/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/091104.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, November 4, 2009, Vol. 13, No. 305 Headlines 44 BULL: Voluntary Chapter 11 Case Summary ABITIBIBOWATER INC: Quebec May Consider Buying Stake ACCESS PHARMACEUTICALS: Files Shelf Registration Statement ADVANCED BLAST PROTECTION: Voluntary Chapter 11 Case Summary ADVANCED CELL: To Sell $2.4MM of Promissory Notes at Discount AFFILIATED FOODS: Bankruptcy Case Converted to Ch. 7 Liquidation AFFINITY GROUP: Lenders Move Interest Payment Date to Nov. 6 ALBERT NATICCHIONI: Case Summary & 20 Largest Unsecured Creditors ALBERT SCALES III: Case Summary & 11 Largest Unsecured Creditors ALI SHAHRYARINEJAD: Case Summary & 13 Largest Unsecured Creditors AMBRILIA BIOPHARMA: Obtains a Second Extension of CCAA Stay Order AMERICAN AIRLINES: Moody's Assigns 'B1' Rating on $276 Mil. Notes AMERICAN INT'L: Draw on Fed Credit at 5-Month High on ILFC Loan AMERICAN INT'L: Congressman Wants Bailout Examined AMERIGROW RECYCLING-DELRAY: Voluntary Chapter 11 Case Summary ARROWHEAD GENERAL: S&P Assigns 'B-' Counterparty Credit Rating AVERION INTERNATIONAL: June 30 Balance Sheet Upside-Down by $2.5MM AVISTAR COMMUNICATIONS: Posts $1.9 Million Q3 2009 Net Loss BANK OF AMERICA: Reorganization Cues Fitch's Rating Affirmations BAYARD SPECTOR: Case Summary & 20 Largest Unsecured Creditors BAYVIEW HOLDINGS: Case Summary & 6 Largest Unsecured Creditors BEARINGPOINT INC: Shareholders Slam Chapter 11 Plan BERNARD MADOFF: Auditors Consent to Partial Judgment BERNARD MADOFF: Fraud Began After Legitimate Strategy Went Bad CANWEST GLOBAL: Canwest LP in Talks with Lenders on Restructuring CARDTRONICS INC: September 30 Balance Sheet Upside-Down by $8.3MM CAPMARK FINANCIAL: Gets Nod to Honor Obligations to Employees CAPMARK FINANCIAL: Gets Nod to Maintain Insurance Programs CAPMARK FINANCIAL: Proposes to Tap Epiq as Claims & Notice Agent CATHOLIC CHURCH: McClure Estate Wants to Reopen Abuse Case CATHOLIC CHURCH: Sheehan Wants Lift Stay to Proceed With Del. Suit CATHOLIC CHURCH: Wilmington Taps Garden City as Claims Agent CELL THERAPEUTICS: Narrows Net Loss to $8.14MM in September 2009 CENTAUR LLC: Moody's Downgrades Default Rating to 'Ca/LD' CENTRAL PACIFIC: Fitch Junks Long-Term Issuer Default Rating CEQUEL COMMUNICATIONS: Note Upsizing Won't Affect Moody's Ratings CERF BROS. BAG: Case Summary & 20 Largest Unsecured Creditors CERUS CORP: Amends Rights Agreement with Wells Fargo Bank CERUS CORP: Records $5.6 Million Third Quarter 2009 Net Loss CHEMTURA CORP: Deal on Recovery of $9.3 Mil. Authorized by Court CHEMTURA CORP: Gets Nod for Branding Agreement With Valent USA CHEMTURA CORP: Proposes to Enter Into NNN Office Lease CHEMTURA CORP: Wants to Assume Vignette Master Agreement CHINA MEDIAEXPRESS: NYSE Amex Rescinds Delisting Notice CIT GROUP: Chapter 11 Filing Cues S&P's Rating Downgrade to 'D' CIT GROUP: Fitch Downgrades Issuer Default Ratings to 'D' CIT GROUP: Receivables Exchange Ready Fund for Liquidity Aid CIT GROUP: To Present Prepack Plan for Confirmation on Dec. 8 CIT GROUP: Australia Bondholders Agree to Waive Rights CLIFFORD ROBINSON: Case Summary & 10 Largest Unsecured Creditors COLT DEFENSE: Moody's Affirms Corporate Family Rating at 'B1' COMSTOCK HOMEBUILDING: Enters Into Loan Modification with Keybank COYOTES HOCKEY: Court Approves $140 Million Sale Deal to NHL CROWN CASTLE: Fitch Assigns Issuer Default Ratings at 'BB-' CRUSADER ENERGY: Stockholders Seek Probe on Diminished Value CYCLACEL PHARMACEUTICALS: Receives Deficiency Notice From Nasdaq DANIEL ABELMAN: Voluntary Chapter 11 Case Summary DAVID HERNDON: Voluntary Chapter 11 Case Summary DELTA AIR: Flight 188 Pilots Licenses Revoked by FAA DELTA AIR: Steps Up Talks With JAL for Possible Alliance DELTA AIR: Stipulation Resolving MMA & MDE's Claims Approved DENBURY RESOURCES: Encore Merger Deal Cues Moody's Rating Review DENBURY RESOURCES: S&P Affirms Corporate Credit Rating at 'BB' DENNY'S CORP: Posts $10.03 Million Net Income for Q3 2009 E*TRADE FIN'L: Withdraws Request for Funding at OTS EDGEWATER REALTY INC: Case Summary & 12 Largest Unsec. Creditors EQUIPMENT ACQUISITION: List of 20 Largest Unsec. Creditors EQUIPMENT ACQUISITION: Hires Arnstein & Lehr as Bankruptcy Counsel EQUIPMENT ACQUISITION: Taps Dev't Specialists as Financial Advisor EQUIPMENT ACQUISITION: Wants Filing of Schedules Moved to Nov. 24 ETHAN ALLEN: S&P Downgrades Corporate Credit Rating to 'B+' EUROFRESH INC: Expects to Exit Bankruptcy in Late November EUROFRESH INC: Has Access to Cash Collateral Until November 30 EZ LUBE: Wins Confirmation of Reorganization Plan FAIRPOINT COMMS: Fitch Downgrades IDR to 'D' FAIRPOINT COMMS: Proposes to Employ BMC Group as Claims Agent FAIRPOINT COMMS: Proposes to Employ Paul Hastings as Counsel FIRSTPLUS FINANCIAL: Court Confirms Ch. 11 Trustee Appointment FORD MOTOR: Says October U.S. Sales Up 3% From Last Year FORD MOTOR: Seeks 2013 Extension of Revolving Credit Facility FORD MOTOR: Fitch Gives Positive Outlook, Affirms 'CCC' Rating FORD MOTOR: Moody's Raises Corporate Family Rating to 'B3' FORD MOTOR: Moody's Upgrades Senior Unsecured Rating to 'B3' FOURTH QUARTER: Case Summary & Creditors Lists GAINESVILLE HOSPITALITY: Case Summary & Unsecured Creditors GAYNOR M.J.: Case Summary & 4 Largest Unsecured Creditors GENERAL CABLE: Moody's Affirms Corporate Family Rating at 'Ba3' GENERAL MOTORS: Cancels Opel Sale to Magna; to Restructure Unit GENERAL MOTORS: U.S. October 2009 Sales Up 4% from 2008 GIGABEAM CORP: Completes Sale Process to Lenders GLASSLINE PARTNERSHIP: Voluntary Chapter 11 Case Summary GMAC INC: Moody's Reviews 'Ca' Senior Unsecured Ratings GPX INTERNATIONAL: Hires Hanify & King as Bankruptcy Counsel GPX INTERNATIONAL: Taps Hinckley Allen as Special Counsel GPX INTERNATIONAL: Hires Torys as Special Canadian Counsel GPX INTERNATIONAL: Sec. 341 Meeting Set for December 1 GPX INTERNATIONAL: Taps Argus Management as Financial Advisor GPX INTERNATIONAL: Taps TM Capital as Investment Banker GPX INTERNATIONAL: Trustee Balks at Exec. Bonuses GREYSTONE PHARMACEUTICALS: Case Summary & Unsecured Creditors HALCYON HOLDINGS: May Auction Terminator Rights to Pay Debt HALLWOOD ENERGY: Court Confirms HPI's First Amended Joint Plan HAMPSHIRE GROUP: Adopts 2009 Incentive Plan & 2010 Bonus Plan HAYES LEMMERZ: Wins Confirmation of Plan after Deals Reached HAZLETON GENERAL: Moody's Affirms 'Ba2' Ratings on $22 Mil. Bonds HERBST GAMING: Wins Approval of Reorganization Plan HYDRALOGIC SYSTEMS: Forbearance Extended to November 30 HYDROGENICS CORP: Closes Financing Deal with Algonquin Power HYDROGENICS CORP: Posts $5.4 Million Q3 2009 Net Loss INFINITO GOLD: Receives Default Waivers Until November 30 IRIDIUM OPERATING: Wins Confirmation of Liquidating Plan JAGIRDAR INC: Case Summary & 6 Largest Unsecured Creditors LAND O'LAKES: Moody's Assigns Rating on $375 Mil. Senior Facility LANDAMERICA FIN'L: Extends Employment of G. Evans Until Dec. 31 LANDAMERICA FIN'L: J. Chiang Plea for Rule 2004 Examination Denied LANDAMERICA FIN'L: To Pay $15MM Balance Under 2nd PBGC Settlement LAS VEGAS SANDS: Reports Loss as Revenue Misses Estimates LDG SOUTH: List of 20 Largest Unsecured Creditors LDG SOUTH: Taps Stichter Riedel as Bankruptcy Counsel LEHMAN BROTHERS: Hearing on Barclays Windfall Charges in April LEHMAN BROTHERS: LBI Proposes Protocol to Unwind Receivables LEHMAN BROTHERS: LBSF Wants to Compel Chicago Board to Perform LEHMAN BROTHERS: LBSF Wants to Sell Swap Pact Stake to Goldman LEONARDO MORCOS: Case Summary & 18 Largest Unsecured Creditors LEXINGTON PRECISION: Files Third Amended Plan & Disc. Statement LYONDELL CHEMICAL: Jack Williams Named Examiner MANCHESTER HOUSING: Moody's Downgrades Bond Ratings to 'Ba2' MEDIACOM LLC: June 30 Balance Sheet Upside-Down by $224 Million METALDYNE CORP: Creditors Want Sale Appeal Tossed NORANDA ALUMINUM: Expects to Report Up to $8MM Q3 Net Income NOWAUTO GROUP: Former Auditor Moore Refuses to Issue SEC Letter OTTER TAIL: Files for Chapter 11, Has Deal with Lenders PETTERS GROUP: Founder Faked Deals Since 'Day One,' Secretary Says PHILADELPHIA NEWSPAPERS: Court Approves Disclosure Statement PLF INVESTMENTS: Case Summary & 11 Largest Unsecured Creditors QSGI INC: Court Approves Sale of DSC Business to Victory Park QSGI INC: Court OKs $2MM Sale of DCM Business to SMS Maintenance QUANTUM CORP: Posts $11 Million Third Quarter 2009 Net Income REVLON CONSUMER: Moody's Upgrades Corporate Family Rating to 'B2' REVLON CONSUMER: S&P Raises Corporate Credit Rating to 'B' RODNEY DAVIS: Case Summary & 20 Largest Unsecured Creditors RSC EQUIPMENT: Moody's Assigns 'Caa2' Rating on $200 Mil. Debt RSC EQUIPMENT: S&P Retains 'B+' Corporate Credit Rating SEAGATE TECHNOLOGY: Moody's Affirms 'Ba2' Corporate Family Rating SEMGROUP LP: Conoco Seeks Recoupment of Fees & Expenses SEMGROUP LP: Gets Nod of Race Trac Settlement Pact SEMGROUP LP: Gets Nod to Retain Mckool Smith as Co-Counsel SENSATA TECHNOLOGIES: S&P Affirms 'CCC+' Corporate Credit Rating SHERWOOD/CLAY-AUSTIN: Voluntary Chapter 11 Case Summary SIMMONS CO: Deutsche Bank Extends Pledge for $35MM DIP Facility SOUTH TEXAS: Files for Bankruptcy Under Chapter 11 SPANSION INC: Admits to More Job Cuts SPANSION INC: Gets Nod to Assume Leases in Asia & Europe SPANSION INC: King & Spalding Charges $2.9 Mil. for June-Aug. Work STATION CASINOS: Boyd "Ready to Begin Due Diligence" STATION CASINOS: Gets Nod for Ernst & Young as Tax Advisor STATION CASINOS: Wants Lease Decision Extension for Vegas Leases SUPERIOR OFFSHORE: Resolves $23M Back Taxes Claim TALBOTS INC: August 1 Balance Sheet Upside-Down by $206.7 Million TAYLOR BEAN: Sovereign Balks at Terms of DIP Loans TENNECO INC: Moody's Affirms Corporate Family Rating at 'B3' TERRY BRADFORD COX: Case Summary & 3 Largest Unsecured Creditors TOUSA INC: Lenders to Post About $700 Million in Bonds TRIAD FINANCIAL: S&P Puts 'B' Rating on CreditWatch Positive TRIDENT RESOURCES: Files Schedules of Assets and Liabilities UNIFI INC: Posts $2.48MM Net Income for September 27 Quarter VITESSE SEMICONDUCTOR: Appoints Hugar and Lyon as Directors VITESSE SEMICONDUCTOR: Closes Debt Restructuring Transactions WESCO INC: Case Summary & 8 Largest Unsecured Creditors YRC WORLDWIDE: S&P Downgrades Corporate Credit Rating to 'CC' * Bank Failures Buffeting FDIC Efforts to Bolster Insurance Fund * Capital Markets Still Extremely Weak, Survey Shows * CIT Filing Pushes Junk-Bond Default Rate to 13.1%, Fitch Says * Kamakura Reports Improvement in October Troubled Company Index * Pension Funds for Public Employees Lost $600 Billion in 2008 * W.L. Ross Sees Huge Commercial Property Crash Ahead * Small-Firms Bankruptcy Filings Up 44% Yr-Over-Yr, Equifax Says * Winston & Strawn Adds Private Equity Practice * Upcoming Meetings, Conferences and Seminars ********* 44 BULL: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: 44 Bull, LLC 2 East Broughton St. Savannah, GA 31401 Bankruptcy Case No.: 09-42513 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Southern District of Georgia (Savannah) Debtor's Counsel: C. James McCallar Jr., Esq. McCallar Law Firm P.O. Box 9026 Savannah, GA 31412 Tel: (912) 234-1215 Fax: (912): 912-236-7549 Email: mccallarlawfirm@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Giuseppe Venetico, managing member of the Company. ABITIBIBOWATER INC: Quebec May Consider Buying Stake ---------------------------------------------------- Economic Development Minister Clement Gignac said Quebec may consider buying a stake in AbitibiBowater Inc. if the newsprint maker and its unions can agree on how to cut production costs, according to reporting by Bloomberg News. Frederic Tomesco and Christopher Donville at Bloomberg relate that Mr. Cignac told reporters that the provincial government formed a group that includes union and paper-industry representatives to find ways to reduce raw-material and wage costs at mills in Quebec. "Before the government becomes a shareholder of Abitibi, all of the partners will have to make sacrifices that allow us to lower production costs at the Quebec plants," Mr. Gignac said. "This means fiber costs and labor costs." Quebec will not invest in AbitibiBowater until the company can show that it has a "profitable business model," he said. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 29 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of Sept. 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ACCESS PHARMACEUTICALS: Files Shelf Registration Statement ---------------------------------------------------------- Access Pharmaceuticals, Inc., filed with the Securities and Exchange Commission a shelf registration statement in connection with its planned offering of common stock and warrants to purchase additional shares of common stock. The Company expects to use the proceeds received from the offering to further develop its products and product candidates and for general working capital purposes. The Company's common stock is listed on the Over-the-counter Bulletin Board under the symbol "ACCP". The Company intends to apply for listing of its shares of common stock on the NYSE Amex in connection with the offering. The Company does not intend to apply for listing of the warrants on any securities exchange. On October 26, 2009, the last reported sale price of the common stock on the OTC BB was $3.30 per share. A full-text copy of the registration statement is available at no charge at http://ResearchArchives.com/t/s?4825 Access said in a Form 10-Q filing, "We have generally incurred negative cash flows from operations since inception, and have expended, and expect to continue to expend in the future, substantial funds to complete our planned product development efforts. Since inception, our expenses have significantly exceeded revenues, resulting in an accumulated deficit as of June 30, 2009 of $241,226,000. We expect that our capital resources will be adequate to fund our current level of operations into the first quarter of 2010. However, our ability to fund operations over this time could change significantly depending upon changes to future operational funding obligations or capital expenditures. As a result we may be required to seek additional financing sources within the next twelve months. We cannot assure . . . that we will ever be able to generate significant product revenue or achieve or sustain profitability. "In order to conserve cash for the operations of Access, management, employees and consultants reduced their monthly stipends. Some consultants also agreed to take common stock and warrants for their services. As of June 30, 2009, the Company had $2,351,000 in total assets and $16,177,000 in total liabilities, resulting in $13,826,000 stockholders' deficit. On March 31, 2008, Whitley Penn LLP, in Dallas, expressed substantial doubt about Access Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations, negative cash flows from operating activities and an accumulated deficit. About Access Pharmaceuticals Headquartered in Dallas, Texas, Access Pharmaceuticals Inc. (OTC BB: ACCP.OB) -- http://accesspharma.com/-- is an emerging biopharmaceutical company developing products for use in the treatment of cancer, the supportive care of cancer, and other disease states. The Company's product for the management of oral mucositis, MuGard(TM) has received marketing clearance by the FDA as a device. The Company's lead clinical development program for the drug candidate ProLindac(TM) is in Phase II clinical testing. Access also has advanced drug delivery technologies including Cobalamin(TM) mediated oral drug delivery and targeted delivery. ADVANCED BLAST PROTECTION: Voluntary Chapter 11 Case Summary ------------------------------------------------------------ Debtor: Advanced Blast Protection, Inc. 8150 W. State Road 84 Davie, FL 33324 Bankruptcy Case No.: 09-34185 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: John K. Olson Debtor's Counsel: Leslie Gern Cloyd, Esq. 350 E Las Olas Blvd #1000 Ft. Lauderdale, FL 33301 Tel: (954) 525-9900 Fax: (954) 523-2872 Email: lcloyd@bergersingerman.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Dr. Warren R. Phillips, chief executive officer of the Company. ADVANCED CELL: To Sell $2.4MM of Promissory Notes at Discount ------------------------------------------------------------- Advanced Cell Technology, Inc., intends to sell promissory notes in the principal amount of a minimum of $2,400,000, for a purchase price of a minimum of $2,000,000. The Notes will be convertible into shares of the Company's common stock at a conversion price of $0.10. Pursuant to the Offering, the Company also intends to issue (i) one-and-one third Class A warrants for each two shares of common stock underlying the Notes, to purchase shares of the Company's common stock with a term of five years and an exercise price equal to 110% of the closing price of the Company's common stock for the trading day preceding the initial closing date of the Offering (provided that, the initial exercise price shall not be less than $0.10), (ii) additional investment rights, exercisable until 9 months after the second closing date of the Offering, to purchase (a) promissory notes -- Air Notes -- in the principal amount of a minimum of $2,400,000, for a purchase price of a minimum of $2,000,000, with a conversion price of $0.10, and one-and-one third Class A warrants -- Class A Warrants -- for each two shares of common stock underlying the AIR Notes, to purchase shares of the Company's common stock with a term of five years and an exercise price equal to 110% of the closing price of the Company's common stock for the trading day preceding the initial closing date of the Offering (provided that, the initial exercise price shall not be less than $0.10). The Company will be required to redeem the Notes monthly commencing in May 2009, in the amount of 14.28% of the initial principal amount of the Notes, in cash or common stock at the Company's option (subject to the conditions set forth in the Notes), until the Notes are paid in full. The initial closing under the Offering will be for the purchase of a minimum of $1,200,000 principal amount of Notes, for a purchase price of a minimum of $1,000,000. The second closing under the Offering will be within 90 days of the initial closing under the Offering and will be for the purchase of a minimum of $1,200,000 principal amount of Notes, for a purchase price of a minimum of $1,000,000. About Advanced Cell Based in Worcester, Massachusetts, Advanced Cell Technology Inc. (OTC BB: ACTC) -- http://www.advancedcell.com/-- is a biotechnology company focused on developing and commercializing human embryonic and adult stem cell technology in the emerging fields of regenerative medicine. Principal activities to date have included obtaining financing, securing operating facilities, and conducting research and development. The Company has no therapeutic products currently available for sale and does not expect to have any therapeutic products commercially available for sale for a period of years, if at all. At June 30, 2009, the Company had $6,431,749 in total assets, including $918,575 in total current assets, against $78,661,772 in total liabilities, including $72,472,134 in total current liabilities, and $1,579,994 in Series A-1 redeemable convertible preferred stock, $0.001 par value. At June 30, 2009, the Company had accumulated deficit of $138,254,284 and stockholders' deficit of $73,810,017. Advanced Cell warned in an August 2009 regulatory filing it may not be able to continue as a going concern and fund cash requirements for operations through the next 12 months with current cash reserves. The Company has losses from operations, negative cash flows from operations, a substantial stockholders' deficit and current liabilities exceed current assets. AFFILIATED FOODS: Bankruptcy Case Converted to Ch. 7 Liquidation ---------------------------------------------------------------- The Hon. Richard D. Taylor of the U.S. Bankruptcy Court for the Eastern District of Arkansas approved the conversion of the Chapter 11 cases of Affiliated Foods Southwest, Inc., and its debtor-affiliates into liquidation under Chapter 7. The Debtors related that they were unable to secure additional liability and workman's compensation insurance coverage beyond July 17, 2009. Accordingly, the Debtors ceased operations, and terminated all employees. The Debtors asserted that it is not in the best interest of the estates, the creditors, its former employees and the public to continue operations without sufficient insurance coverage. The counsel for U.S. Bank, the U.S. Trustee's Office, and the Unsecured Creditors Committee expressed no opposition to the conversion of the case. Little Rock, Arkansas-based Affiliated Foods Southwest, Inc., and its affiliates filed for Chapter 11 on May 5, 2009 (Bankr. E.D. Ark. Case No. 09-13178). W. Michael Reif, Esq., at Dover Dixon Horne represents the Debtors in their restructuring efforts. The Debtors listed assets between $10 million to $50 million and debts between $100 million to $500 million. AFFINITY GROUP: Lenders Move Interest Payment Date to Nov. 6 ------------------------------------------------------------ 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. 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. 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. As of October 30, 2009, the holders who signed the Institutional Consents have agreed to extend the interest payment date on their AGHI Notes to November 6, 2009. As of October 28, 2009, the holders who signed the Other Consents have agreed to extend the interest payment date on their AGHI Notes to the date that is five business days after the date of termination of the Institutional Consents, including any additional extensions of the Institutional Consents. 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. ALBERT NATICCHIONI: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Joint Debtors: Albert Francis Naticchioni Patricia Marie Naticchioni 915 Twin View Blvd Redding, CA 96003 Bankruptcy Case No.: 09-43932 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Thomas Holman Debtors' Counsel: None. Debtors Filed Petition as Pro Se. Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/caeb09-43932.pdf The petition was signed by the Joint Debtors. ALBERT SCALES III: Case Summary & 11 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Albert Scales, III 1988 Fairgreen Dr Stone Mountain, GA 30087 Bankruptcy Case No.: 09-89296 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Leonard R. Medley III, Esq. Medley & Kosakoski, LLC Suite 850, 2839 Paces Ferry Road Atlanta, GA 30339 Tel: (770) 319-7592 Fax: (770) 319-7594 Email: leonard@mkalaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $2,077,034, and total debts of $2,115,289. A full-text copy of the Debtor's petition, including a list of its 11 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ganb09-89296.pdf The petition was signed by Albert Scales, III. ALI SHAHRYARINEJAD: Case Summary & 13 Largest Unsecured Creditors ----------------------------------------------------------------- Joint Debtors: Ali Shahryarinejad Ofelia Shahryarinejad 5316 Lubao Avenue Woodland Hills, CA 91364 Bankruptcy Case No.: 09-24573 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Maureen Tighe Debtors' Counsel: None. Debtors Filed Petition as Pro Se. Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 13 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-24573.pdf The petition was signed by the Joint Debtors. AMBRILIA BIOPHARMA: Obtains a Second Extension of CCAA Stay Order ----------------------------------------------------------------- Ambrilia Biopharma Inc. obtained on October 29, 2009 a second order from the Superior Court of Quebec extending in its effect the initial order issued by the Court on July 31, 2009, until January 29, 2010, the whole pursuant to the Companies' Creditors Arrangement Act. The purpose of this extension is to provide Ambrilia with an opportunity to develop, file a plan of arrangement for consideration by its creditors and complete its restructuring process. Ambrilia has been operating under the protection of the CCAA since July 31, 2009. Any recovery for creditors and other stakeholders, including shareholders, is uncertain and is highly dependent upon a number of factors, including the outcome of Ambrilia proceedings under the CCAA. About Ambrilia Biopharma Inc. Ambrilia Biopharma Inc. -- http://www.ambrilia.com/-- is a biotechnology company focused on the discovery and development of novel treatments for viral diseases and cancer. The company's strategy aims to capitalize on its broad portfolio and original expertise in virology. Ambrilia's product portfolio is comprised of oncology and antiviral assets, including two new formulations of existing peptides for cancer treatment, a targeted delivery technology for cancer, an HIV protease inhibitor program as well as HIV integrase and entry inhibitors, Hepatitis C virus inhibitors and anti-Influenza A compounds. Ambrilia's head office, research and development and manufacturing facilities are located in Montreal. The Company is currently subject to court protection under the Companies' Creditors Arrangement Act (Canada). AMERICAN AIRLINES: Moody's Assigns 'B1' Rating on $276 Mil. Notes ----------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the $276 million of senior secured notes due August 2016 of American Airlines, Inc., which were privately-placed on July 31, 2009. Moody's is maintaining its other ratings of American and its parent AMR Corporation, including the Caa1 Corporate Family and Probability of Default ratings and the SGL-2 Speculative Grade Liquidity rating. The outlook is stable. The Notes proceeds were used to refinance the Series 1999-1 Enhanced Equipment Trust Certificates of American, which matured on October 15, 2009. Twelve Boeing 1999 vintage aircraft secure American's obligations under the Notes; nine 737-800's, one 767- 300ER and two 777-200ER's. The B1 rating on the Notes, one notch higher than Moody's ratings on other of American's senior secured debt obligations, reflects the benefits to noteholders of the protections of Section 1110 of Title 11 of the United States Code. "Moody's believes that the importance of Boeing's 737-800, B767-300ER and 777-200ER models to American's route and fleet strategy and the effective cross- default and cross-collateralization given the single note and security agreement indicate a high probability of American affirming its obligations under the Notes, in the event of a reorganization of American or AMR," said Moody's Vice President, Jonathan Root. The steeper principal amortization relative to other recent capital market financings of aircraft will cause a reduction in the loan to value ratio in the first few years of the transaction, further supporting expected recovery value over time. Unlike what is typical of Section 1110 financings that use a pass- through structure, there is no liquidity facility backing American's interest obligations of the Notes, in the event of a default by American. The lack of a liquidity facility leads to less ratings uplift than other aircraft financing structures that include such facilities. American is acquiring an additional 65 737-800 aircraft through 2011 to replace its aging MD-80 fleet, cementing the 737-800 as the workhorse serving American's narrow-body routes. Likewise the 777-200ER and 767-300ER are core to the companies' international operations. Based on the valuations provided for the collateral pool, Moody's anticipates that in the event of a rejection of the financing pursuant to Section 1110, the disposition of the collateral would facilitate a high level of recovery, even at a meaningful discount to the appraised values. The last rating action was on September 23, 2009, when Moody's assigned a B2 rating to American's $450 million of senior secured notes and affirmed all of its other ratings of AMR and American, including the Caa1 corporate family and probability of default ratings. Assignments: Issuer: American Airlines, Inc. -- Senior Secured Equipment Trust, Assigned B1 American Airlines, Inc., and its parent AMR Corporation are based in Fort Worth, Texas. AMERICAN INT'L: Draw on Fed Credit at 5-Month High on ILFC Loan --------------------------------------------------------------- According to Bloomberg News, American International Group Inc.'s draw from a Federal Reserve credit line rose to the highest in five months, now owing $44.8 billion on the line, about $6 billion more than at the end of September. Bloomberg relates that the loans increased after AIG had to prop up its airplane-leasing unit with a $2 billion loan. AIG extended the credit to International Lease Finance Corp. to help repay the unit's obligations under a five-year line with banks that expired this month, the plane business said in a filing Oct. 19. ILFC had typically funded airplane purchases by borrowing in the short-term commercial paper market until AIG's government rescue. Credit downgrades tied to the insurer's near collapse cut off that source and forced AIG Chief Executive Officer Robert Benmosche to step in about two weeks ago while he seeks to sell ILFC as part of a plan to repay the U.S. "AIG had to turn to its lender of last resort, the Federal Reserve Bank of New York in order to pay off a $2 billion bank loan that matured," said Kathleen Shanley, an analyst at debt rating firm Gimme Credit LLC, in an Oct. 20 note. The payment "puts off the problem of what to do with the rest of ILFC's debt for another day." About American International Group Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received from the U.S. government, and continues to seek buyers of its assets. AMERICAN INT'L: Congressman Wants Bailout Examined -------------------------------------------------- Representative Darrell Issa has asked for documents and records in connection with claims that the Federal Reserve Bank of New York quashed efforts by American International Group Inc. to pay less than 100% on derivative contracts. Mr. Issa, the ranking member of the House Oversight and Government Reform Committee, has requested e-mails, phone logs and term sheets in connection with the decision to settle $62 billion in credit-default swaps without imposing a "haircut" on the banks. Banks may have been overpaid by $13 billion last year because the Fed scuttled attempts by AIG to secure discounts, Bloomberg cited people familiar with the matter as saying, AIG, once the world's largest insurer, was bailed out in September 2008 after running short of cash because of swaps it sold that required the insurer to compensate banks for declines in mortgage- linked assets. The payments may "amount to nothing less than a backdoor bailout of AIG's creditors," Mr. Issa said, citing an Oct. 27 Bloomberg article about the New York Fed's role in settling AIG's obligations. There are "serious questions about the transparency, accountability and wisdom of the New York Fed's actions." About American International Group Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received from the U.S. government, and continues to seek buyers of its assets. AMERIGROW RECYCLING-DELRAY: Voluntary Chapter 11 Case Summary ------------------------------------------------------------- Debtor: Amerigrow Recycling-Delray, Limited Partnership dba Amerigriow Recycling dba Amerigrow Soils dba Amerigrow Golf dba Amerigrow Trucking dba Mulching Solutions 10320 West Atlantic Avenue Delray Beach, FL 33446 Case No.: 09-34122 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Erik P. Kimball Debtor's Counsel: Heather L. Harmon, Esq. 100 S.E 2 St #4400 Miami, FL 33131 Tel: (305) 349-2300 Fax: (305) 349-2310 Email: HHarmon@gjb-law.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. ARROWHEAD GENERAL: S&P Assigns 'B-' Counterparty Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B-' counterparty credit rating and negative outlook to San Diego, California-based Arrowhead General Insurance Agency Inc. At the same time, Standard & Poor's assigned 'B-' ratings to Arrowhead's first-lien senior secured bank loan and first-lien revolving credit facility as well as its 'CCC' rating to the company's second-lien secured debt. The first-lien recovery rating is '3', indicating S&P's expectation of meaningful (50%- 70%) recovery in the event of a payment default. The second-lien recovery rating is '6', indicating S&P's expectation of negligible (0%-10%) recovery in the event of a payment default. "The ratings on Arrowhead reflect its strained cash flow and diluted capital quality following the leveraged majority investment in Arrowhead by California-based Spectrum Equity Investors in 2006," said Standard & Poor's credit analyst Jieqiu Fan. In addition, the company operates in an industry segment that exhibits somewhat high revenue and earnings cyclicality, high fragmentation, and constraints to carrier access. Another challenge is lower commission and fee income, reflecting ongoing insurance premium rate pressure by carriers and altered insurance purchases by clients as a result of the economic downturn. Moreover, the company has streamlined its product programs to 18 from 26. These weaknesses are partly mitigated by the company's experienced management team and its competitive and focused business platform. Arrowhead has a strong track record of producing low loss ratios, solidifying carriers' interest in programs. Moreover, the company generates favorable EBITDA margins. AVERION INTERNATIONAL: June 30 Balance Sheet Upside-Down by $2.5MM ------------------------------------------------------------------ Averion International Corp.'s consolidated balance sheets at June 30, 2009, showed $62.7 million total assets and $65.2 million in total liabilities, resulting in a $2.5 million shareholders' deficit. At June 30, 2009, the Company's consolidated balance sheets also showed strained liquidity with $23.7 million in total current assets available to pay $28.3 million in total current liabilities. The Company reported a net loss of $1.2 million on total revenue of $18.1 million for the three months ended June 30, 2009, compared with a net loss of $577,000 on total revenue of $20.9 million in the same period last year. Net service revenue for the three months ending June 30, 2009, decreased $2.8 million to $15.9 million as compared with $18.7 million for the three months ending June 30, 2008. The 2008 results include $3.3 million in previously deferred revenue recognized as a large contract was signed during June 2008. Approximately $2.5 million of this revenue related to services delivered prior to the June 2008 quarter. Absent the aforementioned contract, net service revenue for the current period remained flat as compared to the three months ending June 30, 2008. The Company had a net loss of $2.1 million on total revenue of $35.5 million for the six months ended June 30, 2009, compared with a net loss of $3.3 million on total revenue of $38.6 million in the comparable period last year. A full-text copy of the Company's consolidated financial statements for the three and six months ended June 30, 2009, is available for free at http://researcharchives.com/t/s?481c Absent a material adverse change in the level of new business bookings or contract cancellations, the Company believes that its existing capital resources together with cash flow from operations will be sufficient to meet operating needs for the next 12 months. At June 30, 2009, the Company had cash and cash equivalents of $5.4 million as compared to $3.9 million at June 30, 2008, an increase of $1.5 million. Approximately $4.1 million in cash was located outside of the United States at June 30, 2009. Net cash provided by operating activities was $1.6 million for the six months ended June 30, 2009, an increase of $2.5 million from net cash used by operating activities of $952,000 for the corresponding 2008 period. The amount of non-cash charges included in net loss from operations during the six months ended June 30, 2009, was $4.0 million as compared to $5.1 million during the six months ended June 30, 2008. Net cash used by investing activities was $265,000 for the six six months ended June 30, 2009, compared with $569,000 for the six months ended June 30, 2008. Net cash used by investing activities was comprised primarily of outlays for the purchase of capital equipment. Net cash used by financing activities was $254,000 for the six months ended June 30, 2009, compared with net cash used by financing activities of $2.1 million for the six months ended June 30, 2008. The decrease was attributable to the payment of approximately $3.0 million to Cerep in January 2008, which represented a deferred portion of the purchase price related to the October 2007 acquisition of Hesperion AG, and $1.1 million in payments on the Junior notes offset by a $2.0 debt issuance in June of 2008. The Company issued Senior Secured Notes in connection with the Hesperion financing transaction during October and November of 2007. The Senior Secured Notes have a principal amount at maturity of $26.0 million and interest is due and payable quarterly in arrears in the amount of 3% for the first year, 10% for the second year and 15% for the third year. The entire unpaid principal balance plus all accrued and unpaid interest is due and payable by October 31, 2010. The Company issued additional Senior Secured Notes in connection with a financing transaction during June of 2008. The additional Senior Secured Notes have a principal amount at maturity of $2.0 million and interest is due and payable quarterly in arrears in the amount of 3% for the first four months, 10% for the next 12 months and 15% for the final 12 months. The entire unpaid principal balance plus all accrued and unpaid interest is due and payable by October 31, 2010. In its quarterly report for the three months ended June 30, 2009, the Company said that it currently does not have the funds necessary to enable it to repay the Senior Secured Notes when they come due in October of 2010, and it does not anticipate generating such funds through operations. The Company says it is actively exploring strategic alternatives, including a possible restructuring of its outstanding debt as well as strategic alternatives related to decreasing its operating costs. To this end, the Company's Board has appointed a special committee of independent directors to negotiate directly with its debt holders and to explore alternative strategic possibilities. Southborough, Mass.-based Averion International Corp. (OTC BB: AVRO) - http://averionintl.com/-- is an international clinical research organization ("CRO") focused on providing its clients with global clinical research services and solutions throughout the drug development lifecycle. The Company serves a variety of clients in the pharmaceutical, biotechnology and medical device industries. AVISTAR COMMUNICATIONS: Posts $1.9 Million Q3 2009 Net Loss ----------------------------------------------------------- Avistar Communications Corporation last week reported its financial results for the three and nine months ended September 30, 2009. Financial highlights included: -- Total revenue for the nine months ended September 30, 2009, was $6.9 million; as compared to $5.6 million for the nine months ended September 30, 2008, an increase of 23%. Total revenue for the third quarter of 2009, was $1.4 million, as compared to $2.7 million for same quarter in 2008, a decrease of 47%. -- Operating expense (research and development, sales and marketing, and general and administrative) for the nine months ended September 30, 2009 was $8.9 million, as compared to $11.4 million for the nine months ended September 30, 2008, representing a substantial reduction of 22%. Operating expense was $3.2 million for the third quarter of 2009, as compared to $3.1 million for the third quarter of 2008, demonstrating the stabilization of Avistar's cost structure. -- Net loss was $2.5 million for the nine months ended September 30, 2009, or $0.07 per basic and diluted share, as compared to a net loss of $6.2 million, or $0.18 per basic and diluted share, for the nine months ended September 30, 2008, a 60% decrease. Net loss in the third quarter of 2009 was $1.9 million, or $0.05 per basic and diluted share, as compared to a net loss of $774,000, or $0.02 per basic and diluted share, in the third quarter of 2008, a 144% increase. -- Third quarter 2009 expenses included $473,000 for severance paid to former executives and $311,000 of legal services related to Avistar's intellectual property. These expenses are not expected to recur on a regular basis. -- Cash and cash equivalents balance as of September 30, 2009, was $382,000 and the company had $3.3 million available through its line of credit. Cash used in operations during the nine months ended September 30, 2009 was $4.3 million, compared to $9.3 million for the nine months ended September 30, 2008, a $5.0 million improvement. -- Adjusted EBITDA loss for the nine months ended September 30, 2009 was $541,000, compared to an Adjusted EBITDA loss of $4.6 million for the same period in 2008, a reduction in adjusted EBITDA loss of $4.0 million, or 88%, for the first three quarters of 2009. Adjusted EBITDA loss for the third quarter of 2009 was $1.3 million, compared to an Adjusted EBITDA profit of $53,000 in the same quarter of 2008. Bob Kirk, CEO of Avistar, said, "When comparing our results thus far in 2009 against 2008, our corporate performance continues to improve on many fronts, as we overcome remaining challenges. Avistar's strategy and focus, implemented earlier this year, are beginning to show results, although we expect to see the full financial impact in future quarters. The state of the global economy this year, coupled with our sales channel model only just coming up to speed, led to lower than expected revenue. With that said, we have taken steps to consolidate a number of our channel partners under master distributors. This action alone will make our channel model more productive by focusing the teams' effort on our distributors, who in turn will focus their efforts on making our resellers more productive. In addition, we have implemented a pricing model that we believe is the most compelling desktop visual communications product bundle in the industry today. Both of these changes are starting to have a beneficial effect on our channel strategy. "Additionally, the combination of Cisco's System's recently- announced acquisition of Tandberg, continued analyst data from renowned research firms demonstrating strong market growth, our refinement of our channel strategy, and growing momentum within our technology licensing business, in addition to focusing on a productive method to monetize our patent portfolio, leads us to believe that Avistar is well positioned to capture more significant market share in the videoconferencing industry." Mr. Kirk continued, "With the industry growing at an exceptional rate and our solutions and products continuing to evolve in ways that directly provide value to our distributors and partners alike, we believe that Avistar is very well positioned to emerge as the industry's dominant desktop visual communications provider." Other significant recent developments included: -- Avistar continues to invest heavily in its Microsoft OCS and Citrix strategies and is focused on closing business with early adopters of many of these technologies. The Avistar Technology Licensing business continues to grow with successful third quarter product deliveries to LifeSize, IBM, Logitech and Zultys. Royalties from LifeSize, Logitech and Zultys have commenced and are expected to contribute to Avistar's revenue momentum for many years. -- On June 17, 2009, LifeSize announced the LifeSize Desktop, developed by Avistar using the Avistar C3 Media Engine(TM) solution and has started shipping this product. -- On September 23, 2009, Avistar released the Avistar C3 Desktop(TM) software v10.2.6, which includes support for H.239 data sharing in addition to Tandberg Codian certification. -- Also in September, Avistar announced the consolidation of its sales, account management, and marketing functions under Stephen Epstein, the company's chief marketing officer. At September 30, 2009, the Company had $2.4 million in total assets, including $382,000 in cash and cash equivalents, against $14.9 million in total liabilities, resulting in stockholders' deficit of $12.5 million. About Avistar Communications Headquartered in San Mateo, California, Avistar Communications Corporation (Nasdaq: AVSR) -- http://www.avistar.com/-- holds a portfolio of 80 patents for inventions in video and network technology and licenses IP to videoconferencing, rich-media services, public networking and related industries. Current licensees include Sony Corporation, Sony Computer Entertainment Inc. (SCEI), Polycom Inc., Tandberg ASA, Radvision Ltd. and Emblaze-VCON. As reported by the Troubled Company Reporter on August 25, 2009, the Company said it was in discussions with the remaining holders of its 4.5%Convertible Subordinated Secured Notes to convert the Notes into shares of common stock in January 2010 or extend the term of the Notes. The Nasdaq Stock Market, LLC, has determined to remove from listing the common stock of Avistar, effective at the open of business on August 31, 2009. Based on a review of information provided by the Company, Exchange Staff determined that the Company no longer qualified for listing on the Exchange as it failed to comply with Rule 5505(b)(2). BANK OF AMERICA: Reorganization Cues Fitch's Rating Affirmations ---------------------------------------------------------------- Bank of America Corporation has undertaken a reorganization of some of its bank subsidiaries. Bank of America Rhode Island N.A. has begun to hold deposits of external customers. At the same time, Merrill Lynch Bank & Trust Co. FSB has been merged into Bank of America N.A. As a result of the decision to hold deposits at BANA-RI, Fitch has affirmed all existing ratings and the Stable Outlook, and has also assigned long-term and short-term deposit ratings to this subsidiary. Ratings of BANA-RI reflect its position as an operating entity in the BAC family. The long-term and short-term Issuer Default Ratings and the deposit and support floor/support ratings all reflect Fitch's view that there is an extremely high probability that this entity, along with other core BAC subsidiaries, would receive support in a crisis scenario. The Stable Rating Outlook is also derived from government support. BANA-RI's individual rating is linked to that of BAC and reflects the consolidated company's weakened earnings and asset quality profile. Separately, Fitch has withdrawn all issue and issuer ratings of ML-FSB, since this company no longer exists as a separate entity. Fitch has assigned these ratings: Bank of America Rhode Island, N.A. -- Long-term deposits 'A+'; -- Short-term deposits 'F1+'. Fitch has affirmed these ratings with a Stable Outlook: Bank of America Rhode Island, N.A. -- Long-term IDR at 'A+'; -- Short-term IDR at 'F1+'; -- Individual at 'D'; -- Support at '1'; -- Support Floor at 'A+'. Fitch has withdrawn these ratings: Merrill Lynch Bank & Trust Co. FSB -- Long-term IDR 'A+'; -- Short-term IDR 'F1+'; -- Long-term deposits 'A+'; -- Short-term deposits 'F1+'; -- Individual 'D'; -- Support '1'; -- Support Floor 'A+'. BAYARD SPECTOR: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Bayard William Spector aka Bayard W. Spector aka Bayard William Bector aka Bayard W. Bector aka W Bayard Spector aka Spector Bayard 9999 SW 89 Ct Miami, Fl 33176 Case No.: 09-34183 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: Robert A. Angueira, Esq. 6495 SW 24 St Miami, FL 33155 Tel: (305) 263-3328 Email: rangueir@bellsouth.net Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $10,000,001 to $50,000,000 According to the schedules, the Company has assets of $94,673,549, and total debts of $24,001,526. The petition was signed by Mr. Spector. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bayit Capital $360,000 3 Jackson Ave. New York, NY 10028 Suffolk Construction Co. Inc $212,512 Broward County $118,046 Tax Collector Duval County $32,485 Tax Collector Amex $19,835 Duval County $4,784 Tax Collector Mike Hogan, Tax Collector Visdsnb $4,554 Target N.B. $4,004 Discover Fin Svcs LLC $3,593 Barclays Bank Delaware $3,492 Cap One $2,854 Nordstromfsb $2,178 Wach/rec Bank Loan $1,574 Wach/rec $1,574 Gembppbycr $1,475 Shell/citi $1,182 Thd/cbsd $1,160 Mcydsnb $1,087 Citi-citgo $787 Chevron $699 BAYVIEW HOLDINGS: Case Summary & 6 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Bayview Holdings, LLC 70 Homeplace Circle Moneta, VA 24121 Case No.: 09-72799 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Western District of Virginia (Roanoke) Judge: Chief Judge Ross W. Krumm Debtor's Counsel: Kevin J. Funk, Esq. DurretteBradshaw, PLC 1111 East Main Street, 16th Floor Richmond, VA 23219 Tel: (804) 343-4387 Email: kfunk@durrettebradshaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Tom Lovegrove, the company's sole member. Debtor's List of 6 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ AEP Utilities $1,000 Bayview Construction Company Loans $7,000,000 70 Homeplace Circle Moneta, VA 24121 BB&T Real Estate $7,500,000 c/o Word C. Clark, Jr. ($2,750,000 200 West 2nd Street secured) Winston Salem, NC 27101 Embarq Telephone Telephone $100 Franklin County, Virginia Real estate taxes $152,000 c/o Treasurer Franklin County, Virginia Personal property $5,000 c/o Treasurer BEARINGPOINT INC: Shareholders Slam Chapter 11 Plan --------------------------------------------------- Law360 reports that lead plaintiffs in a securities fraud class action against BearingPoint Inc. are opposing the Company's proposed Chapter 11 liquidation plan, saying the Plan doesn't take into account the impact of the litigation on the estate. As reported by the TCR on October 7, BearingPoint, following a sale of its assets, filed a new reorganization plan that offers unsecured creditors 3 to 5 cents on the dollars for their claims. The disclosure statement explaining the Amended Plan calls for calls for paying secured claims in full. Holders of general unsecured claims aggregating $225,171,340 will recover 2.6% to 5.1% of their allowed claims. Holders of $203 million worth of Series C notes and holders of $40 million in FFL notes will get 7.6% to 14.7% of their claims. Series A and B noteholders owed $452,121,889 and equity holders may receive beneficial interests in a liquidating trust, but are currently expected to recover 0% of their claims or interests. The Plan updates the one submitted Feb. 18 together with the Company's Chapter 11 petition, which contemplated on a reorganization. BearingPoint has instead pursued a sale of its units, after determining that creditor recoveries would be maximized through sales of the businesses. The Official Committee of Unsecured Creditors supports the Amended Plan, saying that it "provides the highest and best recoveries for creditors. Copies of the Amended Plan and Disclosure Statement is available for free at: http://bankrupt.com/misc/BearingPoint_DS_Oct09.pdf http://bankrupt.com/misc/BearinPoint_Plan_Oct09.pdf BearingPoint's initial plan called for secured lenders to swap a $500 million loan for a $272 million loan and a letter of credit. Under the earlier plan, unsecured creditors were to get different classes of common stock. Asset Sales On April 2, BearingPoint International Bermuda Holdings Limited, BearingPoint's indirect subsidiary, entered into a Share Sale Agreement with PwC Advisory Co., Ltd., the Japanese member firm of the PricewaterhouseCoopers global network of firms, for the sale of BearingPoint's consulting business in Japan to PwC Japan for roughly $45 million. In addition, PwC Japan assumed the intercompany debt owed by certain non-debtor subsidiaries of BearingPoint to BearingPoint Co., Ltd. (Chiyoda-ku). The closing of the PwC Japan Transaction occurred on May 11. On May 8, 2009, BearingPoint closed the sale of a significant portion of its assets related to BearingPoint's North American Public Services business to Deloitte LLP. BearingPoint received net proceeds of roughly $329.3 million. On April 17, BearingPoint and certain of its subsidiaries entered into an Asset Purchase Agreement with PricewaterhouseCoopers LLP pursuant to which BearingPoint agreed to sell a substantial portion of its assets related to its North American Commercial Services business unit, including Financial Services, to PwC and PwC agreed to assume certain liabilities associated with the assets. In addition, affiliates of PwC also entered into definitive agreements to purchase the equity interests of BearingPoint Information Technologies (Shanghai) Limited, a subsidiary of BearingPoint that operates a global development center in China, and certain assets of a separate global development center in India. On June 15, 2009, BearingPoint closed the sale of their Commercial Services Business to PwC. The purchase price for the PwC U.S. Transaction was $39 million. BearingPoint also sold BearingPoint China GDC to PwC, and anticipates closing the China Transaction and the PwC India Transaction will close within the next several months; however, there can be no assurance that the transactions will be completed. On July 23, BearingPoint won approval to sell to CSC Brazil Holdings LLC and Computer Sciences Corporation its consulting business in Brazil. CSC agreed to purchase BearingPoint, S.A., through the purchase of all issued and outstanding shares of common stock of BearingPoint Brazil, for a purchase price of US$7.9 million. The consummation of the Brazil Transaction was to occur on or prior to August 7. As reported by the Troubled Company Reporter on September 7, 2009, BearingPoint completed the sale of the Company's Europe, Middle East and Africa practice to its European management team for an aggregate price of approximately US$69 million in total consideration. BearingPoint Australia Pty. Limited, a wholly owned subsidiary of BearingPoint, Inc., on September 4, 2009, completed the sale of its consulting business to local management. BPA MBO Pty Limited, BPA MBO Asset Pty Limited (as trustee for the BPA MBO Asset Unit Trust), BPA MBO Services Pty Limited and BPA MBO Trading Pty Limited agreed to purchase BearingPoint Australia through the purchase and assumption of certain assets and liabilities of BearingPoint Australia and for a purchase price of AU$1,000 (exclusive of Australian Goods and Services Tax). Additional fees are payable by the MBO team pursuant to a Trademark License Agreement and Cross-License Agreement. About BearingPoint Inc. BearingPoint, Inc. -- http://www.BearingPoint.com/-- was one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP - - has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next- generation" technology. BearingPoint, Inc., fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 protection on February 18, 2009 (Bankr. S.D.N.Y., Case No. 09-10691). The Debtors' legal advisor is Weil, Gotshal & Manges, LLP, their restructuring advisor is AlixPartners LLP, and their financial advisor and investment banker is Greenhill & Co., LLC. Jeffrey S. Sabin, Esq., at Bingham McCutchen LLP represents the Creditors' Committee. Garden City Group serves as claims and notice agent. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of September 30, 2008. BERNARD MADOFF: Auditors Consent to Partial Judgment ---------------------------------------------------- The Securities and Exchange Commission said Bernard Madoff's auditors have agreed not to contest the SEC's charges that they enabled Madoff's fraud by falsely stating they audited the convicted fraudster's financial statements in accordance with the relevant accounting and auditing standards. On November 3, 2009, the SEC submitted to the Honorable Judge Louis L. Stanton, a federal judge in the Southern District of New York, the consents of David G. Friehling and Friehling & Horowitz, CPA'S, P.C., to a proposed partial judgment imposing permanent injunctions against them. Friehling and F&H consented to the partial judgment without admitting or denying the allegations of the SEC's complaint, filed on March 19, 2009. If the partial judgment is entered by the Court, the permanent injunction will restrain Friehling and F&H from violating certain antifraud provisions of the federal securities laws. The proposed partial judgment would leave the issues of the amount of disgorgement, prejudgment interest and civil penalty to be imposed against Friehling and F&H to be decided at a later time. For purposes of determining Friehling's and F&H's obligations to pay disgorgement, prejudgment interest or a civil penalty, the proposed partial judgment precludes Friehling and F&H from arguing that they did not violate the federal securities laws as alleged in the Complaint. In its complaint, the SEC alleges that Friehling and F&H enabled Madoff's Ponzi scheme by falsely stating, in annual audit reports, that F&H audited Bernard L. Madoff Investment Securities LLC's financial statements pursuant to Generally Accepted Auditing Standards. F&H also made representations that BMIS' financial statements were presented in conformity with Generally Accepted Accounting Principles and that Friehling reviewed internal controls at BMIS. The complaint alleges that all of these statements were materially false because Friehling and F&H did not perform a meaningful audit of BMIS and therefore had no basis to form an opinion about the firm's financial condition or internal controls. The SEC's complaint specifically alleges that Friehling and F&H violated Section 17(a) of the Securities Act, violated and aided and abetted violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and aided and abetted violations of Sections 206(1) and 206(2) of the Advisers Act, Section 15(c) of the Exchange Act and Rule 10b-3 thereunder, and Section 17 of the Exchange Act and Rule 17a-5 thereunder. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Case No. 08-01789) (Lifland, J.). Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). BERNARD MADOFF: Fraud Began After Legitimate Strategy Went Bad -------------------------------------------------------------- According to Bloomberg News, Bernard L. Madoff told the Securities and Exchange Commission his multi-billion-dollar Ponzi scheme started when a legitimate investment strategy went bad and he tried to cover up. The "problem occurred when I made commitments for too much money and then I couldn't put the strategy to work," Mr. Madoff told SEC Inspector General H. David Kotz in a June 17 interview described in a recently released report. "It was my mistake not to just be out a couple hundred million dollars and get out." As reported by the TCR on Sept. 4, a 457-page report by the OIG noted how the SEC missed chances since 1992 to detect a fraud that burned thousands of investors. Inspector General H. David Kotz released on August 31, 2009, a report on the investigation of SEC's failure to uncover Mr. Madoff's ponzi scheme, saying that the agency missed numerous opportunities to uncover the fraud, partly due to inexperienced staff and delays in examinations. Mr. Kotz said in his report that the SEC got six warnings about Mr. Madoff's trading business over 16 years, but its staff failed to follow up adequately. There was also poor communication within SEC's divisions, according to Mr. Kotz. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Case No. 08-01789) (Lifland, J.). Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). CANWEST GLOBAL: Canwest LP in Talks with Lenders on Restructuring ----------------------------------------------------------------- Canwest Global Communications Corp. on October 30 disclosed that it has received approval and a vesting order from the Ontario Superior Court of Justice in respect of the transition of the business of the National Post to Canwest Publishing Inc. through a newly incorporated, wholly-owned subsidiary of CPI, and the re- alignment of certain shared services between its subsidiaries Canwest Media Inc. and Canwest Limited Partnership. The transition of the business of the National Post and the re-alignment of shared services have also been approved by the lenders under Canwest LP's senior secured credit facilities, CIT Business Credit Canada Inc. as lender to CMI, and the ad hoc committee of holders of 8% senior subordinated notes of CMI. This transition and re-alignment are part of Canwest's structured and orderly recapitalization process designed to properly align the provision and cost allocation of certain shared services between CMI and Canwest LP. Shared service agreements that govern content sharing between CMI and Canwest LP and allow for consolidated and co-ordinated advertising sales will continue under the re-alignment until at least August 31, 2010. To date, the attractiveness of a co-ordinated advertising sales effort has been widely endorsed by the marketplace. CMI and Canwest LP will be able to negotiate continuing arrangements to be put in place beyond their scheduled expiry date. The Ontario Superior Court of Justice also granted the request by Canwest for an extension of the stay period granted under the Companies' Creditors Arrangement Act to January 22, 2010. In its Initial Order on October 6, 2009, the Court provided a 30 day stay period. Canwest also disclosed that Canwest LP and the lenders under its senior secured credit facilities continue discussions regarding the framework for a potential restructuring transaction. As previously announced on September 10, 2009, Canwest LP and its senior lenders had entered into a forbearance agreement under which the senior lenders had agreed not to enforce their rights under the senior secured credit facilities arising from Canwest LP's previously announced defaults prior to October 31, 2009. Canwest LP and its senior lenders have agreed to extend this forbearance date to November 9, 2009. Canwest LP owns and operates the National Post, 12 daily newspapers, 23 community newspapers, more than 80 online operations as well as other publications and national services. More information about Canwest's restructuring can be found at www.canwest.com. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CARDTRONICS INC: September 30 Balance Sheet Upside-Down by $8.3MM ----------------------------------------------------------------- Cardtronics, Inc.'s consolidated balance sheets at September 30, 2009, showed $457.2 million in total assets and $465.5 million in total liabilities, resulting in an $8.3 million total shareholders' deficit. At September 30, 2009, the Company's consolidated balance sheets also showed $46.4 million in total current assets available to pay $88.2 million in total current liabilities. The Company reported net income of $6.5 million on total revenues of $128.6 million for the three months ended September 30, 2009, compared with a net loss of $5.2 million on total revenues of $127.3 million in the same period of the prior year. ATM operating revenues increased $3.6 million to $126.2 million during the three months ended September 30, 2009, from $122.6 million during the same period last year. ATM product sales and other revenues decreased 48.2% to $2.4 million during the three months ended September 30, 2009, compared to $4.6 million during the same period of 2008. ATM products sales and other revenues were lower primarily due to lower equipment sales in Mexico and lower value-added reseller program sales. The Company reported net income of $4.1 million on total revenues of $368.6 million for the nine months ended September 30, 2009, compared with a net loss of $13.7 million on total revenues of $374.8 million in the same period of 2008. For the three and nine months ended September 30, 2009, ATM operating gross profit margin, exclusive of depreciation, accretion, and amortization, increased by 8.5 percentage points and 6.8 percentage points, respectively, when compared to the same periods in 2008. For the three and nine months ended September 30, 2009, ATM product sales and other revenues gross profit margin decreased by 23.8 percentage points and 11.3 percentage points, respectively, when compared to the same periods in 2008. These decreases were primarily a result of lower margins achieved on VAR, equipment, and other service sales during the second and third quarters of 2009, as we were required to lower our sales prices in light of the reduced market demand for ATM product sales. A full-text copy of the Company's consolidated financial statements for the three and nine months ended September 30, 2009, is available for free at http://researcharchives.com/t/s?481d As of September 30, 2009, the Company had $6.1 million in cash and cash equivalents on hand and $321.4 million in outstanding long- term debt and capital lease obligations. The Company believes that its cash on hand and its current bank credit facilities will be sufficient to meet its working capital requirements and contractual commitments for the next 12 months. Net cash provided by operating activities totaled $49.0 million for the nine months ended September 30, 2009, compared to net cash provided by operating activities of $11.0 million during the same period in 2008. The year-over-year increase was primarily attributable to improved operating margins and favorable working capital movements in 2009 when compared to 2008. Net cash used in investing activities totaled $20.2 million for the nine months ended September 30, 2009, compared to $54.0 million during the same period in 2008. The year-over-year decrease was the result of a decline in the amount of capital expenditures incurred, as a result of the Company's decision to reduce capital spending in 2009. The Company expects that its capital expenditures for the remaining three months of 2009 will total approximately $5.0 million, net of noncontrolling interests, the majority of which will be utilized to purchase additional ATMs for its company-owned accounts. Net cash used in financing activities totaled $26.6 million for the nine months ended September 30, 2009, compared to $31.1 million provided by financing activities for the same period in 2008. In 2008, the Company incurred incremental borrowings under its revolving credit facility to fund the higher level of capital expenditures during the period. However, in 2009, the Company generated sufficient cash flows after capital expenditures that allowed the Company to repay a significant portion of the outstanding borrowings under its revolving credit facility. As of September 30, 2009, the Company had $321.4 million in outstanding long-term debt and capital lease obligations, which was comprised of (1) $297.1 million (net of discount of $2.9 million) of its senior subordinated notes, (2) $17.0 million in borrowings under its revolving credit facility, (3) $6.9 million in notes payable outstanding under equipment financing lines of its Mexico subsidiary, and (4) $413,000 in capital lease obligations. The Company said that as of September 30, 2009, it was in compliance with all covenants contained within its $175.0 million revolving credit facility and had the ability to borrow an additional $152.2 million under the facility based on such covenants. Based in Houston, Texas, Cardtronics, Inc. operates the world's largest non-bank network of automated teller machines. As of June 30, 2009, the Company's network included over 33,000 ATMs throughout the United States, the United Kingdom, and Mexico, primarily at national and regional merchant locations. The Company provides ATM management and equipment-related services and electronic funds transfer transaction processing services to its network of ATMs as well as ATMs owned and operated by a third party. CAPMARK FINANCIAL: Gets Nod to Honor Obligations to Employees ------------------------------------------------------------- The Bankruptcy Court authorized Capmark Financial Group Inc. and its units, in the interim, to pay prepetition employee obligations up to $6,900,000. The Debtors relate that in the ordinary course of their business, they incur payroll and various other obligations and provide certain benefits to employees in exchange for the employees' performance of service. As of the Petition Date, the Debtors employed over 1,000 individuals. In addition to employees located at the Debtors' headquarters in Horsham, Pennsylvania, the Debtors have employees based in approximately 40 domestic office locations throughout the United States. The Debtors tell the Court that they have incurred certain costs and obligations with respect to their employees relating to the period prior to the Petition Date. The Debtors note that certain of these costs and obligations remain outstanding and due and payable, while others will become due and payable in the ordinary course of business after the Petition Date. The Debtors estimate that the aggregate amount of the prepetition Employee Obligations that are accrued and unpaid as of the Petition Date does not exceed $6.9 million. Prior to the entry of the Court's interim order, General Electric Capital Corporation told the Court that it does not object to the relief sought by the Debtors, except to the extent the Debtors seek to use funds from the accounts established pursuant to agreements with GE to pay their employee obligations. The final hearing to consider the Debtors' request is scheduled for November 24, 2009. 