/raid1/www/Hosts/bankrupt/TCR_Public/091230.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, December 30, 2009, Vol. 13, No. 359
Headlines
20 BAYARD VIEWS: Taps Moritt Hock as Local Counsel
ABITIBIBOWATER INC: ACI Gets OK to Pay Doughan Retirement Benefits
ABITIBIBOWATER INC: ACI Has Canada Court OK for Hydro Lines Pact
ABITIBIBOWATER INC: Proposes Deloitte FAS as Fin'l Advisor
ACCREDITED HOME: Subordinated Noteholders Sue Lone Star
AEROTHRUST CORP: Files for Chapter 11 in Delaware
ALLIS-CHALMERS: Plans $1.5 Billion Capital Raise
ALPINE SECURITIZATION: DBRS Confirms Liquidity Facilities at 'BB'
AMERICAN GENERAL: Demoted to 'B2' by Moody's as AIG Backing Drops
AMP'D MOBILE: U.S. Trustee Seeks Chapter 7 Conversion
ARCH ALUMINUM: Court to Consider Add'l Cash Access Today
BAKERS FOOTWEAR: Posts $10.2 Million Net Loss in Q3 2009
BINGO.COM LTD: Posts $390,000 Net Loss in Q3 2009
BIOLIFE SOLUTIONS: Amends Convertible Multi-Draw Term Loan
CAMP COOLEY: Cash Collateral Hearing Rescheduled to January 12
CATHOLIC KNIGHTS: A.M. Best Downgrades FSR to 'b'
CHEFS DIET ACQUISITION: Hit With Involuntary Chapter 11
CHRYSLER LLC: Has Nod to Abandon Ownership in 8 Entities
CHRYSLER LLC: Marchionne to Receiver $600,000 for Auto Work
CHRYSLER LLC: New Chrysler May Fight Dealership Legislation
CIRCUIT CITY: Greystone Adversary Proceeding Closed
CIRCUIT CITY: Plan Confirmation Hearing Continued to January 28
CIRCUIT CITY: Wins Deal for Rejection of Charter Contracts
CITADEL BROADCASTING: Has Interim Nod for Cash Collateral Use
CITADEL BROADCASTING: To Pay Prepetition Dues to Employees
CITADEL BROADCASTING: Wants to Grant Priority to Inter-Co Claims
CITIGROUP INC: Completes $20-Bil. Repayment of TARP Funds
CITIGROUP INC: Issues 5 Series of Securities; Files Docs with SEC
CITY OF WESTLAND: Moody's Cuts Rating on Sewer Debt to 'Ba1'
CONTINENTAL AIRLINES: Pilots Still Without New Contracts
COOPER-STANDARD: CCAA Stay Extended Until March 31
COOPER-STANDARD: Has Court Nod for Replacement Financing
COOPER-STANDARD: Panel Wants to Hike FTI Monthly Fees to $250,000
CRM HOLDINGS: A.M. Best Downgrades ICRS to 'bb'
CYFRED LTD: Expected to File Schedules & Statement
DREIER LLP: Court Tosses Out Suit against Marc Dreier's Ex-Wife
E*TRADE FIN'L: Appoints Robert Druskin as Interim CEO
E*TRADE FIN'L: To Restructure Cross-Border Trading Operations
EDDIE BAUER: Disclosure Statement Hearing on January 28
EQUIPMENT ACQUISITION: CRO Sues Former Officials
ERICKSON RETIREMENT: Committee Wants to Probe NFP Executives
ERICKSON RETIREMENT: Wants MSRESS Pact Declared a Financing
ERICKSON RETIREMENT: Wants Ruling that Concord Pact a Financing
EUROBANCSHARES INC: Receives Non-Compliance Notice From Nasdaq
EVERGREENBANCORP INC: Sept. 30 Balance Sheet Upside-Down by $4.4MM
EXTENDED STAY: Panel Has Nod for JLLH as Hospitality Advisor
EXTENDED STAY: Court Sets January 15 Claims Bar Date
EXTENDED STAY: Has Court Nod to Probe Wells Fargo Bank
FAIRPOINT COMMS: Panel Gets Nod for Andrews Kurth as Counsel
FBL FINANCIAL GROUP: A.M. Best Affirms ICR of 'bb'
FONTAINEBLEAU LV: Seeks Plan Exclusivity Until March 1
FONTAINEBLEAU LV: Wants to Have Until Jan. 5 to Decide on Leases
FONTAINEBLEAU LV: Court Denies Incentives for Remaining Employees
FONTAINEBLEAU LV: Gets Court Nod $51.5-Mil. DIP Financing
FORTUNE INDUSTRIES: Rick Snow Steps Down as Director
FOUNTAIN VILLAGE: Gets Interim OK to Access M&T Cash Collateral
FREDDIE MAC: Sees Rates Headed to 6 Percent by End of 2010
EDGE PETROLEUM: Court Confirms Plan; Equity Sale to Mariner OK'd
GENCORP INC: Gabelli Funds Disclose 11.47% Equity Stake
GENCORP INC: Issues $200 Mil. of 4.0625% Convertible Debentures
GLOBAL SHIP: Restates Annual Report for Year Ended Dec. 31, 2008
GULFSTREAM CRANE: Wants Hinshaw & Culbertson as Bank. Counsel
H THOMAS O'HARA: Real Estate Slowdown Cues Chapter 11 Filing
HAMPSHIRE GROUP: Loubani Wants Overhaul of Board, Access to Docs
HAMPSHIRE GROUP: Invesco Supports Woodworth/Loubani Proposal
HEARTLAND PUBLICATIONS: Asks for Feb. 19 Schedules Filing Deadline
HEARTLAND PUBLICATIONS: Can Hire Epiq Bankruptcy as Claims Agent
HEARTLAND PUBLICATIONS: Sec. 341 Creditors Meeting Set for Jan. 27
HEARTLAND PUBLICATIONS: Taps Young Conaway as Bankruptcy Counsel
HORIZON FINANCIAL: Receives Non-Compliance Notice From Nasdaq
HOVNANIAN ENTERPRISES: Offers to Exchange 10-5/8% Senior Notes
HOVNANIAN ENTERPRISES: Posts $716.7 Million Net Loss for FY2009
INHIBITEX INC: Receives Non-Compliance Notice From NASDAQ
MAMA MEXICO: Economic Slowdown Prompts Chapter 11 Filing
MANDALAY MEDIA: Posts $1.2MM Net Loss in Sept. 30 Quarter
MIDWAY GAMES: Wants Plan Exclusivity Until Jan. 25
MORGANS HOTEL: Hard Rock Hotel & Casino Loan Maturities Extended
NCI BUILDING: Annual Stockholders Meeting on February 19
NIKISKI PARTNERS: Wants Bracewell & Giuliani as Bankr. Counsel
OPUS EAST: BoA Allowed to Pursue Foreclosure on Property
OPUS SOUTH: Hearing on Outline to Waters Edge Plan on January 4
OPUS SOUTH: Lenders File Litigation Trust Agreement
OPUS SOUTH: Wants Plan Exclusivity Until March 18
OPUS WEST: Surviving Officer, Oversight Committee Named
OWENS CORNING: Faces Class Action for Shingles
OWENS CORNING: Gets Nod for Settlement With Travelers
OWENS CORNING: Releases 3rd Quarter Summary Report
PACIPIC CAPITAL: DBRS Downgrades Issuer Debt Rating to 'CCC'
PATRICK INDUSTRIES: JPMorgan-Led Lenders Reset EBITDA Covenants
PATRICK INDUSTRIES: Inks Deal to Acquire Quality Hardwoods Biz
PENINSULA GAMING: S&P Withdraws 'B+' Rating on $255 Mil. Notes
PENN TRAFFIC: Can Access Cash Collateral Until January 31
PIONEER INSURANCE: A.M. Best Affirms FSR of 'b'
PREMIER HOTEL: Files for Bankruptcy to Protect Interest
PTC ALLIANCE: PBGC Takes Over Pension Fund for 750 Workers
RADIENT PHARMACEUTICALS: Receives Non-Compliance Notice From AMEX
RADIENT PHARMACEUTICALS: Receives NYSE Non-Compliance Notice
RADLAX GATEWAY: Court Rejects Bomel's Bid to Transfer Venue
RAMSEY HOLDINGS: Wants to Employ Gable & Gotwals as Bankr. Counsel
READER'S DIGEST: Opposes Panel's Retention of Stuart Goldfarb
READER'S DIGEST: Wants to Expand Ernst & Young Work
READER'S DIGEST: Has Nod for MWC-Led Auction for CompassLearning
RENAISSANT LAFAYETTE: Has $10-Mil. Financing from Mallory
ROOSEVELT LOFTS: Pushes to Sell Units Amidst Dismissal Case
SAND TECHNOLOGY: Earns C$431,290 in First Quarter Ended October 31
SANTA CLARA SQUARE: Court Grants Jan. 18 Schedules Filing Deadline
SANTA CLARA SQUARE: Taps Cohen and Jacobson as Bankr. Counsel
SANTA CLARA SQUARE: Sec. 341 Creditors Meeting Set for Jan. 27
SIX FLAGS: Assumes ACE Insurance Program
SIX FLAGS: Gets Nod for Office Lease With W2007 Monday
SIX FLAGS: Proposes Merrill Lynch as Board Advisor
SIX FLAGS: Creditors Demand Disclosure by Noteholders
SPANSION INC: Gets Nod to Assume SAP & Reject GRC Contracts
SPANSION INC: Gets Nod to Assume Services Contract With IBM
SPANSION INC: Proposes to Assume Contracts With Air Products
SPANSION INC: Reduces John Brinncko CRO Services
STARCO VENTURES: Has Until February 16 to File Chapter 11 Plan
TAMARACK RESORT: Creditor Seeks Credit Suisse Subordination
TOUSA INC: Committee Finds New Targets for Fraud Suits
THE HINGHAM GROUP: A.M. Best Downgrades FSR to 'b'
TRANSSIBERIAN REINSURANCE: A.M. Best Affirms FSR of 'B-'
TRONOX INC: Equity Committee Wants Eureka Services Extended
TRONOX INC: Ex-Officers Want Payment of Fees From D&O Insurance
TRUMP ENTERTAINMENT: Plan Trims Estimated Recovery by Noteholders
TURNING STONE: S&P Withdraws 'B+' Rating on $160 Mil. Notes
USEC INC: S&P Matches Moody's With 'CCC+' Rating
VENTANA HILLS: Can Access Anglo Irish Bank Cash Collateral
VI-JON INC: S&P Raises Corporate Credit Rating to 'B+'
VISTEON CORP: Unsecured Creditors Panel Says Plan Unconfirmable
WESTMORELAND COAL: Has Deal with Union on Retiree Benefits
WOLVERINE TUBE: WJT Unit Inks Toll Manufacturing Deal with Exeon
WOLVERINE TUBE: Alpine's Elbaum Discloses Disposition of Shares
W.R. GRACE: Adage Owns 5.07% Shares of Grace Common Stock
W.R. GRACE: Anderson Memorial Says Plan Cannot Be Confirmed
W.R. GRACE: Court Approves Professional Fees for April-June
W.R. GRACE: Court OKs Diane Welsh as California Mediator
W.R. GRACE: Sends 3rd Reorganization Plan Modifications
YRC WORLDWIDE: 81% of Notes Tendered as of December 29
* Auto Suppliers Turning Around
* Upcoming Meetings, Conferences and Seminars
*********
20 BAYARD VIEWS: Taps Moritt Hock as Local Counsel
--------------------------------------------------
20 Bayard Views, LLC, has asked for authorization from the U.S.
Bankruptcy Court for the Eastern District of New York to employ
Moritt Hock Hamroff & Horowitz LLP as local counsel, nunc pro tunc
to its Chapter 11 petition date.
Leslie A. Berkoff, a partner at Moritt Hock, says that the firm
will, among other things:
a. assist primary counsel, Porzio Bromberg & Newman, P.C., in
the protection and preservation of the estate of the
Debtor, including the prosecution of actions on the
Debtor's behalf, the defense of any actions commenced
against the Debtor, the prosecution of and/or negotiation
in respect of all litigation in which the Debtor is
involved, and the preparation of objections to claims
filed against the estate;
b. review the local form and procedure, as well as file
necessary motions, applications, answers, orders, reports
and papers in connection with the administration of the
estates;
c. appear at hearings as requested by Porzio Bromberg or the
Debtor to assist in the Chapter 11 case, and assist in the
negotiation and preparation on behalf of the Debtor of
Chapter 11 plan, disclosure statement and all related
documents; and
d. represent the Debtor, where requested by Porizo Bromberg,
in connection with any sales, leases or other uses of
property of the estates and other legal issues.
Moritt Hock will be paid based on the hourly rates of its
personnel:
Leslie A. Berkoff, Partner $450
Lia M. Pistilli, Associate $310
Lee J. Mendelson, Partner $340
Theresa A. Driscoll, Senior Associate $300
Brett P. Garver, Senior Associate $310
Daniella Golshani, Associate $200
Carol Lynne Huvar, Paralegal $105
Jennifer Indence, Paralegal $125
Patricia A. Yates, Paralegal $135
Bonnie Rothenberg, Paralegal $135
Ms. Berkoff assures the Court that Moritt Hock is "disinterested"
as that term is defined in Section 101(14) of the Bankruptcy Code.
Brooklyn, New York-based 20 Bayard Views, LLC, filed for Chapter
11 bankruptcy protection on December 4, 2009 (Bankr. E.D.N.Y.
Case No. 09-50723). Leslie A. Berkoff, Esq., at Moritt Hock
Hamroff Horowitz, assists the Company in its restructuring effort.
The Company listed $10,000,001 to $50,000,000 in assets and
$10,000,001 to $50,000,000 in liabilities in its petition.
ABITIBIBOWATER INC: ACI Gets OK to Pay Doughan Retirement Benefits
------------------------------------------------------------------
Abitibi-Consolidated Company of Canada and its affiliates asked
the Canadian Court to allow the payment of a portion of the
proceeds of letters of credit that were issued to guarantee their
obligations under the Canadian Supplemental Executive Retirement
Plan for Executive Employees of Abitibi-Consolidated Inc., dated
January 1, 1999, and the Secured Management Supplementary Benefit
Agreements dated before 1988 to James Doughan.
Mr. Doughan was president and chief executive officer of Stone-
Consolidated Corporation, which merger with Abitibi-Price Inc. in
1997 resulted to the formation of ACI. Mr. Doughan remained as
ACI's CEO until April 1999 and retired in December 1999.
Mr. Doughan had entered into separate agreements with Stone-
Consolidated and ACI with respect to the positions he held at the
companies, consisting of:
* An Equalization Agreement, where Stone-Consolidated, and
thereafter ACI, obliged itself to maintain Mr. Doughan in
the same after-tax position he would have been had his
income generated in Canada been generated in the United
States;
* An End of Employment Indemnity pursuant to which Stone-
Consolidated committed itself to pay to Mr. Doughan an
indemnity equal to three years' salary upon the end of his
employment, and subsequently modified by way of a Retirement
Compensation Arrangement; and
* A Base Pension, which is a pension plan for ACI's executive
employees.
Following litigations relating to the payment of Mr. Doughan's
benefits, ACI and Mr. Doughan entered into a Settlement
Agreement, through which ACI (i) recognized the validity of the
payment of the retirement benefits, and (ii) accepted to continue
making monthly payments of those benefits pursuant to the Base
Pension and the SERP.
However, as of April 7, 2009, ACI suspended payment of SERP
retirement benefits for all beneficiaries, including Mr. Doughan.
The Base Pension retirement benefits, on the other hand, continue
to be paid to Mr. Doughan and other beneficiaries.
A trust was constituted in April 2004 to guarantee the
obligations created by the SERP and Desjardins Trust Inc. was
appointed trustee, under the terms of a Supplementary Executive
Retirement Compensation. In order to guarantee the obligations
of ACI under the SERP, three letters of credit totaling
C$57,198,000 were issued by Canadian Imperial Bank of Commerce in
favor of Desjardins, in its capacity as trustee.
ACI's suspension of the SERP retirement benefits pursuant to the
SERP constitute a default under the SERP. Accordingly,
Desjardins cashed the Letters of Credit on June 11, 2009.
In accordance with the terms of the Trust Convention, Desjardins
is required to liquidate the SERP and use the proceeds of the
Letters of Credit to pay the guaranteed beneficiaries the amounts
to which they are entitled. The Applicants aver that the lump
sums payable by Desjardins to Mr. Doughan consist of:
Date Gross Amount 25% Withholding Tax Net Amount
---- ------------ ------------------- ----------
December 2009 $2,268,268 $567,067 $1,701,201
In 2010 $2,826,802 $706,700 $2,120,101
By this motion, the CCAA Applicants asked the Canadian Court to
direct Desjardins not to pay the Lump Sum to Mr. Doughan, but to
keep that amount and continue to pay to Mr. Doughan monthly out
of the Lump Sum in the same monthly amount as he was paid as a
retirement benefit pursuant to the SERP prior to the commencement
of the CCAA Proceedings.
The Applicants propose that each party get to receive the amounts
to which he or it is entitled without any further potential
expenses of exemplification and enforcement, once call of the
legal proceedings involving ACI and Mr. Doughan are terminated.
In its 28th monitor report, Ernst & Young, Inc., the Court-
appointed monitor in the Canadian proceedings of the CCAA
Applicants, notes that the effect of the orders requested by ACI
is to maintain the status quo, which appears to cause no
prejudice to either party and leaves both parties in essentially
the same position as if the CCAA Proceedings had never been
instituted and the Settlement Agreement remained in full force
and effect.
Considering the need to protect the interests of all
stakeholders, and bearing in mind the complex and longstanding
legal disputes between the parties, ACI's request "appear[s] to
be fair, reasonable and equitable to both parties," the Monitor
acknowledged.
A full-text copy of E&Y's 28th Monitor Report dated December 9,
2009, is available at no charge at:
http://bankrupt.com/misc/CCAA_28thMonitorReport.pdf
* * *
Mr. Justice Gascon ratified the Settlement Agreement between ACI
and Mr. Doughan. The Canadian Court also directed Desjardins to
comply with the terms of the Agreement.
In the event a bankruptcy order is rendered against ACI or ACI
files an assignment in bankruptcy, the Settlement Agreement is to
be binding on any trustee in bankruptcy and will not be void or
voidable nor deemed to be a fraudulent preference or a reviewable
transaction under the Bankruptcy and Insolvency Act, Article 1631
of the Civil Code of Quebec, the Canadian Court ruled.
About AbitibiBowater
Headquartered in Montreal, Canada, AbitibiBowater Inc. --
http://www.abitibibowater.com/-- produces a wide range of
newsprint, commercial printing papers, market pulp and wood
products. It is the eighth largest publicly traded pulp and paper
manufacturer in the world. AbitibiBowater owns or operates 23
pulp and paper facilities and 28 wood products facilities located
in the United States, Canada, the United Kingdom and South Korea.
Marketing its products in more than 90 countries, the Company is
also among the world's largest recyclers of old newspapers and
magazines, and has third-party certified 100% of its managed
woodlands to sustainable forest management standards.
AbitibiBowater's shares trade over-the-counter on the Pink Sheets
and on the OTC Bulletin Board under the stock symbol ABWTQ.
The Company and several of its affiliates filed for protection
under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009
(Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey
presides over the case. The Company and its Canadian affiliates
commenced parallel restructuring proceedings under the Companies'
Creditors Arrangement Act before the Quebec Superior Court
Commercial Division the next day. Alex F. Morrison at Ernst &
Young, Inc., was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, serves as the Debtors' co-counsel, while
Troutman Sanders LLP in New York, serves as the Debtors' conflicts
counsel in the Chapter 11 proceedings. The Debtors' financial
advisors are Advisory Services LP, and their noticing and claims
agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's
counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario.
Abitibi-Consolidated Inc. and various Canadian subsidiaries filed
for protection under Chapter 15 of the U.S. Bankruptcy Code on
April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also
handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T.
Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in
Wilmington, represent the Chapter 15 Debtors.
As of Sept. 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ABITIBIBOWATER INC: ACI Has Canada Court OK for Hydro Lines Pact
----------------------------------------------------------------
Abitibi-Consolidated Company of Canada asked the Honorable
Mr. Justice Clement Gascon, J.S.C., of the Superior Court
Commercial Division for the District of Montreal in Quebec,
Montreal, Canada,to allow them to enter into the agreement
entitled Entente de Principe Relative au Transfert de Certaines
Lignes de Transport d'Electricite -- the Hydro Lines Agreement --
with Hydro-Quebec Transenergie.
The Hydro Lines Agreement is hinged on the series of transactions,
pursuant to an Acquisition Agreement, which resulted in the sale
of ACCC's 60% indirect interest in the 335MW hydroelectric
facility currently owned and operated by Manicouagan Power Company
to HQTE for gross proceeds of C$615 million. The Sale was closed
on December 9, 2009.
The MPCo Acquisition Agreement contemplates that one of the
conditions in favor of the CCAA Applicants includes the closing
of the sale on an "as is, where is" basis, of ACCC's right, title
and interest in and to:
(i) six 69 KV transmission lines in or near Baie Comeau,
Quebec, which are commonly known as lines L1, L2, L3, L4,
L9 and L17; and
(ii) the servitudes and leases relating to the lands on which
those Transmission Lines are erected, the whole in
consideration of HQTE's payment to ACCC and the assumption
by HQTE of certain liabilities in connection with the
Property.
ACCC's Lines L1 and L2 in the Baie Comeau region are used to
transmit electricity from MPCo to ACCC's Baie Comeau mill and
were constructed in 1984. Lines L3 and L4 are leased to and used
by Hydro-Quebec to supply power to the city of Baie Comeau and
were constructed in 1937. Lines L9 and L17 are back-up lines for
Hydro-Quebec that are not used by ACCC and were also constructed
in 1937. Only Lines L1 and L2 have an impact on ACCC's Baie
Comeau mill.
While ACCC owns all of the Transmission Lines, they are
maintained by MPCo at a cost of approximately C$100,000 per
annum, without any cost to ACCC. Hydro-Quebec pays MPCo
C$200,000 per year for the use of Lines L3 and L4.
Essentially, the Hydro Lines Agreement provides for:
(i) The transfer of Lines L1-L2 to HQTE for a purchase price
of C$1;
(ii) The assumption by HQTE of all future obligations
associated with Lines L1-L2 as of the closing date;
(iii) Certain conditions precedent, including the issuance of an
approval and vesting order with respect to the Proposed
Transaction and the closing of the MPCo Transaction;
(iv) The execution of a Real and Perpetual Servitude Agreement,
affecting the property located on ACCC's land to allow for
the maintenance, operation and upkeep of Lines L1-L2 as
well as, if necessary, the construction of a new higher
capacity electrical transmission line;
(v) The granting of an option, for the benefit of HQTE, to
acquire Lines L3-L4 and Lines L9-17 for C$1, as well as
an option, for the benefit of HQTE, to acquire a right of
ownership on all or part of the land constituting the
servitude of right-of-way as provided for in the Servitude
Agreement, and all of the land constituting the right-of-
way for Lines L3-L4 and Lines L9-L17.
(vi) The execution of a Transitional Operating Agreement under
which HQTE will assume all costs and obligations arising
from the operation, maintenance and upgrade of Lines L3-L4
and Lines L9-L17 from the date of closing of the transfer
of Lines L1-L2 to the earlier of (y) the closing of the
transfer of Lines L3-L4 and Lines L9-L17, or (z) HQTE
implementing a permanent solution with respect to Lines
L3-L4 and Lines L9-L17. Lines L1-L2 will be subject to
the Transitional Operating Agreements from the closing of
the MPCo Transaction to the closing of the transfer of
Lines L1-L2;
(vii) The termination of existing agreements related to Lines
L1-L2 as well as, where applicable, existing agreements
pertaining to Lines L3-L4 and Lines L9-L17 entered into by
ACCC and MPCo;
(viii) Subject to exceptions to the absence of warranty, as
defined in the Hydro Lines Agreement, the Monitor
understands that HQTE is acquiring Lines L1-L2 in their
current state and condition, at its own risk and peril,
without representations or warranty of any kind, as
provided for in Article 1732 Civil Code in Quebec.
(ix) HQTE acknowledges that it has been made aware of the
irregularities affecting the titles of ownership on the
lands on which Lines L1-L2 are located and agrees that
ACCC will not be held liable to correct any defect of
title related to the property rights arising from the
property and that, in this regard, HQTE will not have the
right to seek any remedy against the parties related to
ACCC;
(x) ACCC's indemnification obligation in favor of HQTE under
the Hydro Lines Agreement is limited to C$500,000; and
(xi) Limited representations and warranties including that ACCC
has all the powers and capacity required to enter into the
Hydro Lines Agreement, ACCC is the owner of the property
subject to the Agreement and ACCC will have paid all
outstanding property taxes and transfer fees with respect
to the transfer of the ACCC Transmission Lines.
The Purchase Options are irrevocable for a period of 120 days
from the closing of the transfer of Lines L1-L2, during which
time HQTE will perform and complete its due diligence. HQTE, at
its sole discretion, can exercise its option to acquire any one
or more of Lines L3-L4 and Lines L9-L17 on the same terms and
conditions that apply to Lines L1-L2 in accordance with the Hydro
Lines Agreement.
In its 26th report filed with the Canadian Court, Ernst & Young,
Inc., the Court-appointed monitor in the Canadian proceedings of
the CCAA Applicants, related that revenue derived from leasing
Lines L3-L4 to HQTE to deliver power to the City of Baie Comeau
-- at C$200,000 per annum -- is not significant to ACCC,
especially considering the costs that ACCC will incur if it
retains the ACCC Transition Lines.
According to E&Y Vice President Alex Morrison, costs associated
with continuing to own the ACCC Transmission Lines subsequent to
the MPCo Transaction will include:
(a) annual line losses of approximately C$1,400,000 on Lines
L1-L2;
(b) annual maintenance costs on all six lines of approximately
C$l00,000 to be absorbed by ACCC following the sale of
MPCo;
(c) an investment in sustaining capital expenditures of
approximately C$2,000,000 on Lines L1-L2 needed to comply
with upcoming regulatory changes expected as early as
2010;
(d) approximately C$350,000 to decommission Lines L3-L4 due to
their current condition and age; and
(e) costs to decommission Lines L9-L17 due to their current
condition and age, which have not yet been quantified.
Following the closing of the MPCo Transaction, ACCC will no
longer have access to the human and technical resources of MPCo
to ensure the maintenance and repair of the ACCC Transmission
Lines, Mr. Morrison related.
"It was reasonable for ACCC to negotiate the transfer of the ACCC
Transmission Lines as a condition precedent in the MPCo
Acquisition Agreement, given the avoidance of annual line losses,
annual maintenance costs, investments in sustaining capital
expenditures and decommissioning costs," Mr. Morrison told the
Canadian Court, recommending the approval of the Hydro Lines
Agreement.
A full-text copy of E&Y's 26th Monitor Report dated December 9,
2009, is available for free at:
http://bankrupt.com/misc/CCAA_26thMonitorReport.pdf
* * *
Accordingly, Mr. Justice Gascon authorizes ACCC, as transferor,
to enter into the Hydro Lines Agreement to HQTE, as transferee.
The Canadian Court directs the Land Registrar of the Land
Registry Office for the Registry Division of Saguenay to proceed
with the partial cancellation of any and all encumbrances,
including these registrations published at the Land Registry:
* 15 079 804
* 16 100 728
* 16 109 411
* 16 146 346
* 16 146 347
* 16 286 872
The execution of the Hydro Lines Agreement is to be binding on
any trustee in bankruptcy that may be appointed, and will not be
void or voidable nor deemed to be a settlement, fraudulent
preference, assignment, fraudulent conveyance, transfer at
undervalue or other reviewable transaction under the Bankruptcy
and Insolvency Act, Mr. Justice Gascon rules.
A full-text copy of the Canadian Court's Transmission Lines
Vesting Order is available for free at:
http://bankrupt.com/misc/CCAA_ORDTransmissionLines.pdf
About AbitibiBowater
Headquartered in Montreal, Canada, AbitibiBowater Inc. --
http://www.abitibibowater.com/-- produces a wide range of
newsprint, commercial printing papers, market pulp and wood
products. It is the eighth largest publicly traded pulp and paper
manufacturer in the world. AbitibiBowater owns or operates 23
pulp and paper facilities and 28 wood products facilities located
in the United States, Canada, the United Kingdom and South Korea.
Marketing its products in more than 90 countries, the Company is
also among the world's largest recyclers of old newspapers and
magazines, and has third-party certified 100% of its managed
woodlands to sustainable forest management standards.
AbitibiBowater's shares trade over-the-counter on the Pink Sheets
and on the OTC Bulletin Board under the stock symbol ABWTQ.
The Company and several of its affiliates filed for protection
under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009
(Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey
presides over the case. The Company and its Canadian affiliates
commenced parallel restructuring proceedings under the Companies'
Creditors Arrangement Act before the Quebec Superior Court
Commercial Division the next day. Alex F. Morrison at Ernst &
Young, Inc., was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, serves as the Debtors' co-counsel, while
Troutman Sanders LLP in New York, serves as the Debtors' conflicts
counsel in the Chapter 11 proceedings. The Debtors' financial
advisors are Advisory Services LP, and their noticing and claims
agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's
counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario.
Abitibi-Consolidated Inc. and various Canadian subsidiaries filed
for protection under Chapter 15 of the U.S. Bankruptcy Code on
April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also
handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T.
Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in
Wilmington, represent the Chapter 15 Debtors.
As of Sept. 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ABITIBIBOWATER INC: Proposes Deloitte FAS as Fin'l Advisor
----------------------------------------------------------
AbitibiBowater Inc. and its units seek the U.S. Bankruptcy Court's
authority to employ Deloitte Financial Advisory Services LLP as
their financial advisor nunc pro tunc to November 9, 2009.
The Debtors have selected Deloitte FAS because of the firm's
extensive experience and knowledge in the area of fresh-start
accounting. The firm and more than 1,000 of its professionals
have assisted companies in a variety of complex business issues,
including restructuring and reorganizations, Sean T. Greecher,
Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington,
Delaware, relates.
Pursuant to an Engagement Letter entered into by the parties,
Deloitte FAS agrees to provide the Debtors with these Fresh-Start
Accounting services, including planning for, determination of and
substantiation of the Fresh Start Balance Sheet, which
specifically include:
(a) assisting the Debtors' management in their development of
an implementation approach for Fresh Start Accounting,
starting with any necessary training support and
culminating in a strategy and work plan for the project;
(b) advising and providing recommendations to the Debtors'
management in connection with the determination of a plan
of reorganization adjustments necessary to record the
impact of the POR to the books of entry of the appropriate
legal entities, through Deloitte FAS will:
-- work with accounting, legal and tax advisors to
advise the Debtors' management as it determines the
appropriate recoveries to claimants for allowed
claims and the allocation of resulting gains on
extinguishment or other earnings impacts to separate
legal entities within AbitibiBowater's corporate
structure;
-- review the POR to identify and advise the Debtors'
management and provide recommendations on necessary
accounting adjustments resulting from POR provisions;
and
-- advise the Debtors' management in connection with its
estimation of recoveries to claimants for accrual
accounting purposes, including comparisons with the
Debtors' claims database to estimate liabilities
related to contingent, unliquidated and disputed
claims; and
(c) assisting the Debtors' management in its determination of
revaluation and other fresh start adjustments necessary to
comply with the accounting and reporting requirements, in
coordination with bankruptcy, accounting, tax and
valuation specialists, through advising the Debtors'
management as it records and substantiates adjustments
necessary to determine the Debtors' opening fresh start
balance sheet, as applicable.
Deloitte FAS will also render Valuation Services to the Debtors.
Specifically, the firm will:
(a) develop an estimate of the fair value of the business
enterprise of the Debtors' reporting units as of the
reporting date, including, but not limited to Newsprint,
Specialty Papers, Coated Papers, Market Pulp, Wood
Products and Corporate; and
(b) as required for purposes of the analysis, develop an
estimate of the fair value of the business enterprise at
the plant level, and perform a reconciliation of the
aggregate value of the Reporting Units to the overall
enterprise value of AbitibiBowater;
(c) develop an estimate of the fair value of consolidated
joint ventures with minority interest liability, primarily
including, but not limited to these joint ventures:
-- ACH Limited Partnership
-- Manicouagan Power Company
-- Augusta Newsprint Company
-- Calhoun Newsprint Company
-- Bowater Mersey Paper Company Ltd.
-- Donahue Malbaie Inc.
-- Products Forestiers Mauricie
The Debtors and Deloitte FAS agree that (i) the services
will not include a valuation of the joint venture between
the Debtors and Louisiana-Pacific Corporation, (ii) the
results of Deloitte FAS's valuation services will not be
pushed down or otherwise recorded or reflected in the
financial statements of Louisiana-Pacific.
(d) develop an estimate of the fair value of certain
unconsolidated equity investments, potentially including,
but not limited to:
-- Ponderay Newsprint Company
-- Exploits River Hydro Partnership
-- Star Lake Hydro Partnership,
-- Bois d'ingenierie (Larouche)
-- Societe en Commandite Scierie Opitciwan
(e) develop an estimate of the fair value and estimated useful
lives of certain assets and liabilities as of the fresh
start reporting date or the valuation date for each of the
Reporting Units. The intangible assets to be considered
include, but may not be limited to, water rights, cutting
rights, customer relationships, material contracts, power
purchase agreements, cogeneration contracts, and other
assets or liabilities that Deloitte FAS and the Debtors'
management will mutually agree to include. Deloitte FAS
will rely on the Debtors' management to identify and
confirm its conclusions regarding the specification of the
assets.
Deloitte FAS will also provide the Debtors with advice and
assistance in relation to Accounting and Financial Reporting,
including:
(a) assistance with post-emergence accounting, reporting,
valuation or process and systems implications of POR and
fresh start reporting;
(b) advise the Debtors' management as it prepares accounting
information and disclosures in support of public and
private filings or audited or unaudited financial
statements;
(c) assist the Debtors' management with other valuation
matters as necessary for financial diclosures;
(d) advise the Debtors' management as it evaluates existing
internal controls and develops new controls for Fresh
Start Accounting implementation;
(e) assist the Debtors' management with its responses to
questions or other requests from the Debtors' external
auditors regarding bankruptcy accounting, valuation and
reporting matters.
In relation to application support services, Deloitte FAS will
assist the Debtors' management in its preparation and
implementation of the accounting treatments and systems updates
required for Fresh-Start Accounting implementation as of the
fresh-start reporting date.
The firm will also advise the Debtors' management regarding high
level requirements and consultation on best practices with
respect to (i) stub-year general ledger cut-off as of the fresh-
start reporting date, (ii) push-down of new asset values to fixed
asset subsystems, and (iii) purging of pre-petition accounts
payable subsystem data. Upon request, Application Support may
also include hands on assistance with these items as required:
-- Definition of specific processing requirements;
-- Programming specifications;
-- Application configuration and set-up;
-- Interface development; and
-- Data cleansing and reconciliation.
The Debtors propose to pay for Deloitte FAS' services pursuant to
a fee structure in accordance with these hourly fees, excluding
Valuation Services:
Professional Hourly Rate
------------ -----------
Partner/Principal/Director $560
Senior Manager $450
Manager $375
Senior Associate $275
Associate $170
With respect to Valuation Services, the hourly rates for Deloitte
FAS professionals are:
Professional Hourly Rate
------------ -----------
Partner/Principal/Director $375
Senior Manager $325
Manager $280
Senior Associate $215
Associate $170
The Debtors will also reimburse Deloitte FAS for its actual and
necessary out-of-pocket expenses.
Mark Pighini, a principal member at Deloitte FAS, assured the
Court that his firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
About AbitibiBowater
Headquartered in Montreal, Canada, AbitibiBowater Inc. --
http://www.abitibibowater.com/-- produces a wide range of
newsprint, commercial printing papers, market pulp and wood
products. It is the eighth largest publicly traded pulp and paper
manufacturer in the world. AbitibiBowater owns or operates 23
pulp and paper facilities and 28 wood products facilities located
in the United States, Canada, the United Kingdom and South Korea.
Marketing its products in more than 90 countries, the Company is
also among the world's largest recyclers of old newspapers and
magazines, and has third-party certified 100% of its managed
woodlands to sustainable forest management standards.
AbitibiBowater's shares trade over-the-counter on the Pink Sheets
and on the OTC Bulletin Board under the stock symbol ABWTQ.
The Company and several of its affiliates filed for protection
under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009
(Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey
presides over the case. The Company and its Canadian affiliates
commenced parallel restructuring proceedings under the Companies'
Creditors Arrangement Act before the Quebec Superior Court
Commercial Division the next day. Alex F. Morrison at Ernst &
Young, Inc., was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, serves as the Debtors' co-counsel, while
Troutman Sanders LLP in New York, serves as the Debtors' conflicts
counsel in the Chapter 11 proceedings. The Debtors' financial
advisors are Advisory Services LP, and their noticing and claims
agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's
counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario.
Abitibi-Consolidated Inc. and various Canadian subsidiaries filed
for protection under Chapter 15 of the U.S. Bankruptcy Code on
April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also
handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T.
Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in
Wilmington, represent the Chapter 15 Debtors.
As of Sept. 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ACCREDITED HOME: Subordinated Noteholders Sue Lone Star
-------------------------------------------------------
Bill Rochelle at Bloomberg News reports that the indenture trustee
for the junior subordinated noteholders of Accredited Home Lenders
Holding Co. sued Accredited's owner, Lone Star Funds, claiming it
made fraudulent misrepresentations in connection with the $300
million acquisition in 2007. According to the suit, Lone Star
agreed to buy Accredited Home for $15.10 a share and then began to
make public statements deprecating the Company's value, until it
was ultimately able to complete the purchase for $100 million less
than the original price.
According to the report, the indenture trustee said in its
complaint that Lone Star failed to live up to statements that it
would inject fresh capital after the acquisition.
The indenture trustee wants Lone Star to pay principal and
interest on the junior notes, along with punitive damages.
Accredited has sold most of its assets, other than lawsuits, a
handful of mortgage loans and real estate, and miscellaneous
personal property.
Accredited Home Lenders Holding Co. -- http://www.accredhome.com/
-- is a mortgage banker servicing U.S. markets for conforming and
non-prime residential mortgage loans operating throughout the U.S.
and in Canada. Founded in 1990, the company is headquartered in
San Diego. The Company was acquired by Lone Star Funds for $300
million in October 2007. Lone Star also owns Bruno's Supermarkets
LLC and Bi-Lo LLC, two grocery retailers in Chapter 11.
Accredited Home and its affiliates filed for Chapter 11 on May 1,
2009 (Bankr. D. Del. Lead Case No. 09-11516). Gregory G. Hesse,
Esq., Lynnette R. Warman, Esq., and Jesse T. Moore, Esq., at
Hunton & William LLP, represent the Debtors as counsel. Laura
Davis Jones, Esq., James E. O'Neill, Esq., and Timothy P. Cairns,
Esq., at Pachulski Stang Ziehl & Jones LLP, serve as Delaware
counsel. Kurtzman Carson Consultants is the Debtors' claims
agent. Andrew I Silfen, Esq., Schuyler G. Carroll, Esq., Robert
M. Hirsch, Esq., at Arent Fox LLP in New York, and Jeffrey N.
Rothleder, Esq., at Arent Fox LLP in Washington, DC, represent the
official committee of unsecured creditors as co-counsel. Neil R.
Lapinski, Esq., and Shelley A. Kinsella, Esq., at Elliott
Greenleaf, represent the Committee as Delaware and conflicts
counsel.
According to its bankruptcy petition, Accredited Home's assets
range from $10 million to $50 million and its debts from
$100 million to $500 million.
AEROTHRUST CORP: Files for Chapter 11 in Delaware
-------------------------------------------------
Bill Rochelle at Bloomberg News reports that AeroThrust Corp. says
it intends to hire an investment banker to market the business for
sale. AeroThrust is also seeking permission to use cash
representing collateral for secured lenders' claims.
AeroThrust Corp. is an aircraft and engine repair shop in Miami.
For the first 10 months of 2009, revenue of $58 million resulted
in a $7.7 million net loss. The net loss for calendar 2008 was
$2.6 million.
AeroThrust filed for Chapter 11 petition on Dec. 27 (Bankr. D.
Del. Case No. 09-14541). Thomas F. Driscoll, III, Esq., at
Bifferato LLC, represents the Debtor in its restructuring effort.
The Company listed assets of $53.5 million and debt totaling $45.6
million as of Oct. 31. Debt includes $11.6 million owing to PNC
Bank NA, secured by liens on all the assets. There is another $3.9
million second lien on all assets together with a $2.4 million
loan secured by two engines.
ALLIS-CHALMERS: Plans $1.5 Billion Capital Raise
------------------------------------------------
Allis-Chalmers Energy Inc. has filed an amendment to a shelf
registration statement. The Company intends to issue
$1,500,000,000 in securities, including:
(1) shares of common stock;
(2) shares of preferred stock, in one or more series, which
may be convertible into or exchangeable for debt
securities or common stock;
(3) senior debt securities, which may be convertible into or
exchangeable for common stock or preferred stock;
(4) subordinated debt securities, which may be convertible
into or exchangeable for common stock or preferred stock;
(5) guarantees of debt securities issued by Allis-Chalmers
Energy Inc.;
(6) warrants to purchase common stock, preferred stock, debt
securities (which may or may not be guaranteed pursuant
to guarantees) or units;
(7) rights to purchase common stock, preferred stock, debt
securities (which may or may not be guaranteed pursuant
to guarantees) and units; and/or
(8) units consisting of any combination of common stock,
preferred stock, debt securities (which may or may not be
guaranteed pursuant to guarantees), rights or warrants.
The Company expects to use the net proceeds from the sale of the
securities offered by the prospectus for general corporate
purposes, which may include, among other things:
-- capital expenditures;
-- repayment of indebtedness;
-- working capital; and
-- to make strategic acquisitions.
A full-text copy of the Amended Shelf Registration Statement is
available at no charge at http://ResearchArchives.com/t/s?4caa
The Shelf Registration Statement was originally filed November 9.
2006 Incentive Plan
On November 12, the Company filed a registration statement to
register an additional 7,000,000 shares of the Company's common
stock that may be issued pursuant to the Company's Second Amended
and Restated 2006 Incentive Plan pursuant to the Registration
Statement on Form S-8, File No. 333-139957, filed with the
Securities and Exchange Commission, or the SEC, on January 12,
2007.
A full-text copy of the Registration Statement is available at no
charge at http://ResearchArchives.com/t/s?4cab
At the 2009 Annual Meeting of Stockholders held on November 6,
2009, Allis-Chalmers stockholders approved the Second Amended and
Restated 2006 Incentive Plan. The Amended and Restated Plan was
approved by the Company's board of directors on September 18,
2009, subject to receipt of stockholder approval.
The Amended and Restated Plan (i) increased the maximum number of
shares of the Company's common stock, par value $0.01 per share,
that may be granted under such plan by an additional 7,000,000
shares, resulting in a total of 8,500,000 shares that may be
granted thereunder, (ii) increased the annual limit on options
that may be granted to any one participant from 200,000 shares of
Common Stock to 3,000,000 shares of Common Stock, (iii)
established an annual limit on the aggregate maximum number of
incentive stock options that may be granted to any one participant
of 8,500,000 shares of Common Stock and (iv) established an annual
limit on the number of stock appreciation rights and share-based
awards (other than options and stock appreciation rights) that may
be granted to any one participant of 3,000,000 shares of Common
Stock for each type of award.
About Allis-Chalmers Energy
Houston, Texas-based Allis-Chalmers Energy Inc. (NYSE: ALY) --
http://www.alchenergy.com/-- is a multi-faceted oilfield services
company. Allis-Chalmers provides services and equipment to oil
and natural gas exploration and production companies, domestically
primarily in Texas, Louisiana, New Mexico, Oklahoma, Arkansas,
offshore in the Gulf of Mexico, and internationally, primarily in
Argentina, Brazil and Mexico. Allis-Chalmers provides directional
drilling services, casing and tubing services, underbalanced
drilling, production and workover services with coiled tubing
units, rental of drill pipe and blow-out prevention equipment, and
international drilling and workover services.
At September 30, 2009, the Company's consolidated balance sheets
showed $1.076 billion in total assets, $582 million in total
liabilities, and $494 million in total shareholders' equity.
* * *
As reported by the Troubled Company Reporter on July 15, 2009,
Standard & Poor's Ratings Services raised its corporate credit
rating on Allis-Chalmers Energy to 'B-' from 'SD' (selective
default). The outlook is negative. At the same time, S&P raised
the issue-level rating on Allis-Chalmers' unsecured notes to 'B-'
(the same as the corporate credit rating) from 'D'. S&P revised
the recovery rating on this debt to '4' from '3' indicating
expectations of average (30%-50%) recovery of principal in the
event of a payment default.
The TCR said July 9, 2009, Moody's Investors Service affirmed
Allis-Chalmers' B3 Corporate Family Rating, changed its
Probability of Default Rating to B3 from B3/LD, and upgraded its
$225 million 9% senior notes due 2014 to Caa1 (LGD 4, 62%) from
Caa3 (LGD 3, 35%) and its $205 million 8.5% senior notes due 2017
to Caa1 (LGD 4, 62%) from Ca (LGD 4, 40%). The rating outlook is
stable.
ALPINE SECURITIZATION: DBRS Confirms Liquidity Facilities at 'BB'
-----------------------------------------------------------------
DBRS has confirmed the rating of R-1 (high) for the Commercial
Paper (CP) issued by Alpine Securitization Corp. (Alpine), an
asset-backed commercial paper (ABCP) vehicle administered by
Credit Suisse, New York branch. In addition, DBRS has confirmed
the ratings and revised the tranche sizes of the aggregate
liquidity facilities (the Liquidity) provided to Alpine by Credit
Suisse.
The $6,785,056,962 aggregate liquidity facilities are tranched as
follows:
-- $6,467,620,786 rated AAA
-- $69,994,648 rated AA
-- $42,492,098 rated A
-- $65,319,743 rated BBB
-- $58,598,466 rated BB
-- $29,598,047 rated B
-- $51,433,174 unrated
The ratings are based on November 30, 2009 data.
The CP rating reflects the AAA credit quality of Alpine's asset
portfolio. The updated credit quality aspect of the CP rating is
based on both the portfolio of assets and the available program-
wide credit enhancement (PWCE). The rationale for the CP rating
is based on the updated AAA credit quality assessment as well as
DBRS' prior and ongoing review of legal, operational and liquidity
risks associated with Alpine's overall risk profile.
The ratings assigned to the Liquidity reflect the credit quality
of Alpine's asset portfolio based on an analysis that assesses
each transaction to a term standard. The tranching of the
Liquidity reflects the credit risk of the portfolio at each rating
level. The tranche sizes are expected to vary each month based on
changes in portfolio composition.
For Alpine, both the CP and the Liquidity ratings use DBRS'
simulation methodology, which was developed to analyze diverse
ABCP conduit portfolios. This analysis uses the DBRS CDO Toolbox
simulation model, with adjustments to reflect the unique structure
of an ABCP conduit and its underlying assets. DBRS determines
attachment points for risk based on an analysis of the portfolio
and models the portfolio based on key inputs such as asset
ratings, asset tenors and recovery rates. The attachment points
determine the portion of the exposure rated AAA, AA, A through B
as well as unrated.
DBRS models the portfolio on an ongoing basis to reflect changes
in Alpine's portfolio composition and credit quality. The rating
results are updated and posted on the DBRS website.
AMERICAN GENERAL: Demoted to 'B2' by Moody's as AIG Backing Drops
-----------------------------------------------------------------
Moody's Investors Service downgraded the senior unsecured rating
of American General Finance Corp. (AGFC) to B2 from Baa3 and its
short-term rating to Not Prime from Prime-3. The short-term
ratings of AGFC subsidiary CommoLoCo, Inc. and direct parent
American General Finance Inc. were also downgraded to Not Prime
from Prime-3. The ratings outlook for AGFC's long-term ratings is
negative. This action concludes the review of AGFC's ratings
first initiated on July 31, 2009.
Moody's said that the ratings downgrade primarily reflects Moody's
view that the quality and duration of support from AGFC's ultimate
parent AIG has diminished. As a result, the rating uplift
associated with AIG's support is reduced from several notches to a
single notch above AGFC's stand-alone credit profile. In Moody's
view, AGFC's stand-alone credit profile is consistent with a low-B
rating, driven by liquidity constraints and weaker operating
prospects.
The duration of AIG's support of AGFC is relatively certain
through November 2010, given AIG's statements to this effect in
its financial statement filings with the SEC. Moody's views AIG's
backup support as a critical bridge that reduces the risks
associated with AGFC's efforts to address short-term liquidity
issues and transition towards a more stable funding profile.
