/raid1/www/Hosts/bankrupt/TCR_Public/091204.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, December 4, 2009, Vol. 13, No. 335
Headlines
101/102 HOLDINGS: Sec. 341 Meeting Set for Dec. 29
ADVANTA CORPORATION: Faces Delisting from Nasdaq Market
ALLENTOWN WAY: Case Summary & 5 Largest Unsecured Creditors
AMBAC ASSURANCE: S&P Raises Counterparty Credit Rating to 'CC'
AMEET RANA: Case Summary & 20 Largest Unsecured Creditors
AMR CORP: American Trumps Delta Bid; Dangles $1.1 Billion to JAL
AMR CORP: Eagle Picks Up Options to Purchase 22 Bombardier Jets
ARCH ALUMINUM: Asks Court to Extend Schedules Filing Until Dec. 30
ARCH ALUMINUM: Taps Genovese Joblove as General Bankr. Counsel
ARCH ALUMINUM: Schnader to Negotiate Sale of All Assets
ASARCO LLC: State and Federal Govt. to Get $42MM for Remediation
ASARCO LLC: Parent Wants Escrowed Assets Released
ASARCO LLC: Sues East Katella & Noga for Contract Breach
BANK OF AMERICA: To Repay Entire $45 Billion Obtained From TARP
BOSTON BLACKIE'S: Tough Economy Prompts Chapter 11 Filing
BOSTON SCIENTIFIC: Fitch Puts 'BB+' Rating With Positive Outlook
CALIFORNIA COASTAL: ICW Objects to Use Of Cash Collateral
CANOPY FINANCIAL: SEC Obtains Asset Freeze Against Co-Founder
CAPMARK FIN'L: Can Pay $2.3MM for Prepetition Sales & Use Taxes
CAPMARK FIN'L: Has Final Approval to Protect NOL Carryforwards
CAPMARK FIN'L: Rejects Dunleavy & Creamer Consulting Pacts
CHARTER COMMS: Class Plaintiffs Want Plan Order Reconsidered
CHARTER COMMS: Further Amends Restructuring Pact With CCHI/CCHII
CHARTER COMMS: New Preferred Stock Treatment Clarified
CHARTER COMMS: Stipulation for Payment of Kramer Levin Fees
CHESTNUT FRANKLIN: Voluntary Chapter 11 Case Summary
CHRYSLER LLC: New Chrysler to Idle 5 Plants for 3+ Weeks
CHUGH SHOPPING: Has Until December 7 to File Schedules & Statement
CITIGROUP INC: Has $1.875BB Bond Offer to Meet Abu Dhabi Deal
COHARIE HOG FARM: Has Until December 7 to File Schedules
COLONIAL BANCGROUP: Dropped From Securities Litigation
COMMUNITY HEALTH: Fitch Puts 'B' Rating With Stable Outlook
CONEXANT SYSTEMS: Swaps $6.8 Million in Bond Debt for Equity
CONTINENTAL AIRLINES: Reports November Operational Performance
COOPER-STANDARD: Claims Recovery Buys $33,200 in Claims
COOPER-STANDARD: PBGC to File Consolidated Proof of Claim
COOPER-STANDARD: U.S. Bank Serves as Trustee for $350MM Sub. Notes
CORRECT BUILDING: Files for Bankruptcy to Sell Assets to BMC
CRISTINA ROGGERO: Case Summary & 20 Largest Unsecured Creditors
DAVITA, INC: Fitch Puts 'BB-' Rating With Stable Outlook
DELPHI CORP: Retirees Say PBGC Forced to Accept Unfair Deal
DELTA AIR: American Dangles $1.1 Billion Tie-up Bid to JAL
DENNY HECKER: Court Orders Monthly Payments to Estranged Wife
DUNE ENERGY: Begins Talks With Noteholders; Misses Dec. 1 Interest
ENERGY CONVERSION: To Cut 20% of Jobs Under Restructuring Plan
ERICKSON RETIREMENT: 13 Units' Schedules & Statements
ERICKSON RETIREMENT: Erickson Group LLC's Schedules & Statement
ERICKSON RETIREMENT: Warminster Campus's Schedules & Statement
ESSAR STEEL: Moody's Confirms Corporate Family Rating at 'Caa1'
ESTATES OF LAKE: Case Summary & 18 Largest Unsecured Creditors
EVANS INDUSTRIES: Law Firm's Conflict of Interest Issue Resolved
FAIRVUE CLUB: Files for Bankruptcy to Stave Off Foreclosure
FERNA PINEDA: Voluntary Chapter 11 Case Summary
FINANCIAL GUARANTY: Triggers Payouts on $1-Bil. in Credit Swaps
FLEETWOOD ENTERPRISES: Trial Postponed to Pave Way for Settlement
FONTAINEBLEAU LV: Committee Has Deal With Term Lenders on Fees
FONTAINEBLEAU LV: Moelis Engagement Letter Revised
FONTAINEBLEAU LV: West Publishing Allowed to Cancel Contract
FORD MOTOR: Plans to Develop Future Models Without Mazda
FORD MOTOR: Former Execs' Group Seeks to Trump Geely, Revises Bid
FORUM HEALTH: Youngstown Mayor Taps Help from Federal Government
FRANK TALMO: Case Summary & 20 Largest Unsecured Creditors
FREEDOM COMMS: Committee Gets Court Nod to Seek Alternative Plan
GENERAL GROWTH: Brookfield, Simon Amass Bank Debt, Bonds
GENERAL GROWTH: Gets Nod to Execute Pact With Hawaiian Dredging
GENERAL GROWTH: Terms of Proposed Chapter 11 Plan
GENERAL GROWTH: Wants Lease Decision Deadline Extended
GENERAL MOTORS: Has SAIC Joint Venture in India
GENERAL MOTORS: Merbanco Out, Spyker In as Saab Suitor
GENERAL MOTORS: Ed Whitacre May End Up as Permanent CEO
GLOBAL ENERGY: Wants 45-Day Extension of Schedules Filing
GLOBAL ENERGY: Taps Sullivan & Worcester as Bankruptcy Counsel
GLOBAL ENERGY: Wants to Employ Archer & Greiner as Local Counsel
GRAHAM PACKAGING: Fitch Assigns 'CC/RR6' Rating on $250 Mil. Notes
GSI GROUP: Supports Request for an Equity Committee
HARDWOOD PRODUCTS: To Liquidate Asset to Pay Wells Fargo Debt
HARRAH'S ENTERTAINMENT: Eyes Purchase of Planet Hollywood Resort
HCA, INC.: Fitch Puts 'B' Rating With Stable Outlook
HEARTHSTONE RANCH: Meeting of Creditors Scheduled for Today
HOLDER GROUP: Hopes to Keep Elko Three Properties as Auction Looms
HOLLEY PERFORMANCE: Court Sets February 1 as Claims Bar Date
INTERSTATE BAKERIES: Bakeries Responsible for $60M in Benefits
JAMES MCKAY ANDREWS: Case Summary & 20 Largest Unsecured Creditors
KEDZIE PROJECT: Case Summary & 20 Largest Unsecured Creditors
KINGSWAY FINANCIAL: S&P Cuts Counterparty Credit Rating to 'CCC-'
KMC INTERNATIONAL: Case Summary & 10 Largest Unsecured Creditors
KROPP EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors
LANDAMERICA ONESTOP: Meeting of Creditors Scheduled for January 8
LEVEL 3 COMMUNICATIONS: $1 Million in Debt to Mature by Q4 2009
LANGSELG LLC: Voluntary Chapter 11 Case Summary
LEON KUBIS III: Voluntary Chapter 11 Case Summary
LIFEMASTERS SUPPORTED: Wants to Auction Substantially All Assets
LYONDELL CHEMICAL: Baldwins Sue for Contract Breach
LYONDELL CHEMICAL: Deutsche Bank Dropped From Committee LBO Suit
LYONDELL CHEMICAL: Trepper Named Mediator for Creditors' Dispute
LYONDELL CHEMICAL: Updates Investors on September Results
LYONDELL CHEMICAL: USW Sues Houston Refining to Ask Arbitration
MARSHALL INVESTMENTS: Case Summary & 14 Largest Unsec. Creditors
MICHAEL EDWARD RALKE: Voluntary Chapter 11 Case Summary
MIKE NEMEE: Calaveras County Raises Accuracy of Status Report
MOMENTIVE PERFORMANCE: Moody's Puts 'B2' Rating on $500 Mil. Notes
MOMENTIVE PERFORMANCE: S&P Assigns 'CCC' Senior Secured Rating
MSREF V US: Seeks to Restructure $1-Bil. Mortgage on 5 Resorts
MT BALDY: Files for Bankruptcy to Avoid Paying 10% Delinquent Fee
NAHGBWS LLC: Case Summary & 20 Largest Unsecured Creditors
NORTEL NETWORKS: Courts OK for Ethernet Biz. Sale to Ciena
NORTEL NETWORKS: Has $505 Million Net Loss for Third Quarter
NORTEL NETWORKS: Proposes GSM Sale Termination Fee Agreement
NORTEL NETWORKS: Proposes to Assign Technology Park Lease
NORTEL NETWORKS: Seeks Nod for AsiaPac Restructuring Agreement
NOVA CHEMICALS: S&P Raises Corporate Credit Rating to 'B+'
NPM REALTY LLC: Case Summary & 3 Largest Unsecured Creditors
NTK HOLDINGS: Gets Nod to Hire Ordinary Course Professionals
NTK HOLDINGS: Noteholders Oppose Chapter 11 Plan Delay
NTK HOLDINGS: Ore Hill Objects to Plan Confirmation
NTK HOLDINGS: Ore Hill Wants Plan Status Conference Today
NUTRACEA INC: Rejects HQ Lease, Moves to Less Expensive Offices
NY OFF-TRACK BETTING: Files for Chapter 9 Bankruptcy Protection
OLD TIME POTTERY: To Hold Liquidation Sale in 8 Store Locations
PAULA ANNETTE BONNEY: Voluntary Chapter 11 Case Summary
PECANS OF QUEEN: Court Extends Schedules Filing Until December 7
PENN TRAFFIC: Union Named to Creditors Committee in Bankruptcy
PETTERS WORLDWIDE: Tom Petters Faces Life Time in Prison
PILGRIM'S PRIDE: Gets Nod to Scrap 100 Grower Contracts
PILGRIM'S PRIDE: Gets Nod for Deal With 188 Independent Growers
PILGRIM'S PRIDE: Proposes to Pay Officers' Costs in RICO Suit
POLLUTION CONTROL: Moody's Cuts Ratings on $35.2 Mil. Bonds to Ba2
READER'S DIGEST: Committee Proposes S. Goldfarb as Expert
READER'S DIGEST: Court OKs Plan Outline; Conf. Hearing on Jan. 15
RICHARD HINDIN: Wants to Hire Cooter Mangold as Bankruptcy Counsel
ROSALIE TREIBER: Case Summary & 5 Largest Unsecured Creditors
ROTHSTEIN ROSENFELDT: Co-Founder Surrenders Assets
ROUND ROCK LIMITED: Voluntary Chapter 11 Case Summary
SARATOGA RESOURCES: Wins Approval of Reorganization Plan
SEEDS & BYPRODUCTS: Case Summary & 2 Largest Unsecured Creditors
SEEDS OF CHRIST: Case Summary & 20 Largest Unsecured Creditors
SEMGROUP LP: Final Fee Applications Due January 30
SEMGROUP LP: Samson Co Lawsuits Transferred to Bankruptcy Court
SEMGROUP LP: Seeks Nod for Settlement With Noble & Halron
SHALAN ENTERPRISES: Taps Jeffer Mangels as General Counsel
SIX FLAGS: Noteholders Say Avenue Capital Plan Acts as Poison Pill
SOUTH TEXAS OIL: Faces Delisting from Nasdaq Market
TARRAGON CORP: Solicitation Period Extended Until December 10
TASC INC: Moody's Assigns 'B1' Initial Corporate Family Rating
TEAM TOLEDO HOCKEY: Case Summary & 11 Largest Unsecured Creditors
TECHNIPOWER SYSTEMS: Case Summary & 20 Largest Unsecured Creditors
TEXAS CLASSIC: U.S. Trustee Sets Meeting of Creditors for Dec. 10
TRIBUNE CO: Names Michaels to Replace Zell as Chief Executive
TRIBUNE CO: Fee Examiner OKs $3.88MM for Dec.-Feb. Sidley Work
TRIBUNE CO: Longacre, ASM Capital Buy Claims
TRIUMPH HEALTHCARE: S&P Withdraws 'BB' Corporate Credit Rating
UAL CORP: Adversary Proceedings vs. UMB, et al., Cases
UAL CORP: Court Denies EEOC's Motion for Leave to File Late Claim
UAL CORP: Resolves GSA Objection to Final Decree Closing Cases
UNITED RENTALS: Asks 4th Circ. to Nix Transfer Ruling
VENTANA HILLS: Can Hire Robbins Salomon as Bankruptcy Counsel
VERENIUM CORP: CVI Has Not Accepted 2008 Notes Amendment
VERIFIED IDENTITY: Files to Chapter 11 to Sell to Unnamed Buyer
WORLDSPACE INC: Sirius XM Plans to Become Partner
* Bair Pitches Strict Rules, New Rewards for Asset-Backed Market
* Gov't to Outline Plan to End TARP in the Coming Weeks
* Fitch Says Economic Pressure Supports Healthcare's Neg. Outlook
* Loan Deterioration Ratio Climbs Above 3:1, Report Shows
* Sterne Kessler Directors Selected as 'Washington's Top Lawyers'
* BOOK REVIEW: Vertical Integration, Outsourcing, and Corporate
Strategy
*********
101/102 HOLDINGS: Sec. 341 Meeting Set for Dec. 29
--------------------------------------------------
The U.S. Trustee for Region 14 will convene a meeting of 101/202
Holdings, L.L.C.'s creditors on December 29, 2009, at 2:00 p.m. at
US Trustee Meeting Room, 230 N. First Avenue, Suite 102, Phoenix,
AZ.
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.
Tempe, Arizona-based 101/202 Holdings, L.L.C., filed for Chapter
11 bankruptcy protection on November 27, 2009 (Bankr. D. Ariz.
Case No. 09-30627). Jerry L. Cochran, Esq., at Cochran Law Firm,
Pc, assists the Company in its restructuring effort. The Company
listed $10,000,001 to $50,000,000 in assets and $1,000,001 to
$10,000,000 in liabilities.
ADVANTA CORPORATION: Faces Delisting from Nasdaq Market
-------------------------------------------------------
The Associated Press reports that the Nasdaq Stock Market said it
will delist the stocks of South Texas Oil Co., Advanta Corp.,
Vuance Ltd., and Natural Health Trends Corp. Necessary paperwork
will be filed with the Securities and Exchange Commission to
complete the delisting, which will take effect 10 days later, the
AP says. AP notes the stocks of the four companies have been
suspended already.
About Advanta Corp.
Advanta Corp. -- http://www.advanta.com/-- has had a 59-year
history of being a leading innovator in the financial services
industry and of providing great value to its stakeholders,
including its senior retail note holders and shareholders, prior
to the recent reversals. It has also been a major civic and
charitable force in the communities in which it is based,
particularly in the Greater Philadelphia area.
The Federal Deposit Insurance Corporation placed significant
restrictions on the activities of Advanta Corp.'s Advanta Bank
Corp. following financial woes by the banking unit.
As of Sept. 30, 2009, the Company had $2,497,897,000 in assets
against total liabilities of $2,465,936,000 but the figures
included those of the banking units.
On November 8, 2009, Advanta Corp. filed for Chapter 11 (Bankr. D.
Del. Case No. 09-13931). Attorneys at Weil, Gotshal & Manges LLP,
and Richards, Layton & Finger, P.A., serve as bankruptcy counsel.
Alvarez & Marsal serves as financial advisor. The Garden City
Group, Inc., serves as claims agent. The filing did not include
Advanta Bank. The petition says that Advanta Corp.'s assets
totalled $363,000,000 while debts totalled $331,000,000 as of
Sept. 30, 2009.
About South Texas Oil Company
San Antonio, Texas-based South Texas Oil Company is an independent
energy company engaged in the acquisition, production, exploration
and development of crude oil and natural gas. Its core operating
areas include Texas, Louisiana and the Gulf Coast. Longview Fund
LP owns 42.5 percent of the South Texas stock. Doub Oil & Gas Co.
LLC is a 14.5 percent shareholder.
South Texas Oil and its wholly owned subsidiaries Southern Texas
Oil Company, STO Drilling Company, STO Operating Company and its
wholly owned subsidiary STO Properties LLC has filed for Chapter
11 protection on Oct. 29, 2009 (Bankr. W.D. Tex. Case No. 09
54233).
Ronald Hornberger of Plunkeet & Gibson represents the Debtors in
their restructuring effort.
In the Chapter 11 case, the companies listed assets of
$49.1 million against debt totaling $27.9 million, including
$17.3 million in secured claims.
ALLENTOWN WAY: Case Summary & 5 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Allentown Way, LLC
5827 Allentown Way
Camp Springs, MD 20748
Bankruptcy Case No.: 09-33532
Chapter 11 Petition Date: December 2, 2009
Court: United States Bankruptcy Court
District of Maryland (Greenbelt)
Debtor's Counsel: James Greenan, Esq.
6411 Ivy Lane, Suite 200
Greenbelt, MD 20770
Tel: (301) 441-2420
Email: jgreenan@mhlawyers.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
A full-text copy of the Debtor's petition, including a list of its
5 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/mdb09-33532.pdf
The petition was signed by Stephen J. Troese, managing LLC member
of the Company.
AMBAC ASSURANCE: S&P Raises Counterparty Credit Rating to 'CC'
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its
counterparty credit and financial enhancement ratings on Ambac
Assurance Corp. to 'CC' from 'SD' (selective default). S&P also
affirmed its 'CC' financial strength rating on Ambac and removed
the rating from CreditWatch, where it was placed with positive
implications on Nov. 18, 2009. The outlook on the ratings is
developing.
This action follows Ambac's commutation of four collateralized
debt obligation of asset-backed securities exposures from multiple
counterparties. The transactions, which have an aggregate of
approximately $5 billion of notional outstanding, were settled for
cash payments of approximately $520 million.
"After the commutations and settlement payment, Ambac's financial
position improved modestly," said Standard & Poor's credit analyst
David Veno.
The analysis of Ambac's financial position includes S&P's
expectation that it will receive approximately $440 million in tax
refunds as a result of the recently passed "Worker, Homeownership
and Business Assistance Act of 2009."
The rating action also takes into account that due to the
deterioration of Ambac's financial condition, the Wisconsin OCI
has increased its monitoring of Ambac focusing on maximizing and
preserving the company's claims-paying ability. The Wisconsin OCI
has stated in its Nov. 18, 2009, media advisory that it and its
advisors are working with Ambac to evaluate strategic
alternatives. It is important to note that the Wisconsin OCI has
not taken control of Ambac.
The developing outlook reflects S&P's view that Ambac's financial
position has improved following the commutation of three CDO of
ABS transactions, but that the potential of regulatory
intervention remains high. Ambac could experience further
deterioration in its insured portfolio, which could require the
company to strengthen its reserves to account for higher projected
claims. The additional reserves may hurt operating results, which
S&P believes would strain surplus.
If Ambac experiences additional adverse loss development in its
insured portfolio that weakens its surplus position to a point
where regulatory intervention occurs, S&P would lower the rating.
If there are additional commutations and improvement in the
quality of the insured portfolio, S&P could raise the rating to
'CCC'.
AMEET RANA: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Joint Debtors: Ameet Singh Rana
Lisa Marie Rana
723 Quartz Crystal Place
Cary, NC 27519
Bankruptcy Case No.: 09-10474
Chapter 11 Petition Date: December 2, 2009
Court: United States Bankruptcy Court
Eastern District of North Carolina (Wilson)
Judge: Randy D. Doub
Debtor's Counsel: Danny Bradford, Esq.
Paul D. Bradford, PLLC
dba Bradford Law Offices
6512 Six Forks Road, Suite 304
Raleigh, NC 27615
Tel: (919) 758-8879
Fax: (919) 803-0683
Email: dbradford@bradford-law.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 $2,248,400,
and total debts of $3,021,671.
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/nceb09-10474.pdf
The petition was signed by the Joint Debtors.
AMR CORP: American Trumps Delta Bid; Dangles $1.1 Billion to JAL
----------------------------------------------------------------
Mariko Sanchanta at The Wall Street Journal reports AMR
Corporation's American Airlines and Delta Air Lines Corp. held
press conferences Thursday in their attempt to tie up with Japan
Airlines.
According to the report, American indicated it was prepared to
invest $1.1 billion in JAL along with private-equity firm TPG and
its Oneworld alliance members. Delta and its SkyTeam alliance
partners are dangling a $1.02 billion investment package for JAL.
The report says American even recruited and flew in Norman Mineta,
the former secretary of transportation in Japan. The report also
relates Mr. Mineta said Wednesday: "I believe that a JAL-Delta
alliance would harm competition on every level."
According to the report, Delta President Ed Bastian countered:
"The [Japanese] government is seeking a Japanese or an airline
solution, not a third-party buyout." JAL on Wednesday said it was
in talks with both U.S. airlines but declined to comment further.
"For all the noise Delta and American are making, a definitive
solution regarding JAL's restructuring is still months away," Mr.
Sanchanta says. Mr. Sanchanta relates The Enterprise Turnaround
Initiative Corp., a Japanese government-backed entity that has
access to up to 1.6 trillion yen ($18.31 billion) in state-
guaranteed funds, will decide by the end of January whether it
wants to lead JAL's restructuring. Mr. Sanchanta explains central
to ETIC's decision is whether JAL will be able to scale back its
pension payouts, which total some 330 billion yen.
Mr. Sanchanta also relates JAL CEO Haruka Nishimatsu is set to
embark on a roadshow through Japan next week, to convince retirees
to accept a 30% cut in their benefits. If these overtures are
unsuccessful, the government is proposing a law that would let JAL
scale back its pension obligations, Mr. Sanchanta says.
"The mood at JAL's headquarters in Tokyo is decidedly grim: lights
have been dimmed to save costs, and its once-bustling 14th floor,
full of meeting rooms, is hushed and empty. JAL canceled its
famous New Year's party for the press this year, and employees
have been asked to cut back on wining and dining and other
expenses. Seventy members of JAL management are forgoing their
December pay," Mr. Sanchanta 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.
AMR CORP: Eagle Picks Up Options to Purchase 22 Bombardier Jets
---------------------------------------------------------------
AMR Eagle Holding Corporation on December 2, 2009, entered into an
agreement to exercise options to purchase 22 CRJ 700 series jet
aircraft from Bombardier Inc. (as represented by Bombardier
Aerospace, Commercial Aircraft) under the terms of the January 31,
1998 purchase agreement between AMR Eagle Holding Corporation and
Bombardier Aerospace, Commercial Aircraft. The intent to exercise
these options was previously announced by AMR Corporation on
September 16, 2009.
American Eagle Airlines, Inc. has also entered into agreements
with Export Development Canada to provide ASU compliant financing,
and with another party to complement EDC's financing support. The
total financing package equals 100 percent of the purchase price
of each of the option aircraft. The obligations of American Eagle
Airlines under those financing agreements will be guaranteed by
AMR Corporation. American Eagle Airlines anticipates taking
delivery of two CRJ-700 series option aircraft per month beginning
in June 2010 and continuing through April 2011.
AMR Presenting At Investor Conference
Beverly Goulet, Vice President of Corporate Development and
Treasury of American Airlines, Inc., a subsidiary of AMR
Corporation, will speak at the Next Generation Equity Research
U.S. Airline Conference to be held in New York City on Wednesday,
December 9, 2009, at 11:25 am ET. Ms. Goulet's presentation will
focus on AMR's recent financial performance and the outlook for
the future.
A webcast of Ms. Goulet's remarks along with accompanying slides
will be made available via the investor relations section of the
American Airlines Web site at http://www.aa.com/investorrelations
Additionally, a replay of the speech will remain available for at
least seven days following the event.
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.
ARCH ALUMINUM: Asks Court to Extend Schedules Filing Until Dec. 30
------------------------------------------------------------------
Arch Aluminum & Glass Co., Inc., et al., have asked the U.S.
Bankruptcy Court for the Southern District of Florida to extend
the filing of statement of financial affairs and schedules of
assets and liabilities by an additional 20 days until
December 30, 2009.
The Debtors say that it appears unlikely that they will be able to
complete their Statements and Schedules properly and accurately by
the current 15-day deadline, as their key management has been
entirely occupied in pursuing strategic alternatives, negotiating
agreements to assist in the Debtors' reorganization and preparing
information and documents necessary to prepare the Debtors'
Chapter 11 filings.
Tamarac, Florida-based Arch Aluminum & Glass Co., Inc. -- fka
Trident Consolidated Industries, Arch, Inc., and Arch Tulsa
Acquisition Co.; and dba Arch Mirror North, Arch Mirror South,
Architectural Safety Glass, Arch Mirror West, Arch Tempered Glass
Products, and Arch Deco Glass -- was founded in 1978 by Robert
Silverstein, as a small South Florida glass and metal distributor
with a single truck. During the 1980's the Company opened
fabrication facilities and additional distribution facilities in
Florida and the Northeast. The Company provides a comprehensive
line of products and services to more than 5,000 customers from 28
office, manufacturing and distribution facilities located in 19
states nationwide.
The Company filed for Chapter 11 bankruptcy protection on November
25, 2009 (Bankr. S.D. Fla. Case No. 09-36232). The Company listed
$100,000,001 to $500,000,000 in assets and $100,000,001 to
$500,000,000 in liabilities.
The Company's affiliates -- Arch Aluminum L.C.; AWP, LLC, dba
Yale-Ogron; Arch Aluminum and Glass International Inc.; and AAG
Holdings, Inc. -- also filed separate Chapter 11 petition.
Paul J. Battista, Esq., at Genovese Jblove & Battista, P.A.,
assists the Debtors in their restructuring efforts. Schnader
Harrison Segal & Lewis LLP is the Debtors' special counsel.
Vincen J. Colistra at Phoenix Management Services is the Debtors'
restructuring services provider. Michael Dillahunt and Piper
Jaffrey & Co. is the Debtors' investment banker.
ARCH ALUMINUM: Taps Genovese Joblove as General Bankr. Counsel
--------------------------------------------------------------
Arch Aluminum & Glass Co., Inc., et al., have sought approval from
the U.S. Bankruptcy Court for the Southern District of Florida to
employ Paul J. Battista and the law firm of Genovese Joblove &
Battista, P.A., nunc pro tunc to the Petition Date.
Genovese Joblove will, among other things:
(a) attend meetings and negotiate with representatives of
creditors and other parties-in-interest and advise and
consult on the conduct of the case, including all of the
legal and administrative requirements of operating in
Chapter 11;
(b) advise the Debtors in connection with any contemplated
sales of assets or business combinations;
(c) advise the Debtors in connection with postpetition
financing and cash collateral arrangements, provide
advice and counsel with respect to prepetition financing
arrangements, and provide advice to the Debtors in
connection with the emergence financing and capital
structure, and negotiate and draft documents; and
(d) advise the Debtors on matters relating to the evaluation
of the assumption, rejection or assignment of unexpired
leases and executory contracts.
Mr. Battista, an attorney and shareholder of Genovese Joblove,
says that the hourly rates of the firm's personnel are:
Paul J. Battista $525
Heather L. Harmon $330
Michael L. Schuster $225
Legal Assistants $75-$160
Mr. Battista assures the Court that Genovese Joblove is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Tamarac, Florida-based Arch Aluminum & Glass Co., Inc. -- fka
Trident Consolidated Industries, Arch, Inc., and Arch Tulsa
Acquisition Co.; and dba Arch Mirror North, Arch Mirror South,
Architectural Safety Glass, Arch Mirror West, Arch Tempered Glass
Products, and Arch Deco Glass -- was founded in 1978 by Robert
Silverstein, as a small South Florida glass and metal distributor
with a single truck. During the 1980's the Company opened
fabrication facilities and additional distribution facilities in
Florida and the Northeast. The Company provides a comprehensive
line of products and services to more than 5,000 customers from 28
office, manufacturing and distribution facilities located in 19
states nationwide.
The Company filed for Chapter 11 bankruptcy protection on
November 25, 2009 (Bankr. S.D. Fla. Case No. 09-36232). The
Company listed $100,000,001 to $500,000,000 in assets and
$100,000,001 to $500,000,000 in liabilities.
The Company's affiliates -- Arch Aluminum L.C.; AWP, LLC, dba
Yale-Ogron; Arch Aluminum and Glass International Inc.; and AAG
Holdings, Inc. -- also filed separate Chapter 11 petition.
ARCH ALUMINUM: Schnader to Negotiate Sale of All Assets
-------------------------------------------------------
Arch Aluminum & Glass Co., Inc., et al., have sought authorization
from the U.S. Bankruptcy Court for the District of Florida to
employ Joseph J. Devine and the law firm of Schnader Harrison
Segal & Lewis LLP as special corporate counsel nunc pro tunc to
the Petition Date.
Schnader Harrison will continue assisting the Debtor in
negotiating the terms and conditions of a comprehensive asset
purchase agreement in connection with proposed sale of all or
substantially all of the Debtors' assets to a "stalking horse"
buyer, subject to higher and better offers.
The hourly rates of Schnader Harrison's personnel are:
Joseph Devine $470
Kevin Blanton $365
Christine Cushman $285
Joyce Sun $185
Joseph Devine, an attorney and partner of Schnader Harrison,
assures the Court that the firm is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code.
Tamarac, Florida-based Arch Aluminum & Glass Co., Inc. -- fka
Trident Consolidated Industries, Arch, Inc., and Arch Tulsa
Acquisition Co.; and dba Arch Mirror North, Arch Mirror South,
Architectural Safety Glass, Arch Mirror West, Arch Tempered Glass
Products, and Arch Deco Glass -- was founded in 1978 by Robert
Silverstein, as a small South Florida glass and metal distributor
with a single truck. During the 1980's the Company opened
fabrication facilities and additional distribution facilities in
Florida and the Northeast. The Company provides a comprehensive
line of products and services to more than 5,000 customers from 28
office, manufacturing and distribution facilities located in 19
states nationwide.
The Company filed for Chapter 11 bankruptcy protection on
November 25, 2009 (Bankr. S.D. Fla. Case No. 09-36232). The
Company listed $100,000,001 to $500,000,000 in assets and
$100,000,001 to $500,000,000 in liabilities.
The Company's affiliates -- Arch Aluminum L.C.; AWP, LLC, dba
Yale-Ogron; Arch Aluminum and Glass International Inc.; and AAG
Holdings, Inc. -- also filed separate Chapter 11 petition.
ASARCO LLC: State and Federal Govt. to Get $42MM for Remediation
----------------------------------------------------------------
Colorado Attorney General John Suthers announced that the state
and federal government will receive more than $42 million as part
of a Chapter 11 reorganization plan a judge from the U.S. District
Court for the Southern District of Texas has approved for Asarco,
Inc. and certain related companies. The order, approved by Judge
Andrew S. Hanen, described the Asarco case as "one of the most
successful bankruptcy proceedings in recent history" and "perhaps
the largest and most complex case in bankruptcy history with
respect to claims for environmental liability." The $22 million
the state and federal government will recover along with
$20 million earmarked for a custodial trust will be used for
environmental remediation at sites throughout the state.
The reorganization plan, filed by Asarco's parent company,
Americas Mining Corporation, provides more than $1.7 billion in
funds for environmental remediation of more than 50 sites in 19
states currently and formerly owned or operated by Asarco.
"Asarco's reorganization is exceptional in that Colorado and the
federal government will recover every dollar they claimed for
environmental remediation -- plus interest," Suthers said. "These
funds will go a long way to improving and remediating sites Asarco
operated at throughout the state."
Asarco filed its bankruptcy case in the Southern District of Texas
in 2005. Sixteen states and the federal government participated
in litigation and settlement discussions with Asarco throughout
2006 and 2007, culminating in a series of settlement agreements
approved by Judge Richard S. Schmidt, of the U.S. Bankruptcy Court
for the Southern District of Texas, on June 5, 2009. The
environmental settlement fixed the amounts of environmental
claims, but funding to satisfy the claims awaited confirmation of
the company's Chapter 11 reorganization. On Aug. 31, 2009, Judge
Schmidt recommended that the Americas Mining Corporation plan be
confirmed over a competing plan filed by Asarco itself. That
plan, confirmed by Judge Hanen, provides for the full payment of
environmental claims. Colorado is expected to receive its share
of the $1.7 billion on or about Dec. 9.
The settlements includes the funding of an environmental custodial
trust, which will undertake environmental remediation of an 89-
acre site in Denver, Colorado, in the vicinity of 495 E. 51st St.,
formerly used for smelting and refining and former mining sites
near Silverton. The state will devote $16 million to the
remediation of the Denver site and $4 million to the remediation
of the Silverton site.
The state and the federal government will devote the balance of
the funds they receive under the reorganization to remediation at
a series of other sites, including California Gulch Superfund site
located in and around Leadville; a 4.5 square-mile site near
Vasquez Boulevard and Interstate-70; the Terrible Mine site in
Custer County; a site in the Bonanza mining district in Saguache
County; and, the Summitville Mine Superfund Site.
Assistant Attorneys General Richard Lotz and James Holden
represented Colorado in the Asarco bankruptcy proceedings.
Former Senior Assistant Attorney General Vicky Peters also
contributed to the case.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Paul M.
Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq.,
at Reed Smith LLP give legal advice to the Official Committee of
Unsecured Creditors and David J. Beckman at FTI Consulting, Inc.,
gives financial advisory services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
Judge Andrew S. Hanen of the U.S. District Court for the Southern
District of Texas confirmed on November 13, the Plan of
Reorganization submitted by Asarco Incorporated and Americas
Mining Corporation for ASARCO LLC, Southern Peru Holdings, LLC,
AR Sacaton, LLC, and ASARCO Master, Inc.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: Parent Wants Escrowed Assets Released
-------------------------------------------------
Americas Mining Corporation asks the Bankruptcy Court to modify
the June 2, 2009 Memorandum Opinion and Order to eliminate all
registration, bonding and security requirements, to allow the
release of the escrowed assets securing the Court's April 15,
2009 Final Judgment, and to lift the voting and transferability
restrictions on AMC's Southern Copper Corporation stock, as of
the effective date of the Parent's Plan of Reorganization.
To facilitate the efficient and timely consummation of the
Parent's Plan and payment of ASARCO LLC's creditors, AMC also
asks the Court to consider the request on an expedited basis,
preferably no later than November 30, 2009.
Brian Antweil, Esq., at Haynes & Boone, LLP, in Houston, Texas,
relates that the Parent's Plan calls for the release of the Final
Judgment upon the occurrence of the effective date of the
Parent's Plan, which must occur within 30 days of the
Confirmation Order.
In light of the Confirmation Order and to facilitate the closing
of the Parent's Plan, AMC asks that the Court's June 2 Stay Order
be modified to eliminate AMC's obligation to secure the Final
Judgment or seek registration of the SCC Shares. Specifically,
AMC asks the Court to authorize, upon the occurrence of the
Effective Date:
(i) the release of all assets AMC has placed into escrow as
security for the Final Judgment pursuant to the terms of
the Stay Order; and
(ii) the deletion of any requirement in the Escrow Agreement
dated as of August 10, 2009, that conditions termination
of the escrow upon the expiration of any appeal period or
the absence of an appeal.
AMC further asks that all voting and non-transferability
restrictions contained in the Court's April 15, 2009, agreed order
restricting transfer and voting of shares of SCC by AMC, and
execution on or enforcement of Final Judgment by ASARCO LLC,
which were adopted and extended by the Stay Order, be lifted as
of the Effective Date.
At AMC's behest, the Court will commence an expedited hearing on
December 4, 2009, to consider the request.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Paul M.
Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq.,
at Reed Smith LLP give legal advice to the Official Committee of
Unsecured Creditors and David J. Beckman at FTI Consulting, Inc.,
gives financial advisory services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
Judge Andrew S. Hanen of the U.S. District Court for the Southern
District of Texas confirmed on November 13, the Plan of
Reorganization submitted by Asarco Incorporated and Americas
Mining Corporation for ASARCO LLC, Southern Peru Holdings, LLC,
AR Sacaton, LLC, and ASARCO Master, Inc.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: Sues East Katella & Noga for Contract Breach
--------------------------------------------------------
Transwestern Phoenix, I, LLC, as landlord entered into an Office
Lease Agreement on April 26, 2005, whereby it agreed to lease to
ASARCO LLC certain office space known as the Pointe South
Mountain Corporate Centre located at 8222 S. 48th Street, in
Phoenix, Arizona. Transwestern Phoenix subsequently sold the
property and assigned its rights under the Lease Agreement to
East Katella Partnership, doing business as Pointe South Mountain
Corporate Center, LLC.
The Lease Agreement acknowledged that at the time the Lease
Agreement was entered into, ASARCO provided a $156,765 security
deposit to Transwestern. The Lease Agreement also provided that
the Landlord was to hold the security deposit in a separate
interest-bearing account, with any interest earned being added to
increase the amount of the security deposit, and the Landlord was
obligated to provide ASARCO with an annual statement evidencing
the account and to notify ASARCO of the use of any portion of the
security deposit.
The Lease Agreement also stated that ASARCO had the right to
terminate the Lease early, and upon doing so, ASARCO was to pay a
"termination payment" of two month's worth of base rent -- the
monthly base rental installments due as of the time the Debtor
filed bankruptcy were $13,063 per month -- plus an unamortized
balance of "leasing costs."
In 2008, ASARCO sought and obtained authority to reject the Lease
Agreement effective April 30, 2008. The rejection order was
agreed to by the Landlord. Under the order, ASARCO reserved all
of its rights and claims under the Lease Agreement, specifically
any right to recover its Security Deposit.
Apparently as a result of the early termination of the Lease
Agreement, on June 30, 2008, Noga Property Management, as the
alleged successor-in-interest to Transwestern/East Katella, filed
a contingent unsecured non-priority proof of claim for $170,196,
assigned as Claim No. 18322, representing that Noga was due that
sum as it had not been able to mitigate its damages, relates Jack
L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas.
ASARCO demanded that the Defendants provide an accounting of its
security deposit. ASARCO also sought payment of the balance of
its Security Deposit plus interest after deduction of two months
of base rent and properly supported unamortized leasing costs,
and sough that the Defendants voluntarily withdraw the Noga
Claim. The Defendants, however, failed and refused to provide
any written response nor have they provided ASARCO with any
information regarding the Security Deposit, Mr. Kinzie asserts.
ASARCO, therefore, asks the Court to enter judgment in its favor
for the balance of its Security Deposit in the sum of $141,830,
plus interest, costs, expenses and reasonable attorney fees.
ASARCO also asks the Court to direct Defendants to turn over the
Security Deposit funds with interest, and to deny the Noga Claim
in its entirety.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Paul M.
Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq.,
at Reed Smith LLP give legal advice to the Official Committee of
Unsecured Creditors and David J. Beckman at FTI Consulting, Inc.,
gives financial advisory services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
Judge Andrew S. Hanen of the U.S. District Court for the Southern
District of Texas confirmed on November 13, the Plan of
Reorganization submitted by Asarco Incorporated and Americas
Mining Corporation for ASARCO LLC, Southern Peru Holdings, LLC,
AR Sacaton, LLC, and ASARCO Master, Inc.
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)
BANK OF AMERICA: To Repay Entire $45 Billion Obtained From TARP
---------------------------------------------------------------
Bank of America on Tuesday said it will repay U.S. taxpayers their
entire $45 billion investment provided under the Troubled Asset
Relief Program. The repayment will be made after the completion
of a securities offering.
To date, Bank of America has paid $2.54 billion in dividends to
the U.S. Treasury on the TARP investment. Repaying TARP will save
the company approximately $3.6 billion in annual dividend costs
from the TARP investment.
"We appreciate the critical role that the U.S. government played
last fall in helping to stabilize financial markets, and we are
pleased to be able to fully repay the investment, with interest,"
said Kenneth D. Lewis, chief executive officer and president. "As
America's largest bank, we have a responsibility to make good on
the taxpayers' investment, and our record shows that we have been
able to fulfill that commitment while continuing to lend. We
believe that this is good news, not only for the U.S. taxpayer and
our company, but for the country as it is a milestone indicating
that public policy has succeeded in helping our industry and the
economy begin to recover.
"Adding TARP to our capital has allowed Bank of America to
continue to support the economy. In the 12 months since the
government first made its investment in Bank of America, our
company originated $760 billion in new credit, or approximately
$3 billion per business day," Mr. Lewis added. "Importantly, this
includes our leadership role in financing home ownership, helping
more than 1.54 million customers purchase a new home or refinance
their existing mortgages and another 423,000 homeowners modify
their loans to avoid foreclosure."
So far this year, Bank of America has extended more than
$12 billion in credit to small-business customers and assisted
more than 49,000 small business card clients in improving their
cash flows by modifying their payment structures.
The repayment of TARP is the latest in a series of actions taken
to reduce Bank of America's reliance on government assistance.
Other actions include:
* Paying the U.S. government $425 million to terminate a term
sheet that would have guaranteed up to $118 billion in
assets, if a final agreement had been reached.
* Opting out of the Temporary Liquidity Guarantee Program
in September.
* Exiting the Term Auction Facility in the summer of 2009.
* Eliminating borrowings from the Federal Reserve's Term
Securities Lending Facility and Primary Dealer Credit
Facility.
* Announcing plans to exit the Transaction Account Guarantee
Program effective Jan. 1, 2010.
* Increasing Tier 1 Common capital by approximately
$40 billion in the second quarter of 2009.
* Issuing more than $10 billion in non-government-backed debt
in the public markets in 2009.
Under terms of the authorization from the Treasury and banking
regulators to repay the $45 billion investment made under TARP,
Bank of America will repurchase all 600,000 shares of the
company's Fixed Rate Cumulative Perpetual Preferred Stock,
Series N; all 400,000 shares of the company's Fixed Rate
Cumulative Perpetual Preferred Stock, Series Q; and all 800,000
shares of the company's Fixed Rate Cumulative Perpetual Preferred
Stock, Series R. The shares were issued to the U.S. Treasury as
part of TARP. Bank of America is not exercising its right to
repurchase the related warrants at this time.
Bank of America plans to repay the $45 billion in TARP funds using
$26.2 billion in excess liquidity and $18.8 billion in proceeds
from the sale of "common equivalent securities." The $18.8 billion
issuance of "common equivalent securities" would be treated as
Tier 1 Common capital. Shareholders would be asked at a special
meeting to be held within 105 days of issuance to approve an
increase in the authorized shares outstanding to allow the "common
equivalent securities" to be converted into common stock. The
"common equivalent securities" carry warrants to buy a total of 60
million shares of common stock at $0.01 per share and other
benefits if shareholders do not approve an increase in authorized
common shares.
In addition, Bank of America agreed to increase equity by
$4 billion through asset sales to be approved by the Board of
Governors of the Federal Reserve and contracted for by June 30,
2010. To the extent those asset sales are not completed by the end
of 2010, the company agreed it would raise a commensurate amount
of common equity.
Bank of America also agreed to raise up to approximately
$1.7 billion through the issuance of restricted stock in lieu of a
portion of incentive cash compensation to certain Bank of America
associates as part of their normal year-end incentive payments.
Year-end incentive payments are dependent on the performance of
the company, business units and individuals and have not yet been
determined. This initiative also aligns associate interests with
the company's performance.
After the TARP repayment and these initiatives, the company's Tier
1 Capital ratio would be 11.0 percent, pro forma based on the
September 30, 2009 ratio of 12.5 percent. The Tier 1 Common
capital ratio would be 8.5 percent, pro forma based on the
September 30, 2009 ratio of 7.3 percent. The company will continue
to have strong liquidity.
Repurchase of TARP preferred stock is expected to reduce income
available to common shareholders in the fourth quarter by
$4.1 billion, as the book value of the preferred is less than the
amount paid.
* * *
The Wall Street Journal's Deborah Solomon, Dan Fitzpatrick and
David Enrich report that BofA's announcement means it will be the
first of seven companies to return their large, or extraordinary
taxpayer-funded lifelines. The Journal notes that because of its
improved health, BofA officials had been pushing to repay the
government. The Journal says federal officials refused to allow
it until they were confident the bank was strong enough.
According to the Journal, Treasury officials were eager to allow
the repayment. But discussions bogged down with some regulators
initially disagreeing over what steps BofA had to take to satisfy
concerns about its capital base. To win over hesitant parties,
the Journal says BofA agreed to a number of concessions: raising
$18.8 billion in new capital; shifting some of its bonus pay to
restricted stock instead of cash; and agreeing to shed $4 billion
of assets
"We discussed with them what they felt we needed and there was a
negotiation around it," said Bank of America spokesman Robert
Stickler, according to the Journal.
The Journal notes BofA's repayment likely will intensify pressure
on other large recipients of government aid, including Wells Fargo
& Co., which received $25 billion, and Citigroup Inc., which has
received $45 billion.
The Journal relates bank executives say they resent being branded
as beneficiaries of a bailout and that restrictions on
compensation and other activities accompanying the TARP funds are
complicating their efforts to recruit and retain important
employees. According to the Journal, Mr. Stickler said operating
on a level playing field with rivals like J.P. Morgan Chase & Co.
-- which in June repaid the $25 billion fed bailout it received --
was a key reason for BofA rushing to exit TARP.
The Journal says Citigroup Chief Executive Vikram Pandit has been
vocal about his desire to repay the government, which holds a 34%
stake in the wake of repeated federal rescues. The Journal notes
at a November 20 meeting with employees in Washington, Mr. Pandit
said he is working "very hard" to "repay the government as fast as
possible, clearly with a debt of gratitude and also with a good
rate of return. . . . On that day, people will stop writing that
Citi is a troubled bank with a $45 billion bailout package."
Citigroup declined to comment, the Journal says.
BOSTON BLACKIE'S: Tough Economy Prompts Chapter 11 Filing
---------------------------------------------------------
Anna Marie Kukec at Daily Herald says Boston Blackie's Management
Co. Inc. along with its affiliates filed for Chapter 11 bankruptcy
in the U.S. Bankruptcy Court in Chicago.
Boston Blackie's listed assets of $16,956 and liabilities of
$6.4 million, which includes $5.6 million to GE Capital Corp. in
Scottsdale, Arizona. The Arlington Heights restaurant, on
Algonquin Road, listed its assets at $140,583 with liabilities at
around $1.4 million. The Naperville restaurant, on Route 59,
listed assets at $224,821 and liabilities at $814,798.
The Company said its eight restaurants will be business as usual
during the bankruptcy proceedings, Ms. Kukec says.
According to person with knowledge of the filing, the Company
sought relief because of overextended by expansions and a tough
economy. The Company will look closely at reducing overhead and
create more efficiencies to keep the Company viable and expects to
make such decisions in January, the person said.
Robert Benjamin, Esq., at Querrey & Harrow Ltd., represents the
Company.
BOSTON SCIENTIFIC: Fitch Puts 'BB+' Rating With Positive Outlook
----------------------------------------------------------------
Fitch Ratings' 2010 outlook for the U.S. healthcare sector remains
negative. Persistently high unemployment with its impact on
health insurance coverage along with consumer's lessened ability
to manage out-of-pocket costs of co-payments and co-insurance will
continue to hamper prospects for the industry, in general, in
2010. Growing event risk surrounding U.S. healthcare reform and
that impact on health insurance coverage, reimbursement and the
corresponding change in the competitive landscape all create
uncertainty regarding long-term financial results for the sector.
While there have been some signs of improvement in the economy,
high unemployment is expected to continue well into 2010. This is
particularly troublesome due to its ongoing impact on insurance
coverage and people's ability to manage out-of-pocket expenses for
healthcare. Therefore, people will continue to focus on reducing
healthcare expenses and delaying non-essential care. While this
focus will pressure top-line growth, EBITDA is expected to remain
stable due to on-going cost containment and continued operational
restructuring of companies. Additionally, flexibility in capital
expenditure along with stable EBITDA should result in sustained
levels of free cash flow in 2010. Fitch expects many industry
participants to continue to be aggressive in returning capital to
equity shareholders through dividends and share buybacks.
Congress continues to work on crafting healthcare reform
legislation. While a bill has been approved in the House of
Representatives, the Senate has not voted on its own version.
Consequently, it is unclear what the ultimate impact will be for
the industry from this initiative. However, key issues
surrounding the reform relate to coverage, reimbursement and
changes in the industry competitive environment. In relation to
insurance coverage, if the reform achieves its goal of increased
insurance coverage, this will be a positive for the industry.
Fitch believes that in part, to pay for the insurance coverage
expansion, industry participants will see declining profitability
margins as a result of reimbursement declines.
Reimbursement pressure could come from Medicare reductions,
another public payer or other restrictions associated with the
reform. Key to overall profitability will be whether the coverage
expansion offsets margin erosion in a timely manner to maintain
profit levels. Finally, the most difficult part of reform to
evaluate will be its effect on the competitive environment of the
industry. New restrictions could permanently change prospects for
certain areas of the industry and result in changes in business
strategies. These strategy changes could lead to increases in
merger and acquisition activity in an attempt to improve prospects
through broadening product or service portfolios and increasing
efficiency with scale. With the potential for increased
acquisition and merger activity comes the expectation for
increased debt issuance that could lead to higher leverage at
least in the near term.
The U.S. healthcare industry continues to maintain strong
liquidity. U.S. healthcare companies with Fitch credit ratings
generated last 12 months free cash flow, as of third-quarter 2009,
of approximately $46 billion and maintained balance sheet cash of
approximately $86 billion. However, it is important to note that
Fitch estimates that approximately two-thirds of this cash balance
is outside of the U.S. and would be subject to repatriation.
Nevertheless, this internal liquidity compares to a Fitch
estimated 2010 maturity schedule of approximately $6 billion.
Revolving credit capacity for the industry also remains strong
with an average availability of approximately 93% or $52 billion.
Pharmaceutical Manufacturers:
Fitch sees a negative outlook for the U.S. pharmaceutical industry
in 2010 as drug developers contend with healthcare reform, the
lingering effects of the current macroeconomic environment, the
start of an unprecedented series of significant drug patent
lapses, and the challenging regulatory climate.
Managed-care focus on favoring generic pharmaceuticals to control
drug spending will be accelerated in 2010, when the industry
begins facing a period of record patent challenges. Key drug
patent losses for U.S. drug developers during the year are
Pfizer's anti-depressant Effexor-XR, Merck's anti-hypertensives
Cozaar and Hyzaar, and Eli Lilly's oncologic Gemzar. Following a
year of major consolidation to fill research and development and
product portfolio gaps, Fitch expects business development
activities to be directed to bolstering R&D programs in 2010.
Fitch expects sales growth in the low single digits, and
manageable margin pressure for brand name pharmaceutical
manufacturers. Continued operating costs reductions serves as
margin support as the industry confronts prospects of lower top-
line growth from potential government reimbursement changes and
near-term patent challenges. Incremental margin support is
attained from merger and acquisition synergies.
In general, cash flows generated by drug developers are expected
to cover capital commitments in 2010. Fitch estimates some cash
flow to be directed to debt reduction for those drug manufacturers
involved with recent industry consolidation. The pharmaceutical
industry will continue to use significant operating cash flow for
shareholder-friendly purposes, specifically sustaining or raising
dividends and actively purchasing common shares.
Medical Devices:
Fitch's 2010 outlook for the medical device sector is stable.
Moderate revenue growth and relatively stable margins should
generate sufficient cash to fund operations, share repurchases and
targeted acquisitions. Selected debt refinancing is expected to
be met with ample liquidity and adequate access to the credit
markets. Despite the relative stability within the sector, Fitch
recognizes that 2010 potentially poses meaningful operational,
legislative, regulatory and business cycle risks.
Fitch expects the drug-eluting stent market will remain relatively
flat in terms of revenues, with single-digit volume growth offset
by price declines. Pricing will likely be negatively affected by
moderation in new product introductions and hospitals becoming
more aggressive in their negotiating posture. While Fitch expects
the industry to closely manage costs, some margin pressure is
possible. Within the DES segment, Fitch expects market share
volatility will persist to the extent that new products are
launched into the marketplace. Fitch expects that Abbott Lab's
Xience DES platform and Boston Scientific's Promus DES platform
will continue to gain incremental market share in the U.S., Europe
and Japan.
The cardiac rhythm management market is expected to generate low-
to mid-single-digit revenue growth, with volume increases somewhat
offset by price declines. Fitch expects this environment will
improve if the Food and Drug Administration expands the use of
this technology to patients with less severe forms of heart
failure, which were studied in the MADIT-CRT clinical trial.
Nevertheless, CRM adoption by physicians would likely increase in
a steady, incremental fashion, as opposed to a step-change
function. While BSX conducted the trial with its devices and
would likely be the first to benefit, Fitch believes Medtronic and
St. Jude Medical will also benefit over time.
Fitch expects the majority of acquisitions in the sector will be
targeted, relative to individual firms' size and breadth. In
addition, share repurchases are likely to be funded primarily
through cash flow. As such, Fitch expects any incremental
transaction-related debt to be manageable for the industry's
credit profile.
For-Profit Hospital Operators:
Fitch has a negative outlook for the for-profit hospital sector in
2010. Fitch expects many of the 2009 favorable trends --
including improved margins, decreased leverage, and strengthened
free cash flow -- to reverse in 2010 as providers face
reimbursement pressure and limited opportunities to enact
additional cost controls. Fitch believes a return to an
inflationary environment for labor, supplies and other key
operating expenses is inevitable and will reverse some of the
profitability gains enjoyed by the sector in 2009. In addition,
bad debt expense is expected to remain high through most of 2010,
further pressuring margins. Reimbursement is also likely to be
pressured, with declines in Medicaid and a moderation in Medicare
growth, although managed care rates should remain robust.
Overall, Fitch projects a net deterioration in margins, free cash
flow, and leverage across the sector in 2010. However, Fitch
believes positive rating actions are still possible, particularly
for those companies that use excess cash flow generated in 2009 to
reduce debt and maintain stable credit metrics in 2010.
The year 2010 will also be an active one for mergers and
acquisitions within the industry, in Fitch's opinion. Fitch
believes there is a plenitude of acquisition targets in the market
as a result of the recession and that valuation levels have become
easier to determine, which, along with the record free cash flow
generated in 2009, should lead to an uptick in consolidation
within the industry. Fitch believes any of the for-profit
hospitals it rates could be active acquirers in 2010, although
LifePoint, Universal Health Services, and Community Health Systems
should be the most active.
Fitch currently rates the U.S. healthcare sector:
-- Abbott Laboratories ('A+'; Stable Outlook)
-- Allergan, Inc. ('A-'; Stable Outlook)
-- AmerisourceBergen Corp. ('BBB'; Stable Outlook)
-- Amgen, Inc. ('A', Stable Outlook)
-- Baxter International Inc. ('A'; Stable Outlook)
-- Beckman Coulter, Inc. ('BBB'; Stable Outlook)
-- Boston Scientific Corporation ('BB+' ; Positive Outlook)
-- Bristol-Myers Squibb Company ('A+' ; Stable Outlook)
-- Cardinal Health, Inc. ('BBB'; Stable Outlook)
-- CareFusion Corporation ('BBB'; Stable Outlook)
-- Community Health Systems, Inc. ('B'; Stable Outlook)
-- Covidien Ltd. ('A'; Stable Outlook)
-- DaVita, Inc. ('BB-'; Stable Outlook)
-- Eli Lilly & Co. ('A+' ; Negative Outlook)
-- Express Scripts, Inc. ('BBB'; Stable Outlook)
-- HCA, Inc. ('B', Stable Outlook)
-- Health Management Associates ('B+' ; Stable Outlook)
-- Johnson & Johnson ('AAA'; Stable Outlook)
-- Life Technologies Corporation ('BBB-'; Stable Outlook)
-- LifePoint Hospitals Inc. ('BB-'; Stable Outlook)
-- McKesson Corp. ('BBB+' ; Stable Outlook)
-- Medco Health Solutions Inc. ('BBB'; Stable Outlook)
-- Merck & Co. ('A+', Stable Outlook)
-- Owens & Minor Inc. ('BBB-'; Stable Outlook)
-- Pfizer Inc. ('AA-', Stable Outlook)
-- Quest Diagnostics Inc. ('BBB+'; Stable Outlook)
-- Royalty Pharma Finance Trust ('BBB'; Stable Outlook)
-- St. Jude Medical, Inc. ('A'; Stable Outlook)
-- Tenet Healthcare Corp. ('B-'; Stable Outlook)
-- Thermo Fisher Scientific Inc. ('A-'; Stable Outlook)
-- Universal Health Services ('BBB'; Stable Outlook)
-- Watson Pharmaceuticals Inc. ('BBB-'; Stable Outlook)
CALIFORNIA COASTAL: ICW Objects to Use Of Cash Collateral
---------------------------------------------------------
Law360 reports that Insurance Company of the West is objecting to
California Coastal Communities Inc.'s request to use cash
collateral as the company struggles to emerge from bankruptcy
following the collapse of the real estate market.