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 Freres & 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 Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CAPMARK FINANCIAL: Gets Nod to Maintain Insurance Programs ---------------------------------------------------------- The Bankruptcy Court authorized Capmark Financial Group Inc. and its units to pay all premium adjustments, deductibles, and other related charges arising under the insurance programs in an amount up to $3,000,000. Financial Group Inc. and its units maintain workers' compensation programs and liability, property, directors and officers' liability, and other insurance programs and policies through various insurance carriers, a list of which is available for free at http://bankrupt.com/misc/Capmark_InsurancePrograms.pdf Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates that the nature of the Debtors' businesses makes it essential for the Debtors to maintain the Insurance Programs on an uninterrupted basis, including by making payment of Insurance Obligations whenever arising or posting any collateral or maintenance payment. Mr. Collins asserts that the nonpayment of any Insurance Obligations could result in Insurance Carriers declining to renew their policies or refusing to enter into new insurance agreements with the Debtors in the future. In addition, Mr. Collins maintains, pursuant to the guidelines established by the Office of the United States Trustee for the District of Delaware, the Debtors are obligated to remain current with respect to their primary Insurance Programs. Thus, Mr. Collins asserts, continuation of the Insurance Programs on an uninterrupted basis and payment of the Insurance Obligations are essential to preserve the Debtors' businesses and the value of their estates. Thus, the Debtors seek the Court's authority to maintain their insurance programs without interruption and pay all undisputed prepetition and postpetition obligations of up to $3 million. Prior to the entry of the Court's order, General Electric Capital Corporation said it does not object to the relief sought by the Debtors, except to the extent the Debtors seek to use funds from the accounts established pursuant to the GE Agreements to satisfy their insurance obligations. According to GE Capital, while it does not believe the accounts established pursuant to GE Agreements are within the scope of the Motion, it has filed the objection out of abundance of caution, in case the accounts were improperly established or maintained, or in case the Debtors intent to treat the funds in those accounts as cash collateral for purposes of meeting their insurance obligations. 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 Freres & 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 Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CAPMARK FINANCIAL: Proposes to Tap Epiq as Claims & Notice Agent ---------------------------------------------------------------- Capmark Financial Group Inc. and its units sought and obtained the Court's authority to employ Epiq Bankruptcy Solutions, LLC, as their claims and noticing agent. The Debtors relate that they have thousands of creditors and expect many of their creditors to file proofs of claim. The Debtors assert that noticing, receiving, docketing and maintaining proofs of claim from a large number of creditors may be unduly time consuming and burdensome for the Clerk of the Court. The appointment of Epiq will relieve the Court and the Clerk of heavy administrative and other burdens. Additionally, the Debtors note, the retention of Epiq as the claims and noticing agent will promote the effective administration of their estates. As claims and noticing agent, Epiq will: (a) serve these notices: (i)the 341 notice; (ii) notice of claims bar date; (iii) objections to claims and transfers of claims; (iv) notice of hearing on confirmation/disclosure statement; (v) notice of hearing on the motions filed by the U.S. Trustee; and (vi) notice of transfer of claim; (b) within seven days of mailing, file with the Court, a copy of the notice served with Certificate of Service attached, indicating the name and complete address of each party served; (c) notify parties-in-interest of requests for first day relief and the first day hearing agenda; (d) serve other motions, applications, requests for relief, hearing agendas, and related documents on behalf of the Debtors; (e) maintain copies of all proofs of claim and proofs of interest filed; (f) maintain the official claims register for each debtor and record all transfers of claims and make changes to the creditor matrix after the objection period has expired. Record any order entered by the Court which may affect the claim by making a notation on the claims register and monitor the Court's docket for any claims related pleading filed and make necessary notations on the Claims Register. (g) file quarterly updated Claims Registers with the Court in alphabetical and numerical order or a certification of no claim activity; (h) specify in the Claims Register these information for each claim docketed: (i) the claim number assigned; (ii) the date received; (iii) the name and address of the claimant and agent, if applicable, who filed the claim; and (iv) the classification of the claim; (i) make changes in the Claims Register pursuant to Court order; (j) upon completion of the docketing process for all claims received to date by the Clerk's Office, turn over to the Clerk copies of the Claims Register for the Clerk's review; (k) allow public access to claims and the Claims Register at no charge; (l) maintain an up-to-date mailing list of all creditors and all entities who have filed proofs of claim or interest or request for notices in the case and provide that list to the Court for any interested party upon request; (m) within 10 days of entry of an order converting a case or within 30 days of entry of a final decree, forwarding all claims and an updated Claims Register to the Court, along with an updated mailing list; (n) assist with and maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs, listing the Debtor's known creditors and the amounts owed; (o) design, maintain, and operate in conjunction with the Debtors a Web site as a centralized location where the Debtors will provide information about the Debtors' case, including key dates, service lists, and free access to the case docket within three days of docketing and, at the Debtors' discretion, certain orders, decisions, claims, or other documents filed in the Debtors' cases; (p) maintain a copy of service from which parties may obtain copies of relevant documents; (q) notify all potential creditors of the existence and amount of their claims as set forth in the Schedules of Assets and Liabilities; (r) furnish a form for the filing of proofs of claim, after approval of that notice and form by the Court; (s) implement necessary security measures to ensure the completeness and integrity of the Claims Register; (t) relocate, by messenger, all of the actual proofs of claim filed with the Court, if necessary, to Epiq, not less than weekly; (u) record all transfers of claims and provide any notices of those transfers required by Rule 3001 of the Federal Rules of Bankruptcy Procedure; (v) assist with, among other things, the solicitation and the calculation of votes and distributions as required in furtherance of confirmation of a plan of reorganization; (w) 30 days prior to the close of the case, submit an order dismissing the Agent and terminating the services of the Agent upon completion of its duties and responsibilities and upon the closing of the cases; and (x) at the conclusion of the Chapter 11 cases, box and transport all original documents in proper format, as specified by the Clerk's Office, to the Federal Records. The Debtors will pay Epiq based on the firm's current hourly rates: Title Rate/Hour ----- --------- Clerk $34-$51 Case Manager(Level 1) $106-$148 IT Programming Consultant $119-$161 Case Manager(Level 2) $157-$187 Senior Case Manager $191-$233 Senior Consultant TBD The Debtors will also reimburse Epiq for reasonable, out-of- pocket expenses incurred. The Retention Agreement also provides for a $50,000 retainer. Daniel C. McElhinney, executive director of Epiq Bankruptcy Solutions, LLC, assures that Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code. 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 Freres & 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 Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: McClure Estate Wants to Reopen Abuse Case ---------------------------------------------------------- The Estate of Douglas J. McClure, pursuant to Section 362 of the Bankruptcy Code, asks the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay to allow the McClure Estate to file a motion to reopen an abuse case due to fraud, misrepresentation and other misconduct by, inter alia, the Catholic Diocese of Wilmington. The McClure Estate is the plaintiff in the action entitled McClure v. Catholic Diocese of Wilmington, et al., in the Delaware Superior Court for New Castle County, against the Diocese and St. Ann's Catholic Church, arising out of sexual abuse Mr. McClure suffered at the hands of Father Edward Carley, a longtime Diocesan priest, who served from 1948 through 1993. On April 7, 2009, shortly before the April 13 start of jury selection on the McClure Case, a settlement was reached between the parties. As set forth in the Settlement Agreement, one of the key terms required that a compassionate letter of apology will be sent from Bishop W. Francis Malooly himself, on behalf of the Diocese, and another from Msgr. J. Thomas Cini, the current St. Ann's pastor, on behalf of St. Ann's, to Mr. McClure and his wife, Nancy McClure. The language to be used on the letters will not use the word "alleged" but acknowledge the abuse. Thomas S. Neuberger, Esq., at The Neuberger Firm, P.A., in Wilmington, Delaware, contends that the apology is a key term of the Settlement because if not for non-monetary apologies and acknowledgments, the McClure Case would not have settled. Mr. Neuberger relates that on December 22, 2008, parties traveled to Philadelphia, Pennsylvania, for mediation, and two of the Diocese's attorneys apologized to Mr. McClure for the abuse he suffered at Fr. Carley's hands. Mr. Neuberger notes that Msgr. Cini sat next to the attorneys quietly while they admitted and apologized for the abuse, and Msgr. Cini did not contradict or deny anything his two attorneys said on his behalf. However, Mr. Neuberger says, on January 30, 2009, which was the last day of discovery, the defense flip-flopped and contradictorily denied that Mr. McClure had ever been abused by Fr. Carley. The defense also accused Mr. McClure of suffering from "lapses in reality," "hallucinatory" perceptions and an "impair(ed) ability to accurately report his experiences." Subsequently, over strenuous defense objections, Superior Court Judge Calvin L. Scott, Jr., held that the admissions, apologies and acknowledgments of the abuse could be used to impeach the contradictory testimony of Msgr. Cini, the Diocese and the Parish at trial. In light of the Diocesan flip-flops, Mr. Neuberger avers that the letters of apology and acknowledgment were vitally important Settlement terms for Mr. McClure and his family. After signing his settlement papers on April 21, 2009, later that night or the next day, Mr. McClure passed away. Pursuant to the Settlement Agreement, the McClure Case was dismissed with prejudice on May 15, 2009. "Yet despite the plain terms of the settlement agreement, the Diocese, Bishop Malooly, Msgr. Cini and St. Ann's for six months have stubbornly resisted complying with this vital non-economic settlement term, have obstinately defied their legal obligations under the settlement agreement by refusing to write, sign, send and deliver the long overdue 'compassionate letter(s) of apology,'" Mr. Neuberger tells the Bankruptcy Court. Mr. Neuberger says that Bishop Malooly and Msgr. Cini have been contacted to live up to the Settlement Agreement, and the Diocesan counsel responded and stated that they would comply with their legal obligations. Yet, Mr. Neuberger asserts, despite these promises, both Bishop Malooly and Msgr. Cini have failed to do so. Hence, the McClure Estate asks the Bankruptcy Court to lift the automatic stay in the Chapter 11 case to the extent necessary to (i) permit the McClure Estate to file a request under Rule 60(b) of the Delaware Superior Court Rules of Civil Procedure to reopen the McClure Case due to fraud, misrepresentation and other misconduct by the Diocese, Bishop Malooly and Msgr. Cini, and to permit the McClure Estate to enforce the Settlement Agreement by ordering the Diocese, Bishop Malooly and Msgr. Cini to immediately write the letter of apology as mandated by the Settlement Agreement. The Bankruptcy Court will commence a hearing on November 12, 2009, to consider the request. Objections are due November 4. About Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin October 19. There are 131 cases filed against the Diocese, with 30 scheduled for trial. The Diocese filed for Chapter 11 on Oct. 18, 2009 (Bankr. D. Del. Case No. 09-13560). Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50,000,001 to $100,000,000 while debts are between $100,000,001 to $500,000,000. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Sheehan Wants Lift Stay to Proceed With Del. Suit ------------------------------------------------------------------ James E. Sheehan, a plaintiff in the action entitled Sheehan v. Oblates of St. Francis de Sales, et al., pending in the Delaware Superior Court for New Castle County, asks the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay to allow the Sheehan Case to proceed to trial and judgment against, inter alia, the Catholic Diocese of Wilmington. In the early 1960s, while a student at Salesianum School, Mr. Sheehan was abused and then stalked by Rev. Francis L. Norris, a pedophile priest employed by the Oblates of St. Francis de Sales, who also worked for and was licensed by the Diocese. Representing Mr. Sheehan, Thomas S. Neuberger, Esq., at The Neuberger Firm, P.A., in Wilmington, Delaware, contends that Rev. Norris was known by his superiors to be a suicidal alcoholic in dire need of immediate psychiatric hospitalization; instead, he was transferred to Salesianum to work with children. Now 63 years old, Mr. Sheehan is suffering from life-threatening health problems, including a congestive heart failure and two heart attacks, Mr. Neuberger tells the Court. Mr. Neuberger notes that Mr. Sheehan is in constant danger of a catastrophic cardiac event. Due to Mr. Sheehan's condition, the Superior Court gave him an expedited trial date and his trial is scheduled to commence on November 16, 2009. Mr. Neuberger says that for Mr. Sheehan, justice delayed may truly be justice denied. Under the circumstances, Mr. Neuberger points out that applicable law decisively supports granting relief from stay so that the trial may proceed as scheduled. Hence, Mr. Sheehan asks the Court to lift the automatic stay to the extent necessary to (i) permit the Sheehan Case to proceed to trial and judgment, and (ii) negotiate and enter into any settlement with the Diocese's insurance carriers, without the need to seek further Court approval, provided that the settlement does not affect the Diocese's insurance coverage for other clergy sexual abuse cases. Mr. Neuberger assures Judge Sontchi that Mr. Sheehan will pursue collection of the judgment against the Diocese only through a claim filed in the Diocese's Chapter 11 case. The corresponding hardship to Mr. Sheehan is extreme, Mr. Neuberger asserts. If the Diocese's case follows in the mold of previous diocesan and religious order bankruptcy cases, he argues that the Diocese will seek to maintain in effect for as long as possible the stay on all proceedings in the Clergy Abuse Cases, while it negotiates with its insurance carriers and attempts to stave off determinations concerning what church property constitutes property of its bankruptcy estate. "[Mr.] Sheehan is unlikely to survive that process. The reason that Superior Court Judge Calvin L. Scott, Jr., granted his trial priority is the same reason this Court should grant relief from stay: Sheehan may not otherwise live to see his case go to trial," Mr. Neuberger further says. Mr. Sheehan also asks the Court for an expedited hearing on his request. Accordingly, the Court will commence a hearing on November 2, 2009, to consider the request. Objections were due October 28. Diocese Objects While it is mindful of and sympathetic to the health issues of Mr. Sheehan, the Diocese and its creditors would be prejudiced by permitting a seven-day jury trial on the Sheehan Case to go forward less than one month into the Chapter 11 case, James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, contends. The Diocese did not seek Chapter 11 relief to dodge responsibility for past misconduct by clergy -- or for mistakes made by Diocesan authorities, Mr. Patton asserts. He notes that the primary goal in the Chapter 11 case is to protect and preserve the assets that are properly available for distribution to the Diocese's general creditors and to ensure that, whatever assets can be marshaled, they will be distributed equitably to all creditors, not just a select few. "These goals cannot be accomplished without preserving the automatic stay, particularly at the outset of this case," Mr. Patton avers. He contends that contrary to the request's assertion, all litigation costs associated with the defense of the Sheehan Case have been, and would continue to be, the responsibility of the bankruptcy estate, at the expense of all other creditors. The impact of granting stay relief on anyone of the remaining 131 actions asserted under the Delaware Child Victim's Act will undoubtedly delay the Diocese's reorganization efforts to the detriment of the other creditors of the estate, Mr. Patton argues. Without the stay, he points out, among other things, the Diocese's key personnel would be tied up in litigation with individual creditors, like Mr. Sheehan, rather than focusing on the restructuring of the Diocese. Hence, the Diocese asks the Court to deny the request. About Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin October 19. There are 131 cases filed against the Diocese, with 30 scheduled for trial. The Diocese filed for Chapter 11 on Oct. 18, 2009 (Bankr. D. Del. Case No. 09-13560). Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50,000,001 to $100,000,000 while debts are between $100,000,001 to $500,000,000. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Wilmington Taps Garden City as Claims Agent ------------------------------------------------------------ The Catholic Diocese of Wilmington, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Delaware to employ The Garden City Group, Inc., as claims, noticing and balloting agent for the Diocese, pursuant to the terms and conditions of an engagement agreement between the Diocese and GCG, dated as of October 9, 2009. As claims agent, GCG has agreed to, among other things: (a) prepare and serve required notices in the Diocese's Chapter 11 case, including: * notice of the commencement of the case and the initial meeting of creditors under Section 341(a) of the Bankruptcy Code; * notice of the claims bar date; * notice of objections to claims; * notice of any hearings on a disclosure statement and confirmation of a plan of reorganization; and * other miscellaneous notices to any entities, as the Diocese or the Court may deem necessary or appropriate for an orderly administration of the Chapter 11 case; (b) after the service of a particular notice, file with the Clerk's Office a certificate or affidavit of service that includes an alphabetical list of persons on whom the notice was served and the date and manner of service; and (c) maintain copies of all proofs of claim and proofs of interest filed; GCG will be paid pursuant to the Engagement Agreement. The Diocese submits that GCG's compensation is reasonable in light of the services to be performed. The Diocese reveals that it has provided a retainer to GCG in the amount of $35,000 in connection with GCG's services in the case. Notwithstanding the indemnification provisions contained in the Engagement Agreement, the Diocese will indemnify GCG only pursuant to certain terms and conditions, including that the Diocese will indemnify GCG for any claim arising from, related to or in connection with its performance of the services it is retained to provide. Jennifer M. Keough, GCG's vice president, assures the Court that GCG is a "disinterested person" within the meaning Section 101(14) of the Bankruptcy Code. Survivors Committee Responds The Unofficial Committee of Abuse Survivors says that it does not object to GCG's retention. The Survivors Committee, however, asks that the order approving the request be subject to further Court order as the Survivors Committee will ask for claims and balloting procedures that protect the identities of abuse survivors, who request confidentiality of their identities. * * * The Court approved the application. The Court also approved the terms of the Engagement Agreement. No submission or approval of a formal fee application is required for any payment to GCG, provided that GCG will submit all invoices to the Office of the United States Trustee and any statutory committee of creditors that may be appointed in the case. Any unused portion of the general retainer GCG received prior to the Petition Date will be applied to its postpetition invoices until said Retainer is exhausted. About Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin October 19. There are 131 cases filed against the Diocese, with 30 scheduled for trial. The Diocese filed for Chapter 11 on Oct. 18, 2009 (Bankr. D. Del. Case No. 09-13560). Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50,000,001 to $100,000,000 while debts are between $100,000,001 to $500,000,000. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CELL THERAPEUTICS: Narrows Net Loss to $8.14MM in September 2009 ---------------------------------------------------------------- Cell Therapeutics, Inc., October 30, 2009 provided information pursuant to a request from the Italian securities regulatory authority, CONSOB, pursuant to Article 114, Section 5 of the Unified Financial Act, that the Company issue at the end of each month a press release providing a monthly update of certain information relating to the Company's management and financial situation. Cell Therapeutics narrowed its net loss to $8,140,000 in September from a $24,882,000 net loss in August. Cell Therapeutics had net revenue of $6,000 in September from net revenue of $7,000 in August. At September 30, 2009, Cell Therapeutics had cash and cash equivalents of $54,992,000, net financial standing-current portion of $13,135,000 and net financial indebtedness of ($10,552,000). At August 31, 2009, Cell Therapeutics had cash and cash equivalents of $60,962,000, net financial standing-current portion of $16,010,000 and net financial indebtedness of ($9,141,000). The Company's 4% Convertible Senior Subordinated Notes Convertible with redemption date of July 1, 2010 come due within the next 12 months. The Company had no debt that matured during the month of September 2009. The Company had no outstanding preferred shares as of August 31, 2009 and September 30, 2009. Regulatory Matters and Products in Development With respect to the period from September 1, 2009 through September 30, 2009, the Company announced: -- on September 5, 2009 that the U.S. Food and Drug Administration had notified the Company that a Prescription Drug User Fee Act action date of April 23, 2010 under standard review has been established regarding the Company's New Drug Application for pixantrone as potential treatment for relapsed or refractory aggressive non-Hodgkin's lymphoma; -- on September 15, 2009 that the Company had submitted a Pediatric Investigation Plan to the European Medicines Agency as part of the required filing process for approval of pixantrone for treating relapsed or refractory, aggressive NHL in Europe. The PIP outlines how the Company proposes to study the drug in children in order to benefit child health; -- on September 21, 2009 that the Company (a) had notified the EMEA of its decision to withdraw the Company's Marketing Authorization Application for a non-inferiority indication in non-small cell lung cancer, (b) will re- focus its resources on the approval of OPAXIO for its potential superiority indication in maintenance therapy for ovarian cancer, and (c) plans to meet with the FDA to discuss an additional registration study utilizing OPAXIO as a radiation sensitizer in the treatment of advanced esophageal cancer; and -- on September 29, 2009 that the Company had applied to the EMEA for orphan drug designation for pixantrone in aggressive NHL. Corporate Transactions and Assignment of Assets With respect to the period from September 1, 2009 through September 30, 2009, on September 28, 2009, the Company announced that it had finalized the closing its Bresso, Italy operations. As of September 30, 2009, the Company has recorded a $1.2 million receivable from the sale of physical assets. The Company expects the closure to save approximately $20 million in annual operating expenses in 2010 and beyond based on current exchange rates. Exchange Listing Matters The Company announced on September 22, 2009 that it had been added to the NASDAQ OMX Global Biotechnology Index (NASDAQ: QGBI), which is a modified market-capitalization weighted index designed to track the performance of the largest and most liquid companies engaged in the biotechnology sector. This index will provide the Company with further exposure amongst institutional biotechnology investors. Update on Outstanding Shares The number of shares of the Company's common stock, no par value, issued and outstanding as of August 31, 2009 and September 30, 2009 was 560,000,935 and 563,582,488, respectively. During the month of September 2009, these transactions contributed to the change in the number of shares of the Company's outstanding Common Stock: -- The issuance of 3,299,310 shares of Common Stock in connection with the exchange of a portion of the Company's outstanding convertible notes; -- The issuance of 362,800 shares of Common Stock relating to stock awards under the Company's 2007 Equity Incentive Plan; and -- The cancellation of 80,557 shares of Common Stock due to employee termination under the Company's 2007 Equity Incentive Plan. The Company is not aware of any agreement for the resale of its shares of Common Stock on the MTA nor of the modalities by means of which shares of Common Stock were or will be resold. Debt Restructuring Program With respect to the period from September 1, 2009 through September 30, 2009, the Company on September 24, 2009 agreed to exchange an aggregate of 3,299,310 shares of Common Stock for $3,000,000 aggregate principal amount of its 4% Convertible Senior Subordinated Notes due 2010 and $1,500,000 aggregate principal amount of its 6.75% Convertible Senior Notes due 2010, in each case plus accrued and unpaid interest. The Company, in September 2009, neither issued any new debt instruments nor bought any debt instruments already issued by the Company. The Company believes it is in compliance with the covenants on each series of its outstanding convertible notes. About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc., (Nasdaq and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. Going Concern Doubt Stonefield Josephson Inc. in Los Angeles, California, expressed substantial doubt about Cell Therapeutics' ability to continue as a going concern after auditing company's financial statements for the years ended December 31, 2008, and 2007. The auditing firm reported that the Company has substantial monetary liabilities in excess of monetary assets as of December 31, 2007, including roughly $19.8 million of convertible subordinated notes and senior subordinated notes which mature in June 2008. It also noted that the Company has sustained loss from operations over the audit periods, incurred an accumulated deficit, and has substantial monetary liabilities in excess of monetary assets as of December 31, 2008. As of June 30, 2009, the Company had $43.2 million in total assets; and $98.7 million in total liabilities; resulting in $57.6 million in shareholders' deficit. The Company had $1.35 billion in accumulated deficit as of June 30, 2009. CENTAUR LLC: Moody's Downgrades Default Rating to 'Ca/LD' --------------------------------------------------------- Moody's Investors Service lowered Centaur LLC's probability of default rating to Ca/LD from Caa3. The corporate family rating was also lowered to Ca from Caa3. The Ca/LD probability of default rating recognizes Centaur's payment default under its first lien and second lien term loans. The company failed to make its scheduled October 27, 2009 interest payments by the end of the five-day grace period, which was allowed by the loan agreements. These ratings were downgraded: Corporate Family Rating to Ca from Caa3 Probability of Default Rating to Ca/LD from Caa3 First Lien Term Loan to Caa2 (LGD 2, 17%) from B3 (LGD 2, 19%) First Lien Revolver to Caa2 (LGD 2, 17%) from B3 (LGD 2, 19%) Second Lien Term Loan to Ca (LGD 4, 55%) from Caa3 (LGD 4, 58%) The last rating action was on January 16, 2009, when Moody's lowered Centaur's corporate family rating and probability of default rating to Caa3 from Caa2. Centaur is a subsidiary of Centaur Inc., which owns and operates Hoosier Park, a "racino", which opened in June 2008, in Anderson, Indiana, near Indianapolis, and Fortune Valley Hotel and Casino, located approximately 35 miles from Denver, Colorado. The company also owns Valley View Downs, a development project in Pennsylvania. CENTRAL PACIFIC: Fitch Junks Long-Term Issuer Default Rating ------------------------------------------------------------ Fitch Ratings has downgraded the long-term Issuer Default Rating of Central Pacific Bank, the bank subsidiary Central Pacific Financial, to 'CCC' from 'B'. The ratings of CPF are unaffected by this action and the IDR remains at 'CCC'. A list of ratings affected by this action appears at the end of this release. The downgrade of Central Pacific Bank's ratings reflects the significant escalation of credit problems in both its California and Hawaii loan portfolios. While Fitch expected the company to endure increased credit stress in its Hawaii portfolio, as well as in its still sizeable exposure to California commercial real estate, the recent level of deterioration exceeded Fitch's original projections. Credit deterioration, which is not expected to abate in the near-term, has generated sizeable losses and caused considerable erosion to the bank's capital position. Fitch believes that the company will continue to generate material losses, which will continue to erode capital and reduce the benefit of any potential capital augmentation. Further, due to the heightened level of credit stress and the erosion of capital, the bank is expected to consent to a formal enforcement action with the FDIC and its state regulator, with directives focused on capital, asset quality, and liquidity. Existing regulatory agreements call for Central Pacific Bank to maintain enhanced capital levels that exceed the minimum regulatory requirements to be considered 'well-capitalized', specifically maintaining a leverage ratio of 9%, which the bank is now in violation. CPF continues to explore all public and private means to boost capital and comply with its enhanced capital requirements. Nonetheless, Fitch believes the prospects for raising sufficient equity from external sources to absorb expected losses and to meet enhanced regulatory capital requirements are limited. Should the company be unable to raise the necessary capital and losses continue to diminish the company's capital base, Fitch would likely take further negative rating actions. Fitch assigns Recovery Ratings to individual security issues where the IDR of the issuer is rated in the single-B or below category. As such, Fitch has assigned a Recovery Rating of 'RR3' to the uninsured long-term deposits of Central Pacific Bank, which implies a recovery between 51%-70%, on these instruments in the event of failure or default by the issuer, and a 'RR6' to the preferred and trust preferred securities of CPF, which implies recovery between 0%-10%. CPF is a $5.2 billion banking company headquartered in Honolulu, HI. CPF provides a full range of traditional commercial consumer and banking services. Through its bank subsidiary, Central Pacific Bank, the company operates 39 branches through-out Hawaii. Fitch has taken these rating actions: Central Pacific Bank -- Long-term IDR downgraded to 'CCC' from 'B'; -- Long-term Deposit downgraded to 'B-/RR3' from 'B/RR3'; -- Individual downgraded to 'E' from 'D/E'; -- Short-term IDR downgraded to 'C' from 'B'; -- Short-term Deposit affirmed at 'B'; -- Support affirmed at '5'; -- Support Floor affirmed at 'No Floor'. CEQUEL COMMUNICATIONS: Note Upsizing Won't Affect Moody's Ratings ----------------------------------------------------------------- Moody's Investors Service said the upsize of Cequel Communications Holdings I, LLC's note issuance (8.625% Senior Notes due 2017) to $600 million from $400 million will have no impact on ratings. Loss-given-default point estimates have been updated. Cequel Communications Holdings I, LLC * Corporate Family Rating -- B1 * Probability of Default Rating -- B1 New Senior Unsecured Notes -- B3 (to LGD 6, 92% from LGD 6, 94%) * Outlook - Stable Cequel Communications, LLC * Senior Secured First Lien Credit Facilities -- Ba3 (to LGD 3, 31% from LGD 3, 32%) * Senior Secured Second Lien Credit Facilities -- B3 (to LGD 5, 78% from LGD 5, 82%) The last rating action for Cequel was on October 22, 2009, when Moody's assigned a B3 to the then proposed $400 million debt offering. Additionally, Moody's assigned a B1 Corporate Family Rating and Probability of Default Rating to the intermediate holding company and issuer of the new debt, and withdrew the equivalent former ratings of Cequel Communications, LLC. Cequel Communications Holdings I, LLC, headquartered in St. Louis, Missouri, and doing business as Suddenlink Communications, is an intermediate holding company with cable operating company subsidiaries held by Cequel Communications, LLC, serving approximately 1.3 million video customers. The company provides digital TV, high-speed Internet and telephone service for the home and office and generated revenues of approximately $1.5 billion for the twelve months ended June 30, 2009. CERF BROS. BAG: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Cerf Bros. Bag Co. 2360 Chaffee Drive Saint Louis, MO 63146 Bankruptcy Case No.: 09-51141 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Eastern District of Missouri (St. Louis) Judge: Charles E. Rendlen III Debtor's Counsel: Steven Goldstein, Esq. Goldstein & Pressman, P.C. 121 Hunter Ave., Suite 101 St. Louis, MO 63124 Tel: (314) 727-1717 Fax: (314) 727- 1447 Email: stg@goldsteinpressman.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $2,274,946, and total debts of $7,024,869. A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/moeb09-51141.pdf The petition was signed by Jerry C. Michelson, president of the Company. CERUS CORP: Amends Rights Agreement with Wells Fargo Bank --------------------------------------------------------- Cerus Corporation reports that on October 28, 2009, following approval by the Company's Board of Directors, it entered into an amendment to its Rights Agreement, originally dated November 3, 1999, and amended as of August 6, 2001, with Wells Fargo Bank, N.A., as successor to Wells Fargo Bank Minnesota, N.A. (formerly known as Norwest Bank Minnesota, N.A.), as Rights Agent. The Rights Agent currently serves as the Company's transfer agent with respect to the Company's common stock, par value $0.001 per share, and also has been appointed transfer agent with respect to the Series C Junior Participating Preferred Stock, par value $0.001 per share, if any, that may be issued pursuant to the exercise of the rights under the Rights Agreement. The Amendment provides, among other things, for a decrease in the initial exercise price of the Rights under the Rights Agreement from $170.00 to $30.00 per one one-hundredth of a Preferred Share, and an extension of the final expiration date of the Rights from November 3, 2009 to October 27, 2019. Each one one-hundredth of a Preferred Share has designations and powers, preferences and rights, and the qualifications, limitations and restrictions designed to make it the economic equivalent of a Common Share. The Rights will continue to be evidenced by the stock certificates representing the Common Shares then outstanding, unless and until they are separated upon the occurrence of certain future events. The Amendment also provides for revisions to certain definitions in the Rights Agreement, including revisions to the definition of beneficial ownership under the Rights Agreement to include ownership of certain derivative securities, as well as other technical changes. The Rights have certain anti-takeover effects. The Rights will cause substantial dilution to a person or group that attempts to acquire the Company on terms not approved by the Board. The Rights should not interfere with any merger or other business combination approved by the Board since the Rights may be amended to permit such acquisition or redeemed by the Company at $0.001 per Right prior to the earlier of (i) a person or group of affiliated or associated persons acquiring beneficial ownership of 15% or more of the outstanding Common Shares or (iii) the final expiration date of the Rights. The Board may terminate the Rights Agreement at any time or redeem the Rights prior to the time a person (or a group of affiliated or associated persons) acquires beneficial ownership of 15% or more of the Common Shares. The Rights may also be redeemed following a person (or a group of affiliated or associated persons) acquiring beneficial ownership of 15% or more of the outstanding Common Shares under certain limited circumstances. A full-text copy of the Amendment to Rights Agreement, dated as of October 28, 2009, by and between Cerus Corporation and Wells Fargo Bank, N.A., as successor to Wells Fargo Bank Minnesota, N.A. (formerly known as Norwest Bank Minnesota, N.A.), is available at no charge at http://ResearchArchives.com/t/s?4832 About Cerus Cerus Corporation (NASDAQ:CERS) is a biomedical products company focused on commercializing the INTERCEPT Blood System to enhance blood safety. The INTERCEPT system is designed to inactivate blood-borne pathogens in donated blood components intended for transfusion. The Company markets the INTERCEPT system for both platelets and plasma in Europe and the Middle East. Cerus is also pursuing regulatory approvals in the United States and other countries. The INTERCEPT red blood cell system is in clinical development. As reported by the Troubled Company Reporter on August 17, 2009, Cerus said its available cash balances will be sufficient to meet its capital requirements into 2010, although its independent registered public accountants have indicated that substantial doubt exists as to its ability to continue as a going concern. CERUS CORP: Records $5.6 Million Third Quarter 2009 Net Loss ------------------------------------------------------------ Cerus Corporation last week announced financial results for the third quarter ended September 30, 2009. Net loss for the third quarter of 2009 was $5.6 million, or $0.16 per share, compared to a net loss of $7.8 million, or $0.24 per share, for the third quarter of 2008. Net loss for the first nine months of 2009 was $19.2 million, or $0.58 per share, compared to a net loss of $22.7 million, or $0.70 per share for the same period in 2008. Total revenue for the third quarter of 2009 was $4.8 million, up from $3.9 million in revenue recognized during the third quarter of 2008. Total revenue for the first nine months of 2009 was $12.5 million, down from $12.9 million recognized during the first nine months of 2008, when $1.5 million of previously deferred product revenue was recognized. Product revenue for the INTERCEPT Blood System was $4.6 million during the third quarter of 2009, representing an increase of $0.7 million, or 18%, from the second quarter of 2009. Third quarter 2009 product revenue was up $1.5 million from $3.1 million recognized during the third quarter of 2008. Product revenue for the first nine months of 2009 was $11.5 million, down from $12.0 million during the first nine months of 2008, when the $1.5 million of previously deferred product revenue was recognized. Gross profit from product revenue for the third quarter of 2009 was $300,000, down from $1.2 million for the same period in 2008. Cost of product revenue during the third quarter of 2009 included period costs of $1.0 million, representing idle manufacturing facility costs attributable to the Company's decision to reduce inventory levels. Total operating expenses for the third quarter of 2009 were $6.6 million, down from $9.6 million for the same period in 2008. The decrease in operating expenses was due to a reduction in research and development expenses and selling, general and administrative expenses associated with the Company's restructuring plans, which were previously announced in March 2009. Operating expenses for the first nine months of 2009 were $22.6 million, down from $29.5 million during the same period in 2008. The reduction in operating expenses was directly attributable to the savings realized from the Company's restructuring plan, which allowed the Company to focus its resources on commercializing the INTERCEPT platelet and plasma systems in Europe, reduce operating expenses, and tightly manage working capital. At September 30, 2009, the Company had $43.0 million in total assets against $17.2 million in total liabilities. At September 30, 2009, the Company had cash, cash equivalents and short-term investments of $22.7 million, up from $22.6 million at December 31, 2008. Cash, cash equivalents and short-term investments at September 30, 2009 reflects the $12.2 million in net proceeds generated from the Company's August 2009 registered direct public offering. Net cash used for the Company's operations during the third quarter of 2009 was $2.4 million, which was in line with the net cash used during the second quarter of 2009 and down by $4.8 million from the first quarter of 2009. Close control of working capital, including management of inventory levels and cash collections, contributed to the relatively low net cash used in operating activities. "We are pleased with the results of our concerted focus on growing sales and minimizing cash consumption. Third quarter product revenue grew by 18% over the prior quarter and was driven largely by recurring sales of INTERCEPT disposable kits," said Claes Glassell, President and Chief Executive Officer of Cerus Corporation. "The proceeds from the recently completed registered direct offering, combined with our focused approach and financial discipline, have the Company well positioned to achieve profitability with current capital resources." Recent Highlights: -- Raised $12.2 million of net proceeds in a registered direct public offering, providing the Company with a pathway towards profitability with current capital resources; -- Achieved 18% sequential growth in product revenue during the third quarter of 2009; -- Maintained low net cash consumption, down by more than 65% from the first quarter of 2009; -- Converted the Belgian Red Cross, Service Francophone du Sang to routine use of the INTERCEPT Blood System for platelets; -- Implemented INTERCEPT in two additional centers in France. About Cerus Cerus Corporation (NASDAQ:CERS) is a biomedical products company focused on commercializing the INTERCEPT Blood System to enhance blood safety. The INTERCEPT system is designed to inactivate blood-borne pathogens in donated blood components intended for transfusion. The Company markets the INTERCEPT system for both platelets and plasma in Europe and the Middle East. Cerus is also pursuing regulatory approvals in the United States and other countries. The INTERCEPT red blood cell system is in clinical development. As reported by the Troubled Company Reporter on August 17, 2009, Cerus said its available cash balances will be sufficient to meet its capital requirements into 2010, although its independent registered public accountants have indicated that substantial doubt exists as to its ability to continue as a going concern. CHEMTURA CORP: Deal on Recovery of $9.3 Mil. Authorized by Court ---------------------------------------------------------------- Chemtura Corp. and its units obtained authority from the Bankruptcy Court to enter into a stipulation relating to the return of $9,292,500 that Chemtura Corporation, f/k/a Crompton Corporation, transferred prepetition in connection with a settlement of a class action lawsuit for alleged violations of federal securities laws filed by Pierre Brull and William Ashe, as lead plaintiffs, in the District Court for the District of Connecticut. The Lead Plaintiffs alleged, among other things, that during the period between October 26, 1998 and October 8, 2002, Chemtura and other co-defendants issued materially false and misleading statements concerning their reported financial results and competitions, pricing, sales and margins. In August 2006, the Lead Plaintiffs, Chemtura and the other co- defendants entered into mediation before Judge Daniel Weinstein, whereby the Parties agreed to settle the Securities Action for $20,650,000. The Parties entered into a stipulation pursuant to which they agreed to fully and finally dispose of the Securities Action and any and all other claims against Chemtura and the co- defendants. By December 12, 2008, the Connecticut District Court preliminarily approved the Prepetition Settlement Agreement and scheduled a final approval and fairness hearing for June 12, 2009. Pursuant to the Prepetition Settlement Agreement, Chemtura made payments on December 23, 2008, and January 26, 2009, totaling $9,292,500 in relation to the Prepetition Settlement Amount to Murray Frank & Sailer LLP and Barroway Topaz Kessler Meltzer & Check LLP as counsel to the Lead Plaintiffs and escrow agents for an escrow account created under the Prepetition Settlement Agreement. However, on March 18, 2009, the Debtors, including Chemtura, filed voluntary petitions for relief under the Bankruptcy Code and as a result, the Connecticut District Court has continuously adjourned the final approval hearing with respect to the Prepetition Settlement. By a letter to the Escrow Agents, Chemtura asserted that the Prepetition Transfers are recoverable as preferential payments pursuant to Section 547 of the Bankruptcy Code and demanded the return of the payments. Accordingly, as a result of arm's-length negotiations, Chemtura and the Escrow Agents have reached an agreement for the return of the Prepetition Transfers to Chemtura. According to Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, the proposed Settlement Stipulation provides for the return of the funds without the expense of pursuing a preference litigation in the Court and allows Chemtura to realize a significant recovery for its estate. Pursuant to the Settlement Stipulation, the Lead Plaintiffs will, within three days after the Court's entry of an approval of the Settlement Stipulation, cause the Escrow Agents to return the Prepetition Transfers; and upon receipt, Chemtura will be deemed to fully, finally and forever release and discharge the Lead Plaintiffs and the Escrow Agents from any and all claims that Chemtura has against the Lead Plaintiffs or the Escrow Agents solely with respect to the Lead Plaintiffs' and the Escrow Agents' retention of the Prepetition Transfers during Chemtura's Chapter 11 case. In addition, pursuant to the Settlement Stipulation, Chemtura, the Lead Plaintiffs and the Escrow Agents fully, finally and forever release and discharge each other from any and all costs directly, or indirectly, related to, or in connection with, the return of the Prepetition Transfers. As a result of the Settlement Stipulation and the return of funds, the Lead Plaintiffs may pursue claims against Chemtura in the Chapter 11 cases. However, Mr. Cieri points out that any claims will be subject to subordination under Section 510(b) of the Bankruptcy Code. Mr. Cieri further notes that once Chemtura's funds are returned from escrow, it is possible that the Lead Plaintiffs will prosecute the Securities Action against the individual defendants. Should it occur, Chemtura reserves its rights to seek a stay of the litigation from the Court. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Gets Nod for Branding Agreement With Valent USA -------------------------------------------------------------- Chemtura Corp. and its units obtained the Court's authority to enter into a joint branding agreement with Valent USA Corporation. Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, relates that the Debtors have developed a pesticide formulation that contains active ingredients, ipconazole and metalaxyl, for use as a seed treatment fungicide. On the other hand, Valent has developed a pesticide formulation that contains the active ingredient, clothianidin, for use as a seed treatment insecticide. The Chemtura Formulation and Valent Formulation are complementary soybean seed protectants that when combined together, protect soybeans from all major early season soybean diseases and insect pests, protecting the seed at planting and then moving into the plant to protect it as it grows, Mr. Cieri tells the Court. After ongoing negotiations and discussions between the Debtors and Valent, the Parties determined that it would be in their mutual best interest to enter into a Joint Branding Agreement and market the Chemtura Formulation and Valent Formulation together as a co-branded product, bearing a single brand name, with the two formulations shipped side-by-side on the same pallet. Indeed, the Debtors estimate that due to the complementary nature and synergies between both formulations, the Co-brand Product will allow them to obtain more revenues than it would obtain by marketing and selling their own formulation, Mr. Cieri points out. Pursuant to the Agreement, the Co-brand Product will be exclusively sold and marketed to distributors and seed dealer treaters for use as a seed treatment pesticide on soybeans in the United States and Canada. The Agreement specifically provides that the marketing and sale of the Co-brand Product may be extended by agreement of the Parties to additional crops and territories. The revenues generated from the sale of the Co- brand Product will be distributed between the Debtors and Valent as determined under the Joint Branding Agreement. Additionally, Mr. Cieri says that the Debtors and Valent have agreed to coordinate their efforts in the marketing and sale of the Co-brand Product. Among other things, the Parties' representatives will meet annually to review and agree upon development plans for the Co-brand Product, will jointly develop an annual marketing plan, will discuss volume forecasts annually for the upcoming three crop years and will coordinate the handling of customer complaints. The term of the Joint Branding Agreement is through December 31, 2014. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Proposes to Enter Into NNN Office Lease ------------------------------------------------------ Chemtura Corp. and its units ask the Court for authority to enter into an office lease with NNN 1818 Market Street LLC and certain of its affiliates, which agreement will permit the Debtors to rent the 37th floor of the office building known as 1818 Market Street. In light of their cost saving initiatives and with the goal to improve their corporate presence in the industry, the Debtors have determined to relocate their executive offices to Philadelphia, Pennsylvania, the location of the office space NNN is leasing. Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, contends that by transitioning the Debtors' executive offices to the Philadelphia area, the Debtors will be able to take advantage of that city's close proximity to one of the major centers of the chemical industry in North America and will allow the Debtors to be closer to many of their major customers and suppliers as well as to realize material cost savings. Mr. Cieri tells the Court that the assumption of the Lease is an action in the ordinary course of business. However, NNN has conditioned its entry into the Lease upon the Debtors' seeking and obtaining court approval of the transaction. For these reasons, the Debtors ask the Court to grant their request. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Wants to Assume Vignette Master Agreement -------------------------------------------------------- Chemtura Corp. and its units seek the Court's authority to: (a) enter into the Vignette Products and Services Schedule, which amends the Corporate Master Agreement and related license schedule between Chemtura Corp. and Vignette Corporation n/k/a Open Text; (b) assume the Agreement, as amended by the Revised Schedule; and (c) resolve a dispute with Vignette concerning an alleged outstanding prepetition amount owed by Chemtura to Vignette under the Agreement. Before the Petition Date, Chemtura and Vignette entered into the Agreement for the licensing of Vignette's software products, which the Debtor uses in connection with its internet website, and for the delivery of Vignette's maintenance, consulting and training services. Specifically, Vignette granted a personal, non-exclusive, perpetual, non-transferable license to Chemtura and its affiliates. Upon Chemtura's payment of certain annual program, maintenance, service and training fees specified in the Original Schedule, Vignette agreed to supply its standard software maintenance and support services for the programs specified in the Agreement and the Original Schedule. In addition, Vignette agreed to provide professional consulting and other services so long as Chemtura provided access to the relevant information, personnel, premises, software, data, equipment or other required resources. Since the Petition Date, Chemtura and Vignette have disputed whether Chemtura was in breach of the software licenses granted under the Agreement. Vignette has alleged that Chemtura owes it $108,750 and Chemtura has denied any liability. According to Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, the parties have continued operating under the Agreement pending good faith negotiations to resolve the dispute. Upon engaging in talks, Chemtura and Vignette have finally agreed to enter into a Revised Schedule and Chemtura has agreed to assume the Agreement, as amended. The material terms of the Revised Schedule are: * Vignette will grant Chemtura and its affiliates certain programs and use authorizations for a site module and portal program, which Chemtura has been using during its Chapter 11 cases as the parties have negotiated the terms of the Revised Schedule. Upon Chemtura's payment of certain annual maintenance fees, Vignette will supply maintenance for the site module and portal program; * Chemtura will pay $125,577 in program and maintenance fees; * Upon execution of the Revised Schedule and as a means to settle their dispute concerning alleged prepetition amounts owing, Vignette has agreed to waive its right to assert a Cure Claim against Chemtura in connection with the assumption of the Agreement, as amended. Mr. Cieri notes that without the execution of the Revised Schedule or other resolution of the dispute, Vignette is unwilling to extend its current business relationship with and offer new services or products to Chemtura. For these reasons, the Debtors ask the Court to grant their request. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHINA MEDIAEXPRESS: NYSE Amex Rescinds Delisting Notice ------------------------------------------------------- China MediaExpress Holdings, Inc., disclosed that based on more recent stockholder information that CME has provided, NYSE Amex LLC has rescinded its previously announced delisting notice, issued to the Company on October 23, 2009. The Company has been informed by AMEX that no further appeals are required and it expects to receive a new approval regarding its continued listing from AMEX. Zheng Cheng, CME's Founder and CEO, noted, "We are glad to report to our stockholders the prompt resolution of questions raised by AMEX regarding our business combination with TM Entertainment. We expect that the promising future for our business in the significant PRC markets we serve will continue to provide opportunity for investors interested in benefiting from the significant growth expected in this sector." About CME CME, through contractual arrangements with Fujian Fenzhong, an entity majority owned by CME'S former majority shareholder, operates the largest television advertising network on inter-city express buses in China. While CME has no direct equity ownership in Fujian Fenzhong, through the contractual agreements CME receives the economic benefits of Fujian Fenzhong's operations. Fujian Fenzhong generates revenue by selling advertisements on its network of television displays installed on over 18,000 express buses originating in thirteen of China's most prosperous regions, including the five municipalities of Beijing, Shanghai, Guangzhou, Tianjin and Chongqing and eight economically prosperous provinces, namely Guangdong, Jiangsu, Fujian, Sichuan, Hebei, Anhui, Hubei and Shandong which generate nearly half of China's GDP. CIT GROUP: Chapter 11 Filing Cues S&P's Rating Downgrade to 'D' --------------------------------------------------------------- Standard & Poor's Rating Services said that it lowered its ratings on CIT Group Inc. to 'D', including the long-term counterparty credit rating, which was lowered to 'D' from 'SD'. At the same time, S&P removed the ratings from CreditWatch Negative, including the senior unsecured debt rating, which was placed on CreditWatch June 12, 2009. "The rating action follows the firm's Nov. 1 announcement that it had filed for Chapter 11 bankruptcy protection as part of its previously disclosed plan of reorganization," said Standard & Poor's credit analyst Rian M. Pressman, CFA. The bankruptcy filing will entail a default on substantially all of the firm's rated debt, which is primarily issued or guaranteed by the parent. None of CIT's operating subsidiaries, including CIT's Utah Bank (which S&P currently do not rate), will be included in the filings. The bankruptcy filing followed the conclusion of CIT's debt exchange offer on Oct. 29, 2009. Although the conditions for the debt exchange were not met, creditors accepted a prepackaged plan of bankruptcy in excess of the required thresholds for a successful vote. Under the plan, CIT expects to reduce total debt by approximately $10 billion. S&P expects to reassess S&P's rating on CIT following the company's emergence from bankruptcy when S&P can better assess the firm's restructuring plans, factoring into S&P's assessment the new liability structure, liquidity position, business strategy, and status of regulatory issues. CIT GROUP: Fitch Downgrades Issuer Default Ratings to 'D' --------------------------------------------------------- Fitch Ratings has downgraded the long-term Issuer Default Ratings of CIT Group Inc. to 'D' from 'RD' following the company's filing of a voluntary petition seeking relief under Chapter 11 of the U.S. Bankruptcy Code. The ratings of CIT Bank and the company's other operating subsidiaries remain unchanged as they were not included in yesterday's bankruptcy filing. Fitch has downgraded these ratings: CIT Group Inc.: -- Long-term IDR to 'D' from 'RD; -- Short-term IDR to 'D' from 'RD'. Fitch expects to assign Recovery Ratings on a debt level basis once additional information is reviewed. While recovery at the subordinated debt and preferred stock levels are expected to be $0 or 'RR6', recovery for senior bondholders could be revised accordingly. These ratings remain unchanged: CIT Group Inc. -- Senior debt of 'C/RR4'; -- Subordinated of 'C/RR6'; -- Junior subordinated debt of 'C/RR6'; -- Senior subordinated debt of 'C/RR6'; -- Preferred stock of 'C/RR6' -- Short-term debt of 'C'; -- Individual rating of 'F' '; -- Support rating of '5'; -- Support floor of 'NF'. CIT Bank -- Long-term IDR 'C'; -- Long-term deposits 'CCC/RR2'; -- Short-term IDR'C'; -- Short-term deposits 'C'; -- Individual rating 'E'; -- Support rating '5'; -- Support floor 'NF'. CIT Funding Group of Canada, Inc. -- Long-term IDR 'C'; -- Senior debt 'C/RR4'; -- Short-term IDR 'C'. CIT Group (Australia) Inc. -- Long-term IDR 'C'; -- Senior 'C/RR4'; CIT GROUP: Receivables Exchange Ready Fund for Liquidity Aid ------------------------------------------------------------ After months of efforts to stay afloat, CIT Group's filing for bankruptcy sent shockwaves through the small and midsize business community, particularly retailers and manufacturers, The Receivables Exchange said in a statement. According to the firm, many CIT customers have been contractually bound to CIT even as the nation's single largest lender to small and midsize companies struggled on life support. Now, those companies have a reliable alternative as The Receivables Exchange announced today that it stands ready with more than $20 billion in liquidity to help CIT customers to fill their liquidity gap. The Exchange allows companies of all sizes and from all industries to post their outstanding invoices on its real-time auction trading platform where a global network of accredited institutional investors competitively bid to purchase the receivables. "The Receivables Exchange's market-based solution is perfectly positioned to help CIT customers gain quick and easy access to a reliable, competitive source of capital so they can continue to fund their day-to-day operations," said Bill Andersen, founder and portfolio manager of Andersen Capital Management. "As a receivables Buyer on the Exchange, we have seen firsthand the value of the Exchange's centralized marketplace. The Exchange helps Sellers turn their receivables into cash quickly and easily on their terms while providing Buyers with a reliable, short-term investment opportunity." Many of the nearly one million businesses that rely on CIT for working capital, including manufacturing and retail companies, had been legally bound to continue working with CIT as a single funding source, even though they were left vulnerable due to the lender's ongoing struggles. However, with the recent bankruptcy filing, those companies are now eligible to utilize alternative funding sources and many are actively seeking additional sources in order to stay afloat. "The bankruptcy filing of CIT Group represents a historic and regrettable turn of events for the small business community and for our economy," said Justin Brownhill, co-founder and chief executive officer of The Receivables Exchange. "Thousands of business owners are seeing their single source of liquidity evaporate before their eyes. Sunday's filing underscores the fact that companies can no longer rely on one primary source of liquidity. It is imperative that they have broad access to competitively-priced capital. The Receivables Exchange stands ready to provide a diversified source of liquidity to help CIT customers maintain the strength of their businesses." The Receivables Exchange, which has seen an increased use of receivables financing by businesses of all sizes and across more than 40 industries, reported quarter-over-quarter growth of nearly 200% in the third quarter 2009. Businesses are signing on to tap into the $20 billion of liquidity available on the Exchange's transparent, centralized marketplace for receivables financing. Most businesses wait 60+ days to receive payment on their outstanding invoices - many even longer as their larger customers are slowing down payments to meet their own cash flow needs. Members of The Receivables Exchange no longer have to wait for prolonged periods for their outstanding invoices to be paid. On the Exchange, companies can post their receivables one day and receive their funds the next business day. About The Receivables Exchange The Receivables Exchange -- http://www.receivablesXchange.com-- is the world's first online marketplace for real-time trading of accounts receivable. Changing the landscape of small business financing, The Receivables Exchange provides a new dimension in working capital management. The Exchange connects a global network of accredited institutional investors (Buyers) to the nation's millions of small and mid-sized businesses (Sellers) in search of capital to grow. Buyers get direct access to an $18 trillion new investable asset; Sellers gain access to a new competitive working capital management solution by having their receivables bid on in real-time by multiple Buyers. 