However, Moody's believes longer-term support from AIG is less
certain because of AGFC's diminished strategic importance to AIG.
In Moody's view, the quality of AIG's support of AGFC has
weakened. As a reflection of this, AGFC has had to sell
receivables at a loss to generate cash to service debt maturities,
in lieu of cash injections from AIG. In contrast, previous to the
onset of financial stress at AIG, Moody's believes that AIG would
have supported AGFC, avoiding such losses.
Moody's said that AGFC's rating also reflects its stand-alone
profile, which has been weakened by the firm's funding constraints
and deteriorating operating performance. AGFC has historically
relied upon unsecured debt to fund its operations, but it is
currently unable to economically issue unsecured debt in volumes
sufficient to refinance maturating debt. Additionally, AGFC has
no un-drawn capacity under its bank facilities.
To date in 2009, AGFC has executed asset sales and a
securitization to generate cash in advance of 2010 debt maturities
of $5.8 billion, including $4 billion of bank debt due in July.
Moody's anticipates that the firm will continue in this vein as it
is unlikely to regain access to the unsecured debt markets in the
near-term. Though necessary, Moody's believes these actions will
ultimately reduce AGFC's financial and operational flexibility.
Additionally, these actions carry execution risks that constrain
the firm's ratings.
Moody's said that AGFC's asset performance to date has compared
favorably to other sub-prime mortgage lenders. However, AGFC has
reported seven quarters of pre-tax losses resulting from higher
credit costs, an absence of mortgage banking income, and declining
branch revenues from curtailed origination levels. Moody's
believes AGFC's earnings performance is likely to continue to be
weak through the next several quarters, due to high unemployment
and associated higher-than-normal default experience and pressure
on home values.
AGFC has responded to these conditions by rationalizing operating
costs through branch closures and a reduction in staffing and by
selective price increases. However, in Moody's view, AGFC's
weaker asset performance and associated funding constraints have
negative implications for its franchise strength, because the
firm's home loans, a core product, are now subject to
significantly reduced availability to the firm's customers. Given
pressures on revenue sources and net margins, it is uncertain
whether AGFC will be able to generate sufficient returns to
attract new capital.
If AGFC's actions to generate liquidity and strengthen access to
new capital sources are successful, while also preserving key
franchise strengths and generating attractive returns, the firm's
stand-alone credit profile could improve. AGFC's ratings will
also incorporate the effects of any change in ownership, including
any support provided by a new owner.
AGFC's long-term rating outlook is negative, reflecting continuing
adverse funding and operating conditions, execution risks relating
to the firm's liquidity initiatives, and pressures on operating
results. The outlook could be stabilized if AGFC is able to meet
its debt maturities in July 2010, while also demonstrating an
improvement in asset quality and earnings performance.
Moody's noted that its rating of AGFC's equity hybrid trust-
preferred securities issued through AGFC Capital Trust I was
downgraded four notches, versus the five notch downgrade of AGFC's
senior unsecured rating. The narrowing of the notching
differential reflects the cumulative nature of the deferred
distributions of the securities upon a mandatory deferral, and
Moody's expectation that AGFC's capital contribution agreement
with AIG will provide the funds required to pay the cumulative
distributions.
Ratings affected by the action include:
American General Finance Corporation:
Long-term Issuer: to B2 from Baa3
Senior Unsecured: to B2 from Baa3
Short-term: to Not Prime from Prime-3
AGFC Capital Trust I:
Preferred Stock: to Caa1 from Ba3
American General Finance Inc.:
Short-term: to Not Prime from Prime-3
CommoLoCo, Inc.:
Short-term: to Not Prime from Prime-3
In its last rating action, on July 31, 2009, Moody's downgraded
AGFC's senior unsecured rating to Baa3 from Baa2 and its short-
term rating to Prime-3 from Prime-2 and placed the firm's ratings
on review for further possible downgrade.
AMP'D MOBILE: U.S. Trustee Seeks Chapter 7 Conversion
-----------------------------------------------------
Bill Rochelle at Bloomberg News reports that the U.S. Trustee is
asking the Bankruptcy Court to convert the Chapter 11 case of
Amp'd Mobile Inc. to a liquidation status under Chapter 7. The
U.S. Trustee notes that no operating reports have been filed since
April 2008 and fees to the U.S. Trustee's program are unpaid. A
hearing on the proposed conversion is scheduled for January 11.
Amp'd Mobile sold accounts receivable for $2.56 million to Afni
Inc. after filing for Chapter 11 in June 2007 and shutting down
two months later.
About Amp'd Mobile
Headquartered in Los Angeles, California, Amp'd Mobile Inc. aka
Amp'D Mobile LLC -- http://www.ampd.com/-- is a mobile virtual
network operator that provides voice, text and entertainment
content to subscribers who contract for cellular telephone
service. The company filed for chapter 11 protection on June 1,
2007 (Bankr. D. Del. Case No. 07-10739). Steven M. Yoder, Esq.,
Eric M. Sutty, Esq. and Mary E. Augustine, Esq. at The Bayard
Firm, represent the Debtor in its restructuring efforts.
Attorneys at Otterbourg, Steindler, Houston & Rosen, P.C. and
Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, represent the
Official Committee of Unsecured Creditors. In its schedules filed
with the Court, the Debtor listed total assets of $47,603,629 and
total debts of $164, 569,842. The Debtor's exclusive period to
file a plan expired on Sept. 29, 2007. The Debtor is in the
process of selling various assets. (Amp'd Mobile Bankruptcy News,
Issue No. 26; Bankruptcy Creditors' Services Inc.
http://bankrupt.com/newsstand/or 215/945-7000).
ARCH ALUMINUM: Court to Consider Add'l Cash Access Today
--------------------------------------------------------
The Hon. John K. Olson of the U.S. Bankruptcy Court for the
Southern District of Florida will consider at a hearing on
Dec. 30, 2009, at 9:30 a.m., Arch Aluminum & Glass Co, Inc., and
its affiliates' request for continued use of cash collateral. The
hearing will be held at the U.S. Bankruptcy Court, Ft. Lauderdale
Division, 299 East Broward Boulevard, Room 301, Fort Lauderdale,
Florida.
The Court had earlier given the Debtors permission to access until
the cash collateral securing their loans from prepetition lenders.
But the interim order expires Dec. 30.
PNC Bank, N.A., as agent and lender, consented to the continued
use of cash collateral, and the senior lenders have not objected
to the continued use. The Debtors will use the money to pay
suppliers and other parties.
Prepetition, the Debtors entered into a $148,600,000 loan and
security agreement -- amended from time to time until July 2008 --
with PNC Bank providing the Debtors with a credit facility
composed of (i) a $75,000,000 Senior Secured Revolving Credit
Facility, (ii) a $50,000,000 Senior Secured Term Loan, (iii) a
$10,000,000 Senior Secured Capex Facility, and (iv) a $13,600,000
Senior Secured Term Loan. In connection with the senior secured
credit facility, the Debtors entered into a Swap Transaction with
Wachovia Bank, effective as of April 26, 2007, and a CAD
Amortizing Interest Rate Swap with Citizens Bank of Massachusetts,
effective June 29, 2007.
In 2004, the Debtors entered into a note purchase agreement with
Churchill Capital Partners IV, L.P., selling certain Senior
Subordinated Notes to Churchill IV in the principal amount of
$13,000,000, which had been amended five times until July 2008.
As adequate protection for any diminution in value of the lenders'
collateral, the Debtors will grant the prepetition lenders a
replacement lien on and in all property of the Debtors acquired or
generated after the petition date. The senior lenders will also
have an administrative claim.
About Arch Aluminum
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.
BAKERS FOOTWEAR: Posts $10.2 Million Net Loss in Q3 2009
--------------------------------------------------------
Bakers Footwear Group, Inc., reported a net loss of $10.2 million
for the 13 weeks ended October 31, 2009, compared with a net loss
of $8.3 million for the same period of 2008.
For the 13 weeks ended October 31, 2009, net sales were
$39.0 million, decreasing from $41.1 million for the thirteen
weeks ended November 1, 2008. Comparable store sales for the
third quarter of fiscal 2009 decreased 5.1%, compared to a
comparable store sales increase of 4.5% for the third quarter of
fiscal 2008.
Gross profit decreased to $6.8 million in the third quarter of
2009 from $9.0 million in the third quarter of 2008, a decrease of
$2.2 million or 24.8%. Gross margin in the third quarter of 2009
was negatively impacted by increased promotional activity the
Company took in response to the weak demand for its transitional
product for fall. As a percentage of sales, gross profit
decreased to 17.3% in the third quarter of 2009 from 21.9% in the
third quarter of 2008 primarily as a result of increased markdowns
and lower leverage of buying and occupancy costs.
Nine Months Results
The Company reported a net loss of $14.7 million for the thirty-
nine weeks ended October 31, 2009, compared with a net loss of
$15.5 million for the comparable period ended November 1, 2008.
For the 39-week year-to-date period ended October 31, 2009, net
sales were $127.7 million, decreasing from $128.2 million in the
39-week period ended November 1, 2008. Comparable store sales for
the first nine months of fiscal 2009 increased 0.2%, compared to a
decrease of 0.8% in the first nine months of last year.
Gross profit decreased to $32.4 million in 2009 from $33.1 million
in 2008, a decrease of $741,115 or 2.2%. As a percentage of
sales, gross profit decreased to 25.4% in 2009 from 25.8% in 2008.
Balance Sheet
At October 31, 2009, the Company's balance sheets showed
$53.2 million in total assets and $56.7 million in total
liabilities, which results to a $3.5 million shareholders'
deficit.
The Company's balance sheets at October 31, 2009, also showed
strained liquidity with $26.1 million in total current assets
available to pay $47.4 million in total current liabilities.
A full-text copy of the Company's Form 10-Q is available at no
charge at http://researcharchives.com/t/s?4c9f
Going Concern Doubt
The Company's losses in the first 39 weeks of fiscal year 2009 and
recent years had a significant negative impact on the Company's
financial position and liquidity. As of October 31, 2009, the
Company had negative working capital of $21.3 million, unused
borrowing capacity under its revolving credit facility of $3.5
million, and a shareholders' deficit of $3.5 million.
As of December 5, 2009, the balance on the revolving credit
facility was $19.3 million and unused borrowing capacity was
$2.1 million.
The Company's independent registered public accounting firm's
report issued in the Company's Annual Report on Form 10-K for
fiscal year 2008 included an explanatory paragraph describing the
existence of conditions that raise substantial doubt about the
Company's ability to continue as a going concern, including recent
losses and the potential inability to comply with financial
covenants.
About Bakers Footwear
Based in St. Louis, Missouri, Bakers Footwear Group, Inc. (Nasdaq:
BKRS) is a national, mall-based, specialty retailer of distinctive
footwear and accessories for young women. The Company's
merchandise includes private label and national brand dress,
casual and sport shoes, boots, sandals and accessories. The
Company currently operates over 240 stores nationwide. Bakers'
stores focus on women between the ages of 16 and 35. Wild Pair
stores offer fashion-forward footwear to both women and men
between the ages of 17 and 29.
BINGO.COM LTD: Posts $390,000 Net Loss in Q3 2009
-------------------------------------------------
Bingo.com, Ltd., reported a net loss of $390,432 on total revenue
of $1,436,296 for the three months ended September 30, 2009,
compared with a net loss of $268,774 on total revenue of
$1,560,087 for the same period of 2008.
The increase in net loss for the quarter ended September 30, 2009,
compared to the third quarter of 2008 and the second quarter of
2009, is primarily due to an increase in expenditures incurred
from the Company's Maltese operations.
Balance Sheet
At September 30, 2009, the Company's consolidated balance sheets
showed total assets of $2,268,379, total current liabilities of
$623,403, and total stockholders' equity of $1,644,976.
The Company had cash of $547,505 and working capital of $80,739 at
September 30, 2009. This compares to cash of $412,002 and working
capital of $124,495 at December 31, 2008.
A full-text copy of the Company's Form 10-Q is available for free
at http://researcharchives.com/t/s?4c9a
Going Concern Doubt
The Company has incurred significant losses since inception, and
as of September 30, 2009, had an accumulated deficit of
$13,164,658.
"The application of the going concern basis is dependent upon the
Company achieving profitable operations to generate sufficient
cash flows to fund continued operations, or, in the absence of
adequate cash flows from operations, obtaining additional
financing."
About Bingo.com Ltd.
Based in The Valley, Anguilla, British West Indies, Bingo.com,
Ltd. (OTC BB: BNGOF) -- http://www.bingo.com/-- is in the
business of developing and operating a bingo based web portal
designed to provide a variety of Internet based games played by
individuals plus other forms of entertainment, including an online
community, chat rooms, contests, sweepstakes, tournaments, and
more. The Company generates revenue from players depositing funds
into their account on the Company's Web site and then playing
games for money.
The Bingo.com Web site is owned and operated by Bingo.com
Operations Limited, a subsidiary of Bingo.com, Ltd., which is
publicly traded on the NASDAQ Bulletin Board under the symbol
BNGOF. Bingo.com Operations Limited provides its cash games
pursuant to an Internet gaming license issued by the Lotteries &
Gaming Authority of Malta.
BIOLIFE SOLUTIONS: Amends Convertible Multi-Draw Term Loan
----------------------------------------------------------
BioLife Solutions, Inc., reports that on December 16, 2009, the
Company entered into an Amendment to its Secured Convertible
Multi-Draw Term Loan Facility Agreement with each of Thomas
Girschweiler, a director and stockholder of the Company, and
Walter Villiger, an affiliate of the Company, each a non-U.S.
Person, pursuant to which:
(a) the term of the Secured Convertible Multi-Draw Term Loan
Note was extended to January 11, 2011, and
(b) the conversion feature of the Note was eliminated.
The Note previously delivered to each of the Investors also was
amended to reflect the changes to the Facility Agreement.
In its Form 10-Q for the period ended September 30, 2009, the
Company said it expects that it may need additional capital to
reach a sustainable level of positive cash flow. Although the
Investors who have provided the amended Multi-Draw Term Loan
Facilities historically have demonstrated a willingness to grant
access to the Facilities and renegotiate terms of previous credit
arrangements, there is no assurance they will continue to do so in
the future, or that they will provide an extension of repayment
date of January 11, 2010. If the investors were to become
unwilling to provide access to additional funds through the
amended Multi-Draw Term Loan Facilities, or demand repayment on
January 10, 2010, the Company would need to find immediate
additional sources of capital. There can be no assurance that
such capital would be available at all, or, if available, that the
terms of such financing would not be dilutive to other
stockholders. If the Company is unable to secure additional
capital as circumstances require, it may not be able to continue
its operations.
The Company said it has been unable to generate sufficient income
from operations to meet its operating needs and has an accumulated
deficit of approximately $50 million at September 30, 2009. This
raises substantial doubt about the Company's ability to continue
as a going concern.
At September 30, 2009, the Company had total assets of $1,310,008
against total liabilities of $8,808,608, resulting in $7,498,600
in stockholders' deficit.
About BioLife
BioLife Solutions, Inc., develops, manufactures, and markets
patented hypothermic storage and cryopreservation solutions for
cells, tissues, and organs, and provides contracted research and
development and consulting services related to optimization of
biopreservation processes and protocols. Its proprietary
HypoThermosol(R), CryoStor(TM), and BloodStor(TM) biopreservation
media products are marketed to companies, laboratories, and
academic institutions engaged in research and commercial clinical
applications. The Company's line of serum-free and protein-free
biopreservation solutions are fully defined and formulated to
reduce preservation-induced, delayed-onset cell damage and death.
This platform enabling technology provides academic and clinical
researchers significant improvement in biologic source material
shelf life and also post-thaw isolated cell, tissue, and organ
viability and function.
CAMP COOLEY: Cash Collateral Hearing Rescheduled to January 12
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Texas has
rescheduled to January 12, 2010, at 2:00 p.m., the final hearing
on Camp Cooley Ltd.'s request to access to cash securing repayment
of current and prepetition debt. The hearing will be held at Waco
Bankruptcy Courtroom 1.
The Debtor has already obtained permission, on an interim basis,
to access cash collateral.
Amegy Bank National Association and Lone Star PCA have liens on
the Debtors' cash and other assets. Prepetition, Amegy Bank
National Association and Lone Star PCA made loans and other
financial accommodations available to the Debtor. Lone Star
advanced $5.3 million; Amegy advanced $20 million.
The Debtor would use cash securing loans to Amegy and Lone Star to
pay certain prepetition unsecured debt, pay costs of ongoing
operations, satisfy payroll and employee benefits, pay severance
taxes, and to pay vendors to ensure a continued supply of services
and materials essential to the Debtor's continued viability.
Without access to cash collateral, the Debtor would be unable to
operate its business postpetition.
As adequate protection, the Debtor will grant Amergy and Lone Star
a replacement lien on all assets and proceeds of which would be
subject to the liens on the Debtor's prepetition lenders. An
administrative priority in other assets will be granted
to further ensure adequate protection. As further adequate
protection, the prepetition lenders will receive from the Debtor
cash payments. About $300,000 to Lone Star upon receipt of sales
proceeds from the Fall Sale before any disbursements are made for
ongoing expenses other than the expenses related to the sale.
Franklin, Texas-based Camp Cooley Ltd. operates an agricultural
and farming business. The Company filed for Chapter 11 bankruptcy
protection on November 8, 2009 (Bankr. W.D. Tex. Case No. 09-
61311). R. Glen Ayers Jr., Esq., at Langley and Banack, Inc.,
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.
CATHOLIC KNIGHTS: A.M. Best Downgrades FSR to 'b'
-------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to B
(Fair) from B+ (Good) and issuer credit rating to "bb+" from "bbb-
" of Catholic Knights (the Society) (Milwaukee, WI). The ratings
have been placed under review with negative implications.
These rating actions reflect the Society's decline in its
unassigned funds since year-end 2008 due to investment losses,
both realized and unrealized. As a result, the Society's risk-
adjusted capitalization, as measured by Best's Capital Adequacy
Ratio (BCAR), continues to be weak. A.M. Best notes that Catholic
Knights experienced a large increase in below-investment grade
securities in 2009, due primarily to credit migration in its
residential mortgage-backed securities portfolio, which may
further weaken the Society's balance sheet position and its
unassigned surplus funds going forward. However, these securities
may be subject to re-evaluation before the end of 2009, and the
Society has the intention and ability to hold these securities
over the long term. In order to lower volatility and bolster its
unassigned funds, the Society has reduced its exposure to equities
and is pursuing a capital improvement plan that includes the
addition of capital from external sources.
The rating also recognizes that Catholic Knights has reported
consistently positive statutory operating results over the past
five years while enjoying a long-standing fraternal presence in
the Roman Catholic community.
Catholic Knights has signed a letter of intent to merge with
Catholic Family Life Insurance (Shorewood, WI) and intends to
complete the merger in second quarter 2010. The combination would
result in an increased membership base and opportunities for
fraternal synergies. Furthermore, Catholic Knights has a
successful record of mergers with other Catholic fraternal
organizations, thus gaining membership, expanding financial
capacity and presenting another avenue for membership growth.
However, the merger also will add a higher level of commercial
mortgage loans to Catholic Knights' balance sheet and will
initially result in merger-related charges, with anticipated
savings from economies of scale coming in the following year.
CHEFS DIET ACQUISITION: Hit With Involuntary Chapter 11
-------------------------------------------------------
Creditors filed an involuntary Chapter 11 petition December 22
against Chefs Diet Acquisition Corp. in White Plains, New York
(Bankr. S.D.N.Y. Case No. 09-24392).
Chefs Diet, also known as Kosher Chefs Diet, provides diet meals
and snacks delivered to homes. Products made by Larchmont, New
York-based Chefs Diet are based on the Dr. Sears Zone diet.
The petitioning creditors are owed $190,525. The petitioning
creditors are West-Conn Meat Co., Inc., owed $98,357; Lance Kasak,
Inc., owed $6,530; and M. Tucker Co., Inc., owed $85,638. They
assert claims for unpaid goods delivered prepetition.
Dawn K. Arnold, Esq., at Rattet Pasternak & Gordon-Oliver LLP,
represents the petitioning creditors.
CHRYSLER LLC: Has Nod to Abandon Ownership in 8 Entities
--------------------------------------------------------
Old CarCo LLC, formerly Chrysler LLC, and its units sought and
obtained permission from the Bankruptcy Court to abandon their
ownership interests in eight nondebtor subsidiaries:
(a) two foreign nondebtor subsidiaries:
(1) Chrysler de Venezuela S.A.; and
(2) Chrysler Motors de Venezuela S.A; and
(b) six domestic nondebtor subsidiaries that currently operate
or previously operated Chrysler, Dodge or Jeep dealerships
and that are referred to as "marketing investment
dealerships":
(1) Action Chrysler Jeep Dodge, Inc.;
(2) Des Plaines Chrysler Jeep Dodge, Inc.;
(3) Grapevine Chrysler Jeep Dodge, Inc.;
(4) Lone Star Chrysler Jeep Dodge, Inc.;
(5) Long Beach Chrysler-Jeep, Inc.; and
(6) South Charlotte Chrysler Jeep Dodge, Inc.
As part of the Fiat Transaction, the Debtors sold substantially
all of their operating assets to New Chrysler. However, in
connection with the Fiat Transaction, New Chrysler did not
purchase the Ownership Interests in the Nondebtor Subsidiaries.
As a result, the Nondebtor Subsidiaries remain wholly or partially
owned, directly or indirectly, by Old Carco. Specifically, Old
Carco directly or indirectly owns 100% of the Ownership Interests
in all Nondebtor Subsidiaries other than Des Plaines MID and South
Charlotte MID, and owns a controlling interest in Des Plaines MID
and South Charlotte MID.
The Nondebtor Foreign Subsidiaries have been inactive and the
subject of liquidation proceedings in Venezuela since prior to the
Petition Date. Specifically, Chrysler Venezuela has been in
liquidation since 1989, and Chrysler Motors Venezuela has been in
liquidation since August 2008. The Debtors believe that the
assets and liabilities of the Foreign Nondebtor Subsidiaries are
de minimis.
Corinne Ball, Esq., at Jones Day, in New York, contends that the
Debtors have no source of funding for any further liquidation
activities by the Nondebtor Foreign Subsidiaries. She adds that
the MIDs are unprofitable current and former dealerships owned by
the Debtors. The Debtors have determined that there is no value
in the Ownership Interests in these entities.
The Debtors do not exercise and have not exercised any control
over the business or affairs of the Nondebtor Subsidiaries since
before the Fiat Transaction, Ms. Ball discloses. She notes that
no officer, director or member of management of the Debtors is an
officer, director or member of management of any of the Nondebtor
Subsidiaries.
The Ownership Interests in the MIDs and 65% of the Ownership
Interests in the Nondebtor Foreign Subsidiaries serve as
collateral for the Debtors' obligations to the First Lien Lenders.
Pursuant to the First Lien Winddown Order authorizing the Debtors
to use cash collateral of the Prepetition Secured Lenders, the
First Lien Agent designated the Ownership Interests as "Excluded
Assets" that the First Lien Lenders neither wish to fund, nor own.
Given the designation of the Ownership Interests as Excluded
Assets, and consistent with the terms of the First Lien Winddown
Order, Ms. Ball tells Judge Gonzalez that the Debtors have
determined to abandon the Ownership Interests.
Ms. Ball asserts that abandonment of the Ownership Interests is
appropriate because they are of inconsequential value and provide
no benefit, and only potential burdens, to the Debtors' bankruptcy
estates. In the absence of any further funding for activities
relating to the Ownership Interests, and consistent with the First
Lien Winddown Order, the Debtors believe that the abandonment of
the Ownership Interests is the most cost-efficient means of
relieving their estates of the potential burdens associated with
continued ownership of the Nondebtor Subsidiaries.
About Chrysler LLC
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.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC,
formed in 2009 from a global strategic alliance with Fiat Group,
produces Chrysler, Jeep, Ram, Dodge, Mopar and Global Electric
Motorcars (GEM) brand vehicles and products.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Marchionne to Receiver $600,000 for Auto Work
-----------------------------------------------------------
Chrysler Group LLC obtained approval from the U.S. Treasury
Department to pay the company's Chief Executive Officer, Sergio
Marchionne, $600,000 in stock salary to for his work on the
automaker's board for 2009, reports Bill Koenig of Bloomberg News.
To recall, the Treasury had spent $14.3 billion for Chrysler's
restructuring.
As Chrysler's CEO, Mr. Marchionne's salary is paid by Fiat SpA,
which owns 20% of the automaker. He serves as CEO of both
Chrysler and Fiat, disclosed a letter signed by Kenneth Feinberg,
the department's special master for executive compensation, which
letter was purportedly e-mailed to reporters, notes the report.
According to Mr. Koenig, Chrysler proposed giving Marchionne
$600,000 in restricted stock, one third of which could be sold
after each year of service. Mr. Feinberg ruled that the stock
couldn't be sold until after three years and all obligations to
the Troubled Assets Relief Program have been fulfilled, the report
said.
About Chrysler LLC
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.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC,
formed in 2009 from a global strategic alliance with Fiat Group,
produces Chrysler, Jeep, Ram, Dodge, Mopar and Global Electric
Motorcars (GEM) brand vehicles and products.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: New Chrysler May Fight Dealership Legislation
-----------------------------------------------------------
Chrysler Group LLC Chief Executive Sergio Marchionne said they
might challenge as constitutional legislative efforts to restore
some of their terminated dealers, according to a December 17
report by The New York Times.
As widely reported, a spending bill that would give dealers of
Chrysler Group and another bankrupt auto maker, General Motors
Corp., a chance to appeal their termination passed both houses of
Congress and was recently signed by President Barack Obama.
The $1.1 trillion spending bill includes provisions to give
dealers affected by the auto makers' bankruptcy filing a chance to
challenge or reconsider prior decisions to close the dealers. It
establishes a binding arbitration process to determine whether
dealerships ought to be reinstated.
Mr. Marchionne said they had not decided whether to ask the courts
to stop Congress from compelling Chrysler into arbitration with
former dealers, The New York Times reported.
Mr. Marchionne said restoring large numbers of dealerships could
"cause havoc within Chrysler," pointing out that the review
processes proposed by Chrysler in an attempt to keep Congress from
getting involved "had all the elements of equity and fairness" and
"would have guaranteed a disgruntled dealer the opportunity to air
its concern."
Chrysler Group proposed its own review process for the dealers
last week, which also gives dealers access to arbitration but
under the auto maker's original criteria used to mark dealers for
termination. The plan drew flak, however, from dealer groups
which argued that few stores would be restored under these
criteria because they were circular and self-fulfilling.
Chrysler has more than 2,000 dealers remaining after it terminated
789 dealers in June as part of the acquisition of its major assets
by Italy-based auto maker, Fiat S.p.A.
Chrysler Sends Out Letters
Pursuant to the bill recently passed by Congress, Chrysler Group
sent letters to 789 dealerships who had their franchise agreements
pulled, notifying them of the new arbitration process that could
potentially restore many of the dealerships, egmCarTech's Stephen
Calogera reports, citing Automotive News as its source.
Dealers have until January 25, 2010, to notify Chrysler if they do
in fact intend to seek arbitration, the report notes.
About Chrysler LLC
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.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC,
formed in 2009 from a global strategic alliance with Fiat Group,
produces Chrysler, Jeep, Ram, Dodge, Mopar and Global Electric
Motorcars (GEM) brand vehicles and products.
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)
CIRCUIT CITY: Greystone Adversary Proceeding Closed
---------------------------------------------------
In January 2009, Circuit City Stores, Inc., asked the Court,
pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure, as incorporated by Rule 7012 of the Federal Rules of
Bankruptcy Procedure, to dismiss all counts asserted by Greystone
Data Systems, Inc., in the Complaint.
Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond,
Virginia, contended that the Complaint "reflects a transparent
attempt by Greystone to improperly circumvent the automatic stay
and priority scheme set forth in the Bankruptcy Code and
recharacterize its claim -- a prepetition unsecured claim against
the Debtor based on a prepetition contract -- in order to place
itself ahead of similarly situated creditors in the Debtor's
bankruptcy proceedings under the guise of constructive trust."
Greystone cannot meet its heavy burden of establishing clearly
and convincingly that the extraordinary remedy of constructive
trust is necessary to prevent an injustice where equity dictates
that Greystone not be rewarded for its attempt to make an end run
around the Bankruptcy Code's automatic stay and priority scheme.
Moreover, the Complaint is deficient because it fails to set
forth any well-pled allegations to satisfy the tracing of element
necessary to impose a constructive trust under applicable law,
Mr. Foley asserted.
By notice dated February 25, 2009, Greystone withdrew its
Complaint.
According to the Court's docket dated December 16, 2009, the
Adversary Proceeding is closed.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.
Circuit City Stores together with 17 affiliates filed a voluntary
petition for reorganization relief under Chapter 11 of the
Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08-
35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of August 31, 2008.
Circuit City has opted to liquidate its 721 stores. It has
obtained the Bankruptcy Court's approval to pursue going-out-of-
business sales, and sell its store leases.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Circuit City Stores Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
CIRCUIT CITY: Plan Confirmation Hearing Continued to January 28
---------------------------------------------------------------
The hearing to consider the confirmation of Circuit City Stores
Inc.'s First Amended Joint Plan of Liquidation is continued from
December 21, 2009, to January 28, 2010, at 11:00 a.m., Eastern
Time, or as soon as counsel can be heard before Judge Huennekens,
the Debtors and the Official Committee of Unsecured Creditors
disclosed in a notice filed in Court.
The confirmation hearing may be adjourned from time to time by
announcement in open court.
The Plan may be further modified, if necessary, under Section
1127 of the Bankruptcy Code, before, during, or as a result of
the confirmation hearing, without further notice to parties-in-
interest.
Various parties have filed objections to the Plan. The latest
objectors include the Commonwealth of Virginia Department of
Taxation, which is seeking interest on its priority claim, as
required by Section 511 of the Bankruptcy Code; The Maricopa
County Treasurer, which asserts that its claim should be treated
as a secured claim; Arlington ISD, and other related parties,
which argue that the proper classification of their claims is as
first priority secured tax claims entitled to interest at the rate
provided by applicable non-bankruptcy law; and the Lewisville
Independent School District, which wants the proceeds of the sales
of assets securing its tax claims preserved.
The Liquidating Plan
The Plan provides for the orderly liquidation of the remaining
assets of the Debtors and the distribution of the proceeds of the
liquidation of the Debtors' assets according to the priorities
set forth under the Bankruptcy Code.
Under the Debtors' Joint Plan of Liquidation, all claims against
the Debtors -- other than administrative claims and priority tax
claims, which will be paid in full -- are classified into eight
classes:
Estimated
Estimated Aggregate Amount
Class Description Recovery of Allowed Claims
----- ----------- --------- -----------------
1 Miscellaneous Secured Claims 100% $5 mil.-$20 mil.
2 Non-Tax Priority Claims 100% $35 mil.-$95 mil.
3 Convenience Claims 10% unknown
4 General Unsecured Claims 0%-13.5% $1.8 bil.-$2 bil.
5 Intercompany Claims 0% $0
6 Subordinated 510(c) Claims 0% $0
7 Subordinated 510(b) Claims 0% $0
8 Interests 0% -
A Liquidating Trust will be established on the Plan Effective
Date. All Distributions to the Holders of allowed claims will be
from the Liquidating Trust.
The Plan Proponents also filed on September 24, 2009, clean and
final version of their Disclosure Statement and First Amended
Plan, a full-text copy of which is available at no charge at:
http://bankrupt.com/misc/CC_DS&1stAmPlan_092409.pdf
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.
Circuit City Stores together with 17 affiliates filed a voluntary
petition for reorganization relief under Chapter 11 of the
Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08-
35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of August 31, 2008.
Circuit City has opted to liquidate its 721 stores. It has
obtained the Bankruptcy Court's approval to pursue going-out-of-
business sales, and sell its store leases.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Circuit City Stores Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
CIRCUIT CITY: Wins Deal for Rejection of Charter Contracts
----------------------------------------------------------
Circuit City Stores Inc. and its units obtained from the
Bankruptcy Court approval of an agreement with Charter
Communications, Inc., whereby all executory contracts between the
parties will be deemed rejected as of August 31, 2009.
On March 27, 2009, the Charter filed voluntary petitions for
Chapter 11 relief with the United States Bankruptcy Court for the
Southern District of New York. The Charter Debtors' confirmed
Joint Plan of Reorganization became effective on November 30,
2009.
The Debtors and Charter are parties to a number of executory
contracts, including, but not limited to a certain Retailer
Marketing Agreement dated June 27, 2008, and the Installation
Services Evaluation Agreement dated September 2, 2007.
After entry of the Court's order approving the Stipulation,
Charter will file a notice of entry of the Stipulation and Order
with the New York Court in the Charter Cases.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.
Circuit City Stores together with 17 affiliates filed a voluntary
petition for reorganization relief under Chapter 11 of the
Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08-
35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of August 31, 2008.
Circuit City has opted to liquidate its 721 stores. It has
obtained the Bankruptcy Court's approval to pursue going-out-of-
business sales, and sell its store leases.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Circuit City Stores Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
CITADEL BROADCASTING: Has Interim Nod for Cash Collateral Use
-------------------------------------------------------------
As of December 21, 2009, Citadel Broadcasting Corp. and its units
have prepetition indebtedness of approximately $2.126 billion,
including $2.076 billion of secured debt. A summary of the
Debtors' prepetition indebtedness shows:
Outstanding
Amount
Original (estimated as Maturity
Financing Amount of 12/20/09) Date Security
--------- -------- ------------- -------- --------
Revolving Credit $200M $140.6M June 2013 Secured
Facility
Tranche A Term $600M $544.8M June 2013 Secured
Loan
Tranche B Term $1,535M $1,390.2M June 2014 Secured
Loan
Interest Swap $1,067.5M $970M8 Sept. 2012 Secured
Agreement
8.0% Convertible $330M $49.6M10 Feb. 2011 Unsecured
Subordinated
Notes
The Debtors' Secured Debt consists of: (a) a $200 million six-
year revolver due June 2013; (b) a $600 million six-year Tranche
A term loan due June 2013; and (c) a $1.535 billion seven-year
Tranche B term loan due June 2014. As of December 20, 2009,
$2.076 billion in Secured Debt is outstanding. This balance
includes $140.6 million outstanding on the Revolver,
$544.8 million outstanding on the Tranche A Term Loan, and
$1,390.2 million outstanding on the Tranche B Term Loan.
The Secured Debt is memorialized by that certain Credit
Agreement, dated as of June 12, 2007, by and among Citadel
Broadcasting Corporation, certain lenders and JPMorgan
Chase Bank, N.A.
The obligations under the Credit Agreement are unconditionally
guaranteed by Citadel's operating subsidiaries, including each of
the Debtors. The debt issued under the Credit Agreement is
secured by a first priority security interest in certain assets
and real property of the Debtors.
In addition, the Debtors are party to an amortizing interest swap
agreement, which they use to manage their exposure to the
variability of future cash flows related to floating interest
rate obligations under the Secured Debt Agreement. The swap
agreement is memorialized by: (a) the ISDA 2002 Swap Master
Agreement between JPMorgan Chase Bank, N.A. and Citadel
Broadcasting, dated June 26, 2007, which sets forth the terms and
conditions by which the swap transaction will be governed; and
(b) the Interest Rate Swap Transaction between Chase and Citadel,
dated June 27, 2007, whereby Citadel Broadcasting pays a
quarterly fixed amount to Chase and Chase pays a quarterly
floating amount (derived from LIBOR) to Citadel as per the terms
of the agreement and the Master Agreement from the period
commencing July 12, 2007, through September 30, 2012.
As of December 20, 2009, the notional amount of the Swap
Agreement is $970 million.
The Prepetition Obligations are secured by perfected, valid and
enforceable first priority liens and security interests granted
by the Debtors pursuant to, and to the extent set forth in, the
applicable Credit Documents to JPMorgan Chase Bank, N.A for the
ratable benefit of the Lenders, upon and in the assets and
property of the Debtors, including without limitation, accounts,
chattel paper, deposit accounts, documents, equipment, FCC
licenses, general intangibles, instruments, intellectual
property, inventory, investment property, letter-of-credit
rights, certain commercial tort claims, pledged capital stock and
other pledged interests of certain subsidiaries and other
tangible and intangible personal property and the proceeds
thereof.
Cash on hand and amounts generated by the collection of accounts
receivable, sale of inventory or other dispositions of the
Prepetition Collateral constitute proceeds of the Prepetition
Collateral and, therefore, is "cash collateral" of the Lenders
within the meaning of Section 363(a) of the Bankruptcy Code
In the normal course of business, the Debtors use cash on hand
and cash flow from operations to fund working capital, capital
expenditures and for other general corporate purposes. As of the
Petition Date, the Debtors have approximately $36,000,000 cash on
hand. An inability to use cash on hand and cash generated from
operations during the Chapter 11 cases could cripple the Debtors'
business operations.
Indeed, the Debtors must use their cash to, among other things,
continue the operation of their businesses in an orderly manner,
maintain business relationships with vendors, suppliers and
customers, pay employees and satisfy other working capital and
operational needs -- all of which are necessary to preserve and
maintain the Debtors' going-concern value and, ultimately,
effectuate a successful reorganization, explains Jonathan S.
Henes, Esq., at Kirkland & Ellis LLP, in New York.
As part of the pre-negotiated restructuring supported by more
than 60% of the Debtors' Lenders, the Lenders have consented to
the Debtors' use of Cash Collateral in exchange for the Debtors'
provision of Adequate Protection Obligations.
Against this backdrop, the Debtors ask the Court to enter orders:
(a) authorizing them to use Cash Collateral on an interim
basis pending a final hearing on their request; and
(b) granting certain adequate protection to the Agent and the
Lenders in connection with the use of Cash Collateral and
any diminution in the value of the Lenders' interests in
the Prepetition Collateral.
Salient Terms
A. Parties:
JPMorgan Chase Bank, N.A., as administrative agent and the
lenders from time to time party to the Credit Agreement dated as
of June 12, 2007.
B. Use:
For working capital and general corporate purposes and costs and
expenses related to the Chapter 11 Cases, including, without
limitation, any and all relief afforded by the Court pursuant to
"first-day motions" or otherwise.
C. Term:
The Debtors are authorized to use Cash Collateral on an interim
basis during the period from the Petition Date through the
earliest to occur of (a) 45 days after the Petition Date (with
that date extendable by 30 additional days with the Agent's
consent, which consent will not be unreasonably withheld) or (b)
five-business days following written notice to the Debtors
after the occurrence and continuance of any Termination Event
beyond any applicable grace period.
D. Adequate Protection:
As adequate protection for, and to the extent of, diminution in
the value of the Lenders' interest in the Prepetition Collateral
resulting from (x) the use of the Cash Collateral, (y) the use,
sale or lease of the Prepetition Collateral and (z) the
imposition of the automatic stay:
a. The Agent and the Lenders are granted valid and perfected,
security interests in, and liens on all of the right, title
and interest of the Debtors in, to and under all present
and after-acquired property of the Debtors of any nature
whatsoever.
b. A claim against the Debtors that constitutes expenses of
administration under Sections 503(b)(1), 507(a) and
and 507(b) of the Bankruptcy Code with priority in
payment over any and all administrative expenses.
c. Promptly following entry of the Interim Cash Collateral
Order, the Debtors will cash collateralize each undrawn
Letter of Credit, in an amount equal to 105% of the face
amount of the Letter of Credit.
d. The Debtors are authorized and directed to pay to the Agent
within 10 days after entry of the Interim Cash Collateral
Order (i) all amounts on deposit in the Cash Collateral
Account (estimated to be approximately $4 million), which
will be applied to reduce ratably the principal amount of
all Prepetition Obligations and (ii) all accrued and unpaid
prepetition interest, fees and costs to but not including
the Petition Date on or with respect to the Prepetition
Obligations.
e. The Debtors are authorized and directed to pay or reimburse
all reasonable fees, costs and charges incurred by the
Agent.
The Debtors will continue to comply with the Credit Agreement --
excluding any requirement that any audited financial statements
do not contain a "going concern" or like qualifications, and will
also provide to the Agent no later than Tuesday of every calendar
week, commencing December 29, 2009, a rolling 13-week cash flow
projection in the form of the initial 13-week cash flow
projection that has been mutually agreed upon by the Agent and
the Debtors.
E. Carve-Out:
"Carve Out" will mean the sum of (A) all fees required to be paid
to the Clerk of the Bankruptcy Court and to the Office of the
United States Trustee under section 1930(a) of title 28 of the
United States Code, (B) the costs of administrative expenses not
to exceed $500,000 in the aggregate that are permitted to be
incurred by any Chapter 7 trustee pursuant to any order of the
Court following any conversion of any of the Chapter 11 Cases
pursuant to Section 1112 of the Bankruptcy Code; and (C) at any
time after the first Business Day following delivery of a written
notice delivered by the Agent to the Debtors, the United States
Trustee, counsel for the Debtors and counsel for any statutory
committee appointed in the Chapter 11 Cases stating that a
Termination Event has occurred and is continuing and that the
Carve Out Cap is invoked, which notice may only be delivered
following the occurrence and during the continuance of a
Termination Event, to the extent allowed at any time, whether
before or after delivery of a Carve Out Trigger Notice, whether
by interim order, procedural order or otherwise, all unpaid fees,
costs and expenses incurred by persons or firms retained by the
Debtors and any Committee, the payment of all Professional
Fees incurred by the Professional Persons at any time after the
first Business Day following delivery of a Carve Out Trigger
Notice in an aggregate amount not exceeding $5,000,000, plus all
unpaid Professional Fees allowed at any time by the Bankruptcy
Court, whether before or after delivery of a Carve Out Trigger
Notice, whether by interim order, procedural order or otherwise,
that were incurred by the Professional Persons on or prior to the
first Business Day following the delivery of the Carve Out
Trigger Notice.
Court Grants Interim Approval
The Court authorized the Debtors, on an interim basis, to use the
Cash Collateral during the period from the Petition Date through
and including the Termination Date for working capital and
general corporate purposes and costs and expenses related to the
Chapter 11 Cases, including, without limitation, any and all
relief afforded by the Court pursuant to "first-day motions" or
otherwise, in accordance with the terms and conditions of the
Order.
"Cash is exactly what this company needs to stabilize
operations and continue business," Joshua Sussberg, Esq., at
Kirkland & Ellis, said at the hearing, reports Reuters.
All uses of cash by the Debtors for the costs and expenses of
administering the Chapter 11 Cases will be deemed to be first
from cash, if any, that is not Cash Collateral and thereafter
from Cash Collateral.
The Debtors' right to use the Cash Collateral pursuant to the
Order will terminate on the earliest to occur of:
(a) 45 days after the Petition Date, with that date extendable
by 30 additional days with the Agent's consent, which
consent will not be unreasonably withheld, or
(b) five business days following delivery of written notice to
the Debtors after the occurrence and continuance of
any of these termination events beyond any applicable
grace period:
a. failure of the Debtors to make any payment to the Agent
or the Lenders as and when required by the Order or
other failure to comply in any material respect with the
terms of the Order and that failure will continue
unremedied for more than five business days after notice
thereof;
b. failure of the Debtors to comply with the Reporting
Requirements and that failure will continue unremedied
for more than five business days after notice thereof;
c. failure of the Debtors to comply with any other covenant
or agreement specified in the Order and that failure
will continue unremedied for more than five
business days after notice thereof;
d. any of thee Chapter 11 Cases will be dismissed or
converted to a Chapter 7 Case; or a Chapter 11 Trustee
with plenary powers, a responsible officer, or an
examiner with enlarged powers relating to the operation
of the businesses of the Debtors will be appointed in
any of the Chapter 11 Cases; provided that the
appointment by the Court of an estate representative
for the limited purpose of investigating, commencing or
prosecuting Avoidance Actions on behalf of the Debtor's
estate will not constitute a default;
e. an order will be entered reversing, amending,
supplementing, staying for a period in excess of three
days, vacating or otherwise modifying the Order without
the consent of the Agent;
f. a pleading will be filed by any of the Debtors seeking,
or otherwise consenting to, any of the matters set forth
in paragraphs (d) or (e);
g. one or more judgments or decrees required to be
satisfied as an administrative expense claim will be
entered after the Petition Date against any Debtor
involving in the aggregate a liability of
$5,000,000 or more, and all judgments or decrees will
not have been vacated, discharged, stayed or bonded
pending appeal within 45 days from the entry thereof;
h. without the prior written consent of the Agent, the
Debtors at any time during the Chapter 11 Cases grant
(or seek authority from the Court to grant) liens in the
Prepetition Collateral, the Postpetition Collateral or
any portion thereof to any other parties, which liens
are senior or on a parity with the liens of the Agent or
the Lenders;
i. except on the terms of the Interim Order, the Debtors at
any time: (i) use the Cash Collateral; (ii) use the
Postpetition Collateral; or (iii) apply to any court for
an order authorizing the use of the Cash Collateral or
Postpetition Collateral; or
j. the occurrence of any other "Support Termination Event"
identified in the Plan Support Agreements.
Any party-in-interest objecting to the use of the Lenders' Cash
Collateral must file written objections with the Court no later
than 4:00 p.m. on January 27, 2010.
The Final Hearing will be held on February 3, 2010, at 10:00 a.m.
About Citadel Broadcasting
Citadel Broadcasting Corporation (OTC BB: CTDB) --
http://www.citadelbroadcasting.com/-- is the third largest radio
group in the United States, with a national footprint reaching
more than 50 markets. Citadel is comprised of 166 FM stations and
58 AM stations in the nation's leading markets, in addition to
Citadel Media, which is one of the three largest radio networks in
the United States.
Citadel Broadcasting filed for Chapter 11 with 50 affiliates on
Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422).
The Company listed assets of $1.4 billion and debt of $2.5 billion
in its Chapter 11 filing. Kirkland & Ellis LLP is serving as
legal counsel and Lazard Freres & Co. LLC. As financial advisor
for the restructuring. Kurtzman Carson Consultants is serving as
claims and notice agent.
Bankruptcy Creditors' Service, Inc., publishes Citadel
Broadcasting Bankruptcy News. The newsletter tracks the Chapter
11 proceeding undertaken by Citadel Broadcasting Corp. and other
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
CITADEL BROADCASTING: To Pay Prepetition Dues to Employees
----------------------------------------------------------
By this motion, Citadel Broadcasting Corp. and its units seek the
Court's authority to pay and honor, in the ordinary course of
business and in their sole discretion, any prepetition obligations
due and owing to certain of their employees.
According to Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in
New York, the Debtors seek to minimize personal hardship that
their Employees would suffer if they are not paid when payments
are due, and to maintain the morale of their essential workforce
during this critical time.
The obligations that the Debtors seek authority to pay include:
wages, salaries, commissions, bonuses, payroll and federal tax
form processing services, federal and state withholding taxes and
other amounts withheld, including 401(k) contributions, severance
obligations, health benefits, insurance benefits, retirement
benefits, workers' compensation benefits, paid time off, life and
accidental death and dismemberment insurance, and short- and
long-term disability coverage.
In addition, the Debtors seek authority to continue paying and
honoring on a postpetition basis, all Employee Obligations that
the Debtors provide to their Employees in the ordinary course of
business.
In addition, the Debtors also seek authorization for their banks
and other financial institutions to receive, process and pay any
and all checks, electronic fund transfers and automatic payroll
transfers drawn on the Debtors' operating or general disbursement
accounts, to the extent that the checks or transfers relate to
any of the prepetition Employee Obligations.
As of the Petition Date, the Debtors employ approximately 4,200
employees, approximately 2,700 of which are employed by the
Debtors on a full-time, salaried basis and 1,500 of which are
employed on a part-time basis.
A. Employee Compensation
* Employee Payroll Obligations -- In the ordinary course of
business, the Debtors incur payroll obligations for wages
and salaries to the Employees. The Debtors pay the majority
of their Employees twice each month; the remainder of the
Employees are paid on a bi-weekly basis. The Debtors'
payroll obligations generally include base wages and
salaries, overtime compensation and bonuses, as applicable.
On average, the Debtors' gross payroll totals approximately
$14,500,000 per month, net of payroll taxes.
The Debtors' Employee Payroll Obligations are composed of:
-- wages;
-- commissions;
-- independent contractor compensation; and
-- temporary personnel.
* Deductions and Withholdings -- During each applicable pay
period, the Debtors routinely deduct certain amounts from
paychecks, including, without limitation, (a) garnishments,
child support and similar deductions and (b) other pre-tax
and after-tax deductions payable pursuant to certain of the
Employee benefit plans, flexible spending accounts and
premiums for supplemental life and disability insurance.