California Coastal Communities and its affiliates have sought the
permission of the U.S. Bankruptcy Court for the Central District
of California to use their lenders' cash collateral through the
of January 25, 2010.
The Debtors say that access to cash collateral is essential to
ensure timely payment of employee's wages, salaries, and other
employee-related obligations to maintain employee morale and not
risk the loss of personnel critical to the Debtors' operations and
reorganization. Without access to cash collateral, the Debtors
may be required to cease their operations and the Debtors, their
estates and their creditors would be irreparably harmed.
About California Coastal
California Coastal Communities, Inc., (Nasdaq: CALC) --
http://www.californiacoastalcommunities.com/-- is a residential
land development and homebuilding company operating in Southern
California. The Company's principal subsidiaries are Hearthside
Homes which is a homebuilding company, and Signal Landmark which
owns 105 acres on the Bolsa Chica mesa where sales commenced in
August 2007 at the 356-home Brightwater community. Hearthside
Homes has delivered 2,200 homes to families throughout Southern
California since its formation in 1994.
Irvine, California-based California Coastal Communities, Inc.,
filed for Chapter 11 bankruptcy protection on October 27, 2009
(Bankr. C.D. Calif. Case No. 09-21712). Joshua M. Mester, Esq.,
who has an office in Los Angeles, California, assists the Company
in its restructuring effort. The Company listed $100,000,001 to
$500,000,000 in assets and $100,000,001 to $500,000,000 in
liabilities.
CANOPY FINANCIAL: SEC Obtains Asset Freeze Against Co-Founder
-------------------------------------------------------------
The Securities and Exchange Commission on Wednesday said it has
filed fraud charges against a Chicago-based health care financial
services company and has frozen the assets of its co-founder who
allegedly provided investors with forged financial statements to
lure them into a $75 million investment scheme.
The SEC alleges that Canopy Financial Inc. and its former
president and chief operating officer Jeremy J. Blackburn
solicited investors for a private placement offering for preferred
shares of Canopy. They provided investors with a falsified audit
report purportedly from accounting firm KPMG as well as bank and
financial statements with false and misleading information
exaggerating Canopy's financial condition. Mr. Blackburn
misappropriated at least $1.7 million from the offering into his
personal bank accounts.
"Mr. Blackburn personally profited by falsifying audited financial
statements and bank account records to obtain financing for a
purportedly up-and-coming company involved in health care
technology," said Merri Jo Gillette, Director of the SEC's Chicago
Regional Office. "Our enforcement action seeks the return of
fraudulently obtained funds to investors."
The Honorable Blanche M. Manning in the U.S. District Court for
the Northern District of Illinois granted the SEC's request for a
temporary restraining order and asset freeze against Mr.
Blackburn. The SEC's case was unsealed Wednesday by the court.
The SEC's complaint alleges that Canopy and Mr. Blackburn
solicited investors from at least October 2008 through August
2009, providing them with documents devised to show that Canopy
had a much healthier cash balance and larger client base than it
actually did. Mr. Blackburn also falsified at least one bank
statement to show an account balance of approximately
$8.9 million, when in fact it was a custodial account of a Canopy
client that held approximately $86,952. The SEC further alleges
that Canopy raised approximately $75 million from investors and
paid approximately $40 million in redemptions to existing
investors, including Mr. Blackburn who redeemed 250,000 shares in
exchange for approximately $1.625 million.
According to the SEC's complaint, the fraud came to light when
KPMG discovered that Canopy had been claiming that its financial
statements for 2007 and 2008 were audited by KPMG. In fact, KPMG
had never been retained by Canopy to audit its financial
statements and had never opined on the financial condition of the
company. KPMG issued a cease-and-desist letter to Canopy demanding
that it stop the unauthorized use of KPMG's name and the audit
report purportedly issued by KPMG.
The SEC's complaint, filed under seal on November 30, seeks among
other things permanent injunctions against Mr. Blackburn and
Canopy. In addition to seeking permanent injunctions against Mr.
Blackburn and Canopy for violating the antifraud provisions of the
Securities Act of 1933 [Section 17(a)] and the Securities Exchange
Act of 1934 [Section 10(b) and Rule 10b-5 thereunder], the SEC's
complaint seeks the disgorgement of ill-gotten gains plus
prejudgment interest and financial penalties.
The SEC's investigation is continuing.
The Commission acknowledges the assistance and cooperation of the
U.S. Attorney for the Northern District of Illinois and the
Federal Bureau of Investigation in this matter.
The Troubled Company Reporter on Tuesday ran a story about
Canopy's bankruptcy filing before the U.S. Bankruptcy Court for
the Northern District of Illinois in Chicago. The TCR, citing
Bill Rochelle at Bloomberg News, reported Canopy Financial said it
discovered this month that financial statements were "fraudulent."
The Company said it found "other significant financial and
accounting irregularities." The Company said it informed proper
authorities.
Bloomberg said Canopy sold $75 million in preferred stock in July
and August. From the proceeds, $39.3 million was used to
repurchase some existing common and preferred stock. Canopy said
two officers were implicated in the accounting irregularities.
One was fired and the other resigned.
Chicago, Illinois-based Canopy Financial is a provider of
financial processing services for the health-care industry. It
filed for Chapter 11 on November 25 (Bankr. N.D. Ill. Case No.
09-44943). The petition says assets are less than $10 million
while debt exceeds $50 million.
CAPMARK FIN'L: Can Pay $2.3MM for Prepetition Sales & Use Taxes
---------------------------------------------------------------
Capmark Financial Group Inc. and its units sought the Court's
authority to pay certain prepetition property, sales, and use tax
obligations and certain other governmental assessments of
franchise fees and business license fees to various federal, state
and local authorities, including those obligations subsequently
determined upon audit to be owed for periods prior to the Petition
Date for $200,000.
Following a hearing, the Court authorized the Debtors to pay all
prepetition taxes and other governmental assessments in an amount
not to exceed $2,300,000, on a final basis. A list of the Taxing
Authorities is available for free at:
http://bankrupt.com/misc/Capmark_TaxingAuthorities.pdf
About Capmark Financial
Based in Horsham, Pennsylvania, Capmark Financial Group Inc. --
http://www.capmark.com/-- is a diversified company that provides
a broad range of financial services to investors in commercial
real estate-related assets. Capmark has three core businesses:
lending and mortgage banking, investments and funds management,
and servicing. Capmark operates in North America, Europe and
Asia. Capmark has 1,000 employees located in 37 offices
worldwide.
On October 25, 2009, Capmark Financial Group Inc. and certain of
its subsidiaries filed voluntary petitions for relief under
Chapter 11 (Bankr. D. Del. Case No. 09-13684)
Capmark's financial advisors are Lazard Freres & Co. LLC and
Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey &
LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local
counsel. Beekman Advisors, Inc., is serving as strategic advisor.
KPMG LLP is tax and accounting advisor. Epiq Bankruptcy
Solutions, LLC is the claims and notice agent.
Capmark has total assets of US$20 billion against total debts of
US$21 billion as of June 30, 2009.
Bankruptcy Creditors' Service, Inc., publishes Capmark Financial
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Capmark Financial Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000)
CAPMARK FIN'L: Has Final Approval to Protect NOL Carryforwards
--------------------------------------------------------------
Capmark Financial Group Inc. and its units sought and obtain
approval on a final basis to protect and preserve the potential
value of their net operating losses and other tax attributes,
including tax credits and tax basis in their assets, by
establishing, pursuant to Sections 105(a), 362, and 541 of the
Bankruptcy Code, certain notice and hearing procedures that must
be complied with as a precondition to the effectiveness of
transfers of certain beneficial interests in equity securities or
claims against the Debtors. The Debtors assert that those
transfers, if unmonitored and unrestricted, could severely limit
or preclude their ability to use a valuable asset of their estates
-- their Tax Attributes.
Specifically, the Debtors note, the transfers of beneficial
interests in equity securities could adversely affect their Tax
Attributes if:
(a) too many 5-percent or greater blocks of equity securities
are created, or too many shares are added to or sold from
those blocks, such that, together with previous transfers
by 5-percent shareholders during the preceding three-year
period, an ownership change within the meaning of Section
382 of the International Revenue Code of 1986, as amended,
is triggered prior to consummation, and outside the
context, of a confirmed Chapter 11 plan; or
(b) the beneficial ownership of claims against the Debtors
that are currently held by "Qualified Creditors," as
defined for U.S. federal income tax purposes, is
transferred, prior to consummation of a Chapter 11 plan,
and those claims would be converted under a Chapter 11
plan into a 5-percent or greater block of the stock of a
reorganized Debtor.
The Debtors assert that by establishing procedures for monitoring
the ownership, acquisition and disposition of beneficial
interests in claims and equity securities, they can preserve
their ability to seek substantive relief at the appropriate time
if it appears that the use of their Tax Attributes may be
jeopardized.
Accordingly, the Debtors ask the Court to enter an order (i)
establishing procedures and (ii) determining that any transfer of
beneficial interests in claims and equity securities in violation
of these procedures will be void ab initio:
(a) Procedure for Transfers of CFGI Stock
(i) Any person or entity that beneficially owns CFGI Stock in
an amount sufficient to qualify that person or entity a
Substantial Equityholder must file with the Court a notice
of that status on or before the later of (A) 20 business
days after the effective date of the notice of entry of
the Order or (B) 10 business days after becoming a
Substantial Equityholder.
(ii) At least 15 business days prior to the effective date of
any transfer of CFGI Stock that would result in an
increase in the amount of CFGI Stock beneficially owned by
a person or entity that is or subsequently becomes a
Substantial Equityholder or would result in a person or
entity becoming a Substantial Equityholder, that person or
entity must file with the Court advance written notice of
the intended transfer of CFGI Stock.
(iii) At least 15 business days prior to the effective date of
any transfer of CFGI Stock that would result in a decrease
in the amount of CFGI Stock beneficially owned by a person
or entity that is a Substantial Equityholder, that person
or entity must file with the Court advance written notice
of the intended transfer of CFGI Stock.
(iv) The Debtors will have 10 business days after receipt of a
Notice of Proposed Transfer to file with the Court and
serve on the person or entity providing that Notice of
Proposed Transfer an objection to any proposed transfer on
the grounds that the transfer might adversely affect the
Debtors' ability to utilize their Tax Attributes. If the
Debtors file an objection, the transaction in the Notice
of Proposed Transfer will not be effective unless approved
by final and nonappealable order of the Court. If the
Debtors do not object within that 10 business day period,
the transaction in the Notice of Proposed Transfer may
proceed solely as set forth in the Notice of Proposed
Transfer.
(b) Procedure For Transfers of Claims
(i) Any person or entity that beneficially owns a claim
against any Debtor and that currently is or becomes a
Substantial Claimholder must file with the Court a notice
of that status on or before (A) 20 business days after the
effective date of the notice of entry of the Order or (B)
10 business days after becoming a Substantial Claimholder.
(ii) At least 15 business days prior to the effective date of
any transfer of Claims that would result in an increase in
the amount of aggregate Claims beneficially owned by a
person or entity that is or subsequently becomes a
Substantial Claimholder or would result in a person or
entity becoming a Substantial Claimholder, that person or
entity must file with the Court advance written notice of
the intended transfer of Claims, regardless of whether
that transfer would be subject to the filing, notice, and
hearing requirements of Rule 3001 of the Federal Rules of
Bankruptcy Procedure.
(iii) At least 15 days prior to the effective date of any
transfer of Claims that would result in a decrease in the
amount of aggregate Claims beneficially owned by a person
or entity that is a Substantial Claimholder or would
result in a person or entity ceasing to be a Substantial
Claimholder, that person or entity must file with the
Court advance written notice regardless of whether that
transfer would be subject to filing, notice, and hearing
requirements of Rule 3001 of the Federal Rules of
Bankruptcy Procedure.
(iv) The Debtors will have 10 business days after receipt of a
Notice of Proposed Transfer to file with the Court and
serve on person or entity providing that Notice of
Proposed Transfer an objection to any proposed transfer of
Claims on the grounds that the transfer might adversely
affect the Debtors ability to utilize their Tax
Attributes. If the Debtors file an objection, the
transaction will not be effective unless approved by a
final and nonappealable order of the Court.
Significance of the Debtors' Tax Attributes
The Debtors relate that as of December 31, 2008, they had, for
U.S. federal income tax purposes, NOLs and capital loss
carryforwards of approximately $824 million and tax credits of
approximately $203 million. The Debtors project significant
additional NOLs for their 2009 taxable year.
IRC Sections 39(a), 59(e), 172(b) and 904(c) permit corporations
to carry forward Tax Attributes to offset future taxable income
an tax liabilities, thereby significantly improving their cash
position. Thus, the Debtors maintain that their Tax Attributes
are a valuable asset of their estates, and the availability of
those Tax Attributes may facilitate their successful
reorganization.
About Capmark Financial
Based in Horsham, Pennsylvania, Capmark Financial Group Inc. --
http://www.capmark.com/-- is a diversified company that provides
a broad range of financial services to investors in commercial
real estate-related assets. Capmark has three core businesses:
lending and mortgage banking, investments and funds management,
and servicing. Capmark operates in North America, Europe and
Asia. Capmark has 1,000 employees located in 37 offices
worldwide.
On October 25, 2009, Capmark Financial Group Inc. and certain of
its subsidiaries filed voluntary petitions for relief under
Chapter 11 (Bankr. D. Del. Case No. 09-13684)
Capmark's financial advisors are Lazard Freres & Co. LLC and
Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey &
LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local
counsel. Beekman Advisors, Inc., is serving as strategic advisor.
KPMG LLP is tax and accounting advisor. Epiq Bankruptcy
Solutions, LLC is the claims and notice agent.
Capmark has total assets of US$20 billion against total debts of
US$21 billion as of June 30, 2009.
Bankruptcy Creditors' Service, Inc., publishes Capmark Financial
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Capmark Financial Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000)
CAPMARK FIN'L: Rejects Dunleavy & Creamer Consulting Pacts
----------------------------------------------------------
Bankruptcy Judge Christopher Sontchi authorized Capmark Financial
Group Inc. and its units to reject their Retirement and Consulting
Agreements with Charles E. Dunleavy, Jr., and David Creamer.
The Debtors tell the Court that they have determined the
Agreements are not needed for the administration of their estates,
are unrelated to any of their businesses, are unlikely to be
wanted by any purchasers in connection with the various sales of
their assets, and cannot readily be sold or transferred for the
value to the Debtors' estates. Thus, the Debtors seek the Court's
authority to reject the Agreements. The Debtors assert that
immediate rejection of the Agreements will be more efficient and
less costly by obviating the need for a further motion and
hearing.
Prior to the Debtors' decision to reject the Agreements, the
consultants filed a motion asking the Debtors to promptly decide
as to whether to assume or reject the Agreements.
The Agreements state that Messrs. Dunleavy and Creamer would be
retained as consultants effective upon the acquisition of certain
portion of GMAC Commercial Holding Corp.'s stock by GMACCH
Investor LLC, the predecessor of the Debtor. The Acquisition
occurred on March 22, 2006. GMAC Commercial Holding Corp., the
Debtor's predecessor entity, entered into the Agreement on
March 21, 2006. The Agreement was subsequently assigned to the
Debtor by GMAC Commercial Holding Corp., on March 22, 2006.
Pursuant to the terms of the Agreement, the Debtor is obligated to
pay Mr. Creamer $2,000,000 on March 21, 2010, in respect of the
restrictive covenants contained in the Agreement and $500,000
in 2011.
About Capmark Financial
Based in Horsham, Pennsylvania, Capmark Financial Group Inc. --
http://www.capmark.com/-- is a diversified company that provides
a broad range of financial services to investors in commercial
real estate-related assets. Capmark has three core businesses:
lending and mortgage banking, investments and funds management,
and servicing. Capmark operates in North America, Europe and
Asia. Capmark has 1,000 employees located in 37 offices
worldwide.
On October 25, 2009, Capmark Financial Group Inc. and certain of
its subsidiaries filed voluntary petitions for relief under
Chapter 11 (Bankr. D. Del. Case No. 09-13684)
Capmark's financial advisors are Lazard Freres & Co. LLC and
Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey &
LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local
counsel. Beekman Advisors, Inc., is serving as strategic advisor.
KPMG LLP is tax and accounting advisor. Epiq Bankruptcy
Solutions, LLC is the claims and notice agent.
Capmark has total assets of US$20 billion against total debts of
US$21 billion as of June 30, 2009.
Bankruptcy Creditors' Service, Inc., publishes Capmark Financial
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Capmark Financial Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHARTER COMMS: Class Plaintiffs Want Plan Order Reconsidered
------------------------------------------------------------
Iron Workers Local No. 25 Pension Fund, Indiana Laborers
Pension Fund, and Iron Workers District Council of Western New
York and Vicinity Pension Fund, as Court-appointed lead plaintiffs
in the action styled Iron Workers Local No. 25 Pension Fund v.
Allen, et al., (E.D. Ark.), on behalf of themselves and all others
similarly situated, ask the U.S. Bankruptcy Court for the Southern
District of New York for a limited rehearing, limited
reconsideration, and limited relief from the order confirming the
Debtors' Joint Plan of Reorganization.
The Securities Class Action Plaintiffs, part of a putative class
of purchasers of the Debtor's publicly-traded common stock in the
period from October 23, 2006, through February 12, 2009, were
record owners of the Debtor's stock on the Petition Date, and
disposed of their stock in the period subsequent to the Petition
Date through April 6, 2009.
On June 1, 2009, Herb Lair filed a putative class action complaint
asserting securities fraud claims against the Debtors' officers,
Paul G. Allen, Eloise Schmitz, and Neil Smit, in the United States
District Court for the Eastern District of Arkansas. The District
Court has subsequently appointed the Plaintiffs as lead
plaintiffs.
Despite the mandate in the Case Management Procedures Order that
the Debtors serve entities with a particularized interest in the
particular relief at issue, the Debtors failed to serve copies of
the critically important notice of commencement, the Plan, and
notices of hearing for approval of the disclosure statement and
confirmation of the Plan on the Plaintiffs or their counsel,
relates Robert F. Elgidely, Esq., at Genovese, Joblove & Battista,
P.A., in Miami, Florida.
The Plaintiffs were, therefore, deprived of their fundamental, due
process right to actual notice and an opportunity to be heard on
their objections to the Plan provisions proposing to release the
Debtor's Officers from the claims asserted in the Securities Fraud
Suit and enjoining the Plaintiffs from continuing to prosecute
those claims, Mr. Elgidely argues. He alleges that the Plaintiffs
only recently learned of the Confirmation Order, and of their
classification, treatment, and the involuntary loss of their
claims in the Securities Fraud Suit pursuant to the prearranged
Plan filed on the Petition Date.
The Plan classified holders of interests in the Debtors, including
the Plaintiffs, in Class A-6, and provided for these treatments:
(a) they were not entitled to vote to accept or reject the
Plan;
(b) were deemed to have conclusively rejected the Plan;
(c) their interests would be cancelled, released and
extinguished upon Plan confirmation; and
(d) they would not receive a distribution under the Plan.
Mr. Elgidely contends that the Plan contained a broad Third Party
Release provision, and that it also sought to permanently enjoin
holders of interests in the Debtors, including the Plaintiffs,
from commencing or continuing any cause of action released
pursuant to the Plan.
Despite the Debtors' failure to serve the documents containing the
proposed Third Party Release upon the Plaintiffs or their counsel,
the Bankruptcy Court entered an Order approving the Disclosure
Statement on May 7, 2009, and stated that the Disclosure Statement
provided holders of equity interests with sufficient notice of the
injunction, exculpation, and release provisions contained in the
Plan, including the Third Party Releases, Mr. Elgidely argues.
The Plaintiffs are entitled to a limited rehearing, limited
reconsideration, and limited relief from the Confirmation Order
because they were deprived of notice of, and an opportunity to be
heard on, the Third Party Release, and therefore, the Confirmation
Order is void as a matter of law with respect to their rights and
interests, Mr. Elgidely tells Judge Peck. He asserts that the
Third Party Release is also contrary to controlling precedent
because it (i) inappropriately runs in favor of certain officers
and directors of the Debtors, who failed to provide any
consideration whatsoever in exchange of the releases, (ii) is not
justified by circumstances, which are so rare as to dispense with
the factors required for a proper third party release, and (iii)
operates as a prohibited discharge of the Debtors' Officers and
Directors contrary to Section 524(e) of the Bankruptcy Code.
The Court will commence a hearing on December 17, 2009, to
consider the request. Objections are due December 10.
About Charter Communications
Based in St. Louis, Missouri, Charter Communications, Inc. (Pink
OTC: CHTRQ) -- http://www.charter.com/-- is a broadband
communications company and the fourth-largest cable operator in
the United States. Charter provides a full range of advanced
broadband services, including advanced Charter Digital Cable(R)
video entertainment programming, Charter High-Speed(R) Internet
access, and Charter Telephone(R). Charter Business(TM) similarly
provides scalable, tailored, and cost-effective broadband
communications solutions to business organizations, such as
business-to-business Internet access, data networking, video and
music entertainment services, and business telephone. Charter's
advertising sales and production services are sold under the
Charter Media(R) brand.
Charter Communications and more than a hundred affiliates filed
voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y.
Case No. 09-11435). As of March 31, 2009, the Debtors had total
assets of $13,650,000,000, and total liabilities of
$24,501,000,000. Pacific Microwave filed for bankruptcy April 20,
2009, disclosing assets of not more than $50,000 and debts of more
than $1 billion.
Charter filed its Chapter 11 petitions to implement a financial
restructuring, which, upon approval, would reduce the Company's
debt by approximately $8 billion.
The Hon. James M. Peck presides over the cases. Richard M. Cieri,
Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at
Kirkland & Ellis LLP, in New York, serve as counsel to the
Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at
Togut, Segal & Segal LLP in New York, serves as Charter
Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost,
Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel.
Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the
Debtors' independent auditors. The Debtors' valuation consultants
are Duff & Phelps LLC; the Debtors' financial advisors are Lazard
Freres & Co. LLC; and the Debtors' restructuring consultants are
AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright
Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims
agent is Kurtzman Carson Consultants LLC.
Judge James M. Peck of the U.S. Bankruptcy Court for the Southern
District of New York approved the Debtors' pre-arranged joint plan
of reorganization in a bench ruling on October 15, 2009.
Charter's reorganization plan became effective November 30, 2009.
CHARTER COMMS: Further Amends Restructuring Pact With CCHI/CCHII
----------------------------------------------------------------
Charter Communications, Inc., and its debtor-affiliates must have
their pre-arranged joint plan of reorganization declared effective
by December 2, 2009, according to further amended restructuring
agreements filed before the U.S. Bankruptcy Court for the Southern
District of New York. The deadline was previously set for
November 27, 2009.
Pursuant to a notice dated November 27, the Debtors informed Judge
James M. Peck and parties-in-interest that the restructuring
agreements dated February 11, 2009, (i) between certain of the
Debtors and certain unaffiliated holders of CCH I, LLC and CCH II,
LLC note issuances, and (ii) between certain of the Debtors and
Paul G. Allen, have been amended for the sixth time.
The Sixth Amendment further provides that if consents, approvals
or waivers required to be obtained from governmental authorities
in connection with the Plan with respect to franchises, licenses
and permits covering areas serving at least 80% of the basic
subscribers have not been obtained by November 27, then Charter
will cause the Effective Date to occur no later than December 15,
2009.
If the Effective Date will not occur by December 2, or by
December 15, the Restructuring Agreement will be terminated.
A full-text copy of the executed version of the Sixth Amendment to
the Restructuring Agreement may be accessed for free at:
http://bankrupt.com/misc/CCI_RestructuringAgreements_112709.pdf
About Charter Communications
Based in St. Louis, Missouri, Charter Communications, Inc. (Pink
OTC: CHTRQ) -- http://www.charter.com/-- is a broadband
communications company and the fourth-largest cable operator in
the United States. Charter provides a full range of advanced
broadband services, including advanced Charter Digital Cable(R)
video entertainment programming, Charter High-Speed(R) Internet
access, and Charter Telephone(R). Charter Business(TM) similarly
provides scalable, tailored, and cost-effective broadband
communications solutions to business organizations, such as
business-to-business Internet access, data networking, video and
music entertainment services, and business telephone. Charter's
advertising sales and production services are sold under the
Charter Media(R) brand.
Charter Communications and more than a hundred affiliates filed
voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y.
Case No. 09-11435). As of March 31, 2009, the Debtors had total
assets of $13,650,000,000, and total liabilities of
$24,501,000,000. Pacific Microwave filed for bankruptcy April 20,
2009, disclosing assets of not more than $50,000 and debts of more
than $1 billion.
Charter filed its Chapter 11 petitions to implement a financial
restructuring, which, upon approval, would reduce the Company's
debt by approximately $8 billion.
The Hon. James M. Peck presides over the cases. Richard M. Cieri,
Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at
Kirkland & Ellis LLP, in New York, serve as counsel to the
Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at
Togut, Segal & Segal LLP in New York, serves as Charter
Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost,
Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel.
Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the
Debtors' independent auditors. The Debtors' valuation consultants
are Duff & Phelps LLC; the Debtors' financial advisors are Lazard
Freres & Co. LLC; and the Debtors' restructuring consultants are
AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright
Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims
agent is Kurtzman Carson Consultants LLC.
Judge James M. Peck of the U.S. Bankruptcy Court for the Southern
District of New York approved the Debtors' pre-arranged joint plan
of reorganization in a bench ruling on October 15, 2009.
Charter's reorganization plan became effective November 30, 2009.
CHARTER COMMS: New Preferred Stock Treatment Clarified
------------------------------------------------------
On November 17, 2009, the Court confirmed the Debtors' Joint Plan
of Reorganization. The Confirmation Order, however, does not
reflect an update to the Plan treatment of the New Preferred
Stock, and thus, provides that the aggregate initial liquidation
preference of the New Preferred Stock will remain at $72,000,000.
In a Court-approved stipulation, the Debtors and Law Debenture
Trust Company of New York, as Indenture Trustee for the 6.50%
Convertible Senior Notes due 2027 issued by Charter
Communications, Inc., clarify the provision to reflect the
Debtors' agreement that the aggregate initial liquidation
preference of the New Preferred Stock will be $138,000,000, as
reflected in the Debtors' memorandum of law in support of their
Plan's confirmation.
In all other respects, the Plan and the Confirmation Order remain
unchanged.
Law Debenture acknowledges and agrees that the Stipulation will
not be construed to modify the date of the entry of the
Confirmation Order for purposes of determining a statutory appeal
period or otherwise.
About Charter Communications
Based in St. Louis, Missouri, Charter Communications, Inc. (Pink
OTC: CHTRQ) -- http://www.charter.com/-- is a broadband
communications company and the fourth-largest cable operator in
the United States. Charter provides a full range of advanced
broadband services, including advanced Charter Digital Cable(R)
video entertainment programming, Charter High-Speed(R) Internet
access, and Charter Telephone(R). Charter Business(TM) similarly
provides scalable, tailored, and cost-effective broadband
communications solutions to business organizations, such as
business-to-business Internet access, data networking, video and
music entertainment services, and business telephone. Charter's
advertising sales and production services are sold under the
Charter Media(R) brand.
Charter Communications and more than a hundred affiliates filed
voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y.
Case No. 09-11435). As of March 31, 2009, the Debtors had total
assets of $13,650,000,000, and total liabilities of
$24,501,000,000. Pacific Microwave filed for bankruptcy April 20,
2009, disclosing assets of not more than $50,000 and debts of more
than $1 billion.
Charter filed its Chapter 11 petitions to implement a financial
restructuring, which, upon approval, would reduce the Company's
debt by approximately $8 billion.
The Hon. James M. Peck presides over the cases. Richard M. Cieri,
Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at
Kirkland & Ellis LLP, in New York, serve as counsel to the
Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at
Togut, Segal & Segal LLP in New York, serves as Charter
Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost,
Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel.
Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the
Debtors' independent auditors. The Debtors' valuation consultants
are Duff & Phelps LLC; the Debtors' financial advisors are Lazard
Freres & Co. LLC; and the Debtors' restructuring consultants are
AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright
Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims
agent is Kurtzman Carson Consultants LLC.
Judge James M. Peck of the U.S. Bankruptcy Court for the Southern
District of New York approved the Debtors' pre-arranged joint plan
of reorganization in a bench ruling on October 15, 2009.
Charter's reorganization plan became effective November 30, 2009.
CHARTER COMMS: Stipulation for Payment of Kramer Levin Fees
-----------------------------------------------------------
Charter Communications Inc. and its units notify the Court and
parties-in-interest that they will present a stipulation providing
for payment of fees and expenses of Kramer Levin Naftalis &
Frankel LLP to the Court for signature on December 14, 2009.
Objections are due December 11. The Debtors entered into the
stipulation with Kramer Levin and JP Morgan Chase Bank, N.A.
Pursuant to the Rule 2019 of the Federal Rules of Bankruptcy
Procedure, Kramer Levin disclosed that it represents the members
of an unofficial committee of unaffiliated lenders under the
Amended and Restated Credit Agreement, dated as of March 18, 1999,
among Charter Communications Operating, LLC, as borrower, CCO
Holdings, LLC, as guarantor, certain lenders and JP Morgan Chase
Bank, N.A., as administrative agent.
The First Lien Credit Facility provides that the Debtors agree to
pay the fees and disbursements of one firm of counsel selected by
the Administrative Agent, together with any special or local
counsel, to the Administrative Agent and not more than one other
firm of counsel to the Lenders. The Debtors have determined, and
the Administrative Agent has agreed, that Kramer Levine will be
designated as the "one other" counsel selected under the First
Lien Credit Facility, solely in connection with the Chapter 11
cases.
Accordingly, the parties agree that the Debtors will pay Kramer
Levine the Fees and Expenses as earned, accrued and unpaid through
the entry of the Confirmation Order in the aggregate amount of
$2,725,895. The Fees & Expenses will be payable on the Plan's
effective date or as soon thereafter as practicable.
About Charter Communications
Based in St. Louis, Missouri, Charter Communications, Inc. (Pink
OTC: CHTRQ) -- http://www.charter.com/-- is a broadband
communications company and the fourth-largest cable operator in
the United States. Charter provides a full range of advanced
broadband services, including advanced Charter Digital Cable(R)
video entertainment programming, Charter High-Speed(R) Internet
access, and Charter Telephone(R). Charter Business(TM) similarly
provides scalable, tailored, and cost-effective broadband
communications solutions to business organizations, such as
business-to-business Internet access, data networking, video and
music entertainment services, and business telephone. Charter's
advertising sales and production services are sold under the
Charter Media(R) brand.
Charter Communications and more than a hundred affiliates filed
voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y.
Case No. 09-11435). As of March 31, 2009, the Debtors had total
assets of $13,650,000,000, and total liabilities of
$24,501,000,000. Pacific Microwave filed for bankruptcy April 20,
2009, disclosing assets of not more than $50,000 and debts of more
than $1 billion.
Charter filed its Chapter 11 petitions to implement a financial
restructuring, which, upon approval, would reduce the Company's
debt by approximately $8 billion.
The Hon. James M. Peck presides over the cases. Richard M. Cieri,
Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at
Kirkland & Ellis LLP, in New York, serve as counsel to the
Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at
Togut, Segal & Segal LLP in New York, serves as Charter
Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost,
Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel.
Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the
Debtors' independent auditors. The Debtors' valuation consultants
are Duff & Phelps LLC; the Debtors' financial advisors are Lazard
Freres & Co. LLC; and the Debtors' restructuring consultants are
AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright
Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims
agent is Kurtzman Carson Consultants LLC.
Judge James M. Peck of the U.S. Bankruptcy Court for the Southern
District of New York approved the Debtors' pre-arranged joint plan
of reorganization in a bench ruling on October 15, 2009.
Charter's reorganization plan became effective November 30, 2009.
CHESTNUT FRANKLIN: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Chestnut Franklin LLC
1101 W Hamilton Street
Allentown, PA 18101
Bankruptcy Case No.: 09-23101
Chapter 11 Petition Date: December 1, 2009
Court: United States Bankruptcy Court
Eastern District of Pennsylvania (Reading)
Judge: Richard E. Fehling
Debtor's Counsel: Richard D. Franzblau, Esq.
575 Route 28
Raritan, NJ 08869
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts:
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Leonel Baez, president of the Company.
CHRYSLER LLC: New Chrysler to Idle 5 Plants for 3+ Weeks
--------------------------------------------------------
Dow Jones Newswires' Jeff Bennett reports Chrysler Group LLC will
lengthen the holiday shutdown of five of its manufacturing sites
-- to more than three weeks starting as early as December 21 -- as
it struggles with dropping demand for its vehicles. Most of the
plants were scheduled to temporarily shut down for 10 days, the
report notes.
According to Mr. Bennett:
(A) Production at Chrysler Ontario plants in Windsor and
Brampton will be idled through January 18. Windsor
produces the Chrysler Town & Country and Dodge Caravan
minivans, the European Chrysler Voyager and VW Routan.
Brampton makes the Chrysler 300, Dodge Charger and Dodge
Challenger.
(B) The Toledo, Ohio plant, which makes the Jeep Wrangler,
will be idled from December 21 through January 11.
(C) Chrysler is considering idling its Conner Avenue plant,
which produces the Viper, and Warren Truck plant, which
builds the Dodge Ram pickup.
"We adjust our vehicle production to match customer demand and
dealer orders," Chrysler spokesman Max Gates said Thursday,
according to Dow Jones.
Dow Jones notes Chrysler Chief Executive Officer Sergio Marchionne
hinted at a production cutback during his presentation of the
company's five-year business plan in November. According to Dow
Jones, Mr. Marchionne said he wants to move the company away from
discounting to sell its cars and pickup trucks by matching output
to consumer demand.
Dow Jones notes U.S. sales of Chrysler's products have fallen 38%
through the end of November. Sales for November alone dropped 25%
to 63,560 vehicles from 85,260 for the same month in 2008, Dow
Jones says.
According to Dow Jones, Chrysler also wants to maintain a 60-day
supply of vehicles. It was at 64 days at the end of November.
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)
CHUGH SHOPPING: Has Until December 7 to File Schedules & Statement
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
extended until December 7, 2009, Chugh Shopping Center, Inc.'s
time to file its schedules, statement of financial affairs or
other documents that the Bankruptcy Code requires the Debtor to
file.
Covington, Georgia-based Chugh Shopping Center, Inc., filed for
Chapter 11 bankruptcy protection on November 3, 2009 (Bankr. N.D.
Ga. Case No. 09-89439). Parmesh N. Dixit, Esq., who has an office
in Atlanta, Georgia, assists the Company in its restructuring
effort. The Company listed $10,000,001 to $50,000,000 in assets
and debts.
CITIGROUP INC: Has $1.875BB Bond Offer to Meet Abu Dhabi Deal
-------------------------------------------------------------
Citigroup Inc. on Wednesday announced the successful remarketing
of $1.875 billion aggregate principal amount of its debt
securities, representing the first of four series of debt
securities required to be remarketed under the terms of Citi's
Upper DECS Equity Units issued to the Abu Dhabi Investment
Authority in December 2007. Pursuant to the agreements governing
the Upper DECS Equity Units, the interest rate on this first
series of remarketed debt was reset to 6.010%. The remarketing
will settle on December 15, 2009.
According to the terms of the Upper DECS Equity Units, the Abu
Dhabi Investment Authority is obligated to purchase a total of
235.6 million shares of Citi common stock in four equal
installments, on March 15, 2010, September 15, 2010, March 15,
2011, and September 15, 2011, for a total purchase price of
$7.5 billion.
Citi said the proceeds from the first remarketing will be used to
satisfy the first stock purchase obligation on March 15, 2010. As
a result of each of the four required common stock purchases,
Citi's Tier 1 Common and Tangible Common Equity are expected to
increase by approximately $1.875 billion in each of the first and
third quarters of 2010 and 2011. Citi's Tier 1 Capital level will
remain unchanged by the required stock purchases.
In a free writing prospectus filed with the Securities and
Exchange Commission on Thursday, Citi said net proceeds of the
offering are expected to be $1.904 billion before expenses. The
Notes will mature January 15, 2015.
A preliminary prospectus filed Wednesday indicated the Notes were
originally issued as 6.320% Junior Subordinated Deferrable
Interest Debentures Due March 15, 2041 -- Junior Subordinated
Debentures -- to Citigroup Capital XXIX, a Delaware statutory
trust, in connection with the private sale of Upper DECS Equity
Units in December 2007. In early November 2009 and December 2009,
pursuant to the provisions of the First Supplemental Indenture,
the Fifth Supplemental Indenture and the Sixth Supplemental
Indenture between Citi and The Bank of New York Mellon, as
trustee, the Junior Subordinated Debentures were made senior in
ranking, given a shorter term to maturity and certain other
conforming changes to their terms were made. On November 23,
2009, Citigroup Capital XXIX was dissolved and the notes were
distributed to holders of the Capital Securities.
According to the preliminary prospectus, Citi does not have the
right to defer the payment of interest on the notes. The notes
may not be redeemed prior to maturity unless certain changes in
tax law or interpretations occur and certain other conditions are
satisfied. The notes are senior unsecured debt securities.
The notes are being offered globally for sale in the United
States, Europe, Asia and elsewhere.
Citigroup Global Markets Inc. acts as Sole Book Manager in the
transaction. Barclays Capital Inc.; Deutsche Bank Securities
Inc.; RBS Securities Inc.; and UBS Securities LLC act as Senior
Co-Managers. Blaylock Robert Van, LLC; BNP Paribas Securities
Corp.; KeyBanc Capital Markets Inc.; Lloyds TSB Bank plc; Loop
Capital Markets LLC; Natixis Bleichroeder; RBC Capital Markets
Corporation; Samuel A. Ramirez & Company, Inc.; TD Securities
(USA) LLC; and UniCredit Capital Markets, Inc., act as Junior Co-
Managers.
* * *
Dow Jones Newswires' Marshall Eckblad says Abu Dhabi Investment
Authority, the United Arab Emirates' sovereign fund, will soon
start purchasing $7.5 billion in Citi shares at $31.83 apiece,
even though the New York bank's stock closed at $4.10. The
investment deal was struck two years ago, early in the financial
crisis. Abu Dhabi agreed to invest $7.5 billion in Citi in
exchange for an 11% annual dividend.
"The value of Abu Dhabi's investment will ultimately be shaped by
the price of Citigroup's stock come March. But it seems very
likely that 'one of the world's . . . most sophisticated equity
investors,' as Citi crowed of Abu Dhabi when it inked the complex
deal, will soon overpay for the stock of a bank that has fallen
into the arms of the U.S. government," according to Mr. Eckblad.
The bad news for Abu Dhabi is it only demanded such dividend
payments for a little more than two years -- until March 15, 2010,
Mr. Eckblad points out. Afterwards, Abu Dhabi would in essence
exchange its original investment in four installments for
Citigroup common stock, which was then worth nearly $31.
According to Mr. Eckblad, by agreeing ahead of time to exchange
cash for stock at a price of $31.83, Abu Dhabi figured to make
money under the assumption that Citigroup's shares would rise
modestly over more than 27 months. "But now it is Citi, not Abu
Dhabi, that is seeing prospects for a winning deal. If Citi's
stock price holds steady through March, the beleaguered New York
bank will basically be able to raise new capital by selling stock
at more than seven times its market price. The deal will also
boost Citi's Tier 1 common equity and tangible common equity by
$1.875 billion," Mr. Eckblad says, citing Citi's Wednesday
statement.
About Citigroup Inc.
Based in New York, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com/-- is organized into four major segments
-- Consumer Banking, Global Cards, Institutional Clients Group,
and Global Wealth Management. At June 30, 2009, Citigroup had
total assets of $1.84 trillion and total liabilities of
$1.69 trillion.
As reported in the Troubled Company Reporter on November 25, 2008,
the U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
The U.S. Treasury and the Federal Deposit Insurance Corporation
agreed to provide protection against the possibility of unusually
large losses on an asset pool of roughly $306 billion of loans and
securities backed by residential and commercial real estate and
other such assets, which will remain on Citigroup's balance sheet.
As a fee for this arrangement, Citigroup issued preferred shares
to the Treasury and FDIC. The Federal Reserve agreed to backstop
residual risk in the asset pool through a non-recourse loan.
Citigroup, the third-biggest U.S. bank, received $45 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 selling assets to repay
the bailout funds.
Citigroup is one of the banks that, according to results of the
government's stress test, need more capital.
COHARIE HOG FARM: Has Until December 7 to File Schedules
--------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina extended until December 7, 2009, Coharie Hog Farm, Inc.'s
time to file its statement of financial affairs, schedules and
related documents.
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.
COLONIAL BANCGROUP: Dropped From Securities Litigation
------------------------------------------------------
A judge has dismissed Colonial BancGroup Inc. from a consolidated
securities proposed class action based on Colonial's bankruptcy
filing and refused efforts from the lead plaintiffs to lift a stay
on discovery proceedings as to several other defendants, according
to Law360.
Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc.
(NYSE: CNB) provides diversified financial services, including
retail and commercial banking, wealth management services,
mortgage banking and insurance products. The BancGroup derives
substantially all of its income from Colonial Bank, N.A, its
banking subsidiary. Colonial bank -- http://www.colonialbank.com/
-- operates 354 branches in Florida, Alabama, Georgia, Nevada and
Texas with over $26 billion in assets.
On August 14, 2009, Colonial BancGroup's banking unit Colonial
Bank, Montgomery, AL, was closed by the Alabama State Banking
Department and the Federal Deposit Insurance Corporation was named
receiver. The FDIC sold most of the assets to Branch Banking and
Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion
in assets and assumed $20 billion in deposits of the Bank.
Colonial BancGroup filed for Chapter 11 bankruptcy protection on
August 25, 2009 (Bankr. M.D. Ala. Case No. 09-32303). W. Clark
Watson, Esq., at Balch & Bingham LLP and Rufus T. Dorsey IV,
Esq., at Parker Hudson Rainer & Dobbs LLP assist the Company in
its restructuring efforts. The Company listed $45,000,000 in
assets and $380,000,000 in debts in its bankruptcy filing.
COMMUNITY HEALTH: Fitch Puts 'B' Rating With Stable Outlook
-----------------------------------------------------------
Fitch Ratings' 2010 outlook for the U.S. healthcare sector remains
negative. Persistently high unemployment with its impact on
health insurance coverage along with consumer's lessened ability
to manage out-of-pocket costs of co-payments and co-insurance will
continue to hamper prospects for the industry, in general, in
2010. Growing event risk surrounding U.S. healthcare reform and
that impact on health insurance coverage, reimbursement and the
corresponding change in the competitive landscape all create
uncertainty regarding long-term financial results for the sector.
While there have been some signs of improvement in the economy,
high unemployment is expected to continue well into 2010. This is
particularly troublesome due to its ongoing impact on insurance
coverage and people's ability to manage out-of-pocket expenses for
healthcare. Therefore, people will continue to focus on reducing
healthcare expenses and delaying non-essential care. While this
focus will pressure top-line growth, EBITDA is expected to remain
stable due to on-going cost containment and continued operational
restructuring of companies. Additionally, flexibility in capital
expenditure along with stable EBITDA should result in sustained
levels of free cash flow in 2010. Fitch expects many industry
participants to continue to be aggressive in returning capital to
equity shareholders through dividends and share buybacks.
Congress continues to work on crafting healthcare reform
legislation. While a bill has been approved in the House of
Representatives, the Senate has not voted on its own version.
Consequently, it is unclear what the ultimate impact will be for
the industry from this initiative. However, key issues
surrounding the reform relate to coverage, reimbursement and
changes in the industry competitive environment. In relation to
insurance coverage, if the reform achieves its goal of increased
insurance coverage, this will be a positive for the industry.
Fitch believes that in part, to pay for the insurance coverage
expansion, industry participants will see declining profitability
margins as a result of reimbursement declines.
Reimbursement pressure could come from Medicare reductions,
another public payer or other restrictions associated with the
reform. Key to overall profitability will be whether the coverage
expansion offsets margin erosion in a timely manner to maintain
profit levels. Finally, the most difficult part of reform to
evaluate will be its effect on the competitive environment of the
industry. New restrictions could permanently change prospects for
certain areas of the industry and result in changes in business
strategies. These strategy changes could lead to increases in
merger and acquisition activity in an attempt to improve prospects
through broadening product or service portfolios and increasing
efficiency with scale. With the potential for increased
acquisition and merger activity comes the expectation for
increased debt issuance that could lead to higher leverage at
least in the near term.
The U.S. healthcare industry continues to maintain strong
liquidity. U.S. healthcare companies with Fitch credit ratings
generated last 12 months free cash flow, as of third-quarter 2009,
of approximately $46 billion and maintained balance sheet cash of
approximately $86 billion. However, it is important to note that
Fitch estimates that approximately two-thirds of this cash balance
is outside of the U.S. and would be subject to repatriation.
Nevertheless, this internal liquidity compares to a Fitch
estimated 2010 maturity schedule of approximately $6 billion.
Revolving credit capacity for the industry also remains strong
with an average availability of approximately 93% or $52 billion.
Pharmaceutical Manufacturers:
Fitch sees a negative outlook for the U.S. pharmaceutical industry
in 2010 as drug developers contend with healthcare reform, the
lingering effects of the current macroeconomic environment, the
start of an unprecedented series of significant drug patent
lapses, and the challenging regulatory climate.
Managed-care focus on favoring generic pharmaceuticals to control
drug spending will be accelerated in 2010, when the industry
begins facing a period of record patent challenges. Key drug
patent losses for U.S. drug developers during the year are
Pfizer's anti-depressant Effexor-XR, Merck's anti-hypertensives
Cozaar and Hyzaar, and Eli Lilly's oncologic Gemzar. Following a
year of major consolidation to fill research and development and
product portfolio gaps, Fitch expects business development
activities to be directed to bolstering R&D programs in 2010.
Fitch expects sales growth in the low single digits, and
manageable margin pressure for brand name pharmaceutical
manufacturers. Continued operating costs reductions serves as
margin support as the industry confronts prospects of lower top-
line growth from potential government reimbursement changes and
near-term patent challenges. Incremental margin support is
attained from merger and acquisition synergies.
In general, cash flows generated by drug developers are expected
to cover capital commitments in 2010. Fitch estimates some cash
flow to be directed to debt reduction for those drug manufacturers
involved with recent industry consolidation. The pharmaceutical
industry will continue to use significant operating cash flow for
shareholder-friendly purposes, specifically sustaining or raising
dividends and actively purchasing common shares.
Medical Devices:
Fitch's 2010 outlook for the medical device sector is stable.
Moderate revenue growth and relatively stable margins should
generate sufficient cash to fund operations, share repurchases and
targeted acquisitions. Selected debt refinancing is expected to
be met with ample liquidity and adequate access to the credit
markets. Despite the relative stability within the sector, Fitch
recognizes that 2010 potentially poses meaningful operational,
legislative, regulatory and business cycle risks.
Fitch expects the drug-eluting stent market will remain relatively
flat in terms of revenues, with single-digit volume growth offset
by price declines. Pricing will likely be negatively affected by
moderation in new product introductions and hospitals becoming
more aggressive in their negotiating posture. While Fitch expects
the industry to closely manage costs, some margin pressure is
possible. Within the DES segment, Fitch expects market share
volatility will persist to the extent that new products are
launched into the marketplace. Fitch expects that Abbott Lab's
Xience DES platform and Boston Scientific's Promus DES platform
will continue to gain incremental market share in the U.S., Europe
and Japan.
The cardiac rhythm management market is expected to generate low-
to mid-single-digit revenue growth, with volume increases somewhat
offset by price declines. Fitch expects this environment will
improve if the Food and Drug Administration expands the use of
this technology to patients with less severe forms of heart
failure, which were studied in the MADIT-CRT clinical trial.
Nevertheless, CRM adoption by physicians would likely increase in
a steady, incremental fashion, as opposed to a step-change
function. While BSX conducted the trial with its devices and
would likely be the first to benefit, Fitch believes Medtronic and
St. Jude Medical will also benefit over time.
Fitch expects the majority of acquisitions in the sector will be
targeted, relative to individual firms' size and breadth. In
addition, share repurchases are likely to be funded primarily
through cash flow. As such, Fitch expects any incremental
transaction-related debt to be manageable for the industry's
credit profile.
For-Profit Hospital Operators:
Fitch has a negative outlook for the for-profit hospital sector in
2010. Fitch expects many of the 2009 favorable trends --
including improved margins, decreased leverage, and strengthened
free cash flow -- to reverse in 2010 as providers face
reimbursement pressure and limited opportunities to enact
additional cost controls. Fitch believes a return to an
inflationary environment for labor, supplies and other key
operating expenses is inevitable and will reverse some of the
profitability gains enjoyed by the sector in 2009. In addition,
bad debt expense is expected to remain high through most of 2010,
further pressuring margins. Reimbursement is also likely to be
pressured, with declines in Medicaid and a moderation in Medicare
growth, although managed care rates should remain robust.
Overall, Fitch projects a net deterioration in margins, free cash
flow, and leverage across the sector in 2010. However, Fitch
believes positive rating actions are still possible, particularly
for those companies that use excess cash flow generated in 2009 to
reduce debt and maintain stable credit metrics in 2010.
The year 2010 will also be an active one for mergers and
acquisitions within the industry, in Fitch's opinion. Fitch
believes there is a plenitude of acquisition targets in the market
as a result of the recession and that valuation levels have become
easier to determine, which, along with the record free cash flow
generated in 2009, should lead to an uptick in consolidation
within the industry. Fitch believes any of the for-profit
hospitals it rates could be active acquirers in 2010, although
LifePoint, Universal Health Services, and Community Health Systems
should be the most active.
Fitch currently rates the U.S. healthcare sector:
-- Abbott Laboratories ('A+'; Stable Outlook)
-- Allergan, Inc. ('A-'; Stable Outlook)
-- AmerisourceBergen Corp. ('BBB'; Stable Outlook)
-- Amgen, Inc. ('A', Stable Outlook)
-- Baxter International Inc. ('A'; Stable Outlook)
-- Beckman Coulter, Inc. ('BBB'; Stable Outlook)
-- Boston Scientific Corporation ('BB+' ; Positive Outlook)
-- Bristol-Myers Squibb Company ('A+' ; Stable Outlook)
-- Cardinal Health, Inc. ('BBB'; Stable Outlook)
-- CareFusion Corporation ('BBB'; Stable Outlook)
-- Community Health Systems, Inc. ('B'; Stable Outlook)
-- Covidien Ltd. ('A'; Stable Outlook)
-- DaVita, Inc. ('BB-'; Stable Outlook)
-- Eli Lilly & Co. ('A+' ; Negative Outlook)
-- Express Scripts, Inc. ('BBB'; Stable Outlook)
-- HCA, Inc. ('B', Stable Outlook)
-- Health Management Associates ('B+' ; Stable Outlook)
-- Johnson & Johnson ('AAA'; Stable Outlook)
-- Life Technologies Corporation ('BBB-'; Stable Outlook)
-- LifePoint Hospitals Inc. ('BB-'; Stable Outlook)
-- McKesson Corp. ('BBB+' ; Stable Outlook)
-- Medco Health Solutions Inc. ('BBB'; Stable Outlook)
-- Merck & Co. ('A+', Stable Outlook)
-- Owens & Minor Inc. ('BBB-'; Stable Outlook)
-- Pfizer Inc. ('AA-', Stable Outlook)
-- Quest Diagnostics Inc. ('BBB+'; Stable Outlook)
-- Royalty Pharma Finance Trust ('BBB'; Stable Outlook)
-- St. Jude Medical, Inc. ('A'; Stable Outlook)
-- Tenet Healthcare Corp. ('B-'; Stable Outlook)
-- Thermo Fisher Scientific Inc. ('A-'; Stable Outlook)
-- Universal Health Services ('BBB'; Stable Outlook)
-- Watson Pharmaceuticals Inc. ('BBB-'; Stable Outlook)
CONEXANT SYSTEMS: Swaps $6.8 Million in Bond Debt for Equity
------------------------------------------------------------
Between November 24, 2009 and December 2, 2009, Conexant Systems,
Inc., entered into exchange agreements with certain holders of its
outstanding 4% Convertible Subordinated Notes due 2026 to issue an
aggregate of 2,772,436 shares of the Company's common stock, par
value $0.01 per share, in exchange for $6,800,000 aggregate
principal amount of the Notes. The Company is also paying the
Holders accrued and unpaid interest in cash on the Notes
exchanged. The holders of the Notes may require the Company to
repurchase, for cash, all or part of their Notes on March 1, 2011
at a price of 100% of the principal amount, plus any accrued and
unpaid interest. The Shares will be issued in transactions that
will not be registered under the Securities Act of 1933, as
amended, in reliance upon an exemption from registration provided
under Section 3(a)(9) of the Act. The Exchanges qualify for the
3(a)(9) exemption because the Notes were and the Shares will be
issued by the Company, the Shares will be issued exclusively in
exchanges with the Company's existing security holders and no
commission or other remuneration has been or will be paid or given
directly or indirectly for soliciting the Exchanges.
As reported by the Troubled Company Reporter on November 26, 2009,
Conexant said that between November 20 and 22, 2009, it entered
into exchange agreements with certain holders of its outstanding
4% Convertible Subordinated Notes due 2026 to issue an aggregate
of 1,249,022 shares of the Company's common stock, par value $0.01
per share, in exchange for $3,300,000 aggregate principal amount
of the Notes.
The TCR on December 2, 2009, said Conexant continued its string of
losses, reporting a net loss of $5,263,000 for the fiscal year
ended October 2, 2009. The net loss is substantially lower
compared to net losses of $300,176,000 for the fiscal year ended
October 3, 2008, and $402,462,000 for the fiscal year ended
September 28, 2007.
At October 2, 2009, the Company had total assets of $350,850,000
against total liabilities of $469,401,000, resulting in
shareholders' deficit of $118,551,000. At October 2, 2009, the
Company had accumulated deficit of $4,884,471,000.
"We will continue to explore other restructuring and re-financing
alternatives as well as supplemental financing alternatives
including, but not limited to, an accounts receivable credit
facility. In the event we are unable to satisfy or refinance all
of our outstanding debt obligations as the obligations are
required to be paid, we will be required to consider strategic and
other alternatives, including, among other things, the sale of
assets to generate funds, the negotiation of revised terms of our
indebtedness, additional exchanges of our existing indebtedness
obligations for new securities and additional equity offerings,"
the Company said.
The Company has retained financial advisors to assist in
considering strategic, restructuring or other alternatives.
About Conexant
Newport Beach, California-based Conexant Systems, Inc. (NASDAQ:
CNXT) -- http://www.conexant.com/-- is a fabless semiconductor
company. Conexant's comprehensive portfolio of innovative
semiconductor solutions includes products for imaging, audio,
embedded-modem, and video applications. Outside the United
States, the Company has subsidiaries in Northern Ireland, China,
Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United
Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore,
and Israel.
CONTINENTAL AIRLINES: Reports November Operational Performance
--------------------------------------------------------------
Continental Airlines on Tuesday reported a November consolidated
(mainline plus regional) load factor of 80.5%, 3.2 points above
the November 2008 consolidated load factor, and a record mainline
load factor of 81.1%, 3.3 points above the November 2008 mainline
load factor. The carrier reported a domestic mainline November
load factor of 83.3%, 2.7 points above the November 2008 domestic
mainline load factor, and a record international mainline load
factor of 78.8%, 3.8 points above November 2008.
During November, Continental recorded a U.S. Department of
Transportation on-time arrival rate of 86.2%, a record for the
month, and a mainline segment completion factor of 99.6%.
In November 2009, Continental flew 6.8 billion consolidated
revenue passenger miles (RPMs) and 8.4 billion consolidated
available seat miles (ASMs), resulting in a consolidated traffic
increase of 2.9% and a capacity decrease of 1.2% as compared to
November 2008. In November 2009, Continental flew 6.0 billion
mainline RPMs and 7.4 billion mainline ASMs, resulting in a
mainline traffic increase of 2.7% and a mainline capacity decrease
of 1.4% as compared to November 2008. Domestic mainline traffic
was 3.2 billion RPMs in November 2009, up 2.9% from November 2008,
and domestic mainline capacity was 3.8 billion ASMs, down 0.5%
from November 2008.
For November 2009, consolidated passenger revenue per available
seat mile (RASM) is estimated to have decreased between 7.0 and
9.0% compared to November 2008, while mainline RASM is estimated
to have decreased between 8.0 and 10.0%. The ranges of the year-
over-year RASM estimates for the month of November are wider than
usual due to processing delays associated with the transition to
Star Alliance.
For October 2009, consolidated passenger RASM decreased 14.2%
compared to October 2008, while mainline passenger RASM decreased
15.2% compared to October 2008.
Continental anticipates ending 2009 with an unrestricted cash,
cash equivalents and short-term investments balance of
approximately $2.5 billion.
Continental's regional operations had a November load factor of
75.9%, 2.8 points above the November 2008 regional load factor.