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. CIT Group Inc. and affiliate CIT Group Funding Company of Delaware LLC announced a Chapter 11 filing on November 1, 2009 (Bankr. D. Del. Case No. 09-16565). Evercore Partners, Morgan Stanley and FTI Consulting are the Company's financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel in connection with the restructuring plan. Sullivan & Cromwell is legal advisor to CIT's Board of Directors. CIT Group on November 1 announced that, with the overwhelming support of its debtholders, the Board of Directors voted to proceed with the prepackaged plan of reorganization for CIT Group Inc. and a subsidiary that will restructure the Company's debt and streamline its capital structure. None of CIT's operating subsidiaries, including CIT Bank, a Utah state bank, were ncluded in the filings. As of June 30, 2009, CIT Group had total assets of $71,019,200,000 against total debts of $64,901,200,000. Bankruptcy Creditors' Service, Inc., publishes CIT Group Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of CIT Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) CIT GROUP: To Present Prepack Plan for Confirmation on Dec. 8 ------------------------------------------------------------- CIT Group Inc. announced that the U.S. Bankruptcy Court for the Southern District of New York has scheduled a hearing to consider the confirmation of CIT's prepackaged plan of reorganization for Tuesday, December 8, 2009. Under the Plan, holders of claims in Class 6 JPM L/C Facility Claims, Class 7 Canadian Senior Unsecured Note Claims, Class 8 Long-Dated Senior Unsecured Note Claims, Class 9 Senior Unsecured Note Claims, Class 10 Senior Unsecured Term Loan Claims, Class 11 Senior Unsecured Credit Agreement Claims, Class 12 Senior Subordinated Note Claims and Class 13 Junior Subordinated Note Claims are impaired under the Plan and had their votes solicited prior to the Petition Date. All classes voted to accept the prepackaged plan and all were substantially in excess of the required thresholds for a successful vote. Approximately 90% of the number of debtholders voting, both large and small, cast affirmative votes for the prepackaged plan. Holders of Claims in Class 1 Other Priority Claims, Class 2 Other Secured Claims, Class 3 Other Unsecured Debt Claims and Guarantee Claims, Class 4 Intercompany Claims and Class 5 General Unsecured Claims and Interests in Class 17 Old Delaware Funding Interests are unimpaired under the Plan. Those holders of claims and interests are conclusively presumed to have accepted the Plan and, therefore, did not have their vote solicited prior to the Petition Date. Holders of claims in Class 14 Subordinated 510(b) Claims and Interests in Class 15 Old Preferred Interests, Class 16 Old Common Interests, and Class 18 Other Equity Interests are impaired under the Plan. Those holders of claims and interests are not entitled to a distribution under the Plan, other than Contingent Value Rights received by holders of Old Preferred Interests, are deemed to have rejected the Plan and did not have their votes solicited prior to the Petition Date. In connection with the Plan, the Debtors prepared the Disclosure Statement describing, among other things, the proposed reorganization and its effects on holders of claims against and interests in the Debtors. Following the launch of the solicitation of votes on the Plan, the Debtors, through their voting agent, Epiq Financial Balloting Group, LLC, caused copies of the Disclosure Statement, the Plan and the appropriate Ballot to be transmitted to the holders of notes and other debt impaired under the Plan. Solicitation Packages were also sent to the agents for the debt included in Class 10 Senior Unsecured Term Loan Claims and Class 11 Senior Unsecured Credit Agreement Claims. Additionally, Solicitation Packages were sent directly to the lenders holding claims in Class 6 JPM L/C Facility Claims. Solicitation Packages for Class 6, Class 10, and Class 11 contained an annex to the Disclosure Statement and a Ballot appropriate for their class. In accordance with applicable non-bankruptcy law, the Debtors established 11:59 p.m. (prevailing Eastern Time) on October 29, 2009, as the deadline for a majority of the holders of claims entitled to vote to accept or reject the Plan. Holders of claims in Class 7 and Class 8 have Voting Deadlines of November 5, 2009 at 11:59 p.m. (prevailing Eastern Time) and November 13, 2009 at 11:59 p.m. (prevailing Eastern Time), respectively. Preliminary voting results indicate that all Impaired Classes of Claims entitled to vote on the Plan voted to accept the Plan. The Debtors will file a declaration of FBG certifying the results and methodology for tabulation of ballots accepting or rejecting the Plan with respect to those holders of claims with the October 29, 2009 Voting Deadline. FBG continues to audit the results of the solicitation. Proposed Combined Hearing Date Section 105(d)(2)(B)(vi) of the Bankruptcy Code authorizes the bankruptcy court to combine a hearing on a disclosure statement with a hearing on confirmation of a plan of reorganization. The Debtors assert that a combined hearing in their Chapter 11 cases would promote judicial economy and their expedient reorganization. The adverse effects of the Chapter 11 filings on their businesses and going concern value will be minimized, and the benefit to creditors maximized through prompt distributions and the reduction of administrative expenses of the estate -- which are the hallmarks of a prepackaged plan of reorganization, Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, argues. By their motion, the Debtors asked Judge Allan Gropper of the U.S. Bankruptcy Court for the Southern District of New York to schedule a combined hearing on the first available date after December 1, 2009, to consider (i) the adequacy of the Debtors' Amended Offering Memorandum, Disclosure Statement and Solicitation of Acceptances of the Prepackaged Plan; and (ii) confirmation of the Plan. In order to avoid any delay in consummating the Plan or possible loss of confidence in the Debtors' ability to reorganize quickly, and to preserve the bargained-for recoveries in these cases, it is imperative that the Debtors' time in Chapter 11 be minimized, Mr. Galardi told the Court. Therefore, the Debtors aver that it is in the best interests of their estates, creditors and parties-in- interest to hold the Combined Hearing as soon after December 1, 2009 as is practicable. Disc. Statement & Plan Objections Procedures The Debtors asked the Court to set November 30, 2009, as the last date to file objections to the adequacy of the Disclosure Statement or confirmation of the Plan. The Debtors asked the Court to direct that objections to approval of the Disclosure Statement or confirmation of the Plan, if any, must: (a) be in writing; (b) comply with the Bankruptcy Rules, the Local Bankruptcy Rules and other case management rules and orders of the Court; (c) state the name and address of the objecting party, and the nature and amount of any claim or interest asserted by the objecting party against the estate or property of the Debtors; (d) state with particularity the legal and factual basis for the objection; (e) be filed with the Clerk of the United States Bankruptcy Court for the Southern District of New York, together with proof of service; and (f) be served by personal service or by overnight delivery, so as to be actually received no later than 4:00 p.m. (prevailing Eastern time) on the Objection Deadline by all parties on the Master Service List as provided by any case management order entered in these Chapter 11 cases. The Debtors also sought permission to send a combined notice of the commencement of the Chapter 11 cases and of the Combined Hearing solely to holders of claims identified by the Debtors and a waiver of the requirement to provide equity interest holders with the Combined Notice. The Debtors proposed to publish a notice substantially similar to the Combined Notice in the Wall Street Journal and any other publications the Debtors deem necessary in their sole discretion. Record Date Because solicitation in these Chapter 11 cases occurred prior to the Petition Date, in conjunction with solicitation of votes on certain out of court exchange offers, the Debtors ask the Court to establish a record date of October 29, 2009, corresponding to the Voting Deadline, for the purpose of determining which Holders of Class 6, 9, 10, 11, 12 and 13 Claims were entitled to vote on the Plan. The Record Date for Classes 7 and 8 is proposed to be the Voting Deadline for holders of Claims in those classes to accept or reject the Plan. The Voting Deadline is the appropriate Record Date because the voting procedures required that the Old Notes be "tendered" in conjunction with a vote on the Plan. As a result, in order to vote on the Plan, a party was required to hold those Old Notes on the applicable Voting Deadline. In addition, the Debtors ask the Court to establish November 4, 2009 as the date for determining those holders of Claims entitled to receive the Combined Notice. Waiver of Sec. 341 Meeting Mr. Galardi asserted that cause exists to waive the meeting of creditors or equity security holders as contemplated by Section 341(e). He says the Debtors intend to proceed expeditiously to confirm the Plan and emerge from chapter 11 as quickly as possible. Accordingly, pursuant to Section 341(e), the Debtors asked the Court to enter an order directing the United States Trustee not to convene a meeting of creditors or equity security holders if the Plan is confirmed within 60 days from the Petition Date. Approval of Prepetition Solicitation Procedures The Debtors distributed the Disclosure Statement and solicited acceptances of the Plan prior to the commencement of these Chapter 11 cases. The Debtors asked the Court to determine that the Solicitation Procedures are in compliance with applicable non-bankruptcy law governing the adequacy of disclosure in connection with the solicitation and in accordance with section 1126(b) of the Bankruptcy Code. Mr. Galardi asserts that the solicitation conducted by the Debtors was in accordance with applicable non-bankruptcy law. The Debtors, he says, are relying on certain exemptions to conduct their solicitation. He points out that the Debtors, pursuant to Sections 3(a)(9) and Section 18(b)(4)(C) of the Securities Act of 1933, are exempted to conduct their solicitation. The Debtors continue to solicit votes from certain holders of claims. The Debtors intend to count those votes when evaluating whether the Plan satisfies the requirements of the Bankruptcy Code. The Debtors seek authority to include those votes in the final tabulation of votes on the Plan. A full-text copy of the amended offering memorandum, disclosure statement, and solicitation of acceptances of a prepackaged plan of reorganization, dated October 23, 2009, is available for free at http://ResearchArchives.com/t/s?477c CIT Group Inc. and CIT Group Funding Company of Delaware LLC meanwhile have received the relief they sought from the Court with respect to their "first day" motions, allowing the Company to continue to operate in the ordinary course. 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. CIT Group Inc. and affiliate CIT Group Funding Company of Delaware LLC announced a Chapter 11 filing on November 1, 2009 (Bankr. D. Del. Case No. 09-16565). Evercore Partners, Morgan Stanley and FTI Consulting are the Company's financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel in connection with the restructuring plan. Sullivan & Cromwell is legal advisor to CIT's Board of Directors. CIT Group on November 1 announced that, with the overwhelming support of its debtholders, the Board of Directors voted to proceed with the prepackaged plan of reorganization for CIT Group Inc. and a subsidiary that will restructure the Company's debt and streamline its capital structure. None of CIT's operating subsidiaries, including CIT Bank, a Utah state bank, were ncluded in the filings. As of June 30, 2009, CIT Group had total assets of $71,019,200,000 against total debts of $64,901,200,000. Bankruptcy Creditors' Service, Inc., publishes CIT Group Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of CIT Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) CIT GROUP: Australia Bondholders Agree to Waive Rights ------------------------------------------------------ Sarah McDonald at Bloomberg reports that bondholders of CIT Group Inc.'s Australian unit agreed to allow the lender to keep operating as normal after the U.S. parent filed for bankruptcy. CIT Australia negotiated "certain concessions" for investors in its medium-term notes in return for them "forbearing from exercising rights associated with the bankruptcy," it said in a letter sent to clients and signed by Managing Director Keith Rodwell. The letter didn't give details on the concessions and Rodwell declined to comment when contacted at his office. CIT Group (Australia) Ltd. sold A$300 million ($271 million) of fixed- and floating-rate notes in 2006, according to data compiled by Bloomberg. The bonds were guaranteed by CIT Group, National Australia Bank Ltd. analysts said in a research note. Bloomberg relates that CIT Group's bankruptcy in the U.S. is likely to trigger an event of default, which gives bondholders the right to demand early repayment. The bonds mature in March 2011, Bloomberg data show. "CIT Australia is well capitalized, profitable and cash-flow positive," and the parent group's bankruptcy filing will have "limited effect" on its daily business, the letter said. CIT Australia provides leasing and financing to government agencies, education providers, companies and individuals, according to its Web site. 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. CIT Group Inc. and affiliate CIT Group Funding Company of Delaware LLC announced a Chapter 11 filing on November 1, 2009 (Bankr. D. Del. Case No. 09-16565). Evercore Partners, Morgan Stanley and FTI Consulting are the Company's financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel in connection with the restructuring plan. Sullivan & Cromwell is legal advisor to CIT's Board of Directors. CIT Group on November 1 announced that, with the overwhelming support of its debtholders, the Board of Directors voted to proceed with the prepackaged plan of reorganization for CIT Group Inc. and a subsidiary that will restructure the Company's debt and streamline its capital structure. None of CIT's operating subsidiaries, including CIT Bank, a Utah state bank, were ncluded in the filings. As of June 30, 2009, CIT Group had total assets of $71,019,200,000 against total debts of $64,901,200,000. Bankruptcy Creditors' Service, Inc., publishes CIT Group Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of CIT Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) CLIFFORD ROBINSON: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------------- Joint Debtors: Clifford Ralph Robinson Heather Lynn Robinson fka Lufkins 702 Sandia Place Franklin Lakes, NJ 07417 Case No.: 09-39160 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court District of Oregon Debtors' Counsel: William M. Parker, Esq. 6950 SW Hampton #330 Tigard, OR 97223 Tel: (503) 858-8980 Email: bill-parker@msn.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 According to the schedules, the Company has assets of $12,159,725, and scheduled debts of $11,131,577. The petition was signed by the Joint Debtors. Debtors' List of 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of America RV Loan $274,261 PO Box 45224 Jacksonville, FL 32232-5224 Bank of America 2007 Monaco Dynasty $274,261 PO Box 45224 Dynasty ($270,000 Jacksonville, FL 32232-5224 Location: 702 secured) Sandia Place, Franklin Lakes, NJ 07417 Chase Auto Finance 2008 Infiniti QX56 $57,283 Location: 702 Sandia ($45,000 Place, Franklin Lakes secured) NJ 07417 Chase Auto Finance Auto Loan $57,283 Meadowbrook Properties, LLC Contribution Call $116,665 c/o Hornecker, Cowling, of LLC Hassen & Heysell Neiman Marcus Credit card purchases $25,637 Sound Community Bank Construction Loan to $1,315,858 PO Box 34155 Spanaway Property, LLC, Seattle, WA 98124-1155 a Washington LLC, Personally Guarantied by Cliff Robinson Umpquah Bank Construction Loan to $6,900,000 Jackson County Commercial Meadowbrook Properties, Center LLC, Personally PO Box 1580 Guarantied by Cliff Roseburg, OR 97470 Robinson and others Visa-Wells Fargo Card Services Credit card purchases $50,000 Visa Chase Bank Credit card purchases $25,000 COLT DEFENSE: Moody's Affirms Corporate Family Rating at 'B1' ------------------------------------------------------------- Moody's Investors Service has affirmed the B1 corporate family and probability of default ratings of Colt Defense LLC and assigned a B2 rating to Colt's planned $225 million 2017 senior unsecured notes. The actions follow Colt's plan to issue the notes under rule 144A with registration rights. The note rating, subject to review of final documentation, assumes that proceeds will be used to repay all existing credit facility and subordinated debt and, to a lesser extent, increase balance sheet cash for general corporate purposes. The assigned rating also assumes a new four- year $50 million senior secured revolving credit facility (unrated by Moody's) that will be undrawn at close. The rating outlook is stable. The B1 corporate family rating reflects expectation of sustained production volumes and a moderate leverage profile in 2010 and a growing pipeline of foreign sales prospects. The presence of Colt's $35 million cash balance as of June 2009 (and additional cash that will follow the transaction), the expected $50 million undrawn revolver, and likely continued internal cash flow generation reflects a good liquidity profile, and also supports the B1 CFR. Although significant customer / product concentration constrains rating upside, the significant revenue growth since 2006 -- stemming from substantial M4 carbine production rates for the U.S. military -- underscores Colt's long-standing position as a key U.S. military small arms manufacturer. A substantial risk facing the company is the potential of a competing assault rifle model to replace the M4 as the standard issue U.S. military carbine, which could, in turn, compromise the M4's foreign market potential. The stable outlook reflects the large worldwide installed base of the M4 predecessor rifles (the M16) which may help ensure the M4's eventual penetration into foreign militaries and law enforcement agencies. Though the U.S. Army has not yet sought an alternate M4 producer, a competing manufacturer could supply M4s within 12-18 months, now that Colt's exclusive M4 supply position to the U.S. Army has expired. As Colt progresses toward the September 2011 M4 Army contract expiration date, U.S. Army M4 orders will probably decline. Lower U.S. military orders may not be sufficiently offset by Colt's revenues from the prospective foreign sales pipeline. Because Colt possesses the exclusive right to U.S. Government Foreign Military Sales of M4s through 2047, outlook stability will heavily depend on the M4's market penetration rate. The B2 rating on the planned $225 million unsecured note issue reflects the B1 probability of default rating and the effectively junior position of the notes relative to the planned $50 million senior secured revolving credit facility. The notes, to be co- issued by Colt Defense LLC and Colt Finance Corp. (a shell subsidiary of Colt Defense LLC), would be guaranteed by the same guarantors of Colt's planned $50 million revolver. The ratings: -- Corporate family of B1 affirmed -- Probability of default of B1 affirmed -- $20 million senior secured revolving credit line due July 2012 of Ba3 LGD 3, 36% affirmed, will be withdrawn following execution of the unsecured notes transaction -- $135 million senior secured term loan due July 2014 of Ba3 LGD 3, 36% affirmed, will be withdrawn following execution of the unsecured notes transaction -- $225 million senior unsecured notes due 2017 expected to be assigned B2 LGD 4, 59% Moody's last rating action on Colt occurred November 3, 2008, when the corporate family rating was raised to B1 from B2. Colt Defense LLC, headquartered in West Hartford, Connecticut, manufactures small arms including the M4 carbine and M16 rifle for the U.S. military, U.S. law enforcement agencies, and foreign allied militaries. COMSTOCK HOMEBUILDING: Enters Into Loan Modification with Keybank ----------------------------------------------------------------- Comstock Homebuilding Companies, Inc., and certain of its units on November 2 entered into a loan modification with Keybank National Association, completing its efforts to modify all of the secured loans that the Company has guaranteed. The loan modification amends an existing loan with a $22.8 million outstanding principal balance secured by the Company's Eclipse condominium project and the Company's planned Station View townhouse project in a manner that will immediately provide Comstock with improved operating cashflow from sales at the two properties. The key terms of the modification increase the cash flow available to Comstock through reduced principal payments required by Keybank as condominium units are settled at the Eclipse project and through the sale of the Station View project land. The modification reduces the curtailment requirement from 100% of net proceeds to 85% of the net sales price of Eclipse condominium units, providing Comstock with cash equal to 15% of the net sales price as each condominium unit is delivered. The loan modification will be applied retroactively to all settlements occurring on or after July 1, 2009, resulting in an immediate cash infusion to Comstock. The modification allows for continued receipt by Comstock of 15% of the net sales price of Eclipse condominium units provided Comstock satisfies certain conditions subsequent; including meeting a minimum sales requirement of nine (9) units per quarter on a cumulative basis, and satisfying certain other conditions with respect to certain outstanding unsecured indebtedness of the Company. It will not be deemed a default under the loan should Comstock fail to meet the Modification Covenants but may result in a reversion to the unit release provisions as previously set forth in the existing loan documents. Recent sales at the Eclipse project have been sufficient to position the Company to meet the Modification Covenants with respect to unit sales through Q4 2009. The Company also has entered into a contingent contract covering the sale of the Station View land and expects that, provided the conditions of sale are met, the sale will be consummated in the first quarter of 2010. The Company continues to work diligently on satisfying the Modification Covenants related to the Company's unsecured indebtedness. The Modification also reduces the curtailment requirement applicable to the Station View project; providing for the payment of certain outstanding unsecured debts of the Company from the sale proceeds generated through the sale of the Station View land and thereafter reducing the curtailment requirement from 100% to 85% of the net sales price generated through the pending sale of the Station View project land, subject to a minimum release price to be paid to the Lender. In exchange for the modified terms, Comstock agreed to adjust the interest rate to the higher of LIBOR plus 5.0% or the prime rate plus 2.0% subject to a LIBOR floor of 2.0%. The interest reserve provision of the loan was maintained providing Comstock a means for payment of debt service on the loan as modified without requiring operating cashflow to cover interest expenses. "The agreement reached with Keybank provides us with an immediate cash infusion and gets us very close to completing our plan for stabilizing Comstock," said Christopher Clemente, Comstock's Chairman and Chief Executive Officer. "Sales at the Eclipse project have improved this year, giving us reason to believe that the terms of this loan amendment will facilitate ongoing enhanced cashflow from operations. This will help tremendously in our effort to position Comstock to rebuild shareholder value. We expect to report results for the third quarter on or before November 16, 2009, at which time we believe we will meet the shareholder equity listing requirement applicable to the Nasdaq Capital Markets. These recent accomplishments and continuing signs that the market downturn is easing in the Washington, D.C. metropolitan area gives us reason to once again be optimistic about our future." About Comstock Homebuilding Established in 1985, Comstock Homebuilding Companies, Inc. (Nasdaq: CHCI) is a publicly traded, diversified real estate development firm with a focus on a variety of for-sale residential products. The company currently actively markets its products under the Comstock Homes brand in the Washington, D.C. and Raleigh, N.C. metropolitan areas. Comstock Homebuilding Companies, Inc. trades on NASDAQ under the symbol CHCI. For more information on the Company or it projects please visit http://www.comstockhomebuilding.com/ Comstock Homebuilding had total assets of $105,329,000 against total debts of $104,904,000 as of June 30, 2009. COYOTES HOCKEY: Court Approves $140 Million Sale Deal to NHL ------------------------------------------------------------ Judge Redfield T. Baum approved the sale of the Phoenix Coyotes to the National Hockey League for $140 million. Judge Baum signed the sale order after attorneys made minor modifications to the deal. None of the changes significantly altered the NHL's agreement to pay about $140 million to buy the team from owner Jerry Moyes, Bloomberg said. The sale ends nearly six months of an often-bitter court battle pitting the NHL against Moyes and Canadian billionaire Jim Balsillie. Jerry Moyes, the owner of the Phoenix Coyotes of the National Hockey League, reached an agreement to sell the team to the NHL, according to the Troubled Company Reporter on Oct. 29, 2009. The parties reached a deal at a status hearing on the case on October 26. According to The Canadian Press, Mr. Moyes' lawyer said the outgoing Coyotes owner struck the deal because the expenses of running the team in bankruptcy were being paid from the league's $140-million offer and he was left with few options after his attempt to sell the team to Canadian Jim Balsillie was rejected by the Bankruptcy Court. Former coach Wayne Gretzky, who has a US$22.5 million claim in the case, did not agree to the settlement. Mr. Gretzky, however did not file an objection to the sale. Under the agreement, secured creditor SOF Investment will be paid for its $80 million that and the NHL would get the $37 million it is owed for funding the team since last fall. Between $9 million and $11 million would be available to be divided between Messrs. Moyes and Gretzky. About Coyotes Hockey Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. CROWN CASTLE: Fitch Assigns Issuer Default Ratings at 'BB-' ----------------------------------------------------------- Fitch Ratings has assigned Issuer Default Ratings and long-term debt ratings to Crown Castle International Corp. and its subsidiaries: CCIC -- IDR 'BB-'; -- Senior Unsecured Debt 'B+'. Crown Castle Operating Company -- IDR 'BB-'; -- Senior Secured Credit Facility 'BB+'. CC Holdings GS V LLC (GS V) -- IDR 'BB-'; -- Senior Secured Notes 'BBB-'. The Rating Outlook for CCIC and its subsidiaries is Positive. Approximately $3.4 billion of debt is affected by Fitch's action. CCIC's ratings are supported by the strong recurring cash flows generated from its leasing operations, the robust EBITDA margin that should continue to increase and the considerable scale of its tower portfolio, thus leading to a much lower business risk profile. The strong industry fundamentals and expected growth in demand for wireless services allow for sustainable growth in operating performance and discretionary cash flow. Accordingly, Fitch expects the tower industry, including CCIC, to greatly benefit from new amendments and lease up opportunities as operators enhance network capabilities to support both its 3G and 4G networks. Operators have aggressively subsidized smartphones, netbooks and laptop cards to drive the rapid growth in broadband data applications to stimulate the need for additional enhancements to their networks. CCIC has substantially improved its refinancing risk and liquidity position since the beginning of 2009 due to almost $2.9 billion of new debt issuance to address the nearer-term refinancings associated with the Global Signal and Towers LLC securitizations. In addition, CCIC has limited discretionary spending during 2009 to improve its liquidity. Consequently current maturities through 2011 are relatively nominal and consist of annual term loan amortization payments of 1% and amortization requirements associated with the Crown Castle senior secured notes, series 2009-1. However, CCIC does have interest rate swap agreements with settlement dates ranging from December 2009 to November 2011. The value of this obligation, which is based on the five-year LIBOR swap rate, was $282 million at the end of the second quarter of 2009. In addition, CCIC has a combined $3.3 billion of secured 30-year tower revenue notes with anticipated refinance date provisions that in the event the issues are not repaid in full by the ARD, all excess cash flow generated by the Towers LLC securitized entity will be trapped. The first ARD is in June 2010 for $1.7 billion of secured notes. The second ARD date is in November 2011 for $1.6 billion of secured notes. While CCIC has indicated its intentions to refinance the debt before the ARD, if an ARD was triggered, Fitch believes the company could generate sufficient cash flow from its other entities that CCIC could adequately service its expense obligations and invest in necessary capital requirements. CCIC has a secured credit facility with $635 million remaining on a term loan that matures in 2014 and a $188 million revolving facility due January 2010 that was undrawn as of the second quarter 2009. CCIC has considerable cushion under the credit agreement financial maintenance covenants, which includes consolidated CCOC leverage, consolidated CCIC interest coverage and debt service coverage ratios for the securitization entities. Outside of a cash trap situation, which Fitch views as unlikely at this time, CCIC has significant flexibility in moving cash between subsidiaries. CCIC's credit agreement also effectively limits new incremental secured debt, absent a refinancing, at its operating entities. Cash was $177 million as of the second quarter of 2009. Free cash flow for the first six months of 2009 was approximately $200. CCIC has shown significant flexibility in prioritizing the use of its discretionary cash flow depending on its strategic initiatives. While management has indicated that further material debt reduction is not likely, Fitch expects CCIC will improve its credit profile and naturally delever through increased cash generation. CCIC has indicated a commitment for a targeted leverage ratio within the 5 times (x)-7x range and interest coverage of at least two times. Fitch believes CCIC will likely operate toward the lower end of the targeted range based on expectations for growth in cash flow. Consequently, the Positive Outlook reflects Fitch's leverage expectations, that on a run rate basis, leverage will improve to approximately 5.5x by the end 2010. Since the company has made significant progress on refinancing its capital structure and preserving its liquidity during 2009, Fitch believes CCIC over time will begin to increase the level of land purchases and share repurchases funded through discretionary cash flow. Purchases of land and stock for the first six months of 2009 were $6 million compared with $145 million a year ago. The 'BBB-' rating for the secured debt at GS V reflects the superior recovery and over-collateralization of the debt at the operating company level. The ratings for the secured credit facility at CCOC reflect the lower collateral support from its pledged assets as well as expected benefits from the over- collateralization of the secured assets at Towers LLC, GS V and Global Signal Holdings III LLC. The ratings of the unsecured debt at the holding company level reflect the structural subordination and limited recovery prospects within the capital structure. As the capital structure evolves through refinancing activities at Towers LLC, Fitch believes over time this could lead to improved recovery prospects and ratings upgrade for the unsecured debt at CCIC. The distinction in rating differences between Fitch's existing structured and new corporate debt ratings reflects the structural enhancements with the CMBS issuances, including the protection of interest payments during a bankruptcy process. CRUSADER ENERGY: Stockholders Seek Probe on Diminished Value ------------------------------------------------------------ Michael Bathon at Bloomberg News reports that stockholders of Crusader Energy Group Inc. have asked the Bankruptcy Court to appoint examiner to probe how the Company allegedly lost $1.5 billion in value. According to the report, Crusader Energy, the shareholders noted, had had oil and natural- gas reserves worth $1.9 billion as of Sept. 30, 2008, but the reserves have since been depleted. Crusader has "offered no explanation for how more than $1.5 billion in value disappeared in a matter of months," lawyers for the stockholders said. "An examiner should investigate and explain this perplexing decline in value." SandRidge Sale and Chapter 11 Plan The Bankruptcy Court has authorized Crusader Energy Group to sell substantially all assets at an auction where SandRidge Energy, Inc., would be the lead bidder. All bids for the Debtors' assets must be filed no later than 4:00 p.m., on Nov. 6, 2009, to Vinson & Elkins LLP at Trammell Crow Center, 2001 Ross Avenue, Suite 3700 in Dallas, Texas. In addition, bid must provide for an aggregate consideration valued as determined in the sole and absolute discretion of the Debtors, of at least $500,000 greater than the sum of (i) $7 million; (ii) the cash consideration under the stock purchase agreement; and (iii) $186 million. The Debtors will conduct an auction on Nov. 13, 2009, at 9:30 a.m. According to the Troubled Company Reporter on Sept. 30, 2009, SandRidge Energy has agreed purchase all of the shares of common stock of reorganized Debtors, pursuant to the stock purchase agreement, for: -- $55 million in cash, subject to certain adjustments, including reduction by approximately $90,000 per day from and after Sept. 1, 2009, up to but excluding the Closing Date; -- 13,015,797 shares of SandRidge common stock, par value $0.001 per share, subject to certain adjustments; and -- warrants to purchase an aggregate of 2.0 million shares of SandRidge Common Stock at an exercise price of $15.00 per share during an exercise period ending five years after the closing date of the transactions contemplated under the Purchase Agreement. The Cash Consideration will be paid to the liquidating trust created under the plan of reorganization filed by the Crusader Entities in the Bankruptcy Court on Sept. 22, 2009. Recipients of the Stock Consideration and warrants will not be permitted to dispose of such Stock Consideration or warrants for 180 days after the Closing Date. Deutsche Bank Securities advised SandRidge on the transaction. Jefferies & Company, Inc., advised Crusader. About Crusader Energy Based in Oklahoma City, Oklahoma, Crusader Energy Group Inc. (Pink Sheets: CKGRQ) -- http://www.ir.crusaderenergy.com/-- explores, develops and acquires oil and gas properties, primarily in the Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth Basin in the United States. It has working interests in more than 1,000 wells. Crusader Energy and its affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31797). The Debtors' financial condition as of September 30, 2008, showed total assets of $749,978,331 and total debts of $325,839,980. Beth Lloyd, Esq., Richard H. London, Esq., and William Louis Wallander, Esq., at Vinson & Elkins, L.L.P., represent the Debtors as counsel. Jefferies & Company, Inc. acts as financial adviser to Crusader in its Chapter 11 reorganization. BMC Group Inc. is claims and notice agent. Holland N. Oneil, Esq., Michael S. Haynes, Esq., and Richard McCoy Roberson, Esq., at Gardere, Wynne & Sewell, represent the official committee of unsecured creditors as counsel. CYCLACEL PHARMACEUTICALS: Receives Deficiency Notice From Nasdaq ---------------------------------------------------------------- Cyclacel Pharmaceuticals, Inc. on October 30 disclosed that it received a Nasdaq Staff Deficiency Letter on October 27, 2009 indicating that the Company fails to comply with the minimum bid price requirement for continued listing set forth in Marketplace Rule 5450(a)(1). The letter gives Cyclacel notice that the Company's bid price of its common stock has closed under $1.00 for the last 30 business days. The Nasdaq notice has no effect on the listing of the Company's common stock at this time. Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has an initial period of 180 calendar days, or until April 26, 2010, to regain compliance. The letter states the Nasdaq staff will provide written notification that the Company has achieved compliance with Rule 5450(a)(1) if at any time before April 26, 2010, the bid price of the Company's common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days. If the Company cannot demonstrate compliance with Rule 5450(a)(1) by April 26, 2010, it may transfer its listing to The Nasdaq Capital Market if it meets the initial listing criteria set forth in Nasdaq Marketplace Rule 5505, except for the bid price requirement. In that case, it may have an additional 180 calendar day compliance period in which to comply with the minimum bid price requirement. The Company currently meets these initial listing criteria. Otherwise, the Nasdaq staff may begin the process to have the Company's securities delisted. At that time, the Company may appeal the Nasdaq staff's determination to delist its securities to a Listing Qualifications Panel. About Cyclacel Pharmaceuticals Cyclacel Pharmaceuticals Inc. -- http://www.cyclacel.com/-- is a diversified biopharmaceutical company dedicated to the discovery, development and commercialization of novel, mechanism-targeted drugs to treat human cancers and other serious disorders. Cyclacel's strategy is to build a diversified biopharmaceutical business focused in hematology and oncology based on a portfolio of commercial products and a development pipeline of novel drug candidates. DANIEL ABELMAN: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Daniel Abelman 24 Oakland Street Lexington, MA 02420 Bankruptcy Case No.: 09-20598 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Nina M. Parker, Esq. Parker & Associates 10 Converse Place Winchester, MA 01890 Tel: (781) 729-0005 Fax: (781)729-0187 Email: nparker@ninaparker.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Mr. Abelman. DAVID HERNDON: Voluntary Chapter 11 Case Summary ------------------------------------------------ Joint Debtors: David Herndon Michelle Burnett Herndon 901 Randolph Avenue Milton, MA 02186 Bankruptcy Case No.: 09-20618 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Joan N. Feeney Debtor's Counsel: Paul D. McCarthy, Esq. McCarthy and Malloy 80 Sandra Lane North Andover, MA 01845 Tel: (978) 975-4190 Fax: (866) 843-6431 Email: lawoffice@mccarthyandmolloy.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtors did not file a list of their 20 largest unsecured creditors when they filed their petition. The petition was signed by the Joint Debtors. DELTA AIR: Flight 188 Pilots Licenses Revoked by FAA ---------------------------------------------------- The decision of the Federal Aviation Administration on October 28, 2009, to revoke the licenses of Captain Timothy Cheney and First Officer Richard Cole -- the pilots aboard Northwest Airlines Corp. Flight 188 -- led to the Air Line Pilots Association to begin complaining and planning a response, Andy Pasztor of The Wall Street Journal reported. To recall, two pilots of Northwest Flight 188 were investigated on whether they "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. The pilots reasoned out that "they were distracted at cruise altitude between San Diego and Minneapolis-St. Paul," according to a public release by the National Transportation Safety Board. The FAA revoked the pilots' licenses but clarified that they eventually could reapply for certification to fly, Bloomberg News reported. The NTSB specified that according to the pilots, "there was a concentrated period of discussion where they did not monitor the airplane or calls from ATC even though both stated they heard conversation on the radio . . . neither pilot noticed messages that were sent by company dispatchers . . . both said they lost track of time . . . (and) each pilot accessed and used his personal laptop computer while they discussed the airline crew flight scheduling procedure," according to parent company Delta Air Lines. ALPA opined that the FAA's revocation of the pilots' licenses "threatens to disrupt voluntary safety-reporting programs used by many carriers." ALPA explained that the decision violates "voluntary incident reporting and data-sharing arrangements" in place at Northwest parent Delta and other airlines," according to the report. Delta, as Northwest's parent company, also issued on October 26, 2009, an official statement regarding the company's cooperation with the FAA in the investigation of the incident. Delta noted that along with its Northwest operating subsidiary, it "continues to openly and fully cooperate with the NTSB and FAA to complete the investigation." Using laptops or engaging in activity unrelated to the pilots' command of the aircraft during flight is strictly against the airline's flight deck policies and violations of that policy will result in termination, Delta's statement added. "Nothing is more important to Delta than safety. We are going to continue to cooperate fully with the NTSB and the FAA in their investigations," Delta CEO Richard Anderson said in his official statement. The pilots "didn't act like professionals, and the carrier doesn't condone their behavior," Mr. Anderson told Bloomberg. 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: Steps Up Talks With JAL for Possible Alliance -------------------------------------------------------- Delta Air Lines Inc. has hired investment bank Goldman Sachs Group Inc. and public relations firm Fleishman-Hillard as its advisor on "a possible alliance with Japan Airlines Corp.," people familiar with the negotiations told The Wall Street Journal, indicating Delta's strengthened efforts to tie-up with the ailing company. Delta officers and executives are slated to visit Japan during the first week of November 2009 to discuss the situation. Similarly, American Airlines' parent AMR Corp.'s representatives have been in Tokyo in October for separate talks with JAL, with more executives scheduled to arrive in coming weeks, according to the report. Delta is reportedly eyeing to infuse "a couple hundred million dollars" in JAL in exchange for a stake in Asia's largest airline by revenue. JAL is seeking a capital injection of "about JPY50 billion" from Delta, according to reports. JAL also confirmed on-going negotiations with AMR, and indicated that British Airways and the Australian carrier Qantas Airways are also potential investors. JAL had said it may consider "a breakup of the company along with a range of other options." A special team was launched to draw up restructuring plans for JAL by the end of November 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. DELTA AIR: Stipulation Resolving MMA & MDE's Claims Approved ------------------------------------------------------------ Judge Cecilia Morris approved the stipulation among the Delta Air Lines Inc., the Maryland Aviation Administration and the Maryland Department of the Environment filed with respect to Claim Nos. 4650 and 4651. The Maryland Aviation Administration filed an unsecured non- priority Claim No. 4650 against Delta for $23,343,868 for damages resulting from the alleged release of allegedly hazardous materials at the Baltimore/Washington International Airport airport fuel farm formerly leased to Delta. The Maryland Department of the Environment filed Claim No. 4651 against Delta asserting the same amount and priority, and on the same basis, as the MAA claim. In October 2007, MDE transferred the MDE Claim to MAA. Accordingly, MAA now holds both the MDE Claim and the MAA Claim. To resolve the Claims, Delta and MAA agreed that: (1) in full and final satisfaction of the Claims, (i) the MAA Claim will be deemed reduced to, and allowed as, a non- priority general unsecured claim against Delta for $3,250,000, (ii) the MDE Claim will be deemed satisfied and expunged, and (iii) the Reorganized Debtors' claims agent will be authorized and directed, without the need for any further Court order, to amend the claims register to reflect the effect of the Stipulation. (2) MAA may seek satisfaction of the Claims only as set forth in the Plan, and that in no event will the Reorganized Debtors be liable to MAA with respect to the Claims or the obligations giving rise to the Claims. (3) MAA fully discharges the Reorganized Debtors from the Claims. The Stipulation will not be deemed an admission of liability on the part of the Reorganized Debtors with respect to the Claims. The parties ask Judge Morris to approve their stipulation. 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. DENBURY RESOURCES: Encore Merger Deal Cues Moody's Rating Review ---------------------------------------------------------------- Moody's Investors Service placed the ratings for Denbury Resources, Inc.'s under review for possible downgrade. This action is in response to the announcement that Denbury and Encore Acquisition Company have entered into a definitive merger agreement pursuant to which Denbury will acquire Encore in a transaction valued at approximately $4.5 billion. The ratings under review are Denbury's Ba3 Corporate Family Rating, the Ba3 Probability of Default Rating, and B1 (LGD 4, 69%) rating on the senior subordinated notes. Simultaneously, Moody's placed the ratings for Encore under review for possible downgrade. The ratings under review are Encore's Ba3 CFR, Ba3 Probability of Default Rating, its B1 (LGD 5, 74%) rating on its senior subordinated notes, and shelf ratings. "The review for downgrade reflects Denbury's significantly higher pro forma leverage" said Ken Austin, Senior Credit Officer at Moody's. "While the combined company will have much greater scale and increases Denbury's portfolio of reserves with tertiary recovery potential, the additional debt being incurred for the acquisition will push leverage to among the highest for similarly rated peers." On a pro forma basis, debt to proven developed (PD) reserves will be over $13/boe, including Moody's standard adjustments and before any asset sales. On a flowing barrel basis, debt/average daily production will be over $40,000 b/d. Although Denbury has indicated that it will look to sell approximately $500 million of non-core assets, the details of those assets and timing of proceeds are still unknown at this time. The review will include an assessment of contemplated asset sales. Moody's will evaluate the impact on leverage, reserves and production, the amount and timing of proceeds, as well as the impact on cash flows. In addition, Moody's will review the company's integration plan and its capital spending for 2010 and whether this will be funded within cash flow. Moody's will also evaluate the allocation of that capital program to determine the impact on the company's overall profile. Under the terms of the definitive agreement, Encore stockholders will receive $50.00 per share for each share of Encore common stock, comprised of $15.00 in cash and $35.00 in Denbury common stock subject to both an election feature and a collar mechanism on the stock portion of the consideration. At close, Denbury's shareholders will own approximately 67% of the combined company with Encore shareholders owning the remaining 33%. Denbury's management and board of directors will remain in place. The total purchase price is $2.8 billion for Encore's equity, $0.4 billion for the minority interest in Encore Energy Partners, L.P. plus the assumption/refinancing of approximately $1.3 billion of Encore and ENP debt. While Moody's believes that Denbury is paying a high multiple of an estimated $104,651 of daily flowing production and $25.45/boe, given the complimentary and suitable nature of the Encore reserves for Denbury's CO2 EOR focus, it is not unexpected. Moody's last rating action for Denbury was on February 10, 2009, at which time Moody's assigned ratings to its new notes offering and affirmed existing ratings. The last rating action for Encore was on June 29, 2009 when Moody's commented that the company's announced property acquisitions had no effect on Encore's ratings. Denbury Resources, Inc., is headquartered in Plano, Texas, and is engaged in the exploration, production, acquisition, and exploitation of oil and natural gas. Encore Acquisition Company is an independent exploration and production company headquartered in Fort Worth, TX. DENBURY RESOURCES: S&P Affirms Corporate Credit Rating at 'BB' -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'BB' corporate credit rating, on Denbury Resources Inc. "The affirmation follows Denbury's announcement that it plans to acquire Encore Acquisition Co. in a transaction valued at $4.5 billion," said Standard & Poor's credit analyst David Lundberg. The outlook remains negative. At the same time, S&P placed S&P's ratings on Encore, including the 'BB-' corporate credit rating, on CreditWatch with positive implications. Denbury announced yesterday that it would acquire Encore in a transaction valued at $4.5 billion, including the assumption of debt and the value of Encore's ownership in Encore Energy Partners LP. Encore shareholders will receive $50 per share, consisting of $35 per share of Denbury stock and $15 per share of cash. Completion of the transaction is subject to shareholder votes at Denbury and Encore, and regulatory and other customary approvals. The transaction is expected to be completed in first quarter of 2010. The negative outlook reflects Denbury's aggressive pro forma financial leverage and its need to reduce debt to remain at the current rating level. S&P will consider a downgrade to 'BB-' if the company does not take steps to reduce financial leverage in 2010. Specifically, S&P would expect FFO to debt to approach 20% next year. The most significant factors which will influence Denbury's ability to delever are crude oil prices, asset sales, and the relative size of its 2010 capital budget. S&P does not anticipate an upgrade in the near future. DENNY'S CORP: Posts $10.03 Million Net Income for Q3 2009 --------------------------------------------------------- Denny's Corporation reported net income of $10,033,000 for the quarter ended September 30, 2009, from net income of $10,562,000 for the quarter ended September 24, 2008. The Company posted net income of $23,676,000 for the nine months ended September 30, 2009, from net income of $17,837,000 for the nine month-period ended September 24, 2008. Total operating revenue was $146,064,000 for the quarter ended September 30, 2009, from $189,275,000 for the quarter ended September 24, 2008. Total operating revenue was $467,637,000 for the nine months ended September 30, 2009, from $575,543,000 for the nine month-period ended September 24, 2008. As of September 30, 2009, Denny's had Total Assets of $330,718,000 against Total Liabilities of $477,448,000, resulting in Shareholders' Deficit of $146,730,000. Denny's September 30, 2009 balance sheet also showed strained liquidity with Total Current Assets of $65,889,000, including $29,886,000 of cash and cash equivalents, against Total Current Liabilities of $95,790,000. In its quarterly report on Form 10-Q, Denny's said, "Our working capital deficit was $29.9 million at September 30, 2009 compared with $53.7 million at December 31, 2008. The decrease in working capital deficit resulted primarily from the sale of company-owned restaurants to franchisees during 2008 and 2009. We are able to operate with a substantial working capital deficit because (1) restaurant operations and most food service operations are conducted primarily on a cash (and cash equivalent) basis with a low level of accounts receivable, (2) rapid turnover allows a limited investment in inventories, and (3) accounts payable for food, beverages and supplies usually become due after the receipt of cash from the related sales." Denny's continued its strategic initiative to increase franchise restaurant development through the sale of certain company restaurants. During the third quarter, the company sold seven restaurants to four franchisee operators under FGI bringing the number sold since the program began in early 2007 to 268 or 52% of the pre-FGI company restaurants. Denny's ended the third quarter of 2009 with a system mix of 83% franchised and licensed restaurants and 17% company restaurants compared with 66% franchised and licensed restaurants and 34% company restaurants before the FGI program began in the first quarter of 2007. Year-to-date 2009, the sale of company restaurant operations and other real estate assets generated net sales proceeds of $22.4 million of which $20.7 million was received in cash and the remaining $1.7 million in the form of notes receivable. The majority of cash proceeds were used to reduce debt by $22.0 million during the first three quarters of 2009. Nelson Marchioli, President and Chief Executive Officer, stated, "We continue to execute towards our strategic goals of building new units, refranchising company units, paying down debt, and growing profitability. Our ability to accomplish these goals despite the on-going same-store sales challenges faced by the industry and Denny's is evidence of the strength of the Denny's brand." "Although we are making progress towards our strategic goals, our sales trends must improve. Denny's is focused on driving sales by delivering new and craveable products at an affordable price and with great guest service. We are confident our focus, which includes strengthened communication with our target customers, will drive improvement to guest counts over time." Based on year-to-date results and management's expectations at this time, Denny's updated its financial guidance for full-year 2009 relative to the guidance given in its fourth quarter 2008 earnings release on February 18, 2009. Mark Wolfinger, Executive Vice President, Chief Administrative Officer and Chief Financial Officer, stated, "Denny's updated fiscal 2009 full year guidance reflects the top line sales challenge that the industry and Denny's continues to confront. Furthermore, the material benefits Denny's has derived by its ongoing transition to a franchised focused business model are also incorporated and include a stronger new unit development pipeline as well as a more predictable and consistent ability to grow profitability." A full-text copy of Denny's quarterly report on Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?482b A full-text copy of Denny's earnings release is available at no charge at http://ResearchArchives.com/t/s?482c Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ: DENN) -- http://www.dennys.com/-- is one of America's largest full- service family restaurant chains, consisting of 1,289 franchised and licensed units and 256 company-owned units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. E*TRADE FIN'L: Withdraws Request for Funding at OTS --------------------------------------------------- The Office of Thrift Supervision recently requested that E*TRADE Financial Corporation declare its intentions with respect to the Company's application to participate in the Capital Purchase Program under the Emergency Economic Stabilization Act of 2008. In light of the funding received from the Company's recent capital raising activities and the reduction in interest bearing indebtedness resulting from the recent debt exchange transactions, the Company withdrew its application on October 30, 2009. In late August, the Company completed its $1.74 billion debt exchange, materially reducing its debt burden. The exchange reduced the Parent company's annual interest payments by more than half, to $160 million per year, and extended maturities. As of September 30, approximately $592 million of the convertible debt had been converted to equity. In addition, the Company successfully raised $150 million of cash equity during the quarter, further enhancing the Parent company's liquidity and bringing the total cash gross proceeds from common stock issuances this year to $765 million. About E*TRADE Financial The E*TRADE FINANCIAL (NASDAQ: ETFC) family of companies provides financial services including trading, investing and related banking products and services to retail investors. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Bank products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries. * * * The Company's current senior debt ratings are Caa3 by Moody's Investor Service, CC/CCC-(3) by Standard & Poor's and B (high) by Dominion Bond Rating Service. The Company's long-term deposit ratings are Ba3 by Moody's Investor Service, CCC+ (developing) by Standard & Poor's and BB by DBRS. EDGEWATER REALTY INC: Case Summary & 12 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Edgewater Realty, Inc. 1524 Twin Valley Trail Lithonia, GA 30058 Bankruptcy Case No.: 09-89331 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Stephen J. Sasine, Esq. Suite 200, 5491 Roswell Road Atlanta, GA 30342 Tel: (404) 256-7623 Email: sasinelaw@bellsouth.