The Debtors forward the amount of the Deductions to the
appropriate third-party recipients. Due to the commencement
of the Chapter 11 cases, however, certain Deductions that
were deducted from Employees' earnings were not forwarded to
the appropriate third-party recipients before the Petition
Date. The Debtors believe that, as of the Petition Date,
approximately $300,000 in Deductions have not been remitted
to the appropriate third-party recipients.
* Reimbursable Expenses -- In the ordinary course of their
business, the Debtors reimburse Employees, Temporary
Personnel, Independent Contractors and members of the board
of directors for approved, legitimate expenses incurred on
behalf of the Debtors in the scope of their employment. The
Reimbursable Expenses include, without limitation, certain
business-related travel expenses like meals, hotels,
flights and car rentals.
* Employee Bonus Programs -- To encourage and incentivize
certain key Employees, the Debtors maintained several
employee bonus programs, which serve as an important
component of compensation for certain Employees, are
directly tied to the achievement of financial performance
goals and have always been an integral component to
preserving and increasing the Debtors' enterprise value.
The Employee Bonus Programs are:
-- Sales Bonuses;
-- Management Level Bonuses; and
-- Corporate Bonuses.
From January 1, 2009, through November 30, 2009, the Debtors
paid approximately $4,200,000 to Employees under the
Employee Bonus Programs.
* Severance Obligations -- The Debtors maintain, and have
historically offered, severance payments to terminated
Employees pursuant to an existing severance policy.
Under the terms of the Severance Policy, the Debtors have,
at their discretion, made severance payments to terminated
full-time Employees who do not otherwise have contractual
severance rights, which payments generally equal one week
base salary for Employees terminated in the first two years
of service; two weeks base salary for Employees terminated
in years two through 10 of service; and four weeks severance
for Employees terminated after 10 years of service.
Notably, the Debtors also provide severance payments to
terminated Employees pursuant to certain individualized
employment contracts and in some cases pursuant to
applicable collective bargaining agreements.
B. Employee Benefits
* Medical, Vision and Dental Plans -- The Debtors offer health
care coverage, including prescription drug coverage and
dental and vision care, to approximately 2,630 Employees and
their dependents. The Debtors pay approximately $1,000,000
per month to fund the health care benefits. On an annual
basis, the Debtors spend approximately $12,700,000 on
Employee health care benefits, equal to approximately $4,800
per eligible Employee.
* Workers' Compensation -- The Debtors provide workers'
compensation coverage for their Employees at the
statutorily-required level for each state in which the
Debtors have business operations. The Debtors' Workers'
Compensation Program is administered through ESIS, Inc. and
covers workers' compensation claims through an incurred loss
program with a $1,000,000 liability limit per accident per
Employee.
The Debtors' annual insurance premium and fees for the
Workers' Compensation Program total approximately $365,000,
which premium and fees were paid in full before the Petition
Date.
* Paid Time Off and Leaves of Absence -- The Debtors provide
paid time off to their Employees to cover, among other
things, vacation, sick days and holidays. The amount of
Paid Time Off available to a particular Employee is
generally determined by a specific policy or statutory
requirements or provisions of applicable collective
bargaining agreements.
As of the Petition Date, the Debtors estimate that
approximately $2,600,000 in earned but unpaid Paid Time Off
had accrued for salaried, non-salaried and unionized
Employees.
* 401(k) Plan -- The Debtors maintain the Citadel Broadcasting
Company 401(k) Savings and Retirement Plan, administered
through Merrill Lynch Trust Co., for the benefit of eligible
Employees. The 401(k) Plan is a tax qualified plan within
the meaning of, and administered in accordance with, the
requirements of Section 401(k) and other applicable sections
of the Internal Revenue Code.
Approximately $650,000 is withheld each month from
Employees' paychecks for Employee contributions to the
401(k) Plan.
* Union Plans -- Approximately 270 Employees are unionized,
and belong primarily to (a) the American Federation of
Television and Radio Artists; (b) the National Association
of Broadcast Employees and Technicians; and (c) the Studio
Transportation Drivers Union. Under the terms of the
collective bargaining agreements to which the unionized
Employees are party, the Debtors are required to make
contributions to the health and welfare plans and the
pension/retirement plans of their Union Employees. The
Debtors typically remit the amounts to the appropriate
unions one month in arrears.
* Insurance and Disability Benefits -- The Debtors provide all
active full-time Employees with term life insurance and
accidental death and dismemberment insurance through
MetLife. The Debtors estimate that the Basic Insurance
coverage costs approximately $13,000 per month. As of the
Petition Date, the Debtors estimate they owe approximately
$20,000 on account of premiums for the Basic Insurance.
* Flexible Benefit Plan -- The Debtors offer eligible
Employees the ability to contribute a portion of their pre-
tax compensation to FSA Plans, which contributions are
deducted by the Debtors from the participating Employees'
paychecks. The FSA Contributions accumulate in
participating Employees' flexible spending accounts and are
available for Employees to use to pay for eligible out-of-
pocket health care and dependent care expenses. FSA
Contributions also may be dedicated to commuter
expenditures.
Approximately 630 Employees participate in the FSA Plans
and, on a monthly basis, the Debtors withhold approximately
$100,000 in FSA Contributions.
As of the Petition Date, the Debtors estimate they have
collected approximately $250,000 in FSA Contributions from
Employees' paychecks that have not yet been reimbursed to
the Employees.
Court Enters Interim Order
The Court granted the Debtors' request on an interim basis.
However, the Debtors are not authorized to make any Employee
payments on account of the Employee Bonus Programs or Severance
Payments before the Court enters a final order.
Any objections to the Debtors' request on a permanent basis must
be filed no later than January 27, 2010, at 4:00 p.m. (Eastern
Time). If an objection is timely filed and served so as to be
received on or before the Objection Deadline, it will be set for
hearing on February 3, 2010, at 10:00 a.m. (Eastern Time).
If no objections are timely filed and served, then the Interim
Order will become a final order as of the day immediately
following the Objection Deadline, nunc pro tunc to December 21,
2009, without further hearing or order of the Court.
About Citadel Broadcasting
Citadel Broadcasting Corporation (OTC BB: CTDB) --
http://www.citadelbroadcasting.com/-- is the third largest radio
group in the United States, with a national footprint reaching
more than 50 markets. Citadel is comprised of 166 FM stations and
58 AM stations in the nation's leading markets, in addition to
Citadel Media, which is one of the three largest radio networks in
the United States.
Citadel Broadcasting filed for Chapter 11 with 50 affiliates on
Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422).
The Company listed assets of $1.4 billion and debt of $2.5 billion
in its Chapter 11 filing. Kirkland & Ellis LLP is serving as
legal counsel and Lazard Freres & Co. LLC. As financial advisor
for the restructuring. Kurtzman Carson Consultants is serving as
claims and notice agent.
Bankruptcy Creditors' Service, Inc., publishes Citadel
Broadcasting Bankruptcy News. The newsletter tracks the Chapter
11 proceeding undertaken by Citadel Broadcasting Corp. and other
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
CITADEL BROADCASTING: Wants to Grant Priority to Inter-Co Claims
----------------------------------------------------------------
In the ordinary course of business, Citadel Broadcasting Corp. and
its units maintain business relationships with each other,
resulting in intercompany receivables and payables in the ordinary
course of business.
For example, says Jonathan S. Henes, Esq., at Kirkland & Ellis
LLP, in New York, funds are transferred from Citadel Broadcasting
Company to Citadel Broadcasting Corporation for investment
purposes, and cash transfers are made between the two entities
for payment of interest on intercompany loans. In addition,
Citadel Broadcasting Company and Alphabet Acquisition Corp., both
Debtors, also pay certain overhead costs and operating expenses
and collect vendor payables and accounts receivables on behalf of
Debtors subsidiaries. The costs and revenues, as well as income
taxes and management fees, are then allocated among the legal
entities resulting in Intercompany Claims.
Mr. Henes discloses that the Debtors track all fund transfers
electronically in their accounting system and can ascertain,
trace and account for Intercompany Transactions. He notes,
however, that at the same time, if the Intercompany Transactions
were to be discontinued, the Cash Management System and related
administrative controls would be disrupted to the Debtors'
detriment.
To ensure each individual Debtor will not permanently fund the
operations of an affiliated entity, the Debtors ask that all
Intercompany Claims against a Debtor by another Debtor, arising
after the Petition Date as a result of ordinary course
Intercompany Transactions, be accorded administrative expense
priority. If Intercompany Claims are accorded administrative
expense priority, each entity utilizing funds flowing through the
Cash Management System should continue to bear ultimate repayment
responsibility for the ordinary course transactions, Mr. Henes
submits.
Court Enters Interim Order
Judge Lifland ruled, on an interim basis, that all Intercompany
Claims against a Debtor by another Debtor affiliate arising after
the Petition Date will be accorded administrative expense
priority.
Any objections to the Debtors' request on a permanent basis must
be filed no later than January 27, 2010. If an objection is
timely filed, the objection will be set for hearing on
February 3, 2010, at 10:00 a.m. (Eastern Time).
The Judge's Interim Order will be effective notwithstanding the
filing of an objection.
However, if no objections are timely filed and served, then the
Interim Order will become a final order as of the day immediately
following the Objection Deadline, nunc pro tunc to December 21,
2009, without further hearing.
About Citadel Broadcasting
Citadel Broadcasting Corporation (OTC BB: CTDB) --
http://www.citadelbroadcasting.com/-- is the third largest radio
group in the United States, with a national footprint reaching
more than 50 markets. Citadel is comprised of 166 FM stations and
58 AM stations in the nation's leading markets, in addition to
Citadel Media, which is one of the three largest radio networks in
the United States.
Citadel Broadcasting filed for Chapter 11 with 50 affiliates on
Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422).
The Company listed assets of $1.4 billion and debt of $2.5 billion
in its Chapter 11 filing. Kirkland & Ellis LLP is serving as
legal counsel and Lazard Freres & Co. LLC. As financial advisor
for the restructuring. Kurtzman Carson Consultants is serving as
claims and notice agent.
Bankruptcy Creditors' Service, Inc., publishes Citadel
Broadcasting Bankruptcy News. The newsletter tracks the Chapter
11 proceeding undertaken by Citadel Broadcasting Corp. and other
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
CITIGROUP INC: Completes $20-Bil. Repayment of TARP Funds
---------------------------------------------------------
Citigroup Inc. said December 23 it has completed the repayment of
$20 billion invested in the company by the U.S. government through
the Troubled Asset Relief Program and terminated the loss-sharing
agreement with the government. The repayment of the TARP trust
preferred securities and termination of the loss-sharing agreement
follow the successful completion of a securities offering in which
Citi raised $20.5 billion, including $17 billion in common shares
and $3.5 billion in tangible equity units.
To repay the TARP investment, Citi repurchased $20 billion of TARP
trust preferred securities. As part of the agreement to end the
loss-sharing program, the government has cancelled $1.8 billion of
trust preferred securities that were part of the $7.1 billion paid
in consideration for the program. The government continues to
hold $5.3 billion in trust preferred securities.
The U.S. Treasury continues to hold warrants to buy Citi common
stock issued as part of the TARP investment and 7.7 billion common
shares, which it said it plans to sell in 2010.
After giving effect to the issuance of the $17 billion in common
stock, $3.5 billion of tangible equity units and $1.7 billion of
stock compensation previously announced by Citi, as well as the
repayment of $20 billion of the TARP trust preferred securities
and the termination of the loss-sharing agreement, Citi's pro
forma Tier 1 capital ratio at the end of the third quarter of 2009
would have been 11.0%, compared with 12.8%. The company's pro
forma Tier 1 common ratio at the end of the third quarter would
have been 9.0%, compared with 9.1%.d
* * *
ABI reports that Wells Fargo & Co. and Citigroup Inc. repayment of
government aid allows the two banks to escape heightened
regulatory and public scrutiny.
About Citigroup Inc.
Based in New York, Citigroup Inc. (NYSE: C) -- is a global
diversified financial services holding company whose businesses
provide a broad range of financial services to consumer and
corporate customers. Citigroup has roughly 200 million customer
accounts and does business in more than 140 countries.
Citigroup's businesses are aligned in three reporting segments:
(i) Citicorp, which consists of Regional Consumer Banking (in
North America, EMEA, Asia, and Latin America) and the
Institutional Clients Group (Securities and Banking, including the
Private Bank, and Transaction Services); (ii) Citi Holdings, which
consists of Brokerage and Asset Management, Local Consumer
Lending, and a Special Asset Pool; and (iii) Corporate/Other.
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.
CITIGROUP INC: Issues 5 Series of Securities; Files Docs with SEC
-----------------------------------------------------------------
Citigroup Inc. and Citigroup Funding Inc. filed with the
Securities and Exchange Commission documents in connection with
Citi Funding's planned issuance of these securities:
-- $5,290,000 aggregate principal amount of Buffered
Performance Leveraged Upside SecuritiesSM Based on the
iShares(R) MSCI EAFE Index Fund due January 9, 2012, at
$10.0000 Per Buffered PLUS
See Pricing Supplement at:
http://ResearchArchives.com/t/s?4cac
See Pricing Sheet at:
http://ResearchArchives.com/t/s?4cb2
-- $6,930,000 aggregate principal amount of Buffered
Performance Leveraged Upside SecuritiesSM Based on the
Value of the S&P 500(R) Index due January 9, 2012, at
$10.0000 Per Buffered PLUS
See Pricing Supplement at:
http://ResearchArchives.com/t/s?4cad
See Pricing Sheet at:
http://ResearchArchives.com/t/s?4cb5
-- 1,984,000 Index LeAding StockmarkEt Return Securities
(Index LASERSSM) Based on the Value of the Dow Jones
Industrial AverageSM Due January 9, 2013, at $10.00 per
Index LASERSSM
See Pricing Supplement at:
http://ResearchArchives.com/t/s?4cae
See Pricing Sheet at:
http://ResearchArchives.com/t/s?4cb3
-- $35,420,000 aggregate principal amount of Equity Linked
Securities (ELKS(R)) Based Upon the Common Stock of
General Electric Company Due January 26, 2011, at $10 per
ELKS
See Pricing Supplement at:
http://ResearchArchives.com/t/s?4caf
See Pricing Sheet at:
http://ResearchArchives.com/t/s?4cb1
-- 990,000 Principal Protected Notes Based on the Value of
the S&P 500(R) Index due June 24, 2015, at $10 per Note
See Final Pricing Supplement at:
http://ResearchArchives.com/t/s?4cb0
See Pricing Sheet at:
http://ResearchArchives.com/t/s?4cb4
About Citigroup Inc.
Based in New York, Citigroup Inc. (NYSE: C) -- is a global
diversified financial services holding company whose businesses
provide a broad range of financial services to consumer and
corporate customers. Citigroup has roughly 200 million customer
accounts and does business in more than 140 countries.
Citigroup's businesses are aligned in three reporting segments:
(i) Citicorp, which consists of Regional Consumer Banking (in
North America, EMEA, Asia, and Latin America) and the
Institutional Clients Group (Securities and Banking, including the
Private Bank, and Transaction Services); (ii) Citi Holdings, which
consists of Brokerage and Asset Management, Local Consumer
Lending, and a Special Asset Pool; and (iii) Corporate/Other.
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.
CITY OF WESTLAND: Moody's Cuts Rating on Sewer Debt to 'Ba1'
------------------------------------------------------------
Moody's Investors Service has downgraded to Ba1 from A3 the City
of Westland's (Michigan) water and sewer system revenue debt,
affecting $3.9 million of outstanding debt. The bonds are secured
by the senior lien of on the system's net water and sewer
revenues, and the legal covenants include the maintenance of rates
sufficient to generate annual net revenues that equal at least 1.0
times annual debt service. The downgrade primarily reflects the
district's significantly weakened financial position, including
the failure to generate revenues sufficient to pay debt service in
four of the past five years, the deterioration of reserves, and
the use of reserves to make debt service payments. The primary
drivers for downgrading the rating below investment grade were the
inability of the city to express a coherent plan to increase net
revenues to meet future debt service obligations, which are
expected to increase in 2011. The rating also incorporates the
system's modest debt ratio, mid-sized customer base with average
wealth levels, and the lack of available reserves relative to debt
service. Additionally, the rating reflects Moody's expectation
that the city will eventually implement the rate increases
necessary to comply with the legal covenants for its water and
sewer revenue bonds.
Financial Position Weakened; Multi-Year Coverage Violation
Moody's expects the enterprise's weakened financial position to
stabilize given management's intention to increase rates in 2011
by more than 12%, and the commencement of a rate study to
determine the future needs of the system. Failure to implement
timely and sufficient rate increases, as well as unbudgeted
declines in connection fee revenues, has greatly impacted the
system and has caused net fixed assets to decline during the
previous two years. Including connection fees, the system has had
debt service coverage greater than 1 times annual debt service
only once in the previous five years. In fiscal 2007 the
enterprise's debt service coverage was 0.65 times annual debt
service. In fiscal 2008 the enterprise posted negative net
revenues, and debt service coverage further decreased to -0.12
times due to increased growth in operating expenditures. In
fiscal 2009, coverage increased slightly but was still a very
narrow 0.15 times annual debt service. In fiscal 2010, management
does not expect to have to use cash reserves to meet its April
2010 debt service payment, however, it still does not have mid-
year projections for its water and sewer fund. A rate increase of
11.8%, and the retirement of the 2003 Series of bonds - causing
debt service to decline by more than half in 2010 - has allowed
the city to budget debt service coverage at 1.32 times annual debt
service in 2010. Depending on the level of rate increases imposed
by the city, coverage is expected to decline in fiscal 2011 when
debt service increases to $618,000. Over the last five years, the
enterprise's cash reserves have also declined from 21% of
operating expenditures in 2005 to 2.1% of operating expenditures
in 2009. At the end of 2009, the system had only $381,000 in
available cash reserves, which compares to annual debt service
expenditures of $455,000. While the system has increased rates
during the previous five years, these rates have not been
significant enough to keep up with its increasing wholesale costs
from DWSD, and its operations expenditures.
Mid-Sized Customer Base With Average Wealth Levels
Despite the stability of its customer base, Moody's expects the
system and its service area to experience pressures resulting from
population declines, down-turn in residential real estate markets,
and regional tax base and employment concentration in the domestic
automotive industry. The enterprise serves the City of Westland
(GOLT rated A3), located in southeastern Michigan, approximately
25 miles west of the City of Detroit (GO rated Ba3/negative). The
system contracts with the Detroit Water and Sewer District
(Revenue rated A2/stable) for the bulk of its water and wastewater
treatment services. The system benefits from a stable customer
base that is largely residential, with only modest commercial and
industrial presence, and no large single users. The customer base
has grown from 26,806 connections in 2006 to 26,942 connections in
fiscal 2009, an average annual rate of 0.2%. The city's wealth
levels are average with per capita income and median family income
at 104.8% and 110.5% of the nation, respectively.
Modest Debt Ratio With No Major Future Debt Plans
Moody's expects Westfield's collection and distribution water and
sewer system will maintain its low debt ratio due to moderate
future borrowing plans for this relatively built-out community.
The system's debt ratio is low at 4.8%, but is planning to borrow
approximately $6 million next year through a state revolving fund
loan for sewer improvements to reduce infiltration and inflow.
Officials expect that the loans are likely to be subordinate to
outstanding bonds. Debt amortization is average with 60.6% of
debt retired in 10 years.
System In Violation Of Adequate Legal Covenants
The system covenanted to set rates needed to generate net revenues
in each fiscal year to yield at least 1.0 times of that fiscal
year's debt service. Moody's expects the enterprise will in the
medium term take action to increase rates and generate net
revenues sufficient to provide 1.0 times annual debt service
coverage. The additional bonds test is 1.25 times annual net
revenues though there are no plans for senior lien debt issuance.
The bonds are additionally secured by the debt service reserve
fund which must be equal to the lesser of maximum annual debt
service, 1.25 times average annual debt service, or 10% of bond
proceeds. The debt service reserve is cash funded. The city has
not made debt service payments using this debt service reserve
fund. Management for the water and sewer enterprise is the same
as that of the city, which possesses complete rate setting
authority.
Key Statistics
* Security: Senior lien on net revenues of system
* Type of System: Water distribution and sewer collection system
* Service area coverage: City of Westland
* Population (2008 estimate): 78,961
* Billed customers: 26,942
* Average annual connection growth (2006-2009): 0.2%
* 2009 Operating ratio: 100.2%
* 2009 Debt ratio: 4.8%
* Unrestricted reserves as % of O&M: 2.1%
* 2008 Annual debt service coverage: -0.12x based on all revenues,
-0.26x based on user fees
* 2009 Annual debt service coverage: 0.15x based on all revenues,
-0.01x based on user fees
* 2010 Annual debt service coverage (budgeted): 1.32x based on all
revenues
* Total system revenue debt outstanding: $3.9 million
The last rating action was on March 27, 2006, when Moody's
affirmed the A3 rating on the senior lien revenue bonds of the
water and sewer system.
CONTINENTAL AIRLINES: Pilots Still Without New Contracts
--------------------------------------------------------
The Air Line Pilots Association Int'l says that on December 31,
2009, Continental pilots will see another year pass without a new
contract in place.
The current concessionary agreement that helped keep Continental
out of bankruptcy was signed in April 2005 and became amendable on
Dec. 31, 2008. However, the Continental pilots, represented by
the ALPA, have been negotiating a successor agreement since July
2007, when the union and Continental management agreed to open
discussions early. Since that time, the parties have reached
tentative agreements on only nine of 32 sections of the contract.
Most recently, the union presented a comprehensive proposal to
management on Dec. 9, 2009, bringing all remaining sections of the
contract to the table, most notably those dealing with economic
issues such as pay, work rules and benefits.
Says Captain Jay Pierce, union leader of the Continental pilots,
"When we gave our proposal to management on Dec. 9, it was an
important step forward. Everything is now on the table. We are
looking forward to seeing how our new CEO, Mr. Jeff Smisek, will
assess the value of Continental pilots and the significant
contributions we've made to help our airline.
"Our pilots have given over $200M to Continental each year through
cuts in pay, benefits and work rules under our current agreement.
Our proposal reflects the significant level of sacrifice made by
our pilots and their families and the need to rebalance the
equation. As we renew our negotiating efforts in 2010, we expect
management to recognize the fact that improvements in our contract
are long overdue."
ALPA represents nearly 53,250 pilots at 37 airlines in the United
States and Canada, including the approximately 5,000 pilots at
Continental Airlines. There are currently 147 pilots on furlough
from Continental.
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 roughly 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: CCAA Stay Extended Until March 31
--------------------------------------------------
Cooper-Standard Automotive Canada Ltd. sought and obtained a
court order granting the company a three-month extension of the
stay of proceedings.
The extension gives CSA Canada until March 31, 2010, to formulate
and negotiate a plan of arrangement or compromise in coordination
with Cooper-Standard Holdings Inc. and other U.S.-based
affiliates, which are also under restructuring.
CSA Canada sought creditor protection under the Companies'
Creditors Arrangement Act on August 4, 2009, a day after its U.S.
affiliates filed Chapter 11 petitions in the U.S. Bankruptcy
Court for the District of Delaware. Upon its filing, CSA Canada
obtained an order from the Ontario Superior Court of Justice,
prohibiting creditors from taking legal actions against the
company and its properties.
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: Has Court Nod for Replacement Financing
--------------------------------------------------------
Cooper-Standard Holdings Inc. and its affiliated debtors obtained
interim approval from the U.S. Bankruptcy Court for the District
of Delaware to enter into a replacement credit agreement with
Deutsche Bank Trust Company Americas.
The agreement authorizes the Debtors to obtain as much as
$200 million to refinance the loans they availed from a group of
lenders led by Deutsche Bank under a debtor-in-possession credit
agreement dated August 5, 2009.
Cooper-Standard Automotive Canada Ltd., the Debtors' unit which
is under an insolvency proceeding in Canada, also obtained
approval from the Ontario Superior Court of Justice to execute
the replacement credit agreement.
Under the replacement credit agreement, about $175 million in
initial loan will be provided to Cooper-Standard Automotive Inc.,
METZELER Automotive Profile Systems GmbH and CSA Canada. Of
this, CS Automotive will get $75 million while the foreign units
will get $50 million each.
The companies are also authorized to access an additional
$25 million standby uncommitted single draw term loan facility
from the lenders.
In return for the $200 million loan, the lenders will be granted
superpriority administrative expense claim status in the Debtors'
Chapter 11 cases, first priority lien on their unencumbered
assets, among others.
The maturity date of the $200 million loan will be the earliest
of August 4, 2010; the effective date of a Chapter 11 plan or
CCAA plan of compromise or arrangement; and the acceleration or
the termination of the loan other than as a result of the
borrowings on the closing date, which is the date the full amount
of the loan is made available.
The Bankruptcy Court will hold a hearing on December 29, 2009, to
consider final approval of the Debtors' request.
A full-text copy of the Bankruptcy Court's order is available
without charge at http://researcharchives.com/t/s?4c16
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: Panel Wants to Hike FTI Monthly Fees to $250,000
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Cooper-Standard
Holdings Inc.'s cases seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to increase the monthly fees of
FTI Consulting Inc. from $200,000 to $250,000 for the period
November 14, 2009, to March 31, 2010.
The Court previously approved the Creditors Committee's initial
request to pay FTI Consulting $250,000 per month for the first
three months of its employment, $200,000 per month for the
next six months, and $150,000 per month thereafter.
The Creditors Committee retained FTI Consulting as its financial
adviser effective August 13, 2009.
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)
CRM HOLDINGS: A.M. Best Downgrades ICRS to 'bb'
-----------------------------------------------
A.M. Best Co. has downgraded the financial strength rating (FSR)
to B++ (Good) from A- (Excellent) and issuer credit rating (ICR)
to "bbb" from "a-" of Majestic Insurance Company (Majestic) (San
Francisco, CA). A.M. Best also has downgraded the FSR to B+
(Good) from B++ (Good) and ICR to "bbb-"from "bbb" of Twin Bridges
(Bermuda) Ltd. (Twin Bridges) (Hamilton, Bermuda).
Concurrently, A.M. Best has downgraded the ICRs to "bb" from "bbb-
" of the ultimate parent, CRM Holdings, Ltd. (CRMH) (Hamilton,
Bermuda) [NASDAQ: CRMH], Embarcadero Insurance Holdings, Inc.
(Embarcadero) (San Francisco, CA) and CRM USA Holdings, Inc. (CRM
USA) (Wilmington, DE).
Additionally, A.M. Best has downgraded the debt ratings to "b+"
from "bb" for the trust preferred securities of CRM USA and the
surplus notes of Embarcadero. All ratings have been placed under
review with negative implications.
These rating actions reflect A.M. Best's concern over the
potential impact on Majestic and Twin Bridges due to the issues
faced by their affiliate, Compensation Risk Managers LLC (CRM LLC)
and CRMH. The issues stem from a "Notice of Imminent Enforcement
Action" filed by the New York State Office of the Attorney
General, which intends to file civil claims against CRMH and CRM
LLC and certain directors and officers to seek redress of
allegedly unlawful practices. Furthermore, the New York State
Workers' Compensation Board (WCB) has commenced a lawsuit against
CRMH on its behalf and in its capacity as successor in interest to
the workers' compensation group's self-insurance trusts in New
York, which were previously managed by CRM LLC. The concerns at
CRMH are further compounded by the sizeable deterioration in its
overall earnings and the increased level of dependence on Majestic
to support holding company operations.
The ratings will remain under review until the financial impact of
the lawsuits against CRMH and CRM LLC are evaluated and management
provides A.M Best with additional information that addresses any
funding sources, which may be required as part of the legal
actions.
The following debt ratings have been downgraded and placed under
review with negative implications:
CRM USA Holdings, Inc.-
-- to "b+" from "bb" on $35 million 8.65% junior subordinated
debt securities, due 2036
Embarcadero Insurance Holdings, Inc.-
-- to "b+" from "bb" on $8 million LIBOR+ 4.2% surplus notes,
due 2033
CYFRED LTD: Expected to File Schedules & Statement
--------------------------------------------------
Mindy Augon at Kuam News reports that Cyfred Ltd. was expected to
file a statement of financial affairs, summary of schedules, and
declaration concerning debts and employee income record this week.
Based in Hagatan, Guam, Cyfred Ltd. filed for Chapter 11
protection on December 14, 2009 (Bankr. D.C. Guam Case No. 09-
00214). Curtis C. Van de veld, Esq., Vandeveld Law Offices P.C.,
represents the Debtor in its restructuring efforts. In its
petition, the debtor both listed assets and debts of between
$1 million and $10 million.
DREIER LLP: Court Tosses Out Suit against Marc Dreier's Ex-Wife
---------------------------------------------------------------
Chief U.S. Bankruptcy Court Judge in New York Stuart Bernstein
ruled that Elisa Dreier, Marc Dreier's ex-wife, is not liable for
a $550,000 note to Saleh Holding Group. According to Mr. Roth,
her ex-husband forged her name to the note, taken out in 1997.
The decision held that the plaintiff's case was barred by the
statute of limitations, as the note came due on October 31, 1999.
Mr. Dreier's firm Dreier LLP, had continued to make payments on
the note until November 2008, when his elaborate fraud was
uncovered. The Dreier payments tolled the statute of limitations
for Mr. Dreier. But since Ms. Dreier had not made any payments on
the claim, the court ruled that:
Under well-settled rules, a payment by a joint obligor does
not extend the statute of limitations as to the other joint
obligors. Similarly, a payment by a principal debtor does
not extend the statute of limitations as against a surety,
and a payment by a surety does not extend the statute of
limitations as against a principal debtor. The natural
extension of the rule is that a payment by a maker without
the express or implied authority of a guarantor does not
affect the statute of limitations as against a guarantor.
Richard A. Roth of the NY-based Roth Law Firm, PLLC, represented
Ms. Dreier in the case.
Marc Dreier founded New York-based law firm Dreier LLP --
http://www.dreierllp.com/-- in 1996.
On December 8, 2008, the U.S. Securities and Exchange Commission
filed a suit, alleging that Mr. Dreier made fraudulent offers and
sales of securities in several cities, selling fake promissory
notes to hedge and other private investment funds. The SEC
asserted that Mr. Dreier also distributed phony financial
statements and audit opinions, and recruited accomplices in
connection with that scheme. Mr. Dreier has been charged by the
U.S. government for conspiracy, securities fraud and wire fraud
before the U.S. District Court for the Southern District of New
York (Manhattan) (Case No. 09-cr-00085-JSR).
Dreier LLP filed for Chapter 11 on December 16, 2008 (Bankr.=20
S.D.N.Y., Case No. 08-15051). Judge Robert E. Gerber handles the
case. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton
& Garrison LLP, has been retained as counsel. The Debtor listed
assets between $100 million and $500 million, and debts between
$10 million and $50 million in its filing.
Wachovia Bank National Association, Sheila M. Gowan as trustee for
Chapter 11 estate of Dreier LLP, and Steven J. Reisman as post-
confirmation representative of the bankruptcy estate of
360networks (USA) Inc. signed a petition that sent Mr. Dreier to
bankruptcy under Chapter 7 on January 26, 2009 (Bankr. S.D. N.Y.,
Case No. 09-10371).
E*TRADE FIN'L: Appoints Robert Druskin as Interim CEO
-----------------------------------------------------
E*TRADE Financial Corporation on December 21, 2009, appointed
Robert A. Druskin, currently the Company's Lead Independent
Director, as the Company's Chairman and Interim Chief Executive
Officer, effective December 31.
Donald H. Layton is stepping down as Chairman and Chief Executive
Officer of the Company and as a member of the Board of Directors,
but Mr. Layton has agreed to be available following his departure
to provide consulting services (paid at an hourly rate) to the
Company to assist with the transition.
Mr. Druskin, 62, has been a director of the Company since February
2008. Mr. Druskin is former Chief Operating Officer of Citigroup
and was a member of the Office of the Chairman. He joined Smith
Barney in 1991 as Chief Administrative Officer, later taking on
the role of head of Asset Management and the Futures Division
before returning to the role of CAO. In 2000, Mr. Druskin became
Chief Operations and Technology Officer for Citi. He later became
the President and Chief Operating Officer, then CEO, of Citi
Markets & Banking. In December 2006, he was named Chief Operating
Officer of Citigroup. He is on the boards of Affiliated Computer
Services and United Negro College Fund, and is a Trustee of
Rutgers University where he earned his BA. During his service as
Interim Chief Executive Officer, Mr. Druskin's compensation will
be $300,000 per month.
About E*TRADE Financial
The E*TRADE FINANCIAL (NASDAQ: ETFC) family of companies provides
financial services including trading, investing and related
banking products and services to retail investors. Securities
products and services are offered by E*TRADE Securities LLC
(Member FINRA/SIPC). Bank products and services are offered by
E*TRADE Bank, a Federal savings bank, Member FDIC, or its
subsidiaries.
* * *
The Company's current senior debt ratings are Caa3 by Moody's
Investor Service, CC/CCC-(3) by Standard & Poor's and B (high) by
Dominion Bond Rating Service. The Company's long-term deposit
ratings are Ba3 by Moody's Investor Service, CCC+ (developing) by
Standard & Poor's and BB by DBRS.
E*TRADE FIN'L: To Restructure Cross-Border Trading Operations
-------------------------------------------------------------
E*TRADE Financial Corporation on December 16, 2009, said it
intends to operationally restructure its cross-border trading line
of business, where customers residing outside of the U.S. trade in
U.S. securities, in an effort to obtain efficiencies and higher
margins.
Additionally, following a review and assessment of competitiveness
and profitability, the Company is also pursuing an exit of non-
U.S. local market trading, where customers residing outside of the
U.S. trade in non-U.S. securities. The Company has recently
entered into agreements to sell its local market trading
operations in Germany and the Nordic region.
About E*TRADE Financial
The E*TRADE FINANCIAL (NASDAQ: ETFC) family of companies provides
financial services including trading, investing and related
banking products and services to retail investors. Securities
products and services are offered by E*TRADE Securities LLC
(Member FINRA/SIPC). Bank products and services are offered by
E*TRADE Bank, a Federal savings bank, Member FDIC, or its
subsidiaries.
* * *
The Company's current senior debt ratings are Caa3 by Moody's
Investor Service, CC/CCC-(3) by Standard & Poor's and B (high) by
Dominion Bond Rating Service. The Company's long-term deposit
ratings are Ba3 by Moody's Investor Service, CCC+ (developing) by
Standard & Poor's and BB by DBRS.
EDDIE BAUER: Disclosure Statement Hearing on January 28
-------------------------------------------------------
EBHI Holdings Inc., formerly Eddie Bauer Holdings Inc., and its
debtor-affiliates have filed a joint plan of liquidation and
explanatory disclosure statement.
Eddie Bauer has closed the sale of its $286 million asset sale to
Golden Gate Capital.
The confirmation hearing on the Plan is tentatively scheduled for
March 18. Eddie Bauer still needs to obtain approval of the
Disclosure Statement then send the Plan to creditors for voting
before it can seek confirmation of the Plan.
The Debtors will seek approval of the adequacy of the information
in the Disclosure Statement on January 28. Objections are due
January 21.
Under the Chapter 11 Plan filed Dec. 22, 2009, holders of term
lender secured claims aggregating $203 million will receive
periodic distributions from the liquidating trust from the
proceeds of the sale of their collateral, for an estimated 85% to
96% recovery. Holders of other secured claims will receive
payment in cash, for a 100% recovery. Holders of general
unsecured claims of up to $132.6 million will recover 1% to 20% of
their claims from distributions from available cash after
administrative claims and secured claims are paid. Holders of
noteholder securities claims won't receive any distributions.
Holders of equity interests also would have a 0% recovery.
Only holders of term lender secured claims and general unsecured
claims are voting on the Plan. Under the proposed schedules,
ballots would be due March 4.
A copy of the Plan is available for free at:
http://bankrupt.com/misc/EddieBauer_DS.pdf
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/EddieBauer_Plan.pdf
About Eddie Bauer
Established in 1920 in Seattle, Washington, Eddie Bauer is a
specialty retailer that sells outerwear, apparel and accessories
for the active outdoor lifestyle. The Eddie Bauer brand is a
nationally recognized brand that stands for high quality,
innovation, style and customer service. Eddie Bauer products are
available at 371 stores throughout the United States and Canada,
through catalog sales and online at http://www.eddiebauer.com/
Eddie Bauer participates in a joint venture in Japan and has
licensing agreements across a variety of product categories.
Eddie Bauer, Inc., was a subsidiary of Spiegel, Inc. Eddie Bauer
Inc. emerged from Spiegel's 2003 Chapter 11 case as a separate,
reorganized entity under the control and ownership of Eddie Bauer
Holdings, Inc.
Eddie Bauer Holdings, Inc., and eight affiliates filed for
bankruptcy on June 17, 2009 (Bankr. D. Del. Lead Case No.
09-12099). Judge Mary F. Walrath presides over the case. David
S. Heller, Esq., Josef S. Athanas, Esq., and Heather L. Fowler,
Esq., at Latham & Watkins LLP, serve as the Debtors' general
counsel. Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq.,
at Young Conaway Stargatt & Taylor LLP, serve as local counsel.
The Debtors' restructuring advisors are Alvarez and Marsal North
America LLC. Their financial advisors are Peter J. Solomon
Company. Kurtzman Carson Consultants LLC acts as claims and
notice agent. As of April 4, 2009, Eddie Bauer had $525,224,000
in total assets and $448,907,000 in total liabilities.
Eddie Bauer Canada, Inc., and Eddie Bauer Customer Services filed
for protection from their creditors in Canada on June 17, 2009,
the same day the U.S. Debtors filed for protection from their
creditors. The Canadian Debtors have obtained an initial order of
the Canadian Court staying the proceedings against the Canadian
Debtors and their property in Canada. RSM Richter Inc. was
appointed as monitor in the Canadian proceedings.
On August 4, 2009, Golden Gate Capital closed a deal to acquire
Eddie Bauer Holdings for $286 million. Golden Gate will maintain
the substantial majority of Eddie Bauer's stores and employees in
a newly formed going concern company. Golden Gate beat an
affiliate of CCMP Capital Advisors, LLC, at the auction. The CCMP
unit's $202 million cash offer served as stalking horse bid.
Golden Gate Capital -- http://www.goldengatecap.com/-- is a San
Francisco-based private equity investment firm with roughly
$9 billion of assets under management.
EQUIPMENT ACQUISITION: CRO Sues Former Officials
------------------------------------------------
Bill Rochelle at Bloomberg News reports that the chief
restructuring officer for Equipment Acquisition Resources Inc.
sued Donna Malone, the former chief executive, and her husband,
Sheldon Player, contending they misappropriated most if not all of
the company's net income from 2007 through 2009.
The Company is facing allegations of being a Ponzi scheme. First
Premier Capital LLC, claiming to be owed $20 million, alleged that
that the scheme has cost creditors up to $175 million.
The Company is now being managed by William Brandt, as chief
restructuring officer. Mr. Brandt was hired in October when the
officers and directors resigned
Palatine, Illinois-based Equipment Acquisition Resources, Inc.,
was a market maker in semiconductor manufacturing equipment sales
and servicing. It owns 2000 pieces of semiconductor manufacturing
equipment and was engaged in fraudulent activity.
Equipment Acquisition filed for Chapter 11 bankruptcy protection
on October 23, 2009 (Bankr. N.D. Ill. Case No. 09-39937). Barry
A. Chatz, Esq., at Arnstein & Lehr LLP assists the Company in its
restructuring efforts. The Company listed $10,000,001 to
$50,000,000 in assets and $100,000,001 to $500,000,000 in
liabilities in its petition.
ERICKSON RETIREMENT: Committee Wants to Probe NFP Executives
------------------------------------------------------------
Pursuant to Rule 2004 of the Federal Rules of Bankruptcy
Procedure, the Official Committee of Unsecured Creditors asks the
Court to direct National Senior Campuses, Inc., and the not-for-
profit entities Riderwood Village, Inc., Brooksby Village, Inc.,
Seabrook Village, Inc., Cedar Crest Village, Inc., Ann's Choice,
Inc., Fox Run Village, Inc., Highland Springs Inc., Wind Crest,
Inc., Oak Crest Village, Inc., Greenspring Village, Inc., Maris
Grove, Inc., Ashby Ponds, Inc., Eagle's Trace, Inc., Hickory
Chase, Inc., and Tallgrass Creek, Inc.'s directors to:
(a) appear for examinations no later than January 31, 2010;
and
(b) produce documents in connection with the examinations on a
rolling basis, no later than January 9, 2010.
The directors include Ronald E. Walker, James M. Anders, Harold
Ashby, Willow Pasley, Lawrence D. Shubnell, Rod Coe, Jim Hayes
Meryle Twersky, and Scott K. Phillips, as consultant to the
directors.
A list of the documents sought by the Committee is available for
free at http://bankrupt.com/misc/ERC_CommDocReqs.pdf
Samuel M. Stricklin, Esq., at Bracewell & Giuliani LLP, in
Dallas, Texas, notes that the Committee has worked diligently to
contribute to the Debtors' Chapter 11 cases to maximize value
without the need for formal discovery requests. However, in
light of the conduct of the NSC in connection with the Debtors,
sale process, the Committee is now constrained to seek discovery,
he explains. For one, at a hearing on December 18, 2009, the
Debtors disclosed to the Court that the NSC and the NFPs have
been conducting private meetings with Redwood Capital
Investments, LLC, and CoastWood Senior Housing Partners, LLC, the
two bidders for the right to sponsor the Debtors' Plan of
reorganization. Moreover, the suggestion of the NSC's counsel at
the December 18 Hearing that NSC would be able to select the
winner of the auction five days prior to the auction, and NSC's
efforts to revoke the initial consent granted to Redwood on
September 14, 2009, create additional concerns, he points out.
The risks and potential chilling affect of NSC's conduct remain
too great to ignore without formal investigation, Mr. Stricklin
stresses. As the Court advised at the December 18 Hearing, no
party should be permitted to deviate from the Court-approved
bidding procedures and usurp the Debtors' ability to conduct a
fair and competitive auction, he insists.
Thus, the Committee is seeking discovery relating to, among
others:
(a) the Examinees' involvement in the Debtors' sale process,
including all communications with the Potential Bidders
and any other potential purchaser of the Debtors'
businesses;
(b) transactions between or among the Examinees, the Debtors'
insiders, the Potential Bidders and any other potential
purchasers of the Debtors' businesses;
(c) any payments or transfers between or among the Examinees,
the Debtors' insiders, the Potential Bidders and any other
potential purchasers of the Debtors' businesses; and
(d) the relationships between or among the Examinees and the
Debtors' insiders.
In a related request, the Committee asks the Court to schedule an
expedited hearing on the Rule 2004 Motion on January 7, 2009.
Absent an expedited hearing on the Rule 2004 Motion, the
Committee will not have the opportunity to thoroughly examine and
investigate the affairs of the NSC and the NFPs and their
relationships with interested third parties, thus causing
irreparable harm to the Committee, Mr. Stricklin points out.
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
October 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: Wants MSRESS Pact Declared a Financing
-----------------------------------------------------------
Debtors Dallas Campus, LP, Dallas Campus GP, LLC, and Erickson
Retirement Communities, LLC, commenced an adversary proceeding
against MSRESS III Dallas Campus, L.P., seeking declaratory
judgment.
Dallas Campus was formed by ERC on September 8, 2004, to acquire
and develop a continuing care retirement community located in
Dallas, in Collin County, Texas, known as Highland Springs. On
May 25, 2005, Dallas purchased approximately 90 acres located at
Coit Road and Frankford Road, in Dallas, Collin County, Texas.
The Highland Springs Community was to include approximately 1600
independent living units, 100 assisted living units, 90 skilled
nursing units, and accessory uses.
To finance the initial construction and development of the
Project, Dallas Campus entered into a Construction Loan in the
original principal amount of $70 million, as amended, with Bank
of America, N.A., as administrative agent, and certain other
lenders. The Dallas Construction Loan is guaranteed by ERC and
Erickson Construction, LLC.
Pursuant to the Dallas Construction Loan, Dallas Campus is
required to maintain liquid assets totaling $17,500,000.
In September 2005, the Debtors began the construction and
development of the Highland Springs community, which opened for
occupancy in September 2006. The development of the Highland
Springs Community has yet to be fully completed.
The Debtors sought additional capital to satisfy the Liquidity
Covenant under the Dallas Construction Loan. In this light, on
April 28, 2006, Dallas Campus and MSRESS entered into these
transactions:
(a) A Purchase Agreement, whereby Dallas Campus purportedly
sold the Property to MSRESS for $17,500,000;
(b) A $17,500,000 Loan, which is titled a lease, but in
substance is a financing arrangement pursuant to which
Dallas Campus was to repay the loan from MSRESS;
(c) A limited guaranty and indemnity agreement, wherein ERC
agreed to indemnify MSRESS under certain circumstances and
to guarantee certain obligations of Dallas Campus under
the Lease;
(d) A partnership interest pledge agreement, whereby ERC and
Dallas GP granted a security interest in their partnership
interests in Dallas Campus to MSRESS; and
(e) A ground lessor tri-party agreement, in which MSRESS
agrees that its interests in the Property are subordinate
to the interests of the parties to the Dallas Construction
Loan and certain other related agreements concerning
Highland Springs.
Ted A. Berkowitz, Esq., at Farrell Fritz, P.C., in Uniondale, New
York, explains that MSRESS purchased the Property so that the
Debtors could construct and develop the Highland Springs Community
on it.
Moreover, he says that the characterization of Dallas Campus'
payments under the Loan as interest indicates that the Loan is a
financing and not a lease. The Loan contains an option to
purchase the Property, which price under the Option Purchase is
nominal under the circumstances. Pursuant to the Loan, Dallas
Campus is required to pay, among other things, the amounts owed
for taxes, utilities, and insurance, which payments were
calculated based on the amount MSRESS borrowed to obtain the
Property and not based on the fair market rental value of the
Property, Mr. Berkowitz explains.
Mr. Berkowitz further says that the presence of a right of first
refusal indicates that the Highland Springs Transaction is a
financing and not a lease. Under the Loan, MSRESS has the right
to require Dallas Campus to exercise the Purchase Option. The
inclusion of this provision in the Loan indicates that the
Highland Springs Transaction is a financing and not a lease, he
avers. Mr. Berkowitz further points out that MSRESS never
objected to the characterization of the Highland Springs
Transaction as a financing in Dallas Campus' financial
statements. Thus, he insists that economic realities of the
Highland Springs Transaction and the terms of the Agreement prove
that the relationship between the Defendant and Dallas Campus is
a borrower/lender relationship and not a lessee/lessor
relationship. Since the Highland Springs Transaction is a
financing and not a lease, Section 365 of the Bankruptcy Code
does not apply, he maintains.
Accordingly, the Debtors ask the Court to enter a judgment
declaring that:
(a) the Highland Springs Transaction is a financing, not a
lease; and
(b) Section 365 does not apply to the Highland Springs
Transaction.
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
October 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: Wants Ruling that Concord Pact a Financing
---------------------------------------------------------------
Concord Campus, LP, Concord Campus GP, LLC, and Erickson
Retirement Communities, LLC, filed a complaint for a declaratory
judgment against Strategic Concord Landholder, LP.
Concord was formed by ERC on July 11, 2003, to acquire and
develop land property for the construction of a continuing care
retirement community located in Glen Mills, Pennsylvania, known
as Maris Grove. On July 28, 2003, Concord purchased 90 acres of
land located at 117 Brinton Lake Road, Glen Mills, Concord
Township, in Delaware County, Pennsylvania.
The Maris Grove community was to include 1,400 independent living
units, 100 assisted living units, 130 skilled nursing units, and
accessory uses. To finance the initial construction and
development of the Project, Concord entered into a Construction
Loan with Mercantile-Safe Deposit and Trust Company, now known as
PNC Bank, National Association, as administrative agent, and
certain lenders for a provision of a loan in the original
principal amount of $70 million, as amended.
Pursuant to the Loan Agreement, Concord and ERC, Erickson Group
LLC and Concord GP as guarantors, were required to maintain
liquid assets aggregating $24,000,000. In October 2005, the
Debtors began the construction and development of the Maris Grove
community, which was to open for occupancy in October 2006. The
development of the Maris Grove Community has yet to be completed.