Regional RPMs were 743.8 million and regional ASMs were
980.4 million in November 2009, resulting in a traffic increase of
4.0% and a capacity increase of 0.3% versus November 2008.
About Continental Airlines
Continental Airlines Inc. (NYSE: CAL) --
http://www.continental.com/-- is the world's fifth largest
airline. Continental, together with Continental Express and
Continental Connection, has more than 2,400 daily departures
throughout the Americas, Europe and Asia, serving 130 domestic and
132 international destinations. Continental is a member of Star
Alliance, which provides access to more than 900 additional points
in 169 countries via 24 other member airlines. With more than
41,000 employees, Continental has hubs serving New York, Houston,
Cleveland and Guam, and together with its regional partners,
carries approximately 63 million passengers per year.
Continental ended the third quarter of 2009 with $2.54 billion in
unrestricted cash, cash equivalents and short-term investments.
At September 30, 2009, Continental had $12.5 billion in total
assets against total current liabilities of $4.26 billion, long-
term debt and capital leases of $5.29 billion, deferred income
taxes of $180 million, accrued pension liability of $1.36 billion,
accrued retiree medical benefits of $241 million, and other
liabilities of $806 million; against stockholders' equity of
$446 million.
* * *
As reported by the Troubled Company Reporter on September 4, 2009,
Standard & Poor's Ratings Services lowered its issue-level ratings
on all senior unsecured debt of Continental to 'CCC+' from 'B-'
and revised the recovery ratings on certain unsecured debt issues,
excluding industrial revenue bonds, to '6' from '5'. At the same
time, S&P affirmed its 'B' corporate credit rating and secured
debt ratings on Continental.
The ratings on Continental's unsecured debt are based principally
on declining aircraft values caused by the global aviation
downturn. This could result in reduced asset protection for
unsecured creditors if Continental were to file for bankruptcy.
Continental continues to carry Moody's Investors Service's B2
corporate family and Fitch Ratings' 'B-' Issuer Default Rating and
'CC/RR6' from 'CCC/RR6' senior unsecured rating.
COOPER-STANDARD: Claims Recovery Buys $33,200 in Claims
-------------------------------------------------------
The Office of the Clerk of the Bankruptcy Court received notices
of transfer of claims in the Debtors' Chapter 11 cases from
November 11 to 24, 2009:
Claim Claim
Transferors Transferees Number Amount
----------- ----------- ------ ----------
Cone Drive Operations Claims Recovery 568 $12,816
Group LLC
Approva Corporation Claims Recovery - $20,409
Group LLC
Master Tool & Die Inc. Corre Opportunities - $545
Fund L.P.
About Cooper-Standard
Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/
-- headquartered in Novi, Michigan, is a leading global automotive
supplier specializing in the manufacture and marketing of systems
and components for the automotive industry. Products include body
sealing systems, fluid handling systems and NVH control systems.
The Company is one of the leading suppliers of chassis products in
North America, with about 14% of market share. The Company's main
custoemrs include Ford Motor Company, General Motors, Chrysler,
Audi, Volkswagen, BMW, Fiat and Honda, among other automakers.
Cooper-Standard Automotive employs approximately 16,000 people
globally with more than 70 facilities throughout the world.
Cooper-Standard is a privately held portfolio company of The
Cypress Group and Goldman Sachs Capital Partners Funds.
Cooper-Standard Holdings Inc., together with affiliates, filed for
Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743).
Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and
Richards, Layton & Finger, P.A., will serve as bankruptcy counsel
to the Debtors. Lazard Freres & Co. is serving as investment
banker while Alvarez & Marsal is financial advisor. Kurtzman
Carson Consultants LLC is notice, claims and solicitation agent.
In its bankruptcy petition, the Company said that assets on a
consolidated basis total $1,733,017,000 while debts total
$1,785,039,000 as of March 31, 2009.
The Company's Canadian subsidiary, Cooper-Standard Automotive
Canada Limited, also sought relief under the Companies' Creditors
Arrangement Act in the Ontario Superior Court of Justice in
Toronto, Ontario, Canada.
Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard
Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA
proceedings undertaken by Cooper-Standard Holdings Inc. and its
various affiliates. (http://bankrupt.com/newsstand/or 215/945-
7000)
COOPER-STANDARD: PBGC to File Consolidated Proof of Claim
---------------------------------------------------------
Cooper-Standard Holdings Inc. and Pension Benefit Guaranty
Corporation inked a stipulation authorizing the agency to file
consolidated proofs of claim.
The stipulation, which was approved by the Court on November 23,
2009, permits PBGC to file four consolidated proofs of claim
under Cooper-Standard Holdings Inc.'s Chapter 11 case for each of
the six pension plans sponsored by the Debtors.
Without the stipulation, PBGC would be required to file four
separate claims against each of the 13 Debtors or a total of 312
proofs of claim.
PBGC is a federal corporation created by the Employee Retirement
Income Security Act of 1974. It currently protects the pensions
of more than 44 million American workers and retirees in more
than 29,000 private single-employer and multiemployer defined
benefit pension plans.
About Cooper-Standard
Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/
-- headquartered in Novi, Michigan, is a leading global automotive
supplier specializing in the manufacture and marketing of systems
and components for the automotive industry. Products include body
sealing systems, fluid handling systems and NVH control systems.
The Company is one of the leading suppliers of chassis products in
North America, with about 14% of market share. The Company's main
custoemrs include Ford Motor Company, General Motors, Chrysler,
Audi, Volkswagen, BMW, Fiat and Honda, among other automakers.
Cooper-Standard Automotive employs approximately 16,000 people
globally with more than 70 facilities throughout the world.
Cooper-Standard is a privately held portfolio company of The
Cypress Group and Goldman Sachs Capital Partners Funds.
Cooper-Standard Holdings Inc., together with affiliates, filed for
Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743).
Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and
Richards, Layton & Finger, P.A., will serve as bankruptcy counsel
to the Debtors. Lazard Freres & Co. is serving as investment
banker while Alvarez & Marsal is financial advisor. Kurtzman
Carson Consultants LLC is notice, claims and solicitation agent.
In its bankruptcy petition, the Company said that assets on a
consolidated basis total $1,733,017,000 while debts total
$1,785,039,000 as of March 31, 2009.
The Company's Canadian subsidiary, Cooper-Standard Automotive
Canada Limited, also sought relief under the Companies' Creditors
Arrangement Act in the Ontario Superior Court of Justice in
Toronto, Ontario, Canada.
Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard
Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA
proceedings undertaken by Cooper-Standard Holdings Inc. and its
various affiliates. (http://bankrupt.com/newsstand/or 215/945-
7000)
COOPER-STANDARD: U.S. Bank Serves as Trustee for $350MM Sub. Notes
------------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy
Procedure, U.S. Bank National Association filed a statement in
Court, disclosing that it serves as trustee under an indenture
executed by Cooper-Standard Automotive Inc.
The Indenture was executed on December 23, 2004, by CSA Inc.,
Wilmington Trust Company, which was the original trustee, and
several other parties. CSA issued $350 million of the 8 3/8%
senior subordinated notes due 2014 under the Indenture, according
to the bank.
U.S. Bank, which has served as indenture trustee since August 12,
2009, also disclosed that it did not own any claims or equity
securities of CSA and its affiliated debtors as of their
bankruptcy filing, except for the claim pursuant to the
Indenture.
As of August 3, 2009, the unpaid principal balance on the notes
covered by the Indenture was $313,350,000 plus accrued interest
and other amounts owing under the Indenture, according to U.S.
Bank.
About Cooper-Standard
Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/
-- headquartered in Novi, Michigan, is a leading global automotive
supplier specializing in the manufacture and marketing of systems
and components for the automotive industry. Products include body
sealing systems, fluid handling systems and NVH control systems.
The Company is one of the leading suppliers of chassis products in
North America, with about 14% of market share. The Company's main
custoemrs include Ford Motor Company, General Motors, Chrysler,
Audi, Volkswagen, BMW, Fiat and Honda, among other automakers.
Cooper-Standard Automotive employs approximately 16,000 people
globally with more than 70 facilities throughout the world.
Cooper-Standard is a privately held portfolio company of The
Cypress Group and Goldman Sachs Capital Partners Funds.
Cooper-Standard Holdings Inc., together with affiliates, filed for
Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743).
Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and
Richards, Layton & Finger, P.A., will serve as bankruptcy counsel
to the Debtors. Lazard Freres & Co. is serving as investment
banker while Alvarez & Marsal is financial advisor. Kurtzman
Carson Consultants LLC is notice, claims and solicitation agent.
In its bankruptcy petition, the Company said that assets on a
consolidated basis total $1,733,017,000 while debts total
$1,785,039,000 as of March 31, 2009.
The Company's Canadian subsidiary, Cooper-Standard Automotive
Canada Limited, also sought relief under the Companies' Creditors
Arrangement Act in the Ontario Superior Court of Justice in
Toronto, Ontario, Canada.
Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard
Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA
proceedings undertaken by Cooper-Standard Holdings Inc. and its
various affiliates. (http://bankrupt.com/newsstand/or 215/945-
7000)
CORRECT BUILDING: Files for Bankruptcy to Sell Assets to BMC
------------------------------------------------------------
According to building-products.com, Correct Building Products
filed for Chapter 11 bankruptcy to facilitate a sale to Building
Materials Corp. of America in Wayne, New Jersey.
The Company's products will be added into BMC's exiting GAF/ELK
composite business, which include CrossTimbers decking and
Railways railing, source says.
Based in Biddeford, Maine, Correct Building Products makes outdoor
building products.
CRISTINA ROGGERO: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Cristina Roggero
fka Cristina Chimeno De Roggero
fka Cristina Chimeno
9980 Houston Road
Malibu, CA 90265-2137
Bankruptcy Case No.: 09-26237
Chapter 11 Petition Date: December 2, 2009
Court: United States Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Geraldine Mund
Debtor's Counsel: M Jonathan Hayes, Esq.
Law Office of M Jonathan Hayes
9700 Reseda Bl., Ste201
Northridge, CA 91324
Tel: (818) 882-5600
Fax: (818) 882-5610
Email: jhayes@polarisnet.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of Ms. Roggero's petition, including a list of
her 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/cacb09-26237.pdf
The petition was signed by Ms. Roggero.
DAVITA, INC: Fitch Puts 'BB-' Rating With Stable Outlook
--------------------------------------------------------
Fitch Ratings' 2010 outlook for the U.S. healthcare sector remains
negative. Persistently high unemployment with its impact on
health insurance coverage along with consumer's lessened ability
to manage out-of-pocket costs of co-payments and co-insurance will
continue to hamper prospects for the industry, in general, in
2010. Growing event risk surrounding U.S. healthcare reform and
that impact on health insurance coverage, reimbursement and the
corresponding change in the competitive landscape all create
uncertainty regarding long-term financial results for the sector.
While there have been some signs of improvement in the economy,
high unemployment is expected to continue well into 2010. This is
particularly troublesome due to its ongoing impact on insurance
coverage and people's ability to manage out-of-pocket expenses for
healthcare. Therefore, people will continue to focus on reducing
healthcare expenses and delaying non-essential care. While this
focus will pressure top-line growth, EBITDA is expected to remain
stable due to on-going cost containment and continued operational
restructuring of companies. Additionally, flexibility in capital
expenditure along with stable EBITDA should result in sustained
levels of free cash flow in 2010. Fitch expects many industry
participants to continue to be aggressive in returning capital to
equity shareholders through dividends and share buybacks.
Congress continues to work on crafting healthcare reform
legislation. While a bill has been approved in the House of
Representatives, the Senate has not voted on its own version.
Consequently, it is unclear what the ultimate impact will be for
the industry from this initiative. However, key issues
surrounding the reform relate to coverage, reimbursement and
changes in the industry competitive environment. In relation to
insurance coverage, if the reform achieves its goal of increased
insurance coverage, this will be a positive for the industry.
Fitch believes that in part, to pay for the insurance coverage
expansion, industry participants will see declining profitability
margins as a result of reimbursement declines.
Reimbursement pressure could come from Medicare reductions,
another public payer or other restrictions associated with the
reform. Key to overall profitability will be whether the coverage
expansion offsets margin erosion in a timely manner to maintain
profit levels. Finally, the most difficult part of reform to
evaluate will be its effect on the competitive environment of the
industry. New restrictions could permanently change prospects for
certain areas of the industry and result in changes in business
strategies. These strategy changes could lead to increases in
merger and acquisition activity in an attempt to improve prospects
through broadening product or service portfolios and increasing
efficiency with scale. With the potential for increased
acquisition and merger activity comes the expectation for
increased debt issuance that could lead to higher leverage at
least in the near term.
The U.S. healthcare industry continues to maintain strong
liquidity. U.S. healthcare companies with Fitch credit ratings
generated last 12 months free cash flow, as of third-quarter 2009,
of approximately $46 billion and maintained balance sheet cash of
approximately $86 billion. However, it is important to note that
Fitch estimates that approximately two-thirds of this cash balance
is outside of the U.S. and would be subject to repatriation.
Nevertheless, this internal liquidity compares to a Fitch
estimated 2010 maturity schedule of approximately $6 billion.
Revolving credit capacity for the industry also remains strong
with an average availability of approximately 93% or $52 billion.
Pharmaceutical Manufacturers:
Fitch sees a negative outlook for the U.S. pharmaceutical industry
in 2010 as drug developers contend with healthcare reform, the
lingering effects of the current macroeconomic environment, the
start of an unprecedented series of significant drug patent
lapses, and the challenging regulatory climate.
Managed-care focus on favoring generic pharmaceuticals to control
drug spending will be accelerated in 2010, when the industry
begins facing a period of record patent challenges. Key drug
patent losses for U.S. drug developers during the year are
Pfizer's anti-depressant Effexor-XR, Merck's anti-hypertensives
Cozaar and Hyzaar, and Eli Lilly's oncologic Gemzar. Following a
year of major consolidation to fill research and development and
product portfolio gaps, Fitch expects business development
activities to be directed to bolstering R&D programs in 2010.
Fitch expects sales growth in the low single digits, and
manageable margin pressure for brand name pharmaceutical
manufacturers. Continued operating costs reductions serves as
margin support as the industry confronts prospects of lower top-
line growth from potential government reimbursement changes and
near-term patent challenges. Incremental margin support is
attained from merger and acquisition synergies.
In general, cash flows generated by drug developers are expected
to cover capital commitments in 2010. Fitch estimates some cash
flow to be directed to debt reduction for those drug manufacturers
involved with recent industry consolidation. The pharmaceutical
industry will continue to use significant operating cash flow for
shareholder-friendly purposes, specifically sustaining or raising
dividends and actively purchasing common shares.
Medical Devices:
Fitch's 2010 outlook for the medical device sector is stable.
Moderate revenue growth and relatively stable margins should
generate sufficient cash to fund operations, share repurchases and
targeted acquisitions. Selected debt refinancing is expected to
be met with ample liquidity and adequate access to the credit
markets. Despite the relative stability within the sector, Fitch
recognizes that 2010 potentially poses meaningful operational,
legislative, regulatory and business cycle risks.
Fitch expects the drug-eluting stent market will remain relatively
flat in terms of revenues, with single-digit volume growth offset
by price declines. Pricing will likely be negatively affected by
moderation in new product introductions and hospitals becoming
more aggressive in their negotiating posture. While Fitch expects
the industry to closely manage costs, some margin pressure is
possible. Within the DES segment, Fitch expects market share
volatility will persist to the extent that new products are
launched into the marketplace. Fitch expects that Abbott Lab's
Xience DES platform and Boston Scientific's Promus DES platform
will continue to gain incremental market share in the U.S., Europe
and Japan.
The cardiac rhythm management market is expected to generate low-
to mid-single-digit revenue growth, with volume increases somewhat
offset by price declines. Fitch expects this environment will
improve if the Food and Drug Administration expands the use of
this technology to patients with less severe forms of heart
failure, which were studied in the MADIT-CRT clinical trial.
Nevertheless, CRM adoption by physicians would likely increase in
a steady, incremental fashion, as opposed to a step-change
function. While BSX conducted the trial with its devices and
would likely be the first to benefit, Fitch believes Medtronic and
St. Jude Medical will also benefit over time.
Fitch expects the majority of acquisitions in the sector will be
targeted, relative to individual firms' size and breadth. In
addition, share repurchases are likely to be funded primarily
through cash flow. As such, Fitch expects any incremental
transaction-related debt to be manageable for the industry's
credit profile.
For-Profit Hospital Operators:
Fitch has a negative outlook for the for-profit hospital sector in
2010. Fitch expects many of the 2009 favorable trends --
including improved margins, decreased leverage, and strengthened
free cash flow -- to reverse in 2010 as providers face
reimbursement pressure and limited opportunities to enact
additional cost controls. Fitch believes a return to an
inflationary environment for labor, supplies and other key
operating expenses is inevitable and will reverse some of the
profitability gains enjoyed by the sector in 2009. In addition,
bad debt expense is expected to remain high through most of 2010,
further pressuring margins. Reimbursement is also likely to be
pressured, with declines in Medicaid and a moderation in Medicare
growth, although managed care rates should remain robust.
Overall, Fitch projects a net deterioration in margins, free cash
flow, and leverage across the sector in 2010. However, Fitch
believes positive rating actions are still possible, particularly
for those companies that use excess cash flow generated in 2009 to
reduce debt and maintain stable credit metrics in 2010.
The year 2010 will also be an active one for mergers and
acquisitions within the industry, in Fitch's opinion. Fitch
believes there is a plenitude of acquisition targets in the market
as a result of the recession and that valuation levels have become
easier to determine, which, along with the record free cash flow
generated in 2009, should lead to an uptick in consolidation
within the industry. Fitch believes any of the for-profit
hospitals it rates could be active acquirers in 2010, although
LifePoint, Universal Health Services, and Community Health Systems
should be the most active.
Fitch currently rates the U.S. healthcare sector:
-- Abbott Laboratories ('A+'; Stable Outlook)
-- Allergan, Inc. ('A-'; Stable Outlook)
-- AmerisourceBergen Corp. ('BBB'; Stable Outlook)
-- Amgen, Inc. ('A', Stable Outlook)
-- Baxter International Inc. ('A'; Stable Outlook)
-- Beckman Coulter, Inc. ('BBB'; Stable Outlook)
-- Boston Scientific Corporation ('BB+' ; Positive Outlook)
-- Bristol-Myers Squibb Company ('A+' ; Stable Outlook)
-- Cardinal Health, Inc. ('BBB'; Stable Outlook)
-- CareFusion Corporation ('BBB'; Stable Outlook)
-- Community Health Systems, Inc. ('B'; Stable Outlook)
-- Covidien Ltd. ('A'; Stable Outlook)
-- DaVita, Inc. ('BB-'; Stable Outlook)
-- Eli Lilly & Co. ('A+' ; Negative Outlook)
-- Express Scripts, Inc. ('BBB'; Stable Outlook)
-- HCA, Inc. ('B', Stable Outlook)
-- Health Management Associates ('B+' ; Stable Outlook)
-- Johnson & Johnson ('AAA'; Stable Outlook)
-- Life Technologies Corporation ('BBB-'; Stable Outlook)
-- LifePoint Hospitals Inc. ('BB-'; Stable Outlook)
-- McKesson Corp. ('BBB+' ; Stable Outlook)
-- Medco Health Solutions Inc. ('BBB'; Stable Outlook)
-- Merck & Co. ('A+', Stable Outlook)
-- Owens & Minor Inc. ('BBB-'; Stable Outlook)
-- Pfizer Inc. ('AA-', Stable Outlook)
-- Quest Diagnostics Inc. ('BBB+'; Stable Outlook)
-- Royalty Pharma Finance Trust ('BBB'; Stable Outlook)
-- St. Jude Medical, Inc. ('A'; Stable Outlook)
-- Tenet Healthcare Corp. ('B-'; Stable Outlook)
-- Thermo Fisher Scientific Inc. ('A-'; Stable Outlook)
-- Universal Health Services ('BBB'; Stable Outlook)
-- Watson Pharmaceuticals Inc. ('BBB-'; Stable Outlook)
DELPHI CORP: Retirees Say PBGC Forced to Accept Unfair Deal
-----------------------------------------------------------
Daily Bankruptcy Review reports two representatives for Delphi
Corp. salaried employees said in testimony prepared for a
congressional hearing that the U.S. Treasury Department and Auto
Task Force pressured the Pension Benefit Guaranty Corp. to accept
an unfair pension deal.
Darrell A. Hughes at Dow Jones Newswires reports that Bruce Gump
and Chuck Cunningham, representatives of Delphi Salaried Retirees
Association, said the Treasury or the PBGC should have devised a
better plan to obtain more value from the Delphi liens valued at
nearly $3.4 billion.
Dow Jones says the controversial deal with the PBGC involves $70
million in cash from General Motors Co. and a $3 billion unsecured
bankruptcy claim from Delphi, which relinquished liens the PBGC
placed on Delphi assets during Delphi's roughly four-year
bankruptcy stint.
According to Dow Jones, Mr. Cunningham in his prepared testimony
said, "Many Delphi salaried retirees will only receive somewhere
between 30% [and] 70% of their earned pensions." He added, "What
is equally disturbing is that the PBGC was obviously coerced into
surrendering valuable liens which could have significantly
improved the level of funding for all the plan participants."
"However, the PBGC liens were meant to protect Delphi pension
plans but instead led to Delphi being unable to sell its U.S.-
based manufacturing assets to GM. Delphi was also unable to sell
its remaining offshore business," Dow Jones says.
Dow Jones notes PBGC spokesman Jeffrey Speicher said the agency's
legal staff did the best it could to obtain maximum values and did
not violate federal pension law.
The Troubled Company Reporter on November 24, 2009, recalled the
Delphi Salaried Retirees Association initiated a civil action
seeking equitable relief against the PBGC for actions the agency
has taken in terminating the Delphi Retirement Program for
Salaried Employees in the United States District Court for the
Eastern District of Michigan Southern Division.
Subsequently, the DSRA broadened its civil action to include U.S.
Department of the Treasury Auto Task Force's Secretary Timothy
Geithner, and senior advisers Steven Rattner and Ronald Bloom,
according to a November 18, 2009 report of The Indianapolis Star,
citing court papers filed in the Michigan District Court.
The DSRA alleged in the complaint that the Auto Task Force put
pressure on the PBGC to lift the liens it had placed on Delphi
Corporation's plants abroad to somehow speed up General Motors
Company's exit from Chapter 11, The Indianapolis Star reported.
The DSRA contended that by lifting PBGC's liens, Delphi would
quickly leave bankruptcy and would be in position to supply GM
with a sure flow of auto parts, according to the report. "It is
part of an orchestrated effort on the federal government's part
to restructure the auto industry as expediently and cheaply as
possible," the DSRA asserted under its complaint. The liens
could have been used by the PBGC to force Delphi to replenish its
pension funds, the DSRA further argued in its complaint, the
report pointed out.
About Delphi Corp
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- was a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies. Delphi had approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.
The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on January 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On October 6, 2009, Delphi Corp.'s Chapter 11 plan of
reorganization became effective. A Master Disposition Agreement
executed among Delphi Corporation, Motors Liquidation Company,
General Motors Company, GM Components Holdings LLC, and DIP
Holdco 3, LLC divides Delphi's business among three separate
parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings will
remain responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
DELTA AIR: American Dangles $1.1 Billion Tie-up Bid to JAL
----------------------------------------------------------
Mariko Sanchanta at The Wall Street Journal reports AMR
Corporation's American Airlines and Delta Air Lines Corp. held
press conferences Thursday in their attempt to tie up with Japan
Airlines.
According to the report, American indicated it was prepared to
invest $1.1 billion in JAL along with private-equity firm TPG and
its Oneworld alliance members. Delta and its SkyTeam alliance
partners are dangling a $1.02 billion investment package for JAL.
The report says American even recruited and flew in Norman Mineta,
the former secretary of transportation in Japan. The report also
relates Mr. Mineta said Wednesday: "I believe that a JAL-Delta
alliance would harm competition on every level."
According to the report, Delta President Ed Bastian countered:
"The [Japanese] government is seeking a Japanese or an airline
solution, not a third-party buyout." JAL on Wednesday said it was
in talks with both U.S. airlines but declined to comment further.
"For all the noise Delta and American are making, a definitive
solution regarding JAL's restructuring is still months away," Mr.
Sanchanta says. Mr. Sanchanta relates The Enterprise Turnaround
Initiative Corp., a Japanese government-backed entity that has
access to up to 1.6 trillion yen ($18.31 billion) in state-
guaranteed funds, will decide by the end of January whether it
wants to lead JAL's restructuring. Mr. Sanchanta explains central
to ETIC's decision is whether JAL will be able to scale back its
pension payouts, which total some 330 billion yen.
Mr. Sanchanta also relates JAL CEO Haruka Nishimatsu is set to
embark on a roadshow through Japan next week, to convince retirees
to accept a 30% cut in their benefits. If these overtures are
unsuccessful, the government is proposing a law that would let JAL
scale back its pension obligations, Mr. Sanchanta says.
"The mood at JAL's headquarters in Tokyo is decidedly grim: lights
have been dimmed to save costs, and its once-bustling 14th floor,
full of meeting rooms, is hushed and empty. JAL canceled its
famous New Year's party for the press this year, and employees
have been asked to cut back on wining and dining and other
expenses. Seventy members of JAL management are forgoing their
December pay," Mr. Sanchanta 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.
DENNY HECKER: Court Orders Monthly Payments to Estranged Wife
-------------------------------------------------------------
Star Tribune's Rochelle Olson reports Hennepin County Judge Jay
Quam in Minnesota last week ordered auto magnate Denny Hecker to
pay estranged wife Tamitha Hecker $7,500 a month, plus medical
expenses, pending resolution of their divorce after 15 years of
marriage and two children.
Ms. Olson says Judge Quam declined Mr. Hecker's claims that he is
broke. Judge Quam held that records from Mr. Hecker showed an
"outflow of money far beyond what one would expect of a bankrupt
person" as well as the transfer of $80,000 to girlfriend Christi
Rowan over the past three months, Ms. Olson reports.
"If Mr. Hecker can manage to provide his romantic companion with
$30,000 per month, the court believes that he can pay $7,500 to
the mother of his children," Judge Quam wrote in his seven-page
order, according to Ms. Olson.
Judge Quam, Ms. Olson relates, also ordered Mr. Hecker to appear
in court on December 10 to explain why he shouldn't be held in
contempt for cashing out a 401(k) worth $125,155 and spending the
money. Judge Quam wants Mr.Hecker to explain where the money
went.
"What especially frustrates the court is the ease with which Mr.
Hecker has apparently disregarded his obligations under Minnesota
law: Not only should Mr. Hecker have known that he couldn't
unilaterally liquidate and spend the couple's retirement assets,
but he must have known that those actions" would draw scrutiny,
Judge Quam wrote, according to Ms. Olson.
Denny Hecker filed for Chapter 7 bankruptcy on June 4, 2009,
before the U.S. Bankruptcy Court for the District of Minnesota.
Mr. Hecker listed $18 million in assets and $767 million in debts
owed to automakers, lenders, business partners and former
employees.
According to the Star Tribune in Minneapolis-St. Paul, the
bankruptcy filing had been widely anticipated. Star Tribune noted
Mr. Hecker has been forced to sell or close 25 of his 26
dealerships in recent months, and Chrysler Financial won a
$477 million court judgment against him in April. The bankruptcy
filing temporarily halted efforts by Chrysler and other creditors
from collecting money they say they are owed.
The Troubled Company Reporter on November 20 said Bankruptcy Judge
Robert Kressel held Mr. Hecker in contempt of court for failing to
turn over his financial records in a timely manner.
William R. Skolnick, Esq., at Skolnick & Shiff, P.A., in
Minneapolis, represents Mr. Hecker.
DUNE ENERGY: Begins Talks With Noteholders; Misses Dec. 1 Interest
------------------------------------------------------------------
Dune Energy, Inc., on Wednesday said it has begun discussions with
the holders of a majority of the $300 million in outstanding
principal amount of its 10-1/2% Senior Secured Notes due 2012
(CUSIP: 265338AC7), with a view toward developing a comprehensive
restructuring of the terms of the notes.
In light of these discussions, Dune has notified the trustee under
the indenture governing the notes that Dune does not intend to pay
interest on the notes when due on the applicable December 1, 2009
interest payment date.
The indenture governing the notes contains a 30-day grace period
after which the failure to make such interest payment would
constitute an event of default (which would afford the noteholders
certain remedies). Dune intends to work during the 30-day grace
period to advance discussions with note holders regarding a
possible debt restructuring. Given their preliminary nature, it
is uncertain whether these discussions will lead to a definitive
restructuring arrangement that would be acceptable to Dune's board
of directors.
James A. Watt, President and Chief Executive Officer of the
Company, stated "We are pleased to be discussing ways in which we
can proactively restructure our current agreements with our note
holders to free capital to develop the upside potential in our
existing fields and to take advantage of opportunities in the
market place. By taking these actions, we believe we can maximize
value for all stakeholders." Mr. Watt also noted, that "At the
end of November, we had ample liquidity to make the December 1
interest payment, and we expect the company to continue to
generate sufficient liquidity to continue to meet our obligations
and fund operations. Consequently, prior to expiration of the
interest payment grace period on December 31, 2009, Dune may
reconsider making the currently due interest payment on the
notes."
As of November 30, 2009, Dune had approximately $29 million in
cash. Under its $40 million revolving credit facility with Wells
Fargo Foothill, Dune has approximately $24 million in outstanding
borrowings and an additional $8.3 million issued in standby
letters of credit. Accordingly, considering its cash position and
approximately $7.7 million in remaining borrowing capacity under
its revolving credit facility, Dune has approximately $37 million
in liquidity.
Operational and Production Update
As a result of several wells detailed in prior press releases
commencing production, during the 15-day period ended November 30,
2009, Dune's production volumes have averaged between 32-35
Mmcfe/day, up from an average of 23 Mmcfe/day in the 3rd quarter
of fiscal 2009. In addition, the Company anticipates being able
to bring the South Alvin Gas Unit well on production within the
next 10 days at rates between 3 and 4 Mmcfe/day net to the
company. This well's production has been delayed due to repairs
on an outside operated pipeline through the area. For the
remainder of 2009, the Company plans several field workovers to
offset natural declines in its fields and anticipates commencing a
2-3 well drilling program in its Garden Island Bay field late in
December 2009 or in January 2010.
About Dune Energy
Based in Houston, Texas, Dune Energy, Inc., is an independent
energy company. Since May 2004, it has been engaged in the
exploration, development, acquisition and exploitation of natural
gas and crude oil properties, with interests along the
Louisiana/Texas Gulf Coast. Its properties cover 100,000 gross
acres across 23 producing oil and natural gas fields.
At September 30, 2009, Dune Energy had $382.45 million in total
assets against $365.13 million in total liabilities, resulting in
$179.65 million in stockholders' deficit. At the end of the
quarter, cash was $19.9 million versus $15.5 million at year end
2008. Accounts payable were $9.3 million in the current quarter
versus $21.7 million at year end 2008. Availability under the
Wells Fargo Foothill revolver was reset to $40 million in August
2009. Currently there is $17 million drawn against the revolver
and $8.8 million issued in standby letters of credit. The
$17 million is now considered a current liability as the maturity
of the revolver is May 15, 2010. Under the Wells Fargo Foothill
revolver, the Company is required to maintain $10 million of cash
or availability at the end of each quarter.
ENERGY CONVERSION: To Cut 20% of Jobs Under Restructuring Plan
--------------------------------------------------------------
Energy Conversion Devices, Inc., has initiated a restructuring
plan to better align operating expenses with near-term revenue
expectations while positioning the company to more efficiently
leverage future growth opportunities.
The specific restructuring actions include additional workforce
reductions and the previously announced restructuring related to
ECD's acquisition of Solar Integrated Technologies. In connection
with all restructurings, employees will be reduced by roughly 400,
representing roughly 20% of ECD's combined workforce.
These actions are expected to create annualized savings of
approximately $17 million, with half to be realized in fiscal
2010.
ECD expects to record related charges of approximately $9 million
in fiscal year 2010, including the previously announced
restructuring costs related to ECD's acquisition of Solar
Integrated Technologies. This restructuring plan will be
completed in fiscal 2010.
"We are committed to reducing our cost structure, while still
satisfying the increasing demand for our products in the
marketplace," said Mark Morelli, ECD's President and Chief
Executive Officer. "We expect our business will strengthen in the
second half of our fiscal year, and these steps should lower our
overall operating costs for both the near and long terms, and
position our company to better capitalize on growth opportunities
in our rooftop solar markets."
About Energy Conversion Devices
Rochester Hills, Michigan-based Energy Conversion Devices, Inc.
(Nasdaq: ENER) -- http://www.energyconversiondevices.com/--
manufactures, sells and installs thin-film solar laminates that
convert sunlight to energy using proprietary technology.
ERICKSON RETIREMENT: 13 Units' Schedules & Statements
-----------------------------------------------------
Thirteen affiliates of Erickson Retirement Communities, LLC,
filed with the Court their schedules of assets and liabilities to
reflect these total assets and liabilities:
Debtor Assets Liabilities
------ ----------- ------------
Littleton Campus, LLC $28,876,042 $240,222,385
Concord Campus, LP 28,447,594 315,517,562
Ashburn Campus, LLC 25,731,575 230,798,005
Novi Campus, LLC 24,717,945 252,704,349
Dallas Campus, LP 17,030,813 178,328,177
Houston Campus, LLC 12,273,334 194,776,353
Kansas Campus, LLC 10,490,317 153,931,880
Erickson Construction, LLC 4,264,408 11,747,050
Concord Campus GP, LLC 1,275,000 0
Columbus Campus, LLC 94,523 85,747,743
Warminster Campus GP, LLC 0 0
Senior Campus Services, LLC 0 0
Dallas Campus GP, LLC 0 0
Statements of Financial Affairs
Thirteen Debtors submitted to the Court their statements of
financial affairs:
1. Ashburn Campus, LLC
2. Columbus Campus, LLC
3. Concord Campus GP, LLC
4. Dallas Campus GP, LLC
5. Dallas Campus, LP
6. Erickson Construction, LLC
7. Houston Campus, LP
8. Kansas Campus, LLC
9. Senior Campus Services, LLC
10. Warminster Campus GP, LLC
11. Littleton Campus, LLC
12. Novi Campus, LLC
13. Concord Campus, LP
These Debtors disclosed that they earned income from the
operation of their business during the two years immediately
preceding the Petition Date:
Debtor Income Year
------ ------------ -----------------
Erickson Construction, LLC $51,868,852 1/1/09 - 10/19/09
$274,257,688 1/1/08 - 12/31/08
Concord Campus, LP $10,520,676 1/1/09 - 10/19/09
$10,229,113 1/1/08 - 12/31/08
Novi Campus, LLC $9,521,162 1/1/09 - 10/19/09
$10,417,160 1/1/08 - 12/31/08
Littleton Campus, LLC $6,732,524 1/1/09 - 10/19/09
$6,165,627 1/1/08 - 12/31/08
Houston Campus, LP $3,979,660 1/1/09 - 10/19/09
$4,436,222 1/1/08 - 12/31/08
Dallas Campus, LP $4,237,925 1/1/09 - 10/19/09
$4,341,173 1/1/08 - 12/31/08
Ashburn Campus, LLC $3,677,665 1/1/09 - 10/19/09
$490,571 1/1/08 - 12/31/08
Kansas Campus, LLC $1,269,766 1/1/09 - 10/19/09
$1,185,652 1/1/08 - 12/31/08
Columbus Campus, LLC $118,073 1/1/09 - 10/19/09
$44,073 1/1/08 - 12/31/08
These Debtors earned income from sources other than from
operation of their business during the two years immediately
preceding the Petition Date:
Debtor Income Year
------ ------------ -----------------
Novi Campus, LLC $1,156,483 1/1/09 - 10/19/09
$1,803,045 1/1/08 - 12/31/08
Houston Campus, LP $1,065,134 1/1/09 - 10/19/09
$1,583,160 1/1/08 - 12/31/08
Dallas Campus, LP $779,612 1/1/09 - 10/19/09
$1,139,268 1/1/08 - 12/31/08
Littleton Campus, LLC $628,536 1/1/09 - 10/19/09
$842,345 1/1/08 - 12/31/08
Concord Campus, LP $619,622 1/1/09 - 10/19/09
$837,225 1/1/08 - 12/31/08
Ashburn Campus, LLC $285,335 1/1/09 - 10/19/09
$184,160 1/1/08 - 12/31/08
Kansas Campus, LLC $493,804 1/1/09 - 10/19/09
$728,839 1/1/08 - 12/31/08
Erickson Construction, LLC $31,846 1/1/09 - 10/19/09
$246,737 1/1/08 - 12/31/08
These Debtors made payments to creditors within 90 days
immediately preceding the Petition Date in these amounts:
Debtor Creditor Payments
------ -----------------
Ashburn Campus, LLC $13,905,469
Concord Campus, LP 11,382,591
Erickson Construction, LLC 6,450,100
Dallas Campus, LP 4,669,681
Houston Campus, LP 2,632,788
Novi Campus, LLC 2,450,702
Littleton Campus, LLC 507,460
Columbus Campus, LLC 162,584
Kansas Campus, LLC 150,321
These Debtors made payments within a year immediately preceding
the Petition Date to creditors who are or were insiders:
Debtor Insider Payments
------ ----------------
Concord Campus, LP $54,054,107
Ashburn Campus, LLC 41,801,688
Erickson Construction, LLC 20,708,252
Columbus Campus, LLC 11,390,106
Littleton Campus, LLC 9,174,539
Kansas Campus, LLC 8,589,536
Houston Campus, LP 6,418,323
Novi Campus, LLC 6,700,301
Dallas Campus, LP 5,850,821
These Debtors made payments to entities related to debt
counseling or bankruptcy within one year immediately preceding
the Petition Date:
Debtor Bankruptcy Payments
------ -------------------
Ashburn Campus, LLC $100,000
Concord Campus, LP 100,000
Columbus Campus disclosed that its property known as Hickory
Chase located at 4383 Davidson Road, Hilliard, Franklin County,
Ohio is under receivership with John A. Rothschild, Jr., director
of receiverships Special Asset Division of Continental Realty as
receiver pursuant to a July 14, 2009 order entered in the Court
of Common Pleas of Franklin County, Ohio. Keybank National as
agent, on behalf of Fifth Third Bank, Hillcrest Bank, Wilmington
Trust FSB, Solutions Bank, and First Commonwealth Bank initiated
an action against Columbus Campus, LLC, in the Ohio Court.
Erickson Construction said that within one year immediately
preceding the Petition Date, it is or was a party to five civil
suits, a list of which is available for free at:
http://bankrupt.com/misc/EricksonConsSofA4a.pdf
Concord GP and Concord are parties to two premises liability
arising from injury subcontractor's employee litigation within
one year before the Petition Date pending in the Court of Common
Pleas Philadelphia County, Pennsylvania, initiated by Victor
Tavares and Wesley Robinson.
Within two years immediately preceding the Petition Date, these
bookkeepers and accountants kept certain of the Debtors' books
and records are:
Name Title
---- -----
Barbara Labuskes Vice President of Finance
Scott Thelen Senior Vice President of Finance
Sherrie Rovnan Senior Vice President of Finance
Kent Madigan Senior Director Finance
Neal Gantert Senior Director Finance
Jeremy Trimble Director Finance
Sandy Zinck Senior Director Finance
LeAnne Olson Assistant Controller
Mark Szczybor Assistant Controller
William Buckman Assistant Controller
Linda Sanchez Assistant Controller
Gail Patnaude Accounting Manager
Jeffrey Jacobson EVP, CFO, Treasurer
Tom Brod Executive Vice President Finance
Within two years immediately preceding the Petition Date, Pete
Poore and Dominic Dubois of McGladrey & Pullen, LLP, audited the
books and records of the applicable Debtors.
Certain Debtors disclosed that they issued financial statements
to certain parties within two years before the Petition Date.
Lists of the parties are available for free at:
* http://bankrupt.com/misc/AshburnSofA19d.pdf
* http://bankrupt.com/misc/ColumbusSofA19d.pdf
* http://bankrupt.com/misc/DallasSofA19d.pdf
* http://bankrupt.com/misc/EricksonConstSofA19d.pdf
* http://bankrupt.com/misc/HoustonSofA19d.pdf
* http://bankrupt.com/misc/KansasSofA19d.pdf
* http://bankrupt.com/misc/LittletonSofA19d.pdf
* http://bankrupt.com/misc/NoviSofA19d.pdf
* http://bankrupt.com/misc/ConcordSofA19d.pdf
Erickson Retirement Communities, LLC, owns 100% interest in
Ashburn, Columbus, Concord GP, Dallas GP, Erickson Construction,
Kansas, Senior Campus, Warminster GP, Littleton, Novi, and
Concord. ERC serves as current member of these Debtors.
Moreover, ERC owns 98% interest in Houston and is a limited
partner to Houston.
Erickson Construction's former officers are:
Name Title
---- -----
David Tague Vice President - Construction
George Brown Vice President - Construction
John Deduk Vice President - Preconstruction Servs.
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: Erickson Group LLC's Schedules & Statement
---------------------------------------------------------------
Erickson Group, LLC, listed zero assets and zero liabilities.
The Company, however, presented to the Court a list of creditors
holding secured claims in unknown amounts, a copy of which is
available for http://bankrupt.com/misc/EricksonGroup_SchedD.pdf
Erickson Group also reports that it has received income other
than from operations of its business within two years immediately
preceding the Petition Date:
Year Income
---- ----------
01/01/09-10/18/09 $1,949,926
01/10/08-12/31/09 $2,445,783
Within the two years immediately preceding the Petition Date,
these bookkeepers and accountants kept or supervised the keeping
of books and records of Erickson Group:
Name Title
---- -----
Barbara Labuskes Vice President of Finance
Scott Thelen Senior Vice President of Finance
Sherrie Rovnan Senior Vice President of Finance
Kent Madigan Senior Director Finance
Neal Gantert Senior Director Finance
Jeremy Trimble Director Finance
Sandy Zinck Senior Director Finance
LeAnne Olson Assistant Controller
Mark Szczybor Assistant Controller
Mark Szczybor Assistant Controller
William Buckman Assistant Controller
Linda Sanchez Assistant Controller
Gail Patnaude Accounting Manager
Jeffrey Jacobson EVP, CFO, Treasurer
Tom Brod Executive Vice President Finance
Erickson Group provided to Ciara Forrest of Bank of America a
financial statement within two years immediately preceding the
Petition Date.
Erickson Group's current officers and shareholders are:
Nature and Percentage
Name Title of Stock Ownership
---- ----- ---------------------
J&N Nevada Holding, Inc. Member 37.7344%
Senior Living Limited Member 26.5180%
2002 John C. Erickson Director, 16.2353% Common
GST Trust Chairman and Member Interest
President
2002 Nancy A. Erickson Director 16.2353% Common
GST Trust Member Interest
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: Warminster Campus's Schedules & Statement
--------------------------------------------------------------
A. Real Property
Owned
Ann's Choice - P.A. Property Land $982,909
Ann's Choice - P.A. Property Buildings 23,982,928
B. Personal Property
B.2 Bank Accounts
PNC Bank Account No. 4471 33,719
B.3 Security Deposits with public utilities
PNC - Reserve deposit for land lease 1,462,350
PNC - Security for NH1 Road LOC 115,008
PNC - Security for NH1 Road LOC 550,000
PNC - Security for NH4 Sitework LOC 3,972,414
B.16 Accounts receivable
Ann's Choice 212,712
B.28 Office equipment 445,518
B.29 Computer Software 33,718
TOTAL SCHEDULED ASSETS $31,791,276
===========================================================
C. Property Claimed as Exempt Not applicable
D. Creditors Holding Secured Claims $0
See at http://bankrupt.com/misc/Warminster_SchedD.pdf
F. Creditors Holding Unsecured Non-priority Claims
Money Loaned
Ann's Choice, Inc. 276,759,374
Erickson Retirement Communities, LLC 2,180,353
Intercompany Due
Ann's Choice, Inc. 152,615
Erickson Retirement Communities, LLC 594,110
Development Fee
Erickson Retirement Communities, LLC 771,520
Real Property Lease
Health Care Properties 19,500,000
Goods, Services, Trade
Wallace Roberts & Todd LLC 52,837
Others 75,032,572
See at http://bankrupt.com/misc/Warminster_SchedF.pdf
TOTAL SCHEDULED LIABILITIES $375,043,381
===========================================================
Statement of Financial Affairs
Warminster Campus, LP, discloses that it received income from the
operation of its business during the two years immediately
preceding the Petition Date:
Year Income
---- -----------
01/01/09-10/19/09 $16,419,639
01/01/08-12/31/08 $18,094,474
Warminster Campus also received income from sources other than
from the operation of its business during the two years
immediately preceding the Petition Date:
Year Income
---- -----------
01/01/09-10/19/09 $2,813
01/01/08-12/31/08 $233,351
Within 90 days immediately preceding the Petition Date,
Warminster made payments to creditors, aggregating $1,066,093, a
breakdown of which is available for free at:
http://bankrupt.com/misc/Warminster_3bCredPayments.pdf
Warminster also paid within one year immediately preceding the
Petition Date $30,880,614 to creditors, who are or were insiders.
A breakdown of the insider payments is available for free at:
http://bankrupt.com/misc/Warminster_3cInsiderPayments.pdf
Within two years immediately preceding the Petition Date, these
bookkeepers and accountants kept and supervised the keeping of
books and records of Warminster:
Name Title
---- -----
Barbara Labuskes Vice President of Finance
Scott Thelen Senior Vice President of Finance
Sherrie Rovnan Senior Vice President of Finance
Kent Madigan Senior Director Finance
Neal Gantert Senior Director Finance
Jeremy Trimble Director Finance
Sandy Zinck Senior Director Finance
LeAnne Olson Assistant Controller
Mark Szczybor Assistant Controller
Mark Szczybor Assistant Controller
William Buckman Assistant Controller
Linda Sanchez Assistant Controller
Gail Patnaude Accounting Manager
Jeffrey Jacobson EVP, CFO, Treasurer
Tom Brod Executive Vice President Finance
Also, Pete Poore and Dominic Dubois of McGladrey & Pullen LLP
audited the books and records of Warminster within two years
immediately preceding the Petition Date.
Warminster issued a financial statement to 23 parties within two
years immediately preceding the Petition Date. A list of the
parties is available for free at:
http://bankrupt.com/misc/Warminster_19dFinlStatParties.pdf
Erickson Retirement Communities, LLC, is limited partner to
Warminster and owns 98% interest of Warminster.
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)
ESSAR STEEL: Moody's Confirms Corporate Family Rating at 'Caa1'
---------------------------------------------------------------
Moody's Investors Service confirmed the ratings (Caa1 corporate
family rating) of Essar Steel Algoma Inc. and assigned a B3 rating
to its proposed US$325 million of senior secured notes due 2015.
The company's speculative grade liquidity rating remains SGL-4 and
the rating outlook is stable. This concludes Moody's review for
possible downgrade of ESA, which was initiated on August 21, 2009.
Proceeds from the new notes and the recently-concluded sale, for
C$136 million, of the company's 50.1% interest in a cogen facility
will be used to refinance US$315 million of term loans, repay
US$123 million of ABL borrowings, and pay fees and expenses. The
refinancing of the term loan will free ESA from financial
covenants and the repayment of the ABL will buttress its
liquidity. Moody's rating confirmation and the stable rating
outlook consider the company's improved liquidity and debt
maturity profile and Moody's belief that ESA's parent, Essar
Global Ltd, will provide financial support to ESA, at least up to
a point.
However, North American steel market conditions remain weak and
Moody's expects ESA to have negative operating income and free
cash flow in the second half of its fiscal 2010 (ending March 31,
2010) and quite possibly for all of fiscal year 2011, which will
lead to increased debt and limited liquidity. ESA primarily
produces commodity grades of steel, which leaves it highly exposed
to an extended period of weak steel demand and low prices. And
since it buys 100% of the pellets and met coal it needs, Moody's
can see input costs rising as the North American economy
strengthens, which may temper any sizable impact from higher steel
prices. On top of these significant challenges, ESA has far too
much debt -- pro forma C$808 million before Moody's adjustments
(C$950 million with Moody's adjustments) -- whereas EBITDA was
C$14 million for the twelve months ended September 30, 2009.
ESA's Caa1 corporate family rating also reflects Moody's belief
that its parent company, Essar Global Ltd, will support ESA, at
least up to a point. Besides technical and managerial assistance
over the last two years, the parent has provided financial support
at critical moments by purchasing the plant's cogen power facility
for a total price of C$263 million; the second half of the cogen
purchase closed on November 24, 2009. However, lacking a legal
guarantee from the parent and details on which to assess the
parent's credit worthiness, Moody's can only ascribe modest credit
support to ESA's otherwise weak stand-alone rating.
The SGL-4 speculative grade liquidity rating, denoting weak
liquidity, reflects Moody's expectation of negative cash from
operations over the next 12 months and, therefore, declining
liquidity as the company increasingly borrows under its asset-
based revolving credit facility. Moody's expects pro forma ABL
availability at December 31, 2009, to be approximately
C$140 million. The ABL has no material revolver covenants unless
availability is less than US$42.5 million.
These ratings were confirmed:
-- Caa1 corporate family rating
-- Caa1 probability of default rating
-- Caa2 (LGD5, 78%) for its 9.875% senior unsecured notes due
2015
-- SGL-4 speculative grade liquidity rating
This rating was assigned:
-- B3 (LGD3, 34%) to the proposed US$325 million of senior
secured notes due 2015
The B3 rating for ESA's senior secured term loan facility due 2013
will be withdrawn at the conclusion of the financing.
Moody's previous rating action for ESA was on August 21, 2009,
when the company was placed under review for possible downgrade.
Essar Steel Algoma Inc. is an integrated steel producer
headquartered in Sault Ste. Marie, Ontario. Approximately 80% of
ESA's sales are sheet products, with plate products accounting for
the balance. ESA's principal end markets are steel service
centers, the automotive industry, steel fabricators and
manufacturers. In the twelve months ended September 30, 2009, the
company generated approximately C$1.57 billion in revenues.
ESTATES OF LAKE: Case Summary & 18 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: The Estates of Lake Blalock, LLC
P.O. Box 100
Mayo, SC 29368
Bankruptcy Case No.: 09-08987
Chapter 11 Petition Date: December 1, 2009
Court: United States Bankruptcy Court
District of South Carolina (Spartanburg)
Judge: Chief Judge John E. Waites
Debtor's Counsel: G. William McCarthy, Jr., Esq.
1715 Pickens St. (29201)
PO Box 11332
Columbia, SC 29211-1332
Tel: (803) 771-8836
Email: bmccarthy@mccarthy-lawfirm.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 $7,200,112
and total debts of $5,701,868.
A full-text copy of the Debtor's petition, including a list of its
18 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/scb09-08987.pdf
The petition was signed by Emily Easler-Handy, managing member of
the Company.
EVANS INDUSTRIES: Law Firm's Conflict of Interest Issue Resolved
----------------------------------------------------------------
Law360 reports that Asset Funding Group LLC and Adams and Reese
LLP have called a halt to their dispute over an alleged conflict
of interest in A&R's representation of the company during the 2005
bankruptcy and asset sale of Evans Industries Inc.
Headquartered in Harvey, Louisiana, Evans Industries, Inc. --
http://www.evansindustriesinc.com/-- manufactures and distributes
steel drums. The Company filed for Chapter 11 protection on April
25, 2006 (Bankr. E.D. La. Case No. 06-10370). Eric J. Derbes,
Esq., and Melanie M. Mulcahy, Esq., at The Derbes Law Firm, LLC,
represent the Debtor. C. Davin Boldissar, Esq., at Locke Liddell
& Sapp, LLP, represents the Official Committee of Unsecured
Creditors. In its petition, Evans estimated having assets below
$1 million and debts between $10 million and $50 million.
FAIRVUE CLUB: Files for Bankruptcy to Stave Off Foreclosure
-----------------------------------------------------------
J.R. Lind at nashvillepost.com says Fairvue Club Properties,
subsidiary of TLP Devco, filed for bankruptcy under Chapter 11
after reducing services to its members in a cost-savings plan.
The Company is facing foreclosure on Dec. 18, 2009.
Fairvue Club Properties is a luxury home developer in Middle
Tennessee. The Company listed assets and debts of between $10
million and $50 million.
FERNA PINEDA: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Joint Debtors: Ferna A. Pineda
Magda S. Pineda
aka Maggie Pineda
909 Live Oak Ridge Rd.
Austin, TX 78746
Bankruptcy Case No.: 09-13407
Chapter 11 Petition Date: December 1, 2009
Court: United States Bankruptcy Court
Western District of Texas (Austin)
Debtor's Counsel: Frank B. Lyon, Esq.
6836 Austin Center Blvd., Suite 150
Austin, TX 78731
Tel: (512) 345-8964
Fax: (512) 345-4393
Email: frank@franklyon.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtors did not file a list of their 20 largest unsecured
creditors when they filed their petition.
The petition was signed by the Joint Debtors.
FINANCIAL GUARANTY: Triggers Payouts on $1-Bil. in Credit Swaps
---------------------------------------------------------------
Bloomberg News reports that credit-default swaps traders will
settle $1 billion of contracts protecting against a default by
FGIC Corp.'s bond insurance unit, Financial Guaranty Insurance
Co., after the insurer was ordered by its regulator to cease
claims payments.
A committee of credit swaps dealers and investors voted December 3
to declare a credit event for contracts linked to Financial
Guaranty Insurance, Bloomberg said, citing the International Swaps
and Derivatives Association. Banks and other investors typically
used the swaps to protect against losses on guarantees they had
purchased from the bond insurer on debt such as mortgage-backed
securities. The ruling requires sellers to pay out the amount of
protection sold through the credit swaps, less the value of the
securities FGIC guaranteed.
The New York State Insurance Department in November ordered FGIC
to suspend paying claims after it reported a negative regulatory
capital surplus. FGIC had filed with the NYID its Quarterly
Statement for the period ending September 30, 2009, in which FGIC
reported a surplus to policyholders deficit at September 30, 2009,
of $865,834,577 and an impairment of its required minimum surplus
to policyholders of $932,234,577.
The insurer has been given until January 5 to implement a plan for
restructuring its guarantee obligations and meeting its capital
requirements.
According to Bloomberg, FGIC's capital has been eroded by bad bets
on securities backed by subprime mortgages and other types of home
loans that defaulted at a record pace during the worst financial
crisis since the Great Depression. The company had a surplus of
$506 million at the end of 2008. It is required under New York
State insurance law to maintain a surplus of $65 million.
FGIC said in a November 24 statement that it is currently
formulating a comprehensive restructuring plan contemplating its
commencement of a tender offer for the acquisition or exchange of
certain residential mortgage backed securities guaranteed by FGIC
in the primary market; FGIC's continued pursuit of commutations
with the holders of FGIC-insured collateralized debt obligations
of asset-backed securities; and the commutation, termination or
restructuring of FGIC's exposure in respect of certain other
obligations for which it has established statutory loss reserves;
all with a view to remediate its RMBS, ABS CDO and other
exposures, remove its capital impairment and return it to
compliance with the applicable minimum surplus to policyholders
requirement.
FGIC -- http://www.fgic.com/-- is a monoline financial guaranty
insurance company which previously issued financial guaranties
covering financial payments on public finance, structured finance
and other securities and obligations.
FLEETWOOD ENTERPRISES: Trial Postponed to Pave Way for Settlement
-----------------------------------------------------------------
The Associated Press says that Fleetwood Enterprises, Inc., is in
settlement talks in connection with claims that it supplied the
federal government with toxic hurricane shelters. According to
The AP, a federal judge postponed a New Orleans woman's trial
against Fleetwood Enterprises to pave way for the talks.
Fleetwood, The AP notes, sold 10,500 trailers to a company that
supplied to the Federal Emergency Management Agency, which gave
victims of Hurricane Katrina and Rita emergency housing units.
Founded in 1950, Fleetwood Enterprises, Inc. (NASDAQ: FLE) and its
various subsidiaries produce, distribute, and service recreational
vehicles and manufactured housing. Fleetwood employed 2,100
people in 14 plants located in 10 states.
Based in Riverside, California, Fleetwood Enterprises, Inc.,
together with 19 of affiliates, filed for Chapter 11 protection on
March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254).
Craig Millet, Esq., and Solmaz Kraus, Esq., at Gibson, Dunn &
Crutcher LLP, represent the Debtors in their restructuring
efforts. FTI Consulting Inc. is the financial advisors to the
Debtors. The Debtors tapped Greenhill & Co. LLC as its investment
banker.
FONTAINEBLEAU LV: Committee Has Deal With Term Lenders on Fees
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Fontainebleau Las
Vegas Holdings LLC's deadline to challenge the claims and liens of
the prepetition term lenders or to prosecute avoidance actions
against the Term Lenders and other related parties is on
December 15, 2009.
