/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/091112.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, November 12, 2009, Vol. 13, No. 313 Headlines 174 STREET LLC: Case Summary & 2 Largest Unsecured Creditors 3900 LLC: Court Converts Case to Chapter 7 Liquidation ABITIBIBOWATER INC: ACI Amends US$100MM DIP Facility ABITIBIBOWATER INC: ACI Proposes US$1230MM From Nova Scotia ABITIBIBOWATER INC: Seeks New European Sale Structure ABITIBIBOWATER INC: Wants to Execute $250MM ABH Note Repayments ADVANCE FOOD: Moody's Gives Stable Outlook, Raises Rating to 'Ba3' ADVANTA CORP: Net Loss Widens to $76,485,000 in Q3 2009 AIRPORT INN: Case Summary & 13 Largest Unsecured Creditors AIRTRAN HOLDINGS: Moody's Raises Ratings on Senior Notes to 'Caa3' AMERICAN INT'L: CEO Benmosche Won't Step Down AMERICAN IRONHORSE: Wants to Sell Intellectual Property Assets AMR CORP: Working with TPG on Possible Investment in JAL ANTERO RESOURCES: Moody's Assigns 'Caa1' Rating on $350 Mil. Notes ANTHRACITE CAPITAL: Going Concern Doubt Raised; In Lender Talks APPLIED MATERIALS: To Slash Up to 12% of Jobs Within 18 Mos. ASARCO LLC: To Sell Polluted NJ Property For $1 ASSOCIATED ESTATES: S&P Gives Positive Outlook, Keeps 'B+' Rating AVIZA TECHNOLOGY: Cash Collateral Hearing Set for November 18 BACHRACH ACQUISITION: Pursues Plan Exclusivity Until Dec. 4 BARZEL INDUSTRIES: U.S. Trustee Objects to Creditors' Settlement BEAR STEARNS: Liquidators File 2nd Complaint vs. Cohen, et al. BEAR STEARNS: SEC Distributes $267 Mil. to Funds Hurt by Collapse BEAR STEARNS: Bruce Sherman Sues Former Top Executives BELLUS HEALTH: Net Loss Down to $5.84-Mil; Has Going Concern Doubt BERNARD MADOFF: Optimal's Echeverria Charged with Mismanagement BERNARD MADOFF: Trustee Talking Settlement with Picower Widow BIG SKY FARMS INC: Chapter 15 Case Summary BIGLER LP: Asks Court Approval to Hire BMC as Claims Agent BIGLER LP: Wants King & Spalding as Bankruptcy Counsel BIGLER LP: Schedules Filing Deadline Extended Until January 13 BIGLER LP: Wants H. Malcolm Lovett as Chief Restructuring Officer BON SECOUR: Sec. 341 Meeting Set for December 8 BON SECOUR: List of Six Largest Unsecured Creditors B.O.S. BETTER: Posts $2.7-Mil. Q3 Net Loss; In Waiver Talks CANWEST GLOBAL: CEP Offers Itself as Union Members Representative CANWEST GLOBAL: Submits List of Creditors to Canada Court CANWEST GLOBAL: CEP Union Asks for Bar Date Extension CANWEST GLOBAL: CEP Union Asks for Lift Stay for Arbitration CANWEST GLOBAL: Goldman Wants to Void 441's Shares Transfer CANWEST GLOBAL: Monitor Reports on CCAA Updates CARE FOUNDATION: Wants Solicitation Period Extended Until March 20 CAUDELL-WHITE: Case Summary & 3 Largest Unsecured Creditors CHRYSLER LLC: Agrees to Stay Relief for Mady Dispute Ruling CHRYSLER LLC: Committee Says Daimler Probe Fees Should be Approved CHRYSLER LLC: Stipulation Amending Master Transaction Pact CHRYSLER LLC: Stipulation Settling NC-M Chassis Disputes CIT GROUP: Gets Interim Nod for Deal on Status Quo of JPM Facility CIT GROUP: Gets Nod for Kurtzman Hiring as Claims Agent CIT GROUP: Hearing on Injunction vs. Railcar Lessors Nov. 13 CITIGROUP INC: Reports Stake in China MediaExpress, et al. CITIGROUP INC: To Issue 3 Series of Notes; Files Docs with SEC CLEARWIRE COMMUNICATIONS: S&P Puts 'B+' Rating on $1.45 Bil. Notes CLOUD PEAK: S&P Assigns Corporate Credit Rating at 'BB-' COHARIE HOG FARM: To Liquidate Assets, Cut 170 Jobs CONSECO INC: Files Amendment No. 3 to 3.5% Debentures Tender Offer EDGE PETROLEUM: Plan Confirmation Scheduled for Dec. 11 EMMIS COMMUNICATIONS: Luther King Capital Discloses 10.4% Stake ERICKSON RETIREMENT: Gets Nod to Access $5MM of DIP Financing ERICKSON RETIREMENT: Has Nod for Redwood-Led Auction on Dec. 22 ERICKSON RETIREMENT: Has Nod to Escrow Initial Entrance Deposits ESCADA AG: Insolvency Proceedings in Germany Opened Nov. 1 ESCADA AG: Ordinary Course Professionals Motion Denied ESCADA AG: Sells Primera Brands to Endurance Capital FANNIE MAE: Reviews Impact of Aborted Sale of Tax Credits FINAL ANALYSIS: Settlements Fell Outside Range of Reason FONTAINEBLEAU LAS VEGAS: Bank Suit Set for Trial in August 2011 FORD MOTOR: October 2009 European Sales Climb 13% FOURTH QUARTER PROPERTIES: Taps Stone & Baxter as Bankr. Counsel FRED LEIGHTON: Court Confirms Chapter 11 Plan Proposed by Merrill FREEDOM COMMUNICATIONS: Has Dec. 17 Disclosure Hearing FREEDOM COMMUNICATIONS: Creditors Seek Alternative Plan Proposals FREMONT GENERAL: Files Revised Reorganization Plan FRONTIER AIRLINES: Judge Drain Enters Post-Confirmation Order FRONTIER AIRLINES: Notice of Initial Distribution Under Plan FRONTIER AIRLINES: Seeks Final Decree Closing 2 Cases GAINEY CORP: Auction Protocol Amended to Accommodate Highland Bid GEMCRAFT HOMES: Economic Downturn Blamed for Chapter 11 Filing GENERAL GROWTH: Discloses $117.8 Mil. Net Loss for Q3 GENERAL GROWTH: Proposes Employee Incentive Programs GENERAL GROWTH: Wants to Set Up Claims Objection Procedures GLOBAL CONTAINER: Case Summary & 20 Largest Unsecured Creditors GRAY TELEVISION: Posts $5.5MM Q3 Net Loss; May Breach Covenant GREEKTOWN HOLDINGS: Conway MacKenzie Bills $844,000 for June-Aug. GSCP LP: Moody's Downgrades Senior Debt Rating to 'C' From 'Ca' HAWAIIAN TELCOM: Kirkland's $1.46 Mil. for April-June Approved HERBST GAMING: Confirms Reduction of Workforce HOCKINGS CORPORATION: Case Summary & 2 Largest Unsecured Creditors INFOLOGIX INC: Exempted From NASDAQ's Stockholder Approval Rules INTELSAT LTD: Paid $100 Million Under Contract with Sea Launch INTELSAT LTD: Posts $94,784,000 Net Loss for Q3 2009 INTERMET CORP: Unit to Shutdown Plan and Lay off Workers JMR HOLDINGS: Case Summary & 4 Largest Unsecured Creditors JARDEN CORPORATION: Moody's Gives Pos. Outlook, Puts 'Ba2' Rating JOHNSONDIVERSEY INC: Moody's Puts 'Ba2' Rating on $1.25 Bil. Notes JOHNSONDIVERSEY HOLDINGS: S&P Raises Corp. Credit Ratings to 'B+' KINGSLEY CAPITAL: Court Confirms Amended Reorganization Plan LANDAMERICA FINANCIAL: Objections Pour in to Chapter 11 Plan LEAP WIRELESS: Goldman Sachs & Wellington Disclose Equity Stake LEAP WIRELESS: Unveils Exchange Offer for 7.75% Sr. Secured Notes LEAR CORP: S&P Assigns Corporate Credit Rating at 'B' LEAR CORP: ASM Capital Buys Claims LEAR CORP: Enters Into Warrant Agreement With Mellon Investor LEAR CORP: Issues 5 Mil. Shares Under Incentive Plan LEHMAN BROTHERS: Perpetual Trustee Prevails in Court of Appeals LIFT-TECH ELEVATOR: Case Summary & 20 Largest Unsecured Creditors LIMITED BRANDS: S&P Downgrades Ratings on Unsecured Notes to 'BB-' MAGNA ENTERTAINMENT: Negotiating With Stalking Horse for Pimlico MAGUIRE PROPERTIES: Says Calif. Budget Woes May Impact Financials MANUEL VEGA: Case Summary & 20 Largest Unsecured Creditors MARANI BRANDS: Amends Q3 FY2009 Report; Posts Net Loss of $672,000 METCALF PAVING: Wants to Use $100,000 from Jayjet Transportation NETBANK INC: Estate Supervisor Balks at Exec. Bid for $1.2M NORTEL NETWORKS: ASM Capital, et al., Buy Claims NORTEL NETWORKS: Belden Proposes Lift Stay to Set Off Claim NORTEL NETWORKS: CCAA Units' Forecast for October to December NUTRACEA: Files for Protection Under Chapter 11 NUTRACEA: Case Summary & 20 Largest Unsecured Creditors ORBIT INT'L: Q3 Net Income Up 48.8%; Seeks Waiver From Lender OSCIENT PHARMACEUTICALS: Plan Exclusivity Extended Until Dec. 10 OTTER TAIL: Wants Mackall Crounse as Bankruptcy Counsel OTTER TAIL: Taps Fredrikson & Byron as Special Counsel PANOLAM INDUSTRIES: Moody's Withdraws 'Ca' Corporate Family Rating PATRICK HACKETTS: Files for Chapter 11 After Gouverneur Store Shut PHILADELPHIA NEWSPAPERS: Dist. Court Reverses Credit Bidding Order PILGRIM'S PRIDE: To Sell Dalton, Georgia Truck Stop POLYONE CORPORATION: S&P Affirms 'B1' Corporate Family Rating PRIMEDIA INC: Posts $7.6MM Net Loss for 9 Mos. Ended Sept. 30 PSS WORLD: S&P Raises Corporate Credit Rating to 'BB+' QUARRY POND: Sec. 341 Meeting Set for December 1 RATHGIBSON INC: Wants Plan Filing Extended Until February 23 RATHGIBSON INC: To Modify Plan for Better Tax Treatment RED HAT: S&P Raises Corporate Credit Rating to 'BB+' RENOVA ENERGY: Contractors Wants Tax Bill Deferred Until Next Year RENT-A-CENTER INC: S&P Affirms 'BB' Corporate Credit Rating REVLON INC: Lenders Permit RCPC Unit to Conduct Refinancing REVLON INC: Unit Commences Tender Offer for 9-1/2% Senior Notes REVLON INC: FMR LLC Unloads Equity Stake RIVIERA HOLDINGS: Continues Lender Talks; Warns of Bankruptcy ROLF PAPKE: Case Summary & 6 Largest Unsecured Creditors ROTHSTEIN ROSENFELDT: Creditors Send Firm to Bankruptcy RURAL/METRO OPERATING: Moody's Affirms 'Ba3' Rating on Loans RURAL/METRO CORP: S&P Updates CreditWatch Listing on Refinancing SANDRA ANN READ: Case Summary & 20 Largest Unsecured Creditors SCOTT ROTHSTEIN: Has Involuntary Bankr. Petition from Investors SEA LAUNCH: Intelsat Discloses Paying $100 Million Under Contract SERVICIOS CORPORATIVOS: Solicits Consents From Senior Noteholders SILICON GRAPHICS: Wins Confirmation of Chapter 11 Plan SOUTHEAST TELEPHONE: Gets Final OK to Access CTB Cash Collateral SPRINGBOARD GROUP: Moody's Affirms 'B2' Corporate Family Rating SUNRISE SENIOR: Posts $44.4 Million Third Quarter 2009 Net Loss SWIFT ENERGY: Moody's Assigns 'B3' Rating on $200 Mil. Notes SWIFT ENERGY: S&P Assigns 'BB-' Rating on $200 Mil. Senior Notes SYNUTRA INT'L: Posts $14MM Fiscal Qtr. Loss; Seeks ABN AMRO Waiver TAYLOR BEAN: To Test Selene's $133.2MM Bid at Dec. 11 Auction TNS INC: Moody's Upgrades Corporate Family Rating to 'Ba3' TOYS "R" US: FY 2009 Q2 Comparable Store Net Sales Lower by 6.8% TOYS "R" US: Unit to Issue $725-Mil. of Sr. Secured Notes Due 2017 TRONOX INC: Shareholders Want to File Bankruptcy Plan UNISYS CORP: MMI Investments Discloses 4.73% Equity Stake VENTANA HILLS ASSOCIATES: Sec. 341 Meeting Set for December 8 VENTANA HILLS ASSOCIATES: List of 47 Largest Unsecured Creditors VENTANA HILLS PHASE II: List of 48 Largest Unsecured Creditors VERASUN ENERGY: Former Executives Face Class Action Suit VISTEON CORP: PBGC, Unsecured Committee Object to DIP Financing WHITE ENERGY: Must Pay $1.7 Million to Hale County WHOLE FOODS: Moody's Gives Stable Outlook; Affirms 'Ba3' Ratings WILKES BASHFORD: Files for Bankruptcy After Closing Two Shops WILLIAM CARTER: Moody's Reviews 'Ba2' Corporate Family Rating WILLIAM LYON HOMES: Reports $11,637,000 Net Loss for Q3 2009 * Nine U.S. States Face Budget Crisis, Pew Center Says * Prepackaged Bankruptcies Climbing, Have Offered More Recovery * Va. Atty. General William Mims to Join Hunton & Williams * Seasoned Restructuring Executives Launch Eaglepoint Advisors * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* 174 STREET LLC: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: 174 Street LLC 1556 East 8 Street Brooklyn, NY 11230 Bankruptcy Case No.: 09-49958 Chapter 11 Petition Date: November 10, 2009 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Elizabeth S. Stong Debtor's Counsel: Martin Wolf, Esq. Wolf & Associates, PLLC 2075 86th Street, Suite 201 Brooklyn, NY 11214 Tel: (212) 608-1660 Fax: (212) 228-5607 Email: mwolflaw@yahoo.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 2 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nysb09-49958.pdf The petition was signed by Steven Kaufman, managing member of the Company. 3900 LLC: Court Converts Case to Chapter 7 Liquidation ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Nevada approved the conversion of the Chapter 11 case of 3900, LLC, to a Chapter 7 case. The Court authorized the conversion after no party-in- interest filed an objection to the conversion. Based in Las Vegas, 3900, LLC, also known as Michael's Plaza, owns and operates a shopping center in Tempe, Arizona. Revenue consists of rental income and common area maintenance charges paid by tenants in the shopping center. The company filed for Chapter 11 relief on October 17, 2008 (Bankr. D. Nev. 08-22163). Matthew L. Johnson, Esq., at Matthew L. Johnson & Associates, P.C., represents the Debtor as counsel. In its schedules, 3900, LLC, listed total assets of $18,142,411, and total debts of $10,086,336. ABITIBIBOWATER INC: ACI Amends US$100MM DIP Facility ---------------------------------------------------- In a regulatory filing with the U.S. Securities and Exchange Commission dated November 5, 2009, AbitibiBowater Inc. reported that its subsidiaries, Abitibi-Consolidated Inc. and Donohue Corp., entered into an amendment to the US$100 million superpriority senior secured debtor-in-possession credit facility dated May 6, 2009, among ACI and Donohue, as borrowers, Bank of Montreal, as lender, and the Subsidiary Guarantors. The ACI DIP Facility is guaranteed by Investissement Quebec, as sponsor. The material amendments to the ACI DIP Facility hinge on the sale of Abitibi Consolidated Company of Canada's 60% indirect interest in the 335-megawatt McCormick Hydroelectric facility, owned and operated by Manicouagan Power Company in Quebec, to a joint venture formed by Hydro-Quebec and Alcoa Inc. The Sale was approved on September 29, 2009, by Honorable Mr. Justice Clement Gascon, J.S.C., of the Superior Court Commercial Division for the District of Montreal in Quebec, Montreal, Canada. Under the MPCo Transaction, ACCC will cause all of the assets and liabilities of MPCo to be transferred to a newly formed Quebec limited partnership or the "New LP." An Unlimited Liability Company will be formed and will be the general partner of New LP. The Unlimited Liability Company will hold a 0.001 % interest in the New LP, while ACCC will hold the remaining 99.999% interest in the New LP. The ACI DIP Facility Amendments, which was approved by Mr. Justice Gascon on October 30, 2009, are: (1) The "Availability" section of the Letter Loan Agreement is modified and replaced with this provision: "Subject to the satisfaction of the Initial Availability Conditions (as set forth below), the DIP Facility shall be available to the Borrowers, up to but excluding the earliest of December 15, 2009 or the closing of the sale (the "MPCO Transaction") of ACCC's indirect interest in the Manicouagan Power Company (the "Expected Repayment Date"), by way of multiple borrowings; provided that the aggregate amount of Loans made to Donohue shall not exceed US$10 million." (2) The "Term and Termination" section of the Letter Loan Agreement is modified to set the Maturity Date as June 15, 2010. (3) The "Mandatory Prepayments" section the Letter Loan Agreement is modified and replaced with this language: "(iv) any direct or indirect sale of the Borrower's interest in the assets of the Manicouagan Power Company. Following the closing of the MPCO Transaction, the Borrower will not be entitled to draw on the DIP Facility." (4) The terms of the "Structuring Fee" section of the Letter Loan Agreement is replaced with this language: "(iii) 1% of the Commitment Amount if any Obligations are still outstanding hereunder as of November 1, 2009." (5) The "Specified Events of Default" section of the Letter Loan Agreement is modified to include this provision: "(vi) The failure of the Borrowers to repay the DIP Facility on or before the earlier of (i) December 15, 2009 and (ii) the closing of the MPCO Transaction." In connection with the amendment to the Abitibi DIP Facility, ACI and Donohue also entered into an amendment to Investissement Quebec's Offer to Guarantee the Abitibi DIP Facility dated May 6, 2009, to extend its term on a consistent basis. A full-text copy of the Amending Agreement relating to the ACI DIP Facility is available for free at: http://ResearchArchives.com/t/s?488a 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). ABITIBIBOWATER INC: ACI Proposes US$1230MM From Nova Scotia ----------------------------------------------------------- Abitibi-Consolidated Inc. and certain of its Canadian-based affiliates under Canada's Companies' Creditors Arrangement Act ask Mr. Justice Clement Gascon to authorize ACI and Abitibi- Consolidated Company of Canada to borrow up to C$230 million from 3239432 Nova Scotia Company, an unlimited liability company, under a superpriority secured debtor-in-possession credit facility. The ULC DIP Loan will be extended by ULC to ACI or ACCC using a portion of the proceeds of the sale of ACC's 30% indirect interest in a 335-megawatt McCormick Hydroelectric facility owned and operated by Manicouagan Power Company in Quebec or the MPCo Transaction. With the Court's consent, ACCC's interest in the Power Plant will be sold to a joint venture formed by Hydro- Quebec and Alcoa Inc. The Implementation Agreement pursuant to the MPCo Sale provides that the ULC DIP Facility is a "Permitted Investment," which will be made available to ACI or ACCC on terms and conditions reasonably satisfactory to Alcoa. It is anticipated that the entire C$230 million commitment will be take down in a single initial draw. In addition, the proposed ULC DIP Facility will be free of interests and any fees. The CCAA Applicants though are proposed to pay for the reasonable expenses of ULC and Alcoa in relation to the ULC DIP Facility. The payment of interest by ACI or ACCC, as borrowers, would create taxable revenue in ULC, a special purpose subsidiary with no tax shelter of its own, and would thus be to the disadvantage of all stakeholders. According to the CCAA Applicants, Donohue Corp. will not be a borrower under the ULC DIP Facility and as a result, no superpriority charge will be granted in respect of the assets held by the Donohue Group. The CCAA Applicants emphasize that with the repayment of the ACI DIP Facility from the MPCo Transaction proceeds, the MPCo Transaction would actually result in a loss of liquidity and working capital unless further replacement DIP financing was obtained. Moreover, the CCAA Applicants aver that they require additional DIP financing during the pendency of the CCAA Proceedings to: -- replace the liquidity which will be lost upon repayment of the existing ACI DIP Facility upon completion of the MPCo Transaction; -- provide sufficient liquidity for normal working capital purposes, including capital expenditures and restructuring expenses; -- provide liquidity for any unforeseen liquidity requirements; -- fund increases in inventory levels and meet the anticipated recovery in demand; and -- continue demonstrating to customers and suppliers that the ACI Group will meet its obligations during the pendency of the CCAA Proceedings and continue progress made in re- establishing more normalized trade credit terms. Distribution of Notes The CCAA Applicants also seek permission from the Canadian Court for distributions to US Bank, National Association, as Indenture Trustee and Collateral Trustee of the Senior Notes, of up to $200 million upon completion of the sale of Manicouagan Power Company in Quebec and the ULC DIP Agreement. The proposed distribution of the Senior Secured Notes will substantially reduce the interest cost to the CCAA Applicants. "As the Notes carry an interest rate of 13.75% per year -- a further 2% per year being claimed but remaining in dispute -- repayment of $200 million to the Senior Secured Notes at this time will result in savings to the Petitioners of interest which would otherwise have to be repaid upon emergence from CCAA proceedings of approximately $2.29 million per month or $27.4 million per year," according to the CCAA Applicants. "The Savings are even more favorable when compared to the zero percent interest rate cost of borrowing under the proposed ULC DIP." Monitor Reports on Progress of MPCo Sale, Recommends Approval of ULC DIP Facility In its 19th progress report, Ernst & Young, Inc., the Court- appointed monitor in the Canadian proceedings of the CCAA Applicants, apprised Mr. Justice Gascon of the status of the MPCo Sale. According to E&Y Vice President Alex Morrison, parties to the MPCo Sale agreed to use reasonable commercial efforts to close the Transactions on or before October 15, 2009. However, the Monitor has recently been advised by the Applicants and Hydro- Quebec that the Proposed Transactions are now not expected to close until the latter part of November or early December 2009 and pursuant to an extension from Investissement Quebec to December 15, 2009 for the repayment of the ACI DIP Facility. The Monitor elaborated that the closing of the MPCo Transactions have been delayed due to its complex nature, the outstanding governmental approval for the Sale and transfer of private network hydroelectric facilities required by the Regie de I' Energie, and the need to address a number of outstanding issues relating to the closing of the Proposed Transactions, which include: (i) the negotiation of the definitive acquisition agreement by and among ACI, ACCC and Hydro-Quebec; (ii) the receipt of certain regulatory approvals in connection with the Proposed Transactions; (iii) Hydro-Quebec requires that a new collective bargaining agreement be in place with MPCo's employees at closing; and (iv) the negotiations with respect to a new power purchase agreement for the Company's Baie-Comeau Mill. With respect to the Proposed ULC DIP Facility, the Monitor recognized that the Abitibi Group will require the new ULC DIP Facility to ensure that it has sufficient liquidity to complete its restructuring under its CCAA Proceedings. Nevertheless, the Monitor noted that not all of the incremental ULC DIP Facility liquidity may be required immediately. Accordingly, the Monitor recommends approval of the Proposed ULC DIP Facility. The Monitor also supports the Abitibi Group's request to increase the ACI DIP Charge by the aggregate amount of C$230 million in favor of the ULC DIP Lender provided that the increased amount of the ACI DIP Charge will be subordinated to any and all rights in favor of the Senior Secured Noteholders, the ACCC Term Lenders and the Lien Holders, pursuant to the MPCo Sale. A full-text copy of E&Y's 19th Monitor's Report is available at no charge at: http://bankrupt.com/misc/CCAA_19thMonitorReport.pdf 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). ABITIBIBOWATER INC: Seeks New European Sale Structure ----------------------------------------------------- Pursuant to the terms of a First Amended and Restated Paper Supply Agreement, dated as of January 1, 2001, Abitibi- Consolidated, Inc. contracts with Bridgewater Paper Company Limited or its subsidiaries to effect the sale of products produced by the ACI Group to its European clients. Pursuant to the Current European Sale Structure, the ACI Group's products are sold by BPCL to customers in the U.K. and for the rest of Europe, with BPCL taking legal title in these products before they are sold. The receivables of BPCL generated by the Current Structure are collected in BPCL bank accounts with Citibank, N.A., situated in European countries and then concentrated in BPCL's concentration accounts held with Citibank, N.A. in London. Thereafter, the receivables concentrated in the BPCL London concentration accounts are remitted to Abitibi- Consolidated Company of Canada on a regular basis. As a result, ACI may be owed by BPCL, on an unsecured basis at any given time, between US$5 million to US$15 million in receivables collected by BPCL. By this motion, the CCAA Applicants seek Mr. Justice Gascon's authority to restructure the Current European Sales Structure in order to limit their exposure to BPCL. The Applicants also seek to preserve the rights of their creditors, including the lenders under the Credit and Guaranty Agreement dated as of April 1, 2008, among ACCC, as borrower, ACI, as guarantor, and other guarantors, who currently hold security over BPCL's Accounts Receivables. Specifically, the CCAA Applicants ask the Canadian Court to: (1) declare that Abitibi-Consolidated (U.K.) Inc. or ACUK is a debtor company to which the CCAA applies, and include ACUK on the list of the CCAA Applicants; (2) authorize ACI to enter into the Deed of Amendment with BPCL pursuant to which BPCL's existing and future accounts receivables will be assigned to ACUK; (3) authorize ACUK to become guarantor of the obligations of ACCC as contemplated under the Term Loan; (4) authorize ACUK to become guarantor of the obligations of ACCC under the indenture for the 13.75% Senior Secured Notes due April 11, 2011, and the indenture for the unsecured US$293-million 15.5% Exchange Notes due July 15, 2010; (5) confirm that the ACI charges under the debtor-in- possession facility extends to the shares of ACUK; (6) declare that the present or future assets of ACUK -- save and except for the liens to be created in favor of the Term Lenders -- are not and will not become subject to any charges, liens or encumbrances granted with respect to the CCAA Applicants; and (7) declare that the guarantees under the terms of the Term Loan, the Senior Notes Indenture, and the Unsecured Notes Indenture, validly extend to the obligations of ACUK under the guarantee to be granted by it pursuant to the European Sale Structure in favor of the Term Lenders and the trustees under the Indentures. Outline of Proposed New European Sale Structure As part of the proposed new European Sales Structure, BPCL will agree, in consideration of ACI's continued supply of paper to BPCL, to assign existing and future accounts receivables to ACUK, a new wholly owned subsidiary of ACI incorporated under the Canada Business Corporation Act. The New European Sale Structure is expected to be implemented shortly after the entry of the Canadian Court's approval. Once implemented, it will allow for existing and future accounts receivables of BPCL to be paid directly by the customers to ACUK before the corresponding amounts are remitted to ACI. As is the case under the Current European Sale Structure, the accounts receivables generated under the New European Sale Structure will not be sold to Abitibi-Consolidated U.S. Funding Corp., and will remain at all times distinct from the flow of receivables processed under the Securitization Program. The completion of the New European Sale Structure is contemplated in connection with: (i) the execution, by ACI, ACUK and BPCL, of a Deed of Amendment to Paper Supply Agreement and Assignment to the Paper Supply Agreement giving effect to the New European Sale Structure; (ii) the provision of a notice by BPCL to its customers informing them of the assignment, in favor of ACUK, of existing and future amounts owing by those customers to BPCL; (iii) the execution of the agreements and any other documents which may be necessary for ACUK to become a guarantor under the Term Loan and to provide the security provided, as well as to become a guarantor under the Secured Notes Indenture and the Unsecured Notes Indenture; and (iv) the pledge and delivery by ACI to the Bank of Montreal of the ACUK shares issued to ACI pursuant to a Deed of Hypothec granted by ACI in favor of Bank of Montreal on May 6, 2009. The CCAA Applicants contend that the proposed New European Sale Structure will cause no prejudice to creditors, but rather will benefit all creditors because: -- it will serve to reduce ACI's exposure to BCPL by ensuring that between approximately US$15 million to US$20 million per month in accounts receivables are channeled into ACUK, a corporate entity with activities limited to those contemplated by the New European Sale Structure; and -- it will provide for replacement security to the Term Lenders in order to prevent their secured position from eroding as a result of the assignment of BPCL's accounts receivables to ACUK as well as guarantees to the holders of notes under the Senior Notes Indenture and the Unsecured Notes Indenture. 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). ABITIBIBOWATER INC: Wants to Execute $250MM ABH Note Repayments --------------------------------------------------------------- On April 1, 2008, AbitibiBowater US Holding LLC became indebted in the amount of $201,614,222 to Abitibi-Consolidated Company of Canada. The principal amount of the loan was subsequently increased to $220,946,405. As of the Petition Date, principal amount and accrued interest under the loan was approximately $250,000,000. This is otherwise referred to as the ABH LLC Note. Under Canadian tax law, if a cross-border intercompany debt is incurred and not repaid within one year after the end of the taxation year in which the debt was incurred, the debt is recharacterized as a deemed dividend as of the date of incurrence. On April 1, 2008 date of incurrence, the applicable rate of withholding on a dividend from a Canadian entity to a U.S. entity was 25%, according to Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware. Ms. Morgan emphasizes that if ABH LLC does not repay the ABH LLC Note, Canadian taxing authorities may seek to collect at least $55.25 million from ACCC, as withholding agent for ABH LLC, on account of the ABH LLC Note. Any tax will be due by January 15, 2010, and if not paid outright, will result in an offset by the Canadian tax authorities against tax refunds that ACCC would otherwise receive. In order to repay the ABH LLC Note and resolve the substantial potential tax liability, the Debtors seek the Court's authority to engage in a series of transactions that are necessary to effectuate the repayment of certain intercompany debt to address the potential $55.25 million Canadian withholding tax liability without affecting creditors' interests in the Chapter 11 Cases. The Repayment Steps are: (1) Following the Court's approval the Repayment Steps, two newly formed limited liability companies, (i) LLC1, a wholly owned subsidiary of AbitibiBowater Inc., and (ii) LLC2, a wholly owned subsidiary of ACCC, will file petitions for relief under Chapter 11. Each of LLC1 and LLC2 are formed under U.S. law. (2) ACCC transfers the ABH LLC Note to LLC2 in exchange for the LLC2 Preferred Units with a redemption and retraction value of $250 million. The LLC2 Preferred Units are convertible at the option of the holder into a $250 million debt, with terms and conditions identical to the ABH LLC Note. (3) ACCC distributes to ACI the LLC2 Preferred Units and common units of LLC2 as a reduction of capital of $250 million on the common shares of ACCC. (4) ACI distributes the common and preferred units of LLC2 to ABH as its 82% share of a reduction of capital in an amount equal to $305 million on the shares of ACI. Concurrently, AbitibiBowater Canada Inc. renounces its 18% share of the distribution. (5) ABH transfers the LLC2 Preferred Units to LLC1 in exchange for LLC1 common units. (6) LLC2 Preferred Units are converted into debt -- or the LLC2 Note -- with terms and conditions identical to the ABH LLC Note. (7) LLC2 and ABH LLC will merge, with ABH LLC surviving the Merger. LLC2's Chapter 11 case will be dismissed. Pursuant to a Support Agreement, ABH and LLC1 will be jointly required to transfer the units of LLC1, the LLC2 Note or value equivalent to the value of the LLC2 Note to Abitibi-Consolidated, Inc. or to ACCC upon emergence from bankruptcy, liquidation, default under the LLC2 Note or issuance of a Court order. The Court will grant a lien on LLC1 units and the LLC2 Note to secure the Support Agreement. According to Ms. Morgan, if the Debtors were to begin, but not complete, the Repayment Steps, it would significantly disrupt the Debtors' current capital structure by introducing additional intercompany obligations, potentially impairing certain classes of creditors. In this regard, the Debtors ask the Court to provide that if the Repayment Steps do not proceed to completion, each transaction will be automatically deemed void ab initio, thereby returning the Debtors' intercompany note and capital structure to its identical state immediately prior to any of the transactions. "The only change that will result from the ABH LLC Note Repayment is the satisfaction and deemed repayment of the ABH LLC Note, and the creation of an identical note -- the LLC2 Note -- which will be held by a wholly owned subsidiary of ABH, instead of ACCC," Ms. Morgan tells Judge Carey. "Each of ABH and the wholly owned subsidiary of ABH will be required to transfer the units of LLC1, the LLC2 Note or value equivalent to the value of the LLC2 Note upon emergence from bankruptcy, liquidation or default under the LLC2 Note or issuance of a Court order." A copy of a chart reflecting the flow of the ABH LLC Note Repayment Transaction is available for free at: http://bankrupt.com/misc/CCAA_LLCStructureChart.pdf Ms. Morgan says that the ABH LLC Note Repayment will, in all material respects, leave the Debtors' current entity and capital structure unaltered. The final result of the ABH LLC Note Repayment, he elaborates, is to satisfy the existing ABH LLC Note and create a new and identical note, the LLC2 Note that will be held by two U.S. limited liability companies, instead of the cross-border holding structure that currently exists. Amendments to Financing Agreements To permit the ABH LLC Note Repayment, the Debtors further seek Judge Carey's permission to enter into amendment agreements with respect to: (a) the senior secured superpriority debtor-in-possession credit agreement by and among AbitibiBowater Inc., Bowater Incorporated, Bowater Canadian Forest Products Inc., the lenders, and the Law Debenture Trust Company, as agent; and (b) the amended and restated guaranteed receivables purchase facility by and among certain of the Debtors, Abitibi- Consolidated U.S. Funding Corp., and Citibank, N.A., as Securitization Agent Ms. Morgan relates that the Debtors and the DIP Lenders and Securitization Agent have agreed to enter into the Financing Amendments, which will provide for (i) certain non-material and technical amendments to the respective agreements, as well as (ii) the requirement that parties turn over collateral and accept replacement collateral and guarantees as reasonably requested by the Debtors to effectuate the ABH LLC Note Repayment. The Debtors also seek authority to require certain parties to turn over collateral related to the ABH LLC Note, and to accept replacement collateral and guarantees, as reasonably requested by the Debtors and in furtherance of the ABH LLC Note Repayment. Ms. Morgan assures the Court that the proposed Financing Agreements "will not prejudice any of the Debtors' prepetition creditors in any respect." Specifically, she reminds the Court, the Final DIP Order provides that the Debtors, the DIP Lenders and the DIP Agent may, without further Court approval, amend or waive any non-material provisions of the DIP Financing Agreement if such amendment is not prejudicial to certain prepetition lenders and other third-parties. Similarly, the Final Securitization Order provides that the Debtors and Securitization Agent may, without further Court approval, execute one or more non-material amendments, waivers or supplements to the Securitization Agreement. Though the ABH LLC Note will be satisfied and deemed repaid as part of the Repayment Steps, the LLC2 Note -- identical in all respects to the ABH LLC Note -- will replace it, and all creditors that asserted an interest in the ABH LLC Note will have the same rights and interests in the LLC2 Note, Ms. Morgan clarifies. Accordingly, the repayment of the ABH LLC Note will resolve the Canadian tax liability issue without altering the Debtors' capital structure or impairing the assets available for creditor recoveries, Ms. Morgan avers. 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). ADVANCE FOOD: Moody's Gives Stable Outlook, Raises Rating to 'Ba3' ------------------------------------------------------------------ Moody's Investors Service has changed the rating outlook of Advance Food Company, Inc., to stable from negative. The change in outlook reflects Advanced Food's progress in reducing leverage and increasing financial flexibility as lower commodity costs, an improved pricing environment and cost cuts have boosted margins, enhanced cash flow generation and fostered debt reduction. In addition, the ratings on the first lien credit facility and term loan have been raised to Ba3 from B1 as a result of the reduction in first lien debt during 2009. All other ratings have been affirmed. Advance Food's B1 corporate family rating is supported by its solid credit metrics, good liquidity profile and broad end- customer diversification across the United States. These attributes are partially offset by the speculative grade elements in the company's cost structure, particularly the volatility in raw material prices, its small scale, limited brand equity, and dependence on end-customers' discretionary spend. These ratings were upgraded: -- $40 million senior secured revolving credit facility expiring in March 2012 to Ba3 (LGD 3, 41%) from B1 (LGD 3, 44%); and -- $175 million 1st lien term loan due March 2014 to Ba3 (LGD 3, 41%) from B1 (LGD 3, 44%). These ratings were affirmed: -- Corporate family rating at B1 -- Probability of default rating at B1 -- $50 million 2nd lien term loan due September 2014 at B3; LGD 6 (percentage to 90% from 92%). Moody's most recent rating action for Advance Food on December 8, 2008 changed the outlook to negative from stable and affirmed the company's long-term ratings. Headquartered in Enid, Oklahoma, Advance Food Company, Inc., is a leading full service manufacturer and marketer of a wide variety of value-added, portion-controlled meat products sold primarily into the foodservice distribution channel. Revenues for the twelve months ended September 30, 2009, were approximately $522 million. ADVANTA CORP: Net Loss Widens to $76,485,000 in Q3 2009 ------------------------------------------------------- Advanta Corp. posted wider net loss of $76,485,000 for the three months ended September 30, 2009, from a net loss of $19,258,000 for the same period a year ago. Advanta posted a net loss of $482,459,000 for the nine months ended September 30, 2009, from net income of $3,119,000 for the same period a year ago. Advanta recorded total interest income of $30,393,000 for the three months ended September 30, 2009, from $51,009,000 for the same period a year ago. Advanta recorded total interest income of $98,187,000 for the nine months ended September 30, 2009, from $152,325,000 for the same period a year ago. At September 30, 2009, Advanta had $2,497,897,000 in total assets against $2,465,936,000 in total liabilities, resulting in $31,961,000 in stockholders' equity. Effective June 30, 2009, Advanta's wholly owned bank subsidiary, Advanta Bank Corp., entered into two regulatory agreements with the Federal Deposit Insurance Corporation consenting to the requirements of two cease and desist orders issued by the FDIC. Advanta Bank Corp. did not admit any wrongdoing in entering into the agreements and entered into the agreements in the interest of expediency and to avoid litigation and the costs associated therewith. The first FDIC cease and desist order places significant restrictions on Advanta Bank Corp.'s activities and operations, including its deposit-taking operations, and requires Advanta Bank Corp. to maintain a total risk-based capital ratio of at least 10% and a tier I leverage capital ratio of at least 5%. At September 30, 2009, Advanta Bank Corp.'s total risk-based capital ratio was 10.62% and its tier I leverage capital ratio was 3.73%, resulting in a tier 1 leverage capital ratio that is not in compliance with the first FDIC cease and desist order. Advanta believes it is in compliance with all other requirements in the first order. The first FDIC order also has the impact of requiring Advanta to obtain the FDIC's approval before it would be able to pursue new business opportunities through Advanta Bank Corp., however it does not limit its ability to pursue future business opportunities outside of the bank. In October 2009, Advanta Bank Corp. entered into an additional regulatory agreement with the Utah Department of Financial Institutions consenting to a cease and desist order issued by the UDFI that contains provisions consistent with the first FDIC order, except that the UDFI's order does not include the specific capital requirements that are contained in the FDIC's first order. The second FDIC cease and desist order requires Advanta Bank Corp. to make certain restitution payments to eligible customers and pay a civil money penalty of $150,000. Advanta previously took a $14 million pretax charge related to its estimate of cash back rewards program restitution in the third quarter of 2008. Advanta recorded an additional $19 million pretax charge in the second quarter of 2009 related to its estimate of pricing strategies restitution under the agreement. Advanta began making restitution payments in September 2009 and the payments were completed in October 2009. A full-text copy of the Company's Form 10-Q report is available at no charge at http://ResearchArchives.com/t/s?491c Bankruptcy Filing Jay A. Dubow, Advanta's Chief Administrative Officer, Senior Vice President, Secretary and General Counsel, says the Company's bankruptcy filing constituted an event of default with respect to these debt instruments and triggers, or may trigger, repayment obligations under the terms of certain instruments and agreements relating to direct financial obligations of the Company as set forth: -- Senior Trust Indenture, dated as of October 23, 1995, by and among Advanta Corp. and The Bank of New York Mellon, as successor trustee, with respect to roughly $138,000,000 of principal and accrued and unpaid interest on outstanding debt securities in the form of retail Investment Notes and RediReserve Certificates; and -- Indenture dated as of December 17, 1996 by and among Advanta Corp. and The Bank of New York Mellon, as successor trustee, with respect to roughly $99,375,000 of principal and accrued and unpaid interest on outstanding Series B Junior Subordinated Debentures that are backing roughly $96,375,000 of principal and accrued and unpaid interest on outstanding trust preferred securities issued to third party investors by Advanta Capital Trust I and that are governed by the Amended and Restated Declaration of Trust of Advanta Capital Trust I dated December 17, 1996. The Capital Securities are guaranteed by Advanta Corp. pursuant to the Series B Capital Securities Guarantee dated as of July 29, 1997. Subject to certain notice and other requirements that are set forth in the Senior Trust Indenture, the Indenture, the Declaration and the Guarantee, upon the occurrence of the event of default that is, or may be, triggered by the Bankruptcy Filing, the trustee or holders of not less than 25% in principal amount of the applicable securities outstanding under each of the Senior Trust Indenture, the Indenture and the Declaration, as the case may be, may declare the entire unpaid principal amount of the securities that have been issued under the applicable instrument to be immediately due and payable. Any efforts to enforce such payment obligations under the Debt Documents are stayed as a result of the Bankruptcy Filing and the creditors' rights of enforcement in respect of the Debt Documents are subject to the applicable provisions of the Bankruptcy Code. According to Mr. Dubow, the Debtors intend to use the reorganization process to maximize value to the Debtors' stakeholders. As a result of the Bankruptcy Filing, certain liabilities incurred by the Debtors prior to the Bankruptcy Filing are subject to compromise. The settlement amount of liabilities subject to compromise will be determined as part of the bankruptcy process. On November 8, 2009, Advanta Corp. and certain of its subsidiaries filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 09-13931). Advanta Bank Corp. and certain other subsidiaries of the Company were not part of the Bankruptcy Filing. The Debtors will continue to operate their businesses in the ordinary course of business as "debtors- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. The Non-Filing Entities will continue to operate in the ordinary course of business. As of November 8, 2009, Advanta Corp. and its Filing Subsidiaries had close to $100 million of cash and cash equivalents. This represents an amount that Advanta expects will be adequate to meet its current obligations associated with its ongoing operations as they come due during the Chapter 11 case, including payment of employee salaries and benefits in the ordinary course of business. Over time, however, Advanta Corp. will be unable to meet all of its existing obligations without the protection of the Bankruptcy Filing. AIRPORT INN: Case Summary & 13 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Airport Inn Of Las Vegas 5100 Paradise Rd Las Vegas, NV 89119 Bankruptcy Case No.: 09-31343 Chapter 11 Petition Date: November 10, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Debtor's Counsel: Charles T. Wright, Esq. Piet & Wright 3130 S. Rainbow Blvd., Ste. 304 Las Vegas, NV 89146 Tel: (702) 566-1212 Fax: (702) 566-4833 Email: todd.wright@pietwright.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 13 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-31343.pdf The petition was signed by Dario Pini, president of the Company. AIRTRAN HOLDINGS: Moody's Raises Ratings on Senior Notes to 'Caa3' ------------------------------------------------------------------ Moody's Investors Service upgraded the Speculative Grade Liquidity rating of AirTran Holdings, Inc., to SGL-3 from SGL-4. Moody's also upgraded the rating on the $96 million of 7% senior unsecured convertible notes due 2023 to Caa3 from Ca and affirmed the Caa2 Corporate Family and Probability of Default ratings. The outlook is stable. The upgrade of the Speculative Grade Liquidity rating follows the strengthening of AirTran's internal liquidity because of the two capital market transactions the company recently completed. Unrestricted cash increased by almost $168 million, or about 44% of the September 30, 2009 balance, from the issuance of approximately 11.3 million shares of common stock at $5.08 per share and $115 million of 5.25% senior unsecured convertible notes due November 1, 2016. The New Notes were issued at par and netted 97.25 after underwriting fees. The New Notes are unsecured obligations of AirTran and are not guaranteed by any of its subsidiaries. The significant increase in the cash balance and the relatively low commitments for aircraft deliveries provide sufficient cushion in relation to near term debt maturities and strengthen the view of the company's internal liquidity. "Overall, the company should have adequate reserves to meet its liquidity needs over the next 12 months," said Moody's Vice President, Jonathan Root. The larger cash balance also meaningfully reduces the likelihood of AirTran becoming subject to a significant holdback pursuant to the terms of the existing agreement with its Visa/Mastercard credit card processor as long as the existing revolver remains in place. This further supports the improved liquidity profile. The upgrade of the Rated Convertible Notes to Caa3 results from the larger first loss position in the Loss Given Default waterfall, comprised by convertible debt issues of AirTran that do not benefit from upstream guarantees of subsidiaries. The upgrade of the Rated Convertible Notes (which benefit from upstream guarantees of subsidiaries) considers the greater amount of more junior capital in the capital structure following the issuance of the New Notes (which do not benefit from upstream guarantees). The New Notes provide additional loss absorption and reduce the loss given default assessment of the rated 7% notes, resulting in the rating upgrade. The last rating action was on October 5, 2009, when Moody's changed the ratings outlook to stable from negative. Upgrades: Issuer: AirTran Holdings, Inc -- Speculative Grade Liquidity Rating, Upgraded to SGL-3 from SGL-4 -- Senior Unsecured Conv./Exch. Bond/Debenture, Upgraded to Caa3, LGD5, 85% from Ca, LGD5, 89% AirTran Holdings, Inc., based in Orlando, Florida, conducts its operations through its wholly-owned subsidiary AirTran Airways, Inc., which is one of the largest low cost scheduled airlines in the United States. AMERICAN INT'L: CEO Benmosche Won't Step Down --------------------------------------------- The Wall Street Journal's Serena Ng, Joann S. Lublin and Liam Pleven report that Robert Benmosche, chief executive of American International Group Inc., told employees in an internal memo he remains "totally committed" to leading AIG. Last week, the CEO aired frustrations about federal pay curbs to the board of directors and threatened to resign. According to the Journal, Mr. Benmosche called the compensation issue a "barrier" that "stands in the way of restoring AIG's value" and repaying its government debts, which amount to about $90 billion. A Treasury spokesman declined to comment, the report notes. 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. AIG reported a net loss of $3.3 billion on revenue of $52.63 billion for nine months ended Sept. 30, 2009, compared with a net loss of $37.83 billion on revenue of $63.49 billion in the same period in 2008. AMERICAN IRONHORSE: Wants to Sell Intellectual Property Assets -------------------------------------------------------------- Dallas Business Journal relates that American IronHorse Motorcycles' intellectual property -- including patents, trademarks, Internet addresses and parts designs -- will be sold as the business is liquidated through bankruptcy proceedings. According to a partner of Streambank LLC, an advisory firm specializes in selling intangible assets, no set dollar amount has been set for how much for the assets sale may arise, the report says. The process is expected to close by January 2010, the report notes. The report says that among the assets for sale are trademarks to the company model names like Texas Chopper, Slammer, Legend, Tejas and Outlaw. About American IronHorse Based in Fort Worth, Texas, American IronHorse Motorcycle Company, Inc., designs, manufactures, and markets custom v-twin motorcycles. AIH markets its motorcycles through a national network of more than 100 dealers and is actively pursuing international sales in Canada and the United Kingdom. On March 25, 2008, American IronHorse consented to the move by a group of creditors to place the company under chapter 11 bankruptcy protection before the United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division. On the same day, the Bankruptcy Court entered an order for relief under Chapter 11 of the U.S. Bankruptcy Code. Three creditors -- AG Nichlos, Jr., William E. Buford and Jim Graham -- filed the involuntary petition against the company on Feb. 29, 2008. The petitioners are owed $120,000 by the company. The petitioner's counsel is Troy D. Philips, Esq., at Glast, Phillips & Murray, PC, in Dallas, Texas. Vincent P. Slusher, Esq., at Beirne Maynard & Parsons, LLP, represents the Debtor. AMR CORP: Working with TPG on Possible Investment in JAL -------------------------------------------------------- According to reports, private-equity firm TPG is working with American Airlines parent AMR Corp. on a possible investment in Japan Airlines Corp. TPG is ready to be "part of a solution for JAL" but is waiting for positive signals from the Japanese government and JAL before proceeding further, The Wall Street Journal reported, citing unidentified people. Bloomberg News reported that AMR and TPG may invest at least $300 million in alliance partner Japan Airlines, which sum would be competitive with a proposed investment in Japan Air by Delta Air Lines Inc., Bloomberg's Serena Saitto and Mary Schlangenstein reported, citing unidentified people. According to The Journal, a TPG spokesman said it was unclear whether TPG would participate in a joint minority investment with AMR. A Delta spokeswoman declined to comment, the report notes. Delta is in talks for a partnership with Japan Air. Delta, a member of the SkyTeam group of airlines, wants to lure Japan Air from American's Oneworld group. According to The Wall Street Journal, Delta Air Lines is willing to assume costs JAL would incur if it left its current alliance with American and joined Delta. Those costs could total $15 million to $20 million, these people said, according to the report. The Journal says says an investment in JAL would be a breakthrough for TPG in Japan. The U.S. buyout firm has tried to invest in well-known Japanese brands, but hasn't clinched a big deal for years. It competed for a stake in JAL's credit-card unit and the electronics unit of Matsushita Electric Industrial Co. in 2007, but both went to domestic buyers, the report says. "Private-equity firms have long struggled to sign deals in Japan, mostly because Japanese managers fear the stigma of selling assets to foreign buyers," the report says. The report also notes that TPG has a strong track record investing in airlines world-wide, including Continental Airlines Inc., Ryanair Holdings PLC and the former America West Airlines. But its latest foray, the joint purchase with Northwest Airlines Corp. of Midwest Air Group Inc., ended badly. Republic Airways Holdings Inc. recently purchased Midwest for a small fraction of what TPG and Northwest paid last year, the report adds. About AMR Corp. Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * AMR carries a 'CCC' issuer default rating from Fitch Ratings. It has 'Caa1' corporate family and probability of default ratings from Moody's. It has 'B-' corporate credit rating, on watch negative, from Standard & Poor's. 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. About JAL Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan- based holding company that is active in five business segments through its 225 subsidiaries and 82 associated companies. The Air Transportation segment is engaged in the operation of passenger and cargo planes. The Air Transportation-Related segment is engaged in the transportation of passengers and cargoes, the preparation of in-flight food catering, the maintenance of aircraft and land equipment, as well as the fueling business. The Travel Planning and Marketing segment is involved in the planning and sale of travel packages. The Card and Leasing segment is engaged in the provision of finance, cards and leasing services. The Others segment is involved in businesses related to hotels, resorts, logistics, wholesale, retail, real estate, printing, construction, manpower dispatch, as well as information and communication. The Company has numerous global operating locations. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * As reported by the Troubled Company Reporter on November 3, 2009, Moody's Investors Service has downgraded the long-term debt rating and issuer rating of Japan Airlines International Co., Ltd. To Caa1 from B1, and will continue to review both ratings for further possible downgrade. ANTERO RESOURCES: Moody's Assigns 'Caa1' Rating on $350 Mil. Notes ------------------------------------------------------------------ Moody's Investors Service assigned a Caa1 first-time rating to Antero Resources LLC's proposed $350 million senior unsecured notes due 2017 and a B3 Corporate Family Rating. Proceeds from the note offering will be used to repay the company's $225 million second lien term loan and reduce outstandings under its revolving credit facility. The outlook is stable. "Within its niche strategy of exploiting unconventional oil shale plays through the drillbit, Moody's consider Antero to be a well- run firm that pursues a cogent regional exploitation strategy," commented Francis J. Messina, Moody's Vice-President/Senior Analyst. Antero's B3 CFR rating reflects the company's relatively small size and scale of production; high portion of proven undeveloped reserves, which totaled 64% at year-end 2008; substantial future development cost of the PUD reserves; and, early stage of business formation. Antero's ratings are supported by seasoned management, positive production trends, a high quality asset base, geologic diversification and operating risk diversification across multiple regions, and a good historical three-year F&D cost structure. Antero's year end 2009 average daily production is projected at 17 thousand barrels of oil equivalent, which is less than all but one of the B3 E&P companies Moody's rates. The company's smaller scale and relative concentration indicates a higher level of risk as it executes on its growth strategy. Additionally, with a 64% PUD total at year-end 2008 and an estimated 58% PUD total at year- end 2009, Moody's anticipates Antero will incur substantial future development costs. Antero has had a successful track record for replacing production through the drillbit, with an estimated 137% compounded annual growth rate from 2006 projected through 2009. Because Antero's growth is primarily organic or through the drillbit, three-year all sources reserve replacement costs closely mirror the drillbit replacement costs, both of which are lower than its B3-rated E&P peers. The relatively low three-year drillbit costs of almost $12.67/boe at year-end 2008 (one-year drillbit of $11.84/boe) underlines Antero's solid organic reserve replacement trend and also reflects management's strong operational expertise. However, with approximately 64% proved undeveloped reserves Moody's anticipate substantial future development costs on an already leveraged position. Antero has adequate liquidity over the next four quarters primarily due to availability on its $400 million senior secured revolving credit facility which matures March 15, 2012. The proposed $350 million senior unsecured note offering will be used to repay outstanding borrowings under the $225 million second lien term loan and reduce outstandings under the revolving facility. Also, Antero sufficiently meets its two financial covenants on the revolving credit facility: net debt to EBITDAX less than 4.0x, and a current ratio minimum of 1.0x. The financial covenant under the proposed $350 million senior unsecured notes is an interest coverage ratio greater than 2.25x. The stable outlook is based on an expectation that Antero restrains its capital expenditures to levels largely in line with its operating cash flows while achieving its production growth targets. The outlook could be changed to negative if spending were to materially exceed operating cash flow. The outlook could also be pressured or the ratings downgraded if the company were to significantly increase debt through further property acquisitions and/or outspending its operating cash flows and raise leverage on PD reserves materially above its current range. The ratings for the senior unsecured notes reflect both the overall probability of default of the company, to which Moody's assigns a PDR of B3, and a loss given default of LGD 5. The Caa1 rating of the senior unsecured notes reflects their position in Antero's capital structure, including the subordination to all first lien senior secured creditors and full guarantees of existing and future subsidiaries. Antero Resources LLC is an independent exploration and production company headquartered in Denver, Colorado. ANTHRACITE CAPITAL: Going Concern Doubt Raised; In Lender Talks --------------------------------------------------------------- Anthracite Capital, Inc. reported net loss available to common stockholders for the third quarter of 2009 of $(0.51) per share, compared to $(0.03) per share for the same three-month period in 2008. Operating Earnings for the third quarters of 2009 and 2008 were $0.03 and $0.32 per share, respectively. Operating Earnings is a non-GAAP measure. Update on Financial Condition The Company said substantial doubt continues to exist about its ability to continue as a going concern. As of September 30, 2009, the Company had $297,000 of unrestricted cash and cash equivalents, compared with $9,686,000 at Dec. 31, 2008. The Company failed to meet amortization payment requirements under its secured facilities with Bank of America, Deutsche Bank and Morgan Stanley and has until December 29, 2009 to cure such shortfall (as of November 1, 2009, over $1,315,000) or an event of default will occur. During the cure period, all the cash flows from the Company's assets are being diverted to a cash management account for the benefit of the Company's secured bank lenders subject to limited exceptions approved by them. The Company did not make interest payments due on October 30, 2009 (approximately $1,554,000) on three series of its senior notes. Under the indentures governing these notes, the failure to make an interest payment is subject to a 30-day cure period before constituting an event of default. Unless the secured bank lenders allow the Company to access some of the cash flow currently being diverted into the cash management account or the holders of these notes agree to a refinancing or agree to waive the defaults, the Company will not be able to make interest payments on these notes and events of default will occur on November 30, 2009. An event of default under these notes, absent a waiver, would trigger cross-default and cross-acceleration provisions in the Company's secured bank facilities and its credit facility with BlackRock Holdco 2, Inc., and, if any such debt were accelerated, would trigger a cross-acceleration provision in the Company's convertible notes indenture. If acceleration were to occur, the Company would not have sufficient liquid assets available to repay such indebtedness and, unless the Company was able to obtain additional capital resources or waivers, the Company would be unable to continue to fund its operations or continue its business. In addition, for the quarter ended September 30, 2009, the Company is in breach of a covenant in its secured bank facilities that requires the Company's operating earnings (as defined in the applicable secured bank facility) not be less than a specified amount at quarter end. Unless waived, this breach could lead to an event of default and acceleration. The Company also continues to be in breach of the covenant in its secured facility with Holdco 2 that requires the Company to immediately repay outstanding borrowings under the facility to the extent outstanding borrowings exceed 60% of the fair market value of the shares of common stock of Carbon Capital II, Inc. securing such facility. In March 2009, Holdco 2 waived the Company's failure to repay borrowings in accordance with this covenant until April 1, 2009 and subsequently extended this waiver until January 22, 2010. Based on the Company's current liquidity situation, the Company continues to seek ways to refinance or restructure its indebtedness and is focused on negotiations with its secured bank lenders and unsecured noteholders to cure or obtain a waiver for missed interest payment and amortization payment defaults and covenant breaches. Effect of Market Conditions on the Company's Business Although the capital markets have shown recent signs of stabilizing after a prolonged economic downturn and credit crisis, the Company's assets linked to the U.S. and non-U.S. commercial real estate finance markets continue to be adversely affected as the market value of commercial real estate assets has not recovered and delinquencies have risen significantly for CMBS and commercial real estate loans. These adverse effects include: -- Adverse impact on liquidity. As a result of a continued rise in delinquencies for commercial real estate loans and CMBS during 2009, the Company's cash flow has been materially and adversely affected. This negative trend has continued into the fourth quarter of 2009 and the Company believes this negative trend will continue into the foreseeable future. As a result of the decline in the cash flows from the Company's assets, the Company was unable to make the full September 30, 2009, amortization payments required under its secured bank facilities for two of its three lenders. Pursuant to amendments to its secured bank facilities which closed in May 2009, the Company is required to make payments to reduce the principal balances under the facilities by certain specified amounts as of the end of each quarter, commencing for the quarter ended September 30, 2009. The Company was only able to make the full required amortization payment under its facility with Morgan Stanley. In addition, separate and apart from the aforementioned amortization payment obligations, the Company was unable to make the entire amount of a monthly $1,250,000 amortization payment under its facility with Morgan Stanley due October 31, 2009. The Company has 90 days after the end of any applicable quarter to cure such aggregate amortization payment shortfall or an event of default will occur. During the cure period, all the cash flows from the Company's assets are being diverted to a cash management account for the benefit of the Company's secured bank lenders subject to limited exceptions approved by the secured bank lenders. In the event the secured bank lenders do not allow the Company access to the diverted cash flows, the Company will not be able to make payments due on its unsecured debt and will be unable to pay general and administrative expenses. As a result, the Company may default on its obligations under its unsecured debt and be unable to continue as a going concern. In addition, the Company's current projections show that, even if the Company cures the aggregate amortization payment shortfall by December 29, 2009 (i.e., within the 90-day period), the Company will not be able to make the required amortization payments for the quarter ended December 31, 2009. In such event, the Company would need to cure such shortfall by March 31, 2010, to avoid an event of default. -- Negative operating results during the nine months ended September 30, 2009, and the year ended December 31, 2008. For the nine months ended September 30, 2009, the Company incurred a net loss available to common stockholders of $(132,508,000) driven primarily by significant net realized and unrealized losses, the incurrence of a $(98,999,000) provision for loan losses and a significant decline in interest income due to rising delinquencies on the Company's CMBS and commercial real estate loans. For the year ended December 31, 2008, the Company incurred a net loss available to common stockholders of $(258,050,000), driven primarily by significant net realized and unrealized losses, the incurrence of a $(165,928,000) provision for loan losses and a loss from equity investments of ($53,630,000). -- Substantial doubt about the ability to continue as a going concern. Substantial doubt continues to exist about the Company's current ability to continue as a going concern. The Company's independent registered public accounting firm issued an opinion on the Company's December 31, 2008 consolidated financial statements that stated the consolidated financial statements were prepared assuming the Company will continue as a going concern and further stated that the Company's liquidity position, current market conditions and the uncertainty relating to the outcome of the Company's then ongoing negotiations with its secured bank lenders raised substantial doubt about the Company's ability to continue as a going concern. -- Elimination of dividends. The Company's Board of Directors has not declared any dividend on the Company's common stock or the Company's preferred stock during 2009. The Board of Directors anticipates that the Company will only pay cash dividends on its preferred and common stock, if such cash is available, to the extent necessary to maintain its REIT status until the Company's liquidity position has improved and subject to restrictions in the Company's debt instruments. -- NYSE Listing. On September 15, 2009, the Company was notified by the New York Stock Exchange, Inc., that the average per share price of the Company's common stock was below the NYSE's continued listing standard that requires that the average closing price of listed common stock be no less than $1.00 per share over a consecutive 30 trading-day period. The Company notified the NYSE that it intends to cure the Price Condition deficiency by effecting a reverse stock split, subject to stockholder approval. The notice provides that the Company must obtain stockholder approval by no later than its next annual meeting (scheduled on May 18, 2010) and must implement the reverse stock split promptly thereafter. If the Company has not cured the Price Condition deficiency by that date, the common stock will be subject to suspension and delisting by the NYSE, which would result in defaults under certain of the Company's debt instruments. The exact ratio of the reverse stock split will be determined based on the facts and circumstances at a later date. Completed Initiatives to Restructure Debt Since May 2009, the Company, in addition to amending its secured bank facilities in May 2009, restructured a significant portion of its unsecured debt and thereby reduced its near-term interest expense. Equity-for-Debt Exchanges From May through September 2009, the Company completed a number of equity-for-debt exchanges with holders of its 11.75% Convertible Senior Notes due 2027 pursuant to which the Company acquired and canceled over half of the outstanding amount of convertible notes. In these exchanges, the Company issued an aggregate of 14,997,000 shares of its common stock for $40,981,000 aggregate principal amount of convertible notes. Holders in these exchanges generally released the Company from paying them any accrued and unpaid interest on the exchanged convertible notes. As of November 1, 2009, $39,019,000 aggregate principal amount of convertible notes remained outstanding. Junior Subordinated Debt Exchanges From May through October 2009, the Company restructured all of its junior subordinated debt, comprised of trust preferred securities of its subsidiary capital trusts or related obligations and euro- denominated junior subordinated notes, as described below. In May 2009 and July 2009, the Company completed exchanges with holders of $160,000,000 aggregate liquidation amount of trust preferred securities of its three subsidiary capital trusts and holders of EUR50,000 aggregate principal amount of the Company's euro-denominated junior subordinated notes. The Company issued new notes with a significantly reduced initial interest rate (0.75% per year) for up to four years and with a higher principal amount (125% of the principal or liquidation amount of the securities exchanged). In October 2009, the Company and the holder of $15,000,000 aggregate liquidation amount of trust preferred securities agreed to amend those securities in accordance with the terms of the May 2009 and July 2009 new notes. Holders in these exchanges permitted the Company to retrospectively apply the significantly reduced initial interest rate to the most recently completed interest period for which payment had not been previously made. After the junior debt modification period, the interest rates of the new notes and trust preferred securities return to the original, higher rates of the securities for which they were exchanged or from which they were amended. In addition, during the junior debt modification period, the Company will be subject to limitations on its ability to pay cash dividends on its common or preferred stock or redeem, purchase or acquire any equity interests, and to become liable for new debt other than trade debt or similar debt incurred in the ordinary course of business and debt in exchange for or to provide the funds necessary to repurchase, redeem, refinance or satisfy the Company's existing secured and senior unsecured debt. In addition, during the junior debt modification period, the cure period for a default in the payment of interest when due is three days. The new notes and trust preferred securities otherwise generally have the same terms, including maturity dates, as the securities for which they were exchanged or from which they were amended. Senior Notes Exchanges In October 2009, the Company restructured $64,500,000 aggregate principal amount of its 7.22% Senior Notes due 2016, 7.20% Senior Notes due 2016 and 7.772%-to-Floating Rate Senior Notes due 2017. The senior notes exchanges were similar in structure to the junior subordinated debt exchanges. The Company issued new notes with a significantly reduced initial interest rate (1.25% per year) for up to four years and with a higher principal amount (120% of the principal amount of the notes exchanged). Holders in these exchanges permitted the Company to retrospectively apply the significantly reduced initial interest rate to the most recently completed interest period. After the senior notes modification period, the interest rates of the new notes return to the original, higher rates of the notes for which they were exchanged. In addition, during the senior notes modification period, pursuant to the applicable indentures, the Company is subject to new covenants similar to the new junior debt covenants and additional covenants. In addition, during the senior notes modification period, the cure period for a default in the payment of interest when due is three days. The new notes otherwise generally have the same terms, including maturity dates, as the notes for which they were exchanged. As of November 1, 2009, $13,750,000 aggregate principal amount of the Company's 7.22% Senior Notes due 2016, $18,750,000 aggregate principal amount of its 7.20% Senior Notes due 2016, $28,000,000 aggregate principal amount of its 7.772%-to-Floating Rate Senior Notes due 2017, and the entire $37,500,000 aggregate principal amount of its 8.1275%-to-Floating Rate Senior Notes due 2017 are outstanding and have not been restructured. Projected Cash Interest Payment Savings during Modification Period The Company estimates that the effect of the combined unsecured restructurings and exchanges will result in cash savings of over $22,000,000 per year during the period that the lower coupons are in effect, excluding the impact of certain one-time fees paid in connection with the completion of the restructurings and exchanges. The Company intends to use cash from these savings to reduce indebtedness under its secured bank facilities. About Anthracite Anthracite Capital, Inc. is a specialty finance company focused on investments in high yield commercial real estate loans and related securities. Anthracite is externally managed by BlackRock Financial Management, Inc., which is a subsidiary of BlackRock, Inc., one of the largest publicly traded investment management firms in the United States with approximately $1.435 trillion in global assets under management at September 30, 2009. BlackRock Realty Advisors, Inc., another subsidiary of BlackRock, provides real estate equity and other real estate-related products and services in a variety of strategies to meet the needs of institutional investors. APPLIED MATERIALS: To Slash Up to 12% of Jobs Within 18 Mos. ------------------------------------------------------------ Applied Materials, Inc., said it expects to be taking these actions in fiscal 2010 to strengthen its leadership in its global markets and deliver higher operating efficiencies: * Embedding its sales force into its business groups to increase visibility into customer and market opportunities. * Consolidating its manufacturing and supply chain closer to more of its customers and suppliers. * Implementing various cost reduction initiatives and a restructuring plan expected to achieve total annualized cost savings of approximately $450 million when completed. Under the restructuring plan, Applied Materials expects to reduce its global workforce by roughly 1,300 to 1,500 positions, or 10% to 12%, over a period of 18 months. The company anticipates the pre-tax cost of the plan to be between $100 million and $125 million, most of which is expected to be recognized in the first quarter of fiscal 2010. "Our semiconductor business is in the early phase of a recovery," said Chief Executive Michael Splinter during a conference call Wednesday, according to The Wall Street Journal. The anticipated savings of $450 million are in addition to the structural cost reductions of $460 million achieved in fiscal 2009. Applied Materials on Wednesday reported fiscal 2009 fourth quarter net sales of $1.53 billion and GAAP net income of $138 million or $0.10 per share. For its fiscal year ended Oct. 25, 2009, the company reported net sales of $5.01 billion and a GAAP net loss of $305 million or $0.23 per share. The company also reported non-GAAP results, with fourth quarter net income of $177 million or $0.13 per share and fiscal year net income of $37 million or $0.03 per share. "Applied delivered a solid fourth quarter led by increased net sales and profitability in our semiconductor equipment business, with improved demand and financial performance in all of our segments," said Mike Splinter, chairman and CEO. "For the year, we invested in growth across all of our businesses, introducing new products and expanding into new markets while reducing our cost structure." "Since 2006, Applied has successfully extended our nanomanufacturing leadership from semiconductor and display to the solar industry, and during that time we have seen changes in customer and geographic concentration in all of these markets," Mr. Splinter added. "We are adapting our operating structure to align with these changes and enhance the value we provide to our customers and stockholders." About Applied Materials Applied Materials, Inc. (Nasdaq:AMAT) -- http://www.appliedmaterials.com/-- is the global leader in Nanomanufacturing Technology(TM) solutions with a broad portfolio of innovative equipment, services and software products for the fabrication of semiconductor chips, flat panel displays, solar photovoltaic cells, flexible electronics and energy-efficient glass. ASARCO LLC: To Sell Polluted NJ Property For $1 ----------------------------------------------- Law360 reports that Asarco LLC has earned approval to sell off a vacant property that once housed a zinc processing facility to the city of Trenton, N.J., for $1, allowing the mining company to untangle itself from current and future liabilities involving the remediation of the now-contaminated site. Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASSOCIATED ESTATES: S&P Gives Positive Outlook, Keeps 'B+' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Associated Estates Realty Corp. to positive from stable and affirmed its 'B+' corporate credit rating on the company. Additionally, S&P affirmed all other Associated-related ratings. These actions affect roughly $48 million in preferred stock. "S&P's ratings on Associated acknowledge the company's improved portfolio composition, strengthened debt coverage metrics, and good coverage of all fixed obligations, including the common dividend," said credit analyst Linda Phelps. "However, S&P's expectations for some additional pressure on the company's operating metrics temper these strengths, given the currently very weak economic conditions and the potential for greater volatility given the REIT's comparatively small size." S&P believes Associated's improved portfolio composition, margins, and debt coverage metrics position the REIT to absorb a potential modest decline in FFO at the current rating level. If current coverage levels prove to be sustainable in spite of the weakened economy, S&P would consider a one-notch upgrade. However, the ratings could come under pressure if Associated's fixed-charge coverage declines to the 1.4x level contemplated in S&P's stress scenario analysis. AVIZA TECHNOLOGY: Cash Collateral Hearing Set for November 18 -------------------------------------------------------------- The Hon. Roger L. Efremsky of the U.S. Bankruptcy Court for the Northern District of California will consider Aviza Technology Inc. and its debtor-affiliates' continued use of their prepetition secured lenders' cash collateral on Nov. 18, 2009, at 10:30 a.m. The Debtors' prepetition secured lenders include United Commercial Bank, East West Bank and ChinaTrust Bank (USA.) As reported in the Troubled Company Reporter on June 30, 2009, ATI and Aviza, Inc., entered into a loan and security agreement with the Banks for a credit facility pursuant to which the Banks provided credit of $55,000,000 under a revolving line of credit, an equipment term loan and a real estate term loan. As of ATI's petition date, ATI and Aviza owed the Banks $28,300,000. The Debtors also owed $7,500,000 in unsecured debt. The Banks assert a perfected security interest in substantially all of the Debtors' assets, including accounts receivable, inventory, equipment and real estate. The Debtors related that their assets are worth substantially more than the amount of secured debt and relates that the equity cushion provides the Banks with adequate protection for the use of cash collateral. The proposed sale to Sumitomo Precision Products, according to the Debtors, will, if consummated, result in proceeds sufficient to pay the Bank's secured claim in full and may possibly result in proceeds available to distribute to unsecured creditors. Sumitomo executed a non-binding letter of intent for the sale of certain assets of Aviza and certain of its direct and indirect subsidiaries. The Debtors will also grant to the Banks a replacement lien on all property of Aviza acquired after the commencement of the Chapter 11 case of the same types and description as the collateral securing the Banks' prepetition lien, if any, but excluding claims for and excluding property acquired by the Debtor post-petition. About Aviza Technology Inc. Headquartered in Scotts Valley, California, Aviza Technology Inc. (NASDAQ GM:AVZA) -- http://www.aviza.com/-- designs, manufactures, sells and supports semiconductor capital equipment and process technologies for the global semiconductor industry and related markets. The Company's systems are used in a variety of segments of the semiconductor market for advanced silicon for memory devices, 3-D packaging and power integrated circuits for communications. The Company's manufacturing, R&D, sales and customer support facilities are located in the United Kingdom, Germany, France, Taiwan, China, Japan, Korea, Singapore and Malaysia. The Company and two of its subsidiaries, Aviza Inc. and Trikon Technologies Inc., filed for Chapter 11 bankruptcy protection on June 9, 2009 (Bankr. N.D. Calif. Case No. 09-54511). Judge Roger L. Efremsky presides over the Chapter 11 case. Attorneys at the Law Offices of Murray and Murray represent the Debtors. At the time of the filing, Aviza Technology estimated assets and debts of $10 million to $50 million. BACHRACH ACQUISITION: Pursues Plan Exclusivity Until Dec. 4 ----------------------------------------------------------- Bloomberg's Bill Rochelle reports that Bachrach Acquisition LLC is asking the Bankruptcy Court to extend its exclusive period to file a Chapter 11 plan until December 4. The Debtor's request for a second extension is scheduled for hearing on November 17. Bachrach says its books weren't up to date when the bankruptcy case began. According to the report, at the Nov. 17 hearing, the Official Committee of Unsecured Creditors will also be requesting authority to conduct an investigation into whether the company repaid loans to insiders within one year of bankruptcy. If the Committee's suspicions turn out to be true, the repayments might be recovered as preferences. Headquartered in New York City, Bachrach Acquisition, LLC -- http://www.bachrach.com/-- sells men's apparel and has stores in 13 states. The Company filed for Chapter 11 on May 6, 2009 (Bankr. S. D. N.Y. Case No. 09-12918). Clifford A. Katz, Esq., Evan J. Salan, Esq., Henry G. Swergold, Esq., and Teresa Sadutto-Carley, Esq., at Platzer, Swergold, Karlan, Levine, Goldberg & Jaslow, LLP, represent the Debtor in its restructuring efforts. The formal lists of assets and liabilities show assets on the books for $20.2 million and debt totaling $24.2 million, including $8.1 million secured. BARZEL INDUSTRIES: U.S. Trustee Objects to Creditors' Settlement ---------------------------------------------------------------- The U.S. Trustee is objecting to a proposed settlement among the lenders and unsecured creditors and buyer of the assets of Barzel Industries Inc. According to Bill Rochelle at Bloomberg, the U.S. Trustee, an arm of the Justice Department, objects to the settlement because it will cause money to be distributed in a way that doesn't comply with priorities in bankruptcy law. The U.S. Trustee also says that a confirmation of Chapter 11 plan "will be impossible" and that the case "likely" will end up in dismissal or conversion to Chapter 7. As reported by the TCR on Nov. 5, 2009, Chriscott USA Inc. emerged the winning bidder at an auction for the assets of Barzel Industries. The Bankruptcy Court approved the sale of the assets for $75 million, which is $10 million higher than Chriscott's stalking-horse bid. Chriscott had to sweeten its offer after Lakeside Steel Inc. submitted a competing bid at the Oct. 28 auction. As part of the settlement reached by Chriscott, the secured lenders, the Official Committee of Unsecured Creditors and the Company, the $75 million purchase price includes a $500,000 fund for unsecured creditors and another $300,000 for suppliers who shipped goods prior to the filing. Under the deal, the buyer will be released from claims that might result from being affiliated with the owner that sold the business in 2007. In addition, the company and the creditors would release the lenders from claims for financing the 2007 sale. About Barzel Industries Norwood, Massachusetts-based Barzel Industries, Inc., processes and distributes steel. The Company manufactures steel for the construction and industrial manufacturing industries, and produces finished commercial racking products. Barzel recorded assets of $370,145,000 against debts of $375,412,000 as of May 30, 2009. Barzel Industries -- aka Novamerican Steel Inc. and Symmetry Holdings Inc. -- and seven affiliates filed for Chapter 11 on September 15, 2009 (Bankr. D. Del. Case No. 09-13204). Judge Christopher S. Sontchi presides over the cases. J. Kate Stickles, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Wilmington, Delaware, and Karen M. McKinley, Esq., and Norman L. Pernick, Esq., at Cole Scholtz Meisel Forman Leonard, P.A., in Wilmington, Delaware, serve as legal counsel. On the same day, the Company filed applications for relief under the Canadian Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice -- Commercial List. Barzel Industries and substantially all of its U.S. and Canadian subsidiaries have an Asset Purchase Agreement with Chriscott USA Inc. and 4513614 Canada Inc. pursuant to which the Buyer will purchase substantially all of the assets of the Sellers for $65.0 million in cash, subject to certain adjustments, and assume certain liabilities from the Sellers associated with the purchased assets. The deal is subject to approval by both U.S. and Canadian Courts. BEAR STEARNS: Liquidators File 2nd Complaint vs. Cohen, et al. -------------------------------------------------------------- Geoffrey Varga, voluntary liquidator of Bear Stearns High-Grade Structured Credit Strategies (Overseas) Ltd., and Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage (Overseas) Ltd., filed a second amended complaint against Barry Joseph Cohen, Gerald R. Cummins, David Sandelovsky, Greg Quental, Bear Stearns Asset Management Inc., The Bear Stearns Companies, Inc., Bear Stearns & Co. Inc., Ralph Cioffi, Matthew Tannin, and Raymond McGarrigal. The Second Amended Complaint alleged that the Defendants failed to properly structure the Overseas Funds, failed to provide adequate managerial oversight and risk management to the Oversea. Funds, engaged in a pattern of misrepresentations and deceptive conduct with respect to the Overseas Funds, and continually placed their own interests ahead of the interests of the Overseas Funds. Subsequently, the Defendants answered the Second Amended Complaint and denied all the allegations contained therein. Mr. Tannin, in particular, says that he acted with honesty, integrity and in good faith, and specifically denies any allegation to the contrary. About Bear Stearns New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- was a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The investment bank collapsed in 2008 and was sold in a distressed sale to JPMorgan Chase in a transaction backed by the U.S. government. Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. were open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. BEAR STEARNS: SEC Distributes $267 Mil. to Funds Hurt by Collapse ----------------------------------------------------------------- On May 15, 2009, the U.S. Securities and Exchange Commission started a $267 million Fair Fund distribution to mutual funds and mutual fund shareholders who were harmed by late trading and market timing that occurred through Bear Stearns, which was charged by the SEC in a 2006 enforcement action. According to the SEC, the disbursement of more than $216 million will go to approximately 761,000 shareholders who were harmed and to the asset bases of more than 1,000 affected mutual funds. The Bear Stearns Fair Fund will ultimately return more than $267 million to harmed mutual funds and shareholders before the end of 2009. James A. Clarkson, acting director of the SEC's New York Regional Office said that the SEC is very pleased to make its first distribution from the Bear Stearns Fair Fund to injured mutual funds and their shareholders and look forward to disbursing the rest of the money in the succeeding months. The Sarbanes-Oxley Act of 2002 gave the SEC authority to increase the amount of money returned to injured investors by allowing civil penalties to be included in Fair Fund distributions. Prior to SOX, only disgorgement could be returned to investors. Dick D'Anna, Director of the Office of Collections and Distributions added that the SEC staff continues to work diligently to ensure the distribution of Fair Funds to affected funds and investors. Since passage of the Sarbanes-Oxley Act, the SEC has returned more than $5 billion in lost funds to harmed investors. The SEC brought and settled public administrative and cease-and- desist proceedings against Bear Stearns & Co., Inc. and Bear, Stearns Securities Corp. in March 2006 for violations of the federal securities laws in connection with late trading and market timing of mutual funds. The SEC's order found that shareholders were harmed by the late trading and market timing of mutual funds facilitated by Bear Stearns from January 1999 through October 2003. Bear Stearns consented to the order without admitting or denying the findings. Among other things, the order required Bear Stearns to pay $250 million in disgorgement and penalties for distribution through a Fair Fund. The SEC issued an order approving the Bear Stearns Distribution Plan on Feb. 4, 2009. The SEC notes that distributions are not being made pursuant to a claims process. Therefore, mutual funds and others eligible for distributions from the Bear Stearns Fair Fund do not need to contact the SEC in order to receive a payment. The Fair Fund Administrator responsible for distribution is Rust Consulting, Inc. Investor questions regarding the distribution may be directed to Rust at (888) 356-0259 and information regarding the distribution can also be obtained at: http://www.bearstearnsfairfundsettlement.com About Bear Stearns New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- was a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The investment bank collapsed in 2008 and was sold in a distressed sale to JPMorgan Chase in a transaction backed by the U.S. government. Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. were open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. BEAR STEARNS: Bruce Sherman Sues Former Top Executives ------------------------------------------------------ Bruce Sherman, owner of 5.9 percent of Bear Stearns' outstanding shares and its largest stockholders, sued Bear Stearns' former top executives and Deloitte & Touche LLP, the company's auditor, in a Manhattan federal court and seeks unspecified damages, The Associated Press reports. Mr. Sherman acquired his shares as an officer of Private Capital Management and advised others to do the same. About Bear Stearns New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- was a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The investment bank collapsed in 2008 and was sold in a distressed sale to JPMorgan Chase in a transaction backed by the U.S. government. Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. were open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. BELLUS HEALTH: Net Loss Down to $5.84-Mil; Has Going Concern Doubt ------------------------------------------------------------------ BELLUS Health Inc. (TSX: BLU) reported financial results for the third quarter and nine-months ended September 30, 2009. The Company reported a reduced net loss, compared to the corresponding period in the previous year, and an increased cash position for the quarter, due largely to Management's efforts to reduce overhead expenses and its cash burn rate, as well as a successful rights offering during the third quarter. For the three-month period ended September 30, 2009, BELLUS Health reported a net loss of US$5,840,000 (US$0.04 per share), compared to a net loss of US$11,175,000 (US$0.22 per share) for the corresponding period the previous year. For the nine-month period ended September 30, 2009, the net loss amounted to US$2,867,000 (US$0.02 per share), compared to a net loss of US$36,959,000 (US$0.75 per share) for the same period last year. Gross sales amounted to US$76,000 for the current quarter (US$272,000 for the nine-month period) compared to US$206,000 for the comparative periods the previous year. Net sales amounted to US$99,000 for the current quarter (negative US$6,000 for the nine- month period) compared to US$153,000 for the comparative periods the previous year. These sales represent the sales of VIVIMIND(TM) (also known as tramiprosate and homotaurine), the Company's first natural health brand launched in September 2008, in Canada and globally on the Internet. As at Sept. 30, 2009, the Company had cash and cash equivalents in the amount of US$17,217,000. The Company expects to receive US$2.3 million of tax credits in the next months and there are credit facilities in the amount of approximately US$1.2 million that are currently available. As at Sept. 30, 2009, the Company's committed cash obligations and expected level of expenses for the upcoming twelve months may exceed the committed sources of funds and the Company's cash and cash equivalents on hand. The ability of the Company to continue as a going concern is dependent upon raising additional financing through borrowings, share issuances, receiving funds through collaborative research contracts, distribution agreements or product licensing agreements, and ultimately, from obtaining regulatory approval in various jurisdictions to market and sell its product candidates and ultimately achieving future profitable operations. The outcome of these matters is dependent on a number of factors outside of the Company's control. These factors raise significant doubt about the Company's ability to continue as a going concern. Management continues to actively pursue additional financing. The Company is currently involved in ongoing discussions with several parties to secure partnership agreement, collaboration agreement, licensing agreement and/or sale with respect to its businesses, product or product candidates. While the discussions could lead to the signing of binding agreements in the future, there can be no assurance whatsoever that any such transaction will be put in place. As a result, there is material uncertainty as to whether the Company will have the ability to continue as a going concern and thereby realize its assets and discharge its liabilities in the normal course of business. As announced by the Company's March 31, 2009, the TSX undertook a routine delisting review of BELLUS Health as a result of the Company's having invoked the financial difficulty exemption in connection with the 2009 Notes financing. On October 20, the Company received confirmation from the TSX that its Listing Committee had determined that the Company satisfies the TSX's continued listing requirements. About BELLUS Health BELLUS Health is a global health company focused on the development and commercialization of products to provide innovative health solutions to address critical unmet medical needs. BERNARD MADOFF: Optimal's Echeverria Charged with Mismanagement --------------------------------------------------------------- Warren Giles at Bloomberg reports that Manuel Echeverria, the former head of Banco Santander SA's Optimal Investment Services unit in Geneva, has been charged with criminal mismanagement over his handling of client funds invested with Bernard Madoff. Mr. Echeverria failed to protect the interests of his clients because of "abnormally high remuneration," according to charges outlined in a ruling by the Court of Appeal in Geneva that was obtained by Bloomberg News. Investigating Magistrate Marc Tappolet confirmed the contents of the document, which was sent to the parties in the case on Nov. 6. Optimal's customers invested about EUR2.33 billion (US$3.49 billion) with Madoff, according to Santander. 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: Trustee Talking Settlement with Picower Widow ------------------------------------------------------------- Irving H. Picard, the trustee liquidating Bernard L. Madoff Investment Securities LLC, is in settlement talks with the widow of Jeffrey M. Picower, Bill Rochelle at Bloomberg reported. Mr. Picower was sued for $7.2 billion by Mr. Picard. Mr. Picower, however, drowned in his swimming pool in Palm Beach, Florida, in October. Irving H. Picard has sued Mr. Picower and his foundation $7 billion, to recover fictitious profits that the latter has withdrawn from Madoff. Mr. Picower denied that he knowingly profited from the Ponzi scheme. 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.). BIG SKY FARMS INC: Chapter 15 Case Summary ------------------------------------------ Chapter 15 Petitioner: Big Sky Farms Inc. Chapter 15 Debtor: Big Sky Farms Inc. c/o Julie Johnson McLean 215 10th Street, Suite 1300 Des Moines, IA 50309 Chapter 15 Case No.: 09-03293 Chapter 15 Petition Date: November 10, 2009 Court: Northern District of Iowa (Sioux City) Judge: William L. Edmonds Chapter 15 Petitioner's Counsel: Julie Johnson McLean, Esq. 215 10th Street, Suite 1300 Des Moines, IA 50309-3993 Tel: (515) 288-2500 Fax: (515) 243-0654 Email: JulieMcLean@davisbrownlaw.com Estimated Assets: _______ Estimated Debts: _______ BIGLER LP: Asks Court Approval to Hire BMC as Claims Agent ---------------------------------------------------------- Bigler LP, Bigler Petrochemical, LP, Bigler Plant Services, LP, and Bigler Terminals, LP, have sought the approval of the U.S. Bankruptcy Court for the Southern District of Texas to employ BMC Group, Inc., as claims, noticing, and balloting agent. BMC will provide these services to the Debtors: a. maintaining the creditor matrix, preparing and serving required notices; b. maintaining an official copy of the Debtors' schedules of assets and liabilities as well as statements of financial affairs; c. notifying all potential creditors of the existence and amount of their respective claims as evidenced by the Debtors' books and records set forth in the Schedules; d. furnishing a form for the filing of a proof of claim; e. docketing all claims received, maintaining the official claims registers for each Debtor on behalf of the Clerk, maintaining copies of all proofs of claim filed, and providing the Clerk with certified duplicate unofficial Claims Registers on a weekly basis, unless otherwise directed; and f. recording all transfers of claims and providing any notices of transfers required and providing access to the public for examination of copies of the proofs of claim without charge during regular business hours; BMC will charge standard prices for its services, expenses and supplies at the rates or prices in effect on the day the services and/or supplies are provided to the Debtor. A copy of BMC's standard pricing is available for free at: http://bankrupt.com/misc/BIGLER_standard_pricing.pdf Tinamarie Feil, president and co-founder of BMC, assures the Court that BMC doesn't have interests adverse to the interest of the Debtors' estates or of any class of creditors and equity security holders. Ms. Feil maintains that BMC is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About Bigler Houston-based Bigler is a diversified petrochemical producer. Bigler has production and storage facilities on 271 acres on the Houston Ship Channel. The Company and its affiliates are engaged in a variety of operations within the chemical and petrochemical industries. The Companies currently have approximately 70 employees. The Companies' corporate headquarters are located at 1920 N. Memorial Way, Suite 201, Houston, Texas 77007. Bigler filed for Chapter 11 reorganization on October 30, 2009, in Houston (Bankr S.D. Tex. Case No. 09-38188), listing $233 million in assets against $151 million in liabilities. BIGLER LP: Wants King & Spalding as Bankruptcy Counsel ------------------------------------------------------ Bigler LP, Bigler Petrochemical, LP, Bigler Plant Services, LP, and Bigler Terminals, LP, have sought permission from the U.S. Bankruptcy Court for the Southern District of Texas to employ King & Spalding LLP as bankruptcy counsel. K&S will, among other things: (a) take all necessary action to protect and preserve the estates of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; (b) prepare on behalf of the Debtors the necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates; (c) negotiate and prepare on behalf of the Debtors a plan of to reorganization, a disclosure statement, and all related documents, and negotiate and prepare documents relating to the disposition of assets, as requested by the Debtors; and (d) advise the Debtors on finance, and finance-related matters and transactions, and matters relating to the sale of the Debtor's assets. Henry J. Kaim, a partner in the firm of K&S, says that the firm will be paid based on the hourly rates of its professionals: Professional Rate ------------ ---- Senior Partners $260-$850 Paralegals $205-$275 Legal Assistants $205-$275 Document Clerks $205-$275 Mr. Kaim assures the Court that K&S doesn't have interests adverse to the interest of the Debtors' estates or of any class of creditors and equity security holders. Mr. Kaim maintains that K&S is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. Houston-based Bigler is a diversified petrochemical producer. Bigler has production and storage facilities on 271 acres on the Houston Ship Channel. The Company and its affiliates are engaged in a variety of operations within the chemical and petrochemical industries. The Companies currently have approximately 70 employees. The Companies' corporate headquarters are located at 1920 N. Memorial Way, Suite 201, Houston, Texas 77007. Bigler filed for Chapter 11 reorganization on October 30, 2009, in Houston (Bankr S.D. Tex. Case No. 09-38188), listing $233 million in assets against $151 million in liabilities. BIGLER LP: Schedules Filing Deadline Extended Until January 13 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, at the behest of Bigler LP, et al., extended the deadline to file schedules and statements of financial affairs until January 13, 2010. The Debtors had said that due to the size and complexity of their operations, they will be unable to compile all the information necessary for the preparation and filing of schedules and statements of financial affairs within 15 days after the Debtors' October 30, 2009 bankruptcy filings. According to the Debtors, employee efforts during the initial stages of this case are critical and should be focused on attending to the Debtors' businesses and operations to maximize the value of the Debtors' estates. The Debtors currently have several employees working diligently to assemble and collate the necessary information. The Debtors anticipated that they would need a minimum of 75 days within which to prepare and file their schedules and statements of financial affairs in the appropriate format. Houston-based Bigler is a diversified petrochemical producer. Bigler has production and storage facilities on 271 acres on the Houston Ship Channel. The Company and its affiliates are engaged in a variety of operations within the chemical and petrochemical industries. Bigler started as a trading and distribution company, but began a transition to a fully integrated manufacturer in 2004. Bigler LP filed for Chapter 11 reorganization on October 30, 2009, in Houston (Bankr S.D. Tex. Case No. 09-38188), listing $233 million in assets against $151 million in liabilities. BIGLER LP: Wants H. Malcolm Lovett as Chief Restructuring Officer ----------------------------------------------------------------- Bigler LP, Bigler Land, LLC, Bigler Petrochemical, LP, Bigler Plant Services, LP, and Bigler Terminals, LP, have asked for permission from the U.S. Bankruptcy Court for the Southern District of Texas to employ H. Malcolm Lovett, Jr., at Strategic Capital Corp. as chief restructuring officer. Mr. Lovett will provide certain financial advisory and managerial services as CRO. Mr. Lovett says that he will be paid $410 per hour, plus the reimbursement of necessary expenses. Mr. Lovett assures the Court that he doesn't have interests adverse to the interest of the Debtors' estates or of any class of creditors and equity security holders. Mr. Lovett maintains that he is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. Houston-based Bigler is a diversified petrochemical producer. Bigler has production and storage facilities on 271 acres on the Houston Ship Channel. The Company and its affiliates are engaged in a variety of operations within the chemical and petrochemical industries. The Companies currently have approximately 70 employees. The Companies' corporate headquarters are located at 1920 N. Memorial Way, Suite 201, Houston, Texas 77007. Bigler filed for Chapter 11 reorganization on October 30, 2009, in Houston (Bankr S.D. Tex. Case No. 09-38188), listing $233 million in assets against $151 million in liabilities. BON SECOUR: Sec. 341 Meeting Set for December 8 ----------------------------------------------- The U.S. Trustee for Region 6 will convene a meeting of Bon Secour Partners, LLC's creditors on December 8, 2009, at 10:00 a.m. at Dallas, Room 976. 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. Dallas, Texas-based Bon Secour Partners, LLC, filed for Chapter 11 bankruptcy protection on November 3, 2009 (Bankr. N.D. Tex. Case No. 09-37580). Gerrit M. Pronske, Esq., at Pronske & Patel, P.C., assists the Company in its restructuring effort. In its petition, the Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. BON SECOUR: List of Six Largest Unsecured Creditors ---------------------------------------------------- Bon Secour Partners, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Texas a list of its six largest unsecured creditors. A full-text copy of the Debtor's list of creditors is available for free at http://bankrupt.com/misc/txnb09-37580.pdf Dallas, Texas-based Bon Secour Partners, LLC, filed for Chapter 11 bankruptcy protection on November 3, 2009 (Bankr. N.D. Tex. Case No. 09-37580). Gerrit M. Pronske, Esq., at Pronske & Patel, P.C., assists the Company in its restructuring effort. In its petition, the Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. B.O.S. BETTER: Posts $2.7-Mil. Q3 Net Loss; In Waiver Talks ----------------------------------------------------------- B.O.S. Better Online Solutions Ltd. reported its results for the third quarter ended September 30, 2009. Financial highlights for the third quarter and first nine months ended September 30, 2009 (NON-GAAP): * Revenues for the third quarter and first nine months of 2009 amounted to $8.0 million and $25.1 million respectively, compared to $13.4 million and $41.4 million in the comparable periods in 2008. * EBITDA for the third quarter and first nine months of 2009 amounted to ($928,000) and ($1.6) million respectively, compared to ($110,000) and $468,000 in the comparable periods in 2008. * The Company's backlog is showing signs of recovery and amounted to $9.9 million in the third quarter of 2009, compared to $8.9 million in the second quarter. * The Company is implementing cost reduction measures in the fourth quarter of 2009. Revenues for the third quarter and first nine months of 2009 amounted to $8.0 million and $25.1 million respectively, compared to $13.4 million and $41.4 million respectively, in the comparable periods in 2008. The significant reduction in revenues is mainly attributed to the global economic crises. Revenues for the third quarter of 2009 remain at a similar level to those of the second quarter of 2009, which is a sign of stability after revenues fell consecutively in the first two quarters of 2009. The Company's management said that it is encouraged by the growth of its backlog during the third quarter of 2009. The Company's backlog dropped from a level of $12.1 million as of September 30, 2008 to $8.9 million as of June 30, 2009, but as of September 30, 2009, backlog increased to $9.9 million, and the trend continued in October 2009. In the first quarter of 2009, the Company implemented cost reduction measures, which included a reduction of 19% (29 employees) of the workforce. The drop in revenues in the first nine months of 2009 was stronger than the Company anticipated. BOS is now in the process of implementing additional cost-cutting measures, including an additional reduction of 14% (17 employees) of its workforce. "We believe that the recent sign of recovery in our backlog and the cost reduction program we are putting into place will improve our financial results going forward," said acting CEO Yuval Viner. Review of results on a GAAP basis: Gross profit for the third quarter of 2009 includes an inventory write-off in the amount of $1.3 million resulting from the overall global economic conditions and its impact on the Company's business operations. As a result, gross margin as a percentage of revenues was reduced to 5.1% in the third quarter, down from 22% in the same period last year. Operating loss for the third quarter and for the first nine months of 2009 amounted to $2.5 million and $4.9 million respectively, compared to operating losses of $409,000 and $576,000 for the same periods in 2008, respectively. The Company's operating loss for the first nine months of year 2009 includes an impairment of goodwill in the amount of $1.2 million. Other expenses for the third quarter and first nine months of 2009 amounted to $59,000 and $304,000 respectively, which consisted primarily of a further impairment of the Company's investment in New World Brands Inc. /quotes/comstock/11k!nwbd (NWBD 0.01, 0.00, -3.45%) in which BOS holds less than 20%. Net loss for the third quarter and first nine months of 2009 amounted to $2.7 million and $5.8 million respectively, compared to net loss of $830,000 and $909,000 in the comparable periods in 2008, respectively. As of September 30, 2009, cash and cash equivalents were $1.7 million and short term bank loans amounted to $12.9 million. Following the financial results of the third quarter, the Company is not in line with its financial covenants with its banks, and is currently discussing with the banks waivers and a redefinition of new financial covenants. As a result, long term bank loans in the amount of $1 million as of September 30, 2009, are presented under short term bank loans. On August 20, 2009, the Company announced that it closed a $2.4 million convertible loan financing with several lenders including Catalyst Private Equity Partners (Israel) II L.P., Telegraph Hill Capital Fund I, LLC, certain existing shareholders and members of its management. "Our performance in the third quarter and first nine months of 2009 was adversely affected by the global economic slowdown. Therefore, we have accelerated the implementation of a cost reduction program, which is already resulting in improved operating efficiency," said acting CEO Yuval Viner. "Equally important, we are putting in place an integration plan between the supply chain and RFID & mobile divisions in order to optimize the allocation of our resources amongst our divisions. We expect this will lead to better performance for the BOS group. We are also optimistic that the growth in backlog, compared to the first two quarters of 2009 is a sign that recovery is starting," said Avidan Zelicovsky, acting President. Edouard Cukierman, Chairman, added: "In addition to these measures, due to our growing product portfolio and expertise in the RFID market, we are well positioned to increase revenues and improve our operating results." About BOS B.O.S. Better Online Solutions Ltd. -- http://www.boscorporate.com/-- is a provider of RFID, mobile and supply chain solutions to global enterprises. BOS' proprietary BOServer, BOSaNova, RFID, mobile and supply chain offerings are being used to improve the efficiency of enterprise logistics and organizational monitoring and control systems of over 2,000 customers worldwide. With BOS solutions, companies are enhancing the automation of various aspects of their supply chain, improving asset tracking, and managing real-time business data, all crucial to improving margins in today's competitive marketplace. CANWEST GLOBAL: CEP Offers Itself as Union Members Representative ----------------------------------------------------------------- The Communications, Energy and Paperworkers Union of Canada seeks an order from the Ontario Superior Court of Justice: (a) appointing the Union to represent its current and former members, including pensioners and their beneficiaries, employed or formerly employed by Canwest Global Communications Corp. and the other applicants and partnerships -- the CMI Entities -- in the proceedings under the Companies' Creditors Arrangement Act; (b) appointing CaleyWray as representative counsel on behalf of the Union's Current and Former Members; (c) granting that reasonable legal, actuarial and financial expert and advisory fees and other incidental fees and disbursements, as may have been or will be incurred by the Union and their counsel, will be paid by the Applicants on a bi-weekly basis; and (c) declaring that the property of the Applicants is subject to a security or charge in the amount of C$200,000 in respect of the fees and expenses of the Union incurred in connection with retaining any financial, legal or other experts necessary in order to effectively participate in the CCAA proceedings. The scope of the representation Order requested by the Union does not encompass Former Members of CHCH TV, which are to be separately represented in the CCAA proceedings. The Union or CEP represents approximately 1,000 bargaining unit employees employed by the Applicants in Vancouver, Kelowna, Edmonton, Calgary, Lethbridge, Saskatoon, Winnipeg, Toronto and Ottawa and Halifax and New Brunswick. A principal function of the Union as exclusive bargaining agent of employees employed by the Applicants is the negotiation and administration of collective agreements. Employees and retirees are a vulnerable group of creditors in an insolvency because they have little means to pursue a claim in complex CCAA proceedings or other related insolvency proceedings, says Douglas J. Wray, Esq., at CaleyWray, in Ontario, Toronto. Mr. Wray relates that after issuance of the Initial Order, the Applicants stopped making payments to a number of the Union's Formers Members that were in receipt of salary continuance. Furthermore, the Applicants refused to continue a number of important proceedings, including a termination grievance and proceedings before the Canada Industrial Relations Board pertaining to the configuration of the Union's bargaining units. The Union has a substantial number of outstanding grievances against the Applicants that have been stayed by the Initial Order. The Initial Order may necessitate filing a large number of diverse and complex claims on behalf of the Current and Formers Members, Mr. Wray says. The Union intends to facilitate and advance the claims of its Current and Former Members. Mr. Wray avers that appointing a representative and having representative counsel will introduce efficiency to the process as having one representative for all Current and Former Members of the Union benefits the entire group of creditors and also the estate by avoiding multiple legal representations and proceedings. The practical reality is that a large-scale restructuring like the Applicants' may be unable to progress in an efficient manner without a Representation Order, he says. The large number of employees working or retired in multiple locations and provinces, and the concomitant pension and other complex issues, require effective and efficient advocacy, Mr. Wray adds. Applicants Object The CMI Entities take no position with respect to the appointment of the CEP Union as representative of the CEP Members or the appointment of CaleyWray as CEP Representative Counsel. However, the CMI Entities strongly oppose the granting of funding for the representation or the granting of a charge over their property in respect of the fees and expenses incurred for the representation. John E. McGuire, chief financial officer of Canwest Global Communications Corp. and Canwest Media Inc., relates that because all current and former CEP Members are being kept current in respect of salary, pension and post-retirement benefits -- with the exception of those union members who receive a pension under the CH Employees Plan and approximately nine CEP members who were recently terminated from their employment and have been advised that they will no longer receive salary continuance -- to the best of the knowledge of the CMI Entities, none of the CEP Members are creditors of the CMI Entities and none have claims against the CMI Entities. With no claims to be made against the CMI Entities, the CEP Members have no need to retain financial, legal or other experts to ensure their effective participation in the CCAA proceedings, Mr. McGuire adds. The CMI Entities submit that the fact that the CEP Union is experiencing declining membership and financial difficulties due to the economic crisis and its involvement in numerous CCAA proceedings is irrelevant to its funding request in the present case. The internal funding of the CEP Union's activities, and the fact that the CEP Union's former members do not pay dues, is not something that ought to be of concern to the CMI Entities. * * * The Honorable Justice Sarah E. Pepall has denied the CEP Union's Motion. Madam Justice Pepall pointed out that CEP intends to represent its current and former members, except for the CH Employees. But for this desire and subject to the agreement of Cavalluzzo LLP to act, there is no principled reason for separate representation. "It arises by choice not out of necessity. Furthermore, this is an insolvency," Madam Justice Pepall said. Madam Justice Pepall held that absent a clear and compelling reason including the existence of an obvious conflict of interest, the general rule should be that funding by applicant debtors should only be available for one representative counsel. Even if one disagrees with that proposition, in this case, the CMI Entities have paid and intend to continue to pay, amongst other things, salaries, current service and special payments with respect to the defined benefit pension plans and post-employment and post-retirement benefit payments, she said. Accordingly, Madam Justice Pepall was not persuaded that funding should be granted to pay for CEP's costs for outstanding grievances. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CANWEST GLOBAL: Submits List of Creditors to Canada Court --------------------------------------------------------- Canwest Global Communications Corp. and the other applicants and partnerships -- the CMI Entities -- submitted to the Ontario Superior Court of Justice a list of creditors who filed claims against the estate pursuant to the Creditors' Companies Arrangement Act. A copy of the 50-page list is available for free at http://bankrupt.com/misc/CanWest_CredsList1006.pdf About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CANWEST GLOBAL: CEP Union Asks for Bar Date Extension ----------------------------------------------------- The Communications, Energy and Paperworkers Union asks the Ontario Superior Court of Justice to extend the Claims Bar Date from November 19, 2009, to a date and time deemed appropriate by the Canadian Court. The CEP Union avers that the Canadian court has the jurisdiction and authority to extend the Claims Bar Date pursuant to Section 11 of the Companies' Creditors Arrangement Act. The Union submits that it is appropriate and in the interests of the stakeholders that it represents to have the Claims Bar Date extended. Douglas J. Wray, Esq., at CaleyWray, in Ontario, Toronto, tells the Canadian Court that the CEP Union does not have sufficient time to identify, value and process claims within the timeframe contemplated by the Claims Procedure Order. According to Mr. Wray, the Union has been unsuccessful in its attempts to secure the contact information of the Current and Former Members from the Applicants, which has had the effect of impeding its ability to assess the status of the Current and Former Member's claims. Accordingly, the CEP Union submits that it is appropriate for the Canadian Court to order that the Claims Bar Date be extended so as to enable the Union to effectively advance the interests of the Current and Former Members. Applicants Object The CMI Entities strongly oppose the CEP Union's request. John E. McGuire, chief financial officer of Canwest Global Communications Corp. and Canwest Media Inc., says that the CMI Entities have developed the Claims Procedure, and set the timeline contained therein, in order to advance the recapitalization process in accordance with the Key Dates and timeframe contemplated in the Support Agreement. According to Mr. McGuire, the Support Agreement requires the CMI Entities to take all steps reasonably necessary to obtain creditor approval of a plan of arrangement by no later than January 30, 2010, and to cause the plan of arrangement to be implemented by no later than April 15, 2010. If the Key Dates in the Support Agreement are not satisfied, the Support Agreement can be terminated and the Consenting Noteholders will no longer be under any obligation to support the Recapitalization Transaction. This is clearly not in the best interest of the CMI Entities, Mr. McGuire avers. * * * The Honorable Madam Justice Sarah E. Pepall has denied the CEP Union's Motion. Based on the evidence before her, Madam Justice Pepall said, she was not persuaded that an extension is necessary at this time. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CANWEST GLOBAL: CEP Union Asks for Lift Stay for Arbitration ------------------------------------------------------------ The Communications, Energy and Paperworkers Union of Canada ask the Ontario Superior Court of Justice for an order lifting the stay of proceedings, as provided in the Initial Order, permitting the Union to proceed with its arbitration proceeding against Canwest Global Communications Corp. concerning the termination of Vicki Anderson. The CEP Union also asks the Canadian Court to direct the Applicants to pay any debts incurred in respect of the services provided by Arbitrator Barry Levinson in connection with the grievance of Ms. Anderson. Vicki Anderson was terminated by CHCH Television effective July 27, 2007. The CEP Union filed a grievance on August 21, 2007, asserting that the CHCH Television did not have just cause to terminate the employment of Ms. Anderson. There have been eight days of hearing before Arbitrator Levinson. All evidence has been called and November 3, 2009, was scheduled for final argument. Douglas J. Wray, Esq., at CaleyWray, in Ontario, Toronto, relates that the Union has contacted counsel to CHCH Television requesting an agreement to permit the grievance hearing date to proceed notwithstanding the stay of proceedings provided for in the Initial Order. Mr. Wary says that no agreement has been reached permitting the grievance of Ms. Anderson to proceed. Mr. Wray avers that no prejudice to CHCH Television, any of the Applicants or any stakeholder would result from lifting the stay of proceedings to permit the grievance of Ms. Anderson to proceed. Mr. Anderson has been severely prejudiced by CHCH Television's decision to unjustly terminate her employment, Mr. Wray says. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CANWEST GLOBAL: Goldman Wants to Void 441's Shares Transfer ----------------------------------------------------------- GS Capital Partners VI Fund L.P., GSCP VI AA One Holding S.a.r.l, and GS VI AA One Parallel Holding S.a.r.l ask the Ontario Superior Court of Justice to issue an order: (a) setting aside and declaring void the transfer of the shares from 4414616 Canada Inc. to Canwest Media Inc. on or about October 5, 2009; (b) declaring that the rights and remedies of the GS Parties in respect of the obligations of 441 under a shareholders agreement are not affected by the Companies' Creditors Arrangement Act proceedings in any way whatsoever; and (c) setting aside or amending paragraph 59 of the Initial Order to the extent that it purports to declare that certain pre-filing transactions entered into by Canwest Global Communications Corp. and the other applicants and partnerships -- the CMI Entities -- do not constitute fraudulent preferences, fraudulent conveyances, oppressive conduct, settlements or other challengeable, voidable or reviewable transactions under any applicable law. The GS Parties assert that the transfer was (i) contrary to the terms of the Shareholders Agreement and consequently ineffective; (ii) fraudulent and void as against creditors or others; (iii) oppressive or unfairly prejudicial of the interests and rights of the GS Parties; and (iv) an abuse of the proceedings under the CCAA. In 2007, Canwest Global Communications Corp. approached GSCP and at least two other U.S. based leading private equity investors seeking financial support for its bid in the Alliance Atlantis Communications Inc. auction process and received proposals from them. Canwest chose the proposal made by GSCP and the parties successfully bid for all of the Alliance Atlantis assets. The Bid includes the acquisition of CW Investments Co. (Canada) of a specialty TV business from Alliance Atlantis, the "Specialty TV Business." These are the salient terms of the deal between GSCP and Canwest Global which enabled them to successfully acquire Alliance Atlantis: (a) GSCP would acquire, at its own expense and at its own risk, the slower growth businesses, including the film distribution business and the 50% interest in the CSI television series franchise; (b) CWI would acquire the Specialty TV Business, and CWI would be owned by 441 and the GS Holdcos under the terms of the Shareholders Agreement; (c) GSCP would assist CWI in obtaining separate financing for the Specialty TV Business; and (d) Eventually, Canwest Global would contribute the Conventional TV Business on a debt free basis to CWI in return for an increased ownership stake in CWI. In addition to their rights as shareholders, the GS Parties have the benefit of important contractual rights pursuant to the Shareholders Agreement entered into as of August 15, 2007, and amended and restated as of January 4, 2008. The GS Parties rely on the Shareholders Agreement to preserve the key business elements of their relationship with 441, CWI and Canwest Global. To allow CMI to increase its equity holding in CWI, the Shareholders Agreement requires CMI to cause the transfer of the Conventional TV Business to CWI in return for additional shares of CWI. The Shareholders Agreement limits the upside recovery by the GS Parties through "call rights" that allow CWI to purchase the shares held by the GS Parties at a price calculated by a pre- determined formula. The Shareholders Agreement provides a minimum return for the GS Parties through "put rights" exercisable by the GS Parties against CWI in 2011 through 2013. While ensuring control by 441, the Shareholders Agreement limits certain activities of CWI without the affirmative vote of a director nominated to the board of CWI by the GS Parties. In the event of the insolvency of CMI, the Shareholders Agreement permits the GS Parties to sell all of the shares of CWI. Throughout its dealings with the Specialty TV Business, GSCP fully accommodated the requests and requirements of the CRTC, in part through the terms of the Shareholders Agreement, and has fully supported the on-going operation of the Specialty TV Business under the control of Canwest Global through its subsidiary 441. In order to preserve the upside for Canwest Global, and to provide a minimum return for the GS Parties' equity investment, CWI was permitted to call the shares held by the GS Parties and the GS Parties were entitled to put their shares to CWI in installments from 2011 through 2013. The GS Parties put rights were a trade off both for CWI's right to call the shares held by the GS Parties in CWI and for Canwest Global's right to delay the contribution of the Conventional TV Business until Canwest could improve the financial performance of its Conventional TV Business. Through the Shareholders Agreement, 441, the wholly owned subsidiary of CMI, controlled CWI. Gerald J. Cardinale, managing Director of Goldman Sachs & Co., relates that the Shareholders Agreement was negotiated between the parties with specific consideration given to the parties' best interests in the event of an insolvency of Canwest Global. In particular, Canwest Global and the GS Parties agreed upon certain actions that would occur in the event of an insolvency of Canwest Global. Mr. Cardinale asserts that the transfer of the assets of 441 to CMI as part of the wind up of 441 improperly stayed the rights of GSCP in respect of obligations to be performed by 441 under the Shareholders Agreement including 441's obligations. Mr. Cardinale relates that 441 is a critical party to the Shareholders Agreement. It had no other assets or liabilities other than its shares in CWI and its obligations in respect of those shares to the GS Parties. As the shareholder, it was the party that implements the governance protections of the Shareholders Agreement. It is the party whose shares could be sold in accordance with Section 6.10 of the Shareholders Agreement, he said. According to Mr. Cardinale, in completing the winding up of 441, Canwest breached the provisions of the Shareholders Agreement as well as the Canada Business Corporations Act. The phrase "wind up" in this instance involved two steps, he said. First, 441 transferred its shares of CWI to its parent company CMI. This transaction was subject to restrictions on the transfer of the shares set out in the Shareholders Agreement. Second, 441 was dissolved under the CBCA provisions that permit companies to dissolve voluntarily if they have no assets, obligations or liabilities. Mr. Cardinale asserts that the wind up of 441 was oppressive and undoubtedly intended to impair the interests of the GS Parties because it transfers solvent 441's shares in CWI to insolvent CMI. Mr. Cardinale points out that 441 was not a guarantor of the Notes and, prior to the wind up of 441, the Noteholders had no claims against 441 or its shares in CWI. Mr. Cardinale adds that the wind up is also unfair purely from a process perspective because Canwest Global used the wind up of 441, just before it filed for protection from creditors, to advantage the Noteholders over the GS Parties, including by purporting to stay the rights of the GS Parties under the CCAA and subjecting 441's shares in CWI to the creditor claims by the Noteholders. Additionally, the conveyance of the shares of CWI owned by 441 to CMI did not comply with the restrictions on transfer of shares in CWI contained in the Shareholders Agreement, Mr. Cardinale argues. Given the timing of the assignment and the stay that immediately followed, it is hard to believe that CMI had any intention of performing the obligations of 441 under the Shareholders Agreement, Mr. Cardinale adds. "The formal dissolution of 441 ignored the express ongoing obligations of 441 under the Shareholders Agreement. Contrary to the false premise under which 441 was voluntarily dissolved, at the time of its dissolution, 441 had all of its contractual obligations and liabilities under the Shareholders Agreement," Ms. Cardinale maintains. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CANWEST GLOBAL: Monitor Reports on CCAA Updates ----------------------------------------------- FTI Consulting Canada Inc., the Court-appointed monitor under the proceeding under Companies' Creditors Arrangement Act filed by Canwest Global Communications Corp. and the other applicants and partnerships -- the CMI Entities -- updated the Ontario Superior Court of Justice with the Applicants' activities and other events occurring since October 6, 2009. Claims Procedure In accordance with the terms of the Claims Procedure Order, on October 22, 2009, the Monitor sent out 1,416 CMI Claims Packages to the CMI Known Creditors and 1,989 CMI Claims Packages to the CMI Employees. The Monitor also posted the CMI Claims Notice for two business days in each of The Globe & Mail, the National Post, La Presse and The Wall Street Journal in the period between October 16, 2009, and October 20, 2009. As of October 28, 2009, the Claims Procedure is unfolding as contemplated under the Claims Procedure Order. Pursuant to the Claims Procedure Order, the Monitor is directed to file a report with the Court detailing the nature and quantum of the Canwest Intercompany Claims by October 31, 2009. The Monitor has determined that it will not be possible to complete the report in that timeframe and will be requesting an endorsement of the Canadian Court to extend the time for completion of the report until November 30, 2009. Contract Disclaimers On October 13, 2009, in accordance with Section 32 of the CCAA and following consultation with the Chief Restructuring Officer, the CMI Entities requested the Monitor's consent to disclaim or resiliate an agreement between Canwest Television Limited Partnership and E! Entertainment Television Inc. In accordance with the provisions of the CCAA and the Canadian Association of Insolvency and Restructuring Professionals, Standard of Practice No. 095, Disclaimer or Resiliation of Agreements, the Monitor reviewed the E! Agreement and consulted with members of the CMI Entities' management in order to gain an understanding of the reasons for the proposed disclaimer, the financial benefits and costs to the CMI Entities resulting from the disclaimer, and the financial impact of not disclaiming the E! Agreement on the CMI Entities and the CCAA Proceedings. The Monitor also considered whether the resiliation of the E! Agreement would enhance the prospects of a viable compromise or arrangement being made in respect of the CMI Entities or otherwise benefit the CMI Entities' stakeholders as a whole. Following its review and consideration of the relevant factors, the Monitor provided its consent to the CMI Entities to resiliate the E! Agreement. The CMI Entities served the notice of disclaimer on E! on October 14, 2009. Pre-filing Payments to Certain Suppliers Pursuant to the Initial Order, the Monitor is directed to report to the Canadian Court with respect to any payments made in connection with amounts owing for goods and services actually supplied to the CMI Entities "by other suppliers, with the prior consent of the Monitor, if, in the opinion of the CMI Entities, the supplier is critical to the CMI Business and ongoing operations of any of the CMI Entities". As of October 18, 2009, the CMI Entities had paid a total of C$242,358 to four "other suppliers". All four suppliers are considered critical in the CMI Entities' opinion and all payments were made with the prior consent of and following discussions with the Monitor. Receipts and Disbursements to October 18, 2009 The CMI Entities' actual consolidated net cash outflow for the period from October 6, 2009, to October 18, 2009, was approximately C$16.6 million. A summary of the actual receipts and disbursements shows: For the Period from Oct. 6 to Oct. 18, 2009 Forecast Actual Operating Cashflow -------- ------ Receipts Receipts C$12,589,000 C$11,369,000 Intercompany Receipts 0 0 ----------- ----------- Total Receipts C$12,589,000 C$11,369,000 ----------- ----------- Disbursements Operating Disbursements (27,387,000) (23,950,000) Capital Expenditures (695,000) (69,000) Intercompany Disbursements 0 0 ----------- ----------- Total Disbursements (28,081,000) (24,019,000) ----------- ----------- Net Operating Cashflows (C$15,484,000) (C$12,650,000) ----------- ----------- Restructuring Costs Restructuring Costs (1,165,000) (2,248,000) DIP Interest/Fees 0 (1,395,000) ----------- ----------- Total Restructuring Costs (1,165,000) (3,643,000) ----------- ----------- Total Net Cashflow (16,649,000) (16,293,000) Opening Cash 47,810,000 84,285,000 DIP Advances 0 0 Other Advances 0 0 ----------- ----------- Ending Cash C$31,161,000 C$68,046,000 =========== =========== Greg Watson, senior managing director of FTI, relates that the actual net cash outflow was approximately C$356,000 less than the forecast. The significant items contributing to the positive variance are: (a) a net positive operating variance of approximately C$2.8 million in receipts and disbursements primarily as a result of: (i) a negative variance of C$2 million in receipts resulting from the delay in the transition of the business of the National Post Company; (ii) a positive variance of C$0.8 million in operating receipts resulting from timing of general collections; (iii) a positive variance of C$2.3 million related to obtaining better than expected payment terms from certain creditors; and (iv) a positive variance of C$1.8 million related to differences in timing of the receipt and payment of general invoices offset by higher disbursements resulting from the continued operation by CMI of the National Post Company; and (b) a negative variance of C$2.5 million related to restructuring costs, of which C$1.4 million related to the timing of the payment of fees for conversion of the CIT DIP facility. Mr. Watson adds that ending cash on hand at October 18, 2009, was approximately C$68 million representing a positive variance of approximately C$36.9 million compared to the Initial Forecast. Permanent positive variances totaled approximately C$5.8 million of which approximately C$1.5 million related to lower payroll and C$4.1 million related to lower general operating disbursements. The remaining positive timing variance of C$31.1 million related to delay in the receipt and payment of invoices from broadcast studios in the aggregate amount of C$15.7 million and delayed disbursements for general operating and capital expenditures in the amount of C$9 million. The CMI Entities expect that a portion of the variances will reverse in the future. Cash Flow Forecast The CMI Entities, with the assistance of the Monitor, submitted to the Canadian Court an updated consolidated forecast of their receipts, disbursements and financing requirements. A full-text copy of the Cash Flow Forecast for the period from October 19, 2009, through January 31, 2010, is available for free at http://bankrupt.com/misc/CanWest_WCFFOct19toJan31.pdf It is estimated that for the period of October 19, 2009, to January 31, 2010, the CCAA Entities will have total receipts of C$158.5 million, total operating disbursements of C$196.8 million, and total disbursements relating to the restructuring of C$8.8 million for net cash flow outflow of C$47.2 million. It is anticipated that the CCAA Entities' forecast liquidity requirements during the Cashflow Forecast Period will continue to be met by the funds advanced by Irish Holdco pursuant to the Irish Holdco Secured Note and no drawdown on the CIT Credit Facility is forecast during the Cashflow Forecast Period. In addition, pursuant to the CIT Credit Agreement, following the commencement of the CCAA Proceedings, the CIT Facility increased to a maximum of C$100 million, converted to a DIP facility, and was approved by the Court in the Initial Order. The CMI Entities' liquidity requirements since the date of the Initial Order were met by the funds advanced by Irish Holdco pursuant to the Irish Holdco Secured Note and as of October 18, 2009, there were no amounts drawn under the CIT Facility. On October 16, 2009, the Monitor also submitted to the Canadian Court a Weekly Cash Flow Forecast for the period from October 5, 2009, through January 13, 2009. The purpose of the cash flow projections is to determine the liquidity requirements for the CCAA Entities during the CCAA proceedings. The Monitor disclaims that since the Cash-Flow Statement is based on assumptions regarding future events, actual results will vary from the information presented even if Hypothetical Assumptions occur, and the variations may be material. Accordingly, the Monitor expresses no assurance as to whether the Cash-Flow Statement will be achieved. The Monitor expresses no opinion or other form of assurance with respect to the accuracy of any financial information presented in the Cash-Flow Statement. Accordingly, the Applicants' investors are cautioned that the Cash-Flow Statement may not be appropriate for other purposes. A full-text copy of the Cash-Flow Statement is available for free at http://bankrupt.com/misc/CanWest_WCFFOct5toJan13.pdf 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). CARE FOUNDATION: Wants Solicitation Period Extended Until March 20 ------------------------------------------------------------------ Care Foundation of America, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Tennessee to extend until March 30, 2010, its exclusive period to obtain acceptance of their Joint Plan of Reorganization. A hearing on the request for a second extension has been scheduled for Nov. 24, 2009, at 9:00 a.m. Objections, if any, are due on Nov. 23, at 4:00 p.m. Based in Nashville, Tennessee, Care Foundation of America, Inc., is a nonprofit corporation. Care Foundation and its affiliates each own certain real estate, improvements, and fixtures in the Tampa Bay, Florida that each one in turn leases to Health Services Management, Inc., and its wholly owned subsidiaries for use as a skilled nurning facility. The facilities are known as Ayers Health & Rehabilitation Center, Brooksville Healthcare Center, Bear Creek Nursing Center, Heather Hill Healthcare Center, Royal Oak Nursing Center, and as Cypress Cove Care Center. The Company and five affiliates filed separate petitions for Chapter 11 relief on December 31, 2008 (Bankr. M.D. Tenn. Lead Case No. 08-12367). David E. Lemke, Esq., at Waller Landsden Dortch & Davis, represents the Debtors as counsel. When the Debtors filed for protection from their creditors, they listed total assets of between $50,000,000 and $100,000,000, and total debts of between $1,000,00 and $10,000,000. CAUDELL-WHITE: Case Summary & 3 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Caudell-White Properties, LLP c/o Webb Tanner Powell Mertz & Wilson P.O. Box 1390 Lawrenceville, GA 30046 Bankruptcy Case No.: 09-24821 Chapter 11 Petition Date: November 10, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Gainesville) Debtor's Counsel: J. Robert Williamson, Esq. Scroggins and Williamson 1500 Candler Building 127 Peachtree Street, N.E. Atlanta, GA 30303 Tel: (404) 893-3880 Email: rwilliamson@swlawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ganb09-24821.pdf The petition was signed by Robert L. White, manager of the Company. CHRYSLER LLC: Agrees to Stay Relief for Mady Dispute Ruling ----------------------------------------------------------- In May 2003, Edmund Mady leased a 2003 Dodge Viper manufactured by Old Carco. Thereafter, Mr. Mady filed suit in the 15th Judicial Circuit of Florida against Old Carco for breach of written and implied warranties, pursuant to the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act. On December 29, 2005, Mr. Mady accepted a proposal for settlement of the Consumer Action and subsequently moved for an award of attorneys' fees and costs. The Trial Court denied the Costs Motion and Mr. Mady appealed the Costs Order to Florida's Fourth District Court of Appeals. On March 26, 2008, the Court of Appeals affirmed the Costs Order. Mr. Mady appealed the Court of Appeals Ruling to the Supreme Court of Florida. In the Mady Appeal, both parties submitted briefs, and oral argument was held on March 12, 2009. As of the Petition Date, the Supreme Court of Florida had not yet issued any ruling on the Mady Appeal. On May 22, 2009, Old Carco filed a Notice of Suggestion of Bankruptcy in the Mady Appeal, and on May 27, 2009, the Supreme Court of Florida ordered the Mady Appeal stayed pending the disposition of the Debtors' bankruptcy cases. In a stipulation, the Parties agreed that the Stay is modified solely to the limited extent necessary to allow the Supreme Court of Florida to issue a Ruling with respect to the Mady Appeal, provided, however, that the Parties' Stipulation will not authorize, or be deemed or construed to authorize, either the Debtors or Mr. Mady to: (a) take any further action with respect to the Mady Action before the Supreme Court of Florida or in any other forum, including seeking or filing any supplemental briefs or additional filings in the Supreme Court of Florida; (b) pursue or prosecute any further proceedings or action after the Ruling is issued, whether upon remand or otherwise; or (c) prosecute any other litigation against the Debtors without first obtaining further relief from the Stay. Mr. Mady has indicated that he seeks a ruling from the Supreme Court of Florida to clarify certain legal issues for future cases involving other parties and, if he is successful in the Supreme Court of Florida, to help determine the amount of any monetary claim that may be awarded in the Mady Action for use in filing a proof of claim against the Debtors. With respect to the Debtors, the Ruling will be used for the sole and exclusive purpose of filing a prepetition claim, if any, against the Debtors arising out of the Mady Action. Any Prepetition Claim may be asserted by Mr. Mady solely by filing a proof of claim evidencing Old Carco's asserted indebtedness. The Ruling will not be used against the Debtors by any entity for any other purpose. For the avoidance of doubt, the Ruling will not be used to challenge the Sale Opinion, the Sale Order, the Lemon Law Provision or the impact of any of the foregoing. About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Committee Says Daimler Probe Fees Should be Approved ------------------------------------------------------------------ The United States of America, through the United States Department of Treasury previously objected to the May to August 2009 monthly fee applications of these professionals retained by the Official Committee of Unsecured Creditors with respect to the complaint the Committee filed against Daimler AG: -- Kramer Levin Naftalis & Franel LLP; -- Mesirow Financial Consulting LLC; and -- Pachulski Stang Ziehl & Jones LLP. Subsequently, the Committee filed its response to the U.S. Trustee's objection. Through its counsel, Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, the Committee relates that the Committee conducted the Daimler Investigation only because the Treasury agreed that it could do so. Mr. Mayer says that the Treasury never objected to the Committee's conducting of the Daimler Investigation or bringing of litigation resulting from the investigation. He adds that the Treasury did not object to the payment of Daimler Investigation Fees until after the Daimler Investigation was completed. Accordingly, by its actions, the Treasury has already agreed to the payment of these fees and expenses, Mr. Mayer submits. The Committee notes that the Treasury is of course entitled object to the amount of the Daimler Investigation Fees. However, the Committee submits that the approximately $3.6 million -- which represents fees and disbursements in respect of the Daimler Investigation for two law firms and one financial advisor -- is amply justified. The Committee further notes that it had only 45 days to investigate Daimler's two-year effort to sell Chrysler and the intricate 48-step transaction that, as part of the sale, accomplished the separation of Chrysler Financial LLC from the Debtors. The Daimler Investigation resulted in a complaint seeking billions in damages from Daimler -- a complaint three eminent firms competed for the right to bring, on a contingent-fee basis, Mr. Mayer tells the Court. He further contends that the Court granted the Committee authority to bring the litigation on behalf of Chrysler's estate and that the Treasury has yet to advance any reason why the Committee Daimler Fees are unreasonable. For these reasons, the Committee asks the Court to overrule the Treasury Objections and allow the Committee Professionals' fees on an interim basis, and order the Debtors to pay the Committee Professionals for the Daimler Investigation Fees. Court Allows Fees The Court has allowed the fees and reimbursement of expenses for these professionals for these periods: Professional Period ------------ ------ Jones Day 04/30 to 08/31/09 Togut Segal & Segal LLP 09/01 to 09/30/09 Capstone Advisory Group LLC 04/30 to 08/31/09 Dykema Gossett PLLC 05/01 to 08/31/09 Cahill Gordon & Reindel LLP 05/01 to 08/31/09 About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Stipulation Amending Master Transaction Pact ---------------------------------------------------------- Chrysler LLC, now known as Old CarCo LLC, and its debtor affiliates notify Judge Gonzalez and parties-in-interest that they will present to the Court a stipulation and agreed order approving Amendment No. 4 to the Master Transaction Agreement, dated as of April 30, 2009, among Old Carco LLC, formerly known as Chrysler LLC; Fiat S.p.A.; and Chrysler Group LLC, formerly known as New CarCo Acquisition LLC. Pursuant to the Purchase Agreement, Chrysler Group acquired substantially all of the assets of the Debtors in a sale transaction that was consummated on June 10, 2009. Under the stipulation and order, parties to the Purchase Agreement agreed to authorize the Debtors to enter into the MTA Amendment, dated as of October 29, 2009. Pursuant to and as set forth in the MTA Amendment, among other things: (a) Section 2.08(h) of the Purchase Agreement is amended in its entirety to add certain Product Liability Claims as Assumed Liabilities; and (b) Section 2.09(i) of the Purchase Agreement is amended to include as Excluded Liabilities all Product Liability Claims arising from the sale of Products or Inventory on or prior to the Closing that are not described in Section 2.08(h) of the Purchase Agreement, as amended by the MTA Amendment. A copy of the MTA Amendment is available for free at: http://bankrupt.com/misc/Chrysler_MTA_Amendment_102909.pdf The MTA Amendment has been approved by the Court. P. Pascale Objects Prior to the Court's approval of the Stipulation, Patricia Pascale, plaintiff in a wrongful death case against the Debtors, tells Judge Gonzalez that she supports the stipulation and agreed order insofar as it approves amendments to the Purchase Agreement that provide for New Chrysler's assumption of certain Product Liability Claims. However, she notes, the proposed amendments expressly exclude future asbestos demands from the assumed liabilities of New Chrysler. The exclusion of future asbestos demands is improper to the extent that it purports to affect, in any way, the rights of future asbestos demand holders to seek relief from New Chrysler, as contemplated by the Second Circuit in its August 5, 2009, opinion affirming the Court's order authorizing the sale of substantially all of the Debtors' assets, Ms. Pascale argues. She insists that the stipulation and the proposed amendments should not exclude future asbestos demands from the assumed liabilities of New Chrysler. "At the very least, the [stipulation] and the Purchase Agreement should make explicit that each is neutral as to future asbestos demands so that New Chrysler (or any other party) cannot later rely on the [stipulation] or the amendments to the Purchase Agreement to try to modify or avoid the import of the Second Circuit's August 5, 2009 ruling," Ms. Pascale contends. Ms. Pascale further objected to the Debtors' attempt to have the Court sign the stipulation on just three days' notice to parties- in-interest. She argued that the schedule proposed by the Debtors for the Court's consideration of the matter does not provide parties with adequate notice and a fair opportunity to object to the relief provided. She added that the Debtors have provided no valid explanation as to why the stipulation must be entered on a hurried basis. About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Stipulation Settling NC-M Chassis Disputes -------------------------------------------------------- On May 27, 2009, NC-M Chassis Systems LLC's parent company, known as Metaldyne Corporation and certain of its affiliates, including NC-M Chassis Systems LLC, filed for Chapter 11 protection in the U.S. Bankruptcy for the Southern District of New York. Prior to Chrysler's Petition Date, and the Metaldyne Petition Date, Old Carco LLC f/k/a Chrysler LLC entered into various supply agreements or releases issued by Old Carco and accepted by Metaldyne pursuant to which Metaldyne was obligated to manufacture Old Carco's requirements of certain components parts, service parts, and assembled goods. Old Carco and Metaldyne Corporation, on behalf of itself and its domestic and Canadian controlled affiliates and subsidiaries, among other parties, executed an "Accommodation Agreement" on May 2009, which set out the financial and other accommodations between the parties to the Accommodation Agreement. The Accommodation Agreement was approved by both the Metaldyne Bankruptcy Court and the Chrysler Bankruptcy Court as a postpetition agreement. Old Carco, retroactive as of June 11, 2009, intends to assume and assign to New Chrysler the Accommodation Agreement and is submitting a "Stipulation and Agreed Order for Assumption and Assignment to Chrysler Group LLC of Accommodation Agreement, Related Purchase Orders, and Access and Security Agreement related to Metaldyne Corporation et al." for approval by the Chrysler Bankruptcy Court. Subsequently, the Parties entered into an NC-M Production Contract on May 27, 2009, which was approved by both the Metaldyne Bankruptcy Court and the Chrysler Bankruptcy Court as a postpetition agreement. By this stipulation, Old CarCo identifies New Chrysler as its designee for purposes of exercising any and all rights of a designee under the NC-M Agreement, including without limitation the option to purchase certain equipment, in consideration for New Chrysler's agreement to make certain payments and otherwise assume certain obligations of Old Carco under the NC-M Agreement. The Parties' Settlement Terms include a provision that, in exchange for consideration which the Parties acknowledge to be sufficient, including but not limited to the assignment to New Chrysler of Old Carco's Options under the NC-M Agreement, New Chrysler has agreed to pay certain amounts to satisfy certain obligations of Old Carco. The Parties agree that many of the provisions of the Settlement Terms constitute an ordinary course business transaction in the automotive industry, which may not even be compromises subject to approval under Rule 9019 of the Federal Rules of Bankruptcy Procedure. In addition, Old Carco submits that many of the provisions of the Settlement Terms, including the option to purchase Designated Equipment, were contemplated by the estates and specifically provided for in the Accommodation Agreement, which has already been approved by the Court pursuant to an order entered on May 20, 2009. However, out of an abundance of caution, the Parties are seeking the Court's approval of the Settlement Terms. In their stipulation, the Parties agreed that Settlement Terms, including schedules and exhibits will be approved, nunc pro tunc to October 30, 2009. A copy of the Settlement Terms is available for free at: http://bankrupt.com/misc/ChrysNC-mTerms.pdf In a separate stipulation, Metaldyne has agreed that, there are no amounts that must be paid to cure any defaults under the Designated Agreements. However, Metaldyne reserves and does not waive its rights to assert Old Carco's breach of the Designated Agreements defensively for set-off purposes or recoupment against amounts owed to New Chrysler or Old Carco by Metaldyne or its successors and assigns, including purchasers of its accounts receivable, but only to the extent the set-off or recoupment rights arise in connection with or under the Designated Agreements. About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIT GROUP: Gets Interim Nod for Deal on Status Quo of JPM Facility ------------------------------------------------------------------ Prior to the Petition Date, CIT Group, Inc., and JPMorgan Chase Bank, N.A., as administrative agent, entered into a five-year Letter of Credit Issuance and Reimbursement Agreement, dated May 23, 2005, through which a $750 million standby letter of credit facility was extended by a syndicate of approximately 27 banks, with JPMorgan being the lead bank. As of the Petition Date, the Debtors had drawn approximately $350 million on the JPM L/C Facility. The L/Cs outstanding under the JPM L/C Facility were primarily requested by CIT's non-Debtor affiliates (i) on behalf of a customer needing a letter of credit for its business purposes, and (ii) to assure payment of obligations to an existing customer. The orderly and continued administration of the letters of credit outstanding under the JPM L/C Facility is thus essential to CIT and its non-Debtor affiliates to allow for continued effective operations and maintenance of customer relationships, Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, tells the Court. Mr. Galardi relates that JPMorgan asserted, prior to the Petition Date, conditions to issuance, renewal extension, or increase of letters of credit under the JPM L/C Facility "may not have been satisfied or may have been subject to dispute." Thus, CIT entered into the Cash Collateral Agreement dated October 6, 2009, with JPMorgan and certain other parties to the JPM L/C Facility Agreement in order to induce JPMorgan and the Lenders to continue to issue new L/Cs under the JPM L/C Facility Agreement, to renew or extend letters of credit previously issued that would otherwise expire, and to increase any Letter of Credit previously issued under the JPM L/C Facility. Pursuant to the Cash Collateral Agreement, CIT deposited approximately $100,000,000 with JPMorgan under the JPM L/C Facility, as cash collateral for subsequently issued letters of credit. Prior to issuing letters of credit on behalf of the CIT, its non-Debtor subsidiaries, the party requesting the letter of credit, was required to co-sign an application, "to be jointly and severally liable with CIT for any reimbursement obligation arising from the drawing of [that] letter of credit." In addition, CIT reached agreement with the counter-parties to the JPM L/C Facility with respect to the treatment of claims arising under the Facility under the Debtors' Prepackaged Plan of Reorganization, according to Mr. Galardi. JPMorgan further asserted that as a result of the Chapter 11 cases, no letter of credit under the JPM L/C Facility Agreement can be issued, renewed, extended, or amended after the Petition Date, Mr. Galardi notes. In this regard, CIT sought the Court's permission to enter into and perform under the terms of a stipulation in order to avoid the deleterious effects of further disputes and preserve the status quo with respect to the JPM L/C Facility until the final settlement embodied in the Plan can be effectuated. The Court has entered interim approval on the stipulation entered into by CIT Group, Inc., and JPMorgan Chase Bank. The automatic stay provisions of Section 362 of the Bankruptcy Code are vacated and modified, consistent with the terms of the Stipulation, Judge Gropper ruled. The Court will convene a hearing on November 23, 2009, at 2:30 p.m. (prevailing Eastern Time) to consider approval of the Stipulation on a final basis. Terms of the JPM L/C Facility Stipulation The key terms of the Stipulation between CIT and JPMorgan are: (1) JPMorgan will retain possession of the Cash Collateral for the duration of the Chapter 11 cases and until the consummation of the Plan, including the $400,000 retainer for counsel specified in the Cash Collateral Agreement. (2) To the extent of any drawings on letters of credit under the JPM L/C Facility after the Petition Date but before the effective date of the Plan, to the extent JPMorgan holds Cash Collateral supporting the drawn Letter of Credit, JPMorgan will be authorized to apply the Cash Collateral to the reimbursement obligations arising from that drawing. Otherwise, the Debtor will pay or cause to be paid the reimbursement obligation in full when due in accordance with the L/C Facility Agreement. (3) The automatic stay under Section 362 of the Bankruptcy Code will be lifted to the extent necessary to permit the applications of Cash Collateral and payments. (4) All claims for reimbursement obligations arising from drawings of letters of credit -- the LC Claims -- will be allowed and classified as a separate class. Upon the effective date of the Plan, (i) the Debtor will deliver or cause to be delivered to JPMorgan cash collateral in an amount not to be less than 103% of the total outstanding letters of credit on the effective date, and (ii) any claims of the Debtors, their estates, subsidiaries, or affiliates against the lender parties with respect to the L/C Facility Agreement, will be forever released. On the effective date of the Plan and the delivery to the Issuing Bank of the cash collateral, JPMorgan will release and discharge the Applicants and Account Parties, other than CIT, for any then existing or thereafter arising reimbursement obligations. On or before the effective date, all fees and other charges owing from CIT to JPMorgan under or in respect of the JPM L/C Facility will be paid in full. (5) The Stipulation will terminate automatically upon (i) the effective date of the Plan, (ii) the treatment under the Plan of the claims arising out of the JPM L/C Facility Agreement will be modified, (iii) the failure of the Court to approve the Stipulation by November 6, 2009, or the the Court's reinstitution of the Stay, (iv) the material breach by either party of any of its obligations under the Stipulation, or (v) and action by CIT to institute litigation seeking to restrain JPMorgan from pursuing any remedy against the Applicants or Account Parties. (6) Until the Termination Date, so long as CIT complies with its obligations under the Stipulation, JPMorgan will forbear from pursuing any non-Debtor Applicant or Account Party for any reimbursement obligation under the JPM L/C Facility Agreement for which either of them may be alleged to be liable. The Stipulation does not require CIT to post any collateral additional to that already provided, and would accordingly serve as "the most efficient and cost-effective means of bridging the gap between the Petition Date and the consummation of the proposed Plan's final settlement of disputes arising under the JPM L/C Facility," Mr. Galardi tells the Court. In this regard, the Stipulation will provide a seamless and well- managed transition into Chapter 11 restructuring for the JPM L/C Facility and will thus minimize disruption to CIT and its estate, Mr. Galardi avers. 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: Gets Nod for Kurtzman Hiring as Claims Agent ------------------------------------------------------- CIT Group, Inc., and CIT Group Funding Company of Delaware LLC anticipate that there will be hundreds of thousands of creditors and other parties-in-interest involved in their Debtors' Chapter 11 cases. To relieve the Office of the Clerk of the Bankruptcy Court for the Southern District of New York of potential burdens imposed by notice servicing and claims administration, the appointment of an outside noticing and claims agent will be effective and efficient. The Debtors obtained the Court's permission to employ Kurtzman Carson Consultants to serve as noticing and claims agent in their Chapter 11 cases. Having acted as the official noticing and claims agent in numerous bankruptcy cases, KCC is well-qualified to provide noticing and claims administration services to the Debtors and permit them to focus on their reorganization efforts, Eric Mandelbaum, senior vice president and deputy general counsel at CIT, relates. As the Noticing and Claims Agent, KCC will: (a) prepare and serve required notices in these Chapter 11 cases, including: (i) a notice of the commencement of these Chapter 11 cases; (ii) notices of any hearings on the Disclosure Statement and confirmation of the Prepackaged Plan of Reorganization; (iii) a notice of the initial meetings of creditors and equity holders under Section 341 of the Bankruptcy Code, if necessary; and (iv) notice of objections to claims; (b) maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs; (c) provide access to the public for examination of copies of the proofs of claim or proofs of interest filed in the Chapter 11 cases; (d) furnish a notice of the last date for the filing of proofs of claim and a form for the filing of a proof of claim, as the Court may approve; (e) file with 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 and manner mailed; (f) docket all claims received by the Clerk, maintain the official claims registers for each Debtor on behalf of the Clerk, and provide the Clerk with certified duplicate, unofficial Claims Registers on a monthly basis, unless otherwise directed; (g) specify, in the applicable Claims Register, information for each claim docketed, including (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; (h) record all transfers of claims, pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure and provide any notices of the Transfers; (i) Relocate, by messenger, all of the actual proofs of claim filed with the Court to KCC, not less than weekly, if necessary; (j) upon completion of the docketing process, turn over to the Clerk copies of the Claims Register for the Clerk's review; (k) make changes in the Claims Registers pursuant to any Court orders; (l) maintain the official mailing list for each Debtor of all entities that have filed a proof of claim, which will be available upon request by a party-in-interest or the Clerk; (m) assist with, among other things, solicitation and calculation of votes and distribution as required in furtherance of confirmation of the Plan; (n) file with the Court the final version of the Claims Register immediately before the closing of the Chapter 11 cases, if necessary; and (o) At the close of the case, box and transport all original documents, in proper format, as provided by the Clerk, to: The Federal Archives Record Administration Central Plains Region 200 Space Center Drive Lee's Summit, MO 64064 Pursuant to an engagement letter between the parties, the Debtors will pay KCC's professionals based on these hourly rates: Professional Hourly Rate ------------ ----------- Clerical $45 to $65 Project Specialist $80 to $140 Consultant $165 to $245 Senior Consultant $255 to $275 Senior Managing Consultant $295 to $325 Technology/Programming Consultant $145 to $195 The Debtors will also reimburse KCC for out-of-pocket expenses that it may incur. Michael J. Frishberg, vice president of Corporate Restructuring Services of KCC, neither holds nor represents any interest adverse to the Debtors' estates in connection with any matter on which it would be employed. Accordingly, KCC is a "disinterested person," within the meaning of Section 101(14) of the Bankruptcy Code. 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: Hearing on Injunction vs. Railcar Lessors Nov. 13 ------------------------------------------------------------ The Bankruptcy Court directs the Railcar Lessors and the Indenture Trustees to show cause before Judge Allan L. Gropper of the United States Bankruptcy Court for the Southern District of New York, at a telephonic conference on November 13, 2009, at 3:00 p.m. (prevailing New York Time), why the Court should not enter an order: (i) granting a preliminary injunction precluding Defendants, their agents, attorneys, accountants, parents, affiliates, subsidiaries, successors, transferees or assigns, and all persons acting in concert or participation with any of them, based on an event of default triggered by CIT Group, Inc.'s bankruptcy filing, from exercising against The CIT Group/Equipment Financing, Inc., its property or other interests, any remedies -- other than the demand for payment of Stipulated Loss Value and any other amounts due and payable under the Headleases -- under certain "lease in, lease-out" transactions of railcars during the pendency of the Debtors' Chapter 11 cases or, in the alternative, (ii) extending and applying the automatic stay under Section 362(a) of the Bankruptcy Code to stay the enforcement of Additional Default Remedies against CIT-EF, its property or other interests. The Lessor Defendants are M&T Credit Services, LLC; Siemens Financial Services, Inc.; Fifth Third Leasing Company; Wells Fargo Bank Northwest, N.A.; Wells Fargo Bank, N.A.; INEOS Polymers, Inc.; Wells Fargo Equipment Finance, Inc.; North America Rail Leasing #2 LLC; and BNY Midwest Trust Company. The Indenture Trustee Defendants are Manufacturers and Traders Trust Company and Wilmington Trust Company. Pending a hearing and determination on the Motion, the Enjoined Parties will be temporarily restrained from exercising any of the Additional Default Remedies against CIT-EF, its property or other interests. As stated on the record at the November 3 TRO Hearing, several of the Defendants and other transaction parties have consented to the entry of the Show Cause Order on these terms: A. If the appropriate parties seek payment of Stipulated Loss Value under their applicable transaction documents and in accordance with the transaction documents, CIT-EF will pay the Stipulated Loss Value and other amounts owing under the transaction documents to the transaction parties on the first applicable payment date under the relevant transaction documents so long as the transaction parties satisfy the applicable conditions precedent to the payment under the transaction documents. B. If the transaction parties seek payment of Stipulated Loss Value and other amounts owing under the transaction documents before November 30, 2009, and the transaction parties satisfy all conditions precedent under the applicable transaction documents and Stipulated Loss Value and other amounts owing under the transaction documents are not paid by the first applicable payment date, the restraining order, Stay Extension, and any preliminary and final injunction will immediately terminate without further action by any of the parties or order of the Court. C. The delivery of any notices or other actions required to obtain or facilitate the payment of Stipulated Loss Value under the relevant transaction documents will not be enjoined under the TRO, Stay Extension, or any preliminary and final injunction and will not be deemed a violation of the automatic stay under Section 362(a). D. The TRO, Stay Extension, and any preliminary and final injunction will not apply to aircraft. E. The TRO, Stay Extension, and any preliminary and final injunction will not alter or amend any rights and obligations under the transaction documents except as specifically set forth in the TRO, Stay Extension, and any preliminary and final injunction. F. The Debtors and CIT-EF do not intend to pay to the transaction parties any amounts in excess of Stipulated Loss Value and any other amounts due and owing under the applicable transaction documents. G. All parties reserve all rights with respect to extension of the TRO or entry of the preliminary injunction, or extension of the automatic stay, as well as the calculation of any amounts owing under the transaction documents. Pursuant to Rule 7065 of the Federal Rules of Bankruptcy Procedure, the security provisions of Rule 65(c) of the Federal Rules of Civil Procedure are waived. Any objection to the Motion must be filed with the Court no later than 4:00 p.m. (prevailing New York time) on November 10, 2009. The Lawsuit CIT Group, Inc., and CIT Group Funding Company of Delaware LLC filed an adversary proceeding, assigned as Case No. 09-01713, seeking a preliminary injunction precluding lessors and indenture trustees under "lease-in, lease-out" transactions of railcars from exercising remedies against CIT's non-debtor subsidiary The CIT Group/Equipment Finance, Inc., its property or other interests. The Lessor Defendants are M&T Credit Services, LLC; Siemens Financial Services, Inc.; Fifth Third Leasing Company; Wells Fargo Bank Northwest, N.A.; Wells Fargo Bank, N.A.; INEOS Polymers, Inc.; Wells Fargo Equipment Finance, Inc.; North America Rail Leasing #2 LLC; and BNY Midwest Trust Company. The Indenture Trustee Defendants are Manufacturers and Traders Trust Company and Wilmington Trust Company. In the alternative, the Debtors ask the Court to extend and apply the automatic stay under Section 362(a) of the Bankruptcy Code to stay the enforcement of the Additional Default Remedies against CIT-EF, its property or other interests. CIT Group, Inc., through various subsidiaries, including CIT-EF, among other things, operates railcar and locomotive leasing fleets, covering most bulk industries in North America. This business line of CIT is commonly referred to as "CIT Rail." Each of CIT Rail's Headlease Transactions consists of two leases: a headlease and a sublease. In each Headlease Transaction, CIT-EF enters into or assumes an equipment headlease with a lessor for the lease of Leased-In Railcars. CIT-EF then enters into various subleases with its customers, whereby CIT-EF leases to them the Leased-In Railcars associated with the Headlease Transactions. As of September 2009, there are approximately 28,493 Leased-In Railcars in CIT and its affiliates' railcar fleet, and the contractual rents owed to CIT-EF under the Subleases with respect to the Leased-In Railcars were approximately $12.8 million per month. Presently, CITEF maintains 41 separate Headlease Transactions. Specifically, each of the 20 CIT Rail Trust Headleases provides that if at any time, the credit rating with respect to CIT's senior unsecured indebtedness falls below BBB by Standard & Poor's Rating Services or Baa2 by Moody's Investors Service, Inc., then all existing Subleases will, at CIT-EF's election, be either (i) subject and subordinate to the Headlease, or (ii) assigned to the Lessor as security for CIT-EF's obligations under the Headlease. On April 24, 2009, a downgrade event occurred, as S&P downgraded CIT's unsecured debt rating from BBB to BBB- and Moody's downgraded CIT from Baa2 to Ba2. As a result, on or about June 17, 2009, CIT-EF sent a Notice of Downgrade Event to each Lessor, stating that CIT-EF had elected to assign Subleases to the Leased-In Railcars to the Lessor as security for CIT-EF's obligations under each of the Headleases. Each Headlease provides that CIT's filing of a bankruptcy case is an event of default under the Headlease. In turn, each Indenture provides that the Event of Default under the Headlease operates as an event of default under the Indenture. The occurrence of an Event of Default will permit the Lessors and Indenture Trustee to seek to effectuate certain remedies and other default remedies. Under each of the Headleases, following an Event of Default, the Lessor is entitled to demand a liquidated damages payment equal to a stipulated loss value. Stipulated Loss Value is generally designed to allow the Lessor to: (i) repay indebtedness incurred under the Indenture or otherwise in connection with the Headlease Transaction; (ii) recoup the equity investment made by the Lessor or Owner Participant as well as a return; and (iii) provide additional compensation for certain adverse tax consequences as a result of the acceleration of income resulting from the early termination of the Headlease. The aggregate Stipulated Loss Values for the Leased-In Railcar fleet under the Headlease Transactions is approximately $1.65 billion. If Stipulated Loss Value is demanded and paid, the Lessor would be required to mitigate its damages, which could include the transfer of all right, title and interest in the Leased-In Railcars to CIT-EF. Significantly, whether or not the Lessor demands payment of Stipulated Loss Value, the Lessor also may, as part of its Additional Default Remedies, take effective control of the Railcars involved in its Headlease Transaction by: (i) terminating the Headlease; (ii) requiring the return and storage of Leased-In Railcars that are not subject to Subleases; and (iii) with respect to those Railcars that are subject to Subleases, foreclosing upon CIT-EF's rights and interests in the Subleases. Upon the Event of Default triggered by the bankruptcy filing, the Indenture Trustee and Security Trustee are empowered under the Indentures and Security Agreements to control the Lessor's exercise of the Additional Default Remedies under the Headlease. The Indenture Trustee or the Security Trustee generally acts on the instruction of the majority in interest of the Loan Participants under the specific Headlease Transaction for which it acts as trustee. As a further consequence of the Event of Default, the Indenture Trustees under leveraged leases called the Bombardier Leveraged Leases and the Lessors under the applicable Bombardier Single- Investor Leases, may issue the Payment Direction Letters to the Sublessees whereby Sublessees would be instructed to pay rent directly to the Indenture Trustees. Steven J. Reisman, Esq., at Curtis, Mallet-Prevost, Colt & Mosle, LLP, in New York, tells the Court that the Adversary Proceeding seeks to restrain the Defendants' exercise of the Additional Default Remedies -- those remedies other than demand for payment of Stipulated Loss Value and any other amounts due and payable under the Headleases -- during the pendency of the Debtors' Chapter 11 Cases. The exercise of the Additional Default Remedies would not result in any greater payments, proceeds or value to the Lessors or the Indenture Trustees than they would receive from the payment of Stipulated Loss Value, Mr. Reisman says. However, Mr. Reisman asserts that the exercise of the Additional Default Remedies would likely destroy the going concern value of the Railcars and therefore, cause the needless loss of up to approximately $680 million of value to CIT Rail and, indirectly, to CIT. He adds that the exercise of the Additional Default Remedies could result in significant damage to CIT Rail's overall franchise value and business because the customers of the Leased- In Railcars are also CIT Rail's customers for leasing of Company- Owned Railcars. Moreover, the issuance of Payment Direction Letters will likely lead to confusion and the risk of defection by the Sublessees to CIT Rail's competitors, Mr. Reisman adds. In a down market and with every customer looking for a competitive advantage, the Payment Direction Letters may cause the perception that CIT Rail, and ultimately CIT, has lost its standing in the marketplace due to its inability to maintain and operate its rail fleet. In turn, CIT Rail will have difficulty trying to re-lease to existing customers as they move their business to competitors. Those defections will increase the sublease turnover rate and -- along with Defendants' potential termination of CIT's rights to the Railcars -- further operate to damage the franchise value of CIT Rail. Mr. Reisman relates that over the past several weeks prior to the Petition Date, CIT Rail has reached out to various claimholders associated with the Headlease Transactions in an effort to obtain a six-month forbearance on the exercise of all remedies in exchange for a payment by CIT-EF into a securities account an amount equal to the Headlease rent payments for the same six-month period. He says, as of the Petition Date, CIT has not been able to finalize any forbearance agreements with the Defendants and accordingly, there is nothing currently preventing Defendants from exercising the Additional Default Remedies. In a separate filing, the Debtors seek a temporary restraining order precluding the Defendants from exercising against CIT-EF any remedies under the Headlease Transactions. 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) CITIGROUP INC: Reports Stake in China MediaExpress, et al. ---------------------------------------------------------- Citigroup Global Markets Inc., Citigroup Financial Products Inc., Citigroup Global Markets Holdings Inc., and Citigroup Inc. disclose holding: -- 1,000 shares of the common stock of China MediaExpress Holdings, Inc. f/k/a "TM Entertainment & Media, Inc."; -- 1,000,000 shares or roughly 2.4% of the common stock of Western Liberty Bancorp f/k/a "Global Consumer Acquisition Corp."; -- 1,262,342 shares or roughly 1.6% of the common stock of Stream Global Services, Inc.; The Citigroup entities disclose they no longer hold units of Auction Rate Preferreds of both Calamos Global Dynamic Income Fund and Nuveen Senior Income Fund. Citigroup reported net income for the third quarter 2009 of $101 million from a net loss of $2.8 billion during the same period in 2008. Citigroup has continued its deleveraging, reducing total assets from $2.05 trillion a year ago to $1.88 trillion at September 30, 2009. Asset reductions in Citi Holdings made up approximately 98% of the decline, reflecting the Company's continued strategy of reducing its assets and exposures in this business segment, which are down by almost one-third since the peak levels of early 2008. About Citigroup Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. At June 30, 2009, Citigroup had total assets of $1.84 trillion and total liabilities of $1.69 trillion. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup, the third-biggest U.S. bank, received $52 billion in bailout aid. Other bailed-out banks, including Bank of America Corp., Wells Fargo & Co., have pledged to repay TARP money. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, repaid TARP funds in June. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIGROUP INC: To Issue 3 Series of Notes; Files Docs with SEC -------------------------------------------------------------- Citigroup Inc. filed with the Securities and Exchange Commission documents in connection with Citigroup Funding Inc.'s issuance of these securities: -- Notes Based Upon a Basket of Currencies Due 2011, at $1,000 per note. The Notes are 95% partial principal protected if held to maturity, subject to the credit risk of Citigroup. The Notes combine the investment characteristics of debt and currency investments and pay an amount at maturity that will depend on the percentage change in the value of each of the Brazilian real, Russian ruble, Indian rupee and South African rand, each relative to the U.S. dollar, as measured by each relevant exchange rate, from the Pricing Date to the Valuation Date. See offering summary at: http://ResearchArchives.com/t/s?491e See preliminary pricing supplement at: http://ResearchArchives.com/t/s?491f -- 10,000 Callable Leveraged CMS Spread Principal Protected Notes Due October 29, 2024, at $1,000 per Note See Amended Pricing Supplement at: http://ResearchArchives.com/t/s?4920 -- Equity LinKed Securities __% Per Annum, Based Upon the Common Stock of Research in Motion Limited Due 2010, at $10.00 per ELKS See offering summary at: http://ResearchArchives.com/t/s?4922 Citigroup Inc. also filed with the SEC the CitiFirst Structured Investments Offerings Brochure for November 2009. A full-text copy of the Brochure is available at no charge at: http://ResearchArchives.com/t/s?491d Citigroup also filed its Institutional Investment Manager's Report on Form 13F. A full-text copy of the Form 13F is available at no charge at http://ResearchArchives.com/t/s?4921 Citigroup reported net income for the third quarter 2009 of $101 million from a net loss of $2.8 billion during the same period in 2008. Citigroup has continued its deleveraging, reducing total assets from $2.05 trillion a year ago to $1.88 trillion at September 30, 2009. Asset reductions in Citi Holdings made up approximately 98% of the decline, reflecting the Company's continued strategy of reducing its assets and exposures in this business segment, which are down by almost one-third since the peak levels of early 2008. About Citigroup Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. At June 30, 2009, Citigroup had total assets of $1.84 trillion and total liabilities of $1.69 trillion. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup, the third-biggest U.S. bank, received $52 billion in bailout aid. Other bailed-out banks, including Bank of America Corp., Wells Fargo & Co., have pledged to repay TARP money. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, repaid TARP funds in June. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CLEARWIRE COMMUNICATIONS: S&P Puts 'B+' Rating on $1.45 Bil. Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its issue-level and recovery ratings to the proposed $1.45 billion of senior secured notes due 2015 to be co-issued by Clearwire Communications LLC and Clearwire Finance Inc. Both entities are subsidiaries of Kirkland, Wash.-based wireless carrier Clearwire Corp. S&P rated the notes 'B+' (two notches higher than S&P's 'B-' issue-level rating on the company) with a recovery rating of '1', indicating S&P's expectation of very high (90% to 100%) recovery for noteholders in the event of payment default. The notes will be issued under Rule 144A without registration rights. Net proceeds, coupled with $244 million of new rollover secured notes, will be used to refinance about $1.4 billion outstanding of existing debt, including the existing $178 million Sprint term loan and $66 million term loan held by Comcast. The rollover notes will be pari passu with the new secured notes. As part of the transaction, Clearwire's existing owners will invest about $1.56 billion in exchange for equity in the company, proceeds of which will be used to fund the build-out of new markets in 2010. S&P estimates total funded debt at about $1.7 billion. At the same time, S&P affirmed its existing ratings on Clearwire, including the 'B-' corporate credit rating. The rating outlook is stable. The 'B-' rating continues to reflect S&P's expectation that Clearwire will have large EBITDA losses and net free cash flow deficits for at least several years, coupled with a substantial debt burden. It also reflects S&P's view that the company has a vulnerable business position as a developmental stage company with uncertain growth prospects for fourth-generation (4G) wireless services, a limited operating history, technology risk, and significant competition from existing wireline and wireless broadband services. Tempering factors include a strong portfolio of spectrum licenses and adequate near-term liquidity. S&P's rating does not impute any additional financial support from Clearwire's equity investors. "The notes transaction provides some degree of incremental liquidity by extending debt maturities, and the equity infusion will enable the company to expand into new markets over the next year," said Standard & Poor's credit analyst Allyn Arden. "However, S&P still expect Clearwire will be net free cash flow negative for at least the next few years." CLOUD PEAK: S&P Assigns Corporate Credit Rating at 'BB-' -------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'BB-' corporate credit rating to Gillette, Wy.-based Cloud Peak. The outlook is stable. Standard & Poor's also said that it assigned an issue-level rating of 'BB+' (two notches above the corporate credit rating) to the company's proposed senior secured revolving credit agreement. The recovery rating is '1', indicating S&P's expectation of very high (90%-100%) recovery in the event of a payment default. In addition, Standard & Poor's assigned a 'BB-' (the same as the corporate credit rating) issue-level rating to Cloud Peak's proposed $600 million of senior unsecured notes. The company expects to issue the proposed notes in two tranches, with seven- and 10-year maturities. The recovery rating on the notes is '3', indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. These ratings are based on preliminary terms and conditions. S&P expects that Cloud Peak will use the proceeds of the proposed notes to make a distribution of about $285 million to RTEA to support the company's reclamation bonding obligations and to fund ongoing capital expenditures. The ratings on Cloud Peak reflect the company's significant financial leverage, taking into account the need for meaningful expenditures to secure additional reserves; its lack of operating diversity; the challenges of operating as a stand-alone company; and the inherent risks of coal mining, including operating problems, price volatility, transportation bottlenecks, and weather-related disruptions. The ratings also reflect the favorable competitive position of the company's large, efficient Powder River Basin operations. "We are concerned about escalating costs and the potential negative effects of possible carbon legislation," noted Standard & Poor's credit analyst Marie Shmaruk. "However, S&P maintain a relatively favorable longer-term outlook on the U.S. coal industry, as depleting reserve bases in Central Appalachia, difficulties in permitting new mines, the high cost of alternative electric generation, and heightened overseas demand should support positive supply and demand trends for the industry over the longer term, particularly for the cost-effective, reserve-rich PRB." The company's weak business-risk profile is characterized by its lack of geographic and operating diversity, somewhat short reserve life, and currently weak coal market conditions. With its three large surface mines all located in the PRB, the company produced 97 million tons of coal in 2008. It is the third-largest producer in the U.S and the PRB based on 2008 production. Both Peabody Energy Corp. and Arch Coal Inc. (including the Jacobs Ranch acquisition) have PRB operations that are larger, each producing about 140 million tons/year. Cloud Peak has about one billion tons of proven and probable reserves, though at current production levels, the reserve life is relatively short (about 11 years of proven and probable reserves and 14 years of total reserves) compared with its larger competitors, which have reserve lives of about 20 years. To improve the company's reserve life, Cloud Peak has nominated several Bureau of Land Management (BLM) lease by application tracts that are expected to come up for bid in the near to intermediate term. Although all of the company's production is concentrated in one basin, this risk is somewhat mitigated by the scale and efficiency of its operations, which are less susceptible to operating disruptions than the more mature, difficult-to-mine operations in the eastern U.S. and by the lack of dependence on a single mine for the bulk of its profitability. Still, PRB coal commands lower prices than eastern coal, and in the run-up of coal prices in 2008, it did not enjoy the same increases as other basins. This is primarily because of its lower heat rate, which requires utilities to burn more coal to generate the same amount of electricity and, in most cases, the need to transport coal long distances to reach customers. These factors tend to keep the price low, as the utilities consider total costs in their purchase decisions. S&P consider the company's financial leverage to be significant, and S&P's rating incorporates S&P's expectation that debt-- adjusted for LBA payments, asset retirement obligations and operating leases -- will remain high as the company acquires and develops additional reserves. The large expenditures needed to replace and expand the company's reserve base require a combination of relatively high prices on planned, but currently uncontracted, volumes and adequate access to bank lines or other financing to provide appropriate liquidity for participation in the government auctions, the timing of which is uncertain and not within the company's control. The successful LBA bidders are required to pay the government in five installments, with the first one due upon winning the bid for the right to develop and mine the coal. Although the company could conserve cash by not submitting bids on these tracts, this would likely hurt its overall business position over the longer term. The stable outlook reflects the company's position as an efficient PRB coal producer, its appropriate liquidity, and credit metrics that S&P expects will remain in line with the current rating -- with debt to EBITDA averaging less than 4x. S&P's outlook assumes that Cloud Peak has volume and price commitments for a significant portion of 2010 production at prices above $12 and that prices will improve beginning in 2011 compared with current levels (2010 delivery in the $8/ton-$9/ton), allowing the company to maintain its EBITDA at about $250 million. Downward pressure on the rating could result if continued market weakness, coupled with high LBA spending, causes credit metrics to decline to levels no longer consistent with the current rating. Specifically, S&P would consider a negative rating action if adjusted debt to EBITDA rose to more than 4x and FFO to total debt fell below 15%, and S&P felt that Cloud Peak would not be able to restore them to more appropriate levels in a reasonable time period. Although a positive rating action is less likely in the near term given the company's operating environment and spending needs, one could occur if market conditions improve meaningfully and result in a sustainable improvement in credit metrics. Specifically, S&P could consider revising the outlook to positive if the company grows its reserve base while consistently maintaining debt to EBITDA below 3.5x and FFO to total debt at about 20%. COHARIE HOG FARM: To Liquidate Assets, Cut 170 Jobs --------------------------------------------------- Owner Anne Faircloth said the ultimate plan of Coharie Hog Farm Inc. is to liquidate the Company, which will mean eventual layoffs of 170 workers at the company's farms, grain elevators, mill and offices, according to a report by Sarah Ovaska, staff writer of newsobserver.com The filing, Ms. Ovaska says, came after more than 30 farmers complained that the company had not paid them for delivered corn. The company owes at least $3.12 million to a group of vendors -- including farmers -- She said, citing papers filed with the Court. Clinton, North Carolina based Coharie Hog Farm, Inc., says it has been one of the largest swine producers in the U.S., supplying more than 500,000 hogs a year to a plant operated by Smithfield Foods Inc. It produced more than 140 million pounds of pork annually. The closely held operation has six storage facilities with 3.9 million bushels of capacity. The business used more than 100 contract farmers to raise hogs for market. Anne Faircloth owns 75% of the Company and Nelson Waters owns the remaining quarter. Coharie Hog Farm filed for Chapter 11 on Nov. 6, 2009 (Bankr. E.D. N.C. Case No. 09-09737). Terri L. Gardner, Esq., at Nelson Mullins Riley & Scarborough, LLP, represents the Debtor in its Chapter 11 effort. The petition says assets and debts range from $10,000,001 to $50,000,000. CONSECO INC: Files Amendment No. 3 to 3.5% Debentures Tender Offer ------------------------------------------------------------------ Conseco Inc. has filed Amendment No. 3 to its tender offer statement originally filed on October 15, 2009, as amended by Amendment No. 1 filed on October 19, 2009, and Amendment No. 2 filed on October 30, 2009, in connection with Conseco's offer to purchase for cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated October 15, 2009, and in the related Letter of Transmittal, any and all of its outstanding 3.50% Convertible Debentures due September 30, 2035. The Schedule TO is amended by the information contained in this amendment. Except as specifically provided therein, this amendment does not modify any of the information previously reported in the Schedule TO. A full-text copy of Amendment No. 3 is available for free at: http://researcharchives.com/t/s?4932 About Conseco Inc. Headquartered in Carmel, Indiana, Conseco Inc. (NYSE: CNO) -- http://www.conseco.com/-- is the holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. The company became the successor to Conseco Inc. (Old Conseco), in connection with its bankruptcy reorganization. CNO focuses on serving the senior and middle-income markets. The company sells its products through three distribution channels: career agents, professional independent producers and direct marketing. CNO operates through its segments, which includes Bankers Life, Conseco Insurance Group, Colonial Penn, other business in run-off and corporate operations. * * * Moody's Investors Service has affirmed the ratings of Conseco, Inc. (senior bank facility at Caa1) and its insurance subsidiaries (insurance financial strength at Ba2) and changed the outlook to positive from negative. Standard & Poor's Ratings Services said that it affirmed its 'CCC' counterparty credit rating on Conseco Inc. and the 'BB-' financial strength ratings on Conseco's insurance subsidiaries. S&P revised the outlook to stable from negative. EDGE PETROLEUM: Plan Confirmation Scheduled for Dec. 11 ------------------------------------------------------- Edge Petroleum Corp. has won approval of the disclosure statement explaining its Chapter 11 plan. Edge Petroleum will present the plan for confirmation and the results of an auction for all assets on December 11. The reorganization plan is built upon the sale of the Company's assets. The Chapter 11 plan and sale are supported by the holders of at least two-thirds of the $227.5 million debt under the secured credit agreement, according to Edge. The disclosure statement says the secured lenders are to receive almost all proceeds from the sale and Edge's cash. The lenders are to make a $350,000 "gift" to be shared by unsecured creditors. In addition, unsecured creditors can receive collections from preference suits. The "gift" and lawsuit collections may be used also to pay expenses of the Chapter 11 case. Edge Petroleum has received the Bankruptcy Court's approval to auction off its assets on December 7. It has signed a certain Purchase and Sale Agreement dated September 30, 2009 with PGP Gas Supply Pool No. 3, who will purchase the assets absent higher and better bids at the auction. Pursuant to the Purchase Agreement, the effective date for the sale of the Assets is June 30, 2009 and the purchase price for the Assets is $191.0 million subject to adjustment for, among other things, a downward adjustment related to certain changes in the NYMEX Strip Price over the five year period from January 1, 2010 through December 31, 2014. The Gas Pricing Downward Adjustment is capped at approximately $23.9 million. In addition, in certain events PGP will be entitled to a break-up fee in the amount of $6.0 million and an expense reimbursement of $500,000 in certain events if the contemplated transaction does not close or PGP is not the winning bidder in the auction. The Company notes that it currently has approximately $226.5 million of outstanding principal under its Credit Agreement which is substantially in excess of the proceeds expected to be received pursuant to the Purchase Agreement. About Edge Petroleum Edge Petroleum Corporation (Nasdaq:EPEX) (Nasdaq:EPEXP) is a Houston-based independent energy company that focuses its exploration, production and marketing activities in selected onshore basins of the United States. At June 30, 2009, the Company's balance sheet showed total assets of $264,030,000, total liabilities of $252,492,000 and stockholders' equity of $11,538,000. Edge Petroleum filed for Chapter 11 on October 2, 2009 (Bankr. S.D. Tex. Case No. 09-20644). The Company has retained Akin Gump Strauss Hauer and Feld as legal counsel, Jordan, Hyden, Womble, Culbreth & Holzer, P.C., as local counsel, and Parkman Whaling LLC as financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. EMMIS COMMUNICATIONS: Luther King Capital Discloses 10.4% Stake --------------------------------------------------------------- LKCM Private Discipline Master Fund SPC, LKCM Private Discipline Management, L.P., LKCM Alternative Management, LLC, Luther King Capital Management Corporation, J. Luther King, Jr. and J. Bryan King disclose that as of November 6, 2009, they may be deemed to beneficially own 3,386,171 shares of the Class A Common Stock, par value $0.01, of Emmis Communications Corporation, which represents roughly 10.4% of the outstanding Common Stock. Of the 3,386,171 shares of Common Stock reported, (i) 2,835,347 shares are held directly by Master Fund and (ii) 550,824 shares of Common Stock may be acquired by Master Fund within 60 days of November 6, 2009 upon conversion of shares of Preferred Stock. Luther King Capital reports that Master Fund sold Emmis Common Stock and Preferred Stock between October 15 and November 6. About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation owns and operates radio stations and magazine publications in the U.S. and in Europe. At August 31, 2009, Emmis had $511,546,000 in total assets against $500,910,000 in total liabilities and $140,459,000 in Series A cumulative convertible preferred stock, resulting in stockholders' deficit of $179,962,000. At August 31, 2009, Emmis had $50,139,000 in non-controlling interests and total deficit of $129,823,000. * * * As reported by the Troubled Company Reporter on June 22, 2009, Moody's Investors Service changed Emmis Communications' senior secured term loan rating to Caa2 from Ca following the completion of a series of Dutch auction transactions pursuant to a March 3, 2009 credit facility amendment. The revised rating reflects the Company's capital structure, pro-forma for an roughly $78 million reduction of term loan debt which has resulted from these transactions. In addition, Moody's removed the "/LD" designation previously appended to the Probability of Default rating on April 27, 2009. In April, Moody's cut its corporate family rating on the Company to 'Caa2'. In May, S&P raised its corporate credit rating on the Company to 'CCC+'. In June, S&P withdrew the 'CCC+' Corp. Credit Rating at the Company's request. ERICKSON RETIREMENT: Gets Nod to Access $5MM of DIP Financing ------------------------------------------------------------- Judge Stacey Jernigan of the U.S. Bankruptcy Court for the Northern District of Texas has authorized the Debtors to obtain, on an interim basis, postpetition financing up to an aggregate principal amount of $5,000,000 from ERC Funding Co, LLC. Judge Jernigan also allowed Hingham Campus, LLC, Lincolnshire Campus, LLC and Naperville Campus, LLC, as non-debtor entities; Erickson Retirement Communities, LLC, Ashburn Campus, LLC, Columbus Campus, LLC, Concord Campus GP, LLC, Concord Campus, LP, Dallas Campus GP, LLC, Dallas Campus, LP, Erickson Construction, LLC, Erickson Group, LLC, Houston Campus, LP, Kansas Campus, LLC, Littleton Campus, LLC, Novi Campus, LLC, Senior Campus Services, LLC, Warminster Campus GP, LLC, Warminster Campus, LP, as debtors and debtors-in-possession to execute a Superpriority DIP Loan Agreement and related documents with ERC Funding. A draft of the DIP Loan Agreement is available for free at: http://bankrupt.com/misc/ERC_DIPLoanAgreement.pdf Under the DIP Loan Agreement, ERC Funding, as DIP Lender, will be granted superpriority claims and first priority priming liens senior to any prepetition liens. Moreover, the Borrowers' Prepetition Lenders are granted replacement liens on all of the Borrowers' assets and proceeds to the extent of any diminution in the value of the Prepetition Lenders' collateral from the Petition Date through the date of consummation of a transaction or any payment of DIP Obligations from the Borrowers' property. The Court clarified that the Borrowers are not allowed to use any of the $5 million Interim DIP Amount for needs of the non-Debtor landowners Linden Ponds, Inc., Sedgebrook, Inc. Monarch Landing, Inc. and Ann's Choice, Inc., or the Debtor landowners Columbus Campus, LLC, Warminster Campus GP and Warminster Campus, LP. Pursuant to the Interim DIP Order, ERC Funding has agreed to waive all fees under the DIP Documents and reserves its rights to assert those fees at the final hearing on the DIP Motion. ERC Funding, however, will be entitled to an expense reimbursement as provided under the DIP Loan Agreement. Any objections to the DIP Motion that have not been withdrawn, waived or settled, and all reservations of rights are denied and overruled. As long as the management agreements between Erickson Retirement Communities LLC and National Senior Campus Not-for-Profit Organizations remain in place and until the time a plan of reorganization becomes effective in the Borrowers' Chapter 11 cases, on the 15th and 30th day of each month, the Borrowers are directed by the Court to advance the aggregate amount of $300,000 to the NSC-NFPs to partially defray the postpetition fees and costs incurred by the NSC-NFPs for professional services related to the Borrowers' reorganization efforts. Every three months, the NSC-NFPs will provide a reconciliation of the actual fees and expenses incurred and, to the extent there is a surplus, future payments to the NSC-NFPs will be adjusted to account for the surplus payments. If the payments are insufficient to defray the amount of the reasonable fees and expenses incurred, the NSC-NFPs reserve their rights with respect to any shortfall. Neither the NSC-NFPs nor their professionals are required to apply to the Court for approval for payment of any fees or expenses incurred. A full-text copy of the Erickson Retirement Interim DIP Order dated November 6, 2009, is available for free at: http://bankrupt.com/misc/ERC_InterimDIPOrder.pdf Judge Jernigan will convene a final hearing on the DIP Motion on December 4, 2009. Objections are due November 30. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ERICKSON RETIREMENT: Has Nod for Redwood-Led Auction on Dec. 22 --------------------------------------------------------------- Erickson Retirement Communities LLC and its units have sought the Court's permission to enter into a master sale and purchase agreement with Redwood-ERC Senior Living Holdings, LLC, Redwood- ERC Management, LLC, Redwood-ERC Development, LLC, Redwood-ERC Properties, LLC and Redwood-ERC Kansas, LLC, which contemplates the sale of substantially all of their assets for $100 million, subject to higher bids. Following a hearing, Judge Stacey Jernigan of the U.S. Bankruptcy Court for the Northern District of Texas approved the proposed bidding procedures to govern the sale of substantially all of the assets of Erickson Retirement Communities LLC and its debtor affiliates. Interested parties have until December 14, 2009, to submit a Qualified Bid for the Debtors' assets. The Debtors are authorized to solicit, initiate, encourage, facilitate or take any other action designed to facilitate any inquiries or proposals regarding any merger, share exchange, consolidation, sale of assets, assumption of liabilities, sale of shares of capital stock or similar transactions with third parties until the Bid Deadline. If the Debtors receive no Qualified Bids other than the bid submitted by the Redwood Entities, the Debtors will not hold an auction and Redwood will be named as the Successful Bidder for the Assets. If, however, the Debtors receive at least one Qualified Bid in addition to the Redwood bid, the Debtors will conduct an auction on December 22, 2009. The Court-approved Bidding Procedures will not impair the right of secured creditor to credit bid to the extent applicable; and it is further. As previously reported, under a master sale and purchase agreement, Redwood-ERC Senior Living Holdings, LLC, Redwood-ERC Management, LLC, Redwood-ERC Development, LLC, Redwood-ERC Properties, LLC, and Redwood-ERC Kansas, LLC, have committed to buy substantially all of the Debtors' assets for $100 million, subject to higher and better bids. The Court permits the Debtors to assume the Redwood Master Purchase and Sale Agreement to extent provided under the parties' agreement. The Debtors are also allowed to pay the Commitment Fee, Break-up Fee and Expense Reimbursements provided for under the MSPA, which fees and reimbursements will be entitled to priority over all of the Debtors' administrative expenses. Moreover, Redwood is authorized to exercise its rights under the MPSA to the extent assumed under the Court's recent Order and without further Court approval. Judge Jernigan also approves the procedures relating to the assumption and assignment of contracts under the MSPA. The Successful Bidder will have until 10 days prior to a confirmation hearing to amend the list of executory contracts and unexpired leases to be assumed and assigned. All objections to the Sale Motion to the extent not withdrawn or resolved are overruled, the Court orders. More importantly, Judge Jernigan directs the Debtors and Redwood, as plan sponsor, to file a plan of reorganization and disclosure statement by November 12, 2009. The Court clarifies that the Bidding Procedures Order does not reduce, impair or alter any of the rights or claims of the National Senior Campus Not-for-Profit Organizations, their communities, or the residents of these Communities against the Debtors, the Debtors' property, the Debtors' lenders, the Debtors' lenders' collateral, Redwood or the Successful Bidder. The NFP's and Residents' rights and claims include: (i) the rights and claims of the Residents to occupy their units, to utilize the facilities of their community, to receive the services promised under their Residence and Care Agreements, and the right to receive a refund of their Initial Entrance Deposit or Entrance Deposit pursuant to the Residence and Care Agreements; (ii) the rights and claims of the NFPs pursuant to their management agreements, lease agreements, licensing agreements, development agreements, loan agreements, working capital agreements, purchase option agreements, guarantee agreements, indemnity agreements, warranty agreements, and any other agreements with the Debtors; and (iii) any rights of setoff or recoupment arising from the relationship between the NFPs and the Debtors. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ERICKSON RETIREMENT: Has Nod to Escrow Initial Entrance Deposits ---------------------------------------------------------------- Judge Stacey Jernigan of the U.S. Bankruptcy Court for the Northern District of Texas permits Erickson Retirement Communities LLC and its units to escrow all postpetition initial entrance deposits paid by the residents of the Debtors' communities, including all payments from residents associated with postpetition Initial Entrance Deposits like P-Notes or postpetition flex pay arrangements. For each care continuing retirement community where the landowner is a Debtor in these Chapter 11 cases, the Debtors will designate an independent escrow agent immediately to receive and hold in trust the Initial Entrance Deposits received from the residents of a CCRC into an escrow account. Moreover, each CCRC and its corresponding Debtor Landowner, Not-For-Profit Organizations, and Escrow Agent will execute an escrow agreement, a draft of which is available for free at: http://bankrupt.com/misc/ERC_EscrowAgreement.pdf With respect to each CCRC, the Debtor Landowner must provide to the prepetition agent of the Construction Loan an accounting of the Initial Entrance Deposits deposited into the Escrow Account every two weeks, including the name of the Resident from whom the Initial Entrance Deposit was collected, the building and unit number to which the Initial Entrance Deposit pertains, and the amount of the Initial Entrance Deposit. The Prepetition Agent will have a continuing first priority lien against the Initial Entrance Deposits and all proceeds subject to: (i) the validity, priority or extent that the lien existed prepetition; (ii) the rights of the Residents in the Initial Entrance Deposits; and (iii) any further orders of the Court regarding interests in the Initial Entrance Deposits, including DIP Financing Orders. With respect to Ann's Choice, Inc.'s campus, the Debtors may only escrow the net amount left after the Initial Entrance Deposits have flowed through applicable waterfalls, pursuant to applicable bond indentures and loan agreements. Judge Jernigan clarifies that the Debtors may not escrow any Initial Entrance Deposits transferred to non-Debtor entities. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ESCADA AG: Insolvency Proceedings in Germany Opened Nov. 1 ---------------------------------------------------------- In line with schedule the insolvency court, Munich Municipal Court, opened insolvency proceedings on the assets of Escada AG on November 1, 2009, at 12 noon. Effective November 1, the power of administration and control over all assets and the power of representation of the company has therefore been transferred to the duly appointed insolvency administrator, Attorney-at-Law Dr. Christian Gerloff from Munich, who had so far acted as preliminary insolvency administrator. On August 13, 2009, Escada AG had filed for an insolvency petition because of impending illiquidity. The insolvency administrator is engaged in advanced negotiations with a number of interested parties and is pursuing the objective of the company's going concern. These negotiations are unaffected by the opening of the insolvency proceedings. The aim is to find a new perspective for the companies of the ESCADA Group in the near future. The company's Board of Management continues to support this process as well as the operative management of the company. About ESCADA AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009, the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). Judge Stuart M. Bernstein handles the case. O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Escada USA Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Escada USA, and the insolvency proceedings of ESCADA AG and its units. (http://bankrupt.com/newsstand/or 215/945-7000) ESCADA AG: Ordinary Course Professionals Motion Denied ------------------------------------------------------ Escada (USA) Inc. has sought the Court's authority to retain six professionals to render services in the ordinary course of its business, nunc pro tunc to the Petition Date: Firm Services to be Provided ---- ----------------------- Gibson Dunn & Crutcher LLP Legal representation in the matter of Escada (USA), Inc. v. Utiliquest Kobayashi, Sugita & Goda Legal representation in the Sakaue v. Escada (USA) Inc. Follick & Bessich Legal representation in the matter of the assessment by U.S. Customs and Border Protection for back duties Divine, Blalock, Martin Accounting services for Palm & Sellari, P.A. Beach store business license annual renewal S. Nobile & Company Accounting and form preparation services for sales tax obligations Retail Portfolio Lease selection and Solutions, Inc. negotiation services Gerald C. Bender, Esq., at O'Melveny & Myers LLP, in New York, relates that in the past, the Debtor engaged the services of the OCPs relating to litigation, corporate requirements, real estate and employee-related issues. It is essential that the employment of the OCPs, many of whom are already familiar with the Debtor's financial and business affairs, be continued to avoid disruption of the Debtor's normal business operations, he maintains. The Debtor seeks to reserve the right to hire additional OCPs from time to time during the pendency of its bankruptcy case, as the need arises, and to otherwise supplement the list of OCP from time to time, as necessary. Mr. Bender points out that it is "impractical and cost inefficient" for the Debtor to submit individual applications and proposed retention orders for each OCP as required by Rules 2014 and 2016 of the Federal Rules of Bankruptcy Procedure. Accordingly, the Debtor asks the Court to dispense with the requirement of individual employment applications and retention orders with respect to each OCP. The Debtor also requires each OCP to provide (i) a declaration certifying that the OCP does not represent or hold any interest adverse to the Debtor or its estate, and (ii) a completed retention questionnaire. The Debtor will then serve the OCP Declaration and Retention Questionnaire with the Court and serve upon the Reviewing Parties, which include: * The Office of the United States Trustee, 33 Whitehall Street, 21st Floor New York, New York 10004 Attn: Elisabetta G. Gasparini, Esq. * Otterbourg, Steindler, Houston & Rosen, P.C., Attorneys for the Official Committee of Unsecured Creditors 230 Park Avenue New York, New York 10169 Attn: Melanie e. Cyganowski The Reviewing Parties will have 10 days to notify in writing the Debtor, the other Reviewing Parties and the relevant OCP of any objection to an OCP retention stemming from the contents of the OCP Declaration or Retention Questionnaire. Absent any objection, the retention and compensation structure of the OCP professional will be deemed approved without further Court order. Any objection filed that remains unresolved in 10 days will be set for a hearing before the Court. The Debtor proposes to pay each OCP, without a prior application to the Court, 100% of the fees and disbursements incurred, upon the submission to, and approval by, the Debtor of an appropriate invoice setting forth in reasonable detail the nature of the services rendered and disbursements actually incurred. If any amount owed for an OCP's fees and disbursements exceeds $20,000 per month a cumulative basis, then the payments to that OCP for the excess amounts will be subject to the prior approval of the Court in accordance with Sections 330 and 331 of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules for the Southern District of New York, as well as the Fee Guidelines promulgated by the U.S. Trustee. Paying fees on a cumulative basis would mean that an OCP whose fees and disbursements were less than $20,000 in any month would be eligible to apply the difference between $20,000 and the amount billed in that particular month to any subsequent month in which fees and disbursements exceed $20,000. However, payment during any such subsequent month should not exceed $40,000 per OCP. In addition, the Debtor proposes to cap payments to each OCP at $150,000 for the entire period in which its Chapter 11 case is pending. In the event an OCP seeks more than $40,000 per month on a cumulative basis, that OCP will be required to file a fee application for the full amount of its fees and expenses for that month. The Debtor reserves the right to amend the monthly compensation limitations. Although certain of the OCPs may hold unsecured claims against the Debtor for prepetition services, the Debtor does not believe that any of the OCPs have an interest materially adverse to its interest and the interest of its creditors or other parties-in- interest that should preclude the OCP from continuing to represent the Debtor. Thus, all of the OCPs proposed to be retained meet the special counsel retention requirement under Section 327(e) of the Bankruptcy Code, the Debtor insists. * * * For reasons stated on record at the hearing held October 30, 2009, Judge Bernstein denied the Debtor's request, without prejudice. About ESCADA AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009, the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). Judge Stuart M. Bernstein handles the case. O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Escada USA Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Escada USA, and the insolvency proceedings of ESCADA AG and its units. (http://bankrupt.com/newsstand/or 215/945-7000) ESCADA AG: Sells Primera Brands to Endurance Capital ---------------------------------------------------- Escada AG has sold its Primera division to German private equity firm Endurance Capital, Drapersonline.com reported on November 5, 2009. Primera consists of brands Laurel, Apriori and Cavita, which Escada AG intended to sell to investment fund Mutares AG in May 2009. Due to problems with the closing of the deal, Escada AG withdrew from the transaction, according to the report. Endurance Capital will invest in Primera, driving product and distribution to grow all three brands in 2010, with an initial focus on Europe. "The Primera management have done an excellent job and created the base for successful market positioning," Eberhard Schobitz, director of Endurance Capital, told Drapersonline.com. "After a severe restructuring phase this year, now, we can frame the future of Primera," Primera Group General Manager Dirk Reichert and CEO Thomas Kleinhenz noted, according to the report. About ESCADA AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009, the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). Judge Stuart M. Bernstein handles the case. O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Escada USA Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Escada USA, and the insolvency proceedings of ESCADA AG and its units. (http://bankrupt.com/newsstand/or 215/945-7000) FANNIE MAE: Reviews Impact of Aborted Sale of Tax Credits --------------------------------------------------------- Prior to September 30, 2009, Fannie Mae (formally known as the Federal National Mortgage Association) entered into a nonbinding letter of intent to transfer equity interests in its low income housing tax credit investments. Under the terms of the transaction as contemplated, Fannie Mae would have transferred to unrelated third-party investors approximately one-half of its LIHTC investments for a price exceeding their current carrying value. Upon completion of the transfer, the unrelated third-party investors would have been entitled to receive substantially all of the tax benefits from the LIHTC investments for a specified period of time. At a specified future date, the percentage of tax benefits the investors would have received would have automatically been reduced and the percentage of tax benefits Fannie Mae would have received would have been increased by the same amount. In addition, Fannie Mae could have had the obligation to reacquire all or a portion of the transferred interests. Fannie Mae requested the approval of the Federal Housing Finance Agency, as its conservator, to complete the transaction. FHFA, however, advised Fannie Mae that it had no objection to the transaction as it was consistent with the conservation of the assets of the corporation and that FHFA had requested approval from the U.S. Department of Treasury of the transaction under the terms of the senior preferred stock purchase agreement with Treasury. On November 6, 2009, Treasury notified FHFA and Fannie Mae by letter that it is not consenting to the proposed transaction. The Wall Street Journal's Nick Timiraos said Treasury blocked Fannie Mae's proposed sale of nearly $3 billion in low-income housing tax credits to Goldman Sachs Group Inc. and Berkshire Hathaway Inc. Treasury said the deal was too costly for taxpayers. According to Mr. Timiraos, Fannie Mae had agreed to sell roughly half of its $5.2 billion tax-credit portfolio and had received approval to proceed with the sale from the FHFA. Those credits are virtually worthless to Fannie because the company doesn't have any taxable income to offset, and it is forced to write down the value of those credits every quarter as their value declines, Mr. Timiraos said. In its letter, Treasury stated that it weighed several considerations in deciding whether to provide or withhold approval of the proposed transaction and that, in its view, the proposed sale would result in a loss of aggregate tax revenues that would be greater than the savings to the federal government from a reduction in the capital contribution obligation of Treasury to Fannie Mae under the senior preferred stock purchase agreement. Treasury further stated that withholding approval of the proposed sale affords more protection of the taxpayers than does providing approval. "We are evaluating whether Treasury's decision changes our prior determination that we continue to have the intent and ability to sell or otherwise transfer our LIHTC investments for value," Michael J. Williams, Fannie Mae's President and Chief Executive Officer. "While our conservator has directed us to continue to explore options to sell or transfer these investments for value consistent with our mission, we believe this will be difficult given current constraints and market conditions. While we have not made any decision with respect to whether an impairment of these assets is required under generally accepted accounting principles, if we are unsuccessful in selling or otherwise transferring these investments for value, we are likely to record additional other-than-temporary impairment in the fourth quarter of 2009 that could reduce the carrying value of our LIHTC investments to zero." As of September 30, 2009, the carrying value of Fannie Mae's LIHTC investments was $5.2 billion. "If we record an impairment, our net worth will be reduced by an amount equal to the impairment. Because we expect to have a net worth deficit in future periods, the impairment will increase the amount that would be requested from Treasury by FHFA on our behalf under the senior preferred stock purchase agreement," Mr. Williams said. Receivership Under the senior preferred stock purchase agreement, as amended, the U.S. Treasury committed to provide Fannie Mae with funds of up to $200 billion under specified conditions. The agreement requires Treasury, upon the request of FHFA as Fannie Mae's conservator, to provide funds to Fannie Mae after any quarter in which it has a negative net worth. The senior preferred stock purchase agreement does not terminate as of a particular time; however, Fannie Mae said it may no longer obtain new funds under the agreement once it has received a total of $200 billion under the agreement. Fannie Mae has received an aggregate of $44.9 billion from Treasury under the senior preferred stock purchase agreement to eliminate its net worth deficit as of the end of each of the last three quarters. On November 4, 2009, the Acting Director of FHFA submitted a request to Treasury for an additional $15.0 billion on Fannie Mae's behalf to eliminate its net worth deficit as of September 30, 2009, and requested receipt of those funds on or prior to December 31, 2009. Upon receipt of those funds from Treasury, the aggregate liquidation preference of Fannie Mae's senior preferred stock, including the initial liquidation preference of $1.0 billion, will equal $60.9 billion and the annualized dividend on the senior preferred stock will be $6.1 billion, based on the 10% dividend rate. This dividend obligation exceeds Fannie Mae's reported annual net income for five of the past seven years and will contribute to increasingly negative cash flows in future periods if Fannie Mae continues to pay the dividends on a quarterly basis. If Fannie Mae does not pay the dividend quarterly and in cash, the dividend rate would increase to 12% annually, and the unpaid dividend would accrue and be added to the liquidation preference of the senior preferred stock, further increasing the amount of the annual dividends. Due to current trends in the housing and financial markets, Fannie Mae expects to have a net worth deficit in future periods, and therefore will be required to obtain additional funding from Treasury pursuant to the senior preferred stock purchase agreement. "As a result, we are dependent on the continued support of Treasury in order to continue operating our business. Our ability to access funds from Treasury under the senior preferred stock purchase agreement is critical to keeping us solvent and avoiding the appointment of a receiver by FHFA under statutory mandatory receivership provisions," Fannie Mae said. Fannie Mae said its senior preferred stock dividend obligation, combined with potentially substantial commitment fees payable to Treasury starting in 2010 (the amounts of which have not yet been determined) and its effective inability to pay down draws under the senior preferred stock purchase agreement, will have a significant adverse impact on its future financial position and net worth. Fannie Mae said total assets of $890.3 billion as of September 30, 2009 decreased by $22.1 billion, or 2.4%, from December 31, 2008. Total liabilities of $905.2 billion decreased by $22.3 billion, or 2.4%, from December 31, 2008. Total Fannie Mae stockholders' deficit decreased by $249 million during the first nine months of 2009, to a deficit of $15.1 billion as of September 30, 2009, from a deficit of $15.3 billion as of December 31, 2008. The decrease in total Fannie Mae stockholders' deficit was due to the $44.9 billion in funds received from Treasury under the senior preferred stock purchase agreement, $10.5 billion reduction in unrealized losses on available-for-sale securities, net of tax, and a $3.0 billion reduction in Fannie Mae's deficit to reverse a portion of its deferred tax asset valuation allowance in conjunction with its April 1, 2009 adoption of the new accounting guidance for assessing other-than-temporary impairment. These factors were almost entirely offset by Fannie Mae's net loss of $56.8 billion for the first nine months of 2009. About Fannie Mae Fannie Mae -- http://www.fanniemae.com/-- is a government- sponsored enterprise that was chartered by Congress in 1938. Fannie Mae securitizes mortgage loans originated by lenders in the primary mortgage market into mortgage-backed securities, which can then be bought and sold in the secondary mortgage market. Fannie Mae also participates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities, including the Fannie Mae MBS, for its own mortgage portfolio. In addition, Fannie Mae makes other investments that increase the supply of affordable housing. Under its charter, Fannie Mae may not lend money directly to consumers in the primary mortgage market. Although Fannie Mae is a corporation chartered by the U.S. Congress, and although its conservator is a U.S. government agency and Treasury owns its senior preferred stock and a warrant to purchase its common stock, the U.S. government does not guarantee its securities or other obligations. Fannie Mae has been under conservatorship, with the Federal Housing Finance Agency acting as conservator, since September 6, 2008. As conservator, FHFA succeeded to all rights, titles, powers and privileges of the company, and of any shareholder, officer or director of the company with respect to the company and its assets. The conservator has since delegated to Fannie Mae's management and Board of Directors the authority to conduct the day-to-day operations. FINAL ANALYSIS: Settlements Fell Outside Range of Reason -------------------------------------------------------- WestLaw reports that a proposed settlement that a Chapter 7 trustee negotiated with each ex-employee having a claim against the debtor's estate for overtime pay and unissued stock could not be approved, to the extent that payment to the employee was in excess of the range of possible payments which the employee could reasonably expect based on the amount of his or her claim and his or her estimated 70% to 85% chances of succeeding. The other factors bearing on the propriety of the settlement did not alter the court's conclusion. In re Final Analysis, Inc., --- B.R. ---- , 2009 WL 3208311 (Bankr. D. Md.) (Catiolta, J.). Creditors of Final Analysis, Inc., filed an involuntary Chapter 7 petition (Bankr. D. M. Case No. 01-21039) against the company on September 4, 2001. The Court entered an order for relief on Oct. 16, 2001, and Cheryl Rose was appointed to serve as the Chapter 7 Trustee. Ms. Rose continues to serve in that capacity. Final Analysis, Inc., was owned by Michael Ahan and Nader Modanlo. Among FAI's assets was the majority of the outstanding stock of Final Analysis Communication Services, Inc. Final Analysis Communications filed a chapter 11 petition (Bankr. D. Md. Case No. 06-18250) on Dec. 29, 2006, and is represented by Edward J. Tolchin, Esq., at Fettmann, Tolchin & Majors PC; J. Daniel Vorsteg, Esq., Martin T. Fletcher, Esq., Cameron J. Macdonald, Esq., Chengzhi Yu, Esq., and Stephen B. Gerald, Esq., at Whiteford, Taylor & Preston, LLP. Mr. Modanlo filed a chapter 11 petition (Bankr. D. Md. Case No. 05-26549) too. The Trustee, FACS, Mr. Modanlo and others have been involved in extensive litigation in numerous courts over the past seven years. Trials have been held in the Circuit Court for Montgomery County, the United States District Court for the District of Maryland, and the Bankruptcy Court. The Chapter 7 Trustee testified in connection with the employee settlements that she's eyeing a distribution of 90 cents-on-the- dollar to Final Analysis, Inc.'s unsecured creditors. FONTAINEBLEAU LAS VEGAS: Bank Suit Set for Trial in August 2011 --------------------------------------------------------------- U.S. District Judge Alan S. Gold has scheduled an August 2011 trial on Fontainebleau Las Vegas LLC's lawsuit against that refused to honor contracts for a $770 million loan. Fact discovery in the suit is to be completed in November 2010 and discovery from experts will finish in April 2011. Simultaneous with its bankruptcy petition, Fontainebleau Las Vegas, LLC, one of the three Debtors in the Chapter 11 cases, sued in the Bankruptcy Court a group of banks led by Bank of America, N.A., as administrative agent, on June 9, 2009, for alleged breach under their financing commitment to fund the Debtor's multi-billion-dollar casino-resort development in Las Vegas, Nevada. The Debtor alleged that BofA, along with Merrill Lynch Capital Corporation, JPMorgan Chase Bank, N.A., Barclays Bank PLC, Deutsche Bank Trust Company Americas, The Royal Bank of Scotland PLC, Sumitomo Mitsui Banking Corporation New York, Bank of Scotland, HSH Nordbank AG, New York Branch, and MB Financial Bank, N.A., have "unjustifiably" failed and refused to provide the $770,000,000 in revolver financing under certain credit agreements aggregating $1.85 billion for the casino-resort development. The Debtor also alleged that Deutsche Bank encouraged other revolver lenders to breach their obligations under the credit agreement. The defendants obtained an order withdrawing the reference of the proceedings and moving the case to the District Court. In his 24-page ruling dated August 26, 2009, Florida District Court Judge Alan Gold denied Fontainebleau Las Vegas' request for a summary judgment and the immediate turnover of $656.52 million. The judge said that a trial was necessary to decide whose interpretation of the contract is right. Section 2.1(c)(iii) of the Credit Agreement provided that "Unless the Total Delay Draw Commitments have been fully drawn, the aggregate outstanding principal amount of all Revolving Loans and Swing Loans shall not exceed $150,000,000." Fontainebleau had claimed that the banks have breached a March 2, 2009 notice ,which requested loans in excess of $150 million, on the basis that the Total Delay Draw Commitments, i.e., the $350 million, was not "fully drawn." Fontainebleau Las Vegas had asserted that the unambiguous meaning of "fully drawn" is "fully requested." However, the judge said that the interpretation was "a reasonable one, but not the conclusive one." Judge Gold said the banks have advanced issues that their interpretation -- that in context of the entire agreement, the unambiguous meaning of "fully drawn" "fully funded" -- is also reasonable. About Fontainebleau Las Vegas Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. Attorneys at Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP, represent the Official Committee of Unsecured Creditors. As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FORD MOTOR: October 2009 European Sales Climb 13% ------------------------------------------------- Dow Jones Newswires' Christoph Rauwald and Jeff Bennett report that Ford Motor Co. in a conference call on Wednesday said its European sales in October climbed 13%. Ford, however, raised concern about the strength of the market next year when car- scrapping incentives end, the report says. According to the report, Ford's vehicle sales in its 19 core European markets totaled 121,000 last month, and its European market share stood at 8.8% in October, up 0.5 percentage point compared with the same month last year. Year-to-date it reached 9.1%, also an increase of 0.5 percentage point, the report says. "This is the strongest October we've had in Europe for 12 years," Ford Europe's sales chief, Ingvar Sviggum, said at the conference call, Messrs. Rauwald and Bennett relate. According to Messrs. Rauwald and Bennett, for 2010, Mr. Sviggum said he was unsure how the European market will fare since many countries plan to end their scrappage incentives. The incentives, which give consumers money if they trade in an old vehicle for a new one, helped boost sales throughout 2009, the report says. "But if Germany is an indicator, auto makers may be in for a tough 2010. Mr. Sviggum said sales in that country dropped as much as 25% after Germany ended its incentive program in September," Messrs. Rauwald and Bennett relate. "The one bright spot may be Russia," Messrs. Rauwald and Bennett report. "Mr. Sviggum said he foresees a recovery next year amid rising oil prices. Russia relies heavily on oil profits to drive its economy." According to the report, Russia also is preparing its own incentive program, which will most likely be granted to vehicles produced in Russia. Ford makes the Focus and Mondeo at its plant in St. Petersburg. About Ford Motor 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 November 4, 2009, 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. On Nov. 3, 2009, S&P raised the corporate credit ratings on Ford Motor Co. and Ford Motor Credit Co. LLC to 'B-' from 'CCC+'. FOURTH QUARTER PROPERTIES: Taps Stone & Baxter as Bankr. Counsel ---------------------------------------------------------------- Fourth Quarter Properties XLVII, LLC, and Fourth Quarter Properties 118, LLC, have each sought the permission of the U.S. Bankruptcy Court for the Northern District of Georgia to hire Stone & Baxter, LLP, as bankruptcy counsel. Stone & Baxter will, among other things: (a) prepare, on behalf of the Debtors, necessary and appropriate applications, motions, answers, reports and other legal papers; (b) continue existing litigation to which the Debtors may be a party and to conduct examinations incidental to the administration of the Debtors' estates; (c) take any and all necessary action instant to the proper preservation and administration of the estates; (d) assist the Debtors with the preparation and filing of statements of financial affairs and schedules and lists; and (e) assert all claims that the Debtors have against others and assist the Debtors in connection with claims for taes made by governmental units. James P. Smith, a partner at Stone & Baxter, said that the firm will be paid based on the hourly rates of its professionals: Professional Rate ------------ ---- Associates $195 Partners $200-$340 Research Assistants/Paralegals $100 Mr. Smith assures the Court that Heller Draper doesn't have interests adverse to the interest of the Debtors' estates or of any class of creditors and equity security holders. Mr. Draper maintains that Heller Draper is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. Newnan, Georgia-based Fourth Quarter Properties 118, LLC, dba The Rim, operates a real estate business. The Company filed for Chapter 11 bankruptcy protection on November 2, 2009 (Bankr. N.D. Ga. Case No. 09-13960). James P. Smith, Esq., at Stone & Baxter, LLP, assists the Company in its restructuring efforts. The Company listed $50,000,001 to $100,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. Fourth Quarter Properties XLVII, LLC, which also operates a real estate business, filed for Chapter 11 bankruptcy protection on November 2, 2009 (Bankr. N.D. Ga. Case No 09-13959). The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. FRED LEIGHTON: Court Confirms Chapter 11 Plan Proposed by Merrill ----------------------------------------------------------------- According to Bill Rochelle at Bloomberg, the Bankruptcy Court has confirmed a liquidating plan for Fred Leighton LLC. The Plan was filed by secured lender Merrill Lynch Mortgage Capital Inc., with support from Leighton's chief restructuring officer. The report relates that the Court allowed Merrill to seek confirmation of the Plan without a disclosure statement. Merrill was the only creditor entitled to vote on the plan. All other classes either received full payment or receive nothing, in either case not entitling them to vote. Because Merrill also was the proponent of the plan, the bankruptcy judge ruled that no disclosure statement was required. The Bankruptcy Court approved early this month the sale of Fred Leighton Holding Inc.'s business operations for $25.8 million in cash to investors including a group of private equity firms and estate jewelry seller Windsor Jewelers Inc. Fred Leighton Holding, Inc. -- http://www.fredleighton.com/-- is a New York-based jewelry retailer owned by Ralph O. Emerian. Fred Leighton has decked countless red-carpet-dwellers in diamonds, including Sarah Jessica Parker, Nicole Kidman, and Catherine Zeta- Jones. Fred Leighton and its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on April 15, 2008 (Bankr. S.D.N.Y., Case No. 08-11363). Joshua Joseph Angel, Esq., and Frederick E. Schmidt, Esq., at Herrick, Feinstein LLP, in New York, represent the Debtors. The Official Committee of Unsecured Creditors has retained Michael Z. Brownstein, Esq., and Rocco A. Cavaliere, Esq., at Blank Rome LLP, as counsel. Fred Leighton listed total assets of $128,551,467 and total liabilities of $134,814,367 in its schedules. FREEDOM COMMUNICATIONS: Has Dec. 17 Disclosure Hearing ------------------------------------------------------ Freedom Communications Inc. will seek approval of the disclosure statement explaining the terms of its Chapter 11 reorganization plan. The Debtor has filed a Chapter 11 plan and explanatory disclosure statement on the terms of an agreement with lenders prepetition. Pre-bankruptcy, Freedom Communications reached agreement with its lenders on a restructuring of the Company's debt under Chapter 11. Pursuant to the plan support agreement, lenders owed $771 million will receive $325 million in two secured term loans plus 100% of the stock, subject to dilution. The explanatory disclosure statement says the reorganized company will be worth "substantially less" than the secured debt, meaning that most unsecured creditors and existing stockholders are not entitled to distributions. However, under the Plan, unsecured creditors would split $5 million in cash if they don't object to the plan, and nothing if they object. Suppliers who continue to provide goods and services will receive full payment for their prepetition claims. Existing stockholders would get 2% of the new stock, along with warrants for 10%, if they don't object to the plan. The Plan Support Agreement will be terminated by the lenders if the Debtors do not obtain confirmation of the Plan within five months. Deadline to consummate the Plan is 11 months after the Petition Date. About Freedom Communications Freedom Communications, headquartered in Irvine, Calif., is a national privately owned information and entertainment company of print publications, broadcast television stations and interactive businesses. The company's print portfolio includes approximately 90 daily and weekly publications, including approximately 30 daily newspapers, plus ancillary magazines and other specialty publications. The broadcast company's stations -- five CBS, two ABC network affiliates and one CW affiliate -- reach more than 3 million households across the country. The Company's news, information and entertainment Web sites complement its print and broadcast properties. Freedom Communications filed for Chapter 11 on Sept. 1, 2009 (Bankr. D. Del. Case No. 09-13046). Attorneys at Young Conaway Stargatt & Taylor, and Latham & Watkins LLP serve as Chapter 11 counsel. Houlihan, Lokey, Howard & Zukin, Inc., serves as financial advisor while AlixPartners LLC is restructuring consultant. Logan & Co. serves as claims and notice agent. Freedom Communications had $757,000,000 in assets against debts of $1,077,000,000 as of July 31, 2009. FREEDOM COMMUNICATIONS: Creditors Seek Alternative Plan Proposals ----------------------------------------------------------------- Law360 reports that Freedom Communications Holdings Inc. has again drawn fire from its unsecured creditors, which this time accuse the newspaper publisher of abandoning efforts to seek out the best reorganization plan proposal by deciding on a prepetition plan without their input. The Debtor has filed a Chapter 11 plan and explanatory disclosure statement on the terms of an agreement with lenders prepetition. Pre-bankruptcy, Freedom Communications reached agreement with its lenders on a restructuring of the Company's debt under Chapter 11. Pursuant to the plan support agreement, lenders owed $771 million will receive $325 million in two secured term loans plus 100% of the stock, subject to dilution. Unsecured creditors would split $5 million in cash if they don't object to the plan, and nothing if they object. Suppliers who continue to provide goods and services will receive full payment for their prepetition claims. Existing stockholders would get 2% of the new stock, along with warrants for 10%, if they don't object to the plan. The Plan Support Agreement will be terminated by the lenders if the Debtors do not obtain confirmation of the Plan within five months. Deadline to consummate the Plan is 11 months after the Petition Date. About Freedom Communications Freedom Communications, headquartered in Irvine, Calif., is a national privately owned information and entertainment company of print publications, broadcast television stations and interactive businesses. The company's print portfolio includes approximately 90 daily and weekly publications, including approximately 30 daily newspapers, plus ancillary magazines and other specialty publications. The broadcast company's stations -- five CBS, two ABC network affiliates and one CW affiliate -- reach more than 3 million households across the country. The Company's news, information and entertainment Web sites complement its print and broadcast properties. Freedom Communications filed for Chapter 11 on Sept. 1, 2009 (Bankr. D. Del. Case No. 09-13046). Attorneys at Young Conaway Stargatt & Taylor, and Latham & Watkins LLP serve as Chapter 11 counsel. Houlihan, Lokey, Howard & Zukin, Inc., serves as financial advisor while AlixPartners LLC is restructuring consultant. Logan & Co. serves as claims and notice agent. Freedom Communications had $757,000,000 in assets against debts of $1,077,000,000 as of July 31, 2009. FREMONT GENERAL: Files Revised Reorganization Plan -------------------------------------------------- Investor group New World Acquisition LLC has submitted revisions to its reorganization plan and explanatory disclosure statement for Fremont General Corp. New World has made changes to the Disclosure Statement (a) to accommodate the request of various parties in interest, including the Securities and Exchange Commission; (b) to reflect significant new information made available to New World within the last few days affecting the tax consequences for the Reorganized Debtor; and (c) to respond to objections imposing a standard that none of the other plan proponents have been required to meet or that which Section 1125 of the Bankruptcy Code requires. New World made two changes to the New World Plan and Disclosure Statement based on new information regarding historic ownership change provided to New World within the last few days. For purposes of the New World Plan, New World increased its equity purchase from $4 million to $6.8 million to purchase approximately 20.6 million shares of common stock, depending on the price per share on a 90 day trading average and subject to some adjustment (with a $1 million cap) in the event that the information recently received changes. In addition, the warrants issued by the Reorganized Debtor will be issued to New World under the New World Plan now and New World may allocate certain of the warrants to the lender in connection with the exit financing. These changes are necessary to ensure that the Reorganized Debtor retains the maximum benefit of its NOLs both pre and post effective date. In addition, the changes provide reorganized Fremont with additional capital and provide New World with greater flexibility in obtaining the best possible financing. According to the Disclosure Statement, the New World Plan provides the reorganized Debtor with additional liquidity by way of: (i) a $6.8 million equity investment (with the shares priced at the 90 day average prior to the disclosure statement hearing on the New World Plan); and (ii) exit financing of $20 million for operations, general corporate purposes and reserves for making the distributions required by the Plan and to the holders of post-effective date merger claims. In addition, under the New World Plan, operations of the reorganized Debtor will be under the supervision of a representative and experienced board that will maximize the value of the operations for the benefit of the creditors, holders of post-effective date merger claims and equity interests and observe all good corporate governance practices. A copy of the revised plan and disclosure statement is available for free at: http://bankrupt.com/misc/Fremont_NewWorld_DS_Nov06.pdf http://bankrupt.com/misc/Fremont_NewWorld_Plan_Nov06.pdf 3 Competing Plans Fremont's management, the Official Committee of Unsecured Creditors and the Official Committee of Equity Holders already have filed competing Chapter 11 plans for Fremont. In June, the Company filed a proposed Chapter 11 plan that offers to pay 100 cents on the dollar to general unsecured creditors through pro rata distribution of cash, until the claim has been satisfied, including payment of post-petition interest, as applicable. Holders of equity interests will also receive interests under the Plan. A full-text copy of the disclosure statement with respect to Fremont's Chapter 11 Plan is available for free at http://bankrupt.com/misc/Fremont.DS.pdf In July, the Equity Committee filed a proposed Chapter 11 plan for the Company. The Plan promises to pay all creditors in full with interest, unless they elect to give up interest in return for quicker payment. Debt includes $63 million in unsecured claims plus almost $274 million to holders of debt securities. The shareholders' plan would be financed with $27.9 million in cash that Fremont has on hand plus cash held in a nonbankrupt subsidiary. After the plan becomes effective, the shareholders say Fremont will have $90 million available. The equity holders intend to buy banks and use Fremont's tax loss carryforwards. A copy of the Equity Committee's disclosure statement, as revised September 30, is available for free at: http://bankrupt.com/misc/Fremont_EquityCommittee_DS_Sept30.pdf In July, the Creditors Committee also presented its own plan for Fremont. Under its Plan, holders of class 3 general unsecured claims are afforded the option of waiving their right to post- petition interest in exchange for payment in full of the amount owing to the holders on or before October 31, 2009, so long as sufficient cash is then available to make such payment. Holders of interests in the Debtor will retain those interests in the form of equity trust interests in an Equity Trust established under the Plan. A copy of the Creditors Committee's disclosure statement, as revised September 30, is available for free at: http://bankrupt.com/misc/Fremont_CredCommittee_DS_Sept30.pdf About Fremont General Based in Santa Monica, California, Fremont General Corp. (OTC: FMNTQ) -- http://www.fremontgeneral.com/-- was a financial services holding company with $8.8 billion in total assets at September 30, 2007. Fremont General ceased being a financial services holding company on July 25, 2008, when its wholly owned bank subsidiary, Fremont Reorganizing Corporation (f/k/a Fremont Investment & Loan) completed the sale of its assets, including all of its 22 branches, and 100% of its $5.2 billion of deposits to CapitalSource Bank. Fremont General filed for Chapter 11 protection on June 18, 2008, (Bankr. C.D. Calif. Case No. 08-13421). Robert W. Jones, Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at Stutman Treister & Glatt, represent the Debtor as counsel. Kurtzman Carson Consultants LLC is the Debtor's noticing agent and claims processor. Lee R. Bogdanoff, Esq., Jonathan S. Shenson, Esq., and Brian M. Metcalf, at Klee, Tuchin, Bogdanoff & Stern LLP, represent the Official Committee of Unsecured Creditors as counsel. Fremont's formal schedules showed $330,036,435 in total assets and $326,560,878 in total debts. FRONTIER AIRLINES: Judge Drain Enters Post-Confirmation Order ------------------------------------------------------------- In light of the confirmation of Frontier Airlines' Joint Plan of Reorganization on September 10, 2009, and the occurrence of the Effective Date of the Plan on October 1, 2009, Judge Drain entered a post-confirmation order directing the Debtors' compliance with these items: * serving a copy of the Confirmation Order to the Post-' Effective Date Committee, the United States Trustee and other parties as provided in the Plan; * filing an application for a final decree and, if and when requested by the Court, a closing report in accordance with Rule 3022-1 of the Local Rules of the U.S. Bankruptcy Court for the Southern District of New York, within 60 days following the payment of the final distribution required by the Plan; and * submit information including a final decree closing the Chapter 11 Cases. If the Debtors fail to comply with the Post-Confirmation Order, the Court may issue an order directing the Debtors to "show cause," the Court ruled. About Frontier Airlines Frontier Airlines Holdings, Inc. (OTCBB: FRNTQ) is the parent company of Denver-based Frontier Airlines and Lynx Aviation. Currently in its 16th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation is made up of one of the youngest Airbus fleets in North America offering 24 channels of DIRECTV(R) service in every seatback along with a comfortable all- coach configuration. In conjunction with a fleet of Bombardier Q400 aircraft operated by Lynx Aviation, Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. In addition, Frontier and Midwest Airlines, a subsidiary of Republic, have a codeshare partnership that allows passengers of both airlines access to 70 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. As reported by the TCR on August 14, Republic Airways Holdings, Inc. (NASDAQ: RJET) has been declared the winning bidder in the auction to acquire Frontier, beating Southwest Airlines. Republic Airways expects to close on its purchase of Frontier Airlines on or about Oct. 1, 2009, after which Frontier and Lynx will become subsidiaries of Republic, alongside Midwest Airlines and Republic's other wholly owned subsidiaries. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Notice of Initial Distribution Under Plan ------------------------------------------------------------ Pursuant to their confirmed Joint Plan of Reorganization, Frontier Airlines Inc. and its units notified the Court and parties-in- interest that they made initial distributions to the servicers for, or record holders of, General Unsecured Claims that were allowed as of October 15, 2009 -- the Initial Distribution Date. To recall, the Court confirmed the Debtors' Joint Plan of Reorganization on September 10, 2009. The Effective Date of the Plan occurred on October 1, 2009. Each holder of an Allowed General Unsecured Claim was sent a distribution equal to that Allowed General Unsecured Claim's Initial Pro Rata Share of the Class 3 Allocation, according to Darren S. Klein, Esq., at Davis Polk & Wardwell LLP, in New York. The Reorganized Debtors, in consultation with the Official Committee of Unsecured Creditors, have set initial distributions equal to approximately 14.45% of the Allowed amount of the General Unsecured Claims, Mr. Klein told the Court. On the Initial Distribution Date, the Reorganized Debtors distributed $21,471,725 of the Class 3 Allocation. The remaining $7,278,274 of the Class 3 Allocation will be held in the Disputed Claims Reserve, pursuant to the Plan. On any periodic Interim Distribution Dates and on the Final Distribution Date, subject to the terms and conditions of the Plan, the Reorganized Debtors will make distributions from the Disputed Claims Reserve to those holders of Allowed General Unsecured Claims that are entitled to receive those Distributions, according to Mr. Klein. About Frontier Airlines Frontier Airlines Holdings, Inc. (OTCBB: FRNTQ) is the parent company of Denver-based Frontier Airlines and Lynx Aviation. Currently in its 16th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation is made up of one of the youngest Airbus fleets in North America offering 24 channels of DIRECTV(R) service in every seatback along with a comfortable all- coach configuration. In conjunction with a fleet of Bombardier Q400 aircraft operated by Lynx Aviation, Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. In addition, Frontier and Midwest Airlines, a subsidiary of Republic, have a codeshare partnership that allows passengers of both airlines access to 70 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. As reported by the TCR on August 14, Republic Airways Holdings, Inc. (NASDAQ: RJET) has been declared the winning bidder in the auction to acquire Frontier, beating Southwest Airlines. Republic Airways expects to close on its purchase of Frontier Airlines on or about Oct. 1, 2009, after which Frontier and Lynx will become subsidiaries of Republic, alongside Midwest Airlines and Republic's other wholly owned subsidiaries. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Seeks Final Decree Closing 2 Cases ----------------------------------------------------- Frontier Airlines Holdings, Inc., and its debtor-affiliates ask Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York to enter a final decree closing the fully administered Chapter 11 cases of Frontier Airlines, Inc., and Lynx Aviation, Inc. On September 10, 2009, the Court confirmed the Reorganized Debtors' Joint Plan of Reorganization. The Effective Date of the Plan was October 1, 2009, Damian S. Schaible, Esq., at Davis Polk & Wardwell, in New York, noted. Pursuant to Section 350(a) of the Bankruptcy Code, the Debtors submit that the Fully Administered Cases are inactive. The remaining activity in the Chapter 11 cases is substantively limited to Frontier Holdings, which will remain open, according to Mr. Schaible. Moreover, the Plan contemplates that the estates of the Frontier and Lynx Reorganized Debtors are consolidated with Reorganized Frontier Holdings for purposes of distributions under the Plan. Thus, any payments due to the creditors of any of the Reorganized Debtors under the Plan will be made by Frontier Holdings. According to Ms. Schaible, the Fully Administered Cases meet each of the six factors set forth in the Advisory Note in Rule 3022 of the Federal Rules of Bankruptcy Procedure for the closing of the Fully Administered Cases: (1) The Court's Order dated September 10, 2009, confirming the Plan is now final. (2) The Reorganized Debtors made a cash distribution to prepetition general unsecured creditors of the Frontier and Lynx Reorganized Debtors on the Initial Distribution Date and have established the Disputed Claims Reserve from which future cash distributions will be made to creditors as disputed claims become allowed through the claims reconciliation process. The future cash distributions and the Disputed Claims Reserve, as defined in the Plan, do not require that the Fully Administered Cases remain open. (3) The Reorganized Debtors have distributed and transferred the cash and stock contemplated to be disbursed in the period immediately following confirmation of the Plan. Further, distributions to be made in accordance with the Plan will be made by Reorganized Frontier Holdings and do not require that the Fully Administered Cases remain open. (4) Pursuant to the Plan, the Reorganized Debtors have assumed management of the reorganized estates. New boards of directors have been appointed and are directing the affairs of the Reorganized Debtors. (5) Payments under the Plan have commenced. The initial distribution has occurred. Notably, future distributions will not be made out of the assets of the estates of the Fully Administered Cases. (6) The closing of the Fully Administered Cases will not prejudice any pending motions on Claims, all of which will be resolved or satisfied by the Reorganized Debtors, and the Court will maintain jurisdiction over those matters. The Court will convene a hearing on November 23, 2009, to consider approval of the Motion. About Frontier Airlines Frontier Airlines Holdings, Inc. (OTCBB: FRNTQ) is the parent company of Denver-based Frontier Airlines and Lynx Aviation. Currently in its 16th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation is made up of one of the youngest Airbus fleets in North America offering 24 channels of DIRECTV(R) service in every seatback along with a comfortable all- coach configuration. In conjunction with a fleet of Bombardier Q400 aircraft operated by Lynx Aviation, Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. In addition, Frontier and Midwest Airlines, a subsidiary of Republic, have a codeshare partnership that allows passengers of both airlines access to 70 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. As reported by the TCR on August 14, Republic Airways Holdings, Inc. (NASDAQ: RJET) has been declared the winning bidder in the auction to acquire Frontier, beating Southwest Airlines. Republic Airways expects to close on its purchase of Frontier Airlines on or about Oct. 1, 2009, after which Frontier and Lynx will become subsidiaries of Republic, alongside Midwest Airlines and Republic's other wholly owned subsidiaries. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GAINEY CORP: Auction Protocol Amended to Accommodate Highland Bid ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan granted Highland Capital Management, LP's motion to amend the bid procedures for the sale of substantially all assets of Gainey Corp. and its debtor-affiliates. Highland Capital asked the Court to extend the qualified bid deadline, assumed contract designation and cure amount deadline to Nov. 12, 2009 at 4:00 p.m. (Eastern time) in order to ensure an auction with maximum bidder participation and intelligent bidding. Highland Capital, a secured creditor holding an allowed claim of $31.6 million, expressed its desire to bid for the Debtor's assets. The amendment also included the approval of the break-up fee, payable to the stalking horse purchaser, as a superpriority administrative expense. On Oct. 29, 2009, the Debtor entered into an asset purchase agreement with Trucking Acquisition Company, LLC, an affiliate by common ownership only of the Najafi Companies, LLC for the sale of substantially all of the Debtors' assets. The auction will be on Nov. 16, 2009, at 11:00 a.m. at the offices of Dickinson Wright PLLC, 200 Ottawa Avenue, N.W., Suite 1000, Grand Rapids, Michigan. As reported in the Troubled Company Reporter on Nov. 6, 2009, the Court will convene a hearing to approve the results of the auction on November 17. About Gainey Corp. Headquartered in Grand Rapids, Michigan, Gainey Corp. -- http://www.gaineycorp.com/-- provides trucking and freight- services in the U.S. and parts of Canada. It has 5,000 trucks and trailers, and employs more than 2,300 workers including 1,900 truck drivers. The Company and its subsidiaries filed for Chapter 11 bankruptcy protection on Octoer 14,, 2008 (Bankr. W.D. Mich. Lead Case No. 08-09092). Daniel F. Gosch, Esq., Geoffrey A. Fields, Esq., John T. Schuring, Esq., and Trent B. Collier, at Dickinson Wright PLLC; Inga April Hofer, Esq., Jacob Joseph Sadler, Esq., and Stephen B. Grow, Esq., at Warner Norcross & Judd, LLP, represent the Debtors as counsel. Alixpartners, LLC, is the Debtors' restructuring and financial consultant. Virchow Krause and Company, LLP, is the Debtors' financial advisor. Eric David Novetsky, Esq., Jay L. Welford, Esq., Judith Greenstone Miller, Esq., Louis P. Rochkind, Esq., Paul R. Hage, Esq., and Richard E. Kruger, Esq., at Jaffe, Raitt, Heuer & Weiss, PC, represent the Official Committee of Unsecured Creditors as counsel. As of the commencement date, the Debtors owned assets with a "book" value of approximately $239,000,000. As of May 22, 2009, the Debtors books and records reflected available cash on hand in the amount of approximately $16,300,000, plus billed accounts receivable in the amount of approximately $18,400,000. GEMCRAFT HOMES: Economic Downturn Blamed for Chapter 11 Filing -------------------------------------------------------------- Alan J. Heavens at the Philadelphia Inquirer reports that Gemcraft Homes filed for Chapter 11 bankruptcy protection blaming economic and market conditions existing in the land development and homebuilding industry. Mr. Heavens relates that the company Gemcraft has two developments in the eight-county Philadelphia area: Penn's Manor in Kennett Square and Hills of London Grove in Avondale. Company president Bill Luther, Mr. Heaven says, expected to have $37 million in new financing from existing lenders. Baltimore-based Gemcraft Homes -- http://www.gemcrafthomes.com/-- operates a homebuilding company. GENERAL GROWTH: Discloses $117.8 Mil. Net Loss for Q3 ----------------------------------------------------- General Growth Properties, Inc., reported its third quarter 2009 operating results. For the third quarter of 2009, Core Funds From Operations (Core FFO) per fully diluted share were $0.28, Funds From Operations (FFO) per fully diluted share were $0.31 and Earnings per share -- diluted (EPS) were a loss of $0.38. In the comparable 2008 period, Core FFO per fully diluted share were $0.62, FFO per fully diluted share were $0.56 and EPS were a loss of $0.08. Core FFO and FFO declined for the third quarter of 2009 as compared to the third quarter of 2008 primarily as a result of the impact of the continued weak retail market on operations and ongoing costs associated with GGP's April 2009 bankruptcy filings. A Supplemental Schedule of Significant FFO Items that Impact Comparability is provided with this release. Consistent with previous releases for this year, the third quarter and year to date 2008 results have been restated from the amounts originally reported in 2008 to reflect the adoption of two accounting pronouncements as of January 1, 2009, that required retrospective application. Operational and Financial Highlights "Although comparable and total tenant sales on a trailing twelve month basis continue to be down, third quarter 2009 comparable tenant sales were only down 4.6% as compared to the third quarter 2008," stated Adam Metz, Chief Executive Officer of General Growth. "September 2009 comparable tenant sales actually increased 0.8% as compared to September 2008 comparable tenant sales. While we are hopeful these trends will continue, our outlook remains cautious for the upcoming Holiday season." Elaborating on leasing spreads and Comparable NOI, Mr. Metz stressed, "We have significantly reduced tenant allowance expenditures on new leases signed such that the face rent amount is not reflective of the true value of our new leases when compared to those expiring. Further, although we have increased certain repairs and maintenance expenses in 2009 because the upkeep of our physical plant is critical to building and maintaining the long-term value of our properties, we have also negotiated reductions in certain janitorial and security contracts with no significant declines in service levels. Finally, a portion of our real estate tax increase in 2009 is a result of certain of such taxes no longer qualifying for capitalization due to decreased development spending." Core FFO is defined as Funds From Operations excluding the Real Estate Property Net Operating Income (NOI) from the Master Planned Communities segment and the benefit from (provision for) income taxes. Core FFO for the third quarter of 2009 were $88.9 million or $0.28 per fully diluted share as compared to $199.2 million or $0.62 per fully diluted share for the third quarter of 2008. During the third quarter of 2009 we recorded additional retail property, development project and goodwill impairments of $60.9 million, $0.19 per fully diluted share, which was in excess of similar provisions for impairment of $15.2 million, $0.05 per fully diluted share, recorded in the comparable 2008 period. In addition, $22.6 million, $0.07 per fully diluted share, of net reorganization items were reflected in the third quarter of 2009 as compared to no such reorganization items incurred in the third quarter of 2008. The remaining declines in Core FFO in 2009 are related to retail and other segment declines described below. FFO per fully diluted share was $0.31 in the third quarter of 2009. FFO for the quarter were $100.2 million as compared to $178.9 million in the third quarter of 2008. In addition to the changes in Core FFO for 2009 as compared to 2008 listed above, during the third quarter of 2008 an impairment provision of $40.3 million, $0.13 per fully diluted share, was recorded at our Nouvelle at Natick condominium development. Reference is made to the attached Supplemental Schedule of Significant FFO Items that Impact Comparability for additional items impacting FFO comparability. EPS for the third quarter of 2009 were a loss of $0.38 per share versus a loss of $0.08 in the third quarter of 2008. Third quarter 2009 EPS were significantly impacted by the Core FFO and FFO items discussed above. In addition, there were no significant sales of Retail and Other assets in 2009 whereas, in the third quarter of 2008, we sold (in two separate transactions) two office parks located in Maryland resulting in gains of approximately $18.0 million, which, after allocation of approximately $2.9 million attributable to non-controlling interests, increased EPS by $0.05 per share in 2008. The Company and certain of our wholly-owned subsidiaries (representing approximately 166 of our regional malls, collectively, the "Debtors") continue to operate as debtors-in- possession pursuant to the provisions of Chapter 11 of the U.S. Bankruptcy Code ("Chapter 11"). The Chapter 11 cases are being jointly administered in the Bankruptcy Court of the Southern District of New York (the "Bankruptcy Court"). However, our property management subsidiary, certain of our wholly-owned subsidiaries, and our joint ventures, either consolidated or unconsolidated, have not sought such Chapter 11 protection. Since the commencement of the Chapter 11 cases, the Debtors have continued their normal operations, as approved by Bankruptcy Court rulings. The Debtors have been granted the exclusive right, until February 2010 and April 2010, respectively, to present and obtain acceptance of a plan of reorganization. As part of the plan of reorganization currently being developed, the Debtors are in negotiations with certain secured lenders to extend the maturities on their mortgage loans. Segment Results Retail and Other Segment Revenues from consolidated properties were $736.4 million for the third quarter of 2009 as compared to $784.3 million for the same period in 2008, while revenues from unconsolidated properties, at the Company's ownership share, decreased to $147.6 million for the third quarter of 2009 compared to $151.4 million in the third quarter of 2008. This represents revenue declines in the current quarter of 6.1% and 2.5%, respectively, as compared to the prior year period. Revenues for both consolidated and unconsolidated properties decreased primarily in the areas of minimum rents (including temporary tenant revenues), overage rents, and other revenues (including sponsorship, vending, parking and advertising) due to occupancy declines and reduced tenant sales volumes in the third quarter of 2009 as compared to the same period of 2008. NOI for the third quarter of 2009 was $585.2 million, a decrease of approximately 6.0% from the $622.5 million reported in the third quarter of 2008. In addition to the revenue items discussed above, we sold two office parks in 2008 which also contributed to the decrease in NOI in 2009. Total tenant sales declined 9.8% and comparable tenant sales declined 10.7% in 2009, both on a trailing 12 month basis, compared to the same period last year. Comparable NOI from consolidated properties in the third quarter of 2009 declined by 6.3% compared to the third quarter of 2008. Comparable NOI from unconsolidated properties at the Company's ownership share in the third quarter of 2009 declined 2.7% compared to the third quarter of 2008. In the aggregate, comparable retail and other NOI decreased 5.8% as compared to the third quarter of 2008. Such comparable NOI declines for the three months ended September 2009 versus the three months ended September 2008 are primarily the result of negative new leasing spreads and higher net real estate tax expense. Retail Center occupancy increased slightly to 91.3% at September 30, 2009, as compared to 91.0% at June 30, 2009 but declined as compared to 92.7% at September 30, 2008. Although declines in the economy have yielded year-over-year occupancy reductions, quarter over quarter occupancy improvements in 2009 are primarily attributable to increases in shorter term tenant leasing. Tenant sales per square foot for third quarter 2009 (on a trailing twelve month basis) were $409 as compared to $455 in the third quarter of 2008. Master Planned Communities Segment NOI in the third quarter of 2009 for the Master Planned Communities segment was a loss of $2.2 million for consolidated properties and $0.8 million for unconsolidated properties as compared to a loss of $42.7 million for consolidated properties and income of $3.6 million for unconsolidated properties, respectively, in the third quarter of 2008. NOI remains negative for certain communities as operating expenses cannot be completely eliminated despite the significant reduction in current sales revenues. As detailed in the Supplemental Schedule of FFO Items that Impact Comparability, the NOI loss in the third quarter of 2008 for consolidated properties is due primarily to the $40.3 million provision for impairment related to the Nouvelle at Natick condominium development. Although an auction of certain of the remaining inventory of unsold condominiums was held at Nouvelle at Natick in early October 2009, the sales prices in the executed contracts obtained did not trigger any additional impairment provisions at September 30, 2009 beyond those recognized in previous periods. Land sale revenues in the third quarter of 2009 were approximately $7.4 million for consolidated properties and approximately $7.8 million for unconsolidated properties, compared to $6.2 million for consolidated properties and $13.1 million for unconsolidated properties, in the third quarter of 2008. A full-text copy of the Third Quarter 2009 result is available for free at http://ResearchArchives.com/t/s?48c2 General Growth Properties, Inc. Consolidated Statements of Income Three Months Ended September 30, 2009 (In thousands) Revenues: Minimum rents $489,472 Tenant recoveries 217,040 Overage rents 10,408 Land sales 7,409 Management and other fees 14,500 Other 22,132 ----------- Total revenues 760,961 ----------- Expenses: Real estate taxes 69,925 Repairs and maintenance 56,472 Marketing 7,358 Other property operating costs 108,009 Land sales operations 9,582 Provision for doubtful accounts 5,925 Property management and other costs 44,876 General and administrative 11,652 Provisions for impairment 60,940 Depreciation and amortization 185,016 ----------- Total expenses 559,755 ----------- Operating income 201,206 Interest income 523 Interest expense (326,357) ----------- Loss before income taxes, noncontrolling interests and equity in income of