The Debtors sought additional capital to satisfy the Liquidity
Covenant under the Concord Construction Loan. Thus, on Oct. 11,
2005, Concord and Strategic Concord entered into these
transactions executed simultaneously:
(a) A Purchase Agreement, wherein Concord sold the Property to
Strategic Concord for $25,000,000;
(b) A $25,000,000 Loan, which is titled a lease, but in
substance is a financing arrangement pursuant to which
Concord was to repay the loan from Strategic Concord;
(c) A limited guaranty and indemnity agreement, in which ERC
agreed to indemnify Strategic Concord under certain
circumstances and to guarantee certain obligations of
Concord under the Lease;
(d) A partnership interest pledge agreement, whereby ERC and
Concord GP granted a security interest in their
partnership interests in Concord to Strategic Concord; and
(e) A ground lessor tri-party agreement, whereby Strategic
Concord agrees that its interests in the Property are
subordinate to the interests of the parties to the Concord
Construction Loan and certain related agreements
concerning the Maris Grove community.
Vincent P. Slusher, Esq., at DLA Piper LLP, in Dallas, Texas,
notes that the parties intended the Maris Grove Transaction to be
a financing arrangement -- and not a lease agreement. For one,
he points out, the Property was purchased by Strategic Concord
for the Debtors' use. The Maris Grove Transaction provides
Concord with an option to purchase the Property, which price of
the Purchase Option is nominal under the circumstances.
Concord's obligations under the Maris Grove Transaction are
obligations normally associated with ownership of the Property,
he points out. Similarly, the payments under the Maris Grove
Transaction were interest payments and were computed to provide
Strategic Concord with a return on its investment, Mr. Slusher
adds.
Moreover, the payments under the Maris Grove Transaction were
calculated based on the amount Strategic Concord borrowed to
obtain the Property and not based on the fair market rental value
of the Property, Mr. Slusher discloses. In the event Strategic
Concord chooses to sell the Property, Concord has a right of
first refusal under the Lease. Strategic Concord also did not
object to the characterization of the Maris Grove Transaction as
a financing arrangement in Concord's financial statements. More
importantly, the parties never intended for title of the Property
to remain with Strategic Concord after the term of the Lease
ended, according to Mr. Slusher.
Against this backdrop, the economic realities of the Maris Grove
Transaction and the terms of the Agreement prove that the
relationship between Strategic Concord and Concord is a
borrower/lender relationship and not a lessee/lessor
relationship, Mr. Slusher contends. And since the Maris Grove
Transaction is a financing and not a lease, Section 365 of the
Bankruptcy Code does not apply, he insists.
Thus, the Debtors ask the Court to enter a judgment declaring
that:
(a) the Maris Grove Transaction is a financing, not a lease;
and
(b) Section 365 does not apply to the Maris Grove Transaction.
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
October 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)
EUROBANCSHARES INC: Receives Non-Compliance Notice From Nasdaq
--------------------------------------------------------------
EuroBancshares, Inc., received a letter on December 21, 2009, from
The Nasdaq Stock Market indicating that the Company was not in
compliance with Nasdaq Marketplace Rule 5450(a)(1) because the bid
price of the Company's common stock closed below the required
minimum $1.00 per share for the previous 30 consecutive business
days. The Nasdaq letter has no immediate effect on the listing of
the Company's common stock.
In accordance with Nasdaq rules, the Company has a period of 180
calendar days, until June 21, 2010, to regain compliance with the
minimum bid price rule. If, by June 21, 2010, the bid price of
the Company's common stock closes at or above $1.00 per share for
at least 10 consecutive business days (or such other period of
time as may be determined by Nasdaq), Nasdaq will notify the
Company that it has regained compliance with the minimum bid price
rule. If the Company is unable to regain compliance by June 21,
2010, Nasdaq will provide written notification that the Company's
shares are subject to delisting. At that time, the Company may
appeal Nasdaq's delisting determination and may submit a plan for
regaining compliance with the rule. Alternatively, the Company
could apply to transfer its common stock to The Nasdaq Capital
Market prior to that date if it satisfies all of that market's
initial listing requirements, other than the minimum bid price
requirement. If the Company applies for such transfer and is
approved, then the Company would have an additional 180 days to
regain compliance with the minimum bid price rule while listed on
The Nasdaq Capital Market.
The Company is currently evaluating its alternatives to regain
compliance with the Nasdaq listing requirements.
About EuroBancshares, Inc.
EuroBancshares, Inc., is a diversified bank holding company
headquartered in San Juan, Puerto Rico, offering a broad array of
financial services through its wholly-owned banking subsidiary,
Eurobank; EBS Overseas, Inc., an international banking entity
subsidiary of Eurobank; and EuroSeguros, a wholly-owned insurance
agency subsidiary of Eurobank.
EVERGREENBANCORP INC: Sept. 30 Balance Sheet Upside-Down by $4.4MM
------------------------------------------------------------------
EvergreenBancorp, Inc.'s consolidated balance sheets at
September 30, 2009, showed $482.12 million in total assets and
$486.5 million in total liabilities, resulting in a $4.4 million
shareholders' deficit.
Non-performing loans were approximately $68.9 million at
September 30, 2009, as compared to approximately $24.0 million at
December 31, 2008. Non-performing loans to total loans ratio
stood at 17.97% at September 30, 2009, as compared to 5.67% at
December 31, 2008.
Three Months Results
The Company reported a net loss of $6.8 million for the three
months ended September 30, 2009, compared with a net loss of
$47,000 for the same period of 2008.
The increased loss was primarily the result of a much larger
provision for loan losses (approximately $6.7 million) and the
reduction in net interest income of $958,000 for the third quarter
of 2009 compared with the same period in 2008 due to an increase
in nonaccrual loans.
Nine Months Results
For the first nine months of 2009, net losses were $25.8 million,
compared with net income of $3.5 million for the first nine months
of 2008.
The primary reason for the net loss was a hike in the provision
for loan losses which totaled $24.9 million for the nine months
ended September 30, 2009, as compared to $2.8 million for the same
period in 2008. The decline was further affected by a decrease in
noninterest income due to a gain totaling $5.6 million that the
Company realized as a result of Visa, Inc.'s IPO in March 2008, as
well as an increase in noninterest expense of $1.2 million,
related to FDIC insurance premiums.
A full-text copy of the Company's Form 10-Q is available at no
charge at http://researcharchives.com/t/s?4c9d
Regulatory Actions and Matters
On October 23, 2009, EvergreenBank stipulated and consented to the
issuance of a Consent Order with the Federal Deposit Insurance
Corporation and the Washington State Department of Financial
Institutions ("DFI").
Under the Order, the Bank has agreed to address specific areas
through the adoption and implementation of procedures, plans and
policies designed to improve the safety and soundness of the Bank.
These actions include that the Bank will maintain qualified
management and continued active Board participation in the affairs
of the Bank, develop and adopt a plan to increase capital to
comply with the terms of the Order, maintain an adequate allowance
for loan losses, reduce the level of classified and delinquent
loans, revise and implement lending and collection policies,
develop a funds management plan which includes a reduction in the
reliance on non-core funding sources, and report quarterly on the
Bank's progress in meeting the requirements of the Order. In
addition, the Bank is required to attain specified capital levels
including a Tier 1 capital leverage ratio of 10% and a total risk-
based capital ratio of 12% within 90 days of the Order, and obtain
approval from the FDIC and the DFI of director and management
changes and of dividend payments.
On October 23, 2009, the Company entered into a written agreement
with the Federal Reserve Bank of San Francisco ("FRB"). The FRB
Agreement requires that the Company obtain FRB approval before
paying dividends, taking dividends from the Bank, making payments
on subordinated debt or trust preferred securities, incurring debt
or purchasing/redeeming Company stock. The FRB Agreement also
requires the Company to submit a capital plan, cash flow
projections and progress reports and to obtain FRB approval before
appointing new directors or senior executive officers and comply
with certain payment restrictions on golden parachute payments and
indemnification restrictions. The FRB Agreement requires progress
reports on a quarterly basis.
Previously, on December 22, 2008, the Bank entered into a
Supervisory Directive, effective as of the same date, with the
DFI.
The Directive requires the Bank to, among other things: (1)
improve asset quality, reduce classified assets, maintain an
adequate allowance for loan losses and improve credit
administration; (2) submit a strategic plan that outlines
strategies for improving earnings, achieving certain levels of
liquidity, returning to a "well-capitalized" status, and
identifying additional sources of capital; (3) furnish quarterly
progress reports regarding the Bank's compliance with all
provisions of the Directive; (4) receive prior consent of the DFI
and the Federal Deposit Insurance Corporation before declaring or
paying cash dividends; and (5) notify the DFI and FDIC in writing
of any proposal of certain changes to directors or senior
officers.
Previously, on January 22, 2009, the Company entered into a
Memorandum of Understanding with the FRB. Under the MOU, the
Company must, among other things: (1) obtain written approval from
the FRB prior to declaring or paying any dividends between the
Bank and the Holding Company; (2) not declare or pay any
dividends, make any payments on trust preferred securities, or any
other capital distributions, without the prior written approval of
the FRB; (3) cease any distribution of interest, principal, or
other sums on junior subordinated debentures; (4) receive consent
from the FRB prior to incurring, increasing, renewing, or
guaranteeing any debt; (5) receive consent from the FRB prior to
issuing trust preferred securities; and (6) receive consent from
the FRB prior to purchasing or redeeming any Company stock.
As a result of the asset quality deterioration and the significant
provisions for loan losses the Company has made in current and
prior periods, the Company's and Bank's capital levels have been
significantly reduced and, in the case of the Company, is now
negative. The Bank is now considered to be "critically
undercapitalized", as defined in the Federal Deposit Insurance Act
and related regulations.
Previously, in a letter from the FDIC dated August 6, 2009, the
Bank was required to file a written capital restoration plan to
the FDIC by September 18, 2009; a capital restoration plan was
submitted timely. In a letter dated October 30, 2009, the FDIC
informed the Bank that its capital restoration plan was not
acceptable. The letter stated that the Company should submit an
updated plan no later than November 30, 2009. Although the
Company has not submitted a plan as of the date of filing of this
Form 10-Q, the Company intends to submit an updated plan in the
near future.
On November 5, 2009, the Bank received from the FDIC a Supervisory
Prompt Corrective Action Directive (the "PCA Directive") dated
November 4, 2009.
The PCA Directive directs the Bank (i) within 30 days of receipt
of the PCA Directive, to sell enough shares or obligations of the
Bank so that the Bank will be adequately capitalized and/or to
accept an offer to be acquired; (ii) not to accept, renew or
rollover any brokered deposits; (iii) to restrict interest rates
paid on deposits to a rate not significantly higher than that paid
on similar deposits in its market area; (iv) not to permit average
assets to grow; (v) not to accept, renew or rollover deposits from
correspondent depository institutions; (vi) not to make any
capital distributions or dividend payments to EvergreenBancorp or
any affiliate, or to pay any bonuses to, or increase the
compensation of, any director or officer of the Bank without
approval from the FDIC, (vii) to comply with affiliate transaction
rules; and (viii) not to engage in branching or sell, relocate or
dispose of any branch without the FDIC's approval.
The Company says that it is highly doubtful that it will be able
to raise additional capital or accept a merger offer within the
30-day time period specified in the PCA Directive or within the
90-day time period specified in the Consent Order.
If the Company's and the Bank's capital further deteriorates or
the Company and the Bank is unable to comply with the regulatory
orders, directives and agreements, the regulators may take more
draconian measures including placing the Bank into receivership or
similar action. In general, no later than 90 days after an
insured depository institution becomes critically
undercapitalized, the prompt corrective action statute requires
the appropriate federal regulatory agencies to appoint a receiver
for the institution or take such other action as the agency
determines would better achieve the purpose of the law. Such an
action would have a material and adverse effect on the value of
our stock and it would result in having little or no value.
Going Concern Doubt
In order to achieve compliance with the various agreements
required by the regulators, the Company and the Bank will need to
raise capital, obtain additional liquidity sources, sell assets to
deleverage, or consider other strategic alternatives. The
Company and the Bank's ability to accomplish these goals is
significantly constrained in the current economic environment.
The Bank's ability to decrease its levels of nonperforming assets
is also vulnerable to market conditions, as many borrowers rely on
an active real estate market as a source of repayment,
particularly the Bank's construction loan borrowers. If the real
estate market does not improve, the Bank's level of nonperforming
assets may continue to increase and this will further put strain
on liquidity and capital positions.
As a result of the Bank's capital level, the Company is prohibited
from using brokered deposits to meet its funding/liquidity needs
as other deposits and brokered deposits mature, unless it first
obtains a waiver from the FDIC. In addition, the Company is
prohibited from offering deposit rates substantially above rates
offered by similar financial institutions in its market.
In the second quarter of 2009, the Bank resumed issuing
certificates of deposit through internet-based deposit listing
services in anticipation of using proceeds generated to replace
brokered deposits as they mature. However, the restriction in the
PCA Directive on offering or renewing correspondent depository
institution deposits imposes certain restrictions on the Company's
ability to accept internet deposits in the future.
The Company believes that due to the above conditions, substantial
doubt exists as to its ability to continue as a going concern.
The Company has determined that significant additional sources of
liquidity and capital will be required for it to continue
operations through 2009 and beyond. The Company has engaged
financial advisors to assist it in its efforts to raise additional
capital, sell assets and explore other strategic alternatives to
address its current and expected liquidity and capital
deficiencies. To date, those efforts have not yielded any
definitive options.
About EvergreenBancorp Inc.
Headquartered in Seattle, Washington, EvergreenBancorp, Inc.
(OTC BB: EVGG) -- http://www.EvergreenBancorp.com/-- is a bank
holding company. The Company's wholly owned subsidiary,
EvergreenBank -- http://www.EvergreenBank.com/-- serves the Puget
Sound region with branches in Seattle, Bellevue, Lynnwood, Federal
Way and Kent. The Bank focuses on general commercial banking
business, offering commercial banking services to small and
medium-size businesses, professionals and retail customers.
EXTENDED STAY: Panel Has Nod for JLLH as Hospitality Advisor
------------------------------------------------------------
Bankruptcy Judge James Peck authorized the Official Committee of
Unsecured Creditors in Extended Stay Inc.'s case to employ Jones
Lang LaSalle Hotels as its hospitality advisor effective
August 10, 2009.
In a decision dated December 22, 2009, Judge Peck ruled that
JLLH's fees will be subject to a $400,000 cap, without prejudice
to the rights of the Creditors Committee to seek an increase and
to the rights of the Debtors and TriMont Real Estate Advisors
Inc. to object to that kind of request.
Judge Peck ordered the Debtors to pay the fees and expenses of
the firm up to a maximum of $250,000. Payment to JLLH for any
fees and expenses incurred in excess of $250,000 will not be made
until either (i) the confirmation of a plan for the Debtors and
further order of the Court; or (ii) further court order in case
an event of default occurs.
For every dollar in fees and expenses paid to JLLH, the carve-
out amount allocated to the professionals of the Creditors
Committee will be reduced a commensurate amount up to a maximum
reduction of $250,000.
Prior to the entry of the Court's ruling, the Debtors and U.S.
Bank National Association objected to JLLH's employment. They
complained that the firm's services would duplicate the services
provided by Jefferies & Company Inc., the financial adviser of
the Creditors Committee.
The Creditors Committee, however, countered that JLLH was being
employed to perform "narrowly focused, industry-specific tasks,"
which include analyzing the business and capital expenditure plan
of HVM L.L.C., the company contracted by the Debtors to manage
their hotels.
The Creditors Committee also argued that the work being performed
by JLLH is critical to its ability to perform its statutory
charge in the Debtors' cases. The Committee pointed out that
minor changes in the assumptions that underlie HVM's business
plan can lead to major changes in occupancy, revenue per
available room and other statistics that may materially affect
the enterprise value and future performance of the Debtors in the
hospitality segment they occupy.
"While Jefferies is well qualified and capable of using these
statistics for the valuation which they have been retained to
perform, it is the adjustments to these metrics which are
critical for an accurate, unbiased picture of the Debtors'
prospects. A specialized, highly-skilled hospitality expert,
such as JLLH, is in the best position to provide this valuable
insight," the Creditors Committee said in court papers.
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
For the year ending December 31, 2008, Extended Stay's audited
financial statements show consolidated assets (including nondebtor
affiliates) totaling approximately $7.1 billion and consolidated
liabilities totaling approximately $7.6 billion. Consolidated
revenues for the 12 months ending December 31, 2008 were
approximately $1 billion.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent.
Bankruptcy Creditors' Service, Inc., publishes Extended Stay
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Extended Stay Inc. and
its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
EXTENDED STAY: Court Sets January 15 Claims Bar Date
----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
has set January 15, 2010, as the deadline for creditors to file
their proofs of claim against Extended Stay Inc. and its
affiliated debtors.
For claims that stem from the rejection of executory contracts
and leases, creditors are required to file their proofs of claim
by the later of January 15, 2010, or within 45 days after a
rejection notice is served on them.
Claimants affected by any amendment to the schedule of assets and
liabilities are required to file their proofs of claim by the
later of January 15, 2010, or within 30 days after the Debtors
provide notice of the amendment.
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
For the year ending December 31, 2008, Extended Stay's audited
financial statements show consolidated assets (including nondebtor
affiliates) totaling approximately $7.1 billion and consolidated
liabilities totaling approximately $7.6 billion. Consolidated
revenues for the 12 months ending December 31, 2008 were
approximately $1 billion.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent.
Bankruptcy Creditors' Service, Inc., publishes Extended Stay
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Extended Stay Inc. and
its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
EXTENDED STAY: Has Court Nod to Probe Wells Fargo Bank
------------------------------------------------------
Extended Stay Inc. and its affiliated debtors sought and obtained
permission from the Bankruptcy Court to investigate Wells Fargo
Bank N.A. in a bid to verify the identity of those that have stake
in the $4.1 billion mortgage loan.
The Debtors' request came after Wells Fargo allegedly refused to
provide documents including a certificate register, which bears
the names and addresses of the transferees of certificates
representing interests in the mortgage loan.
The probe was approved despite objections by U.S. Bank National
Association, successor trustee of Wells Fargo. U.S. Bank asked
the Court to deny the proposed investigation, saying the documents
sought are property of the trust that was created under the
agreement.
Wells Fargo serves as the certificate registrar agent and former
trustee under the Trust and Servicing Agreement it executed with
Wachovia Large Loan Inc. and Wachovia Bank N.A. Wachovia Bank is
one of the three companies that provided the mortgage loan to an
investment consortium led by Lightstone Group LLC Chairman David
Lichtenstein to fund the acquisition of the Debtors from
Blackstone Group LP in 2007.
The Debtors' attorney, Jacqueline Marcus, Esq., at Weil Gotshal &
Manges LLP, in New York, says the Debtors need the certificate
register to begin negotiating a plan of reorganization.
Ms. Marcus says the Debtors tried to get a copy of the document
or even just a list of certificate holders from Wells Fargo,
Wachovia and the mortgage loan's special servicer, TriMont Real
Estate Advisors Inc. The companies, however, refused to provide
the documents on grounds that the Trust and Servicing Agreement
does not require them to provide the requested information to the
Debtors.
"Whether or to what extent that may have been true in the non-
bankruptcy context, the Debtors cannot meaningfully begin
negotiating a plan of reorganization without knowing the identity
of the relevant stakeholders," Ms. Marcus asserts.
In connection with the proposed investigation, the Debtors also
ask the Court to compel Wells Fargo to designate an individual or
group of individuals who can provide information regarding
further certificate transfers, among other things.
The Official Committee of Unsecured Creditors backs the proposed
investigation, saying the information sought would also help it
to participate in the formulation of the Debtors' plan.
"Understanding who are the certificate holders is the essential
first step to the Committee's efforts to understand the actual
stakeholders and the controlling party in the $4.1 billion
mortgage loan," says the Committee's attorney, Mark Power, Esq.,
at Hahn & Hessen LLP, in New York.
"As one of the key classes of claims to be dealt with under a
plan, the Committee's ability to negotiate a plan with the
Debtors, these stakeholders and other holders of claims in the
Debtors' chapter 11 cases parties requires the Committee to know
who are the certificate holders," Mr. Power says in court papers.
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
For the year ending December 31, 2008, Extended Stay's audited
financial statements show consolidated assets (including nondebtor
affiliates) totaling approximately $7.1 billion and consolidated
liabilities totaling approximately $7.6 billion. Consolidated
revenues for the 12 months ending December 31, 2008 were
approximately $1 billion.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent.
Bankruptcy Creditors' Service, Inc., publishes Extended Stay
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Extended Stay Inc. and
its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
FAIRPOINT COMMS: Panel Gets Nod for Andrews Kurth as Counsel
------------------------------------------------------------
The Official Committee of Unsecured Creditors in Fairpoint
Communications Inc.'s cases obtained the Court's authority to
retain Andrews Kurth LLP as its counsel nunc pro tunc to
November 10, 2009.
Committee Chair Michael Cullen of J.C. Zampell Construction,
Inc., relates that the Committee has selected Andrews Kurth o
serve as its counsel because of the firm's knowledge of the
Debtors' industry generally; the firm's expertise in the field of
business reorganizations under Chapter 11 of the Bankruptcy Code
and corporate finance and related matters; and the firm's
expertise in representing creditors committees in complex Chapter
11 cases.
As counsel to the Creditors Committee, Andrews Kurth will render
these legal services:
(a) consult and interact with the Committee, the Debtors, the
Office of the United States Trustee and other parties in
interest and their respective professionals concerning the
administration of the Debtors' cases;
(b) review, analyze and respond to pleadings filed by the
Debtors with the Court and to participate in hearings
concerning those pleadings;
(c) investigate the acts, conduct, assets, liabilities and
present and historical financial condition of the Debtors,
the operation of the Debtors' business or proposals to
restructure the Debtors' business, and any relevant matter
in the event and to the extent required by the Committee;
(d) take all necessary action to protect the rights and
interests of the Committee's constituents, including, but
not limited to, the negotiation of a Chapter 11 plan or
plans for the Debtors and all related matters;
(e) represent the Committee in connection with the exercise of
its powers and duties under the Bankruptcy Code and in
connection with the Debtors' cases; and
(f) perform all other necessary and appropriate legal services
the Committee requires in connection with the Debtors'
cases.
The Committee seeks that Andrew Kurth be paid for its services
according to the firm's hourly rates and be reimbursed for
reasonable and necessary expenses incurred or to be incurred.
The firm's hourly rates are:
Professional Hourly Rate
------------ ------------
Attorneys $265 to $955
Paralegals $200 to $245
Paul N. Silverstein, Esq., a member of Andrew Kurth, assures the
Court his firm does not have an interest materially adverse to
the interests of the Debtors' estates.
About FairPoint Communications
FairPoint Communications, Inc. (NYSE: FRP) --
http://www.fairpoint.com/-- is an industry leading provider of
communications services to communities across the country.
FairPoint owns and operates local exchange companies in 18 states
offering advanced communications with a personal touch, including
local and long distance voice, data, Internet, television and
broadband services. FairPoint is traded on the New York Stock
Exchange under the symbols FRP and FRP.BC.
Fairpoint and its affiliates filed for Chapter 11 on Oct. 26, 2009
(Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as
financial advisor for the Company; AlixPartners, LLP as the
restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP
is the Company's counsel. BMC Group is claims and notice agent.
As of June 30, 2009, Fairpoint reported $3.24 billion in total
assets, $321.41 million in total current liabilities,
$2.91 billion in total long-term liabilities, and $1.23 million in
total stockholders' equity.
Bankruptcy Creditors' Service, Inc., publishes Fairpoint
Communications Bankruptcy News. The newsletter tracks the Chapter
11 proceedings of Fairpoint Communications Inc. and its debtor-
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
FBL FINANCIAL GROUP: A.M. Best Affirms ICR of 'bb'
--------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating (FSR) of
B+ (Good) and the issuer credit rating (ICR) of "bbb-" of
EquiTrust Life Insurance Company (EquiTrust). A.M. Best also
affirmed the FSR of B++ (Good) and the ICR of "bbb+" of its
affiliate, Farm Bureau Life Insurance Company (FB Life).
Concurrently, A.M. Best has affirmed the ICR of "bb" and debt
ratings of the ultimate parent of EquiTrust and FB Life, FBL
Financial Group, Inc. (FFG) [NYSE: FFG]. The outlook for all
ratings is negative. All companies are located in West Des
Moines, IA.
The rating affirmations for EquiTrust Life reflect the Company's
role within FFG as a marketer of fixed and indexed annuity
products through independent distribution, the support received
from FFG and the adequate but declining risk-adjusted capital
position over the last several years. The negative outlook
reflects the continued exposure to real estate linked assets
including residential and commercial mortgage backed securities
and commercial mortgage loans. The Company reported improved pre-
tax statutory operating results, though it is a loss through third
quarter 2009 as well as a large, but significantly reduced,
unrealized loss position in its fixed income portfolio.
EquiTrust has reduced sales of its multi-year guarantee and fixed
indexed annuities and plans to offer a more balanced product
portfolio going forward, which will include life products. In
addition, surrender activity has slowed from the very high level
recorded earlier in 2009. While the company's risk-adjusted
capitalization is presently viewed as adequate, further investment
impairments could weaken its capital position.
The rating affirmations for FB Life recognize its favorable
capitalization, consistently positive operating earnings and
strong affinity branding within the Farm Bureau niche. In
addition, the ratings continue to recognize FB Life's more
balanced business profile between life and annuity reserves. FB
Life's unrealized loss position in its fixed income portfolio has
also significantly declined since year end 2008.
The rating of FFG recognizes its GAAP profitability through the
third quarter 2009 and significant increases in stockholders'
equity due to reduced investment impairments and unrealized
losses. The negative outlook on FFG reflects the investment risk
inherent in its consolidated portfolio, the significant growth in
annuity reserves within the organization over the past several
years and high level of intangibles relative to equity. FFG's
rapid growth in recent years, which had exceeded A.M. Best's
expectations, has led to heightened interest rate risk and a high
level of intangibles on its balance sheet. The unrealized loss
position in its fixed income portfolio partially reflects the
rapid asset growth during a period of historically low interest
rates. A.M. Best believes that spread management will continue to
be a challenge for FFG.
Given the significant size of EquiTrust within FFG, the negative
outlook extends to FB Life, as the Company is the primary source
for debt servicing and other cash needs for the holding company.
In addition, further capital losses could weaken FFG's financial
flexibility, further pressuring FB Life's capital.
The following debt ratings have been affirmed with a negative
outlook:
FBL Financial Group Inc-
-- "bb" on $75 million 5.85% senior unsecured notes, due 2014
-- "bb" on $100 million 5.875% senior unsecured notes, due 2017
The following indicative ratings on securities available under the
shelf registration have been affirmed with a negative outlook:
FBL Financial Group Inc-
-- "bb" on senior debt
-- "bb-" on subordinated debt
-- "b+" on preferred stock
FBL Financial Group Capital Trust II-
-- "b+" on trust preferred securities
FONTAINEBLEAU LV: Seeks Plan Exclusivity Until March 1
------------------------------------------------------
By this motion, Fontainebleau Las Vegas Holdings, LLC,
Fontainebleau Las Vegas, LLC and Fontainebleau Las Vegas Capital
Corp. ask the United States Bankruptcy Court for the Southern
District of Florida to further extend their exclusive periods to:
(a) file a plan or plans of reorganization through and
including March 1, 2010; and
(b) solicit acceptances of that plan through and including
May 3, 2010.
Scott L. Baena, Esq., at Bilzin Sumberg Baena Price &
Axelrod LLP, in Miami, Florida, relates that in order to allow
the sale process and the Debtors' stabilization efforts to
continue without distraction and to provide an opportunity for
the sale process to play itself out, the Debtors request an
extension of the exclusive plan filing period for 70 days,
through and including March 1, 2010, within which only they may
file a Chapter 11 plan and an extension of the exclusive
solicitation period for 72 days, through and including May 3,
2010, within which they may solicit acceptances of that plan.
The Resort Debtors further request that the order be without
prejudice to the Resort Debtors' right to seek further
extensions. "This extension preserves the Resort Debtors'
exclusive right to file a chapter 11 plan through the anticipated
closing date of the sale of the Project and the Debtors' other
assets and affords the Debtors with a brief post-closing period
to determine whether pursuing a chapter 11 plan is feasible,
appropriate and in the estates' best interests," Mr. Baena tells
the Court.
Mr. Baena adds that the extension sought by the Debtors is
reasonable in duration and is intended to allow the sale process
to continue to conclusion without unwarranted distraction and to
afford the Debtors a brief post-closing period to assess their
options and determine whether to propose a Chapter 11 plan.
Any Chapter 11 plan will be materially affected by the outcome of
the sale process. Therefore, the extension is most sensible and
efficient to finish the sale process upon which the Debtors have
embarked before determining the process by which the proceeds,
any remaining assets, and claims will be administered, Mr. Baena
says.
The Court will convene a hearing to consider the Motion on
January 7, 2010, at 03:00 p.m.
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: Wants to Have Until Jan. 5 to Decide on Leases
----------------------------------------------------------------
Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas,
LLC and Fontainebleau Las Vegas Capital Corp. seek the Court's
entry of an order granting an additional 41-day extension, or
through and including February 15, 2009, of the period within
which they may assume or reject unexpired nonresidential real
property leases.
The current deadline for the Debtors to assume or reject the
Unexpired Leases is January 5, 2010.
Certain bidding procedures approved by the Court provide for the
resolution of issues regarding executory contracts and unexpired
leases that will be assumed and assigned as part of a sale
transaction of the Debtors' assets, says Scott L. Baena, Esq., at
Bilzin Sumberg Baena Price & Axelrod LLP, in Miami, Florida.
Under the procedures, any unexpired leases that are being assumed
and assigned pursuant to the sale transaction will be deemed to
be assumed by the Resort Debtors and assigned to the successful
bidder as of the closing of the sale or upon the resolution of
any timely filed objection by the non-debtor contracting party by
agreement of the parties or order of the Bankruptcy Court.
Accordingly, the Resort Debtors request an extension of the time
to assume and assign unexpired non-residential real property
leases through February 15, 2009, so as to give sufficient time
for any Unexpired Leases to be assumed and assigned to the
successful bidder.
Mr. Baena tells the Court that the extension sought is without
prejudice to the rights of the Debtors to seek the assumption or
rejection of any Unexpired Leases or further extensions of the
time to assume or reject the Unexpired Leases. Mr. Baena adds
that the Debtors have secured the prior written consent of each
of the landlord parties to the Unexpired Leases to extend the
period within which the Debtors may assume or reject the
Unexpired Leases.
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: Court Denies Incentives for Remaining Employees
-----------------------------------------------------------------
Upon consideration of a motion by Fontainebleau Las Vegas Holdings
LLC and its units for entry of an order authorizing them to make
certain incentive bonus payments pursuant to Sections 363(b),
503(c) and 506(c) of the Bankruptcy Code and objections to the
proposal, the Bankruptcy Court has decided to deny the Motion.
Notwithstanding denial of the motion, the Court held that it will
consider, under certain conditions, restoring the salaries of the
employees who voluntarily agreed to 10% - 30% reductions in
salary if they remain in the Debtors' employ through the date of
the anticipated Section 363 sale and the sale brings in more to
the estate than the $105 million stalking horse bid now on the
table.
Judge A. Jay Cristol says the Debtors argue that the principal
motivation of the Asset Sale Bonus Program is to incentivize a
small cadre of critical employees to work harder, to accomplish a
sale in the short timeframe and manner required by the applicable
agreements and Court Orders when, as it is argued by the Debtors,
it might be more appealing for those employees to simply leave.
However, Congress limited a debtor's ability to pay compensation
outside the ordinary course of business. "But in this case, we
are not dealing with reorganization," Judge Cristol relates.
While the Remaining Employees may well be deserving of the
incentive bonuses, the standard employed under Section 503(c)(3)
for approving a non-ordinary course incentive program is not only
whether the Debtors have exercised their sound business judgment,
as the Debtors argue, but whether the 503(c)(3) payments
"serve[s] the interests of creditors and the debtor's estate,"
Judge Cristol explains.
The Court also does not believe the payments do serve the
interests of the creditors in the Cases. The payments under the
Asset Sale Bonus Program are being proposed to incentivize the
Remaining Employees to go above and beyond the call of duty to
accomplish the sale, but the Court does not believe the payments
are essential or necessary to the survival or reorganization of
the Debtors or Debtors' business. "The Debtors' business is not
going to survive. It will be sold, we hope, on January 21,
2010."
The Court has deep respect for the opinion of Howard Karawan,
Chief Restructuring Officer. But Judge Cristol says he has no
authority to give away funds of the mechanics and materialman
lien claimants or the term lenders, without their consent; and,
they do not consent.
According to Judge Cristol, if the sale price of the business
exceeds the $105 million now on the table, the Court will
consider granting pay restoration to the employees who took 10% -
30% reductions in pay up to the full amount of the reduction,
pari passu, but limited to not more than 20% of the bid increase
net to the estate over $105 million.
Prior to the Court's entry of the order, Fisk Electric Company,
and Colasanti Specialty Services, Inc. informed the Court that
they support the objection raised by the M&M Lienholders against
the Motion.
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: Gets Court Nod $51.5-Mil. DIP Financing
---------------------------------------------------------
The Bankruptcy Court issued a final order authorizing
Fontainebleau Las Vegas Holdings LLC and its units to obtain
postpetition loans, advances and other financial accommodations
on the terms set forth in the DIP Credit Agreement, dated as of
November 23, 2009, among Fontainebleau Las Vegas, LLC, as
Borrower, the Guarantors, the Lenders party thereto and Icahn
Nevada Gaming Acquisition LLC, as administrative agent,
collateral agent and arranger -- the "DIP Securities Parties."
Consistent with the terms of the Final Order and the terms of the
DIP Documents, the Debtors are authorized to borrow from the
DIP Lenders:
(a) an amount of Loans up to $7,260,129 outstanding at any one
time, which will be available from the Closing Date to the
Retail Entities Guarantee Date;
The Retail Entities Guarantee Date means the later to
occur of (a) the date upon which the Retail Debtors
execute one or more Joinder Agreements and (b) the date
upon which the Bankruptcy Court enters the Interim DIP
Order in the Cases of the Retail Entities.
(b) an amount of Loans up to $30,297,638 outstanding at any
one time, which will be available from the Retail Entities
Guarantee Date through December 16, 2009, which amount
will include amounts to be used to repay the Used Cash
Collateral; and
(c) an amount of Loans equal to $51,209,985, which will be
available from the December 16, 2009, until the maturity of
the DIP Credit Facility or the termination or reduction of
commitments pursuant to the terms of the DIP Credit
Agreement.
Subject to the limitations applicable in the DIP Credit
Agreement, the Debtors will use the proceeds of the Loans:
(a) to fund, by way of one or more intercompany loans, the
costs and expenses related to filing and administration of
the contemplated bankruptcy proceedings of Fontainebleau
Las Vegas Retail Parent, LLC, Fontainebleau Las Vegas
Retail Mezzanine, LLC, and Fontainebleau Las Vegas Retail,
LLC ?- the Retail Entities -- to facilitate the
disposition of the interests of the Retail Entities in the
"Tier A" hotel casino and resort -- the Project -- in
accordance with and up to the amount set forth in the
Agreed Budget;
(b) to pay the costs and expenses of the administration of
the Cases, given that the administration is essential to
the Sale;
(c) to fund the stabilization of the Project and the
Stabilization Plan;
(d) within two Business Days after the Retail Entities
Guarantee Date, to indefeasibly pay in full in cash the
Used Cash Collateral.
The Used Cash Collateral refers to the $17,974,410, that
has been used by the Fontainebleau Las Vegas, LLC during
the pendency of the Chapter 11 Cases;
(e) to pay interest and certain fees and expenses relating to
the DIP Credit Facility when, as and to the extent set
forth in the DIP Credit Agreement; and
(f) to pay, without further order of the Court, all other
present and future costs and expenses of the DIP Secured
Parties, including all reasonable fees and expenses of
consultants, advisors and attorneys paid or incurred at
any time in connection with the financing transactions
when, as and to the extent provided for in the Agreed
Budget and the DIP Documents.
For all Obligations arising pursuant to the DIP Credit Agreement,
the other DIP Documents or the Interim Order, the DIP Secured
Parties are granted an allowed super-priority administrative
claim pursuant to Section 364(c)(1) of the Bankruptcy Code, which
claim will have priority in right of payment over any other
obligations, liabilities and indebtedness of the Debtors,
incurred by any of the Debtors and over any administrative
expenses or priority claims of the kind specified in Sections
105, 326, 328, 330, 331, 503(b), 507(a), 507(b), or 364(c)(1) of
the Bankruptcy Code.
A full-text copy of the Final DIP Order is available for free at:
http://bankrupt.com/misc/FB_RetailFinalDIPOrd.pdf
Prior to the Court's entry of the Final Order, these parties-in-
interest raised objections and joinders to objections against the
entry of the Final Order:
* M&M Lienholders
* Contractor Claimants
* Colasanti Specialty Services, Inc.
* Fisk Electric Company
The Court, however, noted in the Final Order that all objections
to the DIP Motion are overruled.
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)
FORTUNE INDUSTRIES: Rick Snow Steps Down as Director
----------------------------------------------------
Fortune Industries, Inc., reports that on December 10, 2009, Rick
Snow resigned from the Company's Board of Directors and his
position as Chairman of the Company's Audit Committee. Mr. Snow's
resignation was not due to a disagreement with Fortune Industries
on any matter relating to the Company's operations, policies or
practices.
Going Concern Doubt
Somerset CPAs, P.C., in Indianapolis, Indiana, said in its
September 28, 2009 audit report that the Company has had recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going
concern.
As of September 30, 2009, the Company had total assets of
$29,924,000 against total liabilities of $10,500,000.
About Fortune Industries
Fortune Industries, Inc. is a holding company of providers of full
service human resources outsourcing services through co-employment
relationships with their clients.
FOUNTAIN VILLAGE: Gets Interim OK to Access M&T Cash Collateral
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Oregon authorized,
in an interim basis, Fountain Village Development to:
-- use cash collateral in which M&T Real Estate Trust, a
Maryland real estate trust, claims a security interest; and
-- grant adequate protection to M&T.
A final hearing on Debtor's use of M&T cash collateral will be
held on February 8, 2010, at 9:00 a.m. at Courtroom 3 of the U.S.
Bankruptcy Court, 1001 SW Fifth Avenue, Portland, Oregon.
The Debtor would use the cash collateral to fund its business
operations postpetition.
Prepetition the Debtor entered into various loan and security
agreements with lenders pertaining to its various properties. The
lenders consist of M&T Real Estate Trust, First Independent Bank,
Telesis Community Credit Union, Fairway America, LLC, Sam and
Michelle pishue, Wells Fargo Bank, National Association, HMS
Investment Co., Inc., and Riverview community Bank.
As adequate protection for any postpetition diminution in value of
its collateral, M&T is granted a lien on and security interest in
Debtor's property and revenue therefrom in which M&T holds a valid
and enforceable prepetition lien and security interest and that is
acquired or generated postpetition. As additional adequate
protection, the Debtor will keep the cash proceeds generated from
the collateral securing the debt of M&T in a segregated account
and make payments from collected funds from the account.
About Fountain Village Development
Portland, Oregon-based Fountain Village Development, a general
partnership, aka Fountain Village Development Co, owns, develops,
operates, manages, and/or leases 20 buildings in Portland,
Hillsboro, and Gearhart, Oregon. The Company has filed for
Chapter 11 bankruptcy protection on November 20, 2009 (Bankr. D.
Ore. Case No. 09-39718). Albert N. Kennedy, Esq., and Ava L.
Schoen, Esq., who have offices in Portland, Oregon, assist the
Company in its restructuring effort. The Company listed
$50,000,001 to $100,000,000 in assets and $50,000,001 to
$100,000,000 in liabilities.
FREDDIE MAC: Sees Rates Headed to 6 Percent by End of 2010
----------------------------------------------------------
American Bankruptcy Institute reports that after hitting an all-
time low in early December, the average rate on a 30-year, fixed-
rate mortgage rose to 5.05% this week and could climb to 6% by the
end of 2010.
The Federal Home Loan Mortgage Corporation (FHLMC) NYSE: FRE --
http://www.freddiemac.com/-- commonly known as Freddie Mac, is a
stockholder-owned government-sponsored enterprise authorized to
make loans and loan guarantees. Freddie Mac was created in 1970
to provide a continuous and low cost source of credit to finance
America's housing.
Freddie Mac conducts its business primarily by buying mortgages
from lenders, packaging the mortgages into securities and selling
the securities -- guaranteed by Freddie Mac -- to investors.
Mortgage lenders use the proceeds from selling loans to Freddie
Mac to fund new mortgages, constantly replenishing the pool of
funds available for lending to homebuyers and apartment owners.
Freddie Mac narrowed its net loss to $5,013,000,000 for the
three months ended September 30, 2009, from a net loss of
$25,295,000,000 for the same quarter a year ago. Freddie Mac
posted a net loss of $14,097,000,000 for the nine months ended
September 30, 2009, from a net loss of $26,263,000,000 for the
same period a year ago.
As of September 30, 2009, Freddie Mac had $866,601,000,000 in
total assets against $856,195,000,000 in total liabilities. As of
September 30, 2009, Total Freddie Mac stockholders' equity was
$10,311,000,000; and Total equity was $10,406,000,000.
Conservatorship
As reported by the Troubled Company Reporter, the U.S. government
took direct responsibility for Fannie Mae and Freddie Mac, placing
the government sponsored enterprises under conservatorship on
September 7, 2008. James B. Lockhart, director of Federal Housing
Finance Agency, said that Fannie Mae and Freddie Mac share the
critical mission of providing stability and liquidity to the
housing market. Between them, the Enterprises have $5.4 trillion
of guaranteed mortgage-backed securities (MBS) and debt
outstanding, which is equal to the publicly held debt of the
United States. Among the key components of the conservatorship,
the FHFA, as conservator, assumed the power of the Board and
management.
EDGE PETROLEUM: Court Confirms Plan; Equity Sale to Mariner OK'd
----------------------------------------------------------------
The Hon. Richard S. Schmidt of the U.S. Bankruptcy Court for the
Southern District of Texas confirmed Edge Petroleum Corporation's
Chapter 11 Plan of Reorganization. The Court also approved the
sale of the equity interests to Mariner Energy.
As reported in the Troubled Company Reporter on December 17, 2009,
the reorganization plan is built upon the sale of the Company's
assets. The Chapter 11 plan and sale are supported by the holders
of at least two-thirds of the $227.5 million debt under the
secured credit agreement, according to Edge. The disclosure
statement says the secured lenders are to receive almost all
proceeds from the sale and Edge's cash. The lenders are to make a
$350,000 "gift" to be shared by unsecured creditors. In addition,
unsecured creditors can receive collections from preference suits.
The "gift" and lawsuit collections may be used also to pay
expenses of the Chapter 11 case.
Mariner Energy is purchasing the subsidiaries and operations of
Edge Petroleum in a transaction valued at approximately $215
million after anticipated purchase price adjustments. Mariner
expects the transaction to close by December 31, 2009, with an
effective date of June 30, 2009.
Edge Petroleum received the Bankruptcy Court's approval to auction
off its assets on December 7. PGP Gas Supply Pool No. 3 opened
the auction with its $191 million offer.
A full-text copy of the Plan of Reorganization is available for
free at http://bankrupt.com/misc/EdgePetroleum_AmendedPlan.pdf
About Edge Petroleum Corp
Edge Petroleum Corporation (Nasdaq:EPEX) (Nasdaq:EPEXP) is a
Houston-based independent energy company that focuses its
exploration, production and marketing activities in selected
onshore basins of the United States.
At September 30, 2009, the Company had total assets of
$247.5 million, total liabilities of $244.2 million, and a
stockholders' deficit of $3.3 million.
Edge Petroleum filed for Chapter 11 on October 2, 2009 (Bankr.
S.D. Tex. Case No. 09-20644). The Company has retained Akin Gump
Strauss Hauer and Feld as legal counsel, Jordan, Hyden, Womble,
Culbreth & Holzer, P.C., as local counsel, and Parkman Whaling LLC
as financial advisor. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
GENCORP INC: Gabelli Funds Disclose 11.47% Equity Stake
-------------------------------------------------------
GGCP, Inc.; GAMCO Investors, Inc.; Gabelli Funds, LLC; GAMCO Asset
Management Inc.; Teton Advisors, Inc.; Gabelli Securities, Inc.;
Gabelli & Company, Inc.; MJG Associates, Inc.; Gabelli Foundation,
Inc.; MJG-IV Limited Partnership; and Mario Gabelli report that
they may be deemed to beneficially own in the aggregate 6,732,426
shares, representing 11.47% of the 58,661,092 shares outstanding,
of GenCorp Inc. common stock.
The Gabelli Funds explained the latter number of shares --
58,661,092 -- is arrived at by adding the number of shares
reported in GenCorp's most recent Form 10-Q for the quarterly
period ended August 31, 2009 -- 58,500,000 -- to the number of
shares which would be receivable by the Gabelli Funds if they were
to convert all of GenCorp's 4.0625% and 2.250% Convertible
Subordinated Debentures held by them into the Common Stock of
GenCorp -- 161,092 shares.
About GenCorp
GenCorp Inc. manufactures aerospace and defense systems, with a
separate real estate segment. GenCorp's Aerospace and Defense
segment includes the operations of Aerojet-General Corporation,
which develops and manufactures propulsion systems for defense and
space applications, armament systems for precision tactical weapon
systems and munitions applications.
GenCorp's Real Estate segment includes activities related to the
entitlement, sale, and leasing of excess real estate assets.
GenCorp owns 12,200 acres of land adjacent to U.S. Highway 50
between Rancho Cordova and Folsom, California, east of Sacramento.
GenCorp also owns 580 acres in Chino Hills, California.
* * *
GenCorp carries Standard & Poor's Ratings Services' 'CCC+'
corporate credit rating and Moody's Investors Service's 'B3'
Corporate Family Rating and 'Caa1' Probability of Default Rating.
GENCORP INC: Issues $200 Mil. of 4.0625% Convertible Debentures
---------------------------------------------------------------
GenCorp Inc. on December 21, 2009, issued $200 million aggregate
principal amount of 4.0625% Convertible Subordinated Debentures
due 2039 in a private placement to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as
amended. The amount includes the full exercise of the option to
purchase an additional $50 million aggregate principal amount of
debentures that GenCorp granted to the initial purchasers of the
debentures solely to cover over-allotments, if any. GenCorp
issued the debentures under an indenture, dated as of December 21,
2009, between GenCorp and The Bank of New York Mellon Trust
Company, N.A., as trustee.
On December 14, 2009, GenCorp announced its intent to offer up to
$125 million of Convertible Subordinated Debentures, plus a grant
to initial purchasers of an option to purchase an additional
$18.75 million aggregate principal amount of the debentures to
cover any over-allotments.
On December 15, 2009, GenCorp announced the pricing of an offering
of $150 million of Convertible Subordinated Debentures. GenCorp
then granted the initial purchasers the option, exercisable within
30 days, to purchase up to an additional $50 million aggregate
principal amount of the debentures solely to cover over-
allotments, if any.
Interest
The debentures bear interest at a rate of 4.0625% per annum on the
principal amount of the debentures from December 21, 2009, payable
semi-annually in arrears on June 30 and December 31 of each year,
beginning June 30, 2010. The debentures will mature December 31,
2039, subject to earlier redemption, repurchase or conversion in
certain circumstances.
GenCorp may pay interest in cash or, at any time on or after the
one-year anniversary of the original issuance date of the
debentures or (if later) any additional debentures subsequently
issued, in shares of its common stock or any combination of cash
and shares of its common stock, at GenCorp's option, subject to
certain conditions. The valuation methodology GenCorp will use in
determining the value of any shares to be so delivered is
described in the Indenture.
Ranking
The debentures are GenCorp's general unsecured subordinated
obligations, which (i) rank junior in right of payment to all of
GenCorp's existing and future senior indebtedness (including its
senior subordinated indebtedness), and (ii) rank equal in right of
payment with all of GenCorp's existing and future unsecured
subordinated indebtedness.
Conversion
The debentures may be converted into shares of GenCorp's common
stock initially at a conversion rate of 111.0926 shares of common
stock per $1,000 principal amount of debentures (equivalent to a
conversion price of approximately $9.00 per share of common
stock), subject to adjustment from time to time as provided in the
Indenture. Holders may convert their debentures at their option
at any time prior to the close of business on the business day
immediately preceding the final maturity date of the debentures.
In addition, if holders of the debentures elect to convert their
debentures in connection with the occurrence of certain
fundamental changes, such holders will be entitled to receive
additional shares of common stock upon conversion in some
circumstances.