As of November 20, 2009, the Committee and the Term Lender
Steering Group have reached agreement with respect to various
matters, including the payment of the Committee's Professionals
in connection with the budget for professionals under the
proposed interim order authorizing debtor-in-possession
financing, the Committee's release of all Claims and Defenses,
and the Committee's withdrawal with prejudice of objections to
fees and expenses requested pursuant to the Cash Collateral
Orders. Based on the terms of the Agreement, the Challenge
Deadline Extension Order is modified, with approval of the Court,
to read:
(A) Subject to and effective immediately upon (a) the entry of
the Interim DIP Order which provides for payment in the
Agreed Budget of no less than $450,000 to the Committee's
Professionals and (b) the making of the Initial Payment to
the Committee's Professionals, then (i) the Challenge
Deadline will automatically terminate and, pursuant to
the Cash Collateral Orders, any Claims and Defenses
against any of the Released Parties will be, without
further order of the Court, deemed to have been forever
relinquished, released, and waived as to the Committee,
and (ii) the Committee will be deemed to have withdrawn,
with prejudice, its objection to the fees and expenses of
the professionals for the Term Lender Steering Group and
other Term Lenders; and
(B) In the event that the Interim DIP Order is subsequently
reversed, or modified by order of a court of competent
jurisdiction through no action of or inducement by the
Committee, and, as a result of that Reversal Order, the
Committee's Professionals do not receive or are required
to disgorge all or any portion of the Initial Payment
under the Agreed Budget: (a) termination of the Challenge
Deadline will be of no further force or effect; (b) the
deadline for the Committee to file a complaint with
respect to Claims and Defenses will be 30 days after the
entry of the Reversal Order; (c) the Committee will be
entitled, within 20 days of the entry of the Reversal
Order, to re-assert and re-file objections to and seek
disgorgement of payment of any professionals pursuant to
the Cash Collateral Orders; (d) the consent of the Term
Lenders to payment of the Committee's Professionals will
be withdrawn; and (e) any approval of payment of any fees
to the Committee's Professionals pursuant to the Interim
DIP Order and Agreed Budget will be void and of no effect,
and the Term Lenders will be entitled to seek disgorgement
of any portion of the Initial Payment not otherwise
disgorged pursuant to the Reversal Order.
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)
FONTAINEBLEAU LV: Moelis Engagement Letter Revised
--------------------------------------------------
An ad hoc group of prepetition term lenders filed a timely
objection to Fontainebleau Las Vegas Holdings LLC's application to
hire Moelis & Company LLC as financial advisor. Aurelius Capital
Management, LP, also filed its joinder to the Objection.
Counsel to Fontainebleau, Scott L. Baena, Esq., at Bilzin Sumberg
Baena Price & Axelrod LLP, in Miami, Florida, relates that the
parties have diligently pursued a resolution of the Objection and
to reach consensus regarding the terms of a final order approving
the Application. In addition, since the October 16, 2009
appointment of Jeffrey Truitt as the Court-appointed Examiner with
respect to the negotiation and supervision of the Debtors' Section
363 sale process, the parties have included the Examiner and his
counsel in the discussions regarding the terms of the retention on
a final basis.
Accordingly, the Debtors submitted to the Court an amended
engagement letter, the terms of which have been agreed to, and
have the support of, the Term Lender Steering Group, Aurelius and
the Examiner.
The Amended Engagement Letter entitles Moelis to payment of (a)
$100,000 per month for services rendered during August, September
and October 2009, (b) $150,000 per month for services rendered,
or to be rendered, in November and December 2009 and January
2010.
If a Sale Transaction is approved by the Court in which Nevada
Gaming Ventures, LLC, is not the approved stalking-horse bidder,
Moelis will be entitled to a Sale Transaction Fee in an amount
equal to 1% of the aggregate Transaction Value.
Clean and Redline copies of the Amended Engagement Letter is
available for free at:
http://bankrupt.com/misc/FB_MoelisAEngagementLetter.pdf
http://bankrupt.com/misc/FB_MoelisAEngagementLetterRed.pdf
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)
FONTAINEBLEAU LV: West Publishing Allowed to Cancel Contract
------------------------------------------------------------
West Publishing, a Thomson Reuters Company sought and obtained
from the Bankruptcy Court an order lifting the automatic stay to
cancel a Fontainebleau Group Contract dated October 31, 2008, by
and between Thomson Reuters and Fontainebleau Las Vegas, L.L.C.
pursuant to Section 362(d)(1) of the Bankruptcy Code and Rule
4001(a)(1) and (a)(3) of the Federal Rules of Bankruptcy
Procedure.
The Contract provides the terms pursuant to which a business
convention at the Fontainebleau Las Vegas Resort is to be held
from June 8, 2012 through June 16, 2012. West Publishing has an
unfettered right to cancel the Event with no penalty whatsoever
until on or before December 1, 2009. If the Contract is
cancelled after that date, liquidated damages may arguably be
required.
Due to the extreme importance and size of the conference for
which the Event was planned, definite plans for the conference
must be made years in advance. Therefore, West Publishing asks
the Court to lift the automatic stay to allow it to exercise its
extant right to cancel the Contract before December 1, 2009.
West Publishing informed the Court that the Debtor does not
oppose its request.
FORD MOTOR: Plans to Develop Future Models Without Mazda
--------------------------------------------------------
Keith Naughton and Alan Ohnsman at Bloomberg report that Ford
Motor Co. intends to develop future models without Mazda Motor
Corp.
Ford Motor has for decades developed vehicle platforms with
Japanese affiliate Mazda. Ford has cut its stake in Hiroshima,
Japan-based Mazda to 11% from 33% since last year as the Dearborn,
Michigan-based carmaker sold shares to raise cash amid a credit
crunch.
"For a lot of designing and engineering, we're going to be focused
on Ford," Mark Fields, Ford's president for the Americas, said on
the sidelines of the Los Angeles Auto Show December 2. "Our
efforts will be focused on the Ford system, as opposed to relying
on others such as Mazda."
Mr. Fields, Mazda's chief executive from 1999 to 2002, spoke after
Ford unveiled the Fiesta small car, which is based on the
mechanical foundation of the Mazda2 subcompact. Takashi
Yamanouchi, Mazda's chief executive officer, said continued
cooperation between the two companies remains possible.
Mazda, which said in October it would raise as much as
JPY93.6 billion ($1.1 billion) for product development by selling
shares, may struggle to introduce new cars without Ford, said auto
analyst Aaron Bragman of IHS Global Insight.
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+'.
Ford Motor Co. carries a long-term issuer default rating of 'CCC',
with a positive outlook, from Fitch Ratings.
FORD MOTOR: Former Execs' Group Seeks to Trump Geely, Revises Bid
-----------------------------------------------------------------
People familiar with the situation told The Wall Street Journal's
Rick Carew in Hong Kong and Matthew Dolan in New York report that
a consortium led by former Ford director Michael Dingman and
former Ford and Chrysler LLC executive Shamel Rushwin submitted a
revised bid this week for Ford's Volvo unit in hopes of beating
out a rival offer by Zhejiang Geely Holding Group Co., one of
China's biggest auto makers.
Sources told the Journal the revised offer by the so-called Crown
consortium is fully funded and includes participation by Swedish
investors -- two adjustments aimed at making the offer more
attractive to Ford in the sale of the Swedish operation.
Ford chose Geely in October as its preferred bidder for Volvo, and
the two sides have been working on detailed elements of an
agreement, particularly over the rights to Volvo technology.
According to Dow Jones Newswires' Patricia Jiayi Ho and Jeff
Bennett on November 30, Geely said Friday it had reached a deal
with Ford on intellectual-property rights in its bid for Volvo.
Dow Jones said an agreement with Ford would mark a significant
step forward in talks between Geely and Ford.
Dow Jones said resolving intellectual-property rights has been a
key stumbling block for U.S. auto makers Ford and General Motors
Co. in efforts to sell overseas brands to potential buyers from
China and Russia with ambitious industry-expansion plans of their
own.
"It's unclear how receptive Ford will be to the new Crown offer. A
company spokesperson declined to comment," the Journal says.
The Journal, citing one of the people familiar with the situation,
relates Geely is financing a roughly $2 billon bid for Volvo with
a combination of cash, bank loans and funds from a small number of
investors. That source said Geely's investors include a
government-owned fund based in Tianjin, China, and a relatively
well-known foreign investor. Another source told the Journal
Geely has reached agreements for loans from Bank of China Ltd.,
China Construction Bank Corp. and Export-Import Bank of China.
The Journal says its sources declined to say the amount of Crown's
bid but described the bid as on par with the Geely offer.
The Crown consortium includes a China-focused merchant-banking
firm, the Balloch Group, which will help coordinate the group's
China strategy if it is successful, according to the Journal's
sources. The Crown consortium also includes Roger Holtback, a
Volvo chief executive in the late 1980s.
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+'.
Ford Motor Co. carries a long-term issuer default rating of 'CCC',
with a positive outlook, from Fitch Ratings.
FORUM HEALTH: Youngstown Mayor Taps Help from Federal Government
----------------------------------------------------------------
George Nelson at Business Journal Daily says Youngstown, Ohio
Mayor Jay Williams is seeking help from the federal government to
preserve 4,000 jobs at Forum Health Inc., saying it would be a
good investment for the government.
Mayor Williams wanted to explore whether unused federal stimulus
funds could be used to improve the reorganization plan made under
chief executive officer Walter Pishkur, whether through loan
guarantees, loan buy-down or direct investment, relates
Mr. Nelson.
The Company has until Dec. 14, 2009, to decide whether to
restructure the health-care system through a reorganization plan
or pursue a merges-and-acquisition plan, says Mr. Nelson.
Based in Warren, Ohio, Forum Health -- http://www.forumhealth.org/
-- offers health care services. The primary service area consists
of the northeast Ohio counties of Mahoning, Trumbull and
Columbiana; and northeast Ohio counties of Ashtabula, Geauga and
Portage and the Pennsylvania counties of Mercer and Lawrence.
Forum Health and its affiliates filed for Chapter 11 protection on
March 16, 2009 (Bankr. N.D. Ohio Lead Case No. 09-40795). Paul W.
Linehan, Esq., and Shawn M Riley, Esq., at McDonald Hopkins LLC,
serve as lead counsel to the Debtors. The Debtors have also
tapped Michael A. Gallo, Esq. at Nadler Nadler & Burdman Co., LPA
as co- counsel; Kurtzman Carson Consultants LLC as claims,
noticing and balloting agent; and Huron Consulting Services LLC as
financial advisors. Alston & Bird LLP represents the official
committee of unsecured creditors formed in the Chapter 11 cases.
At the time of its filing, Forum Health estimated that it had
assets and debts both ranging from $100 million to $500 million.
FRANK TALMO: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Frank Michael Talmo
169 Nellies Corner Road
Rising Sun, MD 21911
Bankruptcy Case No.: 09-33528
Chapter 11 Petition Date: December 2, 2009
Court: United States Bankruptcy Court
District of Maryland (Baltimore)
Judge: Nancy V. Alquist
Debtor's Counsel: Howard M. Heneson, Esq.
810 Glen Eagles Court, Suite 301
Towson, MD 21286
Tel: (410) 494-8388
Fax: (410) 494-8389
Email: hheneson@bankruptcymd.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of $4,381,124
and total debts of $6,836,642.
A full-text copy of Mr. Talmo's petition, including a list of his
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/mdb09-33528.pdf
The petition was signed by Mr. Talmo.
FREEDOM COMMS: Committee Gets Court Nod to Seek Alternative Plan
----------------------------------------------------------------
Randall Chase at The Associated Press says a federal bankruptcy
judge authorized the Official Committee of Unsecured Creditors of
Freedom Communications Inc. to seek an alternative to the
Company's reorganization plan. The bankruptcy judge, according to
The AP, said the ruling should not be taken as an implicit
suggestion that a different or better result is out there. The
judge has doubts that the Committee's effort will yield any
significant results, AP notes.
Pre-bankruptcy, Freedom 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 -- members of the founding Hoiles family and two
private equity firms -- would get 2% of the new stock, along with
warrants to acquire another 10%, if they don't object to the
plan. A Plan Support Agreement with the lenders will be
terminated by the lenders if the Debtors do not obtain
confirmation of the Plan within five months from the Petition
Date. 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.
GENERAL GROWTH: Brookfield, Simon Amass Bank Debt, Bonds
--------------------------------------------------------
The Wall Street Journal's Kris Hudson reports people familiar with
the matter say Brookfield Asset Management Inc. and Simon Property
Group Inc. have acquired General Growth Properties Inc. bank debt
and bonds to position themselves to make bids for all or part the
Debtors.
Sources told the Journal a group led by Toronto-based Brookfield
has bought "close to $1 billion" of General Growth's unsecured
debt in recent months. These sources say Brookfield is hoping to
convert that debt into equity and is considering putting up more
capital to help General Growth pay some or all its remaining
$7 billion in unsecured debt to exit from bankruptcy next year.
The Journal says the amount of debt Simon has amassed is not
known. However, sources told the Journal Simon has held talks
with other General Growth debtholders about possibly buying their
positions as part of a potential bid to buy the Debtors.
Another source told the Journal Simon wants to acquire all of
General Growth, not individual assets.
The Journal says neither Brookfield nor Simon has made a proposal
to General Growth's board.
"This is a once-in-a-generation opportunity to buy a large, high-
quality mall portfolio in the U.S.," said Jim Sullivan, an analyst
with Green Street Advisors Inc., according to the Journal.
The Journal notes Brookfield was part of a bid led by Goldman
Sachs Group Inc. to provide DIP financing for General Growth in
bankruptcy, but a rival bid led by Farallon Capital Management LLC
ultimately prevailed.
According to the Journal, Brookfield manages more than $98 billion
in assets, specializing in infrastructure, power plants and
commercial property. It has raised $5 billion in the past year.
It attempted in 2007 to buy Mills Corp. and its 37 discount malls,
but Mill ultimately was bought by Simon and Farallon, the Journal
says.
Simon owns 323 U.S. malls and is the largest mall operator in the
U.S.
Chapter 11 Plan May Thwart Simon's Plans
Daniel Taub at Bloomberg News reports that General Growth
Properties' plans to keep its best-performing shopping malls may
thwart the acquisition ambitions of competitor Simon Property
Group Inc.
"I would not be surprised to see the odd sale of an asset, but it
won't be to raise substantial capital," General Growth President
and Chief Operating Officer Thomas Nolan said in a telephone
interview with Bloomberg. "We have no current plans to sell any
of those assets we consider to be strategically important."
Before filing for Chapter 11, General Growth had been trying to
sell real estate including Boston's Faneuil Hall, South Street
Seaport in New York City, and the Fashion Show and Shoppes at the
Palazzo malls in Las Vegas. Those sales won't be necessary under
the planned reorganization, Mr. Nolan said.
On December 1, 2009, 182 debtor affiliates of General Growth
presented to the Bankruptcy Court a Joint Plan of Reorganization.
The Plan, according to the Debtors' lead counsel, Marcia L.
Goldstein, Esq., at Weil, Gotshal & Manges LLP, in New York, is a
result of an agreement reached with secured debt holders. The
revised loan terms and loan amendments under the Plan are the
result of extensive negotiations and represent the successful
renegotiation of about $9.7 billion of project-level secured
obligations, including a large amount of commercial mortgage-
backed securities or "CMBS" obligations, she says. Essentially,
the Plan provides for 100% recovery to all holders of Claims
against, and Interests in, the Plan Debtors. Indeed, the Secured
Debt Holders are the only impaired class under the Plan and, thus,
the only Class entitled to vote to accept or reject the Plan. All
other Classes are unimpaired and are thus conclusively presumed to
accept the Plan.
According to Bloomberg, Simon Property, the largest U.S. mall
owner, has been working on an approach toward its biggest rival.
Simon hired merger adviser Lazard Ltd. and Wachtell Lipton Rosen &
Katz, a law firm focusing on acquisitions, for advice on General
Growth, Simon said on Nov. 17.
"We're flattered by the interest in General Growth expressed by a
whole host of investors, including Simon," Mr. Nolan said. "We're
very focused on the immediate task at hand, which is to get the
company recapitalized, restructured, and emerge from bankruptcy as
one of the premier owners of regional shopping centers in the
U.S."
Simon Chief Executive Officer David Simon has said his company is
"a logical buyer" for General Growth malls. "There's a lot we
could do with those properties," he said in a Sept. 15 interview
on Bloomberg Television.
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: Gets Nod to Execute Pact With Hawaiian Dredging
---------------------------------------------------------------
General Growth Properties Inc. and its units obtained approval
from the Bankruptcy Court to enter into a settlement agreement
with Hawaiian Dredging Construction Company, Inc.
In September 2006, the Parties entered into a construction
contract requiring Hawaiian Dredging to provide all labor,
materials, and equipment necessary to produce certain retail
space and other related improvements in connection with the
expansion of the Ala Moana Center in Honolulu, Hawaii. In
November 2008, Hawaiian Dredging filed an application for
mechanic's and materialman's liens for $9,151,268 with the
Circuit Court of the First Circuit, Hawaii.
In December 2008, Hawaiian Dredging filed a complaint in the
Hawaii state court seeking $9,151,268 for amounts due and owing
under the Contract. In February 2009, the Parties entered into a
Temporary Forbearance Agreement establishing a payment schedule
and providing for the application of a forbearance fees and
accrual of interest on the payment balance. Prepetition, the
Debtors made numerous payments under the Forbearance Agreement.
In June 2009, Hawaiian Dredging recorded an Order for Attachment
of Mechanics' and Materialmen's Lien with the Office of the
Assistant Registrar Land Court, State of Hawaii. In July 2009,
Hawaiian Dredging filed a notice of perfection lien in the
Debtors' Chapter 11 cases for $6,124,784. In September 2009, the
Lien was scheduled in Ala Moana's and General Growth Properties,
Inc.'s schedules of assets and liabilities, as amended, as a
contingent, unliquidated, disputed claim for $6,993,537.
After negotiations and review, Ala Moana and Hawaiian Dredging
have agreed to allow Hawaiian Dredging a claim for $6,331,537.
Thus, the parties entered into the Settlement Agreement with
these pertinent terms:
(a) Ala Moana agrees to pay Hawaiian Dredging 85% of the amount
of the Claim or $5,381,806;
(b) Hawaiian Dredging will retain an allowed secured claim for
5% of the Claim or $316,576 to be satisfied pursuant to a
confirmed Chapter 11 for Ala Moana or as ordered by the
Court;
(c) Hawaiian Dredging agrees to waive 10% of the Claim or
$633,153;
(d) Hawaiian Dredging agrees to waive any and all present and
future claims to attorneys' fees, interest and penalties
associated with the Claim;
(e) Hawaiian Dredging agrees to deliver, upon receipt of the
settlement payment, a full lien release for the Lien as well
as any liens or other claims from its subcontractors.
Hawaiian Dredging will satisfy all liens of claims arising
from its work at the Ala Moana Project against the amounts
paid to them under the Settlement Agreement and will fully
exonerate Ala Moana from any obligation to any lien holder
or claimant relating to Hawaiian Dredging's work on the Ala
Moana Project;
(f) Hawaiian Dredging agrees that it has not and will not
transfer any portion of its remaining claim;
(g) Hawaiian Dredging agrees to release all claims and causes of
action arising out of the Contract or work in connection
with the Ala Moana Project; and
(h) Hawaiian Dredging agrees to indemnify, defend and hold
harmless the Debtors against any claims or cause of action
asserted by Hawaiian Dredging or any related party in
connection with the work performed at the Ala Moana Project
due to claims for non-payment or tort claims due to Hawaiian
Dredging's negligence.
The Debtors believe that settling Hawaiian Dredging's Claim
pursuant to the Settlement Agreement provides an opportunity for
their estates to realize a more favorable resolution than waiting
until later in the reorganization process.
GENERAL GROWTH: Terms of Proposed Chapter 11 Plan
-------------------------------------------------
One hundred eighty-two debtor affiliates of General Growth
Properties, Inc., presented to the United States Bankruptcy Court
for the Southern District of New York a Joint Plan of
Reorganization and accompanying Disclosure Statement on
December 1, 2009.
The 182 Plan Proponent Debtors are part of the GGP Group that
operates on an integrated basis with a variety of centralized
functions. The 182 Plan Debtors excludes General Growth
Properties, Inc. A list of the Plan Debtors is available for
free at http://bankrupt.com/misc/ggp_PlanDebtorsList.pdf
The Plan, according to the Debtors' lead counsel, Marcia L.
Goldstein, Esq., at Weil, Gotshal & Manges LLP, in New York, is a
result of the Debtors' tireless efforts to stabilize their
business and explore consensual means to restructure their
balance sheets. After several months of dialog, which began
shortly after the Petition Date, the Plan Debtors reached an
agreement with their applicable Secured Debt Holders. The
revised loan terms and loan amendments under the Plan are the
result of extensive negotiations and represent the successful
renegotiation of about $9.7 billion of project-level secured
obligations, including a large amount of commercial mortgage-
backed securities or "CMBS" obligations, she says.
The $9.7 billion negotiation is a result of continued talks since
the Debtors first disclosed in early November that it reached a
consensus on secured lenders regarding an $8.9 billion debt
restructuring. The Debtors still need to reach similar
agreements with secured lenders of about $11.7 billion in
remaining debt.
Essentially, the Plan provides for 100% recovery to all holders
of Claims against, and Interests in, the Plan Debtors. Indeed,
the Secured Debt Holders are the only impaired class under the
Plan and, thus, the only Class entitled to vote to accept or
reject the Plan. All other Classes are unimpaired and are thus
conclusively presumed to accept the Plan.
In connection with implementing the Plan, the Plan Debtors may
merge, consolidate, convert or dissolve certain Plan Debtor
entities. After the Effective Date, and without the need for
further Court approval, the Plan Debtors may (a) cause any or all
of the Plan Debtors to be merged into or contributed to one or
more of the Plan Debtors or non-Debtor Affiliates, dissolved or
otherwise consolidated or converted, (b) cause the transfer of
assets between or among the Plan Debtors or non-Debtor Affiliates
or (c) engage in any other transaction in furtherance of the Plan
A chart detailing the Plan Debtors' reorganization process is
available for free at:
http://bankrupt.com/misc/ggp_reorganizationprocess.pdf
The Other Debtors who are not proponents of the current Plan,
including GGP, the parent entity of the Plan Debtors, will remain
in Chapter 11 after the Effective Date. Ms. Goldstein notes that
there is no guarantee that the Other Debtors will be able to
obtain the financing and satisfy the other conditions necessary
to effectively reorganize.
Pursuant to Section 1129(a)(5) of the Bankruptcy Code, the
identity of proposed initial directors and officers of the Plan
Debtors after the Effective Date will be included in a Plan
Supplement. The Plan provides that directors and officers of the
Plan Debtors who continue to serve after the Effective Date, if
any, will not be liable to any person for any claim that arose
prior to the Effective Date in connection with the service of
these directors and officers in their capacity as director,
officer, manager or trustee.
"We are extremely pleased to take this important step of filing
the plan of reorganization for these debtors," Thomas H. Nolan,
Jr., president and chief operating officer of GGP, said in a
press release. "Our successful completion of agreements in
principal with additional mortgage lenders shows our continued
progress. We will continue to work with our other secured
mortgage lenders and are hopeful that we will reach additional
consensual agreements quickly."
Settlement with Secured Debt Holders
Beginning in September 2009, the Plan Debtors and the Secured
Debt Holders engaged in negotiations on the terms of a secured
debt restructuring proposal that would extend and ladder loan
maturities and provide sustainable, go-forward capital
structures.
Ultimately, on November 13, 2009, the Plan Debtors reached an
agreement in principle with certain of the Secured Debt Holders
on the terms of a consensual plan of reorganization and amended
credit documents. The Plan Debtors subsequently reached similar
agreements with the other Secured Debt Holders regarding the
terms of a plan and terms of amended credit documents subject to
definitive documentation. The Plan Debtors' agreement with the
Secured Debt Holders covers approximately $9.7 billion in Secured
Debt Claims. Copies of the term sheets outlining the general
provisions of the agreements with the Secured Debt Holders are
available for free at:
http://bankrupt.com/misc/ggp_TermSheets.pdf
Ms. Goldstein relates that since the execution of the term sheet,
the Plan Debtors and the Secured Debt Holders have had ongoing
discussions about the terms of the Plan, some of which vary from
or clarify those of the term sheet. Moreover, "Exhibit B" to the
Plan provides that certain terms apply only to the treatment of
holders of Class B Secured Debt Claims against a certain Plan
Debtor. A full-text copy of the Exhibit B is available for free
at http://bankrupt.com/misc/ggp_ExhibitB.pdf
Pursuant to the Plan and Amended Credit Documents, each of the
Secured Debt Holders generally agreed to, among other things:
(i) maintain the current, non-default contract rate of
interest across all of the loans;
(ii) extend the weighted-average maturity date by 5.2 years,
which result in a weighted-average extended term starting
from January 1, 2010 of 6.4 years; and
(iii) permit the Plan Debtors to retain their existing cash
management system.
The Secured Debt Holders also agreed to (i) waive claims for
default interest, late fees, Anticipated Repayment Debt interest,
and immediate repayment of accelerated principal balances; and
(ii) in certain instances, waive and consent to prepetition
events of default that existed under existing loan documents.
In exchange, the Plan Debtors agreed to, among other things:
-- strengthen the bankruptcy remoteness features of their
organizational documents;
-- provide automatic relief from the automatic stay under
Section 362 of the Bankruptcy Code and termination of the
extended maturity of the loan in the event of a Subsequent
Bankruptcy Event;
-- strengthen the Secured Debt Holders' consent rights;
-- provide, upon emergence of certain parent-level entities,
non-recourse carve-out guarantees by the ultimate parent of
the Plan Debtors;
-- increase reserves;
-- catch up any unpaid amortization during the Debtors'
Chapter 11 cases upon the Plan Debtors' emergence;
-- pay increased amortization on all loans;
-- pay a restructuring fee of 100 basis points on the
outstanding balance of the loans; and
-- pay a pro rata portion of the annual 25 basis points
special servicing fee on the outstanding balance of the
loans; provided, however, that the treatment of 13
Special Consideration Properties namely:
* Eagle Ridge Mall
* Oviedo Marketplace
* Grand Traverse Mall
* Country Hills Plaza
* Moreno Valley Mall
* Lakeview Square
* Northgate Mall
* Bay City Mall
* Mall St. Vincent
* Southland Center
* Chapel Hills Mall
* Chico Mall
* Piedmont Mall
The parties also agreed to certain "most favored nations"
treatment for the Secured Debt Holders in connection with
modifications to the material economic terms of certain of the
Debtors' other project-level secured loans.
The Plan Debtors believe that consensual restructuring by and
among the Plan Debtors and their Secured Debt Holders will, among
other things, provide the Plan Debtors with a viable capital
structure going forward, maintain applicable non-default contract
rate interest, and incentivize the Debtors' other project-level
secured lenders to reach similar agreements, ultimately allowing
for a comprehensive reorganization of the entire GGP enterprise.
In addition to the negotiations with the Secured Debt Holders,
the Debtors are in continuing dialog to restructure their
remaining property-level secured debt. To the extent that
any of the Other Debtors reach an agreement with the remaining
property-level secured debt holders after final approval of the
Disclosure Statement, the Debtors may, with the consent of the
Official Committee of Unsecured Creditors, file a consensual plan
on substantially similar terms to the Plan.
If an agreement is not reached with the remaining property-level
secured debt holders, then the Debtors may file a plan or plans,
seeking nonconsensual confirmation under Section 1129(b) of the
Bankruptcy Code, if necessary, over the objection of the
remaining property-level secured debt holders.
A chart reflecting the organizational structure of the GGP Group
is available for free at:
http://bankrupt.com/misc/ggp_OrganizationalChart.pdf
In the event that either (i) the Plan is not confirmed, or (ii)
the Effective Date does not occur in accordance with the Plan,
the Plan Debtors or the Secured Debt Holders may choose to
terminate the settlements embodied in the Plan. There can be no
assurance that any subsequent settlements or nonconsensual plan
would result in a recovery for creditors equal to that provided
for under the Plan, Ms. Goldstein says.
Treatment of Claims
Administrative Expense Claims, Priority Tax Claims, Secured Tax
Claims, and GGP Administrative Expense Claims are deemed
unimpaired and will be paid in full in the ordinary course of
business consistent with current practice.
Other claims are grouped into seven classes with Class B Secured
Debt Claims being the only impaired class:
Nature of
Class Claims Impairment Entitled to Vote
----- --------- ---------- ----------------
A Priority Non- Unimpaired No; Deemed to
Tax Claims Accept
B Secured Debt Impaired Yes
Claims
C Mechanics' Unimpaired No; Deemed to
Liens Claims Accept
D Other Secured Unimpaired No; Deemed to
Claims Accept
E General Unimpaired No; Deemed to
Unsecured Accept
Claims
F Intercompany Unimpaired No; Deemed to
Obligations Accept
G Interests Unimpaired No; Deemed to
Accept
Pension Plan Matters
Non-Debtor Mayfair Property, Inc., sponsors a Retirement Income
Plan for Employees Represented by Local #1 and non-Debtor General
Growth Management, Inc., sponsors a Pension Plan for Employees of
Victoria Ward, Ltd., which Pension Plans are covered by Employee
Retirement Income Security Act. The Plan Debtors are members of
Mayfair's and GGM's controlled group.
The Pension Plans are ongoing, and will continue after the
effective Date of the Plan. Accordingly, the Plan Debtors will
remain jointly and severally liable for the contributions
required to be made to the Pension Plans in the amounts necessary
to meet the minimum funding standards prescribed by Section 1082
of Title 29 of the U.S. Code and Section 412 of Title 26 of the
U.S. Code, and for the payment of any PBGC premiums prescribed by
Sections 1306 and 1307 of Title 29 of the U.S. Code.
Given that the Pension Plans will continue after the Effective
Date, should the Pension Plans terminate after the Plan is
confirmed, the Plan does not affect in any way the Plan Debtors'
liabilities with respect to the Pension Plans, including their
liabilities to the Pension Benefit Guaranty Corporation for the
Pension Plans' unfunded benefit liabilities under Section 1362(b)
of Title 29 of the U.S. Code, or the Pension Plans' funding
deficiencies under Section 1362(c).
In the event that the Pension Plans terminate prior to
confirmation of the Plan, the PBGC asserts that it will have
claims against each of the Plan Debtors, jointly and severally,
for the Pension Plans' underfunding, any due and unpaid
contributions, and any unpaid PBGC premiums, and that all or part
of these claims may be entitled to priority as an administrative
expense claim or a priority tax claim.
Plan Debtors & Committees Recommend Plan Acceptance
The Plan Debtors, the Creditors' Committee, and the Official
Committee of Equity Security Holders recommend that holders of
Claims in Class B vote to accept the Plan. The Plan Debtors, the
Creditors' Committee, and the Equity Committee believe that
(i) the distributions under the Plan are at least equal to the
amounts that Creditors would receive if the Plan Debtors
were liquidated under Chapter 7 of the Bankruptcy Code;
and
(ii) acceptance of the Plan is in the best interests of
the holders of Class B Claims.
The Debtors say financial projections under the Plan will be
available online at no later than December 7, 2009.
A full-text copy of the Plan dated December 1, 2009, is available
for free at http://bankrupt.com/misc/ggp_Dec1Plan.pdf
A full-text copy of the Disclosure Statement is available for
free at http://bankrupt.com/misc/ggp_Dec1DS.pdf
Portions of Plan to be Filed Under Seal
The Debtors have sought and obtained the Bankruptcy Court's
authority to seal certain portions of the Plan relating to, among
others, maturities, fees, interests, and amortization schedules
resulting from subsequent changes to certain loans not subject to
the Plan or Loan Settlements.
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 Lease Decision Deadline Extended
------------------------------------------------------
Based on the statutory deadline under Section 365(d)(4) of the
Bankruptcy Code and prior order of the Court, General Growth
Properties Inc. and its units have until November 12, 2009, to
assume or reject any unexpired non-residential real property
leases under which the Debtors are tenants. The Debtors are party
to the approximately 85 office leases, ground leases, surface or
subsurface rights agreements, and other similar agreements, a list
of which is available for free at
http://bankrupt.com/misc/ggp_leases.pdf
In certain instances, the Deadline may be inapplicable to the
Agreements or its application may be the subject of dispute
between the Debtors and their counterparties. Moreover, many of
the Agreements relate to the Debtors' core assets, their shopping
centers, which are critical to their reorganization, Sylvia A.
Mayer, Esq., at Weil, Gotshal & Manges LLP, in New York, tells
the Court.
Rather than rush to make decisions with respect to their shopping
centers or risk inadvertent rejection of the Agreements, the
Debtors have instead contacted their counterparties to request an
agreed extension of the lease decision deadline. In conjunction
with these requests, the Debtors have sought to extend the
Deadline to the earlier of July 12, 2010, or 30 days after
confirmation of a Chapter 11 plan, unless an earlier date is
provided for under the plan, and have offered their
counterparties a one-time administrative fee of $1,000 to defray
any expenses associated with granting the extension and as
consideration for their accommodation.
As of October 14, 2009, the Debtors have already received
consents with respect to 21 of the Agreements and are in
discussions with other counterparties to obtain similar consents.
Concurrent with the filing of this Motion, the Debtors filed an
initial notice disclosing the consensual extensions received to
date.
Ms. Mayer says that while it is the Debtors' hope that they will
obtain consensual extensions from many of their counterparties,
if the Debtors are unable to obtain an extension with respect to
a particular Agreement, then the Debtors may challenge whether
that Agreement is subject to the Deadline and seek to assume or
reject that Agreement. To this end, the Debtors filed and served
a notice that identified: (a) those Agreements for which the
Debtors have obtained consents, (b) those Agreements that the
Debtors believe are not subject to the Deadline, (c) those
Agreements that the Debtors seek to reject, and (d) those
Agreements that the Debtors seek to assume and the amount the
Debtors' records indicate that they owe the counterparty under
the applicable Agreement.
The Agreements directly affect the Debtors' business operations
and reorganization. The relief requested in this Motion is
essential to preserve value for all stakeholders.
By this Motion, the Debtors ask the Court (1) to approve the
consensual extensions of the Deadline pursuant to Sections 105(a)
and 365(d)(4)(B)(ii) of the Bankruptcy Code; (2) to the extent
applicable, to determine that certain Agreements are not non-
residential real property leases subject to Section 365(d)(4);
and (3) authorize them to assume or reject certain Agreements
determined to be subject to Section 365(d)(4) for which the
Debtors do not obtain consensual extensions of the Deadline.
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 MOTORS: Has SAIC Joint Venture in India
-----------------------------------------------
Dow Jones Newswires' Patricia Jiayi Ho reports General Motors Co.
and China's SAIC Motor Corp. are expected to unveil Friday a new
joint venture in the Indian market, in one of the first efforts by
a China-based foreign joint venture to take its operations beyond
Chinese borders.
Dow Jones reports a person with knowledge of the negotiations said
Thursday GM and SAIC plan to set up a 50-50 joint venture to make
passenger vehicles already produced by GM in India, including the
Chevrolet Spark.
Dow Jones says the move highlights the steady development of
Chinese auto makers such as SAIC, some of which have touted their
ambition to push into the global center stage but have not been
able to show results. All they have achieved so far is to set up
manufacturing plants and sales networks in less-developed markets
such as the Middle East, South America and Africa, Dow Jones says.
According to Dow Jones, SAIC Motor spokeswoman Judy Zhu said, "We
are in discussions with GM regarding how to expand our cooperation
beyond the JVs in the China market." She declined to elaborate.
Dow Jones recalls GM said its November sales in China more than
doubled from a year earlier to 177,339 units. GM's November sales
in India rose 12% from a year earlier to 6,114 units.
Dow Jones also reports SAIC said Wednesday it will suspend its
shares from trading Thursday due to a "major asset
reorganization." SAIC said its board will hold a meeting before
December 9 to discuss the asset reorganization plan. Dow Jones
relates Ms. Zhu declined to comment on the share suspension.
Dow Jones relates SAIC said its shares will resume trading on the
Shanghai Stock Exchange after it announces a detailed plan for the
reorganization.
About General Motors
General Motors Company -- http://www.gm.com/-- is one of the
world's largest automakers, tracing its roots back to 1908. With
its global headquarters in Detroit, GM employs 209,000 people in
every major region of the world and does business in some 140
countries. GM and its strategic partners produce cars and trucks
in 34 countries, and sell and service these vehicles through these
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel,
Vauxhall and Wuling. GM's largest national market is the United
States, followed by China, Brazil, the United Kingdom, Canada,
Russia and Germany. GM's OnStar subsidiary is the industry leader
in vehicle safety, security and information services.
GM acquired its operations from General Motors Company, n/k/a
Motors Liquidation Company, on July 10, 2009, pursuant to a sale
under Section 363 of the Bankruptcy Code. Motors Liquidation or
Old GM is the subject of a pending Chapter 11 reorganization case
before the U.S. Bankruptcy Court for the Southern District of New
York.
At September 30, 2009, GM had $107.45 billion in total assets
against $135.60 billion in total liabilities.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). General Motors changed its name to Motors
Liquidation Co. following the sale of its key assets to a company
60.8% owned by the U.S. Government.
The Honorable Robert E. Gerber presides over the Chapter 11 cases.
Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H.
Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors
in their restructuring efforts. Al Koch at AP Services, LLC, an
affiliate of AlixPartners, LLP, serves as the Chief Executive
Officer for Motors Liquidation Company. GM is also represented by
Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as
counsel. Cravath, Swaine, & Moore LLP is providing legal advice
to the GM Board of Directors. GM's financial advisors are Morgan
Stanley, Evercore Partners and the Blackstone Group LLP.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MOTORS: Merbanco Out, Spyker In as Saab Suitor
------------------------------------------------------
Reuters reports Merbanco Merchant Banking president and chief
executive Christopher Johnston said the Wyoming-based private
investment firm is out as a bidder for General Motors Co.'s Saab
Automobile AB. Reuters says GM informed Mr. Johnston on Tuesday
that Merbanco was out after a board meeting in which Saab's future
was discussed. "We were disappointed to learn we were not invited
to move forward in our efforts for Saab," Mr. Johnston said in an
email to Reuters.
According to an article by Chris Paukert posted at Autoblog.com,
Spyker, The Netherlands-based luxury car maker, confirmed it --
along with its shareholders at the Convers Group -- has "expressed
an interest in Saab. Spyker designs, manufactures, markets and
distributes high-end sports cars. Spyker also operates a GT
racing team which participates in the Le Mans series and other
endurance races. According to Reuters, Spyker has market
capitalization of EUR31.66 million, annual revenue of
EUR7.8 million and a team of 132 employees.
Other bidders for Saab are BAIC, the state-owned holding company
of Beijing Automotive Import & Export Corporation, one of China's
major auto production bases and among the eight largest automobile
groups in China, and Renco Group Inc., a privately held company
with affiliated operating companies in a variety of industries,
including mining, mineral recovery, automotive assembly and fleet
support.
BAIC has a 50% equity interest in Beijing-Benz-Daimler Chrysler
Automotive Co. Ltd. -- its joint venture with Daimler -- which
manufactures and distributes Mercedes-Benz passenger cars and
Chrysler vehicles in China.
Renco makes the Humvee and Hummer, and specializes in military and
special-purpose vehicles and diesel engines to power its top-of-
the-line trucks.
Mr. Paukert also said U.K. buff book Autocar reported Fritz
Henderson's dismissal could stem from his apparent desire to close
Saab, a viewpoint that was evidently not shared by the rest of
GM's board. "We suspect there were a whole host of issues that
led to Henderson's resignation, but it's likely that GM's trustees
would prefer to offload the brand rather than incur substantial
shutdown costs," according to Mr. Paukert. "Call it a 'potential
contributing factor,' if you will," Mr. Paukert said.
The Troubled Company Reporter, citing Bloomberg News, on Thursday
said Mr. Henderson resigned after directors concluded he hadn't
done enough to fix the finances and culture of the biggest U.S.
automaker. According to Bloomberg, the board gave Mr. Henderson,
51, a 100-day review on his performance since GM's bankruptcy
exit. Bloomberg said its source asked not to be identified
because the discussions were private. While Mr. Henderson made
progress, it wasn't enough, said the source, who didn't have
specifics about the evaluation.
About General Motors
General Motors Company -- http://www.gm.com/-- is one of the
world's largest automakers, tracing its roots back to 1908. With
its global headquarters in Detroit, GM employs 209,000 people in
every major region of the world and does business in some 140
countries. GM and its strategic partners produce cars and trucks
in 34 countries, and sell and service these vehicles through these
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel,
Vauxhall and Wuling. GM's largest national market is the United
States, followed by China, Brazil, the United Kingdom, Canada,
Russia and Germany. GM's OnStar subsidiary is the industry leader
in vehicle safety, security and information services.
GM acquired its operations from General Motors Company, n/k/a
Motors Liquidation Company, on July 10, 2009, pursuant to a sale
under Section 363 of the Bankruptcy Code. Motors Liquidation or
Old GM is the subject of a pending Chapter 11 reorganization case
before the U.S. Bankruptcy Court for the Southern District of New
York.
At September 30, 2009, GM had $107.45 billion in total assets
against $135.60 billion in total liabilities.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). General Motors changed its name to Motors
Liquidation Co. following the sale of its key assets to a company
60.8% owned by the U.S. Government.
The Honorable Robert E. Gerber presides over the Chapter 11 cases.
Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H.
Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors
in their restructuring efforts. Al Koch at AP Services, LLC, an
affiliate of AlixPartners, LLP, serves as the Chief Executive
Officer for Motors Liquidation Company. GM is also represented by
Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as
counsel. Cravath, Swaine, & Moore LLP is providing legal advice
to the GM Board of Directors. GM's financial advisors are Morgan
Stanley, Evercore Partners and the Blackstone Group LLP.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MOTORS: Ed Whitacre May End Up as Permanent CEO
-------------------------------------------------------
Bloomberg News reports that General Motors Co. Chairman Ed
Whitacre, poised to spend as long as a year as interim chief
executive officer pending a CEO search, may end up hiring himself.
According to the report, a permanent successor to Fritz Henderson,
who was ousted Dec. 1, will have to work under federal pay limits
while facing hurdles such as ending annual losses that began in
2005. That may make Mr. Whitacre a good fit, according to
recruiters, former GM director Jerome York and one of the
chairman's Texas associates, Bloomberg said.
Bill Vlasic at The New York Times says finding a permanent chief
executive with a track record of success, and willing to take on
the challenge of a difficult turnaround and working for an
impatient board, could take months. It will also be complicated
by pay restrictions imposed by the federal government as a
condition of the $50 billion in loans it made to GM, Mr. Vlasic
says.
According to Mr. Vlasic, Mr. York said, "the biggest impediment to
hiring someone from the outside as C.E.O. will be the compensation
issue.? Mr. York said most executives of that caliber expect a
boatload of money to join a new company.
New York Times notes Mr. Henderson?s cash salary was cut 25%, to
$950,000, once the government became majority owner after it
helped GM emerge from bankruptcy. But Mr. Whitacre has spoken
publicly about the need to relax the restrictions, the Times says.
Mr. Whitacre retired in 2007 as chairman and CEO of AT&T Inc., the
largest U.S. phone company.
About General Motors
General Motors Company -- http://www.gm.com/-- is one of the
world's largest automakers, tracing its roots back to 1908. With
its global headquarters in Detroit, GM employs 209,000 people in
every major region of the world and does business in some 140
countries. GM and its strategic partners produce cars and trucks
in 34 countries, and sell and service these vehicles through these
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel,
Vauxhall and Wuling. GM's largest national market is the United
States, followed by China, Brazil, the United Kingdom, Canada,
Russia and Germany. GM's OnStar subsidiary is the industry leader
in vehicle safety, security and information services.
GM acquired its operations from General Motors Company, n/k/a
Motors Liquidation Company, on July 10, 2009, pursuant to a sale
under Section 363 of the Bankruptcy Code. Motors Liquidation or
Old GM is the subject of a pending Chapter 11 reorganization case
before the U.S. Bankruptcy Court for the Southern District of New
York.
At September 30, 2009, GM had $107.45 billion in total assets
against $135.60 billion in total liabilities.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). General Motors changed its name to Motors
Liquidation Co. following the sale of its key assets to a company
60.8% owned by the U.S. Government.
The Honorable Robert E. Gerber presides over the Chapter 11 cases.
Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H.
Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors
in their restructuring efforts. Al Koch at AP Services, LLC, an
affiliate of AlixPartners, LLP, serves as the Chief Executive
Officer for Motors Liquidation Company. GM is also represented by
Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as
counsel. Cravath, Swaine, & Moore LLP is providing legal advice
to the GM Board of Directors. GM's financial advisors are Morgan
Stanley, Evercore Partners and the Blackstone Group LLP.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GLOBAL ENERGY: Wants 45-Day Extension of Schedules Filing
---------------------------------------------------------
Global Energy Holdings Group, Inc., et al., have asked the U.S.
Bankruptcy Court for the District of Delaware to extend the filing
of schedules of assets and liabilities, schedules of executory
contracts and unexpired leases, and statements of financial
affairs by an additional 45 days until January 25, 2010.
The Debtors say that they won't be able to complete the Schedules
and Statements within the current 15-day deadline, given the
urgency with which they sought Chapter 11 relief and the numerous
critical operational matters that their lean staff must address in
the early days of these case, and because assembling the necessary
information will require a significant expenditure of the Debtors'
time and effort, at a time when that would be best spent towards
effectuating the Debtors' reorganization efforts.
Atlanta, Georgia-based Global Energy Holdings Group, Inc., fdba
Xethanol Corporation, is a diversified renewable energy company.
Its principal operating division is Global Energy Systems, Inc.
Global's business operations and investments include: the right to
purchase all landfill gas generated at the Hickory Ridge Landfill
in DeKalb County, Georgia; utility energy service contract Master
Agreements with AGL Services Company and The Southern Company; and
minority investments in renewable energy or clean technology
businesses.
The Company filed for Chapter 11 bankruptcy protection on
November 25, 2009 (Bankr. D. Del. Case No. 09-14192). Charles J.
Brown, Esq., at Archer & Greiner, P.C., assists the Company in its
restructuring effort. As of September 30, 2009, the Company has
$10.30 million in assets and $5.27 million in liabilities.
GLOBAL ENERGY: Taps Sullivan & Worcester as Bankruptcy Counsel
--------------------------------------------------------------
Global Energy Holdings Group, Inc., et al., have asked for the
approval of the U.S. Bankruptcy Court for the District of Delaware
to hire Sullivan & Worcester LLP as bankruptcy counsel, nunc pro
tunc to the Petition Date.
Sullivan & Worcester will, among other things:
a. take necessary action to protect and preserve the Debtors'
estates, including the prosecution of actions on the
Debtors' behalf, the defense of any actions commenced
against the Debtors and the negotiation of disputes in
which the Debtors are involved;
b. prepare necessary motions, applications, answers, orders,
reports, and other papers in connection with the
administration of the Debtors' estates; and
c. take necessary actions in connection with a Chapter 11
plan and related disclosure statement(s) and related
documents, and further actions as may be required in
connection with the administration of the Debtors'
estates.
Gayle Ehrlich, a partner in Sullivan & Worcester, says that the
hourly rates of the firm's personnel are:
Partners $470-$800
Counsel $470-$800
Associates $285-$560
Paraprofessionals $200-$265
Ms. Ehrlich assures the Court that Sullivan & Worcester is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The Debtors have also sought Court authorization to hire Archer &
Greiner, P.C., as local counsel, Allomet Partners, LLC, as
restructuring advisor, Sutherland Asbill & Brennan LLP as special
counsel for securities matters and certain transactional work, and
Randall D. Quintrell, P.C., as special regulatory counsel for
energy and environmental regulatory affairs. Sullivan & Worcester
says that it will carefully monitor and coordinate efforts of
professionals retained by Debtors and will clearly delineate their
respective duties to prevent duplication of effort.
About Global Energy
Atlanta, Georgia-based Global Energy Holdings Group, Inc., fdba
Xethanol Corporation, is a diversified renewable energy company.
Its principal operating division is Global Energy Systems, Inc.
Global's business operations and investments include: the right to
purchase all landfill gas generated at the Hickory Ridge Landfill
in DeKalb County, Georgia; utility energy service contract Master
Agreements with AGL Services Company and The Southern Company; and
minority investments in renewable energy or clean technology
businesses.
The Company filed for Chapter 11 bankruptcy protection on
November 25, 2009 (Bankr. D. Del. Case No. 09-14192). As of
September 30, 2009, the Company has $10.30 million in assets and
$5.27 million in liabilities.
GLOBAL ENERGY: Wants to Employ Archer & Greiner as Local Counsel
----------------------------------------------------------------
Global Energy Holdings Group, Inc., et al., have sought
authorization from the U.S. Bankruptcy Court for the District of
Delaware to hire Archer & Greiner, P.C., as local counsel nunc pro
tunc to the Petition Date.
Archer & Greiner will, among other things:
a. take necessary action to protect and preserve the Debtors'
estates, 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 necessary motions, applications, answers, orders,
reports, and other papers I connection with the
administration of the Debtors' estates; and
c. take necessary actions in connection with a Chapter 11
plan and related disclosure statement(s) and all related
documents.
Charles J. Brown, III, a partner at Archer & Greiner, says that
the hourly rates of the firm's personnel are:
Partners $235-$520
Counsel $235-$520
Associates $160-$310
Paraprofessionals $150-$175
Mr. Brown assures the Court that Archer & Greiner is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The Debtor has sought the Court's permission to retain Sullivan &
Worcester LLP as lead counsel, Allomet Partners, LLC, as
restructuring advisor, Sutherland Asbill & Brennan LLP as special
counsel for securities matters and certain transactional work, and
Randall D. Quintrell, P.C., as special regulatory counsel for
energy and environmental regulatory affairs. Archer & Greiner
says that it will carefully monitor and coordinate efforts of
professionals retained by Debtors and will clearly delineate their
respective duties to prevent duplication of effort.
Atlanta, Georgia-based Global Energy Holdings Group, Inc., fdba
Xethanol Corporation, is a diversified renewable energy company.
Its principal operating division is Global Energy Systems, Inc.
Global's business operations and investments include: the right to
purchase all landfill gas generated at the Hickory Ridge Landfill
in DeKalb County, Georgia; utility energy service contract Master
Agreements with AGL Services Company and The Southern Company; and
minority investments in renewable energy or clean technology
businesses.
The Company filed for Chapter 11 bankruptcy protection on
November 25, 2009 (Bankr. D. Delaware Case No. 09-14192). As of
September 30, 2009, the Company has $10.30 million in assets and
$5.27 million in liabilities.
GRAHAM PACKAGING: Fitch Assigns 'CC/RR6' Rating on $250 Mil. Notes
------------------------------------------------------------------
Fitch Ratings has assigned a 'CC/RR6' rating to Graham Packaging
Company, L.P.'s and GPC Capital Corp. I joint issuance of
$250 million senior unsecured notes due 2017. Proceeds from the
issuance will be used to fully redeem the 8 1/2% notes due 2012.
Fitch also places all of Graham's ratings on Rating Watch
Positive, which are:
-- Issuer Default Rating 'B-';
-- Senior secured revolving credit facility 'B/RR3';
-- Senior unsecured notes 'CC/RR6';
-- Senior subordinated notes 'CC/RR6'.
The Rating Watch reflects Graham's indication that the company is
currently pursuing a corporate reorganization and initial public
offering, which is expected to be completed in early 2010. Graham
expects to change the name of GPC Capital Corp. II to Graham
Packaging Company Inc. and exchange newly issued shares of its
common stock for all of the partnership interests of Graham
Packaging Holdings Company. Providing the IPO is successful,
Graham intends to use the net proceeds for debt reduction.
Consequently, credit metrics are expected to further strengthen,
with leverage decreasing to 5 times or less in 2010. The company
also has taken considerable steps to improve its maturity profile.
The $250 million debt offering essentially extends the 2012 debt
maturity by five years. During the second quarter, Graham
completed amendments to its credit agreement that, with the
expected refinancing of the 2012 notes, allows for a final
maturity date for the $1.2 billion term loan C of April 2014,
extending the maturity date of the term loan by approximately 21/2
years. In addition, lenders agreed to extend the maturity of
approximately $113 million of its revolving credit agreement to
October 2013, while the remaining $135 million of the commitment
will have a maturity date of October 2010. As a result of the
expected reduction in leverage, the improved maturity profile and
stable operating results in a challenging environment, Fitch
believes the ratings could be increased at the conclusion of a
successful IPO.
GSI GROUP: Supports Request for an Equity Committee
---------------------------------------------------
Stephen W. Bershad disclosed that he and GSI Group Inc. entered
into a letter agreement wherein GSI agreed to support
Mr. Bershad's request, made on November 23, 2009, for the
appointment of an equity committee. In the agreement, Mr. Bershad
has agreed not to contest the April 30, 2010 meeting date set by
the Board of Directors in response to his earlier request for a
meeting of shareholders to elect directors. If, among other
reasons, the equity committee is not formed by December 31, 2009,
or, if formed, is disbanded for any reason, Mr. Bershad retains
his right to challenge the April 30, 2010 meeting date.
"We believe an equity committee will give the GSI shareholders a
voice in the GSI bankruptcy that they currently don't have and can
be formed more quickly, and represent the interests of
shareholders sooner, than a protracted proxy contest for control
of the GSI Board," said Mr. Bershad. "In short, at this time, we
believe an equity committee provides a better mechanism to protect
the rights of GSI shareholders in the bankruptcy process than
replacing a majority of the Board of Directors. Consequently, we
believe that it is currently in the best interests of GSI's
shareholders not to contest the meeting date in exchange for
formation of the equity committee."
About GSI Group Inc.
GSI Group Inc. supplies precision technology to the global
medical, electronics, and industrial markets and semiconductor
systems. GSI Group Inc.'s common shares are quoted on Pink Sheets
OTC Markets Inc.
The Company and two of its affiliates filed for Chapter 11
protection on Nov. 20, 2009 (Bankr. D. Del. Lead Case No. 09-
14110). William R. Baldiga, Esq., at Brown Rudnick LLP,
represents the Debtors in their restructuring effort. Mark
Minuti, Esq., at Saul Ewing LLP, as its local Counsel. The
Debtors selected Garden City Group Inc. as their claims and notice
agent. In their petition, the Debtors posted $555,000,000 in
total assets and $370,000,000 in total liabilities as of Nov. 6,
2009.
HARDWOOD PRODUCTS: To Liquidate Asset to Pay Wells Fargo Debt
-------------------------------------------------------------
According to building-products.com, Hardwood Products will auction
its sawmill to pay its primary secured creditor Wells Fargo, which
owed $2.9 million.
The company, source notes, has abandoned its search for financing
to restart it sawmill.
Based in Branscomb, California, Hardwood Products operates a
sawmill. The company file for Chapter 11 protection in May.
HARRAH'S ENTERTAINMENT: Eyes Purchase of Planet Hollywood Resort
----------------------------------------------------------------
Daily Bankruptcy Review reports the Nevada Gaming Control Board
said Monday Harrah's Entertainment Inc. has filed an application
to purchase the struggling Planet Hollywood Resort & Casino in Las
Vegas.
Harrah's Entertainment, Inc., owns or manages 52 casinos,
primarily under the Harrah's, Caesars and Horseshoe brand names in
the United States. The casino entertainment facilities include 33
land-based casinos, 12 riverboat or dockside casinos, three
managed casinos on Indian lands in the United States, one managed
casino in Canada, one combination thoroughbred racetrack and
casino, one combination greyhound racetrack and casino, and one
combination harness racetrack and casino. The 33 land-based
casinos include one in Uruguay, 11 in the United Kingdom, two in
Egypt and one in South Africa. On January 28, 2008, Harrah's
Entertainment was acquired by affiliates of Apollo Global
Management, LLC, and TPG Capital, LP, in an all cash transaction.
* * *
As reported by the Troubled Company Reporter on September 25,
2009, Moody's Investors Service assigned a Caa1 rating to the
$1.0 billion senior secured term loan to be issued by Harrah's
Operating Company. Moody's also affirmed Harrah's Entertainment's
Caa3 Corporate Family rating, Caa3 Probability of default rating
and all of the long-term debt ratings of HET and HOC, Inc.
The TCR said June 15, 2009, that Standard & Poor's Ratings
Services raised its corporate credit ratings on Harrah's
Entertainment and Harrah's Operating to 'CCC+' from 'CCC'.
HCA, INC.: Fitch Puts 'B' Rating With Stable Outlook
----------------------------------------------------
Fitch Ratings' 2010 outlook for the U.S. healthcare sector remains
negative. Persistently high unemployment with its impact on
health insurance coverage along with consumer's lessened ability
to manage out-of-pocket costs of co-payments and co-insurance will
continue to hamper prospects for the industry, in general, in
2010. Growing event risk surrounding U.S. healthcare reform and
that impact on health insurance coverage, reimbursement and the
corresponding change in the competitive landscape all create
uncertainty regarding long-term financial results for the sector.
