAP net income (net income adjusted for amortization of acquisition intangibles, share-based compensation, realized cash gains on financial instruments, non- cash mark-to-market adjustments, acquisition expense, the effect of tax adjustments that are outside of the company's anticipated effective tax rate, and capitalized loan fee amortization, all net of tax), (ii) non-GAAP earnings per share, calculated as non-GAAP net income on a fully diluted per share basis, and (iii) non-GAAP adjusted EBITDA (net income adjusted for interest/financing, taxes, depreciation, amortization, share-based compensation, realized cash gains on financial instruments, non-cash mark-to- market adjustments, and acquisition expense). Reconciliation statements for non-GAAP financial measures are provided below. Non-GAAP net income for the third quarter of 2009 was $6.8 million, $0.17 per share, up 16% compared to $5.8 million, $0.15 per share, for the year ago quarter. September 30, 2009, year-to-date non-GAAP net income was $19.9 million, $0.50 per share, up 16% compared to $17.1 million, $0.44 per share, for the prior year. Third quarter 2009 non-GAAP adjusted EBITDA was $16.1 million, up 10% compared to $14.6 million for the year ago quarter. September 30, 2009 year-to-date non-GAAP adjusted EBITDA was $47.1 million, up 12% compared to $42.1 million for the prior year. Operating revenue for the Bankruptcy segment for the third quarter of 2009 was $25.4 million, up 93% compared to $13.2 million for the year ago quarter. September 30, 2009 year-to-date operating revenue was $66.8 million, up 71% compared to $39.0 million in the prior year. Non-GAAP adjusted EBITDA was $13.8 million for the third quarter of 2009, up 106% compared to $6.7 million for the year ago quarter. September 30, 2009 year-to-date non-GAAP adjusted EBITDA was $34.7 million, up 47% compared to $23.6 million in the prior year, which included a $3.5 million cash gain on interest rate floor options. Excluding the prior year one-time cash gain on interest rate floor options, year-to- date 2009 non-GAAP adjusted EBITDA increased 73% compared to the prior year. The strong financial results for the segment relate to an increase in Chapter 11 filings and retentions, which have generated a 156% year-to-date increase in corporate restructuring operating revenue compared to the prior year. Operating revenue for the Electronic Discovery segment for the third quarter of 2009 was $12.2 million compared to $15.1 million for the year ago quarter. September 30, 2009 year-to-date operating revenue was $40.5 million compared to $44.6 million in the prior year. Third quarter 2009 non-GAAP adjusted EBITDA was $3.3 million compared to $6.7 million for the year ago quarter. September 30, 2009 year-to-date non-GAAP adjusted EBITDA was $12.6 million compared to $21.1 million in the prior year. The quarter and year-to-date segment results include the effects of organic investment of new service offerings, geographic expansion into new markets, the impacts of the current economic conditions and pricing pressures in the industry. It is anticipated that as the global economy recovers, this market segment will experience increased case activity levels resulting in increased spending. Operating revenue for the Settlement Administration segment for the third quarter of 2009 was $13.6 million compared to $23.5 million in the year ago quarter. September 30, 2009 year- to-date operating revenue was $53.5 million compared to $69.0 million in the prior year. Non-GAAP adjusted EBITDA was $4.6 million for the third quarter of 2009 compared to $6.7 million for the year ago quarter. September 30, 2009 year- to-date non-GAAP adjusted EBITDA was $16.6 million, compared to $13.5 million in the prior year. The decline in third quarter operating revenue and non-GAAP adjusted EBITDA was related to the major analog-to-digital television conversion contract that was launched in the fourth quarter of 2007 and which, as expected, was substantially completed during the second quarter of 2009. Tom W. Olofson, chairman and CEO, and Christopher E. Olofson, president and COO of Epiq Systems stated, "We continue to experience excellent growth in bankruptcy revenue, highlighted by major contributions from a significant portfolio of corporate restructuring Chapter 11 engagements. Third quarter 2009 Bankruptcy segment operating revenue set a new all-time record, surpassing the second quarter of 2009, which is now the second- strongest quarterly result. Chapter 11 corporate restructuring engagements are generally long-term, multi-year assignments that are characterized by a recurring revenue component and revenue visibility into future periods. In addition, Chapter 7 bankruptcy trustee services aggregate deposit balances continue to exhibit growth and strength, with a 26% year-to-date increase versus the prior year. As we consider these variables combined with continued strong bankruptcy filings and an anticipated future increase in short term interest rates, the Bankruptcy segment is poised for continued growth through the remainder of 2009 and in 2010." Recent key events include: * Within the Bankruptcy segment, Chapter 11 operating revenue increased 156% during the first nine months of 2009 compared to the same period last year. New third quarter client retentions included companies such as Samsonite Company Stores, Bashas', Basin Water, Luna Innovations, Finlay Enterprises, and Holley Performance Products. * During the National Association of Bankruptcy Trustees Annual Seminar, the company premiered the next generation