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 12 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ganb09-89331.pdf The petition was signed by Lisa D. Smith, president of the Company. EQUIPMENT ACQUISITION: List of 20 Largest Unsec. Creditors ---------------------------------------------------------- Equipment Acquisition Resources, Inc., filed with the U.S. Bankruptcy Court for the Northern District of Illinois a list of 20 largest unsecured creditors. A full-text copy of the Debtor's list of creditors is available for free at http://bankrupt.com/misc/deb09-39937.pdf Palatine, Illinois-based Equipment Acquisition Resources, Inc., filed for Chapter 11 bankruptcy protection on October 23, 2009 (Bankr. N.D. Ill. Case No. 09-39937). Barry A. Chatz, Esq., at Arnstein & Lehr LLP assists the Company in its restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. EQUIPMENT ACQUISITION: Hires Arnstein & Lehr as Bankruptcy Counsel ------------------------------------------------------------------ Equipment Acquisition Resources, Inc., has sought permission from Bankruptcy Judge John H. Squires to hire Barry A. Chatz, Konstantinos Amiros, Miriam R. Stein, Robert A. McKenzie, and the law firm of Arnstein & Lehr LLP as bankruptcy counsel. A&L will, among other things: -- negotiate the terms of the Debtor's use of cash collateral with its secured creditors; -- pursue confirmation of a plan and approval of a disclosure statement; -- prepare necessary applications, motions, answers, orders, reports and other legal papers; and -- assist the Debtor with the disposition of its assets A&L will be paid in these rates: Professional Hourly Rate ------------ ----------- Barry A. Chatz $580 Konstantinos Armiros $535 Miriam R. Stein $430 Robert A. McKenzie $265 Becky L. Sutton (paralegal) $215 Konstantinos Armiros, a partner with A&L, assures the Court that A&L does not have interests adverse to the interest of the Debtors' estates or of any class of creditors and equity security holders. Mr. Armiros maintains that A&L is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. Palatine, Illinois-based Equipment Acquisition Resources, Inc., filed for Chapter 11 bankruptcy protection on October 23, 2009 (Bankr. N.D. Ill. Case No. 09-39937). Barry A. Chatz, Esq., at Arnstein & Lehr LLP assists the Company in its restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. EQUIPMENT ACQUISITION: Taps Dev't Specialists as Financial Advisor ------------------------------------------------------------------ Equipment Acquisition Resources, Inc., has sought the permission of the Hon. John H. Squires of the U.S. Bankruptcy Court for the Northern District of Illinois to employ Development Specialists, Inc., to render financial advisory services necessary to the effective administration of the Debtor's estate. DSI will, among other things: -- evaluate the business operations of the Debtor and counsel the Debtor with respect to the administration of the bankruptcy estate; -- investigate the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's business, and any other matters relevant to the case or to the formulation of a plan of reorganization; and -- assist in the preparation of motions, answers, orders, reports, and other legal papers in connection with the administration of the bankruptcy estate. DSI says that it will be compensated for the work of William A. Brandt, Jr., of DSI, the Debtor's chief restructuring officer. Mr. Brandt won't be separately compensated by the Debtor for his work as chief restructuring officer. DSI will be paid these rates: Professional Hourly Rate ------------ ----------- Senior Consultants $425-$595 Consultants $250-$420 Junior Consultants $120-$245 The Debtor is asking the Court for an interim authorization to retain DSI pursuant to Bankruptcy Rule 6003, and a final order to be entered on or about the 20th day after the Company filed for Chapter 11 bankruptcy protection. The Debtor says that retention of DSI prior to the 20-day period is necessary given the size of the case, and the extensive work which is needed to be done during the first 20 days of the case in order to preserve the assets of the estate for the benefit of the creditors. Mr. Brandt, DSI's president, assures the Court that DSI does not have interests adverse to the interest of the Debtors' estates or of any class of creditors and equity security holders. Mr. Brandt maintains that DSI is a disinterested person as the term is defined under Section 101(14) of the Bankruptcy Code. Palatine, Illinois-based Equipment Acquisition Resources, Inc., filed for Chapter 11 bankruptcy protection on October 23, 2009 (Bankr. N.D. Ill. Case No. 09-39937). Barry A. Chatz, Esq., at Arnstein & Lehr LLP assists the Company in its restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. EQUIPMENT ACQUISITION: Wants Filing of Schedules Moved to Nov. 24 ----------------------------------------------------------------- Equipment Acquisition Resources, Inc., has asked the Hon. John H. Squires of the U.S. Bankruptcy Court for the Northern District of Illinois to extend the deadline for the filing of the Company's schedules and statements of financial affairs until November 24, 2009. The filing deadline of Equipment Acquisition's schedules is on November 7, 2009. The Debtor says that completion of its schedules and statement requires the collection, review, and assembly of a large volume of information and that it will need additional time to review the records and compile the necessary information to complete the bankruptcy schedules and statement of financial affairs. William A. Brandt, Jr., of Development Specialists, Inc., the Debtor's chief restructuring officer, will require additional time to prepare the schedules and statement of financial affairs on behalf of the Debtor. Mr. Brandt was elected as the sole member of the board of directors and as the chief restructuring officer, after the members of the Company's board of directors and its officers resigned on October 8, 2009. The Debtor assures that no party will be unduly prejudiced by the request for an extension and that the schedules and statement of financial affairs will be filed a week before the December 1, 2009 meeting of creditors to give creditors time to complete a full review of the documents. A hearing on the Debtor's request for the schedules filing extension is set for November 5, 2009, at 9:30 a.m. Palatine, Illinois-based Equipment Acquisition Resources, Inc., filed for Chapter 11 bankruptcy protection on October 23, 2009 (Bankr. N.D. Ill. Case No. 09-39937). Barry A. Chatz, Esq., at Arnstein & Lehr LLP assists the Company in its restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. ETHAN ALLEN: S&P Downgrades Corporate Credit Rating to 'B+' ----------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit and senior unsecured debt ratings on Ethan Allen Interiors Inc. to 'B+' from 'BB'. The outlook is negative. At the same time, S&P lowered the rating on the company's wholly owned subsidiary's (Ethan Allen Global Inc.) $200 million senior unsecured notes due 2015 , to 'B+' from 'BB', while the recovery rating remains a '3', indicating S&P's expectation for meaningful (50% to 70%) recovery in the event of a payment default. "The rating actions follow the company's very weak operating results in recent quarters and credit protection measures that are well below S&P's prior expectations," said Standard & Poor's credit analyst Rick Joy. Although the company has taken actions to reduce operating expenses and strengthen its competitive position, S&P believes near-term operating performance may decline further, given the current weak economy and S&P's expectation for continued challenges in the North American residential furnishings industry. As of Sept. 30, 2009, the company had about $203 million of total funded debt, excluding operating lease obligations. The ratings on Ethan Allen reflect the company's vulnerability to reduced discretionary spending in an economic downturn and its exposure to the highly competitive residential furnishings industry. S&P believes Ethan Allen benefits from its brand strength and dedicated retail distribution network. However, the impact of continued weakness in the housing market on the furniture industry remains a significant rating concern. Ethan Allen is one of the largest manufacturers and retailers of home furnishings and accessories in the U.S. As a vertically integrated company, Ethan Allen designs, manufactures, sources, distributes, and sells a full range of home furnishings under the well-recognized Ethan Allen brand. The company's products are sold through a dedicated international network of 300 retail stores, which S&P believes provides a competitive advantage. Although the company maintains a leading market position with a strong brand in the highly fragmented residential furnishings industry, S&P believes housing market weakness and reduced consumer spending on furniture have pushed down sales in the past two years. Sales for the first quarter of fiscal 2010 ended Sept. 30, 2009, declined nearly 34%, but the rate of decline did moderate somewhat from the declines in the second half of fiscal 2009. Overall, for the 12 months ended Sept. 30, 2009, sales were down 35%. S&P believes Ethan Allen will continue to face a challenging operating environment, given the weak U.S. housing market and economy. In light of S&P's expectation for continued weakness, S&P believes existing very weak credit measures could deteriorate further in the near term. S&P would consider a lower rating if the company's operating performance and credit measures substantially weaken further, and/or if the company's liquidity is materially pressured. Although less likely over the near term, S&P could revise the outlook to stable if Ethan Allen can stabilize operating results, improve margins, and materially improve credit measures from current levels. EUROFRESH INC: Expects to Exit Bankruptcy in Late November ---------------------------------------------------------- The U.S. Bankruptcy Court Judge Charles G. Case II has confirmed reorganization plan of Eurofresh Inc. and Eurofresh Produce Ltd. The Debtors expect to exit from Chapter 11 bankruptcy protection in late November. Western Farm Press relates that the Debtors settled with the majority of their existing debt holders to convert more than $200 million of debt into equity as part of their recapitalization process. Under the agreement, the Debtors will receive $35 million in new capital to repay debt and ensure financial stability to continue investing in strategic capital expenditures. The Troubled Company Reporter said on Oct. 1, 2009, under the Plan, holders of existing credit facility secured claims, miscellaneous secured claims, and convenience claims are expected to receive 100% recovery. Holders of general unsecured claims and senior noteholder claims are expected to get between 5% and 7% recovery under the plan. The Debtors do not expect any distribution to holders of discount noteholder claims, subordinated debt securities claims and holders of equity interests. According to the explanatory disclosure statement, claimants will receive these distributions under the Plan: i) holders of existing credit facility secured claims -- debt of $50 million secured by a blanket lien on substantially all assets of Eurofresh pursuant to a Credit and Guaranty Agreement dated as of March 25, 2008, signed by Silver Point Finance, LLC, as agent -- will receive a principal reduction payment of $7.5 million of the outstanding obligations under the existing credit documents and a rollover of all remaining obligations under the existing credit documents, to the extent allowed, into a new credit facility; ii) holders of miscellaneous secured claims will, on the effective date, either be reinstated, paid in full in cash or satisfied by the return of collateral; iii) holders of allowed convenience claims will receive the lesser of the allowed general unsecured claims of the holder or $1,000 paid in cash; iv) holders of allowed general unsecured claims will receive cash payments in an amount equal to the holder's pro rata share of the general unsecured claim fund; and v) holders of allowed senior noteholder claims will receive their pro rata share of: a) $10.0 million in face amount of PIK preferred stock; b) one million shares of New Common Stock; and c) certain proceeds of reserved shares under certain circumstances. The Plan will be funded by new money financing and the issuance of new common stock and PIK stock. A total of $12.5 million in new financing will be provided by Johan van den Berg and certain noteholders -- holders of the $170,000,000 of 11-1/2% senior notes due in 2013 issued by Eurofresh prepetition. The $7.5 million of the new money financing will be applied to reduce the principal amount under the Existing Credit Documents and $5 million of which will be used for working capital of Reorganized Eurofresh. Bio Dynamics B.V./S.a.r.L., a Luxembourg company, company, which is an affiliate, and under the direction, of Johan van den Berg, will receive 40% of the stock of reorganized Eurofresh, the Investing Noteholders 40%, 10% to Senior Noteholders and the remaining 10% to be held in reserve. A full-text copy of the disclosure statement explaining the Plan is available for free at http://ResearchArchives.com/t/s?3df6 A full-text copy of the Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?3df7 About Eurofresh Inc. Headquartered in Snowflake, Arizona, Eurofresh, Inc. -- http://www.eurofresh.com/-- produces and sells tomatoes. The Company and Eurofresh Produce Ltd., its affiliate, filed for Chapter 11 on April 21, 2009 (Bankr. D. Ariz. Lead Case No. 09- 07970). Craig D. Hansen, Esq., at Squire, Sanders & Dempsey L.L.P. represents the Debtors in their restructuring effort. Ilene J. Lashinsky, U.S. Trustee for Region 14, appointed five creditors to serve on the official committee of unsecured creditors in the Debtors' Chapter 11 cases. The Committee retained Stutman, Treister & Glatt P.C. as counsel, and Lewis & Roca L.L.P. as co-counsel. The Eurofresh Inc., in its bankruptcy petition, said it has assets worth $50 million to $100 million and debts of $100 million to $500 million. EUROFRESH INC: Has Access to Cash Collateral Until November 30 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona authorized, on a sixth interim basis, Eurofresh, Inc., and affiliate Eurofresh Produce Ltd. to: a) use cash securing repayment of prepetition creditors loan until Nov. 30, 2009; and b) grant adequate protection to prepetition secured parties. A final hearing on the third renewed motion is yet to be scheduled. Commencing on Oct. 28, 2009, and ending on Nov. 20, 2009, the Debtors are authorized to use $14,202,000 of cash collateral, including adequate protection payments, consistent with the fifth revised budget for the sixth cash collateral period. The Debtors related that the cash collateral is necessary, essential, and appropriate for the Debtors to continue the orderly operation of their businesses, well as to ease customer, supplier and vendor concerns regarding their financial stability. The replacement liens granted to the secured parties in the prepetition collateral will have the same priority and validity. The secured parties are also granted an allowed administrative expense claim against the Debtors and their estates, which claim will have priority over all other claims for costs or claims. As additional adequate protection to the collateral agent and prepetition creditors, on the effective date of the Debtors' First Amended Joint Plan of Reorganization, the Debtors will pay to the collateral agent, for the ratable benefit of prepetition creditors, which will be accrued during the sixth cash collateral period: (a) any outstanding adequate protection payments payable under the first interim order, second interim order, the third interim order, the fourth interim order or the fifth interim order; (b) an amount equal to interest on the prepetition loan obligations at the non-default rate as calculated in the prepetition loan documents plus any letter of credit fees, which amount will be accrued weekly in arrears commencing on Oct. 30, 2009; (c) an amount equal to Fixed rent and variable rent due under the prepetition capital lease documents which amount will be accrued weekly in arrears commencing on Oct. 30, 2009; and (d) an amount equal to the reasonable postpetition fees and expenses of the administrative agent and prepetition creditors incurred in connection with these cases or the prepetition credit obligations or in the protection of prepetition lenders rights and interests in the collateral and the prepetition credit documents. The Debtors' authority to use cash collateral will expire on the occurrence of a termination event. About Eurofresh Inc. Headquartered in Snowflake, Arizona, Eurofresh, Inc. -- http://www.eurofresh.com/-- produces and sells tomatoes. The Company and Eurofresh Produce Ltd., its affiliate, filed for Chapter 11 on April 21, 2009 (Bankr. D. Ariz. Lead Case No. 09-07970). Craig D. Hansen, Esq., at Squire, Sanders & Dempsey L.L.P. represents the Debtors in their restructuring effort. Ilene J. Lashinsky, U.S. Trustee for Region 14, appointed five creditors to serve on the official committee of unsecured creditors in the Debtors' Chapter 11 cases. the Committee retained Stutman, Treister & Glatt P.C. as counsel, and Lewis & Roca L.L.P. as co-counsel. The Eurofresh Inc., in its bankruptcy petition, said it has assets worth $50 million to $100 million and debts of $100 million to $500 million. U.S. Bankruptcy Court Judge Charles G. Case II confirmed Eurofresh Inc.'s reorganization plan in October. Eurofresh and its subsidiary, Eurofresh Produce Ltd., expects to exit Chapter 11 bankruptcy protection by the end of November. EZ LUBE: Wins Confirmation of Reorganization Plan ------------------------------------------------- The Bankruptcy Court has confirmed the Chapter 11 reorganization plan for EZ Lube LLC, Law360 reports. Under the Plan, DIP Lenders owed $62.5 million will receive about $8.5 million in cash while converting $40 million of their loan into exit financing. The remainder, about $22.5 million, is to be converted into stock. Second-lien lenders owed $29.5 million, mezzanine lenders owed $17.1 million and unsecured creditors with $20.6 million in claims will spit up the remainder of the stock. The Plan converts $95 million in debt to equity. Prior to the filing, EZ Lube owed $96 million to prepetition secured creditors and $11 million to unsecured creditors including suppliers. A copy of the disclosure statement explaining the Plan is available for free at: http://bankrupt.com/misc/EZ_Lube_DiscStatement.pdf Headquartered in Santa Ana, California, EZ Lube LLC -- http://www.ezlube.com/-- provides oil change and related services for automobiles including: oil filter replacement, lubricating chassis, and gearbox and brake fluid level maintenance. On December 9, 2008, EZ Lube together with Xpress Lube-Tech, Inc., filed for Chapter 11 (Bankr. D. Del., Lead Case No. 08-13256). The company's attorneys are Curtis A. Hehn, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP. Broadway Advisors LLC has been tapped as financial advisor, and Coffey Management Company as chief restructuring advisor. Kurtzman Carson Consultants LLC acts as claims and notice agent. In its petition EZ Lube estimated assets and debts of $100 million to $500 million each. As reported in the December 10 issue of the Troubled Company Reporter, EZ Lube along with its affiliate, Xpress Lube-Tech Inc., filed for bankruptcy to facilitate a sale transaction with EZ Lube Acquisition Company LLC, an affiliate of its existing lenders, funds managed by GSO Capital Partners LP. However, the sale did not push through. FAIRPOINT COMMS: Fitch Downgrades IDR to 'D' -------------------------------------------- Fitch Ratings has downgraded the ratings of FairPoint Communications, Inc. (FairPoint) as follows: -- Issuer Default Rating (IDR) to 'D' from 'C'. -- Senior secured revolving credit facility to 'CC/RR3' from 'B-/RR1'; -- Senior secured term loan due 2014 to 'CC/RR3' from 'B- /RR1'; -- Senior secured term loan due 2015 to 'CC/RR3' from 'B- /RR1'; -- Senior secured delayed-draw term loan due 2015 to 'CC/RR3' from 'B-/RR1'; -- 13.125% senior unsecured notes due April 2, 2018 (New Notes) to 'C/RR6' from 'C/RR4'; -- 13.125% senior unsecured notes due April 1, 2018 (Old Notes) to 'C/RR6' from 'C/RR4'. Fitch's downgrade reflects the company's Oct. 26, 2009 announcement that it has filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. FairPoint also announced a restructuring plan with the lenders holding more than 50% of its approximately $2 billion of outstanding secured debt. The restructuring plan calls for the lenders to receive a new $1 billion secured term loan, and 98% of the company's newly issued common stock. If the unsecured creditors, including the holders of the Old Notes and the New Notes, agree to the restructuring plan, they will receive 2% of the common equity and warrants to purchase up to 5% of the new common stock. If the unsecured creditors do not vote as a class to accept the plan, no distributions under the plan will be received. In aggregate, there are approximately $570 million in outstanding senior unsecured notes. Under the terms of the plan, the company will not pay interest or principal on its pre-petition debt while in Chapter 11. 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: Proposes to Employ BMC Group as Claims Agent ------------------------------------------------------------- Fairpoint Communications Inc. and its units sought and obtained permission from Judge Lifland to appoint BMC Group Inc. to act as the official claims agent of the Clerk of the Bankruptcy Court in order to assume full responsibility for the distribution of notices and proofs of claim, and maintenance, processing and docketing of proofs of claim filed in their Chapter 11 cases. The Debtors relate that they obtained and reviewed engagement proposals from other court-retained claims agents to ensure selection through a competitive process. Upon review, the Debtors maintain that based on all engagement proposals obtained and reviewed, BMC Group Inc. would provide the most cost effective and efficient service as a claims agent for their Chapter 11 cases. Although the Debtors have not yet filed their schedules of assets and liabilities, they anticipate that there will be more than 20,000 entities to be noticed. In view of the number of anticipated claimants and the complexity of their business, the Debtors aver that the appointment of an outside claims agent is necessary. The appointment of BMC Group as the official claims agent, the Debtors insist will aid in the expedited distribution of notices and processing of claims, and the Bankruptcy Court Clerk will be relieved of the administration burden of processing what may be an overwhelming number of claims. BMC Group will undertake, among other things, these actions and procedures: * Notify all potential creditors of the filing of the bankruptcy petitions and of the setting of the first meeting of creditors, pursuant to Section 341(a) of the Bankruptcy Code, under the proper provisions of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure; * Maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs, listing the Debtors' known creditors and amounts owed; * Notify all potential creditors of the existence and amount of their respective claims as evidenced by the Debtors' books and records and as set forth in the Schedules; * Furnish a notice of the last date for the filing of proofs of claims and a form for the filing of a proof of claim, after such notice and form are approved by this Court; * File with the Clerk of the Court an affidavit or certificate of service which includes a copy of the notice, a list of persons to whom it was mailed, and the date mailed, within 10 days of service; * Docket all claims received by the Clerk's office, maintain the official claims registers for each debtor entity that has filed a Chapter 11 petition on behalf of the Clerk, and provide the Clerk with certified duplicate, unofficial registers of claims on a monthly basis, unless otherwise directed; * Specify, in the applicable Claims Register, the information for each claim docketed: (i) the claim number assigned, (ii) the date received, (iii) the name and address of the claimant and agent, if applicable, who filed the claim, and (iv) the classifications of the claim, e.g., secured, unsecured, priority, etc.; * Relocate, by messenger, all of the actual proofs of claim filed to BMC Group, not less than weekly; * Upon completion of the docketing process for all claims received to date by the Clerk's office for each case, turn over to the Clerk copies of the claims register for the Clerk's review; * Make changes in the Claims Registers pursuant to orders of the Court; * Maintain the official mailing list for each debtor entity that has filed a Chapter 11 petition, and all entities that have filed a proof of claim, which list will be available upon request by a party-in-interest or the Clerk; * Assist with, among other things, solicitation and calculation of votes and distribution as required in furtherance of confirmation of plans of reorganization; * Thirty days prior to the close of the Debtors' cases, submit a request for the termination of the Official Claims Agent's services upon completion of its duties and responsibilities and upon the closing of the Debtors' cases; * File with the Court the final version of the claims register before the close of the Chapter 11 cases; and * At the close of the case, box and transport all original documents, in proper format, as provided by the Clerk's office, to the Federal Archives Record Administration, located at Central Plains Region, 200 Space Center Drive, Lee's Summit, in Missouri 64064. The claims register maintained by BMC Group will be opened to the public for examination without charge during regular business hours. BMC Group will not employ any past or present employee of the Debtors for work that involves the Debtors' bankruptcy proceedings. The Debtors will pay BMC Group a $50,000 retainer out of assets of their estates. In view of the BMC Group Retention Order, Judge Lifland nullifies the termination provision contained in the engagement letter, ruling that the termination provision is unenforceable. 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: Proposes to Employ Paul Hastings as Counsel ------------------------------------------------------------ Fairpoint Communications Inc. and its units seek the Court's approval to employ Paul, Hastings, Janofsky & Walker LLP, as their lead counsel, nunc pro tunc to October 26, 2009. The Debtors relate that they have selected Paul Hastings as their attorneys because of the firm's extensive knowledge of their business and financial affairs, their extensive general experience and knowledge, and in particular, their recognized expertise in the field of financial restructuring and bankruptcy. Paul Hastings recently assisted and advised the Debtors in connection with the preparation for, and commencement, of these Chapter 11 cases. Paul Hastings thus has the necessary background and relevant experience with the Debtors to deal effectively and efficiently with the potential legal issues and other matters that may arise in the context of these Chapter 11 cases. As counsel to the Debtors, Paul Hastings is expected to: (a) advise the Debtors of their rights, powers and duties as debtors and debtors-in-possession while operating and managing their respective businesses and properties under Chapter 11 of the Bankruptcy Code; (b) prepare on behalf of the Debtors all necessary and appropriate applications, motions, proposed orders, other pleadings, notices, schedules and other documents, and reviewing all financial and other reports to be filed in these bankruptcy cases; (c) advise the Debtors concerning, and prepare responses to, applications, motions, other pleadings, notices and other papers that may be filed by other parties in these bankruptcy cases; (d) advise the Debtors with respect to, and assist in the negotiation and documentation of, financing agreements and related transactions; (e) review the nature and validity of any liens asserted against the Debtors' property and advise the Debtors on the enforceability of those liens; (f) advise the Debtors regarding their ability to initiate actions to collect and recover property for the benefit of their estates; (g) advise and assist the Debtors in connection with any potential property dispositions; (h) advise the Debtors concerning executory contract and unexpired lease assumptions, assignments and rejections as well as lease restructurings and recharacterizations; (i) advise the Debtors in connection with the formulation, negotiation and promulgation of a plan or plans of reorganization, and related transactional documents; (j) assist the Debtors in reviewing, estimating and resolving claims asserted against their estates; (k) commence and conduct litigation necessary and appropriate to assert rights held by the Debtors, protect assets of the Debtors' Chapter 11 estates or otherwise further the goal of completing the Debtors' successful reorganization; and (l) provide non-bankruptcy services for the Debtors, upon the Debtors' request. The Debtors propose to pay Paul Hastings on an hourly basis and reimburse the firm of its necessary out-pocket expenses in connection to the contemplated engagement. Paul Hastings' hourly rates are: Professional Hourly Rate ------------ ----------- Members and Counsel $735 to $950 Associates $445 to $680 Paraprofessionals $175 to $320 Luc A. Despins, Esq., a member of Paul, Hastings, Janofsky & Walker LLP, in New York, discloses that his firm has received advance payments from the Debtors to cover prepetition professional services. Mr. Despins further discloses that as of the Petition Date, Paul Hastings has an estimated remaining credit balance of $700,000, in favor of the Debtors for future professional services subsequent to the Petition Date. Mr. Despins assures the Court that Paul Hastings is a "disinterested person" in the Debtors' Chapter 11 cases as the term is defined under Section 101(14) of the Bankruptcy Code. 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) FIRSTPLUS FINANCIAL: Court Confirms Ch. 11 Trustee Appointment -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas confirmed the appointment of Matthew Orwig as Chapter 11 Trustee in the Chapter 11 case of FirstPlus Financial Group, Inc. On Oct. 9, 2009, the Court heard two motions requesting resolution of a disputed Chapter 11 Trustee election reported by the U.S. Trustee. The Court ordered that the election dispute must be resolved in favor of maintaining Mr. Orwig as Chapter 11 Trustee. As reported in the Troubled Company Reporter on July 27, 2009, the Debtor agreed to the U.S. Trustee's request for the appointment of a Chapter 11 Trustee to manage the Company's bankruptcy estate. The Company hopes to enhance liquidity while it reorganizes its operations. Based in Beaumont, Texas, FirstPlus Financial Group, Inc. -- http://www.firstplusgroup.com/-- (Pink Sheets: FPFX) is a diversified company that provides commercial loan, consumer lending, residential and commercial restoration, facility (janitorial and maintenance) services, insurance adjusting services, construction management services and a facilities and restoration franchise business. The Company has three direct subsidiaries, Rutgers Investment Group, Inc., FirstPlus Development Company and FirstPlus Enterprises, Inc. In turn, FirstPlus Enterprises, Inc., has three of its own direct subsidiaries, FirstPlus Restoration Co., LLC, FirstPlus Facility Services Co., LLC and The Premier Group, LLC. FirstPlus Restoration and FirstPlus Facility jointly own FirstPlus Restoration & Facility Services Company. Additionally, FirstPlus Development has one direct subsidiary FirstPlus Acquisitions-1, Inc. A subsidiary of FirstPlus Financial Group -- FirstPlus Financial Inc. -- filed for Chapter 11 bankruptcy in March 1999 before the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, amid turmoil in the asset-backed securitization markets and the lack of a reliable, committed secondary take-out source for high LTV loans. A modified third amended plan of reorganization was confirmed in that case in April 2000. The Company filed for Chapter 11 protection on June 23, 2009 (Bankr. N.D. Tex. Case No. 09-33918). Aaron Michael Kaufman, Esq., and George H. Tarpley, Esq., at Cox Smith Matthews Incorporated, serves as counsel. The Debtor has total assets of $15,503,125 and total debts of $4,539,063 as of June 30, 2008. FORD MOTOR: Says October U.S. Sales Up 3% From Last Year -------------------------------------------------------- Ford Motor Company reports that Ford, Lincoln and Mercury October U.S. sales totaled 132,483, up 3% versus a year ago and 21% higher than September. This marks the third time in the last four months Ford sales have increased. "Consumer demand for our new high-quality, fuel-efficient products is driving Ford's market share gains," said Ken Czubay, Ford vice president, U.S. Marketing Sales and Service. "Ford vehicles are among the `freshest' available by any automaker - with more than 80% of our sales in October coming from our new 2010 models." Meanwhile, rival General Motors on Tuesday said a strong performance by its four core brands -- Chevrolet, Buick, GMC, and Cadillac -- resulted in GM U.S. October sales of 177,603 vehicles, up 4% from last October, the company's first year-over-year gain since January 2008. Total sales increased 13% when compared with September. The four brands accounted for about 95% of GM's retail sales, an increase of 10 percentage points compared to the prior year. Ford estimates its total market share in October was more than 15% -- higher than a year ago and higher than its share in the first nine months of 2009. Ford's October retail share was up for the 12th time in 13 months. "The Ford plan is working, led by the strength of our product lineup and customer demand for our new cars, utilities and trucks," said Mr. Czubay. "Consumers increasingly are noticing that the Ford difference is our great products, our strong business and our leadership in quality, fuel efficiency, safety, smart technologies and value." October Sales Highlights: -- All-new Ford Taurus sales totaled 6,076, up 141% versus a year ago. Dealers reported retail sales nearly tripled year-ago levels. -- Other new Ford, Lincoln and Mercury cars posting increases included the Ford Fusion (up 24%), Ford Mustang (up 2%) and Lincoln MKZ (up 27%). -- Crossover utilities posted strong sales increases: Ford Escape was up 26%; Ford Edge up 38%; Ford Flex up 8%; Mercury Mariner up 36%; Lincoln MKX up 15%. In addition, sales of the all-new Lincoln MKT crossover were up 36% from September. -- Ford's F-Series truck achieved sales of 39,496 and a year- to-year share increase in the full-size pickup category. In addition, the all-new Ford F-150 SVT Raptor captured the coveted "Truck of Texas" award from the Texas Auto Writer's Association. Ford's F-Series has been the No. 1- selling truck in America for 32 years straight. -- Ford's new EcoBoost engine technology is winning customers, too. In October, sales of EcoBoost-equipped models were twice as high as September. EcoBoost provides customers up to 20% improvement in fuel economy and a 15% reduction in emissions versus larger-displacement engines. EcoBoost is standard on the Taurus SHO and available on the Ford Flex, Lincoln MKS and Lincoln MKT. The sales data are based largely on data reported by dealers representing their sales to retail and fleet customers. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. * * * As reported by the Troubled Company Reporter on April 15, 2009, Standard & Poor's Ratings Services said it raised its ratings on Ford Motor Co. and related entities, including the corporate credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank PLC, Ford Credit's European bank, are also unchanged, at 'B-', maintaining the one-notch rating differential between FCE and its parent Ford Credit. S&P said that the outlook on all entities is negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring in order to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently- approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. FORD MOTOR: Seeks 2013 Extension of Revolving Credit Facility ------------------------------------------------------------- Ford Motor Company on Monday announced additional steps to improve its balance sheet and enhance automotive liquidity. Actions being announced include a proposal to lenders under Ford's revolving credit facility to extend the maturity of the facility from 2011 to 2013 in exchange for reducing lenders' commitments and increasing interest margins and fees. In addition, Ford is seeking to raise additional capital with a convertible debt offering and an equity distribution plan. "These actions support the third pillar of our One Ford plan - finance the plan and improve our balance sheet," said Alan Mulally, Ford's president and CEO. "We expect the moves will enhance Ford's automotive liquidity and over time reduce the company's debt burden, providing an additional cushion given the still uncertain state of the economy." (A) Credit agreement amendment and extension Ford has proposed to the lenders under its secured credit agreement an amendment that would reduce revolving lenders' revolving commitments, extend the maturity of such lenders' revolving commitments until 2013 and modify certain covenants and other provisions. Pursuant to the proposal, each revolving lender that agrees to extend the maturity of its revolving commitments may reduce its revolving commitment by up to 25 percent at its election and to the extent its reduced revolving commitment exceeds certain specified levels, such excess would be converted into a new term loan under the secured credit agreement maturing on December 15, 2013. In exchange for a reduction in their revolving commitments, as well as a 1 percentage point increase in interest rate margins, an increase in fees and payment of an upfront fee, the revolving lenders would agree to extend the maturity of their revolving commitments and loans to Nov. 30, 2013 from Dec. 15, 2011. The modified covenants would expand existing limitations on debt prepayments and repurchases to allow for further balance sheet improvements. Ford would repay revolving loans to the extent necessary to effect the commitment reductions on Dec. 3, 2009. The revolving lenders are required to submit their response to Ford's proposal by Nov. 18, 2009. To date, certain revolving lenders have indicated that they intend to accept Ford's proposal and extend about $6 billion of revolving commitments and loans to Nov. 30, 2013. The amendment and extension is subject to approval by lenders holding a majority in principal amount of the loans and commitments outstanding under the secured credit agreement. (B) Senior convertible notes offering Ford intends to offer, subject to market and other conditions, approximately $2 billion in aggregate principal amount of senior convertible notes due in 2016. The notes will be convertible by the holder and payable at Ford's option in common stock, cash or a combination thereof. Ford intends to grant the underwriters an option to purchase an additional $300 million in aggregate principal amount of senior convertible notes. Barclays Capital, BofA Merrill Lynch, Citi, Deutsche Bank Securities, Goldman Sachs & Co., J.P. Morgan, Morgan Stanley and RBS are acting as joint book-running managers of the senior convertible notes offering. BNP Paribas and HSBC also will be included in the underwriting syndicate for the offering. (C) Equity distribution plan Ford intends to enter into an equity distribution agreement with certain broker/dealers pursuant to which it may offer and sell shares of its common stock from time to time for an aggregate offering price of up to $1 billion. Any sales of common stock under the equity distribution agreement are not expected to commence until December 2009 and are expected to be made over a several-month period by means of ordinary brokers' transactions on the New York Stock Exchange at market prices or as otherwise agreed. The senior convertible notes and the shares of common stock will be issued pursuant to Ford's existing effective shelf registration statement filed with the Securities and Exchange Commission. Net proceeds to Ford from the senior convertible notes offering and sales, if any, under the equity distribution plan are expected to be used for general corporate purposes. Ford has filed a registration statement (including a prospectus) with the SEC for the offerings to which this communication relates. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. * * * As reported by the Troubled Company Reporter on April 15, 2009, Standard & Poor's Ratings Services said it raised its ratings on Ford Motor Co. and related entities, including the corporate credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank PLC, Ford Credit's European bank, are also unchanged, at 'B-', maintaining the one-notch rating differential between FCE and its parent Ford Credit. S&P said that the outlook on all entities is negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring in order to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently- approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. FORD MOTOR: Fitch Gives Positive Outlook, Affirms 'CCC' Rating -------------------------------------------------------------- Fitch Ratings has revised the Rating Outlook on Ford Motor Company and Ford Motor Credit Company to Positive from Stable. Fitch has also affirmed the Issuer Default Rating at 'CCC'. The Positive Outlook reflects the better than expected progress on Ford's cost reduction program, production and inventory discipline that has resulted in solid pricing performance and continued market share gains. Although Fitch expects a weak rebound in industry sales in 2010, in part recognizing the hangover from the Cash-for-Clunkers program, Fitch expects that cash drains will be materially reduced and comfortably within Ford's liquidity position. Fitch expects that industry sales will show only modest improvement in 2010, based on macroeconomic factors including increased unemployment, reduced wealth, consumer spending pressures and a higher savings rate. Other factors muting a rebound in industry sales include more limited financing capacity, potential increases in gas prices and evolving consumer thinking that may stretch average vehicle age. Nevertheless, the combination of Ford's cost reduction efforts and price performance has led to sharply reduced cash drains in a trough environment. Fitch expects that even if U.S. industry sales were to remain flat at roughly 10.5 million vehicles in 2010, Ford's cash drain would be less than $5 billion. As U.S. industry sales climb above an 11.5 SAAR rate, Ford should be able to achieve positive free cash flow. Although cost reductions should continue to be realized through fourth quarter-2010, the step change in fixed cost reductions have largely been completed, and margin expansion going forward will need to be derived primarily from capacity utilization and scale efficiencies associated with increases in industry volumes. The current contract talks demonstrate, however, that full labor-cost parity may still be a challenge. A Fitch upgrade of Ford would be driven by a combination of these (unchanged from Fitch's Aug. 29 press release): -- Industry sales rebound to an annual 12 million sales level more quickly than currently forecast; -- Ford's products continue to hold or gain share; -- Inventory management at Ford and the industry allows Ford to hold or improve product prices; -- A clear path to positive free cash flow is projected; -- Liabilities continue to be managed or addressed, including the maturity of the company's bank agreement; -- Independent access to capital by Ford Credit improves. An Outlook revision back to Stable or a ratings downgrade could result from some combination of these factors: -- U.S. industry sales revert to new lows versus 2009 levels in the event of a double-dip recession; -- A market disruption in oil prices which sends gas prices sharply higher and drives consumers away from vehicle purchases; -- A breakdown in the supply chain resulting from further supplier bankruptcies and lack of access to capital, or from dislocations caused by the dissolution of a major competitor; -- Inability of Ford Credit to obtain financing on competitive terms. Ford is currently riding a wave of consumer goodwill resulting from its ability to avoid a direct government rescue and from favorable quality reports. Product winnowing and capacity reductions at GM and Chrysler indicate that several points of U.S. market share may be up for grabs over the next several years, with Ford in a good position to capture a portion of it. Ford's competitive product lineup across market segments, a good recent history of product introductions, and a rapid cadence of new products and refreshenings indicate that recent share gains could persist. Ford is now realizing the benefits, through improved pricing, of its long-term efforts to match production with real (and economic) market demand, through a disciplined strategy of capacity, production and inventory management. Improved price performance remains a critical, and highly challenging, component of the industry's recovery. Ford's ability to restructure its manufacturing footprint and labor force, accelerate product introductions and improve quality measures during a period of unprecedented industry turmoil has been impressive. Over the long-term, global and U.S. over-capacity indicate that low industry margins and cyclicality will result in recurrent periods of restructuring, capacity and product obsolescence and competitor failures. The competitive landscape will remain challenging, in terms of new capacity from transplant competitors (Kia, Volkswagen) and in terms of technologies. Ford could remain at a competitive disadvantage with better-capitalized competitors than can afford higher and more varied investments as the global transportation market evolves. Toyota's recent challenges in the U.S., in terms of quality and over-capacity, are likely to persist. Ford will remain challenged to sustain sales levels of its most high-volume products through model changes. Nevertheless, transplant manufacturers maintain capital, technological, and manufacturing flexibility advantages that will continue to benefit their cost and competitive position. Importantly, government actions, from fuel efficiency to tax credits, will continue to have a material affect on demand and investment in the industry going forward. The Cash-for-Clunkers program allowed Ford to better manage inventory and production during a trough sales environment, but is viewed by Fitch as simply pulling forward industry sales. The program did, however, provide other clear benefits to Ford. Ford Credit's results have benefited from better pricing in the used car market and higher lease residual values, effectively reversing a portion of earlier, severe write-downs. In addition, the pull-forward of industry sales and production provided critical revenues to the supply base. Even though supplier bankruptcies have continued at a high level, the increased flow of money to the suppliers has relieved the critical liquidity position of the supplier base and assisted in the restructuring process. Over the next several years, a reduction in various forms of financial aid to the supply base by Ford is expected to provide incremental margin enhancement. Ford's liquidity position remains adequate to finance dramatically reduced negative cash flows, even if they persist through 2010. Even in the weak industry recovery forecast by Fitch, Ford should be able to sustain liquidity at more than twice the minimum required level. Scheduled proceeds from the Department of Energy loans ($5.9 billion in total), contributions from Ford Credit, and working capital inflows from increased production should offset near-term operating losses persisting from weak market conditions. Ford has been able to manage its liability structure through the 2009 debt exchange and regular equity issuance. Fitch expects that Ford will continue to tap the equity markets as conditions permit, and that Ford will issue equity to the maximum extent permitted (50%) to finance its upcoming obligations under the VEBA agreement. Fitch notes that minimal or no contributions to the company's underfunded U.S. pension obligations could create more onerous contributions at a later date given recent asset performance, but the contribution of equity for these obligations would limit the potential claim on cash over the next five years. Proceeds from Volvo are expected to be limited, and may be largely offset by retained liabilities. Ford's cash at the end of 3Q was $23.8 billion, providing and adequate cushion in the event of persistent weakness in U.S. industry sales. The balance sheet remains burdened by debt, unfunded pensions and obligations under Ford's VEBA agreement, with only marginal improvement potential over the near term, outside of material equity issuance. Of primary concern is the December 2011 maturity of the bank agreement. Fitch expects that given Ford's operating performance and the improvement in the capital markets, Ford is in a position to address the maturity of the facility. Solvency of the industry remains dependent on various factors, including; U.S. (and some international) government assistance, multiple direct government aid into General Motors, Chrysler and their financial affiliates, debt guarantees for financial affiliates, the TALF program to facilitate auto loan and dealer financing, supplier guarantees, Cash-for-Clunkers and Department of Energy loans. Although Ford has avoided direct government aid, the company has clearly benefited from the substantial liquidity injected into the industry, and the weaning of the industry off of this assistance will present challenges. In particular, the ability of the domestic industry to economically access capital to provide competitive vehicle financing will remain a competitive disadvantage for some time versus better-capitalized transplants. However, the relatively healthy performance of auto-loan paper during the current crisis, the improvement in the used car market and residual values, the share gains by third-party lenders such as credit unions, all indicate that financing options should remain available as the government role is reduced. In particular, the growth of third- party lenders provides comfort that financing is being offered under arms-length terms, meaning that production is more aligned with real demand rather than incentive-led artificial levels that require manufacturer subsidies. Fitch views the retention of Ford Credit by Ford as a credit strength. Operating performance at Ford's international operations showed profitability in the third quarter, although stimulus measures around the globe, and particularly in Europe, will make it challenging to sustain this performance until a global economic recovery develops. In particular, demand in Europe is expectedly to be down materially following the expiration of scrappage programs. Fitch continues to recognize the strong linkage between the ratings of Ford Credit and Ford. In addition to the rating drivers cited for its automotive parent, continued improvement in operating performance and the ability to finance its business independent of government programs would support an upgrade for Ford Credit. Fitch has affirmed these ratings and revised the Outlook to Positive from Stable: Ford Motor Co. -- Long-term IDR at 'CCC'; -- Senior secured credit facility at 'B/RR1'; -- Senior secured term loan at 'B/RR1'; -- Senior unsecured at 'CC/RR6'. Ford Motor Co. Capital Trust II -- Trust preferred stock at 'C/RR6'. Ford Holdings, Inc. -- Long-term IDR at 'CCC' '; -- Senior unsecured at 'CC/RR6'. Ford Motor Co. of Australia -- Long-term IDR at 'CCC'; -- Senior unsecured at 'CC/RR6'. Ford Motor Credit Company LLC -- Long-term IDR at 'CCC'; -- Short-term IDR at 'C'; -- Commercial paper at 'C'. FCE Bank Plc -- Long-term IDR at 'CCC'; -- Short-term IDR at 'C'; -- Commercial paper at 'C'; -- Short-term deposits at 'C'. Ford Capital B.V. -- Long-term IDR at 'CCC'; Ford Credit Canada Ltd. -- Long-term IDR at 'CCC'; -- Short-term IDR at 'C'; -- Commercial paper at 'B'. Ford Credit Australia Ltd. -- Long-term IDR at 'CCC'; -- Short-term IDR at 'C'; -- Commercial paper at 'B'. Ford Credit de Mexico, S.A. de C.V. -- Long-term IDR at 'CCC'. Ford Credit Co S.A. de CV -- Long-term IDR at 'CCC' Ford Motor Credit Co. of New Zealand -- Long-term IDR at 'CCC'; -- Short-term IDR at 'C'; -- Commercial paper at 'C'. Ford Motor Credit Co. of Puerto Rico, Inc. -- Short-term IDR at 'C'. FORD MOTOR: Moody's Raises Corporate Family Rating to 'B3' ---------------------------------------------------------- Moody's Investors Service raised the Corporate Family Rating of Ford Motor Company to B3 from Caa1. Other ratings that were raised include: Probability of Default Rating to B3 from Caa3; secured credit facility to Ba3 from B1; unsecured debt to Caa1 from Caa2; and trust preferred stock to Caa2 from Caa3. Ford's Speculative Grade Liquidity rating remains at SGL-3, indicating adequate liquidity for the coming 18 months. The rating outlook is stable. Moody's also raised the senior long-term rating of Ford's finance subsidiary, Ford Motor Credit Company LLC, to B3 from Caa1 and placed the firm's ratings on review for further possible upgrade. The upgrade reflects the substantial progress Ford continues to make in strengthening its product portfolio and cost structure while maintaining a very substantial cash position on its balance sheet. As a result of this progress, Moody's expects that the company will remain solidly on track to return to profitability and positive operating cash flow for its automotive business by 2011. Moreover, Ford's $23.8 billion cash position should provide an adequate liquidity cushion in the event that the pace of recovery in automotive demand is slower than the company anticipates. Evidence of Ford's progress in reestablishing a sustainable and competitive business model include: the increase in its market share in both the US and Europe; the narrowing price gap between key Ford vehicles sold in the US and competing vehicles from Japanese manufacturers; the company's expectation that structural costs for 2009 will be reduced by $5 billion compared with earlier expectations of a $4 billion reduction; and the $2.5 billion increase in its gross cash position to $22.8 billion during the third quarter. Despite the favorable operating and financial momentum that Ford is exhibiting, as evidenced in its strong third quarter performance, Moody's cautions that the company continues to face considerable intermediate-term challenges. Most importantly, market demand in the key regions of North America and Europe will likely remain below the level necessary to support breakeven performance until 2011. As a result, Moody's expect that Ford's key credit metrics for 2009 and 2010 will be weak for the B3 rating category. For fiscal 2009, the company's operating cash burn could exceed $5 billion and the ratio of EBITA/interest will likely be negative. For 2010, rising shipment levels should improve operating performance and the pace of automotive cash burn will narrow considerably relative to the 2009 level. Nevertheless, Moody's estimate that the cash burn will remain very sizable and that EBITA/interest will be less than 1x. The upgrade of the PDR to B3 from Caa3 reflects Moody's view that the likelihood has diminished that Ford will undertake some form of balance sheet restructuring initiative (such as a significant below-par exchange offer or tender for outstanding obligations) that Moody's would view as a distressed exchange or other default event. The stable outlook is supported by Ford's more sustainable cost structure and by a liquidity position that appears to be adequate to fund the large operating cash burn until there is sufficient recovery in demand to enable Ford to reach its breakeven production levels. This level of demand is not likely to occur until 2011. Bruce Clark, senior vice president with Moody's said, "We're trying to take a balanced and prospective view of Ford with the B3 rating. Despite the company's strong third quarter, its full-year operating performance and credit metrics for 2009 and 2010 will remain weak for the B3 rating level. However, the evidence Moody's see indicates that Ford is on track in its plans to re- establish a sustainable and competitive business model. Continued progress should enable the company to generate much stronger financial performance during 2011 as global vehicle demand continues to recover." As a result of critical changes in the UAW labor agreement that was ratified in May, Ford's domestic cost structure is transitioning to a level that will be largely competitive with that of transplants. The key elements of the UAW agreement include: the establishment of a two-tier wage structure; considerable tightening of eligibility requirements for the JOBs bank program; the establishment of a UAW-run healthcare program; and the option to meet half of its future obligations to the UAW health care VEBA with stock rather than cash. The present value of these obligations approximates $7 billion. Contract modifications that were recently rejected by the UAW membership would have been constructive if ratified, and would have preserved parity with the modifications granted to GM and Chrysler. However, Moody's does not believe that the rejection will materially weaken Ford's fundamental competitive position. Beyond the benefits in the approved UAW labor agreement, Ford's current product offerings and its new product pipeline appear to be more competitive and robust than at any point in the last 25 years. These factors will help lay the groundwork for much stronger operating performance as demand recovers. However, the company's path to improved financial results faces potential risks, particularly those related to the level and mix of vehicle demand. A key risk is that the recovery in global automotive demand could be slower than expected. In addition, any significant rise in fuel prices could accelerate the shift in demand toward smaller vehicles that are less profitable for the company. Moody's six-month update of its Industry Outlook for Global Automotive Manufacturers (published in October and available on moodys.com) anticipates that light vehicle demand in the US will be 11.5 million units in 2010 and 13.0 million in 2011. Moody's base-case forecast compares conservatively with forecasts of approximately 12 million units in 2010 and 14.2 million units in 2011 from sources that include JD Powers, Global Insight and General Motors Corporation's most recently published viability plan. A scenario in which industry shipments are closer to Moody's estimates will entail a slower pace of recovery in Ford's performance. However, Moody's expect that Ford will remain on track for restoring a level of performance that supports the B3 rating under Moody's base case forecast, and believe that it has the liquidity necessary to contend with the slower pace of recovery in industry demand that Moody's anticipate. Clark said that, "A critical element in Moody's assessment of Ford is the adequacy of its liquidity position to cover all funding requirements during the coming eighteen months. This liquidity position should be sufficient even if the pace of recovery in US demand is slower than that anticipated by many market participants and observers. Moody's also think that Ford Credit has the resources to provide adequate funding in support of Ford's retail and wholesale operations." Ford's Speculative Grade Liquidity rating of SGL-3, which reflects an adequate liquidity profile during the coming 18 months, is supported by the company's $23.8 billion cash position at September 2009. Additional liquidity will be provided by the recent approval of approximately $5.9 billion in Department of Energy loans that support investments in more fuel efficient vehicles; the DOE loan proceeds will be disbursed over the next three years. These liquidity sources should be adequate to meet Ford's cash and liquidity requirements during the coming 18 months. Ford's principal liquidity requirements include a sizable operating cash burn that will occur during the balance of 2009 and through 2010. This sizeable cash burn is expected to result from industry unit volume in the US and Europe that remain near historically low levels through 2010, with no material rebound in demand until 2011. As a result, Moody's expect that Ford's production levels will remain below its breakeven level through 2010, and that the company will generate considerable negative cash flow through this period. In addition to funding an operating cash burn, Ford will also have to maintain sufficient cash to fund large intra-quarter swings in its working capital position. Moody's estimate that this minimum cash level, which would not be available to cover operating losses, is approximately $7.5 billion. Although further improvement in Ford's rating during the intermediate term is not likely, upward movement could be possible over time if the company can demonstrate that it is likely to deliver 2011 metrics that include: EBITA/interest approximating 2x, debt/EBITDA below 5x, and free cash flow in the area of $2 billion. The factors most likely to result in pressure on the rating would be a decline in Ford's US market share below 15% compared with a share of 15.9% for the nine months through September 2009, or any widening in the price gap between Ford vehicles and comparably equipped vehicles of Japanese or Korean manufacturers. Ratings pressure could also result if it appears likely that the company will deliver 2011 credit metrics at these levels: EBITA/interest below 1x; debt/EBITDA above 6.5; and negative free cash flow. Ratings raised include: -- Corporate Family Rating: to B3 from Caa1 -- Probability of Default Rating: to B3 from Caa3 -- Secured bank debt: Ba3 LGD2, 11 from B1 LGD2, 10 -- Senior unsecured debt: Caa1 LGD4, 65 from Caa2 LGD4, 66 -- Trust preferred: to Caa2 LGD6, 94 from Caa3 LGD6, 94. The last rating action on Ford occurred on September 3, 2009, and included an upgrade of the company's CFR to Caa1 from Caa3, an improvement in the Speculative Grade Liquidity rating to SGL-3 from SGL-4, and a change in the rating outlook to Stable from Negative. Ford Motor Company, headquartered in Dearborn Michigan, is leading global manufacturer of automobiles. FORD MOTOR: Moody's Upgrades Senior Unsecured Rating to 'B3' ------------------------------------------------------------ Moody's Investors Service upgraded the senior unsecured rating of Ford Motor Credit Company LLC to B3 from Caa1. This follows Moody's upgrade of Ford Motor Company's corporate family rating to B3 from Caa1, with a stable outlook. Ford Credit's long-term ratings remain on review for further possible upgrade. Moody's based its upgrade of Ford Credit's long-term ratings on the upgrade of Ford's corporate family rating. Ford Credit's ownership by and business concentrations with Ford are central considerations in Moody's ratings of the auto lender. In Moody's view, Ford's strengthened product offerings and financial prospects have lessened the risks to Ford Credit's asset performance, operating results, and capital position. However, this view is tempered by Ford's continuing intermediate term challenges, including weak demand conditions and cash burn, which results in uncertainty regarding Ford Credit's performance and financial position. Moody's said that the upgrade also considers the measures Ford Credit has successfully employed to manage funding and operating challenges associated with the economic downturn and capital market contraction. Ford Credit has maintained significant cash liquidity and has strengthened its capital position during the downturn. The company ended the third quarter with $17.3 billion of unrestricted cash, a meaningful increase from the $13.7 billion the firm reported at the end of the second quarter. In comparison, Ford Credit has approximately $12.5 billion of unsecured debt maturing over the next four quarters. Ford Credit's managed leverage measured 7.7x at the end of the quarter, improved from 9.9x at the end of 2008. "In the slower auto sales environment, the dynamic at Ford Credit has been to reduce scale as receivables and leases pay down, which generates cash to repay debt and results in stronger capital measures," said Moody's senior analyst Mark Wasden. Moody's expects that Ford Credit will continue to prudently manage its cash and capital resources in light of continuing significant risks to liquidity and capital. Ford Credit has also issued both secured and unsecured debt during the downturn. Government stimulus programs and signs of economic recovery have helped to improve the cost and accessibility of funding in recent months. Moody's notes, however, that Ford Credit's ratings are constrained by its reliance on wholesale funding, which entails recurring risks of illiquidity stemming from market disruptions. Moody's said that the strength and pace of potential improvements in Ford Credit's margins and credit loss trends as economic recovery takes hold is a key ratings consideration. For the third quarter, Ford Credit posted results that are stronger than any quarter since the second quarter of 2005. Net income benefited from a recovery in the value of used vehicles in 2009, which led to significantly reduced credit provisions in the quarter. Finance margins, however, remained flat year-over-year. Moody's anticipates that net reductions in Ford Credit's loan and lease portfolios will lead to lower revenues in the near term, highlighting the importance of keeping operating costs aligned. The ill financial health of many consumers continues to pose intermediate term risks to Ford Credit's earnings. "High unemployment and a modest pace of recovery for the U.S. economy and the U.S. auto industry are likely to present challenges to Ford Credit's asset performance, profitability and financial flexibility in the intermediate term," said Wasden. Ford Credit's senior unsecured debt rating formerly had been positioned one- to two-notches higher than Ford's corporate family rating, on the basis of stronger loss recovery estimates for Ford Credit in a liquidation scenario. During its review of Ford Credit's ratings, Moody's will assess the extent to which a notching differential is justified, considering the effects of credit cycles and capital market contractions on Ford Credit's asset values and performance expectations. Moody's review will also consider the timing and strength of potential improvements in Ford Credit's asset quality, net interest margin, and profitability as economic recovery unfolds. Trends in unemployment and the cost of debt capital will have a bearing on these factors, Moody's said. The review will also incorporate the limitations of Ford Credit's funding model and actions the firm has taken to better its liquidity and capital profiles, as well as the magnitude and quality of the asset coverage available to the firm's creditors. Ratings affected by the action include: Issuer: Ford Motor Credit Company LLC: -- Senior unsecured to B3 from Caa1 -- Subordinate shelf to (P)Caa2 from (P)Caa3 Issuer: FCE Bank Plc: -- Senior unsecured to B3 from Caa1 Issuer: Ford Credit Australia Ltd.: -- Backed senior unsecured to B3 from Caa1 Issuer: Ford Credit Canada Limited: -- Backed senior unsecured to B3 from Caa1 Issuer: Ford Motor Credit Co. of New Zealand Ltd.: -- Backed senior unsecured to B3 from Caa1 Issuer: Ford Credit Capital Trusts I, II, and III: -- Backed preferred shelf to (P)Caa2 from (P)Caa3 In its last rating action on September 3, 2009, Moody's placed Ford Credit's Caa1 senior unsecured rating on review for possible upgrade. Ford Motor Credit Company LLC is the Dearborn, Michigan-based captive finance arm of Ford Motor Company. FOURTH QUARTER: Case Summary & Creditors Lists ---------------------------------------------- Debtor: Fourth Quarter Properties 118, LLC dba The Rim 45 Ansley Drive Newnan, GA 30263 Case No.: 09-13960 Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $100,000,001 to $500,000,000 Debtor Affiliate Filing Separate Chapter 11 Petition: Fourth Quarter Properties XLVII, LLC Case No: 09-13959 Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $50,000,001 to $100,000,000 Fourth Quarter Properties V, Inc. Case No.: 09-13968 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Type of Business: The Debtors operate a real estate business. Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Newnan) Debtors' Counsel: James P. Smith, Esq. Stone & Baxter, LLP Fickling & Co. Building, Suite 800 577 Mulberry Street Macon, GA 31201 Tel: (478) 750-9898 Fax: (478) 750-9899 Email: jsmith@stoneandbaxter.com The petition was signed by Stanley E. Thomas, the company's manager. A. Fourth Quarter Properties 118's List of 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Amtech Lighting Services Trade Debt $10,791 Cushing, Morris, Trade Debt $5,652 Armbruster, et al. David A. Minutti Trade Debt $65,121 Hartman, Simons, Spielman Trade Debt $2,241 & Wood, LLP Native Land Design, LLC Trade Debt $5,174 Pape-Dawson Engineers, Inc. Trade Debt $3,375 Ryan Roberts Trade Debt $1,500 Seto Grading LLC Trade Debt $12,443 Thomas Enterprises, Inc. Trade Debt $868 Thomson Tax & Accounting Trade Debt $58,406 Tiger Sanitation, Inc. Trade Debt $710 US Security Associates, Inc. $8,605 Willis Insurance Services Trade Debt $1,085 of GA B. Fourth Quarter Properties XLVII's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 3rd Works, LLC $148,392 B2 and Company Exponential $410,591 5449 N. Old Ranch Rd Attn: Beth Bradford Park City, UT 84098 Hartman, Simons, Spielman $167,950 & Wood LLP HKS, Inc. $132,560 IDQ Realty Advisors, Inc. $31,891 Attn: Ignacias de Quesada Iris J. Callie Company Trade Debt $25,000 Attn: Iris J. Caliie Koniver Stern Group, Inc. $56,322 Attn: Bruce Konvier Lowe Engineers, LLC $21,137 Attn: Chris Owens Redmond Schwartz Mark Design $61,858 SEC Planning, LLC $39,780 Attn: Matthew Master Setco Grading, LLC $446,360 Attn: Amy Bowman 50 Ansley Dr. Newnan, GA 30263 Specialty Retail $140,805 Development SWA Group $102,707 Attn: Chuck McDaniel The McDevitt Company $44,651 Attn: Lorraine Abney The Partnership, Inc. $38,882 Attn: David Arnold The Shopping Center $140,940 Center Group, LLC URS Corporation $111,922 Attn: John Oliver Vratsinas Construction Co $3,609,465 Attn: Jeff Johnson 1000 Abernathy Rd., NE, Suite 1130 Atlanta, GA 30328 Wakefield Beasley & Assoc $1,276,969 Attn: Lamar Wakefield 5155 Peachtree Pkwy # 300 Norcross, GA 30092 Walker Parking Consultants 29,034 Attn: Victor Iraheta C. A full-text copy of Fourth Quarter Properties V 's petition, including a list of its 8 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ganb09-13968.pdf GAINESVILLE HOSPITALITY: Case Summary & Unsecured Creditors ----------------------------------------------------------- Debtor: Gainesville Hospitality, Inc. aka dba Super 8 Motel 541 Dorsey Street Gainesville, GA 30501 Bankruptcy Case No.: 09-24704 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Gainesville) Debtor's Counsel: Brad A. Baldwin, Esq. Burr & Forman LLP Suite 1100, 171 Seventeenth Street, NW Atlanta, GA 30363 Tel: (404) 685-4332 Email: bbaldwin@burr.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 10 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ganb09-24704.pdf The petition was signed by Seemaben Patel, president of the Company. GAYNOR M.J.: Case Summary & 4 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Gaynor, M.J., LLC dba Comfort Suites (Pt. Wentworth) 107 Maner Row Pooler, GA 31322 Bankruptcy Case No.: 09-42510 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Southern District of Georgia (Savannah) Debtor's Counsel: Richard C. E. Jennings, Esq. Law Offices Of Skip Jennings, PC 115 W Oglethorpe Ave Savannah, GA 31401 Tel: (912) 234-6872 Fax: (912) 236-7549 Email: skipjenningspc@comcast.