Unconsolidated Real Estate Affiliates (124,628) Benefit from (provision for) income taxes 14,430 Equity in income of Unconsolidated Real Estate Affiliates 15,341 Reorganization items (22,597) ----------- Loss from continuing operations (117,454) Gain from discontinued operations 29 ----------- Net (loss) income (117,425) Allocation to noncontrolling interests (422) ----------- Net (loss) income attributable to controlling interests ($117,847) =========== About General Growth Properties Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly ] 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Proposes Employee Incentive Programs ---------------------------------------------------- In 2008, General Growth Properties, Inc., and its debtor affiliates retained new senior management to focus on restructuring their business and maximizing their enterprise value. The Debtors then began to consider changing their compensation structure to incentivize employees and align their employee goals with those of the reorganization of the Debtors. In consultation with Hewitt Associates LLC, as well as extensive negotiations with the Official Committee of Unsecured Creditors, the Debtors modified their prepetition Cash Value Added Compensation Incentive Plan and adopted a Key Employee Incentive Plan. Modified CVA Plan Terms The Modified CVA Plan provides that all full-time employees of the Debtors, except leasing representatives, will be eligible to participate in the Modified Plan, provided that Chief Executive Officer and President and Chief Operating Officer will only be eligible to participate in 2010. Participating employees will be assigned a target opportunity equal to a percentage of their base salary, subject to adjustment based on the individual employee's performance, as payment under the Modified CVA Plan. While most eligible employees' CVA Target Opportunity will be set at prepetition levels and will be consistent with historic target opportunities, with respect to 716 management level employees, their CVA Target Opportunity will be increased by 25% to reflect the equity grants that they were previously entitled to receive. However, the CVA Target Opportunity will not be increased for those employees who are participating in the KEIP. Form of payout under the Modified CVA is cash. The performance period is the twelve month period ending December 31, 2009, and December 31, 2010. Performance Metrics under the Modified CVA Plan are: -- For non-KEIP participants, an eligible employee's performance will be based on a combination of net operating income and individual performance metrics. "NOI" means the aggregate operating revenues of the Debtors' real estate properties and master planned communities less the aggregate property and related expenses of those properties and communities. The target NOI for 2009 is $2.33 billion. The target NOI for 2010 will be set by the Compensation Committee in the ordinary course following consultation with management; provided that the Compensation Committee has set a proposed target, the Debtors will notify the proposed target to the Creditors' Committee. If the Debtors and the Creditors' Committee reach an agreement, the agreed target will be adopted as the target NOI for 2010 without further order of the Court. If the Debtors and the Creditors' Committee are unable to reach an agreement, the Debtors may seek Court approval of the proposed target. -- For KEIP participants, performance will be based on EBITDA, which is defined as NOI plus property management revenue less corporate overhead and capitalized costs. The target EBITDA for 2009 is $2.17 billion. The target EBITDA for 2010 will be set by the Compensation Committee in the ordinary course following consultation with management; provided that once the Compensation Committee has set a proposed target, the Debtors will notify the Creditors' Committee of the proposed target. If the Debtors and the Creditors' Committee reach an agreement on the target, the agreed target will be adopted as the target EBITDA for 2010 without further Court order. If the Debtors and the Creditors' Committee are unable to reach an agreement, the Debtors may seek Court approval of the proposed target. -- This payout scheme will be utilized for calculating payments under the Modified CVA Plan: Performance Payout Level (EBITDA % of CVA or NOI, as Target applicable) Opportunity ------------ ----------- Maximum 109% and above 200% of Target Target 100% 100% of Target Low Performance 92% 11.1% of Target Threshold 91%or below No Payout The incentive pool will be distributed as follows: -- (a) those officers of the Debtors appointed to the Debtors' executive committee from time to time, and (b) those other managing employees designated by the CEO and COO, are paid at the attained EBITDA level for all employees participating in the KEIP, unless adjusted by the CEO or COO based on individual performance; and -- all other participants will be paid their portion of the incentive pool based on their applicable performance objective pursuant to administrative procedures approved by the CEO, which may include adjustment of that amount based on the participant's individual performance. Incentive payouts under the Modified CVA will be paid as soon as practicable after the end of the applicable performance period. A participating employee who terminates prior to conclusion of the performance period will not be eligible to receive a CVA Plan incentive award. KEIP Terms Under the KEIP, 47 of General Growth Properties, Inc.'s active executives will be eligible to participate in the KEIP. The 47 participants were chosen either because they are essential to the Debtor' operations or integral to the bankruptcy reorganization. Eligible executives will be assigned a target opportunity equal to a percentage of their base salary. To the extent that the Debtors hire a new CFO, that executive will become eligible to participate in the KEIP, thus increasing the number of participants to 47. The KEIP is primarily based on performance metrics tied to distributions to holders of the Parent Level Debt and Equity. The KEIP performance metrics are the POR Recovery Value and the Market-Based Recovery Value, which are 40% using the POR Recovery Value and 60% using the Market-Based Recovery Value, to each executive's KEIP Target: -- POR Recovery Value is calculated by dividing (a) the aggregate value of all consideration distributed or to be distributed to the holders of the Parent Level Debt and Equity pursuant to a confirmed Chapter 11 plan, by (b) the aggregate allowed claim amount and estimated claim amount, as of the emergence date of the Debtors, of the Parent Level Debt. -- Market-Based Recovery Value is calculated by dividing (a) the sum of: * the volume-weighted average price of publicly traded equity securities during the 10 days prior to and 10 days after the 90th day after the Emergence Date, * the aggregate public market value for publicly traded debt securities during the Trading Period, * for non-publicly traded debt securities, the aggregate market value of those debt securities, * for nonpublicly traded debt securities, the value of those securities as determined by an independent third party, * the value ascribed to any trust certificates issued by the Debtors based on the value reflected in the confirmation order, Chapter 11 plan or related disclosure statement, and * the face amount of cash and cash equivalents; by (b) the aggregate allowed claim amount and estimated claim amount, as of the Emergence Date, of the Parent Level Debt. This payout scheme will determine cumulative award amounts: Plan Recovery Recovery % Under Performance Plan Metric Payout % ---------------- ------------------ Threshold 45% or below 0% Low Performance 46% 5% Target 65% 100% High Performance 1 85% 200% High Performance 2 95% 300% High Performance 3 105% 400% Uncapped If the target is achieved, the aggregate payout based on the Plan Recovery Metrics will not exceed $15.2 million. In addition to the Plan Recovery Metrics based on distributions, there is an emergence incentive pool specifically designed to incentivize employees to expeditiously emerge from Chapter 11: Emergence Date Pool -------------- ---- June 30, 2010 or earlier $10 million July 1, 2010 to Sept. 30, 2010 5 million October 1, 2010 or later 0 Form of payout under the KEIP is cash. The timing of payout is: -- the payments calculated based on the POR Recovery Value will be paid immediately after the emergence date; and -- the payments calculated based on the Market-Based Recovery Value will be paid immediately after the Trading Period. Each participating executive will have a right to the full amount earned or awarded under the KEIP if (a) an executive is employed immediately prior to the Emergence Date, or (b) their employment is terminated without cause or by death or disability on or after confirmation of the Chapter 11 plan, but prior to the Emergence Date. If an executive is terminated without cause, the executive will be entitled to a pro rata amount of their POR Recovery Value Award and Market-Based Recovery Value award based on a fraction, (y) the numerator of which is number of days employed from April 16, 2009 until the date of termination, and (z) the denominator of which is the number of days from April 16, 2009, until immediately prior to the Emergence Date. The CEO and the President & COO will participate in the KEIP and the 2010 CVA Plan. For 2009, the CEO and President & COO will remain at their contractual levels, thus entitled to receive their base salary, applicable quarterly compensation, any discretionary compensation as determined by the Board, and a pro rata share of their quarterly compensation for the period of November and December 2009. To the extent that the Board approves any discretionary compensation for the CEO and the President & COO for 2009, those amounts will be offset against any amounts they may earn under the KEIP. For 2010, the CEO and President & COO will participate in the Modified CVA Plan, with their CVA Target Opportunity set at $2 million and $1.6 million. A chart summarizing the costs if the applicable targets are achieved under the Modified CVA Plan and the KEIP is available for free at http://bankrupt.com/misc/ggp_incentiveplanscosts.pdf At the Debtors' behest, Judge Gropper of the U.S. Bankruptcy Court for the Southern District of New York approved the Modified CVA Plan and KEIP. Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges LLP, in New York, asserted that the Modified CVA and KEIP are necessary and appropriate means to incentivize employees and drive performance during their Chapter 11 cases. She disclosed that certain of the participants in the KEIP are "insiders" under Section 101(31) of the Bankruptcy Code and, thus, the KEIP implicates Section 503(c). However, the KEIP is not a retention or severance plan because neither Section 503(c)(1) nor Section 503(c)(2) are applicable to evaluating the KEIP, she insisted. She stressed that the Debtors' employees have been waiting for implementation of the Modified CVA Plan since January. Any further delay will decrease employee morale and could result in underperformance, she added. The Creditors' Committee has indicated its support for approval of the Employee Incentive Programs, she stated. In a declaration, Todd McGovern, principal at Hewitt Associates LLC, disclosed that Adam Metz, the Debtors' chief executive officer's contract provided for fixed compensation, plus discretionary bonuses of up to $ 1 million. Thomas H. Nolan, the Debtors' president and chief operating officer, has up to $800,000 in fixed compensation, plus discretionary bonuses. Mr. McGovern said that to align their compensation incentives with the rest of management team, Messrs. Metz and Nolan have agreed to offset any discretionary bonus payments they may receive for 2009 against KEIP payments to which they become entitled. Messrs. Metz and Nolan will not participate in the CVA Plan for 2009, but will participate in the CVA Plan in 2010, he disclosed. In a regulatory filing with the U.S. Securities and Exchange Commission on October 21, 2009, General Growth Properties, Inc. said that the KEIP Target Opportunity expressed as a percentage for the annual base salary for each executive officer of the Debtors is: Officer Target Opportunity % ------- ------------------ Adam Metz, 225% Chief Executive Officer Thomas H. Nolan, Jr., 200% President and Chief Operating Officer Sharon Polonia, 125% Executive Vice President, Asset Management Edmund Hoyt, 75% Interim Chief Financial Officer Robert Michaels, Vice Chairman 40% Mr. Metz further disclosed that amounts payable to the CEO and COO pursuant to the KEIP will be reduced by the amount of any discretionary compensation paid to these officers for 2009. About General Growth Properties Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly ] 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Wants to Set Up Claims Objection Procedures ----------------------------------------------------------- General Growth Properties Inc. and its units filed their schedules of assets and liabilities and statements and statements of financial affairs on August 26, 2009. The Debtors subsequently amended their Schedules on September 23, 2009. The Bar Date Order established November 12, 2009, as the deadline for each person to file a proof of claim. The Debtors scheduled 6,000 liquidated, non-contingent and undisputed claims in their Schedules. As of November 2, 2009, about 2,400 proofs of claim have been filed in the Debtors' Chapter 11 cases. As a result, more than 8,400 filed claims and scheduled claims are pending against the Debtors. In conjunction with the Bar Date, the Debtors have been begun a comprehensive review and reconciliation of all prepetition claims, including the Filed Claims and the Scheduled Claims. The Debtors, by this motion, ask the Court to approve claim objection procedures intended to streamline the claims process and conserve the resources of the Debtors' estates. Pursuant to Rule 3007(d) of the Federal Rules of Bankruptcy Procedure, the Debtors propose to file omnibus objections seeking reduction, reclassification or disallowance of claims on these grounds: (a) the claims seek recovery of amounts for which the Debtors are not liable; (b) the amount claimed contradicts the Debtors' books and records; (c) the claims were incorrectly classified; (d) the claims do not include sufficient documentation to ascertain the validity of the claim; and (e) the claims are objectionable under Section 502(e)(1) of the Bankruptcy Code. Moreover, the Debtors will serve affected claimants with notice of an Omnibus Objection at least 30 days prior to the hearing on that objection. The Debtors propose, in their discretion, to serve a notice of the omnibus claim objection, rather than the entire omnibus claim objection, on each of the claimants whose claims are the subject of the applicable omnibus claim objection and, if known, their counsel. The Claim Objection Notice would include an explanation of the claim objection process, a description of the basis of the omnibus claim objection, information regarding the response deadline and hearing date, and identification of the claim that is the subject of the omnibus claim objection. The Debtors also seek to limit notice of claim objections to: (a) service of a complete copy of each claim objection on the U.S. Trustee and counsel to the Official Committee of Unsecured Creditors; (b) with respect to Omnibus Objections, service of a Claim Objection Notice on the claimants whose claims are the subject of the applicable omnibus claim objection and their counsel; and (c) with respect to individual claim objections, service of a complete copy of each individual objection on the claimants whose claims are the subject of the applicable individual claim objection and their counsel. The Debtors believe that no additional service or notice should be required for claim objections. To the extent a party in interest asks for a copy, the Debtors will provide that party with a complete copy of any omnibus or individual claim objection. Moreover, the Debtors propose that responses to the Debtors' omnibus and specific claim objections will be due 21 days after mailing of the objection or Claim Objection Notice. To avoid confusion, the Claim Objection Notice and the omnibus and individual claim objections will specify the time and date that responses are due. As part of the Debtors' claims reconciliation efforts, the Debtors expect to identify claim amounts originally scheduled and noticed that exceed the Debtors' actual liability to creditors. To avoid the cumbersome process of amending their Schedules, obtaining a supplemental bar date and sending out supplemental bar date notices, the Debtors seek the Court's approval of certain procedures regarding omnibus motions to deem the Schedules amended. To the extent that the Debtors identify additional prepetition claims not previously scheduled and for which no proof of claim has been filed, the Debtors will instead comply with the standard procedures for amending their Schedules and sending out bar date notices to the additional claimants. The Debtors propose to serve a notice of the motions to deem schedules amended, rather than the entire motion, on the claimants whose claims are the subject of the applicable motion and their counsel, if known. The proposed Schedule Amendment Notice would be personalized for each claimant and would include an explanation of the process, an explanation of the request for a deemed amendment of the Schedules, and information regarding the response deadline and hearing date. Moreover, the Debtors seek to limit notice of the Schedule Amendment Notice using the proposed Omnibus Objection Procedures. The Debtors propose that responses to the Debtors' Schedule Amendment Notice will be due 21 days after mailing of the notice. Sylvia A. Mayer, Esq., at Weil, Gotshal & Manges LLP, in New York, asserts that the Claim Objection Notice and Schedule Amendment Notice will substantially reduce the related service costs without depriving the claimants of any information they would require to understand and respond to any objection or motion. She points out that filing of numerous individual claim objections will materially delay the claims resolutions process, and, ultimately, the distribution to the Debtors' estates' creditors. Similarly, filing an omnibus motion deeming the Schedules as amended will reduce the delay associated with the process of amending the Schedules, and thus, will reduce the expense related to the amendment of the Schedules, she maintains. Judge Gropper will consider the Debtors' Motion, on an expedited basis, on November 19, 2009. Objections are due November 16. About General Growth Properties Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly ] 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GLOBAL CONTAINER: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Global Container Lines Limited 100 Quentin Roosevelt Boulevard Garden City, NY 11530 Case No.: 09-78585 Chapter 11 Petition Date: November 10, 2009 Court: United States Bankruptcy Court Eastern District of New York (Central Islip) Judge: Alan S. Trust Debtor's Counsel: C. Nathan Dee, Esq. Matthew G. Roseman, Esq. Cullen & Dykman, LLP 100 Quentin Rooselvelt Blvd Garden City, NY 11530 Tel: (516) 724-3817 Fax: (516) 357-3792 Email: ndee@cullenanddykman.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Bijan Paksima, the company's vice president. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Blue Sea Capital $145,500 Briarcliffe Ltd. Caterina $2,862,382 Akin, Gump, Straus, Hauer 590 Madison Avenue Attn: Heidi Liss New York, NY 10022 Briarcliffe Ltd. Loan $1,885,020 c/o Akin Gump Strauss Hauer & Feld LLC 590 Madison Avenue New York, NY 10022 Comet Shipping Nigeria Lt $191,713 c/o Michael J. Carcich DeWitt Stern Imperatore $828,534 Harborside Financial Cent Plaza Five Suite 1510 Jersey City, NJ 07311 DeWitt Stern Imperatore $574,896 PI Insurance Harbourside Financial Ctr Jersey City, NJ 07311 Keybank Equipment Finance $9,083,000 66 South Pearl Street Albany, NY 12207 Keybank National $5,195,000 Association 66 South Pearl Street Albany, NY 12207 Mercur International for $3,824,566 Development Co Ltd. Faisal Islamic Bank Bldg. 5th Floor Port Sudan National Bank of Pakistan line of credit $4,953,000 100 Wall Street New York, NY 10005 NSPO Eqypt $137,500 SDV Ghan Limited $445,175 c/o Weber Gallagher Simpson Stapleon Fires & 2000 Market St. 13 Fl. Philadelphia, PA 19103 Seacastle Container $360,648 Leasing 1 Maynard Drive Park Ridge, NJ 07656 Spedag East Africa Ltd. $797,342 Kriegackerstasse 91 Muttenz 4002 Basel Switzerland Tanzania Road Haulage $1,267,500 PO Box 21493 Nelson Mandela Expressway Dar Es Salaam, Tanzania Textainer Equipment $164,633 Textainer Equipment $137,427 Management TSG Technical Services $229,955 United States Dept of $145,785 Agriculture Kansas City Commodity US Bureau of Customs and $131,654 Border Protection GRAY TELEVISION: Posts $5.5MM Q3 Net Loss; May Breach Covenant -------------------------------------------------------------- Gray Television, Inc., reported a net loss of $5,520,000 for the three months ended September 30, 2009, from net income of $4,644,000 for the same period a year ago. Gray posted a net loss of $21,088,000 for the nine months ended September 30, 2009, from net income of $4,009,000 for the same period a year ago. Revenues (less agency commissions) were $66,446,000 for the three months ended September 30, 2009, from $82,631,000 for the same period a year ago. Revenues (less agency commissions) were $192,857,000 for the three months ended September 30, 2009, from $232,373,000 for the same period a year ago. At September 30, 2009, Gray had $1,240,000,000 in total assets against $1,054,747,000 in total liabilities and $93,085,000 in preferred stock. Gray said the continuing general economic recession, including the significant decline in advertising by the automotive industry, has adversely impacted its ability to generate cash from operations during the current period and the recent past. If these general economic trends do not begin to improve, Gray said its ability to maintain adequate liquidity or compliance with its leverage ratio covenant will come under increased pressure. Gray said compliance with the leverage ratio covenant on or after March 31, 2010 will depend on the interrelationship of its ability to reduce outstanding debt or the results of its operations during the intervening future periods. Gray said based on certain internal financial projections it is not likely to be in compliance with its leverage ratio as of March 31, 2010. "In the future, if we are unable to maintain compliance with these covenants, including the required leverage ratio, we expect that we would use reasonable efforts to seek an amendment or waiver to our senior credit facility. However, we can provide no assurances that any amendment or waiver would be obtained by us nor of its terms. If we are unable to obtain any required waivers or amendments, we would be in default under the senior credit facility and any such default could allow the lenders that hold a majority of the outstanding debt under that facility to demand an acceleration of the repayment of all outstanding amounts under our senior credit facility," Gray said. Gray made its most recent Series D Perpetual Preferred Stock cash dividend payment on October 15, 2008 for dividends earned through September 30, 2008. Gray has deferred the cash payment of its preferred stock dividends earned thereon since October 1, 2008. The deferral of dividend payments is allowable under the terms of the Series D Perpetual Preferred Stock. When three consecutive cash dividend payments with respect to the Series D Perpetual Preferred Stock remain unfunded, the dividend rate increases from 15.0% per annum (or $15 million) to 17.0% per annum (or $17 million). Thus, Gray said its Series D Perpetual Preferred Stock dividend began accruing at 17.0% per annum on July 16, 2009 and will accrue at that rate as long as at least three consecutive cash dividend payments remain unfunded. The Series D Perpetual Preferred Stock dividend rate was 15% per annum from December 31, 2008 through July 16, 2009. Prior to December 31, 2008, its Series D Perpetual Preferred Stock dividend rate was 12% per annum. In a news statement, Gray said the current national economic recession has severely impacted its short-term revenue generation and has made revenue forecasting more difficult than in prior periods. Based on advertising orders received to date, pending advertising orders and advertising orders expected to be received in the future, Gray believes its fourth quarter 2009 local revenue, excluding political revenue, will increase from 2008 results by approximately 1%. Gray believes its fourth quarter 2009 national revenue, excluding political revenue, will decrease from its 2008 results by approximately 9%. Expected decreases in political revenues as forecast reflect the off-year of the political cycle. Gray estimates its consulting revenue to increase to $600,000 for the fourth quarter of 2009. Gray anticipates its retransmission consent revenues during the fourth quarter of 2009 will increase approximately $2.9 million, to a total of approximately $3.7 million, reflecting the successful retransmission negotiations concluded in December 2008. For the full year 2009, Gray anticipates retransmission consent revenues will be approximately $15.7 million compared to $3.0 million for full year 2008. Gray said the anticipated decline in fourth quarter 2009 broadcast expense reflects its ongoing expense reduction initiatives and lower national representation fees, which are paid based on a percentage of its national revenue. For the full year 2009, Gray anticipates its broadcast operating expenses will decrease by approximately $14.5 million, or 7.3%, compared to 2008. The anticipated decrease in corporate expense for the fourth quarter of 2009 compared to the fourth quarter of 2008 is due primarily to an expected decrease in relocation, market research and legal expenses. A full-text copy of the Company's Form 10-Q report is available at no charge at http://ResearchArchives.com/t/s?4923 A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?4924 Gray Television, Inc., is a television broadcast company headquartered in Atlanta, GA. Gray currently operates 36 television stations serving 30 markets. Each of the stations are affiliated with either CBS (17 stations), NBC (10 stations), ABC (8 stations) or FOX (1 station). In addition, Gray currently operates 38 digital second channels including 1 ABC, 4 Fox, 7 CW, 16 MyNetworkTV and 1 Universal Sports Network affiliates plus 8 local news/weather channels and 1 "independent" channel in certain of its existing markets. GREEKTOWN HOLDINGS: Conway MacKenzie Bills $844,000 for June-Aug. ----------------------------------------------------------------- The Bankruptcy Court has approved the fee applications filed by these professionals retained in connection with Greektown Holdings LLC's bankruptcy cases for these periods: Professional Applicable Period Fees Expenses ------------ ----------------- -------- -------- Conway MacKenzie, 06/01 to 08/31/09 $844,879 $7,810 Inc. Schafer and Weiner 06/01 to 08/31/09 $501,708 $21,941 PLLC Moelis & Company 06/01 to 08/31/09 $450,000 $26,192 LLC Honigman Miller 07/07 to 09/08/09 $366,204 $8,156 Schwartz and Cohn LLP Clark Hill PLC 06/01 to 08/31/09 $241,907 $6,144 Ernst & Young LLP 06/01 to 08/31/09 $170,217 $1,038 Jackier Gould PC 06/01 to 08/31/09 $38,111 $265 Floyd E. Allen and 06/01 to 08/31/09 $1,461 $4 Associates P.C. In a separate filing, Fine Consulting, Inc. d/b/a The Fine Point Group certified that there were no responses or objections to its previous monthly fee applications for the period from June to August 2009 period. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. Clark Hill PLC serves as counsel to the Official Committee of Unsecured Creditors. Greektown Holdings listed assets and debts of $100 million to $500 million in its bankruptcy petition. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GSCP LP: Moody's Downgrades Senior Debt Rating to 'C' From 'Ca' --------------------------------------------------------------- Moody's Investors Service has downgraded the senior debt rating of GSCP, L.P., to C from Ca, concluding the review for downgrade initiated on May 4, 2009. GSC is the borrowing entity of GSC Group, an asset management firm specializing in credit-based alternative investment strategies. Moody's will withdraw the rating due to a lack of adequate information necessary to maintain it. GSC's senior debt rating of C incorporates the fact that the company has defaulted on its outstanding loan balance of approximately $210 million. Also important to the rating is whether GSC will remain a going concern and the value of the company's partnership interests in its own managed private equity funds, mezzanine funds, and CDOs. These considerations would be useful for an assessment of the loan's recovery value; however, the information available for such analysis is very limited. Moody's expectations are that GSC will face significant challenges as a going concern and the company's investments are likely to remain at distressed levels; thus, creditors' total losses can be expected to exceed 50% of the loan balance. The last rating action on GSC was on May 4, 2009, when the company was placed on review for downgrade following the company's default on a scheduled amortization payment on the company's bank term loan. Approximately $210 million of debt was outstanding at the time of default. GSC Group is a privately-held asset management firm focused on credit-based alternative investments for institutions and high net worth individuals. Headquartered in Florham Park, New Jersey, GSC's assets under management were $18 billion as of September 30, 2008. HAWAIIAN TELCOM: Kirkland's $1.46 Mil. for April-June Approved -------------------------------------------------------------- Pursuant to Sections 330 and 331 of the Bankruptcy Code, the bankruptcy judge authorizes Hawaiian Telcom Communications Inc. to pay the fees and expenses and holdback amounts of these professionals for the fee period from April 1, 2009, through June 30, 2009: Firm Fees Expenses ---- ---------- -------- Kirkland & Ellis LLP $1,464,650 $33,785 Cades Schutte LLP 228,194 967 Deloitte & Touche LLP 91,360 0 Ernst & Young LLP 26,893 0 Moseley Biehl Tsugawa Lau & Muzzi 82,539 6,822 Morrison & Foerster LLP 598,206 45,669 Kirkland & Ellis' allowed fees of $1,464,650 reflects a reduction of $15,600, pursuant to an agreement with the U.S. Trustee for Region 15. Cades Schutte is also allowed $10,759 for State of Hawaii General Excise Tax for the period, which reflects a $32 deduction. Cades Schutte's allowed fees of $228,194 reflects a reduction of $700. Deloitte & Touche is allowed $4,304 for Hawaii GET. Kirkland & Ellis and Cades Schutte serve as counsel to the Debtors. Deloitte is the Debtors' independent auditors. Ernst & Young acts as tax auditors to the Debtors. Moseley Biehl is co- counsel to the Official Committee of Unsecured Creditors. Morrison Foerster is the Committee' lead counsel. Fee Objections Prior to the entry of orders on the second interim fee applications, the Prepetition Lenders objected to the fee applications of (i) Morrison & Foerster, (ii) Moseley Biehl, and (iii) FTI Consulting, Inc., financial advisor to the Committee. The Prepetition Lenders noted that certain fees incurred by the professionals arose from investigation of the Lenders' liens and defense of the Committee in the adversary proceeding commenced by Lehman Commercial Paper, Inc., as administrative agent for the Prepetition Lenders. The Prepetition Lenders asserted the Cash Collateral Final Order dated January 16, 2009, provides that no cash collateral may be used by the Committee to object or raise any defense to the validity of the Prepetition Lenders' liens and claims. In response to the Prepetition Lenders, the Committee pointed out that it is inequitable to enforce the limitations set forth in the Cash Collateral Final Order given that it was Lehman Commercial that initiated the Adversary Proceeding against the Committee. The Court thus acknowledged that allowance of Morrison & Foerster's and Moseley Biehl's fees and expenses is subject to the agreement between the Committee and the Prepetition Lenders concerning the appropriate allocation of fees and expenses to unencumbered assets. Moreover, Tiffany Carroll, United States Trustee for Region 15, complained that Lazard Freres & Co. LLC's requested interim fees of $600,000 is unreasonable in light of its performance of 237.4 hours of work. Similarly, the U.S. Trustee sought an opportunity to review Lazard Freres' invoices and time sheets for reimbursement of $47,436 billed by the Sonnenschein firm. With the Debtors proceeding towards reorganization without a new investor, Lazard Freres' role as investment banker to the Debtors is diminished, the U.S. Trustee said. About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HERBST GAMING: Confirms Reduction of Workforce ---------------------------------------------- Arnold M. Knightly at Las Vegas Review Journal reports that Herbst Gaming Inc. confirmed that it laid off workers. The layoffs are coming two weeks after the Bankruptcy court Confirmed the Company's plan, which will hand the company to its secured lenders next year, Mr. Knightly relates. A person with knowledge of the matter said the layoffs account for less than 5% of the Company's workforce, adds. About 200 workers were laid off over the weekend in the California border town, Mr. Knightly reported, citing an employee. 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. HOCKINGS CORPORATION: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Hockings Corporation 79245 Corporate Center Drive, Suite 102 La Quinta, CA 92253 Bankruptcy Case No.: 09-37110 Chapter 11 Petition Date: November 10, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Richard M. Neiter Debtor's Counsel: William S. Bonnheim, Esq. 39-301 Badger St., Ste. 800 Palm Desert, CA 92211 Tel: (760) 772-9696 Fax: (760) 772-9690 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 2 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-37110.pdf The petition was signed by Jeffery Hockings, president of the Company. INFOLOGIX INC: Exempted From NASDAQ's Stockholder Approval Rules ---------------------------------------------------------------- InfoLogix, Inc., that NASDAQ has granted the Company's request for an exception to NASDAQ's stockholder approval requirements, in accordance with NASDAQ Listing Rule 5635(f). The Company is relying on this exception to complete a proposed plan of restructuring, pursuant to which a portion of the Company's outstanding debt with Hercules Technology Growth Capital, Inc., would be converted into equity in the Company, the remaining outstanding debt with Hercules would be otherwise restructured, the Company would issue warrants to Hercules or its affiliate to purchase equity in the Company, and certain other debt and earnout obligations with other parties would be restructured. The Company currently anticipates that the transaction would close on or about November 20, 2009. The restructuring would result in cancellation of $5 million in indebtedness and provide for up to $5 million in availability under a revolving credit facility with Hercules. About InfoLogix, Inc. InfoLogix Inc. (NASDAQ: IFLG) -- http://www.infologix.com/-- provides enterprise mobility solutions for the healthcare and commercial industries. InfoLogix uses the industry's most advanced technologies to increase the efficiency, accuracy, and transparency of complex business and clinical processes. With 19 issued patents, InfoLogix provides mobile managed solutions, on- demand software applications, mobile infrastructure products, and strategic consulting services to over 2,000 clients in North America including Kraft Foods, Merck and Company, General Electric, Kaiser Permanente, MultiCare Health System and Stanford School of Medicine. The Company has $45.06 million in assets against debts of $46.35 million as of June 30, 2009. INTELSAT LTD: Paid $100 Million Under Contract with Sea Launch -------------------------------------------------------------- Intelsat, Ltd., disclosed it has made approximately $100 million of payments under its contracts and options with Sea Launch Company L.L.C. for the launch of three satellites. In August 2009, Intelsat obtained approval from the bankruptcy court to make payments directly to Space International Services for the two launches provided by Space International Services. As of September 30, 2009, Intelsat had approximately $43 million outstanding of payments made to Sea Launch relating to satellite launches that Sea Launch is still required to provide the Company. Intelsat contracted Sea Launch for the future launch of three satellites, one through Sea Launch and two through Space International Services. The Company has options for the launch of four additional satellites through Sea Launch. "While Sea Launch is continuing to operate as a debtor-in- possession, and while we may receive full or partial credit for prior payments relating to the launches, there can be no assurance that Sea Launch will honor its contractual obligations to us, or do so without charging us significant additional amounts beyond what is provided for in our current agreements. In addition, should we try to procure alternative launch services for the satellites involved, there can be no assurance that we will not incur significant delays and significant additional expenses as a result," Intelsat said. About Sea Launch Sea Launch Co. is a satellite-launch services provider that offers commercial space launch capabilities from the Baikonur Space Center in Kazakhstan. Its owners include Boeing Co., RSC Energia, and Aker ASA. Sea Launch Company, L.L.C., filed for Chapter 11 on June 22, 2009 (Bankr. D. Del. Case No. 09-12153). Joel A. Waite, Esq., and Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtor's counsel. At the time of the filing, the Company said its assets range from $100 million to $500 million and debts are at least $1 billion. About Intelsat Headquartered in Pembroke, Bermuda, Intelsat, Ltd. -- http://www.intelsat.com/-- provides fixed satellite services worldwide. Intelsat provides service on a global fleet of 51 satellites and seven owned teleports and terrestrial facilities. Intelsat supplies video, data and voice connectivity in roughly 200 countries and territories for roughly 1,800 customers, many of which Intelsat has had relationships with for over 30 years. Intelsat has one of the largest, most flexible and one of the most reliable satellite fleets in the world, which covers over 99% of the world's population. Intelsat had $17,052,043,000 in total assets against total current liabilities of $659,614,000, long-term debt, net of current portion of $15,087,524,000, deferred satellite performance incentives, net of current portion of $115,607,000, deferred revenue, net of current portion of $226,198,000, deferred income taxes of $531,913,000, accrued retirement benefits of $238,385,000, other long-term liabilities of $343,554,000 and noncontrolling interest of $7,058,000, resulting in stockholders' deficit of $157,810,000. INTELSAT LTD: Posts $94,784,000 Net Loss for Q3 2009 ---------------------------------------------------- Intelsat, Ltd., reported a net loss of $94,784,000 for the three months ended September 30, 2009, from a net loss of $179,291,000 for the same period a year ago. Intelsat reported a net loss of $685,118,000 for the nine months ended September 30, 2009, from a net loss of $673,939,000 for the same period a year ago. Intelsat said revenue was $617,888,000 for the three months ended September 30, 2009, from $598,512,000 for the same period a year ago. Revenue was $1,892,219,000 for the nine months ended September 30, 2009, from $1,756,112,000 for the same period a year ago. Intelsat had $17,052,043,000 in total assets against total current liabilities of $659,614,000, long-term debt, net of current portion of $15,087,524,000, deferred satellite performance incentives, net of current portion of $115,607,000, deferred revenue, net of current portion of $226,198,000, deferred income taxes of $531,913,000, accrued retirement benefits of $238,385,000, other long-term liabilities of $343,554,000 and noncontrolling interest of $7,058,000, resulting in stockholders' deficit of $157,810,000. In a news statement, Intelsat generated negative free cash flow from operations of $19.5 million during the three months ended September 30, 2009, as the result of interest and satellite construction payments as well as changes in working capital during the period. Free cash flow from operations is defined as net cash provided by operating activities, less payments for satellites and other property and equipment (including capitalized interest). Payments for satellites and other property and equipment during the three months ended September 30, 2009 totaled $172.6 million. Intelsat generated free cash flow from operations of $93.3 million during the nine months ended September 30, 2009. Payments for satellites and other property and equipment during the nine months ended September 30, 2009 totaled $456.0 million. Intelsat is in the process of procuring and building 11 satellites that are expected to be launched throughout the next three years, including the New Dawn joint venture satellite. The company expects that 2009 total capital expenditures will range from approximately $625 million to $675 million, however, several late 2009 contract milestones could result in some expenditures being delayed into 2010. The 2009 capital expenditure estimate excludes capital expenditures related to the New Dawn satellite, for which Intelsat's cash contributions in 2009 are expected to be minimal, and the purchase of the ProtoStar I satellite, for which all of the $210 million consideration is expected to be paid in 2009. The company indicated that changes in the overall satellite launch market could result in increases to expected launch costs in the future. A full-text copy of the Company's Form 10-Q report is available at no charge at http://ResearchArchives.com/t/s?4926 A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?4925 About Intelsat Headquartered in Pembroke, Bermuda, Intelsat, Ltd. -- http://www.intelsat.com/-- provides fixed satellite services worldwide. Intelsat provides service on a global fleet of 51 satellites and seven owned teleports and terrestrial facilities. Intelsat supplies video, data and voice connectivity in roughly 200 countries and territories for roughly 1,800 customers, many of which Intelsat has had relationships with for over 30 years. Intelsat has one of the largest, most flexible and one of the most reliable satellite fleets in the world, which covers over 99% of the world's population. INTERMET CORP: Unit to Shutdown Plan and Lay off Workers -------------------------------------------------------- Tony Adams at Ledger Inquirer relates that Columbus Foundry Inc., owned by Intermet Corp., will close its 350,000-square-foot plant by Dec. 12, 2009, and lay off its remaining 169 employees The Company has notified the Georgia Department of Labor about the shutdown and layoff, Mr. Adams notes. "The entire Columbus Foundry will be closed and the layoffs are expected to be permanent," says Mr. Adams, citing an employee of the Company as saying. Columbus Foundry is located at 1600 Northside Industrial Blvd., just south of the Bradley Park Drive shopping area. Based in Fort Worth, Texas, Intermet Corp. designs and manufactures machine precision iron and aluminum castings for the automotive and industrial markets. The Company and its debtor- affiliates filed for Chapter 11 protection on August 12, 2008 (D. Del. Case Nos. 08-11859 to 08-11866 and 08-11868 to 08-11878). Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Michael E. Comerford, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as the Debtors' counsel. James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' co-counsel. Kurtzman Carson Consultants LLC serves as the Debtors' claims, notice and balloting agent. An official committee of unsecured creditors has been formed in this case. In its petition, Intermet Corp. listed assets of $50 million to $100 million and debts of $100 million to $500 million. This is the Debtors' second bankruptcy filing. Intermet Corp., along with its debtor-affiliates, filed for Chapter 11 protection on September 29, 2004 (Bankr. E.D. Mich. Case Nos. 04-67597 through 04-67614). Salvatore A. Barbatano, Esq., at Foley & Lardner LLP, represented the Debtors. In their previous bankruptcy filing, the Debtors listed $735,821,000 in total assets and $592,816,000 in total debts. Intermet Corporation emerged from its first bankruptcy filing in November 2005. JMR HOLDINGS: Case Summary & 4 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Jmr Holdings, LLC 1930 East Meadowmere Street, Suite 1010 Springfield, MO 65804 Bankruptcy Case No.: 09-12914 Chapter 11 Petition Date: November 9, 2009 Court: United States Bankruptcy Court Middle District of Tennessee (Nashville) Judge: George C. Paine II Debtor's Counsel: Steven L. Lefkovitz, Esq. Law Offices Lefkovitz & Lefkovitz 618 Church St., Ste. 410 Nashville, TN 37219 Tel: (615) 256-8300 Fax: (615) 255-4516 Email: slefkovitz@lefkovitz.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $3,575,000 and total debts of $2,264,409. 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/tnmb09-12914.pdf The petition was signed by Mike Delacy, chief manager of the Company. JARDEN CORPORATION: Moody's Gives Pos. Outlook, Puts 'Ba2' Rating ----------------------------------------------------------------- Moody's Investors Service changed Jarden Corporation's ratings outlook to positive from stable reflecting the company's good operating performance during the recession and its improved liquidity position. At the same time, Moody's assigned a Ba2 rating to the $600 million amended secured term loan traunch and affirmed all other exiting ratings, including the B1 corporate family rating and SGL 2 speculative grade liquidity rating. "The positive outlook reflects Moody's view that Jarden's large scale with $5 billion in revenue, broad product diversification and leading brand names has helped it weather a severe consumer led recession and should enable it to improve its profitability as the economic recovery begins to take shape" said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. The positive outlook also reflects the improved transparency of Jarden's organic performance as there haven't been any significant recent acquisitions. The positive outlook further considers Jarden's strong liquidity position with over $600 million of cash, good operating cash flow and an improved debt maturity profile following the amendment and extension of $600 million term loan traunch. The B1 corporate family rating reflects the company's scale, its leading (and in some cases dominant) market share in select categories and its improving liquidity profile. The corporate family rating also reflects the acquisitive nature of the company while at the same time recognizing the diversification benefits expected to be realized from its breadth of products. The SGL 2 speculative grade liquidity rating reflects Jarden's good liquidity profile, highlighted by cash balances of over $600 million, an improving debt maturity profile and good operating cash flow. Further benefiting Jarden's liquidity profile is having sufficient cushion under its financial covenant, having access to a $100M revolver that expires in January 2012 and having access to an accounts receivable securitization facility that can be upsized to $400 million ($248 million drawn at September 30th). Constraining the company's liquidity profile is the annual renewal of the $250 million accounts receivable securitization facility, the recent implementation of a $30M annual dividend and the maturity of over $545 million in 2011 (three quarterly amortization payments of around $180 million) and by the maturity of almost $180 million in January 2012. The company is expected to maintain adequate headroom under its financial covenants. This rating was assigned: -- $600 million term loan at Ba2 (LGD 2 -- 25%); These ratings were affirmed/assessments revised: -- Corporate family rating at B1; -- Probability of default rating at B1; -- $225 million senior secured revolver to Ba2 (LGD 2 -- 25% from LGD 2 -- 27%); -- $725 million secured term loan at Ba2 (LGD 2 -- 25% from LGD 2 -- 27%); -- $300 million senior unsecured notes at B2 (LGD 4, 69% from LGD 5, 71%); -- $650 million senior subordinated notes at B3 (LGD 6 -- 90%) - - no change in LGD assessment; -- Speculative grade liquidity rating at SGL 2 The last rating action was on May 20, 2009, where Moody's upgraded the senior secured credit facility rating to Ba2 and upgraded the liquidity rating to SGL 2. Jarden Corporation is a leading provider of niche consumer products. Jarden operates in three primary business segments through a number of well recognized brands, including: Outdoor Solutions: Abu Garcia(R), Berkley(R), Campingaz(R) and Coleman(R), Fenwick(R), Gulp!(R), JT(R), K2(R), Marker(R), Marmot(R), Mitchell(R), Penn(R), Rawlings(R), Shakespeare(R), Stearns(R), Stren(R), Trilene(R), Volkl(R) and Zoot(R); Consumer Solutions: Bionaire(R), Crock-Pot(R), FoodSaver(R), Health o meter(R), Holmes(R), Mr. Coffee(R), Oster(R), Patton(R), Rival(R), Seal-a- Meal(R), Sunbeam(R), VillaWare(R) and White Mountain(R); and Branded Consumables: Ball(R), Bee(R), Bicycle(R), Crawford(R), Diamond(R), Dicon(R), First Alert(R), Forster(R), Hoyle(R), Kerr(R), Lehigh(R), Leslie-Locke(R), Loew Cornell(R) and Pine Mountain(R). Headquartered in Rye, N.Y., Jarden has over 20,000 employees worldwide and reported consolidated net sales of approximately $5.1 billion for the twelve months ended September 30, 2009. JOHNSONDIVERSEY INC: Moody's Puts 'Ba2' Rating on $1.25 Bil. Notes ------------------------------------------------------------------ Moody's assigned a Ba2 to the proposed $1.25 billion senior secured credit facility of JohnsonDiversey, Inc., and certain of its subsidiaries and a B3 to $400 million of proposed senior notes. Moody's also affirmed the B2 Corporate Family Rating and assigned an SGL-2 speculative grade liquidity rating. The rating outlook is stable. On October 7, 2009, JohnsonDiversey Holdings, Inc., the holding company parent of JDI, entered into a series of agreements principally designed to recapitalize JD Holdings and JDI (Recapitalization). Pursuant to the agreements, an investment fund managed by Clayton, Dubilier & Rice, Inc., and SNW Co., Inc., a wholly owned subsidiary of S.C. Johnson & Son, Inc., will make equity investments in JD Holdings of approximately $477 million and $9.9 million, respectively. The equity investments along with the proceeds from a $1 billion secured term loan and $400 million of unsecured notes will be used to fund a cash payment of $158 million to Unilever, refinance approximately $1.5 billion of existing debt and pay transaction fees and expenses. In addition, $250 million of senior unsecured PIK notes will be issued by JD Holdings to affiliates of Unilever. The Recapitalization, which is conditioned upon completing the debt financing and customary regulatory approvals, is expected to close prior to the end of the year. "The Recapitalization will substantially improve the debt maturity and liquidity profile of JD Holdings by eliminating the Unilever put obligation and the 2010 and 2011 maturities of the existing bank credit facility" stated Lenny Ajzenman, Senior Vice President. Following the Recapitalization, the key constraints on the B2 Corporate Family Rating are (i) weak cash flow metrics for the rating category (ii) the potential for weak demand during 2010 in end markets that are sensitive to discretionary consumer spending and (iii) the potential for continued raw material cost volatility. The ratings are supported by the company's number one or number two market positions in key global markets, a diverse customer base, solid long term growth prospects and steady profit performance in 2009 despite pressures from a global recession. Moody's assigned these ratings (assessments): * JohnsonDiversey, Inc. - $450 million secured term loan due 2015, Ba2 (LGD 2, 21%) * JohnsonDiversey, Inc. - $250 million secured revolver due 2014, Ba2 (LGD 2, 21%) * JohnsonDiversey, Inc. - $400 million senior unsecured notes due 2017, B3 (LGD 5, 73%) * JohnsonDiversey Holdings II B.V. - $500 million secured term loan due 2015, Ba2 (LGD 2, 21%) * JohnsonDiversey Canada, Inc. - $50 million secured term loan due 2015, Ba2 (LGD 2, 21%) * JohnsonDiversey, Inc. - SGL-2 speculative grade liquidity rating Moody's affirmed these ratings (assessments): -- $175 million secured revolver due 2010, Ba2 (LGD 1, 9%) -- $328 million secured term loan due 2011, Ba2 (LGD 1, 9%) -- $98 million secured term facility due 2010, Ba2 (LGD 1, 9%) -- $300 million senior subordinated notes due 2012, B2 (LGD 4, 56%) -- Eur225 million senior subordinated notes due 2012, B2 (LGD 4, 56%) -- $406 million 10.67% discount notes due 2013, Caa1 (LGD 6, 92%) -- Corporate Family Rating, B2 -- Probability of Default Rating, B2 All of the ratings on the existing debt of JDI and JD Holdings are expected to be withdrawn upon the repayment of such debt in connection with the Recapitalization. The last rating action on JD Holdings was on June 10, 2008, when Moody's affirmed the B2 Corporate Family Rating and B2 Probability of Default Rating and raised the rating on the senior subordinated notes to B2 from B3. JD Holdings, through its wholly owned subsidiary JDI, is a leading global supplier of cleaning, hygiene, and sanitizing products, equipment and related services to the institutional and industrial cleaning and sanitation markets. Revenues for the twelve months ended October 2, 2009, were approximately $3.1 billion. JOHNSONDIVERSEY HOLDINGS: S&P Raises Corp. Credit Ratings to 'B+' ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit ratings on JohnsonDiversey Holdings Inc. and JohnsonDiversey Inc. to 'B+' from 'B'. The outlook is stable. Standard & Poor's also said that based on preliminary terms and conditions, it assigned a 'BB-' senior secured debt rating to JohnsonDiversey Inc.'s proposed $1.25 billion senior secured credit facilities. The recovery rating is '2', indicating S&P's expectation for substantial (70%-90%) recovery in the event of a payment default. In addition, based on preliminary terms and conditions, Standard & Poor's assigned a 'B-' senior unsecured debt rating to JohnsonDiversey Inc.'s proposed offering of $400 million senior unsecured notes due 2019. The recovery rating is '6', indicating S&P's expectation for negligible (0%-10%) recovery in the event of a payment default. The company will use the proceeds of the new debt issues and new equity of $487 million to refinance existing debt, pay Unilever PLC, and pay transaction-related costs. JohnsonDiversey Holdings Inc. will change its name to Diversey Holdings Inc., and JohnsonDiversey Inc. will change its name to Diversey Inc. upon closing of the transaction. Pro forma for the transaction, the company will have total adjusted debt of about $2.1 billion. S&P adjust debt to include about $400 million of tax-effected unfunded postretirement obligations as well as off-balance-sheet lease and receivables financing. S&P will withdraw its ratings on the company's existing debt at closing. The ratings on Sturtevant, Wis.-based JohnsonDiversey Holdings Inc. and its operating subsidiary, JohnsonDiversey Inc., reflect its business risk profile, which S&P considers satisfactory, and highly leveraged financial profile. JohnsonDiversey is a leading global manufacturer and marketer of cleaning and hygiene products and related services for institutional and industrial cleaning. The company is the second- largest player, with an estimated 8% share of this still- fragmented global market (estimated to be more than $40 billion in size), trailing only the industry leader, Ecolab Inc. JohnsonDiversey's operations are well-diversified by customer and geography, with nearly 80% of sales generated outside North America. Markets should remain relatively stable (recession- related volume declines were in the mid-single digit percentage area), with business continuing to benefit from concerns regarding food safety and the desire to limit the spread of illnesses. Moreover, S&P expects that the company will continue to capitalize on the sale of products that reduce customers' usage of energy, water, and labor. Driving improved operating performance is a major, multiyear restructuring program that JohnsonDiversey began in 2005 and has nearly completed. It included major facilities rationalization and headcount reductions and the exit of underperforming businesses. According to management, the program has resulted in annual operating cost savings totaling more than $200 million, significantly exceeding initial expectations. Costs associated with the restructuring program, which are expected to total about $400 million, were funded with significant asset sales. S&P expects that JohnsonDiversey's operating margins (before depreciation and amortization) will stabilize at 13%-14%, with a pretax return on capital in the low double-digit percentage area. However, fluctuating raw material costs can occasionally pressure operating profitability. Although the company's credit metrics have improved, they will likely remain considerably weaker than Ecolab's (A/Stable/A-1), the operating margins and return on capital of which are in the upper teens percentage area. JohnsonDiversey's cash interest expense should decline following completion of the recapitalization because of the pay-in-kind feature of the Unilever note during the first five years. Capital spending needs are moderate and should be $100 million- $120 million in each of the next few years. Free operating cash flow, which was negative at times during the restructuring, should continue to strengthen and be modestly positive in 2010 and beyond, facilitating modest deleveraging over time. S&P expects the key funds from operations to adjusted total debt ratio to average about 12%. The outlook is stable. "Although JohnsonDiversey is highly leveraged, S&P expects that operating performance will remain relatively stable and the company will generate modest positive operating cash flow following completion of the restructuring and recapitalization," said Standard & Poor's credit analyst Cynthia Werneth. S&P could lower the ratings if operating performance weakens or debt increases substantially for any reason such that funds from operations to adjusted total debt drops and is likely to stay below 10% or adjusted total debt to EBITDA exceeds 6x for an extended period. S&P could raise the ratings if FFO to adjusted total debt appeared likely to approach and remain near 15% and adjusted total debt to EBITDA declines to and remains below 5x. KINGSLEY CAPITAL: Court Confirms Amended Reorganization Plan ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Colorado confirmed Kingsley Capital Inc.'s Second Amended Plan of Reorganization. Under the Plan, unsecured creditors will receive distributions of 80% of available cash not used to pay or reserved for allowed administrative claims, professional fee claims, allowed priority non-tax claims, and allowed priority unsecured tax claims, pro rata. All payments will be applied first to interest and then to principal. Holders of interests remained unimpaired. A full-text copy of the Chapter 11 Plan, as twice amended, is available at http://bankrupt.com/misc/kingsley.ch11plan.pdf A full-text copy of the Disclosure Statement, as thrice amended, is available for free at: http://bankrupt.com/misc/kingsley.3rdamendedds.pdf Denver, Colorado-based Kingsley Capital Inc. filed for Chapter 11 relief on May 23, 2008 (Bankr. D. Colo. Case No. 08-17152). Christian C. Onsager, Esq., David M. Rich, Esq., and Michael J. Guyerson, Esq., at Onsager, Staelin & Guyerson LLC, represent the Debtor as counsel. The Debtor filed on June 9, 2008, its schedules of assets and schedules, disclosing total assets of $10,356,146 and total liabilities of $5,028,840. LANDAMERICA FINANCIAL: Objections Pour in to Chapter 11 Plan ------------------------------------------------------------ Law360 reports that about a dozen objections have come in against LandAmerica Financial Group Inc.'s Chapter 11 plan, mostly by entities that have adversary proceedings pending against the liquidating real estate services and financing company and by the Internal Revenue Service. On October 24, 2009, the Debtors delivered to the Court a further Amended Joint Chapter 11 Plan. Under the Plan, unsecured creditors of Capital Title Group, Inc., will recover 2.7%. Holders of unsecured claims against LFG will recover 26.20%. A blacklined copy of the October 24 Amended Plan is available for free at http://bankrupt.com/misc/LandAm_AmendedPlan1024.pdf About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co- counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC, serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LEAP WIRELESS: Goldman Sachs & Wellington Disclose Equity Stake --------------------------------------------------------------- The Goldman Sachs Group, Inc., and Goldman, Sachs & Co. report holding beneficial ownership of 5,748,019 shares or roughly 7.4% of the common stock of Leap Wireless International, Inc. Wellington Management Company, LLP, in its capacity as investment adviser, may be deemed to beneficially own 3,704,859 shares or roughly 4.78% of Leap's common stock which are held of record by Wellington Management's clients. About Leap Wireless Headquartered in San Diego, California, Leap Wireless International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/ -- and its joint ventures provide wireless services in 34 states and the District of Columbia and hold licenses in 35 of the top 50 U.S. markets. Through its affordable, flat-rate service plans, Cricket offers customers a choice of unlimited voice, text, high- speed data and mobile Web services. * * * According to the Troubled Company Reporter on April 29, 2009, Standard & Poor's Ratings Services revised its outlook on Leap Wireless International Inc. to positive from stable. At the same time, S&P affirmed its ratings on the San Diego-based wireless carrier, including the 'B-' long-term corporate credit rating and 'B+' secured bank loan rating on subsidiary Cricket Communications Inc. LEAP WIRELESS: Unveils Exchange Offer for 7.75% Sr. Secured Notes ----------------------------------------------------------------- Leap Wireless International, Inc.'s operating subsidiary, Cricket Communications, Inc., has commenced an exchange offer for its outstanding unregistered 7.75% Senior Secured Notes due 2016. These notes were originally issued on June 5, 2009, in a private placement pursuant to Rule 144A and Regulation S under the Securities Act of 1933 in an aggregate principal amount of $1.1 billion. Holders of the notes may exchange them for an equal principal amount of a new issue of 7.75% Senior Secured Notes due 2016 pursuant to an effective registration statement on Form S-4 filed with the Securities and Exchange Commission. Terms of the new notes are substantially identical to those of the original notes, except that the transfer restrictions, registration rights, and additional interest provisions relating to the original notes do not apply to the new notes. The exchange offer will expire at 5:00 p.m. EST on Wednesday, December 9, 2009, unless extended. Tenders of the original notes must be made before the exchange offer expires and may be withdrawn at any time before the exchange offer expires. Documents describing the terms of the exchange offer, including the prospectus and transmittal materials for making tenders, can be obtained from the exchange agent, Wilmington Trust FSB, c/o Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-1615, Attention: Sam Hamed, telephone (302) 636-6470. A full-text copy of the prospectus on Cricket's exchange offer is available at no charge at http://ResearchArchives.com/t/s?4927 Leap reported a net loss for the third quarter of $65.4 million, compared to a net loss of $47.3 million, for the comparable period of the prior year. As of September 30, 2009, Leap had $5.36 billion in total assets, including $222.9 million in cash and cash equivalents, against total liabilities of $3.55 billion and redeemable noncontrolling interests of $75.7 million, resulting in $1.74 billion in stockholders' equity. A full-text copy of Leap's quarterly report on Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?4928 Leap and Cricket also filed other financial data in connection with the exchange offer. A full-text copy of the filing is available at no charge at http://ResearchArchives.com/t/s?4929 About Leap Wireless Headquartered in San Diego, California, Leap Wireless International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/ -- and its joint ventures provide wireless services in 34 states and the District of Columbia and hold licenses in 35 of the top 50 U.S. markets. Through its affordable, flat-rate service plans, Cricket offers customers a choice of unlimited voice, text, high- speed data and mobile Web services. * * * According to the Troubled Company Reporter on April 29, 2009, Standard & Poor's Ratings Services revised its outlook on Leap Wireless International Inc. to positive from stable. At the same time, S&P affirmed its ratings on the San Diego-based wireless carrier, including the 'B-' long-term corporate credit rating and 'B+' secured bank loan rating on subsidiary Cricket Communications Inc. LEAR CORP: S&P Assigns Corporate Credit Rating at 'B' ----------------------------------------------------- Standard & Poor's Ratings Services said it has assigned Lear Corp. a 'B' corporate credit rating. The outlook is stable. S&P also assigned a 'BB-' issue rating (two notches above the corporate credit rating) and '1' recovery rating to the new company's proposed $400 million, first-lien exit facility; and a 'BB-' issue rating and '1' recovery rating to the new company's proposed $550 million, second-lien term loan facility. Lear has total balance sheet debt of approximately $996 million, a reduction of more than 75% from pre-bankruptcy levels. "The ratings reflect what S&P considers to be Lear's aggressive financial risk profile and weak business risk profile," said Standard & Poor's credit analyst Lawrence Orlowski. "We project that Lear's global sales for 2010 will grow 12% year over year and more than 10% in 2011 as global auto sales begin to recover," he continued. Still, S&P believes leverage, as measured by adjusted debt to EBITDA, will remain high, at more than 5.0x at the end of 2010. However, S&P believes leverage could decline significantly in 2011 if global light-vehicle sales stay in line with S&P's expectations. S&P expects U.S. light-vehicle sales in 2010 of 10.9 million units, up only slightly from S&P's current assumption of 10.2 million units in 2009. Lear is a leading, Tier 1 global automotive supplier and had sales of $13.6 billion in 2008. The company is made up of two divisions: seating systems and electrical/electronics. In S&P's view, prospects for positive free cash flow generation will improve, mostly because of a lower cash interest burden. The company should benefit, in S&P's view, from higher operating profitability because of various past restructuring actions, such as transferring manufacturing capacity to lower-cost regions, reducing manufacturing capacity, and eliminating administrative overhead. Still, S&P assume the company will generate negative free operating cash flow in fiscal 2010, but positive free operating cash flow in fiscal 2011. However, if auto production drops suddenly again, Lear could begin using cash at levels greater than S&P currently assumes. Liquidity appears to be adequate for near-term needs in the current economy. The company lacks a revolving credit facility but has more than $1 billion in cash and cash equivalents on its balance sheet. S&P believes this should provide a sufficient cushion to cover S&P's projection of Lear's operating cash needs. Intra-quarter working capital should peak at about $400 million as auto production volumes increase. Lear's business risk profile is weak, largely because of volatile auto production levels, high fixed costs, fierce competition, and severe pricing pressures that characterize the global auto supplier industry. Furthermore, Lear has significant exposure to General Motors LLC (unrated) and Ford Motor Co. (B-/Stable/--). In the profitable seating systems division, Lear derives about 25% of its revenue from GM. S&P believes this concentration means the business prospects of the new GM following its restructuring constitute a risk to Lear's profitability. S&P expects Lear to remain the No. 2 player in the global seating systems market. Business in China is growing strongly, and Lear's backlog for the next