Optional Redemption by GenCorp
GenCorp may at any time redeem any debentures for cash (except
with respect to any make-whole premium that may be payable) if the
last reported sale price of GenCorp's common stock has been at
least 150% of the conversion price then in effect for at least 20
trading days during any 30 consecutive trading day period ending
within five trading days prior to the date on which GenCorp
provides notice of redemption. GenCorp may redeem the debentures
either in whole or in part at a redemption price equal to (1) 100%
of the principal amount of the debentures to be redeemed, plus (2)
accrued and unpaid interest, if any, up to, but excluding, the
redemption date, plus (3) if GenCorp redeems the debentures prior
to December 31, 2014, a "make-whole premium" equal to the present
value of the remaining scheduled payments of interest that would
have been made on the debentures to be redeemed had such
debentures remained outstanding from the redemption date to
December 31, 2014. Any make-whole premium is payable in cash,
shares of GenCorp's common stock or a combination of cash and
shares, at GenCorp's option, subject to certain conditions. The
valuation methodology GenCorp will use in determining the value of
any shares to be so delivered is described in the Indenture.
Repurchase at the Option of the Holder
Holders of the debentures may require GenCorp to repurchase all or
part of their debentures on December 31, 2014, 2019, 2024, 2029
and 2034 at an optional repurchase price equal to (1) 100% of
their principal amount plus (2) accrued and unpaid interest, if
any, up to, but excluding, the date of repurchase. GenCorp may
elect to pay the optional repurchase price in cash, shares of
GenCorp's common stock or a combination of cash and shares of
common stock, at GenCorp's option, subject to certain conditions.
The valuation methodology GenCorp will use in determining the
value of any shares to be so delivered is described in the
Indenture.
Additionally, if a fundamental change, as defined in the
Indenture, occurs prior to maturity, holders of the debentures
will have the right to require GenCorp to purchase all or part of
their debentures for cash at a repurchase price equal to 100% of
their principal amount, plus accrued and unpaid interest, if any,
up to, but excluding, the repurchase date.
Events of Default
The debentures and the Indenture contain customary events of
default, including, among other things, payment default, covenant
default and certain cross-default provisions linked to the payment
of other indebtedness of GenCorp or its significant subsidiaries.
GenCorp is not subject to any financial covenants under the
Indenture.
Transfer Restrictions; Additional Interest
The offer and sale of the debentures and the shares of GenCorp's
common stock issuable upon conversion of the debentures and in
certain other circumstances pursuant to the terms of the Indenture
have not been registered under the Securities Act. The debentures
and such common stock generally do not benefit from any
registration rights, and GenCorp does not intend to file a shelf
registration statement for the resale of the debentures or such
shares of common stock except in the limited circumstances
required by the Indenture. If there is no effective resale
registration statement at the time of sale, holders may only
resell debentures or shares of common stock pursuant to an
exemption from the registration requirements of the Securities Act
and applicable state securities laws. Additional interest, at a
rate of 0.50% per annum, in respect of the debentures is payable
only under specified circumstances described in the Indenture in
the event the debentures are not freely tradable pursuant to Rule
144 under the Securities Act.
Use of Proceeds
GenCorp estimates that the net proceeds from the sale of the
debentures, after payment of applicable fees and expenses in
connection with the offering, will be approximately
$194.5 million. GenCorp intends to use the net proceeds from the
offering to refinance all or a portion of its 4% Contingent
Convertible Subordinated Notes due 2024 and, to the extent of any
excess proceeds, a portion of its 9-1/2 % Senior Subordinated
Notes due 2013.
A full-text copy of the Indenture, dated as of December 21, 2009,
between GenCorp Inc. and The Bank of New York Mellon Trust
Company, N.A., as trustee., relating to GenCorp's 4.0625%
Convertible Subordinated Debentures due 2039, is available at no
charge at http://ResearchArchives.com/t/s?4c9e
About GenCorp
GenCorp Inc. manufactures aerospace and defense systems, with a
separate real estate segment. GenCorp's Aerospace and Defense
segment includes the operations of Aerojet-General Corporation,
which develops and manufactures propulsion systems for defense and
space applications, armament systems for precision tactical weapon
systems and munitions applications.
GenCorp's Real Estate segment includes activities related to the
entitlement, sale, and leasing of excess real estate assets.
GenCorp owns 12,200 acres of land adjacent to U.S. Highway 50
between Rancho Cordova and Folsom, California, east of Sacramento.
GenCorp also owns 580 acres in Chino Hills, California.
* * *
GenCorp carries Standard & Poor's Ratings Services' 'CCC+'
corporate credit rating and Moody's Investors Service's 'B3'
Corporate Family Rating and 'Caa1' Probability of Default Rating.
GLOBAL SHIP: Restates Annual Report for Year Ended Dec. 31, 2008
----------------------------------------------------------------
Global Ship Lease, Inc., has filed Amendment No. 1 on Form 20-F/A
which amends and restates in its entirety the Company's annual
report on Form 20-F for the year ended December 31, 2008, as filed
with the Securities and Exchange Commission on June 25, 2009, to
reflect the material developments, including consequences of the
Credit Facility Amendment dated August 20, 2009.
The Company says a comparison between the year ended December 31,
2008, and the year ended December 31, 2007, is of limited value as
operations in the year ended December 31, 2008, were comprised
almost entirely of Global Ship Lease's on-going business of owning
and chartering out containerships under time charters, whereas
operations in the year ended December 31, 2007, were comprised
almost entirely of the Predecessor Group earning revenue from the
transportation of containerized cargo.
Further, as a result of the accounting for the merger between
Global Ship Lease and Marathon Acquisition Corp. on August 14,
2008, the year ended December 31, 2008, is reported as a
Predecessor period, prior to the merger, and a Successor period,
after the merger. The capital and legal structure of Global Ship
Lease changed significantly on the merger, including Global Ship
Lease becoming listed on the New York Stock Exchange.
The Company reported net income of $7.4 million for the period
from January 1 to August 14, 2008, of which $9.5 million related
to the time charter business of Global Ship Lease and
$(2.1) million loss related to the Predecessor Group's business,
and a net loss of $44.0 million loss for the period from August 15
to December 31, 2008, also all related to the time charter
business, compared to net income of $16.8 million in 2007 of which
roughly $100,000 related to the time charter business and
$16.7 million to the Predecessor Group.
Operating revenue was $58.0 million for the period from January 1
to August 14, 2008, including time charter revenue of
$55.9 million and voyage revenue of $2.1 million, and
$39.1 million for the period from August 15 to December 31, 2008,
all related to the time charter business. This compares to time
charter revenue of $2.9 million and voyage revenue of
$332.2 million for the year ended December 31, 2007.
Balance Sheet
At December 31, 2008, the Company's consolidated balance sheet
showed total assets of $966.6 million, total liabilities of
$671.6 million, and total stockholders' equity of $295.0 million.
A full-text copy of the Company's Form 20-F/A is available at no
charge at http://researcharchives.com/t/s?4ca3
Going Concern Doubt
PricewaterhouseCoopers' audit report of Global Ship Lease, Inc.'s
combined balance sheets as of the the year ended December 31,
2008, and the related combined statements of income contained an
explanatory paragraph which states that the Company is in
discussion with its lenders to amend its facility agreement in
respect to loan to value test that raises substantial doubt about
its ability to continue as a going concern.
Global Ship Lease's credit facility contains restrictive covenants
including a maximum leverage ratio based on borrowings under the
credit facility expressed as a percentage of charter-free market
value of its secured vessels. As a result of the Credit Facility
Amendment dated August 20, 2009, regular testing of the leverage
ratio covenant has been suspended effectively until April 30,
2011, and prepayment of outstanding borrowings commencing
November 30, 2009, is required. If the leverage ratio tested as
of April 30, 2011, or earlier in certain circumstances set forth
in the credit facility, exceeds the permitted level, or if the
Company fails to meet the minimum scheduled prepayments, the
lenders under the credit facility may require the Company to make
a prepayment of the borrowings or provide additional security,
which would likely cause a default under the credit facility and
which would raise substantial doubt about the company's ability to
continue as a going concern.
About Global Lease
Based in London, U.K., Global Ship Lease, Inc. (NYSE: GSL) --
http://www.globalshiplease.com/-- is a Republic of the Marshall
Islands corporation that owns a fleet of modern containerships of
diverse sizes and charters the vessels out under long-term, fixed-
rate charters to reputable container shipping companies to
generate stable revenues.
Global Ship Lease's fleet, as of September 30, 2009, consisted of
17 containerships, including three newly built vessels, with an
aggregate capacity of 66,297 twenty-foot equivalent unit ("TEU")
and a weighted average age of approximately 5.6 years and a non-
weighted average age of 6.6 years. All of these vessels were
acquired from CMA CGM S.A. or its subsidiaries pursuant to an
asset purchase agreement. CMA CGM is the Company's charterer and
sole source of operating revenue.
GULFSTREAM CRANE: Wants Hinshaw & Culbertson as Bank. Counsel
-------------------------------------------------------------
Gulfstream Crane, LLC, has sought permission from the U.S.
Bankruptcy Court for the Southern District of Florida to employ
Michael D. Seese and the law firm of Hinsaw & Culbertson, LLP, as
bankruptcy counsel.
Michael D. Seese, a partner at H&C, says that the firm will, among
other things:
a. negotiate with creditors, prepare and seek confirmation of
a plan of reorganization and related documents, and assist
the Debtor with implementation of any plan;
b. assist the Debtor in the analysis, negotiation and
disposition of estate assets for the benefit of the estate
and its creditors;
c. review executor contracts and unexpired leases; and
d. negotiate and document any debtor-in-possession financing
and exit financing.
According to Mr. Seese, H&C will be paid based on the hourly rates
of its personnel:
Michael D. Seese $400
Members $350-$600
Associates and Of Counsel $190-$400
Paralegals $115-$180
Mr. Seese assures the Court that H&C is "disinterested" as that
term is defined in Section 101(14) of the Bankruptcy Code.
Pompano Beach, Florida-based Gulfstream Crane, LLC -- dba General
Crane -- is engaged primarily in the business of supplying and
renting crane, hoist and rigging equipment. The Company operates
and maintains facilities in Florida, Georgia and Texas.
The Company filed for Chapter 11 bankruptcy protection on
December 8, 2009 (Bankr. S.D. Fla. Case No. 09-37091). Michael D.
Seese, Esq., who has an office in Fort Lauderdale, Florida,
assists the Company in its restructuring effort. The Company
listed $50,000,001 to $100,000,000 in assets and $50,000,001 to
$100,000,000 in liabilities.
H THOMAS O'HARA: Real Estate Slowdown Cues Chapter 11 Filing
------------------------------------------------------------
Adam Pincus at The Real Deal Online reports that H. Thomas O'Hara
Architect filed for Chapter 11 bankruptcy in the U.S. Bankruptcy
Court in Manhattan, listing assets of $1.2 million and debts of
$4.3 million. The Company blamed the filing on intense financial
pressure from the real estate slowdown. The Company said it owes
$1.5 million to Citibank Commercial Loan Servicing and $643,166 to
the Internal Revenue Service. Based in Manhattan, New York, H.
Thomas O'Hara Architect is a building designer.
HAMPSHIRE GROUP: Loubani Wants Overhaul of Board, Access to Docs
----------------------------------------------------------------
Hampshire Group, Limited, on December 15, 2009, received a letter
from Loubani Limited Partnership (i) indicating Loubani's interest
in seeking to remove certain of the Company's directors and elect
by written consent its own slate of directors and (ii) demanding
access to the Company's books and records pursuant to Section
220(b) of the Delaware General Corporation Law.
Loubani is seeking:
-- the removal of each member of the Board of Directors of
Hampshire other than Peter H. Woodward and Richard A.
Mandell; and
-- the election of Ronald Campo, Mohammed Loubani, Peter W.
Woodworth and Gary Rada as directors of the Company to
fill the resulting vacancies on the Board of Directors of
Hampshire.
On December 15, 2009, Peter W. Woodworth, Joyce Woodworth, Loubani
L.P. and Mohammed Loubani entered into a written agreement to form
a group under the Securities Exchange Act of 1934, as amended.
The Group was deemed to have acquired beneficial ownership, for
purposes of Sections 13(d) and 13(g) of the Exchange Act, of all
equity securities of the Company beneficially owned by each member
of the Group. None of the members of the Group purchased any
additional shares of Common Stock in connection with the
Agreement. The Group is deemed to beneficially own an aggregate
of 464,018 shares of the Company's common stock, or 8.5% the
class, based on 5,469,165 shares outstanding as of October 31,
2009.
Loubani L.P. is principally engaged in the business of acting as
an investment fund. Loubani L.P. has no executive officers or
directors. Loubani L.P. is an Ontario limited partnership.
Mohammed Loubani is the general partner of Loubani L.P. Mohammed
Loubani is a citizen of Canada.
Mr. Woodworth was previously employed by a subsidiary of the
Company. His employment ended as of December 31, 2000. Mr.
Woodworth is currently the president of WKM Properties LLP, a
family real estate development firm, located a 902 East Second
Street, Suite 100, Winona, Minnesota 55987-4696.
Mrs. Woodworth is the producer and director of the "Spirit of the
Heartland" television series for the HBCI Cable Television Company
located at 58 Johnson Street, Winona, Minnesota 55987.
A full-text copy of the Letter to Board of Directors and Corporate
Secretary, dated as of December 15, 2009, submitted by the Group
to the Company, is available at no charge at:
http://ResearchArchives.com/t/s?4ca8
A full-text copy of the Letter re: Demand For Inspection of
Stockholder List Materials of Hampshire Group, Limited pursuant to
8 Del. C. Section 220, dated as of December 15, 2009, submitted by
Loubani L.P. to the Company, is available at no charge at
http://ResearchArchives.com/t/s?4ca9
Board Disagrees with Loubani
A copy of the Company's response to the letter:
December 23, 2009
VIA FACSIMILE
Mr. Mohammed Loubani
Loubani Limited Partnership
1 Grosvenor Street, Suite 1411
London, Ontario N6A 1Y2
Canada
Gentlemen:
We have received your letters dated December 15, 2009. The
board takes its responsibilities seriously and strongly
disagrees with your assertions that it has been unresponsive
to shareholder concerns or that it has failed to look after
shareholder interests. In fact, the board and management
have identified various opportunities to improve the
operating performance of Hampshire's businesses and the value
of Hampshire's stock. For more detailed information about
these opportunities and how we are pursuing them we direct
you to the letter to shareholders dated November 18, 2009,
which was filed with the SEC on Form 8-K on November 30,
2009.
As you are well aware, the Company has been managing a number
of issues over the last three years relating to governmental
investigations, a restatement of its financial statements, a
failed acquisition attempt by NAF Holdings and various
lawsuits and claims with former members of management and
others relating to the foregoing. These events unfolded
concurrently with unprecedented industry and economic
challenges.
In response to these events, the board of directors has
proactively undertaken a series of steps intended to realize,
protect and build value for shareholders, including
significant changes to the Company's management team,
reevaluations of its business strategy, and several changes
to its own composition, including the addition of three new
directors, Richard Mandell, Herbert Elish and, most recently,
Peter Woodward. During this process several previous members
of the board have resigned.
Further, the board is committed to calling an annual meeting
of shareholders to elect a slate of directors as promptly as
practicable in 2010. Given the SEC rules requiring the
delivery of our annual report for 2009, we expect that the
meeting will be held in late April or early May.
In light of our commitment to hold the 2010 annual meeting as
soon as practicable, a consent solicitation at this time will
not serve the best interests of either the other stockholders
or the Company, its customers or its employees. We would
welcome the opportunity to discuss this with you or your
representatives and hope that you not take further actions
that would distract management from the task at hand.
In response to your request made pursuant to Section 220 of
the Delaware General Corporation Law, please be advised that
your counsel can contact Mark H. Harnett at MacKenzie
Partners, Inc., 105 Madison Avenue, New York, NY 10016 (212)
929-5877 to coordinate delivery of the materials we are
required to deliver to you. Prior to the delivery of the
materials through MacKenzie, please provide the Company with
a certified check in the amount of $300 to cover the
reasonable cost of obtaining and furnishing such materials.
Sincerely,
Harvey L. Sperry
Chairman of the Board
cc:
Mark H. Harnett
Heath Golden
Steven J. Gartner, Esq.
2009 Restructuring Plan
During July 2009, the Company initiated the final phase of its
2009 restructuring plan, which included executive level
organizational changes and the consolidation of its Asian
operations. As a result of this consolidation, the Company will
reduce its global workforce by an additional 29%, bringing total
2009 personnel reductions to approximately 50% of first quarter
2009 staffing levels.
The Company has said it is on track to complete the final phase of
its 2009 restructuring plan by the end of 2009.
At September 26, 2009, the Company had total assets of $99,108,000
against total liabilities of $51,101,000.
About Hampshire Group
Hampshire Group, Limited is a U.S. provider of women's and men's
sweaters, wovens and knits, and a designer and marketer of branded
apparel. Its customers include leading retailers such as JC
Penney, Kohl's, Macy's, Belk's and Dillard's, for whom it provides
trend-right, branded apparel. Hampshire's owned brands include
Spring+Mercer(R), its "better" apparel line, Designers
Originals(R), Hampshire's first brand and still a top-seller in
department stores, as well as Mercer Street Studio(R),
Requirements(R), and RQT(R). Hampshire also licenses the Geoffrey
Beene(R) and Dockers(R) labels for men's sweaters, both of which
are market leaders in their categories, and licenses JOE Joseph
Abboud(R) for men's sportswear and Alexander Julian Colours(R) for
men's tops.
HAMPSHIRE GROUP: Invesco Supports Woodworth/Loubani Proposal
------------------------------------------------------------
Invesco Ltd. reports that its subsidiary, Invesco Trimark Ltd., an
Ontario corporation, owns 1,087,224 shares of Hampshire Group,
Limited, representing 19.87% of the Company's outstanding common
shares as of October 31, 2009.
Invesco Trimark has sole power to vote those Shares and sole power
to dispose of those Shares. Invesco Trimark has not effected any
transactions in the Shares during the past 60 days. No other
person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the
sale of, those Shares.
Each of Invesco Ltd. and Invesco Trimark is primarily engaged in
the business of managing investment assets. Invesco through its
various subsidiaries provides investment management services to
institutional and individual investors worldwide.
Invesco Trimark initially acquired Shares because it believed that
the Shares represented an attractive investment opportunity.
Invesco Trimark has been a passive investor in Hampshire Group.
Invesco Trimark continually reviews its investment in Hampshire
Group and other entities in which it has invested. As part of
that review, Invesco Trimark recently became aware of the
formation of a group by Peter W. Woodworth, Joyce Woodworth,
Loubani L.P. and Mohammed Loubani, and an effort by the
Woodworth/Loubani Group to, among other things, solicit written
consents from holders of a majority of the outstanding voting
stock of Hampshire Group to adopt resolutions that would (1)
remove each member of Hampshire Group's current board of
directors, except for Peter H. Woodworth and Richard A. Mandell;
and (2) elect four new directors.
As part of its general interest in proposals that may assist
Hampshire Group in realizing its value, Invesco Trimark has
reviewed the merits of the Woodworth/Loubani Group Proposals.
Based on the facts available to it, it is the current intent of
Invesco Trimark to support the Woodworth/Loubani Group Proposals.
Invesco Trimark intends to review its investment in Hampshire
Group on a continuing basis. Depending on various factors,
including, without limitation, Hampshire Group's financial
position, results and strategic direction, price levels of the
Shares, conditions in the securities markets and general economic
and industry conditions, Invesco Trimark said it may, from time to
time and at any time, in the future take actions with respect to
its investment in Hampshire Group as it deems appropriate,
including, but not limited to, supporting the Woodworth/Loubani
Group Proposals, entering into financial instruments or other
agreements which increase or decrease its economic exposure with
respect to its investment in Hampshire Group, or selling some or
all of its holdings in Hampshire Group.
Meanwhile, River Road Asset Management, LLC, said that as of
November 30, 2009, it no longer hold any shares of Hampshire
Group, Limited.
2009 Restructuring Plan
During July 2009, the Company initiated the final phase of its
2009 restructuring plan, which included executive level
organizational changes and the consolidation of its Asian
operations. As a result of this consolidation, the Company will
reduce its global workforce by an additional 29%, bringing total
2009 personnel reductions to approximately 50% of first quarter
2009 staffing levels.
The Company has said it is on track to complete the final phase of
its 2009 restructuring plan by the end of 2009.
At September 26, 2009, the Company had total assets of $99,108,000
against total liabilities of $51,101,000.
About Hampshire Group
Hampshire Group, Limited is a U.S. provider of women's and men's
sweaters, wovens and knits, and a designer and marketer of branded
apparel. Its customers include leading retailers such as JC
Penney, Kohl's, Macy's, Belk's and Dillard's, for whom it provides
trend-right, branded apparel. Hampshire's owned brands include
Spring+Mercer(R), its "better" apparel line, Designers
Originals(R), Hampshire's first brand and still a top-seller in
department stores, as well as Mercer Street Studio(R),
Requirements(R), and RQT(R). Hampshire also licenses the Geoffrey
Beene(R) and Dockers(R) labels for men's sweaters, both of which
are market leaders in their categories, and licenses JOE Joseph
Abboud(R) for men's sportswear and Alexander Julian Colours(R) for
men's tops.
HEARTLAND PUBLICATIONS: Asks for Feb. 19 Schedules Filing Deadline
------------------------------------------------------------------
Heartland Publications, LLC, et al., have asked the U.S.
Bankruptcy Court for the District of Delaware to extend the filing
of schedules of assets and liabilities and statements of financial
affairs by an additional 60 days, until February 19, 2010.
The Debtors say that they must necessarily gather information from
their books, records and other documents relating to hundreds of
transactions, which will require an expenditure of substantial
time and effort on the part of the Debtors. The Debtors have
devoted a significant amount of time, energy and resources to
negotiating the terms and conditions of what they believe will be
viable Chapter 11 plan of reorganization, and therefore have not
had an ample opportunity to complete the process of compiling the
information necessary to complete their schedules and statements
in a thorough and accurate manner.
Headquartered in Clinton, Connecticut, Heartland Publications, LLC
-- http://www.heartlandpublications.com/-- operates 50 paid-
circulation newspapers and numerous free or controlled
distribution products in Georgia, Kentucky, North and South
Carolina, Ohio, Oklahoma, Tennessee, Virginia and West Virginia.
The Company reaches more than 250,000 print subscribers each month
and many others via interactive Web sites. The Company operates
50 paid-circulation newspapers and numerous free or controlled
distribution products in nine states.
Heartland Publications, LLC -- aka Macon County Times, et al. --
filed for Chapter 11 bankruptcy protection on December 21, 2009
(Bankr. D. Del. Case No. 09-14459). Kenneth J. Enos, Esq., and
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor,
assist the Company in its restructuring effort. Duff & Phelps,
Securities LLC is the Debtor's financial advisor. Epiq Bankruptcy
Solutions is the Debtor's claims and notice agent. As of
October 31, 2009, the Debtor has $134.3 million in assets and
$166.2 million in liabilities.
HEARTLAND PUBLICATIONS: Can Hire Epiq Bankruptcy as Claims Agent
----------------------------------------------------------------
Heartland Publications, LLC, et al., sought and obtained the
approval of the Hon. Kevin Gross of the U.S. Bankruptcy Court for
the District of Delaware to employ Epiq Bankruptcy Solutions, LLC,
as claims and noticing agent, nunc pro tunc to the Petition Date.
Epiq will, among other things:
a. notify potential creditors of the filing of the Chapter 11
petitions and of the setting of the first meeting of
creditors;
b. furnish a notice of the last date for the filing of proofs
of claim and a form for filing a proof of claim to
creditors and parties-in-interest;
c. maintain an official copy of the schedules, listing
creditors and amounts owed; and
d. docket claims filed and maintain the official claims
register on behalf of the Clerk and provide to the Clerk
an exact duplicate.
Epiq will be compensated as set forth in its engagement letter
with the Debtor. A copy of the engagement letter is available for
free at:
http://bankrupt.com/misc/HEARTLAND_PUBLICATIONS_agreement.pdf
Daniel C. McElhinney, the executive director of Epiq, assured the
Court that the firm is "disinterested" as that term is defined in
Section 101(14) of the Bankruptcy Code.
Headquartered in Clinton, Connecticut, Heartland Publications, LLC
-- http://www.heartlandpublications.com/-- operates 50 paid-
circulation newspapers and numerous free or controlled
distribution products in Georgia, Kentucky, North and South
Carolina, Ohio, Oklahoma, Tennessee, Virginia and West Virginia.
The Company reaches more than 250,000 print subscribers each month
and many others via interactive Web sites. The Company operates
50 paid-circulation newspapers and numerous free or controlled
distribution products in nine states.
Heartland Publications, LLC -- aka Macon County Times, et al. --
filed for Chapter 11 bankruptcy protection on December 21, 2009
(Bankr. D. Del. Case No. 09-14459). Kenneth J. Enos, Esq., and
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor,
assist the Company in its restructuring effort. Duff & Phelps,
Securities LLC is the Debtor's financial advisor. Epiq Bankruptcy
Solutions is the Debtor's claims and notice agent. As of
October 31, 2009, the Debtor has $134.3 million in assets and
$166.2 million in liabilities.
HEARTLAND PUBLICATIONS: Sec. 341 Creditors Meeting Set for Jan. 27
------------------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of Heartland
Publications, LLC, et al.'s creditors on January 27, 2010, at
10:00 a.m. at J. Caleb Boggs Federal Building, Room 5209, 844 King
Street Wilmington, DE, 19801.
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.
Headquartered in Clinton, Connecticut, Heartland Publications, LLC
-- http://www.heartlandpublications.com/-- operates 50 paid-
circulation newspapers and numerous free or controlled
distribution products in Georgia, Kentucky, North and South
Carolina, Ohio, Oklahoma, Tennessee, Virginia and West Virginia.
The Company reaches more than 250,000 print subscribers each month
and many others via interactive Web sites. The Company operates
50 paid-circulation newspapers and numerous free or controlled
distribution products in nine states.
Heartland Publications, LLC -- aka Macon County Times, et al. --
filed for Chapter 11 bankruptcy protection on December 21, 2009
(Bankr. D. Del. Case No. 09-14459). Kenneth J. Enos, Esq., and
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor,
assist the Company in its restructuring effort. Duff & Phelps,
Securities LLC is the Debtor's financial advisor. Epiq Bankruptcy
Solutions is the Debtor's claims and notice agent. As of
October 31, 2009, the Debtor has $134.3 million in assets and
$166.2 million in liabilities.
HEARTLAND PUBLICATIONS: Taps Young Conaway as Bankruptcy Counsel
----------------------------------------------------------------
Heartland Publications, LLC and its units have sought the approval
of the U.S. Bankruptcy Court for the District of Delaware to hire
Young Conaway Stargatt & Taylor, LLP, as bankruptcy counsel, nunc
pro tunc to the Petition Date.
Young Conaway will, among other things:
a. pursue the confirmation of a Chapter 11 plan and approval
of the corresponding solicitation procedures and
disclosure statement;
b. prepare on behalf of the Debtors necessary applications,
motions, answers, orders, reports and other legal papers;
c. appear in Court and otherwise protecting the interests of
the Debtors before the Court; and
d. perform all other legal services for the Debtors which may
be necessary and proper in these proceedings.
Robert S. Brady, a partner at Young Conaway, says that the firm
will be paid based on the hourly rates of its personnel:
Robert S. Brady $610
Edwin J. Harron $560
Kenneth J. Enos $310
Robert F. Poppiti, Jr. $260
Justin H. Rucki $240
Chad A. Corazza, Paralegal $115
Mr. Brady assures the Court that Young Conaway is "disinterested"
as that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Clinton, Connecticut, Heartland Publications, LLC
-- http://www.heartlandpublications.com/-- operates 50 paid-
circulation newspapers and numerous free or controlled
distribution products in Georgia, Kentucky, North and South
Carolina, Ohio, Oklahoma, Tennessee, Virginia and West Virginia.
The Company reaches more than 250,000 print subscribers each month
and many others via interactive Web sites. The Company operates
50 paid-circulation newspapers and numerous free or controlled
distribution products in nine states.
Heartland Publications, LLC -- aka Macon County Times, et al. --
filed for Chapter 11 bankruptcy protection on December 21, 2009
(Bankr. D. Del. Case No. 09-14459). Kenneth J. Enos, Esq., and
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor,
assist the Company in its restructuring effort. Duff & Phelps,
Securities LLC is the Debtor's financial advisor. Epiq Bankruptcy
Solutions is the Debtor's claims and notice agent. As of
October 31, 2009, the Debtor has $134.3 million in assets and
$166.2 million in liabilities.
HORIZON FINANCIAL: Receives Non-Compliance Notice From Nasdaq
-------------------------------------------------------------
Horizon Financial Corp. reported that on December 21, 2009, it
received notification from The Nasdaq Stock Market of non-
compliance with the continued listing standards of The Nasdaq
Global Select Market. For 30 consecutive trading days ended
December 18, 2009, the Company's common stock has not maintained a
minimum market value of publicly held shares ("MVPHS") of
$5 million as required for continued inclusion on the Nasdaq
Global Select Market.
In accordance with The Nasdaq Stock Market rules, the Company has
90 calendar days to regain compliance. If the Company cannot
demonstrate compliance with the MVPHS requirement by March 22,
2010, Nasdaq will provide the Company written notification that
its securities will be delisted, at which time the Company may
appeal the determination. During the 90 calendar day period, the
Company will consider its alternatives, including whether to apply
to transfer its securities to The Nasdaq Capital Market.
Horizon Financial Corp. is a $1.30 billion, bank holding company
headquartered in Bellingham, Washington. Its primary subsidiary,
Horizon Bank, maintains a regional banking presence that has been
serving customers for 87 years, and operates 18 full-service
offices, four commercial loan centers and four real estate loan
centers throughout Whatcom, Skagit, Snohomish and Pierce counties
in Washington.
HOVNANIAN ENTERPRISES: Offers to Exchange 10-5/8% Senior Notes
--------------------------------------------------------------
K. Hovnanian Enterprises, Inc., and Hovnanian Enterprises, Inc.,
filed with the Securities and Exchange Commission a Form S-4
Registration Statement under the Securities Act of 1933 in
connection with its intent to exchange all outstanding 10-5/8%
Senior Secured Notes due 2016 -- $785,000,000 aggregate principal
amount outstanding -- for 10-5/8% Senior Secured Notes due 2016,
which have been registered under the Securities Act of 1933.
The Exchange Offer will expire at 5:00 p.m., New York City Time,
on [_________], 2010, unless extended.
Pursuant to the Exchange Offer:
-- The Company will exchange all outstanding notes that are
validly tendered and not validly withdrawn for an equal
principal amount of exchange notes that are freely
tradeable.
-- Noteholders may withdraw tenders of outstanding notes at
any time prior to the expiration date of the exchange
offer.
-- The exchange of outstanding notes for exchange notes in
the exchange offer will not be a taxable event for U.S.
federal income tax purposes.
-- The Company will not receive any proceeds from the
exchange offer.
The exchange notes are being offered to satisfy some of the
Company's obligations under the registration rights agreement
entered into in connection with the placement of the outstanding
notes.
The terms of the exchange notes to be issued in the exchange offer
are substantially identical to the outstanding notes, except that
the exchange notes will be freely tradeable.
Hovnanian Enterprises, Inc., the parent company of the issuer of
the exchange notes, K. Hovnanian Enterprises, Inc., and each of
its wholly owned subsidiaries, other than the issuer and certain
of Hovnanian Enterprises, Inc.'s financial service subsidiaries,
joint ventures and subsidiaries holding interests in joint
ventures, will fully and unconditionally guarantee our obligations
under the exchange notes.
The exchange notes may be sold in the over-the-counter market, in
negotiated transactions or through a combination of such methods.
The Company does not plan to list the exchange notes on a national
market.
A full-text copy of the Form S-4 is available at no charge at:
http://ResearchArchives.com/t/s?4ca2
About Hovnanian Enterprises
Hovnanian Enterprises, Inc. (NYSE: HOV), founded in 1959 by Kevork
S. Hovnanian, is headquartered in Red Bank, New Jersey. The
Company is one of the nation's largest homebuilders with
operations in Arizona, California, Delaware, Florida, Georgia,
Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York,
North Carolina, Ohio, Pennsylvania, South Carolina, Texas,
Virginia and West Virginia. The Company's homes are marketed and
sold under the trade names K. Hovnanian(R) Homes(R), Matzel &
Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes,
Oster Homes, First Home Builders of Florida and CraftBuilt Homes.
As the developer of K. Hovnanian's(R) Four Seasons communities,
the Company is also one of the nation's largest builders of active
adult homes.
At October 31, 2009, the Company had $2.024 billion in total
assets against $2.340 billion in total liabilities. At October
31, 2009, the Company had accumulated deficit of $826.007 million
and stockholder's deficit of $349.598 million.
* * *
Hovnanian carries S&P's "CCC" corporate credit rating; Moody's
"Caa1" corporate family rating; and Fitch's "CCC" Issuer Default
Rating.
HOVNANIAN ENTERPRISES: Posts $716.7 Million Net Loss for FY2009
---------------------------------------------------------------
Hovnanian Enterprises, Inc., reported its third straight year in
the red.
Hovnanian said that, for the fourth quarter of fiscal year ended
October 31, 2009, after-tax net loss was $250.8 million, or $3.21
per common share, compared with a net loss of $450.5 million, or
$5.79 per common share, in the fourth quarter of 2008. For fiscal
2009, the after-tax net loss was $716.7 million, or $9.16 per
common share, compared with a net loss of $1.1 billion, or $16.04
per common share, for the previous year. The Company also posted
a $627.1 million net loss in fiscal 2007.
Total revenues were $437.4 million for the three months ended
October 31, 2009 compared with $721.4 million in the same quarter
a year ago. For all of fiscal 2009, total revenues were
$1.6 billion compared with $3.3 billion in the prior year.
Pre-tax land-related charges for the fourth quarter ended
October 31, 2009, were $146.4 million, including land impairments
of $122.7 million, write-offs of predevelopment costs and land
deposits of $15.3 million and $8.4 million representing the write
down of the Company's investments in certain unconsolidated joint
ventures. For all of fiscal 2009, pre-tax land-related charges
were $703.1 million, including land impairments of $614.1 million,
write-offs of predevelopment costs and land deposits of
$45.4 million and $43.6 million representing the write down of
investments in certain unconsolidated joint ventures.
During the fourth quarter of 2009, $52.9 million of face value
of debt was repurchased in the open market for approximately
$33.9 million of cash. Additionally, $742.6 million of senior
secured and senior unsecured debt was purchased in cash tender
offers during the quarter with the proceeds from the issuance
of $785.0 million of senior secured notes. This resulted in a
$36.4 million loss on extinguishment of debt because a 6% premium
was paid for one series of the senior secured notes. The net
result of both the tender offers and the open market repurchases,
including transaction costs, is a loss on extinguishment of debt
for the 2009 fourth quarter of $17.6 million.
During fiscal 2009, debt was reduced by $754.1 million through
open market repurchases of debt, cash tender offers and exchange
offers. As a result of all of the transactions, a $410.2 million
gain on extinguishment of debt, net of costs, was recorded during
fiscal 2009.
The pre-tax loss was $248.8 million for the 2009 fourth quarter
and $672.0 million for all of fiscal 2009. Excluding land-related
charges and the effect from extinguishment of debt, the pre-tax
loss was $84.8 million and $379.1 million, respectively, for the
three month and 12 month periods ended October 31, 2009.
At October 31, 2009, the Company had $2.024 billion in total
assets against $2.340 billion in total liabilities. At
October 31, 2009, the Company had accumulated deficit of
$826.007 million and stockholder's deficit of $349.598 million.
At October 31, 2009, homebuilding cash was $555.2 million,
including restricted cash required to collateralize letters of
credit. Cash flow during the fourth quarter of fiscal 2009 was
positive $83.9 million.
As a result of recent tax legislation, an income tax benefit that
will increase cash, net income and stockholders' equity by
$275 million to $295 million is expected in the first half of
fiscal 2010. This has increased slightly from the previous
expectation of $250 million to $275 million.
"For our fourth quarter we reported a year-over-year increase in
net contracts, and for the fourth consecutive quarter we reported
improvements in net contracts per active selling community, with
an impressive 60% year-over-year increase during our fourth
quarter," commented Ara K. Hovnanian, Chairman of the Board,
President and Chief Executive Officer. "A trend of improvements
in sales pace is yet another sign that the housing market is at or
approaching a bottom."
"Additionally, we purchased or optioned approximately 4,000 lots
during the final two quarters of our fiscal year. Purchasing new
land parcels at discounted prices and reloading our land position
is an important component in our plan to return to profitability,"
continued Mr. Hovnanian. "We believe the new land parcels we
acquire near the bottom of this real estate cycle will generate
normalized gross margin in the 20% range and over time will assist
in elevating our consolidated gross margin levels and drive
revenue growth. The cumulative effect of better gross margins, an
improved sales absorption pace and a growing community count will
put us on the right path to achieve profitability."
"During the fourth quarter, we took an important step in
improving our capital structure by extending the maturities of
$599.5 million of senior secured debt that was scheduled to mature
in May of 2013 and approximately $125 million of senior unsecured
debt that was to mature between 2012 and 2015 to November 2016.
We now have only $180 million of debt coming due through 2013.
Additionally through our capital market transactions, we reduced
debt by $754.1 million during fiscal 2009," stated J. Larry
Sorsby, Chief Financial Officer. "After our fiscal year ended,
tax legislation was changed that results in us now expecting a
$275 million to $295 million tax refund in our second quarter of
2010. This increase in cash coupled with relatively small amounts
of debt coming due over the next few years provides the liquidity
that we need to ride out the remainder of this industry downturn
and to continue to take advantage of opportunities to purchase new
land parcels."
"Despite the initiatives we have undertaken and the positive
trends we are witnessing in the market, several factors continue
to warrant attention, including continued job losses, the
possibility of more foreclosures, the prospects of rising mortgage
rates, anticipated tightening of FHA guidelines, and the
expiration of the federal homebuyers tax credit. In view of these
risks, we believe a cautious approach is prudent and therefore
remain equally focused on profitable growth and liquidity,"
concluded Mr. Hovnanian.
A full-text copy of the Company's financial report on Form 10-K is
available at no charge at http://ResearchArchives.com/t/s?4ca1
A full-text copy of the Company's earnings release is available at
no charge at http://ResearchArchives.com/t/s?4ca0
Bylaws Amendment
On December 15, 2009, Hovnanian's Board of Directors approved
amendments to, and restated, the Company's Restated Bylaws, which
changes were effective immediately upon approval. The Restated
Bylaws were amended to permit (1) the Board to determine that
annual or special meetings of the Company's stockholders will be
held solely by means of remote communication and (2) stockholders
and proxyholders not physically present at a meeting of
stockholders to participate and vote in the meeting by means of
remote communication, subject to authorization by the Board and
any guidelines and procedures the Board may adopt. In addition,
the Restated Bylaws were amended to add an advance notice
provision that applies to stockholders seeking to propose business
or nominate directors at a stockholders' meeting and the
indemnification provisions were amended to provide that the
Company shall not, in connection with the settlement or resolution
of any claim alleged against it in any action, suit or proceeding,
seek or consent to entry of an order that releases, bars or
otherwise affects the rights of indemnification and advancement of
expenses provided in the Restated Bylaws.
The Board also made certain technical and conforming amendments to
the Restated By-laws.
About Hovnanian Enterprises
Hovnanian Enterprises, Inc. (NYSE: HOV), founded in 1959 by Kevork
S. Hovnanian, is headquartered in Red Bank, New Jersey. The
Company is one of the nation's largest homebuilders with
operations in Arizona, California, Delaware, Florida, Georgia,
Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York,
North Carolina, Ohio, Pennsylvania, South Carolina, Texas,
Virginia and West Virginia. The Company's homes are marketed and
sold under the trade names K. Hovnanian(R) Homes(R), Matzel &
Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes,
Oster Homes, First Home Builders of Florida and CraftBuilt Homes.
As the developer of K. Hovnanian's(R) Four Seasons communities,
the Company is also one of the nation's largest builders of active
adult homes.
* * *
Hovnanian carries S&P's "CCC" corporate credit rating; Moody's
"Caa1" corporate family rating; and Fitch's "CCC" Issuer Default
Rating.
INHIBITEX INC: Receives Non-Compliance Notice From NASDAQ
---------------------------------------------------------
Inhibitex, Inc., has received notice from The NASDAQ Stock Market
stating that for 30 consecutive business days the bid price for
the Company's common stock has closed below the minimum $1.00 per
share as required by Marketplace Rule 5550(a)(2) for continued
listing on the NASDAQ Capital Market. This notification has no
effect on the listing of the Company's common stock at this time.
The December 23, 2009 letter indicates that in accordance with
Marketplace Rule 5810(c)(3)(A), the Company will regain compliance
with the minimum bid requirement if at any time before June 21,
2010 (180 calendar days), the bid price of the Company's common
stock closes at $1.00 per share or above for a minimum of 10
consecutive business days.
In the event the Company does not regain compliance with the
minimum bid price rule by June 21, 2010, NASDAQ will provide the
Company with written notification that its common stock is subject
to delisting from the NASDAQ Capital Market. At that time,
pursuant to Marketplace Rule 5810(c)(3)(A), the Company will be
eligible for an additional grace period of another 180 calendar
days if it meets all initial listing requirements, with the
exception of the bid price, for the NASDAQ Capital Market.
Alternatively, the Company may appeal NASDAQ's determination to
delist its common stock at that time.
About Inhibitex
Inhibitex, Inc., headquartered in Alpharetta, Georgia, --
http://www.inhibitex.com/-- is a biopharmaceutical company
focused on developing products to treat serious infectious
diseases. The Company's pipeline includes FV-100, its clinical-
stage nucleoside analogue in Phase II development for the
treatment of herpes zoster (shingles), as well as INX-189, an HCV
nucleotide polymerase inhibitor in preclinical development.
Inhibitex has also licensed the use of certain of its proprietary
MSCRAMM(R) protein technology to Wyeth for the development of
staphylococcal vaccines.
MAMA MEXICO: Economic Slowdown Prompts Chapter 11 Filing
--------------------------------------------------------
Adrianne Pasquarelli at Crain's New York business says Mama Mexico
filed for Chapter 11 bankruptcy, citing economic slowdown which
affected sales of New York restaurants. The company posted assets
of between $100,000 and $500,000, and liabilities of between
$1 million and $10 million.
The Company said its restructuring to be short as it is now
working on a payment plan for its creditors, a person with
knowledge of the filing as saying.
Mama Mexico operates a restaurant at East 49th Street in New York
MANDALAY MEDIA: Posts $1.2MM Net Loss in Sept. 30 Quarter
---------------------------------------------------------
Mandalay Media, Inc., reported a net loss of $1.2 million on net
revenues of $10.1 million for the three months ended September 30,
2009, compared with a net loss of $3.0 million on revenues of
$5.0 million for the same period last year.
For the six months ended September 30, 2009, net loss was
$2.2 million, compared with a net loss of $6.4 million for the
comparable period last year.
Balance Sheet
At September 30, 2009, the Company's consolidated balance sheets
showed total assets of $87.1 million, total liabilities of
$39.3 million, and total stockholders' equity of $47.8 million.
The Company's consolidated balance sheets at September 30, 2009,
also showed strained liquidity with $14.7 million in total current
assets available to pay $39.3 million in total current
liabilities.
A full-text copy of the Company's Form 10-Q is available for free
at http://researcharchives.com/t/s?4c95
Amendments
On December 4, 2009, Mandalay Media filed amended quarterly
reports for the fiscal quarters ended December 31, 2008,
September 30, 2008, and June 30, 2008, and an amended 10-K for the
fiscal year ended March 31, 2009.
A full-text copy of the Company's amended 10-Q for the fiscal
quarter ended December 31, 2008, is available at no charge at:
http://researcharchives.com/t/s?4c96
A full-text copy of the Company's amended 10-Q for the fiscal
quarter ended September 30, 2008, is available at no charge at:
http://researcharchives.com/t/s?4c97
A full-text copy of the Company's amended 10-Q for the fiscal
quarter ended June 30, 2008, is available at no charge at:
http://researcharchives.com/t/s?4c98
A full-text copy of the Company's amended 10-K for the fiscal year
ended March 31, 2008, is available at no charge at:
http://researcharchives.com/t/s?4c99
Going Concern Doubt
One of the Company's operating subsidiaries, Twistbox
Entertainment, Inc., has sustained substantial operating losses
since commencement of operations. The Company has also incurred
negative cash flows from operating activities and the majority of
the Company's assets are intangible assets and goodwill, which
have been subject to impairment in the current year.
In addition, Twistbox has a significant amount of debt, in the
form of a secured note. The Company has guaranteed 50% of this
debt, and the group is subject to certain covenants. The debt and
the operation of covenants were restructured on August 11, 2009.
The realization of a major portion of the assets in the
accompanying consolidated balance sheet is dependent upon
continued operations of the Company, which is in turn dependent on
reaching a positive cash flow position while maintaining adequate
liquidity.
About Mandalay Media
Based in Los Angeles, Calif., Mandalay Media, Inc. (OTC Bulletin
Board: MNDL) -- http://www.mandalaymediainc.com/-- through its
wholly-owned subsidiary Twistbox Entertainment, Inc., is a
producer and publisher of mobile entertainment. Twistbox has
exclusive licenses with industry-leading brands, direct
distribution with more than 120 wireless operators in over 45
countries and provides an extensive portfolio of award-winning
games, WAP sites and mobile TV channels. Its wholly-owned
subsidiary AMV Holding Limited is a European leader in direct-to-
consumer mobile Internet content and services.
MIDWAY GAMES: Wants Plan Exclusivity Until Jan. 25
--------------------------------------------------
Bill Rochelle at Bloomberg News reports that Midway Games Inc. for
a fifth time is requesting an extension of the exclusive right to
propose a liquidating Chapter 11 plan. The Bankruptcy Court will
consider Midway's request for a January 25 extension of its
exclusive period to propose a plan and a March 30 extension of its
exclusive period to solicit acceptances of the plan at a hearing
on January 26. Midway says it's in the process of exchanging
drafts of the plan and disclosure statement with the Official
Committee of Unsecured Creditors.
Headquartered in Chicago, Illinois, Midway Games Inc. (OTC Pink
Sheets: MWYGQ) -- http://www.midway.com/-- was a leading
developer and publisher of interactive entertainment software for
major videogame systems and personal computers.
The Company and nine of its affiliates filed for Chapter 11
protection on February 12, 2009 (Bankr. D. Del. Lead Case No.
09-10465). Michael D. DeBaecke, Esq., Jason W. Staib, Esq, and
Victoria A. Guilfoyle, Esq., at Blank Rome LLP, in Wilmington,
Delaware; and Marc E. Richards, Esq., and Pamela E. Flaherty,
Esq., at Blank Rome LLP, in New York, represent the Debtors in
their restructuring efforts. Attorneys at Milbank, Tweed, Hadley
& McCloy LLP and Richards, Layton & Finger, P.A. represent the
official committee of unsecured creditors as counsel. Epiq
Bankruptcy Solutions, LLC, is the Debtors' claims, noticing, and
balloting agent.
On July 10, 2009, Midway and certain of its U.S. subsidiaries
completed the sale of substantially all of their assets to
Warner Bros. Entertainment Inc. in a sale approved by the Court.
The aggregate gross purchase price is roughly $49 million,
including the assumption of certain liabilities. Midway is
disposing of its remaining assets.
At June 30, 2009, the Debtors had $1.39 billion in total assets
and $1.59 billion in total liabilities.
MORGANS HOTEL: Hard Rock Hotel & Casino Loan Maturities Extended
----------------------------------------------------------------
Morgans Hotel Group Co. said that the maturity date of the loan
secured by the hotel and casino has been amended so that it is
extendable to February 2014. In addition, the non-recourse loan,
secured by approximately 11 acres of unused land owned by a Hard
Rock subsidiary is now extendable until February 2014.
"These amendments represent a vote of confidence from our lenders
and mark another milestone in the restructuring of our balance
sheet and our affiliate loans. With these extensions, the joint
venture has reduced the stress of the near term loan maturities on
the property, allowing us and our partner to focus our attention
and resources on our greatest priorities: maximizing the guest
experience and improving the long term value and financial
performance of Hard Rock," said Marc Gordon, President of Morgans
Hotel Group.
Among other things, the amendment with the lenders on the hotel
and casino loan provides for:
-- Extension of the loan term for two additional one year
extension periods through February 9, 2014;
-- Waiver of the debt-yield requirement for the one-year
extension option to extend the maturity date until
February 9, 2012 from February 9, 2011 -- the other
extension options do not have a debt-yield requirement
either;
-- Removal or modification of certain covenants, including
covenants related to maintenance of a monthly minimum
interest reserve balance;
-- Requirement that the joint venture post an incremental
$30 million and $7 million into interest and working capital
reserves, respectively. MHG funded approximately $3 million
of these reserves with the remainder having been funded by
MHG's capital partner in the Hard Rock venture; and
-- Changes to certain interest rates and fees.