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $7,273,000, and total debts of $5,210,927. A full-text copy of the Debtor's petition, including a list of its 4 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/gasb09-42510.pdf The petition was signed by Jayanti Shah, managing member of the Company. GENERAL CABLE: Moody's Affirms Corporate Family Rating at 'Ba3' --------------------------------------------------------------- Moody's Investors Service affirmed the Ba3 Corporate Family Rating of General Cable Corporation and assigned an SGL-1 speculative grade liquidity rating. The rating outlook remains stable. GCC recently commenced an exchange offer for its outstanding 1% Senior Convertible Notes due 2012 (2012 Senior Notes). The company is offering to exchange $925 principal amount of new Subordinated Convertible Notes due 2029 (2029 Subordinated Notes) for each $1,000 principal amount of 2012 Notes. The exchange offer is conditioned upon, among other things, at least $100 million aggregate principal amount of the 2012 notes being tendered prior to the expiration of the offer on November 24, 2009. The proposed 2029 Subordinated Notes are not rated by Moody's. If the exchange offer closes based on the aforementioned terms, Moody's expects to raise the ratings on the senior unsecured notes of GCC to Ba3 from B1 in accordance with Moody's Loss Given Default rating methodology. The completion of the exchange offer would add subordinated indebtedness to the capital structure and create a layer of first loss absorption for the senior notes in a default scenario. The Ba3 Corporate Family Rating benefits from the company's leading market positions in the highly cyclical wire and cable industry, favorable longer term demand trends, broad geographic diversity and very good liquidity. The current economic downturn has sharply weakened demand for GCC's products in many major end markets and created a difficult pricing environment. Despite a sharp profitability decline in 2009, credit metrics position the company adequately in the Ba3 rating category. Moody's affirmed these ratings (LGD assessments): -- $475 million senior unsecured convertible notes due 2012, B1 (LGD 4, 61%) -- $355 million senior unsecured convertible notes due 2013, B1 (LGD 4, 61%) -- $125 million senior unsecured floating rate notes due 2015, B1 (LGD 4, 61%) -- $200 million senior unsecured notes due 2017, B1 (LGD 4, 61%) -- Corporate Family Rating, Ba3 -- Probability of Default Rating, Ba3 The last rating action on GCC was on September 26, 2007, when Moody's assigned a rating of B1 to a proposed offering of senior unsecured convertible notes and confirmed all other ratings of GCC. This rating action concluded a review for possible downgrade initiated on September 12, 2007. General Cable Corporation is a leading global developer and manufacturer of copper, aluminum and fiber optic wire and cable products. For the twelve months ended October 2, 2009 (LTM period), the company reported revenues of approximately $4.5 billion. GENERAL MOTORS: Cancels Opel Sale to Magna; to Restructure Unit --------------------------------------------------------------- Given an improving business environment for General Motors Company over the past few months, and the importance of Opel//Vauxhall to GM's global strategy, the GM Board of Directors has decided to retain Opel and will initiate a restructuring of its European operations in earnest. "GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration," said Fritz Henderson, president and CEO. "We understand the complexity and length of this issue has been draining for all involved. However, from the outset, our goal has been to secure the best long term solution for our customers, employee, suppliers, and dealers, which is reflected in the decision reached today. This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall's long-term future." The Wall Street Journal's John D. Stoll and Sharon Terlep write that GM's change of heart reflects the car maker's increasing confidence about its outlook as well as the direction of its aggressive new chairman, Edward E. Whitacre Jr. According to the Journal, Mr. Whitacre, a former AT&T Corp. chief, who was picked by the U.S. government to steer GM, has told GM executives to concentrate on growing its market, not shrinking it. On a preliminary basis, the GM plan entails total restructuring expenses of about EUR3 billion, significantly lower than all bids submitted as part of the investor solicitation. GM will work with all European labor unions to develop a plan for meaningful contributions to Opel's restructuring. While Opel continues to outperform against its viability plan assumptions and immediate liquidity is stable, time is of the essence. GM is facing a November 30 expiration on EUR1.5 billion in bridge loans from Germany. According to the Journal, GM hadn't received word from the German government Tuesday evening on whether it will continue extending the loans or request they be repaid, said a person familiar with the matter. The Journal relates that officials in Berlin, where the news arrived late Tuesday evening, were caught off guard by the decision. According to the Journal, it was unclear whether German Chancellor Angela Merkel, who met with President Barack Obama and U.S. lawmakers in Washington on Tuesday, was aware that GM was considering keeping Opel. The Journal, however, relates that Ms. Merkel's conservative ally Roland Koch, state premier of Hesse where Opel is based, condemned GM's decision, saying he was "angry that months of effort to find a good solution for Opel Europe have failed because of GM." "While strained, the business environment in Europe has improved." Mr. Henderson said in a news statement. "At the same time, GM's overall financial health and stability have improved significantly over the past few months, giving us confidence that the European business can be successfully restructured. We are grateful for the hard work of the German and other EU governments in navigating this difficult economic period. We're also appreciative of the effort put forward by Magna and its partners in Russia in trying to reach an equitable agreement." Mr. Henderson added that GM also hopes to build on its already significant business in Russia and to resume work directly with GAZ to contribute to both the modernization of its operations and the joint development of the Russian vehicle market on a mutually attractive basis. More details on the next steps in the restructuring will be provided as the plans and developments warrant. The Journal notes that Mr. Henderson's management team had worked out a deal last Summer to sell 55% of Opel to the partnership of Canadian autoparts maker Magna, Russian car maker OAO GAZ and Russian state-controlled OAO Sberbank. The German government committed to finance the plan and help fund Opel with EUR4.5 billion in aid. Under the deal, the German government would kick in billions of dollars in financing to close the sale and initiate a restructuring. Magna had committed to spend $500 million. General Motors -- -- http://www.gm.com/-- one of the world's largest automakers, traces its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors acquired operations from General Motors Corporation on July 10, 2009. GENERAL MOTORS: U.S. October 2009 Sales Up 4% from 2008 ------------------------------------------------------- The Wall Street Journal's John D. Stoll and Sharon Terlep observe that SINCE emerging debt-free from bankruptcy reorganization in July and 60% owned by the U.S. government, General Motors Company has seen car sales climb. GM on Tuesday said a strong performance by its four core brands -- Chevrolet, Buick, GMC, and Cadillac -- resulted in GM U.S. October sales of 177,603 vehicles, up 4% from last October, the company's first year-over-year gain since January 2008. Total sales increased 13% when compared with September. The four brands accounted for about 95% of GM's retail sales, an increase of 10 percentage points compared to the prior year. "We're very pleased with consumer acceptance to our newest cars, crossovers and trucks," said Susan Docherty, GM vice president, U.S. Sales. "While we have more work to do, we are making progress and will continue our focus on delivering vehicles and a sales and service experience that brings consumers to Chevrolet, Buick, GMC and Cadillac -- and keeps them coming back." Total GM sales increased 4% compared with October 2008; retail sales were up 15% for the same period. Year-over-year total sales increase is the first since January 2008. Meanwhile, rival Ford Motor Company has reported that Ford, Lincoln and Mercury October U.S. sales totaled 132,483, up 3% versus a year ago and 21% higher than September -- marking the third time in the last four months Ford sales have increased. GM said it has gained market share for the third straight month -- estimated at 21% of the total light vehicle market. Chevrolet, Buick, GMC and Cadillac retail sales represented 95% of October retail sales against 85% in October 2008. Combined Buick/GMC retail sales were up 20% compared with last year, driving Buick- Pontiac-GMC retail sales up 12%. Strong retail sales of Chevrolet's launch vehicles -- Camaro, Equinox, and Traverse -- led to a year-over-year increase in total sales of 9%, and a 31% increase in retail sales for the same period. "Chevrolet had a solid sales month in October supported by our 2009 launch products Camaro, Equinox and Traverse," said Brent Dewar, vice president, global Chevrolet. "Our broad lineup appeals to a range of consumers, whether it's the modern sports car, Camaro, appealing to performance enthusiasts or the Equinox and Traverse delivering what today's families care about: safety, styling and efficiency." "We like the momentum we've seen in the sales of new Buick and GMC models," said Susan Docherty, Buick-GMC general manager, and GM Vice President of U.S. Sales. "In October, Buick and GMC both had their best sales months of 2009, and in fact, total sales for these two brands were up 33% over October 2008 for the combined total of Buick, Pontiac and GMC." "The interest customers are showing in the new SRX is exciting - we are seeing Lexus, BMW and Mercedes customers trading their vehicles for the SRX," said Bryan Nesbitt, Cadillac General Manager. Total combined sales for Saturn, Pontiac, Saab and HUMMER were 15,089 for the month. As a percent of total GM sales, these brands represented 9% of sales, compared with 15% in October 2008. The U.S. October 2009 SAAR of 10.6 million is a 13% improvement compared to last month, but is the second-lowest SAAR for October since the early 1980s. The U.S. economy and auto industry are showing signs of recovery. In October, GM produced 228,000 vehicles (92,000 cars and 136,000 trucks). This is down 90,000 vehicles, or 28% compared with October 2008, when GM North America produced 318,000 vehicles (151,000 cars and 167,000 trucks). (Production totals include joint venture production of 15,000 vehicles in October 2009 and 11,000 vehicles in October 2008) GM third quarter production was 531,000 vehicles (205,000 cars and 326,000 trucks), which was down 42% compared to the same quarter in 2008. GM North America built 915,000 vehicles (436,000 cars and 479,000 trucks) in the third quarter of 2008. However, third quarter production was substantially higher than production volumes for Q1 and Q2 2009 of 371,000 (up 43%) and 395,000 (up 34%), respectively. GM's 2009 fourth quarter forecast at 620,000 vehicles (239,000 cars and 381,000 trucks), which is down about 24% from a year ago. GM North America built 815,000 vehicles (365,000 cars and 450,000 trucks) in the fourth quarter of 2008. However, Q4 2009 production volumes represent a 17% increase compared to Q3 2009. At October month-end, inventories of vehicles for U.S. dealers increased to 444,000 (172,000 cars and 272,000 trucks) compared to September, 2009 (157,000 cars and 267,000 trucks), an increase of 5%. Compared to month-end inventories for October 2008 (336,000 cars and 464,000 trucks), inventories decreased by 356,000 (164.000 cars and 192,000 trucks), or 45%. 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). GIGABEAM CORP: Completes Sale Process to Lenders ------------------------------------------------ Reuters reports that a court has approved the sale process of Gigabeam Corp., which is a vital piece to restructuring the business. According the report, as a result of this latest transaction, the business is in full operation as a private entity and out of Chapter 11. The public entity connected to symbol GGBM.PK is no longer operating and will continue through the bankruptcy process. As reported by the TCR on Oct. 30, 2009, GigaBeam was authorized on Oct. 27 to sell assets to secured lenders in exchange for $6.1 million in debt and payment of the cost of curing contract defaults. The Debtor agreed to sell all direct or indirect, right, title and interest of seller in and to the tangible and intangible assets, properties, rights, claims and contracts related to the business. Durham, North Carolina-based GigaBeam Corporation provides wireless communication equipment. It filed for Chapter 11 on Sept. 2, 2009 (Bank. D. Del. Case No. 09-13113). Carl D. Neff, Esq., Daniel K. Astin, Esq. and Mary E. Augustine, Esq. at Ciardi Ciardi & Astin represent the Debtor in its restructuring effort. GLASSLINE PARTNERSHIP: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Glassline Partnership Ltd 4822 Southerland Rd Houston, TX 77092 Case No.: 09-38397 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Wesley W. Steen Debtor's Counsel: Matthew Hoffman, Esq. Law Offices of Matthew Hoffman, p.c. 2777 Allen Parkway, Suite 1000 Houston, TX 77019 Tel: (713) 654-9990 Fax: (713) 654-0038 Email: mhecf@aol.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company says it does not have unsecured creditors who are non insiders when it filed its petition. GMAC INC: Moody's Reviews 'Ca' Senior Unsecured Ratings ------------------------------------------------------- Moody's Investors Service said that it is continuing its review of GMAC Inc.'s ratings for possible upgrade. GMAC's senior unsecured rating was upgraded to Ca and placed on review for further possible upgrade on June 10, 2009. Moody's outlook on the ratings of Residential Capital LLC (senior at C), GMAC's mortgage finance subsidiary, remains stable. Moody's review of GMAC's ratings will include an assessment of the firm's capital adequacy, taking into consideration the requirement by banking regulators that the lender raise as much as $5.6 billion of additional capital by November 9. The $5.6 billion figure represents the remaining amount of new Tier 1 common equity that GMAC requires, based upon the results of the U.S. government's Supervisory Capital Assessment Program conducted earlier this year. Moody's will also examine GMAC's plans regarding further support of ResCap as it services its portfolio of troubled residential mortgages to liquidation. ResCap's string of large quarterly losses and consequent need for capital support has significantly limited GMAC's financial flexibility, in Moody's view. "Two factors weighing on GMAC's credit profile are its remaining capital deficiency from the SCAP exercise and the continuing support requirements of ResCap," said Moody's senior analyst Mark Wasden. "A resolution of these concerns could result in a multi- notch improvement in the firm's long-term ratings," he added. Moody's noted that other long-term concerns, such as GMAC's business concentrations with GM and Chrysler, could limit the potential for ratings upgrade. Moody's believes that the amount of capital GMAC is required to raise could be less than $5.6 billion if regulators determine that the company's risk of loss has improved since the SCAP process was completed. Additionally, GMAC has indicated that it has experienced relatively modest losses associated with the bankruptcy of General Motors to date, which could also be the basis for a downward revision of the firm's requirement for additional capital. Given GMAC's limited access to private sources of capital, Moody's continues to believe that any additional required regulatory capital would come from the U.S. Treasury. Moody's said that GMAC faces continuing challenges that constrain its long-term ratings, including execution risks as it pursues its transition to a bank operating and funding model, revenue concentrations with GM and Chrysler, and an eventual need to reduce its reliance on the U.S. government's support and ownership. "GMAC's ratings will be constrained as long as recovery in the auto industry remains elusive, particularly as it relates to the operating prospects of GM and Chrysler," said Wasden. Moody's said that support from the U.S. government has strengthened GMAC's capital and liquidity positions and business prospects, which is the source of upward pressure on the firm's ratings. The U.S. government currently owns 35.4% of GMAC, has injected $12.5 billion including investments through the U.S. Treasury's Troubled Asset Relief Program, and has guaranteed $7.4 billion of the firm's long-term debt through the FDIC's Temporary Liquidity Guarantee Program. Underscoring GMAC's role in the revival of the U.S. domestic auto industry, regulators also granted the firm expanded funding flexibility in GMAC Bank (a/k/a Ally Bank), via expanded 23A exemptions under the Federal Reserve Act. Regulators also endorsed GMAC's agreements with Chrysler to become the preferred provider of dealer floorplan financing to Chrysler dealers and a provider of subvented retail auto financing to buyers of Chrysler vehicles. In its last rating action on June 10, 2009, Moody's upgraded GMAC's senior unsecured rating to Ca from C and placed its ratings on review for further possible upgrade. GMAC Inc. is a global provider of auto finance, residential mortgage finance, and related products and services. GPX INTERNATIONAL: Hires Hanify & King as Bankruptcy Counsel ------------------------------------------------------------ GPX International Corporation has sought the permission of the U.S. Bankruptcy Court for the District of Massachusetts to hire Hanify & King, Professional Corporation as bankruptcy counsel. H&K will, among other things: -- advise the Debtor on any plan of reorganization and any other matters relevant to the formulation and negotiation of a plan or plans of reorganization in the case; -- assist the Debtor in the negotiation and documentation of financing agreements, debt and cash collateral orders and related transactions; and -- prepare all necessary and appropriate applications, motions, answers, orders, reports, and other pleadings and other documents, and review all financial and other reports filed in the Debtor's Chapter 11 case; H&K will seek compensation based upon its normal and usual hourly billing rates, and will seek reimbursement of expenses. H&K requests that it receive compensation for services rendered to the Debtor upon approval of the Court. The Debtor's proposed interim compensation procedures is available for free at http://ResearchArchives.com/t/s?4824 A hearing will be held on November 18, 2009, at 11:00 a.m. before the Honorable Judge Joan N. Feeney at 12th Floor, Courtroom 1, J.W. McCormack Post Office & Court House, 5 Post Office Square, Boston, MA 02109-3945 to consider the request by the Debtor for administrative order establishing procedures for interim compensation and reimbursement of expenses of professionals. Harold B. Murphy, a shareholder of H&K, assures the Court that H&K doesn't have interests adverse to the interest of the Debtors' estates or of any class of creditors and equity security holders. Mr. Murphy maintains that H&K is a disinterested person as the term is defined under Section 101(14) of the Bankruptcy Code. GPX International Tire Corporation -- http://www.gpxtire.com/-- 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 International filed for Chapter 11 bankruptcy protection on October 26, 2009 (Bankr. D. Mass. Case No. 09-20170). Harold B. Murphy, Esq., and Christian J. Urbano, Esq., at Hanify & King, P. C., assists the Company in its restructuring efforts. The Company listed US$100 million to US$500 million in assets and US$100 million to US$500 million in liabilities. GPX INTERNATIONAL: Taps Hinckley Allen as Special Counsel --------------------------------------------------------- GPX International Tire Corporation has sought the U.S. Bankruptcy Court for the District of Massachusetts to hire Hinckley, Allen & Snyder LLP as special counsel. Hinckley Allen will, among other things: -- advise the Debtor's corporate and affiliated entity matters and consult with the Debtor as to potential assets and liabilities; -- advise the Debtor and prepare any required corporate documentation with respect to the Debtor's efforts to (i) collect and recover property for the benefit of its estate, (ii) dispose of property, including the sale of the Solid Tire Unit, and/or (iii) assume, assign or reject executory contracts or leases; -- advise and assist the Debtor with respect to various corporate matters as may become necessary during the pendency of this proceeding, including matters relating to employment and intellectual property. The Debtor has also filed an application to employ Hanify & King, P.C., as its bankruptcy counsel and Torys, LLP, as special Canadian counsel. The Debtor assures that the services that Hinckley Allen will provide as special counsel will relate solely to special counsel matters and not the Debtor's reorganization efforts. The Debtor said that every effort will be taken to avoid duplicating services. Hinckley Allen will seek compensation based upon its normal and usual hourly billing rates, and will seek reimbursement of expenses. Hinckley Allen reserves its right to seek an enhancement of its fees or a lodestar award greater than its normal hourly time charges, subject to the Court's approval. The Debtor's proposed interim compensation procedures is available for free at http://ResearchArchives.com/t/s?4824 A hearing will be held on November 18, 2009, at 11:00 a.m. before the Honorable Judge Joan N. Feeney at 12th Floor, Courtroom 1, J.W. McCormack Post Office & Court House, 5 Post Office Square, Boston, MA 02109-3945 to consider the request by the Debtor for administrative order establishing procedures for interim compensation and reimbursement of expenses of professionals. Margaret D. Farrell, a partner in Hinckley Allen, assures the Court that Hinckley Allen doesn't have interests adverse to the interest of the Debtors' estates or of any class of creditors and equity security holders. Ms. Farrell maintains that Hinckley Allen is a disinterested person as the term is defined under Section 101(14) of the Bankruptcy Code. GPX International Tire Corporation -- http://www.gpxtire.com/-- 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 International filed for Chapter 11 bankruptcy protection on October 26, 2009 (Bankr. D. Mass. Case No. 09-20170). Harold B. Murphy, Esq., and Christian J. Urbano, Esq., at Hanify & King, P. C., assists the Company in its restructuring efforts. The Company listed US$100 million to US$500 million in assets and US$100 million to US$500 million in liabilities. GPX INTERNATIONAL: Hires Torys as Special Canadian Counsel ---------------------------------------------------------- GPX International Tire Corporation has asked the permission of the U.S. Bankruptcy Court for the District of Massachusetts to employ Torys, LLP, as special Canadian counsel. The Debtor has administrative, sales, and warehousing facilities in Brampton, Ontario, leased by its Canadian subsidiary. Torys has substantial experience and expertise in Canadian insolvency issues, to address Canadian legal issues which may arise due to the Debtor's assets and its affiliate located in Canada. The Debtor has also filed an application to employ Hanify & King, P.C., as its bankruptcy counsel and Hinckley, Allen & Snyder LLP as special counsel. The Debtor is asking the Court to allow Torys to perform limited representation of the Debtor. The Debtor assures that Torys will render services that relate solely to the Debtor's Canadian matters, and won't overlap with services provided by bankruptcy or general corporate counsel. Every effort will be taken to avoid duplicating services, says the Debtor. Torys will seek compensation based upon its normal and usual hourly billing rates, and will seek reimbursement of expenses. Torys reserves its right to seek an enhancement of its fees or a lodestar award greater than its normal hourly time charges, subject to the Court's approval. The Debtor's proposed interim compensation procedures is available for free at http://ResearchArchives.com/t/s?4824 A hearing will be held on November 18, 2009, at 11:00 a.m. before the Honorable Judge Joan N. Feeney at 12th Floor, Courtroom 1, J.W. McCormack Post Office & Court House, 5 Post Office Square, Boston, MA 02109-3945 to consider the request by the Debtor for administrative order establishing procedures for interim compensation and reimbursement of expenses of professionals. Scott Bomhof, a partner of Torys, LLP, assures the Court that Torys doesn't have interests adverse to the interest of the Debtors' estates or of any class of creditors and equity security holders. Mr. Murphy maintains that Torys is a disinterested person as the term is defined under Section 101(14) of the Bankruptcy Code. GPX International Tire Corporation -- http://www.gpxtire.com/-- 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 International filed for Chapter 11 bankruptcy protection on October 26, 2009 (Bankr. D. Mass. Case No. 09-20170). Harold B. Murphy, Esq., and Christian J. Urbano, Esq., at Hanify & King, P. C., assists the Company in its restructuring efforts. The Company listed US$100 million to US$500 million in assets and US$100 million to US$500 million in liabilities. GPX INTERNATIONAL: Sec. 341 Meeting Set for December 1 ------------------------------------------------------ The U.S. Trustee for Region 1 will convene a meeting of GPX International Tire Corporation's creditors on December 1, 2009, at 12:30 p.m., at Suite 1055, U.S. Trustee Office. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. GPX International Tire Corporation -- http://www.gpxtire.com/-- 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 International filed for Chapter 11 bankruptcy protection on October 26, 2009 (Bankr. D. Mass. Case No. 09-20170). Harold B. Murphy, Esq., and Christian J. Urbano, Esq., at Hanify & King, P. C., assists the Company in its restructuring efforts. The Company listed US$100 million to US$500 million in assets and US$100 million to US$500 million in liabilities. GPX INTERNATIONAL: Taps Argus Management as Financial Advisor ------------------------------------------------------------- GPX International Tire Corporation has sought the approval of the U.S. Bankruptcy Court for the District of Massachusetts to hire Argus Management Corporation as financial advisor. Argus will, among other things: -- consult with the Debtor and its counsel with respect to the development and implementation of a plan to reorganize the Debtor's business operations; -- prepare or coordinate the preparation of other analyses and reports as may be requested or required by the Debtor, the Court, the Debtor's secured creditors, and any official committees appointed in the Debtor's bankruptcy case; -- prepare or coordinate the preparation of monthly operating reports and other reports and information; -- advise the Debtor's senior management on the performance of the business on a regular basis or as requested and recommending actions to improve the value of the Debtor's assets; and -- assist in talks with potential investors and manage and improve creditor relations. Argus will seek compensation based upon its normal and usual hourly billing rates, and will seek reimbursement of expenses. The Debtor's proposed interim compensation procedures is available for free at http://ResearchArchives.com/t/s?4824 A hearing will be held on November 18, 2009, at 11:00 a.m. before the Honorable Judge Joan N. Feeney at 12th Floor, Courtroom 1, J.W. McCormack Post Office & Court House, 5 Post Office Square, Boston, MA 02109-3945 to consider the request by the Debtor for administrative order establishing procedures for interim compensation and reimbursement of expenses of professionals. John G. Haggerty, a principal of Argus, assures the Court that Argus doesn't have interests adverse to the interest of the Debtors' estates or of any class of creditors and equity security holders. Mr. Haggerty maintains that Argus is a disinterested person as the term is defined under Section 101(14) of the Bankruptcy Code. GPX International Tire Corporation -- http://www.gpxtire.com/-- 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 International filed for Chapter 11 bankruptcy protection on October 26, 2009 (Bankr. D. Mass. Case No. 09-20170). Harold B. Murphy, Esq., and Christian J. Urbano, Esq., at Hanify & King, P. C., assists the Company in its restructuring efforts. The Company listed US$100 million to US$500 million in assets and US$100 million to US$500 million in liabilities. GPX INTERNATIONAL: Taps TM Capital as Investment Banker ------------------------------------------------------- GPX International Tire Corporation is seeking the approval of the U.S. Bankruptcy Court for the District of Massachusetts to employ TM Capital Corp. as investment banker in connection with marketing the assets. TM Capital will assist in maximizing the value of the Debtor's assets and business operations. TM Capital will, among other things: -- analyze the current financial position of the Debtor and its business units and identify; -- contact prospective purchasers, solicit their interest, execute confidentiality agreements with such parties, and circulate presentation materials; and -- solicit and review acquisition proposals from such parties, and conduct negotiations with the parties regarding transaction value, structure and terms. Michael S. Goldman, a managing director of TM Capital, said that the firm has agreed to provide investment banking and related financial advisory services to the Debtor, pursuant to the terms and conditions of the Engagement Letter, which is available for free at: http://bankrupt.com/misc/GPXINTERNATIONAL_engagement letter.pdf Mr. Goldman assures the Court that TM Capital doesn't have interests adverse to the interest of the Debtors' estates or of any class of creditors and equity security holders. Mr. Goldman maintains that TM Capital is a disinterested person as the term is defined under Section 101(14) of the Bankruptcy Code. GPX International Tire Corporation -- http://www.gpxtire.com/-- 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 International filed for Chapter 11 bankruptcy protection on October 26, 2009 (Bankr. D. Mass. Case No. 09-20170). Harold B. Murphy, Esq., and Christian J. Urbano, Esq., at Hanify & King, P. C., assists the Company in its restructuring efforts. The Company listed US$100 million to US$500 million in assets and US$100 million to US$500 million in liabilities. GPX INTERNATIONAL: Trustee Balks at Exec. Bonuses ------------------------------------------------- Law360 reports that the U.S. Trustee has come out against GPX International Tire Corp.'s bid to authorize a senior management incentive program that would provide stay bonuses to three officers. The U.S. Trustee claims that the program is a "disguised key employee retention plan," which is prohibited under the latest changes to the Bankruptcy Code. 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 International filed for Chapter 11 on Oct. 26, 2009 (Bankr. D. Mass. Case No.: 09-20170). 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. The petition says assets and debts range from $100 million to $500 million. GREYSTONE PHARMACEUTICALS: Case Summary & Unsecured Creditors ------------------------------------------------------------- Debtor: Greystone Pharmaceuticals, Inc. aka Greystone Medical, Inc. aka Greystone Medical Group, Inc. 16261 Bass Road, Suite 202 Fort Myers, FL 33908 Case No.: 09-32236 Type of Business: The Debtor operates a pharmaceutical company. Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Western District of Tennessee (Memphis) Judge: Paulette J. Delk Debtor's Counsel: John L. Ryder, Esq. One Commerce Square, Suite 2700 Memphis, TN 38103-2555 Tel: (901) 525-1455 Email: jryder@harrisshelton.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 According to the schedules, the Company has assets of $25,467,546, and scheduled debts of $22,601,150. The petition was signed by Greg P. Pilant, the company's CEO. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Alfonso and Wilma Gaziano $500,000 12651 Water Oak Drive Estero, FL 33928 Alfonso and Wilma Gaziano $169,042 ($0 secured) BLN Capital Funding LLC $1,074,950 ($0 secured) Dolphin Direct Equity $1,600,000 Partners 129 East 17th Street New York, NY 10003 Douglas & Brenda Pilant $175,000 Gary Pilant $1,000,000 & Christine Pilant JT TN 1806 Cottonwood Valley Circle S. Irving, TX 75038 Gregory Pilant & Christine $2,030,000 Pilant JT TN 15110 Bain Road Fort Myers, FL 33908 Gregory Pilant & Christine $1,897,500 Pilant JT TN 15110 Bain Road Fort Myers, FL 33908 Helaine Kaplan $600,000 17 Riverview Terrace Smithtown, NY 11787 Lawrence Kaplan $450,000 17 Riverview Terrace Smithtwon, NY 11787 Michael Miller $300,000 31 Pierce Lane Norwich, VT 05055 Northeast Securities $350,000 100 Wall Street 8th Floor New York, NY 10005 O'Melveny & Myers LLP $213,927 Peaches G. Blank $500,000 1001 Greenwich Park Nashville, TN 37215 Richard Trippeer $1,000,000 6358 Blue Heron Cove Memphis, TN 38120 Stanford Venture Capital $5,000,000 Holdings 201 South Biscayne Blvd. 12th Floor Miami, FL 33131 Stanley A. Kaplan $200,000 Stanley Gottleib $200,000 US Treasury Taxes $495,677 PO Box 804521 Cincinatti, OH 45280-4521 University of Tennessee $184,088 HALCYON HOLDINGS: May Auction Terminator Rights to Pay Debt ----------------------------------------------------------- According to Bloomberg News, Kevin Shultz, a Los Angeles-based senior managing director at FTI Capital Advisors, financial advisor to Halcyon Holding Group LLC, said Halcyon may auction the rights to the Terminator movie franchise to pay down as much as $100 million in debt. Mr. Schultz said an auction is among several options under consideration and may occur as soon as mid-January. He said Halcyon has had discussions with all of Hollywood's major studios and large independent production companies, as well as some investment funds. The buyer would get rights to future revenue from "Terminator Salvation" and to sequels, he added. The Company borrowed $30 million to purchase the rights in 2007 and for operating capital, Mr. Schultz said. Halcyon Holding Group LLC is the company that produced "Terminator Salvation," a film that generated $369 million in box office receipts. Halcyon Holding Group LLC and two affiliated companies filed Chapter 11 petitions on Aug. 17 in Los Angeles, California (Bankr. C.D. Calif. Case No. 09-31854). Halcyon said it has between $50 million and $100 million in both assets and debts. HALLWOOD ENERGY: Court Confirms HPI's First Amended Joint Plan -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas has confirmed Hall Phoenix/Inwood, Ltd.'s first amended joint plan of reorganization for Hallwood Energy, L.P., and its affiliated debtors. HPI is the largest secured and unsecured creditor of the Debtors. The Court also ordered that the Trustee of Trust I will be Ray Balestri and the Trustee of Trust II and Trust III will be Douglas J. Brickley of LECG, LLC. All existing ownership interests in the Debtors held by any non-Debtor party are canceled and, on the Plan's Effective Date, the Debtors are authorized and directed to issue new ownership interests in each of the Debtors to Trust I which new ownership interests will represent all of the outstanding ownership of the Debtors. The First Amended Plan proposed by HPI was filed on August 27, 2009. The disclosure statement was approved by the Court on August 28, 2009. FEI Shale's Claims will be treated in accordance with Option B of the Plan as finally modified and set forth in Exhibit "A" to the confirmation order. The essential terms of the Plan are: -- the formation of three trusts (Trust I, Trust II and Trust III) for the benefit of creditors into which certain causes of action, including claims against the Debtors officers, directors and professionals and The Hallwood Group Incorporated, can be pursued for the benefit of creditors. -- a settlement between the Debtors' estates and HPI and its officers of all claims of the Debtors against said parties, including claims for subordination and breach of fiduciary duty. Under the terms of the settlement the litigation will be dismissed with prejudice and HPI will fulfill its obligations under the Plan including advancing the costs of operating the trusts, releasing its liens on certain causes of action and contributing HPI's direct claims to the Trust. HPI will also receive a reconveyance of all of its collateral except those causes of action transferred to Trust I. -- trade creditors will receive from Trust I, the first $1,000,000 after payment of certain other claims and administrative costs and then 10% of all Recoveries; from Trust II, 60% of all Recoveries after payment of administrative costs; and from Trust III, 100% of all Recoveries after repayment of any borrowings by Trust III and after payment of administrative costs. -- payment of 100% of allowed priority M&M lien claims as provided in the Plan. HPI will have an allowed claim in the amount of $118 million of which $28 million will be an allowed secured claims and $90 million will be an allowed unsecured claim. The amount of the allowed secured claim is an estimation of the value of HPI's collateral. HPI's secured claim will be treated and fully satisfied in accordance with the terms of the HPI settlement set forth in Section 6.01 of the Plan. HPI's allowed unsecured claim will be treated as an unsecured claim in Class 10. The HPI secured claim and HPI unsecured claim are currently, and will continue to be, subject to the security interest and lien on the HPI secured lenders and serve as collateral for the HPI secured lender note as described in Section 6.01h of the Plan. A full-text copy of HPI's first amended plan is available for free at: http://bankrupt.com/misc/hallwood.hpiamendedplan.pdf http://bankrupt.com/misc/hallwood.hpiamendedplanpart2.pdf A full-text copy of the Court's confirmation order dated October 16, 2009, is available for free at: http://bankrupt.com/misc/hallwood.hpiplanconfirmationorder.pdf About Hallwood Energy Based in Dallas, Texas, Hallwood Energy, L.P. -- http://www.hallwoodenergy.com/-- is an upstream energy corporation, engaging in the exploration, acquisition, development and production of oil and gas properties. The Company and five of its affiliates filed separate petitions for Chapter 11 relief on March 1, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31253). Kathleen M. Patrick, Esq., Michael R. Rochelle, Esq, Scott Mark DeWolf, Esq., and Sean Joseph McCaffity, Esq., at Rochelle McCullough L.L.P., represent the Debtors in their restructuring efforts. Blackhill Partners LLC serves as the Debtors' business consultant. Brian A. Kilmer, Esq., at Okin Adams & Kilmer LLP, in Dallas, and Brian D. Roman, Esq., at Okin Adams & Kilmer LLP, in Houston, represent the official committee of unsecured creditors. In its bankruptcy petition, Hallwood listed assets between $50 million and $100 million, and debts between $100 million and $500 million. HAMPSHIRE GROUP: Adopts 2009 Incentive Plan & 2010 Bonus Plan ------------------------------------------------------------- Hampshire Group, Limited on October 21, 2009, adopted the Hampshire Group, Limited 2009 Stock Incentive Plan, which is designed to assist the Company in attracting, retaining, motivating, and rewarding key employees, officers, directors, and consultants, and promoting the creation of long-term value for stockholders of the Company by closely aligning the interests of these individuals with those of such stockholders. The Plan permits the Company to award eligible persons nonqualified stock options, restricted stock, and other stock-based awards. The Plan will be administered by the Company's board of directors or a committee appointed by the Board consisting of two or more individuals. The total number of shares of the Company's common stock available for issuance under the Plan is 880,000, subject to adjustment in the event of any stock dividend or split, reorganization, recapitalization, merger, share exchange, or any other similar corporate transaction or event. The Committee is authorized by the Plan to grant other stock-based awards, including but not limited to restricted stock units and stock appreciation rights, in each case subject to terms and conditions set forth in the applicable award grant agreements. In connection with adopting the Plan, the Board approved grants of restricted stock under the Plan totaling 847,500 shares, which consisted of grants to 24 employees totaling 367,500 shares and the following grants to named executive officers and directors: Name Number of Shares ---- ---------------- Heath L. Golden 100,000 Howard L. Zwilling 100,000 Mark W. Lepine 100,000 Jonathan W. Norwood 100,000 Herbert Elish 20,000 Harvey L. Sperry 20,000 Irwin W. Winter 20,000 Richard A. Mandell 20,000 Ten percent of each award of restricted stock will be subject to time-based vesting, with 25% of the Time-Vested Shares vesting on March 31 of each of 2010, 2011, 2012, and 2013, subject to the respective grantee's continued service through the applicable vesting date. The remaining 90% of each award of restricted stock will be subject to performance-based vesting, with 25% of the Performance-Vested Shares vesting on March 31 of each of 2011, 2012, 2013, and 2014, provided that as of each such vesting date the Company's consolidated return on operating income for the preceding fiscal year as a percent of average working capital (excluding discontinued operations) is equal to or greater than 6%, with respect to the 2010 and 2011 fiscal years, and 8%, with respect to the 2012 and 2013 fiscal years. In the event the Company misses its target in a given year, the shares that would otherwise have vested in that year will be rolled forward to the next year and will vest simultaneously with the shares already allocated for that subsequent year should the Company exceed that year's target by an amount sufficient to cover the prior year's or years' cumulative shortfall. This rollover mechanism will permit shares to be carried forward over multiple years until the expiration of the Plan. If a grantee becomes incapacitated due to death or disability, his restricted stock would vest (based upon the applicable vesting requirements outlined herein) as if he had remained employed with the Company through each applicable vesting date. All unvested shares will automatically vest upon a change of control under the Plan. Bonus Plan On October 21, 2009, the Company adopted the Hampshire Group, Limited 2010 Cash Incentive Bonus Plan pursuant to which it will grant annual performance-based bonuses to certain of its employees. The Committee will administer the Bonus Plan. The Committee will determine who will receive bonuses under the Bonus Plan, set annual performance metrics and bonus payout levels, as well as interpret the Bonus Plan and make all other decisions and determinations necessary or advisable for the administration of the Bonus Plan. Target bonus amounts under the Bonus Plan will be a percentage of each participant's base salary, and actual bonus amounts paid under the Bonus Plan will depend on the extent to which annual performance metrics are achieved, as determined by the Committee. Bonus payments under the Bonus Plan are subject to the Company's meeting all of its financial covenants that would be impacted by the accrual and payment of bonuses under the Bonus Plan. In addition, to the extent that bonuses in excess of 100% of their target amounts become payable under the Bonus Plan and the payment of such bonuses would reduce the Company's operating income below the Company's budgeted operating income for the applicable fiscal year, the bonuses will be reduced pro-rata for all participants such that the Company's operating income is equal to or greater than its budgeted operating income for such fiscal year. Bonuses will also be reduced pro-rata in the event that the total amount of bonuses payable under the Bonus Plan for a fiscal year would place the Company in a non-compliance position with respect to its financial covenants. Earned bonuses will be paid no later than March 15 following the fiscal year in which they were earned, and a participant must be employed on the date such bonuses are paid in order to receive his or her bonus. If a participant in the Bonus Plan begins working for the Company after the first day of the fiscal year in which he or she becomes eligible to participate in the Bonus Plan, such participant's bonus will be pro rated for the number of days the participant is employed by the Company during such fiscal year. In addition, in the event of a "change in control" of the Company (as such term is defined in the Bonus Plan), the pro-rata bonus earned through the date of the change in control will be paid to participants in connection with such change in control. The Committee may amend or terminate the Bonus Plan at any time. Unless sooner terminated, the Bonus Plan will expire on the tenth anniversary of the date it was adopted. In connection with adopting the Bonus Plan, the Board approved these target bonus amounts for the Company's named executive officers: Name Percent of Base Salary ---- ---------------------- Heath L. Golden 32.5% Jonathan Norwood 25% Howard L. Zwilling 25% Mark W. Lepine 25% Restructuring and Cost Reduction Plans During July 2009, the Company initiated the final phase of its 2009 restructuring plan, which included executive level organizational changes and the consolidation of its Asian operations. As a result of this consolidation, the Company will reduce its global workforce by an additional 29%, bringing total 2009 personnel reductions to approximately 50% of first quarter 2009 staffing levels. About Hampshire Group Hampshire Group, Limited (Pink Sheets: HAMP.PK) is a U.S. provider of women's and men's sweaters, wovens and knits, and a designer and marketer of branded apparel. Its customers include leading retailers such as JC Penney, Kohl's, Macy's, Belk's and Dillard's, for whom it provides trend-right, branded apparel. Hampshire's owned brands include Spring+Mercer(R), its "better" apparel line, Designers Originals(R), Hampshire's first brand and still a top- seller in department stores, as well as Mercer Street Studio(R), Requirements(R), and RQT(R). Hampshire also licenses the Geoffrey Beene(R) and Dockers(R) labels for men's sweaters, both of which are market leaders in their categories, and licenses JOE Joseph Abboud(R) for men's tops and bottoms and Alexander Julian Colours(R) for men's tops. HAYES LEMMERZ: Wins Confirmation of Plan after Deals Reached ------------------------------------------------------------ Hayes Lemmerz International, Inc. said the United States Bankruptcy Court for the District of Delaware has confirmed a plan of reorganization for the Company and substantially all of its U.S. subsidiaries that will significantly improve the Company's balance sheet and reduce its leverage. The Company's total consolidated prepetition funded indebtedness of approximately US$720 million is expected to be reduced to approximately US$240 million upon emergence from Chapter 11. The Company also announced that it has reached settlements with its U.S. retirees that will allow the Company to significantly reduce the burden of its retiree medical liabilities in the United States. In addition, the Company has reached an agreement in principle with the Pension Benefit Guaranty Corporation that is expected to resolve the PBGC's claims with respect to the Company's United States pension plan. The Company's legacy retiree medical and pension liabilities in the United States were in excess of US$250 million prepetition and are expected to be less than US$75 million upon emergence from Chapter 11. The Court's confirmation order is conditioned upon the Company obtaining exit financing. The Company is currently working with a number of potential lenders to structure exit financing of approximately US$100 million. The Company expects to finalize its exit financing and to emerge from Chapter 11 no later than December. "We appreciate the efforts of our prepetition creditors in reaching agreements that enable us to significantly reduce our debt," said Curtis J. Clawson, Chairman and Chief Executive Officer of the Company. "We also appreciate the cooperation of the PBGC and the representatives of our retirees in reaching agreements that will allow us to substantially reduce our pension and retiree medical obligations in a manner that is fair and equitable to our valued retirees. We worked long and hard to achieve this important balance. We believe that we will emerge from Chapter 11 as a leaner, stronger competitor well positioned to continue our leadership in the global wheel market. Our customers and suppliers will not see any changes in our business following our emergence." About Hayes Lemmerz Originally founded in 1908, Hayes Lemmerz International, Inc. (NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel wheels for passenger cars and light trucks and of steel wheels for commercial trucks and trailers. The Company is also a supplier of automotive powertrain components. The Company has global operations with 23 facilities, including business, sales offices and manufacturing facilities, located in 12 countries around the world. The Company sells products to every major North American, Asian and European manufacturer of passenger cars and light trucks and to commercial highway vehicle customers throughout the world. The Company and certain affiliates filed for bankruptcy on May 11, 2009 (Bankr. D. Del. Case No. 09-11655) after reaching agreements with lenders holding a majority of the Company's secured debt. The Company's principal bankruptcy attorneys are Skadden, Arps, Slate, Meagher & Flom, LLP. Lazard Freres & Co., LLC, serves as the Company's financial advisors. AlixPartners, LLP, serves as the Company's restructuring advisors. The Garden City Group, Inc., serves as the Debtors' claims and notice agent. As of January 31, 2009, the Debtors had total assets of $1,336,600,000 and total debts of $1,405,200,000. This is the Company's second trip to the bankruptcy court, dubbed a Chapter 22, which was precipitated by an unprecedented slowdown in industry demand and a tightening of credit markets. HAZLETON GENERAL: Moody's Affirms 'Ba2' Ratings on $22 Mil. Bonds ----------------------------------------------------------------- Moody's Investors Service has affirmed the Ba2 bond ratings for Hazleton General Hospital and Hazleton-St. Joseph Medical Center (PA) bonds, affecting $22 million in debt. Hazleton General Hospital guarantees the bonds issued for Hazleton-St. Joseph and operates under the parent, Greater Hazleton Health Alliance. The rating outlook is stable. Legal Security: As of December 31, 2006, HSJ was merged into HGH and HGH assumed the liabilities, including debt, of HSJ. HGH has granted a mortgage lien on substantially all of its property and equipment for the bondholders. Debt service reserve funds exist for the outstanding bonds. Interest Rate Derivatives: None Strengths * Although operations have been variable and GHHA experienced operating losses in 2007 and 2008, operating cashflow margins have remained good, averaging 7.5% since 2005 * Wellspring's recent engagement has identified opportunities and cost savings of $5 million, of which $4 million has been implemented to date, resulting in improved operating performance in 2009; a new Wellspring engagement is targeting an additional $2-3 million in improvements * Modest capital plans for the foreseeable future, which should help preserve liquidity * Adequate debt measures with a 3-year average 2.7 times peak debt service coverage and 6.4 times debt-to-cashflow and no new debt plans; additionally, GHHA's bonds are all fixed rate * Although variable in the past, unrestricted cash levels increased notably to an adequate 109 days as of August 31, 2009 Challenges * Although GHHA's market position is still leading, market share has declined notably to 57% in 2006 (latest available data) from 66% in 2002 and the hospital faces competition from other large hospitals within the broader service area * With the exception of 2007, admissions have been declining, including a significant 14% decline in 2009, and contributing to low revenue growth, in part due to increasing observation cases * Physician recruitment needs will likely require further growth in the number of and subsidies for employed physicians * Weak service area demographics, with expected decline in population, an aging population, and income levels lower than the Commonwealth average Recent Developments/Results Moody's believes admissions and market share declines will continue to challenge GHHA to maintain adequate margins. Admissions declined by 3% in 2008 and by 14% through eight months of 2009, primarily due to a weaker economy and a shift to observation cases. Admissions and observation cases combined increased 7% in 2008. Greater use of outpatient services resulted in total outpatient surgeries (including surgeries at a joint venture ambulatory surgery center) increasing to 4% in 2008 and 2% through eight months of 2009. Surgeries at HGH have declined as cases have shifted to the joint venture. While GHHA still maintains a leading market position, the hospital has been challenged with outmigration, particularly to larger healthcare systems including Geisinger and Lehigh Valley health systems although competitive threats have not increased over the last year. GHHA has implemented a number of strategies to retain volumes and recapture market share. A critical initiative is physician recruitment given a small active staff of 108 physicians and a high dependency on the top ten admitters of 55% (with average age of 50 years for the top 30 physicians). GHHA has increased the number of employed physicians to 13 with a focus on specialists in order to better compete and reduce outmigration. As a result, the costs to employ physicians have risen to $1.5-$2 million annually; further growth in employed physicians and subsidies will be a challenge for GHHA to absorb. In 2007, GHHS opened its Health and Wellness Center with a joint venture surgery center with physicians on the same campus. This strategy has been successful in helping to retain physicians, growing overall surgeries, as well as contributing income to GHHA. Following strong operating profits in 2005 and 2006, GHHA experienced operating losses in 2007 and 2008. Performance in 2008 was below budget, although better than 2007 and performance in 2009 shows further improvement and a return to profitability. The operating loss in 2008 was $1.3 million (-1.3%), an improvement from a loss of $2.4 million (-2.4%) in 2007. Operating cashflow in 2008 grew to $8.2 million (8%), compared with $5.9 million (6%) in 2007. Operating cashflow in 2008 was about $1 million less than the budget primarily due to volume shortfalls. Additionally, 2008 was affected by increases in depreciation expense, higher physician employment costs, and investments in the new Health and Wellness Center. Nevertheless, the improvement in 2008 was due to additional revenue from the Medicare wage index reclass (starting in October 2007) resulting in an additional $2.2 million in annual revenue and contributing to a 4.5% increase in revenue, as well as growth in outpatient surgeries. The Medicare wage index reclassification is expected to continue, which will be important since it's a large contributor to operating income. Through eight months of fiscal year 2009, GHHA has operating income of $1.5 million (2.0%) and operating cashflow of $8.7 million (11.5%), both better than the comparable eight-month prior year period. Improvement in 2009 reflects payor increases and a higher Medicare case mix index (largely driving modest 1.5% revenue growth), increases in outpatient surgeries, and 1% reduction in total expenses. The reduction in expenses is the result of implementing $4 million of savings (out of $5 million identified) from the engagement of Wellspring. The hospital has re-engaged Wellspring to assist in implementing additional improvements and is targeting $2.4 to $3.4 million. GHHA believes the organization will be ahead of budget ($884th operating income) for the full year of 2009. Following a history of variable cash levels, GHHA's unrestricted liquidity increased in 2009 due to modest capital spending and better operating performance. Unrestricted cash as of August 31, 2009, was at a high of $29 million (109 days of cash in hand), increasing from $21 million as of fiscal yearend December 31, 2008. Cash was maintained at $21 million from fiscal yearend December 31, 2007, due to modest capital spending. As of August 31, 2009, cash-to-debt improved to 73% from a modest at 50% as of December 31, 2008. Although the pension plan was frozen in 2006 and converted to a defined contribution plan, it was underfunded by $17 million as of December 31, 2008. Future funding levels are anticipated to be at expense levels, which are approximately $2 million annually. Capital spending has been moderated to preserve liquidity with a low capital spending ratio of 0.5 in 2008. Capital spending is budgeted at $4.5 million for fiscal year 2009, although management expects to spend about $3 million. Fiscal year 2010 spending is anticipated to be about $4-$5 million, which is manageable relative to cashflow levels. GHHA's debt measures are adequate for the rating category and the hospital has no plans for new debt. Peak debt service coverage based on 2008 results was 2.9 times. Debt-to-cash flow was reasonable at 5.9 times. GHHA's debt structure for rated debt is all fixed rate bonds (GHHA has $2.5 million of unrated variable debt and $13.5 million of unrated debt that is fixed until 2027 which then becomes variable rate). Outlook The stable outlook reflects Moody's belief that the Wellspring initiatives and other cost reduction initiatives by the hospital will enable GHHA to sustain recent improvement and that cash will be maintained given operating improvement and manageable capital plans. What could change the rating-UP Sustained improvement in operations; stability or growth in inpatient and outpatient volumes and market share; maintenance of liquidity levels with no additional debt issuance What could change the rating-DOWN Decline in operating performance, loss of physicians or increase in competition within service area; deterioration in liquidity and related measures; additional borrowing. Key Indicators Assumptions & Adjustments: -- Based on financial statements for Greater Hazleton Healthcare Alliance -- First number reflects audit year ended December 31, 2007 -- Second number reflects audit year ended December 31, 2008 -- Interest adjusted for capitalized interest -- Investment returns smoothed at 6% unless otherwise noted * Inpatient admissions: 8,065; 7,792 * Total operating revenues: $98.8 million; $103.3 million * Moody's-adjusted net revenue available for debt service: $7.3 million; $9.5 million * Total debt outstanding: $43 million; $42 million * Maximum annual debt service (MADS): $3.3 million; $3.3 million * MADS Coverage with reported investment income: 2.2 times; 2.7 times * Moody's-adjusted MADS Coverage with normalized investment income: 2.2 times; 2.9 times * Debt-to-cash flow: 8.6 times; 5.9 times * Days cash on hand: 81 days; 78 days * Cash-to-debt: 49%; 50% * Operating margin: -2.4%; -1.3% * Operating cash flow margin: 6.0%; 8.0% Rated Debt -- Series 1997 (Hazleton General Hospital) fixed rate debt ($9.3 million): Ba2 -- Series 1996 (Hazleton-St. Joseph Medical Center) fixed rate debt ($12.7 million): Ba2 The last rating action was on September 18, 2008, when HGH's and HSJ's Ba2 ratings were affirmed and stable outlook maintained. HERBST GAMING: Wins Approval of Reorganization Plan --------------------------------------------------- Herbst Gaming Inc. won court confirmation of a reorganization plan that will hand the company to its lenders, leaving nothing for noteholders owed $363 million. Steven Church at Bloomberg reports that U.S. Bankruptcy Judge Gregg W. Zive approved the plan, overruling objections from the noteholders and other low-ranking creditors, who claim the three Herbst brothers drove their company into bankruptcy by doubling its debt to $1.15 billion through a pair of acquisitions in 2007. As part of the reorganization plan, the company agreed not to file lawsuits related to the 2007 expansion, a decision opposed by the Official Committee of Unsecured Creditors. The creditors argued they could potentially be paid more by suing lenders and the Herbst family. "I find the probability of success to be very low," Judge Zive said in court, referring to the potential lawsuits. The Chapter 11 Plan As reported by the Troubled Company Reporter on August 11, 2009, the Debtors have determined that the enterprise value of their Assets, consisting of the Casino Business and Slot Route Business ranges from $500,000,000 to $600,000,000. The holders of senior credit facility claims owed $847,363,000 in principal plus accrued interest of $29,103,000, will receive 100% of the stock. Holders of Senior Credit Facility Claims will receive indirectly through the ownership of Herbst Gaming LLC 100% ownership of the Reorganized Debtors and $350,000,000 of restructured debt. Holders of 7% Senior Subordinated Notes Due November 15, 2014 and 8.125% Senior Subordinated Notes Due June 1, 2012, are contractually subordinated to the Senior Credit Facility Claims, won't receive anything under the Plan, in light of the enterprise value of the assets. Holders of allowed general unsecured claims will be paid in full. The Debtors intend to assume and honor all Slot Route Contracts. Equity Interests in Herbst Gaming will be canceled and equity holders will not receive anything under the Plan. A full-text copy of the second amended disclosure statement is available for free at http://ResearchArchives.com/t/s?41e7 About Herbst Gaming Headquartered in Reno, Nevada, Herbst Gaming Inc. -- http://www.herbstgaming.com/-- is a diversified gaming company. The Company and its subsidaries focuses on two business lines, slot route operations and casino operations. The slot route business involves the exclusive installation and operation of slot machines in non-casino locations, such as grocery stores, drug stores, convenience stores, bars and restaurants throughout Nevada. As of March 31, 2009, the slot route Debtors operated approximately 6,900 slot machines machines through Nevada. The casino business consists of 12 casinos in Nevada, and two in Missouri and one in Iowa. As of the petition date, the Nevada casinos had an aggregate of roughly 5,082 hotel rooms, 329 recreational vehicle spaces/hookups, 6,800 slot machines and 138 table games. As of the petition date, the non-Nevada casinos had an aggregate of roughly 2,300 slot machines and 47 table games. The Iowa casino also offers roughly 60 all-suite hotel rooms and 65 RV spaces with utility hookups. The Company and 17 of its affiliates filed for Chapter 11 protection on March 22, 2009 (Bankr. D. Nev. Lead Case No. 09-50752). Thomas H. Fell, Esq., and Gerald M. Gordon, Esq., at Gordon Silver, represent the Debtors in their restructuring efforts. Herbst Gaming had $919.1 million in total assets; and $33.5 million in total liabilities not subject to compromise and $1.24 billion in liabilities subject to compromise, resulting in $361.0 million in stockholders' deficiency as of March 31, 2009. HYDRALOGIC SYSTEMS: Forbearance Extended to November 30 ------------------------------------------------------- HydraLogic Systems Inc. announced that CCM Master Qualified Fund, Ltd., has agreed to further extension of the Forbearance Agreement through to November 30, 2009. "We are in the process of reviewing various options currently available to us in our efforts to discharge the Lenders note", stated Michael Beckley, President and Chief Executive Officer of HydraLogic Systems Inc. "At this time, we are seeing substantially more interest in acquiring part and/or all of the operating assets of the Company by private equity firms, who, impressed that our operations are delivering a positive EBITA in these challenging economic times, see considerable value going forward." About HydraLogic Systems HydraLogic is an innovator of engineered misting systems and proprietary environmental chemistries with reoccurring revenue distribution platforms. The Company strives to be market leaders in providing technologies, through turnkey distribution and service models into the multi-billion dollar mosquito and odour control industries as Bug Defence and HLS Ecolo respectively. HydraLogic Systems is traded on the TSX Venture exchange - symbol: HLS. HYDROGENICS CORP: Closes Financing Deal with Algonquin Power ------------------------------------------------------------ Hydrogenics Corporation has closed the non-dilutive financing transaction with Algonquin Power Income Fund (Toronto: APF.UN) with gross cash proceeds of approximately C$10.8 million. Hydrogenics Corporation, formerly 7188501 Canada Inc. -- New Hydrogenics -- on October 27, 2009, completed the non-dilutive financing transaction which involved (i) a plan of arrangement between New Hydrogenics; Algonquin Power & Utilities Corp., formerly Hydrogenics Corporation -- Old Hydrogenics; and Old Hydrogenics' wholly owned subsidiaries, Stuart Energy Systems Corporation and Hydrogenics Test Systems Inc.; and (ii) take-over bids pursuant to which Old Hydrogenics made offers to acquire all of the issued and outstanding units and convertible debentures of Algonquin Power Income Fund. Pursuant to the Plan of Arrangement, which was completed on October 27, 2009, Old Hydrogenics, Stuart Energy and Test Systems transferred substantially all of their assets and liabilities to New Hydrogenics and the existing class of common shares of Old Hydrogenics were redeemed for common shares in the capital of New Hydrogenics. New Hydrogenics has substantially all of the same assets, liabilities, directors, management and employees as Old Hydrogenics had previous to the Transaction, except for certain tax attributes that remain behind, and Old Hydrogenics shareholders have become shareholders of New Hydrogenics. Pursuant to the Offers, unitholders of Algonquin Power have exchanged their Units for a new class of common shares of Old Hydrogenics, and debentureholders of Algonquin Power have exchanged their convertible debentures for convertible debentures of Old Hydrogenics or New Common Shares, which has resulted in, among other things, unitholders of Algonquin Power becoming shareholders of Old Hydrogenics and Algonquin Power becoming a subsidiary entity of Old Hydrogenics. Old Hydrogenics has been renamed "Algonquin Power & Utilities Corp." and New Hydrogenics continues the Hydrogenics business as "Hydrogenics Corporation". Subject to the final approval of the Toronto Stock Exchange and NASDAQ Global Market the common shares of New Hydrogenics will trade on the TSX under the symbol "HYG" and on NASDAQ under the symbol "HYGS". The existing certificates for Old Hydrogenics common shares represent common shares of New Hydrogenics. Specifically, 42,651,749 units of Algonquin Power (53.96% of the total issued and outstanding Units), $68,699,000 principal amount of 6.65% convertible unsecured subordinated debentures of Algonquin Power due July 31, 2011 (80.86% of the aggregate principal amount of Series 1 Debentures) and $44,624,000 principal amount of 6.20% convertible unsecured subordinated debentures of Algonquin Power due November 30, 2016 (74.41% of the aggregate principal amount of Series 2 Debentures) have been tendered to the Exchange Offers. The remaining 36,396,271 Units (46.04% of the total issued and outstanding Units) were acquired by Hydrogenics pursuant to the compulsory acquisition provisions of Algonquin Power's declaration of trust. The remaining $16,265,000 principal amount of Series 1 Debentures (19.14% of the aggregate principal amount of Series 1 Debentures) and $15,343,000 principal amount of Series 2 Debentures (25.59% of the aggregate principal amount of Series 2 Debentures) were acquired by Hydrogenics pursuant to the compulsory acquisition provisions of Algonquin Power's trust indenture in respect of the Debentures. Hydrogenics did not own any Units or Debentures prior to completion of the Exchange Offers. Daryl Wilson, Hydrogenics' President and CEO, stated, "we are very pleased to announce the closing of this complex transaction, which was clearly in the best interests of our company and our investors. We have bolstered Hydrogenics' balance sheet in a way that was non-dilutive to shareholders -- leaving the company stronger positioned to pursue our many growth initiatives in 2010." The Company had indicated that in the event that the transaction with the trustees of Algonquin Power Income Fund is either not completed, or is delayed, it will require additional financing in the fourth quarter of 2009 to continue its operations as a going concern. In the event that the proposed transaction is completed, the Company anticipates it will require additional funding during 2010. About Hydrogenics Based in Mississauga, Ontario, Hydrogenics Corporation (TSX: HYG; Nasdaq: HYGS) -- http://www.hydrogenics.com/-- develops and provides hydrogen generation and fuel cell products and services, serving the growing industrial and clean energy markets. Hydrogenics has operations in North America and Europe. HYDROGENICS CORP: Posts $5.4 Million Q3 2009 Net Loss ----------------------------------------------------- Hydrogenics Corporation reported to the U.S. Securities and Exchange Commission its financial results for the quarterly period ended September 30, 2009. Highlights for the three months ended September 30, 2009 compared to the three months ended September 30, 2008: -- Revenues, decreased $7.4 million or 68%, reflecting lower revenues in Hydrogenics' OnSite Generation and Power Systems business units due to the timing of project execution, which Hydrogenics believes in the case of its OnSite Generation business unit are the result of prevailing conditions in credit markets and the current global economy. -- Cash operating costs were $5.6 million, an 18% increase from $4.8 million in the third quarter of 2008. Cash operating costs for the third quarter of 2009 include: (i) $1.8 million of transaction related expenses associated with the Company's proposed transaction with the trustees of Algonquin Power Income Fund, which is anticipated to generate approximately C$10.8 million of gross proceeds; (ii) $0.3 million of deferred compensation costs indexed to the Company's share price; and (iii) $200,000 of costs attributable to the Company's Test Systems business unit. -- EBITDA loss was $5.1 million for the third quarter of 2009, an increase of $1.7 million or 48% compared to the third quarter of 2008. This increase is attributable to $1.8 million of transaction related expenses associated with the Company's proposed transaction with the trustees of Algonquin Power Income Fund. -- Net loss was $5.4 million, a 46% increase from $3.7 million in the third quarter of 2008. -- Cash and cash equivalents, restricted cash and short-term investments were $7.3 million as at September 30, 2009, a $4.6 million sequential quarterly decrease from the second quarter of 2009 reflecting a $5.1 million loss, excluding non-cash items partially offset by $0.5 million of non- cash working capital. Highlights for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008: -- Revenues, exclusive of our Test Systems business unit, decreased $13.4 million or 48%, primarily reflecting lower revenues in the Company's OnSite Generation business unit. -- Cash operating costs were $17.2 million, consistent with the nine months ended September 30, 2008. Cash operating costs for the nine months ended September 30, 2009 include: (i) $3.0 million of transaction related expenses associated with the Company's proposed transaction with the trustees of Algonquin Power Income Fund; (ii) $700,000 of deferred compensation costs indexed to the Company's share price; (iii) $600,000 of costs associated with business streamlining initiatives; and (iv) $400,000 of costs attributable to the Company's Test Systems business unit. -- EBITDA loss was $14.4 million for the nine months ended September 30, 2009, an increase of $2.0 million or 16% compared to the nine months ended September 30, 2008. This increase is attributable to the factors noted partially offset by cost savings related to the Company's ongoing business streamlining initiatives. -- Net loss was $15.4 million, a 26% increase from $12.2 million in the nine months ended September 30, 2008. As of September 30, 2009, the Company had $33.2 million in total assets against $22.6 million in total liabilities. At September 30, 2009, the Company had $1.6 million of restricted cash as collateral under the terms of the Company's credit agreements. The Company had $2.4 million of letters of credit and letters of guarantee outstanding as at September 30, 2009 ($2.3 million as at December 31, 2008) with expiry dates extending to October 2011. "As the global economy stabilizes, our strategic growth initiatives remain on track - with increasing visibility and order flow for renewable energy projects, fuel cells, and industrial hydrogen applications alike, pointing to a recovery in our end markets," said Daryl Wilson, President and Chief Executive Officer. "The company is well positioned for top line growth and margin expansion, and we look forward to sequential gains in the quarters to come. With the imminent closing of our $10.8 million non-dilutive financing with the trustees of Algonquin Power Income Fund, our cash position is immediately bolstered allowing us to pursue other initiative to fund our operations," added Mr. Wilson. A copy of the Company's Third Quarter 2009 Interim Consolidated Financial Statements and Results of Operations (Unaudited) is available at no charge at http://ResearchArchives.com/t/s?4828 A copy of the Company's Third Quarter 2009 Management's Discussion and Analysis of Financial Condition and Results of Operations is available at no charge at http://ResearchArchives.com/t/s?4829 A copy of the Company's slide presentation is available at no charge at http://ResearchArchives.com/t/s?482a The Company had indicated that in the event that the transaction with the trustees of Algonquin Power Income Fund is either not completed, or is delayed, it will require additional financing in the fourth quarter of 2009 to continue its operations as a going concern. In the event that the proposed transaction is completed, the Company anticipates it will require additional funding during 2010. About Hydrogenics Based in Mississauga, Ontario, Hydrogenics Corporation (TSX: HYG; Nasdaq: HYGS) -- http://www.hydrogenics.com/-- develops and provides hydrogen generation and fuel cell products and services, serving the growing industrial and clean energy markets. Hydrogenics has operations in North America and Europe. INFINITO GOLD: Receives Default Waivers Until November 30 --------------------------------------------------------- Infinito Gold Ltd. has received waivers of events of default under the outstanding $50,500,000 Secured Convertible Notes of the Company held by Exploram Enterprises Ltd. and Auro Investments Ltd. When the Notes were issued, the Company and the Noteholders expected the current Costa Rican legal challenge to the grant of a change of land use permit for the Crucitas mine before the SALA IV in Costa Rica would be resolved in time to permit the Company to complete the drawdown of funds under a project debt financing facility to finance commencement of construction at the Crucitas project by September 30, 2009. Consistent with this view, the Notes provided that it would be an Event of Default if the Sala IV proceedings had not been resolved favourably by June 30, 2009 and if the first drawdown under a project debt financing facility did not occur by September 30, 2009 and the first interest payment due under the Notes was payable on September 30, 2009. As the court proceedings have not been resolved, the Company has not completed a drawdown under a project debt financing facility and does not have the funds to fund payment of interest due on September 30, 2009. The Noteholders have granted the Company a waiver of the events of default associated with its non-compliance with each of these provisions until November 30, 2009. In addition, as of September 30, 2009, the Company owed $4.4 million in accrued interest, plus structuring fees of $510,000 to the Noteholders, and the Noteholders have agreed to defer payment of these fees by the Company (and waived the defaults related to non- payment) until November 30, 2009. Interest is accruing on these unpaid amounts at a rate of 15% per annum. These waivers represent the fifth time since June 30, 2009 the Noteholders have waived events of default relating to the delay in receipt of a decision by the SALA IV, each previous waiver having been given for a period of approximately one month. Exploram is the controlling shareholder of the Company and Auro is a company associated with Steven Dean, the Company's Chairman. Infinito Gold Ltd. is a gold exploration & development company based in Calgary, Canada, in the process of transisting from junior explorer to gold producer. IRIDIUM OPERATING: Wins Confirmation of Liquidating Plan -------------------------------------------------------- The Bankruptcy Court has issued an order confirming Iridium Operating's First Amended Joint Chapter 11 Plan of Liquidation, BankruptcyData reports. BData says the Court also issued a separate order approving an administrative expense claim in favor of the Internal Revenue Service and a distribution on account of such claim, (B) authorizing and directing the Plan administrator for Iridium Operating to file all tax returns on behalf of the parent and to take such other steps as the Plan administrator deems appropriate to wind-up the business of the parent, (C) approving the dismissal of the Chapter 11 cases of Iridium LLC and Iridium Promotions, Inc. and (D) granting related relief. About Iridium Operating Iridium Operating LLC used to develop and deploy global wireless personal communication systems. Iridium was a spinoff from Schaumburg, Illinois-based Motorola. It was formerly a unit of Motorola Inc. On August 19, 1999, some holders of Iridium's senior notes filed an involuntary chapter 11 petition (Bankr. S.D.N.Y. Case No: 99-45005) against Iridium and its subsidiary Capital Corp. At that time, the Debtors were highly leveraged with $3.9 billion in secured and unsecured debt. On the same date, Iridium and 7 other subsidiaries filed voluntary chapter 11 petitions in Delaware. They consented to the jurisdiction of the N.Y. Court in Sept. 7, 1999. William J. Perlstein, Esq., and Eric R. Markus, Esq., at Wilmer, Cutler & Pickering represent the Debtors in their restructuring efforts. John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP represent the petitioning creditors: Magten Partners, Wall Financial Investments (USA) Ltd., and Canyon Capital Advisors LLC, as Fund Manager for The Value Realization Fund, L.P. Bruce Weiner, Esq., at Rosenberg, Musso & Weiner LLP, represent the Official Committee of Unsecured Creditors. Iridium's operating unit sold all of its operating assets in 2000 to Iridium Satellite. JAGIRDAR INC: Case Summary & 6 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Jagirdar, Inc. dba Comfort Inn 5784 Wembley Drive Douglasville, GA 30135 Bankruptcy Case No.: 09-89270 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Paul Reece Marr, Esq. 300 Galleria Parkway, N.W., Suite 960 Atlanta, GA 30339 Tel: (770) 984-2255 Fax: (770) 984-0044 Email: pmarr@mindspring.