three years stands at $1.4 billion. The company pursues what it characterizes as a low-cost-country strategy designed to increase global manufacturing and engineering competitiveness. Lear has indicated that it has more than 100 manufacturing and engineering facilities in 21 countries that it characterizes as low-cost, and it has increased low-cost engineering capabilities in China, India, and the Philippines. These actions should especially help its electrical/electronics division support global platforms and increase in scale, thereby bolstering profitability in this business. Under the plan of reorganization, Robert Rossiter and Matthew Simoncini will remain CEO and CFO, respectively, of the new Lear. Mr. Rossiter also is expected to remain chairman of the board. The outlook is stable. S&P could lower the rating if free operating cash flow generation in 2010 is significantly worse than the negative $170 million S&P currently expects, or if free operating cash flow remains negative in 2011. S&P believes either of these events could occur if global light-vehicle sales fail to recover in 2010, which could also lead to tighter cushions under the leverage and coverage covenants. These covenants tighten sharply over the next year. S&P could consider raising the rating if auto production is stronger than S&P expects, contributing to substantial positive cash flow generation, a debt-to-EBITDA ratio below 4.5x, and funds from operations exceeding 15% on a sustainable basis. For example, S&P estimates that these ratio requirements could be met if gross margins rose to about 5%. LEAR CORP: ASM Capital Buys Claims ---------------------------------- In separate filings dated November 6, 2009, through November 9, 2009, creditors of the Debtors notified the Court that they intend to transfer each of their claims against the Debtors: Transferor Transferee Claim Amount ---------- ---------- ------------ Tool-Plas Systems Inc. ASM Capital III, L.P. $80,800 Strategic Products and Services ASM Capital III, L.P. 13,759 Dynamic Technology Inc. ASM Capital, L.P. 11,491 Dynamic Technology Inc. ASM Capital, L.P. 11,491 Windsor Machine & Stamping 2009 Ltd Creditor Liquidity, L.P. 54,053 Service Master Professional Janitorial ASM Capital, L.P. 4,928 Logicalis ASM Capital, L.P. 3,676 Itrade Inc. ASM Capital, L.P. 2,736 Demco 45, LLC Fayett Group LLC 232,965 About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Attorneys at Kirkland & Ellis LLP, served as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP was engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tapped as special counsel. Alvarez & Marsal North America, LLC, is the Debtors' restructuring advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC served as the Debtors' claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) Lear Corporation announced November 9 that it has successfully emerged from its court-supervised financial reorganization with a strong and flexible balance sheet, positive operating results in the Third Quarter, a growing sales backlog and a robust competitive profile. LEAR CORP: Enters Into Warrant Agreement With Mellon Investor ------------------------------------------------------------- Lear Corp. entered into a Warrant Agreement with Mellon Investor Services LLC, as warrant agent, on November 9, 2009. In accordance with the Warrant Agreement, Lear issued on the effective date of its First Amended Joint Plan of Reorganization, warrants to purchase an aggregate of 8,157,250 shares of common stock, par value $0.01 per share, of Lear. The Warrants will expire on the fifth anniversary of the Effective Date. Each Warrant entitles its holder to purchase one share of Common Stock at an exercise price of $0.01 per share of Common Stock, as may be adjusted from time to time in accordance with the Warrant Agreement. The Warrants are exercisable for an aggregate of up to 8,157,250 shares of Common Stock, subject to adjustment. Holders of the Warrants may exercise the Warrants (i) commencing on the business day immediately following a period of 30 consecutive trading days during which the closing price of the Common Stock for at least 20 of the trading days is equal to or greater than $39.63 (as adjusted from time to time), and (ii) the fifth anniversary of the Effective Date. Holders that elect to exercise the Warrants must do so by providing written notice of the election to Lear and the Warrant Agent prior to the Expiration Date, in a form prescribed in the Warrant Agreement, and paying the applicable exercise price for all Warrants being exercised, together with all applicable taxes and governmental charges. Prior to the exercise of the Warrants, no holder of Warrants is entitled to any rights as a stockholder of Lear, including, without limitation, the right to vote, receive notice of any meeting of stockholders or receive dividends, allotments or other distributions. The number of shares of Common Stock for which a Warrant is exercisable, the Exercise Price, and the Trigger Price is subject to adjustment from time to time upon the occurrence of certain events, including an increase in the number of outstanding shares of Common Stock by means of a dividend consisting of shares of Common Stock, a subdivision of Lear's outstanding shares of Common Stock into a larger number of shares of Common Stock or a combination of Lear's outstanding shares of Common Stock into a smaller number of shares of Common Stock. In the event Lear pays an extraordinary dividend to the holders of Common Stock, the Trigger Price will be decreased dollar-for-dollar by the amount of cash or the fair market value of any securities or other assets paid or distributed on each share of Common Stock in respect of the extraordinary dividend. In addition, upon the occurrence of certain events constituting a reorganization, recapitalization, reclassification, consolidation, merger or similar event, each holder of a Warrant will have the right to receive, upon exercise of a Warrant, an amount of securities, cash or other property receivable by a holder of the number of shares of Common Stock for which a Warrant is exercisable immediately prior to that event. After the consummation of any of that event, all of the Warrants will be deemed to be no longer outstanding and not transferable on Lear's books or the books of the surviving corporation, and will represent solely the right to receive the consideration payable upon the exercise of the Warrant, without interest. About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Attorneys at Kirkland & Ellis LLP, served as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP was engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tapped as special counsel. Alvarez & Marsal North America, LLC, is the Debtors' restructuring advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC served as the Debtors' claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) Lear Corporation announced November 9 that it has successfully emerged from its court-supervised financial reorganization with a strong and flexible balance sheet, positive operating results in the Third Quarter, a growing sales backlog and a robust competitive profile. LEAR CORP: Issues 5 Mil. Shares Under Incentive Plan ---------------------------------------------------- On November 9, 2009, Lear Corporation registered with the U.S. Securities and Exchange 5,907,874 shares of common stock to be issued under its Lear Corporation 2009 Long-Term Stock Incentive Plan. The proposed maximum offering price is $35 per share with a maximum aggregate offering price of $206,775,590. A copy of the filing may be accessed for free at: http://researcharchives.com/t/s?492b About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Attorneys at Kirkland & Ellis LLP, served as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP was engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tapped as special counsel. Alvarez & Marsal North America, LLC, is the Debtors' restructuring advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC served as the Debtors' claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) Lear Corporation announced November 9 that it has successfully emerged from its court-supervised financial reorganization with a strong and flexible balance sheet, positive operating results in the Third Quarter, a growing sales backlog and a robust competitive profile. LEHMAN BROTHERS: Perpetual Trustee Prevails in Court of Appeals --------------------------------------------------------------- Perpetual Trustee Company Limited, acting in its capacity as trustee for retail investors in Australia, New Zealand and Papua New Guinea, has prevailed in its defence of an appeal made by Lehman Brothers Special Financing Inc. in the English Court of Appeal against the first instance decision of the Chancellor in the English High Court on 28 July 2009. On November 6, 2009, the Court of Appeal unanimously dismissed LBSF's appeal and upheld the High Court's decision that provisions which allow for the subordination of rights or beneficial entitlements of LBSF on its bankruptcy or default are valid and effectual under English law. The efficacy of provisions such as these is widely perceived as an important factor in the assignment of credit ratings to credit linked notes and other instruments. Perpetual was represented by English lawyers from Sidley Austin* working together with lawyers from the Australian firm of Henry Davis York. The action, which is called Perpetual Trustee Company Limited v (1) BNY Corporate Trustee Services Limited and (2) Lehman Brothers Special Financing Inc. (together with a case that was heard concurrently, Belmont Park Investments Pty Limited and Others v (1) BNY Corporate Trustee Services Limited and (2) Lehman Brothers Special Financing Inc.), has been closely monitored by financial market participants given its potentially far-reaching significance to similar synthetic CDO and other derivative transactions in which parties have deliberately selected English law to govern their dealings. The proceedings were brought by Perpetual as the holder of certain credit-linked notes issued as part of the "Dante" Note Programme sponsored by LBSF and its affiliates. The proceedings were brought against BNY Corporate Trustee Services Limited. LBSF elected to be joined as a party to those proceedings. BNY maintained a neutral stance throughout the proceedings. The action concerns a variety of issues, including whether BNY should be prevented from applying "Noteholder Priority" in relation to the distribution of the proceeds of the Collateral over which it was directed to enforce security following an acceleration of the Notes held by Perpetual. The documents (which were governed by English law) provided for a reversal of the priority of payments to allow Perpetual (as holder of the Notes) to be paid ahead of LBSF (as Swap Counterparty) if there was an Event of Default in relation to LBSF under the Swap Agreement. An Event of Default under the Swap Agreement had occurred as a result of the Chapter 11 Bankruptcy filings of LBSF and its parent company in the United States and other events. LBSF maintained at first instance that provisions of the U.S. Bankruptcy Code (the so-called "ipso facto" rule) and, in the alternative, provisions of English law, operated to make the reversal of the priority of payments ineffectual as a matter of law. LBSF appealed the High Court's decision that the reversal of the priority of payments was not ineffectual under English law under the so-called "anti-deprivation principle." The Court of Appeal unanimously upheld the English High Court's decision at first instance, confirming that provisions in contracts governed by English law that subordinate the rights or beneficial entitlements of the swap counterparty on an insolvency or other default will not generally be prohibited by English law. The Master of the Rolls, Lord Neuberger, commented that LBSF's prior ranking right to the proceeds of the collateral under the documents was always contingent, and given that LBSF had never unconditionally owned a prior ranking right, it could not be said to have been "deprived" of such a right contrary to the English law anti-deprivation principle. LBSF has applied for permission to appeal to the newly formed English Supreme Court and the Court of Appeal's decision on whether to grant such permission is expected shortly. The validity of provisions such as these as a matter of U.S. law has yet to be determined by the U.S. courts and is presently the subject of litigation initiated by LBSF in the U.S. after LBSF elected to be joined as a party to the English proceedings. Motions seeking summary judgement on the U.S. law issue are scheduled to be heard on 19 November 2009 in New York in the U.S. Bankruptcy Court. Also at issue in the proceedings is whether the English Court will permit the application of foreign insolvency laws (by virtue of an application under the Cross Border Insolvency Regulations 2006 to invalidate these subordination provisions. That issue was not the subject of the hearing before the Court of Appeal, having been adjourned by the English High Court to permit an appropriate application for recognition and assistance under the CBIR to be made by LBSF. Sidley is one of the world's largest full-service law firms, with approximately 1700 lawyers practising in 16 U.S. and international cities, including Beijing, Brussels, Frankfurt, Geneva, Hong Kong, London, Shanghai, Singapore, Sydney and Tokyo. Every year since 2003, Sidley has been named to Legal Business' Global Elite, its designation for the 18 firms "that define the pinnacle of the legal profession." BTI, a Boston-based consulting and research firm, has named Sidley to their Client Service Hall of Fame as one of only two law firms to rank in the Client Service Top 10 for seven years in a row. 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) LIFT-TECH ELEVATOR: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Lift-Tech Elevator Service, LLC 926 Newark Ave Suite 101 Jersey City, NJ 07306 Bankruptcy Case No.: 09-40244 Chapter 11 Petition Date: November 10, 2009 Court: United States Bankruptcy Court District of New Jersey (Newark) Debtor's Counsel: Shmuel Klein, Esq. Law Office of Shmuel Klein 113 Cedarhill Avenue Mahwah, NJ 07430 Tel: (201) 529-3411 Email: shmuelklein@optonline.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/njb09-40244.pdf The petition was signed by Dominic Glenn, owner of the Company. LIMITED BRANDS: S&P Downgrades Ratings on Unsecured Notes to 'BB-' ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it revised its recovery rating on Limited Brands' (BB/Negative/B-1) unsecured notes without subsidiary guarantees to '5' from '4' indicating the expectation of modest (10%-30%) recovery in the event of a payment default. Concurrently, S&P is lowering the rating on those notes to 'BB-' from 'BB', and removing it from CreditWatch, where it was placed on June 15, 2009, with negative implications. In addition, S&P is assigning a '3' recovery rating to the $500 million unsecured notes with subsidiary guarantees due 2019. The '3' recovery rating indicates the expectation of meaningful (50%-70%) recovery in the event of a payment default. These notes are rated the same as the corporate credit rating. "The recovery rating revision on the unsecured notes results from the repayment of $108 million unsecured notes with senior unsecured notes that rank senior to its unguaranteed unsecured notes," said Standard & Poor's credit analyst Diane Shand. Hence, there is more priority debt ahead of the existing unguaranteed unsecured notes. Ratings would not have been affected if the company had used the proceeds to repay secured debt. The ratings on Columbus, Ohio-based specialty retailer Limited Brands reflect its participation in the intensely competitive specialty retail industry and weakening credit measures. The company's satisfactory market positions in intimate apparel and personal care products and its geographic diversity partially mitigate these weaknesses. Both Victoria's Secret and Bath & Body Works are relatively mature and their growth rates are slowing. Limited Brands sells highly discretionary items and both Victoria's Secret and BBW suffered declines in same-store sales and profitability in 2008 and thus far in 2009 as a result of the significant drop in consumer spending. Historically, both had provided consistent and solid cash flows. A manageable debt maturity schedule provides additional financial flexibility. The company recently amended its credit facility to loosen covenants. Currently, the company has a 31% cushion within its covenants. S&P expects the company will have more than a 20% cushion in the financial covenants in its revolving credit facility during 2009. MAGNA ENTERTAINMENT: Negotiating With Stalking Horse for Pimlico ---------------------------------------------------------------- Magna Entertainment Corp. has asked the Bankruptcy Court to extend by two days after November 9, 2009, the deadline to enter into stalking horse agreements for the Maryland Jockey Club, which comprise the Pimlico and Laurel Park race tracks. Magna said that in an effort to further stimulate the auction process for the Maryland Jockey Club and generate further competitive bidding, they are diligently working towards finalizing a purchase agreement that can serve as the "stalking horse bid". The Debtors, however, were not able to meet the original deadline for those bids. Initial bids for the Maryland tracks were due Nov. 2 for the selection of the so-called stalking horse. A second round of bids is scheduled by Dec. 2. The auction will be Jan. 8, followed by a sale approval hearing on Jan. 20. A Feb. 25 auction is scheduled for the tracks Santa Anita and Golden Gate Fields in California, and Gulfstream in Florida; with bids due Feb. 10 and a sale hearing on Feb. 26 About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J. Finnegan, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent for the Debtors. Magna Entertainment Corp. had total assets of US$1.054 billion and total liabilities of US$947.3 million based on unaudited consolidated financial statements as of December 31, 2008. MAGUIRE PROPERTIES: Says Calif. Budget Woes May Impact Financials ----------------------------------------------------------------- Maguire Properties, Inc., said in a regulatory filing that continuing state budget problems in California may have an adverse effect on its operating results and occupancy levels. Maguire Properties said the State of California continues to address severe budget shortfalls through reductions of benefits and services and the layoff or furlough of employees. "The perception that the State is not able to effectively manage its budget or cuts in services and benefits may reduce demand for leased space in California office properties. A significant reduction in demand for office space could adversely affect our future financial condition, results of operations, cash flow, quoted trading prices of our securities and ability to satisfy our debt service obligations and to pay distributions to stockholders," the Company said. Maguire Properties also said many of its major tenants have experienced or may experience a notable business downturn, weakening their financial condition and potentially resulting in their failure to make timely rental payments or a default under their leases. Some of the Company's tenants are in the mortgage, financial, insurance and professional services industries. "In many cases, we have made substantial up-front investments in the applicable leases, through tenant improvement allowances and other concessions, as well as typical transaction costs (including professional fees and commissions) that we may not be able to recover. In the event of any tenant default, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment," the Company said. As of September 30, 2009, Maguire's 20 largest tenants represented 44.9% of Maguire's Effective Portfolio's total annualized rental revenue (excluding Properties in Default). According to the Company, the bankruptcy or insolvency of a major tenant also may adversely affect the income produced by its properties. If any tenant becomes a debtor in a case under the United States Bankruptcy Code, Maguire cannot evict the tenant solely because of the bankruptcy. In addition, the bankruptcy court might authorize the tenant to reject and terminate their lease with Maguire. Moreover, Maguire's claim against the tenant for unpaid future rent would be subject to a statutory cap that might be substantially less than the remaining rent actually owed under the lease. Also, the claim for unpaid rent would likely not be paid in full. There have recently been a number of high profile bank failures, and several of Maguire's banking tenants faced distress in 2008 and continue to face distress in 2009. Failed banks or banks involved in government-facilitated sales are subject to the FDIC's statutory authority and receivership process. The FDIC has receivership powers that are substantially broader than those of a bankruptcy trustee. In dealing with the FDIC in any repudiation of a lease, the Company as landlord is likely in a less favorable position than with a debtor in a bankruptcy proceeding. Many of the creditor protections that exist in a bankruptcy proceeding do not exist in a FDIC receivership. As reported by the TCR on Friday, Maguire posted a net loss of $48.58 million on total revenue of $126.32 million for the quarter ended September 30, 2009, from a net loss of $67.75 million on total revenue of $123.86 million for the same period a year ago. The Company posted a net loss of $533.80 million on total revenue of $378.06 million for the nine months ended September 30, 2009, from a net loss of $231.79 million on total revenue of $379.24 million the prior year. At September 30, 2009, Maguire had $4.17 billion in total assets against $4.69 billion in total liabilities. A full-text copy of the Company's Form 10-Q report is available at no charge at http://ResearchArchives.com/t/s?492a About Maguire Properties, Inc. Maguire Properties, Inc. (NYSE: MPG) -- http://www.maguireproperties.com/-- is the largest owner and operator of Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high-quality office properties in the Southern California market. Maguire Properties, Inc. is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. MANUEL VEGA: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Joint Debtors: Manuel H. Vega Anel G. Vega 6907 S. Copper Run Ave Tucson, AZ 85756 Bankruptcy Case No.: 09-28890 Chapter 11 Petition Date: November 10, 2009 Court: United States Bankruptcy Court District of Arizona (Tucson) Judge: Eileen W. Hollowell Debtor's Counsel: Eric Slocum Sparks, Esq. 110 S Church Ave #2270 Tucson, AZ 85701 Tel: (520) 623-8330 Fax: (520) 623-9157 Email: eric@ericslocumsparkspc.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $2,232,830, and total debts of $3,466,919. 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/azb09-28890.pdf The petition was signed by the Joint Debtors. MARANI BRANDS: Amends Q3 FY2009 Report; Posts Net Loss of $672,000 ------------------------------------------------------------------ Marani Brands, Inc., has amended its report on Form 10-Q for the fiscal 2009 third quarter ended March 31, 2009, mainly to reflect accounting changes as a result of the application of reverse merger, rather than purchase method accounting to the April 2008 merger transaction between the Company and Margrit Enterprises International, Inc. The Company reported a net loss of $672,671 on sales of $81,443 for the three months ended March 31, 2009, compared with a net loss of $773,930 on sales $36,872 in the same period of fiscal 2008. At March 31, 2009, the Company's consolidated balance sheets showed $1,623,634 in total assets and $2,027,297 in total liabilities, resulting in a $403,663 shareholders' deficit. The Company's consolidated balance sheets at March 31, 2009, also showed strained liquidity with $1,608,874 in total current assets available to pay $1,903,732 in total current liabilities. A full-text copy of the Company's amended quarterly report for the period ended March 31, 2009, is available for free at: http://researcharchives.com/t/s?492e Going Concern Doubt As of March 31, 2009, the Company has an accumulated deficit of $22,495,358 and incurred a net loss of $672,671 for the three months ended March 31, 2009. The Company's current business plan requires additional funding beyond its anticipated cash flows from operations. The Company believes these and other factors raise substantial doubt about its ability to continue as a going concern. About Marani Brands Based in North Hollywood, Calif., Marani Brands, Inc. (OTC BB: MRIB) primarily engages in the distribution of wine and spirit products manufactured in Armenia. The Company's signature product is Marani Vodka, a premium vodka which is manufactured exclusively for the Company in Armenia. METCALF PAVING: Wants to Use $100,000 from Jayjet Transportation ---------------------------------------------------------------- David Krechevsky at Republican American reports that Metcalf Paving Co. Inc. is asking the U.S. Bankruptcy Court in New Haven for authority to access $100,000 from its managing partner Jayjet Transportation LLC because the Company can't find a willing lender. Mr. Krechevsky relates that the facility is secured by a first lien on any receivables by the loan. According to person familiar with the matter, the Company was unable to reach an agreement with Naugatuck Savings Bank to allow the company to use its cash collateral. The bank has a lien on the company's assets and receivable, Mr. Krevchevsky notes. A hearing is set for Thursday at 3:00 p.m., to consider the Company's request, the report says. Based in Beacon Falls, Metcalf Paving Co. Inc. operates a paving and asphalt milling company. NETBANK INC: Estate Supervisor Balks at Exec. Bid for $1.2M ----------------------------------------------------------- Law360 reports that the liquidating supervisor for the estate of NetBank Inc. is opposing a motion for summary judgment by a former executive who claims the bank owes him more than $1.2 million in severance. Headquartered in Jacksonville, Florida, NetBank Inc. -- http://www.netbank.com/-- is a financial holding company of Netbank, the United States' oldest Internet bank serving retail and business customers in all 50 states. NetBank Inc. does retail banking, mortgage banking, business finance, and provides ATM and merchant processing services. The Company filed for chapter 11 protection on Sept. 28, 2007 (Bankr. M.D. Fla. Case No. 07-04295). Alan M. Weiss, Esq., at Holland & Knight LLP, represents the Debtor. The U.S. Trustee for Region 21 appointed six creditors to serve on an Official Committee of Unsecured Creditors of the Debtor's case. Rogers Towers, Esq. at Kilpatrick Stockton LLP, represents the Committee in this case. Rogers Towers P.A. serves as co-counsel to the Committee. As of Sept. 25, 2007, the Debtor listed total assets of $87,213,942 and total debts of $42,245,857. NORTEL NETWORKS: ASM Capital, et al., Buy Claims ------------------------------------------------ The Office of the Clerk of the Bankruptcy Court recorded seven notices of transfer of claims in the Debtors' Chapter 11 cases for the period from October 21 to 28, 2009. They are: Claim Claim Transferee Transferor Number Amount ---------- ---------- ------ ---------- United States Debt Brennan Consulting Service 163 $19,500 Recovery III LP United States Debt National Journal Group Inc. -- $4,228 Recovery LLC Liquidity Solutions Rapid Sheet Metal Inc. -- $1,626 Liquidity Solutions Pucan Trading 1921/1922 $856 ASM Capital LP Quarry Integrated 1735 $35,340 Communications ASM Capital LP NetFormx Inc. 2198 $32,266 ASM Capital LP Arbor Industries USA Inc. 478 $2,664 ASM Capital LP SecureLogix Corporation -- $9,642 About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for our customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Belden Proposes Lift Stay to Set Off Claim ----------------------------------------------------------- Prior to the Petition Date, Belden Inc. executed an escrow agreement dated July 16, 2008, which concerned a merger of Shark Acquisition Corp. and Trapeze Networks Inc. Belden is the parent corporation of Shark Acquisition while Nortel Networks Ltd., through its wholly owned subsidiary Nortel Networks Inc., was a shareholder of Trapeze. Under the Escrow Agreement, $10 million in funds potentially payable to shareholders of Trapeze were placed in escrow pending satisfaction of various conditions under the Merger Agreement and the Escrow Agreement. NNL has a 4.6782% interest in Trapeze and is potentially entitled to its pro rata share of the escrow in the sum of $467,823, upon distribution of the escrow funds. The obligations of Belden and NNL under these Agreements are not in dispute although the amounts at issue remain subject to adjustment as provided under the Escrow Agreement. Furthermore, NNL owes Belden $332,344 for pension indemnification obligations, which stemmed from an asset purchase agreement entered into by its predecessor, Northern Telecom Limited and Belden's predecessor, Cable Design Technologies (CDT) Canada Inc. Accordingly, Belden asks the Bankruptcy Court to lift the automatic stay to allow it to set off NNL's $467,823 claim against its $332,344 claim. After application of Belden's set-off rights, NNL will be left with a claim of up to $135,479 against the escrow funds. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for our customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: CCAA Units' Forecast for October to December ------------------------------------------------------------- Ernst & Young Inc., the firm appointed to monitor the assets of Nortel Networks Corporation and its four affiliates that filed for creditor protection under Canada's Companies' Creditors Arrangement Act, delivered to the Ontario Superior Court of Justice its 25th monitor report on October 22, 2009. The Monitor Report provides updates on the consolidated cash position and liquidity of NNC and its subsidiaries as of October 3, 2009, actual receipts and disbursements, cash flow forecast, among other things. Ernst & Young reported that as of October 3, 2009, NNC and its subsidiaries had consolidated gross cash balance of about $2.9 billion, which is held globally in various Norte1 units and joint ventures. As of October 3, 2009, the Nortel companies based in North America have cash available for operations and post-filing intercompany settlements of about $878 million compared to a gross cash position of about $1.1 billion. Of this, approximately $182 million is held by the Canada-based Nortel units while about $696 million is held by the U.S.-based units. Nortel Government Solutions, a U.S. non-debtor entity, has cash of approximately $56 million for use in its own operations and for settlement of intercompany transactions. It is anticipated that the shares of NGS will be transferred to Avaya Inc. in connection with the closing of the sale of Nortel's Enterprise Solutions Business. The administrators of U.K.-based Nortel units have cash available for operations and post-filing intercompany settlements for Nortel Networks UK and other foreign-based units of approximately $737 million. Meanwhile, Nortel entities in the Asia Pacific region have about $417 million of cash available for operations and intercompany settlements. NETAS, a joint venture in which NNC and its subsidiaries have a 53% stake, has approximately $61 million of cash, of which $32 million represents Nortel's proportionate share. As at October 3, 2009, Nortel Networks (CALA) Inc.'s available cash position is $76 million. Other Nortel units in the Caribbean and Latin America that are not in bankruptcy have about $63 million of cash generally available to fund their in-country operations and inter-company settlements. Actual Receipts and Disbursements from July 12 to October 3, 2009 The actual consolidated net cash outflow of NNC and the other CCAA applicants, for the period July 12 to October 3, 2009, is $26.9 million, according to the Monitor Report. Available cash was greater than forecast by approximately $7.5 million as a result of the appreciation of the Canadian dollar against the U.S. dollar. Meanwhile, unavailable cash decreased by about $0.9 million. Cash Flow Forecast for the Period October 4 to December 31, 2009 NNC and its subsidiaries, with the assistance of Ernst & Young, prepared an updated 14-week cash flow forecast for the period from October 4 to December 31, 2009. The cash flow forecast indicates that NNC and the other CCAA applicants will have total receipts of $400 million and total disbursements of $524 million resulting in a net cash outflow of $124 million. As of October 3, 2009, the CCAA applicants have available cash balances of about $182 million, excluding restricted cash and unavailable cash of about $59 million. A full-text copy of the 25th Monitor Report is available without charge at http://bankrupt.com/misc/Nortel25thMonitorReport.pdf About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for our customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NUTRACEA: Files for Protection Under Chapter 11 ----------------------------------------------- NutraCea disclosed that the company has filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Arizona. None of the Company's subsidiaries, including its Brazilian rice bran oil operation, Irgovel, were included in the bankruptcy filing. The company plans to use the protection provided by the courts under Chapter 11 to restructure its operations, reduce overhead and sell non-core assets, in line with the previously announced strategy of focusing on its core businesses of stabilized rice bran, rice bran oil, nutraceuticals and baby cereal. "The protection provided by the Chapter 11 process will allow NutraCea to gain immediate liquidity through the $6,750,000 Debtor-in-Possession financing facility provided by Wells Fargo Bank, N. A. and to resume normal day-to-day operations, while giving us the opportunity to restructure, strengthen our business performance and create long-term value for our stakeholders," said W. John Short, Chief Executive Officer. Mr. Short added, "We will work hard to emerge from this process as quickly as possible with a streamlined cost structure that should allow us to operate as a healthier, more competitive and profitable company. We deeply appreciate the dedication and efforts of our employees, who have worked exceedingly hard during this challenging period. We look forward to the continued support of our customers, vendors and business partners as we reposition NutraCea for future growth and profitability." In conjunction with its filing, the Company applied for Bankruptcy Court approval for a DIP financing facility provided by Wells Fargo Bank, N. A. The DIP facility provides lines of credit totaling $6,750,000 which, combined with cash flow from operations, will permit payment of employee wages and benefits and allow the Company to resume normal day-to-day operations, including payment of post-petition obligations to vendors and professional service providers, all in the normal course of business. The total funds that NutraCea will be able to access under the DIP financing facility will be determined using a borrowing base formula and will be reduced by the outstanding balance owing under NutraCea's old credit facility with Wells Fargo Bank, N.A. NutraCea currently owes approximately $3,575,000 to Wells Fargo Bank, N.A. under the old credit facility. The Company's obligations under the DIP financing facility will be secured by its facilities in Phoenix, Arizona, Dillon, Montana and Mermentau, Louisiana and all of its personal property assets other than certain intellectual property assets. In addition to seeking Bankruptcy Court approval of the DIP financing, NutraCea has filed several customary first day motions seeking authority to take actions in furtherance of its reorganization. NutraCea has hired Forrester, Worth & Green PLLC as its bankruptcy counsel. The Company plans to post regular updates on its Web site regarding the Chapter 11 process in order to keep employees, customers, vendors, professional service providers, shareholders, other stakeholders and the general public apprised of its progress as it restructures under court supervision. NutraCea sought protection from Chapter 11 after Wells Fargo accelerated a principal balance due on a line of credit that it defaulted, Andrew Johnson at azcetral.com reports. In addition, the Company is facing lawsuits over a facility in Louisiana due to late payments on lease and supply deals, Mr. Johnson notes. The Company also restated its financial results for fiscal years 2006 and 2007 and the first three quarters of 2008 last month due to accounting errors discovered by independent investigators hired by the firm's audit committee. About NutraCea NutraCea -- http://www.NutraCea.com/-- is a world leader in production and utilization of stabilized rice bran. NutraCea holds many patents for stabilized rice bran production technology and proprietary products derived from SRB. NutraCea's proprietary technology enables the creation of food and nutrition products to be unlocked from rice bran, an underutilized by-product of standard rice processing. NUTRACEA: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Nutracea, a California corporation 5090 N. 40th Street, Suite 400 Phoenix, AZ 85018 Case No.: 09-28817 Chapter 11 Petition Date: November 10, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: S. Cary Forrester, Esq. Forrester & Worth, PLLC 3636 North Central Avenue, Suite 700 Phoenix, AZ 85012 Tel: (602) 271-4250 Fax: (602) 271-4300 Email: scf@fwlawaz.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Leo G. Gingras, the company's chief operating officer. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ AETNA Health Insurance $135,399 Audio Video Resources Construction $170,709 Inc. Brycon, Inc. Construction $1,078,451 6150 W. Chandler Blvd Suite #39 Chandler, AZ 85226 Farmers Rice Note Payable $1,920,000 Cooperative 1760 Creekside Oaks Dr Suite 200 Sacramento, CA 95833 Farmers Rice Milling Bran Supply $117,186 Co., Inc. PO Box 98509 Baton Rouge, LA 70884 Foley & Lardner, LLP Legal Services $321,743 35th Floor, One Century Plaza 2029 Century Park East Los Angeles, CA 90067 Hadasit Medical and Research $100,000 Research Svc. & Development Ltd. Halpern Capital Settlement $925,000 20900 NE 30th Avenue Aventura, FL 33180 Henderikus Hoogenkemp Consulting $97,208 Grote Leof 36 Herbalscience Research and $275,000 Singapore PTE LTD Development 1Science ParkRd.#01-07 The Capricorn Singapore Science Park II Singapore Louisiana Rice Mill Bran Supply $296,199 102 South 13th Street Mermentau, LA 70556 McDermott, Will & Emery Patent Attorneys $98,514 MSS Technologies, Inc. Software System $142,490 Navigant Consulting, Inc. Consulting Fees $250,971 30 S. Wacker Drive Suite 3100 Chicago, IL 60606 Osborn Maledon, PA Legal $275,184 Iolta Account 2929 N. Central Ave. Phoenix, AZ 85012 PHD Technologies, LLC $87,539 Sacramento Bag MFG. Co. Packaging $118,335 Trea, Inc. Construction Work $155,052 Weintraub Genshlea Legal $385,134 Chediak Law Corporation 400 Capitol Mall, 11th Floor Sacramento, CA 95814 Wellington Foods Food Ingredients $292,091 3250 E. 29th Street Long Beach, CA 90806 ORBIT INT'L: Q3 Net Income Up 48.8%; Seeks Waiver From Lender ------------------------------------------------------------- Orbit International Corp. reported results for the third quarter and nine-month period ended September 30, 2009. Third Quarter 2009 vs. Third Quarter 2008 -- Net sales declined by 1.1% to $6,876,000 compared to $6,951,000; -- Gross margin was 39.6% compared to 39.4%; -- Net income increased 48.8% to $320,000 compared to $215,000; -- Earnings per diluted share was $.07, compared to $.05 per diluted share; and, -- Earnings before interest, taxes, depreciation and amortization, and stock based compensation (EBITDA, as adjusted) was $619,000 ($.14 per diluted share) compared to $578,000 ($.12 per diluted share). Nine Months 2009 vs. Nine Months 2008 -- Net sales declined by 2.1% to $19,029,000 from $19,434,000; -- Gross margin was 39.7% compared to 39.6%; -- Net loss was $27,000 or $.01 per share compared to net loss of $80,000 or $.02 per share; -- EBITDA, as adjusted decreased to $880,000 ($.20 per diluted share) compared to $990,000 ($.21 per diluted share); and, -- Backlog at September 30, 2009, increased 52% to $18.9 million, compared to $12.4 million at June 30, 2009; and 33% higher than the $14.2 million of backlog reported at September 30, 2008. Dennis Sunshine, President and Chief Executive Officer stated, "Third quarter revenues increased 13.7% and 12.6% as compared to the first and second quarters, respectively. Net income for the third quarter of $320,000 nearly offset the net loss incurred through the first half of the year. Third quarter results were positively impacted by the receipt of two key program awards, which were previously projected for release by our customers no later than the second quarter of 2009. The first contract was a $1.9 million award to our Orbit Instrument Division for Remote Control Units [RCU's] to support the Common Transponder Program for U.S. Navy and U.S. Army Identification Friend or Foe field operations. The second significant award, received by our Integrated Combat System subsidiary during the quarter, had an aggregate value in excess of $4,447,000, supporting the MK 119 and MK 437 Naval Gun Systems. ICS had commenced the procurement of material, and labor resources were allocated to the job beginning in the second quarter. As a result, ICS expects to be substantially complete on eight [8] out of the ten [10] MK 119 cabinets by the end of the year, with the last two remaining cabinets and the MK 437 cabinets completed and shipped by the second quarter of 2010. Since the MK 119 is recorded under the percentage of completion method, ICS is expected to record strong operating results in the fourth quarter." Mr. Sunshine added, "After booking these two significant orders, and including several prototype awards recently received for new program opportunities, our backlog at the end of the third quarter was approximately $19 million. Based on the dollar value and delivery requirements for our backlog, we expect a strong 2009 fourth quarter and improved operating results in the first half of 2010 as compared to the first half of 2009. More importantly due to the higher backlog, together with the number of new and follow- on program opportunities, we also believe the Company is well positioned for increased revenue and profitability for the entire 2010 year. As evidenced by our current third quarter results, we continue to focus our efforts on tightly managing costs to further improve our profitability." Mr. Sunshine continued, "Separate and apart from our current level of business, several opportunities that our Electronics and Power Groups have been supporting, have the potential for significant follow-on multi-year production program revenue that could commence in 2010. As the Company previously announced, as of October 1st, 2009, our TDL subsidiary successfully completed its move to a larger 50,000 square foot facility, located in the Quakertown, PA. This facility is now set up with expanded engineering, design, inspection, test and production capabilities that our prior facility could not handle. This larger facility now permits TDL to bring back several manufacturing processes that were previously outsourced simply due to facility space constraints. As a result, TDL should realize significant manufacturing efficiencies while gaining in-house control of customer driven production schedule requirements." Mr. Sunshine noted, "Both our operating segments are experiencing better than anticipated growth opportunities. Behlman's COTS division has had strong year to date results, with several programs now entering the production phase of the program requirements. The strength in its COTS division has more than offset the weakness in its commercial division in 2009. In spite of the continued weakness in the economy, during the third quarter, Behlman's commercial division recorded its strongest bookings for the year and strong bookings have carried over into the current fourth quarter." Mitchell Binder, Chief Financial Officer, added, "Our financial condition remains strong. At September 30, 2009, total current assets were $21,275,000 versus total current liabilities of $5,347,000 for a 4.0 to 1 current ratio. In addition, with approximately $20 million and $7 million in federal and state net operating loss carryforwards respectively, we should continue to shield profits from federal and New York State taxes and enhance future cash flow." Mr. Binder continued, "Our cash and cash equivalents and marketable securities as of September 30, 2009 were approximately $3.3 million having used approximately $898,000 to repurchase shares under our $3 million treasury stock repurchase program. From August 2008 through October 31, 2009, a total of 368,147 common shares have been repurchased at an average price of $2.48 per share. Finally, our tangible book value at September 30, 2009 was $3.28 per share, increasing from $3.15 at June 30, 2009, and $3.19 at December 31, 2008." Binder also stated, "Because of lower than expected profitability due to customer contract delays, at September 30, 2009, the Company was not in compliance with two of its financial covenants with its primary lender. The Company believes it will obtain a waiver from its lender, but there can be no assurance that such waiver will be obtained. In the event such waiver is not obtained, all long term debt reflected on the Company's financial statements would be reclassified to current liabilities." Mr. Binder concluded, "We will continue to monitor the price of our stock as compared to the present value of our Company as well as the significance of several potential growth opportunities. Consequently, we intend to continue to purchase shares under our program subject to market conditions and at times when we deem it appropriate." Mr. Sunshine concluded, "Our management continues to explore a number of strategic and financial alternatives that would enhance shareholder value, including synergistic acquisitions and/or the potential sale of the Company." Orbit International Corp. -- http://www.orbitintl.com/-- conducts its operations through its Orbit Instrument Division and its wholly owned subsidiaries, Behlman Electronics, Inc.(Behlman) and Tulip Development Laboratory, Inc. (TDL) and its affiliated manufacturing company, TDL Manufacturing, Inc. (TDLM) and Integrated Consulting Services, Inc., d/b/a Integrated Combat Systems (ICS). Through its Orbit Instrument Division, which includes its wholly owned subsidiaries, Orbit Instrument of California, Inc. and Tulip, the Company is engaged in the design, manufacture and sale of customized electronic components and subsystems. ICS, based in Louisville, Kentucky, performs systems integration for gun weapons systems and fire control interface, as well as logistics support and documentation. Behlman is engaged in the design and manufacture of distortion free commercial power units, power conversion devices and electronic devices for measurement and display. OSCIENT PHARMACEUTICALS: Plan Exclusivity Extended Until Dec. 10 ---------------------------------------------------------------- The Hon. Henry J. Boroff of the U.S. Bankruptcy Court for the District of Massachusetts extended Oscient Pharmaceuticals Corporation, et al.'s exclusive periods to file a Chapter 11 Plan and to solicit acceptances of that Plan until Dec. 10, 2009, and Feb. 10, 2010. Waltham, Massachusetts-based, Oscient Pharmaceuticals Corporation -- http://www.antararx.com/and http://www.factive.com/-- marketed two FDA-approved products in the United States: ANTARA(R) (fenofibrate) capsules, a cardiovascular product and FACTIVE(R) (gemifloxacin mesylate) tablets, a fluoroquinolone antibiotic. ANTARA is indicated for the adjunct treatment of hypercholesterolemia (high blood cholesterol) and hypertriglyceridemia (high triglycerides) in combination with diet. FACTIVE is approved for the treatment of acute bacterial exacerbations of chronic bronchitis and community-acquired pneumonia of mild to moderate severity. ANTARA accountsi for over 80% of the Debtors' 2008 revenues. The Debtors also had a late- stage antibiotic candidate, Ramoplanin, for the treatment of Clostridium difficile-associated disease. As of Dec. 31, 2008, the Debtors' audited consolidated financial statements reflected total assets of $174 million and total liabilities of $255 million. Oscient Pharmaceuticals Corporation together with an affiliate filed for Chapter 11 on July 13, 2009 (Bankr. D. Mass. Case No. 09-16576). Judge Henry J. Boroff presides over the case. Charles A. Dale III, Esq., at K&L Gates LLP, represents the Debtors. The Debtors also hired Ropes & Gray LLP as special litigation counsel, and Broadpoint Capital Inc. as financial advisor. As reported by th TCR on Sept. 23, 2009, Oscient has obtained Court approval to sell its cholesterol-lowering drug Antara to Lupin Ltd. for $38.6 million. Lupin, an Indian generic drugmaker, outbid Akrimax Pharmaceuticals LLC at a court-supervised auction. New Jersey based Akrimax was the lead bidder at the start of the auction with a $20 million offer and eventually raised its offer to $35.4 million including a break-up fee and royalty payments. Oscient earlier won approval from the Bankruptcy Court to sell commercial rights to antibiotic Factive to Cornerstone Therapeutics Inc. Cornerstone agreed to pay $5,000,000 plus an amount for purchased inventory. OTTER TAIL: Wants Mackall Crounse as Bankruptcy Counsel ------------------------------------------------------- Otter Tail AG Enterprises, LLC, has sought the permission of the U.S. Bankruptcy Court for the District of Minnesota to employ Mackall, Crounse & Moore, PLC, as Chapter 11 bankruptcy counsel. Timothy D. Moratzka, a member at MCM, said that the firm will, among other things: (a) analyze the Debtor's financial situation and rendering advice and assistance in determining how to proceed, which has included advice, negotiation and preparation of documents for a Chapter 11 filing; (b) assist with the preparation of the filing of the petition, exhibits, attachments, schedules, statements, and lists, for stay motions, and other documents required; (c) represent the Debtor at the meeting of creditors and negotiating with the creditors and other parties in interest; and (d) work with the Debtor and other parties to obtain approval of a sale process and representing the estate in any sale, followed by a liquidating plan and disclosure statement. According to Mr. Moratzka, the Debtor has agreed that MCM will hold a retainer of $100,000 in trust for application against its final allowed fees. The Debtor also advanced into the firm's trust account $1,039 for payment of the filing fees. Mr. Moratzka assures the Court that MCM doesn't have interests adverse to the interest of the Debtors' estates or of any class of creditors and equity security holders. Mr. Moratzka maintains that MCM is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About Otter Tail 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. The Company filed for Chapter 11 bankruptcy protection on October 30, 2009 (Bankr. D. Minn. Case No. 09-61250). The petition listed assets of $66.4 million against $86 million in debt, nearly all secured. The largest secured creditor is AgStar Financial Services, owed $40.9 million. OTTER TAIL: Taps Fredrikson & Byron as Special Counsel ------------------------------------------------------ Otter Tail AG Enterprises, LLC, has asked for permission from the U.S. Bankruptcy Court for the District of Minnesota to hire Fredrikson & Byron, P.A., as special counsel. Fredrikson & Byron will provide comprehensive legal services regarding Securities and Exchange Commission issues, including preparation of reports to the SEC, and preparation of a private placement memorandum that will be used to attract new investment in a reorganized debtor. Fredrikson & Byron will be paid $175 to $340 per hour for its services. The Debtor is asking that the Court allow: -- Fredrikson & Byron to schedule a hearing for allowance of its professional fees and expenses not more than once every 90 days. -- Fredrikson & Byron to submit monthly requests for payment to the Debtor, with copies to the Committee of Unsecured Creditors or its counsel and to the Office of the U.S. Trustee; and -- the Debtor to pay 80% of fees and 100% of costs on a monthly basis, subject to later allowance by the Court. Todd A. Taylor, a partner in Fredrikson & Byron, assures the Court that the firm doesn't have interests adverse to the interest of the Debtors' estates or of any class of creditors and equity security holders. Mr. Taylor maintains that Fredrikson & Byron is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. 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. The Company filed for Chapter 11 bankruptcy protection on October 30, 2009 (Bankr. D. Minn. Case No. 09-61250). The petition listed assets of $66.4 million against $86 million in debt, nearly all secured. The largest secured creditor is AgStar Financial Services, owed $40.9 million. PANOLAM INDUSTRIES: Moody's Withdraws 'Ca' Corporate Family Rating ------------------------------------------------------------------ Moody's Investors Service withdrew all ratings of Panolam Industries International Inc. because the issuer has entered bankruptcy. These ratings will be withdrawn: -- Corporate family rating at Ca; -- Probability of default rating at D; -- Sr. Sec. 1st Lien Term Loan due 2012 at Caa3 (LGD2, 27%); -- Sr. Sec. 1st Lien Revolver due 2010 at Caa3 (LGD2, 27%); -- 10.75% Sr. Sub. Notes due 2013 at C (LGD5, 82%); and -- Speculative grade liquidity rating at SGL-4. Moody's last rating action for Panolam occurred on July 7, 2009 when the company's Probability of Default was downgraded to D from Ca/LD. Headquartered in Shelton, Connecticut, Panolam is an integrated manufacturer of thermally fused melamine panels and high pressure laminates. PATRICK HACKETTS: Files for Chapter 11 After Gouverneur Store Shut ------------------------------------------------------------------ Kim Smith Dedam, staff writer at Press Republican, reports that Patrick Hacketts Hardware Co. filed Chapter 11 bankruptcy, two days after closing its Gouverneur store under threat of eviction. According to a company official, the Chapter 11 filing will not affect operations of the Company's department store in Tupper Lake and three other stores, Mr. Dedam relates. Chapter 11 is the most recent adjustment in the 150-year-old company's tumultuous push to restructure operations, he adds. Based in New York, Patrick Hacketts Hardware Co. -- http://www.hackettsonline.com/-- operates department stores. PHILADELPHIA NEWSPAPERS: Dist. Court Reverses Credit Bidding Order ------------------------------------------------------------------ Philadelphia Newspapers LLC took an appeal to the U.S. District of the Eastern District of Pennsylvania from the Bankruptcy Court's ruling that gives secured lenders the right to use the $300 million in debt they are owed as part of their bid to acquire the Company. The Company is contemplating to sell its business to a group of local investors, including Bruce E. Toll, absent higher and better bids for the assets. The investor group Philly Papers LLC is offering $30 million cash plus a combination of payment of certain expenses and assumption of liabilities that will yield gross proceeds to the estates of $41 million. The Debtor opposed a credit bid by lenders owed more than $400 million, saying that it would have a "chilling effect" on competing bidders. A credit bid would easily top the offer by Mr. Toll. In an opinion entered November 10, 2009, District Judge Eduardo C. Robreno reversed the October 8 ruling by the Bankruptcy Court. As a result, Philadelphia Newspapers can hold an auction where the secured lenders must bid cash and cannot submit a credit bid if intends to participate in the auction. Judge Robreno noted that with respect to 11 U.S.C. Sec. 1129(b)(2)(A), a plan is fair and equitable to secured creditors if the plan provides (i) the holders of the secured claims will retain the liens securing their claims, (ii) each holder of a secured claim will receive cash payments totaling at least the allowed amount of the claim, of a value of at least the value of the holder's interest in the estate's interest in the property; or for the realization of the holders of the indubitable equivalent of the claims. Judge Robrero notes that courts have expressly recognized that the use of the word "or" means that the three alternatives set forth under Section 1129(b)(2)(A) must be viewed in the disjunctive, such that the plan must only satisfy the criteria of one of the three alternatives. Given the contrasting language of Sec. 1129(b)(2)(A)(i) and Sec. 1129(b)(2)(A)(ii), it appears that Congress intended to provide three alternative paths to confirmation, one of which, does not entitle a secured creditor the right to credit bid at a public auction, Judge Robrero said. "Therefore, it was error for the Bankruptcy Court to conclude that the Senior Lenders had a statutory right to credit bid when a plan of reorganization pursued under the Indubitable Equivalent Prong does not guarantee that the Senior Lenders be afforded such a right," Judge Robrero concluded. The auction has been scheduled by the Bankruptcy Court for November 18, 2009. Deadline for competing bids is November 18, 2009. A copy of the District Court Opinion is available for free at: http://bankrupt.com/misc/Philly_Papers_Robreno_Opinion.pdf The Chapter 11 Plan Philadelphia Newspapers LLC is scheduled to present its Chapter 11 reorganization plan for confirmation at hearings scheduled to begin December 4, 2009. Philadelphia Newspapers has already obtained approval of the disclosure statement explaining the Plan and are now soliciting votes on the Plan. The Plan is based upon a sale of all of the Debtors' business to Bruce E. Toll-led Philly Papers LLC, subject to higher and better offers. According to the disclosure statement explaining the Plan, with the sale of the Debtors' business to Bruce Toll, holders of secured claims, including $66 million, senior secured claims, will recover 100 cents on the dollar. Holders of $350 million prepetition unsecured debt claims will recover less than 1% of their claims. Holders of prepetition unsecured trade claims will recover up to 6%. The Plan allocates $750,000 liquidating trust in favor of general unsecured trade creditors and a 3% distribution of equity interests in Philly Papers to holders of unsecured prepetition claims other than general trade creditors. A copy of the Debtors' Disclosure Statement is available for free at http://bankrupt.com/misc/PhillyNews_DiscStatement.pdf A copy of the Debtors' Insider Chapter 11 Plan is available for free at http://bankrupt.com/misc/PhillyNews_Ch11Plan.pdf 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. PILGRIM'S PRIDE: To Sell Dalton, Georgia Truck Stop --------------------------------------------------- According to Bill Rochelle at Bloomberg, Pilgrim's Pride Corp., is seeking the Bankruptcy Court's approval to sell a former truck stop in Dalton, Georgia, for $118,000 without holding an auction. Higher offers are welcome. A hearing on the sale will be held Dec. 1. Pilgrim's Pride is scheduled to present its plan for confirmation on December 8, 2009. The deadline for ballots to be received by the voting agent is December 1, 2009. Pilgrim's Pride sees emergence from bankruptcy before the end of December. Under terms of the joint plan of reorganization, Pilgrim's Pride has entered into an agreement to sell 64% of the new common stock of the reorganized Pilgrim's Pride to JBS U.S.A. for $800 million in cash. Distributions Under Ch. 11 Plan The Plan, as amended, October 19, 2009, will be financed in part by the sale of 64% of the stock to JBS for US$800 million, leaving the remaining 36% of the stock, presumptively worth US$450 million, for existing equity holders. All creditors will be paid fully either in cash or through issuance of new debt. Proceeds from the sale of the new common stock of the reorganized Pilgrim's Pride to JBS will be used to fund cash distributions to allowed claims under the plan. Under the terms of the plan, all creditors of the Debtors holding allowed claims will be paid in full. The Amended Plan also offers to pay priority tax claims with postpetition interest, if applicable. All existing Pilgrim's Pride common stock will be cancelled and existing stockholders will receive the same number of new common stock shares, representing 36% of the reorganized Pilgrim's Pride in aggregate. The plan also calls for an exit facility for senior secured financing in an aggregate principal amount of at least US$1.65 billion. Since the proposed plan of reorganization represents a "100% plan," with creditors being repaid in full, shareholders represent the only impaired class and will be the only group entitled to vote on the plan of reorganization. The Equity Committee supports the Plan, noting that the Plan results in an initial recovery to equity holders valued at upwards of $450 million, with the potential to enjoy further appreciation of their interests in the Reorganized Debtors (or a successor) should their businesses continue to prosper. A copy of the Amended Plan is available for free at: http://bankrupt.com/misc/Pilgrims_AmendedPlan.pdf A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Pilgrims_AmendedDS.pdf About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- employs roughly 41,000 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico and Mexico. The Company's primary distribution is through retailers and foodservice distributors. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. Lazard Freres & Co., LLC, is the Company's investment bankers and William K. Snyder of CRG Partners Group LLC is chief restructuring officer. Kurtzman Carson Consulting LLC serves as claims and notice agent. Kelly Hart and Brown Rudnick represent the official equity committee. Attorneys at Andrews Kurth LLP represents the official committee of unsecured creditors. As of December 27, 2008, the Company had US$3,215,103,000 in total assets, US$612,682,000 in total current liabilities, US$225,991,000 in total long-term debt and other liabilities, and US$2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the Chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) POLYONE CORPORATION: S&P Affirms 'B1' Corporate Family Rating ------------------------------------------------------------- Moody's affirmed PolyOne's ratings (Corporate Family Rating of B1) and changed its outlook to positive. The positive outlook reflects the significant improvement (roughly 45%) in operating income generated by its Specialty and Performance businesses in the past two quarters relative to the similar six month period in 2008; the significant increase in the operating income (roughly 35%) from its Specialty businesses in the third quarter relative to the prior year; and the meaningful improvement in Funds From Operations (defined as Cash Flow From Operations less the change in working capital) over the same time period. This year will likely be the first time that PolyOne will generate enough FFO, excluding dividends from SunBelt and its divested OxyVinyls joint ventures, to cover capital spending. Moody's currently projects that PolyOne's FFO will be $70-90 million above capex in 2009, in addition to the roughly $100 million PolyOne will generate from working capital. PolyOne's improved performance was generated despite very weak economic conditions in the US and Europe with volumes down 15-20% or more in most of its Specialty and Performance businesses in the past two quarters. "It appears that PolyOne has turned the corner in regards to the profitability of its wholly owned operations," stated John Rogers, Senior Vice President at Moody's "In addition, the cash generated in 2009 will greatly improve its financial flexibility in managing a significant debt maturity in 2012." Despite a Net Debt/EBITDA of roughly 3x in 2006 and 2007, PolyOne's CFR remained at B1 due to concern about the volatility in the earnings stream from the company's joint ventures (their share of OxyVinyls was divested in the third quarter of 2007) and the weak cash flow generated by its wholly owned operations. To the extent that PolyOne can continue to demonstrate improved margins in its Specialty businesses and maintain Retained Cash Flow/Net Debt of more than 15% through the first half of 2010, Moody's could assess the appropriateness of a Ba3 CFR. An important consideration in any potential upgrade is management's commitment to a 2x Net Debt/EBITDA ratio through most of the cycle, with temporary increases due to acquisitions of no more than 3x. The last rating action on PolyOne was on April 7, 2008, when Moody's assigned a B1 rating to unsecured notes issued by PolyOne. PolyOne Corporation, headquartered in Avon Lake, Ohio, is a custom compounder of thermoplastic resins (formulated resin systems that include additives, colorants, fillers, etc) and formulated systems (pre-blended additives and color primarily for resins and inks). PolyOne is also a leading North American distributor of resins; their distribution segment constitutes roughly 30% of total sales. The company also owns a 50% share of SunBelt Chlor Alkali Partnership. Revenues were $2 billion for the LTM ended September 30, 2009. PRIMEDIA INC: Posts $7.6MM Net Loss for 9 Mos. Ended Sept. 30 ------------------------------------------------------------- PRIMEDIA Inc. swung to a net loss of $7,663,000 for the nine months ended September 30, 2009, from net income of $27,487,000 for the same period a year ago. The Company posted net income of $3,739,000 for the three months ended September 30, 2009, from net income of $11,960,000 for the 2008 quarter. Total revenue, net, was $196,678,000 for the nine months ended September 30, 2009, from $230,696,000 for the same period a year ago. Total revenue, net, was $63,014,000 for the three months ended September 30, 2009, from $76,414,000 for the same quarter in 2008. At September 30, 2009, the Company had $241,089,000 in total assets against $351,812,000 in total liabilities. The September 30 balance sheet also showed strained liquidity: The Company had $48,177,000 in total current assets, including $7,955,000 in cash and cash equivalents, against $62,539,000 in total current liabilities. The Company disclosed it has required debt repayments, including capital leases, of $3.0 million during the next 12 months. The Company believes its liquidity, capital resources and cash flows from operations are sufficient to fund planned capital expenditures, working capital requirements, interest and principal payments on its debt, dividend payments, and other anticipated expenditures, including obligations that may arise from its efforts to terminate or modify certain of its RDAs and repayments of principal under its Term Loan B Facility and purchases of its common stock, if any, for the foreseeable future. The Company has no significant required debt repayments until 2014. As part of its distribution business, the Company has entered into contracts with various retail chains, including grocery, drug, convenience, video, fitness and mass merchandise retailers for exclusive rights for distribution related to the Company's and third-party free publications, which the Company refers to as RDAs. "During the third quarter, we continued to focus on areas of our business that we can control in this challenging economic environment," said Charles Stubbs, president and CEO of PRIMEDIA, in a press statement. "Apartment Guide, our largest business, saw a revenue decline over the quarter as higher national unemployment rates and lower effective rents led apartment owners to reduce spending on our premium print products. Yet, despite this environment, Apartment Guide and Rentals.com again achieved gains in customer count and expanded markets. This leaves us well positioned for an eventual turn in the economy. The ongoing weakness in residential real estate sales continued to adversely impact our New Homes and DistribuTech businesses, which contributed to a decline in total revenue. "We continued to implement permanent reductions in our cost structure and make significant strides in improving the efficiency and effectiveness of our organization. As of the end of the quarter, we achieved a $20 million operating expense reduction from our 2008 operating expense base, and we are now expecting to see at least $25 million in reductions for the full year. Our cost reductions have been part of a permanent streamlining of our organization that is enabling us to aggressively evolve with a changing media landscape by building upon our historical position as the leading print solution for consumers and our advertisers to become the leading online and mobile vertical search network of websites in our space. "We made significant progress toward this goal in the third quarter as we expanded content, gained consumer traffic -- ranking #2 among all apartment vertical search websites for each of July, August and September* -- and produced millions of quality leads for our advertisers. The total number of leads we produced for our advertisers has grown year over year, and two-thirds of our leads are now generated through our websites and mobile applications. "PRIMEDIA has a strong financial foundation, and we remain committed to managing our businesses with focused discipline, while investing in innovative growth opportunities to enhance long-term shareholder value," added Mr. Stubbs. A full-text copy of the Company's Form 10-Q report is available at no charge at http://ResearchArchives.com/t/s?492c A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?492d About PRIMEDIA Inc. Based in Atlanta, Georgia, PRIMEDIA Inc. (NYSE: PRM) -- http://www.primedia.com/-- generates quality leads for advertiser clients through publishing and distributing print and online guides, primarily for the apartment and other residential rental property sectors of the residential real estate industry. The Company's print and online guides are provided free of charge to end users. It distributes print guides through its proprietary distribution network, DistribuTech. PRIMEDIA's principal digital assets are the Web sites associated with its print publications and Internet-only offerings, including ApartmentGuide.com, Rentals.com, RentalHouses.com, NewHomeGuide.com and AmericanHomeGuide.com. PSS WORLD: S&P Raises Corporate Credit Rating to 'BB+' ------------------------------------------------------ Standard & Poor's Ratings Services said it has raised its ratings on PSS World Medical Inc., including its corporate credit rating, to 'BB+' from 'BB'. S&P also removed PSS from CreditWatch with positive implications, where it had been placed on Oct. 13, 2009. The outlook is stable. "The upgrade reflects S&P's belief that PSS will continue to offset the potential effect of the rising population of uninsured patients through operating efficiencies, new customers, and expanded relationships with existing customers while maintaining its improved financial position," said Standard & Poor's credit analyst Jesse Juliano. "Thus far in fiscal 2010, PSS has performed well from both a business and financial risk perspective, despite the weak economy. S&P believes PSS will sustain its solid operating performance while maintaining its intermediate financial risk profile," he continued. The rating on Jacksonville, Fla.