For 2009, MHG estimates its management fees and expense
reimbursements from Hard Rock will be in excess of $7 million.
With the anticipated opening of a new guestroom tower, the hotel
will have been expanded in 2009 by approximately 875 rooms, 30,000
square feet of casino space, 60,000 square feet of meeting and
convention space, several new food and beverage outlets and a new
and larger "Joint" entertainment venue.
The land loan was also amended to extend the maturity date to
February 9, 2012, with two additional one year extension periods
through February 9, 2014, and among other things, to reduce the
pay rate on the debt. One of the lender groups funded half of the
reserves necessary for the extension in exchange for an equity
participation in the land.
About Morgans Hotel Group
Morgans Hotel Group Co. -- http://www.morganshotelgroup.com/--
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles, Scottsdale and South Beach, Clift
in San Francisco, Ames in Boston, and Sanderson and St Martins
Lane in London. Morgans Hotel Group and an equity partner also
own the Hard Rock Hotel & Casino in Las Vegas and related assets.
Morgans Hotel Group has other property transactions in various
stages of completion, including projects in SoHo, New York, Palm
Springs, California, Isla Verde, Puerto Rico, Playa del Carmen,
Mexico and Dubai, UAE.
NCI BUILDING: Annual Stockholders Meeting on February 19
--------------------------------------------------------
The Annual Meeting of Stockholders of NCI Building Systems, Inc.,
will be held at 10:00 a.m. on February 19, 2010, at the NCI
Conference Center located at 7313 Fairview, in Houston, Texas.
At the meeting, stockholders will be asked to:
(1) Proposal 1: Elect the three Class II directors -- Gary
L. Forbes; George Martinez; and Jonathan L. Zrebiec --
to serve until the 2013 Annual Meeting of Stockholders or
until their successors have been elected and will have
qualified;
(2) Proposal 2: Approve the amendment and restatement of the
2003 Long-Term Stock Incentive Plan;
(3) Proposal 3: Approve an amendment to the Company's
Restated Certificate of Incorporation to effect a reverse
stock split of the common stock of the Company;
(4) Proposal 4: Approve certain other amendments to the
Company's Restated Certificate of Incorporation;
(5) Proposal 5: Ratify the appointment of Ernst & Young LLP
as the Company's independent registered public accounting
firm for fiscal 2010; and
(6) Transact other business as may properly come before the
Annual Meeting of Stockholders or any reconvened meeting
following any adjournment or postponement thereof.
A full-text copy of the Company's proxy statement is available at
no charge at http://ResearchArchives.com/t/s?4ca4
On December 23, 2009, the Company filed its annual report on Form
10-K for the fiscal year ended November 1, 2009.
NCI Building posted a net loss of $746,964,000 for the fiscal year
ended November 1, 2009, from net income of $78,881,000 for the
fiscal year ended November 2, 2008, and net income of $63,729,000
for the fiscal year ended October 28, 2007.
At November 1, 2009, the Company had total assets of $613,848,000
against total current liabilities of $178,685,000; total long-term
liabilities of $162,683,000; and Series B cumulative convertible
participating preferred stock of $222,815,000, resulting in
stockholders' equity of $49,665,000. At November 2, 2008, the
Company had stockholders' equity of $623,829,000.
A full-text copy of NCI Building's annual report on Form 10-K is
available at no charge at http://ResearchArchives.com/t/s?4ca5
On December 16, 2009, NCI Building made available presentation
materials used by NCI in certain presentations by management. A
full-text copy of the Presentation Materials is available at no
charge at http://ResearchArchives.com/t/s?4ca6
About NCI Building
Based in Houston, Texas, NCI Building Systems, Inc. (NYSE: NCS) is
one of North America's largest integrated manufacturers of metal
products for the nonresidential building industry. NCI is
comprised of a family of companies operating manufacturing
facilities across the United States and Mexico, with additional
sales and distribution offices throughout the United States and
Canada.
NCI proposed a financial restructuring to address an immediate
need for liquidity in light of a potentially imminent default
under, and acceleration of, its existing credit facility, which
was to occur as early as November 6, 2009 (which would have, in
turn, lead to a default under, and acceleration of, its other
indebtedness, including the $180.0 million in principal amount of
2.125% Convertible Senior Subordinated Notes due 2024, and the
high likelihood that the Company would be required to repurchase
the convertible notes on November 15, 2009, the first scheduled
mandatory repurchase date under the convertible notes indenture.
In October 2009, NCI Building and Clayton, Dubilier & Rice, Inc.,
completed a $250 million equity investment in the Company by CD&R-
managed funds. The CD&R-managed funds acquired newly issued
preferred stock resulting in an ownership position in the Company
of roughly 68.5% on an as-converted basis.
This concludes the Troubled Company Reporter's coverage of NCI
Building until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
NIKISKI PARTNERS: Wants Bracewell & Giuliani as Bankr. Counsel
--------------------------------------------------------------
Nikiski Partners, Ltd., has asked for permission from the U.S.
Bankruptcy Court for the Southern District of Texas to hire
Bracewell & Giuliani LLP as bankruptcy counsel.
Bracewell & Giuliani will, among other things:
(a) advise the Debtor with respect to its rights, duties and
powers in this case;
(b) assist the Debtor in analyzing the claims of creditors
and in negotiating with creditors;
(c) representing the Debtor in all matters involving disputes
with creditors or other parties in interest;
(d) advise and represent the Debtor in all matters related to
its efforts to reorganize its business affairs; and
William A. Wood, III, a partner at Bracewell & Guiliani, says that
the firm will be paid based on the hourly rates of its personnel:
William A. Wood, Partner $675
Marcy E. Kurtz, Partner $650
Jason G. Cohen, Associate $390
Chris S. Tillmanns, Associate $325
Laura L. Venta, Associate $275
Gale W. Gattis, Paralegal $210
Mr. Wood assures the Court that Bracewell & Guiliani is
"disinterested" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The Woodlands, Texas-based Nikiski Partners, Ltd., filed for
Chapter 11 bankruptcy protection on December 4, 2009 (Bankr. S.D.
Texas Case No. 09-39332). William Alfred Wood, III, Esq., at
Bracewell & Giuliani LLP assists the Company in its restructuring
effort. The Company listed $10,000,001 to $50,000,000 in assets
and up to $50,000 in liabilities.
OPUS EAST: BoA Allowed to Pursue Foreclosure on Property
--------------------------------------------------------
Bank of America, N.A., in its capacity as administrative agent
for itself and certain other lenders, ask the Bankruptcy Court to
lift the automatic stay so that it can foreclose on its interest
in a newly constructed 12-story, urban office-retail building in
100 M Street SE, in Washington, D.C., owned by Debtor 100 M St. SE
LLC.
BofA reasons that it seeks the foreclosure proceedings because
the Debtors cannot provide adequate protection to its interest
and have no equity in the Property nor any ability to reorganize.
Stuart M. Brown, Esq., at Brown Angell Palmer & Dodge LLP, in
Wilmington, Delaware, relates that 100 M St. SE LLC, one of the
Opus East Debtors, derives its interest in the Property from a
60-year ground lease with Square 743, Inc., the ground lessor,
which holds the fee simple interest in the title to the land
underlying the Property.
Mr. Brown notes that the Debtor own the improvements to and
situated on the Property. She adds that the Property does not
include the fee to the underlying land, as it is owned by the
Ground Lessor, but does include the Debtor's interest in the
Ground Lease.
BofA recounts that it sought relief from the automatic stay in
July 2009 and after a hearing, the Court entered a stipulated
order (i) authorizing Jeoffrey L. Burtch, the Chapter 7 trustee
of the Debtor's bankruptcy estate, to operate the Debtor's
business, and (ii) authorizing the limited use of BofA's cash
collateral and granting adequate protection to BofA. Pursuant to
the Stipulation, the Trustee engaged Douglas Wilson Companies as
property manager.
Mr. Brown asserts, and the Trustee concurs, that the market value
of the Property is less than the amount owed to BofA, and as a
result there is no equity in the Property from the Debtor's
bankruptcy estate.
Accordingly, BofA and the Trustee reached an agreement, whereby:
(a) The Trustee consents to BofA being granted relief from the
automatic stay to seek the appointment in state court of
the Property Manager as a receiver and to pursue
foreclosure of the Property;
(b) BofA will consent to a "carve-out" from its cash
collateral currently held by the Trustee to cover the fees
and expenses of the Trustee incurred to date in an amount
not exceeding $85,930;
(c) In addition, BofA will carve out from its collateral the
Trustee's reasonable additional fees and expenses incurred
with respect to the Property until its title is
transferred from the Debtor's bankruptcy estate;
(d) With regard to any claims made against the Trustee with
respect to the Property that are covered by insurance
policies, BofA will indemnify the Trustee up to the amount
of any policy deductible;
(e) The Trustee and BofA mutually agree to release each other
from all claims arising prior to the Petition Date;
(f) The Trustee will hand over to BofA the balance remaining
from its cash collateral after giving effect to the
Trustee Expenses and other items agreed to between the
Trustee and BofA;
(g) The effect of the Stipulation will terminate automatically
when the title to the Property is transferred from the
Debtor's bankruptcy estate; and
(h) The Stipulation will be modified so that the Property
Manager can continue to manage the Property in
consultation with BofA until a receiver is appointed or
the Property is otherwise disposed of, but without
remitting funds to the Trustee.
About Opus East
Rockville-based Opus East LLC has developed more than 13.3 million
square feet of space since starting operations in 1994. It filed
for Chapter 7 liquidation in the U.S. Bankruptcy Court for the
District of Delaware. Opus East LLC listed $100 million to
$500 million in debts, against $50 million to $100 million in
assets in its Chapter 7 petition.
Bankruptcy Creditors' Service, Inc., publishes Opus West
Bankruptcy News. The newsletter tracks the separate Chapter 11
proceedings of Opus West Corp. and Opus South Corp. and Chapter 7
proceedings of Opus East their related debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
OPUS SOUTH: Hearing on Outline to Waters Edge Plan on January 4
---------------------------------------------------------------
Wachovia Bank, National Association, as agent and on its own
behalf; Regions Bank; PNC Bank, National Association; and Bank of
America, presented to the U.S. Bankruptcy Court for the District
of Delaware on November 30, 2009, a Plan of Liquidation and
Disclosure Statement for Debtor Waters Edge One LLC.
Waters Edge is one of the Opus South Debtors. The Plan
Proponents extended postpetition financing to Waters Edge to
assist the Debtor's needs for funding in its daily operations
while under bankruptcy.
The Lenders Plan contemplates that Waters Edge will liquidate its
principal assets through the pursuit of litigation of the "RMSSR
Claims."
The Lenders will appear before the Court on January 4 to seek
approval of the disclosure statement explaining the Plan of
Liquidation.
In connection with the solicitation of support for the Plan, the
Opus South Lenders ask the Court to establish December 30,
2009, as the record date for determining creditors entitled to
receive solicitation packages and creditors entitled to vote to
accept or reject the Plan.
The Opus South Lenders also urge the Court to appoint Womble
Carlyle Sandridge & Rice PLLC to serve as voting agent and
provide balloting services. The Voting Agent is expected to
perform all services relating to the maintenance of records on
the solicitation of votes on the Plan.
In addition, the Lenders seek that February 10, 2010, be
established as the deadline by which all Ballots must be properly
executed, completed, delivered to, and received by the Voting
Agent.
About Opus South
Headquartered in Atlanta, Georgia, Opus South Corporation --
http://www.opuscorp.com/-- provides an array of real estate
related services across the United States including real estate
development, architecture & engineering, construction and project
management, property management and financial services.
The Company and its affiliates filed for Chapter 11 on April 22,
2009 (Bankr. D. Del. Lead Case No. 09-11390). Victoria Watson
Counihan, Esq., at Greenberg Traurig, LLP, represents the Debtors
in their restructuring efforts. The Debtors propose to employ
Landis, Rath & Cobb, LLP, as conflicts counsel, Chatham Financial
Corporation as real estate broker, Delaware Claims Agency LLC as
claims agent. The Debtors have assets and debts both ranging from
$50 million to $100 million.
Bankruptcy Creditors' Service, Inc., publishes Opus West
Bankruptcy News. The newsletter tracks the separate Chapter 11
proceedings of Opus West Corp. and Opus South Corp. and their
related debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
OPUS SOUTH: Lenders File Litigation Trust Agreement
---------------------------------------------------
Waters Edge One LLC previously entered into a Global Settlement
Agreement with Wachovia Bank, certain lenders and other parties,
which provides for (1) the consensual agreement among the parties
to sell certain properties, (2) the Lenders' consent to the
release of the Opus South Debtors' guaranty and certain
obligations upon the satisfaction of certain conditions, and (3)
Wachovia's provision of postpetition financing to Waters
Edge.
The Global Settlement also provided for the creation of a
Litigation Trust to pursue the "RMSSR Claims."
Subsequently, the Debtors submitted to the Court an executed copy
of the Litigation Trust Agreement, a copy of which is available
for free at http://bankrupt.com/misc/OpSLitTrstAgmt.pdf
The RMSSR Claims refer to claims currently pursued by Waters Edge
against Ruden McClosely, Smith Schuster & Russell P.A. and Mark
Grant in the Circuit Court of the Sixth Judicial District in and
for Pinellas County, Florida -- that relates to legal services
provided in connection with a certain real property of Waters
Edge located in Pinellas County, Florida, commonly known as the
Waters Edge Condominium Building. Waters Edge granted the DIP
Lenders a first priority interest in the RMSSR Claims to secure
the Debtor's obligations under the DIP Loan Agreement.
About Opus South
Headquartered in Atlanta, Georgia, Opus South Corporation --
http://www.opuscorp.com/-- provides an array of real estate
related services across the United States including real estate
development, architecture & engineering, construction and project
management, property management and financial services.
The Company and its affiliates filed for Chapter 11 on April 22,
2009 (Bankr. D. Del. Lead Case No. 09-11390). Victoria Watson
Counihan, Esq., at Greenberg Traurig, LLP, represents the Debtors
in their restructuring efforts. The Debtors propose to employ
Landis, Rath & Cobb, LLP, as conflicts counsel, Chatham Financial
Corporation as real estate broker, Delaware Claims Agency LLC as
claims agent. The Debtors have assets and debts both ranging from
$50 million to $100 million.
Bankruptcy Creditors' Service, Inc., publishes Opus West
Bankruptcy News. The newsletter tracks the separate Chapter 11
proceedings of Opus West Corp. and Opus South Corp. and their
related debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
OPUS SOUTH: Wants Plan Exclusivity Until March 18
-------------------------------------------------
By this motion, Opus South Corporation asks the Court to further
extend (i) the period during which it has the exclusive right to
file a Chapter 11 plan by 90 days through and including March 18,
2010, and (ii) the period during which it has the exclusive right
to solicit acceptances of that plan, through and including
May 17, 2010.
As previously reported, the Court extended the Exclusive Plan
Filing Period for the Opus South Debtors through December 18,
2009, and the Exclusive Solicitation Period for the same Debtors
through February 16, 2010.
Victoria W. Counihan, Esq., at Greenberg Traurig LLP, in
Wilmington, Delaware, asserts that ample cause exists to extend
the Exclusive Periods of the Opus South Debtors. She contends
that the Opus South Debtors have worked diligently to administer
their estates and since the Petition Date, have focused on
stabilizing properties, obtaining necessary funding, negotiating
and consummating sales of assets, and negotiating various
alternative exit strategies for each particular property with
each property's particular lender.
Opus South Corp. is the management company for all of the Opus
South Debtors whose Chapter 11 cases are still pending and all
the affiliated Opus South Debtors whose cases have previously
been converted to Chapter 7. It provides employees and
accounting services and conducts general business operations for
all the Debtors.
Ms. Counihan points out that Waters Edge One LLC, one of the Opus
South Debtors, has filed a plan of reorganization and has
scheduled a confirmation hearing for the middle of February 2010.
She asserts that Opus South Corp. will need to continue to
provide its management services to Waters Edge through the
effective date of confirmation of its Chapter 11 plan.
Opus South Corp. desires to keep its options available for an
exit strategy for its case, including the right to file a Chapter
11 plan, until all of the other affiliated Debtors for which it
provides management services have finalized their Chapter 11
cases, Ms. Counihan tells the Court.
Ms. Counihan maintains that the extension of the Exclusive
Periods will not harm creditors or other parties-in-interest, as
they will retain the right to seek to terminate the Exclusive
Periods or to oppose any future requests for extensions.
The Court will convene a hearing on January 4, 2010, at
2:00 p.m., to consider the Debtors' request. By application of
Rule 9006-2 of the Local Rules of Bankruptcy Practice and
Procedures of the U.S. Bankruptcy Court for the District of
Delaware, the Opus South Debtors' Exclusive Periods are
automatically extended through the conclusion of that hearing.
About Opus South
Headquartered in Atlanta, Georgia, Opus South Corporation --
http://www.opuscorp.com/-- provides an array of real estate
related services across the United States including real estate
development, architecture & engineering, construction and project
management, property management and financial services.
The Company and its affiliates filed for Chapter 11 on April 22,
2009 (Bankr. D. Del. Lead Case No. 09-11390). Victoria Watson
Counihan, Esq., at Greenberg Traurig, LLP, represents the Debtors
in their restructuring efforts. The Debtors propose to employ
Landis, Rath & Cobb, LLP, as conflicts counsel, Chatham Financial
Corporation as real estate broker, Delaware Claims Agency LLC as
claims agent. The Debtors have assets and debts both ranging from
$50 million to $100 million.
Bankruptcy Creditors' Service, Inc., publishes Opus West
Bankruptcy News. The newsletter tracks the separate Chapter 11
proceedings of Opus West Corp. and Opus South Corp. and their
related debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
OPUS WEST: Surviving Officer, Oversight Committee Named
-------------------------------------------------------
Pursuant to the terms of Joint Chapter 11 Plan of Liquidation
submitted by Opus West Corp. and its and its units, John Bittner
of Grant Thornton LLP, in Dallas, Texas, has been designated as
the Surviving Officer.
In a separate filing, the Official Committee of Unsecured
Creditors appointed Rob Jones of Ennis Steel Industries, Inc.,
and Nelson R. Braddy, Jr. of King of Texas Roofing Company L.P.
as members of the Oversight Committee pursuant to the Plan.
The Opus West Debtors presented to the U.S. Bankruptcy Court for
the Northern District of Texas a joint Chapter 11 plan of
liquidation and an accompanying disclosure statement on
November 25, 2009.
The Debtors subsequently submitted on December 2, 2009, an
amended Plan and Disclosure Statement, which contained minor
modifications, including the treatment of priority non-tax claims
asserted against the Debtors.
The Opus West Plan contemplates the liquidation of the Debtors
and the resolution of certain claims through a series of
mechanisms, in order to provide a distribution to holders of
general unsecured claims.
Upon the occurrence of the Plan Effective Date, the Plan and all
remaining property of each Debtor's Estate will be managed under
the direction of a Surviving Officer, in consultation with an
Oversight Committee.
About Opus West Corporation
Based in Phoenix, Arizona, Opus West Corporation is a full-service
real estate development firm that focuses on acquiring,
constructing, operating, managing, leasing and/or disposing of
real estate development projects primarily located in the western
United States.
Opus West and its affiliates filed for Chapter 11 on July 6, 2009
(Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at
Greenberg Traurig, LLP, represents the Debtors in their
restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is
co-counsel to the Debtors. Pronske & Patel, P.C., is conflicts
counsel. Chatham Financial Corp. is financial advisor. BMC Group
is the Company's claims and notice agent. As of May 31, Opus West
-- together with its non-debtor affiliates -- had $1,275,334,000
in assets against $1,462,328,000 in debts. In its bankruptcy
petition, Opus West said it had assets and debts both ranging from
$100 million to $500 million.
Opus West joins affiliates that previously filed for bankruptcy.
Opus East LLC, a real estate operator from Rockville, Maryland,
commenced a Chapter 7 liquidation on July 1 in Delaware. Opus
South Corp., a Florida condominium developer based in Atlanta,
filed a Chapter 11 petition April 22 in Delaware.
Bankruptcy Creditors' Service, Inc., publishes Opus West
Bankruptcy News. The newsletter tracks the separate Chapter 11
proceedings of Opus West Corp. and Opus South Corp. and their
related debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
OWENS CORNING: Faces Class Action for Shingles
----------------------------------------------
Patricia Wright of Brownsville, Pennsylvania, has filed a class
action, on behalf of all homeowners who have had installed since
1986 shingles manufactured by Owens Corning, in a federal court
in Pennsylvania, consumeraffairs.com reports.
The complaint alleges defective design and fraudulent marketing,
for Owens Corning's failure to adequately test its Owens Corning
Oakridge Shadow 40-years shingles for common conditions that it
knew, or should have known, could damage the shingles, according
to the report.
The shingles, Ms. Wright complained, deteriorated by cracking,
curling and degranulating 10 years after her purchase. This is
far ahead of the expiration of their warranty periods, Ms. Wright
lamented.
Ms. Wright also complained that Owens Corning firmly refused to
replace the faulty shingles, even when the Company allegedly
covered with warranty for up to 40 years, the news source noted.
The Shingles Class Action also charges Owens Corning with breach
of contract, breach of warranty, negligence, strict product
liability, unjust enrichment, and breach of Pennsylvania consumer
protection laws, according to consumeraffairs.com.
About Owens Corning
Headquartered in Toledo, Ohio, Owens Corning fka Owens Corning
(Reorganized) Inc. (NYSE: OC) -- http://www.owenscorning.com/--
is a producer of residential and commercial building materials and
glass fiber reinforcements, and other similar materials for
composite systems. The company has operations in 26 countries.
The Company filed for Chapter 11 protection on October 5, 2000
(Bankr. D. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at
Saul Ewing LLP, represented the Debtors. Elihu Inselbuch, Esq.,
at Caplin & Drysdale, Chartered, represented the Official
Committee of Asbestos Creditors. James J. McMonagle served as the
Legal Representative for Future Claimants until June 20, 2007.
Mr. McMonagle was replaced by Michael J. Crames. Mr. Crames
served as Mr. McMonagle's counsel until July 2005, when he retired
from the law firm Kaye Scholer LLP.
On September 28, 2006, the Honorable John P. Fullam, Sr., of the
U.S. District Court for the Eastern District of Pennsylvania
affirmed the order of Honorable Judith Fitzgerald of the U.S.
Bankruptcy Court for the District of Delaware confirming Owens
Corning's Sixth Amended Plan of Reorganization. The Plan took
effect on October 31, 2006, marking the company's emergence from
Chapter 11.
Reorganized Owens sought on July 25, 2008, from the Delaware
Bankruptcy Court a final decree closing the Chapter 11 cases of 17
of its affiliates. Only the Chapter 11 case of Owens Corning
Sales, LLC, formerly known as Owens Corning, under Case No.
00-03837 will remain open.
(Owens Corning Bankruptcy News; Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000)
OWENS CORNING: Gets Nod for Settlement With Travelers
-----------------------------------------------------
Reorganized Owens Corning sought and obtained the approval of
Judge Judith K. Fitzgerald of the United States Bankruptcy Court
for the District of Delaware, of their settlement agreement with
Travelers Indemnity and Surety Company, in order to avoid the
expense and risks attendant to the litigation with respect to the
issues relating to Travelers' Claim No. 7304.
The key terms of the Agreement are:
(a) The parties agree that Claim No. 7304 is to be allowed as a
Class A6-B Senior Indebtedness Claim for $2,900,000 against
Owens Corning;
(b) Upon Court approval of the Agreement, the Reorganized
Debtors will make a distribution to Travelers in accordance
with their Chapter 11 Plan without delay, so as to give
Travelers the same percentage distribution on account of
the Allowed Claim as made thus far to other creditors with
Allowed Class A6-B claims.
(c) Travelers will continue to provide coverage under the
policies or other agreements at issue in Claim No. 7304,
including continuing to administer workers' compensation
and other claims of third parties covered under those
policies and agreements.
The prompt resolution of the parties' claim dispute without
resort to additional and costly litigation is in the best
interest of the Reorganized Debtor and affords broad protection
from and against claims that have been, or may be in the future
be, asserted by third parties seeking workers' compensation or
other benefits covered under the policies and agreements at issue
in Claim No. 7304, Neal C. Glenn, Esq., at Kelley, Jasons,
McGowan, Spinelli & Hanna, LLP, asserts.
No objection was filed against the request.
About Owens Corning
Headquartered in Toledo, Ohio, Owens Corning fka Owens Corning
(Reorganized) Inc. (NYSE: OC) -- http://www.owenscorning.com/--
is a producer of residential and commercial building materials and
glass fiber reinforcements, and other similar materials for
composite systems. The company has operations in 26 countries.
The Company filed for Chapter 11 protection on October 5, 2000
(Bankr. D. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at
Saul Ewing LLP, represented the Debtors. Elihu Inselbuch, Esq.,
at Caplin & Drysdale, Chartered, represented the Official
Committee of Asbestos Creditors. James J. McMonagle served as the
Legal Representative for Future Claimants until June 20, 2007.
Mr. McMonagle was replaced by Michael J. Crames. Mr. Crames
served as Mr. McMonagle's counsel until July 2005, when he retired
from the law firm Kaye Scholer LLP.
On September 28, 2006, the Honorable John P. Fullam, Sr., of the
U.S. District Court for the Eastern District of Pennsylvania
affirmed the order of Honorable Judith Fitzgerald of the U.S.
Bankruptcy Court for the District of Delaware confirming Owens
Corning's Sixth Amended Plan of Reorganization. The Plan took
effect on October 31, 2006, marking the company's emergence from
Chapter 11.
Reorganized Owens sought on July 25, 2008, from the Delaware
Bankruptcy Court a final decree closing the Chapter 11 cases of 17
of its affiliates. Only the Chapter 11 case of Owens Corning
Sales, LLC, formerly known as Owens Corning, under Case No.
00-03837 will remain open.
(Owens Corning Bankruptcy News; Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000)
OWENS CORNING: Releases 3rd Quarter Summary Report
--------------------------------------------------
Mark W. Mayer, vice president and chief accounting officer of
Owens Corning Delaware, submitted to the Office of the U.S.
Trustee a post-confirmation summary report for the quarter ended
September 30, 2009.
Owens Corning Delaware
Case No. 00-3837
Post-Confirmation Report
For Quarter Ended September 30, 2009
Cash, beginning of period $26,200,000
Total receipts received by Debtor:
Cash sales 0
Accounts receivable 768,963,000
Proceeds from litigation 0
Sale of Debtor's assets 0
Capital infusion under Plan 0
---------------
Total cash received 768,963,000
---------------
Total cash available 795,163,000
Less disbursement made by Debtor:
Disbursements made under Plan 64,000
Disbursement made for administrative claims 685,000
Other disbursements 781,717,000
---------------
Total disbursements 782,467,000
---------------
Cash, at end of period $12,696,000
===============
The Chapter 11 cases of the other Owens Corning affiliates have
been closed, Case Nos. 00-3838 through 00-3854.
About Owens Corning
Headquartered in Toledo, Ohio, Owens Corning fka Owens Corning
(Reorganized) Inc. (NYSE: OC) -- http://www.owenscorning.com/--
is a producer of residential and commercial building materials and
glass fiber reinforcements, and other similar materials for
composite systems. The company has operations in 26 countries.
The Company filed for Chapter 11 protection on October 5, 2000
(Bankr. D. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at
Saul Ewing LLP, represented the Debtors. Elihu Inselbuch, Esq.,
at Caplin & Drysdale, Chartered, represented the Official
Committee of Asbestos Creditors. James J. McMonagle served as the
Legal Representative for Future Claimants until June 20, 2007.
Mr. McMonagle was replaced by Michael J. Crames. Mr. Crames
served as Mr. McMonagle's counsel until July 2005, when he retired
from the law firm Kaye Scholer LLP.
On September 28, 2006, the Honorable John P. Fullam, Sr., of the
U.S. District Court for the Eastern District of Pennsylvania
affirmed the order of Honorable Judith Fitzgerald of the U.S.
Bankruptcy Court for the District of Delaware confirming Owens
Corning's Sixth Amended Plan of Reorganization. The Plan took
effect on October 31, 2006, marking the company's emergence from
Chapter 11.
Reorganized Owens sought on July 25, 2008, from the Delaware
Bankruptcy Court a final decree closing the Chapter 11 cases of 17
of its affiliates. Only the Chapter 11 case of Owens Corning
Sales, LLC, formerly known as Owens Corning, under Case No.
00-03837 will remain open.
(Owens Corning Bankruptcy News; Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000)
PACIPIC CAPITAL: DBRS Downgrades Issuer Debt Rating to 'CCC'
------------------------------------------------------------
DBRS has downgraded all ratings of Pacific Capital Bancorp (PCBC
or the Company) and its bank subsidiary, Pacific Capital Bank,
N.A. (the Bank), including PCBC's Issuer & Senior Debt rating to
CCC from B and the Bank's Deposits & Senior Debt rating to B from
BB. Concurrently, the Bank's Short-Term Instruments rating was
downgraded to R-5 from R-4. All ratings remain Under Review with
Negative Implications.
The ratings action follows the Company's pending sale of its E-
Filing Financial Services Division, which houses the Refund
Anticipation Loan (RAL) and Refund Transfer (RT) businesses after
the Office of the Comptroller of the Currency (OCC) notified
Pacific Capital that it would not allow any RAL originations in
2010. As part of its Under Review with Negative Implications,
DBRS was looking for the RAL/RT business to operate at or near
capacity for the 2010 tax season to generate much needed capital
to offset large credit losses. While the sales price is not known
at this time, distressed sales rarely receive fair value and the
Company is now losing its primary capital generator at a time
Pacific Capital needs it most.
Another concern, the Company's Chief Financial and Operating
Officer is departing at a time when all strategic options should
be on the table and continually evaluated. In DBRS's opinion, the
Company must raise capital and shrink the balance sheet to survive
independently.
DBRS notes that Pacific Capital is holding excess liquidity and is
mainly concerned with low capital metrics combined with elevated
asset quality problems. Indeed, the tangible common to tangible
assets ratio was a very weak 2.74% at the end of Q3 2009 and more
quarterly losses are likely as the Company deals with high levels
of nonperforming assets. Furthermore, while the Company is well-
capitalized by the standard regulatory definition, capital metrics
are below the enhanced capital requirements mandated by the OCC.
The review will focus on what strategic plans management will
undertake to position the Company for improved financial
fundamentals, how much capital the sale of the RAL/RT business
will generate, whether balance sheet initiatives will achieve the
desired regulatory capital ratios mandated by the OCC and whether
elevated credit costs will continue to invade capital and pressure
overall results. In DBRS's opinion, Pacific Capital must
immediately address its weak tangible common equity ratio,
especially since more quarterly losses are likely.
PATRICK INDUSTRIES: JPMorgan-Led Lenders Reset EBITDA Covenants
---------------------------------------------------------------
Patrick Industries, Inc., reports that on December 11, 2009, the
Company entered into a Fourth Amendment to its Credit Agreement,
dated May 18, 2007, with JPMorgan Chase Bank, N.A., as
Administrative Agent.
The Fourth Amendment amended certain definitions, terms and
reporting requirements. The financial covenants were modified to
establish new quarterly minimum consolidated earnings before
interest, taxes, depreciation and amortization requirements that
will replace the existing minimum one-month and two-month
requirements beginning with the fiscal quarter ended March 28,
2010.
CONSOLIDATED EBITDA
Fiscal Quarter Fiscal Quarter
(ended on or closest to) then ending
------------------------ --------------
March 28, 2010 ($584,000)
June 27, 2010 $2,204,300
September 26, 2010 $1,973,200
December 31, 2010 $1,434,600
In addition, the monthly borrowing limits under the revolving
commitments were reset in conjunction with updated projected
monthly cash flows for 2010.
Effective with the Fourth Amendment, borrowings under the
revolving line of credit are subject to a borrowing base, up to a
maximum borrowing limit of $28.0 million for fiscal year 2010.
BORROWING BASE AMOUNTS
Period Amount
------ ------
November 1, 2009 - December 31, 2009 $25,000,000
January 1, 2010 - January 24, 2010 $21,000,000
January 25, 2010 - February 28, 2010 $23,000,000
March 1, 2010 - March 28, 2010 $26,000,000
March 29, 2010 - April 25, 2010 $28,000,000
April 26, 2010 - June 27, 2010 $27,000,000
June 28, 2010 - August 29, 2010 $28,000,000
August 30, 2010 - October 24, 2010 $26,000,000
October 25, 2010 - November 28, 2010 $25,000,000
November 29, 2010 - December 31, 2010 $21,000,000
The interest rates for borrowings under the revolving line of
credit and the term loan, and the expiration date of the Credit
Agreement remained unchanged. The Company's ability to access
these borrowings is subject to compliance with the terms and
conditions of the credit facility including the financial
covenants.
"We are pleased to have entered into this amendment of our credit
agreement that reflects the modifications made to our operating
plan for the 2010 fiscal year in anticipation of improving market
conditions in the RV industry and stabilization in the
manufactured housing industry and industrial markets. The
amendment further reflects the Company's forward operating
momentum and the strong relationship we have with our senior
lenders who have been extremely supportive as we continue to
reduce our leverage position. The progress we have made has taken
a total team effort and we are extremely appreciative of the
continued support of our banking group, customers, suppliers,
shareholders, and team members as we are cautiously optimistic
about what 2010 will bring from a market perspective," stated Todd
Cleveland, President and Chief Executive Officer.
The members of the lending syndicate are:
* JPMORGAN CHASE BANK, N.A., individually and as
Administrative Agent;
* FIFTH THIRD BANK;
* BANK OF AMERICA, N.A., as successor to LaSalle Bank
National Association;
* KEY BANK, NATIONAL ASSOCIATION;
* RBS CITIZENS, NATIONAL ASSOCIATION, successor by merger
with Charter One Bank;
* ASSOCIATED BANK; and
* 1ST SOURCE BANK
A full-text copy of the Fourth Amendment is available at no charge
at http://ResearchArchives.com/t/s?4ca7
Credit Agreement Amendment
At March 1, 2009 -- the Company's February fiscal month end --
Patrick was in violation of the Consolidated EBITDA financial
covenant under the terms of its credit agreement. On April 14,
2009, the Company entered into a Third Amendment to the Company's
Credit Agreement, pursuant to which, among other things, the
lenders waived any actual or potential Event of Default resulting
from its failure to comply with the Consolidated EBITDA covenants
for the fiscal months ended March 1, 2009 and March 29, 2009. In
addition, the Third Amendment amended or added certain
definitions, terms and reporting requirements including a
modification of the one-month and two-month Consolidated EBITDA
covenants to be more reflective of current economic conditions.
Borrowings under the revolving line of credit are subject to a
borrowing base, up to a borrowing limit. The maximum borrowing
limit amount was reduced from $33.0 million to $29.0 million in
accordance with the Company's cash flow forecast. The principal
amount outstanding under the term loan, the interest rates for
borrowings under the revolving line of credit and the term loan,
and the expiration date of the Credit Agreement remained unchanged
under the amended terms.
At September 27, 2009, the Company had $86.5 million in total
assets against $71.1 million in total liabilities, resulting in
$15.3 million in stockholders' equity.
About Patrick Industries
Patrick Industries, Inc. -- http://www.patrickind.com/-- is a
major manufacturer of component products and distributor of
building products serving the manufactured housing, recreational
vehicle, kitchen cabinet, home and office furniture, fixture and
commercial furnishings, marine, and other industrial markets and
operates coast-to-coast through locations in 13 states. Patrick's
major manufactured products include decorative vinyl and paper
panels, wrapped moldings, cabinet doors and components, slotwall
and slotwall components, and countertops. The Company also
distributes drywall and drywall finishing products, interior
passage doors, flooring and roofing products, vinyl and cement
siding, ceramic tile, and other miscellaneous products.
This concludes the Troubled Company Reporter's coverage of Patrick
Industries until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
PATRICK INDUSTRIES: Inks Deal to Acquire Quality Hardwoods Biz
--------------------------------------------------------------
Patrick Industries, Inc., has signed a definitive agreement to
acquire certain assets of the cabinet door business of Quality
Hardwoods Sales, a limited liability company. The transaction is
expected to be completed in January 2010.
"This acquisition fits within the scope of our strategic plan by
adding products which complement our existing RV product lines,"
stated Todd Cleveland, President and Chief Executive Officer.
"Patrick's expertise in the cabinet door industry and its state of
the art manufacturing facility afford the Company the opportunity
to further drive value for its customers and shareholders and gain
additional market share, while at the same time improving both our
profitability and leverage positions."
Credit Agreement Amendment
At March 1, 2009 -- the Company's February fiscal month end --
Patrick was in violation of the Consolidated EBITDA financial
covenant under the terms of its credit agreement. On April 14,
2009, the Company entered into a Third Amendment to the Company's
Credit Agreement, pursuant to which, among other things, the
lenders waived any actual or potential Event of Default resulting
from its failure to comply with the Consolidated EBITDA covenants
for the fiscal months ended March 1, 2009 and March 29, 2009. In
addition, the Third Amendment amended or added certain
definitions, terms and reporting requirements including a
modification of the one-month and two-month Consolidated EBITDA
covenants to be more reflective of current economic conditions.
Borrowings under the revolving line of credit are subject to a
borrowing base, up to a borrowing limit. The maximum borrowing
limit amount was reduced from $33.0 million to $29.0 million in
accordance with the Company's cash flow forecast. The principal
amount outstanding under the term loan, the interest rates for
borrowings under the revolving line of credit and the term loan,
and the expiration date of the Credit Agreement remained unchanged
under the amended terms.
At September 27, 2009, the Company had $86.5 million in total
assets against $71.1 million in total liabilities, resulting in
$15.3 million in stockholders' equity.
About Patrick Industries
Patrick Industries, Inc. -- http://www.patrickind.com/-- is a
major manufacturer of component products and distributor of
building products serving the manufactured housing, recreational
vehicle, kitchen cabinet, home and office furniture, fixture and
commercial furnishings, marine, and other industrial markets and
operates coast-to-coast through locations in 13 states. Patrick's
major manufactured products include decorative vinyl and paper
panels, wrapped moldings, cabinet doors and components, slotwall
and slotwall components, and countertops. The Company also
distributes drywall and drywall finishing products, interior
passage doors, flooring and roofing products, vinyl and cement
siding, ceramic tile, and other miscellaneous products.
This concludes the Troubled Company Reporter's coverage of Patrick
Industries until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
PENINSULA GAMING: S&P Withdraws 'B+' Rating on $255 Mil. Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'B+' issue-level
rating and '5' recovery rating on Peninsula Gaming LLC's
$255 million 8.75% senior secured notes due 2012, co-issued by
Peninsula Gaming Corp. The rating was withdrawn due to the
redemption in full of this obligation.
Ratings List
Peninsula Gaming LLC
Corporate Credit Rating B+/Stable/--
Rating Withdrawn
Peninsula Gaming LLC
To From
-- ----
$255M 8.75% nts due 2012* NR B+
Recovery Rating NR 4
* Co-issued by Peninsula Gaming Corp.
NR -- Not rated.
PENN TRAFFIC: Can Access Cash Collateral Until January 31
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware, in a third
interim order, authorized The Penn Traffic Company, et al., to use
the cash collateral securing their obligation to their prepetition
lenders.
A final hearing on the Debtor's access to cash collateral will be
held on January 25, 2010, at 11:30 a.m. (Prevailing Eastern Time)
at the U.S. Bankruptcy Court, Courtroom No. 2, 6th Floor, 824
Market St., Wilmington, Delaware.
The Debtors would use the money to fund their Chapter 11 case, pay
suppliers and other parties.
Prepetition the Debtors entered into two credit facilities: (1)
the first lien credit facility -- with General Electric Capital
Corporation as the administrative agent -- which provided a (a)
revolving credit facility in the aggregate principal amount of
$50,000,000 inclusive of a letter of credit facility in the
aggregate principal amount of $47,500,000 and a swing line
facility in the aggregate principal amount of $7,500,000 and (b) a
term loan in the aggregate principal amount of $6,000,000; and (2)
the second lien credit facility -- with Kimco Capital Corp. as
administrative agent -- a term loan in the aggregate principal
amount of $10,000,000.
As adequate protection for any diminution in value of their
collateral postpetition, the first lien agent and first lien
lenders are granted valid, perfected and enforceable security
interest upon all of the assets of the Debtors. The first lien
agent is granted an administrative claim and will be paid cash
payments of interest at the default rate and at the times required
under the first lien credit agreements. The Debtors will also pay
to any bank issuing postpetition letters of credit and the first
lien agent for itself and on behalf of the first lien lenders any
reasonable fees and expenses of legal counsel, financial advisors,
auditors, appraisers and other consultants within ten business
days after the delivery of an invoice. The second lien agent and
second lien lenders are granted valid, perfected and enforceable
security interest subject to the terms and conditions equivalent
to a lien granted under Bankruptcy Code sections 364(c) and (d) in
the Collateral. The Second Lien Agent is granted an
administrative claim and will also be paid cash payments of
interest at the default rate and at the times required under the
second lien credit agreements. The Debtors will pay to second
lien agent for itself and on behalf of the second lien lenders any
reasonable fees and expense of legal counsel, 10 business days
after the delivery of an invoice.
The Debtor's access to the cash collateral will terminate on (i)
January 31, 2010, or (ii) the occurrence of an event of default.
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.
PIONEER INSURANCE: A.M. Best Affirms FSR of 'b'
-----------------------------------------------
A.M. Best Co. has affirmed the financial strength rating (FSR) of
B (Fair) and issuer credit rating (ICR) of "bb" of Pioneer
Insurance Company Limited (Pioneer) (New Zealand). The outlook
for both ratings is stable. Concurrently, A.M. Best has withdrawn
the ratings at the company's request and assigned an NR-4 to the
FSR and an "nr" to the ICR.
The ratings reflect Pioneer's weak operating performance resulting
from poor past underwriting standards and costs associated with
the re-organization of the company.
Offsetting these rating factors are improvements in Pioneer's
management and internal control, rationalized book of business and
moderate risk-adjusted capitalization.
PREMIER HOTEL: Files for Bankruptcy to Protect Interest
-------------------------------------------------------
Ben Sutherly, staff writer at Dayton Daily News, reports that
Premier Hotel Group LLC filed for Chapter 11 bankruptcy to protect
its interest as it negotiates with a potential buyer. The Company
listed assets and debts of between $1 million and $10 million.
The Company, according to the report, owes $638,000 to Par-Mee
Dev. Corp.; $462,280, Perpetual Federal Savings Bank of Urbana;
$196,813, Greene County Treasurer; and $30,329, Baymont Franchise
Systems of Chicago.
Premier Hotel Group LLC owns a hotel building at 730 E. Xenia
Drive in Fairborn operated by Baymont Inn and Suites.
PTC ALLIANCE: PBGC Takes Over Pension Fund for 750 Workers
----------------------------------------------------------
Doug Halonen at Pension&Investments says the Pension Benefit
Guaranty Corporation is taking over the pension fund of PTC
Alliance Corp. The pension fund covering 750 employees and
retirees was terminated on Dec. 28, 2009. The plan is 51% funded
with $39.7 million in assets and $77.1 million in liabilities.
The agency said it expects to cover $37 million of shortfall.
Headquartered in Wexford, Pennsylvania, PTC Alliance Corp. makes
welded and cold drawn mechanical steel tubing and tubular shapes,
chrome-plated bar products and precision components. The Company
and its affiliates filed for Chapter 11 protection on October 1,
2009 (Bankr. D. Del. Lead Case No. 09-13395). The Debtors
selected Reed Smith LLP as their counsel. PTC Alliance listed,
in its petition, assets between $50 million and $100 million, and
debts between $100 million and $500 million.
RADIENT PHARMACEUTICALS: Receives Non-Compliance Notice From AMEX
-----------------------------------------------------------------
Radient Pharmaceuticals Corporation has received notice from the
NYSE Amex that the Company is not in compliance with the continued
listing standard in Section 1003(a)(iv) of the Exchange's Company
Guide. The Company has until January 22, 2010, to submit a plan
to regain compliance by June 23, 2010. If the Company does not
submit a plan or if the plan is not accepted by the Exchange, or
if the Company's plan is accepted but we fail to make progress
consistent with our plan, or we are not in compliance by June 23,
2010, the Company would be subject to delisting procedures.
About Radient Pharmaceuticals:
Headquartered in Tustin, California, Radient Pharmaceuticals
Corporation is an integrated pharmaceutical company devoted to the
research, development, manufacturing, and marketing of diagnostic,
and premium skin care products.
RADIENT PHARMACEUTICALS: Receives NYSE Non-Compliance Notice
------------------------------------------------------------
Radient Pharmaceuticals Corporation reports that on December 23,
2009, it received notice from the NYSE Amex LLC stating that the
Company is not in compliance with Section 1003(a)(iv) of the
Exchange's Company Guide.
Specifically, after reviewing of the Company's Form 10-Q for the
period ended September 30, 2009, the Exchange staff opined that
the Company has sustained losses which are so substantial in
relation to its overall operation or its existing financial
resources, or its financial condition has become so impaired that
it appears questionable, as to whether the Company will be able to
continue operations or meet obligations as they mature.
As a result, Radient has become subject to the procedures and
requirements of Section 1009 of the Company Guide. To maintain
the Company's NYSE Amex listing, the Company must submit a plan to
the Exchange by January 22, 2010, advising the Exchange that the
Company intends to regain compliance with Section 1003(a)(iv) of
the Company Guide by June 23, 2010. The Company is preparing the
plan including specific milestones, quarterly financial
projections, and details related to any strategic initiatives
which can reasonably be expected to bring the Company into
compliance within the plan period.
Following its submission, the NYSE Amex Corporate Compliance
Department will evaluate the Company's plan and determine whether
the Company has made a reasonable demonstration in the plan of an
ability to regain compliance with the continued listing standards
by June 23, 2010. If the plan is accepted, the Company may be
able to continue its listing during the plan period up to June 23,
2010, during which time the Company will be subject to periodic
review to determine if the Company is making progress consistent
with the plan. If the Company does not submit a plan, or if the
Company's plan is not accepted, or if the Company's plan is
accepted but the Company fails to make progress consistent with
its plan, or it is not in compliance by June 23, 2010, the Company
will be subject to delisting proceedings. Under NYSE Amex rules,
the Company has the right to appeal any determination by NYSE Amex
to initiate delisting proceedings.
About Radient Pharmaceuticals
Headquartered in Tustin, California, Radient Pharmaceuticals
Corporation is an integrated pharmaceutical company devoted to the
research, development, manufacturing, and marketing of diagnostic,
and premium skin care products.
At September 30, 2009, the Company had $26,160,438 in total assets
against $4,927,694 in total liabilities. The September 30 balance
sheet showed strained liquidity: The Company had $246,048 in total
current assets against $2,950,658 in total current liabilities.
Going Concern Qualification
On April 15, 2009, Radient Pharmaceuticals (formerly AMDL, Inc.)
filed with the SEC an Annual Report on Form 10-K in which included
an audit opinion with a "going concern" explanatory paragraph
which expresses doubt, based upon current financial resources, as
to whether AMDL can meet its continuing obligations without access
to additional working capital.
On December 11, 2009, Radient entered into a Waiver of Default
agreement with St. George Investments, LLC, pursuant to which St.
George waived all defaults under a 12% promissory note in the
principal amount of $555,555.56 through February 1, 2010 and
agreed not to accelerate any amounts due under the St. George Note
before February 1, 2010.
RADLAX GATEWAY: Court Rejects Bomel's Bid to Transfer Venue
-----------------------------------------------------------
NetDockets reports that Judge Bruce W. Black at the United States
Bankruptcy Court for the Northern District of Illinois in Chicago
last week denied a request made by Bomel Construction Co., Inc.,
to move the bankruptcy cases of RadLAX Gateway Hotel, LLC and its
affiliates to the U.S. Bankruptcy Court for the Central District
of California in Los Angeles.
Bomel was a contractor to the Debtors. NetDockets notes Bomel was
hired to "design and build an eight-level 2,543 car stall cast-in-
place concrete parking structure" which is currently unfinished
and unusable.
According to NetDockets, Bomel filed the request in early
November, asserting that:
-- it is due approximately $15.5 million on the construction
contract for the parking structure, and
-- the bankruptcy cases should be transferred to California
because the companies' assets (the hotel), the majority of
the creditors, and outstanding litigation are all located
in California.
In contrast, Bomel asserted that the only basis for venue in
Illinois is the location of the LLC's members and technical
headquarters.
NetDockets says the Court rejected those arguments. NetDockets
notes the Court's order entered does not provide significant
detail regarding the Court's reasoning for its decision, instead
referencing the Court's comments made on the record at the
hearing.