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 6 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ganb09-89270.pdf The petition was signed by David Jagirdar, CEO of the Company. LAND O'LAKES: Moody's Assigns Rating on $375 Mil. Senior Facility ----------------------------------------------------------------- Moody's Investors Service assigned a Baa3 rating to Land O'Lakes, Inc.'s new $375 million senior secured bank revolving credit facility, and assigned (P)Baa3 ratings to its pending issuances of $325 million in aggregate of privately placed senior secured notes. In addition, Moody's affirmed the company's corporate family and probability of default ratings at Ba1, and its speculative grade liquidity rating at SGL-3. Finally, Moody's withdrew the Baa3 rating on the company's $400 million senior secured bank revolving credit facility that was replaced by the new $375 million bank facility. The outlook is stable. Ratings Assigned: Land O'Lakes, Inc.: -- $375 million senior secured revolving credit facility due April 2013 at Baa3 (LGD3); LGD Rate at 30%; -- $155 million of 6.24% senior secured notes due December 2016 at (P)Baa3 (LGD3); LGD Rate at 37%; -- $85 million of 6.67% senior secured notes due December 2019 at (P)Baa3 (LGD3); LGD Rate at 37%; -- $85 million of 6.77% senior secured notes due December 2021 at (P)Baa3 (LGD3); LGD Rate at 37%. Ratings Affirmed (certain LGD rates revised): Land O'Lakes, Inc. -- Corporate family rating at Ba1; -- Probability of default rating at Ba1; -- $150 million 9% senior secured second lien debt at Baa3 (LGD3); LGD Rate at 37%; -- Senior unsecured notes at Ba2 (LGD4); LGD Rate at 64%; -- Speculative grade liquidity rating at SGL-3. Land O'Lakes Capital Trust I -- $191 million 7.45% capital securities at Ba2 (LGD5); LGD Rate to 88% from 89%. Ratings Withdrawn: Land O'Lakes, Inc. -- $400 million senior secured revolving credit at Baa3 (LGD2); LGD Rate at 29%. The new and pending debt security issuances are part of a refinancing program initiated by Land O'Lakes to extend the term of its near-term debt maturities, to reduce interest costs, and to provide additional liquidity. The refinancing program includes the issuance of $700 million in new debt securities consisting of the newly issued $375 million senior secured bank revolving credit facility that replaced the $400 million bank facility due August 2011; and $325 million of privately placed senior secured notes that will be issued on or about December 15 when several existing notes will be called. Land O'Lakes also amended its five-year $400 million receivables securitization facility to extend the maturity to April 2013. The pending private notes will be issued in three tranches: $155 million of 6.24% senior secured notes due 2016; $85 million of 6.67% senior secured notes due December 2019; and $85 million of 6.77% senior secured notes due 2021. These notes will be sold under a note purchase agreement that Land O'Lakes has executed with several institutional lenders. Land O'Lakes has provided an irrevocable notice to redeem $350 million of 8.75% senior unsecured notes due 2011, and $175 million of 9.00% senior secured notes due 2010. As of October 29, 2009, the aggregate outstanding under the called notes was $323.7 million. These notes will be redeemed at par on December 15, 2009, using the proceeds from the new debt security issuances, at which time the new private notes will be assigned definitive ratings and the ratings on the called notes will be withdrawn. Moody's most recent rating action for Land O'Lakes on February 26, 2009, affirmed the ratings of Land O'Lakes, Inc., including the company's corporate family and probability of default ratings at Ba1, and its speculative grade liquidity rating at SGL-3. Land O'Lakes, Inc., based in Arden Hills, Minnesota, is an agricultural cooperative focusing on dairy food, animal feed, and agricultural crop inputs. Revenues for the fiscal year ended December 31, 2008, were approximately $12 billion. LANDAMERICA FIN'L: Extends Employment of G. Evans Until Dec. 31 --------------------------------------------------------------- In a Form 8-K filing with the U.S. Securities and Exchange Commission, Debtor LandAmerica Financial Group, Inc., disclosed that it has extended the employment of G. William Evans, the company's executive vice president and chief financial officer, to assist with matters relating to LFG's Chapter 11 bankruptcy case. It currently is anticipated that Mr. Evans' employment with LFG will terminate no later than December 31, 2009, unless proceedings in the Bankruptcy Court make further extensions necessary or advisable. About LandAmerica Financial Group LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co- counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC, serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: J. Chiang Plea for Rule 2004 Examination Denied ------------------------------------------------------------------ The Bankruptcy Court denied the Rule 2004 Examination requested by John Chiang, Controller of the State of California, without prejudice. John Chiang, Controller of the State of California, has been seeking adequate information on (1) claims against the Debtors that are asserted by other Debtors or non-debtor affiliates and that will be automatically allowed under the Amended Joint Chapter 11 Plan; (2) claims against the Debtors that arise under Chapter 5 of the Bankruptcy Code and that will be automatically released under the Plan; and (3) the financial affairs of Capital Title Group, Inc. and affiliated non-debtors that was able to file a bankruptcy petition up to five calendar days before the voting-and-confirmation-objection deadline and still be treated as a Debtor for purposes of the Plan. The Controller reminded the Court that its concerns were considered at the Disclosure Statement hearing and the Court itself noted that expedited discovery and other relief could be sought in order to procure information needed to assess the propriety of the Plan. The Controller thus endeavored to obtain discovery from the Debtors on consensual terms, but an agreement has not yet been reached and time is quickly running out. Accordingly, the Controller asked the Court to require the Debtors to produce certain requested documents and to arrange for a knowledgeable representative to be examined under Rule 2004 of the Federal Rules of Bankruptcy Procedure. The Controller further proposed a schedule for discovery and in an attempt to ease the burden on the Debtors, has requested that information be provided on a rolling basis beginning with the most accessible information. About LandAmerica Financial Group LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co- counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC, serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: To Pay $15MM Balance Under 2nd PBGC Settlement ----------------------------------------------------------------- The Pension Benefit Guaranty Corporation has filed three unliquidated claims against each of LandAmerica Financial Group, Inc., LandAmerica 1031 Exchange Services, Inc. and certain other Debtors. The PBGC Claims assert damages for (i) PBGC flat rate and variable premiums; (ii) termination premiums, at the rate of $1,250 per participant per year for three years, under Section 1306(a)(7) of the Labor Code; (iii) unpaid minimum funding contributions; and (iv) unfunded benefit liabilities estimated by the PBGC in April 2009 to be approximately $35.7 million if the Cash Balance Plan terminates. The PBGC Claims allege joint and several liability of LandAmerica Financial Group Inc. and each LFG Controlled Group Member, including each of its direct and indirect subsidiaries. LFG sponsors the LandAmerica Financial Group, Inc. Cash Balance Plan, which is a defined benefit pension plan subject to Title IV of the Employee Retirement Income Security Act of 1974 that is within the jurisdiction of the PBGC. The Cash Balance Plan had approximately 7,400 participants as of January 1, 2009. SunTrust Bank is the trustee of the Cash Balance Plan. Also as previously reported, the Debtors and the PBGC, among others, reached a settlement in mid May 2009 whereby LFG would escrow 30% of the net cash or cash equivalent proceeds actually received from the sale of LandAmerica Home Warranty Company, LandAmerica Property Inspection Services, Inc., Buyer Real Estate Services, Inc., and Residential Property Maintenance, Inc., together referred to as "Home Warranty"; and LoanCare Servicing Center, Inc., and LC Insurance Agency, Inc., together referred to as "LoanCare" for the benefit of funding a standard termination of the Cash Balance Plan or to satisfy allowed claims, if any, of the PBGC in exchange for the release of HomeWarranty and LoanCare from any payment. The May 2009 Settlement is referred to as the First PBGC Settlement. In order to consensually resolve all PBGC Claims, the Debtors, representatives of the Debtors, the Creditors' Committees, and the PBGC entered into further negotiations in September 2009. After weeks of extensive arm's-length negotiations, the Parties reached an agreement on October 23, 2009, regarding a global settlement of the PBGC Claims, whereby LFG agree to pay the Cash Balance Plan $15,000,000 in exchange for the PBGC's release and discharge of all LFG Controlled Group Members from the PBGC Claims or any other claim under ERISA Title IV. The salient terms of the parties' Settlement Agreement are: (a) Within two business days after the date on which an order by the Court approving the Settlement Agreement becomes final, non-appealable and not subject to stay, appeal, rehearing or reconsideration order, LFG will pay $15,000,000 to the Cash Balance Plan; (b) Upon the later of the order approving the Settlement Agreement becoming a Final Order and the Cash Balance Plan's receipt of the Settlement Amount, PBGC will absolutely and unconditionally release all LFG Controlled Group Members from the PBGC Claims; (c) Upon the later of the order approving the Settlement Agreement becoming a Final Order and the Payment Date, PBGC, LFG and the LFG Committee will (i) agree to terminate the First PBGC Settlement Agreement, and (ii) direct the escrow agent, Branch Banking and Trust Company, under the related Escrow Agreement dated July 29, 2009, to disburse all of the Escrow Fund to LFG pursuant to Section 4(a) of the Escrow Agreement within two business days; (d) Upon the Payment Date, LES will pay LFG $3.75 million -- the Intercompany Payment; provided that in the event the Cash Balance Plan terminates in a standard termination in accordance with Section 4041(b) of the ERISA and Section 1341(b) of the Labor Code, LFG will receive a distribution of any residual assets of the Cash Balance Plan in accordance with ERISA and Section 8.04 of the Cash Balance Plan and will pay LES 25% of any net amount; (e) All Non-Debtor Affiliates are intended to be and are deemed to be third party beneficiaries of the Settlement Agreement with all benefits, protections, and rights to be enforced; (f) Although the Settlement Amount is intended to help facilitate a Standard Termination of the Cash Balance Plan, the Parties agree and acknowledge that there is no assurance that a Standard Termination of the Cash Balance Plan can or will be accomplished, and there is neither any agreement or obligation of the LFG Controlled Group Members to effectuate or fund a standard termination of the Cash Balance Plan, nor any agreement or obligation of PBGC to refrain from initiating or resuming proceedings to terminate the Cash Balance Plan involuntarily. PBGC understands, acknowledges, and agrees that after the Settlement Amount is paid to the Cash Balance Plan, PBGC will have no recourse against the LFG Controlled Group Members for the PBGC Claims; (g) As partial consideration for PBGC's release of any termination premiums claim, the Debtors, with the consent of the LFG Committee and the LES Committee, on behalf of themselves and any successors-in-interest, waive all rights to any excess assets of the Cash Balance Plan after the involuntary termination, provided that the order or agreement effecting the termination does not become final and effective before July 1, 2010; (h) PBGC agrees it will not object to or otherwise oppose the Liquidating Plan on any grounds; and (i) In the event the Liquidating Plan is not approved by the Debtors' creditors, both LES and LFG reserve all rights, claims and defenses against the other, including contribution claims relating to the Settlement Amount, the Intercompany Payment or otherwise. A full-text copy of the Second PBGC Settlement Agreement is available for free at: http://bankrupt.com/misc/LandAm_2ndPBGCSettlement.pdf LFG and LES, in their business judgment, believe that the Claims Settlement Agreement is in the best interests of their estates. In addition, as the Second PBGC Settlement Agreement contemplates releases of the PBGC Claims in favor of LFG Controlled Group Members, the Debtors other than LFG and LES, as well as non- debtor affiliates, are benefited by the terms of the Settlement Agreement. Accordingly, LFG and LES ask the Court to approve their entry into the Second PBGC Settlement Agreement. About LandAmerica Financial Group LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co- counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC, serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LAS VEGAS SANDS: Reports Loss as Revenue Misses Estimates --------------------------------------------------------- Las Vegas Sands Corp. reported a net loss of $76.5 million, or 19 cents a share, on revenues of $908.26 million for thee months ended Sept. 30, 2009, compared with a net loss of $32.2 million, or 19 cents a share, on $805.26 million during the comparable period last year. Net revenue for the third quarter of 2009 was $1.14 billion, an increase of 3.2% compared to $1.11 billion in the third quarter of 2008. Consolidated adjusted property EBITDAR in the third quarter of 2009 increased 11.7% to $272.3 million, compared to $243.8 million in the year-ago quarter. According to Bloomberg, Las Vegas Sands Corp., which is controlled by billionaire Sheldon Adelson, posted its seventh straight quarterly loss after U.S. gamblers spent less and businesses canceled conferences in the recession. Bloomberg notes that while sales rose 3.2% to $1.14 billion, the figures missed the $1.16 billion average estimate. Macau, the only part of China where casinos are legal, helped Sands counter declines on the Las Vegas Strip, where resorts have slashed prices in response to drop in corporate meetings and betting. Sheldon G. Adelson, chairman and CEO, said in a statement, "We are pleased to report that our properties in Macau delivered a record performance in adjusted property EBITDAR, led by healthy gaming volumes in combination with the consistent execution of our right- sizing and cost savings programs. These efforts resulted in record adjusted property EBITDAR margin at The Venetian Macao of 30.5%, compared to 26.0% in the prior year quarter, and meaningfully improved EBITDAR margin at Sands Macao of 27.5%, compared to 17.1% during the third quarter of last year. "While our current quarter's results in Las Vegas reflected unusually low table games hold, which negatively impacted our revenues by approximately $40 million, the execution of our cost savings programs has positioned us to deliver improved operating margins and cash flows as the economy recovers. In addition, we just completed the best quarter in our history with respect to future group room night bookings, and today we have more group rooms on the books for 2010 than we expect to realize in calendar year 2009. "We remain focused on our de-leveraging strategy and during the quarter we increased our financial flexibility by completing both an amendment of our Macau credit facilities and a $600 million pre-IPO exchangeable bond financing. We also filed an application for a listing of our Macau operations on the Hong Kong Stock Exchange. "In Singapore, we continue to progress on the development of Marina Bay Sands. After topping off the three 55-story hotel towers in July, we are making progress on the installation of the SkyPark(TM), which is the final major structural feature of the property. We are making steady progress on pre-opening activities for each of the major operational areas of the property and remain focused on opening Marina Bay Sands in the first quarter of 2010." A full-text copy of the Company's news release on its third quarter results is available for free at: http://researcharchives.com/t/s?4827 About Las Vegas Sands Based in Las Vegas, Nevada, Las Vegas Sands Corp. (NYSE: LVS) -- http://www.lasvegassands.com/-- owns and operates The Venetian Resort Hotel Casino, The Palazzo Resort Hotel Casino, and an expo and convention center. The company also owns and operates the Sands Macao, the first Las Vegas-style casino in Macao, China. The casino company is controlled by billionaire Sheldon Adelson. As reported by the TCR on Aug. 4, 2009, Moody's Investors Service has placed Las Vegas Sands, Corp.'s ratings, including its B3 Corporate Family Rating, on review for possible downgrade. The review for possible downgrade reflects LVSC's weak fiscal 2009 second quarter operating results and Moody's heightened concern regarding the company's ability to maintain an adequate liquidity profile, reduce leverage, and remain in compliance with its financial covenants. LDG SOUTH: List of 20 Largest Unsecured Creditors ------------------------------------------------- LDG South, LLC, filed with the U.S. Bankruptcy Court for the Middle District of Florida a list of its 20 largest unsecured creditors. A full-text copy of the Debtor's list of creditors is available for free at http://bankrupt.com/misc/flmb09-24038.pdf Naples, Florida-based LDG South, LLC, filed for Chapter 11 bankruptcy protection on October 22, 2009 (Bankr. M.D. Fla. Case No. 09-24038). Stephen R. Leslie, Esq., at Stichter, Riedel, Blain & Prosser 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 liabilities. LDG SOUTH: Taps Stichter Riedel as Bankruptcy Counsel ----------------------------------------------------- LDG South, LLC, has asked for permission of the U.S. Bankruptcy Court for the Middle District of Florida to hire Stitchter, Riedel, Blain & Prosser, P.A., as the Company's bankruptcy counsel, nunc pro tunc to October 22, 2009. Stichter Riedel will, among other things: -- prepare on behalf of the Debtor necessary motions, applications, orders, reports, pleadings, and other legal papers; -- appear before the Court and the U.S. Trustee to represent and protect the interests of the Debtor; -- assist with and participating in talks with creditors and other parties-in-interest in formulating a reorganization plan, drafting such a plan and a related disclosure statement, and taking necessary legal steps to confirm such a plan; and -- represent the Debtor in all adversary proceedings, contested matters, and matters involving administration of this case; and -- represent the Debtor in negotiations with potential financing sources. Stitchter Riedel will be paid at these rates: Professional Hourly Rate ------------ ----------- Harley E. Riedel $475 Stephen R. Leslie $355 Daniel R. Fogarty $210 Partners $325-$475 Associates $210-$325 Paralegals $150 Stephen R. Leslie, an attorney at Stichter Riedel, assures the Court that Stichter Riedel does not have interests adverse to the interest of the Debtors' estates or of any class of creditors and equity security holders. Mr. Leslie maintains that Stichter Riedel is a disinterested person as the term is defined under Section 101(14) of the Bankruptcy Code. Naples, Florida-based LDG South, LLC, filed for Chapter 11 bankruptcy protection on October 22, 2009 (Bankr. M.D. Fla. Case No. 09-24038). Stephen R. Leslie, Esq., at Stichter, Riedel, Blain & Prosser 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 liabilities. LEHMAN BROTHERS: Hearing on Barclays Windfall Charges in April -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York issued a scheduling order on the motions filed by Lehman Brothers Holdings Inc., the Official Committee of Unsecured Creditors, and Lehman Brothers Inc.'s trustee, seeking reconsideration of the Court's prior decision authorizing the sale of LBHI's North American broker-dealer business to Barclays Capital Inc. The order dated October 27, 2009, sets this timetable: November 16, 2009 Deadline for LBHI, LBI Trustee and Creditors' Committee to file adversary complaints in case they intend to file complaints connection with their motions. Deadline for LBHI, LBI Trustee and Creditors Committee to respond to the document requests served by Barclays on September 22 and 23, 2009. Deadline for Barclays to provide supplemental documents consisting of GFS Reports for each day between September 12 and 30, 2008 for which a report has not already been produced; and additional documentation to explain and support the acquisition balance sheet reported by Barclays in February 2009. December 8, 2009 Deadline for LBHI, LBI Trustee and Creditors' Committee to respond to the supplemental document requests served by Barclays on October 9, 2009. December 15, 2009 Deadline for LBHI, LBI Trustee and Creditors' Committee to serve statements of the facts relevant to their motions as to which they contend there is no genuine issue that requires an evidentiary hearing. January 8, 2010 Deadline for Barclays to identify witnesses it may use to present expert testimony in support of its opposition to the motions and to serve on LBHI, LBI Trustee and the Creditors' Committee expert reports. January 22, 2010 Deadline for Barclays to complete depositions unless it chooses to conduct any deposition at a later date, in which case the deposition should be completed by no later than February 15, 2010. January 29, 2010 Deadline for Barclays to serve a single consolidated opposition to the motions other than LBI Trustee's arguments regarding interpretation of the sale order and the purchase agreement relating to the "undelivered assets," and an opposition to all arguments made by LBI Trustee regarding interpretation of the sale order and the purchase agreement relating to the undelivered assets. Barclays may also file a motion to enforce the sale order and secure the transfer of any undelivered assets. Deadline for Barclays to serve statements responding to the statements submitted by LBHI, LBI Trustee and the Creditors Committee. February 15, 2010 Deadline for LBHI, LBI Trustee and Creditors Committee to take additional discovery including deposition. March 1, 2010 Deadline for LBHI, LBI Trustee and Creditors Committee to identify experts and serve expert reports. March 4, 2010 Deadline for LBHI, LBI Trustee and Creditors Committee to serve their respective reply papers in further support of their motions; and opposition to any motion Barclays may file to enforce the sale order. March 18, 2010 Deadline for Barclays to serve and file its reply brief in further support of its motion to enforce the transfer of the undelivered assets. March 25, 2010 Oral argument on motions of LBHI, LBI Trustee and the Creditors Committee. The Court has also scheduled ten days for any potential evidentiary hearing on the motions of LBHI, et al., beginning at 10 a.m. on April 26, 2010, and continuing as needed for the week of April 26, 2010 and the week of May 3, 2010. If the Court determines that an evidentiary hearing is required, the parties must make an agreement and submit to the Court for its approval a schedule for the conduct of the evidentiary hearing as well as for the exchange of witness lists, exhibit lists, and deposition designations applicable. Windfall Allegations Lehman Brothers Holdings Inc., which is now being led by Alvarez & Marsal has asked the U.S. Bankruptcy Court for the Southern District of New York to revisit a ruling at the end of September last year later approving the sale of LBHIS' North American broker-dealer business to Barclays Capital Inc. The move by LBHI came following the results of LBHI's investigation into the sale, showing that the deal that closed differed from the one approved by the Court and allegedly gave the U.K. bank "immediate and enormous windfall profit" in the sum of $8.2 billion. LBHI clarified in its motion under Rule 60(b) of the Federal Rules of Civil Procedure that it is not necessary to undo the sale and said the Court only needs require Barclays to return to the Sellers' estates the value it took in excess of what LBHI and Lehman Brothers Inc. were entitled to convey based on the record before the Court. James W. Giddens, trustee for the Liquidation of Lehman Brothers Inc. under the Securities Investor Protection Act, filed its own Civil Rule 60(b) motion in the SIPA proceedings, alleging that the transfer of additional assets to Barclays in accordance with the Sept. 19, 2008 order by the Bankruptcy Court would create an unfair windfall for Barclays at the expense of public customers. Barclays purchased substantially all of Lehman's North American broker-dealer assets in a sale transaction negotiated, approved and executed within the span of a few days immediately following LBHI's filing for bankruptcy. The Official Committee of Unsecured Creditors has filed its own motion to have Barclays return proceeds from the alleged windfall. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LBI Proposes Protocol to Unwind Receivables ------------------------------------------------------------ James Giddens, trustee for the liquidation of Lehman Brothers Inc., seeks court approval to implement a process to unwind, close-out and reduce to cash receivables owed by financial institutions and other parties under their foreign exchange derivatives contracts and various other contracts. Mr. Giddens estimates that there are about 1,700 counterparties that are indebted to LBI's estate, of which about 120 owe a sum of $3 million dollars or more. The receivables due from this smaller group account for more than 90% of the total receivables outstanding. Mr. Giddens proposes these procedures: (1) With respect to any receivable, the trustee is authorized and has the full power and authority to resolve, fix and reduce to cash amounts owed by a counterparty to LBI's estate, and such "payment amount" may incorporate setoffs solely to the extent that the setoff is permitted by applicable law. With respect to payment amounts below $3 million, the trustee may resolve and reduce to cash the receivables without further court order. The trustee's interim reports to the Court will include information regarding those receivables collected by LBI's estate in the period covered by that report. (2) With respect to payment amounts of $3 million and above, the trustee will prepare a stipulation and order and seek court approval by notice of presentment. (3) The stipulation may address and permit the collateral, margin, securities or other property held by the counterparties or by LBI's estate to be liquidated, returned or setoff with respect to any receivable. (4) In connection with any stipulation, the trustee is authorized but not required to provide a release to the counterparties to the extent that the trustee determines that a release is appropriate. The hearing to consider approval of the proposed procedures is scheduled for November 18, 2009. Creditors and other concerned parties have until November 13, 2009, to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LBSF Wants to Compel Chicago Board to Perform -------------------------------------------------------------- Lehman Brothers Special Financing Inc. asks the U.S. Bankruptcy Court for the Southern District of New York to compel The Board of Education of the City of Chicago to perform its obligations under an ISDA master agreement. LBSF's attorney, Richard Slack, Esq., at Weil Gotshal & Manges LLP, in New York, says that even though LBSF has not yet determined whether to assume or reject the agreement, the Board has refused to perform its obligations under the agreement. The agreement at issue is an interest rate swap transaction entered into by the companies in 2003. Under the deal, LBSF agreed to make monthly payments based on a floating interest rate on a notional amount of $95.35 million while the Board agreed to make semiannual payments based on a fixed interest rate on the same notional amount. Due to declining interest rates, the value of LBSF's position has increased significantly and the Board owes LBSF about $1,079,647 plus default interest, which the Board has refused to pay, according to Mr. Slack. "While LBSF is determining whether to assume or reject the agreement, the unilateral cessation of required payments is prohibited and constitutes a violation of the automatic stay," Mr. Slack says, adding that the Board's refusal usurped LBSF's right to assume or reject an executory contract. The hearing to consider approval of LBSF's request is scheduled for November 19, 2009. Creditors and other concerned parties have until November 3, 2009, to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LBSF Wants to Sell Swap Pact Stake to Goldman -------------------------------------------------------------- Lehman Brothers Special Financing Inc. seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to sell its stake in a swap agreement known as 1992 ISDA Master Agreement with Structured Asset Receivable Trust Series 2005-1 for $7.03 million to Goldman Sachs Bank USA or its affiliate, Goldman Sachs Mitsui Marine Derivative Products L.P. The ISDA agreement dated December 15, 2004, allowed LBSF and the Trust to enter into an interest rate swap transaction, which is set to expire on January 21, 2015. Lehman Brothers Holdings Inc. serves as credit support provider for LBSF under the agreement. As of October 21, 2009, LBSF owes $127,041 to Structured Asset Receivable Trust while the trust owes $5,211,270 plus interest to LBSF. Under its deal with Goldman, LBSF agreed to assume, assign and transfer to Goldman all of its interest in the swap agreement in return for payment of $7.03 million, subject to adjustments to be agreed upon by the companies. Upon assumption of the swap agreement but immediately prior to assignment, Structured Asset Receivable Trust is required to pay $5,084,229 plus interest to LBSF. Meanwhile, LBHI's obligations under the swap agreement will not be assumed by Goldman. The hearing to consider approval of LBSF's request is scheduled for November 18, 2009. Creditors and other concerned parties have until November 13, 2009, to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEONARDO MORCOS: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Leonardo Morcos 2604 Hidden Valley Road La Jolla, CA 92037 Bankruptcy Case No.: 09-16939 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Southern District of California (San Diego) Debtor's Counsel: David L. Speckman, Esq. Speckman & Associates 835 Fifth Ave, Suite 301 San Diego, CA 92101 Tel: (619) 696-5151 Email: speckmanandassociates@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of Mr. Morcos' petition, including a list of his 18 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/casb09-16939.pdf The petition was signed by Mr. Morcos. LEXINGTON PRECISION: Files Third Amended Plan & Disc. Statement --------------------------------------------------------------- Lexington Precision Corporation and its wholly owned subsidiary Lexington Rubber Group, Inc. filed their third amended joint plan of reorganization under Chapter 11 of the Bankruptcy Code and an explanatory disclosure statement. The Plan provides repayment in full of all creditors while also achieving a significant reduction in their consolidated indebtedness through a conversion of LPC's senior subordinated notes and junior subordinated note into equity securities of LPC at values based upon the valuation of the Debtors prepared by the Debtors' financial advisor, W.Y. Campbell & Company. Pursuant to the Plan, holders of LPC's senior subordinated notes will receive shares of Series C preferred stock and holders of LPC's junior subordinated note and Series B preferred stock will receive newly-issued shares of LPC Common Stock. The Series C preferred stock was designed to permit the holders thereof to participate fully in the anticipated increase in the enterprise value of the Debtors following the completion of the Chapter 11 cases, while retaining their priority position relative to the classes junior to them in the capital structure of LPC. The Debtors caution holders of LPC's junior subordinated note, Series B peferred stock, and common stock that, in the event that the aggregate value of the equity of the Debtors increases at a rate of less 6% per annum, or if it declines, following the Plan's Effective Date, the 6% annual accretion to the liquidation preference of the Series C preferred stock will erode the value of the LPC common stock that these holders will receive or retain pursuant to the Plan. The Plan provides for 19 classes of claims and interests. General unsecured claims against LPC under Class 7 and general unsecured claims under Class 17 will receive cash payments in the aggregate amount equal to 106.75% of the allowed claim comprised of an initial payment of 10% of the allowed claim on the Effective Date and 9 payments equal to 10.75% of the allowed claim payable quarterly commencing 3 months after the Effective Date or when the claim is allowed. Classes 7 and 17 are impaired under the Plan and are entitled to vote. LPC common stock Interests under Class 11 and Interests in LRGI under Class 19 are retained. Classes 11 and 19 are unimpaired and deemed to accept. Other equity interests in LPC under Class 12 are cancelled and will receive no distribution under the Plan. Class 12 is impaired and deemed to reject the Plan. The Debtors believe that the Rubber Group has strong technical capabilities, leading market positions, and a long history of earning superior profit and cash margins, with EBITDA for 2009 forecasted to be $10.6 million on net sales of $51.0 million, for an EBITDA margin of 20.8%. 2007 and 2008 Actual Sales and 2009 Forecast Sales 2007 Actual 2008 Acutal 2009 Forecast ----------- ----------- ------------- Automotive Aftermarket $22.0MM $26.6MM $27.0MM Automotive OEM 35.8MM 18.0MM 8.9MM Medical Devices 15.9MM 16.3MM 15.0MM Other Industries .8MM 1.4MM .1MM ------- ------- ------- Total Rubber Group $74.6MM $62.3MM $51.0MM EBITDA from Continuing Operations $13.7MM $11.4MM $10.6MM 2007 Actual 2008 Acutal 2009 Forecast ----------- ----------- ------------- Automotive OEM $11.6MM $8.8MM $7.5MM Other Industries 2.2MM 2.0MM 2.2MM ------- ------- ------- Total Metals Group $13.3MM $10.8MM $9.7MM EBITDA from Continuing Operations $490,000 ($205,000) ($286,000) The New Junior Secured Loan To fund the distributions under the Plan and the continued operations of the Reorganized Debtors, the Reorganized Debtors will obtain the New Junior Secured Loan in an amount not less than $10 million. The existing DIP Lenders are expected to participate in the New Junior Secured Loan in an amount of not less than $4 million. The Debtors are currently engaged in negotiations with certain customers that have expressed an interest in participating in the remaining portion of the New Junior Secured Loan. The Debtors expect that the material terms of the New Junior Secured Loan will be as set forth on Exhibit 1.67 of the Plan, although those terms are still subject negotiation. The documents evidencing the New Junior Secured Loan will be filed as part of the Plan Supplement. Approval of the New Junior Secured Loan will be sought concurrently with confirmation of the Plan. A full-text copy of the Debtors' third amended plan is available for free at http://bankrupt.com/misc/lexington.3rdamendedplan.pdf A full-text copy of the proposed disclosure statement for the Debtors' third amended plan is available at for free: http://bankrupt.com/misc/lexington.DS3rdamendedplan.pdf About Lexington Precision Headquartered in New York, Lexington Precision Corp. -- http://www.lexingtonprecision.com/-- and its wholly-owned subsidiary Lexington Rubber Group, Inc. conduct their operations through two operating groups, the Rubber Group and the Metals Group. The business of the Rubber Group is conducted by LRGI while the business of the Metals Group is conducted by LPC. The Rubber Group is a manufacturer of tight-tolerance, molder rubber componets that are sold to customers who supply the automotive aftermarket, to customers who supply the automotive original-equipment manufacturers ("OEMs"), and to manufacturers of medical devices. The Metals Group manufactures a variety of high- volume components that are machined from aluminum, brass, steel, and stainless steel bars and blanks. The components produced by the Metals Group include airbag inflator components, solenoids for transmissions, fluid handling couplings, hydraulic valve blocks, power steering components, and wiper-system components, primarily for use by the automotive OEMs. 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. Before this third amended plan, it was amended twice, on August 8, 2008, and then on December 17, 2008. LYONDELL CHEMICAL: Jack Williams Named Examiner ----------------------------------------------- ABI reports that Bankruptcy Judge Ronald E. Gerber approved the appointment of former ABI Resident Scholar Prof. Jack F. Williams to probe certain concerns about Lyondell Chemical Co.'s actions since it filed for chapter 11 protection earlier in 2009. As reported by the TCR on Oct. 29, 2009, Judge Robert E. Gerber approved an examiner with a limited budget and scope to conduct the probe. The examiner will have a US$200,000 budget and required filing the final report within 30 days of appointment. The Official Committee of Unsecured Creditors in Lyondell's cases asked the Bankruptcy Court to order the appointment of an examiner to investigate whether Len Blavatnik and the lenders from the chemical maker's 2007 buyout are unfairly influencing its bankruptcy. The Creditors Committee asserts that Lyondell needs an independent examiner because Mr. Blavatnik, chairman of Access Industries Holding LLC, still controls the Company. The examiner, according to the panel, should probe why the Company wouldn't refinance its $8 billion bankruptcy loan, and how Mr. Blavatnik and lenders who worked with him in 2005 will also fund a rights offering that includes a "forced settlement" of the creditors' lawsuit against them. The U.S. trustee supported the Creditors Committee's call for an examiner. The Debtors ceded to the Court's view that appointment of an examiner is mandatory. However, the Debtors urged the Court to limit the scope of the examiner's appointment to the issue of whether or not the Debtors and their professionals have used and are using customary and appropriate processes with respect to soliciting equity sponsorship proposals and selecting an equity sponsorship proposal. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MANCHESTER HOUSING: Moody's Downgrades Bond Ratings to 'Ba2' ------------------------------------------------------------ Moody's Investors Service has downgraded to Ba2 from Baa3 Manchester Housing and Redevelopment Authority's (NH) Revenue Bonds Series A & B of 2000. Security for these bonds is solely derived from the City of Manchester's allocation of state meals and room's taxes received in excess of $454,927. The downgrade reflects declining debt service coverage levels and the expectation that the portion of meals and rooms tax dedicated to the bonds will be insufficient to fully fund the July 1st interest payment. The negative outlook reflects concerns that the dedicated portion of meals and room tax receipts may continue to fall short of debt service requirements. In addition, dedicated net revenues may be insufficient to replenish a draw on the debt service reserve fund within the required timeframe, which would constitute an event of default. The City of Manchester (GO rated Aa2 with a stable outlook) is under no obligation to make up a debt service shortfall or replenish a draw on the debt service reserve fund. The revenue bonds were originally issued in March of 2000 to fund the construction of the Verizon Wireless Arena (formerly the Manchester Civic Center). The 11,000 seat arena opened in November of 2001 and primarily hosts sporting events and concerts. Appropriation risk exists as the transfer of meals and rooms taxes to the trustee is subject to annual appropriation by City Council. While the city has never failed to appropriate these funds, bondholders do not have recourse to the facility in an event of non-appropriation. The fiscal 2010 meals and rooms tax distribution to municipalities, from the State of New Hampshire (GO rated Aa2 with a stable outlook), was capped at the fiscal 2009 level of $58.8 million as part of the state's adopted biennial budget (fiscal 2010 and 2011). For the City of Manchester this action froze its total meals and rooms tax allocation at $4.85 million and the amount due to bondholders at $4.399 million (net of $454,927 retained by the city). Moody's anticipates the January 2010 principal and interest payment ($3.7 million) will be paid in full. However, a $66,325 shortfall is anticipated for the July 1, 2010 interest payment of $681,000. Coverage levels would drop further in fiscal 2011 to 0.92 times, representing a shortfall of approximately $396,000. Current projections indicate excess meals and rooms tax receipts following the January 2011 principal and interest payment to be sufficient to replenish the $66,325 debt service reserve fund draw down from July although a subsequent withdrawal would be needed in July 2011. Assuming there is no change in the funding formula or additional support, the city's next meals and room's tax receipt would be insufficient to replenish the debt service reserve fund to required levels. In the event that the debt service reserve, which is currently funded at maximum annual debt service, is drawn upon the deficiency is to be restored to MADs from net revenues no later than the second succeeding interest payment date following the date of withdrawal. If the debt service reserve fund is not fully replenished within the required timeframe, an event of default would occur and all bonds outstanding would become immediately due and payable. Of note, the debt service reserve was fully funded at closing with $525,000 cash and $4.61 million surety bond. As incremental meals and rooms tax revenues have annually exceeded debt service requirements, management has applied excess revenues to reduce the surety bond portion of the reserve. Currently, the primary debt service reserve is funded with $3.52 million of cash and a $1.62 million surety policy with ACA Financial Guaranty to achieve MADS of $5.14 million. Outlook The negative outlook reflects Moody's expectation that dedicated meals and room's tax receipts will continue to be challenged to meet debt service payments and/or replenish a draw on the debts service reserve fund, potentially triggering an event of default. What Could Remove The Negative Outlook? * A change to the meals and rooms tax distribution formula resulting in, at a minimum, sum sufficient coverage levels over the near term and satisfactory coverage in future periods * Additional ongoing funds pledged for debt service offsetting the anticipated meals and room's tax shortfall What Could Move The Rating Down? * Further declines in pledged revenues * Alteration of the state meals and rooms distribution formula that disadvantages Manchester * The inability of future meals and rooms tax receipts to replenish a draw on the debt service reserve fund to required levels within the necessary timeframe Rating Methodology And Last Rating Action Taken The Manchester Housing and Redevelopment Authority rating was assigned by evaluating factors believed to be relevant to the credit profile for this series of bonds including i) the business risk and competitive position of the issuer versus others within its industry or sector, ii) the capital structure and financial risk of the issuer, iii) the projected performance of the issuer over the near to intermediate term, iv) the issuer's history of achieving consistent operating performance and meeting budget or financial plan goals, v) the nature of the dedicated revenue stream pledged to the bonds, vi) the debt service coverage provided by such revenue stream, vii) the legal structure that documents the revenue stream and the source of payment, and viii) and the issuer's management and governance structure related to payment. These attributes were compared against other issuers both within and outside of the issuers core peer group and the issuers rating is believed to be comparable to ratings assigned to other issuers of similar credit risk. The last rating action was on December 23, 2008, when the Baa3 rating and negative outlook for the Manchester Housing and Redevelopment Authority was affirmed. MEDIACOM LLC: June 30 Balance Sheet Upside-Down by $224 Million --------------------------------------------------------------- Mediacom LLC's consolidated balance sheets at June 30, 2009, showed $1.58 billion in total assets and $1.80 billion in total liabilities, resulting in a $224.0 million stockholders' deficit. At June 30, 2009, the Company's consolidated balance sheets also showed strained liquidity with $61.3 million in total current assets available to pay $316.0 million in total current liabilities. The Company reported net income of $21.9 million on revenues of $157.2 million for the three months ended June 30, 2009, compared with net income of $14.8 million on revenues of $153.9 million during the corresponding period in 2008. Revenues increased $3.3 million, or 2.2%, largely attributable to growth in the Company's high-speed data and phone customers, largely offset by the inclusion of the MCC cable systems located in Western North Carolina in the results of the prior year period. Revenue generating units grew 2.2%, offset in part by the inclusion of the Exchange Systems in the aggregate number of RGUs as of June 30, 2008, and average total monthly revenue per basic subscriber increased $7.14, or 8.4%. Adjusted OIBDA increased $954,000, or 1.7%, mainly due to growth in HSD and phone revenues, offset in part by higher service costs and the inclusion of the WNC Systems in the results of the prior year period. The Company defines Adjusted OIBDA as operating income before depreciation and amortization and non-cash, share- based compensation charges. Operating income grew $1.1 million, or 3.8%, to $30.1 million for the three months ended June 30, 2009, compared to $29.0 million in the same period in 2008, principally due to the increase in Adjusted OIBDA and, to a lesser extent, lower depreciation and amortization, offset in part by the inclusion of the WNC Systems in the results of the prior year period. For the six months ended June 30, 2009, the Company had net income of $33.5 million on revenues of $319 million, compared with net income of $9.4 million on revenues of $302.8 million during the six months ended June 30, 2008. A full-text copy of the Company's consolidated financial statements for the three months ended June 30, 2009, is available for free at http://researcharchives.com/t/s?4820 As of June 30, 2009, the Company's total debt was $1.51 billion. Of this amount, $43.5 million matures during the 12 months ending June 30, 2010. The Company believes that it has sufficient liquidity to meet its requirements over the next two years, which include debt maturities of $15.3 million during the remainder of 2009 and $56.5 million of debt maturities in 2010. In addition to cash flows from operating activities, the Company also has $14.1 million of cash on hand and $301.8 million of unused revolving credit commitments as of June 30, 2009. Net cash flows provided by operating activities were $89.6 million for the six months ended June 30, 2009, primarily due to Adjusted OIBDA of $117.6 million, offset in part by interest expense of $45.3 million. Net cash flows provided by operating activities were $109.6 million for the six months ended June 30, 2008, primarily due to Adjusted OIBDA of $113.2 million and the $40.5 million net change in operating assets and liabilities, offset in part by interest expense of $52.1 million. Net cash flows used in investing activities, which consisted entirely of capital expenditures, were $48.6 million for the six months ended June 30, 2009, as compared to $61.2 million for the prior year period. The $12.6 million decrease in capital expenditures was primarily due to higher spending in the prior year period on customer premise equipment, service area expansion and scalable infrastructure for digital transition deployment and HSD requirements. This decrease was partly offset by greater capital improvements and network replacement related to storm activity and the development and implementation of customer provisioning software for HSD and phone customers. Net cash flows used in financing activities were $36.9 million for the six months ended June 30, 2009, primarily due to the Company's capital contribution to Mediacom Communications Corporation of $110.0 million, substantially offset by a capital contribution from MCC of $82.2 million and, to a much lesser extent, net borrowings of $6.0 million under the Company's revolving credit facility. In February 2009, the Company made a $110.0 million capital contribution to MCC to fund its cash obligation under the Exchange Agreement. At the same time, the Company received an $82.2 million capital contribution from MCC under the Transfer Agreement, comprising an $8.2 million payment related to the Asset Transfer, and a $74.0 million payment for the Company's contribution of the cable systems located in Western North Carolina to MCC. Net cash flows used in financing activities were $43.5 million for the six months ended June 30, 2008, mainly due to a net reduction of debt of $31.3 million and other financing activities of $8.2 million. As of June 30, 2009, the Company had unused revolving credit commitments of $301.8 million under its credit facility, all of which could be borrowed and used for general corporate purposes based on the terms and conditions of the Company's debt arrangements. All of the Company's unused revolving credit commitments expire on September 30, 2011, and are not subject to scheduled reductions prior to maturity. Continued access to the credit facility is subject to the Company's remaining in compliance with the covenants of such credit facility, principally the requirement that it maintains a maximum ratio of total senior debt to cash flow, as defined in the credit agreement, of 6.0 to 1.0. The Company has issued senior notes totaling $625 million as of June 30, 2009. The indentures governing the senior notes contain financial and other covenants that are generally less restrictive than those found in the Company's credit facility, and do not require the Company to maintain any financial ratios. Principal covenants include a limitation on the incurrence of additional indebtedness based upon a maximum ratio of total indebtedness to cash flow, as defined in these agreements, of 7.0 to 1.0. These agreements also contain limitations on dividends, investments and distributions. For all periods through June 30, 2009, the Company was in compliance with all of the covenants under the credit facility and senior note arrangements. The Company does not believe that it will have any difficulty complying with any of the applicable covenants in the foreseeable future. About Mediacom LLC Based in Middletown, New York, Mediacom LLC is a wholly owned subsidiary of Mediacom Communications Corporation, the nation's eighth largest cable television company based on the number of basic video subscribers, or basic subscribers, and among the leading cable operators focused on serving the smaller cities and towns in the United States. Through the Company's interactive broadband network, the Company provides a wide array of advanced products and services, including video services such as video-on- demand, high-definition television and digital video recorders, in addition to high-speed data and phone service. As of December 31, 2008, the Company served approximately 601,000 basic subscribers, 288,000 digital video customers or digital customers, 337,000 HSD customers and 114,000 phone customers, totaling 1.34 million revenue generating units. The Company provides access to the triple play bundle to 87% of the estimated homes that its network passes. METALDYNE CORP: Creditors Want Sale Appeal Tossed ------------------------------------------------- Law360 reports that the official committee of unsecured creditors in Metaldyne Corp.'s Chapter 11 case has asked the Court to toss an appeal from BDC Finance LLC, which claims the auction was really a gussied-up private mergers and acquisitions negotiation. Metaldyne announced October 16 it has completed the sale of substantially all of its assets to MD Investors Corporation, an entity formed by private-equity firms Carlyle Group and Solus Investment Funds. MD Investors purchased certain assets related to Metaldyne's Sintered Products, Vibration Controls Products, European Forging Products and Powertrain Products Groups, including its balance shaft module, driveline machining and assembly, and tubular products operations. In addition, certain chassis-related assets were acquired. The purchase was made under a court supervised 11 U.S.C. Sec. 363 auction process. MD Investors paid approximately $40 million in cash subject to adjustments under the asset purchase agreement, plus the assumption of certain debt and liabilities, and credit bid more than $425 million of secured term debt. The new company will operate under the name Metaldyne, LLC. About Metaldyne Corp. Metaldyne was previously a wholly-owned subsidiary of Asahi Tec, a Shizuoka, Japan-based chassis and powertrain component supplier in the passenger car/light truck and medium/heavy truck segments. Asahi Tec is listed on the Tokyo Stock Exchange. Metaldyne Corporation and its affiliates filed for Chapter 11 protection on May 27, 2009 (Bankr. S.D.N.Y. Case No. 09-13412). The filing did not include the company's non-U.S. entities or operations. Richard H. Engman, Esq., at Jones Day represents the Debtors in their restructuring efforts. Judy A. O'Neill, Esq., at Foley & Lardner LLP serves as conflicts counsel; Lazard Freres & Co. LLC and AlixPartners LLP as financial advisors; and BMC Group Inc. as claims agent. A committee of Metaldyne creditors is represented by Mark D. Silverschotz, Esq., and Kurt F. Gwynne, Esq., at Reed Smith LLP, and the committee tapped Huron Consulting Services, LLC, as its financial advisor. For the fiscal year ended March 29, 2009, the company recorded annual revenues of approximately US$1.32 billion. As of March 29, 2009, utilizing book values, the company had assets of US$977 million and liabilities of US$927 million. Judge Glenn approved the sale of substantially all assets to Carlyle Group earlier this month for approximately $496.5 million. Metaldyne is a leading global designer and supplier of metal based components, assemblies and modules for transportation related powertrain applications including engine, transmission/transfer case, driveline, and noise and vibration control products to the motor vehicle industry. The new Metaldyne company has approximately $650 million in revenue with 26 facilities in 12 countries. For more information go to http://www.metaldyne.com/ NORANDA ALUMINUM: Expects to Report Up to $8MM Q3 Net Income ------------------------------------------------------------ Noranda Aluminum Holding Corporation announced preliminary financial results for the third quarter of 2009. On August 31, 2009 the Company completed a transaction with Century Aluminum Company through which the Company became the sole owner of Gramercy Alumina LLC and St. Ann Bauxite Limited. The Company's third quarter 2009 financial statements will include the consolidated results of Gramercy and St. Ann after August 31, 2009 based on a preliminary determination of the fair values of assets acquired and liabilities assumed. Prior to August 31, 2009, the Company's financial statements include the Company's share of Gramercy and St. Ann results under the equity method of accounting for investments. For third quarter 2009, the Company expects to report consolidated revenues of $218 million. * External upstream revenues were $108 million in third quarter 2009. External aluminum shipments for the period totaled 77 million pounds, representing a 12% increase compared to second quarter 2009 shipments, and a 40% decrease as compared to third quarter 2008. * Third quarter 2009 upstream revenues also included approximately $19 million from Gramercy and St. Ann external shipments of alumina and bauxite in September and $14 million from the resale of alumina inventories in excess of New Madrid's requirements. * The Company is in negotiations to sell additional alumina to optimize its capacity utilization. * Downstream revenues were $110 million in third quarter 2009. Downstream shipment volumes were 84 million pounds in third quarter 2009, representing a 6% increase compared to second quarter 2009 and an 11% decrease compared to third quarter 