While there have been some signs of improvement in the economy,
high unemployment is expected to continue well into 2010. This is
particularly troublesome due to its ongoing impact on insurance
coverage and people's ability to manage out-of-pocket expenses for
healthcare. Therefore, people will continue to focus on reducing
healthcare expenses and delaying non-essential care. While this
focus will pressure top-line growth, EBITDA is expected to remain
stable due to on-going cost containment and continued operational
restructuring of companies. Additionally, flexibility in capital
expenditure along with stable EBITDA should result in sustained
levels of free cash flow in 2010. Fitch expects many industry
participants to continue to be aggressive in returning capital to
equity shareholders through dividends and share buybacks.
Congress continues to work on crafting healthcare reform
legislation. While a bill has been approved in the House of
Representatives, the Senate has not voted on its own version.
Consequently, it is unclear what the ultimate impact will be for
the industry from this initiative. However, key issues
surrounding the reform relate to coverage, reimbursement and
changes in the industry competitive environment. In relation to
insurance coverage, if the reform achieves its goal of increased
insurance coverage, this will be a positive for the industry.
Fitch believes that in part, to pay for the insurance coverage
expansion, industry participants will see declining profitability
margins as a result of reimbursement declines.
Reimbursement pressure could come from Medicare reductions,
another public payer or other restrictions associated with the
reform. Key to overall profitability will be whether the coverage
expansion offsets margin erosion in a timely manner to maintain
profit levels. Finally, the most difficult part of reform to
evaluate will be its effect on the competitive environment of the
industry. New restrictions could permanently change prospects for
certain areas of the industry and result in changes in business
strategies. These strategy changes could lead to increases in
merger and acquisition activity in an attempt to improve prospects
through broadening product or service portfolios and increasing
efficiency with scale. With the potential for increased
acquisition and merger activity comes the expectation for
increased debt issuance that could lead to higher leverage at
least in the near term.
The U.S. healthcare industry continues to maintain strong
liquidity. U.S. healthcare companies with Fitch credit ratings
generated last 12 months free cash flow, as of third-quarter 2009,
of approximately $46 billion and maintained balance sheet cash of
approximately $86 billion. However, it is important to note that
Fitch estimates that approximately two-thirds of this cash balance
is outside of the U.S. and would be subject to repatriation.
Nevertheless, this internal liquidity compares to a Fitch
estimated 2010 maturity schedule of approximately $6 billion.
Revolving credit capacity for the industry also remains strong
with an average availability of approximately 93% or $52 billion.
Pharmaceutical Manufacturers:
Fitch sees a negative outlook for the U.S. pharmaceutical industry
in 2010 as drug developers contend with healthcare reform, the
lingering effects of the current macroeconomic environment, the
start of an unprecedented series of significant drug patent
lapses, and the challenging regulatory climate.
Managed-care focus on favoring generic pharmaceuticals to control
drug spending will be accelerated in 2010, when the industry
begins facing a period of record patent challenges. Key drug
patent losses for U.S. drug developers during the year are
Pfizer's anti-depressant Effexor-XR, Merck's anti-hypertensives
Cozaar and Hyzaar, and Eli Lilly's oncologic Gemzar. Following a
year of major consolidation to fill research and development and
product portfolio gaps, Fitch expects business development
activities to be directed to bolstering R&D programs in 2010.
Fitch expects sales growth in the low single digits, and
manageable margin pressure for brand name pharmaceutical
manufacturers. Continued operating costs reductions serves as
margin support as the industry confronts prospects of lower top-
line growth from potential government reimbursement changes and
near-term patent challenges. Incremental margin support is
attained from merger and acquisition synergies.
In general, cash flows generated by drug developers are expected
to cover capital commitments in 2010. Fitch estimates some cash
flow to be directed to debt reduction for those drug manufacturers
involved with recent industry consolidation. The pharmaceutical
industry will continue to use significant operating cash flow for
shareholder-friendly purposes, specifically sustaining or raising
dividends and actively purchasing common shares.
Medical Devices:
Fitch's 2010 outlook for the medical device sector is stable.
Moderate revenue growth and relatively stable margins should
generate sufficient cash to fund operations, share repurchases and
targeted acquisitions. Selected debt refinancing is expected to
be met with ample liquidity and adequate access to the credit
markets. Despite the relative stability within the sector, Fitch
recognizes that 2010 potentially poses meaningful operational,
legislative, regulatory and business cycle risks.
Fitch expects the drug-eluting stent market will remain relatively
flat in terms of revenues, with single-digit volume growth offset
by price declines. Pricing will likely be negatively affected by
moderation in new product introductions and hospitals becoming
more aggressive in their negotiating posture. While Fitch expects
the industry to closely manage costs, some margin pressure is
possible. Within the DES segment, Fitch expects market share
volatility will persist to the extent that new products are
launched into the marketplace. Fitch expects that Abbott Lab's
Xience DES platform and Boston Scientific's Promus DES platform
will continue to gain incremental market share in the U.S., Europe
and Japan.
The cardiac rhythm management market is expected to generate low-
to mid-single-digit revenue growth, with volume increases somewhat
offset by price declines. Fitch expects this environment will
improve if the Food and Drug Administration expands the use of
this technology to patients with less severe forms of heart
failure, which were studied in the MADIT-CRT clinical trial.
Nevertheless, CRM adoption by physicians would likely increase in
a steady, incremental fashion, as opposed to a step-change
function. While BSX conducted the trial with its devices and
would likely be the first to benefit, Fitch believes Medtronic and
St. Jude Medical will also benefit over time.
Fitch expects the majority of acquisitions in the sector will be
targeted, relative to individual firms' size and breadth. In
addition, share repurchases are likely to be funded primarily
through cash flow. As such, Fitch expects any incremental
transaction-related debt to be manageable for the industry's
credit profile.
For-Profit Hospital Operators:
Fitch has a negative outlook for the for-profit hospital sector in
2010. Fitch expects many of the 2009 favorable trends --
including improved margins, decreased leverage, and strengthened
free cash flow -- to reverse in 2010 as providers face
reimbursement pressure and limited opportunities to enact
additional cost controls. Fitch believes a return to an
inflationary environment for labor, supplies and other key
operating expenses is inevitable and will reverse some of the
profitability gains enjoyed by the sector in 2009. In addition,
bad debt expense is expected to remain high through most of 2010,
further pressuring margins. Reimbursement is also likely to be
pressured, with declines in Medicaid and a moderation in Medicare
growth, although managed care rates should remain robust.
Overall, Fitch projects a net deterioration in margins, free cash
flow, and leverage across the sector in 2010. However, Fitch
believes positive rating actions are still possible, particularly
for those companies that use excess cash flow generated in 2009 to
reduce debt and maintain stable credit metrics in 2010.
The year 2010 will also be an active one for mergers and
acquisitions within the industry, in Fitch's opinion. Fitch
believes there is a plenitude of acquisition targets in the market
as a result of the recession and that valuation levels have become
easier to determine, which, along with the record free cash flow
generated in 2009, should lead to an uptick in consolidation
within the industry. Fitch believes any of the for-profit
hospitals it rates could be active acquirers in 2010, although
LifePoint, Universal Health Services, and Community Health Systems
should be the most active.
Fitch currently rates the U.S. healthcare sector:
-- Abbott Laboratories ('A+'; Stable Outlook)
-- Allergan, Inc. ('A-'; Stable Outlook)
-- AmerisourceBergen Corp. ('BBB'; Stable Outlook)
-- Amgen, Inc. ('A', Stable Outlook)
-- Baxter International Inc. ('A'; Stable Outlook)
-- Beckman Coulter, Inc. ('BBB'; Stable Outlook)
-- Boston Scientific Corporation ('BB+' ; Positive Outlook)
-- Bristol-Myers Squibb Company ('A+' ; Stable Outlook)
-- Cardinal Health, Inc. ('BBB'; Stable Outlook)
-- CareFusion Corporation ('BBB'; Stable Outlook)
-- Community Health Systems, Inc. ('B'; Stable Outlook)
-- Covidien Ltd. ('A'; Stable Outlook)
-- DaVita, Inc. ('BB-'; Stable Outlook)
-- Eli Lilly & Co. ('A+' ; Negative Outlook)
-- Express Scripts, Inc. ('BBB'; Stable Outlook)
-- HCA, Inc. ('B', Stable Outlook)
-- Health Management Associates ('B+' ; Stable Outlook)
-- Johnson & Johnson ('AAA'; Stable Outlook)
-- Life Technologies Corporation ('BBB-'; Stable Outlook)
-- LifePoint Hospitals Inc. ('BB-'; Stable Outlook)
-- McKesson Corp. ('BBB+' ; Stable Outlook)
-- Medco Health Solutions Inc. ('BBB'; Stable Outlook)
-- Merck & Co. ('A+', Stable Outlook)
-- Owens & Minor Inc. ('BBB-'; Stable Outlook)
-- Pfizer Inc. ('AA-', Stable Outlook)
-- Quest Diagnostics Inc. ('BBB+'; Stable Outlook)
-- Royalty Pharma Finance Trust ('BBB'; Stable Outlook)
-- St. Jude Medical, Inc. ('A'; Stable Outlook)
-- Tenet Healthcare Corp. ('B-'; Stable Outlook)
-- Thermo Fisher Scientific Inc. ('A-'; Stable Outlook)
-- Universal Health Services ('BBB'; Stable Outlook)
-- Watson Pharmaceuticals Inc. ('BBB-'; Stable Outlook)
HEARTHSTONE RANCH: Meeting of Creditors Scheduled for Today
-----------------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of creditors
in Hearthstone Ranch II LLC's Chapter 11 case on December 4, 2009,
at 10:30 a.m. The meeting will be held at the U.S. Trustee
Office, 501 I Street, Suite 7-500, Sacramento, California.
This is the first meeting of creditors required under Section
341(a) of the 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.
Hearthstone Ranch II LLC, owner of a development in Stanislaus
County, California, filed a Chapter 11 petition. The property is
claimed to be worth $10.5 million.
The Company filed for Chapter 11 on November 4, 2009 (Bankr.
E.D. Calif. Case No. 09-93573). Hilton A. Ryder, Esq., in Fresno,
Calif., represents the Debtor in its restructuring effort.
According to the schedules, the Company has assets of $10,500,064,
and total debts of $11,640,801.
HOLDER GROUP: Hopes to Keep Elko Three Properties as Auction Looms
------------------------------------------------------------------
The Associated Press reports that Holder Group expects to keep
ownership of three properties in the Elko area scheduled for
public auction on Dec. 23, 2009.
A person familiar with the matter said the foreclosure notices for
the properties are part of the company's bankruptcy proceedings,
AP says. The company is trying to keep the casinos open, AP adds.
Holder Group filed for Chapter 11 bankruptcy reorganization in
June 2009.
HOLLEY PERFORMANCE: Court Sets February 1 as Claims Bar Date
------------------------------------------------------------
Judge Peter Walsh of the U.S. Bankruptcy Court for the District of
Delaware set February 1, 2010, at 5:00 p.m. (Eastern) as the or
deadline for creditors to file proofs of claim against Holley
Performance Products, Inc. and its affiliates.
Holley Performance and its affiliates are leading suppliers of
performance automotive products. The Company designs,
manufactures, and markets a diversified line of performance
automotive products, including carburetors, fuel pumps, fuel
injection systems, nitrous oxide injection systems, superchargers,
exhaust headers, mufflers, and automotive performance plumbing
products.
Holley Performance and its affiliates filed for Chapter 11 on
September 28, 2009 (Bankr. D. Del. Case No. 09-13333). Pepper
Hamilton LLP represents the Debtors in their restructuring effort.
Ropes & Gray LLP is corporate counsel. Epiq Bankruptcy Solutions
LLC serves as claims and notice agent. The Debtors' cases have
been assigned to Judge Peter J. Walsh. The petition says assets
and debts are between $100 million and $500 million.
Holley Performance returned to bankruptcy 19 months after winning
court approval of its last reorganization plan. The Delaware
Bankruptcy Court confirmed Holley Performance's prepackaged
reorganization plan on March 18, 2008.
INTERSTATE BAKERIES: Bakeries Responsible for $60M in Benefits
--------------------------------------------------------------
In a stinging blow to Sara Lee Corp. and other members of the
American Bakers Association Retirement Plan, a federal judge has
backed the Pension Benefit Guaranty Corp.'s determination that the
participating employers are obligated to cover $60 million in
deficits left in the plan by formerly bankrupt member Interstate
Bakeries Corp, according to Law360.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh-baked
bread and sweet goods, under various national brand names,
including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and
Drake's(R). Currently, IBC employs more than 25,000 people and
operates 45 bakeries, as well as approximately 800 distribution
centers and approximately 800 bakery outlets throughout the
country.
The Company and eight of its subsidiaries and affiliates filed for
chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6% senior subordinated convertible notes due Aug. 15, 2014) in
total debts.
The Debtors first filed their Chapter 11 Plan and Disclosure
Statement on Nov. 5, 2007. On Jan. 30, 2008, the Debtors received
court approval of the disclosure statement explaining their first
amended plan. IBC did not receive any qualifying alternative
proposals for funding its plan in accordance with the court-
approved alternative proposal procedures.
The Debtors, on Oct. 4, 2008, filed another Plan, which
contemplates IBC's emergence from Chapter 11 as a stand-alone
company. The filing of the Plan was made in connection with the
plan funding commitments, on Sept. 12, 2008, from an affiliate of
Ripplewood Holdings L.L.C. and from Silver Point Finance, LLC, and
Monarch Master Funding Ltd.
On December 5, 2008, the Bankruptcy Court confirmed IBC's Amended
New Joint Plan of Reorganization. The plan was filed October 31,
2008. The exit financings that form the basis for the Plan are
reflected in corresponding debt and equity commitments.
Bankruptcy Creditors' Service, Inc., publishes Interstate Bakeries
Bankruptcy News. The newsletter tracks the chapter 11 proceedings
undertaken by Interstate Bakeries Corporation and its eight
affiliated debtors. (http://bankrupt.com/newsstand/or
215/945-7000)
JAMES MCKAY ANDREWS: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: James McKay Andrews
4071 Minden
Memphis, TN 38117
Bankruptcy Case No.: 09-33468
Chapter 11 Petition Date: December 2, 2009
Court: United States Bankruptcy Court
Western District of Tennessee (Memphis)
Judge: David S. Kennedy
Debtor's Counsel: Michael P. Coury, Esq.
Butler, Snow, O'Mara, Stevens & Cannada
Suite 500, 6075 Poplar Avenue
Memphis, TN 38119
Tel: (901) 680-7200
Fax: (901) 680-7201
Email: mike.coury@butlersnow.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. Andrews' petition, including a list of his
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/tnwb09-33468.pdf
The petition was signed by Mr. Andrews.
KEDZIE PROJECT: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: The Kedzie Project, LLC
1657 West Cortland Avenue
Chicago, IL 60622
Bankruptcy Case No.: 09-45752
Chapter 11 Petition Date: December 2, 2009
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Pamela S. Hollis
Debtor's Counsel: Gregory K. Stern, Esq.
53 West Jackson Blvd., Suite 1442
Chicago, IL 60604
Tel: (312) 427-1558
Fax: (312) 427-1289
Email: gstern1@flash.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ilnb09-45752.pdf
The petition was signed by Neil Ornoff, managing member of the
Company.
KINGSWAY FINANCIAL: S&P Cuts Counterparty Credit Rating to 'CCC-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its unsolicited
long-term counterparty credit and senior unsecured debt ratings on
Toronto-based insurance holding company Kingsway Financial
Services Inc. two notches to 'CCC-' from 'CCC+'. The outlook is
negative.
"The downgrade reflects S&P's assessment of what S&P views as
continued deterioration in Kingsway's profitability, liquidity,
capital, and financial flexibility," said Standard & Poor's credit
analyst Foster Cheng. On Nov. 6, 2009, the company announced it
had lost US$118.1 million for third-quarter 2009, bringing its
year-to-date loss to US$214.8 million. While most of this was,
S&P understands, due to run-off and discontinued businesses
(including US$95.5 million from subsidiary Lincoln General
Insurance Co.), this nevertheless represents in S&P's view a
deterioration in its liquidity and capital position that was above
its expectations.
S&P also note the filing by the Pennsylvania Department of
Insurance's on Nov. 20, 2009, of a petition to review the
donations by Kingsway's subsidiary Kingsway America, Inc., of
shares in Walshire General Assurance Co. to 20 different
charities. Walshire is the parent company of operating subsidiary
Lincoln. If the PDOI is successful in its petition for review and
KAI's donation of shares is reversed, S&P believes this could lead
to Kingsway providing continued financial support directly or
indirectly to Lincoln.
The negative outlook reflects S&P's assessment of the company's
profitability, liquidity, capital adequacy, competitive position,
and financial flexibility all of which S&P views as weak. S&P
believes that the company has a relatively high level of financial
leverage and its operating companies currently face a difficult
underwriting environment. Standard & Poor's believes that
Kingsway is currently vulnerable and is dependent upon favorable
business, financial, and economic conditions to meet its financial
commitments.
KMC INTERNATIONAL: Case Summary & 10 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: KMC International, LLC
P.O. Box 323
Horsham, PA 19044-0323
Bankruptcy Case No.: 09-42599
Chapter 11 Petition Date: December 2, 2009
Court: United States Bankruptcy Court
District of New Jersey (Camden)
Debtor's Counsel: Laurent W. Metzler, Esq.
Metzler & DeSantis, LLP
74 East Second Street
Moorestown, NJ 08057
Tel: (856) 234-2772
Fax: (856) 234-1217
Email: LWM@metzlerdesantis.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 $2,238,483
and total debts of $2,252,379.
A full-text copy of the Debtor's petition, including a list of its
10 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/njb09-42599.pdf
The petition was signed by Michael Corbi, managing member of the
Company.
KROPP EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Kropp Equipment, Inc., a Corporation
1020 Kennedy Avenue
Schererville, IN 46375
Case No.: 09-25196
Chapter 11 Petition Date: December 2, 2009
Court: United States Bankruptcy Court
Northern District of Indiana (Hammond Division)
Judge: J. Philip Klingeberger
Debtor's Counsel: Daniel Freeland (EW), Esq.
9105 Indianapolis Boulevard
Highland, IN 46322
Tel: (219) 922-0800
Email: dlf9601b@aol.com
Sheila A. Ramacci (JG), Esq.
9105 Indianapolis Boulevard
Highland, IN 46322
Tel: (219) 922-0800
Email: dlf9601b@aol.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Kurt Kropp, the company's vice
president.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Illinois Department of Illinois Sales Taxes $528,068
Revenue
9511 W. Harrison St.
Des Plaines, IL 60016
Genie Industries Purchase of Parts $24,148
Faraci & Faraci Legal Services $22,822
Midwest Operating Health & Welfare Plan $14,973
Engineers
City of Chicago Dept Lease Taxes $12,617
Revenue
Midwest Operating Pension plan $12,075
Engineers
The Burlington Insurance Insurance Deductible $11,076
Co
MJ Petroleum Fuel Purchase $9,976
Witham Sales & Service Fuel Purchase $9,974
Flatiron Capital Insurance Premiums $9,856
Indiana Department of Sales and Use Taxes $9,636
Revenue
Battery Service Purchase of Batteries $5,985
Corporation
Stevenson Crane Service Equipment Rental $5,835
Hellman's Tire Service Tire Repair $5,536
Swartz Retson Co Accounting fees $4,800
Randall Industries Equipment Rental $4,680
Commercial Tire Service Tire Purchase $4,535
and repair
Truck City of Gary Parts Purchase $4,512
Skyworks Equipment Rental Equipment Rental $4,286
Local 150 IUOE Vacation Employer Wage & $3,710
Saving Fringe
LANDAMERICA ONESTOP: Meeting of Creditors Scheduled for January 8
-----------------------------------------------------------------
The U.S. Trustee for Region 4 will convene a meeting of creditors
in LandAmerica OneStop, Inc.'s Chapter 11 case on January 8, 2010,
at 10:00 a.m. The meeting will be held at the U.S. Trustee
Office, 701 E. Broad Street, Suite 4300, Richmond, Virginia.
This is the first meeting of creditors required under Section
341(a) of the 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.
Glen Allen, Virginia-based LandAmerica OneStop, Inc., filed for
Chapter 11 on November 4, 2009 (Bankr. E.D. Va. Case No. 09-
37276). John H. Maddock III, Esq., at McGuireWoods LLP represents
the Debtor in its restructuring effort. In its petition, it
listed $10,000,001 to $50,000,000 in assets and $50,000,001 to
$100,000,000 in debts.
LEVEL 3 COMMUNICATIONS: $1 Million in Debt to Mature by Q4 2009
---------------------------------------------------------------
Level 3 Communications, Inc., disclosed that roughly $1 million in
long-term debt, capital leases and commercial mortgage --
excluding debt discounts, premiums and fair value adjustments --
will mature in the fourth quarter of 2009.
Roughly $160 million in long-term debt, capital leases and
commercial mortgage will mature in 2010 and $436 million will
become due in 2011, Level 3 said in a Form 10-Q filed with the
Securities and Exchange Commission in November.
Level 3 reported a net loss of $170 million for the three months
ended September 30, 2009, from a net loss of $129 million for the
same period a year ago. Level 3 reported a net loss of
$436 million for the nine months ended September 30, 2009, from a
net loss of $361 million for the same period a year ago.
At September 30, 2009, Level 3 had $8.968 billion in total assets
against $8.297 billion in total liabilities. At September 30,
2009, Level 3 had accumulated deficit of $10.875 billion and
stockholders' equity of $671 million.
On November 3, 2009, Level 3 filed a Form S-3 Registration
Statement under the Securities Act of 1933 to register $75,000,000
Aggregate Principal Amount of 7% Convertible Senior Notes due
2015, Series B; and 41,666,670 Shares of Common Stock Issuable
Upon Conversion of the Notes. The Company said holders of its 7%
Convertible Senior Notes due 2015, Series B; and 41,666,670 shares
of its common stock issuable upon conversion of the notes may
offer for sale the notes and the common stock at any time at
market prices prevailing at the time of sale or at privately
negotiated prices. The selling securityholder may sell the notes
or the common stock directly to purchasers or through
underwriters, broker-dealers or agents, who may receive
compensation in the form of discounts, concessions or commissions.
Level 3 will not receive any of the proceeds from the sale of the
notes or the common stock by the selling securityholder.
About Level 3
Broomfield, Colorado, Level 3 Communications, Inc. (NASDAQ: LVLT)
-- http://www.Level3.com/-- provides fiber-based communications
services. Level 3 offers a portfolio of metro and long-haul
services, including transport, data, Internet, content delivery
and voice.
* * *
LVLT, along with its wholly owned subsidiary Level 3 Financing,
Inc., has a 'B-' Issuer Default Rating and a Positive Rating
Outlook.
LANGSELG LLC: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Langselg, LLC
7800 Cava Place
Austin, TX 78735
Bankruptcy Case No.: 09-13402
Chapter 11 Petition Date: December 1, 2009
Court: United States Bankruptcy Court
Western District of Texas (Austin)
Judge: Craig A. Gargotta
Debtor's Counsel: Richard W. Alexander, Esq.
2112 Rio Grande Street
Austin, TX 78705
Tel: (512) 482-9500
Fax: (512) 474-0954
Email: ralexander@alexanderatty.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Robert Langguth, managing partner of
the Company.
LEON KUBIS III: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Joint Debtors: Leon Kubis, III
Lisa A. Kubis
3601 Waterview Blvd.
Ocean City, NJ 08226
Bankruptcy Case No.: 09-42585
Chapter 11 Petition Date: December 2, 2009
Court: United States Bankruptcy Court
District of New Jersey (Camden)
Debtor's Counsel: Maureen P. Steady, Esq.
12000 Lincoln Drive West, Suite 208
Marlton, NJ 08053
Tel: (856) 396-0540
Fax: (609) 482-8011
Email: msteady@mac.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtors did not file a list of their 20 largest unsecured
creditors when they filed their petition.
The petition was signed by the Joint Debtors.
LIFEMASTERS SUPPORTED: Wants to Auction Substantially All Assets
----------------------------------------------------------------
LifeMasters Supported SelfCare, Inc., asks the U.S. Bankruptcy
Court for the Central District of California for permission to
sell substantially all of its assets to Alere, LLC, subject to
higher and better offers at an auction on December 14, 2009.
Alere, LLC, the stalking horse bidder, agreed to purchase the
Debtor's assets for $1.75 million, free and clear of liens, claims
and interest, pursuant to Section 363 of the Bankruptcy Code.
Alere, LLC is an affiliate of Inverness Medical Innovations, Inc.
The Debtor proposes a hearing on this matter on December 17, 2009,
at 10:30 a.m., at Courtroom 5A, 411 West Fourth Street, Santa Ana,
California.
The Debtor's asset was marketed by Alvarez & Marsal healthcare
industry Group, LLC.
Irvine, California-based LifeMasters Supported SelfCare, Inc. --
http://www.lifemasters.com/-- is a disease management and health
improvement company with more than 15 years of experience working
with employers, insurers, hospitals and physicians to lower costs
and improve patient satisfaction with the healthcare system.
LifeMasters is accredited by the National Committee for Quality
Assurance (NCQA) and URAC.
The Company filed for Chapter 11 on Sept. 14, 2009 (Bankr. C. D.
Calif. Case No. 09-19722). The Debtor listed assets and debts
both ranging from $10,000,001 to $50,000,000.
LYONDELL CHEMICAL: Baldwins Sue for Contract Breach
---------------------------------------------------
C. A. and Ann Lorraine Baldwin, acting pro se, filed a complaint
against Lyondell Chemical Company, seeking declaratory judgment
that the Debtor has breached its contractual obligations. The
Baldwins also seek a determination that certain debts owed by the
Debtor to them are non-dischargeable pursuant to Section 523 of
the Bankruptcy Code.
In 1994, Lyondell Petrochemical Company was the name of the
entity now known as Lyondell Chemical Company, the Debtor, and a
signatory to the contract.
On December 23, 1994, the Baldwins and Lyondell Petrochemical
entered into a contract entitled "Settlement Agreement, Full and
Final Release and Covenant Not To Sue," to compromise and settle
claims asserted by the Baldwins regarding Mr. Baldwin's
termination from employment in 1994.
Among other things, the Settlement Agreement contains language
with respect to certain payments to be made by Lyondell
Petrochemical to the Baldwins. The Settlement Agreement
provides, among other things, that Lyondell Petrochemical will
pay $5,208 per month during the period from March 1, 1995,
through February 28, 2012. In addition to the monthly payments,
Lyondell Petrochemical will also pay to the Baldwins a single
payment of $188,700.
According to the Baldwins, Lyondell Petrochemical and Lyondell
Chemical made the Payments up to and including the Payment for
January 2009, but have not made a Payment since then.
The Baldwins note that the Settlement Agreement also contains
language concerning the right of Mr. Baldwin to obtain a letter
of reference.
The Baldwins sent a letter dated February 1, 2009, to the
Debtor's representative requesting performance of its obligation
to provide a letter of reference. While a certified receipt
shows the letter was received on February 5, 2009, Lyondell
Chemical has never provided the letter of reference.
The Baldwins assert that:
(a) The Debtor has previously made Payments in excess of
$200,000. There can be no argument that the remaining
Payments, which the Debtor has not made in a timely
fashion are attributable ". . . only to the settlement of
the defamation claims." Pursuant to Section 523(a)(6) of
the Bankruptcy Code, the Debtor may not be discharged from
any debt ". . . for willful and malicious injury by the
debtor to another entity or to the property of another
entity. . .."
The Payments, which are due and owing, but which remain
unpaid, constitute a debt, which may not be discharged in
this bankruptcy case.
(b) The Debtor has not provided the letter of reference it was
required to produce by the Settlement Agreement.
Thus, the Baldwins ask the Court for (i) a binding determination
that the indebtedness of the Debtor for the Payments is non-
dischargeable, (ii) a declaratory judgment that the Debtor has
breached its contractual obligations to the Baldwins with respect
to their obligation pursuant to the Settlement Agreement, and
(iii) payment of attorneys' fees, expenses, and costs.
At the Baldwin's behest, Judge Gerber authorized the Baldwins to
file under seal "Exhibit A" to the Complaint and "Exhibit A" to
the Complaint, as amended.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. On January 6, 2009,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code to facilitate a restructuring of the company's
debts. The case is In re Lyondell Chemical Company, et al.,
Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell
entities, including Equistar Chemicals, LP, Lyondell Chemical
Company, Millennium Chemicals Inc., and Wyatt Industries, Inc.
filed for Chapter 11. In May 2009, one of the cases was dismissed
-- Case No. 09-10068 -- because it is duplicative of Case No. 09-
10040 relating to Debtor Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately US$8 billion in DIP financing
to fund continuing operations. The DIP financing includes two
credit agreements: a US$6.5 billion term loan, which comprises a
US$3.25 billion in new loans and a US$3.25 billion roll-up of
existing loans; and a US$1.57 billion asset-backed lending
facility.
Luxembourg-based LyondellBasell Industries AF S.C.A. and another
affiliate were voluntarily added to Lyondell Chemical's
reorganization filing under Chapter 11 on April 24, 2009, in order
to seek protection against claims by certain financial and U.S.
trade creditors. On May 8, 2009, LyondellBasell Industries added
13 non-operating entities to Lyondell Chemical Company's
reorganization filing under Chapter 11 of the U.S. Bankruptcy
Code. All of the entities are U.S. companies and were added to
the original Chapter 11 filing for administrative purposes. The
filings will have no impact on current business or operations as
none of the entities manufactures or sells products.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: Deutsche Bank Dropped From Committee LBO Suit
----------------------------------------------------------------
In separate stipulations entered by Deutsche Bank Trust Company
with (i) the Committee, and (ii) The Bank of New York Mellon and
the Bank of New York Mellon Trust Company, N.A., as indenture
trustee for the holders of certain notes aggregating
(a) $100 million issued by Lyondell Chemical Company, as
predecessor-in-interest of ARCO Chemical Company, and
(b) $225 million issued by Equistar Chemicals, LP, agreed to
dismiss Deutsche Bank from the Committee Action.
The parties agreed that Deutsche Bank will:
* timely respond to any formal discovery requests or informal
information requests that the Committee as plaintiff, or
BoNY as plaintiff-intervenor, may propound to Deutsche Bank;
and
* make itself available at trial in the event the Committee or
BoNY request that Deutsche Bank appear as a witness.
The parties further stipulated that the dismissal of Deutsche
Bank from the Committee Action will not impact the Committee or
BoNY's right to any of the relief the Committee or BoNY has
sought in the Committee Action.
Judge Gerber has approved the stipulation entered between the
Committee and Deutsche Bank.
BoNY Amends Intervenor Complaint
BoNY filed with the Court an amended complaint in intervention
against ABN Amro Inc.; ABN Amro Bank N.V., and The Wilmington
Trust Company on November 9, 2009.
Pursuant to the Amended Intervenor Complaint, BoNY removed
Deutsche Bank as defendant in its original intervenor complaint
dated October 19, 2009, arising from Lyondell's and Equistar's
obligations under their guarantees of 8.375% Senior Notes due
2015 issued by Nell AF S.a.r.l., which guarantees were entered
pursuant to the December 20, 2007 acquisition of Lyondell
Chemical Company by Basell AF S.C.A.
Stuart I. Friedman, Esq., at Friedman & Witterstein, in New York,
states that no major changes were made in the Amended Intervenor
Complaint. However, in the Amended Intervenor Complaint, BoNY
seeks to avoid not only Lyondell's and Equistar's guarantees of
Senior Notes by Nell but as well the guarantees made by certain
subsidiaries and affiliates of Lyondell in connection with the
Merger.
Mr. Friedman explains that upon the Merger, Lyondell and Equistar
became Restricted Subsidiaries of Basell under an Indenture dated
August 10, 2005 for the Nell Notes. Wilmington Trust was
appointed as Successor Indenture Trustee under the Nell Indenture
effective February 5, 2009, and ABN AMRO Bank N.V. is the
security agent for the Nell Notes. ABN AMRO, Inc. is a joint
lead arranger under the Senior Credit Facility; and the Bridge
Loan Facility.
BoNY alleges that because Lyondell's, Equistar's, and the other
subsidiaries' guarantees to the Nell Notes under the Nell
Indenture were predicated on their guarantees of the Senior
Credit Facility, these guarantees were fraudulent conveyances and
obligations. In addition, the Nell Notes Guarantors' guarantees
under the Nell Notes were also fraudulent conveyances and
obligations, and there was no legitimate basis for Lyondell,
Equistar, or the other Nell Notes Guarantors to grant the Nell
Guarantees, BoNY asserts.
Mr. Friedman points out that Lyondell, Equistar, and the other
Nell Notes Guarantors did not receive reasonably equivalent value
or fair consideration in exchange for the incurrence of the Nell
Guarantees and each of Lyondell, Equistar, and the other Nell
Notes Guarantors (i) was insolvent, or became insolvent as a
result of the incurrence of the Nell Guarantees; (ii) was engaged
or was about to engage in a business or transaction for which the
remaining assets were unreasonably small capital; and (iii)
intended, believed, or reasonably should have believed that it
would incur debts beyond its ability to pay the debts as they
became due.
Thus, by the Amended Intervenor Complaint, BoNY seeks, among
others, to avoid the guarantee obligations incurred by Lyondell,
Equistar, and the other Nell Notes Guarantors under the Nell
Guarantees under Section 544(b) and 548(a) of the Bankruptcy Code
and under applicable state fraudulent transfer law.
A full-text copy of the Amended Intervenor Complaint is available
for free at:
http://bankrupt.com/misc/Lyondell_Nov9AmComplaint.pdf
In a related request, BoNY seeks the Court's authority to file an
unredacted copy of its Amended Intervenor Complaint under seal.
BoNY explains that the Amended Intervenor Complaint cited highly
confidential commercial information that has been designated
confidential or highly confidential pursuant to a proposed
stipulation and protective order among the parties in the
Committee Action.
BoNY further seeks the Court's authority to pursue the claims of
the Debtors' estates relating to additional guarantees of senior
notes issued by Nell as set forth in the Amended Intervenor
Complaint.
Mr. Friedman insists that the Amended Intervenor Complaint
correlates directly with the original complaint filed by the
Committee and the causes of action asserted in the Amended
Intervenor Complaint arise from the same set of operative facts
namely, obligations incurred and transfers made in connection
with the Merger. He further argues that if successful, the
claims relating to the Additional Guarantees would avoid over a
billion dollars in liabilities incurred by the estates of
Lyondell, Equistar, and the other Nell Notes Guarantors. Thus,
any costs associated with the litigation are minuscule in
comparison with these potential benefits to the Debtors' estates,
he points out. While BoNY believes that the Amended Intervenor
Complaint is fully authorized by the Court's prior orders, BoNY
filed a conditional motion out of abundance of caution.
In a Court-approved stipulation, BoNY; Goldman Sachs
International; Goldman Sachs Credit Partners L.P.; Citibank,
N.A., London Branch; Citigroup Global Markets Inc.; Citibank
International plc; UBS Securities LLC; Merrill, Lynch, Pierce,
Fenner & Smith, Inc.; Merrill Lynch Capital Corporation;
LeverageSource III S.a.r.l. and the Ad Hoc Group of Senior
Secured Lenders, known as Financing Party Defendants, agreed that
the Financing Party Defendants' time to respond to BoNY's Amended
Complaint in Intervention on October 19, 2009 is extended until
20 days after the disposition of the Financing Party Defendants'
Motion to Dismiss the Committee Complaint. The Parties further
agreed that any motions to dismiss by the Financing Party
Defendants responding to or addressing issues in Phase I-A will
be deferred until entry of a case management order for the Phase
I-A proceedings, and the dates on which these motions must be
served and filed will be scheduled after the adjudication of
issues under Phase I on December 10, 2009.
In another Court-approved stipulation, BoNY, ABN Amro Inc. and
ABN Amro Bank agree that the ABN Entities' time to respond to the
Amended Intervenor Complaint dated November 9, 2009, is extended
until 20 days after the disposition of the Financing Party
Defendants' Motion to Dismiss Committee Complaint. However, any
motions to dismiss by the ABN Amro Entities' responding to or
addressing the Phase I-A issues will be deferred until entry of a
case management order for the Phase I-A proceedings, and the
dates on which these motions must be served will be scheduled
after adjudication of the Phase I Trial, the parties agreed.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. On January 6, 2009,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code to facilitate a restructuring of the company's
debts. The case is In re Lyondell Chemical Company, et al.,
Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell
entities, including Equistar Chemicals, LP, Lyondell Chemical
Company, Millennium Chemicals Inc., and Wyatt Industries, Inc.
filed for Chapter 11. In May 2009, one of the cases was dismissed
-- Case No. 09-10068 -- because it is duplicative of Case No. 09-
10040 relating to Debtor Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately US$8 billion in DIP financing
to fund continuing operations. The DIP financing includes two
credit agreements: a US$6.5 billion term loan, which comprises a
US$3.25 billion in new loans and a US$3.25 billion roll-up of
existing loans; and a US$1.57 billion asset-backed lending
facility.
Luxembourg-based LyondellBasell Industries AF S.C.A. and another
affiliate were voluntarily added to Lyondell Chemical's
reorganization filing under Chapter 11 on April 24, 2009, in order
to seek protection against claims by certain financial and U.S.
trade creditors. On May 8, 2009, LyondellBasell Industries added
13 non-operating entities to Lyondell Chemical Company's
reorganization filing under Chapter 11 of the U.S. Bankruptcy
Code. All of the entities are U.S. companies and were added to
the original Chapter 11 filing for administrative purposes. The
filings will have no impact on current business or operations as
none of the entities manufactures or sells products.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: Trepper Named Mediator for Creditors' Dispute
----------------------------------------------------------------
Bankruptcy Judge Robert Gerber directed Lyondell Chemical Co. and
the party groups in the action initiated by the Official Committee
of Unsecured Creditors against the Debtors' prepetition lenders
and directors to engage in non-binding mediation to facilitate
settlement discussions of the Committee Action, the resolution of
which would facilitate the confirmation of the Debtors' Joint Plan
of Reorganization.
Judge Gerber appointed Myron Trepper, Esq., senior counsel at
Wilkie Farr & Gallagher LLP, to serve as mediator for the
Parties.
According to the Judge, on a date to be set by the Mediator, each
Party Group will furnish a statement as to its factual and legal
contentions to the Mediator and other Parties. All documents
provided to, and any conversations with, the Mediator will not be
discoverable. The Mediator will not distribute the materials to
anyone other than individuals assisting him in connection with
the Mediation. The Mediator will destroy all Mediation
Statements, Settlement Statements, and any confidential documents
provided to the Mediator immediately after the conclusion of the
Mediation.
The representatives of the Parties attending a Mediation session
will include at least one principal of each represented person or
any authorized entity within a Party Group that may enter into a
settlement; provided, however, that members of the D&O Defendant
Group may attend the Mediation sessions by phone or allow a
designee to appear in person on their behalf. The Mediator will
provide the Debtors with a statement of fees and expenses, and
file a fee application with the Court.
The Mediator and any personnel who assist him, and all the
Parties, will not have any communication with the Court
regarding, or disclose, any aspect of the Mediation other than to
report whether a settlement has been reached between any of the
Parties.
Each Party will bear its own fees and expenses, except to the
extent these fees and expenses are payable by the Debtors or
their estates, pursuant to the Final DIP Order. Moreover, the
fees and expenses of the Committee professionals incurred in
connection with time spent exclusively (1) preparing for the
Mediation; (2) drafting a Mediation Statement; (3) drafting a
Settlement Statement; (4) attending the Mediation sessions; and
(5) performing follow-up tasks exclusively relating to the
Mediation will be paid by the Debtors' estates pursuant to the
fee procedures approved in the Debtors' Chapter 11 cases
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. On January 6, 2009,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code to facilitate a restructuring of the company's
debts. The case is In re Lyondell Chemical Company, et al.,
Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell
entities, including Equistar Chemicals, LP, Lyondell Chemical
Company, Millennium Chemicals Inc., and Wyatt Industries, Inc.
filed for Chapter 11. In May 2009, one of the cases was dismissed
-- Case No. 09-10068 -- because it is duplicative of Case No. 09-
10040 relating to Debtor Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately US$8 billion in DIP financing
to fund continuing operations. The DIP financing includes two
credit agreements: a US$6.5 billion term loan, which comprises a
US$3.25 billion in new loans and a US$3.25 billion roll-up of
existing loans; and a US$1.57 billion asset-backed lending
facility.
Luxembourg-based LyondellBasell Industries AF S.C.A. and another
affiliate were voluntarily added to Lyondell Chemical's
reorganization filing under Chapter 11 on April 24, 2009, in order
to seek protection against claims by certain financial and U.S.
trade creditors. On May 8, 2009, LyondellBasell Industries added
13 non-operating entities to Lyondell Chemical Company's
reorganization filing under Chapter 11 of the U.S. Bankruptcy
Code. All of the entities are U.S. companies and were added to
the original Chapter 11 filing for administrative purposes. The
filings will have no impact on current business or operations as
none of the entities manufactures or sells products.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: Updates Investors on September Results
---------------------------------------------------------
LyondellBasell Vice President for Investor Relations Douglas Pike
shared with the investors the Company's results for the month of
September 2009.
Mr. Pike said that September 2009 results are well ahead of plan.
He related that depressed refining conditions are adversely
affecting results. Similarly, he pointed out that oxyfuels
margins follow seasonal declines. With respect to the chemicals
segment, he disclosed that U.S. olefin margins are flat as co-
product and raw materials price increases offset one another.
However, he noted that improved intermediates results due to
lower raw material prices. With respect to the polymers section,
he said that good results are led by US polyethylene and other
products remain in line with August 2009 results.
As for the third quarter of 2009, Mr. Pike stated that
LyondellBasell expects that weak refining conditions will
continue. LyondellBasell also foresees temporary strength in
oxyfuels margins driven by maintenance activities.
LyondellBasell further anticipates that olefins will be pressured
by increased raw material costs and some decline in co-product
values. He added that polymers outlook is dependent upon U.S.
polyethylene export opportunities.
A full-text copy of the Investor Update is available for free at:
http://ResearchArchives.com/t/s?4a44
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. On January 6, 2009,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code to facilitate a restructuring of the company's
debts. The case is In re Lyondell Chemical Company, et al.,
Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell
entities, including Equistar Chemicals, LP, Lyondell Chemical
Company, Millennium Chemicals Inc., and Wyatt Industries, Inc.
filed for Chapter 11. In May 2009, one of the cases was dismissed
-- Case No. 09-10068 -- because it is duplicative of Case No. 09-
10040 relating to Debtor Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately US$8 billion in DIP financing
to fund continuing operations. The DIP financing includes two
credit agreements: a US$6.5 billion term loan, which comprises a
US$3.25 billion in new loans and a US$3.25 billion roll-up of
existing loans; and a US$1.57 billion asset-backed lending
facility.
Luxembourg-based LyondellBasell Industries AF S.C.A. and another
affiliate were voluntarily added to Lyondell Chemical's
reorganization filing under Chapter 11 on April 24, 2009, in order
to seek protection against claims by certain financial and U.S.
trade creditors. On May 8, 2009, LyondellBasell Industries added
13 non-operating entities to Lyondell Chemical Company's
reorganization filing under Chapter 11 of the U.S. Bankruptcy
Code. All of the entities are U.S. companies and were added to
the original Chapter 11 filing for administrative purposes. The
filings will have no impact on current business or operations as
none of the entities manufactures or sells products.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: USW Sues Houston Refining to Ask Arbitration
---------------------------------------------------------------
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy,
Allied Industrial and Service Workers International Union and its
Local 13-227 initiated an action against Debtor Houston Refining,
LP pursuant to the Labor Management Relations Act for injunctive
relief to compel arbitration of a dispute under USW's collective
bargaining agreement with the Debtor.
USW is the bargaining agent of certain employees of the Debtor at
its facility at Houston, Texas under the CBA dated February 15,
2009, effective February 1, 2009 through January 31, 2012. The
CBA provides for participation in various benefits, including a
401(k) plan. Moreover, the Debtor "matched" employee
contributions to the 401(k) plan.
Joseph J. Vitale, Esq., at Cohen, Weiss and Simon LLP, in New
York, relates that the Debtor unilaterally ceased matching
employee contributions to the 401(k) plan. In May 2009, the USW
submitted a grievance alleging that the Debtor breached the CBA
when the Debtor unilaterally ceased the "401(k) match for
represented employees." The Debtor refused to accept the
Grievance, citing that the Grievance did not raise a grievable
issue under the CBA because the Plan Document for the Houston
Refining 401(k) and Savings Plan provides that the Plan may be
amended at any time from time to time. He further discloses that
the USW sought arbitration of the Grievance to which the Debtor
refused. If the issue is arbitrated, he says, the USW will seek
an order from the arbitrator declaring that the Debtor violated
the CBA by failing to match employee contributions to the 401(k)
plan, compelling the Debtor to match these contributions, and
compelling the Debtor to remedy its postpetition failure to match
these contributions.
The USW, hence, asks the Court to compel the Debtor to submit the
Grievance to arbitration.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. On January 6, 2009,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code to facilitate a restructuring of the company's
debts. The case is In re Lyondell Chemical Company, et al.,
Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell
entities, including Equistar Chemicals, LP, Lyondell Chemical
Company, Millennium Chemicals Inc., and Wyatt Industries, Inc.
filed for Chapter 11. In May 2009, one of the cases was dismissed
-- Case No. 09-10068 -- because it is duplicative of Case No. 09-
10040 relating to Debtor Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately US$8 billion in DIP financing
to fund continuing operations. The DIP financing includes two
credit agreements: a US$6.5 billion term loan, which comprises a
US$3.25 billion in new loans and a US$3.25 billion roll-up of
existing loans; and a US$1.57 billion asset-backed lending
facility.
Luxembourg-based LyondellBasell Industries AF S.C.A. and another
affiliate were voluntarily added to Lyondell Chemical's
reorganization filing under Chapter 11 on April 24, 2009, in order
to seek protection against claims by certain financial and U.S.
trade creditors. On May 8, 2009, LyondellBasell Industries added
13 non-operating entities to Lyondell Chemical Company's
reorganization filing under Chapter 11 of the U.S. Bankruptcy
Code. All of the entities are U.S. companies and were added to
the original Chapter 11 filing for administrative purposes. The
filings will have no impact on current business or operations as
none of the entities manufactures or sells products.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MARSHALL INVESTMENTS: Case Summary & 14 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Marshall Investments, LLC
107 South Willow Ave
Tampa, FL 33606
Bankruptcy Case No.: 09-27423
Debtor-affiliates filing separate Chapter 11 petitions
November 20, 2009:
Entity Case No.
------ --------
Marshall Aviation, LLC 09-26583
MTM Enterprises, Inc. 09-26592
Initech Restoration, Inc. 09-26599
Debtor-affiliates filing separate Chapter 11 petitions
November 30, 2009:
Entity Case No.
------ --------
BMJC, LLC 09-27473
Marshall Investment, LLC 09-27423
Unit 308, LLC 09-27458
North A Properties, LLC 09-27468
Debtor-affiliates filing separate Chapter 11 petitions December 1,
2009:
Entity Case No.
------ --------
Villas of Tampania, LLC 09-27526
Chapter 11 Petition Date: November 30, 2009
Court: United States Bankruptcy Court
Middle District of Florida (Tampa)
Debtor's Counsel: Richard J. McIntyre, Esq.
McIntyre, Panzarella, Thanasides & Eleff
6943 East Fowler Avenue
Temple Terrace, FL 33617
Tel: (813) 899-6059
Fax: (813) 899-6069
Email: rich@mcintyrefirm.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
14 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/flmb09-27423.pdf
The petition was signed by Brian M. Marshall, manager of the
Company.
MICHAEL EDWARD RALKE: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Michael Edward Ralke
3192 East Bogert Trail
Palm Springs, CA 92264
Bankruptcy Case No.: 09-39103
Chapter 11 Petition Date: December 2, 2009
Court: United States Bankruptcy Court
Central District of California (Riverside)
Debtor's Counsel: William A. Cooper, Esq.
W. Austin Cooper Law Offices
2525 Natomas Park Dr., Ste 320
Sacramento, CA 95833
Tel: (916) 927-2525
Fax: (916) 920-0355
Email: austincooperlaw@yahoo.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Mr. Ralke.
MIKE NEMEE: Calaveras County Raises Accuracy of Status Report
-------------------------------------------------------------
Claudette Langley at calaverasenterprises.com says Calaveras
County's representative Kronick Moskivitz Tiedemann & Girardi
raised several question in the Chapter 11 filing of Mike and
Michelle Nemee regarding the accuracy of their claims in their
status report, saying the report includes erroneous statements
that could mislead the court.
According to papers filed with the court, the county asserts that
the Nemees' 2001 grading activity on their Ospital Road property
was first said to be for a vineyard, then for cattle grazing and
then, finally, an admission that its was for a persona-use 18-hole
golf-course. The couple had applied for a zoning change in order
to operate a commercial golf course and to construct golf-related
amenities.
Mike and Michelle Nemee own the Ridge at Trinitas. The company
filed for Chapter 11 bankruptcy on Oct. 7, 2009.
MOMENTIVE PERFORMANCE: Moody's Puts 'B2' Rating on $500 Mil. Notes
------------------------------------------------------------------
Moody's Investors Service assigned a B2 rating on up to
$500 million of new senior secured first lien notes due 2017 to be
issued by Momentive Performance Materials Inc. Additionally,
Moody's assigned B1 ratings to the proposed downsized and extended
1st lien revolver expiring in 2014 and term loan expiring in 2015.
The outlook is negative.
Moody's also affirmed Momentive's Corporate Family Rating of Caa1
and its other ratings. These ratings are subject to receipt of
final documentation and the acceptance of the extension by a
majority of the first lien credit facility.
"We view this refinancing as a credit positive for Momentive as it
provides an additional 18 - 24 months to improve profitability and
cash flow prior to addressing the refinancing of the majority of
its debt;" stated John Rogers, Senior Vice President at Moody's,
"if Momentive can generate more than enough EBITDA going forward
to cover cash interest and capex, Moody's would change the
outlook."
The notching of the senior secured notes at B2 takes into
consideration its contractual subordination to the proposed first
lien revolver and term loan debt. The notes have unconditional
guarantees from all of Momentive's domestic subsidiaries and
certain foreign subsidiaries, subject to applicable laws, and will
be secured by substantially the same assets as the company's
senior credit agreement.
This transaction includes a proposed amendment to the credit
agreement which would reduce the size of its revolver by
$108 million and extend the maturities of the revolver commitments
and term loans to August 2014 and December 2015, respectively,
assuming that all revolver and term loan holders approve the
amendment. Additionally, the new first-lien inter-creditor
agreement will contractually subordinate the notes to the revolver
and any first lien term loan debt that participates in the credit
facility amendment. The terms of the agreement stipulate that any
collateral proceeds allocated to the notes be paid to holders of
the revolver or first lien term loan that participate in the
credit facility amendment until they are paid in full, before the
holders of the notes obtain any collateral proceeds. Any first
lien term loan debt that does not agree to the amendment will have
a weaker position in bankruptcy than the term loan debt that
agrees to the amendment; however, Moody's does not believe that
the differential will be significant enough to warrant a lower
rating.
Moody's views this refinancing as a modest credit positive for the
company as it opportunistically extends Momentive's debt maturity
profile by 18 to 24 months and reduces the required refinancing in
2014. However, the improvement is not sufficient to warrant a
change in the rating or outlook at this time as credit metrics
remain weak and demand recovery may be slower than the company
anticipates. The negative outlook reflects Moody's concern that
Momentive has not generated sufficient EBITDA (reported EBITDA,
excluding extraordinary items) to cover its interest and capex
expenses. However, Moody's noted that in the third quarter of
2009, Momentive did generate sufficient EBITDA to cover these
costs. To the extent that Momentive can continue to generate
sufficient EBITDA to cover these costs over two consecutive
quarters or in any twelve month period, Moody's could change the
outlook or reassess the appropriateness of a higher rating
depending on the magnitude of the improvement and the company's
near-term outlook.
Momentive should have roughly $400 million of liquidity subsequent
to these transactions, primarily due to cash on the balance sheet
and limited availability under its revolver, which is expected to
be reduced in size by $108 million from $300 million, assuming
that all revolver and term loan holders approve the amendment.
Additionally, in September, Momentive obtained a waiver from its
lenders through the end of 2009 with regard to the sole financial
covenant in its first lien facility, a 4.25 times first lien
secured leverage ratio. The company came under that level for the
third quarter and is expected to remain under the covenant in the
fourth quarter due to its strong performance in the third quarter
of 2009. The ratings would come under additional pressure if the
company's cash and availability falls below $100 million for a
sustained period.
Ratings assigned:
Momentive Performance Materials Inc. & Subsidiaries
-- First Lien Senior Secured Notes (up to $500 million) at B2
(LGD2, 25%)
-- Senior Secured (First Lien) Revolving Credit Facility due Aug
2014 at B1 (LGD1, 7%)
-- Senior Secured (First Lien) Term Loan due Dec 2015 at B1
(LGD1, 7%)
Ratings affirmed:
Momentive Performance Materials Inc. & Subsidiaries
-- Corporate Family Rating at Caa1
-- Probability of Default Rating at Caa1
-- 12.5% Second Lien Notes at B3 (LGD3, 35%)
-- Senior Unsecured Notes (combination of US$, Euro and Toggle
notes) due 2014 at Caa2 (LGD4, 64%)
-- Senior Subordinated Notes due 2016 at Caa3 (LGD5, 89%)
-- Speculative Grade Liquidity Rating - SGL-3
-- Senior Secured (First Lien) Revolving Credit Facility due Dec
2012 at B1 (LGD2, 13%)*
-- Senior Secured (First Lien) Term Loan due Dec 2013 at B1
(LGD2, 13%)*
* These ratings would be withdrawn after completion of the
transaction if vast majority of the first lien term loan holders
agree to the extension.
Moody's last rating action for Momentive was on June 15, 2009,
when Moody's lowered Momentive's PDR to Ca/LD from Caa3. The
company's PDR was later moved back to Caa1, in accordance with
Moody's standard practices.
Momentive Performance Materials Inc., headquartered in Albany, New
York, is the second largest producer of silicones and silicone
derivatives worldwide. The company has two divisions: silicones
(which accounted for 90% of revenues in 2008) and quartz.
Revenues were $2 billion for LTM period ended September 30, 2009.
An affiliate of Apollo Management is the company's majority owner.
MOMENTIVE PERFORMANCE: S&P Assigns 'CCC' Senior Secured Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC' senior
secured debt rating to Albany, New York-based Momentive
Performance Materials Inc.'s proposed offering of senior secured
notes due 2017. The recovery rating is '6', indicating S&P's
expectation of negligible (0%-10%) recovery in the event of a
payment default. The company is also seeking to extend the
maturity of a portion of its senior secured credit facilities.
"The ratings on the proposed notes are based on S&P's expectation
that at least 80% of lenders will agree to extend maturities,"
said Standard & Poor's credit analyst Cynthia Werneth. If the
percentage is lower, recovery prospects for senior secured
noteholders would be better, and the ratings on this debt could
therefore be somewhat higher.
All other ratings on Momentive and its subsidiaries, including the
'CCC+' corporate credit rating, remain on CreditWatch with
positive implications. If the refinancing is consummated as
currently planned and there is no material change to anticipated
terms and conditions, S&P expects to raise the corporate credit
rating to 'B-'.
Based on the postrefinancing capital structure and S&P's updated
recovery analysis, S&P expects to raise the ratings on the portion
of the revolving credit facility and term loans whose maturities
are extended to 'B+' from 'CCC+'. S&P would revise the recovery
rating to '1', indicating its expectation for very high (90%-100%)
recovery in the event of a payment default, from '3'. S&P expects
to raise the ratings on the portion of the revolving credit
facility and term loans that are not extended to 'B-' from 'CCC+'.
The recovery ratings on these loans would remain at '3',
indicating S&P's expectation of meaningful (50%-70%) recovery in
the event of a payment default. The extending credit facilities
will be rated higher than the nonextending credit facilities
because they will benefit from a turnover provision. This
provision requires that upon an event of default any collateral
proceeds will be paid to extending lenders prior to noteholders
until the outstanding obligations to extending lenders are repaid
in full. This contractual subordination results in the notes
being rated lower than the credit facilities.
S&P expects to raise all the other issue-level ratings on
Momentive that are currently on CreditWatch?the second-lien senior
secured debt, the senior unsecured debt, and the subordinated debt
by one notch to 'CCC' from 'CCC-'. The recovery rating would
remain unchanged at '6'.
If the transaction is completed as planned, S&P expects to remove
all ratings on Momentive from CreditWatch, where they were placed
with positive implications on Sept. 24, 2009, and assign a stable
outlook.
The ratings reflect Momentive's very high debt leverage and fair
business risk profile. Momentive is a large producer of silicones
used in a wide variety of applications and quartz used primarily
in semiconductors.