Oak Brook, Illinois-based RadLAX Gateway Hotel, LLC, operates a
hotel. The Company and its affiliates filed for Chapter 11 on
Aug. 17, 2009 (Bankr. N.D. Ill. Case Nos. 09-30047 - 09-30032).
RadLAX blamed its bankruptcy in large part on RadLAX Gateway Deck,
LLC's inability to complete construction of a parking structure
adjacent to the hotel due to the companies' lenders' refusal to
advance funds for continuing construction. David M. Neff, Esq.,
at Perkins Coie LLP, represents the Debtors in their restructuring
efforts. In their petition, the Debtors listed $50,000,001 to
$100,000,000 in assets and $100,000,001 to $500,000,000 in debts.
RAMSEY HOLDINGS: Wants to Employ Gable & Gotwals as Bankr. Counsel
------------------------------------------------------------------
Ramsey Holdings, Inc., et al., have sought authorization from the
U.S. Bankruptcy Court for the Northern District of Oklahoma to
employ Sidney K. Swinson, John D. Dale, and the law firm Gable &
Gotwals, P.C., as bankruptcy counsel.
G&G will, among other things, advise clients about the bankruptcy
process and their duties and rights as debtors in possession,
participate in conference calls with third parties, prepare
pleadings for initiating the cases including first day motions,
and start the preparation of the schedules and statement of
financial affairs for each Debtor.
G&G will be paid based on the hourly rates of its personnel:
Sidney K. Swinson, Shareholder $300
Jeffrey D. Hassell, Shareholder $300
Mark D.G. Sanders, Of Counsel $275
John D. Dale, Associate $235
Brandon C. Bickle, Associate $190
Sarah Goss Powers, Associate $175
Sidney K. Swinson, a shareholder at G&G, assures the Court that
the firm is "disinterested" as that term is defined in Section
101(14) of the Bankruptcy Code.
Tulsa, Oklahoma-based Ramsey Holdings, Inc., filed for Chapter 11
bankruptcy protection on December 18, 2009 (Bankr. N.D. Okla. Case
No. 09-13998). The Company's affiliates -- Auto Crane Company;
Eskridge, Inc.; Ramsey Industries, Inc.; and Ramsey Winch Company
-- also filed for Chapter 11 bankruptcy protection. John D. Dale,
Esq., at Gable & Gotwals assists the Debtors in their
restructuring efforts. Ramsey Holdings listed $10,000,001 to
$50,000,000 in assets and $50,000,001 to $100,000,000 in
liabilities.
READER'S DIGEST: Opposes Panel's Retention of Stuart Goldfarb
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of The Reader's
Digest Association, Inc., et al., is seeking the Bankruptcy
Court's authority to retain Stuart U. Goldfarb, nunc pro tunc to
October 29, 2009, as its special industry expert.
The Committee said that Mr. Goldfarb's services would be 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.
The Debtors filed an objection to the Application. The Debtors
relate that the Creditors Committee filed an application asking
the Court to enter an order (i) authorizing the Creditors'
Committee to retain Stuart A. Goldfarb, as special industry
expert, effective as of October 29, 2009, and (ii) requiring the
Debtors to pay Mr. Goldfarb's fees and expenses pursuant to the
order establishing procedures for interim compensation and
reimbursement of expenses for professionals, subject to a $30,000
cap for a "first phase" with additional fees and expenses to
potentially be owed if a "second phase" is deemed necessary by the
Creditors' Committee, in its sole discretion.
On behalf of Reader's Digest, James H.M. Sprayregen P.C., Esq., at
Kirkland & Ellis LLP, in New York, notes that the Debtors
understand that Mr. Goldfarb was sought out and engaged by the
Creditors' Committee in October 2009 to assist its financial
advisors and attorneys in reviewing and analyzing the Debtors'
business plan and in anticipation of potential litigation related
to valuation of the Debtors' enterprise.
Although the Debtors do not object to payment of reasonable fees
and expenses incurred by Mr. Goldfarb in diligence work conducted
during the "First Phase" of Mr. Goldfarb's engagement and prior to
December 1, 2009, the Debtors do not believe it is appropriate for
the Creditors' Committee to continue to incur fees and expenses in
connection with Mr. Goldfarb's employment on a go-forward basis,
at the expense of the bankruptcy estates, in light of the
Creditors' Committee's current support for the Debtors' plan of
reorganization, Mr. Sprayregen avers.
As reported to the Court on November 24, 2009, at the hearing to
approve the Debtors' disclosure statement, Mr. Sprayregen says
that the Debtors, the senior secured lenders and the Creditors
Committee reached agreement on a comprehensive settlement, the
terms of which are incorporated into the Plan. The settlement,
which provides increased recoveries to unsecured creditors, is
also expressly conditioned on the Creditors' Committee's agreement
to cease unnecessary and expensive discovery related to, among
other things, a contested valuation of the Debtors' business.
Accordingly, although the Debtors acknowledge that Mr. Goldfarb's
work prior to the settlement announcement on November 24, 2009,
was appropriate, and may well have facilitated settlement
discussions among the parties, the Debtors do not believe the
continued engagement of Mr. Goldfarb provides any ongoing benefit
to the Debtors' estates. The Debtors, therefore, reserve their
right to object to any fees or expenses associated with the
Creditors' Committee's continued employment of Mr. Goldfarb for
work undertaken after December 1, 2009, and should not be
prejudiced in any way by entry of the proposed order relating to
the Application.
Similarly, the Debtors do not believe the Creditors' Committee
should have the sole discretion to engage Mr. Goldfarb into the
cryptically described "second phase" set forth in the Application,
Mr. Sprayregen contends. Although the Creditors' Committee
acknowledges that continued use of Mr. Goldfarb is "not currently
anticipated," he argues that the Application leaves open the
possibility of a "second phase" of work for Mr. Goldfarb, which is
uncapped in terms of aggregate fees and expenses.
Because the Creditors' Committee, the senior secured lenders and
the Debtors are aligned in their support for the Plan, the Debtors
do not believe it is appropriate to authorize unfettered
discretion to the Creditors' Committee to incur additional fees at
$600 per hour and associated expenses. Therefore, the Debtors
contend that the Creditors' Committee should be required to seek
consent from the Debtors, the senior secured lenders and the Court
before continuing to charge the Debtors' estates for additional
costs associated with Mr. Goldfarb's work. The Debtors also
reserve their right to contest that Mr. Goldfarb qualifies as an
expert for any "second phase" work he may be requested to complete
for the Creditors' 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)
READER'S DIGEST: Wants to Expand Ernst & Young Work
---------------------------------------------------
The Reader's Digest Association Inc. and its units seek the
Court's permission to expand the scope of the retention and
employment of Ernst & Young LLP to include certain additional
services, nunc pro tunc to October 15, 2009.
Ernst & Young's Additional Services include:
-- assisting Reader's Digest, under the direction of certain
members of Reader's Digest management, with the analysis
of the operating results and financial position of the
Debtors' Compass Learning business in connection with its
contemplated sale;
-- auditing and reporting the financial statements and
supplemental schedules of The Reader's Digest Association,
Inc. Retirement Plan and 401(k) Partnership of The
Reader's Digest Association, Inc., for the year ended
June 30, 2009, which are to be included in the Pension
Plans' Form 5500 filings with the Department of Labor's
Employee Benefits Security Administration;
-- performing attestation services on the statement of net
assets of CompassLearning, Inc. (Puerto Rico branch) for
the year ended June 30, 2009, to express an opinion on
whether the statement of net assets is presented fairly,
in all material respects, in relation to the consolidated
financial statements of Reader's Digest taken as a whole;
and
-- providing international restructuring tax services to
Reader's Digest, including performing a feasibility
analysis and transfer of pricing analysis and documentation
with respect to implementation of a step royalty.
Pursuant to the terms and conditions of the Additional Engagement
Letters, Ernst & Young will be paid with these fee schemes:
(a) For the CompassLearning Services, a flat fee of $150,000,
and for any out of scope services based on its hourly
rates:
Partners/Principals $410 to $490
Executive Directors $400
Senior Managers $365
Managers $300
Seniors $215
(b) For the Pension Plan Audit Services, a flat fee of
$79,400, plus reimbursement of actual expenses, for up to
417 hours of professional services, and for hours in
excess of 417 hours, based on Ernst & Young's hourly
rates:
Partners $327
Executive Directors $303
Senior Managers $297
Seniors $198
Staff $94
(c) For the Attestation Services, a flat fee of $15,000 for
up to 80 hours of professional services, and for hours
in excess of 80 hours, based on an hourly rate of $200
per hour; and
(d) For the International Restructuring Services, based on
its hourly rates:
Partners/Principals $547 to $710
Executive Directors $517 to $667
Senior Managers $487 to $557
Managers $426 to $490
Seniors $304 to $344
Staff $213 to $278
Ernst & Young's fees for the International Restructuring Services
will be capped as:
(i) Restructuring:
Asia Pacific Regional Restructuring $675,000
Czech Planning $200,000
Poland Planning $200,000
IP Planning:
Detailed design/implementation $225,000
U.S. tax opinion $75,000
Review of IP valuation $25,000
Cost sharing $75,000
(ii) Transfer Pricing:
Phase I through Phase VI $140,000
Phase VII (local country transfer $300,000
pricing report 12 countries -
$25,000 per country)
The Debtors will also reimburse Ernst & Young for any direct
expenses it incurred in connection with its retention and the
performance of the Additional Services.
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: Has Nod for MWC-Led Auction for CompassLearning
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved a bidding process where Marlin Equity II and MWC Media
Inc. will be the stalking horse bidder for The Reader's Digest
Association, Inc.'s assets in CompassLearning.
MWC Media Inc. will purchase CompassLearning for $20.2 million
absent higher and better bids at an auction on January 7. To
participate in the auction, competing bids must be sent by
December 31. The Debtors will present the results of the auction
at a hearing on January 12.
CompassLearning is a research-based, educational technology
company that produces and markets a wide-range of digital
supplemental education materials, and provides onsite technical
support and seminar consulting/teacher training professional
services for educators to facilitate curriculum development and
technology integration in the classrooms using CompassLearning
products. CompassLearning is a wholly-owned subsidiary of Debtor
WRC Media, Inc., which in turn, is wholly-owned by Reader's
Digest.
Among the material terms of the APA with MWC Media are:
-- Purchase Price: $20,250,000. The total Purchase Price is
$43,184,290, if including assumed liabilities;
-- Deposit: $1,500,000 deposited into escrow account by Buyer
upon execution of the APA;
-- Bid Protections Break-Up Fee: $607,500, an amount equal to
3% of the Initial Purchase Price of $20,250,000;
-- Reimbursable Expenses: up to a cap of $300,000;
-- Liabilities that will be assumed by the Stalking Horse
Bidder, include (i) liabilities relating exclusively to
Buyer's ownership or operation of the Business or Acquired
Assets that arise exclusively from events, facts or
circumstances that occur after the Closing, (ii) all
Current Liabilities, including liabilities for deferred
revenue, (iii) Transfer Taxes and certain Property Taxes,
and (iv) all Liabilities of the Business for payroll,
vacation and sick leave, accrued in respect of the Covered
Employees incurred in the Ordinary Course of Business and
only to the extent reflected on the Final Balance Sheet;
-- Buyer will grant all Transferred Employees credit after the
Closing for continuous service with Sellers prior to the
losing for purposes of participation and vesting and, in
the case of any Buyer severance plan or program, benefit
accruals under any Buyer Plan. The Debtors are not be
responsible for any severance payment liabilities; and
-- Sale proceeds will be available (i) to pay costs and
expenses incurred in connection with the Sale, (ii) for
general corporate purposes, and (iii) to pay for the
administration of the bankruptcy cases through and until
confirmation of the Plan, subject to the terms of the
Credit and Guarantee Agreement, among the Debtors, J.P.
Morgan Chase Bank, N.A., as agent and certain lenders.
A full-text copy of the CompassLearning APA is available for free
at http://bankrupt.com/misc/RDA_CompassLearning_APA_120309.pdf
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)
RENAISSANT LAFAYETTE: Has $10-Mil. Financing from Mallory
---------------------------------------------------------
Renaissant Lafayette LLC will be asking the Bankruptcy Court for
permission to access $10 million of debtor-in-possession financing
from Mallory Properties LLC.
Renaissant Lafayette is the owner of a 280-unit luxury condominium
development in Milwaukee named Park Lafayette. The project is at
the intersection of North Prospect Avenue and Lafayette Place in
Milwaukee. So far, 39 units were sold.
Renaissant filed a Chapter 11 petition on Dec. 28 (Bankr. E.D.
Wisc. Case No. 09-38166). The petition says assets range from
$50,000,001 to $100,000,000 and debts range from $100,000,001 to
$500,000,000. Renaissant owes $103 million to the construction
lender Longview Ultra Construction Loan Investment Fund.
ROOSEVELT LOFTS: Pushes to Sell Units Amidst Dismissal Case
-----------------------------------------------------------
Ryan Vaillancourt, staff writer at Los Angeles Downtown News,
reports that Roosevelt Lofts requested a hearing by Jan. 8, 2010,
for the Bankruptcy Court to consider a proposal to sell between 50
and 75 units in an auction, which could generate about $35
million, but lender Bank of America opposed both plan to sell
units and the expedited hearing. The bank instead sought to
dismiss the Company's Chapter 11 case.
BoA issued $78.8 million in construction loan to the company's
unit Milbank Real Estate. A hearing is set for Feb. 2, 2010, to
consider the bank's request.
Based in Los Angeles, California, Roosevelt Lofts LLC is a luxury
condominium project in downtown Los Angeles. The company filed
for Chapter 11 protection on April 13, 2009 (Bankr. C.D. Calif.
Case No. 09-14214). David L. Neale, Esq., at Levene Neale Bender
Rankin & Brill LLP, represents the Debtor. In its petition, the
Debtor listed assets of between $100 million and $500 million, and
debts of between $50 million and $100 million.
SAND TECHNOLOGY: Earns C$431,290 in First Quarter Ended October 31
------------------------------------------------------------------
SAND Technology Inc. reported net income of C$431,290 on revenue
of C$2,485,464 for the three months ended October 31, 2009,
compared with a net loss of C$989,850 on revenue of C$1,223,928
for the same period of 2008.
Compared to the first quarter of fiscal 2009, there was a large
increase in revenues for the first quarter of fiscal 2010. The
revenue growth is mostly due to the sale of high value software
licenses in Europe to two existing customers.
The change from net loss to net income is mostly due to the large
increase in sales.
Balance Sheet
At October 31, 2009, the Company's consolidated balance sheets at
October 31, 2009, showed C$2,630,682 in total assets and
C$4,552,035 in total liabilities, resulting in a C$1,921,353
shareholders' deficit.
The Company's consolidated balance sheets at October 31, 2009,
also showed strained liquidity with C$2,561,758 in total current
assets available to pay C$4,126,201 in total current liabilities.
A copy of the Company's quarterly report for the period ended
October 31, 2009, is available at no charge at:
http://researcharchives.com/t/s?4c9b
A full-text copy of management's discussion and analysis of the
Company's consolidated financial statements as of and for the
first quarter ended October 31, 2009, is available for free at:
http://researcharchives.com/t/s?4c9c
Going Concern
In light of operating losses suffered in the past years, the
Company's ability to realize its assets and discharge its
liabilities depends on the continued financial support of its
shareholders and debenture holders, its ability to obtain
additional financing and its ability to achieve revenue growth.
"While the financial statements have been prepared on the basis of
accounting principles applicable to a going concern, current
global economic turbulence and liquidity crisis cast substantial
doubt upon validity of this assumption."
About SAND Technology
Based in Westmount, Quebec, Canada, SAND Technology Inc. provides
Data Management Software and Best Practices for storing,
accessing, and analyzing large amounts of data on-demand while
lowering TCO, leveraging existing infrastructure and improving
operational performance.
SAND/DNA solutions include CRM analytics, and specialized
applications for government, healthcare, financial services,
telecommunications, retail, transportation, and other business
sectors.
SAND Technology has offices in the United States, Canada, the
United Kingdom and Central Europe.
SANTA CLARA SQUARE: Court Grants Jan. 18 Schedules Filing Deadline
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
has extended, at the behest of Santa Clara Square, LLC, the filing
of schedules and statement of affairs until January 18, 2010.
The Debtor had said that while it and its counsel are diligently
working to complete the schedules and statement of financial
affairs, the intervening holidays will make it difficult to
complete this task imminently because counsel will be out of the
office for most of the week of December 28, 2009, and so the
Debtor won't be in a position to file the required documents by
January 4, 2010, the date specified by the Court. January 4,
2010, will be the first day back in the office).
Los Altos, California-based Santa Clara Square, LLC, filed for
Chapter 11 bankruptcy protection on December 21, 2009 (Bankr. N.D.
Calif. Case No. 09-61196). Lawrence A. Jacobson, Esq., at the Law
Offices of Cohen and Jacobson, 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.
SANTA CLARA SQUARE: Taps Cohen and Jacobson as Bankr. Counsel
-------------------------------------------------------------
Santa Clara Square, LLC, has sought permission from the U.S.
Bankruptcy Court for the Northern District of California to employ
Cohen and Jacobson, LLP, as bankruptcy counsel.
Cohen and Jacobson will, among other things:
a. prepare the necessary schedules, statements, and other
documents required, formulate a Disclosure Statement
and Plan of Reorganization, and seek confirmation of a
plan.
b. deal with creditors and their agents and attorneys as may
be necessary from time to time;
c. to the extent necessary, prepare the Motion for Use of
Cash Collateral in order to seek use of cash collateral
during the bankruptcy proceeding; and
d. defend motions for relief from stay as agreed between
Client and Attorneys.
Cohen and Jacobson will be paid based on the hourly rates of its
personnel:
Lawrence A. Jacobson $400
Sean M. Jacobson $250
Lawrence A. Jacobson, a partner at Cohen and Jacobson, assures the
Court that the firm is "disinterested" as that term is defined in
Section 101(14) of the Bankruptcy Code.
Los Altos, California-based Santa Clara Square, LLC, filed for
Chapter 11 bankruptcy protection on December 21, 2009 (Bankr. N.D.
Calif. Case No. 09-61196). Lawrence A. Jacobson, Esq., at the Law
Offices of Cohen and Jacobson, 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.
SANTA CLARA SQUARE: Sec. 341 Creditors Meeting Set for Jan. 27
--------------------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of Santa
Clara Square, LLC's creditors on January 27, 2010, at 12:30 p.m.
at San Jose Room 130, U.S. Federal Building, 280 S 1st Street
#130, San Jose, CA.
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.
Los Altos, California-based Santa Clara Square, LLC, filed for
Chapter 11 bankruptcy protection on December 21, 2009 (Bankr. N.D.
Calif. Case No. 09-61196). Lawrence A. Jacobson, Esq., at the Law
Offices of Cohen and Jacobson, 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.
SIX FLAGS: Assumes ACE Insurance Program
----------------------------------------
Six Flags Inc. and its units sought and obtained the Court's
authority to (i) assume the ACE Prepetition Insurance Program and
(ii) enter into the ACE Postpetition Insurance Program.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A.,
relates that prior to the Petition Date, ACE American Insurance
Company and its affiliated insurance companies issued certain
insurance policies to, and entered into related agreements with
the Debtors; and ESIS, Inc. entered into certain agreements,
including claims servicing agreements, with the Debtors.
Prior to the Petition Date, the Debtors commenced negotiations
with ACE regarding the possible provision of insurance coverage
beyond December 31, 2009; and, on or about December 8, 2009, the
Debtors and Ace agreed to a proposal setting forth certain terms
for postpetition insurance for the period from December 31, 2009,
through December 31, 2010, pursuant to which certain policies
providing workers' compensation, automobile liability and general
liability coverage will be issued to the Debtors.
Pursuant to the ACE Prepetition Insurance Program and the Ace
Postpetition Insurance Program, the Debtors have both monetary
and non-monetary obligations to ACE, Mr. DeFranceschi tells the
Court. The aggregate estimated premium payable to ACE with
respect to the ACE Postpetition Insurance Program is $1,636,398.
The Debtors ultimately will owe additional amounts in connection
with deductibles and other monetary obligations of the Debtors to
ACE, he continues.
As security for the Debtors obligations under the ACE Prepetition
Insurance Program, the Debtors provided ACE with letters of
credit prior to the Petition Date in the aggregate amount of
$23,013,891 and paid loss deposit funds and claims funds in the
aggregate amount of $992,661.
After the Petition Date, ACE received a notice of non-renewal of
the Prepetition Letter of Credit and drew its full amount in
accordance with the terms of the ACE Insurance program, and ACE
currently holds the proceeds thereof in the amount of
$23,013,891, Mr. DeFranceshi avers.
In connection with the renewal of the ACE Insurance Programs, the
Debtors have agreed to provide ACE with one or more letters of
credit, the aggregate amount of which will be $25,113,891 as of
December 31, 2009, and additional paid loss deposit funds, the
aggregate amount of which will be $1,204,661 as of December 31,
2009. All Letters of Credit Proceeds Thereof and Cash Collateral
provided, at any time by the Debtors will secure all obligations
of the Debtors to ACE under the ACE Insurance Programs.
Mr. DeFranceshi tells the Court that under the laws of various
states in which the Debtors operate, the Debtors are required to
maintain workers' compensation insurance as well as general
liability and automobile liability insurance. The Debtors'
postpetition financing facility also requires that the Debtors
maintain appropriate insurance.
Further, the ACE Postpetition Insurance Program is conditioned
upon the Debtors obtaining an order authorizing them, among other
things, to assume the ACE Prepetition Insurance Program and enter
into the ACE Postpetition Insurance Program. Failure to adhere
to this requirement would result in the Debtors not receiving
insurance coverage. Without insurance coverage, the Debtors
cannot operate, Mr. DeFranceshi stresses.
The Debtors do not believe that there are any existing defaults
under the ACE Prepetition Insurance Program, but to the extent
that there are amounts due, the Debtors intend to pay those
amounts pursuant to the terms of the ACE Prepetition Insurance
Program in the ordinary course, regardless of whether the claims
arise prepetition, postpetition, or before or after assumption of
the ACE Prepetition Insurance Program, Mr. DeFranceschi points
out.
The Debtors submit that the ACE Insurance Program requires that
ACE be granted a superpriority security interest in and liens on
the Letters of Credit and its Proceeds and Cash Collateral and
its proceeds pursuant to Section 364(d)(1) of the Bankruptcy Code
as additional security for the Debtors' obligations under the ACE
Insurance Program. The Debtors have concluded that financing for
postpetition coverage comparable to that provided by ACE under
the ACE Insurance Program is currently unobtainable and the
Debtors have agreed to ACE being granted superpriority status.
Debtors and ACE Companies Stipulate
The Debtors and ACE American Insurance Company, Bankers Standard
Insurance Company, Indemnity Insurance Company of North America,
ACE Fire Underwriters Insurance Company, Insurance Company of
North America, Pacific Employers Insurance Company, Illinois
Union Insurance Company, Westchester Fire Insurance Company,
Westchester Surplus Lines Insurance Company, ACE Property and
Casualty Insurance Company, ACE Insurance Company of Texas and
ESIS, Inc., have agreed to permit the ACE Companies to file a
single consolidated proof of claim in the Lead Case asserting all
claims related to the ACE insurance Program arising on or before
the applicable Petition Date against each of the Debtors.
A full-text copy of the stipulation is available for free
at http://bankrupt.com/misc/SixF_ACECos_ConsClaimsStip.pdf
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).
SIX FLAGS: Gets Nod for Office Lease With W2007 Monday
------------------------------------------------------
Six Flags Inc. and its units obtained permission from the
Bnakruptcy Court to enter into a final lease agreement with W2007
Monday 230 Park Owner, LLC. Pursuant to a term sheet of the
lease, the Debtors intend to enter into a lease with respect to
approximately 21,217 square feet of office space in the building
located at 230 Park Avenue, New York, at $45 per Rentable Square
Foot.
A full-text copy of the Lease Term Sheet is available for free
at http://bankrupt.com/misc/SixF_W2007_LeaseTermSheet.pdf
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).
SIX FLAGS: Proposes Merrill Lynch as Board Advisor
--------------------------------------------------
Six Flags Inc. and its units seek the Court's authority to employ
Merrill Lynch, Pierce, Fenner & Smith Incorporated to serve as
financial advisor to their Board of Directors nunc pro tunc to
September 21, 2009.
In an effort to resolve the uncertainties surrounding the plan
process, in September 2009, the Board determined that it was
appropriate to retain experienced professionals to render
independent financial advisory services to the Board in
connection with the Debtors' Chapter 11 cases to assist the Board
in evaluating various alternatives available to the Debtors.
According to Jeffrey R. Speed, the Debtors' chief financial
officer, the Debtors' ultimate goal in employing Merrill Lynch is
to provide the Board, and by extension, the Debtors, their
estates, and other parties in interest, with an independent
review and analysis regarding various available alternatives and
to assist the Debtors in exiting chapter 11 quickly and
efficiently.
The Board has selected Merrill Lynch based upon, among other
things:
(a) the Board's need to employ independent financial advisory
firm to provide financial advice with respect to the
restructuring and the alternative plan of reorganization
recently submitted
(b) Merrill Lynch's in-depth knowledge and expertise of the
financial markets, current lending conditions, and
valuation; and
(c) Merrill Lynch's extensive experience and excellent
reputation in providing financial advisory services in
complex cases.
As financial advisors to the Board, the Debtors expect Merrill
Lynch to provide these services:
(a) assist the Debtors in the development, preparation and
distribution of selected information, documents and other
materials in an effort to enable the consummation of any
Transactions;
(b) evaluate indications of interest and proposals regarding
any Transactions from current or potential lenders, equity
investors, acquirers or strategic partners;
(c) assist the Debtors with the development, structuring and
implementation of any Transactions, including participating
as a representative of the Debtors in meetings with
creditors and other parties involved in any Transactions;
(d) assist the Debtors in valuing the Debtors' assets and
operations;
(e) provide expert advice and testimony regarding financial
matters related to any Transactions;
(f) advise and attend meetings of the Board, creditor groups,
official constituencies and other interested parties; and
(g) provide other financial advisory services as may be agreed
upon Merrill Lynch and the Debtors.
For its services, the Debtors propose to pay Merrill Lynch:
(1) Monthly Fee of $50,000. Fifty percent of each Monthly Fee
earned and received by Merrill Lynch following the sixth
month will be credited against the Restructuring
Transaction Fee;
(2) Reimbursement for all fees, reasonable disbursements and
reasonable out-of-pocket expenses;
(c) A Restructuring Transaction Fee of $3,550,000 upon the date
of confirmation of a plan of reorganization under Chapter
11 of the Bankruptcy Code pursuant to an order of the
court.
Due to the nature of Merrill Lynch's engagement and its
compensation structure, the Debtors further ask the Court for a
waiver of the requirements of Local Rule 2016-2(d), which
requires retained professionals to submit detailed time entries
with their application for payment of compensation in chapter 11
cases.
Robert F. Masella, managing director of Merrill Lynch, discloses
that Merrill Lynch's affiliates, Bank of America, N.A. and Bank
of America Securities agree to participate in one or more
facilities to provide up to $800,000,000 in financing to the
Debtors in connection with a Chapter 11 Plan sponsored by the
Debtors, however, Merrill Lynch does not represent any entity
other than the Board, in matters related to the Debtors' Chapter
11 cases.
Mr. Masella further discloses that Merrill Lynch does not hold or
represent any interest materially adverse to the Board of the
Debtors in the matters for which Merrill Lynch is proposed to be
retained. Furthermore, Merrill Lynch is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code and
is qualified to represent the Board as their financial advisors,
Mr. Masella assures the Court.
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).
SIX FLAGS: Creditors Demand Disclosure by Noteholders
-----------------------------------------------------
Bill Rochelle at Bloomberg News reports that the Official
Committee of Unsecured Creditors in Six Flags Inc.'s cases is
asking the Bankruptcy Court to compel members of an unofficial
committee of operating company noteholders to comply with
bankruptcy rules by giving details about their holdings and
trading in claims against the company. The Unsecured Creditors
Committee contends that the noteholders, while attempting to
impose a plan on the company to serve their interests, were at the
same time trying to shield themselves from the treatment they were
attempting to impose on others. A hearing on the motion is
scheduled for January 8.
Mr. Rochelle notes that in a decision early this month, U.S.
Bankruptcy Judge Mary F. Walrath in Delaware required a collection
of noteholders to disclose their claim holdings in the Chapter 11
liquidation of bank holding company Washington Mutual Inc.
Judge Christopher S. Sontchi of the United States Bankruptcy
Court for the District of Delaware signed on December 21, 2009, an
order approving the Disclosure Statement explaining the Joint
Plan of Reorganization filed by Six Flags. Ballots would be due
January 28. The confirmation hearing is set to begin March 8.
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).
SPANSION INC: Gets Nod to Assume SAP & Reject GRC Contracts
-----------------------------------------------------------
Spansion LLC and SAP America, Inc., are parties to an End-User
Software License Agreement effective March 9, 2006, through which
SAP licenses to Spansion a comprehensive suite of business,
management and tracking software which encompasses nearly every
operational function performed by the Debtors. The License
Agreement is also the vehicle by which the Debtors receive
maintenance for the licensed software.
The Debtors and SAP are also parties to a Business Objects
License Agreement by and between Spansion LLC and Business
Objects Americas. SAP became a successor-in-interest to the
Business Objects Contract after its purchase of Business Objects
Americas. Pursuant to the Business Objects Contract, the Debtors
license a set of software tools used to track and report
manufacturing data, including production data and executive
reports.
Spansion and SAP are also parties to a Virsa Systems, Inc.,
Software License Agreement effective September 15, 2004, by and
between Advanced Micro Devices, Inc. and Virsa Systems, Inc. SAP
became a successor-in-interest to the GRC Contract after its
purchase of Virsa Systems, Inc. On September 27, 2005, AMD
assigned its interest in the GRC Contract to Spansion LLC.
Pursuant to the GRC Contract, the Debtors license a set of
software tools used to minimize internal conflicts through data
access hierarchies.
The Debtors accordingly sought and obtained the Court's authority
to:
(a) assume the SAP Contracts;
(b) reject the GRC Contract; and
(c) enter into a stipulation.
The Debtors assert that the software licenses and maintenance
services to be provided under the SAP Contracts are critical to
the continued operations of their business.
Pursuant to a stipulation among the parties, SAP has agreed to
accept a cure payment of $749,450 and an allowed general
unsecured claim for $494,564 in lieu of any cure amount that it
might have or assert in connection with the assumption of the SAP
Contracts.
About Spansion Inc.
Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a
Flash memory solutions provider, dedicated to enabling, storing
and protecting digital content in wireless, automotive,
networking and consumer electronics applications. Spansion,
previously a joint venture of AMD and Fujitsu, is the largest
company in the world dedicated exclusively to designing,
developing, manufacturing, marketing, selling and licensing Flash
memory solutions.
Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion
International, Inc., and Cerium Laboratories LLC filed voluntary
petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead
Case No. 09-10690). On February 9, 2009, Spansion's Japanese
subsidiary, Spansion Japan Ltd., voluntarily entered into a
proceeding under the Corporate Reorganization Law (Kaisha Kosei
Ho) of Japan to obtain protection from its creditors as part of
the company's restructuring efforts. None of Spansion's
subsidiaries in countries other than the United States and Japan
are included in the U.S. or Japan filings. Michael S. Lurey,
Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at
Latham & Watkins LLP, have been tapped as bankruptcy counsel.
Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware
counsel. Epiq Bankruptcy Solutions LLC, is the claims agent.
The United States Trustee has appointed an official committee of
unsecured creditors in the case. As of September 30, 2008,
Spansion disclosed total assets of US$3,840,000,000, and total
debts of US$2,398,000,000.
Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009
(Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's
counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said
that Spansion Japan had US$10 million to US$50 million in assets
and US$50 million to US$100 million in debts.
Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding
undertaken by Spansion Inc. and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
SPANSION INC: Gets Nod to Assume Services Contract With IBM
-----------------------------------------------------------
The Bankruptcy Court authorized Spansion Inc. and its units to
assume their executory contract with International Business
Machines Corporation. IBM will have an allowed general unsecured
claim for $559,257. IBM will be entitled to a cure amount of
$352,758.
Spansion LLC and IBM are parties to the Master Services Agreement
effective September 6, 2005, under which IBM and Spansion entered
into a statement of work for the provision of specific technical
services. Under the MSA, Spansion and IBM have entered into these
agreements related to IBM's Applications on Demand service:
(a) IBM Agreement for Exchange of Confidential Information
dated July 18, 2005; and
(b) Full Service Solution Schedule No. 8370689-SS-SA-00-0
effective September 9, 2005, as amended.
IBM AoD provides hosting for Spansion's tier-1 business
applications, including SAP and key non-SAP applications relating
to data warehouses, sales, quality, and electronic data
interchange.
Through extensive negotiations, Spansion and IBM have agreed to
extend the IBM Contracts for two months. Thereafter, the Debtors
note, the IBM Contracts, as amended, will continue on a month-to-
month basis at prices which are reasonable for the benefits to be
provided.
The Debtors assert that the IBM Contracts provide them with
services critical to the operation of their business.
About Spansion Inc.
Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a
Flash memory solutions provider, dedicated to enabling, storing
and protecting digital content in wireless, automotive,
networking and consumer electronics applications. Spansion,
previously a joint venture of AMD and Fujitsu, is the largest
company in the world dedicated exclusively to designing,
developing, manufacturing, marketing, selling and licensing Flash
memory solutions.
Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion
International, Inc., and Cerium Laboratories LLC filed voluntary
petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead
Case No. 09-10690). On February 9, 2009, Spansion's Japanese
subsidiary, Spansion Japan Ltd., voluntarily entered into a
proceeding under the Corporate Reorganization Law (Kaisha Kosei
Ho) of Japan to obtain protection from its creditors as part of
the company's restructuring efforts. None of Spansion's
subsidiaries in countries other than the United States and Japan
are included in the U.S. or Japan filings. Michael S. Lurey,
Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at
Latham & Watkins LLP, have been tapped as bankruptcy counsel.
Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware
counsel. Epiq Bankruptcy Solutions LLC, is the claims agent.
The United States Trustee has appointed an official committee of
unsecured creditors in the case. As of September 30, 2008,
Spansion disclosed total assets of US$3,840,000,000, and total
debts of US$2,398,000,000.
Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009
(Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's
counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said
that Spansion Japan had US$10 million to US$50 million in assets
and US$50 million to US$100 million in debts.
Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding
undertaken by Spansion Inc. and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
SPANSION INC: Proposes to Assume Contracts With Air Products
------------------------------------------------------------
Spansion LLC and Air Products and Chemicals, Inc. are parties to
that certain Product Supply Agreement dated July 1, 1994,
pursuant to which Air Products has constructed and maintains a
nitrogen plant at Spansion's Austin, Texas manufacturing
facility. The Nitrogen Plant produces and supplies both nitrogen
and oxygen gas for use in Spansion's manufacturing operations.
Spansion and Air Products are also parties to that certain
Materials Supply Agreement dated March 15, 2006. The MSA is a
master agreement under which Air Products and the Debtors have
entered into these Addenda for the provision of additional gases:
(i) Bulk Gases for the Debtors' Sunnyvale, California facility
and FAB 25;
(ii) Bulk Tank Monthly Service Charge SDC and FAB 25;
(iii) Services for SDC and FAB 25; and
(iv) SDC Pipeline.
The Addenda govern the provision of additional gases in bulk, the
maintenance of a nitrogen gas pipeline for SDC, and a host of
services generally associated with the provision of gas products
to the Debtors.
As a result of the closing of the SDC and decreased operations in
general, the current terms of the Addenda are far in excess of
the Debtors' actual needs for the various gases supplied by Air
Products. To this end, Spansion and Air Products entered into
good faith negotiations to negotiate amendments to each of the
Addenda that would bring the agreements into conformity with
Spansion's actual needs in the future. As a result of the
Amendments, the MSA and its Addenda -- which were otherwise in
excess of the Debtors' requirements -- will become agreements
that are appropriate for the Debtors' operational needs going
forward and will have cost structures that are reasonable for the
benefits they will provide. In addition, the Debtors and Air
Products have negotiated a cure payment that is less than the
cure amount that would otherwise be due, which will allow the
Debtors to assume the Air Products Contracts without prohibitive
costs.
Under the parties' Stipulation, Air Products has agreed to accept
a cure payment of $581,543 and an allowed general unsecured claim
for $310,947 in lieu of any cure amount that it otherwise might
have or assert in connection with the assumption of the Air
Products Contracts. Upon the allowance of the Allowed Claim and
payment of the Cure Amount, Air Products acknowledges in the
Stipulation that the Debtors will have satisfied all of the
requirements of Section 365 of the Bankruptcy Code for the
assumption of the Air Products Contracts.
By this motion, the Debtors seek the Court's authority to (A)
assume the Air Products Contracts, as amended by the Amendments,
which, in the Debtors' business judgment, provide benefits to
their estates of greater value than the costs to the Debtors
under the Air Products Contracts, and which benefits are
necessary for the Debtors' future operations; and (B) enter into
and perform the Stipulation.
About Spansion Inc.
Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a
Flash memory solutions provider, dedicated to enabling, storing
and protecting digital content in wireless, automotive,
networking and consumer electronics applications. Spansion,
previously a joint venture of AMD and Fujitsu, is the largest
company in the world dedicated exclusively to designing,
developing, manufacturing, marketing, selling and licensing Flash
memory solutions.
Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion
International, Inc., and Cerium Laboratories LLC filed voluntary
petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead
Case No. 09-10690). On February 9, 2009, Spansion's Japanese
subsidiary, Spansion Japan Ltd., voluntarily entered into a
proceeding under the Corporate Reorganization Law (Kaisha Kosei
Ho) of Japan to obtain protection from its creditors as part of
the company's restructuring efforts. None of Spansion's
subsidiaries in countries other than the United States and Japan
are included in the U.S. or Japan filings. Michael S. Lurey,
Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at
Latham & Watkins LLP, have been tapped as bankruptcy counsel.
Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware
counsel. Epiq Bankruptcy Solutions LLC, is the claims agent.
The United States Trustee has appointed an official committee of
unsecured creditors in the case. As of September 30, 2008,
Spansion disclosed total assets of US$3,840,000,000, and total
debts of US$2,398,000,000.
Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009
(Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's
counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said
that Spansion Japan had US$10 million to US$50 million in assets
and US$50 million to US$100 million in debts.
Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding
undertaken by Spansion Inc. and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
SPANSION INC: Reduces John Brinncko CRO Services
------------------------------------------------
Spansion Inc. and its units ask the Court to authorize a second
amendment to the retention of Brincko Associates, Inc., in order
to reduce the monthly compensation of John Brincko as chief
restructuring officer to $50,000, and provide notice of the merger
between Brincko Associates and Sitrick and Company Inc.
According to the Debtors, they have agreed with Brincko
Associates that, effective as of November 1, 2009, it would be in
the best interest of the Debtors' estates to reduce the hourly
quantity of services performed by Mr. Brincko and to reduce his
compensation accordingly. Prior to November 1, 2009, Mr. Brincko
was providing full-time services to the Debtors at a monthly
compensation of $95,000.
Effective as of November 20, 2009, Brincko Associates and Sitrick
merged to form Sitrick Brincko Group, LLC. Following the merger,
Resources Connection, Inc., a professional services firm acquired
all of the outstanding membership interests in Sitrick Brincko
Group from Brincko Associates and Sitrick, and Sitrick Brincko
Group became a wholly-owned subsidiary of Resources Connection.
The Debtors aver that the formation of Sitrick Brincko Group will
not impact the services provided to them by Brincko Associates or
Sitrick.
About Spansion Inc.
Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a
Flash memory solutions provider, dedicated to enabling, storing
and protecting digital content in wireless, automotive,
networking and consumer electronics applications. Spansion,
previously a joint venture of AMD and Fujitsu, is the largest
company in the world dedicated exclusively to designing,
developing, manufacturing, marketing, selling and licensing Flash
memory solutions.
Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion
International, Inc., and Cerium Laboratories LLC filed voluntary
petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead
Case No. 09-10690). On February 9, 2009, Spansion's Japanese
subsidiary, Spansion Japan Ltd., voluntarily entered into a
proceeding under the Corporate Reorganization Law (Kaisha Kosei
Ho) of Japan to obtain protection from its creditors as part of
the company's restructuring efforts. None of Spansion's
subsidiaries in countries other than the United States and Japan
are included in the U.S. or Japan filings. Michael S. Lurey,
Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at
Latham & Watkins LLP, have been tapped as bankruptcy counsel.
Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware
counsel. Epiq Bankruptcy Solutions LLC, is the claims agent.
The United States Trustee has appointed an official committee of
unsecured creditors in the case. As of September 30, 2008,
Spansion disclosed total assets of US$3,840,000,000, and total
debts of US$2,398,000,000.
Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009
(Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's
counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said
that Spansion Japan had US$10 million to US$50 million in assets
and US$50 million to US$100 million in debts.
Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding
undertaken by Spansion Inc. and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
STARCO VENTURES: Has Until February 16 to File Chapter 11 Plan
--------------------------------------------------------------
The Hon. K. Rodney May of the U.S. Bankruptcy Court for the Middle
District of Florida has established February 16, 2010, as the
deadline for Starco Ventures, Inc. to file a Chapter 11 plan and
disclosure statement.
The Court said that if the Debtor fails to file a plan and
disclosure statement by the filing deadline, the Court will issue
an order to show cause why the case should not be dismissed or
converted to a Chapter 7 case pursuant to Section 1112(b)(1) of
the Bankruptcy Code.
Seminole, Florida-based Starco Ventures, Inc., filed for
Chapter 11 bankruptcy protection on November 25, 2009 (Bankr. M.D.
Fla. Case No. 09-27105). Marshall G. Reissman, Esq., at Law
Offices of Marshall G. Reissman assists the Company in its
restructuring effort. The Company has $66,090,000 in assets and
$66,412,860 in debts.
TAMARACK RESORT: Creditor Seeks Credit Suisse Subordination
-----------------------------------------------------------
Petra Inc. is asking the Bankruptcy Court to deny a request by
secured lender Credit Suisse Group AG to allow it to foreclose on
Tamarack Resort LLC's assets. The Court will convene a hearing on
Jan. 15 to consider Credit Suisse's request to lift the automatic
stay that barred the foreclosure action.
Petra Inc. wants to subordinate the secured claims of Credit
Suisse. According to Bill Rochelle at Bloomberg News, Petra, one
of the creditors who filed an involuntary bankruptcy petition
against Tamarack, is hoping to turn the case into a replay of the
reorganization of Yellowstone Mountain Club LLC where the
bankruptcy judge ruled that actions by the same secured lender,
Credit Suisse, were "so far overreaching and self-serving that
they shocked the conscience of the court."
Tamarack Resort LLC, a golf and ski resort in Valley County,
Idaho, was sent to Chapter 7 after creditors submitted an
involuntary petition (Bankr. D. Idaho Case No. 09-03911). The
petitioning creditors include an affiliate of Bank of America
Corp. owed $4.7 million.
The project's 27.5% owner, VPG Investments Inc., filed for Chapter
11 reorganization in 2008, only to have the petition dismissed in
October 2008 at the request of the secured creditor, Credit
Suisse, Caymans Islands Branch. VPG was controlled by Mexican
businessman Alfredo Miguel Afif. Credit Suisse, the agent for the
secured lenders, characterized VPG's Chapter 11 case as "a classic
example of a bad faith filing" made "solely as a litigation
tactic" to stop foreclosure.
TOUSA INC: Committee Finds New Targets for Fraud Suits
------------------------------------------------------
Bill Rochelle at Bloomberg News reports that the Official
Committee of Unsecured Creditors for Tousa Inc. wants authority
from the Bankruptcy Court to sue another group of defendants to
recover an additional $60 million from claims that a bail out and
refinancing in mid-2007 of a joint venture in Transeastern
Properties Inc. resulted in fraudulent transfers.
According to the report, the Creditors Committee, if permitted,
will sue for $50 million from Arthur and Edward Falcone, who were
owners of the company that was Tousa's joint venturer in buying
Transeastern in 2005. The Committee says that money given the
Falcones and their companies in mid-2007 were fraudulent
transfers.
The Committee also wants the right to sue Kendall Land Development
LLP, which also received payments as part of the settlement in
mid-2007 regarding Transeastern.
The Committee already won judgment against secured lenders on
claims that loans made six months before the Chapter 11 filing
were fraudulent transfers. The bankruptcy judge required the
lenders to post a total of $700 million in appeal bonds to stay
enforcement of his October ruling that the transactions were
voidable in bankruptcy.
About Tousa Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08-
10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta,
Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at
Berger Singerman, to represent them in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.
TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.
Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by TOUSA Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
THE HINGHAM GROUP: A.M. Best Downgrades FSR to 'b'
--------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to B
(Fair) from B+ (Good) and issuer credit ratings to "bb" from "bbb-
" of The Hingham Group (Hingham) and its members. Hingham
consists of Hingham Mutual Fire Insurance Company and its wholly
owned subsidiary, Danbury Insurance Company (both of Hingham, MA).
The outlook has been revised to stable from negative.
The ratings downgrade reflects Hingham's decline in
capitalization, trend of earnings variability, high exposure to
equity market volatility, limited product offerings and geographic
concentration of risks in New England.
The negative rating factors are partly offset by the group's long
standing agency relationships, regional market presence and
vigilant catastrophe mitigation efforts.
Hingham is primarily engaged in writing homeowners, dwelling fire
and, through a majority-owned subsidiary, private passenger
automobile insurance products in New England.
TRANSSIBERIAN REINSURANCE: A.M. Best Affirms FSR of 'B-'
--------------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating of B-
(Fair) and the issuer credit rating of "bb-" of OJSC Transsiberian
Reinsurance Corporation (Transsib Re) (Russia). The outlook for
both ratings is positive.
The ratings reflect Transsib Re's good business position, weak but
improving risk-adjusted capitalisation and good underwriting
performance. The main offsetting factors are its limited
financial flexibility and volatility in the investment income
results and weak enterprise risk management.
Transsib Re's gross written premiums have been declining over the
previous two years due to the softening market conditions, which
have led the company to re-evaluate its exposure to certain large
risks and the Russian motor quota share business. However, A.M.
Best expects the decline to be halted mainly due to the increase
in liability business both in Russia and Kazakhstan and further
growth emanating from the Turkish market.
Underwriting performance has remained good despite the challenging
market conditions. The combined ratio is likely to stabilise at
around 95%, as the claims ratio improves due to the lack of
significant losses and the reduction in motor business.
Investment performance has been badly impacted by the decline in
equity markets and the general economic volatility, although
A.M. Best recognises that a significant part of the decline was
due to unrealised capital losses. A.M. Best believes that
investment performance is likely to stabilise in 2010 due to the
reduced equity exposure (mainly due to the revaluation of the held
assets).
Transsib Re benefited from a significant capital injection in
2008, which was partly offset by the significant losses in the
same year. Risk-adjusted capitalisation is likely to start
improving as the company follows a no-dividend policy and
retention levels are significantly reduced. A.M. Best believes
that Transsib Re has limited capital flexibility as it depends on
future retained earnings, although there are no dividend payments
planned in the nearest future.
A.M. Best believes that the company needs to strengthen its
enterprise risk management by defining its risk appetite and
aligning key processes such as investment strategy and evaluation
of catastrophe exposures with it.
TRONOX INC: Equity Committee Wants Eureka Services Extended
-----------------------------------------------------------
The Official Committee of Equity Security Holders in Tronox Inc.'s
cases asks the Court to extend the employment of Eureka Capital
Partners, LLC, and Young & Partners LLC as financial advisors
pursuant to Section 1103 of the Bankruptcy Code and Rules 2014(a)
and 2016 of the Federal Rules of Bankruptcy Procedure, nunc pro
tunc to December 10, 2009.
On November 19, 2009, the Court approved a limited, two-month
retention of financial advisors to assist in the Equity Committee
in preparing for a contemplated sale of estate assets, as well as
further assisting the Equity Committee in developing and
participating in negotiations with regard to a standalone plan of
reorganization. The proposed sale has not yet occurred, and the
Equity Committee therefore still requires the ongoing services of
its financial advisors, Karen B. Dine, Esq., at Pillsbury
Winthrop Shaw Pittman LLP, in New York, asserts.
The Equity Committee further asks that the terms of
Eureka/Young's retention remain as currently in place, except
that Eureka/Young will be retained on an ongoing basis unless
there is a sale of all or substantially all of the Debtors'
assets, at which point the retention may terminate subject to the
right of the Equity Committee to seek Court approval for a
further retention.