version of TCMS(R), the company's comprehensive trustee case management system, which is scheduled for release in 2010. Utilizing the latest technology available, the new release of TCMS(R) will provide a modernized user interface and significant value-added features including customized one click buttons, advanced search capabilities and integration with Microsoft Outlook. * As reported by the Administrative Office of the U.S. Courts, bankruptcy filings totaled 1,306,315 for the 12 month period ended June 30, 2009, up 35% versus the same period in 2008. During this period, Chapter 7 filings were up 47%, Chapter 11 filings were up 91%, and Chapter 13 filings were up 12%. The quarter ending June 30, 2009 represented the highest quarterly filing period since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was enacted. * The company launched IQ Review(TM), a revolutionary combination of new intelligent technology and expert services which incorporates new prioritization technology into DocuMatrix(TM), our flagship document management platform. With the ability to "learn" from a legal expert, IQ Review(TM) determines patterns in content across all data, rates each document, and fast tracks the most responsive documents to the beginning of the review -- the result is more cost effective prioritized reviews. Conference Call The company will host a conference call today at 3:30 p.m. Central time to discuss these results. The internet broadcast of the call can be accessed at http://www.epiqsystems.com. To listen by phone, please call (888) 481-2845 before 3:30 p.m. central time. An archive of the internet broadcast will be available on the company's website until the next earnings update. A recording of the call will also be available through November 26, 2009, beginning approximately two hours after the call ends. To access the recording, please call (888) 203-1112 and enter passcode 7692044. About Epiq Systems Epiq Systems recently opened a corporate restructuring office in Harford, Connecticut, staffed with seasoned industry experts to accommodate increasing customer demand. Epiq Systems' corporate restructuring engagements frequently last several years. * Focus Management Launches Dallas Regional Office -------------------------------------------------- Focus Management Group has launched a new regional office in Dallas. The new location is in response to the firm's increasing demand for its services and is aimed to accommodate future growth plans in Texas and other Southern states. "Today's economic conditions and various industry challenges have created an expanding need for our restructuring expertise nationwide," said J. Tim Pruban, President of Focus Management Group. "Our Dallas location will provide us with an additional platform in bringing financial stability to our clients and their stakeholders. We are pleased to be a part of this dynamic marketplace." The Dallas office will provide the Company's full portfolio of services to distressed companies and their stakeholders, including turnaround management, interim management, operational analysis and process improvement, bankruptcy services, bank and creditor negotiations, asset recovery, recapitalization services, and special situation investment banking. Serving as the Managing Director of the Dallas office is Christopher Gouskos, who leads Focus Management Group's Banking and Financial Services Practice. With over 20 years of experience in the financial services industry, Gouskos has a well-diversified background in all aspects of corporate and consumer finance. He has extensive experience in workouts, loan remediation and loan syndication work and has a proven track record of strong performance in the banking, finance and mortgage lending communities. He can be reached at 214-295-3062 or via e-mail at c.gouskos@focusmg.com Focus Management Group's Dallas office is located at 100 Highland Park Village in Suite 200, Dallas, TX 75205. About Focus Management Group Focus Management Group -- http://www.focusmg.com/-- provides nationwide professional services in turnaround management, insolvency proceedings, business restructuring and operational improvement with a senior-level team of 120 professionals. Headquartered in Tampa, FL, with offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles and Philadelphia, the firm provides a full portfolio of services to distressed companies and their stakeholders, including secured lenders and equity sponsors. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Paris Las Vegas, Las Vegas, Nev. Contact: http://www.abiworld.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ January 27-29, 2010 TURNAROUND MANAGEMENT ASSOCIATION Distressed Investing Conference, Bellagio, Las Vegas Contact: http://www.turnaround.org/ Feb. 21-23, 2010 INSOL International Annual Regional Conference Madinat Jumeirah, Dubai, UAE Contact: 44-0-20-7929-6679 or http://www.insol.org/ April 20-22, 2010 TURNAROUND MANAGEMENT ASSOCIATION Sheraton New York Hotel and Towers, New York, NY Contact: http://www.turnaround.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 6-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ October 25-27, 2011 TURNAROUND MANAGEMENT ASSOCIATION Hilton San Diego Bayfront, San Diego, CA Contact: http://www.turnaround.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: October 15, 2009 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost 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, Joy A. Agravante, Marites M. Claro, Rousel Elaine C. Tumanda, 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 **