2008. Rising LME prices had a favorable impact on revenues, operating income and net income compared to second quarter 2009. For third quarter 2009, the Company expects to report an operating loss in the range of $3 million to $13 million. This range compares to operating income of $12.4 million for second quarter 2009 and $32.1 million for third quarter 2008. Third quarter 2009 operating results include $14 million of insurance proceeds recognized in excess of claim expenses incurred to date related to the previously reported January 2009 pot line freeze at the Company's New Madrid, Missouri aluminum smelter. Second quarter 2009 operating income included a $33.3 million favorable impact from the timing of recognition of expected insurance recoveries in relationship to expenses. For third quarter 2009, the Company expects to report net income in the range of $1 million to $8 million, compared to a net loss of $12.1 million in second quarter 2009 and $22.4 million in third quarter 2008. In addition to the operating loss factors, third quarter 2009 net income includes the after-tax effects of a $28 million gain on debt repurchases. In third quarter 2009, the Company repurchased $81 million aggregate principal amount of debt for an aggregate price of $52 million, plus fees. The Company ended third quarter 2009 with total debt of $1.0 billion, $256 million in cash and $191 million of locked-in value from offsetting fixed-price aluminum sales and purchase swaps. A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?4826 The Company expects to file a more detailed press release regarding its third quarter 2009 results and to host an investor conference call during the week of November 3, 2009, and to file its Quarterly Report on Form 10-Q for the three months ended September 30, 2009 prior to November 16, 2009. Ranges indicated in the Company's earnings release are unaudited, and reflect management's current best estimates. During the course of the preparation of final consolidated quarterly financial statements and related notes, the Company may identify items that would require material adjustments to the preliminary financial information presented in the release. About Noranda Aluminum Noranda Aluminum Holding Corporation -- http://www.norandaaluminum.com/-- is a North American integrated producer of value-added primary aluminum products, as well as high quality rolled aluminum coils. The Company has two businesses, an upstream and downstream business. The primary metals, or upstream business, produced approximately 261,000 metric tons of primary aluminum in 2008. The rolling mills, or downstream business, are one of the largest foil producers in North America and a major producer of light gauge sheet products. Noranda Aluminum Holding Corporation is a private company owned by affiliates of Apollo Management, L.P. As reported by the Troubled Company Reporter on July 17, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Noranda Aluminum Holding Corp. to 'CCC+' from 'SD'. The outlook is developing. The TCR said August 10, 2009, that Moody's Investors Service confirmed Noranda Aluminum Holding Corporation's Caa1 Probability of Default rating, Caa1 Corporate Family Rating, and Caa3 senior unsecured notes rating. At the same time, Moody's confirmed Noranda Aluminum Acquisition Corporation's B2 senior secured revolver and senior secured term loan ratings and its Caa2 senior unsecured notes rating. The speculative grade liquidity rating remains SGL-3 and the rating outlook is stable. NOWAUTO GROUP: Former Auditor Moore Refuses to Issue SEC Letter --------------------------------------------------------------- NowAuto Group, Inc. CFO Faith Forbis reports the Company has requested that Moore & Associates, Chartered, its independent registered public account firm, furnish it with an amended Exhibit 16.1 letter from Moore addressed to the Securities and Exchange Commission stating whether it agrees with certain statements by the Company. According to Ms. Forbis, Mr. Moore has notified NowAuto Group that he will not be providing this letter. Ms. Forbis relates that on August 7, 2009, the Board of Directors of NowAuto Group dismissed Moore & Associates. On the same date, the accounting firm of Seale and Beers, CPAs was engaged as NowAuto Group's new independent registered public account firm. The Board of Directors of NowAuto Group and its Audit Committee approved of the dismissal of Moore & Associates and the engagement of Seale and Beers, CPAs as its independent auditor. None of the reports of Moore & Associates Chartered on the Company's financial statements for either of the past two years or subsequent interim period contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles, except that NowAuto Group's audited financial statements contained in its Form 10-K for the fiscal year ended June 30, 2008, a going concern qualification in the registrant's audited financial statements. During NowAuto Group's two most recent fiscal years and the subsequent interim period thru August 7, 2009, there were no disagreements with Moore & Associates whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Moore & Associates' satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its report on NowAuto Group's financial statements. According to Ms. Forbis, the action was taken in anticipation of sanctions taken by the Public Company Accounting Oversight Board of Moore & Associates. Subsequently, on August 27, 2009, the PCAOB revoked the registration of Moore because of violations of PCAOB rules and auditing standards in auditing financial statements, PCAOB rules and quality controls standards, And Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b- 5 thereunder, and non-cooperation with a Board investigation. Ms. Forbis says during the two most recent fiscal years and the interim periods preceding the engagement, NowAuto Group has not consulted Seale and Beers regarding any of the matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-B. Ms. Forbis also relates that discussions about the reliability of the Company's June 30, 2008 report began in July. Moore & Associates was sanctioned on August 27. Therefore, the audit for this period is no longer valid and is being redone, Ms. Forbis says. This statement and any subsequent statements should not be relied on. According to Ms. Forbis, goodwill has been reviewed again and an impairment is expected. Also, the Company plans to increase the Allowance for Doubtful Accounts. This will have the effect of reducing total assets, earnings for the period, and retained in the subsequent periods. These matters have been discussed with the independent auditor, Seale and Beers, as well as the subsequent auditor, Semple, Marchal & Cooper. As reported by the Troubled Company Reporter on October 22, 2009, NowAuto Group reported revenue of $5.4 million and a net loss of $0.24 per diluted share for its fiscal year ended June 30, 2009, versus revenue of approximately $4.5 million and a net loss of $0.21 per diluted share in the prior fiscal year. The Company posted a net loss of $2,231,531 for fiscal 2009 compared to a net loss of $2,102,634 for fiscal 2008. At June 30, 2009, the Company had $3,857,876 in total assets against $10,376,460 in total liabilities. Cash and cash equivalents at June 30, 2009, was roughly $41,000 versus cash of $33,000 at June 30, 2008. In its audit report dated October 16, 2009, Semple, Marchal & Cooper, LLP, noted the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. About NowAuto Group Based in Tempe, Arizona, NowAuto Group, Inc. (NAUG:BB and NWAU.PK) operates three buy-here-pay-here used vehicle dealerships in Arizona. The Company manages all of its installment finance contracts and purchases installment finance contracts from a select number of other independent used vehicle dealerships. Through its subsidiary, NavicomGPS, Inc. the company markets GPS tracking devices, primarily to independent used vehicle dealerships. OTTER TAIL: Files for Chapter 11, Has Deal with Lenders ------------------------------------------------------- Otter Tail Ag Enterprises LLC submitted a Chapter 11 petition before the U.S. Bankruptcy Court in the District of Minnesota. According to BankruptcyData, the Company stated that its negotiated bankruptcy filing was initiated with the approval of its senior lenders, AgStar Financial Services and MMCDC New Markets Fund II to "implement a strategy intended to create a viable company that can compete in current markets." The Company is represented by Timothy D. Moratzka of Mackall, Crounse & Moore. "We believe that by filing for the protection afforded us under Chapter 11 of the U.S. Bankruptcy Code, we will be able to move forward with our senior lenders and members to restructure our debt and raise the necessary capital to move forward in today's economy," said Anthony Hicks, Otter Tail Ag's chief executive officer. "We have been working to avoid the kind of fire sale liquidation of plants that has been happening around the country, where big outside companies come in and buy the assets for pennies on the dollar," Mr. Hicks said. Otter Tail Ag Enterprises, LLC, a Minnesota limited liability company, was organized with the intention of developing, owning and operating a 55 million gallon per year capacity dry-mill ethanol plant near Fergus Falls, Minnesota. The company was in the development stage until March 2008, when the company commenced operations. PETTERS GROUP: Founder Faked Deals Since 'Day One,' Secretary Says ------------------------------------------------------------------ Petters Group Worldwide LLC founder Thomas Petters, charged with overseeing a $3.5 billion Ponzi scheme, relied on phony shipments of electronic equipment from "day one" to build his business empire, his ex-secretary said, according to reporting by Bloomberg News. Deanna Coleman, Mr. Petter's secretary and office manager, testified in the fraud trial of Mr. Petters, said Mr. Petter's staff made up fake purchase orders for shipments of TVs and DVD players and phony wire-transfer receipts to fool investors that Petters's deals were legitimate. According to Jef Feeley and Beth Hawkins at Bloomberg, prosecutors contend Mr. Petters, 52, duped hedge funds into funding fictitious shipments of consumer electronics for more than a decade. "We didn't have any real deals at Petters" that would generate revenue to repay investors, Ms. Coleman told jurors in federal court in St. Paul, Minnesota. Mr. Petters, whose bankrupt business empire once included Sun Country Airlines Inc. and Polaroid Corp., pleaded not guilty to a 20-count indictment accusing him of mail and wire fraud, money laundering and conspiracy. Mr. Petters resigned from the company he founded in 1994 after Federal Bureau of Investigation agents raided his headquarters in Minnetonka, Minnesota, in September 2008. Investigators said they had evidence that hedge funds invested in phantom bulk orders of electronics for retailers including Wal-Mart Stores Inc.'s Sam's Club warehouse stores and Costco Wholesale Corp. About Petters Group Worldwide Based in Minnetonka, Minn., Petters Group Worldwide LLC is named for founder and chairman Tom Petters. The group is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Petters formed the company in 1988. Petters Company, Inc. is the financing and capital-raising unit of Petters Group Worldwide, LLC. Petters Company, Inc., and Petters Group Worldwide, LLC, filed separate petitions for Chapter 11 relief on Oct. 11, 2008 (Bankr. D. Minn. Case No. 08-45257 and 08- 45258, respectively). James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P., represents the Debtors as counsel. In its petition, Petters Company, Inc., listed debts of between $500 million and $1 billion, while its parent, Petters Group Worldwide, LLC, listed debts of not more than $50,000. As reported in the Troubled Company Reporter on Oct. 7, 2008, Petters Aviation, LLC,, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the District of Minnesota on Oct. 6, 2008 (Lead Case No. 08-45136). Petters Aviation, LLC, is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Inc., Sun Country's parent company. PHILADELPHIA NEWSPAPERS: Court Approves Disclosure Statement ------------------------------------------------------------ The Bankruptcy Court has approved the disclosure statement explaining the Chapter 11 plan for Philadelphia Newspapers LLC. As reported by the TCR on Oct. 28, 2009, the Official Committee of Unsecured Creditors of Philadelphia Newspapers objected to the Disclosure Statement, 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. Approval of the Disclosure Statement allows the Debtor to begin solicitation of votes on, then seek confirmation of, the Plan. However, according to Law360, Philadelphia Newspapers still faces a crucial appeal over whether lenders can submit a credit bid. 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. Meanwhile, according to Law360, a charter schools company that accuses the Philadelphia Inquirer of defamation is pressing its fight against Philadelphia Newspapers in a bankruptcy appeal, arguing an injunction blocking the paper from getting details about the Company via Pennsylvania's Right to Know Law is enforceable. 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. PLF INVESTMENTS: Case Summary & 11 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: PLF Investments, LLC 2143 Acker Way Escondido, CA 92029 Bankruptcy Case No.: 09-16936 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Southern District of California (San Diego) Debtor's Counsel: John L. Smaha, Esq. Smaha Law Group, APC 7860 Mission Center Court, Suite 100 San Diego, CA 92108 Tel: (619) 688-1557 Fax: (619) 688-1558 Email: jsmaha@smaha.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 11 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/casb09-16936.pdf The petition was signed by Paul L. Faucher, president of the Company. QSGI INC: Court Approves Sale of DSC Business to Victory Park ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida authorized QSGI, Inc., et al., to: a) sell substantially all of the assets of the Data Security Compliance division of QSGI, Inc., a debtor-affiliate, to Victory Park Credit Opportunities Master Fund, Ltd. for $500,000; b) assume and assign executory contracts and unexpired leases to Victory Park. The sale, pursuant to Section 363 of the Bankruptcy Court, to the will be free and clear of all liens, claims. Victory Park agreed to carve out these amounts from its collateral: $50,000 for general unsecured creditors, $127,000 for non-professional administrative expenses and an aggregate amount of $260,000 for the Court approved fees and expenses of the Debtors' counsel, Shraiberg, Ferrara & Landau, P.A. and the Debtors' restructuring consultant, Kinetic Advisors. Upon consummation of the sale of DSC division and the sale of DCM division, the sum of $92,000 will be deposited by Victory Park into an escrow account held at Berger Singerman, P.A. About QSGI, Inc. Palm Beach, Florida-based QSGI, Inc., and its affiliates provide technology services and maintenance geared towards both uses of enterprise class hardware as well as the uses of business - competing hardware. The Debtors filed for Chapter 11 on July 2, 2009 (Bankr. S.D. Fla. Lead Case No. 09-23658). Bradley S. Shraiberg, Esq., at Shraiberg, Ferrara, Landau P.A., represents the Debtors in their restructuring efforts. The Debtors listed between $10 million and $50 million each in assets and debts. QSGI INC: Court OKs $2MM Sale of DCM Business to SMS Maintenance ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida authorized QSGI, Inc., et al., to: a) sell substantially all of the assets of the Data Center Maintenance Business division of Qualtech Services Group, Inc., a debtor-affiliate, to SMS Maintenance, LLC, the stalking horse bidder; and b) assume and assign certain executory contracts and unexpired leases. The sale, pursuant to the Section 363 of the Bankruptcy Code, will be free and clear of all liens, claims, and encumbrances. The purchaser will purchase the assets of the DCM division of the Seller $2,000,000. In addition, the purchaser will assume deferred revenue in cash. The seller will retain all other liabilities and obligations. Upon closing, the purchaser will transmit by wire transfer to lender the cash purchase price less the Deposit of $200,000 less the adjustments, if any. From the sale proceeds, the lender will carve out these amounts from their collateral: $50,000 for general unsecured creditors, $127,000 for non-professional administrative expenses and an aggregate amount of $260,000 for the Court approved fees and expenses of the Debtors' counsel, Shraiberg, Ferrara & Landau, P.A. and Debtors' restructuring consultant, Kinetic Advisors. At closing on the sale of the DCM division, Debtors' counsel, Shraiberg, Ferrara & Landau, P.A. will take possession of the hard drives from Debtors' communication server and backups thereof and will hold same until further Order of the Court. About QSGI, Inc. Palm Beach, Florida-based QSGI, Inc., and its affiliates provide technology services and maintenance geared towards both uses of enterprise class hardware as well as the uses of business - competing hardware. The Debtors filed for Chapter 11 on July 2, 2009 (Bankr. S.D. Fla. Lead Case No. 09-23658). Bradley S. Shraiberg, Esq., at Shraiberg, Ferrara, Landau P.A., represents the Debtors in their restructuring efforts. The Debtors listed between $10 million and $50 million each in assets and debts. QUANTUM CORP: Posts $11 Million Third Quarter 2009 Net Income ------------------------------------------------------------- Quantum Corp. said revenue for its fiscal second quarter (FQ2'10), ended September 30, 2009, was $175 million. This represented a 19% decline from the same period last year (FQ2'09), primarily due to the significantly weaker economy, a continued sales mix shift toward higher margin opportunities, and lower royalties (partly reflecting a one-time royalty payment from Riverbed Technology, Inc. last year). Despite the year-over-year decline, revenue grew 9% on a sequential basis. In addition, the company increased its GAAP gross margin rate to 43.8% and GAAP operating income margin to 8.5% - up from 38.5% and 2.6 percent, respectively, in FQ2'09. In both cases, this was the highest level achieved in more than eight years. Quantum also reported its second consecutive quarter of GAAP profits, with $11 million in net income, or basic earnings per share of six cents. This compared to a GAAP net loss of $3 million in FQ2'09 and represented the company's best performance in nearly five years. The $11 million profit included a $2 million net gain related to the retirement of convertible debt, offset by $9 million in amortization of intangibles, $3 million in stock-based compensation charges and $2 million in restructuring costs. The net impact of these four items reduced basic earnings per share by five cents. Quantum generated $31 million in cash from operations for the quarter, paid down $20 million of its senior debt and ended the quarter with $85 million in cash and cash equivalents. As of September 30, 2009, the Company had $501.6 million in total assets against $247.2 million in total current liabilities and $352.9 million in total long-term liabilities, resulting in $98.5 million in stockholders' deficit. "Despite the continuing impact of the economic downturn and changes in the deduplication landscape, we delivered some of our best results in many years," said Rick Belluzzo, chairman and CEO of Quantum. "This included significantly higher gross margin rates, operating income and margins, and net income, compared to both last year and the prior quarter. We also generated strong growth in disk systems and software revenue, with our branded DXi backup/deduplication sales up significantly, both year-over-year and sequentially. "Our September quarter results reflect a number of initiatives we have implemented over the past year, as well as an aggressive shift we made in our go-to-market focus during the quarter in response to changed industry dynamics," continued Mr. Belluzzo. "While we have more work to do in completing our transformation to a storage systems company, our performance clearly shows the substantial progress we've made." Quantum's product revenue, which includes sales of the company's hardware and software products, totaled $118 million in FQ2'10. This represented a decrease of $25 million from FQ2'09, primarily reflecting expected declines in both OEM tape automation sales and OEM devices and media revenue. About Quantum Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive. Quantum provides a comprehensive, integrated range of disk, tape, and software solutions supported by a world-class sales and service organization. * * * As reported by the Troubled Company Reporter on July 10, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Quantum Corp. to 'B-' from 'CC'. S&P also raised the company's subordinated rating to 'CCC' from 'C'. S&P has removed all ratings from CreditWatch, where they were placed on April 3, 2009. The outlook is negative. The TCR said July 8, 2009, Moody's Investors Service upgraded Quantum's corporate family rating and probability of default rating each to B3, from Caa1 and Ca, respectively, following the announcement that the Company has repurchased more than $135 million of its 4.375% Convertible Subordinated Notes due 2010. The rating outlook is positive. REVLON CONSUMER: Moody's Upgrades Corporate Family Rating to 'B2' ----------------------------------------------------------------- Moody's Investors Service upgraded Revlon Consumer Products Corporation's corporate family rating to B2 from B3 and its speculative grade liquidity rating to SGL-2 from SGL-3. The outlook is stable. The corporate family rating upgrade to B2 reflects both Revlon's sustained operating and financial improvements despite the ongoing challenges of the macroeconomic environment as well as its ability to stabilize its market share position for the company's core Revlon brand as a result of a series of successful new product introductions. "While competitive activity for mass market cosmetics remains very high, Revlon's improved cost structure and debt profile should provide the company with sufficient financial flexibility needed to sustain market share in its core global brands while generating acceptable levels of profitability through ongoing investments in new product development," says Moody's Vice President and Senior Credit Officer, Janice Hofferber. Moody's upgrade of Revlon's speculative grade liquidity rating to SGL-2 reflects the company's improved free cash flow, limited reliance under its revolving credit facilities, and lack of any near-term debt maturities as a result of the company's prepayment of scheduled term loan amortization payments until January 2011 and consummation of its October 2009 exchange offer that effectively resulted in the maturity date extension of its $107 million senior subordinated term loan due August 2010 with $48.6 million due to its immediate parent, Revlon, Inc., due in October 2013 and the remaining balance of $58.4 million extended to October 2014. These ratings of Revlon were upgraded: -- Corporate family rating to B2 from B3; -- Probability of default rating to B2 from B3; -- $815 million senior secured term loan facility to Ba3 (LGD 2, 28%) from B1 (LGD 2, 28%); -- $341 million 9.5% senior notes due 2011 to Caa1 (LGD 5, 81%) from Caa2 (LGD 5, 79%); and -- Speculative grade liquidity rating to SGL-2 from SGL-3. These ratings of Revlon were affirmed (LGD point estimates revised): -- $160 million senior secured asset based revolving credit facility due 2012 at Ba3 (LGD 2, 28%) -- Outlook is stable The last rating action regarding Revlon was on September 25, 2008, when Moody's upgraded the company's corporate family rating to B3 from Caa1, its Speculative Grade Liquidity rating to SGL-3 from SGL-4 and maintained the outlook at positive. Headquartered in New York, Revlon Consumer Products Corporation is a worldwide cosmetics, skin care, fragrance, and personal care products company. The company is a wholly-owned subsidiary of Revlon, Inc., which is majority-owned by MacAndrews & Forbes, which is in turn wholly-owned by Ronald O. Perelman. Revlon's net sales for the twelve-month period ended September 2009 were approximately $1.3 billion. M&F beneficially owns approximately 77.5% of Revlon's outstanding Class A common stock, 100% of Revlon's Class B common stock and 78.9% of Revlon's combined outstanding shares of Class A and Class B common stock, which together represent approximately 77.3% of the combined voting power of such shares. REVLON CONSUMER: S&P Raises Corporate Credit Rating to 'B' ---------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on Revlon Consumer Products Corp. to 'B' from 'B-'. The outlook is positive. S&P also raised the issue ratings on RCPC's $840 million senior secured term loan due 2012 ($815 million outstanding as of Sept. 30, 2009) to 'B+' from 'B'. The recovery rating on this loan remains '2', indicating S&P's expectation for substantial (70%-90%) recovery in the event of a payment default. In addition, S&P raised the ratings on RCPC's 9.5% senior unsecured notes to 'B-' from 'CCC+', and the '5' recovery rating on these notes remains unchanged, indicating the expectation for modest (10%-30%) recovery in the event of a payment default. S&P removed all debt ratings from CreditWatch with positive implications, where they were placed on Oct. 9, 2009, following the completion of Revlon Inc.'s (the parent company of RCPC) previously announced preferred stock exchange offer and the company's continued operating improvements. About $1.3 billion of total reported debt was outstanding at Sept. 30, 2009. "The upgrade reflects the company's enhanced financial profile, primarily attributed to sustained improvement in profitability, positive free cash flow generation, and stronger credit protection measures," said Standard & Poor's credit analyst Susan Ding. In addition, RCPC enhanced its maturity profile by extending a portion ($58.4 million) of the maturity of its MacAndrews & Forbes (M&F) senior subordinated term loan to Oct. 2014 as compared with its prior maturity date Aug. 2010. The remaining balance of $48.6 million was extended to Oct 2013. The ratings on RCPC reflect the company's strong brand names, participation in the intensely competitive mass-market cosmetics industry, its highly leveraged capital structure, and its positive operating momentum. Revlon faces significantly larger and financially stronger competitors with leading market positions, including L'Oreal S.A. (--/--/A-1+) with its L'Oreal and Maybelline brands, and Procter & Gamble Co. (AA-/Stable/A-1+) with its Cover Girl and Max Factor brands. In recent periods, RCPC's operating performance and financial measures improved meaningfully. S&P believes the company has also benefited from its strength in the mass channel, where consumers are trading down from the department store channel as a result of the weaker economy. Over half of Revlon's sales are generated in the U.S. where the company currently maintains about an estimated 18% aggregate dollar market share in its U.S. color cosmetics segment (with its Revlon and Almay brands) and an estimated 10% dollar market share in its U.S. women's hair color segment. Revlon is also a category participant within the anti-perspirant/deodorant sector and is a leading participant in the beauty tools segment. Standard & Poor's Ratings Services expects the company to continue to invest in its brands and on new product launches and line extensions. S&P expects that RCPC will maintain its market shares and continue to improve its operating performance and generate positive free cash flow. As a result, S&P believes that the company's credit measures will continue to strengthen as RCPC further reduces its debt levels and expands its EBITDA base. If the company is able to sustain its improved operating performance and continues to generate free cash flow, S&P could raise the ratings. According to S&P's internal assumptions, even if the company's 2009 fiscal sales decline by low single digits and margins contract by 170 basis points, leverage would trend toward 5.5x. If the company is able to sustain leverage below 5.5x S&P could consider raising the ratings. The outlook could be revised to stable if Revlon is unable to further reduce leverage beyond current levels. RODNEY DAVIS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Joint Debtors: Rodney C. Davis, II Donna L Davis 72 Ray Hill Road East Haddam, CT 06423 Bankruptcy Case No.: 09-33109 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court District of Connecticut (New Haven) Judge: Lorraine Murphy Weil Debtor's Counsel: Peter L. Ressler, Esq. Groob Ressler & Mulqueen 123 York Street, Suite 1B New Haven, CT 06511-0001 Tel: (203) 777-5741 Fax: (203) 777-4206 Email: ressmul@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $3,449,228, and total debts of $2,232,491. A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ctb09-33109.pdf The petition was signed by the Joint Debtors. RSC EQUIPMENT: Moody's Assigns 'Caa2' Rating on $200 Mil. Debt -------------------------------------------------------------- Moody's Investors Service assigned a Caa2 rating to RSC Equipment Rental, Inc's proposed issuance of $200 million of unsecured debt. Proceeds from the issuance will be used to pay down second lien debt. Moody's also affirmed the B3 Corporate Family Rating and all other existing debt ratings. The outlook is stable. The new issuance benefits the company by extending a portion of the $1.5 billion of debt scheduled to mature in 2013. Post transaction, debt maturities in 2013 will be reduced to $1.29 billion, comprised of $479 million 2nd lien and $819 million revolver. The company's B3 Corporate Family Rating reflects Moody's expectation that demand for the equipment rental services will remain depressed well into 2010, resulting in declining utilization and rental rates. Due to the severity of the economic downturn, RSC's credit metrics have weakened and are likely to worsen in the short-term. For the twelve months ending September, key credit metrics include debt to EBITDA of 4.6 times, EBITDA to interest of 2.7 times and EBIT to interest of 0.8 times. However, the fundamental business position remains competitive, cost reductions help offset losses, and the company is expected to maintain adequate liquidity to contend with the downturn, as reflected by the SGL-3 liquidity rating. This rating was assigned: -- $200 million senior unsecured notes due 2014 rated Caa2 (LGD5, 86%) These ratings were affirmed: -- Corporate Family Rating rated affirmed at B3 -- Probability of Default Rating affirmed at B3 -- $1.1 billion senior secured revolving bank credit facility affirmed at Ba3 (LGD2, 13%) -- $400 million senior secured notes due 2017 affirmed at B1 (LGD3, 33%) -- $671.5 million 2nd lien term loan due 2013 affirmed at Caa1 (LGD4, 62%) -- $620 million senior unsecured notes due 2014 affirmed at Caa2 (LGD5, 86%) -- Speculative Grade Liquidity rating affirmed at SGL-3 The ratings outlook is stable. The last rating action was on June 25, 2009, at which time Moody's changed RSC's Corporate Family Rating to B3 and SGL rating to SGL- 3. RSC Equipment Rental, Inc., is one of the largest equipment rental companies in North America operating 464 locations throughout the United States and Canada. The company maintains over 1,000 categories of equipment having an original equipment cost of $2.4 billion. Revenues for the twelve months ending September RSC EQUIPMENT: S&P Retains 'B+' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services said that the ratings on RSC Equipment Rental, including the 'B+' corporate credit rating, remain unchanged. The outlook is stable. S&P also assigned an issue-level rating of 'B-' to the proposed offering of $200 million senior unsecured notes due 2019 (based on preliminary terms; S&P is basing the rating on the assumption of $200 million of notes and S&P's estimate of the borrowing base availability on the ABL credit facility). The recovery rating is '6', indicating negligible expectation (0%-10%) of recovery in a default scenario. S&P expects the company will use the proceeds to reduce amounts outstanding on its second-lien term-loan debt. The ratings on RSC reflect its aggressive financial profile, which more than offsets its position as one of the largest providers of construction equipment rentals. Although RSC operates in the cyclical, highly competitive, and fragmented equipment rental sector, it has good geographic, product, and customer diversity, and a well-maintained and relatively young fleet. "The ratings incorporate S&P's expectations of declining industry conditions in the intermediate term," said Standard & Poor's credit analyst John R. SiCo. S&P expects that RSC's operating performance will face challenges, because it is operating in the declining phase of the cycle. "If nonresidential construction markets decline by more than S&P expects in 2010, which S&P currently believe will be 20%, S&P could lower the ratings, in light of a severe downturn and significant deterioration in operating margins, because of much weaker pricing conditions," he continued. Standard & Poor's expects RSC to maintain financial and acquisition discipline. S&P's ratings do not factor in dividends or other shareholder-friendly initiatives, or a debt- financed acquisition, all of which could result in a possible downward rating action. S&P is unlikely to raise the ratings at this point in the cycle. SEAGATE TECHNOLOGY: Moody's Affirms 'Ba2' Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service affirmed Seagate Technology HDD Holdings, Inc.'s ratings (Ba2 corporate family) and changed the outlook to stable from negative. The outlook revision to stable reflects Seagate's better-than- expected operating performance, increase in year-over-year cash flow generation, improving liquidity profile and good progress on debt repayment as the company realized benefits from facility closures, cost reductions and lower capex requirements, which Moody's anticipate will continue. It also captures good execution on time-to-market delivery of new products as well as an improved customer demand environment for PCs, which Moody's expect to continue as a result of contracting replacement cycles. The improvement in the outlook also anticipates that gross margin and cash flow expansion will be supported by improving product mix and higher capacity utilization levels. Additionally, Moody's expect Seagate's credit profile will benefit from rising disk drive volumes as a result of expanding demand for notebooks, improvement in the desktop segment and gradual recovery in mission-critical enterprise markets. The continued ramp of higher margin products and completion of the restructuring program should also produce a steady upturn in operating results and expected free cash flow generation. The Ba2 corporate family rating continues to reflect the company's leading position in the disk drive industry and its proven ability to generate significant amounts of profits and FCF during business upcycles that provide cushion to withstand cyclical downturns. In addition, it recognizes Seagate's good execution on new product introductions, time-to-market product delivery and transitions as well as its streamlined manufacturing footprint and improved supply chain that can accommodate abrupt spikes/contractions in short-term demand. The CFR also incorporates the inherent volatility of the disk drive sector, which is characterized by capital intensity, short product life cycles, commoditization and maturation-linked average selling price declines. While Moody's believe that industry volatility may have become less pronounced as a result of the sector's ongoing consolidation, the industry's sharp pullback in demand, which remains weak relative to historical levels as the global economy slowly recovers, has forced Seagate to rationalize production capacity as in past downturns. These ratings were affirmed and assessments changed: * Corporate Family Rating -- Ba2 * Probability of Default Rating -- Ba2 * $411 Million (originally $430 Million) Guaranteed Senior Secured Second Priority Notes due May 2014 -- Ba1, LGD assessment revised to (LGD-2, 16%) from (LGD-2, 23%) * $104 Million (originally $230 Million) Convertible Senior Notes due April 2010 -- Ba3, LGD assessment revised to (LGD-4, 64%) from (LGD-4, 67%) * $579 Million (originally $600 Million) Guaranteed Senior Unsecured Notes due October 2011 - Ba3, LGD assessment revised to (LGD-4, 64%) from (LGD-4, 67%) * $600 Million Guaranteed Senior Unsecured Notes due October 2016 - Ba3, LGD assessment revised to (LGD-4, 64%) from (LGD-4, 67%) * $ 35 Million (originally $60 Million) Convertible Subordinated Debentures due March 2012 -- B1 (LGD-6, 96%) * Speculative Grade Liquidity Rating -- SGL-2 The last rating action was on April 13, 2009, when Moody's confirmed Seagate's Ba2 CFR, downgraded the senior unsecured and convertible notes to Ba3 from Ba2, assigned a first-time Ba1 rating to the senior secured notes, upgraded the speculative grade liquidity rating to SGL-2 from SGL-3 and revised the outlook to negative, which concluded the review for possible downgrade initiated January 15, 2009. With headquarters in Scotts Valley, CA, and revenues of $9.4 billion for the twelve months ended October 2, 2009, Seagate is the worldwide leader in the design, manufacture and marketing of disk drive products used as the primary medium for storing electronic information in systems ranging from personal computers and consumer electronics to data centers. SEMGROUP LP: Conoco Seeks Recoupment of Fees & Expenses ------------------------------------------------------- ConocoPhillips Company seeks payment of $1,420,403 of fees and expenses it incurred by defending against attacks on the title of the crude oil it bought from SemGroup LP and its affiliates. Conoco also asks permission from the Court to recoup the fees and expenses from the escrowed funds. According to Philip G. Eisenberg, Esq., at Locke Lord Bissell & Liddell, LLP, in Houston, Texas, Debtor SemCrude L.P., pursuant to prepetition agreements, has provided Conoco with a warranty of good title for all Crude Oil purchased by Conoco from SemCrude. The Producers' constant attacks on the title of the Crude Oil created a breach of the warranty title, even if the Producers' arguments are eventually rejected by the Court, he asserts. Mr. Eisenberg asserts that a breach of warranty of title has occurred when SemCrude proposed to assist the producers by paying their legal fees with the very funds that were used to protect Conoco's rights. Because the breach has occurred, Conoco asserts that it is entitled to payment of its costs and expenses to defend the title of the crude oil. 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. SemGroup, LP, has won confirmation from the U.S. Bankruptcy Court of its Fourth Amended Plan of Reorganization on October 28, 2008. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Gets Nod of Race Trac Settlement Pact -------------------------------------------------- Debtor SemFuel, L.P., and Race Trac Petroleum, Inc., were parties to a prepetition purchase agreement whereby Race Trac was required to purchase 55,000 barrels per month of unleaded gasoline blended with ethanol and 5,000 barrels per month of premium unleaded gasoline blended with ethanol. As a condition of entry into the Purchase Agreement, SemFuel also entered into a Thruput/Sales Contract with Metroplex Energy, Inc., a subsidiary of Race Trac. Under the Thruput Contract, SemFuel agreed to purchase denatured Ethanol from Metroplex that would in turn be used to manufacture the gasoline sold to Race Trac under Purchase Agreement. By mid-August 2008 and September 2008, Race Trac was more than 10 days past due on its payment for deliveries made by SemFuel for July and August totaling $9,896,961. As of the Petition Date, SemFuel owed Race Trac/Metroplex for purchases made by SemFuel under the Thruput Contract. Race Trac filed Claim No. 5917 for the Ethanol Obligation for $2,467,517. SemFuel sent letters demanding payment of the $9,896,961 to which Race Trac responded that the Outstanding Race Trac Obligation should be set off against the Ethanol Obligation. To resolve the dispute, SemFuel and Race Trac entered into a stipulation wherein (i) Race Trac agrees to pay SemFuel $9,896,961 in full; and (ii) SemFuel agrees that Claim No. 5917 for $2,467,517 will be deemed an allowed general unsecured claim. The Debtors have obtained approval from the Bankruptcy Court of the Stipulation between SemFuel and Race Trac. The Debtors insist that the $9,896,961 Race Trac has agreed to return to SemFuel is the maximum amount that SemFuel will likely recover from Race Trac if it sought to recover these funds through litigation. 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. SemGroup, LP, has won confirmation from the U.S. Bankruptcy Court of its Fourth Amended Plan of Reorganization on October 28, 2008. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Gets Nod to Retain Mckool Smith as Co-Counsel ---------------------------------------------------------- The Official Producers' Committee in SemGroup LP.'s cases obtained the Court's authority to retain McKool Smith, P.C., as its co- counsel, nunc pro tunc to October 1, 2009. Hugh Ray and Peter Goodman recently left Andrews Kurth LLP and joined the law firm McKool Smith. The OPC wishes to have the continuation of its primary counsel, Messrs. Ray and Goodman, at a critical juncture in the Debtors' Chapter 11 cases, Michael G. Daniel of Samson Resources Company, the OPC chair, relates. The Debtors' Chapter 11 cases are poised for confirmation pursuant to the terms of an agreed-upon settlement by and amount the Debtors, the OPC, certain producer creditors of the estate, and the Debtors' prepetition secured lenders, which settlement has been embodied in the Debtors' Fourth Amended Plan of Reorganization dated September 25, 2009, according to Mr. Daniel. Messrs. Ray and Goodman negotiated the settlement on behalf of the OPC and are critical to its implementation, Mr. Daniel tells the Court. In light of the extensive legal services that may be necessary in these bankruptcy cases, the OPC believes that the employment of McKool Smith is appropriate and in the best interests of the creditor body that OPC represents, he adds. While Andrews Kurth and its attorneys, who have been involved in these Chapter 11 cases, will continue to assist the OPC, Messrs. Ray and Goodman will continue to play the same role they have during the course of the Debtors' bankruptcy cases, according to Mr. Daniel. McKool Smith attorneys may assist the OPC on discrete matters, but they will not duplicate the work done by Andrews Kurth, he assures the Court. McKool Smith will be paid on an hourly basis, plus reimbursement of actual, necessary expenses and other charges incurred by the firm. The firm's current hourly rates are: Principal $450 - $900 Hugh Ray, principal $700 Peter Goodman, principal $700 Paul Moak, principal $605 Attorneys, Counsel $225 - $575 Legal assistants $85 - $180 Hugh M. Ray, Esq., a member of McKool Smith, in Houston, Texas, discloses in his declaration that the firm formerly represented Mia Oven, individually, with respect to the Bankruptcy Examiner's investigation. Ms. Oven was an employee of SemGroup and traded mostly for SemMaterials. The representation of Ms. Oven ended several months ago. Mr. Ray adds that the firm currently represents or formerly represented affiliates of potential parties-in-interest in matters unrelated to the Debtors or their bankruptcy cases, including: * Adverse to Wachovia Bank in matter on behalf of Toll Brothers Inc.; * Adverse to JPMorgan Chase Bank on behalf of Affiliated Computer Systems; * Adverse to Bank of America on behalf of Realtime Data, LLC; and * Adverse to Goldman Sachs on behalf of Realtime Data, LLC. Except for the former representation of Ms. Oven, McKool Smith does not and will not represent any entity or any of their affiliates or subsidiaries in matters related to the Debtors or their Chapter 11 cases, Mr. Ray assures the Court. McKool Smith does not represent any other entity having an adverse interest in the Debtors' Chapter 11 cases, and does not hold or represent any interest adverse to the estate. McKool Smith is a disinterested person as the term is defined in Section 11(14) of the Bankruptcy Code, Mr. Ray asserts. 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. SemGroup, LP, has won confirmation from the U.S. Bankruptcy Court of its Fourth Amended Plan of Reorganization on October 28, 2008. 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) SENSATA TECHNOLOGIES: S&P Affirms 'CCC+' Corporate Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed the ratings on Attleboro, Massachusetts-based Sensata Technologies, Inc., including the 'CCC+' corporate credit rating. At the same time, S&P revised the outlook on the company to stable from negative. The outlook revision reflects improved operating performance in third-quarter 2009 and better prospects for Sensata in the near term, which reduces the risk of a covenant violation and should result in improving credit measures. In the third quarter, Sensata reported that EBITDA grew by 11% in spite of a 16% year- over-year revenue decline. Given improving trends and significant cost-reduction actions, the company appears likely to display year-over-year EBITDA growth for the next couple of quarters. Sensata, formerly a division of Texas Instruments Inc., consists of two business units that manufacture highly engineered electronic sensors and controls, generating more than $1 billion of revenues. The company sells its products in mature, cyclical end markets that expand primarily at GDP-like rates. The company also has a significant exposure to the challenged global automotive market, which accounts for more than half of sales. However, the company does benefit from strong market positions, as it is the sole or primary source for most of its customers. "While credit measures are very weak, Sensata appears likely to generate better EBITDA due to improved market conditions and significant cost-cutting actions," said Standard & Poor's credit analyst Dan Picciotto. For example, S&P could raise the ratings if adjusted debt to EBITDA trends to less than 7x and S&P anticipate further improvement. "We could lower the ratings if market conditions turn negative and S&P does not expect the company to maintain adequate headroom under its covenants," he continued. For instance, if S&P expected adjusted debt to EBITDA to remain around 8x, S&P could lower the ratings. SHERWOOD/CLAY-AUSTIN: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Sherwood/Clay-Austin Lights LLC 7525 Picardy Avenue, Suite 220 Baton Rouge, LA 70808 Case No.: 09-11725 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Middle District of Louisiana (Baton Rouge) Debtor's Counsel: Douglas S. Draper, Esq. 650 Poydras Street, Suite 2500 New Orleans, LA 70130-6103 Tel: (504) 299-3300 Fax: (504) 299-3399 Email: ddraper@hellerdraper.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. SIMMONS CO: Deutsche Bank Extends Pledge for $35MM DIP Facility --------------------------------------------------------------- Simmons Bedding Company on October 30, 2009, entered into an amendment to the Commitment Letter dated as of August 20, 2009, among Deutsche Bank Trust Company Americas, Deutsche Bank Securities Inc., Bedding Holdco Incorporated, SBC, and certain of SBC's subsidiaries regarding DB's arrangement of a debtor-in- possession revolving credit facility in an aggregate principal amount of US$35 million. The amendment became effective upon the payment of an amendment fee and extends the termination date of the Commitment Letter from October 31, 2009, to November 30, 2009 and, if the Company pays an additional amendment fee on or prior to November 30, 2009, December 31, 2009. Prepack Chapter 11 Plan As reported by the Troubled Company Reporter on October 21, 2009, Simmons Bedding Co. and its parent Simmons Co. are soliciting votes on a prepackaged reorganization plan. According to the disclosure statement included in the pre- bankruptcy solicitation package sent to debtholders, holders of $298,775,125 in 10% senior discounted notes issued by the holding company will recover 3.7% to 5.6% by splitting $10 million to $15 million cash. They also have the right to trade cash for ownership of Class A common stock. Holders of $221 million in 7.875% senior subordinated notes due 2014 issued by SBC, the operating company, will divide $185 million to $190 million cash for a recovery of 83.4% to 85.7%. Trade creditors and other unsecured creditors with $56.7 million in claims are to be paid in full. Lenders owed $542 million for borrowings made to SBC and secured by first priority liens on the assets, will also be paid in full in cash. Holders of equity interests in SBC and Holdco won't receive anything. Holders of equity interests in Bedding Holdco Incorporated will not receive distributions on account of their equity interests, but will obtain recovery on account of their ownership of Holdco Note Claims. Creditors will receive the high end of their projected recovery if restructuring expenses by Simmons won't exceed $38 million. Ares Management LLC and Ontario Teachers' Pension Plan, the sponsors of the plan, will acquire Simmons in return for a $310 million equity investment and $425 million in exit financing. Simmons is soliciting votes from senior bank lenders, holders of its 7.875% senior subordinated notes, and holders of Simmons' 10% discount notes. The consent solicitation will expire on November 12, 2009, unless extended. The disclosure statement assumes a Chapter 11 filing Nov. 15. In connection with the plan, Simmons Bedding also has arranged for a $35 million debtor in possession revolving credit facility with certain lenders, pursuant to which Deutsche Bank Trust Company Americas will act as the administrative agent and collateral agent and Deutsche Bank Securities Inc. will act as the sole book runner and lead arranger. A copy of the Disclosure Statement, which was filed with the Securities and Exchange Commission, is available for free at: http://researcharchives.com/t/s?4728 A copy of the Plan Sponsor Agreement is available for free at: http://researcharchives.com/t/s?45a6 About Simmons Company Simmons Company -- http://www.simmons.com/-- is one of the top three US mattress makers alongside rivals Sealy and Serta. Simmons Bedding Company is the indirect subsidiary of Simmons Company. Simmons Bedding manufactures and markets a broad range of products including Beautyrest(R), Beautyrest Black(R), Beautyrest Studio(TM), ComforPedic by Simmons(TM), ComforPedic Loft(TM), Natural Care(R), Beautyrest Beginnings(TM) and BeautySleep(R). Simmons Bedding operates 19 conventional bedding manufacturing facilities and two juvenile bedding manufacturing facilities across the United States, Canada and Puerto Rico. Simmons Bedding also serves as a key supplier of beds to many of the world's leading hotel groups and resort properties. Simmons Bedding is committed to developing superior mattresses and promoting a higher quality sleep for consumers around the world. As of June 27, 2009, Simmons Co. had $895.9 million in total assets and $1.26 billion in total liabilities, resulting in stockholder's deficit of $367.5 million. Weil, Gotshal & Manges LLP is acting as legal counsel and Miller Buckfire & Co., LLC is acting as financial advisor to Simmons. Sullivan & Cromwell LLP is acting as legal counsel and Goldman, Sachs & Co., is acting as financial advisor to Ares and Teachers'. SOUTH TEXAS: Files for Bankruptcy Under Chapter 11 -------------------------------------------------- South Texas Oil and its wholly owned subsidiaries Southern Texas Oil Company, STO Drilling Company, STO Operating Company and its wholly owned subsidiary STO Properties LLC has filed for Chapter 11 protection (Bankr. W.D. Tex. Case No. 09 54233). BankruptcyData reports that the Company says it will file a motion seeking Court approval of debtor-in-possession financing composed of a term loan facility in an aggregate principal amount of up to $1,500,000. Ronald Hornberger of Plunkeet & Gibson represents the Debtors in their restructuring effort. About South Texas Oil Company San Antonio, Texas-based South Texas Oil Company is an independent energy company engaged in the acquisition, production, exploration and development of crude oil and natural gas. Its core operating areas include Texas, Louisiana and the Gulf Coast. SPANSION INC: Admits to More Job Cuts ------------------------------------- Spansion Inc., acknowledged that the Company cut an undisclosed number of jobs on Oct. 26, 2009, EETimes reported. According to a Spansion spokesperson, the layoff was necessary to better prioritize and align the company's resources with its business goals and emergence from Chapter 11. No other details were provided, says the report. 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: Gets Nod to Assume Leases in Asia & Europe -------------------------------------------------------- Spansion Inc. and its units sought and obtained the Court's authority to assume eight unexpired leases on non-residential real property: Lease Monthly Rent ----- ------------ Vantaa Lease $7,825 Munich Lease 28,350 Milan Lease 31,247 Amsterdam Lease 1,714 Camberley Lease 2,708 Stockholm Lease 3,540 Taipei Lease 6,401 Seoul Lease 50,984 The Debtors assert that the Leased Premises pursuant to each of the eight real property leases are important to the success of their business operations. The Munich Premises are the ideal location for the Debtors' European sales headquarters as they are centrally-located on the European continent. Furthermore, because Germany is the location of the majority of the Debtors' key automotive customers, it is critical that the Debtors maintain a presence there. The Taipei Premises, the Vantaa Premises and the Stockholm Premises are home to important sales centers. Each of these locations provides critical sales exposure to key customers who are based or conduct a large amount of business in Taiwan, Finland and Sweden. In each of these locations, the Debtors have sales and sales support staff, including finance and technology specialists. The Seoul Premises also house sale operations. In addition to a sales office and support operations, the Debtors conduct field test operations at this location. The Seoul Premises have a field application engineering lab that is designed for this purpose, and they are the business location for the engineers who are trained to test the Debtors' products. The Milan Premises are the Debtors' primary design and research and development center for the Debtors' NAND Flash memory products. At this location, the highly-trained staff design a variety of NAND Flash memory products. The Debtors chose Milan for their design center to gain access to a large pool of local talented engineers and designers. The Amsterdam Premises are located adjacent to the city's airport. This location is the logistics hub for products coming from the Debtors' foreign subsidiaries in the Far East for distribution to the Debtors' European customers. The Debtors' finished products are shipped to the nearby airport, and the Debtors' staff working at the Amsterdam Premises coordinates distribution of the products to customers. The Debtors relate that they will be leaving the Camberley Premises at the end of October 2009, pursuant to the terms of the Camberley Lease and an ancillary agreement with the Landlord. The Debtors tell the Court that they are choosing to vacate this property rather than extend the Lease because they are negotiating a new lease on another property in England with a much lower rental cost. A list of the Assumed Leases is available for free at http://bankrupt.com/misc/Spansion_AssumedLeases.pdf 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: King & Spalding Charges $2.9 Mil. for June-Aug. Work ------------------------------------------------------------------ Pursuant to Sections 330 and 331 of the Bankruptcy Code, the professionals retained in Spansion Inc.'s cases seek payment of their fees and reimbursement of their expenses: A. Debtors' Professionals Professional Period Fees Expenses ------------ ------ ---- -------- Brincko Associates, Inc. 09/01/09- 09/30/09 $158,010 $23,688 Sitrick and Company Inc. 06/01/09- 08/31/09 1,903 0 KPMG LLP 06/01/09- 08/31/09 232,193 6,434 King & Spalding LLP 06/01/09- 08/31/09 2,905,207 51,879 Duane Morris LLP 06/01/09- 08/31/09 261,839 5,361 Latham & Watkins LLP 06/01/09- 08/31/09 2,863,586 61,619 Gordian Group, LLC 06/01/09- 08/31/09 225,000 25,432 K&L Gates LLP 06/01/09- 08/31/09 642,090 209,119 Baker & McKenzie LLP 06/01/09- 08/31/09 359,376 2,707 Wilson Sonsini Goodrich 06/01/09- & Rosati, P.C. 08/31/09 45,754 0 Duane Morris is the Debtors' co-counsel. Brincko Associates serves as restructuring professionals to the Debtors. Sitrick and Company is the Debtors' corporate communications consultants. KPMG is the Debtors' financial advisor. King & Spalding is the Debtors' special litigation counsel. Latham & Watkins serves as the Debtors' counsel. Gordian Group acts as the Debtors' financial advisors. K&L Gates is the Debtors' special litigation counsel. Baker & McKenzie and Wilson Sonsini serve as the Debtors' special counsel. In a separate filing, the Debtors certified to the Court that no objections were filed as to these fee applications: Professional 80% Fees 100% Expenses ------------ -------- ------------- Duane Morris LLP $76,728 $2,188 Morrison & Foerster LLP 318,250 31,707 Wilson Sonsini Goodrich & Rosati, P.C. 18,023 - Sitrick And Company Inc. 220 - K & L Gates LLP 154,540 86,087 Brincko Associates Inc. 126,646 21,450 Baker & McKenzie 137,194 6,004 Ernst & Young LLP 113,184 177 Gordian Group, LLC 60,000 4,313 Latham & Watkins LLP 781,789 21,261 KPMG LLP 17,054 - King & Spalding LLP 1,206,928 25,625 B. Professionals of the Official Committee on Unsecured Creditors The Committee's professionals seek payment of fees and reimbursement of expenses pursuant to Sections 330 and 331 of the Bankruptcy Code. Professional Period Fees Expenses ------------ ------ ---- -------- FTI Consulting, Inc. 08/01/09- 08/31/09 $150,000 $0 FTI Consulting, Inc. 06/01/09- 08/31/09 450,000 12,997 Young Conaway Stargatt 06/01/09- & Taylor, LLP 08/31/09 20,612 5,831 Young Conaway Stargatt 09/01/09- & Taylor, LLP 09/30/09 17,526 334 Paul Hastings Janofsky & 03/12/09- Walker LLP 06/30/09 1,316,281 49,650 Paul Hastings and Young Conaway serve as the Committee's counsel. FTI Consulting serves as the Committee's financial advisor. Fee Auditor's Report Warren H. Smith & Associates, P.C., in its capacity as fee auditor, submitted with the Court its final report regarding the interim fee application of Morgan Stanley & Co., Inc. for the period from March 1, 2009, through May 31, 2009. Warren H. Smith recommends fees totaling $400,000 and reimbursement of expenses for $24,226. Morgan Stanley's recommended expenses reflects a reduction by $99,429. 