-based PSS reflects the company's narrow operating focus as a niche distributor of medical products to alternate-site health care providers and the potential negative effect of the weak economy on PSS's customers. These concerns are partially offset by the company's leading position in its niche markets, significant supplier and client diversity, and intermediate financial risk profile. Although S&P believes PSS has established a solid niche position, the company is narrowly focused in a competitive industry, which is reflected in PSS's fair business risk profile. S&P has concerns about the credit risks in the company's customer base, including the potential for reduced reimbursement beyond 2009 for physician practices and elder care businesses, cost pressures, and growth of the uninsured population. These pressures could lead to higher bad debt for PSS or customer bankruptcies. However, PSS has effectively managed through the weak economy and is willing to walk away from unprofitable business. The company has reduced receivables relative to sales in its elder care business during the past few years while reducing bad-debt charge- offs. At the same time, surgery centers, hospice facilities, and in-home care providers have provided opportunities for sales growth. PSS's customer and supplier diversity provides insulation from customer losses and supply price inflation. Because of its low operating margins (which are typical for a distribution company), cost controls are particularly important for PSS. The company is vulnerable to general cost inflation and rising fuel costs but has proven its ability to manage these expenses appropriately. In fact, PSS's margins have expanded despite the dramatic rise in fuel costs in recent years, partly because of the growth of its more-profitable private-label business. S&P believes the company's liquidity is adequate. PSS is expected to generate about $100 million in operating cash flow annually. This would easily cover annual capital spending of about $30 million. At Oct. 2, 2009, cash totaled $130 million, and only about $50 million had been drawn under its $200 million senior secured revolving credit facility. The company has no significant near-term debt maturities. The outlook is stable. S&P believes PSS will continue to operate with an intermediate financial risk profile to mitigate the weak economy. Margins could be supported by a shift to more profitable private-label products, a leveraging of revenue growth, or increased operating efficiencies. S&P could lower the rating if S&P believes total adjusted debt will exceed 3x and FFO to total adjusted debt will fall below 30% for an extended period. S&P believes this could be caused by an unlikely 5% drop in revenue and a gross margin decline of more than 100 basis points, or through a significant debt-financed acquisition. S&P could raise the rating if the company operates for an extended period under a modest financial risk profile, roughly defined as adjusted debt to EBITDA of 1.5x to 2x and FFO to adjusted debt of 45% to 60%, but S&P believes this is unlikely in the near term. QUARRY POND: Sec. 341 Meeting Set for December 1 ------------------------------------------------ The U.S. Trustee for Region 17 will convene a meeting of Quarry Pond, LLC's creditors on December 1, 2009, at 1:00 p.m. at the San Francisco 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. Quarry Pond, LLC -- dba Quarry Ponds Town Center and One Ripe Tomato -- filed for Chapter 11 bankruptcy protection on November 3, 2009 (Bankr. N.D. Calif. Case No. 09-33426). Ruth Elin Auerbach, Esq., at Law Offices of Ruth Elin Auerbach assists the Company in its restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. RATHGIBSON INC: Wants Plan Filing Extended Until February 23 ------------------------------------------------------------ RathGibson Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend its exclusive periods to file a Chapter 11 Plan and to solicit acceptances of that Plan until Feb. 23, 2010, and April 28, 2010. The Debtors initial exclusive filing period expired on Nov. 10, 2009, and its initial exclusive solicitation period expires on Jan. 11, 2009. The Debtors propose a hearing on the motion on Dec. 10, 2009, at 1:00 p.m. (E.T.). Objections, if any, are due on Nov. 30, 2009, at 4:00 p. (E.T.) Based in Lincolnshire, Illinois, RathGibson Inc. -- http://www.RathGibson.com/, http://www.GreenvilleTube.com/ and http://www.ControlLine.com/-- is a worldwide manufacturer of highly engineered stainless steel, nickel, and titanium tubing for diverse industries such as chemical, petrochemical, energy -- power generation, energy -- oil and gas, food, beverage, pharmaceutical, biopharmaceutical, medical, biotechnology, and general commercial. Manufacturing locations include: Janesville, Wisconsin, North Branch, New Jersey, Clarksville, Arkansas (Greenville Tube), and Marrero, Louisiana (Mid-South Control Line). In addition to the sales offices in Janesville, North Branch, and Marrero, RathGibson has also strategically placed sales offices in Houston, Texas, USA; Shanghai, China; Manama, Bahrain; Melbourne, Australia; Seoul, Republic of Korea; Mumbai, India; Singapore; Vienna, Austria; and Buenos Aires, Argentina. RathGibson, Inc., together with three affiliates, filed for Chapter 11 on June 13, 2009 (Bankr. D. Del. Case No. 09-12452). Attorneys at Young, Conaway, Stargatt & Taylor and Willkie Farr & Gallagher LLP serve as co-counsel. Jefferies & Company Inc. and Mesirow Financial Consulting LLC have been hired as financial advisors. Kelley Drye & Warren LLP serves as special corporate counsel. Garden City Group is claims and notice agent. The petition says that Rathgibson has assets and debts of $100 million to $500 million. Scott Welkis, Esq., Kristopher M. Hansen, Esq., and Jayme T. Goldstein, Esq., at Stroock & Stroock & Lavan represent Wilmington Trust FSB, as administrative agent, and an ad hoc committee of certain holders of Senior Notes. Attorneys at Richards, Layton & Finger P.A., also represent the ad hoc noteholders committee. RATHGIBSON INC: To Modify Plan for Better Tax Treatment ------------------------------------------------------- According to Bill Rochelle at Bloomberg, RathGibson Inc. is revising its Chapter 11 plan. RathGibson says it needs to add two affiliates to the Chapter 11 case and revise the plan to achieve a "more tax efficient restructuring," Bloomberg's Bill Rochelle reported. RathGibson has already obtained approval of the disclosure statement to the Chapter 11 plan. The Plan had been scheduled for a confirmation hearing on October 16 but was called off pending the revisions. Under the terms of the original Plan, however of secured claims aggregating $53.5 million will recover 100% of their claims. Holders of senior notes owed a total of $209.2 million will receive new common stock for a 7% recovery. Holders of Allowed general unsecured claims will receive payment in full in cash. Meanwhile, the Company is asking the bankruptcy judge for an extension of the exclusive right to propose a plan until Feb. 23. A hearing on the extension is scheduled for Dec. 10. About RathGibson Inc. Based in Lincolnshire, Illinois, RathGibson Inc. -- http://www.RathGibson.com/, http://www.GreenvilleTube.com/and http://www.ControlLine.com/-- is a worldwide manufacturer of highly engineered stainless steel, nickel, and titanium tubing for diverse industries such as chemical, petrochemical, energy -- power generation, energy -- oil and gas, food, beverage, pharmaceutical, biopharmaceutical, medical, biotechnology, and general commercial. Manufacturing locations include: Janesville, Wisconsin, North Branch, New Jersey, Clarksville, Arkansas (Greenville Tube), and Marrero, Louisiana (Mid-South Control Line). In addition to the sales offices in Janesville, North Branch, and Marrero, RathGibson has also strategically placed sales offices in Houston, Texas, USA; Shanghai, China; Manama, Bahrain; Melbourne, Australia; Seoul, Republic of Korea; Mumbai, India; Singapore; Vienna, Austria; and Buenos Aires, Argentina. RathGibson, Inc., together with three affiliates, filed for Chapter 11 on June 13, 2009 (Bankr. D. Del. Case No. 09-12452). Attorneys at Young, Conaway, Stargatt & Taylor and Willkie Farr & Gallagher LLP serve as co-counsel. Jefferies & Company Inc. and Mesirow Financial Consulting LLC have been hired as financial advisors. Kelley Drye & Warren LLP serves as special corporate counsel. Garden City Group is claims and notice agent. The petition says that Rathgibson has assets and debts of $100 million to $500 million. Scott Welkis, Esq., Kristopher M. Hansen, Esq., and Jayme T. Goldstein, Esq., at Stroock & Stroock & Lavan represent Wilmington Trust FSB, as administrative agent, and an ad hoc committee of certain holders of Senior Notes. Attorneys at Richards, Layton & Finger P.A., also represent the ad hoc noteholders committee. RED HAT: S&P Raises Corporate Credit Rating to 'BB+' ---------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Raleigh, North Carolina-based software company Red Hat Inc. to 'BB+' from 'BB'. The rating outlook is stable. "The rating upgrade reflects Red Hat's strong base of recurring revenues, consistent earnings growth, and considerable debt capacity at the existing rating level," explained Standard & Poor's credit analyst Molly Toll-Reed. The 'BB+' rating is based on the company's relatively narrow business profile, highly competitive industry conditions, and rapid technology evolution. S&P believes that barriers to entry provided by the large number of independent software and hardware vendors that certify their products to work with Red Hat partially offset these concerns, as do liquidity, balance sheet strength, and cash flow that are good for the 'BB+' rating. Red Hat provides open-source operating and middleware software and related services predominantly to large enterprise customers. The company sells subscriptions for its operating and middleware products, entitling the customer to support, software updates, and upgrades. Red Hat supplements its software business with training and consulting services, and it has a small presence in the desktop and embedded operating systems markets. The company works with a global open-source community of software developers, which it uses to reduce the cost and development time of its software. The growth of Red Hat's subscriptions should continue to benefit from expected growth in Linux's share of the total operating systems market and growth in middleware subscriptions. However, S&P expects economic uncertainty and reduced levels of IT spending to suppress near-term revenue growth. In addition, Red Hat faces competition from established proprietary operating systems such as Unix and Windows, and from other Linux distributors. Annualized revenues exceeded $700 million in the August 2009 quarter. S&P expects Red Hat to maintain adjusted annual EBITDA margins in the mid-20% range, benefitting from improving operating scale. In addition, the company's deferred revenue base lends substantial predictability to reported revenue levels over the near term. Following the January 2009 redemption of its debentures, Red Hat has no funded debt outstanding. However, S&P believes that the company will continue to be acquisitive, and that larger acquisitions could incorporate debt financing. The current rating level and outlook incorporate the expectation that adjusted total debt to EBITDA will not exceed 3x on a peak basis, and will remain below 2x over the intermediate term. RENOVA ENERGY: Contractors Wants Tax Bill Deferred Until Next Year ------------------------------------------------------------------ Times News writer Laurie Welch reports that a group of contractors asked the commissioners of Minidoka County to defer Renova Energy LLC's tax bill until January 2011. According to the report, doing so would facilitate their plan to borrow $1 million to move Renova's assets out of bankruptcy and into a trust so the partially constructed plant can be sold. Ms. Welch relates that the contractors must first pay $1.5 million in administrative costs for the bankruptcy -- $500,000 more than the subcontractors can borrow -- in order for the groups to move the assets to the trust. The amount could be offset and the plan could move forward if the county's $359,123 tax bill is deferred until January 2011, she notes. Renova Energy LLC operates an ethanol plant. The company filed for Chapter 11 bankruptcy in June 2008 in a Wyoming U.S. Bankruptcy Court. RENT-A-CENTER INC: S&P Affirms 'BB' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed all its ratings on Rent-A-Center Inc., including the 'BB' corporate credit rating. The outlook is stable. The recovery rating on the proposed amended and extended senior secured bank loan ratings is '2', indicating that lenders could expect substantial (70%-90%) recovery in the event of a payment default or bankruptcy. The bank loan ratings are based on proposed terms, which include extended term loan amortization, maturity date extensions, and interest rate increases for extending lenders. Total debt at Sept. 30, 2009, was about $659 million. "The ratings on Rent-A-Center reflect the low-income profile of its customer base which is disproportionately vulnerable to poor economic conditions (including high unemployment and inflation), the ongoing threat of regulatory and litigation risk in both the politically unpopular "payday" lending and core rent-to-own (RTO) business, and the risk of continued merchandise deflation primarily with respect to high-definition TVs," said Standard & Poor's credit analyst Jerry Phelan. The company's strong market position in a fragmented industry, expanded customer base resulting from reduced consumer credit availability, and improved credit measures partially offset these concerns. The outlook revision to stable from positive reflects S&P's reassessment of the probability of a ratings upgrade over the near term, and not any recent substantial unfavorable developments with respect to potential future RTO industry regulation under the proposed Consumer Financial Protection Agency Act of 2009 (CFPA). The reassessment reflects uncertainty surrounding whether the CFPA will be passed, what industries (including RTO) may be regulated by the act, and the impact of any such regulation. If S&P had greater assurance that Rent-A-Center would not be substantially negatively impacted by CFPA regulation, S&P would give consideration to a ratings upgrade. REVLON INC: Lenders Permit RCPC Unit to Conduct Refinancing ----------------------------------------------------------- Revlon, Inc.'s wholly owned operating subsidiary, Revlon Consumer Products Corporation, has received all of the required lender consents to the amendments to its bank term loan credit agreement and bank revolver credit agreement. The Amendments permit RCPC to conduct certain refinancing transactions on a variety of terms and conditions, including terms that would permit RCPC to seek to refinance its 9-1/2% Senior Notes due April 2011 on a secured basis. On Monday, RCPC said it intends to offer $330 million aggregate principal amount of senior secured notes due 2015, subject to market and other customary conditions. It is expected that the notes will be guaranteed by Revlon, Inc. and RCPC's domestic subsidiaries, which also currently guarantee RCPC's bank term loan agreement and bank revolver agreement, and that the notes and the related guarantees will be secured, subject to certain exceptions, by liens on the same collateral that secures RCPC's bank term loan agreement on a second priority basis and liens on the same collateral that currently secures RCPC's bank revolver agreement on a third-priority basis, subject to certain exceptions. RCPC intends to use the net proceeds from the offering, together with other cash, to: (i) pay the total tender offer consideration in connection with RCPC's cash tender offer to purchase any and all of the $340.5 million outstanding aggregate principal amount of its 9-1/2% Senior Notes due April 2011; and (ii) pay the applicable premium and accrued interest, along with related fees and expenses, on any 9-1/2% Senior Notes that may be subsequently redeemed by RCPC following the tender offer. The notes and the related guarantees will be offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended, and outside the United States in compliance with Regulation S under the Securities Act. The notes and the related guarantees will not be registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. About Revlon Based in New York, Revlon, Inc. (NYSE: REV) -- http://www.revloninc.com/-- is a worldwide cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirants/deodorants and beauty care products company. The Company's vision is to provide glamour, excitement and innovation to consumers through high-quality products at affordable prices. Websites featuring current product and promotional information can be reached at http://www.revlon.com/ http://www.almay.com/and http://www.mitchumman.com/ The Company's brands, which are sold worldwide, include Revlon(R), Almay(R), ColorSilk(R), Mitchum (R), Charlie (R), Gatineau(R) and Ultima II (R). At September 30, 2009, Revlon had $802.0 million in total assets against total current liabilities of $315.2 million, long-term debt of $1.147 billion, long-term debt - affiliates of $107.0 million, long-term pension and other post-retirement plan liabilities of $209.3 million, other long-term liabilities of $66.1 million, resulting in $1.04 billion in stockholders' deficiency. At September 30, 2009, the Company had a liquidity position of $173.2 million, consisting of cash and cash equivalents (net of any outstanding checks) of $59.7 million, as well as $113.5 million in available borrowings under the 2006 Revolving Credit Facility. REVLON INC: Unit Commences Tender Offer for 9-1/2% Senior Notes --------------------------------------------------------------- Revlon, Inc.'s wholly owned operating subsidiary, Revlon Consumer Products Corporation, has commenced a cash tender offer to purchase any and all of its 9-1/2% Senior Notes due April 2011. The Tender Offer is described in an offer to purchase, dated November 6, 2009 and related letter of transmittal. RCPC currently intends to redeem Notes not purchased in the Tender Offer. The Tender Offer is conditioned on, among other things, RCPC obtaining financing proceeds of at least $330 million to be used, together with other cash, to pay the Tender Offer Consideration. The aggregate principal amount of Notes outstanding is $340,550,000. The tender offer consideration is $1,023.75 and the tender offer premium is $5.00, for a total consideration of $1,028.75. The Tender Offer will expire at 11:59 p.m., New York City time, on December 7, 2009, or any other date and time to which RCPC may extend the Tender Offer, unless earlier terminated. Notes validly tendered in the Tender Offer at or prior to 5:00 p.m., New York City time, on November 20, 2009 and accepted for purchase will receive the total consideration. Notes validly tendered in the Tender Offer after November 20, 2009, but before the Expiration Date and accepted for purchase will receive the Tender Offer Consideration, but not the Early Tender Premium. In addition, all Notes validly tendered in the Tender Offer on or prior the Expiration Date and accepted for purchase will receive accrued and unpaid interest from the last interest payment date to, but not including, the payment date. Payment for Notes that are validly tendered in the Tender Offer at or prior to November 20, 2009 and accepted for purchase will be made promptly after November 20, 2009. Payment for Notes that are validly tendered in the Tender Offer after November 20, 2009 and at or prior to the Expiration Date and accepted for purchase will be made promptly after the Expiration Date. No tenders of the Notes will be valid if submitted after the Expiration Date. Tenders of the Notes may be withdrawn from the Tender Offer at any time at or prior to, but not after, 5:00 p.m., New York City time, on November 20, 2009. Citigroup Global Markets Inc. is the sole dealer manager of the Tender Offer. U.S. Bank National Association has been retained to serve as the depositary and information agent. Persons with questions regarding the Tender Offer should contact Citigroup Global Markets Inc. at (toll-free) (800) 558-3745 or (toll) (212) 723-6106. Requests for copies of the Offering Materials and other related materials should be directed to U.S. Bank National Association at (toll-free) (800) 934-6802. None of RCPC or its affiliates, its board of directors, the dealer manager, the depositary and information agent or the trustee for the Notes makes any recommendation as to whether holders of the Notes should tender or refrain from tendering the Notes in the Tender Offer. About Revlon Based in New York, Revlon, Inc. (NYSE: REV) -- http://www.revloninc.com/-- is a worldwide cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirants/deodorants and beauty care products company. The Company's vision is to provide glamour, excitement and innovation to consumers through high-quality products at affordable prices. Websites featuring current product and promotional information can be reached at http://www.revlon.com/ http://www.almay.com/and http://www.mitchumman.com/ The Company's brands, which are sold worldwide, include Revlon(R), Almay(R), ColorSilk(R), Mitchum (R), Charlie (R), Gatineau(R) and Ultima II (R). At September 30, 2009, Revlon had $802.0 million in total assets against total current liabilities of $315.2 million, long-term debt of $1.147 billion, long-term debt - affiliates of $107.0 million, long-term pension and other post-retirement plan liabilities of $209.3 million, other long-term liabilities of $66.1 million, resulting in $1.04 billion in stockholders' deficiency. At September 30, 2009, the Company had a liquidity position of $173.2 million, consisting of cash and cash equivalents (net of any outstanding checks) of $59.7 million, as well as $113.5 million in available borrowings under the 2006 Revolving Credit Facility. REVLON INC: FMR LLC Unloads Equity Stake ---------------------------------------- FMR LLC disclosed in a regulatory filing that it no longer holds shares of Revlon Inc. common stock. "Inasmuch as [FMR is] no longer the beneficial owners of more than five percent of the number of shares outstanding, [FMR has] no further reporting obligation under Section 13(d) of the Securities and Exchange Commission thereunder, and [FMR has] no obligation to amend this Statement if any material change occurs in the facts set forth herein," the filing said. No other details were provided. Based in New York, Revlon, Inc. (NYSE: REV) -- http://www.revloninc.com/-- is a worldwide cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirants/deodorants and beauty care products company. The Company's vision is to provide glamour, excitement and innovation to consumers through high-quality products at affordable prices. Websites featuring current product and promotional information can be reached at http://www.revlon.com/ http://www.almay.com/and http://www.mitchumman.com/ The Company's brands, which are sold worldwide, include Revlon(R), Almay(R), ColorSilk(R), Mitchum (R), Charlie (R), Gatineau(R) and Ultima II (R). At September 30, 2009, Revlon had $802.0 million in total assets against total current liabilities of $315.2 million, long-term debt of $1.147 billion, long-term debt - affiliates of $107.0 million, long-term pension and other post-retirement plan liabilities of $209.3 million, other long-term liabilities of $66.1 million, resulting in $1.04 billion in stockholders' deficiency. At September 30, 2009, the Company had a liquidity position of $173.2 million, consisting of cash and cash equivalents (net of any outstanding checks) of $59.7 million, as well as $113.5 million in available borrowings under the 2006 Revolving Credit Facility. RIVIERA HOLDINGS: Continues Lender Talks; Warns of Bankruptcy ------------------------------------------------------------- Riviera Holdings Corporation discloses in a regulatory filing that with the aid of its financial advisors and outside counsel, it is continuing to negotiate with its various creditor constituencies to refinance or restructure its debt. The Company is currently in default on its credit facility with Wachovia Bank, National Association, as of September 30, 2009. As a result, there is substantial doubt about the Company's ability to continue as a going concern. "We cannot assure you that we will be successful in completing a refinancing or consensual out-of-court restructuring, if necessary. If we were unable to do so, we would likely be compelled to seek protection under Chapter 11 of the U. S. Bankruptcy Code," the Company said. On June 8, 2007, RHC and its restricted subsidiaries entered into a $245 million Credit Agreement with Wachovia Bank, National Association, as administrative agent. On June 29, 2007, in conjunction with the Credit Facility, the Company entered into an interest rate swap agreement with Wachovia as the counterparty that became effective June 29, 2007. On March 25, 2009, the Company engaged XRoads Solution Group LLC as financial advisor. Based on an extensive analysis of its current and projected liquidity, and with the financial advisor's input, the Company determined it was in the best interests of the Company to not pay the Wachovia Credit Facility and Swap Agreement accrued interest of $13.9 million for the nine months ended September 30, 2009. Consequently, the Company elected not to make these payments. The Company's failure to pay interest due on any loan within the Credit Facility within a three-day grace period from the due date was an event of default under the Credit Facility. As a result of these events of default, the Company's lenders have the right to seek to charge additional default interest on the Company's outstanding principal and interest under the Credit Agreement, and automatically charge additional default interest on any overdue amounts under the Swap Agreement. These default rates are in addition to the interest rates that would otherwise be applicable under the Credit Agreement and Swap Agreement. The Company has incurred approximately $3 million in default interest related to the Credit Facility and Swap Agreement for the nine months ended September 30, 2009. As of September 30, 2009, the amount outstanding under the Swap Agreement was $22.1 million. Riviera Holdings posted a net loss of $4,673,000 for the three months ended September 30, 2009, from a net loss of $3,464,000 for the same period a year ago. The Company posted a net loss of $19,213,000 for the nine months ended September 30, 2009, from net income of $826,000 for the same period a year ago. Net revenues were $34,632,000 for the three months ended September 30, 2009, from $40,208,000 for the same period a year ago. Net revenues were $103,931,000 for the nine months ended September 30, 2009, from $133,785,000. As of September 30, 2009, the Company had $203,361,000 in total assets against $280,942,000 in total liabilities, resulting in $77,581,000 in stockholders' deficiency. 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?4935 Riviera Holdings Corporation owns and operates the Riviera Hotel and Casino on the Strip in Las Vegas, Nevada, and the Riviera Black Hawk Casino in Black Hawk, Colorado. ROLF PAPKE: Case Summary & 6 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Rolf M. Papke 332 Mantoloking Rd Brick, NJ 08723-5719 Bankruptcy Case No.: 09-40269 Chapter 11 Petition Date: November 10, 2009 Court: United States Bankruptcy Court District of New Jersey (Trenton) Debtor's Counsel: Timothy P. Neumann, Esq. Broege, Neumann, Fischer & Shaver 25 Abe Voorhees Drive Manasquan, NJ 08736 Tel: (732) 223-8484 Email: tneumann@bnfsbankruptcy.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. Papke's petition, including a list of his 6 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/njb09-40269.pdf The petition was signed by Mr. Papke. ROTHSTEIN ROSENFELDT: Creditors Send Firm to Bankruptcy ------------------------------------------------------- Creditors of Florida law firm Rothstein Rosenfeldt Adler PA have signed a petition to send the law firm to bankruptcy, Bloomberg News reported. The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors say they are owed money invested in lawsuit settlements. According to Bloomberg Rothstein Rosenfeldt's co-founder Scott Rothstein has been suspected of running a multimillion-dollar Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed Nov. 9 that Mr. Rothstein, the firm's former chief executive officer, sold investments in non-existent legal settlements. Mr. Rothstein hasn't been charged criminally by U.S. authorities, who continue to investigate the case. Rothstein Rosenfeldt on Nov. 2 sued Mr. Rothstein and asked a judge to dissolve the firm. The next day the judge appointed a receiver to take over the firm's finances. The firm should be dissolved in bankruptcy court and a trustee should be appointed, the creditors said in the petition, filed in federal bankruptcy court in Fort Lauderdale, Florida. The bankruptcy case is In re Rothstein Rosenfeldt Adler PA, U.S. Bankruptcy Court, Southern District of Florida (Fort Lauderdale). RURAL/METRO OPERATING: Moody's Affirms 'Ba3' Rating on Loans ------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Rural/Metro Operating Company, LLC, a wholly-owned subsidiary of Rural/Metro Corporation following several changes to the proposed refinancing transaction. Specifically, Moody's affirmed the (P) Ba3 on the proposed $180 million term loan (upsized from $150 million) and $40 million revolver; the Caa1 rating on the 12.75% Senior Discount Notes; and the B2 Corporate Family Rating and B2 Probability of Default Rating. The outlook remains positive. The ratings on the 9.875% Senior Subordinated Notes remain under review for possible downgrade. However, Moody's anticipate that if substantially all of the Sub Notes are tendered for, Moody's would confirm and withdraw the B2 rating. If the refinancing transactions close as now proposed, Moody's would remove the (P) designation from the Ba3 rating on the proposed credit facility and Moody's would also withdraw the ratings on the existing senior secured credit facility. LGD point estimates are subject to change and all ratings are subject to review of final documentation. Ratings Affirmed/LGD point estimates revised: Rural/Metro Operating Company, LLC -- Proposed $40 million revolving credit facility due 2013 to (P) Ba3, (LGD3, 30%) from (P) Ba3, (LGD2, 24%) -- Proposed $180 million senior secured Term Loan due 2014 to (P) Ba3, (LGD3, 30%) from (P) Ba3, (LGD2, 24%) -- Existing $20 million senior secured revolving credit facility due 2010, Ba2 (LGD1, 9%) -- Existing $45 million senior secured letter of credit facility due 2011, Ba2 (LGD1, 9%) -- Existing $56 million senior secured Term Loan B due 2011,Ba2 (LGD1, 9%) The ratings on the 9.875% senior subordinated notes due 2015 remain under review for possible downgrade Rural/Metro Corporation -- 12.75% senior discount notes due 2016, Caa1 (LGD5, 88%) -- Corporate Family Rating, B2 -- Probability of Default Rating, B2 The outlook is positive. The last rating action was on October 21, 2009, when Moody's rated a proposed refinancing transaction and changed the outlook to positive. Rural Metro provides emergency and non-emergency medical transportation, fire protection, airport fire and rescue and home healthcare services in 22 states and approximately 400 communities within the United States. The services are provided under contract with government entities, hospitals, healthcare facilities and other healthcare organizations. Net revenue for the twelve months ended September 30, 2009, was approximately $507 million. RURAL/METRO CORP: S&P Updates CreditWatch Listing on Refinancing ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it has updated its CreditWatch listing on Rural/Metro Corp. and its subsidiary, Rural/Metro LLC. The Oct. 20, 2009, CreditWatch listing was prompted by the plans of Rural/Metro Corp. to refinance its credit facility due 2011, including its revolver due 2010, and to launch a tender offer for its 9.875% senior subordinated notes due 2015. The refinancing will extend the maturity of the credit facility and give the company the ability to continue to use its free cash flow to prepay debt. Since 2005, the company has used $64 million of internally generated funds to reduce its senior secured debt. Additionally, a successful tender offer for the senior subordinated notes, would reduce the complexity of the capital structure by effectively eliminating the restricted payments basket provision of the Holdco debt that applied only to the senior subordinated notes. Moreover, the refinancing of the high- cost senior subordinated notes reduces the company's annual cash interest expense. "If the proposed refinancing and tender offer are successful, S&P expects the corporate credit rating to be upgraded to 'B+' from 'B'," said Standard & Poor's credit analyst Rivka Gertzulin. S&P expects the rating outlook to be stable. Additionally, because senior subordinated notes due 2015 will be removed from the capital structure, the recovery rating on the Holdco senior discount notes due 2016 would be revised to '5' from '6', indicating the expectation for a modest (10%-30%) recovery. The issue rating on those notes would be revised to 'B' (one notch lower than the expected corporate credit rating). SANDRA ANN READ: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Sandra Ann Read 319 Midway Island Clearwater, Fl 33767 Bankruptcy Case No.: 09-25809 Chapter 11 Petition Date: November 10, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Herbert R. Donica, Esq. Donica Law Firm PA 106 S Tampania Avenue #250 Tampa, FL 33609 Tel: (813) 878-9790 Fax: (813) 878-9746 Email: ecf-hrd@donicalaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of Ms. Read's petition, including a list of her 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-25809.pdf The petition was signed by Ms. Read. SCOTT ROTHSTEIN: Has Involuntary Bankr. Petition from Investors --------------------------------------------------------------- Amy Sherman and Jay Weaver at Miami Herald report that three investors -- including Universal Legal, Bonnie Barnett and Aran Development -- made an involuntary filing under Chapter 11 against Rothstein Rosenfeldt Adler for alleged Ponzi scheme. The report, citing court documents, says the firm owes $7,800 to Universal Legal; $350,000, Aran Development; and $500,000, Mr. Barnett. Jeffrey Sonn represents the three investors. The investors are asking the court to appoint a Chapter 11 trustee to investigate the firm's alleged Ponzi scheme and to help investors reclaim losses, the report relates. Rothstein Rosenfeldt Adler -- http://www.rra-law.com/-- operates a law firm. SEA LAUNCH: Intelsat Discloses Paying $100 Million Under Contract ----------------------------------------------------------------- Intelsat, Ltd., disclosed it has made approximately $100 million of payments under its contracts and options with Sea Launch Company L.L.C. for the launch of three satellites. In August 2009, Intelsat obtained approval from the bankruptcy court to make payments directly to Space International Services for the two launches provided by Space International Services. As of September 30, 2009, Intelsat had approximately $43 million outstanding of payments made to Sea Launch relating to satellite launches that Sea Launch is still required to provide the Company. Intelsat contracted Sea Launch for the future launch of three satellites, one through Sea Launch and two through Space International Services. The Company has options for the launch of four additional satellites through Sea Launch. "While Sea Launch is continuing to operate as a debtor-in- possession, and while we may receive full or partial credit for prior payments relating to the launches, there can be no assurance that Sea Launch will honor its contractual obligations to us, or do so without charging us significant additional amounts beyond what is provided for in our current agreements. In addition, should we try to procure alternative launch services for the satellites involved, there can be no assurance that we will not incur significant delays and significant additional expenses as a result," Intelsat said. About Sea Launch Sea Launch Co. is a satellite-launch services provider that offers commercial space launch capabilities from the Baikonur Space Center in Kazakhstan. Its owners include Boeing Co., RSC Energia, and Aker ASA. Sea Launch Company, L.L.C., filed for Chapter 11 on June 22, 2009 (Bankr. D. Del. Case No. 09-12153). Joel A. Waite, Esq., and Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtor's counsel. At the time of the filing, the Company said its assets range from $100 million to $500 million and debts are at least $1 billion. About Intelsat Headquartered in Pembroke, Bermuda, Intelsat, Ltd. -- http://www.intelsat.com/-- provides fixed satellite services worldwide. Intelsat provides service on a global fleet of 51 satellites and seven owned teleports and terrestrial facilities. Intelsat supplies video, data and voice connectivity in roughly 200 countries and territories for roughly 1,800 customers, many of which Intelsat has had relationships with for over 30 years. Intelsat has one of the largest, most flexible and one of the most reliable satellite fleets in the world, which covers over 99% of the world's population. Intelsat had $17,052,043,000 in total assets against total current liabilities of $659,614,000, long-term debt, net of current portion of $15,087,524,000, deferred satellite performance incentives, net of current portion of $115,607,000, deferred revenue, net of current portion of $226,198,000, deferred income taxes of $531,913,000, accrued retirement benefits of $238,385,000, other long-term liabilities of $343,554,000 and noncontrolling interest of $7,058,000, resulting in stockholders' deficit of $157,810,000. SERVICIOS CORPORATIVOS: Solicits Consents From Senior Noteholders ----------------------------------------------------------------- Servicios Corporativos Javer, S.A.P.I. de C.V. solicited consents, upon the terms and subject to the conditions set forth in the Consent Solicitation Statement dated October 28, 2009 and in the related Consent Letter, to a waiver of the change of control provisions of and amendment to the Indenture, dated as of August 4, 2009, among the Company, The Bank of New York Mellon, as Trustee, and the Subsidiary Guarantors party thereto, pursuant to which the 13.0% Senior Notes due 2014 (CUSIP Nos. 81763TAA1, 81763TAB9 and P8585LAA0) (ISIN Nos. US81763TAA16, US81763TAB98 and USP8585LAA00) were issued. As of 5:00 p.m., New York City time, on November 9, 2009, valid consents from holders of a majority in aggregate principal amount of the outstanding Notes had been received and not withdrawn. Since the Consent Time has occurred, holders may not revoke their consents. The Consent Solicitation will expire at 5:00 p.m., New York City time, on November 10, 2009. On November 9, 2009, the Company, the Guarantors and the Trustee executed a supplemental indenture to effect the Waiver and Amendment. However, on the terms and subject to the conditions of the Consent Solicitation, the Waiver and Amendment will not become operative until the Company pays the Consent Payment and delivers an officers' certificate to the Trustee certifying such payment has been made. The Company launched the Consent Solicitation in connection with the intended sale of the Company's Series "A" and Series "B" shares representing 60% of the capital stock of the Company. On October 24, 2009, the Company, Proyectos del Noreste, S.A. de C.V., which beneficially owns 99.99% of the Company's capital stock, and Mr. Salomon Marcuschamer Stavchansky, who owns 99.9% of the capital stock of the Parent Company, entered into a Stock Purchase Agreement with Southern Cross Latin America Private Equity Fund III, L.P., Gestora Metevco Holding Limitada y Compania en Comandita por Acciones, Degomex Holding, L.P., Evercore Mexico Capital Partners II, L.P. and ARVX Capital, S.A. de C.V. and other parties thereto in connection with the sale of the Shares. Each of the Purchasers may appoint investment vehicles as designees to purchase their portion of the Shares. Upon consummation of the Stock Purchase, it is anticipated that the Purchasers, and/or their designees, will own capital stock representing 60% of the Voting Stock (as defined in the Indenture) of the Company. The closing of the Stock Purchase is conditioned on the consummation of the Consent Solicitation, approval from Mexican Regulatory Authorities and other customary conditions. The Stock Purchase is expected to close in November 2009. However, closing may be delayed or not occur at all. By providing the Requisite Consents, holders have agreed to (i) waive the Company's obligation under the Indenture to make a Change of Control Offer in connection with the Stock Purchase and (ii) amend the Indenture to provide that the Purchasers and/or their respective affiliates, Southern Cross Capital Partners III, L.P. and/or its affiliates, Evercore Mexico Partners II, L.P. and/or its affiliates and ARVX Capital, S.A. de C.V. and/or its affiliates, investment funds or vehicles managed, sponsored or advised, directly or indirectly, by Southern Cross Capital Partners III, L.P., Evercore Mexico Partners II, L.P. or ARVX Capital, S.A. de C.V., or any of their respective affiliates, and any limited or general partners of, or other investors in, any of the entities referred to in the foregoing and their respective affiliates will be "Permitted Holders" under the Indenture. Following the satisfaction of the conditions contained in the Consent Solicitation Statement, the Company will pay, prior to the consummation of the Stock Purchase, to the Information Agent for transmission to each holder who has validly delivered (and has not revoked) a valid consent on or prior to the Expiration Date in respect of such Notes, $2.50 for each $1,000 in principal amount of such Notes. In the event that all conditions to the consummation of the Stock Purchase, including payment of any consideration pursuant to the Stock Purchase Agreement and other than the consummation of the Consent Solicitation, have not been met or waived, the Consent Payment will not be paid or become payable to the holders who have validly delivered consents in connection with the Consent Solicitation, and the Waiver and Amendment will not become operative. The Company engaged Credit Suisse and BofA Merrill Lynch to act as the Solicitation Agents for the Consent Solicitation, and Global Bondholder Services Corporation to act as the Information Agent for the Consent Solicitation. Any questions or requests for assistance regarding the Consent Solicitation may be made to Credit Suisse at (800) 820-1653 (toll- free) or (212) 538-1861 (collect), or BofA Merrill Lynch, at (888) 292-0070 (toll-free) or (646) 855-3401 (collect). Questions or requests for assistance or additional copies of the Consent Solicitation Statement, the Consent Letter and related documents may be directed to Global Bondholder Services Corporation at (866) 387-1500 (toll-free) (bankers and brokers call collect at (212) 430-3774). Servicios Corporativos Javer, S.A.P.I. de C.V. -- http://www.javer.com.mx/-- is one of the largest privately-owned housing development companies in Mexico, and specializes in the construction of affordable entry-level, middle-income and residential housing in Mexico . Headquartered in Monterrey, Nuevo Leon, Mexico, the Company started operations in 1973 and is currently the leading housing developer in terms of number of units sold in northeastern Mexico. SILICON GRAPHICS: Wins Confirmation of Chapter 11 Plan ------------------------------------------------------ Silicon Graphics Inc. has won confirmation of a Chapter 11 plan, Bill Rochelle at Bloomberg News reported. Unsecured creditors owed a total of $101 million won't be receiving any distributions. Holders of $1.7 million in priority claims are slated to recover between 5% and 50%, according to the explanatory disclosure statement. The Plan creates a liquidating trust under which 75% of the trust goes to the lenders and the remaining 25% goes to the priority claim holders. Secured creditors receive the reorganized company's stock. Silicon Graphics on May 8, 2009, completed the sale of substantially all of its assets, excluding certain intellectual property assets, to Rackable Systems, Inc. Silicon Graphics sold its assets for $42.5 million in cash, plus the assumption of certain liabilities associated with the acquired assets. Prior to the sale of its assets Sunnyvale, California-based Silicon Graphics Inc. -- http://www.sgi.com/-- delivered an array of server, visualization, and storage software. This is the second bankruptcy filing for Silicon Graphics. The Debtors first filed for Chapter 11 on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. The Court confirmed the Debtors' Plan of Reorganization on September 19, 2006. When the Debtors filed for protection from their creditors, they listed total assets of $369,416,815 and total debts of $664,268,602. The Company and 14 of its affiliates filed for protection for the second time on April 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-11701). Mark R. Somerstein, Esq., at Ropes & Gray LLP, represents the Debtors in their restructuring efforts. The Debtors proposed AlixPartners LLC as restructuring advisor; Houlihan Lokey Howard & Zukin Capital, Inc., as financial advisor; and Donlin, Recano & Company, Inc., as claims and noticing agent. When the Debtors filed for protection from their creditors, they listed $390,462,000 in total assets and $526,548,000 in total debts as of 2008. On June 4, 2009, the Company amended its Amended and Restated Certificate of Incorporation pursuant to the Certificate of Amendment of Amended and Restated Certificate of Incorporation of Silicon Graphics, Inc., to change its name to Graphics Properties Holdings, Inc. SOUTHEAST TELEPHONE: Gets Final OK to Access CTB Cash Collateral ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Kentucky authorized, on a final basis, SouthEast Telephone, Inc. to: -- use cash securing repayment of loan with Community Trust Bank through the date of the confirmation hearing on a plan of reorganization if a plan is of record in this Court on or before Jan. 26, 2010; and -- provide adequate protection to CTB. The Debtor owes $3.4 million to CTB, which is secured by blanket liens on all assets. The Debtor related that it needs access to the cash collateral to ensure continued going concern operations and to protect and preserve the value of the Debtor's assets and on-going operations. The Debtor was unable to obtain funds, either unsecured or secured. As adequate protection, CTB is granted replacement lien and superpriority administrative claim which are subordinate to the fees of the U.S. Trustee and the carve-out for fees. The Debtor's right to use the cash collateral will expire (i) at the end of the term; (ii) in the event of a termination or suspension of the order; or (iii) in the event the Debtor is in default. Pikeville, Kentucky-based SouthEast Telephone, Inc., operates a telecommunication business. The Company filed for Chapter 11 on Sept. 28, 2009 (Bankr. E.D. Ky. Case No. 09-70731). Jamie L. Harris, Esq., and Laura Day DelCotto, Esq., at Wise DelCotto PLLC, represent the Debtor in its restructuring effort. In the Debtor's schedules, it said it has assets of at least $15,573,655, and total debts of $31,423,707. SPRINGBOARD GROUP: Moody's Affirms 'B2' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service affirmed Springboard Group S.a.r.l's B2 corporate family rating and B2 probability of default rating following the announcement that the private equity groups acquiring the company and eBay (rated A3) have reached a wholesale settlement with Skype's founders over all software previously licensed from Joltid which will end all litigation currently pending against the investor group and eBay at the closing of the acquisition. Under the terms of the legal agreement, Joltid, their advisors and affiliated companies will receive certain cash payments and up to 14% equity in the company. The settlement, which is contingent upon successful closing of the acquisition, eliminates one of the previously identified risks overhanging Skype's future, as Skype will now own the underlying Peer-to-Peer technology instead of licensing it from Joltid. However, this positive development is offset by the additional $100mm in senior debt the company will incur to help pay for the settlement. As part of the rating action, Moody's affirmed the B1 (LGD3, 43%) senior secured instrument ratings for the $30 million senior secured revolving credit facility and $700 million senior secured term loan expected to be issued through Springboard Finance LLC, the primary US operating subsidiary of Skype. The rating outlook remains stable. Skype is a leading provider of Internet-based communication services (voice, video, text, and other features) through its P2P software technology. On September 1, 2009, eBay agreed to sell a 65% equity interest in Skype for approximately $1.9 billion to an equity consortium, including Silver Lake Partners, CPP Investment Board, Index Ventures, and Andreessen Horowitz. As part of the master settlement, eBay will now retain a 30% equity interest in Skype, while Index Ventures will exit the investor group. Silver Lake will retain majority Board of Directors control. Skype's B2 CFR reflects the significant industry and technology risks inherent to the rapidly evolving field of peer-to-peer internet communications and the wider deployment of Voice-over- Internet-Protocol technology across the world, in addition to competitive threats from incumbent carriers, other technology developers, social networking sites, and regulatory bodies. These risks are significant and likely to constrain the rating over the near-to-medium term, particularly given the limited product diversity of the company's revenue stream. Moody's notes that total post-closing adjusted Debt/EBITDA leverage (which includes $125 million in seller financing from eBay) of about 5.2x, based on 9/30/09 EBITDA, is high among its competitors in communications services and technology, although the company's projected revenue and EBITDA growth should enable it to delever over the intermediate term. At the same time, the rating is supported by the significant equity cushion provided by the sponsors, the collateral package and the company's success in building over a relatively short time period a growing and profitable business with strong cash generating capabilities. Skype's revenues and EBITDA have grown substantially over the past several years in conjunction with the company's registered user base, which is estimated to be around 480 million. While this number is substantial, the company has only monetized a relatively small proportion of the user base, generating revenues primarily from its international long distance voice service offering, which allows paying users to participate in calls between their computers and traditional telephone lines. Although this service has been successful to date, its longevity is threatened by the ongoing migration of land line users to Internet-based phones (Skype does not charge users for computer-to-computer calls) as well as the possibility of future regulatory action in certain jurisdictions, as these calls effectively circumvent tariff-based international long distance calls, which can be an important revenue source for emerging market telecom operators and governments. Consequently, Moody's believes Skype's long-term success will ultimately be dependent on the company's ability to further develop new revenue streams, including mobile, advertising and enterprise sales, that harness the powerful network effects of its large user community. The stable outlook reflects Moody's view that the company's credit metrics will modestly improve over the next twelve-to-eighteen months through revenue and EBITDA growth, and stable free cash flow generation, and further that its prepaid calling business model will remain viable in the near term given the strength of its brand and quality of its product. Moody's most recent rating action for Skype was on September 23, 2009. At that time, Moody's assigned first time ratings to the company. Headquartered in Luxembourg, Skype is a technology company centered around P2P communications and VoIP software tools. SUNRISE SENIOR: Posts $44.4 Million Third Quarter 2009 Net Loss --------------------------------------------------------------- Sunrise Senior Living Inc. reported revenues of $382.6 million for the third quarter of 2009, as compared to $412.6 million for the third quarter of 2008. Net loss for the third quarter of 2009 was ($44.4) million, or ($0.88) per fully diluted share, as compared to net loss of ($68.7) million, or ($1.36) per fully diluted share, for the third quarter of 2008. The loss before income taxes and discontinued operations for the third quarter of 2009 was ($37.8) million as compared to loss before income taxes and discontinued operations for the third quarter of 2008 of ($70.9) million. In the third quarter, net loss from operations for the three months ended September 30, 2009, was ($33.9) million. Adding back non-recurring items including the SEC investigation costs of $1.1 million and restructuring costs of $9.0 million, and non-cash charges including depreciation and amortization of $11.7 million, the provision for doubtful accounts of $300,000, write-off of capitalized project costs of $700,000 and impairment of long-lived assets of $9.9 million, adjusted loss from ongoing operations was ($1.3) million. Adjusted (loss) income from ongoing operations is a measure of operating performance that is not calculated in accordance with U.S. GAAP and should not be considered as a substitute for income or loss from operations or net income or loss. Adjusted income from ongoing operations is used by management to focus on income generated from the ongoing operations of the Company and to help management assess if adjustments to current spending decisions are needed. It is not calculated in accordance with U.S. generally accepted accounting principles and should not be considered as a substitute for income/loss from operations or net income/loss. Cash and Liquidity Update On October 19, 2009, Sunrise entered into the 13th Amendment to its bank credit facility extending its maturity date to December 2, 2010. At September 30, 2009, the outstanding borrowings under the bank credit facility were $68.9 million. On October 19, 2009, after paying $6.0 million of principal in connection with the 13th Amendment, the outstanding borrowings under the bank credit facility were $62.9 million and outstanding letters of credit were $23.9 million. At September 30, 2009, the Company had total assets of $1.096 billion against total liabilities of $1.092 billion. At September 30, 2009, Sunrise had a retained loss of $471.4 million and stockholders' deficit of $87,000. With non-controlling interest of $4.1 million, Sunrise had total equity of $4.0 million at September 30, 2009. Moreover, Sunrise's September 30 balance sheet showed strained liquidity: The Company had $373.6 million in total current assets against $860.5 million in total current liabilities. Sunrise had $43.4 million and $29.5 million of unrestricted cash at September 30, 2009 and December 31, 2008, respectively. Sunrise has no borrowing availability under the bank credit facility, and has significant scheduled debt maturities in 2009 and 2010 and significant long-term debt that is in default. As of September 30, 2009, Sunrise and its consolidated subsidiaries had debt of $624.6 million, of which $151.5 million of debt is scheduled to mature in 2009. Long-term debt that is in default totals $411.9 million, including $200.0 million of debt ($219.3 million face) that is in default as a result of the failure to pay principal and interest to the lenders of Sunrise's German communities. Sunrise is endeavoring to extend debt maturity dates, re-finance debt and obtain waivers from applicable lenders. The Company is engaged in discussions with various venture partners and third parties regarding the sale of certain assets with the purpose of increasing liquidity and reducing obligations. "We are pleased with the restructuring progress we have made but not with our financial performance," said Mark Ordan, Sunrise's chief executive officer. "We are dedicated to matching our sector- leading brand and care with profitable results." Sale of 21 Communities On October 7, 2009, Sunrise entered into an agreement to sell 21 wholly owned assisted living communities, located in 11 states, to Brookdale Senior Living, Inc. for $204 million. Brookdale placed into escrow an earnest money deposit of $5 million toward the purchase price. The closing date is currently scheduled for November 16, 2009. At the closing of the sale, Sunrise expects to receive approximately $60 million in proceeds after payment or assumption by Brookdale of certain mortgage loans, the posting of required escrows, and payment of expenses by Sunrise. Sunrise will use $25 million of the proceeds to pay down its bank credit facility and will place $20 million into a collateral account for the benefit of other creditors. Sunrise recorded an impairment charge of $6.8 million in the third quarter of 2009 to write down five of the 21 communities to fair value. The Company expects to record a gain on the sale of real estate of approximately $50 million upon closing of the transaction. Germany On October 22, 2009, Sunrise entered into a restructuring agreement, in the form of a binding term sheet, with the two lenders to seven of the nine German communities, to settle and compromise their claims against the Company, including under operating deficit and principal repayment guarantees provided by Sunrise in support of its German subsidiaries. The two lenders contended that these claims had an aggregate value of approximately $121.6 million. The binding term sheet contemplates that, on or before the first anniversary of the execution of definitive documentation for the restructuring, certain other of its identified lenders may elect to participate in the restructuring with respect to their asserted claims. The claims being settled by the two lenders represent approximately 77.5 percent of the aggregate amount of claims asserted by the lenders that may elect to participate in the restructuring transaction. Sunrise has guaranteed among other things that, within 30 months of the first execution of the definitive documentation for the restructuring, the electing lenders will receive a minimum of $58.3 million from the net proceeds of the sale of certain unencumbered North American properties, which equals 80 percent of the most recent aggregate appraised value of these properties, as well their pro rata share of up to an aggregate of 5 million shares of common stock for the lenders who participate on or before the first execution of definitive documentation. If the electing lenders do not receive at least $58.3 million by such date, Sunrise will make payment to cover any shortfall or, at such lenders' option, convey to them the remaining unsold properties. As any gain or loss on the transaction is dependent upon the values at closing of the aforementioned consideration, Sunrise is unable to estimate any gain or loss at this time. In addition, Sunrise will market for sale the German assisted living communities subject to loan agreements with the electing lenders and will remain responsible for all costs of operating, preserving and maintaining these communities until the earlier of either their sale or December 31, 2010. In the second quarter of 2009, Sunrise engaged a broker to assist in the sale of the nine German communities and at that time, classified the German assets as held for sale. As the book value of the majority of the assets was in excess of their fair value less estimated costs to sell, the Company recorded a charge of $52.4 million in the second quarter of 2009, which is included in discontinued operations. Fountains On October 26, 2009, Sunrise entered into agreements with its venture partner as well as with the venture lender to release the Company from all claims that the venture partner and the lender had against Sunrise prior to the date of the agreements and from all of its future funding obligations in connection with the Fountains portfolio. In exchange, Sunrise, among other things, transferred its 20-percent ownership interest to its venture partner, contributed vacant land parcels adjacent to six of the Fountains communities to the venture, and will transition from management. Sunrise will retain certain management and operating obligations during a temporary transition period. There will be no gain or loss as a result of this transaction. EdenCare Portfolio Transition Sunrise could be terminated in 2009 from management of a portfolio of communities owned by HCP, Inc. for failure to meet performance thresholds. On June 18, 2009, HCP announced it had exercised this termination right. Sunrise, which earned fees totaling $3.0 million in 2008, transitioned these communities to a new manager on October 1, 2009. Senior Living Condominium Project In 2006, Sunrise sold a majority interest in one condominium venture and one related assisted living venture to third parties. In conjunction with the development agreement for this project, Sunrise agreed to be responsible for actual project costs in excess of budgeted project costs of more than $10.0 million (subject to certain limited exceptions). The $10.0 million is recoverable as a loan from the venture. Through September 30, 2009, Sunrise has paid $50.7 million in cost overruns. Construction of this project is now complete. Sunrise accounts for the condominium and assisted living ventures under the profit- sharing method of accounting, and its investment carrying value at September 30, 2009 is $13.5 million for the two ventures, which includes its $10.0 million recoverable loan and advances Sunrise has made to the ventures. Sunrise recorded a loss of $2.9 million and $9.9 million from the two ventures in the three and nine months ended September 30, 2009, respectively. The pace of sales of condominium units and prices could impact the recovery of Sunrise's investment carrying value. The weak economy in the Washington, D.C. area will require Sunrise to implement more aggressive marketing and sales plans. No assurance can be given that additional pre-tax charges will not be required in subsequent periods with respect to this condominium venture. In July 2009, the lender notified Sunrise that an event of default had occurred. The event of default was related to providing certain financial information for the venture that the lender had previously requested. In October 2009, Sunrise received a notice of default related to the nonpayment of interest. Sunrise is in discussions with the lender on these matters. A full-text copy of the Company's Form 10-Q report is available at no charge at http://ResearchArchives.com/t/s?492f A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?4930 About Sunrise Senior Living Sunrise Senior Living, a McLean, Va.