S&P expects to resolve the CreditWatch upon closing of the
refinancing, which S&P thinks will occur within the next one to
two weeks. At that time, S&P expects to raise the ratings as
outlined above.
MSREF V US: Seeks to Restructure $1-Bil. Mortgage on 5 Resorts
--------------------------------------------------------------
The Wall Street Journal's Kris Hudson and Anton Troianovski report
MSREF V U.S. fund, a $1.75 billion real-estate fund managed by
Morgan Stanley, is trying to restructure a $1 billion securitized
mortgage on five resorts it bought in 2007.
The mortgage comes due in February 2011. The Journal relates a
person familiar with the talks said the fund hopes to get revised
terms on the mortgage so it can retain the resorts subject to the
mortgage. If the fund defaults on the mortgage, the special
servicer may try to foreclose.
According to the Journal, MSREF V U.S. fund bought eight resorts
at the top of the market from CNL Hotels & Resorts Inc. The fund
put $1.52 billion of debt on five properties, including a
$1 billion first mortgage and a $525 million mezzanine loan. The
first mortgage was carved up and sold to investors as commercial
mortgage-backed securities. The five properties are the 780-room
Grand Wailea Resort Hotel & Spa in Maui; the 796-room La Quinta
Resort & Club and PGA West in La Quinta, Calif.; the 739-room
Arizona Biltmore Resort & Spa in Phoenix; the 693-room Doral Golf
Resort & Spa in Miami; and the 279-room Claremont Resort & Spa in
Berkeley, Calif.
The Journal says the five resorts have been hammered along with
the rest of the luxury-hotel market by the economic downturn,
making it difficult for them to pay debt service and possibly even
operating costs. According to the Journal, debt-rating company
Realpoint LLC said the resorts' combined cash flow declined to
$84 million in this year's first half from $150 million during the
last six months of 2007. Their average occupancy fell to 62.5%
from 72% in that same span.
The Journal says the MSREF V U.S. fund has suffered a sharp
decline in value. It also held the 310-room former Maui Prince
Hotel in Hawaii, which the fund and a partner lost to foreclosure
earlier this year. The California State Teachers' Retirement
System last summer disclosed that its $137 million investment in
MSREF V was worth just $300,000 by last March.
According to Realpoint, the Journal continues, the servicer
overseeing the mortgage last month transferred it to its special
servicing team tasked with handling complex negotiations with
borrowers. The Journal notes a recent monthly report issued by
the servicer, PNC Financial Services Group Inc's Midland Loan
Services, noted that the loan was transferred "due to servicer
determination of imminent default." The report also said the
borrower was "requesting extension options."
The Journal also relates Fitch Inc. said Midland told its analysts
that the resorts' cash flow no longer covers the cost of their
operations.
MT BALDY: Files for Bankruptcy to Avoid Paying 10% Delinquent Fee
-----------------------------------------------------------------
Josh Brodesky at Arizona Daily Star reports that Mt. Baldy
Ventures LLC made a voluntary filing under Chapter 11 to avoid
paying a 10% delinquent fee on the loan for 52,000-square-foot
former Kmart in Douglas.
The Company's first lien holders Jerry & Sandy DeGrazia refused to
extend or amend the loan, Mr. Brodesky says.
The building was acquired for $550,000 at an auction in 2005, Mr.
Brodesky notes.
Mt. Baldy Ventures LLC is a holding company owned by William
Martin, who owns Tucson-based Madera Financial.
NAHGBWS LLC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: NAHGBWS, LLC
dba Comfort Inn & Suites
360 Son Johnson Rd
Boaz, AL 35956-2709
Bankruptcy Case No.: 09-84911
Chapter 11 Petition Date: December 2, 2009
Court: United States Bankruptcy Court
Northern District Of Alabama (Decatur)
Debtor's Counsel: Tameria S. Driskill, Esq.
PO Box 8505
Gadsden, AL 35902
Tel: (256) 546-5591
Fax: (256) 546-6557
Email: tamerialaw@bellsouth.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of $5,765,278
and total debts of $6,391,746.
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/alnb09-84911.pdf
The petition was signed by Loyd H. Richey, managing member of the
Company.
NORTEL NETWORKS: Courts OK for Ethernet Biz. Sale to Ciena
----------------------------------------------------------
Nortel Networks Corporation disclosed that at a joint hearing
December 3 it, its principal operating subsidiary Nortel Networks
Limited, and certain of its other subsidiaries including Nortel
Networks Inc. obtained orders from the United States Bankruptcy
Court for the District of Delaware and the Ontario Superior Court
of Justice approving the asset sale agreement with Ciena
Corporation for the sale of Nortel's North American, Caribbean and
Latin American and Asian Optical Networking and Carrier Ethernet
businesses. Certain other Nortel subsidiaries, including Nortel
Networks U.K. Limited, have entered into a separate asset sale
agreement with Ciena for the Europe, Middle East and Africa
portion of Nortel's Optical Networking and Carrier Ethernet
businesses. Under the agreements, Ciena will pay an aggregate
purchase price of US$530 million in cash plus US$239 million
principal amount of convertible notes due June 2017.
As announced on November 23, 2009, Ciena's purchase will include
substantially all product platforms, patents and intellectual
property that are predominantly used in the businesses, and
provides for the transition of substantially all of Nortel's
Optical Networking and Carrier Ethernet customer contracts to
Ciena. The sale is subject to additional court approvals in
France and Israel and certain regulatory approvals, information
and consultation with employee representatives and/or employees in
certain EMEA jurisdictions, other customary closing conditions and
certain post-closing purchase price adjustments. Nortel will work
diligently with Ciena with a target to close the sale in the first
quarter of 2010, subject to the timing of obtaining other
regulatory approvals.
Late Bid from Nokia
Steven Church at Bloomberg reports that Nortel Networks won
permission to sell its optical-networking business to Ciena for
$769 million after the bankruptcy judge rejected a higher, all-
cash bid from Nokia Siemens Networks because it came in too late.
On Dec. 1, Nokia Siemens challenged Ciena's bid, submitting a new
offer of $810 million in cash for the assets. That offer came
more than a week after Nokia declined to top Ciena's final bid at
an auction for the optical-networking business that ended on Nov.
22.
The Canadian Press reported Nokia Siemens, a joint venture between
Nokia Oyj and Siemens AG, tried to block the Ciena deal, saying it
would offer $810 million in cash for Nortel Networks Corp.'s
optical networking and carrier Ethernet businesses. Nokia Siemens
partnered with One Equity Partners. According to Canadian Press,
Nokia Siemens took issue with the valuation of the convertible
note portion of the offer. Nokia Siemens, with One Equity
Partners, said it had offered $770 million in cash during the
auction, but Nortel picked Ciena instead. Canadian Press noted
Nokia's offer would top the US$530 million in cash plus US$239
million of convertible notes due June 2017 that made up Ciena's
winning bid for what was considered one of Nortel's more-prized
units.
According to Bloomberg, Creditors also had urged Judge Gross to
reopen the auction, arguing that it may increase their recoveries
by $20 million.
Nevertheless, Bloomberg relates, U.S. Bankruptcy Judge Kevin Gross
ruled that Nokia's $810 million offer should be rejected. Ciena
argued that it has already started work on combining the two
companies based on the results of the Nov. 22 auction. "There has
been a lot of work done to begin a massive process of integrating"
the businesses, Ciena attorney Douglas Bacon said in court.
According to the Bloomberg report, Nortel argued that allowing a
bid after the auction had ended would disrupt the three remaining
sales the telecommunications maker is planning as part of its
bankruptcy. Potential buyers may not participate in future
auctions because they wouldn't know if the results would be final,
company attorney James Bromley said in court.
Other Sales
Nortel also announced that at the joint hearing, it, NNL, and
certain of its other subsidiaries including NNI obtained orders
from the United States Bankruptcy Court for the District of
Delaware and the Ontario Superior Court of Justice approving the
asset sale agreement for the sale of Nortel's North American GSM
business to Telefonaktiebolaget LM Ericsson (Ericsson). Certain
other Nortel subsidiaries, including Nortel Networks U.K. Limited
(in administration) and Nortel Networks SA, have entered into a
separate asset sale agreement with Kapsch Carrier Com AG (Kapsch)
for the portion of Nortel's GSM business outside of North America
and for Nortel's GSM-R business. Under the agreements, Ericsson
and Kapsch will pay an aggregate purchase price of US$103 million
in cash.
As announced on November 25, 2009, Ericsson will purchase assets
relating to the North American GSM business and Kapsch will
purchase assets relating to the EMEA and Taiwan GSM businesses.
Kapsch will also purchase the assets of the GSM-R business.
Ericsson and Kapsch will assume the relevant customer contracts in
their specified regions as well as the products, specified patents
predominantly used in the GSM/GSM-R business and non-exclusive
licenses of other relevant patents. The sale is subject to
additional court approvals in France and certain regulatory
approval, information and consultation with employee
representatives and/or employees in certain EMEA jurisdictions,
other customary closing conditions and certain post-closing
purchase price adjustments. Nortel will work diligently with
Ericsson and Kapsch towards an expected sale close at the end of
the first quarter of 2010, subject to the timing of obtaining
regulatory approvals.
As previously announced, Nortel does not expect that the Company's
common shareholders or the NNL preferred shareholders will receive
any value from the creditor protection proceedings and expects
that the proceedings will result in the cancellation of these
equity interests.
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: Has $505 Million Net Loss for Third Quarter
------------------------------------------------------------
Nortel Networks Corporation announced its results for the third
quarter 2009. Results were prepared in accordance with United
States generally accepted accounting principles (GAAP) in U.S.
dollars.
Following discussions with the U.S. Securities and Exchange
Commission (SEC), commencing with the quarterly report on Form
10-Q for the quarter ended September 30, 2009, Nortel will no
longer combine the results of the Europe, Middle East and Africa
(EMEA) subsidiaries, and entities they control (Equity
Investees), with its consolidated results. Nortel has determined
that, as of the Petition Date, it is appropriate to present its
Equity Investees under the equity method of accounting based on
the conclusion that Nortel exercises significant influence over
those entities. The equity method of accounting results in the
financial position and results of operations of the Equity
Investees being presented net on a single line in the balance
sheet and statement of operations, respectively, versus being
combined gross into each individual line item. The comparative
periods have not been recast for this change in presentation. As
a result, analysis using the comparative periods may be
difficult, and may not provide meaningful comparisons.
The Enterprise Solutions (ES) business as well as the Nortel
Government Solutions (NGS) and DiamondWare businesses are
presented as discontinued operations for the quarter ended
September 30, 2009. Accordingly, comparative periods have been
recast to give effect for the change in presentation.
The CDMA business did not qualify for treatment as discontinued
operations and as a result has been included in
continuing operations.
Except in the Segment Revenues section, the discussion below
relates to Results from Continuing Operations under U.S. GAAP and
excludes the financial results of the Equity Investees.
Consistent with the way the Company manages its business segments,
the financial information in the Segment Revenues section includes
the results of the Equity Investees within each segment.
Therefore, in order to reconcile the financial information for
the business segments discussed below to our consolidated
financial information, the net financial results of the Equity
Investee must be removed.
Third Quarter 2009 Financial Summary
Nortel's overall financial performance in the third quarter of
2009 continued to be impacted by ongoing negative economic
conditions and the uncertainty created by the Company's Creditor
Protection Proceedings, which resulted in a decrease in
customers' spending levels.
* Revenues in the third quarter of $1,045 million, with
declines year over year in all segments, except Carrier
VoIP and Application Solutions (CVAS), and in all regions.
These revenues exclude third quarter revenues related to
Equity Investees' revenues of $348 million and
$353 million related to discontinued operations. The
Company previously reported total revenues of $2,319 million
in the third quarter of 2008.
* Gross margin of 45 percent in the quarter, an increase of
6.8 percentage points from the year ago quarter, includes
charges related to workforce and other cost reduction
activities and pension curtailment losses that
historically would have been recorded in special charges.
Excluding these charges, gross margin in the third quarter
of 2009 would have been 47 percent. Gross margin was
positively impacted by the exclusion of the Equity
Investees
* SG&A expense in the third quarter of $155 million, a
decrease of 43 percent from the year ago quarter.
Excluding $32 million related to workforce and other cost
reduction activities and pension curtailment losses that
historically would have been recorded in special charges,
SG&A for the third quarter of 2009 would have decreased by
55 percent year over year. SG&A expense in the third
quarter excludes $129 million related to Equity Investees
* R&D expense in the third quarter of $184 million, a
decrease of 32 percent from the year ago quarter.
Excluding $20 million related to workforce and other cost
reduction activities and pension curtailment losses that
historically would have been recorded in special charges,
R&D expense for the third quarter of 2009 would have
decreased by 39 percent year over year. R&D expense in
the third quarter excludes $37 million related to Equity
Investees
* Cash balance as of September 30, 2009, was $1.81 billion
and excluded Equity Investees cash of $798million. The
consolidated cash balance plus Equity Investees cash
exceeded the June 30, 2009 consolidated cash balance of
$2.56 billion, which included Equity Investees cash of
$819 million
Segment Revenues
The financial information for our business segments includes the
results of the Equity Investees as if they were consolidated,
which is consistent with the way we manage our business segments,
but does not include the results of discontinued operations.
Commencing with the third quarter of 2009, Nortel is reporting
its CVAS business unit as a separate reportable segment. Prior
to that time, the results of CVAS were included in the Wireless
Networks (WN) reportable segment, which prior to the third
quarter of 2009 was called the Carrier Networks (CN) reportable
segment.
Segment revenues were $1,271 million for the third quarter of 2009
compared to $1,595 million for the third quarter of 2008,
reflecting a reduction of 20% percent due to declines across all
business segments, except CVAS. The reduction was primarily a
result of the continuing economic downturn and the uncertainty
created by the Creditor Protection Proceedings.
Segment Revenues B/(W)
Revenues B/(W)
Q3 2009 Q3 2008 YoY
------- ------- ----
Wireless Networks $663 $805 (18%)
Carrier VoIP & Appl. Solutions $208 $182 14%
Metro Ethernet Networks $295 $398 (26%)
LGN $103 $211 (51%)
Other $2 ($1) 150%
------- ------- ----
Total Segment Revenues $1,271 $1,595 (20%)
Discontinued Operations $475 $724 (34%)
WN revenues in the third quarter of 2009 were $663 million, a
decrease of 18% percent compared with the year ago quarter with
declines in the GSM and UMTS solutions business, while the CDMA
solutions business was essentially flat. The wireless segment
was negatively impacted by a reduction in spending by certain
customers as a result of their change in technology migration
plans.
CVAS revenues in the third quarter of 2009 were $208 million, an
increase of 14% percent compared with the year ago quarter due to
contract deliveries and project completions in the third quarter
of 2009.
Metro Ethernet Networks (MEN) revenues in the third quarter of
2009 were $295 million, a decrease of 26% percent compared with
the year ago quarter with impacts across all businesses. In
addition to the factors above, lower revenues from certain
customers also impacted the year over year decline.
LG-Nortel Co. Ltd. (LGN) revenues in the third quarter of 2009
were $103 million, a decrease of 51% percent compared with the
year ago quarter. In addition to the factors described above, a
majority of the decline was in LGN Carrier, primarily due to the
recognition of certain deferred revenues in the third
quarter of 2008 not repeated in the third quarter of 2009 and
higher sales volumes related to our 3G wireless products in the
third quarter of 2008, as well as the impact of foreign exchange
fluctuations. The decrease was partially offset by network
upgrades related to certain customers and an increase in wireless
local loop sales in the third quarter of 2009.
Discontinued operations revenues in the third quarter of 2009 were
$475 million, a decrease of 34% percent compared with the year ago
quarter. In addition to the factors above, Asia and Canada
revenues were also unfavorably impacted by foreign exchange
fluctuations.
Gross Margin
Gross margin was 45.0 percent of revenues in the third quarter of
2009. Excluding charges related to workforce and other cost
reduction activities and pension curtailment losses that
historically would have been recorded in special charges, gross
margin in the third quarter of 2009 would have been 47 percent (a)
of revenues. This compared to gross margin of 38.2 percent for
the third quarter of 2008. Compared to the third quarter of 2008,
in addition to the items already noted, gross margin increased
primarily as a result of the exclusion of the Equity Investees,
which positively impacted gross margin by 5.7 percentage points,
the favorable impacts of product mix and the favorable impact of
foreign exchange fluctuations and price erosion, and a decrease in
warranty costs.
Operating Expenses
Operating Expenses B/(W)
Q3 2009 YoY
------- ----
SG&A $155 43%
R&D $184 32%
------- ----
Total Operating Expenses $339 37%
A focus on reducing costs resulted in lower operating expenses
compared to the year ago quarter. Operating expenses were
$339 million in the third quarter of 2009. This compares to
operating expenses of $541 million for the third quarter of 2008.
SG&A expenses were $155 million in the third quarter of 2009,
compared to $272 million for the third quarter of 2008. Excluding
charges related to workforce and other cost reduction activities
and pension curtailment losses that historically would have been
recorded in special charges, SG&A expenses for the third quarter
of 2009 would have been $123 million. SG&A expense in the third
quarter of 2009 also excludes $129 million related to Equity
Investees. Compared to the third quarter of 2008, in addition to
the items already noted, SG&A was favorably impacted primarily by
headcount reductions and lower spending levels across all
categories including a reduction in sales and marketing investment
in maturing technologies.
R&D expenses were $184 million in the third quarter of 2009,
compared to $269 million for the third quarter of 2008. Excluding
charges related to workforce and other cost reduction activities
and pension curtailment losses that historically would have been
recorded in special charges, R&D expenses for the third quarter of
2009 would have been $164 million. R&D expense in the third
quarter of 2009 also excludes $37 million related to Equity
Investees. Compared to the third quarter of 2008, in addition to
the items already noted, R&D was favorably impacted primarily by
headcount reductions and the cancellation of certain R&D
programs.
Net Loss
The Company reported a net loss in the third quarter of 2009 of
$508 million compared to net loss of $3,413 million in the third
quarter of 2008.
The net loss in the third quarter of 2009 of $508 million
included a loss from discontinued operations of $164 million,
reorganization costs of $223 million primarily related to the
recording of a pension liability, interest expense of
$75 million, other charges of $46 million, comprised in part by
pension curtailment expense and break-up fees in relation to the
CDMA and LTE Access Asset sale, $10 million in income tax expense
and an expense of $3 million for earnings attributable to non-
controlling interests (formerly minority interests), partially
offset by Other income -- net of $60 million, comprised in part of
a currency exchange gains of $61 million.
The net loss in the third quarter of 2008 of $3,413 million
included $2,133 million in income tax expense, a goodwill
impairment charge of $661, loss from discontinued operations
of $556, interest expense of $81 million, special charges of
$41 million for headcount and other cost reduction activities,
an expense of $21 million for earnings attributable to non-
controlling interests (formerly minority interests) and Other
expense net of $14 million, comprised primarily of a gain of
$8 million due to changes in foreign exchange rates and a loss of
$4 million from mark-to-market gains on interest rate swaps.
Cash
Consolidated cash balance as of September 30, 2009 was
$1.81 billion and excluded Equity Investees cash of $798 million.
The consolidated cash balance plus Equity Investees cash exceeded
the June 30, 2009 consolidated cash balance of $2.56 billion,
which included Equity Investees cash of $819 million. The
decrease in the consolidated cash balance was primarily due to the
deconsolidation of the Equity Investees, cash used in investing
activities of $50 million, mainly due to changes in restricted
cash, and cash used in financing activities of $2 million,
partially offset by cash from operating activities of
$124 million and net favorable foreign exchange impacts of
$41 million.
NORTEL NETWORKS CORPORATION
Unaudited Consolidated Balance Sheets
As of September 30, 2009
ASSETS
Current assets
Cash and cash equivalents $1,818,000,000
Short-term investments 6,000,000
Restricted cash and cash equivalents 118,000,000
Accounts receivable-net 901,000,000
Inventories-net 350,000,000
Deferred income taxes-net 12,000,000
Other current assets 373,000,000
Assets held for sale 208,000,000
Assets of discontinued operations 727,000,000
---------------
Total current assets 4,513,000,000
Investments 139,000,000
Plant and equipment-net 786,000,000
Goodwill 10,000,000
Intangible assets-net 54,000,000
Deferred income taxes-net 13,000,000
Other assets 190,000,000
---------------
Total assets $5,705,000,000
===============
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities
Trade and other accounts payable $300,000,000
Payroll and benefit-related liabilities 167,000,000
Contractual liabilities 96,000,000
Restructuring liabilities 9,000,000
Other accrued liabilities 743,000,000
Long-term debt due within one year -
Liabilities held for sale 398,000,000
Liabilities of discontinued operations 613,000,000
---------------
Total current liabilities 2,326,000,000
Long-term liabilities
Long-term debt 41,000,000
Investment in net liabilities of
Equity Investees 476,000,000
Deferred income taxes-net 7,000,000
Other liabilities 475,000,000
---------------
Total long-term liabilities 999,000,000
Liabilities subject to compromise 6,921,000,000
---------------
Total liabilities $10,246,000,000
SHAREHOLDERS' DEFICIT
Common shares, without par value - Authorized
shares: unlimited; Issued and outstanding
shares: 497,946,541 as of Sept. 30, 2009 35,597,000,000
Additional paid-in capital 3,644,000,000
Accumulated deficit (43,652,000,000)
Accumulated other comprehensive loss (931,000,000)
---------------
Total NNC shareholders' deficit (5,342,000,000)
Non-controlling interests 801,000,000
---------------
Total shareholders' deficit (4,541,000,000)
---------------
Total liabilities & shareholders' deficit $5,705,000,000
===============
NORTEL NETWORKS CORPORATION
Unaudited Consolidated Statements of Operations
For the Three Months Ended September 30, 2009
Revenues:
Products $962,000,000
Services 83,000,000
---------------
Total revenues 1,045,000,000
Cost of revenues:
Products 548,000,000
Services 27,000,000
---------------
Total cost of revenues 575,000,000
---------------
Gross profit 470,000,000
Selling, general & admin expense 155,000,000
Research and development expense 184,000,000
Amortization of intangible assets 3,000,000
Goodwill impairment -
Special charges -
Loss (gain) on sales of businesses &
sales & impairments of assets 15,000,000
Other operating expense - net 46,000,000
---------------
Operating earnings (loss) 67,000,000
Other income (expense)-net 60,000,000
Interest and dividend income -
Interest expense:
Long-term debt (75,000,000)
Other -
---------------
Earnings (loss) from continuing operations
before reorganization items, income taxes
and equity in net earnings of associated
companies and Equity Investees 52,000,000
Reorganization items-net (223,000,000)
---------------
Loss from continuing operations before income
taxes and equity in net loss of associated
companies and Equity Investees (171,000,000)
Income tax expense (10,000,000)
---------------
Loss from continuing operations before equity
in net loss of associated companies and
Equity Investees (181,000,000)
Equity in net loss of associated
companies-net of tax (1,000,000)
Equity in net loss of Equity Investees (159,000,000)
---------------
Net loss from continuing operations ($341,000,000)
Net loss from discontinued
operations-net of tax (164,000,000)
---------------
Net loss ($505,000,000)
Income attributable to noncontrolling interests (3,000,000)
---------------
Net loss attributable to NNC ($508,000,000)
===============
NORTEL NETWORKS CORPORATION
Unaudited Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2009
Cash flows from (used in) operating activities:
Net loss attributable to NNC ($1,289,000,000)
Net loss from discontinued operations -
net of tax 488,000,000
Adjustments to reconcile net loss to net
cash from (used in) operating activities:
Amortization and depreciation 157,000,000
Goodwill impairment -
Non-cash portion of cost reduction activities 18,000,000
Equity in net loss (earnings) of associated
companies-net of tax 1,000,000
Equity in net loss of Equity Investees 448,000,000
Share-based compensation expense 86,000,000
Deferred income taxes 22,000,000
Pension and other accruals 157,000,000
Loss on sales of businesses and impairments
of assets, net 1,000,000
Income attributable to non-controlling
interests-net of tax 35,000,000
Reorganization items-non cash 265,000,000
Other-net (529,000,000)
Change in operating assets & liabilities 379,000,000
---------------
Net cash from (used in) operating activities-
continuing operations 239,000,000
Net cash from (used in) operating activities -
discontinued operations (18,000,000)
---------------
Net cash from (used in) operating activities 221,000,000
Cash flows from (used in) investing activities:
Expenditures for plant & equipment (32,000,000)
Proceeds on disposals of plant & equipment 87,000,000
Change in restricted cash & cash equivalents (82,000,000)
Increase in short & long-term investments -
Decrease in short & long-term investments 40,000,000
Acquisitions of investments & businesses-net
of cash acquired (1,000,000)
Proceeds from the sales of investments &
businesses & assets-net 6,000,000
---------------
Net cash from (used in) investing activities-
continuing operations 18,000,000
Net cash from (used in) investing activities-
discontinued operations 13,000,000
---------------
Net cash from (used in) investing activities 31,000,000
Cash flows from (used in) financing activities:
Dividends paid including paid by subsidiaries
to noncontrolling interests (6,000,000)
Capital repayment to noncontrolling interests (29,000,000)
Increase in notes payable 36,000,000
Decrease in notes payable (76,000,000)
Proceeds from issuance of long-term debt -
Repayments of long-term debt -
Debt issuance costs -
Repayments of capital leases (7,000,000)
---------------
Net cash used in financing activities-
continuing operations (82,000,000)
Net cash used in financing activities-
discontinued operations (1,000,000)
---------------
Net cash used in financing activities (83,000,000)
---------------
Effect of foreign exchange rate changes on
cash and cash equivalents 51,000,000
---------------
Net cash from (used in) continuing operations 226,000,000
Net cash from discontinued operations (6,000,000)
---------------
Net increase (decrease) in cash &
cash equivalents 220,000,000
Cash & cash equivalents, beginning 2,397,000,000
Less cash & cash equivalents of
Equity Investees (761,000,000)
---------------
Adjusted cash & cash equivalents, beginning 1,636,000,000
---------------
Cash & cash equivalents, end 1,856,000,000
Less cash & cash equivalents of
discontinued operations, end (38,000,000)
---------------
Cash & cash equivalents of
continuing operations, end $1,818,000,000
===============
A full-text copy of Nortel Networks' Third Quarter 2009
Financial Results filed on Form 10-Q is available at the U.S.
Securities and Exchange Commission at:
http://researcharchives.com/t/s?4a75
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: Proposes GSM Sale Termination Fee Agreement
------------------------------------------------------------
Nortel Networks Inc. and its units ask the Bankruptcy Court to
approve a certain GSM termination fee agreement entered into by
and among Nortel Networks Corporation, Nortel Networks Limited,
and Nortel Networks Inc., as main sellers, with
Telefonaktiebolaget LM Ericsson, as purchaser, dated November 24,
2009.
The GSM Termination Fee Agreement is related to the "North
American Purchase Agreement entered into by the Debtor Sellers
and Ericsson dated November 24, 2009, for the sale of the
Debtors' asserts related to their GSM/GSM-R Business. Certain of
the Debtors' European affiliates and joint administrators also
entered into an independent Asset Sale Agreement, dated
November 24, 2009, with Kapsch Carriercom AG.
THE GSM Termination Fee Agreement specifically aims to address
certain issues raised by the parties' entry of the North American
Purchase Agreement.
Under the GSM Termination Fee Agreement, the parties covenant
that:
-- NNI will file (1) a notice with the Bankruptcy Court to
inform all parties-in-interest that upon completion of the
Auction, Ericsson as purchaser has been designated by the
Debtor Sellers as the Successful Bidder, (2) a motion with
the Bankruptcy Court, seeking approval of the assumption
and assignment procedures for certain contracts, (3) a
notice of a proposed final sale order approving and
authorizing the Sale, and (4) a motion for approval of the
GSM Termination Fee Agreement.
-- NNL and NNC will file (1) a motion with the Canadian Court,
seeking approval of the Canadian Approval and Vesting Order
Motion with respect to the Sale, and (b) a motion with the
Canadian Court, seeking approval of the GSM Termination Fee
Agreement.
-- The Debtor Sellers will not withdraw the U.S. Sale Motion
or the Canadian Approval and Vesting Order Motion with
respect to the Sale. The U.S. Sale Motion refers to that
motion dated September 30, 2009, seeking approval the sale
of the Debtors' GSM/GSM-R Business.
-- Subject to the availability of the Bankruptcy Court, NNI
will use reasonable best efforts to prosecute and seek
approval of each of the Assignment Procedures Motion, the
GSM Termination Fee Agreement Motion and the U.S. Sale
Motion with respect to the Sale by December 2, 2009,
provided that if the Bankruptcy Court approves the Sale and
grants the relief sought by the U.S. Sale Motion and the
Canadian Court approves the Sale and grants the relief
sought in the Canadian Approval and Vesting Motion prior to
the approval of the Motion, the parties agree that NNI may
withdraw the Motion without incurring any obligation to pay
the Termination Fee.
The parties further agree that in the event of a breach by the
Debtor Sellers of their obligations under the GSM Termination Fee
Agreement, Ericsson, as purchaser, will provide written notice to
the Sellers of that breach. If the Sellers fail to cure that
breach within one business day of actual receipt of the Breach
Notice, the Sellers will pay to the Purchaser, as the sole and
exclusive remedy of the Purchaser, in immediately available funds
within two business days following that event, a cash fee of
$3.09 million.
The Sellers' obligation to pay the Termination Fee will, to the
extent owed by the U.S. Debtors, constitute allowed
administrative expense claims against the U.S. Debtors under
Section 503(b) of the U.S. Bankruptcy Code and will be entitled
to a first priority Lien on the proceeds of an Alternative
Transaction, if any. An "Alternative Transaction" refers the
sale, transfer or other disposition, directly or indirectly,
including through an asset sale, stock sale, merger, amalgamation
or other similar transaction, of all or a material portion of the
Business or all or a material portion of the Assets in a
transaction or a series of transactions with one or more Persons
other than the Purchaser, Kapsch or their affiliates.
Andrew R. Remming, Esq., at Morris, Nichols, Arhst & Tunnell LLP,
in Wilmington, Delaware, asserts that the purpose of the GSM
Termination Fee Agreement is to ensure that the Debtors take all
necessary and reasonable steps to ensure that the North American
Purchase Agreement is approved by the Bankruptcy Court in a
timely manner. The Termination Fee, he maintains, provides the
Purchaser with an appropriate remedy for liquidated damages in
the event that the Debtors fail to fulfill their obligations
under the Fee Agreement.
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: Proposes to Assign Technology Park Lease
---------------------------------------------------------
Nortel Networks Inc. and its affiliated debtors seek authority
from the U.S. Bankruptcy Court for the District of Delaware to
assume and assign these contracts to a lease contract dated
March 7, 1997, with Technology Park Limited Partnership, and a
sublease dated August 1, 2005 with Raytheon Company.
NNI executed the March 1997 Contract to lease a non-residential
real property located at 600 Technology Park Drive, in Billerica,
Massachusetts. NNI then leased out a portion of those premises
to Raytheon under the August 2005 Contract.
The Contracts are among those designated by Avaya for assumption
and assignment as part of the sale of the Nortel's Enterprise
Solutions Business to Avaya. Avaya offered to acquire the
business for $900 million and an additional $15 million reserved
for a Nortel employee retention program.
"The transfer of the lease and the sublease to Avaya by NNI is
necessary to consummate the sale, which this Court has determined
is in the best interests of the Debtors, their estates and their
creditors," says NNI's attorney, Andrew Remming, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, Delaware.
The Court will hold a hearing on December 15, 2009, to consider
approval of the request. Creditors and other concerned parties
have until December 8, 2009, to file their objections.
NORTEL NETWORKS: Seeks Nod for AsiaPac Restructuring Agreement
--------------------------------------------------------------
Nortel Networks Inc. and its affiliated debtors ask the U.S.
Bankruptcy Court for the District of Delaware to approve a deal
they entered into with their units in the Asia Pacific region.
The parties entered into the deal to address the financial
difficulties being faced by the Nortel units in the APAC region
as a result of the bankruptcy and insolvency cases commenced by
NNI and its U.S. and foreign affiliates. It establishes a
structure that would enable the APAC units to restructure their
debt to allow increased liquidity, and enable them to pay a
portion of their outstanding debt to NNI and its affiliates as of
January 14, 2009.
The deal is formalized in a 45-page agreement referred to as the
Asia Restructuring Agreement, a copy of which is available for
free at http://bankrupt.com/misc/Nortel_AsiaRestucturingAgrmt.pdf
The key terms of the Asia Restructuring Agreement are:
(1) A portion of each APAC unit's prepetition intercompany
debt will be repaid to NNI and its affiliates.
(2) A further portion of each APAC unit's prepetition
intercompany debt will be repayable in monthly amounts but
only to the extent of the unit's net cash balance, after
provision for its estimated working capital requirements,
certain estimated severance payments and costs for
reinstatement of leased premises, estimated future taxes
and certain other specified costs, expenses and
provisions.
(3) The remainder of each APAC unit's prepetition intercompany
debt will be subordinated and postponed to the prior
payment in full of other debts including obligations owed
to some non-filed Nortel affiliates and non-affiliated
third parties; intercompany obligations incurred after
January 14, 2009; and the portions of prepetition
intercompany debt to be repaid.
(4) The APAC units will appoint Ernst & Young Solutions LLP as
their restructuring manager to provide financial
consulting and advisory services.
(5) The APAC units will cooperate and participate in the sale
of global businesses or other assets to third parties. In
furtherance of these global sale transactions, the APAC
units will enter into future agreements to terminate
intellectual property licenses extended to them by the
Canada-based Nortel units. Participation in the global
sale transactions by the APAC units will not be
conditioned upon minimum allocation of sale proceeds from
those transactions.
(6) Implementation of the Asia Restructuring Agreement is
conditioned on the approval of the Ontario Superior Court
of Justice and the Bankruptcy Court and if so sought, a
direction of the English Court confirming that the
administrators of Nortel's European affiliates are at
liberty to enter into the Asia Restructuring Agreement on
behalf of each of the European affiliate, excluding Nortel
Networks S.A.
In addition, the participation of some APAC units in the
restructuring and other matters provided for in the Asia
Restructuring Agreement is conditioned on regulatory
approvals in their respective jurisdictions of
incorporation.
The hearing to consider approval of the Asia Restructuring
Agreement is scheduled for December 2, 2009. Creditors and other
concerned parties have until November 25, 2009, to file their
objections.
Canada-based Nortel Networks Corporation and its four affiliates
also filed a motion in the Ontario Superior Court of Justice to
approve the Asia Restructuring Agreement. The Canadian Court has
not yet issued an order approving the agreement.
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)
NOVA CHEMICALS: S&P Raises Corporate Credit Rating to 'B+'
----------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit and senior unsecured debt ratings on commodity chemicals
producer NOVA Chemicals Corp. to 'B+' from 'B-'. The recovery
rating on the senior unsecured debt is unchanged at '4'.
At the same time, S&P removed all ratings from CreditWatch with
positive implications, where they were placed Oct. 7, 2009. The
outlook on NOVA Chemicals is stable.
"We base the upgrade and removal from CreditWatch on recent steps
the company has taken to refinance the majority of its upcoming
debt and credit facilities maturity," said Standard & Poor's
credit analyst Jatinder Mall.
The ratings on NOVA Chemicals reflect what Standard & Poor's views
as the company's highly leveraged capital structure, exposure to
volatile commodity chemicals, and weak styrene business. These
weaknesses are counterbalanced in S&P's opinion by NOVA Chemicals'
cost-competitive olefins/polyolefins business, which generates
good cash flow through the cycle, and parental support from
International Petroleum Investment Co. (AA/Stable/A-1+).
NOVA Chemicals produces commodity chemicals and plastics used in
consumer, industrial, and packaging products. The company has an
annual production capacity of 6,600 million pounds of ethylene and
3,620 million pounds of polyethylene. It also produces a small
amount of performance styrenics, which includes expandable
polystyrene and styrenic polymer performance products. Nova
Chemicals' Ineos Nova joint venture produces styrene monomer and
solid polystyrene in North America and Europe.
The stable outlook reflects Standard & Poor's view of NOVA
Chemicals' improving financial performance and the parental
support S&P believes IPIC will provide. However, S&P could lower
the ratings if market conditions deteriorate leading to lower
profitability and if leverage stays above 5.5x. Alternatively,
S&P could raise the ratings as the company's operating performance
improves and if it can demonstrate its ability to sustain leverage
below 4x.
NPM REALTY LLC: Case Summary & 3 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: NPM Realty LLC
949 Park Avenue
Cranston, RI 02910
Bankruptcy Case No.: 09-14702
Chapter 11 Petition Date: December 2, 2009
Court: United States Bankruptcy Court
District of Rhode Island (Providence)
Debtor's Counsel: Robert B. Jacquard, Esq.
231 Reservoir Avenue
Providence, RI 02907
Tel: (401) 467-2300
Fax: (401) 467-8678
Email: bjacquard@gmail.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 $2,200,000
and total debts of $2,750,000.
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/rib09-14702.pdf
The petition was signed by Nicola P. Mattielo, manager of the
Company.
NTK HOLDINGS: Gets Nod to Hire Ordinary Course Professionals
------------------------------------------------------------
The Bankruptcy Court authorized NTK Holdings Inc. and its units,
pursuant to Sections 105(a), 327, 328, and 330 of the Bankruptcy
Code, to employ and pay professionals employed in the ordinary
course of their businesses.
Each Ordinary Course Professional will file (a) an affidavit
certifying that it does not represent or hold any interest
adverse to the Debtors or their estates for the matter on which
the professional is to be employed, and (b) a completed retention
questionnaire.
The Debtors may pay the OCP 100% of fees and 100% of expenses
sought without application to the Court. The Court, however,
ruled that:
(a) OCPs other than Reinhart Boerner Van Deuren S.C., Hogan &
Hartson LLP, and Caturano and Company, P.C. -- the
Excluded OCPs -- will be paid in the aggregate amount not
exceeding a $35,000 per month on a "rolling basis;" and
(b) in the aggregate, fees and disbursements to an Excluded
OCP will not exceed a total of $60,000 per month.
Paying fees on a "rolling basis" will mean that an OCP, other
than the Excluded OCP, whose fees and disbursements are less than
$35,000 in any month will be eligible to apply the difference
between $35,000 and the amount billed in the month to any
subsequent month in which fees and disbursements exceed $35,000;
provided; however, that the payment to any OCP in any subsequent
month will not exceed $45,000.
Every 90 days, commencing on February 1, 2010, the Debtors will
file with the Court a report summarizing payments to OCPs.
In the event that confirmation and the effective date of the
Prepackaged Plan occurs before January 7, 2010, the Debtors will
file a single Report covering the period from the Petition Date
through the effective date of the Prepackaged Joint Plan of
Reorganization.
A list of the Debtors' Ordinary Course Professionals is available
for free at http://bankrupt.com/misc/NTK_OCPList1119.pdf
About NTK Holdings
NTK Holdings Inc., the parent company of Nortek Holdings and
Nortek Inc., is a diversified global manufacturer of branded
residential and commercial ventilation, HVAC and home technology
convenience and security products. NTK Holdings and Nortek offer
a broad array of products including range hoods, bath fans, indoor
air quality systems, medicine cabinets and central vacuums,
heating and air conditioning systems, and home technology
offerings, including audio, video, access control, security and
other products.
As reported by the TCR on Sept. 4, 2009, NTK Holdings, Inc., and
Nortek, Inc., entered into a restructuring and lockup agreement
with bondholders to effectuate a comprehensive restructuring of
the Company's debt under Chapter 11. When concluded, the
Agreement will eliminate approximately $1.3 billion in total
indebtednes by, among other things, exchanging debt to bondholders
for equity in the Company.
NTK Holdings Inc., together with affiliates, including Nortek
International, Inc. and Nortek Holdings, Inc., filed for Chapter
11 with a prepackaged plan accepted by all impaired creditors on
October 21, 2009 (Bankr. D. Del. Case No. 09-13611). The Company
has tapped Blackstone Group and Weil, Gotshal & Manges to aid in
its restructuring effort. Mark D. Collins, Esq., at Richards
Layton & Finger P.A., serves as local counsel. Epiq Bankruptcy
Solutions is claims and notice agent. An Ad Hoc Committee of
Nortek noteholders is being represented by Andrew N. Rosenberg,
Esq., and Brian N. Hermann, Esq., at Paul, Weiss, Rifkind, Wharton
& Garrison LLP; and William Derrough, Esq., and Adam Keil, Esq.,
at Moelis & Company.
NTK Holdings and its units have assets of $1,655,200,000, against
debts of $2,778,100,000 as of July 4, 2009.
Bankruptcy Creditors' Service, Inc., publishes NTK Holdings
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Nortek Holdings Inc., Nortek Internationa Inc., and
their affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
NTK HOLDINGS: Noteholders Oppose Chapter 11 Plan Delay
------------------------------------------------------
Roberta A. DeAngelis, acting United States Trustee for Region 3,
informed the U.S. Bankruptcy Court for the District of Delaware
that as of November 23, 2009, the U.S. Trustee failed to appoint
members to an official committee of unsecured creditors in the
Chapter 11 cases of NTK Holdings, Inc., and its debtor affiliates.
According to Ms. DeAngelis, there has been insufficient response
to the U.S. Trustee's communication for service on the committee.
Ore Hill Wants Committee Formed
Ore Hill Partners LLC, an investment advisor to a holder of NTK
Holdings, Inc. 10-3/4% Senior Discount Notes and debt under the
NTK Holdings, Inc. Senior Unsecured Loan Facility, asserts that
absent an Official Committee, there is no case counter-balance
regarding any of the matters in the Chapter 11 cases, including
especially the Debtors' Prepackaged Joint Plan of Reorganization.
Ore Hill points out that the U.S. Trustee has not convened an
organizational meeting in furtherance of the appointment of an
Official Committee.
Committee appointment is necessary, Steven K. Kortanek, Esq., at
Womble, Carlyle, Sandridge & Rice, PLLC, Wilmington, Delaware,
asserts on behalf of Ore Hill. As the Debtors readily admit, the
Prepackaged Plan is not fully consensual among all classes of
unsecured creditors because it was negotiated exclusively with
creditors holding claims against those Debtors that are
subsidiary operating companies, Mr. Kortanek points out.
According to Mr. Kortanek, unsecured creditors holding claims
against NTK Holdings, Inc., were not reserved a seat at the
bargaining table. The parent-company creditors voted down the
Prepackaged Plan rendering confirmation dependent on cram-down
over their dissenting vote, he says.
"These creditors have a statutory entitlement to an Official
Committee of Unsecured Creditors that may investigate and
consider whether the Prepackaged Plan treats their claims
appropriately," Mr. Kortanek argues.
Ore Hill asserts that the appointment should be directed with all
deliberate speed since the confirmation hearing is presently
scheduled to begin on December 4, 2009.
Ore Hill relates that contrary to the statement filed by the U.S.
Trustee, several creditors holding unsecured claims against NTK
Holdings, Inc., have expressed interest in sitting on an official
creditors' committee. Mr. Kortanek tells the Court that on
various dates, Ore Hill, Lehman Commercial Paper, Inc., and
Waterstone Capital Management submitted to the U.S. Trustee their
individual questionnaire expressing interest in serving on the
Official Committee.
Ore Hill asserts that an order compelling the U.S. Trustee to
immediately appoint an Official Committee of Unsecured Creditors
is proper.
In a separate filing, Ore Hill asks the Court to consider the
request, on an expedited basis, on December 3, 2009. The Court,
however, ruled that the request be heard on December 4.
Responses to Ore Hill's request are due on December 1.
Prior to the entry of the Court's order, the Debtors objected to
Ore Hill's December 3 hearing request asserting that it would be
a waste of the Court's time and of the parties' resources to
conduct a hearing on the Motion to Compel on December 3, and then
conduct the confirmation hearing on December 4.
Ad Hoc Committee's Response to Ore Hill
An ad hoc committee of holders of approximately $949,752,000 of
the total outstanding principal amount of notes issued by NTK
Holdings, Inc., asserts that the possible formation of an
official creditors' committee should not delay consideration of
the Motions, in light of the fact that the Debtors' creditors
have voted in favor of the Debtors' Prepackaged Plan.
The Ad Hoc Committee relates that as established by the
solicitation results of the Prepackaged Plan, the creditors have
spoken, and the appointment of a creditors' committee will not
alter the results. In addition, the Ad Hoc Committee asserts
that Ore Hill fails to articulate any benefit to creditors if the
Court were to grant the request for an adjournment of the
Hearing. This is especially the case in respect of Ore Hill,
which, as a creditor solely of NTK Holdings, Inc., can only be
paid after all claims of Nortek, Inc. are paid in full. Thus,
the possibility of a creditors' committee being appointed is not
a basis to adjourn the Hearing and delay consideration of the
Motions, the Ad Hoc Committee argues.
The Ad Hoc Committee sought and obtained prior permission from
the Court to file a reply to the Ore Hill's Omnibus Response.
The Reply is deemed filed and a matter of record in the Cases.
The ad hoc committee members are Ares Management LLC, Capital
Research and Management Co., Fidelity Investments, Franklin
Templeton Investments, Goldman Sachs Management, and Western
Asset Management Company.
The Prepackaged 11 Plan
The U.S. Bankruptcy Court for the District of Delaware at the
October 23 hearing will hold a combined hearing on December 4,
2009, to consider (i) approval of the disclosure statement
explaining the prepackaged Chapter 11 plan and (ii) confirmation
of the Chapter 11 plan.
Companies in Chapter 11 usually seek approval of the disclosure
statement before soliciting votes on the plan, then seek
confirmation of the plan following the solicitation of votes.
However, NTK Holdings solicited votes on the plan pre-bankrutpcy.
Nortek completed its previously announced solicitation of votes
from creditors for the Prepackaged Plans on October 16, 2009. As
a result of the Solicitation, 100% of the votes cast by holders of
Nortek's 10% Senior Secured Notes due 2013, 100% of the votes cast
by holders of Nortek's 8-1/2% Senior Subordinated Notes due 2014,
and 100% of the votes cast by holders of Nortek's 9-7/8% Series A
and Series B Senior Subordinated Notes due 2011, each voted to
accept the Prepackaged Plans. Holders of indebtedness under NTK
Holdings' Senior Unsecured Credit Facility, however, did not
accept the Prepackaged Plans. Nevertheless, NTK Holdings intends
to seek confirmation of the Prepackaged Plans through the cram-
down process.
Nortek expects that the Chapter 11 process will take approximately
two to three months to complete, but can give no assurance that
this time frame will be met. Nortek also stated that no
management changes are anticipated and it has no plans to sell any
of its subsidiaries.
On its effective date, following its confirmation by the
Bankruptcy Court, the Prepackaged Plans provide for these
distributions:
* Holders of 10% Notes will receive new Nortek 11% senior
secured notes and 5% of the equity in the reorganized Nortek;
holders of 8-1/2% Notes and 9-7/8% Notes will receive 93% of
the equity in the reorganized Nortek, and
* Holders of 10 3/4% Notes and indebtedness under the NTK
Credit Facility will receive 2% of the equity, and warrants
to purchase additional equity, of the reorganized Nortek.
* All other creditors are unimpaired and, if not previously
paid, will be paid in full in the ordinary course of business
under the Prepackaged Plans.
Nortek and NTK Holdings expect that the consummation of the
Prepackaged Plans will result in an approximate $1.3 billion
reduction of their outstanding indebtedness.
About NTK Holdings
NTK Holdings Inc., the parent company of Nortek Holdings and
Nortek Inc., is a diversified global manufacturer of branded
residential and commercial ventilation, HVAC and home technology
convenience and security products. NTK Holdings and Nortek offer
a broad array of products including range hoods, bath fans, indoor
air quality systems, medicine cabinets and central vacuums,
heating and air conditioning systems, and home technology
offerings, including audio, video, access control, security and
other products.
As reported by the TCR on Sept. 4, 2009, NTK Holdings, Inc., and
Nortek, Inc., entered into a restructuring and lockup agreement
with bondholders to effectuate a comprehensive restructuring of
the Company's debt under Chapter 11. When concluded, the
Agreement will eliminate approximately $1.3 billion in total
indebtednes by, among other things, exchanging debt to bondholders
for equity in the Company.
NTK Holdings Inc., together with affiliates, including Nortek
International, Inc. and Nortek Holdings, Inc., filed for Chapter
11 with a prepackaged plan accepted by all impaired creditors on
October 21, 2009 (Bankr. D. Del. Case No. 09-13611). The Company
has tapped Blackstone Group and Weil, Gotshal & Manges to aid in
its restructuring effort. Mark D. Collins, Esq., at Richards
Layton & Finger P.A., serves as local counsel. Epiq Bankruptcy
Solutions is claims and notice agent. An Ad Hoc Committee of
Nortek noteholders is being represented by Andrew N. Rosenberg,
Esq., and Brian N. Hermann, Esq., at Paul, Weiss, Rifkind, Wharton
& Garrison LLP; and William Derrough, Esq., and Adam Keil, Esq.,
at Moelis & Company.
NTK Holdings and its units have assets of $1,655,200,000, against
debts of $2,778,100,000 as of July 4, 2009.
Bankruptcy Creditors' Service, Inc., publishes NTK Holdings
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Nortek Holdings Inc., Nortek Internationa Inc., and
their affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
NTK HOLDINGS: Ore Hill Objects to Plan Confirmation
---------------------------------------------------
Ore Hill Partners LLC objects to the confirmation of NTK Holdings
Inc.'s Prepackaged Joint Plan of Reorganization.
Ore Hill tells the Court that it is compelled to submit an
objection to ensure that the confirmation process does not move
forward without due consideration of the significant issues
raised by the Prepackaged Plan, and to ensure that any soon-to-
be-appointed official committee of unsecured creditors is able to
investigate and fully vet the Proposed Prepackaged Plan.
Steven K. Kortanek, Esq., at Womble, Carlyle, Sandridge & Rice,
PLLC, in Wilmington Delaware, on behalf of Ore Hills complain
that the Prepackaged Plan is not fully consensual among all
classes of unsecured creditors, appears to raise serious
questions regarding its confirmability.
According to Mr. Kortanek, the valuation underlying the Proposed
Prepackaged Plan may be overly conservative and may understate
the value of the Debtors.
Because the Prepackaged Plan gives 98% of the equity in the
reorganized debtors to the operating company creditors who
negotiated it, Mr. Kortanek asserts that any understatement of
value would render the Prepackaged Plan unconfirmable. In
addition, the Prepackaged Plan would eliminate certain
intercompany claims held by the parent-company and Debtor NTK
Holdings, Inc., against its subsidiaries. However, the Debtors
have provided no meaningful justification for the elimination of
those previously recognized claims, Mr. Kortanek avers.
NTK HOLDINGS: Ore Hill Wants Plan Status Conference Today
---------------------------------------------------------
Pursuant to Section 105(d) of the Bankruptcy Code, Ore Hill
Partners LLC asks the Court hold a telephonic status conference
to address issues related to the upcoming December 4, 2009
hearing where the Court will consider (i) approval of the
Debtors' Joint Prepackaged Plan of Reorganization and its
accompanying proposed disclosure statement, and (ii) the Motion
of Ore Hill to compel the United States Trustee to appoint an
official committee of unsecured creditors.
Ore Hill cited that Section 105(d)(1) of the Bankruptcy Code
provides that the Court, upon the request of a party in interest,
"[will] hold a status conferences as are necessary to further the
expeditious and economical resolution of the case."
In an effort to promote efficiency as well as an expeditious and
economical resolution of the Cases, Ore Hill asks the Court to
schedule a status conference to discuss issues related to the
Committee Motion and the Confirmation Hearing. According to Ore
Hill, the Court's decision regarding whether to grant its request
to compel the U.S. Trustee to appoint an Official Committee will
have a direct impact on when and how the hearing on December 4,
2009, should be conducted.
Plan Supplements
Meanwhile, the Debtors delivered to Judge Kevin J. Carey on
November 13, 2009, supplements in support of their Prepackaged
Joint Plan of Reorganization.
Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New
York, says the documents contained in the Plan Supplement are
integral to and part of the Prepackaged Plan and will be approved
in the Confirmation Order.
The hearing to consider confirmation of the Prepackaged Plan is
currently scheduled for December 4, 2009, at 10:00 a.m. (Eastern
Time).
The Plan Supplements are:
(A) EXIT FINANCING DOCUMENTS AND INDENTURES
Exhibit A: Form of Credit Agreement
Exhibit B: Form of U.S. Security Agreement
Exhibit C: Form of Nortek Senior Secured Notes Indenture
Exhibit D: Form of Collateral Agreement
Exhibit E: Form of Lien Subordination and Intercreditor
Agreement
Full-text copies of the Exhibits are available for free
at:
http://bankrupt.com/misc/NTK_Plan_ExA.pdf
http://bankrupt.com/misc/NTK_Plan_ExB&C.pdf
http://bankrupt.com/misc/NTK_Plan_ExD&E.pdf
(B) EQUITY RELATED DOCUMENTS
Exhibit F: Form of New Warrant Agreement
Exhibit G: Form of Equity Incentive Plan
Exhibit H: Form of Emergence Bonus Plan
Full-text copies of the Exhibits are available for free
at http://bankrupt.com/misc/NTK_Plan_ExFG&H.pdf
(C) CONTRACT RELATED DOCUMENTS
Exhibit I: Schedule of executory contracts and unexpired
leases to be rejected, a full-text copy of which is
available for free at:
http://bankrupt.com/misc/NTK_Plan_ExI.pdf
(D) CORPORATE GOVERNANCE DOCUMENTS
Exhibit J: Form of Restated Certificate of Incorporation
Exhibit K: Form of Restated Bylaws
Exhibit L: Form of Registration Rights Agreement
Exhibit M: Identities of initial members of the board of
directors and officers of the Reorganized
Debtors
Full-text copies of the Exhibits are available for free
at http://bankrupt.com/misc/NTK_PlanJKL&M.pdf
About NTK Holdings
NTK Holdings Inc., the parent company of Nortek Holdings and
Nortek Inc., is a diversified global manufacturer of branded
residential and commercial ventilation, HVAC and home technology
convenience and security products. NTK Holdings and Nortek offer
a broad array of products including range hoods, bath fans, indoor
air quality systems, medicine cabinets and central vacuums,
heating and air conditioning systems, and home technology
offerings, including audio, video, access control, security and
other products.
As reported by the TCR on Sept. 4, 2009, NTK Holdings, Inc., and
Nortek, Inc., entered into a restructuring and lockup agreement
with bondholders to effectuate a comprehensive restructuring of
the Company's debt under Chapter 11. When concluded, the
Agreement will eliminate approximately $1.3 billion in total
indebtednes by, among other things, exchanging debt to bondholders
for equity in the Company.
NTK Holdings Inc., together with affiliates, including Nortek
International, Inc. and Nortek Holdings, Inc., filed for Chapter
11 with a prepackaged plan accepted by all impaired creditors on
October 21, 2009 (Bankr. D. Del. Case No. 09-13611). The Company
has tapped Blackstone Group and Weil, Gotshal & Manges to aid in
its restructuring effort. Mark D. Collins, Esq., at Richards
Layton & Finger P.A., serves as local counsel. Epiq Bankruptcy
Solutions is claims and notice agent. An Ad Hoc Committee of
Nortek noteholders is being represented by Andrew N. Rosenberg,
Esq., and Brian N. Hermann, Esq., at Paul, Weiss, Rifkind, Wharton
& Garrison LLP; and William Derrough, Esq., and Adam Keil, Esq.,
at Moelis & Company.
NTK Holdings and its units have assets of $1,655,200,000, against
debts of $2,778,100,000 as of July 4, 2009.
Bankruptcy Creditors' Service, Inc., publishes NTK Holdings
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Nortek Holdings Inc., Nortek Internationa Inc., and
their affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
NUTRACEA INC: Rejects HQ Lease, Moves to Less Expensive Offices
---------------------------------------------------------------
NutraCea Inc. said its motion to reject its current headquarters
lease and enter into a new less expensive headquarters lease was
approved on November 30, 2009, by the U.S. Bankruptcy Court for
the District of Arizona.
Chief Executive Officer, W. John Short said, "We are pleased with
the Court's decision to allow us to quickly move to more cost
efficient headquarters. Our new space is roughly 75% smaller and
over 80% less expensive. This new space will allow us to reduce
our headquarters' rent by over $100,000 per month and is just one
step in the process of reducing our corporate overhead."
Effective Monday, December 7, 2009, NutraCea's new headquarters'
address will be 6720 North Scottsdale Road, Suite 390, Scottsdale,
AZ 85253.
About Nutracea
Phoenix, Arizona-based Nutracea Inc. (OTC: NTRZ) --
http://www.NutraCea.com/-- for Chapter 11 bankruptcy protection
on November 10, 2009 (Bankr. D. Ariz. Case No. 09-28817). S. Cary
Forrester, Esq., at Forrester & Worth, PLLC, assists the Company
in its restructuring effort. The Company listed $50,000,001 to
$100,000,000 in assets and $10,000,001 to $50,000,000 in
liabilities.