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) STATION CASINOS: Boyd "Ready to Begin Due Diligence" ---------------------------------------------------- Keith Smith, Chief Executive Officer of Boyd Gaming Corp., said during the conference call discussing the Company's third-quarter financial results that it plans to acquire some, if not all, of the properties of Station Casinos, Inc. "We stand ready to discuss our proposal and begin due diligence as soon as the bankruptcy proceedings allow," KVBC.com quoted Mr. Smith as saying during the conference call. "Station has previously suggested that our proposal is not serious. Let me be clear, we cannot be more serious. We are very interested in acquiring some or all of the Station assets. To the extent that the bankruptcy allows, we are not in this to create controversy; we have the financial capability and stability to execute a transaction." In February 2009, Boyd offered Station Casinos to acquire several of its properties for $950 million but Station Casinos rejected that offer. Boyd Gaming reaffirmed during it August 5, 2009 conference call with investors for its 2009 Second Quarter Financial Results, its interest in buying Station Casinos assets. About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. Station Casinos Inc., together with its affiliates, filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as local counsel. The Debtor is also hiring Lazard Freres & Co. LLC as investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STATION CASINOS: Gets Nod for Ernst & Young as Tax Advisor ---------------------------------------------------------- Station Casinos Inc. and its units obtained the Court's permission to employ Ernst & Young LLP as their independent auditor and tax advisor nunc pro tunc to the Petition Date. The Debtors desire to employ E&Y LLP as their independent auditor and tax advisor, pursuant to the terms and conditions set forth in these agreements comprising the Engagement Letters: (a) the agreement for benefit plan audit services; (b) the agreement for consolidated financial statement and internal controls audit services; (c) the agreement for quarterly review services - the Audit Engagement Letters - and (d) the master tax services agreement and these incorporated statements of work: * the statement of work for 1120 review services, * the statement of work for IRS audit assistance, and * the statement of work for routine on call tax advice. The Debtors initially did not file an application to employ E&Y LLP as they believed E&Y LLP would be employed as an ordinary course professional under the Debtors' initial motion for authority to retain professionals in the ordinary course of business. Recently, however, the Debtors determined to employ E&Y LLP as a Section 327 professional pursuant to the Application. E&Y LLP has agreed to provide, certain audit and tax services in connection with the chapter 11 cases, subject to approval by the Court of the Engagement Letters. These are the summaries of descriptions of the Services: (A) Audit Services: (a) Under the Benefit Plan Audit Engagement Letter, E&Y LLP will audit and report on the financial statements and supplemental schedules of the Station Casinos, Inc. 401(k) Retirement Plan for the year ended December 31, 2008. (b) Pursuant to the Financial Statement and Internal Controls Audit Engagement Letter, E&Y LLP will: (i) audit the consolidated financial statements and effectiveness of internal control over financial reporting for Station Casinos, Inc. for the year ended December 31, 2009; (ii) audit the financial statements of Green Valley Ranch Gaming, LLC, Barley's Casino and Brewing Company and Aliante Gaming, LLC for the year ended December 31, 2009 and (iii) issue combining financial statements for Station Casinos, Inc.'s Nevada properties required pursuant to Regulation 6.080 of the Nevada Gaming Control Board and compliance reports required pursuant to NGCB Regulation 6.090 and 6.105. (c) Under the Quarterly Review Engagement Letter, E&Y LLP will perform a quarterly review of the unaudited interim financial information before the company files its form 10-Q. (B) Tax Services: (d) Pursuant to the 2008 1120 Review SOW, E&Y LLP will perform limited review procedures with respect to Station Casinos, Inc.'s U.S. federal income tax return for the taxable year ended December 31, 2008. (e) Under the 2007 IRS Audit SOW, E&Y LLP will provide assistance and advice concerning the audit of Station Casinos, Inc.'s income tax filings for the year ended December 31, 2007. (f) Under the On-Call SOW, E&Y LLP will provide assistance with services, upon request, in addressing general tax questions and projects that are not covered by a separate SOW and do not involve any significant tax planning or projects and are expected, at the beginning of the specific project, to involve total professional time with respect to the project not to exceed $25,000 in fees. The Debtors will pay and reimburse E&Y LLP for fees and out-of- pocket expenses E&Y LLP incurred the Chapter 11 cases. E&Y LLP's applicable hourly rates for the Audit Services are: Professional Hourly Rate ------------ ----------- Partners/Principals $483 - $516 Executive Directors $420 - $450 Senior Managers $420 - $438 Managers $330 - $366 Seniors $210 - $235 Staff $145 - $170 E&Y LLP's applicable hourly rates for the Tax Services are: Professional Hourly Rate ------------ ----------- National Partners/Principals/ Executive Directors $610 - $760 Partners/Principals $483 - $585 Executive Directors $420 - $495 Senior Managers $420 - $490 Managers $330 - $400 Seniors $210 - $370 Staff $145 - $190 During the 90 days before the Petition Date, E&Y LLP received from the Debtors $547,995 for services rendered to the Debtors. E&Y LLP is holding retainers in the amount of $150,350 as of the Petition Date, which amounts will be applied to postpetition services as the amounts are permitted to be paid in accordance with the Bankruptcy Code, Federal and Local Bankruptcy Rules and orders of the Court. The Debtors and E&Y LLP have agreed to caps on fees for the respective Audit Services -- provided that the caps do not apply to work related to bankruptcy requirements the as employment and compensation-related work -- as follows: (a) E&Y LLP's fees for the work under the Benefit Plan Audit Engagement Letter will not exceed $30,440; (b) E&Y LLP's fees for the work under the Financial Statement and Internal Controls Audit Engagement Letter will not exceed $940,000; and (c) E&Y LLP's fees for the work under the Quarterly Review Engagement Letter will not exceed $20,350. Thomas M. Friel, Executive Vice President, Chief Accounting Officer, and Treasurer Of Station Casinos, Inc., assures the Court that E&Y LLP does not hold or represent any interest adverse to the Debtors' estates. The Debtors believe that E&Y LLP is a "disinterested person," as defined in Section 101(14) of the Bankruptcy Code as modified by Section 1107(b). Thomas M. Roche, a partner of Ernst & Young LLP, discloses that E&Y LLP is currently a party or participant in certain litigation matters involving parties-in-interest in the Chapter 11 cases. Moreover, E&Y LLP has thousands of professional employees and it is possible that certain employees of E&Y LLP may have business associations with parties in interest in the Cases or hold securities of the Debtors or interests in mutual funds or other investment vehicles that may own securities of the Debtors. Certain entities that are parties in interest are lenders to E&Y LLP: Barclays Bank PLC, Citibank, NA, JP Morgan Chase Bank, NA, The Royal Bank of Scotland PLC, Wachovia Bank NA and Wells Fargo Bank, NA are participants in E&Y LLP's Revolving Credit Program and E&Y LLP has borrowed long-term debt from New York Life Insurance Company, Metropolitan Life Insurance Company, Prudential Life Insurance Company of America, Nationwide Life and Annuity Insurance Company, Westchester Fire Insurance Company and Fidelity & Deposit Company of Maryland. Mr. Roche says that E&Y LLP may perform services for its clients that relate to the Debtors merely because the clients may be creditors or counterparties to transactions with the Debtors and the clients' assets and liabilities may thus be affected by the Debtors' status. A full-copy of the engagement letter is available for free at: http://bankrupt.com/misc/SC_E&YAgreement.pdf E&Y LLP delivered to the Court lists of professionals which have in the past or are currently providing services to E&Y LLP, and parties-in-interest involved in litigation with E&Y LLP, a copy of which is available for free at: http://bankrupt.com/misc/SC_E&YPartiesDisc.pdf About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. Station Casinos Inc., together with its affiliates, filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as local counsel. The Debtor is also hiring Lazard Freres & Co. LLC as investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STATION CASINOS: Wants Lease Decision Extension for Vegas Leases ---------------------------------------------------------------- Station Casinos, Inc., owns 100% of the equity interests in various non-debtor subsidiaries that own and operate gaming and entertainment complexes in the Las Vegas, Nevada, metropolitan area, including: (a) Palace Station, Inc.; (b) Boulder Station, Inc.; (c) Sunset Station, Inc.; and (d) Charleston Station, LLC. Debtor FCP PropCo, LLC, owns, or leases from a third party, all of the real property underlying the Hotel/Casinos. Specifically, PropCo owns all of the real property underlying each of Palace Station, Sunset Station and Red Rock; and PropCo owns certain of the real property underlying Boulder Station, and leases the remaining real property underlying Boulder Station from KB Enterprises. Thomas M. Friel, executive vice-president and chief accounting officer of Station Casinos, discloses, in a declaration filed with the Court, that, pursuant to a Master Lease Agreement, dated November 7, 2007, between SCI and PropCo, SCI leases from PropCo the real property underlying the Hotel/Casinos. Pursuant to certain sublease agreements, SCI subleases the real property underlying the Hotel Casinos to the Operating Companies. The Master Lease is a "triple net" lease under which taxes, insurance, capital expenditures, and other expenses are the exclusive obligations of SCI. Ultimately, the revenues from the Operating Companies fund the sublease payments to SCI, SCI's rent payments to PropCo under the Master Lease, and PropCo's payments under a Ground Lease and certain mortgage payments. SCI, as tenant, is also a party to five other real property leases used in connection with the operation of its business: (a) Corporate Headquarters Lease. SCI leases an office building from Cole South Las Vegas NV, LLC. The office building is the corporate headquarters for the Debtors, and is the worksite for most of the Debtors' employees; (b) Call Center Lease. SCI subleases office space from KB Home Nevada, Inc. pursuant to a Sublease by and between KB Home Nevada, Inc. and SCI, which Sublease was consented to by the landlord, Beltway Business Park Office No. 1, LLC, pursuant a Consent to Sublease by and among, KB Home, SCI and Beltway. SCI previously operated its call center from this office space; (c) Mail Center Lease. SCI leases office and warehouse space from JHS, LLC pursuant an Office/Warehouse Lease Agreement by and between Landlord's predecessor in interest and SCI, as the same has been amended from time to time. SCI operates its mail center from this office and warehouse space. (d) Hangar Lease. SCI leases an airplane hangar from Paradise Aviation Owners' Association, LLC Landlord pursuant to Ground Sublease Agreement by and between Landlord and SCI, as amended. Although SCI no longer leases the aircraft that was formerly housed at the hangar, the property was substantially improved by SCI and the lease has value for the estate; and (e) Wild Wild West Lease. Although the Wild Wild West Lease has been assigned by SCI to Tropicana Station, Inc. with the landlord's consent, SCI has certain rights and obligations in respect of the Wild Wild West Lease. The Wild Wild West Lease document has elements of an executory contract and a lease. SCI does not intend to waive any rights that come from the executory contract elements of the document; to the contrary, all the rights are expressly reserved. SCI sought, in an abundance of caution, a Stipulation regarding the Wild Wild West Lease in order to ensure that any and all rights that flow to SCI are available to the estate. PropCo partially owns the real property underlying Boulder Station. PropCo leases the remaining real property underlying Boulder Station from KB Enterprises, pursuant to a Ground Lease and Sublease Agreement by and between KB Enterprises and Boulder Station, Inc. In November 2007, (a) BSI assigned the Ground Lease to Boulder PropCo, LLC, and (b) PropCo succeeded to the interest in the Ground Lease as tenant, with the landlord's consent evidencing, among others, Boulder PropCo, LLC's merger with and into PropCo, with PropCo as the surviving company. The landlord's consent to the merger is evidenced by the Ground Lessor Estoppel Certificate, dated as of November 6, 2007. The Debtors and PropCo are current on all of their obligations under the Leases. Mr. Friel avers that each of the real property leases is part and parcel of the Debtors' overall business operations. According to Mr. Friel, the four Hotel/Casinos owned by the non-debtor Operating Companies have generated substantial revenues, enabling SCI to fund rent payments to PropCo under the Master Lease, and PropCo in turn to fund mortgage and Ground Lease payments. The Hotel/Casinos remain an essential element of the Debtors' restructuring plans and, therefore, it is in the best interests of their bankruptcy estates that the Debtors maintain flexibility at this time with respect to the Master Lease and Ground Lease. By this motion, the Debtors ask the Court to extend the deadline by which SCI and PropCo must assume or reject the unexpired non- residential real property leases from November 25, 2009, to February 23, 2010. A list of the landlords, tenant and applicable properties for each unexpired lease of nonresidential real property subject to the Extension Motion is available for free at: http://bankrupt.com/misc/SCI_LeaseLandlords.pdf The Debtors also ask the Court to approve certain stipulations entered into between SCI or PropCo, as tenants, and the lessors of nonresidential real property, which stipulations provide for the extension of SCI or PropCo's lease decision deadline to varying dates. Each of the Debtors' business operations located at the properties governed by the other Leases that are the subject of the Motion play a role in the generation of revenues in the Debtors' business, Mr. Friel tells the Court. He says SCI requires at least the 90-day extension of time to decide what role the properties that are the subject of the Leases will play in the Debtors' reorganization, and ultimately whether to assume or reject the leases, which extension the Court is authorized to grant under Section 365(B)(i) of the Bankruptcy Code. Mr. Friel adds that, as reflected in the Stipulations, certain of the lessors have agreed to an extension of time greater than 90 days, which the Court is authorized to approve under the authority in Section 365(d)(4)(B)(ii). The Court should reward the rational behavior by parties who understand they are saving the estate and themselves substantial sums that would otherwise be expended in seeking periodic extensions of the Section 364(d) deadlines, Mr. Friel asserts. About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. Station Casinos Inc., together with its affiliates, filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as local counsel. The Debtor is also hiring Lazard Freres & Co. LLC as investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SUPERIOR OFFSHORE: Resolves $23M Back Taxes Claim ------------------------------------------------- According Law360, an agent representing the bankruptcy estate of Superior Offshore International Inc. has reached a deal with the Internal Revenue Service over an initial $22.5 million employment and income tax claim, which the agent argued was too high and overstated the oil exploration services company's true liability. Headquartered in Houston Texas, Superior Offshore International Inc. (Nasdaq: DEEP) -- http://www.superioroffshore.com/-- provides subsea construction and commercial diving services to the offshore oil and gas industry. The company's construction services include installation, upgrading and decommissioning of pipelines and production infrastructure. The company operates a fleet of seven service vessels and provides remotely operated vehicles and saturation diving systems for deepwater and harsh environment operations. Superior Offshore International, Inc., filed for bankruptcy protection on April 24, 2008 (Bankr. S.D. Tex. Case No. 08-32590). The Debtors listed total assets of $67,587,927 and total liabilities of $54,359,884 in its schedules. David Ronald Jones, Esq., and Joshua Walton Wolfshohl, Esq., at Porter & Hedges LLP, represented the Debtor as counsel. The U.S. Trustee for Region 7 appointed five creditors to serve on an Official Committee of Unsecured Creditors. Douglas S. Draper, Esq., at Heller Draper Hayden Patrick & Horn LLC, and Michael D. Rubenstein, Esq., at Liskow Lewis, represented the Committee as counsel. TALBOTS INC: August 1 Balance Sheet Upside-Down by $206.7 Million ----------------------------------------------------------------- The Talbots, Inc.'s consolidated balance sheets at August 1, 2009, showed $855.9 million in total assets and $1.06 billion in total assets, resulting in a $206.7 million total shareholders' deficit. At August 1, 2009, the Company's consolidated balance sheets also showed strained liquidity with $482.3 million in total current assets available to pay $507.3 million in total current liabilities. The Company reported a net loss of $24.5 million for the thirteen weeks ended August 1, 2009, compared with a net loss of $25.0 million during the same period ended August 2, 2008. Net sales consist of store sales and direct marketing sales. Direct marketing sales include the Company's catalog and Internet channels. Net sales in the second quarter of 2009 were $304.6 million compared to $395.2 million in the second quarter of 2008, a decrease of $90.6 million, or 22.9%. Store sales in the second quarter of 2009 decreased by $79.4 million, or 23.8%, compared to the second quarter of 2008. Reflected in store sales was a $73.2 million or 24.9% decline in comparable store sales for the period. Direct marketing sales in the second quarter of 2009 decreased by $11.2 million, or 18.4%, compared to the second quarter of 2008. For the twenty-six weeks ended August 1, 2009, the Company reported a net loss of $48.0 million, compared with a net loss of $23.4 million in the same period ended August 2, 2009. Net sales for the first half of 2009 were $610.8 million compared to $810.0 million for the first half of 2008, a decrease of $199.2 million, or 24.6%. Store sales in the first half of 2009 decreased by $168.2 million, or 24.8%, compared to the first half of 2008. Reflected in store sales was a $157.5 million, or 25.9%, decline in comparable store sales for the period. Direct marketing sales in the first half of 2009 decreased by $31.0 million, or 23.7%, compared to the first half of 2008. A full-text copy of the Company's consolidated financial statements for the 13 weeks and 26 weeks ended August 1, 2009, is available for free at: http://researcharchives.com/t/s?4823 The substantial deterioration in the U.S. economy and decline in consumer discretionary spending had a significant impact on the Company's sales, operating profits and cash flows in 2008 and in the first half of 2009. The Company expects that the current conditions in the global economy will continue during 2009 and possibly beyond. For the 26 weeks ended August 1, 2009, and August 2, 2008, cash flows provided by operating activities from continuing operations were $41.3 million and $53.7 million, respectively. As of August 1, 2009, the Company had a working capital deficit of $25.1 million and a stockholders' deficit of $206.7 million. In addition, as of August 1, 2009, the Company has substantial debt obligations coming due in the next nine months, and the Company's revolving loan facility with AEON Co., Ltd. expires in April 2010. Based on the Company's current assumptions and forecast for 2009, and assuming it is able to extend, refinance or replace each of its current credit facilities which mature at various dates in 2009 and 2010, the Company believes that it has developed a fiscal 2009 financial plan that, if successfully executed, will provide sufficient liquidity to finance its anticipated working capital and other currently expected non-debt maturity cash needs for the next 12 months. The Company's $150.0 million secured revolving credit facility, entered into with AEON, which extends to April 2010, has not been drawn upon and has current availability of $150.0 million to address any shortfall in working capital or other funding needs while this facility is outstanding. Cash provided by operating activities was $41.3 million during the first half of 2009 compared to $53.7 million during the first half of 2008. The decrease of $12.4 million is primarily due to loss from continuing operations of $39.3 million during the first half of 2009 compared to income from continuing operations for the first half of 2008 of $6.6 million. The decline was substantially offset by a lower investment in working capital, primarily inventory, and receipt of a $26.6 million income tax refund. Cash used in investing activities was $13.2 million in the first half of 2009 compared to $17.4 million in the first half of 2008, an improvement of $4.2 million. Cash flows used in investing activities were primarily related to purchases of property and equipment. Cash used for purchases of property and equipment during the first half of 2009 was $13.2 million compared to $20.0 million during the first half of 2008. This $6.8 million decline in expenditures was a result of the Company's planned decline in spending on new store openings, store renovations, and information technology due to the uncertain economic environment of late 2008 continuing into the first half of 2009. In the first half of 2009, the company opened 11 new stores, and closed eight others. Cash provided by financing activities was $18.2 million during the first half of 2009 compared to a cash use of $21.8 million during the first half of 2008. The improvement in cash provided by financing activities in 2009 was due to proceeds received from the $200.0 million term loan facility from AEON Co., Ltd., and $30.0 million in borrowings under the Company's AEON (U.S.A.) $50.0 million facility, as well as the suspension of the quarterly dividend payment that was approved by the Company's Board of Directors in February 2009. Also during the first half of 2009, the Company paid down the remaining balance of approximately $200.0 million on its $400 million term loan (Acquisition Debt) using the borrowings from AEON Co., Ltd. In the first half of 2008, the Company paid $14.4 million in dividends. Based in Hingham, Mass., The Talbots, Inc. (NYSE:TLB) is a specialty retailer and direct marketer of women's apparel, shoes, and accessories. The Company operates stores in the United States and Canada. In addition, its customers may shop online or via its catalogs. The Company's products are sold through its 587 stores, its circulation of approximately 55 million catalogs during the fiscal year ended January 31, 2009, and online through its Web site. TAYLOR BEAN: Sovereign Balks at Terms of DIP Loans -------------------------------------------------- Taylor Bean & Whitaker Mortgage Corp.'s proposed $25 million of DIP financing is facing opposition from a prepetition lender. Law360 reports that Sovereign Bank has questioned the effects the DIP financing on its liens and the standing of its claims. 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. TENNECO INC: Moody's Affirms Corporate Family Rating at 'B3' ------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Tenneco Inc. -- Corporate Family Rating and Probability of Default rating at B3. In a related action Moody's affirmed the ratings for Tenneco's senior secured bank debt at Ba3, the rating on the second-lien senior secured note at B1, the rating on the senior unsecured notes at B3; and the rating on the senior subordinated notes at Caa2. The rating outlook is change to Stable. The B3 Corporate Family Rating anticipates gradual improvement in Tenneco's weak credit metrics over the intermediate-term stemming from improving global economic conditions and automotive production levels. Tenneco's market leadership as a global supplier of critical emission and ride control products is expected to support its competitive position. Restructuring actions taken by the company, including headcount reductions, plant closures and salary reductions, have served to mitigate automotive production declines experienced during the year. However, the company will continue to be challenged by weak automotive industry conditions in Europe, where automotive unit sales are projected to decline by about 9%. Moreover, with approximately 24% of 2008 revenues from the North American operations of the Detroit-3, Tenneco will be exposed to the potential for further market share erosion, particularly at GM and Chrysler. Further, content per vehicle will also be pressured as consumers buying preferences shift to smaller cars away from SUVs. The stable outlook reflects Tenneco's ability to implement restructuring actions which have stabilized the company's performance and improved profit margins under weak industry conditions. While Moody's continues to expect a challenging global automotive manufacturing environment over the near-term, Tenneco's margin improvements should position company to benefit from the expected increase in global automotive production in 2010. Modest further restructuring actions may be required given the unevenness of the expected recovery in production levels. For the LTM period ending September 30, 2009, Tenneco's EBIT/Interest (including Moody's Standard adjustments) approximated 0.6x and Debt/EBITDA approximated 6.6x. Tenneco is expected to maintain an adequate liquidity profile over the near-term. As of September 30, 2009, the company maintained cash and cash equivalents of $137 million. The company maintains a $550 million revolving credit facility and a $130 million senior secured tranche B letter of credit facility which also permits revolving borrowings. Availability under these facilities was $390 million at September 20, 2009 after considering $242MM of cash drawings and about $48 million of outstanding letters of credit. Tenneco's free cash flow generation over the near-term will be challenged by increasing working capital requirements as industry conditions improve and step-ups in amortization requirements under the company's term loan facilities. As such, reliance on the company's $550 million revolving credit facility is expected to continue over the near-term. Alternative sources of liquidity are limited as essentially all the company's assets are pledged to secure the bank credit facilities. These ratings were affirmed: -- Corporate Family rating, B3; -- Probability of Default rating, B3; -- $550.0 million first lien senior secured revolving credit facility, Ba3 (LGD2, 11%); -- $150 million first lien senior secured term loan A, Ba3 (LGD2, 11%); -- $130 million first lien senior secured letter of credit / revolving loan facility, Ba3 (LGD2, 11%); -- 10.25% guaranteed senior secured second-lien notes due 2013, to B1 (LGD3, 30%); -- 8.125% guaranteed senior unsecured notes due 2015, to B3 (LGD3, 49%); -- 8.625% guaranteed senior subordinated notes due November 2014, to Caa2 (LGD5, 83%); The last rating action for Tenneco was on February 18, 2009, when the company's Corporate Family Rating was lowered to B3. Tenneco, headquartered in Lake Forest, Illinois, is a leading manufacturer of automotive ride control (approximately 33% of sales) and emissions control (approximately 67% of sales) products and systems for both the worldwide original equipment market and aftermarket. Leading brands include Monroe(R), Rancho(R), Clevite(R), and Fric Rot ride control products and Walker(R), Fonos, and Gillet emission control products. Net sales in 2008 were approximately $5.9 billion. TERRY BRADFORD COX: Case Summary & 3 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Terry Bradford Cox 683 Greenview Avenue NE Atlanta, GA 30305 Bankruptcy Case No.: 09-89085 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Judge: C. Ray Mullins Debtor's Counsel: Herbert C. Broadfoot II, Esq. Ragsdale, Beals, Seigler, et al. 2400 International Tower 229 Peachtree Street, N.E. Atlanta, GA 30303 Tel: (404) 588-0500 Fax: (404) 523-6714 Email: broadfoot@rbspg.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 According to the schedules, the Company has assets of $1,011,000, and total debts of $812,126. A full-text copy of Ms. Cox's petition, including a list of her 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ganb09-89085.pdf The petition was signed by Ms. Cox. TOUSA INC: Lenders to Post About $700 Million in Bonds ------------------------------------------------------ Bloomberg News reports that U.S. Bankruptcy Judge John K. Olson ordered lenders, which include Citigroup Inc. and Wells Fargo & Co., to post bonds of $700 million while by Dec. 1, while a fraudulent transfer ruling is appealed. The bond amounts are 110 percent of the monetary awards. According to Bloomberg, Judge Olson denied the request to put on hold the nonmonetary awards which include the avoidance of liens and the disallowance of claims, among others. The bankruptcy cases "will be stuck dead in the water if the nonmonetary awards were to be stayed," Judge Olson said. Citicorp North America NA, the agent for the first-lien lenders, asked Judge Olson to grant the stay without requiring a bond because there is no risk of default. In the alternative, Citicorp requested, pursuant to Bankruptcy Rule 7062, that the Court fix the amount of the supersedeas bond at not more than 110% of the judgment. Although not binding on the Court, the Southern District of Florida's local rules provide that "[a] supersedeas bond staying execution of a money judgment shall be in the amount of 110% of the judgment." S.D. Fla. Local R. 62.1(A). As reported by the TCR on Oct. 15, 2009, Judge John K. Olson of the U.S. Bankruptcy Court for the Southern District of Florida has held that the loans Citicorp North America, as administrative agent, and certain prepetition lenders extended to TOUSA Inc. and its affiliates barely six months before the Petition Date were fraudulent transfers. TOUSA, Inc. caused certain of its subsidiaries to borrow in July 2007 from certain lenders (i) a $200 million first lien term loan with Citicorp, as administrative agent under the parties' credit agreement, and (ii) a $300 million second lien term loan with Citicorp as administrative agent, as subsequently replaced by Wells Fargo Bank. To secure the Loans, the lenders were granted liens on substantially all of TOUSA's assets. The proceeds of the Loans were used to settle a litigation initiated by Senior Transeastern Lenders against TOUSA and its subsidiary, TOUSA Homes LP, that arose from the default on debt incurred to finance the Transeastern Joint Venture, a business venture that TOUSA undertook in 2005. Certain of TOUSA's affiliates, otherwise referred to as the "Conveying Subsidiaries," which were not defendants in the Transeastern litigation and were not liable to the entities that financed the Transeastern Joint Venture, nonetheless incurred liabilities and granted liens to secure the resolution of TOUSA Inc.'s liabilities as their parent company. In the Adversary Complaint the Official Committee of Unsecured Creditors initiated in July 2008 against Citicorp, Wells Fargo and the Senior Transeastern Lenders, the Committee sought (1) to avoid and recover $500 million in liens granted pursuant to the July 2007 Loan Transaction; (2) to recover $420 million paid in cash to prior lenders to other Debtors whose loans were paid out as part of the same loan transaction in which the challenged liens were granted; and (3) to avoid as preferential the grant of a security interest in a $207 million tax refund which was perfected less than 90 days before the Debtors' petitions were filed. With respect to the first lien lenders, the Court ordered the disgorgement by the first lien lenders of "any and all principal, interest, costs, expenses and other fees or amounts paid to, for the benefit of, or on behalf of, the First . . . Lien Lenders or in respect of the First . . . Lien Lenders' asserted claims or obligations against the Conveying Subsidiaries' estates. According to Citicorp, the payments on the loan obligation subject to the disgorgement order include the paydown amount of $70,884,588, plus other amounts which continue to be calculated, included but not limited to interest payments made pursuant to the First Lien Term Loan. The Court set October 23, 2009 as the deadline to file an accounting of the amounts to be disgorged subject to the disgorgement order. A full-text copy of Judge Olson's 182-page Findings of Fact and Conclusions of Law dated October 13, 2009, is available for free at http://bankrupt.com/misc/TOUSA_JudgeOlsonOct13Findings.pdf About Tousa Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIAD FINANCIAL: S&P Puts 'B' Rating on CreditWatch Positive ------------------------------------------------------------ Standard & Poor's Ratings Services said that it has placed its B' counterparty rating and 'B-' senior unsecured debt rating Triad Financial Corp. on CreditWatch Positive. "The rating action follows the closing of Santander Consumer USA's acquisition of Triad. There was no public announcement of the acquisition. Santander Consumer USA, an unrated majority-owned subsidiary of Sovereign Bancorp will call the $60 million of term debt that remains outstanding. S&P expects to either assign a rating reflecting the standalone financial profile of Santander Consumer USA and its strategic importance to Sovereign; or, to withdraw S&P's ratings on Triad at the end of the call window on Dec. 1, 2009," said Standard & Poor's credit analyst Jeffrey Zaun. TRIDENT RESOURCES: Files Schedules of Assets and Liabilities ------------------------------------------------------------ Trident Resources Corp. filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $764,500 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $410,000,000 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $136,860,000 ----------- ------------ TOTAL $764,500 $546,860,000 Calgary, ALberta-based Trident Resources Corp. operates a natural gas exploration and development company. The Company and its affiliates filed for Chapter 11 on Sept. 8, 2009 (Bankr. D. Del. Case Nos. 09-13150 to 09-13154). UNIFI INC: Posts $2.48MM Net Income for September 27 Quarter ------------------------------------------------------------ Unifi, Inc., reported net income of $2,489,000 for its first fiscal quarter ended September 27, 2009, from a net loss of $676,000 for the quarter ended September 28, 2008. Net sales were $142,851,000 for the first fiscal quarter ended September 27, 2009, from $169,009,000 for the quarter ended September 28, 2008. As of September 27, 2009, Unifi had total assets of $497,918,000 against total current liabilities of $59,343,000, notes payable of $178,722,000, other long-term debt and liabilities of $2,907,000 and deferred income taxes of $438,000, resulting in stockholders' equity of $256,508,000. During the first quarter of fiscal 2010, the Company spent $2.1 million on capital expenditures compared to $3.6 million in the first quarter fiscal year 2009. The Company estimates its fiscal year 2010 capital expenditures will be within a range of $8.0 million to $9.0 million. From time to time, the Company may have restricted cash from the sale of certain nonproductive assets reserved for domestic capital expenditures in accordance with its long-term borrowing agreements. As of September 27, 2009, the Company had no restricted cash funds that were required to be used for domestic capital expenditures. The Company's capital expenditures primarily relate to maintenance of existing assets and equipment and technology upgrades. Management continuously evaluates opportunities to further reduce production costs, and the Company may incur additional capital expenditures from time to time as it pursues new opportunities for further cost reductions. During the first quarter of fiscal year 2010, the Company received $1.6 million in dividend distributions from its joint ventures. Although historically over the past five years the Company has received distributions from certain of its joint ventures, there is no guarantee that it will continue to receive distributions in the future. The Company may from time to time increase its interest in its joint ventures, sell its interest in its joint ventures, invest in new joint ventures or transfer idle equipment to its joint ventures. The Company is executing its plans to establish a wholly-owned base of operations in Central America. The total investment in the initial stages is expected to be $10.0 million or less. The Company expects to be operational over the next six to nine months. A full-text copy of the Company's quarterly report on Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?482d A full-text copy of the Company's preliminary earnings release is available at no charge at http://ResearchArchives.com/t/s?482e About Unifi Unifi, Inc. (NYSE: UFI) -- http://www.unifi.com/and http://www.repreve.com/-- is a diversified producer and processor of multi-filament polyester and nylon textured yarns and related raw materials. The Company adds value to the supply chain and enhances consumer demand for its products through the development and introduction of branded yarns that provide unique performance, comfort and aesthetic advantages. Key Unifi brands include, but are not limited to: AIO(R) - all-in-one performance yarns, SORBTEK(R), A.M.Y.(R), MYNX(R) UV, REPREVE(R), REFLEXX(R), MICROVISTA(R) and SATURA(R). Unifi's yarns and brands are readily found in home furnishings, apparel, legwear, and sewing thread, as well as industrial, automotive, military, and medical applications. Unifi Inc. continues to carry Moody's Investor Service's Caa2 senior secured debt rating which was placed in December 2007. VITESSE SEMICONDUCTOR: Appoints Hugar and Lyon as Directors ----------------------------------------------------------- James H. Hugar and G. Grant Lyon on October 28, 2009, were each appointed as directors of Vitesse Semiconductor Corporation. The New Directors have not yet been named to any of the committees of the Board of Directors. The appointments will become effective upon the closing of the debt restructuring transactions contemplated by the Debt Conversion Agreement entered into by the Company. "Jay and Grant bring the diverse skills and perspectives that our Board needs to guide Vitesse through its next steps forward," said Chris Gardner, chief executive officer of Vitesse and a member of its Board of Directors. "I personally and all of the employees of Vitesse extend our thanks and appreciation to Willow, Guy, and Bob for the diligence, expertise, and dedication they brought to the Company, and for their contributions in setting the stage for the next phase of Vitesse's recovery." Mr. Hugar recently retired from Deloitte & Touche LLP, where he served as partner-in-charge of the Southern California Investment Companies Industry and Broker/Dealer Practice. His clients included financial service companies, community banking, distribution, and companies within the aerospace and defense industries. Mr. Hugar has 35 years of experience in public accounting. He has participated in hundreds of audit committees of boards of directors and trustees for both publicly and privately held companies. Mr. Hugar holds a bachelor's degree from Pennsylvania State University and an MSBA degree from the University of California at Los Angeles. He is a member of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants. Mr. Lyon is currently the president of Odyssey Capital Group, LLC, a financial advisory and management consulting firm, where he has been since 2005. In 2005, Mr. Lyon served as interim Chief Financial Officer of Hypercom Corporation. Before 2005, Mr. Lyon held positions as managing director at Ernst & Young Corporate Finance, LLC; managing member of Golf Equity, LLC; vice president, Capital Markets at Evans Withycombe Residential, Inc. and Arthur Andersen, where he began his career. Mr. Lyon has been involved in corporate initiatives that have included capital acquisition, business and securities valuation, acquisitions and mergers, and bankruptcy reorganizations. Mr. Lyon currently serves as a director of Fairfield Residential LLC and as chairman of the board of Three Five Systems, Inc. He holds a bachelor's degree and an MBA degree from Brigham Young University. Mr. Lyon is also a certified public accountant. Pursuant to the terms of the Company's Amended and Restated 2001 Stock Incentive Plan and only upon the New Directors' appointments becoming effective, the New Directors will each be granted an option to purchase 75,000 shares of common stock of the Company at an exercise price equal to the Company's closing stock price on the date of grant. Each of their options will have a ten-year term and will vest in full one year and one day following the date of grant, so long as each remains a director. The New Directors will also execute an indemnity agreement with the Company that is substantially the same as the indemnity agreements with all the directors of the Company. Resignation of Directors On October 22, 2009, Guy W. Adams and Willow B. Shire, and on October 26, 2009, Robert A. Lundy, notified the Company that they will resign as Directors of the Company, effective upon the Closing. The Departing Directors' resignations are conditioned upon both the occurrence of the Closing and the acceptance of such resignations by the Company's Board of Directors. Debt Conversion Agreement As reported by the Troubled Company Reporter, the Company, effective October 16, 2009, entered into a Debt Conversion Agreement with the beneficial owners of more than 96.7% of its 1.5% Convertible Subordinated Debentures due 2024. Holders of the 2024 Debentures had the right to require the Company to repurchase the 2024 Debentures on October 1, 2009, for 113.76% of the principal amount to be purchased. The repurchase right would have resulted in an additional payment of $13.3 million on the $96.7 million outstanding 2024 Debentures or a total amount due of roughly $110.0 million. Under the terms of the Conversion Agreement, the Converting Noteholders have agreed to exchange their 2024 Debentures for a combination of cash, shares of common stock, new convertible debentures, and in some cases, shares of preferred stock. The Company will use roughly $10.0 million of cash in connection with this transaction, roughly $3.6 million of which will be used to repurchase 2024 Debentures from holders that are not parties to the Conversion Agreement and roughly $6.4 million of which will be paid to parties to the Conversion Agreement in partial repayment of the 2024 Debentures. The Company will issue these securities in connection with the Debt Restructuring Transaction for the remaining $100.0 million of aggregate principal amount and premium of 2024 Debentures: -- Roughly 173 million shares of the Company's common stock, par value $0.01 per share; -- Roughly $50 million aggregate principal amount of new 8.0% Convertible Second Lien Debentures Due 2014; and -- Roughly 771,000 shares of new Series B Participating Convertible Non-Cumulative Preferred Stock, par value $0.01 per share, each share of which is convertible into 100 shares of Common Stock for an aggregate of roughly 77.1 million shares of Common Stock. The Converting Noteholders agreed to exchange roughly 50% of their 2024 Debentures (after the partial repurchase for cash) for shares of Common Stock at $0.20 per share, subject to a limitation on ownership of 9.9% of the outstanding shares of Common Stock. Converting Noteholders who would otherwise own more than 9.9% of the outstanding Common Stock following the exchange will receive a combination of Common Stock and Series B Preferred Stock. The Converting Noteholders will receive one share of Series B Preferred Stock for every 100 shares of Common Stock that they would have otherwise received in the exchange in excess of the number of shares of Common Stock that equals 9.9% of the outstanding shares of Common Stock. The Series B Preferred Stock is non-voting and has a dividend preference equal to $0.001 per share of Series B Preferred Stock, which amount is payable when and if dividends are declared and payable with respect to the Common Stock. The Converting Noteholders will exchange the roughly 50% of their remaining 2024 Debentures (after the partial repurchase for cash) for the New Debentures. All of the 2024 Debentures acquired by the Company as a result of the Debt Restructuring Transaction will be cancelled. The Company expects to pay the principal amount, premium and accrued interest on any remaining 2024 Debentures immediately after the consummation of the Debt Restructuring Transaction. The Company and the Converting Noteholders have agreed that the New Debentures will convert into shares of Common Stock at a conversion price of $0.225 per share (equivalent to an initial conversion rate of roughly 4,444 shares per $1,000 principal amount of debentures), subject to customary adjustments. The Company may elect to deliver cash in lieu of shares of Common Stock if the New Debentures are converted. About Vitesse Semiconductor Based in Camarillo, California, Vitesse Semiconductor Corporation (Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of high-performance, cost-competitive semiconductor solutions for Carrier and Enterprise networks worldwide. Engineering excellence and dedicated customer service distinguish Vitesse as an industry leader in Gigabit Ethernet, Ethernet-over-SONET, Optical Transport, and other applications. Vitesse had total assets of $107,636,000 against total debts of $160,101,000 as of June 30, 2009. VITESSE SEMICONDUCTOR: Closes Debt Restructuring Transactions ------------------------------------------------------------- Vitesse Semiconductor Corporation on October 30, 2009, closed its debt restructuring transactions with its major creditors. The debt restructuring agreements call for the conversion of 96.7% of the Company's approximately $110 million aggregate principal amount of 1.5% Convertible Subordinated Debentures due 2024 into a combination of cash, equity securities, and secured convertible debentures. With respect to the remaining 3.3% of those convertible debentures, the Company is settling its obligations in cash. Additionally, Vitesse has made a cash payment of approximately $5 million of its $30 million senior secured loan, the terms of which had been amended to facilitate the debt restructuring. This debt restructuring significantly reduces the total amount of debt burden on Vitesse's balance sheet by replacing the Company's approximately $110 million of convertible debt which was due and payable on October 1, 2009 with approximately $50 million of convertible debt due in five years. "This debt restructuring resolves the issues we have had with our creditors and enables us to focus our resources on optimizing the value of our operations," said Chris Gardner, chief executive officer of Vitesse. "Management expects that with our improved financial stability and with continued improvements to the economy, the Company will be well positioned to achieve its potential by developing and delivering high-quality, leading-edge products to our customers." Under the terms of the debt restructuring transaction, Vitesse is: -- Paying approximately $6.4 million as cash consideration to the holders of the 2024 Debentures that participated in the exchange. -- Paying approximately $3.6 million in cash to satisfy its obligations to those holders of 2024 Debentures that did not participate. -- Issuing approximately $50 million in aggregate principal amount of new convertible secured debentures. These new convertible secured debentures have a five-year term, an 8.0% annual interest rate, and a conversion price of $0.225 per share. The indebtedness under these new convertible secured debentures is secured by a second- priority security interest in substantially all of Vitesse's assets. -- Issuing approximately 173 million shares of common stock along with approximately 771,000 shares of a new Series B Preferred Stock that will be convertible into common stock on a 100:1 basis and that will have a dividend preference relative to the common stock. The Series B Preferred Stock and the new convertible secured debentures include restrictions on conversion that prohibit a holder of these securities from converting them if it would result in the holder beneficially owning more than 9.9% of Vitesse's outstanding stock. Assuming the full conversion of the Series B Preferred Stock into common stock, Vitesse would have approximately 481 million shares outstanding. The Company does not currently have a sufficient amount of common stock authorized to permit the conversion of the new convertible debentures into common stock. The Company plans to seek shareholder approval of an increase in the authorized shares of common stock to permit the full conversion of the convertible secured debentures. If Vitesse has not obtained shareholder approval on or prior to February 15, 2010, Vitesse will pay these debenture holders on February 16, 2010, an additional monthly payment equal to 1.0% of the outstanding principal amount of the new convertible debentures, and Vitesse will be required to pay the additional amount each month until it has obtained shareholder approval. If Vitesse has not obtained shareholder approval prior to February 15, 2011, the holders will have the option to convert the notes for cash as further described in the new Indenture. As a condition to the closing of the debt restructuring transaction, the Company was obligated to set the size of its Board of Directors at six directors and to appoint two qualified new directors from a list of at least four persons identified by the debt holders prior to November 2, 2009. For the Company to satisfy this requirement, two of the Company's current directors had to resign on or prior to the closing of the debt restructuring. Additional information about the terms of the Company's debt restructuring transaction is available at no charge at http://ResearchArchives.com/t/s?482f The Company intends to call a Special Meeting of Stockholders to approve a reverse stock-split (which may or may not be implemented) and to increase the number of the Company's authorized shares of Common Stock to permit the conversion of the New Notes that are contemplated by the Conversion Agreement into shares of the Company's Common Stock. The Company expects to announce the record date and meeting date for this Special Meeting as soon as practicable. Holders of shares of the Company's Common Stock on the record date, including shares of Common Stock issued in connection with the debt restructuring transaction, will be able to vote their shares at this Special Meeting. A full-text copy of the preliminary proxy statement is available at no charge at http://ResearchArchives.com/t/s?4830 About Vitesse Semiconductor Based in Camarillo, California, Vitesse Semiconductor Corporation (Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of high-performance, cost-competitive semiconductor solutions for Carrier and Enterprise networks worldwide. Engineering excellence and dedicated customer service distinguish Vitesse as an industry leader in Gigabit Ethernet, Ethernet-over-SONET, Optical Transport, and other applications. Vitesse had total assets of $107,636,000 against total debts of $160,101,000 as of June 30, 2009. WESCO INC: Case Summary & 8 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Wesco, Inc. 9190 W. Olympic Blvd., Suite 316 Beverly Hills, CA 90212 Bankruptcy Case No.: 09-40327 Chapter 11 Petition Date: November 2, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Alan M. Ahart Debtor's Counsel: David B. Golubchik, Esq. Levene Neale Bender Rankin & Brill LLP 10250 Constellation Blvd., Suite 1700 Los Angeles, CA 90067 Tel:(310) 229-1234 Email: dbg@lnbrb.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $6,033,500, and total debts of $3,296,208. A full-text copy of the Debtor's petition, including a list of its 8 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-40327.pdf The petition was signed by Andrew Wolf, president of the Company. YRC WORLDWIDE: S&P Downgrades Corporate Credit Rating to 'CC' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on YRC Worldwide Inc. to 'CC' from 'CCC'. At the same time, S&P lowered the corporate credit ratings on selected subsidiaries' senior unsecured debt issues to 'C' from 'CC'. The recovery ratings on the senior unsecured debt remain at '6'. S&P placed all the issue-level ratings on CreditWatch with negative implications, pending completion of the proposed exchange offer. The ratings actions on Overland Park, Kansas-based trucking company YRC Worldwide reflect its announcement that it will launch an exchange offer to purchase its contingent convertible senior notes and subsidiary's USF Corp. senior notes. In exchange for its 5% and 3.375% contingent convertible senior notes due 2023 and its 8.5% USF senior notes due 2010, noteholders will receive YRCW common and preferred stock. Under S&P's criteria, S&P views a formal exchange offer at a discount by a company under substantial financial pressure as a distressed-debt exchange and tantamount to a default. "S&P will lower S&P's corporate credit rating on YRCW to 'SD' (selective default) and lower S&P's ratings on issues repurchased under the tender offer to 'D' (default) on completion of the offer," said Standard & Poor's credit analyst Anita Ogbara. Shortly thereafter, S&P will assign a new corporate credit rating, representative of the default risk, post-financial-restructuring. "On completion of the exchange offer, S&P will lower S&P's corporate credit rating on YRCW to 'SD' (selective default) and lower S&P's ratings on issues involved in the exchange offer to 'D' (default)," she continued. * Bank Failures Buffeting FDIC Efforts to Bolster Insurance Fund ---------------------------------------------------------------- Alison Vekshin at Bloomberg reports that the Federal Deposit Insurance Corp., replenishing funds after the worst financial crisis since the Great Depression, faces additional strains on its resources after spending $2.5 billion to shut nine banks last week. On October 30, the Federal Deposit Insurance Corporation entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. The nine banks were subsidiaries of FBOP Corporation, Oak Park, Illinois. Last weekend's closings are expected to cost the FDIC's insurance fund a total of $358.2 million. The number of banks that have failed so far this year have reached 115. The FDIC, expecting failures to continue through 2010, asked banks to prepay three years of premiums to raise $45 billion for the fund depleted by 115 shutdowns this year. "The failure of nine banks totaling almost $20 billion in assets is a further substantial blow to the deposit insurance fund," said Kevin Petrasic, a lawyer at Paul, Hastings, Janofsky & Walker LLP in Washington and former special counsel at the Office of Thrift Supervision. "The FDIC clearly has its work cut out for it to try to right the fund." According to Bloomberg, this year's surge after 25 banks were shut in 2008 pushed the industry-supported deposit insurance fund into a deficit in the third quarter for the first time since 1991, according to agency estimates. The negative balance reflected $32 billion the FDIC had set aside for failures expected through June 30. * Capital Markets Still Extremely Weak, Survey Shows ---------------------------------------------------- With high unemployment pushing up vacancies, no credit capacity and property values plummeting, commercial real estate markets remain extremely stressed with little prospect for significant near-term improvement, according to The Real Estate Roundtable's latest quarterly survey of senior commercial real estate executives. All three indices tracked by the "Sentiment Survey" have risen considerably since the near-collapse of financial markets last fall -- a reflection of respondents' collective sense of relief at having survived the worst of the turmoil, and the extreme uncertainty and paralysis of last year giving way to a greater sense of acceptance of market realities. However, the latest numbers -- particularly the "Current Conditions" reading of 56 -- remain well below the ideal of 100. An overall index of 100 means all survey respondents have answered that conditions today are "much better" than they were a year ago, and will be "much better" 12 months from now. "The problems now are more clearly defined and there's a grim sense of reality setting in, but that's a long way from saying markets are stabilizing or that conditions are on the mend," said Roundtable President and CEO Jeffrey DeBoer. "With job losses mounting, consumer confidence in the doldrums, and a relapse of the recession still possible, additional policy action is needed to restore credit availability -- the lubricant of the economy and job creation -- and to address the equity shortage resulting from falling commercial property values," Mr. DeBoer continued. An overwhelming majority of the 100+ respondents in the Q4 survey said property values are down today vs. a year ago, although the percentage declined to 77 percent from 93 percent in the previous quarter. But respondents were far from optimistic about future valuations, with 71 percent saying they expect values to remain "about the same" or to erode even further in the next 12 months. "So-called 'zombie buildings' and empty storefronts on Main Street will only mean bigger budget shortfalls for local governments, more layoffs for construction, hotel and retail workers, and further devaluation of investment portfolios held by individual and institutional investors," Mr. DeBoer added. "If there is any good news to report, it's that the trillion- dollar refinancing crisis in commercial real estate now has the attention of policymakers at the highest levels -- including President Obama." Fox Business News reported Oct. 16 that the President had been briefed recently by his top economic advisors about rising "maturity" and "performance" defaults on commercial mortgages and what this might mean for the U.S. banking system. Capital market conditions remain extremely fragile, the survey shows, but there is now a greater mix of perspectives on the markets' trajectory. On the debt side, 28 percent of those polled said credit availability is worse today than a year ago, compared to 71 percent who said so in the previous quarter. The percentage who characterized equity availability as worse today than one year ago also dropped significantly -- from 55 percent in the 3rd quarter to 17 percent in the latest survey. As with the Fed's latest "Beige Book" report last week, Mr. DeBoer cautioned, any signs of "improvement" or of a leveling off in the rates of decline should be looked at in the context of where things were 12 months ago. Not surprisingly, given the depth of dysfunction in commercial real estate debt markets, almost all participants in the current survey (95 percent) expect debt market conditions to be at least the same or better 12 months from now. Although U.S. policymakers have adopted or implemented several policy recommendations offered by The Roundtable in its "Five- Point Liquidity Plan" this past year, additional steps are needed to reconnect loan originators and secondary markets; bring new equity into commercial real estate (primarily, through reform of the Foreign Investment in Real Estate Property Tax Act [FIRPTA]); and to improve the Term Asset-Backed Lending Facility's (TALF) ability to foster new issuance of commercial mortgage-backed securities (CMBS). The quarterly Sentiment Survey seeks to capture feedback from a broad range of real estate industry segments, asset classes, ownership vehicles and capital structures, including owners and asset managers, financial services firms and operators. It is administered for The Real Estate Roundtable by FPL Advisory Group of Chicago. A PDF of the entire report is available online at www.rer.org. The Roundtable brings together leaders of the nation's publicly- held and privately owned real estate ownership, development, lending and management firms with the leaders of national real estate trade associations to jointly address key national policy issues relating to real estate and the overall economy. Collectively, Roundtable members' portfolios contain over 5 billion square feet of office, retail and industrial properties; over 1.5 million apartment units; and in excess of 1.3 million hotel rooms. * CIT Filing Pushes Junk-Bond Default Rate to 13.1%, Fitch Says --------------------------------------------------------------- The U.S. high-yield default rate for 2009 rose to 13.1 percent after CIT Group Inc. filed for bankruptcy, Bloomberg said, citing Fitch Ratings. * Kamakura Reports Improvement in October Troubled Company Index ---------------------------------------------------------------- Kamakura Corporation announced Monday that the Kamakura index of troubled public companies made its seventh consecutive improvement in October. The index declined from 10.90% in September to 10.68%, with credit conditions at the best levels since December 2007. Kamakura's index had reached a peak of 24.3% in March. Kamakura defines a troubled company as a company whose short term default probability is in excess of 1%. Credit conditions are now better than credit conditions in 63.9 percent of the months since the index's initiation in January 1990, and 3.02 percentage points better than the index's historical average of 13.7%. The all-time low in the index was 5.4%, recorded in April and May, 2006, while the all-time high in the index was 28.0%, recorded in September 2001. The index is based on default probabilities for almost 27,000 companies in 30 countries. To follow the troubled company index and other risk commentary by Kamakura on a daily basis, see www.twitter.com/dvandeventer. In October, the percentage of the global corporate universe with default probabilities between 1% and 5% decreased by 0.03 percentage points to 7.37%. The percentage of companies with default probabilities between 5% and 10% was down 0.09 percentage points to 1.61%. The percentage of the universe with default probabilities between 10 and 20% was down 0.09 percentage points to 1.01% of the universe, while the percentage of companies with default probabilities over 20% was down by 0.11 percentage points to 0.69% of the total universe in October. In March, by contrast, 3.1% of the total universe had default probabilities over 20%. Kamakura's President Warren A. Sherman said Monday, "While credit quality continued to improve in October, the rate of improvement has slowed. Within the rated company universe, a number of companies have shown a significant increase in default risk. The rated firms showing the largest increase in short run default risk in October include Citadel Broadcasting, CIT, Allied Irish Bank, Bank of Ireland, and Ambac." The Kamakura index uses the annualized one month default probability produced by the best performing credit model of the Kamakura Risk Information Services default and correlation service. The model used is the fourth generation Jarrow-Chava reduced form default probability, a formula that bases default predictions on a sophisticated combination of financial ratios, stock price history, and macro-economic factors. The countries currently covered by the index include Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Hong Kong, India, Ireland, Israel, Italy, Japan, Luxemburg, Malaysia, Mexico, the Netherlands, New Zealand, Norway, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, United Kingdom, and the United States. Kamakura CEO Dr. Donald R. van Deventer and other members of Kamakura senior management also maintain an active blog on key risk management issues. Recent blog entries include the following stories: -- Reduced Form Macro Factor and Roll Rate Models of Mortgage Default: An Introduction and Application -- Pitfalls in Asset and Liability Management: Interpolating Monte Carlo Results, Or How to Prove Augusta National is Not a Golf Course -- Rating the Rating Agencies -- An Appreciation and Some Suggestions: 'The Financial Crisis and Lessons for Insurers' from the Society of Actuaries -- Advances in Risk Management: Glass Boxes, Black Boxes, CDOs and Grocery Lists -- More on Glass Boxes, Black Boxes, CDOs and Grocery Lists -- An Appreciation: Joseph Tibman's 'The Murder of Lehman Brothers' -- Robert A. Jarrow on 'TARP Warrants Valuation Methods' -- Too Smart to Fail About Kamakura Corporation Kamakura Corporation is a leading provider of risk management information, processing and software. Kamakura has been a provider of daily default probabilities for listed companies since November, 2002. Kamakura launched its private firm modeling product in January, 2004. Kamakura is also the first company in the world to develop and install a fully integrated credit risk, market risk, asset and liability management, and transfer pricing system. Kamakura has clients ranging in size from $3 billion in assets to $1 trillion in assets. Kamakura's risk management software is currently used in the United States, Germany, Canada, the United Kingdom, Australia, China and many other countries in Asia. Kamakura's research effort is led by Professor Robert Jarrow, who was named Financial Engineer of the Year in 1997 by the International Association of Financial Engineers. Professor Jarrow and Dr. van Deventer were both named to the 50 member RISK Hall of Fame in December 2002. Kamakura management has published twenty-one books and more than 100 publications on credit risk, market risk, and asset and liability management. Kamakura has world-wide distribution alliances with IPS-Sendero -- http://www.ips-sendero.com/and Unisys -- http://www.unisys.com/-- making Kamakura products available in almost every major city around the globe. * Pension Funds for Public Employees Lost $600 Billion in 2008 -------------------------------------------------------------- Retirement accounts for states and local government employees lost $600 billion in value in the year that ended June 30, a decline of 21%, Bloomberg reported, citing a U.S. Census Bureau report. Assets of the 100 largest public retirement systems, accounting for 89 percent of public pension activity, fell to $2.2 trillion, the lowest in five years, the Census Bureau said. According to Bloomberg, the decline, coming as the Standard & Poor's 500 Index fell 28% in the worst recession since the Great Depression, portends cuts in benefits or increases in taxpayer and employee contributions. "If you have a system like we have in Illinois that was severely underfunded in the good times, this is not a temporary problem," said J. Fred Giertz, an economics professor at the University of Illinois at Urbana-Champaign and a trustee of the State University Retirement System. * W.L. Ross Sees Huge Commercial Property Crash Ahead ----------------------------------------------------- According to reporting by Bloomberg News, billionaire investor Wilbur L. Ross Jr., said the U.S. is in the beginning of a "huge crash in commercial real estate." "All of the components of real estate value are going in the wrong direction simultaneously," said Mr. Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. "Occupancy rates are going down. Rent rates are going down and the capitalization rate -- the return that investors are demanding to buy a property -- are going up." U.S. commercial property sales are forecast to fall to the lowest in almost two decades as the industry endures its worst slump since the savings and loan crisis of the early 1990s, according to property research firm Real Capital Analytics Inc. The Moody's/REAL Commercial Property Price Indices already have fallen almost 41% since October 2007, Moody's Investors Service said Oct. 19. * Small-Firms Bankruptcy Filings Up 44% Yr-Over-Yr, Equifax Says ---------------------------------------------------------------- Commercial bankruptcies among the nation's more than 25 million small businesses increased by 44% from the third quarter of 2008 to the third quarter of 2009, according to Equifax Inc., which analyzes its comprehensive small business database for the on- going study. Comparing the month of September 2008 to September 2009 shows an increase of 27 percent. There were 9361 bankruptcy filings in September 2009 throughout the U.S., up from 7386 a year ago, according to the data. California remains the most negatively affected state with eight MSA's (metropolitan statistical areas) among the 15 areas with the most commercial bankruptcy filings during September 2009. Los Angeles, Riverside/San Bernardino and Sacramento metropolitan areas continued to lead the nation in small-business bankruptcy filings as they did at the end of the second quarter. The other MSA's with the most bankruptcy filings during the month include: -- Denver-Aurora, CO -- Santa Ana-Anaheim-Irvine, CA -- San Diego-Carlsbad CA -- Dallas-Plano-Irving, TX -- Portland-Vancouver-Beaverton, OR-WA -- California (excluding MSA's within the state) -- Oakland-Fremont-Hayward, CA -- Oregon (excluding MSA's within the state) -- Chicago-Naperville-Joliet, IL -- Houston-Sugar Land-Baytown, TX -- San Jose-Sunnyvale-Santa Clara CA -- Atlanta-Sandy Springs-Marietta, GA "Economic pain is continuing for small businesses across the country. We're still seeing hefty increases in the number of bankruptc ies in a lot of major metro areas." said Dr. Reza Barazesh head of North American research for Equifax's Commercial Information Solutions division. "However, the 69 percent drop and 49 percent decline in bankruptcies in Charlotte and New York-White Plains respectively, and a 44 percent drop in Atlanta between the second and third quarters indicates that the East Coast may be experiencing an earlier recovery from the recession than the West Coast." Charlotte - number four in June - dropped out of the top 15 entirely to 39th; Atlanta dropped from fifth to 15th; and New York - White Plains dropped from eighth to 24th. Equally consistent with this east/west difference over the same period, the 11th, 12th and 13th MSAs with the greatest number of bankruptcies at the end of the second quarter of 2009 -- Santa Ana-Anaheim, Denver and San Diego -- increased in rank to 5th, 4th, and 6th by the end of the third quarter. Santa Ana-Anaheim increased three percent, Denver was up 13 percent and San Diego increased four percent. For its research, Equifax reviewed and analyzed small business data for the month of September, the most recent month for which complete data is available, and compared it with results from September 2008. Equifax defines a small business as a commercial entity of less than 100 employees. The company's report also listed the 15 metro areas with the fewest small-business bankruptcy filings. They are: -- Charleston, WV -- Trenton-Ewing NJ -- Tallahassee FL -- South Bend-Mishawaka IN-MI -- New Jersey (excluding MSA's within the state) -- Holland-Grand Haven MI -- Gainesville FL -- Baton Rouge LA -- Wilmington NC -- Toledo OH -- Roanoke VA -- Lubbock TX -- Lancaster PA -- Springfield MA -- Savannah GA For the analysis, Equifax analyzed Chapter 7, 11 and 13 filings. Chapter 7 is a liquidation proceeding in which a debtor receives a discharge of all debts; while Chapter 11 and Chapter 13 are reorganization bankruptcies enabling individuals and companies to pay off debt over a set period of years. About Equifax Equifax -- http://www.equifax.com/-- empowers businesses and consumers with information they can trust. A global leader in information solutions, the company leverage one of the largest sources of consumer and commercial data, along with advanced analytics and proprietary technology, to create customized insights that enrich both the performance of businesses and the lives of consumers. Headquartered in Atlanta, Georgia, Equifax Inc. operates in the U.S. and 14 other countries throughout North America, Latin America and Europe. Equifax is a member of Standard & Poor's (S&P) 500(R) Index. * Winston & Strawn Adds Private Equity Practice ----------------------------------------------- Winston & Strawn LLP has significantly expanded its private equity practice and middle-market capabilities with the addition of Dominick P. DeChiara, Bradley C. Vaiana, Bryan C. Goldstein, and Jennifer C. Kurtis, who have joined the firm's New York office as partners. The attorneys came to Winston from Nixon Peabody, where DeChiara chaired the private equity practice. They are joined by four associates. DeChiara will co-chair the firm's private equity practice. The team represents private equity clients and their portfolio companies in a range of middle market corporate transactions as well as the ongoing management of fund portfolio companies. The team also represents public companies in mergers and acquisitions; going-private transactions; tender offers; cross-border transactions; special committee matters; PIPE transactions; corporate restructurings, reorganizations and bankruptcies; corporate governance; and SEC compliance matters. "We are excited to have Dom, Brad and their team join Winston," said Michael S. Elkin, managing partner of the New York office. "They bring a remarkable range of experience in the private equity market that complements Winston's preeminent private equity and corporate practices." Said DeChiara: "We're delighted to join Winston & Strawn. The firm's expansive corporate platform, and in particular its well- known private equity fund formation practice, are a natural fit for our private equity transactional practice and will help keep our clients' sophisticated transactions on track in today's challenging environment " Winston & Strawn LLP -- http://www.winston.com.-- is an international commercial law firm with 14 offices in America, Asia and Europe. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- 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 26, 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 **