Ms. Dine relates that in the Retention Order, the Court outlined
briefly the circumstances necessary for an extension of
Eureka/Young's retention. The Court provided that the terms of
the Retention Order would remain in force if for any reason the
auction and sale hearing did not occur by December 10, 2009.
However, the Retention Order directed that the Equity Committee
must seek to approve the continued retention "as soon as
practicable" after December 10, 2009.
The Court should therefore extend the term of Eureka/Young's
retention as contemplated in their retention order and waive any
continuing requirement to apply for further periodic extensions,
Ms. Dine says.
About Tronox Inc.
Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes. Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products. The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries. In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.
Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008. The Company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr.
S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRONOX INC: Ex-Officers Want Payment of Fees From D&O Insurance
---------------------------------------------------------------
Former Tronox Incorporated directors and officers Thomas W.
Adams, Mary Mikkelson and Marty Rowland ask the U.S. Bankruptcy
Court for the Southern District of New York for an order
confirming that the automatic stay is inapplicable to the
advancement of certain defense fees and costs by Twin City Fire
Insurance Company under a Directors, Officers and Company
Liability Policy issued by Twin City to Tronox Incorporated.
Twin City issued Directors, Officers and Company Liability Policy
No. 00 DA 0226832-07 to the Debtor for the "Policy Period" of
November 22, 2007 to November 22, 2008. The Policy Period
subsequently was extended to November 22, 2009.
The Insureds have incurred and continue to incur defense fees and
costs in connection with the In Re Tronox, Inc. Securities
Litigation and therefore have requested that Twin City advance
those fees and costs under the Policy.
In addition, the Insureds have been informed that they will be
subpoened for deposition in the adversary proceeding filed by
Tronox Incorporated against Anadarko Petroleum Corporation and
Kerr-McGee Corporation.
Kristin C. Wigness, Esq., at Katten Muchin Rosenman LLP, in New
York, relates that given the overlap between the allegations
against the Insureds In Re Tronox, Inc. Securities Litigation and
the facts and circumstances at issue in the Anadarko/Kerr-McGee
Proceeding, the Insureds will incur additional defense fees and
costs in connection with their deposition in the Adversary
Proceeding.
Subject to mutual reservations of rights, Twin City has agreed to
advance Claims Expenses, as that term is defined in the Policy,
under the Policy, provided that the Insureds secure approval from
the Court to do so.
According to Mr. Wigness, Courts almost universally acknowledge
that the question of whether the automatic stay should be lifted
to permit the advancement of defense costs entails the
consideration of the central purpose of D&O policies, which is to
protect individual directors and officers.
Here, Mr. Wigness says, the Insureds require the funding of their
defense in the In Re Tronox, Inc. Securities Litigation and any
related deposition or other testimony in the Anadarko/Kerr-McGee
Proceeding. In addition, the Policy's Order of Payment
Endorsement confirms the parties' intent to weigh the individual
Insureds' interests in the Policy proceeds over any such interest
of the Debtor.
Moreover, the Insureds assert that the Policy is not property of
the Debtor's estate under Section 541 of the Bankruptcy Code, and
therefore the automatic stay does not apply to Twin City's
advancement of Claims Expenses in connection with the In Re
Tronox, Inc. Securities Litigation.
About Tronox Inc.
Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes. Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products. The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries. In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.
Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008. The Company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr.
S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRUMP ENTERTAINMENT: Plan Trims Estimated Recovery by Noteholders
-----------------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Trump Entertainment
Resorts Inc. filed a sixth amendment to the reorganization plan.
The explanatory disclosure statement, also revised, now projects
that noteholders and unsecured creditors will recover just under
1%, rather than 1.4% shown in the prior version.
Creditors are voting on competing plans. Secured claimants and
noteholders have filed their own reorganization plans for Trump.
As reported by the TCR on Dec. 15, 2009, Carl C. Icahn's
affiliated entities have entered into an agreement with Beal Bank
and Beal Bank Nevada, pursuant to which the Icahn entities have
purchased a majority of the outstanding first lien bank debt of
Trump Entertainment. Mr. Icahn agreed and Beal Bank will jointly
prosecute the plan that Beal Bank has proposed.
Mr. Icahn has a 51% stake in the bank's first lien bank debt worth
$485 million and rights to take the remaining stake, Reuters
reported.
Reuters relates that Beal Bank's plan raised the possibility of
Mr. Trump's name being wiped off while the bondholder's plan would
give Mr. Trump a 10% stake in the Company.
Confirmation hearings on the competing plans are scheduled for
next year.
Beal Bank Plan
Secured creditors Beal Bank and Beal Bank Nevada filed December 4
a competing reorganization plan for Trump Entertainment Resorts
Inc.
Beal Bank believes that the Debtors need to raise additional
capital to remain competitive in the Atlantic City gaming market.
Given that competition among casino and hotel operators in the
Atlantic City market is intense and increasing, a significant
amount of working capital is required to maintain a competitive
advantage.
The Beal Plan contemplates the contribution of $225 million of new
equity capital to reorganized Trump Entertainment in the form of a
rights offering to be backstopped by Beal, in exchange for an
allocation of 3.829% of the membership interests in Reorganized
TER Holdings.
Under the Plan, Beal Bank, which is owed $485 million secured by a
first priority lien on substantially all the Debtors' assets, will
reduce its first-lien debt to $100 million and convert the
remainder into 55.5% of the new stock.
]
The Beal Plan gives second lien noteholders and unsecured
creditors $13.9 million cash or 2% of the new stock. Second-lien
debt holders and unsecured creditors can purchase 32.5% of the
equity in the $225 million rights offering. Second lien
noteholders are expected to recover 1.1% while unsecured creditors
are to recover less than 1% of their claims.
Existing equity will be extinguished.
A copy of the Beal Plan is available for free at:
http://bankrupt.com/misc/Trump_Beal_Plan.pdf
A copy of the Beal Disclosure Statement is available for free at:
http://bankrupt.com/misc/Trump_Beal_DiscStatement.pdf
The disclosure statement explaining the Beal Plan is scheduled for
consideration at a Dec. 14 court hearing. The disclosure
statement explaining a competing plan by noteholders has already
been approved by the Bankruptcy Court.
Noteholders Plan
In July 2009, Trump Entertainment management filed a Chapter 11
plan built around the proposed sale of the company to shareholder
Donald Trump. Under the original plan, Donald J. Trump and BNAC,
Inc., an affiliate of Beal Bank Nevada, will invest $100 million
cash in the newly private company and become its owners. The
original plan provides for a 94% recovery for Beal Bank, the
secured creditor, and a wipe-out for lower ranked creditors.
Certain of the holders of the Debtors' 8-1/2% Senior Secured Notes
due 2015 in the outstanding principal amount of $1.25 billion
filed a Chapter 11 plan, which allows second lien
noteholders and general unsecured claimants to have distributions
in the form of 5% of the new common stock and subscription rights
to acquire 95% of the new common stock.
In September, Judge Judith Wizmur approved a request by the
noteholders of an examiner to investigate the Company's decision
to endorse a Chapter 11 plan backed by shareholder Donald
Trump. The bondholders urged a probe as to whether the board
acted in good faith as unsecured creditors will be wiped out under
Donald Trump's plan while he would retain control of the Company.
On November 16, Donald Trump sent a letter to the Company
terminating their purchase agreement with BNAC, which was the
backbone of the management-sponsored Plan. Mr. Trump said he has
exercised his rights to terminate the deal on various grounds
including as a result of the appointment of an examiner in the
Company's Chapter 11 cases and as a result of the confirmation
hearing in the bankruptcy cases being scheduled for after
January 15, 2010, which is the deadline in the Purchase Agreement
for confirmation of the Company's plan of reorganization.
Mr. Trump and daughter Ivanka Trump, which own shares in Trump
Entertainment, have also entered into an agreement with the
holders of 61% of the partnership's outstanding 8.5% Senior
Secured Notes due 2015. Under the deal, Mr. Trump and his
daughter Ivanka have agreed to support the Chapter 11 plan
proposed by the noteholders and permit the Company to continue to
use the Trump name in connection with the Company's three casinos.
Pursuant to such agreement, Mr. Trump will receive 5% of the new
common stock in the Company to be issued under such noteholders'
proposed Chapter 11 plan of reorganization and warrants to
purchase up to an additional 5% of such common stock. Mr. Trump
will also waive claims against Trump Entertainment in excess of
$100 million.
Under the Noteholders Plan, noteholders would get 70% of the
equity in the casinos by investing $225 million through a rights
offering available to holders of the second-lien notes. For
backstopping the offering, the noteholder group would receive a
fee equal to 20% of the new equity. Unsecured creditors and
second-lien debt holders under the Noteholders Plan are in line
for 5 percent of the new equity for an estimated 1.4%. The
bondholder would sell one of the three casinos for $75 million to
Coastal Marina LLC, a company controlled by Richard T. Fields.
The withdrawal by Mr. Trump prompted Beal Bank to file its own
plan. The Debtors have already conveyed support for the
Noteholders Plan.
About Trump Entertainment
Based in Atlantic City, New Jersey, Trump Entertainment Resorts
Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and
operates three casino hotel properties in Atlantic City, New
Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza
Hotel and Casino, and Trump Marina Hotel Casino. The Company
conducts gaming activities and provides customers with casino
resort and entertainment.
Donald Trump is a shareholder of the Company and, as its non-
executive Chairman, is not involved in the daily operations of the
Company. The Company is separate and distinct from Mr. Trump's
privately held real estate and other holdings.
Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other
affiliates filed for Chapter 11 on February 17, 2009 (Bankr. D.
N.J., Lead Case No. 09-13654). The Company has tapped Charles A.
Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel,
and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the
Company's auditor and accountant and Lazard Freres & Co. LLC is
the financial advisor. Garden City Group is the claims agent.
The Company disclosed assets of $2,055,555,000 and debts of
$1,737,726,000 as of December 31, 2008.
Trump Hotels & Casino Resorts, Inc., filed for Chapter 11
protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898
through 04-46925). Trump Hotels' obtained the Court's
confirmation of its Chapter 11 plan on April 5, 2005, and in May
2005, it exited from bankruptcy under the name Trump Entertainment
Resorts Inc.
TURNING STONE: S&P Withdraws 'B+' Rating on $160 Mil. Notes
-----------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'B+' issue-level
rating on Turning Stone Resort Casino LLC's $160 million 9.125%
senior unsecured notes due 2010. The rating was withdrawn due to
the redemption in full of this obligation.
Ratings List
Turning Stone Resort Casino LLC
Corporate Credit Rating B+/Positive/--
Rating Withdrawn
Turning Stone Resort Casino LLC
To From
-- ----
$160M 9.125% nts due 2010 NR B+
NR -- Not rated.
USEC INC: S&P Matches Moody's With 'CCC+' Rating
------------------------------------------------
According to Bill Rochelle at Bloomberg News, USEC Inc. has a
revolving credit that matures in August and a corporate rating
from Standard & Poor's that recently declined one click to CCC+,
matching the action taken on Dec. 18 by Moody's Investors Service.
Moody's was also concerned about the ability to renew the
revolving credit. Where Moody's reduced the rating on the
convertible notes to Caa2, S&P lowered them one step more to CCC-.
S&P estimates the holders won't recover more than 10 percent in
the event of default.
USEC Inc. produces enriched uranium for nuclear power plants.
USEC generated $2 billion revenue for a year ended in September.
VENTANA HILLS: Can Access Anglo Irish Bank Cash Collateral
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
authorized, on a final basis, Ventana Hills Associates Ltd. and
Ventana Hills Phase II, L.P., to access cash collateral of Anglo
Irish Bank Corporation Limited, fka Anglo Irish bank Corporation
PLC.
The Debtor would use the cash collateral to maintain sufficient
liquidity to operate its business in Chapter 11.
Prepetition, the Debtor borrowed money and received other
financial accommodations from Anglo Irish Bank in the original
principal amount of $53,125,000.
As adequate protection, Anglo Irish Bank is granted replacement
liens and superpriority administrative claim, subject and
subordinate to a carve out.
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.
VI-JON INC: S&P Raises Corporate Credit Rating to 'B+'
------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on St. Louis, Missouri-based Vi-Jon Inc. to 'B+' from 'B'.
The rating outlook is stable.
In addition, S&P revised its recovery rating on the company's
secured credit facilities to '2', indicating its expectation of
substantial (70% to 90%) recovery for lenders in the event of a
payment default, from '3'. This revision reflects S&P's
expectation that the company's will continue to voluntarily repay
debt (above the required amortization) with its moderate positive
cash flow generation. S&P raised its issue-level rating on this
debt to 'BB-' (one notch higher than the 'B+' corporate credit
rating) from 'B', in accordance with its notching criteria for a
'2' recovery rating.
The 'BB' rating reflects Vi-Jon's participation in the highly
competitive personal care segment of the consumer products sector,
moderate debt leverage, and significant customer concentration.
The company participates in the private-label segment of the
personal care products market, where it competes with much larger
branded players, such as Procter & Gamble Co., Colgate-Palmolive
Co., and Kimberly-Clark Corp. While private-label manufacturers
like Vi-Jon offer lower-priced products than branded players and
its market share has grown in recent years, the company remains
vulnerable to aggressive advertising and promotional activities
from larger branded companies.
"A key rating concern is that Vi-Jon has a significant sales
concentration with a key customer," noted Standard & Poor's credit
analyst Jayne Ross. "Although the company has a longstanding
relationship with this customer and has increased the diversity of
its product offerings to it, Vi-Jon's operations would be
adversely affected if it lost this business."
Because Vi-Jon is primarily a private-label manufacturer,
operating margins are well below those of its branded competition.
S&P believes that the company could experience some margin
pressure as retailers seek price rollbacks due to the decline in
raw material costs. Over the intermediate to long term, however,
Vi-Jon could see some volume and margin growth opportunities from
its branded operations and contract manufacturing.
Credit protection measures have been strong for the rating over
the past two years despite higher commodity costs. For the 12
months ended Oct. 3, 2009, sales rose by more than 10% from the
prior year due to higher sales across all segments. EBITDA
margins improved quarter over quarter due to relatively stable
commodity costs. During the 12 months ended Oct. 3, 2009, total
debt to EBITDA was 2.6x, EBITDA to interest coverage was 9.3x, and
funds from operations to total debt was more than 25%, as compared
to 4.0x, 4.5x, and 13.28%, respectively, in the prior-year period.
VISTEON CORP: Unsecured Creditors Panel Says Plan Unconfirmable
---------------------------------------------------------------
The Official Committee of Unsecured Creditors in Visteon Corp.'s
cases asks the Bankruptcy Court for authority to promptly begin
discovery of Visteon in connection with its proposed
reorganization plan.
The Committee says it now feels confident that Visteon's proposed
reorganization plan, which contemplates a wipe out of unsecured
creditors, "ultimately will not be confirmed."
The Committee adds that its proposed discovery is not specifically
focused on the Plan, but is about "remedying a large information
gap that has been allowed to remain extant far too long."
The Committee will ask the Bankruptcy Court at the Jan. 21 hearing
for authority to examine the company's financial records plus
documents pertaining to the former parent, Ford Motor Co., which
would be given releases under the Plan.
The Committee noted that that Visteon's capacity to shoulder
$320 million in debt after reorganization is "dramatically lower"
than the Company told the panel on Dec. 2. It adds that the
figure is "a remarkably low number" when considered against
management projections for its EBITDA and the projected cash flow
from Asian units following emergence. The projected
profitability and cash flow were blanked out in the version of
the motion the Committee filed publicly with the Bankruptcy
Court.
The Committee also says that terminating Visteon's pension plan
will result in "de minimis" savings.
The Chapter 11 Plan
Visteon delivered to the U.S. Bankruptcy Court for the District of
Delaware their Joint Plan of Reorganization and Disclosure
Statement on December 17, 2009.
Visteon Chief Financial Officer and Executive Vice President
William G. Quigley, III, relates that among other things, the
Plan contemplates:
-- The issuance of New Visteon Common Stock and a new senior
secured loan by the Reorganized Debtors to discharge claims
against and interest in the Debtors' estates. In
particular, the Plan contemplates the issuance of the New
Senior Secured Loan and a portion of New Visteon Common
Stock to the Term Loan Lenders in satisfaction and
discharge of their claims;
-- The payment in full in cash of Administrative Claims, DIP
Facility Claims, Priority Tax Claims, Professional Claims,
and certain other Secured Claims from cash on hand and from
the Debtors' existing assets;
-- The extinguishment of all interests in Visteon Corp.;
-- The reinstatement of Intercompany Interests and
Intercompany Claims in the Reorganized Debtors' discretion;
-- The termination of the Pension Plans. As a result, the
Pension Benefit Guaranty Corporation will receive the
remaining portion of the New Visteon Common Stock after the
Term Loan Lenders' Claims are satisfied; and
-- No recovery for Holders of General Unsecured Claims.
Bankruptcy Judge Christopher Sontchi will convene a hearing on
January 28, 2010, to consider the adequacy of the Disclosure
Statement. Objections to the Disclosure Statement are due no
later than January 15.
Full-text copies of Visteon's Plan and Disclosure Statement are
available for free at:
http://bankrupt.com/misc/Visteon_Plan.pdf
http://bankrupt.com/misc/Visteon_DS.pdf
About Visteon Corp
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. The company has corporate offices in
Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen,
Germany. It has facilities in 27 countries and employs roughly
35,500 people. The Company has assets of $4,561,000,000 and debts
of $5,311,000,000 as of March 31, 2009.
Visteon and 30 of its affiliates filed for Chapter 11 protection
on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through
09-11818). Judge Christopher S. Sontchi oversees the Chapter 11
cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and
James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, represent the Debtors in their restructuring efforts.
Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P.
Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl
& Jones LLP, in Wilmington, Delaware, serve as the Debtors' local
counsel. The Debtors' investment banker and financial advisor is
Rothschild Inc. The Debtors' notice, claims, and solicitation
agent is Kurtzman Carson Consultants LLC. The Debtors'
restructuring advisor is Alvarez & Marsal North America, LLC.
Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Visteon
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
WESTMORELAND COAL: Has Deal with Union on Retiree Benefits
----------------------------------------------------------
Westmoreland Coal Company on December 16, 2009, said it has
entered into an agreement with the United Mine Workers of America
to modernize the method by which prescription drugs are provided
to retirees of Westmoreland's former Eastern operations, and to
retirees of its subsidiary Basin Resources, Inc., in Colorado.
Under the agreement, Westmoreland and Basin will utilize a new
system of distribution and administration, along with drug
formularies, to enable them to continue to provide prescription
drug benefits to retirees at a lower cost to the companies. These
modifications are expected to become effective around April 1,
2010.
Keith E. Alessi, Westmoreland's President and CEO said "Our staff,
the union and outside professionals have been working for over a
year to design a modern delivery system for prescription drugs. I
am highly appreciative of the cooperation of the union leadership
in this effort. We have incorporated efficiencies in both the
acquisition and distribution of prescription drugs in this
agreement. The savings from this, combined with savings from our
previously announced pension freeze and elimination of post
retirement prescription benefits for non represented employees,
will result in meaningful reductions in our actuarially calculated
balance sheet liabilities at year end as well as reductions in
heritage expenses beginning in 2010."
Balance Sheet
At September 30, 2009, the Company's consolidated balance sheets
showed $773.2 million in total assets and $998.2 million in total
liabilities, resulting in a $225.0 million shareholders' deficit.
The Company's consolidated balance sheets at September 30, 2009,
also showed strained liquidity with $114.2 million in total
current assets available to pay $305.6 million in total current
liabilities.
Going Concern Issues
In its quarterly report for the three months ended September 30,
2009, the Company indicated it has suffered recurring losses from
operations, has a working capital deficit and a net capital
deficiency. The Company believes that these conditions raise
substantial doubt about its ability to continue as a going
concern.
About Westmoreland Coal
Westmoreland Coal Company (NYSE Amex: WLB) --
http://www.westmoreland.com/-- is the oldest independent coal
company in the United States. The Company's coal operations
include coal mining in the Powder River Basin in Montana and
lignite mining operations in Montana, North Dakota and Texas. Its
power operations include ownership of the two-unit ROVA coal-fired
power plant in North Carolina.
WOLVERINE TUBE: WJT Unit Inks Toll Manufacturing Deal with Exeon
----------------------------------------------------------------
Wolverine Joining Technologies, LLC, a wholly owned subsidiary of
Wolverine Tube Inc., on December 21, 2009, entered into a toll
manufacturing agreement with Exeon, Inc.
Exeon is a wholly owned subsidiary of The Alpine Group, Inc., a
principal shareholder of voting securities of Wolverine.
WJT currently also provides toll manufacturing services to other
customers.
Under the Toll Agreement, which became effective November 30,
2009, Exeon provides raw materials (principally metals, including
silver, copper, tin and zinc) to WJT which WJT uses to manufacture
products for Exeon's sale to customers. WJT will act as sales
agent for Exeon and will market and sell Exeon's finished goods.
In addition, WJT will provide certain related administrative
services. Exeon will pay WJT a monthly toll services fee of $4.45
per copper pound for the products shipped. The toll services fee
will be adjusted periodically, if necessary.
The Toll Agreement provides for an initial term of three years,
which is automatically renewed for successive 12-month periods,
unless either party, upon 90 days' prior notice, terminates the
agreement. Additionally, either party may terminate the Toll
Agreement upon 30 days' notice. The Toll Agreement also contains
other terms and conditions customary for agreements of this type
including: confidentiality requirements, limited warranties, and
indemnifications between the parties.
To facilitate WJT's transition to providing toll manufacturing
services to Exeon, Exeon purchased WJT's raw materials as of
November 30, 2009 for a purchase price of approximately $900,000.
During a transition period of approximately 90 to 120 days
following the effective date of the Toll Agreement, WJT will
continue to manufacture finished goods from its then existing
work-in-process and sell such finished goods to customers. Also,
during this transition period, all WJT invoices will be collected
by Exeon for WJT and Exeon will remit to WJT its portion of such
invoiced amounts in accordance with a pre-determined phased
payment schedule.
At the conclusion of the transition period, WJT and Exeon
anticipate that WJT will have completed its work in process which
existed on the Toll Agreement's effective date, sold its finished
goods (both those existing on such effective date and those
resulting from the completion of such work-in-process), and
collected its accounts receivable from the sale of such goods.
About Wolverine Tube
Wolverine Tube, Inc. is a global manufacturer and distributor of
copper and copper alloy tube, fabricated products, and metal
joining products. The Company currently operates seven facilities
in the United States, Mexico, China, and Portugal. It also has
distribution operations in the Netherlands and the United States.
At October 4, 2009, the Company had total assets of $192,632,000
against total liabilities of $240,277,000; Series A Convertible
Preferred Stock of $17,674,000; Series B Convertible Preferred
Stock of $9,700,000; and total accumulated deficit of $75,019,000.
Going Concern Doubt
In its quarterly report for the three months ended October 4,
2009, the Company believes that its available cash and cash
anticipated to be generated through operations is expected to be
adequate to fund the Company's liquidity requirements, although
there can be no assurances that the Company will be able to
generate such cash. Additionally, the Company does not currently
have in effect a revolving credit agreement or other capital
commitments to supplement its existing cash and anticipated cash
resources, if necessary, to meet its liquidity requirements
materially in excess of the Company's current expectations.
According to the Company, the uncertainty about the Company's
ability to achieve its projected results, the absence of such
credit or capital commitments and the uncertainty about the future
price of copper, which has a substantial impact on working
capital, raises substantial doubt about the Company's ability to
continue as a going concern. The Company expects to continue to
actively manage and optimize its cash balances and liquidity,
working capital, operating expenses and product profitability,
although there can be no assurances the Company will be able to do
so.
WOLVERINE TUBE: Alpine's Elbaum Discloses Disposition of Shares
---------------------------------------------------------------
Steven S. Elbaum -- Chairman of the Board and Chief Executive
Officer of the Alpine Group, Inc., an industrial holding company
-- reports it may be deemed to beneficially own 63,618,101 shares
or roughly 62.3% of the common stock of Wolverine Tube Inc.
Mr. Elbaum disclosed that on December 14, 2009, he purchased 2,000
shares of Series A Convertible Preferred Stock of the Company
through an entity over which Mr. Elbaum exercises control; 2,000
shares of Series B Convertible Preferred Stock of the Company
through an entity over which Mr. Elbaum exercises control; and
2,000 shares of Series B Preferred Stock in his individual
capacity from Alpine. One of the Elbaum Entities is a limited
liability company in which the Reporting Person and one other
person are the sole members. Mr. Elbaum, as sole manager of such
limited liability company, has sole voting and dispositive power
with respect to all shares held by the entity. The other Elbaum
Entity is a family-owned entity over which Mr. Elbaum exercises
sole voting and dispositive power with respect to all shares held
by the entity.
Mr. Elbaum also reported that on December 14, 2009, Alpine sold
14,000 shares of Series A Preferred Stock and 6,000 shares of
Series B Preferred Stock to certain investors in a series of
private placements for a purchase price of $18.18 in cash per
share. The Purchasers are shareholders of Alpine, including
certain of its officers and directors. The sales were made
pursuant to individual Purchase and Sale Agreements between Alpine
and each Purchaser. Under the Purchase and Sale Agreements,
Alpine is entitled to receive an additional contingent payment in
the event (i) any shares of Series A Preferred Stock or Series B
Preferred Stock sold in the private placement are sold, redeemed
or exchanged or any dividend or distribution is made in respect of
such shares prior to June 30, 2012, and (ii) the value of the
consideration received by a purchaser on account of such events
exceeds $72.72 per share. The amount of the contingent payment,
if any, made to Alpine shall be determined by the amount in which
the value of the consideration received by the selling Purchaser
exceeds $72.72 per share; provided, however, that Alpine shall not
be entitled to a contingent payment in excess of $145.44 per
share. Alpine shall receive any contingent payment in the form and
type of consideration received by the selling Purchaser.
Each Purchaser agreed to be bound by the Stockholders Agreement.
Mr. Elbaum also said Plainfield Special Situations Master Fund
Limited and Alpine entered into a Stockholders Agreement, dated as
of February 16, 2006. On February 26, 2007, Alkest LLC became a
party to the Stockholders Agreement.
On December 14, 2009, each Purchaser became bound by the
Stockholders Agreement pursuant to the Purchase and Sale
Agreements. Pursuant to the Stockholders Agreement, none of
Plainfield, Alpine, Alkest or the Purchasers shall transfer any
voting securities of the Company without first offering such
voting securities of the Company to the other parties bound by the
Stockholders Agreement. The private placements to the Purchasers
were permitted transfers under the Stockholders Agreement.
Also pursuant to the Stockholders Agreement, Plainfield and Alpine
each agree that, so long as the other holds 10% of the outstanding
capital stock of the Company, it will vote all its eligible shares
in favor of the two board designees of such other party, and
Alkest and the Purchasers must vote all of their eligible shares
in favor of the two board designees of each Alpine and Plainfield.
The Stockholders Agreement also requires that for any matter
submitted to Plainfield or Alpine as a holder of Series A
Preferred Stock, each shall consult with the other and cooperate
in order to attempt to reach agreement on the manner in which
votes should be cast or consent be given.
On October 14, 2009, pursuant to the Stockholders Agreement,
Alpine irrevocably offered to sell to Plainfield and Alkest up to
927,000 shares of Common Stock at a price of $.05 per share, all
cash. Pursuant to the Stockholders Agreement, the offerees could
accept such offer within five days, failing which Alpine would be
free for a period of 30 days thereafter to sell the offered Common
Stock at a price and upon other terms and conditions no more
favorable than those offered to Plainfield and Alkest. Plainfield
and Alkest declined to accept such offer, and Alpine sold 406,230
shares of Common Stock through a broker-assisted transaction on
the open market for an average price of $0.05 per share in
connection with its 2009 tax planning.
Mr. Elbaum said he purchased Series A Preferred Stock and Series B
Preferred Stock with personal funds.
About Wolverine Tube
Wolverine Tube, Inc. is a global manufacturer and distributor of
copper and copper alloy tube, fabricated products, and metal
joining products. The Company currently operates seven facilities
in the United States, Mexico, China, and Portugal. It also has
distribution operations in the Netherlands and the United States.
At October 4, 2009, the Company had total assets of $192,632,000
against total liabilities of $240,277,000; Series A Convertible
Preferred Stock of $17,674,000; Series B Convertible Preferred
Stock of $9,700,000; and total accumulated deficit of $75,019,000.
Going Concern Doubt
In its quarterly report for the three months ended October 4,
2009, the Company believes that its available cash and cash
anticipated to be generated through operations is expected to be
adequate to fund the Company's liquidity requirements, although
there can be no assurances that the Company will be able to
generate such cash. Additionally, the Company does not currently
have in effect a revolving credit agreement or other capital
commitments to supplement its existing cash and anticipated cash
resources, if necessary, to meet its liquidity requirements
materially in excess of the Company's current expectations.
According to the Company, the uncertainty about the Company's
ability to achieve its projected results, the absence of such
credit or capital commitments and the uncertainty about the future
price of copper, which has a substantial impact on working
capital, raises substantial doubt about the Company's ability to
continue as a going concern. The Company expects to continue to
actively manage and optimize its cash balances and liquidity,
working capital, operating expenses and product profitability,
although there can be no assurances the Company will be able to do
so.
W.R. GRACE: Adage Owns 5.07% Shares of Grace Common Stock
---------------------------------------------------------
Adage Capital Partners, L.P., disclosed in a Schedule 13-G filed
with the U.S. Securities and Exchange Commission on December 24,
2009, that it has shared voting power and shared dispositive power
of 3,661,356 shares of W.R. Grace & Co. common stock.
Adage owns an aggregate of 3,661,356 or 5.07% of Grace shares.
Adage Capital Partners GP, L.L.C., Adage Capital Advisors, L.L.C.,
as general partners of ACP, each owns 3,661,356 shares of Grace
common stock. Robert Atchinson and Phillip Gross, as managing
members of ACP, also disclose ownership of 3,661,356 Grace shares.
Grace had 72,236,518 shares of common stock issued and outstanding
as of October 31, 2009.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing is
scheduled to continue on October 13 and 14.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Anderson Memorial Says Plan Cannot Be Confirmed
-----------------------------------------------------------
W.R. Grace & Co.'s Second Amended Joint Plan of Reorganization
cannot be confirmed because (i) it violates the fundamental tenet
of "equality of treatment" required of any bankruptcy plan, (ii)
it fails to afford creditors in the same class the same treatment,
(iii) it improperly classifies creditors who are subjected to
disparate treatment in the same class, (iv) it is not proposed in
good faith, and (v) it does not comply with the requirements of
the Bankruptcy Code, according to Anderson Memorial Hospital.
Anderson filed in December 1992 an asbestos property damage class
action in the South Carolina Circuit Court, styled Anderson
Memorial Hospital v. W.R. Grace. Anderson sought the recovery of
costs associated with the abatement of asbestos-containing
material from a proposed class consisting essentially of owners of
private commercial and local government buildings which "have
suffered or will suffer asbestos contamination," Christopher D.
Loizides, Esq., at Loizides, P.A., in Wilmington, Delaware,
relates, on behalf of Anderson.
"The Plan is the culmination of the Debtors' strategy to
disenfranchise unresolved property damage claimants and undermine
efforts to deal with property damage claims globally through an
appropriate class mechanism . . . and by subjecting Anderson to
treatment prejudicially different from that afforded to other
claimants," Mr. Loizides contends.
The Plan Proponents have recognized the validity of their expert
testimonies relating to substantial future property damage
demands, but they have rejected disposition of property damage
claims on a collective basis in favor of individual trials.
Hence, the Plan is essentially a violation of the fundamental
promise of equality of treatment, Mr. Loizides avers.
For the same reasons that the Plan violates the requirement of
"equality of treatment," the Plan also fails to satisfy the
requirements of Section 524(g), pursuant to which the Debtors seek
an injunction protecting various settling third parties,
Mr. Loizides further relates.
The flaws in the Debtors' classification scheme also render
meaningless any vote that is made on the Plan. The Debtors
purport to solicit Class 7 only for purposes of the requirement in
Section 524(g) of the Bankruptcy Code that to obtain a Section
524(g) injunction, the Plan must be approved by a 75% vote of "a
separate class or classes of the claimants whose claims are to be
addressed by a trust."
Specifically, Section 524(g) requires that "present claims and
future demands that involve similar claims" must be paid "in
substantially the same manner." Since the Plan mandates disparate
treatment for similarly situated property damage claims, it does
not satisfy the requirements of Section 524(g).
Anderson also presented that as of May 23, 2005, Grace told the
Court that everything was on track with respect to Property Damage
claims, which would be resolved in early 2006, and that it was the
Personal Injury constituency that was presenting problems.
However, it became clear that the Debtors' strategy had changed,
and that their new mission was to aggressively smear Anderson's
claims in particular, and property damage claims generally,
"through an underhanded campaign against Anderson's counsel,
Speights & Runyan," Mr. Loizides notes.
"Despite prior negotiations, the Debtors' new game plan was to go
to war with property damage claims and to use S&R as their
scapegoat. In the spring of 2005, [Grace's lead counsel, David
Bernick of Kirkland & Ellis LLP, in New York] met with some
members of the ACC and their counsel, and suggested 'getting rid
of this guy [Mr. Daniel Speights] so Grace could make a deal with
the PI constituency."
For these reasons, Anderson maintains that the Debtors' Plan does
not comply with the provisions of the Bankruptcy Code and cannot
be confirmed under Section 1129(a)(1) of the Bankruptcy Code.
A full-text copy of Anderson's Post-trial Brief is available for
free at:
http://bankrupt.com/misc/WRGrace_AndersonPostTrialBrief.pdf
Subsequently, Anderson sought for leave to exceed the single brief
page limitation and for additional time to file a hyperlinked
version of its Post-Trial Brief.
Debtors Respond
"All of Anderson's objections lack merit," Mr. Bernick says in a
43-page response submitted to the Court.
Under the Debtors' Plan, Anderson will receive the most favorable
treatment afforded to any asbestos claimant in Grace's Chapter 11
Cases -- 100% of the allowed amount of its claim. Apparently,
however, Anderson wants the right to shop for the most favorable
forum to litigate its claim, which the Bankruptcy Court does not
afford, Mr. Bernick argues.
By filing a proof of claim against Grace, Anderson submitted to
the jurisdiction of the Court and triggered "the 'process of
allowance and disallowance' of claims, thereby subjecting (itself)
to the Court's equitable power," Mr. Bernick adds, citing
Langenkamp v. Culp, 498 U.S. 42,44 (1991) and In re Winstar
Commc'ns, Inc., 554 F.3d 382,406 (3d Cir. 2009).
Despite the Plan's promise to pay its claim in full, Anderson
argues that the "singling out of Anderson for disparate treatment,
coupled with the Debtors' conduct during the case, evidence that
the Plan is not proposed in good faith." [However,] Anderson's
argument fails . . . because objections to the treatment of a
particular claim are not properly treated as 'good faith'
objections," Mr. Bernick tells the Court.
Mr. Bernick points out that Anderson's Post-Trial Brief
"consist[s] of bitterness and invective regarding Grace's supposed
motives and strategies, unsupported by any record evidence that
Grace pursued a strategy to "smear" and victimize Anderson's
counsel Speights & Runyan and which are wholly irrelevant to its
Plan objections."
Accordingly, the Debtors ask the Court to overrule Anderson's
objections and confirm the Plan.
A full-text copy of the Debtors' Response is available for free at
http://bankrupt.com/misc/WRGrace_ResponsetoAndersonBrief.pdf
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing is
scheduled to continue on October 13 and 14.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Court Approves Professional Fees for April-June
-----------------------------------------------------------
The Bankruptcy Court allowed the fee applications of these
professionals for the period from April 1 through June 30, 2009:
Professional Fees Expenses
------------ ---- --------
Anderson Kill & Olick, P.C. $986,833 $11,359
David T. Austern 32,800 1,166
Janet S. Baer, P.C. 383,187 18,946
Beveridge & Diamond, P.C. 172,459 2,682
Bilzin Sumberg Dunn Baena Price & Axelrod 144,298 41,127
Blackstone Advisory Services L.P. 500,000 10,506
BMC Group 512,989 86,904
Buchanan Ingersoll & Rooney PC 46,884 187
Campbell & Levine, LLC 148,695 16,218
Caplin & Drysdale, Chartered 1,428,568 216,159
Capstone Advisory Group, LLC 195,700 593
Casner & Edwards LLP 35,963 41,303
Charter Oak Financial Consulting LLC 44,357 0
Day Pitney LLP 25,040 53
Duane Morris LLP 175,331 3,835
Ferry Joseph & Pearce, P.A. 97,953 3,512
Foley Hoag LLP 147,015 3,142
Hamilton Rabinovitz & Alschuler, Inc. 1,562 0
Holme Roberts & Owen, LLP 2,379 4,685
Kirkland & Ellis LLP 6,594,833 2,315,190
Kramer Levin Naftalis & Frankel LLP 215,996 5,645
Legal Analysis Systems, Inc. 154,137 0
Official Committee of Asbestos PI Claimants 0 90
Ogilvy Renault LLP C$32,882 C$211
Pachulski Stang Ziehl & Jones LLP 153,544 137,556
Piper Jaffrey & Co. 140,000 136
PricewaterhouseCoopers LLP 444,099 4,520
PricewaterhouseCoopers LLP (Darex 2008) 51,264 40
Reed Smith LLP 167,206 41,537
Alan B. Rich 173,880 15,682
Alexander M. Sanders, Jr. 25,020 747
Saul Ewing LLP 67,440 8
Steptoe & Johnson LLP 12,366 69
Stroock & Stroock & Lavan LLP 653,243 16,935
Towers Perrin Tillinghast 1,322 0
Tre Angeli LLC 130,000 514
Venable LLP 706,595 6,405
Warren H. Smith & Associates, P.C. 58,277 716
Woodcock Washburn LLP 7,611 950
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing is
scheduled to continue on October 13 and 14.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Court OKs Diane Welsh as California Mediator
--------------------------------------------------------
Bankruptcy Judge Judith Fitzgerald authorized W.R. Grace & Co. and
its units to appoint Diane M. Welsh as mediator with respect to
certain claims filed by the State of California, as asserted in
Civil Action No. 08-863, litigated the U.S. District Court for the
District of California. The California Claims had been remanded
by the District Court to the Bankruptcy Court for further
proceedings.
Ms. Welsh currently acts as the Mediator for asbestos-related
property damage claims asserted by the law firm Speights & Runyan,
on behalf of certain individual claimants.
As Mediator for the California Claims, Ms. Welsh be paid $550 per
hour, plus and initial non-refundable Case Management Fee of $275.
Ms. Welsh will also be reimbursed for necessary out-of-pocket
expenses, the Court ruled.
The Mediator will neither be liable for any damages nor have any
obligations other than the duties prescribed in the order of
appointment. The Debtors and the California Claimants will
equally indemnify, defend and hold the Mediator harmless from any
claims by any part against the Mediator arising out of, or
relating to, the performance of her duties.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing is
scheduled to continue on October 13 and 14.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Sends 3rd Reorganization Plan Modifications
-------------------------------------------------------
Reorganization plan proponents for W.R. Grace & Co. -- consisting
of management, the Official Committee of Equity Security
Holders, the Official Committee of Asbestos Personal Injury
Claimants and the Future Asbestos PI Claims Representative --
submitted to the U.S. Bankruptcy Court for the District of
Delaware a third set of modifications to the Second Amended Joint
Plan of Reorganization.
Essentially technical in nature, the Third Set of Plan
Modifications, dated December 16, 2009, addresses certain
objections or clarifications raised by various parties-in-interest
in relation to the confirmation of the Plan, David M. Bernick,
Esq., at Kirkland & Ellis LLP, in New York, relates.
The technical modifications relate to the Successor Claims
Injunction Language under the Plan. A new section entitled
"Reservations and Recourse for the Benefit of Holders of Grace-
Related Claims" was added to make clear that the Reorganized
Debtors will, from and after the Effective Date of the Plan,
assume all liability of Fresenius Medical Care Holdings, Inc.,
with respect to Grace-Related Claims, other than Asbestos Personal
Injury Claims, claims arising out of the Fresenius Transaction, as
defined in the Plan, and claims based on theories of fraudulent
transfer, successor liability and similar matters, according to
Mr. Bernick.
The effect of this Plan Modification will be to permit Claimants
who had direct, non-asbestos PI Claims against Fresenius that
arose prior to the occurrence of the Fresenius Transaction, to
assert those Claims against the Reorganized Debtors in accordance
with the terms of the New Section, Mr. Bernick says.
The Third Plan Modifications also include an amended version of
the minutes of the settlement agreement approved on October 18,
2008, by the Canadian Court, with respect to claims filed by
Canadian claimants in relation to property damages caused by the
Debtors' Zonolite Attic Insulation product. By its terms, the CDN
ZAI Minutes of Settlement was void if Grace did not obtain the
Plan confirmation order by October 31, 2009.
According to Mr. Bernick, the Amended and Restated CDN ZAI Minutes
of Settlement extends the original agreement on its terms, with
these specific changes:
(i) the deadline for receiving the Confirmation Order in the
United States is now December 31, 2010;
(ii) Grace agreed to increase its contribution to the CDN ZAI
Property Damage Claims Fund from C$6,500,000 to
C$8,095,632 or C$8,595,632, depending on the date of the
Confirmation Order;
(iii) the parties agreed that the CDN ZAI PD Claims Fund may
accept CDN ZAI PD Claims through December 31, 2009;
(iv) Grace agreed to support the application of the
applicants at the Companies' Creditors Arrangement Act in
Canada in the Bankruptcy Court for their appointment of a
special counsel for CDN ZAI Claimants; and
(v) the prohibition on CDN ZAI Claimants from pursuing the
government of Canada for certain CDN ZAI PI Claims has
been lifted so that those Claims may be pursued, provided
that any subsequent claims by the Canadian government for
contribution and indemnity are channeled to the Asbestos
PI Trust.
The Amended and Restated CDN ZAI Minutes of Settlement is similar
to the original CDN ZAI Minutes of Settlement, and was approved by
the Canadian Court on December 13, 2009, with the written decision
pending, Mr. Bernick notes.
Under the Plan, the CCAA Representative Counsel voted on behalf of
all CDN ZAI Claimants. Under the Amended and Restated CDN ZAI
Minutes of Settlement, the vote which the CCAA Representative
Counsel made pursuant to the original agreement in favor of the
Plan will constitute a vote pursuant to the Amended and Restated
CDN ZAI Minutes of Settlement in favor of the Plan. Thus, no
further solicitation of CDN ZAI Claimants is required, Mr. Bernick
explains.
Mr. Bernick further relates that as part of the second set of Plan
Modifications dated October 12, 2009, certain changes were made to
the Asbestos PD Trust Agreement better account for any possible
payment defaults. However, the Bankruptcy Court expressed concern
that if Amendments applied to current Asbestos PD Claimants, those
Claimants could argue that they are impaired by the Plan and would
be entitled to vote to accept the Plan for purposes of Section
1126 of the Bankruptcy Code.
Thus, to avoid Asbestos PD Claimant concerns, the Asbestos PD
Trust Agreement has been further amended to make clear that the
payment default procedures embodied in the Agreement only apply to
future Asbestos PD Claimants. Accordingly, there is no provision
of the Plan which could arguably impair current Asbestos PD
Claimants, Mr. Bernick says.
The Third Set of Plan Modifications also includes a certain
settlements approved by the Court with respect to certain
insurers.
A full-text copy of the summary of the Third Set of Modifications
to the Plan is available at no charge at:
http://bankrupt.com/misc/WRGrace_3rdPlanModifications.pdf
The Debtors also submitted to Judge Fitzgerald a final amended
chart, which provides (i) a summary of the requirements for the
confirmation of the Debtors' Plan, and (ii) a list of the final
objections to the Plan.
The closing arguments with respect to the confirmation of the Plan
are scheduled to be heard from January 4 to January 5, 2010.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing is
scheduled to continue on October 13 and 14.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
YRC WORLDWIDE: 81% of Notes Tendered as of December 29
------------------------------------------------------
YRC Worldwide Inc. on Tuesday said it has extended the expiration
date for its exchange offers until 11:59 p.m., New York City time,
that day, unless further extended.
As of 11:59 p.m., New York City time, on December 28, 2009, 92% of
the aggregate principal amount of the 5.0% and 3.375% Notes and
53% of the 8-1/2% Notes had been tendered into the exchange
offers, representing 81% of the company's outstanding notes. As
of the prior expiration date on December 23, 2009, 90% of the
aggregate principal amount of the 5.0% and 3.375% Notes and 53% of
the 8-1/2% Notes had been tendered into the exchange offers,
representing 80% of the company's outstanding notes.
The company said that it continues to work with its noteholders
through this holiday period to increase the level of support for
this recapitalization, which is a key part of the comprehensive
plan the company is implementing to place it on a more solid
financial base.
Bankruptcy Warning
As reported in the Troubled Company Reporter on November 11, 2009,
YRC Worldwide told investors it would file for bankruptcy if it
cannot complete a $536 million debt exchange offer that will
enable it to tap into a $106 million revolver credit reserve.
YRC Worldwide is seeking to exchange up to 42 million shares of
the Company's common stock and up to 5 million shares of the
Company's new Class A convertible preferred stock for its (i) 5.0%
Net Share Settled Contingent Convertible Senior Notes and 5.0%
Contingent Convertible Senior Notes due 2023, (ii) 3.375% Net
Share Settled Contingent Convertible Senior Notes and 3.375%
Contingent Convertible Senior Notes due 2023 and (iii) the USF-8
1/2% notes due 2010 issued by the Company's subsidiary, YRC
Regional Transportation, Inc., with an aggregate face value of
approximately $536.8 million.
YRC said the uncertainty regarding its ability to generate
sufficient cash flows and liquidity to fund operations raises
substantial doubt about its ability to continue as a going
concern.
At September 30, 2009, the Company had $3.281 billion in total
assets against total current liabilities of $1.687 billion, long-
term debt, less current portion of $892.0 million, deferred
income taxes, net of $131.4 million, pension and post retirement
of $384.9 million, and claims and other liabilities of
$410.2 million, resulting in shareholders' deficit of
$225.5 million.
About YRC Worldwide
YRC Worldwide Inc., a Fortune 500 company headquartered in
Overland Park, Kan., -- http://yrcw.com/-- is one of the largest
transportation service providers in the world and the holding
company for a portfolio of successful brands including YRC, YRC
Reimer, YRC Glen Moore, YRC Logistics, New Penn, Holland and
Reddaway. YRC Worldwide has the largest, most comprehensive
network in North America with local, regional, national and
international capabilities. Through its team of experienced
service professionals, YRC Worldwide offers industry-leading
expertise in heavyweight shipments and flexible supply chain
solutions, ensuring customers can ship industrial, commercial and
retail goods with confidence.
* Auto Suppliers Turning Around
-------------------------------
According to ABI, auto-parts suppliers are making a surprising
turnaround, defying fears earlier in the year that many would
collapse amid the car industry's downturn and the bankruptcy
filings of General Motors Co. and Chrysler Group LLC.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
January 27-29, 2010
TURNAROUND MANAGEMENT ASSOCIATION
Distressed Investing Conference, Bellagio, Las Vegas
Contact: http://www.turnaround.org/
Feb. 21-23, 2010
INSOL
International Annual Regional Conference
Madinat Jumeirah, Dubai, UAE
Contact: 44-0-20-7929-6679 or http://www.insol.org/
April 20-22, 2010
TURNAROUND MANAGEMENT ASSOCIATION
Sheraton New York Hotel and Towers, New York, NY
Contact: http://www.turnaround.org/
Apr. 29-May 2, 2010
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 17-20, 2010
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
July 7-10, 2010
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Ocean Edge Resort, Brewster, Massachusetts
Contact: 1-703-739-0800; http://www.abiworld.org/
July 14-17, 2010
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Conference
The Ritz-Carlton Amelia Island, Amelia, Fla.
Contact: http://www.abiworld.org/
Aug. 5-7, 2010
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 6-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
Dec. 2-4, 2010
AMERICAN BANKRUPTCY INSTITUTE
22nd Annual Winter Leadership Conference
Camelback Inn, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 31-Apr. 3, 2011
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa
Traverse City, Michigan
Contact: http://www.abiworld.org/
October 25-27, 2011
TURNAROUND MANAGEMENT ASSOCIATION
Hilton San Diego Bayfront, San Diego, CA
Contact: http://www.turnaround.org/
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
Last Updated: December 6, 2009
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
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Each Tuesday edition of the TCR contains a list of companies with
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A list of Meetings, Conferences and Seminars appears in each
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related conferences are encouraged. Send announcements to
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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
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Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. 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.
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*** End of Transmission ***