NY OFF-TRACK BETTING: Files for Chapter 9 Bankruptcy Protection
---------------------------------------------------------------
New York City Off-Track Betting Corporation on Thursday said its
Board of Directors has authorized it to file a petition for
adjustment of its debts under chapter 9 of the U.S. Bankruptcy
Code in the U.S. Bankruptcy Court for the Southern District of New
York.
NYC OTB is developing a transformational business plan which, if
implemented, would make necessary changes with respect to NYC
OTB's business model and position NYC OTB for future growth. The
success of the plan depends on the New York State Legislature
making statutory revisions to the State racing law governing
distribution of funds.
NYC OTB will continue day-to-day operations without interruption
as it develops its new business plan. NYC OTB will continue to
provide its customers with the same horse racing wagering services
as it had before its chapter 9 filing, and customers will continue
to be able to bet on races in person, by phone and online. Funds
held on account by wagering customers will remain safe, secure and
available for wagering.
"NYC OTB took the serious step of filing a chapter 9 case, after
careful deliberation, with three principal objectives in mind --
creating a sound basis for future operations, using the business
model to access capital in the financial markets without any
taxpayer support and paying all its obligations," said Meyer
"Sandy" Frucher, chairman of NYC OTB.
The NYC OTB business plan is being designed to significantly
reduce NYC OTB's costs and provide for improved operational
efficiencies while addressing the detrimental features of the law
governing distribution of funds and other legislative matters. The
business plan will lay out a compelling strategy to expand the
business by attracting new consumer segments, improving the NYC
OTB experience for existing customers and accessing new sources of
revenue. The business plan contemplates the receipt by NYC OTB of
roughly $250 million in financing in order to pay its existing
obligations and to fund current operations and the plans for
growth. It is envisioned that this financing will be arranged in
the financial markets in conjunction with NYC OTB's emergence from
chapter 9. Taxpayer assistance is not requested.
NYC OTB is currently running a significant monthly structural
deficit which is no longer sustainable. Declining wagering
revenues, an outdated business model and the New York State
Legislature's unfavorable statutory funding formula are
contributing factors to NYC OTB's insolvency. NYC OTB is pursuing
protection under chapter 9 as the best alternative to ceasing
operations. If successful, the business plan will reinvent NYC
OTB and revive an economic engine. However, without necessary
statutory amendments, NYC OTB will close, which will have an
adverse impact on the New York horse racing industry and the State
economy.
"NYC OTB generates hundreds of millions of dollars annually for
the region, but it has been hobbled by statutes that make it
impossible for the corporation to cover its own operating
expenses," Mr. Frucher said. "We have never taken a single dollar
from taxpayers in our history and our plan does not request a
single tax dollar to transform NYC OTB into a powerful,
sustainable economic engine. We just require the common-sense
legislative changes that will allow this important state asset to
grow."
The business plan will call for a dramatic overhaul of the NYC OTB
business model. New technologies are expected to enhance customer
service while increasing efficiency and cutting costs. A new
bricks and mortar strategy is intended to reinvent old storefront
locations while creating new, modern flagship attractions in
select city locations.
Most importantly, the business plan will ask for changes to the
racing laws, including a modification of the current legislative
distribution scheme, which at present require NYC OTB to calculate
and pay the State, the City and the horse racing industry a
percentage of gross wagers placed with NYC OTB. The business plan
will propose instead that NYC OTB make calculations and payments
to the horse racing industry based on Wagering Commission revenue
it actually receives after allowance for costs of NYC OTB's
functions have been met. NYC OTB will not be asking for any
changes to the legislation as it relates to payments to the City
and State. Without this change, NYC OTB may be forced to cease
operations, which would cause the City, the State and horse racing
industry to lose all revenues that could be provided by NYC OTB.
NYC OTB is working actively with stakeholders in the development
and implementation of the business plan and its chapter 9 debt
adjustment plan and anticipates that it can proceed expeditiously
to exit Chapter 9. However, NYC OTB cannot confirm precisely when
it will emerge from Chapter 9, because it will need the New York
State Legislature to enact an overhaul of racing legislation, and
it will need bankruptcy court approval. The Federal Bankruptcy
Court can approve a plan to adjust NYC OTB's obligations and stay
collection of pre-bankruptcy obligations for a period of time, but
it does not have the power to make changes in state law. NYC OTB
is committed to working with all stakeholders to create a better
and more sustainable business for the benefit of the City, the
State and the horse racing industry.
About NYC OTB
The New York City Off-Track Betting Corporation --
http://www.nycotbfacts.com/-- has played a central role in the
New York State horse racing industry for the past 38 years and has
been a financial resource to New York City and New York State
during that time. Since its inception in 1971, NYC OTB has
provided New York City with over $1.4 billion in cumulative
revenues, New York State with nearly $600 million and the New York
horse racing industry with nearly $2.2 billion. Additionally, the
NYC OTB currently employs roughly 1,365 workers in the City's five
boroughs.
OLD TIME POTTERY: To Hold Liquidation Sale in 8 Store Locations
---------------------------------------------------------------
Old Time Pottery will conduct a liquidation sale in eight of its
store locations as part of the Company's strategic reorganization
plan, following its bankruptcy filing in August 2009. The sale,
which is just in time for the holiday season, will begin on
December 3, 2009 and will be managed by Hudson Capital Partners,
LLC. Old Time Pottery's additional 29 locations will remain
opened and will continue to operate as usual.
In a sale that is expected to last around 8 weeks, inventory
valued at approximately $15.5 million will be completely
liquidated at below-market prices. Customers can expect to find a
wide range of housewares, including glassware, dinnerware, framed
art, linens, rugs and craft supplies, seasonal decorations,
mirrors, wall decor, lamps, candles, silk plants and other home
accents. The liquidation sale will take place at eight Old Time
Pottery stores located in Tennessee, Georgia, Oklahoma, Illinois,
Ohio and North Carolina.
"For nearly 25 years, consumers continue to look to Old Time
Pottery for its exceptional selection of discounted home
accessories and decorations," said Jim Schaye, president and CEO
of Hudson Capital Partners. "We are anticipating the merchandise
to move quickly, as the sale offers consumers an excellent
opportunity to buy great holiday gifts at discounts on already
great prices."
About Old Time Pottery
Since 1986, Old Time Pottery has brought great bargains and
stylish home decor into the homes of millions of people. Started
as a single store operation in Murfreesboro, Tennessee in 1986,
the company now covers the Southeast and the Midwest with stores
at least 2 acres each. Famous for its low prices, Old Time
Pottery buys in vast volume from the industry's largest suppliers.
That, along with its low cost warehouse style stores, allows the
company to offer the best deals on stylish home decor.
The Company filed for Chapter 11 on Aug. 21, 2009 (Bankr. M.D.
Tenn. Case No. 09-09548). G. Rhea Bucy, Esq., Linda W. Knight,
Esq., and Thomas H. Forrester, Esq. at Gullett, Sanford, Robinson,
Martin represent the Debtor in its restructuring efforts. In its
petition, the Debtor listed $50,000,001 to $100,000,000 in assets
and $10,000,001 to $50,000,000 in debts.
PAULA ANNETTE BONNEY: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Paula Annette Bonney
aka Paula A. Bonney
aka Annette Bonney
4618 N. Versailles Avenue
Dallas, TX 75209
Bankruptcy Case No.: 09-38261
Chapter 11 Petition Date: December 1, 2009
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Barbara J. Houser
Debtor's Counsel: Howard Marc Spector, Esq.
Spector & Johnson, PLLC
12770 Coit Road
Banner Place, Suite 1100
Dallas, TX 75240
Tel: (214) 365-5377
Fax: (214) 237-3380
Email: hspector@spectorjohnson.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Ms. Bonney.
PECANS OF QUEEN: Court Extends Schedules Filing Until December 7
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona extended
until December 7, 2009, The Pecans of Queen Creek, L.L.C.'s time
to file its schedules and statement of financial affairs.
The Debtor related that the extension will enable the compilation
of necessary information to complete the schedules and statements.
The Pecans Of Queen Creek, LLC, is based in Tempe, Arizona. The
Company filed for Chapter 11 bankruptcy protection on November 13,
2009 (Bankr. D. Ariz. Case No. 09-29332). Michael W. Carmel,
Esq., at Michael W. Carmel, Ltd., 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.
PENN TRAFFIC: Union Named to Creditors Committee in Bankruptcy
--------------------------------------------------------------
The Office of the United States Trustee appointed the United Food
and Commercial Workers Union to the Creditors Committee in the
bankruptcy of Penn Traffic.
"Pennsylvania cannot afford -- now more than ever -- to lose
thousands of good jobs," said Wendell Young, IV, president of UFCW
Local 1776 in Plymouth Meeting, PA. "The UFCW is in ongoing
discussions with Penn Traffic and potential investors to find
solutions that keep as many stores as possible open. Grocery
stores are integral to our neighborhoods as both businesses and
employers. A reckless fire sale would cause lasting damage to the
communities and working families of Pennsylvania."
More than ninety percent of Penn Traffic's 5,000 employees are
represented by the UFCW. Penn Traffic operates more than 100
grocery stores in Pennsylvania, New York, New Hampshire, and
Vermont under the P&C, Quality Markets, and BiLo Foods banners.
Penn Traffic owes an estimated $9.56 million to current and former
employees.
About Penn Traffic
Syracuse, New York-based The Penn Traffic Company -- dba P&C
Foods, Bi-Lo Foods, and Quality Markets -- operates supermarkets
in Pennsylvania, upstate New York, Vermont, and New Hampshire
under the Bilo, P&C and Quality trade names. The Company filed
for Chapter 11 bankruptcy protection on November 18, 2009 (Bankr.
D. Delaware Case No. 09-14078). Ann C. Cordo, Esq., and Gregory
W. Werkheiser, Esq., at Morris, Nichols, Arsht & Tunnell assist
the Company in its restructuring effort. Donlin Recano is the
Company's claims agent. The Company listed $150,347,730 in assets
and $136,874,394 in liabilities as of May 4, 2009.
These affiliates also filed separate Chapter 11 petition: Sunrise
Properties, Inc.; Pennway Express, Inc.; Penny Curtiss Baking
Company, Inc.; Big M Supermarkets, Inc.; Commander Foods Inc.; P
and C Food Markets, Inc. of Vermont; and P.T. Development, LLC.
PETTERS WORLDWIDE: Tom Petters Faces Life Time in Prison
--------------------------------------------------------
David Phelps at Star Tribune says jurors are still weighing the
evidence in an attempt to determine whether Tom Petters of Petters
Co. Inc. is guilty of the 20 charges he faces in a Ponzi Scheme
that allegedly siphoned $3.65 billion from investors.
Mr. Phelps says Mr. Petters will life in prison if proven guilty.
The jurors have a heap of government evidence including financial
documents, emails and recorded conversations between Mr. Petters
and his associates, Mr. Phelps notes.
About Petters Group Worldwide
Based in Minnetonka, Minn., Petters Group Worldwide LLC is named
for founder and chairman Tom Petters. The group is a collection
of some 20 companies, most of which make and market consumer
products. It also works with existing brands through licensing
agreements to further extend those brands into new product lines
and markets. Holdings include Fingerhut (consumer products via
its catalog and Web site), SoniqCast (maker of portable, WiFi MP3
devices), leading instant film and camera company Polaroid
(purchased for $426 million in 2005), Sun Country Airlines
(acquired in 2006), and Enable Holdings (online marketplace and
auction for consumers and manufacturers' overstock inventory).
Petters formed the company in 1988.
Petters Company, Inc., is the financing and capital-raising unit
of Petters Group Worldwide, LLC. Petters Company, Inc., and
Petters Group Worldwide, LLC, filed separate petitions for Chapter
11 relief on Oct. 11, 2008 (Bankr. D. Minn. Case No. 08-45257 and
08-45258, respectively). James A. Lodoen, Esq., at Lindquist &
Vennum P.L.L.P., represents the Debtors as counsel. In its
petition, Petters Company, Inc., listed debts of between
$500 million and $1 billion, while its parent, Petters Group
Worldwide, LLC, listed debts of not more than $50,000.
As reported in the Troubled Company Reporter on Oct. 7, 2008,
Petters Aviation, LLC,, and affiliates MN Airlines, LLC, doing
business as Sun Country Airlines, Inc., and MN Airline Holdings,
Inc., filed for Chapter 11 bankruptcy protection with the U.S.
Bankruptcy Court for the District of Minnesota on Oct. 6, 2008
(Lead Case No. 08-45136). Petters Aviation, LLC, is a wholly
owned unit of Thomas Petters Inc. and owner of MN Airline
Holdings, Inc., Sun Country's parent company.
PILGRIM'S PRIDE: Gets Nod to Scrap 100 Grower Contracts
-------------------------------------------------------
Judge D. Michael Lynn approved Pilgrim's Pride Corp.'s rejection
of 100 grower agreements. The rejected agreements are composed
of:
-- 36 Broiler Grower Agreements, a four-part schedule of which
is available for free at:
http://bankrupt.com/misc/PPC_6threj_broilergrowers.pdf
http://bankrupt.com/misc/PPC_7threj_broilergrowers.pdf
http://bankrupt.com/misc/PPC_9threj_broilergrowers.pdf
http://bankrupt.com/misc/PPC_10threj_broilergrowers.pdf
-- 43 Breeder Agreements, a list of which is available for
free at:
http://bankrupt.com/misc/PPC_11threj_breedergrowers.pdf
-- 21 Pullet Grower Agreement, a list of which is available for
free at:
http://bankrupt.com//misc/PPC_13threj_pulletgrowers.pdf
Further, Judge Lynn ordered that all claims arising as a result
of the rejection of these Agreements must be filed no later than
November 26, 2009.
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)
PILGRIM'S PRIDE: Gets Nod for Deal With 188 Independent Growers
---------------------------------------------------------------
Pilgrim's Pride Corp. obtained the Court's authority pursuant to
Rule 9019 of the Federal Rules of Bankruptcy Procedure, to enter
into a settlement agreement with 188 independent contract growers,
to resolve disputes that arose as a result of the Debtors'
proposed rejection of their Grower Contracts.
The parties memorialized the terms of their agreement in a
stipulation dated October 14, 2009, the salient terms of which
are:
* Within three business days after the Court Approval Date, the
Debtors will make:
(i) a single lump sum payment of $1,177,500 to 157 specific
Growers, a complete list of which is available for free
at http://bankrupt.com/misc/PPC_2ndresolvedgrowersA.pdf
(ii) a single lump sum payment of $1,272,500 to 31 specific
Growers, a complete list of which is available for free
at http://bankrupt.com/misc/PPC_2ndresolvedgrowersB.pdf
* Within three business days after the Court Approval Date, the
Growers will take all actions necessary to dismiss their
Objections with prejudice;
* The PPC Parties will be released from and against any claims,
liabilities and causes of action, whatsoever; provided,
that except for Growers Leann Parker and Jeffrey Parker and
Jill Forrest and Kenny Forrest, for which this release will
be deemed to be a full and final general release of all
claims whatsoever;
* The Releasing Parties agree that they will not file any
proofs of claim in the Debtors' bankruptcy cases for any of
the PPC Released Claims. To the extent that the Releasing
Parties' Proofs of Claim allege these claims or damages, the
PPC Released Claims in those Proofs of Claim are deemed
satisfied and expunged upon Debtors' making of the Payments;
* To the extent permitted by law, the Releasing Parties forever
waive, release, and covenant not to sue or assist
with suing any complaint or claim against any
Releasee with any court, governmental agency, or other entity
based on a PPC Released Claim, whether known or unknown at
the time of execution of this Agreement. The Releasing
Parties also waive any right to recover from any Releasee in
a civil suit or other action brought by any governmental
agency or any other individual or entity for or on their
behalf with respect to any PPC Released Claim;
* The Parties agree that nothing in the Agreement will
constitute an admission by any Party of any fault,
or liability whatsoever, and the Parties acknowledge that all
liability is expressly denied by PPC.
A full text copy of the Settlement Agreement is available for
free at http://bankrupt.com/misc/PPC_Growers_2ndsettlement.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)
PILGRIM'S PRIDE: Proposes to Pay Officers' Costs in RICO Suit
-------------------------------------------------------------
Pursuant to Section 363 of the Bankruptcy Code, Pilgrim's Pride
Corp. and its units seek the Court's authority to pay legal costs
for two of its employees in connection with a class action
complaint filed by Jennifer Hall against two of the Debtors'
Russellville, Alabama processing plant employees, Paul White and
Phyllis Thomas.
The RICO Action, a class action complaint filed by Jennifer Hall
in the United States District Court for the Northern District of
Alabama, Northwestern Division on March 16, 2007, against two
employees of the Debtors' Russelville, Alabama processing plant,
Paul White and Phyllis Thomas, has not been certified as a class
action, but another plaintiff, Jose Rocha, has been added. Paul
White has been dismissed from the suit and another employee,
Gloria Fisher, has been added as a defendant.
The Plaintiffs in the RICO Action have alleged that Ms. Thomas,
the Complex Manager, and Ms. Fisher, the Human Resources Clerk,
at the Russellville Facility, conspired with other of the
Debtors' human resources personnel to depress wages by knowingly
hiring large numbers of illegal immigrants to work in the
Debtors' facilities.
Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP in
Dallas, Texas, narrates, that following the filing of the RICO
Action, Pilgrim's Pride Corporation requested that Baker &
McKenzie, LLP, defend Ms. Thomas and Fisher and Paul White when
he was a party. B&M provided defense up to the time of the
Petition Date, and the Debtors paid the cost of the defense.
The Plaintiffs have claimed, among other things, that the
Employees have knowingly employed illegal immigrants in the
Debtors' facilities. The Plaintiffs have claimed those actions
are part of a conspiracy and a company-wide scheme to hire more
illegal workers than legal workers. The Debtors have always
denied these allegations, Mr. Youngman says.
Prior to the Petition Date, the Alabama Northern District Court
required the Plaintiffs to file an amended complaint and limited
the discovery in the RICO Action to the Russellville, Alabama
facility only.
Also prior to the Petition Date, B&M, on behalf of the Employees,
filed a motion for summary judgment, which, if granted, could
dispose of the entire case. The Plaintiffs responded to the
motion for summary judgment and designated expert testimony in
support of their response. The Employees moved to exclude the
expert testimony, Mr. Youngman says.
Since the Petition Date, the RICO Action has remained inactive,
and the motion for summary judgment and motion to exclude expert
testimony filed by the Employees have remained pending. Based on
the inactivity, it has not been necessary for B&M to take any
actions on behalf of the Employees.
Recently, the District Court in the RICO Action set a hearing on
Thomas and Fisher's motion to exclude the plaintiffs' expert
testimony for November 17, 2009. The Plaintiffs recently filed a
motion to continue that hearing until December 3 or 4, 2009.
Now that the RICO Action is active again, the Debtors seek to
ensure that the Employees are defended, Mr. Youngman stressed.
According to Mr. Youngman, in the ordinary course of business it
is common for large corporations to pay for the representation of
employees in connection with lawsuits related to employees' job
responsibilities.
Although the Debtors do not believe that approval of the Court is
required to pay legal costs of counsel for the Employees because
that practice is in the ordinary course of business, to the
extent property of the Debtors' estates is being used outside the
ordinary course of business, out of abundance of caution, the
Debtors request authority to use property of the estate to pay
legal costs of counsel for the Employees, Mr. Youngman asserts.
The U.S. Bankruptcy Court for the Northern District of Texas will
convene a hearing to consider this motion on December 1, 2009 at
10:30 a.m. Central Time. Objections are due by November 24.
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)
POLLUTION CONTROL: Moody's Cuts Ratings on $35.2 Mil. Bonds to Ba2
------------------------------------------------------------------
Moody's Investors Service has downgraded Pollution Control
Financing Authority of Camden County to Ba2 from Baa3 and has
placed the rating under review for possible downgrade. The
downgrade affects $35.2 million of outstanding Solid Waste Revenue
Bonds, Series 1991. The authority's solid waste system does not
generate sufficient revenues to pay its debt service obligations
and has been reliant upon aid from the State of New Jersey (GO
rated Aa3/Negative) since 1999 to meet its debt service
obligations. The rating downgrade and the placement of the rating
under review is based upon the decreasing amounts of debt service
support from the state over the past three years, the uncertainty
as to the state's commitment and ability to support the final year
of debt service which includes a substantial balloon payment in
the face of many competing financial pressures and the authority's
weakened financial condition.
Resolution of the review for downgrade will focus on the state's
willingness and ability to continue supporting authority debt
through maturity. In Moody's view it is unlikely that the
authority will have the ability to generate sufficient revenues to
fund operations, debt service as well as rebuild liquidity should
state support of debt service continue to decline or disappear
altogether. A multi-notch rating downgrade is possible, depending
on the timing and extent of state support and the authority's
financial condition. The authority has completely drawn down on
its debt service reserve fund and has very limited liquidity.
Legal Security: Bonds are secured by a pledge of net revenues of
the solid waste system and the debt service reserve fund, which
has been fully depleted.
Interest Rate Derivatives: None
Credit Strengths
* State of New Jersey's demonstrated ability and commitment to
provide financial support to the authority-and other solid waste
systems in the state-so that it can meet its debt service
obligations
* Established and tested process for requesting assistance; the
authority requests assistance one to two months before debt
service is due and the funds are subsequently transferred to the
trustee a few days before payment is due
* The annual June 1 debt service is an interest-only payment,
which the authority was able to meet for the past 4 years (the
authority still requires assistance for its December 1 principal
and interest payment)
* All contracts expire in 2011 after the bonds mature in 2010
Credit Challenges
* While the state has a solid track record of providing ongoing
support for solid waste authorities in the state, it has no
legal or written moral obligation to do so
* Support of authority debt service has been waning in recent
years with the state only partially funding authority debt
service requests for the past three consecutive years
* Operating revenues are adequate to cover only operating
expenses, current capital costs and a portion of debt service,
thus state assistance is necessary to pay the remaining portion
of debt service
* The debt service reserve fund has been fully depleted
* Debt service will peak in 2010, the year of final bond maturity;
the state is in receipt of the debt service schedule and is
aware of the balloon payment
* Disposal alternatives within close proximity create competition
for the authority, which has no contractually committed waste
Recent Developments:
This is the third consecutive year in which state assistance for
authority debt service has remained flat at $6 million despite the
growth in requested assistance from $8 million in FY 2007 (the
year in which the state began underfunding the authority requested
amounts) to $10 million in FY 2009. Since 2007 the authority has
pulled from available funds, including future construction funds
to meet December 1 debt service requirements. Each year the New
Jersey Office of Management and Budget appropriates funds for the
solid waste state assistance program. The annual appropriations
have been decreasing since 2001 due in part to the facilities'
overall declining debt service requirements. The OMB budgeted
solid waste aid has declined from $35 million in solid waste aid
for the state FY 2008, to $30 million in FY 2009 and is
$27 million in the current fiscal year.
As the state's funding assistance has come below the levels
requested by the authority, the authority has made up the
difference by pulling from its own available resources to fully
meet debt service requirements. As a result of this practice the
authority's financial and operating conditions have been further
weakened as the authority has been forced to pull resources funds
for future capital improvements. Additionally, the authority's
challenged finances are reflected in the days cash on hand which
have been depleted from a high of 223 days in FY 2007 to 163 days
in FY 2008 and is projected to decline to a narrow 70 days at FYE
2009 (based on actual 2008 expenditures; expenditures used in the
days cash on hand calculation include facility operating
expenditures which are paid first from trustee held funds to
Foster Wheeler for waste to energy facility operations). Adding
additional financial pressure to the authority is the decline in
overall tonnages processed for the third consecutive year.
Tonnages declined 3.46% in FY 2007, 5.22% in FY 2008 and are down
1% year to date through September 2009.
Despite such a lengthy and sustained record of state aid, Moody's
believes that there are a number of critical uncertainties that
place negative pressure on the rating. These uncertainties
include the state's willingness and ability to potentially provide
a greater level of debt service support to the authority as debt
maturity approaches with a balloon principal payment of
$24.3 million on December 1, 2010. This substantially larger debt
service demand coupled with growing financial pressures on the
state budget in the current economic recession raise a number of
questions as to the state's ability to meet the potential request
of the authority for future debt service and weighed heavily on
the rating action taken.
Market Position/Competitive Strategy: Loss of Flow Control
Resulted In Loss of Revenues
The Pollution Control Financing Authority of Camden County's solid
waste disposal system consists of a 1,050-ton per day waste-to-
energy facility, which began operation in 1991, and the Pennsauken
Landfill. The WTE facility is owned and operated by Camden County
Energy Recovery Associates, a wholly owned subsidiary of Foster
Wheeler.
When it began operations, the authority had been relying on flow
control ordinances that allowed it to charge tipping fees
sufficient to meet expenses, including debt service. Following
the Carbone decision in 1994, the United States Court of Appeals
for the Third Circuit held on May 1, 1997, that New Jersey's solid
waste system violated the Commerce Clause (Atlantic Coast
decision). Following Atlantic Coast, and the loss of flow
control, the authority was forced to reduce its tipping fees in
order to be more competitive with other facilities and landfills.
Annual operating revenues were then insufficient to meet debt
service payments and state aid was needed immediately after debt
service reserves were depleted, and has been required every year
since.
Key Indicators:
-- Type of System: Landfill and WTE facility owned and operated
by Foster Wheeler
-- Final Maturity: December 1, 2010
-- State Assistance, FY 2009: $6 million
-- Tonnage, FY 2008: 406,569 (-5.22% decrease from 2007)
-- Tonnage, FY 2009 YTD (September 2009): 306,369 (-1.13%
decrease from September 2008)
-- Tipping Fees, FY 2008: $24.9 million
-- Electric Revenues, FY 2008: $14 million
-- Debt Outstanding, FY 2008: $35.2 million
-- Debt Service Coverage, FY 2008: 0.58x without state aid (0.48
on a bond ordinance basis)
Rated Debt:
-- Series 1991; $35.2 million
Principal Methodology And Last Rating Action
The bond rating was assigned by evaluating factors believed to be
relevant to the credit profile of the issuer such as i) the
business risk and competitive position of the issuer versus others
within its industry or sector, ii) the capital structure and
financial risk of the issuer, iii) the projected performance of
the issuer over the near to intermediate term, iv) the issuer's
history of achieving consistent operating performance and meeting
budget or financial plan goals, v) the nature of the dedicated
revenue stream pledged to the bonds, vi) the debt service coverage
provided by such revenue stream, vii) the legal structure that
documents the revenue stream and the source of payment, and viii)
and the issuer's management and governance structure related to
payment.
The last rating action taken was on September 9, 2008, when the
Baa3 rating and stable outlook on Camden County Pollution Control
Financing Authority was affirmed.
READER'S DIGEST: Committee Proposes S. Goldfarb as Expert
---------------------------------------------------------
The Official Committee of Unsecured Creditors of The Reader's
Digest Association, Inc., et al., seeks the Court's authority to
retain Stuart U. Goldfarb, nunc pro tunc to October 29, 2009, as
its special industry expert.
Daniel Pevonka, on behalf of R.R. Donnelley & Sons Company, Co-
Chairperson of the Creditors' Committee, tells the Court that
Mr. Goldfarb was selected due to his experience in the
international media industry and with developing growth strategies
and managing operations.
Mr. Goldfarb's services for the Creditors' Committee are limited
to meeting with the panel's financial advisors and attorneys,
reviewing and analyzing the Debtors' business plan and related
financial information, advising on areas in the Business Plan for
potential revenue growth or cost savings, conveying his findings
to the Creditors' Committee and its advisors, and attending any
required deposition or Court hearing.
As industry expert, Mr. Goldfarb's compensation for professional
services rendered in connection with reviewing and analyzing the
Business Plan and related financial information, and conveying his
findings to the Creditors' Committee, inclusive of expenses -- the
first phase of work -- will be capped at $30,000 based on an
estimate of 50 hours expended at a rate of $600 per hour.
Expenses will be charged at actual costs incurred and will be
itemized separately from the fees on his invoices.
Mr. Pevonka says Mr. Goldfarb intends to submit to the Debtors a
detailed invoice for the first phase of his work, and if, after 15
days, no party-in-interest objects, then the Debtors will be
authorized and directed to remit payment of the First Phase
Invoice. If any party timely objects to either the First Phase
Invoice or the Second Phase Invoice, or if the Second Phase
Invoice exceeds $20,000 so that the total amount of fees and
expenses requested exceeds $50,000, then Mr. Goldfarb will file an
application with the Court as required by Section 330 of the
Bankruptcy Code for the allowance of his compensation.
Mr. Goldfarb assures the Court that he is a "disinterested
person," as defined in Section 101(14) of the Bankruptcy Code.
About The Reader's Digest Association
RDA is a global multi-brand media and marketing company that
educates, entertains and connects audiences around the world. The
company builds multi-platform communities based on branded
content. With offices in 44 countries, it markets books,
magazines, and music, video and educational products reaching a
customer base of 130 million in 78 countries. It publishes 94
magazines, including 50 editions of Reader's Digest, the world's
largest-circulation magazine, operates 65 branded Web sites
generating 22 million unique visitors per month, and sells
40 million books, music and video products across the world each
year. Its global headquarters are in Pleasantville, N.Y.
Reader's Digest said that as of June 30, 2009, it had total assets
of $2.2 billion against total debts of $3.4 billion.
Reader's Digest, together with its 47 affiliates, filed for
Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529).
Kirkland & Ellis LLP has been engaged as general restructuring
counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as
conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire
& Co, LLC, is financial advisor. AlixPartners, LLC, is
restructuring consultant. Kurtzman Carson Consultants is notice
and claims agent.
The Official Committee of Unsecured Creditors is tapping BDO
Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as
investment banker and Otterbourg, Steindler, Houston & Rosen,
P.C., as counsel.
Bankruptcy Creditors' Service, Inc., publishes Reader's Digest
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Reader's Digest and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
READER'S DIGEST: Court OKs Plan Outline; Conf. Hearing on Jan. 15
-----------------------------------------------------------------
Judge Robert Drain of the U.S. Bankruptcy Court for the Southern
District of New York approved on November 30, 2009, the Disclosure
Statement explaining the Third Amended Joint Plan of
Reorganization of The Reader's Digest Association, Inc., and its
debtor affiliates.
The Court approved the Disclosure Statement after finding that the
document provides adequate information pursuant to Section
1125(a)(1) of the Bankruptcy Code and Rule 3017(b) of the Federal
Rules of Bankruptcy Procedure. To the extent not withdrawn,
settled or otherwise resolved, any objections to the approval of
the Disclosure Statement are overruled, Judge Drain ruled.
Judge Drain also approved the Debtors' Solicitation Procedures, as
well as their notices and form of ballots.
Prior to his entry of the Disclosure Statement Order, Judge Drain
said at a hearing that he will approve the Disclosure Statement.
"I believe it is worthwhile to have the plan go out for a vote,"
he was quoted by Bloomberg News as saying.
Subject to the Restructuring Support Agreement, the Debtors with
the consent of the Official Committee of Unsecured Creditors,
which consent will not be unreasonably withheld, are authorized to
make non-material changes to the Disclosure Statement, the Plan
and related documents before distributing Solicitation Packages to
each creditor or other party-in-interest in accordance with the
terms of this Solicitation Procedures Order without further Court
order. Corrections will include changes to correct typographical,
clerical and grammatical errors, and to make conforming changes
among the Disclosure Statement, the Plan and related documents.
As previously reported, prepetition secured lenders holding more
than 80% of the Debtors' prepetition bank debt executed a
restructuring support agreement setting forth the terms of a
proposed restructuring plan that provides for the conversion of
approximately $1.2 billion of prepetition secured debt into nearly
100% of the equity in the Reorganized Debtors.
The Court established these dates and deadlines with respect to
the solicitation of votes on, objecting to, and confirmation of,
the Plan:
November 25, 2009 Record Date
December 4, 2009 Solicitation Deadline
December 4, 2009 Publishing of Publication Notice
December 11, 2009 Filing of Plan Supplement
December 15, 2009 Filing of Contract and Lease Schedule
January 5, 2010 Confirmation/Assumption Objection Deadline
January 8, 2010 Voting Deadline
January 11, 2010 Filing of Voting Report
January 11, 2010 Objections' Reply Deadline
January 15, 2010 Confirmation Hearing
Debtors File 3rd Amended Plan
Prior to the entry of the Disclosure Statement Order, the Debtors
delivered to the Court on November 24, 2009, their Third Amended
Plan of Reorganization and accompanying Disclosure Statement.
In the Third Amended Plan, a whole subsection is added announcing
that after extensive, good-faith negotiations, the Plan is
supported by the key creditor constituencies in the Chapter 11
Cases. Specifically, the Plan is supported by the Debtors'
Prepetition Lenders, who hold the largest single claim against the
Debtors' estates, and the Creditors Committee.
As a result of the restructuring transactions contemplated by the
Plan, the Debtors' senior secured lenders under the Prepetition
Credit Agreement will own substantially all of the New Common
Stock in Reorganized RDA Holding, Inc., subject to dilution by
shares of the New Common Stock issued in connection with:
(a) Management Equity Plan. The Plan provides that the New
Board will grant equity awards in the form of restricted
stock, options and warrants for 7.5% of the New Common
Stock to continuing employees and directors of the
Reorganized Debtors, provided that the equity grants will
not include more than 2.5% in the form of restricted New
Common Stock; and
(b) New Warrants. The Plan provides that any Holder of a
Senior Subordinated Note Claim as of the Record Date that
votes in favor of the Plan will receive its Pro Rata share
of the New Warrants to be issued on the Plan's effective
date. The New Warrants will be issued pursuant to the
terms of the New Warrant Agreement, the form of which will
be included in the Plan Supplement.
The estimated percent recovery for Class 5 Other General Unsecured
Claims is increased to 3.3% to 3.6% from 2.5% to 2.7%. For Class
6 Senior Subordinated Note Claims, the recovery is pegged at less
than 1%. Holders of Class 6 Senior Subordinated Note Claims, who
vote in favor of the Plan, will receive their Pro Rata share of
the New Warrants issued on the Effective Date. No other
distributions will be made to Class 6 under the Plan.
On the Effective Date, the Third Amended Plan provides that the
Reorganized Debtors will issue New Warrants to the Holders of
Claims in Class 6, who have voted to accept the Plan pursuant to
the terms of the New Warrant Agreement.
The treatment of the Senior Subordinated Note Claims is in
accordance with and gives effect to the provisions of Section
510(a) of the Bankruptcy Code, except that the Prepetition Lenders
have agreed to waive the subordination provisions in the Senior
Subordinated Note Indenture only to the limited extent necessary
to allocate the New Warrants to holders of Class 6 Claims that
vote to accept the Plan.
The whole section on rights offering and subsection process has
been deleted because the Debtors will issue New Warrants, which
will be issued on the Effective Date pursuant to the terms of the
New Warrant Agreement to purchase up to 6.5% of the New Common
Stock, on a fully diluted basis, with an expiration date of the
fourth anniversary of the Effective Date, and an exercise price of
(i) $1.800 billion, increased at a rate of 10% per annum as of the
third anniversary of the Effective Date, minus the sum of the face
amount owed by the Reorganized Debtors as of the Effective Date on
account of the New First Priority Term Loan, the Reinstated Euro
Term Loan, and the New Second Priority Term Loan, divided by (ii)
the number of shares of New Common Stock issued and outstanding as
of the Effective Date.
The Debtors subsequently filed a revised Third Amended Plan and
Disclosure Statement on November 30, 2009, to add non-substantial
details, including the Court-approved dates and deadlines.
Copies of the Third Amended Plans and Disclosure Statements are
available for free at:
http://bankrupt.com/misc/RDA_3rdAmended_DS_112409.pdf
http://bankrupt.com/misc/RDA_3rdAmended_Plan_112409.pdf
http://bankrupt.com/misc/RDA_3rdAmended_DS_113009.pdf
http://bankrupt.com/misc/RDA_3rdAmended_Plan_113009.pdf
Among other things, the revised Third Amended Plan provides:
-- that Class 10 Intercompany Claims are impaired and holders
of claims in that Class have voting rights;
-- details with respect to the Management Compensation
Programs, specifically relating to the Management
Compensation Plan, the Variable Compensation Plan and the
Enterprise Value Maximization Plan;
-- for the dissolution of the Creditors Committee; and
-- a subsection on claims administration responsibility.
The revised Third Amended Plan provides that the Reorganized
Debtors will retain responsibility for administering, disputing,
objecting to, compromising or otherwise resolving all Claims
against the Debtors, and will bear the responsibility for any
fees, costs, expenses or other liabilities incurred by the
Reorganized Debtors in connection with the claims administration.
On the Effective Date, there may be formed a Claims Oversight
Committee, which will monitor (i) the Claims Administration
conducted by the Reorganized Debtors, and address the Bankruptcy
Court if the Claims Oversight Committee disagrees with the
Reorganized Debtors' determinations with respect to Claims
resolution, and (ii) distributions to Holders of Allowed Claims in
Class 5 and to address the Bankruptcy Court with respect to those
matters.
The Claims Oversight Committee is a three-member committee to be
selected by the Creditors Committee and appointed on the Effective
Date. The membership of the Claims Oversight Committee may be
increased or decreased at the direction of the Claims Oversight
Committee membership. The Claims Oversight Committee may employ,
without Court order, professionals to assist it in carrying out
its duties, and its reasonable fees and expenses will be paid in
the ordinary course without further Court order, provided that the
fees and expenses will be subject to a cap, in an amount and from
a funding source to be agreed upon by the Creditors Committee, the
Debtors and the steering committee of the Prepetition Lenders.
The Reorganized Debtors will consult with the Claims Oversight
Committee on a regular basis concerning their investigation,
prosecution and proposed settlement of Class 5 Claims and will
provide written reports to the Claims Oversight Committee on a
monthly basis regarding the status of the Claims resolution
process.
The Reorganized Debtors will not settle or compromise any Class 5
Claim in excess of the Allowed amount of $250,000 without either
the approval of the Claims Oversight Committee or an order of the
Bankruptcy Court. The Reorganized Debtors may settle or
compromise any Class 5 Claims for less than the Allowed amount of
$250,000 without a Court order and without the approval of the
Claims Oversight Committee.
About The Reader's Digest Association
RDA is a global multi-brand media and marketing company that
educates, entertains and connects audiences around the world. The
company builds multi-platform communities based on branded
content. With offices in 44 countries, it markets books,
magazines, and music, video and educational products reaching a
customer base of 130 million in 78 countries. It publishes 94
magazines, including 50 editions of Reader's Digest, the world's
largest-circulation magazine, operates 65 branded Web sites
generating 22 million unique visitors per month, and sells
40 million books, music and video products across the world each
year. Its global headquarters are in Pleasantville, N.Y.
Reader's Digest said that as of June 30, 2009, it had total assets
of $2.2 billion against total debts of $3.4 billion.
Reader's Digest, together with its 47 affiliates, filed for
Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529).
Kirkland & Ellis LLP has been engaged as general restructuring
counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as
conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire
& Co, LLC, is financial advisor. AlixPartners, LLC, is
restructuring consultant. Kurtzman Carson Consultants is notice
and claims agent.
The Official Committee of Unsecured Creditors is tapping BDO
Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as
investment banker and Otterbourg, Steindler, Houston & Rosen,
P.C., as counsel.
Bankruptcy Creditors' Service, Inc., publishes Reader's Digest
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Reader's Digest and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
RICHARD HINDIN: Wants to Hire Cooter Mangold as Bankruptcy Counsel
------------------------------------------------------------------
Richard J. Hindin has sought permission from the U.S. Bankruptcy
Court for the Eastern District of Virginia to employ Cooter,
Mangold, Deckelbaum & Karas, LLP, as bankruptcy counsel.
Cooter Mangold will, among other things:
a. represent the Debtor in defense of any proceedings
instituted to reclaim property or to obtain relief from
the automatic stay;
b. continue to represent the Debtor in any litigation against
Split Timber, including an avoidance action and/or an
action to contest the validity of the Utah judgment
entered in favor of Split Timber;
c. prepare necessary applications, answers, orders, motions,
orders, reports and other legal papers, and appearing on
the Debtor's behalf in proceedings instituted by or
against the Debtor; and
d. assist the Debtor in the preparation of schedules,
statements of financial affairs, any amendments the Debtor
may be required to file, and the preparation and
confirmation of a plan and disclosure statement.
The hourly rates of the personnel are:
Stephen Nichols $450
Senior Partners $625
Paralegals $100
Dale A. Cooter, a partner at Cooter Mangold, assures the Court
that the firm is "disinterested" as that term is defined in
Section 101(14) of the Bankruptcy Code.
McLean, Virginia-based Richard J. Hindin is a businessman and
investor with extensive real property holdings and business
interests. He owns a residence located at 407 Chain Bridge Road,
McLean, VA and an adjoining property located at 405 Chain Bridge
Road, McLean, VA. Additionally, he owns a beach-front property
located in North Bethany, DE. He owns or co-owns two smaller
condominium properties located in Montgomery County, Maryland.
Mr. Hindin filed for Chapter 11 bankruptcy protection on
November 27, 2009 (Bankr. E.D. Va. Case No. 09-19741). The
Company listed $10,000,001 to $50,000,000 in assets and
$10,000,001 to $50,000,000 in liabilities.
ROSALIE TREIBER: Case Summary & 5 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Rosalie Clare Treiber
27603 N 39th Ave
Phoenix, AZ 85083
Bankruptcy Case No.: 09-31169
Chapter 11 Petition Date: December 2, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Debtor's Counsel: Nasser U. Abujbarah, Esq.
The Law Offices Of Nasser U. Abujbarah
10654 N. 32nd St
Phoenix, AZ 85028
Tel: (602) 493-2586
Fax: (602) 923-3458
Email: NUALegal@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 Ms. Treiber's petition, including a list of
her 5 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/azb09-31169.pdf
The petition was signed by Ms. Treiber.
ROTHSTEIN ROSENFELDT: Co-Founder Surrenders Assets
--------------------------------------------------
Bloomberg News reports that Scott W. Rothstein has surrendered
more than 20 properties, plus a collection of luxury cars, jewelry
and business interests to federal prosecutors who sought
forfeiture of those items. Mr. Rothstein gave up the assets in an
agreement with acting U.S. Attorney Jeffrey Sloman in Miami. The
accord, signed Nov. 16 and 17, was filed December 3 in federal
court in Fort Lauderdale.
The U.S. can now "dispose" of the properties or funds obtained
from their sale and help repay victims, according to the
agreement, which said that Mr. Rothstein didn't admit to any
wrongdoing and is trying to avoid litigation costs, Bloomberg News
said.
Mr. Rothstein on Dec. 1 pleaded not guilty to U.S. charges he sold
investors stakes in fictitious legal settlements. Mr. Rothstein,
47, faces 100 years in prison if convicted of two counts of wire
fraud and three conspiracy charges filed December 1. Prosecutors
say his law firm was a racketeering enterprise that fleeced
investors in a Ponzi scheme.
According to Bloomberg, prosecutors said the Ponzi scheme began in
2005 and bankrolled his Fort Lauderdale firm, Rothstein Rosenfeldt
Adler PA. Rothstein and his coconspirators gave to the campaigns
of local, state and federal politicians in a way that evaded
limits on such donations and disguised the true source of the
money, prosecutors alleged in document known as a criminal
information. Many of the contributions have since been returned.
About Rothstein Rosenfeldt
Creditors of Rothstein Rosenfeldt Adler PA signed a petition to
send the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No.
09-34791). 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.
Herbert M. Stettin, the state-court appointed receiver for
Rothstein Rosenfeldt, was officially carried over as the Chapter
11 trustee in the involuntary bankruptcy case.
ROUND ROCK LIMITED: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Round Rock Limited
16912 North IH 35
Austin, TX 78728
Bankruptcy Case No.: 09-13409
Chapter 11 Petition Date: December 1, 2009
Court: United States Bankruptcy Court
Western District of Texas (Austin)
Debtor's Counsel: Vanessa E. Gonzalez, Esq.
Munsch Hardt Kopf & Harr, P.C.
600 Congress, Ste. 2900
Austin, TX 78701
Tel: (512) 391-6121
Fax: (512) 391-7113
Email: vgonzalez@munsch.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Robert Mendoza.
SARATOGA RESOURCES: Wins Approval of Reorganization Plan
--------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Louisiana
confirmed the reorganization plan for Saratoga Resources Inc.
Saratoga expects to exit from Chapter 11 bankruptcy prior to the
end of the year, just nine months after its bankruptcy filing.
Saratoga and its subsidiaries have reached an agreement in
principle with their secured lenders regarding the financial
restructuring. That agreement was incorporated into a Second
Amended Plan of Reorganization as Modified, filed on November 25,
2009.
The Plan sets the stage for Saratoga to exit from Chapter 11 with
payment in full for all its creditors and preservation of the
interests of all equity holders.
"Saratoga is deeply grateful for the support, participation and
patience of all constituents involved in the bankruptcy case and
for the sound and efficient guidance of our legal team led by our
bankruptcy counsel, Adams and Reese, and our special oil and gas
counsel, Paul J. Goodwine of New Orleans-based Schully Roberts,
Slattery & Marino. With the imminent emergence from bankruptcy,
we look forward to a bright and profitable future," said Andy
Clifford, president of Saratoga. "The Company's focus is on
increasing production through low-cost workovers and
recompletions, increasing reserves through field studies and
development, and decreasing operating costs. We believe that
these three metrics, independent of the volatility of oil and gas
prices, enable value creation for our investors and lenders."
"This is an excellent result achieved within a relatively short
period of time for a company coming out of bankruptcy, especially
with all creditors being paid 100 percent of their allowed claims
and the equity holders preserving their interests," said Robin
Cheatham, practice group leader of Adams and Reese Commercial
Restructuring and Bankruptcy Team.
About Saratoga Resources
Saratoga Resources Inc. (OTCBB: SROEQ) is an independent
exploration and production company with offices in Houston and
Covington. Saratoga engages in the acquisition and development of
oil and gas producing properties that allow the Company to grow
through low-risk development and risk-managed exploration.
Saratoga operates 14 fields in Louisiana and Texas with 106 active
producing wells. Current net production is roughly 3,000
barrels of oil equivalent per day -- BOEPD -- with 70% oil versus
gas. Principal holdings cover 37,756 gross (34,246 net) acres,
mostly held-by-production, located in the state waters offshore
Louisiana.
Saratoga Resources, Inc., and certain operating subsidiaries filed
on March 31, 2009, voluntary Chapter 11 petitions in the U.S.
Bankruptcy Court for the Western District of Louisiana in
Lafayette, Louisiana. Saratoga is being advised by its legal
counsel, Adams & Reese LLP; its investment banker, Pritchard
Capital Partners LLC; and its financial advisor, Ambrose
Consulting LLC.
The case is In Re Harvest Oil and Gas, LLC (Bankr. W.D. La. Lead
Case No. 09-50397). Robin B. Cheatham, Esq., at Adams & Reese
LLP, represents the Debtors in their restructuring effort. The
Debtors listed between $100 million and $500 million each in
assets and debts.
SEEDS & BYPRODUCTS: Case Summary & 2 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Seeds & Byproducts, Incorporated
PO Box 219
Progreso, TX 78579
Bankruptcy Case No.: 09-70864
Chapter 11 Petition Date: December 1, 2009
Court: United States Bankruptcy Court
Southern District of Texas (McAllen)
Judge: Richard S. Schmidt
Debtor's Counsel: Antonio Villeda, Esq.
Attorney at Law
5414 N 10th St
McAllen, TX 78504
Tel: (956) 631-9100
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
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/txsb09-70864.pdf
The petition was signed by Pedro L. Lopez, president of the
Company.
SEEDS OF CHRIST: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Seeds Of Christ, Ltd.
dba Timber Park Apartments
5351 Peterson Ln.
Dallas, TX 75240
Bankruptcy Case No.: 09-38271
Chapter 11 Petition Date: December 1, 2009
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Barbara J. Houser
Debtor's Counsel: Michael G. Colvard, Esq.
Martin & Drought, P.C.
300 Convent, 25th Flr.
San Antonio, TX 78205
Tel: (210) 227-7591
Fax: (210) 227-7924
Email: mcolvard@mdtlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/txnb09-38271.pdf
The petition was signed by John Delao.
SEMGROUP LP: Final Fee Applications Due January 30
--------------------------------------------------
To recall, SemGroup L.P. and its debtor affiliates emerged from
Chapter 11 protection on November 30, 2009, ending a 16-month
bankruptcy.
SemGroup's Fourth Amended Joint Plan of Reorganization is deemed
effective on November 30, 2009. A Notice of Effective Date filed
with the U.S. Bankruptcy Court for the District of Delaware set
deadlines for filing of rejection damages claims and final fee
applications.
A. Rejection Damages Claims
All proofs of claim relating to rejected contracts under the Plan
must be filed and served upon Kurtzman Carson Consultants, LLC,
the Debtors' claims processing agent, to be received no later
than 30 days after the later of:
(i) notice of entry of an order approving the rejection of the
contracts,
(ii) notice of entry of the Confirmation Order, and
(iii) notice of an amendment to schedule of contracts under the
Plan.
Failure to Claims not timely filed will be forever barred from
assertion against the Debtors and their estates or the
Reorganized Debtors and their property.
B. Final Fee Applications
All applications for final allowances of fees and reimbursement
of expenses pursuant to Sections 327, 328, 330, 503(b), and 1103
of the Bankruptcy Code for services rendered up to October 26,
2009, must be filed with the Bankruptcy Court on January 30,
2009, and served on:
* counsel to the Debtors
Martin A. Sosland, Esq.
Weil, Gotshal & Manges LLP
200 Crescent Court
Suite 300
Dallas, Texas 75201
* counsel to the Debtors
John H. Knight, Esq.
Richards, Layton & Finger, PA,
One Rodney Square
920 North King Street
Wilmington, Delaware 19801
* counsel to the Official Committee of Unsecured Creditors
Susheel Kirpalani, Esq.
Daniel S. Holzman, Esq.
Joseph Minias, Esq.
Quinn Emanuel Urquhart Oliver & Hedges
51 Madison Avenue,
22nd Floor,
New York, New York 10010
* counsel for Bank of America, N.A., agent for a consortium of
lenders
Margot B. Schonholtz, Esq.
Marc Rosenberg, Esq.
Kaye Scholer, LLP,
425 Park Avenue,
New York, New York, 10022
* Roberta A. DeAngelis
United States Trustee for Region 3
J. Caleb Boggs Federal Bldg.
844 King Street
Suite 2207
Lockbox 35, Wilmington, Delaware, 19801
* Warren H. Smith, of Warren H. Smith & Associates
Fee Auditor
Republic Center,
325 N. St. Paul
Suite 1275,
Dallas, Texas 75201.
Objections, if any, to any Final Fee Applications will be filed
and actually received not later than 30 days after filing of a
Final Fee Application.
Amended Plan Exhibits
The Debtors filed with the Court on November 24, 2009, a revised
schedule of contracts to be assumed under the Plan reflecting
certain modifications agreed to by the Debtors and
counterparties. The Amended Schedule is available for free
at http://bankrupt.com/misc/semgroup_nov24pactssched.pdf
In a subsequent notice dated November 24, 2009, the Debtors
further revised their schedule of contracts to be assumed under
the Plan reflecting certain modifications agreed to by the
Debtors and counterparties. The Schedule is available for free
at http://bankrupt.com/misc/semgroup_nov24revpactssched.pdf
About SemGroup L.P.
SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream
service company that provides diversified services for end users
and consumers of crude oil, natural gas, natural gas liquids and
refined products. Services include purchasing, selling,
processing, transporting, terminalling and storing energy.
SemGroup serves customers in the United States, Canada, Mexico and
Wales.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. is the Debtors' claims agent. The Debtors' financial
advisors are The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
November 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.
SemGroup, LP, won confirmation from the U.S. Bankruptcy Court
of its Fourth Amended Plan of Reorganization on October 28, 2008.
The Company emerged from Chapter 11 December 2 as SemGroup(R)
Corporation.
SEMGROUP LP: Samson Co Lawsuits Transferred to Bankruptcy Court
---------------------------------------------------------------
Judge Joe Heaton of the U.S. District Court for the Western
District of Oklahoma, in an order dated November 19, 2009,
directs 15 civil actions commenced by Samson Resources Company
and its related companies against several downstream purchasers.
The 15 Civil Actions are:
* Case No. CIV-09-0272-HE
* Case No. CIV-09-0807-HE
* Case No. CIV-09-0808-HE
* Case No. CIV-09-0810-HE
* Case No. CIV-09-0811-HE
* Case No. CIV-09-0812-HE
* Case No. CIV-09-0813-HE
* Case No. CIV-09-0814-HE
* Case No. CIV-09-0815-HE
* Case No. CIV-09-0816-HE
* Case No. CIV-09-0817-HE
* Case No. CIV-09-0818-HE
* Case No. CIV-09-0819-HE
* Case No. CIV-09-0820-HE
* Case No. CIV-09-0827-HE
The Downstream Purchaser defendants include Valero Marketing and
Supply Company; National Cooperative Refinery Association; Husky
Marketing and Supply Company; Chevron Texaco LP; Teppco Crude GP
LLC; Cimarron Transmission Company; Interstate Petroleum
Corporation; Merrill Lynch Pierce Fenner & Smith Inc.; Occidental
Energy Marketing Inc.; Oasis Transportation and Marketing
Corporation; Plains Marketing GP Inc.; Plains Marketing LP; Shell
Oil Company; BP Oil Supply Company; J. Aron & Company; Sunoco
Logistic Partners LP; ConocoPhillips Company; and Coffeyville
Resources Refining & Marketing LLC.
Through the litigations, Samson asserts statutory lien claims,
based on the various state statutes, arising out of Samson's sale
of crude oil between June 1, 2008, and July 21, 2008, to Debtor
SemCrude, L.P., and its related entities.
Judge Heaton, in support of his decision, concluded that these
litigations brought by Samson are "related to" the Debtors'
bankruptcy. Judge Heaton explained that to the extent that
plaintiffs are successful in the suits, establishing the
existence of valid liens and requiring the defendants to pay
plaintiffs amounts they were otherwise owed by the debtor, the
bankruptcy estate will necessarily be affected. Any downstream
purchaser required to pay Samson for crude acquired through
SemGroup LP will necessarily have the nature and amount of its
claims against the debtor, or of the debtor's claims against it,
altered, Judge Hoe noted. Depending on the circumstances --
principally whether the particular defendant has already paid
SemGroup for the crude involved or not -- Judge Heaton said
defendants could end up with larger claims against the debtor,
based on theories of indemnity, breach of warranty of title, or
the like. Or, if the particular defendant has not already paid
the debtor, then the amount owed by the defendant to the debtor
would be reduced to the extent of any payments the defendant made
to Samson or at least a defense would arise to any collection
effort by the debtor. Under either scenario, the process of
netting out the relationship between SemGroup and the Downstream
Purchasers, now underway, would be impacted, he noted.
Further, the proof of plaintiffs' lien claims as to particular
production will necessarily involve substantial tracing and other
proof issues, likely resulting in substantial attorneys' fees and
other costs, Judge Heaton said. Defendants argue they are
entitled to recover those costs and fees from the debtor, based
on their contractual undertakings with it. Those claims, Judge
Heaton noted, may also impact the overall claims position of the
bankruptcy.
About SemGroup L.P.
SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream
service company that provides diversified services for end users
and consumers of crude oil, natural gas, natural gas liquids and
refined products. Services include purchasing, selling,
processing, transporting, terminalling and storing energy.
SemGroup serves customers in the United States, Canada, Mexico and
Wales.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. is the Debtors' claims agent. The Debtors' financial
advisors are The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
November 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.
SemGroup, LP, won confirmation from the U.S. Bankruptcy Court
of its Fourth Amended Plan of Reorganization on October 28, 2008.
The Company emerged from Chapter 11 December 2 as SemGroup(R)
Corporation.
SEMGROUP LP: Seeks Nod for Settlement With Noble & Halron
---------------------------------------------------------
SemGroup LP and its units ask the Court to approve a stipulation
of settlement among Debtor SemFuel, LP, Noble Petro Inc., and
Halron Lubricants, Inc.
Prior to the Petition Date, SemFuel and Halron entered into a
tank lease, dated as of April 2005, pursuant to which Halron
leased storage capacity in certain tanks. The tanks subject to
the Tank Lease Agreement were included in the assets sold by
SemFuel to Noble America Corp. in September 2009. The Tank
Lease, however, was not assigned to Noble as part of the sale.
In connection with the consummation of the transactions
contemplated by the asset purchase agreement between SemFuel and
Noble Americas, the parties entered into a letter agreement
pursuant to which SemFuel agreed to deposit $500,000 into escrow
pending resolution of certain matters, including termination of
the Tank Lease Agreement.
In September 2009, the Debtors sought the Court's authority to
reject several unexpired leases, including the Tank Lease
Agreement. Halron sought to preserve its right under the Tank
Lease Agreement.
SemFuel, Noble and Halron have actively engaged in arm's-length
negotiations to consensually resolve their disputes and claims
relating to the Tank Lease Agreement and the leased tanks.
The stipulation provides that Halron agrees to withdraw its
objection to the proposed rejection and to enter into a new lease
agreement and access agreement with Noble. The Parties agree
that the Tank Lease Agreement will be terminated and SemFuel and
Halron will each cease to have any rights or obligations under
the Agreement.
In addition, SemFuel will sell and transfer to Halron all of
SemFuel's right, title and interest under (i) a tank lease, dated
November 11, 2004, with Flambeau Woodyard, Inc., and (ii) a tank
lease, dated July 1, 2005, with Rocky Mountain Enterprises.
The Stipulation also provides for the Debtors to assume and
assign the Flambeau Lease and the RME Lease to Halron. In
exchange for the Transferred Assets, Halron will pay SemFuel
$30,000.
The Stipulation further provides that the $500,000 currently held
in escrow pursuant to the Escrow Letter will be distributed
$250,000 to Noble and $250,000 to SemFuel.
About SemGroup L.P.
SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream
service company that provides diversified services for end users
and consumers of crude oil, natural gas, natural gas liquids and
refined products. Services include purchasing, selling,
processing, transporting, terminalling and storing energy.
SemGroup serves customers in the United States, Canada, Mexico and
Wales.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. is the Debtors' claims agent. The Debtors' financial
advisors are The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
November 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.
SemGroup, LP, won confirmation from the U.S. Bankruptcy Court
of its Fourth Amended Plan of Reorganization on October 28, 2008.
The Company emerged from Chapter 11 December 2 as SemGroup(R)
Corporation.
SHALAN ENTERPRISES: Taps Jeffer Mangels as General Counsel
----------------------------------------------------------
Shalan Enterprises, LLC, has sought permission from the U.S.
Bankruptcy Court for the Central District of California to employ
Jeffer, Mangels, Butler & Marmaro LLP as general reorganization
counsel.
Jeffer Mangels will, among other things:
a. advise and assist the Debtor in the preparation of certain
documents to be filed with the Court and/or the Office of
the U.S. Trustee, including voluntary petition, schedules
of assets and liabilities, and statement of financial
affairs.
b. represent the Debtor in any adversary proceedings;
c. advise and protect the Debtor on its rights, investments
and interests in the Debtor's properties and to protect
the Debtor's economic interests in the properties; and
d. advise, assist and represent the Debtor in the
negotiation, formulation and confirmation of a plan of
reorganization.
The hourly rates of Jeffer Mangels' personnel are:
Joseph A. Eisenberg $775
John A. Graham $625
David M. Poitras $595
Thomas M. Geher $525
Caroline Djang $345
Wilma Escalante, Paralegal $190
Joseph A. Eisenberg, the principal of a professional corporation
which is a partner in Jeffer Mangels, assures the Court that the
firm is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code.
Marina Del Rey, California-based Shalan Enterprises, LLC, filed
for Chapter 11 bankruptcy protection on November 25, 2009 (Bankr.
C.D. Calif. Case No. 09-43263). The Company has $12,540,000 in
assets and $7,426,313 in liabilities.
SIX FLAGS: Noteholders Say Avenue Capital Plan Acts as Poison Pill
------------------------------------------------------------------
Daily Bankruptcy Review reports a group of noteholders said the
$50 million in fees attached to Avenue Capital's bankruptcy-exit
plan for Six Flags Inc. will effectively serve as a "poison pill"
to any competing reorganization proposal for the Debtors.
As reported by the Troubled Company Reporter on December 2, 2009,
a group of Six Flags senior bondholders is asking the Bankruptcy
Court to terminate the Debtors' exclusive period to propose a
Chapter 11 plan so that the noteholders can present an alternative
reorganization plan that would give the noteholders control over
the amusement park operator.
Holders of over $500 million of SFI Notes -- approximately 57% of
all uncontingent, non-insider claims against SFI -- have agreed to
sponsor a competing plan for the Debtors' estates that will (i)
pay in full in cash or otherwise reinstate all creditors of the
Debtors' estates, other than SFI, and (ii) provide a materially
enhanced recovery for creditors of SFI compared to the low
recovery provided by the plan proposed by the Debtors' management.
Reuters reports that the group said their plan was submitted to
Six Flags' board of directors on November 25.
The TCR said the Noteholders Plan is supported by a fully
committed and backstopped rights offering for $420 million in
cash. Proceeds from the offering will pay in full in cash all
allowed claims of holders of 12.25% notes issued by Six Flags
Operations, Inc. The remaining secured debt of $1.1 billion owed
to lenders under a Credit Agreement dated as of May 25, 2007 is
unimpaired: (i) the revolving loans of $270 million will be
refinanced with the proceeds of new secured indebtedness in the
amount of $280 million and (ii) the term loans of approximately
$835 million due in 2015 will be reinstated.
The Noteholders note that while the Management Plan provides
holders of SFO Notes with 25% of the stock in SFI and rights to
participate in an offering of 70% of the new common stock, the
Noteholder Plan provides the SFO Noteholders with cash payment in
full.
While the Management Plan provides the holders of SFI Notes with
approximately 5% of the new common stock in SFI, the Noteholder
Plan provides the holders of SFI Notes with 19% of the new common
stock and rights to participate in the convertible preferred stock
offering to purchase up to an additional 81% of the new common
stock.
Reuters says the proposal is the third alternative plan from Six
Flags investors. Six Flags' original plan proposed to transfer
almost all of its stock to senior lenders, including JPMorgan
Chase & Co., in return for cutting its debt. Reuters says the
initial plan sparked immediate opposition, in part because it was
far more favorable to bank lenders than what the company had
proposed just prior to bankruptcy.
Reuters relates the alternative plan backed by Avenue Capital
Management, which owned the senior class of notes, proposes to pay
senior lenders in full and give most of the equity to the senior
class of noteholders. The Debtors have since adopted the Avenue
Capital proposal as their current plan.
Reuters says the plan by the junior class of noteholders, led by
hedge fund Stark Investments, did not mention any recovery for
equity holders. Reuters also notes investors in Six Flags
preferred shares, known as PIERS, have proposed a plan that will
pay all creditors in full. That plan, backed by Resilient Capital
Management LLC, proposed raising capital by issuing convertible
securities, Reuters says.
Reuters notes Six Flags did not immediately return calls seeking
comment. The noteholders who proposed the plan did not return
calls for comment, according to Reuters.
About Six Flags
Headquartered in New York City, Six Flags, Inc., is the world's
largest regional theme park company with 20 parks across the
United States, Mexico and Canada.
Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr.
D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T.
Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings,
Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors'
lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine
Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington,
Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP,
serves as special counsel. Houlihan Lokey Howard & Zukin Capital
Inc., serves as financial advisors, while KPMG LLC acts as
accountants. Kurtzman Carson Consultants LLC serves as claims and
notice agent. As of March 31, 2009, Six Flags had $2,907,335,000
in total assets and $3,431,647,000 in total liabilities.
Bankruptcy Creditors' Service, Inc., publishes Six Flags
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Six Flags Inc. and its
various affiliates. (http://bankrupt.com/newsstand/or 215/945-
7000).
SOUTH TEXAS OIL: Faces Delisting from Nasdaq Market
---------------------------------------------------
The Associated Press reports that the Nasdaq Stock Market said it
will delist the stocks of South Texas Oil Co., Advanta Corp.,
Vuance Ltd., and Natural Health Trends Corp. Necessary paperwork
will be filed with the Securities and Exchange Commission to
complete the delisting, which will take effect 10 days later, AP
says.
AP notes the stocks of the four companies have been suspended
already.
About Advanta Corp.
Advanta Corp. -- http://www.advanta.com/-- has had a 59-year
history of being a leading innovator in the financial services
industry and of providing great value to its stakeholders,
including its senior retail note holders and shareholders, prior
to the recent reversals. It has also been a major civic and
charitable force in the communities in which it is based,
particularly in the Greater Philadelphia area.
The Federal Deposit Insurance Corporation placed significant
restrictions on the activities of Advanta Corp.'s Advanta Bank
Corp. following financial woes by the banking unit.
As of Sept. 30, 2009, the Company had $2,497,897,000 in assets
against total liabilities of $2,465,936,000 but the figures
included those of the banking units.
On November 8, 2009, Advanta Corp. filed for Chapter 11 (Bankr. D.
Del. Case No. 09-13931). Attorneys at Weil, Gotshal & Manges LLP,
and Richards, Layton & Finger, P.A., serve as bankruptcy counsel.
Alvarez & Marsal serves as financial advisor. The Garden City
Group, Inc., serves as claims agent. The filing did not include
Advanta Bank. The petition says that Advanta Corp.'s assets
totalled $363,000,000 while debts totalled $331,000,000 as of
Sept. 30, 2009.
About South Texas Oil Company
San Antonio, Texas-based South Texas Oil Company is an independent
energy company engaged in the acquisition, production, exploration
and development of crude oil and natural gas. Its core operating
areas include Texas, Louisiana and the Gulf Coast. Longview Fund
LP owns 42.5 percent of the South Texas stock. Doub Oil & Gas Co.
LLC is a 14.5 percent shareholder.
South Texas Oil and its wholly owned subsidiaries Southern Texas
Oil Company, STO Drilling Company, STO Operating Company and its
wholly owned subsidiary STO Properties LLC has filed for Chapter
11 protection on Oct. 29, 2009 (Bankr. W.D. Tex. Case No. 09
54233).
Ronald Hornberger of Plunkeet & Gibson represents the Debtors in
their restructuring effort.
In the Chapter 11 case, the companies listed assets of
$49.1 million against debt totaling $27.9 million, including
$17.3 million in secured claims.
TARRAGON CORP: Solicitation Period Extended Until December 10
-------------------------------------------------------------
The Hon. Donald H. Steckroth of the U.S. Bankruptcy Court for the
District of New Jersey, in its bridge order, extended Tarragon
Corporation, et.al.'s exclusive period to solicit acceptances to
their Chapter 11 Plan until December 10, 2009.
Based in New York City, Tarragon Corporation (NasdaqGS:TARR) --
http://www.tarragoncorp.com/-- is a leading developer of
multifamily housing for rent and for sale. Tarragon's operations
are concentrated in the Northeast, Florida, Texas, and Tennessee.
Tarragon and its affiliates filed for Chapter 11 protection on
January 12, 2009 (Bankr. D. N.J. Case No. 09-10555). The Hon.
Donald H. Steckroth presides over the case.
Michael D. Sirota, Esq., Warren A. Usatine, Esq., and Felice R.
Yudkin, Esq., at Cole Schotz Meisel Forman & Leonard, P.A.
TASC INC: Moody's Assigns 'B1' Initial Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service assigned initial B1 Corporate Family and
Probability of Default ratings to TASC, Inc., and Ba2 ratings to
the company's secured bank obligations. The bank credit
facilities are part of the financing for the announced
$1.65 billion leveraged acquisition of TASC by affiliates of
General Atlantic and Kohlberg Kravis Roberts from Northrop Grumman
Corporation. The rating outlook is stable.
TASC has annual revenues of approximately $1.6 billion which it
earns as a systems engineering and technical assistance provider
to multiple US Government intelligence agencies as well as the
Department of Defense and various civil agencies. By selling its
advisory services unit, Northrop Grumman will strategically
address organizational conflict of interest requirements created
in the recent Weapon Systems Acquisition Reform Act of 2009 and
allow it to focus on its much larger weapon systems and other non-
consulting operations and services.
The B1 Corporate Family and Probability of Default ratings
recognize TASC's well established business position as one of the
larger prime contractors in a focused niche of providing complex
system design and procurement strategies to a collection of
intelligence agencies and the DoD. It further incorporates
healthy operating profitability and ongoing free cash flow
generation, but also emphasizes a leveraged capital structure.
TASC's revenues have been relatively consistent for the last few
years but should expand going forward for multiple reasons. These
include organic growth in federal government expenditures on
intelligence and cyber security, being freed of earlier OCI
complications from Northrop Grumman's other businesses which may
have inhibited it bidding on or being awarded government
contracts; and OCI issues at other prime weapons and systems
contractors who have yet to resolve OCI challenges. TASC's track
record of contract retention, high award fee achievement, below
average attrition rates among critical employees and steady
operating margins should sustain its profitability. The critical
technical expertise, track record and classified nature of the
work performed offer advantages to experienced providers.
Combined with low capital intensity, the company should produce
strong levels of free cash flow, enabling it to comfortably
service material fixed charges stemming from its initial debt
burden.
The company's starting capital structure will consist of
$900 million of funded debt and $865 million of equity. Despite
the significant equity contribution, Moody's would gauge TASC's
starting adjusted debt/EBITDA to be around 6 times. Although it
will incur incremental administrative costs as a stand-alone
entity, the rating agency considers TASC's EBITA margins to be
sustainable with EBITA/adjusted interest expense expected to be
around 2 times.
The stable outlook reflects a favorable environment for SETA
contractors with demonstrated expertise in intelligence and cyber
security, TASC's sizable backlog, margins which are unlikely to
come under near-term pressure, as well as a good liquidity
profile.
Ratings assigned:
-- Corporate Family, B1
-- Probability of Default, B1
-- $100 million secured revolving credit facility, Ba2, LGD-2,
27%
-- $200 million secured term loan A, Ba2, LGD-2, 27%
-- $390 million secured term loan B, Ba2, LGD-2, 27%
The Ba2 rating on the secured debt, two notches above the
Corporate Family rating, flows from its priority of claim over
$310 million of subordinated debt (not rated) and other junior
obligations in the liability waterfall.
TASC, Inc., headquartered in Chantilly, VA, provides advanced
systems engineering and technical services to U.S. Government
intelligence agencies and the DoD.
TEAM TOLEDO HOCKEY: Case Summary & 11 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Team Toledo Hockey, LLC
233 N. Lallendorf Road
Oregon, OH 43616
Bankruptcy Case No.: 09-38301
Chapter 11 Petition Date: December 1, 2009
Court: United States Bankruptcy Court
Northern District of Ohio (Toledo)
Judge: Mary Ann Whipple
Debtor's Counsel: Steven L. Diller, Esq.
124 E Main St
Van Wert, OH 45891
Tel: (419) 238-5025
Email: dillerlaw@roadrunner.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
11 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ohnb09-38301.pdf
The petition was signed by Kenneth Raymond Miller Sr.,
owner/manager of the Company.
TECHNIPOWER SYSTEMS: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Technipower Systems, Inc.
fka Solomon Technologies, Inc.
14 Commerce Drive
Danbury, CT 06810
Bankruptcy Case No.: 09-52444
Chapter 11 Petition Date: December 2, 2009
Court: United States Bankruptcy Court
District of Connecticut (Bridgeport)
Debtor's Counsel: James Berman, Esq.
Zeisler and Zeisler
558 Clinton Avenue
P.O. Box 3186
Bridgeport, CT 06605
Tel: (203) 368-4234
Email: jberman@zeislaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ctb09-52444.pdf
The petition was signed by Peter W. DeVecchis Jr., president of
the Company.
TEXAS CLASSIC: U.S. Trustee Sets Meeting of Creditors for Dec. 10
-----------------------------------------------------------------
The U.S. Trustee for Region 7 will convene a meeting of creditors
in Texas Classic Homes, LP's Chapter 11 case on December 10, 2009,
at 10:00 a.m. The meeting will be held at Suite 3401, 515 Rusk
Ave, Houston, Texas.
This is the first meeting of creditors required under Section
341(a) of the 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.
Richmond, Texas-based Texas Classic Homes, LP, filed for Chapter
11 on November 3, 2009 (Bankr. S.D. Tex. Case No. 09-38472). Jack
Nicholas Fuerst, Esq., represents the Debtor in its restructuring
effort. According to the schedules, the Company has assets of
$10,293,577, and total debts of $6,608,751.
TRIBUNE CO: Names Michaels to Replace Zell as Chief Executive
-------------------------------------------------------------
Tribune Company on Wednesday said its board of directors has named
Randy Michaels Chief Executive Officer; Michaels has also been
elected to the board. Sam Zell remains Tribune's Chairman and
will continue to provide the management team with strategic
oversight and vision.
Mr. Zell recommended the leadership transition to the board,
saying, "This appointment reflects Randy's increasing
responsibilities. During the last two years, we've made
substantial progress transforming Tribune from a collection of
newspapers and television stations to a fast-paced, innovative
media company that is using its scale and brands to compete more
effectively than ever before."
"At this point in Tribune's evolution, no one is better suited to
lead the company forward. Randy has a unique combination of real-
time creativity, expertise and passion, and I completely trust his
judgment and his leadership."
Mr. Michaels was appointed Chief Operating Officer in May, 2008,
and has been part of the company's senior executive team since
Tribune's going-private transaction in December 2007. Prior to
becoming COO, Mr. Michaels served as executive vice president and
chief executive officer of Tribune's interactive and broadcast
divisions.
"I am grateful to Sam and the members of the board for this vote
of confidence and the opportunity," said Mr. Michaels. "I look
forward to continuing to work closely with Sam and the rest of the
board -- this is a great company with a great future."
"There is a lot of work yet to do," he continued, "but we have
tremendously talented people and world-class brands in print, on
air and online. Our businesses are profitable and we're gaining
market-share and momentum in a tough environment. The entire
management team is focused on the long-term and keeping Tribune at
the cutting-edge of creativity and innovation, which will
translate into success on the bottom-line."
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austion LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Fee Examiner OKs $3.88MM for Dec.-Feb. Sidley Work
--------------------------------------------------------------
Stuart Maue, in its capacity as fee examiner in Tribune Co.'s
cases, recommends approval of fees and reimbursement of expenses
as to these professionals:
Recommended Recommended
Professional Period Fees Expenses
------------ ------ ----------- -----------
Cole, Schotz, Meisel, 12/08/08-
Forman & Leonard, P.A. 02/28/09 $318,188 $23,845
Sidley Austin LLP 12/08/09-
02/28/09 3,886,289 158,441
Lazard Freres & Co. 12/08/08-
LLC 02/28/09 554,839 10,030
PricewaterhouseCoopers 12/08/08-
LLP 02/28/09 774,477 14,260
Stuart Maue recommends a reduction to Sidley Austin's fees by
$10,753 and expenses by $6,919.
Cole Schotz's recommended fees reflect a reduction by $591. Cole
Schotz's recommended expenses have been reduced by $1,656.
Stuart Maue recommends a reduction by $2,007 to Lazard Freres'
expenses.
PwC's recommended fees reflect a reduction by $1,601 and its
recommended expenses have been reduced by $1,229.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austion LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Longacre, ASM Capital Buy Claims
--------------------------------------------
Creditors, from November 18 to November 27, 2009, notified the
Court that they intend to transfer each of their claims against
the Debtors:
Claim
Transferor Transferee Amount
---------- ---------- ------
Imperial Rubber Products Inc. ASM Capital, L.P. $2,684
Imperial Rubber Products Inc. ASM Capital, L.P. 1,219
Panther Express Claims Recovery Group LLC 2,830
Wanted Technologies, Inc. Longacre Opportunity
Fund, L.P. 43,500
Jones Lang Lasalle Americas, Longacre Opportunity
Inc. Fund, L.P. 230,919
Jones Lang Lasalle Americas, Longacre Opportunity
Inc. Fund, L.P. 255,199
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austion LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIUMPH HEALTHCARE: S&P Withdraws 'BB' Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it has withdrawn its
ratings on Triumph HealthCare Holdings Inc. The company was
acquired by RehabCare Group Inc. (BB-/Stable/--) in a transaction
completed on Nov. 18, 2009. Triumph's rated bank facilities have
been repaid.
Ratings List
Triumph HealthCare Holdings Inc.
Ratings Withdrawn To From
----------------- -- ----
Corporate credit rating NR BB/Stable/--
Triumph HealthCare Second Holdings LLC
Ratings Withdrawn To From
----------------- -- ----
First-lien senior secured NR B+
Second-lien senior secured NR CCC+
First-lien recovery NR 2
Second-lien recovery NR 6
UAL CORP: Adversary Proceedings vs. UMB, et al., Cases
------------------------------------------------------
Judge Wedoff signed on November 10, 2009, orders dismissing these
adversary proceedings:
(i) adversary proceeding no. 06-00698 initiated by the City of
Los Angeles against United Air Lines, Inc., and UMB Bank;
(ii) adversary proceeding no. 05-01884 initiated by United
against U.S. Bank National Association; and
(iii) adversary proceeding no. 03-00977 initiated by United
against RAIC, the City and UMB Bank.
The Adversary Proceedings were formally closed from November 12,
to November 13, 2009.
As previously reported, the Court approved a settlement agreement
among United Air Lines, city of Los Angeles, acting by and
through the Board of Airport Commissioners of its Department of
Airports, UMB Bank, N.A., as successor trustee for a $25,000,000
in remaining principal outstanding Adjustable-Rate Facilities
Lease Refunding Revenue Bonds, issue of 1984 and $34,390,000 in
remaining principal outstanding 6.785% Facilities Lease Refunding
Revenue Bonds, issue of 1992, and Regional Airports Improvement
Corporation.
About UAL Corp.
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) --
http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest air
carrier. The airline flies to Brazil, Korea and Germany.
The Company filed for Chapter 11 protection on December 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven
R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in
their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. Judge Eugene
R. Wedoff confirmed the Debtors' Second Amended Plan on
January 20, 2006. The Company emerged from bankruptcy protection
on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
UAL and United both carry a 'CCC' issuer default rating from Fitch
Ratings. UAL carries a 'B-'' on 'watch negative', corporate
credit rating from Standard & Poor's Ratings Services.
UAL CORP: Court Denies EEOC's Motion for Leave to File Late Claim
-----------------------------------------------------------------
In a memorandum of law and conclusions of fact dated November 24,
2009, Judge Wedoff found that Equal Employment Opportunity
Commission has failed to offer any compelling reason or cogent
reason for failing to timely amend its claims. The EEOC
contended that an amendment was unnecessary over the last three
years because the claims have not substantively changed since
they were filed. However, Judge Wedoff averred that this
contention is unsupportable in light of the representations the
EEOC made in its response to United Air Lines, Inc.'s Twenty-
third Claims Objection. If the EEOC believed that the two
administrative claims filed by Maria Lovell and Shelly Kia sought
class-wide relief, it could not have stated that the claims were
brought solely on behalf of two individuals or, that the amount
of the claims was statutorily capped at $300,000 each rather than
an uncapped amount of over $55 million, Judge Wedoff pointed out.
Even if the EEOC mistakenly believed it had filed class claims,
the unreasonableness of this belief and the EEOC's apparent
carelessness weigh against excusing its mistake, Judge Wedoff
said.
Judge Wedoff further noted that allowing a creditor to
drastically increase the amount of its claims after confirmation,
without a cogent reason, is an unacceptable treatment of the
other parties in the bankruptcy case. Although the EEOC
correctly notes that there is no bright-line rule for determining
how much delay is too much, it offers no authority excusing its
failure to act for nearly three years, Judge Wedoff explained.
Given that the claims bar date was long ago, United's plan
already consummated, and a final decree closing the Debtors'
Chapter 11 cases will soon be entered, it is apparent that the
EEOC has waited too long to seek to amend its claims, Judge
Wedoff concluded.
Accordingly, Judge Wedoff denied the EEOC's Motion for Leave.
About UAL Corp.
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) --
http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest air
carrier. The airline flies to Brazil, Korea and Germany.
The Company filed for Chapter 11 protection on December 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven
R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in
their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. Judge Eugene
R. Wedoff confirmed the Debtors' Second Amended Plan on
January 20, 2006. The Company emerged from bankruptcy protection
on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
UAL and United both carry a 'CCC' issuer default rating from Fitch
Ratings. UAL carries a 'B-'' on 'watch negative', corporate
credit rating from Standard & Poor's Ratings Services.
UAL CORP: Resolves GSA Objection to Final Decree Closing Cases
--------------------------------------------------------------
UAL Corp. and its reorganized debtor affiliates and the United
States Government, on behalf of the General Services
Administration, have agreed to resolve the GSA's objection to the
UAL's request for entry of a final decree closing their Chapter 11
cases.
In an agreed order, Judge Eugene R. Wedoff of the United States
Bankruptcy Court for the Northern District of Illinois directed
the Clerk of Court to open a new adversary proceeding.
All pleadings and documents filed in connection with the
contested matter arising from the Debtors' Objection to the
Claims of the GSA, Transportation Services Administration, and
Bureau of Customs and Border Protection as it applies to the
GSA's Claim No. 44651 will be filed in the docket of the newly
created adversary proceeding, and copies of all previously-filed
pleadings related to the Contested Matter, including Claim No.
44651. The Contested Matter will continue to be treated as a
contested matter rather than an adversary proceeding, including
that Rules 3007, 9013 and 9014 of the Federal Rules of Bankruptcy
Procedure will continue to apply to the Contested Matter, Judge
Wedoff said.
No earlier than one day after expiration of the time for filing a
notice of appeal of any judgment on the EEOC's Motion for Leave
pursuant to Rule 8002 of the Federal Rules of Bankruptcy
Procedure, the Court may enter a final order closing the Debtors'
Chapter 11 cases, Judge Wedoff ruled.
* * *
Pursuant to a notice dated November 25, 2009, a draft order with
respect to the Debtors' Motion to Close its Chapter 11 Cases is
due December 9, 2009.
About UAL Corp.
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) --
http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest air
carrier. The airline flies to Brazil, Korea and Germany.
The Company filed for Chapter 11 protection on December 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven
R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in
their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. Judge Eugene
R. Wedoff confirmed the Debtors' Second Amended Plan on
January 20, 2006. The Company emerged from bankruptcy protection
on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
UAL and United both carry a 'CCC' issuer default rating from Fitch
Ratings. UAL carries a 'B-'' on 'watch negative', corporate
credit rating from Standard & Poor's Ratings Services.
UNITED RENTALS: Asks 4th Circ. to Nix Transfer Ruling
-----------------------------------------------------
United Rentals Inc. asked a U.S. Court of Appeals for the Fourth
Circuit panel on Wednesday to settle a dispute with a Chapter 7
trustee for a contracting company over allegedly preferential
payments United received for construction supplies, Law360
reports.
VENTANA HILLS: Can Hire Robbins Salomon as Bankruptcy Counsel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
authorized Ventana Hills Associates Ltd. and Ventana Hills Phase
II, L.P., to employ Robbins, Salomon & Patt, Ltd., as counsel.
RSP is expected to, among other things:
-- advise the Debtor with respect to its powers and duties as
debtor-in-possession in the continued management and
operation of its business and properties;
-- meet and negotiate with representatives of creditors and
other parties-in-interest; and
-- advise and consult on the conduct of the case, including all
of the legal and administrative requirements of operating in
a Chapter 11.
Richard H. Fimoff, a partner at RSP, told the Court that as of
November 3, 2009, the Debtor did not owe RSP any outstanding fees
or expenses. RSP received $99,000 to be used to satisfy the
payment of RSP fees and expenses.
The hourly rates of RSP personnel are:
Partners $300 - $450
Associates $140 - $270
Paralegals/Research Clerks $105 - $155
Mr. Fimoff assured the Court that RSP is a "disinterested person"
as that term is defined in Section 101(14) of the Bankruptcy Code.
Mr. Fimoff can be reached at:
Robbins, Salomon & Patt, Ltd.
25 E. Washington Street, Suite 1000
Chicago, Illinois 60601
Tel: (312) 782-9000
Fax: (312) 782-6690
Ventana Hills Associates, Ltd., is the owner and operator of a
residential apartment project located in Pittsburgh, Pennsylvania,
known as "Ventana Hills Apartments. Ventana Hills Apartments was
constructed in 2002 as a rental apartment community, in two
phases, and was purchased by the Debtor in 2004 for $50,000.
Ventana Hills Associates and affiliate Ventana Hills Phase II,
L.P., filed for Chapter 11 on November 3, 2009 (Bankr. N.D. Ill.
Case No. 09-41755). The Debtors each estimated assets of and
debts of $50,000,001 to $100,000,000 in their respective
petitions. Richard H. Fimoff, Esq., at Robbins, Salomon & Patt
Ltd., in Chicago, Illinois, represent the Debtor.
VERENIUM CORP: CVI Has Not Accepted 2008 Notes Amendment
--------------------------------------------------------
Verenium Corporation said in a regulatory filing in November that
Capital Ventures International -- which holds roughly $3.2 million
in aggregate principal amount of 8% Senior Convertible Notes due
April 1, 2012 -- has not signed an amendment agreement as of
November 9, 2009.
On July 1, 2009, the Company entered into amendment agreements
with required holders of its 2008 Notes to modify certain terms of
all of the 2008 Notes. The amendments became effective on July 6,
2009. Pursuant to their original terms, the 2008 Notes may be
amended and restated with the written consent of the holders
representing at least 66.67% of the 2008 Notes outstanding. As of
July 1, 2009, there was roughly $29.5 million aggregate principal
amount of the 2008 Notes outstanding. The Company entered into
the amendment agreements with holders of roughly $25.6 million, or
86.8%, of the 2008 Notes.
According to the Company's Form 10-Q filing for the quarterly
period ended September 30, 2009, filed with the Securities and
Exchange Commission early November, the Company said on April 30,
2009, Capital Ventures filed a lawsuit against the Company in the
United States District Court for the Southern District of New York
alleging that the Company breached the terms of the 2008 Notes by
processing certain conversion notices submitted to the Company by
CVI at $2.13 per share (now $25.56 per share on a reverse split-
adjusted basis) and, with the recent amendment of the 2008 Notes,
$1.74 per share (now $20.88 on a reverse-split adjusted basis)
rather than $1.47 per share (now $17.64 per share on a reverse-
split adjusted basis) asserting that CVI is entitled to additional
shares based on the applicable conversions, as well as damages,
and requesting a declaratory judgment that $1.47 per share (now
$17.64 per share on a reverse-split adjusted basis) is the
conversion price for the 2008 Notes.
On June 3, 2009, CVI amended its complaint to also request a
declaratory judgment that the Company cannot amend the 2008 Notes,
pursuant to their terms, without the consent of each affected
noteholder, including CVI. The Company filed its answer to CVI's
amended complaint on June 30, 2009, denying all material
allegations of the complaint, as amended. An initial pre-trial
conference was held on August 11, 2009, and the case is presently
in the discovery phase.
On October 6, 2009, in response to the Company's exchange of
approximately $30.5 million of 2007 Notes and the granting of
security interest in certain assets of the Company to exchanging
holders and holders of the 2008 Notes, CVI filed a Motion to Amend
First Amended Complaint. CVI's proposed amended pleading alleges
that the Company further breached the Note by both amending the
terms of the Notes without CVI's express consent and then
undertaking various transactions authorized by the amendment. The
amended pleading also alleges that the conversion rate has once
again inappropriately been changed as a result of the
transactions. The Company opposed the Motion on October 21, 2009,
on the ground of futility, arguing that the amendment was proper
under the plain language of the Notes. A status conference was
held on November 5, 2009, and the Motion remains pending.
Between February 27, 2009 through November 9, 2009, CVI has
converted approximately $11.25 million in face value, and the
Company has issued approximately 11.3 million shares, or 900,000
on a reverse-split adjusted basis, to settle these conversions and
related "make-whole" obligations at $25.56 or, following the
recent amendment of the 2008 Notes, $20.88 per share. Assuming a
conversion price of $17.64, 1.7 million additional shares, or
200,000 on a reverse-split adjusted basis, would be issuable in
connection with these conversions. If the Company were to be
found to have not satisfied its obligations under the 2008 Notes,
because the Company processed the applicable conversion notices at
the wrong conversion price, the Company could, among other
negative consequences, be required to redeem the 2008 Notes in
whole or in part. The Company does not believe that this lawsuit
will have a material impact on its financial statements. The
Company believes any contingent liabilities related to these
claims are not probable or estimable and therefore no amounts have
been accrued for these matters.
Verenium disclosed in a separate filing in November its offer to
certain option holders expired on November 12. Verenium offered
to exchange certain outstanding options to purchase shares of the
Company's common stock that have an exercise price that is greater
than $5.01 per share for new replacement options to purchase the
same or a reduced number of shares of Verenium's common stock at a
fixed exercise price per share that is equal to the fair market
value of Verenium's common stock on the date the replacement
options are granted.
Pursuant to the Offer, Verenium accepted elections to replace
options to purchase 615,047 shares of common stock. As a result,
options to purchase 474,415 shares of common stock were granted
pursuant to and as set forth in an Offer to Exchange Certain
Outstanding Options to Purchase Common Stock for New Replacement
Options.
In May 2009, the Company's Board of Directors authorized a stock
option exchange program to allow eligible employees the
opportunity to exchange certain options granted under the
Company's equity incentive plans. The Company's shareholders
approved the stock option exchange program at the 2009 Annual
Meeting of Shareholders on September 1, 2009.
On October 13, 2009, the Company issued a Tender Offer to all
holders of eligible options. Pursuant to the Tender Offer,
options to purchase common stock that have an exercise price
greater than $5.01 per share are eligible for replacement options
with lower exercise prices. Fifty percent of all exchanged
options will be subject to two additional years added to the
existing vesting terms. The Tender Offer was expected to expire
November 12, at which time, the exchange will be accounted for as
a modification to the existing options in accordance with
authoritative guidance, according to the Company's Form 10-Q.
In its Form 10-Q, the Company said the incremental value to the
option holders created as a result of the modification will be
recognized as additional compensation expense. The Company had
said, assuming all eligible options are exchanged, this amount is
estimated to be approximately $1.8 million and will be recognized
over the modified vesting period.
Going Concern/Bankruptcy Warning
The Company has incurred a net loss of $18.9 million for the nine
months ended September 30, 2009, and has an accumulated deficit of
$632.5 million as of September 30, 2009.
Based on the Company's current operating plan, which includes
payments to be received by the Company or its consolidated
entities from BP relating to the first and second phases of the
strategic partnership, as well as proceeds from the Company's
recent equity financing, the Company says its existing working
capital may not be sufficient to meet the cash requirements to
fund the Company's planned operating expenses, capital
expenditures, required and potential payments under the 2007
Notes, the 2008 Notes, and the 2009 Notes, and working capital
requirements through 2010 without additional sources of cash
and/or the deferral, reduction or elimination of significant
planned expenditures. These factors raise substantial doubt about
the Company's ability to continue as a going concern.
The Company adds that while it believes that it will be successful
in raising or generating additional cash through a combination of
corporate partnerships and collaborations, federal, state and
local grant funding, selling or financing assets, incremental
product sales and the additional sale of equity or debt
securities, if it is unsuccessful in raising additional capital
from any of these sources, it may need to defer, reduce or
eliminate certain planned expenditures, restructure or
significantly curtail its operations, file for bankruptcy or cease
operations.
About Verenium
Based in Cambridge, Mass., Verenium Corporation (NASDAQ: VRNM)
-- http://www.verenium.com/-- is a leader in the development and
commercialization of cellulosic ethanol, an environmentally-
friendly and renewable transportation fuel, as well as high-
performance specialty enzymes for applications within the
biofuels, industrial, and animal health markets.
As of September 30, 2009, Verenium Corporation had $161.5 million
in total assets, $143.4 million in total liabilities, and
$18.1 million in total shareholders' equity.
VERIFIED IDENTITY: Files to Chapter 11 to Sell to Unnamed Buyer
---------------------------------------------------------------
Jay Boehmer at BTNonline says Verified Identity Pass filed for
Chapter 11 bankruptcy as it seeks to close sale to an undisclosed
prospective buyer, saying the filing offers the company the best
option for a sale.
Necessary paper for the sale will be filed within seven days, Mr.
Boehmer says.
Mr. Boehmer, citing papers filed with the court, says the company
is in talks with WidePoint Corp., Henry Inc. and L-1 Identity
Solutions. Henry and L-1 presented a deal to eliminate or
restructure contingencies to closing and ensure the protection of
the customer data in connection with a sale, he notes.
Mr. Boehmer relates the company said it has a book value of
between $7 million and $10 million.
Verified Identity Pass operates Clear Registered Traveler program
at 18 of the 21 airports in the United States.
WORLDSPACE INC: Sirius XM Plans to Become Partner
-------------------------------------------------
Reuters says Sirius XM said that it may partner with WorldSpace
Inc., which is partially controlled by Liberty Media. A Sirius XM
officer said that the deal would involve using its relationships
to the struggling company build satellite radio equipment and
connection with automakers, reports says.
WorldSpace, Inc. (WRSPQ.PK) -- http://www.1worldspace.com/--
provides satellite-based radio and data broadcasting services to
paying subscribers in 10 countries throughout Europe, India, the
Middle East, and Africa. 1worldspace(TM) satellites cover two-
thirds of the earth and enable the Company to offer a wide range
of services for enterprises and governments globally, including
distance learning, alert delivery, data delivery, and disaster
readiness and response systems. 1worldspace(TM) is a pioneer of
satellite-based digital radio services.
The Debtors and their affiliates operate two geostationary
satellites, AfriStar and Asia Star, which are in orbit over Africa
and Asia. The Debtor and two of its affiliates filed for Chapter
11 bankruptcy protection on October 17, 2008 (Bankr. D. Del., Case
No. 08-12412 - 08-12414). James E. O'Neill, Esq., Laura Davis
Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl
& Jones, LLP, represent the Debtors as counsel. Neil Raymond
Lapinski, Esq., and Rafael Xavier Zahralddin-Aravena, Esq., at
Elliot Greenleaf, represent the Official Committee of Unsecured
Creditors. When the Debtors filed for bankruptcy, they listed
total assets of $307,382,000 and total debts of $2,122,904,000.
* Bair Pitches Strict Rules, New Rewards for Asset-Backed Market
----------------------------------------------------------------
Dawn Kopecki at Bloomberg News reports that U.S. Federal Deposit
Insurance Corp. Chairman Sheila Bair said the market for bonds
backed by consumer debt won't wean itself from government
assistance until banks embrace stiffer guidelines for issuing the
securities.
"Nobody has any confidence in the securities," Ms. Bair said in an
interview December 3 at Bloomberg's Washington office, calling for
more effort by the industry to stabilize the market. "If they
just want to keep things the way they were and resist change, it
doesn't work any more."
According to Bloomberg, the market for bonds backed by car loans
and credit-card payments had been relying on a Federal Reserve
funding program for the bulk of investor interest since March
after the main measure of risk widened to records in 2008.
The FDIC plans to vote Dec. 15 on new voluntary restrictions for
such bonds as a way to reassure private investors that the market
is safe.
* Gov't to Outline Plan to End TARP in the Coming Weeks
-------------------------------------------------------
Dow Jones Newswires' Michael R. Crittenden and Sarah N. Lynch
report Department of the Treasury Secretary Timothy Geithner told
a U.S. Senate panel Wednesday the administration will outline its
plan to end the government's $700 billion Troubled Asset Relief
Program in the next few weeks. Dow Jones says that, however,
doesn't mean the program will expire as scheduled by year end.
"We are close to the point where we can wind down this program and
stop making new commitments," Mr. Geithner said, according to Dow
Jones.
Dow Jones notes Treasury officials have come under increasing
pressure to share their plans for the TARP, which was passed at
the height of the financial crisis last year and which is set to
expire at the end of the year. The Journal says the Treasury can
extend the program into 2010 if it deems it necessary, though many
on Capitol Hill have balked at prolonging a program that has come
to symbolize Washington's bailout of Wall Street at the expense of
taxpayers.
The Journal notes Mr. Geithner warned that officials are wary of
ending the government backstop too early. Officials don't want to
prematurely take steps that would restrict the flow of credit and
exacerbate current economic difficulties, he said, according to
the Journal.
* Fitch Says Economic Pressure Supports Healthcare's Neg. Outlook
-----------------------------------------------------------------
Fitch Ratings' 2010 outlook for the U.S. healthcare sector remains
negative. Persistently high unemployment with its impact on
health insurance coverage along with consumer's lessened ability
to manage out-of-pocket costs of co-payments and co-insurance will
continue to hamper prospects for the industry, in general, in
2010. Growing event risk surrounding U.S. healthcare reform and
that impact on health insurance coverage, reimbursement and the
corresponding change in the competitive landscape all create
uncertainty regarding long-term financial results for the sector.
While there have been some signs of improvement in the economy,
high unemployment is expected to continue well into 2010. This is
particularly troublesome due to its ongoing impact on insurance
coverage and people's ability to manage out-of-pocket expenses for
healthcare. Therefore, people will continue to focus on reducing
healthcare expenses and delaying non-essential care. While this
focus will pressure top-line growth, EBITDA is expected to remain
stable due to on-going cost containment and continued operational
restructuring of companies. Additionally, flexibility in capital
expenditure along with stable EBITDA should result in sustained
levels of free cash flow in 2010. Fitch expects many industry
participants to continue to be aggressive in returning capital to
equity shareholders through dividends and share buybacks.
Congress continues to work on crafting healthcare reform
legislation. While a bill has been approved in the House of
Representatives, the Senate has not voted on its own version.
Consequently, it is unclear what the ultimate impact will be for
the industry from this initiative. However, key issues
surrounding the reform relate to coverage, reimbursement and
changes in the industry competitive environment. In relation to
insurance coverage, if the reform achieves its goal of increased
insurance coverage, this will be a positive for the industry.
Fitch believes that in part, to pay for the insurance coverage
expansion, industry participants will see declining profitability
margins as a result of reimbursement declines.
Reimbursement pressure could come from Medicare reductions,
another public payer or other restrictions associated with the
reform. Key to overall profitability will be whether the coverage
expansion offsets margin erosion in a timely manner to maintain
profit levels. Finally, the most difficult part of reform to
evaluate will be its effect on the competitive environment of the
industry. New restrictions could permanently change prospects for
certain areas of the industry and result in changes in business
strategies. These strategy changes could lead to increases in
merger and acquisition activity in an attempt to improve prospects
through broadening product or service portfolios and increasing
efficiency with scale. With the potential for increased
acquisition and merger activity comes the expectation for
increased debt issuance that could lead to higher leverage at
least in the near term.
The U.S. healthcare industry continues to maintain strong
liquidity. U.S. healthcare companies with Fitch credit ratings
generated last 12 months free cash flow, as of third-quarter 2009,
of approximately $46 billion and maintained balance sheet cash of
approximately $86 billion. However, it is important to note that
Fitch estimates that approximately two-thirds of this cash balance
is outside of the U.S. and would be subject to repatriation.
Nevertheless, this internal liquidity compares to a Fitch
estimated 2010 maturity schedule of approximately $6 billion.
Revolving credit capacity for the industry also remains strong
with an average availability of approximately 93% or $52 billion.
Pharmaceutical Manufacturers:
Fitch sees a negative outlook for the U.S. pharmaceutical industry
in 2010 as drug developers contend with healthcare reform, the
lingering effects of the current macroeconomic environment, the
start of an unprecedented series of significant drug patent
lapses, and the challenging regulatory climate.
Managed-care focus on favoring generic pharmaceuticals to control
drug spending will be accelerated in 2010, when the industry
begins facing a period of record patent challenges. Key drug
patent losses for U.S. drug developers during the year are
Pfizer's anti-depressant Effexor-XR, Merck's anti-hypertensives
Cozaar and Hyzaar, and Eli Lilly's oncologic Gemzar. Following a
year of major consolidation to fill research and development and
product portfolio gaps, Fitch expects business development
activities to be directed to bolstering R&D programs in 2010.
Fitch expects sales growth in the low single digits, and
manageable margin pressure for brand name pharmaceutical
manufacturers. Continued operating costs reductions serves as
margin support as the industry confronts prospects of lower top-
line growth from potential government reimbursement changes and
near-term patent challenges. Incremental margin support is
attained from merger and acquisition synergies.
In general, cash flows generated by drug developers are expected
to cover capital commitments in 2010. Fitch estimates some cash
flow to be directed to debt reduction for those drug manufacturers
involved with recent industry consolidation. The pharmaceutical
industry will continue to use significant operating cash flow for
shareholder-friendly purposes, specifically sustaining or raising
dividends and actively purchasing common shares.
Medical Devices:
Fitch's 2010 outlook for the medical device sector is stable.
Moderate revenue growth and relatively stable margins should
generate sufficient cash to fund operations, share repurchases and
targeted acquisitions. Selected debt refinancing is expected to
be met with ample liquidity and adequate access to the credit
markets. Despite the relative stability within the sector, Fitch
recognizes that 2010 potentially poses meaningful operational,
legislative, regulatory and business cycle risks.
Fitch expects the drug-eluting stent market will remain relatively
flat in terms of revenues, with single-digit volume growth offset
by price declines. Pricing will likely be negatively affected by
moderation in new product introductions and hospitals becoming
more aggressive in their negotiating posture. While Fitch expects
the industry to closely manage costs, some margin pressure is
possible. Within the DES segment, Fitch expects market share
volatility will persist to the extent that new products are
launched into the marketplace. Fitch expects that Abbott Lab's
Xience DES platform and Boston Scientific's Promus DES platform
will continue to gain incremental market share in the U.S., Europe
and Japan.
The cardiac rhythm management market is expected to generate low-
to mid-single-digit revenue growth, with volume increases somewhat
offset by price declines. Fitch expects this environment will
improve if the Food and Drug Administration expands the use of
this technology to patients with less severe forms of heart
failure, which were studied in the MADIT-CRT clinical trial.
Nevertheless, CRM adoption by physicians would likely increase in
a steady, incremental fashion, as opposed to a step-change
function. While BSX conducted the trial with its devices and
would likely be the first to benefit, Fitch believes Medtronic and
St. Jude Medical will also benefit over time.
Fitch expects the majority of acquisitions in the sector will be
targeted, relative to individual firms' size and breadth. In
addition, share repurchases are likely to be funded primarily
through cash flow. As such, Fitch expects any incremental
transaction-related debt to be manageable for the industry's
credit profile.
For-Profit Hospital Operators:
Fitch has a negative outlook for the for-profit hospital sector in
2010. Fitch expects many of the 2009 favorable trends --
including improved margins, decreased leverage, and strengthened
free cash flow -- to reverse in 2010 as providers face
reimbursement pressure and limited opportunities to enact
additional cost controls. Fitch believes a return to an
inflationary environment for labor, supplies and other key
operating expenses is inevitable and will reverse some of the
profitability gains enjoyed by the sector in 2009. In addition,
bad debt expense is expected to remain high through most of 2010,
further pressuring margins. Reimbursement is also likely to be
pressured, with declines in Medicaid and a moderation in Medicare
growth, although managed care rates should remain robust.
Overall, Fitch projects a net deterioration in margins, free cash
flow, and leverage across the sector in 2010. However, Fitch
believes positive rating actions are still possible, particularly
for those companies that use excess cash flow generated in 2009 to
reduce debt and maintain stable credit metrics in 2010.
The year 2010 will also be an active one for mergers and
acquisitions within the industry, in Fitch's opinion. Fitch
believes there is a plenitude of acquisition targets in the market
as a result of the recession and that valuation levels have become
easier to determine, which, along with the record free cash flow
generated in 2009, should lead to an uptick in consolidation
within the industry. Fitch believes any of the for-profit
hospitals it rates could be active acquirers in 2010, although
LifePoint, Universal Health Services, and Community Health Systems
should be the most active.
Fitch currently rates the U.S. healthcare sector:
-- Abbott Laboratories ('A+'; Stable Outlook)
-- Allergan, Inc. ('A-'; Stable Outlook)
-- AmerisourceBergen Corp. ('BBB'; Stable Outlook)
-- Amgen, Inc. ('A', Stable Outlook)
-- Baxter International Inc. ('A'; Stable Outlook)
-- Beckman Coulter, Inc. ('BBB'; Stable Outlook)
-- Boston Scientific Corporation ('BB+' ; Positive Outlook)
-- Bristol-Myers Squibb Company ('A+' ; Stable Outlook)
-- Cardinal Health, Inc. ('BBB'; Stable Outlook)
-- CareFusion Corporation ('BBB'; Stable Outlook)
-- Community Health Systems, Inc. ('B'; Stable Outlook)
-- Covidien Ltd. ('A'; Stable Outlook)
-- DaVita, Inc. ('BB-'; Stable Outlook)
-- Eli Lilly & Co. ('A+' ; Negative Outlook)
-- Express Scripts, Inc. ('BBB'; Stable Outlook)
-- HCA, Inc. ('B', Stable Outlook)
-- Health Management Associates ('B+' ; Stable Outlook)
-- Johnson & Johnson ('AAA'; Stable Outlook)
-- Life Technologies Corporation ('BBB-'; Stable Outlook)
-- LifePoint Hospitals Inc. ('BB-'; Stable Outlook)
-- McKesson Corp. ('BBB+' ; Stable Outlook)
-- Medco Health Solutions Inc. ('BBB'; Stable Outlook)
-- Merck & Co. ('A+', Stable Outlook)
-- Owens & Minor Inc. ('BBB-'; Stable Outlook)
-- Pfizer Inc. ('AA-', Stable Outlook)
-- Quest Diagnostics Inc. ('BBB+'; Stable Outlook)
-- Royalty Pharma Finance Trust ('BBB'; Stable Outlook)
-- St. Jude Medical, Inc. ('A'; Stable Outlook)
-- Tenet Healthcare Corp. ('B-'; Stable Outlook)
-- Thermo Fisher Scientific Inc. ('A-'; Stable Outlook)
-- Universal Health Services ('BBB'; Stable Outlook)
-- Watson Pharmaceuticals Inc. ('BBB-'; Stable Outlook)
* Loan Deterioration Ratio Climbs Above 3:1, Report Shows
---------------------------------------------------------
The November Mortgage Monitor report, released by Lender
Processing Services, Inc., reveals a nationwide loan deterioration
ratio higher than 3:1 -- indicating that for every one loan
improved, three more loans are deteriorating. Published by LPS, a
leading provider of mortgage performance data and analytics, the
November 2009 Mortgage Monitor report is an in-depth summary of
mortgage industry performance indicators based on data collected
as of October 31, 2009.
Of home loans that were current as of December 2008, more than
two million, or 4.02 percent, were delinquent or in foreclosure by
the end of October 2009. High rates of deterioration were
particularly evident in the Northeast and Northwest. Thirty-one
states now have non-current loan rates (delinquency plus
foreclosure rates) ranging from 10 percent in Missouri to as high
as 22.7 percent in Florida.
Foreclosure sales jumped in October, with the rate at 5.6 percent
of foreclosures in inventory. The number of foreclosures on the
market continues to stall as foreclosure timelines extend. Nearly
30 percent of properties that have been in foreclosure for 12
months have not yet been put on the market for sale -- twice the
level of the prior year. Foreclosure inventories continued to
climb to record levels. October's foreclosure rate stood at 3.14
percent, a month-over-month increase of 0.7 percent and a
year-over-year increase of 85.1 percent.
Total delinquencies, already at record highs, edged up 0.85
percent in October over September's figures and were 32 percent
higher than the same period last year. Loans rolling to a more
delinquent status remain elevated, but totals are below the Nov.
2008 peak. Roll rates into foreclosure remain low as a result of
loss mitigation efforts and elevated delinquent loan volumes.
Other key results from LPS' October Mortgage Monitor include:
Total U.S. loan delinquency rate: 9.4 percent
Total U.S. foreclosure inventory rate: 3.1 percent
Total U.S. non-current* loan rate: 12.6 percent
States with most non-current* loans: Florida, Nevada,
Mississippi, Arizona,
Georgia, California,
Michigan, Indiana, Ohio
and Illinois
States with fewest non-current* loans: North Dakota, South
Dakota, Alaska,
Wyoming,
Montana, Nebraska,
Vermont, Colorado,
Oregon and Washington
*Non-current totals combine foreclosures and delinquencies as a
percent of active loans in that state.
** Totals based on LPS Applied Analytics' loan-level database of
mortgage assets.
LPS manages the nation's leading repository of loan-level
residential mortgage data and performance information from
approximately 40 million loans across the spectrum of credit
products. The company's research experts carefully analyze this
data to produce dozens of charts and graphs that reflect trend and
point-in-time observations for LPS' monthly Mortgage Monitor
Report.
To review the full report, listen to a presentation of the report
or access an executive summary, visit:
http://www.lpsvcs.com/NEWSROOM/INDUSTRYDATA/Pages/default.aspx.
About Lender Processing Services
Lender Processing Services, Inc. -- http://ww.lpsvcs.com--
provides integrated technology and services to the mortgage and
real estate industries. LPS offers solutions that span the
mortgage continuum, including lead generation, origination,
servicing, workflow automation (Desktop), portfolio retention and
default. LPS also offers proprietary mortgage and real estate
data and analytics for the mortgage and capital markets
industries.
* Sterne Kessler Directors Selected as 'Washington's Top Lawyers'
-----------------------------------------------------------------
Sterne, Kessler, Goldstein & Fox P.L.L.C., disclosed that Dr.
Jorge A. Goldstein and Robert Greene Sterne, both founding
directors of the firm, have been selected for inclusion in the
Washingtonian's 'Washington's Top Lawyers' list published in the
December 2009 issue of the magazine.
Dr. Goldstein and Mr. Sterne were both recognized for their
contributions to intellectual property law and referred to as
"some of Washington's best legal minds." Mr. Sterne and Dr.
Goldstein were listed under the 'That's my idea" category, which
is reserved for patent, trademark, and copyright attorneys. Only
37 attorneys included on this year's list were recognized as a
'Top Lawyer' in intellectual property, out of 800 total recognized
attorneys.
The list is broken into 29 categories spanning environmental law
to bankruptcy practice. Of an estimated 80,000 lawyers practicing
in the District of Columbia, the Washingtonian's 'Washington's Top
Lawyers' list includes only the top 1% or 800 total lawyers. The
list is published every other year.
Sterne, Kessler, Goldstein & Fox P.L.L.C. - A law firm of
Strategists and Advisors specializing in the protection, transfer
and enforcement of Intellectual Property Rights. Founded in 1978
and based in Washington, DC, the firm has over 130 patent
attorneys, agents and technical specialists representing a broad
range of clients, including emerging and established companies,
venture capital firms, universities and select individuals.
* BOOK REVIEW: Vertical Integration, Outsourcing, and Corporate
Strategy
---------------------------------------------------------------
Author: Kathryn Rudie Harrigan.
Publisher: BeardBooks, Washington, D.C. 2003
(reprint of 1983 book by D. C. Heath and Company)
Softcover: 390 pp.
List Price: $34.95
The original title of Vertical Integration, Outsourcing, and
Corporate Strategy, first published in 1983, was Strategies for
Vertical Integration. The updated title reflects the topic of
outsourcing that was discussed in the original material. By the
early 1980s, when the book first appeared, the "old image of
vertical integration [was] outmoded" says that author. The old
image saw vertical integration as "operations that are 100 percent
owned and physically interconnected and that supply 100 percent of
the firm's needs." But this image of vertical integration rarely
fulfilled the expectations of a generation of business leaders.
Vertical integration was not only undesirable, it also could be
deceptive and short-sighted. Vertical integration made many
companies too narrowly-focused, complex, and inflexible and
burdensome to operate. These are especially undesirable traits in
today's economic environment characterized by market-share
fluctuations, lower start-up costs for many businesses, fickle
consumers, competition from foreign corporations, the enhanced
role of advertising and marketing, and rapid technological
developments affecting corporate communication and distribution.
While vertical integration has become a much more risky aim in
today's diversified, decentralized economy, it nonetheless
continues to embody classic favorable business principles and
undisputed competitive advantages. "The principle benefits of
vertical integration are economies of integration and cost
reduction made possible by improved coordination of activities,"
says the author. But as Harrigan soon discovered from her
research, "firms sometimes undertake a more costly degree of
integration than may be required to cut costs" or reach some other
objective. This is one way that corporations can err in pursuing
vertical integration. Another way they can err is by becoming
involved in vertical integration in the first place.
Harrigan's substantive text provides case studies of how companies
implemented strategies for vertical integration. These
strategies, which ranged from the successful to the ill-fortuned,
cover sixteen business sectors, including petroleum refining,
pharmaceuticals, genetic engineering, personal microcomputers, and
the tailored-suits field of the clothing industry. The author
looks at nearly two hundred companies within these industries for
guidance and lessons they offer regarding vertical integration.
In today's global economy, monopolies are discouraged by
government policies. Thus, there are many more players, single
sources of raw materials can be unreliable, and corporations are
finding that it is more important to be responsive to changing
markets that to have a permanent identity or unvarying products.
As a corporate strategy, vertical integration can be adapted.
There is no monolithic model for vertical integration; there is
large universe of possibilities with respect to breadth, depth,
and form. With its expert analyses and identification of the
factors and variables about which choices have to be made,
Harrigan's book is invaluable for high-stakes corporate decision-
makers who want will sooner or later be faced with the question of
whether vertical integration is the appropriate strategic
approach.
Kathryn Rudie Harrigan has received fellowships and other honors
and recognition for her business leadership, membership on boards
of directors, and scholarly work in the field of business. She
has written several other books and numerous articles.
*********
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.
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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. Marites Claro, Joy Agravante, Rousel Elaine Tumanda, 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
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herein is obtained from sources believed to be reliable, but is
not guaranteed.
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are $25 each. For subscription information, contact Christopher
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