-based company, employs approximately 40,000 people. As of November 9, 2009, Sunrise operated 403 communities in the United States, Canada, Germany and the United Kingdom, with a combined unit capacity of approximately 41,500 units. Sunrise offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing and rehabilitative services. Sunrise's senior living services are delivered by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents. To learn more about Sunrise, please visit http://www.sunriseseniorliving.com. SWIFT ENERGY: Moody's Assigns 'B3' Rating on $200 Mil. Notes ------------------------------------------------------------ Moody's Investors Service assigned a B3 rating to Swift Energy Company's proposed $200 million senior unsecured notes due 2020. Moody's also affirmed its B2 Corporate Family Rating and its existing senior unsecured note rating of B3. The ratings are subject to review of final documents and terms and conditions of the proposed senior unsecured notes. The outlook remains stable. The proceeds from the pending $200 million senior unsecured notes offering will be used to repay all of Swift's $150 million 7.625% senior notes due 2011 and reduce outstandings under the $300 million revolving facility. Swift's B2 CFR reflects the company's scale, continued high and unsustainable costs trends, and financial leverage. Specifically, Swift's costs have significantly increased over the past three years. Swift's leveraged full-cycle cost per barrel has increased 81% since 2007 to $89.69 projected for 2009. During the upcycle Swift's capital spending appears to have added considerable debt without a meaningful addition to its reserve position. Also, over the past three years, Swift's capex has resulted in weak finding and development costs. However, during 2009 the company issued equity and has reduced its financial leverage. Debt/proved developed reserves has begun to decline to $8.18/boe (projected 2009) reduced from $9.79/boe at year-end 2008, while debt/average daily production has declined 10% to $19,059 (projected 2009). Swift's B2 rating is supported by its scale and its improving liquidity. The company has a $300 borrowing base revolver with 100% availability after completion of the $200 million issue, its recently announced joint venture, and a $115 million equity offering. The B3 rating for the unsecured notes reflect both the overall probability of default of the company, to which Moody's assigns a PDR of B2, and a loss given default of LGD 4 for the unsecured notes. Additionally, the B3 rating of the unsecured notes reflects its position in the capital structure. The last rating action was on April 3, 2009, at which time Moody's downgraded Swift's ratings and assigned a stable outlook. Swift Energy Company is a North American independent exploration and production company headquartered in Houston, Texas. SWIFT ENERGY: S&P Assigns 'BB-' Rating on $200 Mil. Senior Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned an issue- level rating of 'BB-' (one notch higher than the corporate credit rating) to Swift Energy Co.'s proposed $200 million senior unsecured notes due 2020. The recovery rating is '2', indicating S&P's expectation for substantial (70%-90%) recovery in the event of a payment default. The Houston, Texas-based oil and gas exploration and production company intends to use gross proceeds of $200 million to redeem its $150 million 7.625% notes due 2011. Once it calls the notes, S&P expects to withdraw the rating on the issue. Swift will apply additional proceeds to its revolving credit facility so that there will be more than $275 million available under its recently re- affirmed $300 million borrowing base revolving credit facility due 2011. S&P's corporate credit rating on Swift is 'B+', and the outlook is stable. Ratings List Swift Energy Co. Corporate credit rating B+/Stable/-- New rating Swift Energy Co. $200M senior unsecured notes BB- Recovery rating 2 SYNUTRA INT'L: Posts $14MM Fiscal Qtr. Loss; Seeks ABN AMRO Waiver ------------------------------------------------------------------ Synutra International, Inc. reported financial results for the fiscal second quarter and six months ended September 30, 2009. Details of the report were presented in Form 10-Q the Company filed with the Securities and Exchange Commission on November 9, 2009. Revenues Rise 38% from Prior Quarter Revenues for the fiscal second quarter ended September 30, 2009 totaled $65.3 million, down 31.1% from $94.8 million in the second quarter a year earlier. The year-over-year drop reflects reduced infant formula sales primarily in the Company's U-Smart product series after the Chinese government found eight lots of Synutra's U-Smart series of formula products along with certain products of 21 other manufacturers had been contaminated with melamine in September 2008. The reduction in revenues was partially offset by an increase in sales of surplus milk powder to industrial customers. On a sequential basis, revenues in the second quarter were up 38.0% from $47.4 million in the first quarter ended June 30, 2009. The increase was primarily due to the sale of surplus milk powder of about $18 million to industrial customers from our inventory, while our powdered formula product sales was $42.0 million as the company paced its shipments to distributors in order to help them reduce their inventory glut built up in the aftermath of the melamine incident. According to data released by China's Ministry of Commerce's Commercial Information Center (CIC), Synutra's market share stabilized at approximately 7.2% for the quarter ended September 30, 2009, representing a significant increase from the 3.4% reported in October 2008, the month immediately following the melamine contamination incident. Gross Margins Improve in Key Segment Gross profit across all Synutra operating segments in the second quarter ended September 30, 2009 totaled $12.3 million, or 18.8% of revenues, up from a gross loss of $26.7 million a year earlier. The improvement reflects recovery from the melamine incident, which resulted in substantial product recall costs in the prior year quarter. In the company's powdered formula segment, gross margin was 50.6% for the quarter ended September 30, 2009, compared to a negative margin of -32.5% a year earlier. The powdered milk segment is the company's largest by sales, accounting for 64.3% of revenue in the latest quarter. Sequentially, the gross margin of the powdered formula segment in the 2009 second quarter was up from 47.6% in the prior quarter, ended June 30, 2009. The Company pointed to the improvement as one sign that its premium line of Super series infant formula products, which accounted for about 53.1% of segment shipment, or 70% of sales, for the quarter ended September 30, 2009, have led the segment in market recovery and helped to stabilize the Company's market position. The 18.8% gross margin across all segments was down sequentially from 41.3% in the first quarter ended June 30, 2009. The drop reflected a gross loss of $8.8 million in the Company's non-core business which primarily sold surplus milk powder to industrial customers. The loss was incurred during the reporting quarter ended September 30, 2009, when the Company sold below cost domestically produced milk powder in inventory in order to improve its working capital situation. Expenses Fall, Losses Narrow from Last Year Net operating expenses included an impairment loss of 5.9 million resulting from a contemplated assets disposal transaction (see below) and all other operating expenses totaling $22.6 million in the quarter ended September 30, 2009. The total operating expenses were down 19.2% from $35.4 million a year earlier. Selling and distribution expenses fell by 3.0% to $10.3 million from $10.7 million, reflecting a decrease in freight charges partially offset by an increase in compensation expenses for Synutra's sales force. Advertising and promotion expenses fell by 59.7% to $7.5 million from $18.6 million. The sharp drop was due mainly to the shifting of resources from aggressive advertising to promotional activities by field promoters in communities and nutrition education professionals at the medical facilities. General and administrative expenses also fell substantially year over year, by 27.7% to $4.9 million from $6.8 million. The drop was due primarily to a decrease of $1.7 million in legal and professional fees incurred for a terminated following-on offering in the quarter ended September 30, 2008. Operating expenses in the quarter ended September 30, 2009 were offset by $107,000 in other operating income, compared to offsetting income of $733,000 a year earlier. In the quarter ended September 30, 2009, the company took an impairment loss of $5.9 million resulting from the contemplated sale of three dairy farms and two milk processing factories to Heilongjiang Wondersun Dairy Co. for $28.9 million after entering into an agreement with the purchaser on September 9, 2009. Synutra's operating loss in the quarter ended September 30, 2009 (including the impairment loss from the Heilongjiang Wonderson transaction) was $16.3 million, down from an operating loss of $62.1 million in the year-earlier quarter. Sequentially, the operating loss in the latest quarter widened from a loss of $10.6 million in the quarter ended June 30, 2009. Apart from the impairment loss from the Heilongjiang Wondersun transaction, comparable operating loss in the quarter ended September 30, 2009, was slightly improved, at $10.4 million from the prior quarter. Net loss attributable to common shareholders for the quarter ended September 30, 2009, was $14.0 million, or $0.26 per fully diluted share, compared to a year-earlier net loss of $49.7 million, or $0.92 per fully diluted share. On a sequential basis, net loss attributable to common shareholders in the latest quarter widened from $10.0 million, or $0.18 per fully diluted share, in the quarter ended June 30, 2009. Cash Position Improves, Working Capital Deficit Reduced On the balance sheet, Synutra reported cash and cash equivalents of $57.8 million on September 30, 2009, up from $37.7 million on March 31, 2009 (the end of the prior fiscal year) and $29.6 million on June 30, 2009 (the end of the prior quarter). The company remains in a working capital deficit, though that deficit had narrowed to approximately $62.4 million on September 30, 2009, compared to $80.43 million on March 31, 2009, and $83.74 million on June 30, 2009. In its ongoing effort to regain the liquidity and positive operating cash flows lost in the Melamine-related recalls, the company has been in discussions with local banks to obtain short term financing to support its operational needs and has been able to renew all of its existing loans with domestic PRC banks. As of September 30, 2009, it had short-term borrowings from local banks of $271.5 million with a weighted average interest rate of 3.42%. The loans were secured by the pledge of certain fixed assets held by the Company's subsidiaries, pledge of land use right in Qingdao, China and pledge of cash deposits which was recorded as restricted cash. The maturity dates of the short-term loans from local banks outstanding at September 30, 2009 ranged from October 2009 to September 2010. As of the date of this press release, all outstanding short-term loans from local banks that have become due have been repaid. As of September 30, 2009, Synutra had unsecured long-term borrowing from local banks of $16.1 million, maturing from March 2011 to June 2012 with a weighted average interest rate of 5.4%. In addition to the loans from local banks, it also had short-term loans from related parties amounting to $10.7 million with a weighted average interest rate of 4.7%. The maturity dates of the short-term loans outstanding from related parties at September 30, 2009 were from October 2009 to January 2010, and were extendable under same terms upon maturity. As of September 30, 2009, the company was not able to meet the financial covenants of its loan with ABN AMRO and it reclassified the outstanding balance of $34.7 million under the loan to current liabilities, since it considered this debt callable by the bank. At the date of this press release, a waiver sought from the bank had not been granted. CEO: Report Marks Slow but Genuine Progress Liang Zhang, Chairman and CEO of Synutra, commented, "The results from the latest quarter show the lingering and very serious effects of last year's melamine incident and product recall, but they also reflect genuine progress on important fronts. For instance, we are heartened to see the sequential rise in revenues from the quarter ended June 30, led by our Super product series restoring to the pre-recall level. We believe our continued effort to reduce the inventory glut with the distributors is producing results. The improving gross margins in our primary operating sector, powdered milk formula, are also reason for encouragement, as is our substantially improved cash position and the reduction in our working capital deficit -- though much work remains to be done in the latter area." Six-Month Results Reflect Pre- and Post-Recall Trends For the six months ended September 30, 2009, Synutra reported revenues of $112.7 million, down 49.3% from $222.2 million in the comparable period of 2008. The first fiscal six months of include the last full quarter (ended June 30, 2008) not affected by the melamine incident and recall, as well as the quarter in which the company took the bulk of its recall losses. Gross profit for the six months ended September 30, 2009, was $31.9 million, or 28.3% of revenues, compared to $40.2 million, or 18.1% of revenues, in the comparable period of 2008. The higher gross margin in the most recent six months reflected improved margins in the company's powdered formula segment, whereas the lower gross margins a year earlier were due in part to recall- related gross losses in the quarter ended September 30, 2008. Loss from operations in the six months ended September 30, 2009, totaled $26.9 million, compared to $42.6 million a year earlier. The narrowing of losses was due to year-over-year reductions in operating expenses, especially in advertising and promotion, partially offset by a $5.9 million impairment loss recorded on the contemplated sale of Synutra assets to Heilongjiang Wondersun in September 2009. Net loss attributable to common shareholders for the six months ended September 30, 2009, was $24.0 million, or $0.44 per fully diluted share, compared to $34.0 million, or $0.63 per fully diluted share, in the six months ended September 30, 2008. Synutra's Forms 10-Q for the latest and prior quarters are available online at http://www.synutra.com/ About Synutra International Synutra International Inc. is an infant formula company in China. It principally produces, markets and sells its products under the "Shengyuan," or "Synutra," name, together with other complementary brands. It focuses on selling premium infant formula products, which are supplemented by more affordable infant formulas targeting the mass market as well as other nutritional products and ingredients. It sells its products through an extensive, nationwide sales and distribution network covering 29 provinces and provincial-level municipalities in China. As of September 30, 2009, this network comprised over 490 distributors and over 1,000 sub-distributors who sell Synutra products in over 75,000 retail outlets. TAYLOR BEAN: To Test Selene's $133.2MM Bid at Dec. 11 Auction ------------------------------------------------------------- Taylor Bean & Whitaker Mortgage Corp. has received approval of procedures to sell a portfolio of repossessed real estate, Bill Rochelle at Bloomberg reported. Selene Residential Mortgage Opportunity Fund LP will buy the assets for $133.2 million absent higher and better bids at the auction. Initial competing bids are due Dec. 10. The sale hearing is scheduled for December 15. An affiliate of Selene received final court approval on Nov. 9 to provide Taylor Bean with $25 million in financing for the reorganization. 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. TNS INC: Moody's Upgrades Corporate Family Rating to 'Ba3' ---------------------------------------------------------- Moody's Investors Service upgraded TNS Inc.'s corporate family rating to Ba3 from B1 and assigned a Ba3 rating to the company's proposed refinancing transaction of $75 million senior secured revolving credit facility and $325 million first lien term loan. Proceeds from the proposed debt offering will be used to refinance the existing credit facilities including the debt raised in March 2009 to acquire VeriSign, Inc.'s Communication Services Group for approximately $230 million in cash. The upgrade reflects TNS' reduced leverage due to debt paydown over the last six months, as well as expectations of improved interest coverage due to refinancing at a lower interest rate. The upgrade also incorporates Moody's expectations that the company will continue to generate strong positive free cash flow, which would help in further delevering the company. The company's Ba3 corporate family rating incorporates Moody's favorable view of TNS' enhanced scale, diversification and market position from the CSG acquisition, while maintaining strong pro forma credit metrics and good liquidity position. The rating, however, is constrained by TNS' relatively small size in the highly competitive data communication and network services markets. In addition, given the current challenging macroeconomic environment, Moody's believes that TNS could continue to face declines in transaction volumes in its core domestic and international dial-up POS business, increased pricing pressure and prospects of continued consolidation in the telecommunication services industry, and to a lesser extent, customer churn in its financial services business. The stable outlook reflects Moody's expectation that TNS will continue to maintain its good liquidity and market position, and generate strong operating profits and free cash flows, which would be used to repay debt. The stable outlook also reflects Moody's expectation that TNS will be able to stabilize the underperformance of CSG and successfully integrate its operations without any material customer attrition. TNS, Inc. These ratings were upgraded: -- Corporate Family Rating to Ba3 from B1 -- Probability of Default Rating to B1 from B2 Transaction Network Services, Inc. This new rating is assigned: -- $75 million NEW Senior Secured Revolving Credit Facility due 2014 - Ba3 (LGD3, 35%) -- $325 million NEW Senior Secured Term Loan due 2015 - Ba3 (LGD3, 35%) These ratings were upgraded currently, but will be withdrawn on closing of this proposed transaction: -- $15 million Senior Secured Revolving Credit Facility due 2013 to Ba3 (LGD3, 35%) from B1 (LGD3, 33%) -- $250 million Senior Secured Term Loan due 2014 to Ba3 (LGD3, 35%) from (P) B1 (LGD3, 33%) -- 5 million Senior Secured Term Loan due 2014 to Ba3 (LGD3, 35%) from B1 (LGD3, 33%) The last rating action was on March 9, 2009, when Moody's affirmed TNS' CFR at B1 and assigned (P) B1 rating to the company's $250 million senior secured first lien term loan. TNS is a provider of business-critical data communication services to credit card, debit card, and automated teller machine transaction processors. TNS is also a provider of call signaling and database access services to the domestic telecommunications industry and of secure data and voice network services to the global financial services industry. For the last twelve months ended September 30, 2009, total revenues for TNS were $418 million. TOYS "R" US: FY 2009 Q2 Comparable Store Net Sales Lower by 6.8% ---------------------------------------------------------------- Toys "R" Us, Inc. reports that for the second quarter of fiscal 2009, Toys "R" Us - Delaware, Inc.'s comparable store net sales decreased by 6.8%. Declines in the entertainment product category -- where sales have been particularly soft due to the video game cycle -- accounted for the majority of the decline in comparable store net sales in the second quarter of fiscal 2009. For the first 12 weeks of the third quarter of fiscal 2009, Toys-Delaware estimates that comparable store net sales were down 7.2%, with the entertainment product category accounting for more than one-third of the decline. Comparable store net sales in the final week of the third quarter were adversely impacted by the shift of the "Big Book" promotional event from the last week of the third quarter in fiscal 2008 to the first week of the fourth quarter in fiscal 2009. As a result, Toys-Delaware currently estimates that total comparable store net sales in the third quarter of fiscal 2009 were down approximately 9.0%, with the entertainment product category accounting for slightly less than half of the decline. Despite the negative comparable store net sales in the third quarter of fiscal 2009, Toys-Delaware believes that results for the quarter will show gross margin rate improvement and expense reductions in sufficient amounts to more than offset the impact of the net sales decline on the operating results for the quarter. About Toys "R" Us Toys "R" Us, headquartered in Wayne, New Jersey, is the largest specialty retailer of toys, with annual revenues of around $14 billion. It operates stores both in the U.S. and internationally, as well as the Babies "R" Us format. As of August 1, 2009, the company had $8.172 billion in total assets; total current liabilities of $2.085 billion, long-term debt of $5.496 billion, deferred tax liabilities of $55 million, deferred rent liabilities of $269 million, and other non-current liabilities of $372 million. As of August 1, 2009, the company had Toys "R" Us, Inc. stockholders' deficit of $214 million and noncontrolling interest of $109 million, and total stockholders' deficit of $105 million. The Company carries a 'B2' probability of default rating from Moody's, "B" issuer credit ratings from Standard & Poor's, and "B-" long term issuer default rating from Fitch. TOYS "R" US: Unit to Issue $725-Mil. of Sr. Secured Notes Due 2017 ------------------------------------------------------------------ Toys "R" Us, Inc., on Tuesday, announced the pricing of $725 million aggregate principal amount of senior secured notes due 2017 to be issued by Giraffe Properties, LLC, which will be renamed Toys "R" Us Property Company II, LLC, one of its indirect wholly owned subsidiaries. The notes will have an interest rate of 8.50% per annum and are being issued at a price equal to 98.573% of their face amount at maturity. The Issuer estimates that the gross proceeds from the offering will be approximately $715 million. The Issuer intends to use the cash proceeds from the offering of the notes, together with cash on hand, to repay the Issuer's and its direct and indirect parent entities' existing senior secured real estate loan and security agreement and related mezzanine loans in the aggregate amount of $600 million. In addition, in connection with the offering and the related transactions, MPO Properties, LLC, an indirect wholly owned subsidiary of Toys "R" Us, Inc., and its direct and indirect parent entities will repay their senior secured real estate loan and security agreement and related mezzanine loans in the aggregate amount of $200 million. The notes will be secured by first priority security interests in all of the real estate properties of the Issuer. The notes are solely the obligation of the Issuer and are not guaranteed by Toys "R" Us, Inc. or Toys "R" Us - Delaware, Inc. The notes were offered only to qualified institutional buyers in reliance on the exemption from registration set forth in Rule 144A under the Securities Act of 1933, as amended, and outside the United States to non-U.S. persons in reliance on the exemption from registration set forth in Regulation S under the Securities Act. The notes have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act. About Toys "R" Us Toys "R" Us, headquartered in Wayne, New Jersey, is the largest specialty retailer of toys, with annual revenues of around $14 billion. It operates stores both in the U.S. and internationally, as well as the Babies "R" Us format. As of August 1, 2009, the company had $8.172 billion in total assets; total current liabilities of $2.085 billion, long-term debt of $5.496 billion, deferred tax liabilities of $55 million, deferred rent liabilities of $269 million, and other non-current liabilities of $372 million. As of August 1, 2009, the company had Toys "R" Us, Inc. stockholders' deficit of $214 million and noncontrolling interest of $109 million, and total stockholders' deficit of $105 million. The Company carries a 'B2' probability of default rating from Moody's, "B" issuer credit ratings from Standard & Poor's, and "B-" long term issuer default rating from Fitch. TRONOX INC: Shareholders Want to File Bankruptcy Plan ----------------------------------------------------- The official committee of shareholders of Tronox Inc. asks the Bankruptcy Court to terminate Tronox's exclusive period to propose a Chapter 11 plan. Tronox has told the Court that while it is preparing to conduct an auction where Huntsman Corp. will be lead bidder for its assets, it has also held preliminary discussions with stakeholders over the terms of a standalone reorganization plan. The Equity Committee, however, wants to file its own bankruptcy plan for the chemical maker, saying a bid from Huntsman Corp. undervalues its assets. In addition, the Equity Committee notes that to the extent the Debtors and the Creditors Committee have been pursuing a plan at all, "it is a plan that improperly deprives the public shareholders of any meaningful recovery and that, after satisfying administrative and secured claims, wrongfully awards the unsecured creditors with all of the intrinsic value of the reorganized company." The Equity Committee, in consultation with financial advisors Eureka Capital Partners, LLC and Young & Partners, LLC, says it has developed a Chapter 11 plan, which includes a reasonable mechanism for value to return to equity, would not "disrupt" the Debtors' alleged dual track process, but would, if anything, demonstrate to all potential lenders and/or acquirers of the company that Tronox's assets have thus far been vastly undervalued by the Huntsman bid and by the Debtors' uneven and delayed implementation of the "dual track" process. A plan pursuant to the EC Term Sheet would allow Tronox's fundamentally healthy and profitable operations to reorganize and emerge largely free of the improperly allocated Legacy Liabilities. A trust will be established and funded to continue litigation against Anadarko Petroleum Corp. and to address environmental remediation concerns pending the resolution of Anadarko litigation. Claims asserted by the EPA and various tort claimants will be satisfied by the proceeds of the Anadarko litigation. Allowed unsecured claims will be paid in full with a combination of cash and preferred shares of Reorganized Tronox.2 Public shareholders will also receive new equity and rights to purchase additional shares in Reorganized Tronox. The EC Term Sheet further provides that Reorganized Tronox will be capitalized by: (i) the Company's excess cash; (ii) a new senior term loan and revolving credit facility of $[280-$300] million; (iii) a high yield issue of $[205-$225] million; and (iv) a backstopped rights offering to the public shareholders of $[100] million. In addition, the EC Term Sheet sets forth a mechanism for an Equity Sponsor to back-stop a rights offering giving Tronox's existing public shareholders and noteholders an opportunity to invest additional new money in Reorganized Tronox. About Tronox Inc. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders have been appointed in the cases. The Creditors Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) UNISYS CORP: MMI Investments Discloses 4.73% Equity Stake --------------------------------------------------------- MMI Investments, L.P., and affiliates disclose holding in the aggregate 2,000,000 shares or roughly 4.73% of the common stock of Unisys Corporation. MMI Investments said the total purchase price of 2,000,000 shares of Common Stock owned by MMI Investments was $147,712,864; the source of funds is a combination of MMI's working capital and margin loans. These margin loans were obtained from Bear, Stearns & Co. Inc. and Merrill Lynch & Co. under customary terms and conditions. About Unisys Based in Blue Bell, Pennsylvania, Unisys Corporation (NYSE: UIS) -- http://www.unisys.com/-- provides a portfolio of IT services, software, and technology that solves critical problems for clients. With more than 26,000 employees, Unisys serves commercial organizations and government agencies throughout the world. At September 30, 2009, the Company had total assets of $2.741 billion against total current liabilities of $1.305 billion, long- term debt of $845.0 million, long-term postretirement liabilities of $1.410 billion, and other long-term liabilities of $325.4 million, resulting in stockholders' deficit of $1.145 billion. VENTANA HILLS ASSOCIATES: Sec. 341 Meeting Set for December 8 ------------------------------------------------------------- The U.S. Trustee for Region 11 will convene a meeting of creditors for Ventana Hills Associates, Ltd., and Ventana Hills Phase II, L.P., on December 8, 2009, at 1:30 p.m. at 219 South Dearborn, Office of the U.S. Trustee, 8th Floor, Room 802, Chicago, Illinois 60604. 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. Lake Forest, Illinois-based Ventana Hills Associates, Ltd., filed for Chapter 11 bankruptcy protection on November 3, 2009 (Bankr. N.D. Ill. Bankr. Case No. 09-41755). Richard H. Fimoff, Esq., at Robbins, Salomon & Patt Ltd assists the Company in its restructuring efforts. The Company listed $50,000,001 to $100,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. Debtor-affiliate Ventana Hills Phase II, L.P., filed for Chapter 11 bankruptcy protection on November 3, 2009 (Bankr. N.D. Ill. Case No. 09-41758). The Company listed $50,000,001 to $100,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. VENTANA HILLS ASSOCIATES: List of 47 Largest Unsecured Creditors ---------------------------------------------------------------- Ventana Hills Associates, Ltd., filed with the U.S. Bankruptcy Court for the Northern District of Illinois a list of its 47 largest unsecured creditors. A full-text copy of the Debtor's list of creditors is available for free at http://bankrupt.com/misc/illnb09-41755.pdf Lake Forest, Illinois-based Ventana Hills Associates, Ltd., filed for Chapter 11 bankruptcy protection on November 3, 2009 (Bankr. N.D. Ill. Case No. 09-41755). Richard H. Fimoff, Esq., at Robbins, Salomon & Patt Ltd assists the Company in its restructuring efforts. The Company listed $50,000,001 to $100,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. VENTANA HILLS PHASE II: List of 48 Largest Unsecured Creditors -------------------------------------------------------------- Ventana Hills Phase II, L.P., filed with the U.S. Bankruptcy Court for the Northern District of Illinois a list of its 47 largest unsecured creditors. A full-text copy of the Debtor's list of creditors is available for free at http://bankrupt.com/misc/illnb09-41758.pdf Lake Forest, Illinois-based Ventana Hills Associates, Ltd., filed for Chapter 11 bankruptcy protection on November 3, 2009 (Bankr. N.D. Ill. Case No. 09-41755). Richard H. Fimoff, Esq., at Robbins, Salomon & Patt Ltd assists the Company in its restructuring efforts. The Company listed $50,000,001 to $100,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. VERASUN ENERGY: Former Executives Face Class Action Suit -------------------------------------------------------- Coughlin Stoia Geller Rudman & Robbins LLP disclosed that a class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of the common stock of VeraSun Energy Corp. between March 12, 2008 and September 16, 2008, inclusive, seeking to pursue remedies under the Securities Exchange Act of 1934. VeraSun is not named in this action as a defendant because it filed for bankruptcy protection on October 31, 2008. The complaint charges certain of VeraSun's former executives with violations of the Exchange Act. VeraSun engages in the production and sale of ethanol and its co-products in the United States. The complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Company's true financial condition, business and prospects. Specifically, the complaint alleges that defendants failed to disclose the following adverse facts, among others: (i) VeraSun was, in part, a speculative commodities trader in addition to an ethanol producer; (ii) VeraSun engaged in speculative and risky derivate transactions that exposed the Company to substantial financial and liquidity risk; (iii) VeraSun experienced substantial loses on speculative derivative transactions causing margin pressures on the Company; (iv) as a result of margin pressures from bad speculative derivative transactions, the Company sold out of a large short position in corn and incurred substantial losses; (v) the Company entered into highly risky "accumulator" contracts that obligated VeraSun to purchase increasing amounts of corn after the price of corn fell in price per bushel; and (vi) VeraSun's financial condition and especially its liquidity were negatively impacted as a result of speculative commodity transactions, ultimately causing the Company to file for bankruptcy. On September 16, 2008, VeraSun announced that it commenced a public offering of 20 million shares of its common stock to raise money for "general corporate purposes." The true purpose of this public offering was to raise capital in an effort to prevent a disastrous impact from the huge losses experienced by the Company as a result of its speculative trading and risky bets on the price of corn. In response to the Company's announcement on September 16, 2008, shares of the Company's stock fell $3.81 per share, or 70%, from a close of $5.22 per share before the announcement, to close at $1.41 per share on September 17, 2008, on extremely heavy trading volume. Plaintiff seeks to recover damages on behalf of all purchasers of VeraSun common stock during the Class Period. The plaintiff is represented by Coughlin Stoia, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud. Coughlin Stoia, a 190-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.com/or http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The Company and certain affiliates filed for Chapter 11 protection on October 31, 2008 (Bankr. D. Del. Case No. 08-12606). Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun closed on April 1, 2009, the sale of substantially all of its assets to Valero Renewable Fuels, a subsidiary of Valero Energy Corporation, North America's largest petroleum refiner and marketer. Valero paid $350 million for the ethanol production facilities in Aurora, Fort Dodge, Charles City, Hartley and Welcome, in addition to the Reynolds site. Valero also successfully bid $72 million for the Albert City facility and $55 million for the Albion facility. VeraSun also completed on April 9 the sale to AgStar Financial Services PCA of substantially all of the assets relating to the company's production facilities in Dyersville, Iowa; Hankinson, North Dakota; Janesville, Minnesota; Central City and Ord, Nebraska; and Woodbury, Michigan. AgStar released the USBE Subsidiaries from their obligations under $319 million of existing indebtedness and assumed certain liabilities relating to the AgStar Facilities. Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware confirmed on October 23, 2009, the Chapter 11 Plan of Liquidation filed by VeraSun Energy Corporation and its debtor affiliates (VeraSun Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). VISTEON CORP: PBGC, Unsecured Committee Object to DIP Financing --------------------------------------------------------------- Visteon Corporation and its debtor affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to obtain a secured superpriority priming multi-draw term loan facility of up to $150 million from Wilmington Trust Company, as administrative agent, and certain other lenders. William G. Quigley II, chief financial officer and executive vice president of Visteon, asserts that the proposed DIP Facility provides the Debtors with more than just the cash and credit support they anticipate needing to operate their business. He avers that of almost equal importance is the confidence that financing will reinforce in the Debtors' suppliers, customers, and employees. Certain members of the Prepetition Term Lenders ad hoc steering committee who may agree to provide financing, and their successors and assigns comprise the DIP Lenders. BankruptcyData reports that the Pension Benefit Guaranty Corp. and the official committee of unsecured creditors filed with the U.S. Bankruptcy Court separate objections to Visteon's proposed DIP financing. The PBGC stands with the Committee against the Debtors' unwarranted and unreasonable efforts to grant the Prepetition Term Agent and Prepetition Term Lenders an adequate protection guarantee and additional adequate protection liens in the unencumbered assets of Visteon Electronics Corporation. According to the PBGC, in view of the Debtors' strong performance in chapter 11 and substantial progress towards plan confirmation, the chapter 11 cases simply do not present the type of exigent circumstances or value deterioration that would justify the granting of additional liens against substantial unencumbered assets as adequate protection for the Term Lenders' prepetition claims, and the granting of a guarantee in support of the Term Loan Obligations effectively constitutes an impermissible cross- collateralization of such obligations. About Visteon Corp Visteon continues to win new business despite the difficult economic environment. During the first nine months of 2009, Visteon won more than $400 million in incremental new business. On a regional basis, Asia and North America each accounted for 41 percent of the total, with Europe accounting for the remaining 18 percent. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) WHITE ENERGY: Must Pay $1.7 Million to Hale County -------------------------------------------------- Deborah Zacher, special projects writer at MyPlainview.com, reports that commissioners learned White Energy owes $1.7 million to Hale County. In a tax abatement agreement with the county, the company was to pay 100% of county taxes for 2008 before the amount was to decrease in 10% increments the next nine years, Ms. Zacher relates. Plainview BioEnergy stopped producing ethanol at the beginning of this year, and White Energy filed for Chapter 11 bankruptcy in May, causing payments to stall, she notes. Ms. Zacher says the company's plant recently reopened and is producing at about 60 percent capacity but the payment status of the 2008 taxes remains unknown. The payment was to be paid in full at the end of the year. White Energy, Ms Zacher says, has been unable to make a payment until a reorganization plan is created. A 21% penalty and interest has been added along with a 20% attorney fee, said Micah Malouf, attorney for White Energy as of Nov. 1, 2009. Headquartered in Dallas, Texas, White Energy, Inc. -- http://www.white-energy.com/-- builds and acquires ethanol production projects. White Energy's plants have a combined capacity of producing 240 million gallons of ethanol a year, making it one of the 10 largest ethanol producers in the U.S. and the second-largest gluten maker. Two plants are in Texas with the third in Kansas. White spent $323 million building the plants in Texas. The Company and its debtor-affiliates filed for Chapter 11 on May 7, 2009 (Bankr. D. Del. Lead Case No. 09-11601). Michael R. Lastowski, Esq., at Duane Morris LLP, represents the Debtors in their restructuring efforts. The Debtors tapped The Garden City Group Inc. as claims agent. On the petition date, White Energy disclosed assets and debts ranging from $100 million to $500 million. WHOLE FOODS: Moody's Gives Stable Outlook; Affirms 'Ba3' Ratings ---------------------------------------------------------------- Moody's Investors Service changed the rating outlook of Whole Foods Market Inc. to stable from negative, and affirmed the company's Ba3 Corporate Family Rating and the Ba3 rating of its term loan. The change in outlook anticipates that Whole Foods' credit metrics will continue to improve as the company continues to generate positive cash flow which may be used to reduce debt and internally finance future growth. The ratings reflect Whole Foods' high leverage and operating risk which is greater than conventional supermarkets because of the company's expensive fast growth strategy and focus on higher-end products. Ratings also reflect expectations that operating margins and cash flow are stabilizing as the company slows growth in the future, and that Whole Foods will remain a market leader. These ratings were affirmed and point estimates updated: -- Corporate Family Rating at Ba3 -- Probability of Default Rating at Ba3 -- $700 million Senior Secured Term Loan due in 2012 to Ba3 (LGD 3, 47%) from (LGD 3, 46%) The last rating action for Whole Foods was the rating confirmation and change in outlook to negative on March 4, 2009. Whole Foods Market, headquartered in Austin, Texas, is a leading supermarket retailer which emphasizes natural and organic foods. The company has 286 stores in the U.S., Canada and U.K., and had approximately $8 billion in revenues over the last 12 months. WILKES BASHFORD: Files for Bankruptcy After Closing Two Shops ------------------------------------------------------------- Sajid Farooq at NBC Bay Arena reports that Wilkes Bashford files for bankruptcy after shutting down operations of its two stores and laying off 18 employees. Mr. Farooq relates that the filing was made to protect the company as it sells it assets to Ed Mitchell West LLC. The company would continue to sell high end clothes in San Francisco and Palo Alto, California, he adds. WILLIAM CARTER: Moody's Reviews 'Ba2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service placed all ratings of William Carter Company Inc. (a wholly owned subsidiary of Carter's Inc.) on review for possible downgrade. LGD assessments are subject to change. The rating action follows from the company's announcement that, following a review by management of issues identified with respect to the timing of recognizing margin support agreements and the associated historical accounting treatment, it has concluded that the previously issued financial statements for the fiscal years 2004 through 2008 and the fiscal quarters from September 29, 2007, through July 4, 2009, should no longer be relied upon. Moody's review will focus on Carter's ongoing review into these matters, the steps taken to remediate identified control deficiencies, and the magnitude of the impact of any restatement on its financial statements. Moody's review will also consider any impact these events have on the company's liquidity should there be any need to address covenants or other terms of the company's financing agreements. These ratings were placed on review for possible downgrade, LGD assessments are subject to change. William Carter Company -- Corporate Family Rating at Ba2 -- Probability of Default Rating at Ba3 -- Sr. Secured Credit Facilities at Ba2 (LGD 2, 28%) Moody's last rating action on Carter's Inc. was on September 15, 2009, when the company's Corporate Family was upgraded to Ba2 from Ba3. Headquartered in Atlanta, Georgia, The William Carter Company is a leading marketer of branded apparel product for infants and young children under the Carter's and OshKosh brands. WILLIAM LYON HOMES: Reports $11,637,000 Net Loss for Q3 2009 ------------------------------------------------------------ William Lyon Homes reported a net loss of $11,637,000 for the three months ended September 30, 2009, compared to net loss of $41,096,000 for the comparable period a year ago. Consolidated operating revenue decreased 34% to $67,213,000 for the three months ended September 30, 2009 as compared to $102,168,000 for the comparable period a year ago. The Company reported a net loss for the nine months ended September 30, 2009 of $41,251,000 compared to net loss of $80,832,000 for the comparable period a year ago. Consolidated operating revenue decreased 44% to $213,959,000 for the nine months ended September 30, 2009, as compared with $379,694,000 for the comparable period a year ago. As of September 30, 2009, the Company had $738,740,000 in total assets against $597,784,000 in total liabilities. The Company incurred impairment losses on real estate assets of $21,910,000 for the three months ended September 30, 2008 with no comparable amount in the 2009 period. During the nine months ended September 30, 2009 and 2008, the Company incurred impairment losses on real estate assets of $24,171,000 and $68,028,000, respectively. The impairments were primarily attributable to slower than anticipated home sales and lower than anticipated net revenue due to depressed market conditions in the housing industry. The future undiscounted cash flows estimated to be generated were determined to be less than the carrying amount of the assets. Accordingly, the real estate assets were written-down to their estimated fair value. On October 20, 2009, the Company entered into a Senior Secured Term Loan Agreement that provides a first lien secured loan of up to $206 million, secured by substantially all of the assets of the Company (excluding stock in William Lyon Homes, Inc., the Borrower) and certain wholly-owned subsidiaries. The net proceeds of the $131 million first installment of the loan were used to repay the Company's revolving credit facilities and to repurchase, in a privately negotiated transaction, $72,511,000 principal amount of its outstanding Senior Notes at a cost of approximately $50,757,000 plus accrued interest. The Company expects to use the remaining proceeds from the first and second installments for general corporate purposes and opportunistic land acquisition. A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?4931 William Lyon Homes -- http://www.lyonhomes.com/-- is primarily engaged in the design, construction and sales of single-family detached and attached homes in California, Arizona and Nevada and at September 30, 2009 had 21 sales locations. The Company's corporate headquarters are located in Newport Beach, California. * * * As reported by the Troubled Company Reporter on November 3, 2009, Standard & Poor's Ratings Services lowered its issue rating on William Lyon Homes' senior unsecured notes to 'D' from 'CC'. S&P also revised its recovery rating to '6', which indicates its expectation for negligible (0%-10%) recovery, from '5', which indicated S&P's expectation for a modest (10%-30%) recovery. At the same time, S&P placed its 'CCC-' corporate credit rating on the privately held homebuilder on CreditWatch with positive implications. "S&P lowered its rating on William Lyon's senior unsecured notes after the Newport Beach, Calif.-based homebuilder repurchased certain of its notes at a large discount to their face value, which S&P viewed as tantamount to default under its criteria for exchange offers and similar restructurings," said credit analyst James Fielding. "S&P revised its recovery rating because the company obtained a new secured loan commitment that could diminish the recovery prospects for unsecured creditors. However, the new loan bolsters liquidity, in S&P's view, and it appears that several of the company's key housing markets are firming." S&P will resolve its CreditWatch placement after the company releases its third-quarter earnings and after we've had the opportunity to discuss near-term capital plans with this privately held company's management team. S&P would raise its corporate credit rating one notch, to 'CCC', if the company appears likely to maintain capacity to repay its near-term obligations and indicates that operating pressures continued to ease in the third quarter. However, S&P will maintain its 'D' ratings on the notes until S&P is reasonably comfortable that additional discounted repurchases are unlikely. * Nine U.S. States Face Budget Crisis, Pew Center Says ------------------------------------------------------ Public policy research group The Pew Center on the States said in a report that that Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin are at grave risk of facing similar fiscal strains that brought California on the brink of insolvency. While California often takes the spotlight, other states are facing hardships just as daunting," said Susan Urahn, managing director of the Washington, D.C.-based center. "Decisions these states make as they try to navigate the recession will play a role in how quickly the entire nation recovers." The states are dealing with declining tax revenue, resurgent deficits and increasing unemployment and home foreclosure rates, the report said. According to the report, all but New Jersey, Illinois and Wisconsin also have been hampered by a rule requiring a two-thirds legislative vote to approve tax increases. * Prepackaged Bankruptcies Climbing, Have Offered More Recovery --------------------------------------------------------------- According to Bloomberg News, as defaults soar above 200 this year, companies of financially distressed companies like RH Donnelley Corp. and Accuride Corp. have been working with company executives to arrange prepackaged bankruptcies. The prepackaged bankruptcies, according to Moody's, are allowing investors to recoup 5% more of their money on average than in standard filings. The pre-arranged filings between lenders and management are up 26- fold in the past two years, Moody's data show. "In this economic melee, if they didn't get proactive and didn't have sufficient and appropriate information, committees do run the risk of being directed by what a debtor wants as opposed to what they should be getting out of the company," said Kevin Lavin, a senior managing director at FTI Consulting in New York who specializes in restructurings. Corporate defaults have almost tripled this year to 239 issuers, compared with 82 in 2008, Standard & Poor's said last week in a report. T he 12-month forecast for U.S. high-yield bond failures is 6.9 percent, the ratings company said last month. An analysis of 167 prepackaged bankruptcies from 1989 through April 2009 by Moody's shows a 54.6% recovery rate from prepackaged bankruptcies, compared with 49.4% for a standard filing. There have been 26 pre-packaged bankruptcies this year through July 31, compared with 1 in 2007, according to Moody's. Law360 reports that prepackaged Chapter 11 filings for public companies have risen sharply in 2009, with 30 prepackaged bankruptcies filed to date compared with 10 during the same time in 2008, according to a newly released report. * Va. Atty. General William Mims to Join Hunton & Williams ---------------------------------------------------------- Hunton & Williams LLP today announced Virginia Attorney General William C. Mims will become a partner of the firm when he leaves office in January 2010. Mr. Mims will join the firm in Washington and Richmond in the administrative law group, government relations practice. "We are privileged to have someone of Bill's caliber join our firm," said Wally Martinez, the firm's managing partner. "Bill will be representing clients whose interests are affected by the legislative and executive branches of various state governments and the federal government, particularly in health care, competition, consumer protection, and energy." Mims has a long history of service to the Commonwealth of Virginia. He recently was named co-chair of Governor-elect Bob McDonnell's transition team. Prior to his role as Virginia's Attorney General, Mr. Mims served as Chief Deputy Attorney General from January 2006 until February 2009, in the Virginia Senate from 1998 to 2005, and in the Virginia House of Delegates from 1992 to 1997. He also served on Capitol Hill as Chief of Staff to Congressman Frank Wolf (R-Va). He holds law degrees from Georgetown University and George Washington University. "I am pleased to be joining Hunton & Williams," said Mims. "I look forward to serving clients in Virginia, Washington, and nationwide. The firm's core values of excellence, integrity, and public service provide an excellent work culture." The Hunton & Williams government relations team is comprised of lawyers and legislative professionals representing clients' interests at all levels of local, regional, national, and cross- border governing bodies in the United States and abroad. Members of the team include a former attorney general of Virginia, a former member of the United States House of Representatives, former legislators, former Cabinet and sub-Cabinet officials, former counsel to congressional committees, and lawyers whose legal careers have focused on legislation, administrative, and regulatory matters. About Hunton & Williams Hunton & Williams LLP -- http://www.hunton.com.-- provides legal services to corporations, financial institutions, governments and individuals, as well as to a broad array of other entities. Since its establishment more than a century ago, Hunton & Williams has grown to nearly 1,000 lawyers serving clients in 100 countries from 18 offices around the world. * Seasoned Restructuring Executives Launch Eaglepoint Advisors -------------------------------------------------------------- Eaglepoint Advisors, LLC, disclosed its formation. The firm is headed by two veteran CEOs who have successfully managed a number of high-profile distressed companies and a seasoned financial restructuring expert. Collectively they have completed over 140 restructurings. Eaglepoint Advisors has partnered with Kurt Salmon Associates, a 74-year-old global management consulting firm with over 400 professionals and an unparalleled reputation in the consumer sector. "The decision to partner with Eaglepoint was an easy one," said John Karonis, president of KSA's Retail and Consumer Products Group. "We both share unparalleled experience, expertise and commitment to consumer-sector businesses, and our combination creates a very strong portfolio of services for a broad range of clients." Eaglepoint's ability to access KSA's global network of more than 400 consulting professionals provides it with sufficient scale to quickly and seamlessly turn around consumer-sector businesses, regardless of size or complexity. "Our approach builds on decades of industry and turnaround expertise, a hands-on leadership style and the innovative financial solutions we bring to every situation," said David Chamberlain, senior managing partner. "When you hire us, you get us. One of Eaglepoint's senior managing partners leads every assignment. There is no 'B' team." "Not only can we help smaller companies where there is a lack of access to the type of senior-level advice we provide, but we can also take on larger situations using KSA's deep reservoir of talent," said Peter Harris, senior managing partner. "There is not an aspect of the restructuring or bankruptcy process we have not seen," said Joe Alouf, senior managing partner. "We've run companies, served on boards of directors and chaired high- profile creditors' committees. Every company we work with benefits from this firsthand knowledge." * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- In Re Allen Martin Schwartz Maria Asuncion Bankr. D. Nev. Case No. 09-30573 Chapter 11 Petition filed October 29, 2009 See http://bankrupt.com/misc/nvb09-30573.pdf In Re UW of North Carolina, LLC dba University Wellness of North Carolina dba UW of North Carolina dbaImpact Athletics Bankr. N.J. Case No. 09-39327 Chapter 11 Petition filed October 31, 2009 See http://bankrupt.com/misc/njb09-39327.pdf In Re Albert Francis Naticchioni Bankr. E.D. Calif. Case No. 09-43932 Chapter 11 Petition filed November 2, 2009 Filed as Pro Se In Re David Pilkington Bankr. N.D. Calif. Case No. 09-70460 Chapter 11 Petition filed November 2, 2009 See http://bankrupt.com/misc/nmb09-15020.pdf Filed as Pro Se In Re N43EF, LLC Bankr. N.D. Ga. Case No. 09-89130 Chapter 11 Petition filed November 2, 2009 See http://bankrupt.com/misc/ganb09-89130.pdf In Re The Honolulu Medical Group, Inc. Bankr. Hawaii Case No. 09-02566 Chapter 11 Petition filed November 2, 2009 See http://bankrupt.com/misc/hib09-02566.pdf In Re Anthony St. Bernard Bankr. E.D. Mich. Case No. 09-73909 Chapter 11 Petition filed November 2, 2009 See http://bankrupt.com/misc/mieb09-73909.pdf In Re View Cleveland LLC dba View Ultra-Lounge and Night Club dba viewnightclub.com Bankr. N.D. Ohio Case No. 09-55035 Chapter 11 Petition filed November 2, 2009 See http://bankrupt.com/misc/ohnb09-55035.pdf In Re Laguna Diamond LLC Bankr. C.D. Calif. Case No. 09-22112 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/cacb09-22112.pdf In Re Mark Steven Slattery dba Twin Cities Manufacturing Pamela Jean Slattery dba Twin Cities Manufacturing Bankr. C.D. Calif. Case No. 09-36545 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/cacb09-36545.pdf In Re Bijendra Prasad dba M and B Minit Mart Malti Kalidin dba M and B Minit Mart Bankr. E.D. Calif. Case No. 09-93545 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/caeb09-93545.pdf In Re Sagebrush Mountain Village, LLC Bankr. Colo. Case No. 09-33476 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/cob09-33476.pdf In Re Constantin Ardelean Bankr. S.D. Fla. Case No. 09-34267 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/flsb09-34267.pdf In Re 1601 West Sunnyside Drive #106, LLC c/o Jim Balarezo Bankr. Idaho Case No. 09-41733 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/idb09-41733.pdf In Re Choops Restaurant Group, LLC Bankr. N.D. Ill. Case No. 09-41754 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/ilnb09-41754.pdf In Re Gregory C. Early, Jr. Nicole D. Early Bankr. Md. Case No. 09-31263 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/mdb09-31263.pdf In Re L & P Rosen Enterprises, LLC dba Gymboree Play & Music Bankr. Md. Case No. 09-31258 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/mdb09-31258p.pdf See http://bankrupt.com/misc/mdb09-31258c.pdf In Re Donato Joseph Dandreo, III aka Daniel Joseph Dandreo, III Bankr. Mass. Case No. 09-20642 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/mab09-20642.pdf Filed as Pro Se In Re Scenic Village Townhomes, LLC Bankr. W.D. N.Y. Case No. 09-22927 Chapter 11 Petition filed November 3, 2009 Filed as Pro Se In Re M.C. Painting Corporation Bankr. E.D. Pa. Case No. 09-18478 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/paeb09-18478.pdf In Re BBRM 141 Second Street LLC dba Pizza Joe's dba McMonagles dba PJ McMonagles dba Pizza Joe's 6 Packs Bankr. W.D. Pa. Case No. 09-28166 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/pawb09-28166.pdf In Re Tag Enterprise Bankr. W.D. Tenn. Case No. 09-32260 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/tnwb09-32260.pdf In Re Debt Relief of America, LP Bankr. N.D. Texas Case No. 09-37589 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/txnb09-37589.pdf In Re Estate of William E. Simpkins Bankr. N.D. Texas Case No. 09-47079 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/txnb09-47079.pdf In Re New Vision Value Homes Inc. Bankr. N.D. Texas Case No. 09-47087 Chapter 11 Petition filed November 3, 2009 See http://bankrupt.com/misc/txnb09-47087.pdf Filed as Pro Se In Re Real Pros, LLC fka Real Pros Inc Bankr. S.D. Texas. Case No. 09-38485 Chapter 11 Petition filed November 3, 2009 Filed as Pro Se In Re Francisco J. Santos Leticia Santos Bankr. Ariz. Case No. 09-28412 Chapter 11 Petition filed November 4, 2009 See http://bankrupt.com/misc/azb09-28412.pdf In Re Richard Coatney Bankr. C.D. Calif. Case No. 09-24682 Chapter 11 Petition filed November 4, 2009 See http://bankrupt.com/misc/cacb09-24682.pdf Filed as Pro Se In Re Celio Vicente Sonia Vicente Bankr. Mass. Case No. 09-20694 Chapter 11 Petition filed November 4, 2009 See http://bankrupt.com/misc/mab09-20694.pdf In Re Moulton Concrete, LLC Bankr. N.H. Case No. 09-14345 Chapter 11 Petition filed November 4, 2009 See http://bankrupt.com/misc/nhb09-14345.pdf In Re City Center at Des Moines, LLC Bankr. Ore. Case No. 09-39215 Chapter 11 Petition filed November 4, 2009 See http://bankrupt.com/misc/orb09-39215.pdf In Re Rajkumar Vijaya Guttha Sanghamitra Guttha Bankr. E.D. Pa. Case No. 09-18500 Chapter 11 Petition filed November 4, 2009 See http://bankrupt.com/misc/paeb09-18500.pdf In Re Jeffrey Bowen Tanner Lauralea Jeanette Tanner aka Lauralea Jeanette Dorman Bankr. M.D. Tenn. Case No. 09-12778 Chapter 11 Petition filed November 4, 2009 See http://bankrupt.com/misc/tnmb09-12778.pdf In Re Javier Estrada, Inc. Bankr. S.D. Texas Case No. 09-50324 Chapter 11 Petition filed November 4, 2009 See http://bankrupt.com/misc/txsb09-50324.pdf In Re William McClendon Zenith L. McClendon Bankr. N.D. Ala. Case No. 09-84529 Chapter 11 Petition filed November 5, 2009 See http://bankrupt.com/misc/alnb09-84529.pdf In Re Paul Hamilton Investments, Inc. Bankr. S.D. Ala. Case No. 09-15182 Chapter 11 Petition filed November 5, 2009 See http://bankrupt.com/misc/alsb09-15182.pdf In Re 2nd Ave Lighting Inc. Bankr. Ariz. Case No. 09-28529 Chapter 11 Petition filed November 5, 2009 See http://bankrupt.com/misc/azb09-28529.pdf In Re Rockmovers Inc. Bankr. D. Ariz. Case No. 09-28549 Chapter 11 Petition filed November 5, 2009 See http://bankrupt.com/misc/azb09-28549.pdf In Re Garfield Avenue Self Storage, LLC Bankr. C.D. Calif. Case No. 09-22208 Chapter 11 Petition filed November 5, 2009 See http://bankrupt.com/misc/cacb09-22208.pdf In Re Damien H. Gilliams Bankr. S.D. Fla. Case No. 09-34429 Chapter 11 Petition filed November 5, 2009 Filed as Pro Se In Re Mastercare Shutter Corporation Bankr. S.D. Fla. Case No. 09-34465 Chapter 11 Petition filed November 5, 2009 See http://bankrupt.com/misc/flsb09-34465.pdf In Re Factor Dynamics, Inc. Bankr. E.D. N.Y. Case No. 09-78482 Chapter 11 Petition filed November 5, 2009 See http://bankrupt.com/misc/nyeb09-78482.pdf In Re Lanzut Equities, LLC. Bankr. S.D. N.Y. Case No. 09-24087 Chapter 11 Petition filed November 5, 2009 Filed as Pro Se In Re Michael Jacob Waltz Bankr. M.D. Pa. Case No. 09-08671 Chapter 11 Petition filed November 5, 2009 See http://bankrupt.com/misc/pamb09-08671.pdf In Re BrookEdge Village LLC Bankr. R.I. Case No. 09-14385 Chapter 11 Petition filed November 5, 2009 See http://bankrupt.com/misc/rib09-14385.pdf In Re Global Response Technologies Bankr. Utah Case No. 09-32355 Chapter 11 Petition filed November 5, 2009 Filed as Pro Se In Re Saratoga Food Group OMNI 9, LLC Bankr. E.D. Va. Case No. 09-74660 Chapter 11 Petition filed November 5, 2009 See http://bankrupt.com/misc/vaeb09-74660.pdf In Re Saratoga Food Group Omni 10, LLC Bankr. E.D. Va. Case No. 09-51810 Chapter 11 Petition filed November 5, 2009 See http://bankrupt.com/misc/vaeb09-51810.pdf In Re Coastal Produce Inc. dba Coastal Meats & Produce Bankr. S.D. Ala. Case No. 09-15197 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/alsb09-15197.pdf In Re Nettles Wood Producers, LLC Bankr. S.D. Ala. Case No. 09-15210 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/alsb09-15210.pdf In Re 3504 De Poe LLC Bankr. D. Ariz. Case No. 09-28606 Chapter 11 Petition filed November 6, 2009 Filed as Pro Se In Re Pantaleon Grande, LLC Bankr. D. Ariz. Case No. 09-28665 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/azb09-28665.pdf In Re REVMF Entertainment, LLC dba Catch 22 Sports Grill Bankr. D. Ariz. Case No. 09-28628 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/azb09-28628.pdf In Re Akshar Inc. of North Florida dba Days Inn dba Days Inn of Jasper, Florida Bankr. M.D. Fla. Case No. 09-09438 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/flmb09-09438.pdf In Re DRSRJ Development, LLC Bankr. M.D. Fla. Case No. 09-25582 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/flmb09-25582.pdf In Re John C. Green Bankr. M.D. Fla. Case No. 09-25566 Chapter 11 Petition filed November 6, 2009 Filed as Pro Se In Re SJ Realty Group, LLC dba Tampa Truck Stop dba Citgo Auto/Truck Plaza dba 301 Truck Stop Bankr. M.D. Fla. Case No. 09-25581 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/flmb09-25581.pdf In Re Tateram Dinanath Indrani Manbahal Bankr. M.D. Fla. Case No. 09-16997 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/flmb09-16997.pdf In Re T.I.D. Services, Inc. Bankr. M.D. Fla. Case No. 09-16998 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/flmb09-16998.pdf In Re City Center Services Corporation, Inc. Bankr. D. Kan. Case No. 09-23765 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/ksb09-23765.pdf In Re Shawnee Village Associates, L.P., a Kansas limited partnership Bankr. Kan. Case No. 09-23764 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/ksb09-23764.pdf In Re 210 Restaurant Corp. Bankr. N.J. Case No. 09-40001 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/njb09-40001.pdf In Re Mauro R. Piccininni Joanne C. Piccininni Bankr. S.D.N.Y. Case No. 09-24095 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/nysb09-24095.pdf In Re Nancy Murphy-Rodgers fka Nancy Murphy Bankr. D. Nev. Case No. 09-31183 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/nvb09-31183.pdf In Re Westside Development Group, LLC Bankr. Nev. Case No. 09-31147 Chapter 11 Petition filed November 6, 2009 Filed as Pro Se In Re Kalibi Properties, LLC Bankr. E.D. N.C. Case No. 09-09729 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/nceb09-09729.pdf In Re Odin J. Beveridge Mary S. Beveridge Bankr. E.D. N.C. Case No. 09-09734 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/nceb09-09734.pdf In Re TBG Development, LLC Bankr. W.D. N.C. Case No. 09-33113 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/ncwb09-33113.pdf In Re Tarnel USA, Inc. Bankr. N.D. Case No. 09-31310 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/ndb09-31310.pdf In Re Irene Louise Stevens Bankr. M.D. Tenn. Case No. 09-12850 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/tnmb09-12850.pdf In Re Automatics, LLC Bankr. N.D. Texas Case No. 09-37634 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/txnb09-37634.pdf In Re Saratoga Food Group LLC Bankr. E.D. Va. Case No. 09-74675 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/vaeb09-74675.pdf In Re Carpal Tunnel Clinic, LLC dba Neuro-Diagnostic Clinics Bankr. W.D. Texas Case No. 09-13203 Chapter 11 Petition filed November 8, 2009 See http://bankrupt.com/misc/txwb09-13203.pdf In Re Aero Precision Manufacturing, Inc. dba Aero Metals dba Aero Consultants Bankr. D. Ariz. Case No. 09-28683 Chapter 11 Petition filed November 9, 2009 Filed as Pro Se In Re Freeport Distribution, Inc. Bankr. D. Ariz. Case No. 09-28684 Chapter 11 Petition filed November 9, 2009 See http://bankrupt.com/misc/azb09-28684.pdf In Re Freeport Logistics, Inc. Bankr. D. Ariz. Case No. 09-28680 Chapter 11 Petition filed November 9, 2009 See http://bankrupt.com/misc/azb09-28680.pdf In Re MTC Leasing, L.L.C. Bankr. D. Ariz. Case No. 09-28752 Chapter 11 Petition filed November 9, 2009 See http://bankrupt.com/misc/azb09-28752.pdf In Re Philip Alan Seddon Cynthia Louise Seddon aka Cynthia Wyckoff Bankr. C.D. Calif. Case No. 09-36972 Chapter 11 Petition filed November 8, 2009 See http://bankrupt.com/misc/cacb09-36972.pdf In Re Chandana Basu Bankr. C.D. Calif. Case No. 09-36985 Chapter 11 Petition filed November 9, 2009 See http://bankrupt.com/misc/cacb09-36985.pdf In Re Jimmy Tomicic Bankr. C.D. Calif. Case No. 09-41161 Chapter 11 Petition filed November 9, 2009 Filed as Pro Se In Re Snowtime Holdings, Inc. Bankr. C.D. Calif. Case No. 09-36997 Chapter 11 Petition filed November 9, 2009 See http://bankrupt.com/misc/cacb09-36997.pdf In Re Ershad Ali aka Ali Ershad Shabana Ershad Bankr. E.D. Calif. Case No. 09-44434 Chapter 11 Petition filed November 9, 2009 See http://bankrupt.com/misc/caeb09-44434.pdf In Re Denise J. Martin dba Florida Railroad & Lumber Co., LLC Bankr. N.D. Fla. Case No. 09-10567 Chapter 11 Petition filed November 9, 2009 Filed as Pro Se In Re R.G. Enterprises, L.L.C. Bankr. W.D. La. Case No. 09-51651 Chapter 11 Petition filed November 9, 2009 See http://bankrupt.com/misc/lawb09-51651.pdf In Re CDDM Corporation Bankr. W.D. Mich. Case No. 09-13226 Chapter 11 Petition filed November 9, 2009 See http://bankrupt.com/misc/miwb09-13226.pdf In Re Douglas M. Smith Linda L. Smith Bankr. E.D. Mo. Case No. 09-20571 Chapter 11 Petition filed November 9, 2009 See http://bankrupt.com/misc/moeb09-20571.pdf In Re Kidwell Family Co., L.P. Bankr. W.D. Mo. Case No. 09-22364 Chapter 11 Petition filed November 9, 2009 See http://bankrupt.com/misc/mowb09-22364.pdf In Re Joan Ethelyn Warren aka Brook View Estates, LLC aka Pool Toyz aka Druid Development, LLC aka Sinclair Whitworth, LLC represented by Joan Ethelyn Warren Bankr. D. N.J. Case No. 09-40100 Chapter 11 Petition filed November 9, 2009 Filed as Pro Se In Re Superior Maintenance of Westchester, Inc. dba Tri-State Maintenance Corporation Bankr. S.D.N.Y. Case No. 09-24105 Chapter 11 Petition filed November 9, 2009 See http://bankrupt.com/misc/nysb09-24105.pdf In Re Geneva Group, LLC Bankr. D. Ore. Case No. 09-39304 Chapter 11 Petition filed November 9, 2009 See http://bankrupt.com/misc/orb09-39304.pdf In Re Colonial Paving & Concrete Co. Bankr. E.D. Va. Case No. 09-19229 Chapter 11 Petition filed November 9, 2009 See http://bankrupt.com/misc/vaeb09-19229.pdf In Re SB Real Holdings, LLC Bankr. Ariz. Case No. 09-28899 Chapter 11 Petition filed November 10, 2009 See http://bankrupt.com/misc/azb09-28899.pdf In Re Nutec Enterprises, Inc. dba Prudential California Realty Bankr. C.D. Calif. Case No. 09-25046 Chapter 11 Petition filed November 10, 2009 See http://bankrupt.com/misc/cacb09-25046.pdf In Re Isaias Ayala Aguilar dba Tacos La Playita Angelica Garcia Bankr. N.D. Calif. Case No. 09-13720 Chapter 11 Petition filed November 5, 2009 See http://bankrupt.com/misc/canb09-13720.pdf In Re Edward Emanuel Parker Bankr. M.D. Fla. Case No. 09-09515 Chapter 11 Petition filed November 10, 2009 See http://bankrupt.com/misc/flmb09-09515.pdf In Re Summit Charter Schools, Inc. Bankr. M.D. Fla. Case No. 09-17170 Chapter 11 Petition filed November 10, 2009 See http://bankrupt.com/misc/flmb09-17170.pdf In Re Rothstein Rosenfeldt Adler, PA Bankr. S.D. Fla. Case No. 09-34791 Chapter 11 Petition filed November 10, 2009 Filed as Pro Se In Re SM Success, Inc. dba SM Chevron Food Mart Bankr. N.D. Ga. Case No. 09-24789 Chapter 11 Petition filed November 6, 2009 See http://bankrupt.com/misc/ganb09-24789.pdf In Re AAA Digital Imaging, Inc. Bankr. N.D. Ga. Case No. 09-89973 Chapter 11 Petition filed November 10, 2009 See http://bankrupt.com/misc/ganb09-89973.pdf In Re MostChoice.com, Inc. Bankr. N.D. Ga. Case No. 09-90005 Chapter 11 Petition filed November 10, 2009 See http://bankrupt.com/misc/ganb09-90005.pdf In Re TDF Properties Bankr. Nev. Case No. 09-31291 Chapter 11 Petition filed November 10, 2009 See http://bankrupt.com/misc/nvb09-31291.pdf In Re All Bright Laundromat Inc. Bankr. E.D. N.Y. Case No. 09-49949 Chapter 11 Petition filed November 10, 2009 See http://bankrupt.com/misc/nyeb09-49949.pdf In Re Shiptrade, Inc. Bankr. E.D. N.Y. Case No. 09-78584 Chapter 11 Petition filed November 10, 2009 See http://bankrupt.com/misc/nyeb09-78584.pdf In Re Patrick Hackett Hardware Company dba Wisebuys Stores dba Hacketts Bankr. N.D. N.Y. Case No. 09-63135 Chapter 11 Petition filed November 10, 2009 See http://bankrupt.com/misc/nynb09-63135.pdf In Re AAA Convenience, Inc. dba Uni-Mart Store #4274 Bankr. M.D. Pa. Case No. 09-08767 Chapter 11 Petition filed November 10, 2009 See http://bankrupt.com/misc/pamb09-08767.pdf In Re W.L.L. Partners Bankr. W.D. Tenn. Case No. 09-14657 Chapter 11 Petition filed November 10, 2009 See http://bankrupt.com/misc/tnwb09-14657.pdf In Re Bossier Country LP Bankr. W.D. Texas Case No. 09-61303 Chapter 11 Petition filed November 5, 2009 See http://bankrupt.com/misc/txwb09-61303.pdf In Re West Daniels Land Association, Inc. Bankr. Utah Case No. 09-32502 Chapter 11 Petition filed November 10, 2009 See http://bankrupt.com/misc/utb09-32502.pdf In Re Tire Depot, LLC Bankr. N.J. Case No. 09-40213 [40205] Chapter 11 Petition filed November 10, 2009 See http://bankrupt.com/misc/njb09-40213.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission **