/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/100125.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, January 25, 2010, Vol. 14, No. 24 Headlines AETERNA ZENTARIS: Receives NASDAQ Non-compliance Notice ALFRED WILEY CLARK: List of 20 Largest Unsecured Creditors ALFRED WILEY CLARK: Section 341(a) Meeting Set for February 16 ALFRED WILEY CLARK: Taps Sexton & Associates as Bankruptcy Counsel ALL AMERICAN PROPERTIES: Section 341(a) Meeting Set for Feb. 24 AMBAC FINANCIAL: Citigroup Discloses 6.2% Equity Stake AMC ENT: Fitch Says Kerasotes Buy May Be at Least Leverage Neutral AMERICAN BIO: Posts $241,000 Net Loss in Q3 2009 AMERICAN COMMERCE: Posts $112,000 Net Loss in November 30 Quarter AMERICAN INT'L: ILFC CEO Udvar-Hazy Expected to Step Down AMERICAN TONERSERV: Obtains $400,000 Funding From Galt AMKOR TECHNOLOGY: Moody's Reviews Junk Rating on Sub. Notes ANAVERDE LLC: Files Schedules of Assets & Liabilities ANAVERDE LLC: Wants to Auction Assets April 12 ANAVERDE LLC: Wants to Hire Cross & Simon as Bankruptcy Counsel AMERICAN MEDIA: Bank Debt Trades at 6% Off in Secondary Market ARVINMERITOR, INC: Moody's Affirms 'Caa1' Corporate Family Rating ASPEN LAND: Lender Alpine Bank Wants Chapter 11 Case Dismissed ATRIUM COS: Chapter 11 Cues Moody's Cut on ACIH to 'D' ATRIUM COS: S&P Cuts Issue-Level Rating on Senior Notes to 'D' BANK OF LEETON: Closed; Sunflower Bank Assumes Deposits ATRIUM COS: Noteholder Trustee Objects to DIP Financing BERNARD MADOFF: Trustee Has Nod for Firm to Pursue Canadian Assets BERNIE'S AUDIO: Final Hearing on Asset Sales on Jan. 28 BERNIE'S AUDIO: List of 20 Largest Unsecured Creditors BERNIE'S AUDIO: Section 341(a) Meeting Set for Feb. 22 BERNIE'S AUDIO: Wants to Hire Rogin Nassau as Bankruptcy Counsel BILL HEARD: Bankr. Ct. Should Have Set Aside Default Judgment BLACK CROW: Court Extends Schedules Filing Until Feb. 10 BLACK CROW: Section 341(a) Meeting Set for Feb. 17 BLACK CROW: Taps Wiley Rein as Bankruptcy Counsel BLACK CROW: Wants Latham Shuker as Co-Counsel BLOCKBUSTER INC: S&P Gives Negative Outlook, Affirms 'B-' Rating BLOSSOM VALLEY: Plan Contemplates Sale of 2 Residential Projects BORDERS GROUP: Denies Delay of Payment to Publishers BROADLANE INC: Moody's Affirms Corporate Family Rating at 'B2' BROCADE COMMUNICATIONS: S&P Raises Corporate Credit Rating to 'BB' BUILDERS FIRSTSOURCE: Delays Registration Statement Effective Date BUILDERS FIRSTSOURCE: Stadium Capital Reports 14.8% Stake CALIFORNIA HOUSING: S&P Junks Counterparty Credit Ratings CAMBIUM LEARNING: S&P Raises Rating on Senior Facility to 'B+' CAPMARK FINANCIAL: CLIP in Chapter 11 to Sell Assets CAPMARK FINANCIAL: Obtains Approval for Employees' Severance Plan CAPMARK FINANCIAL: REEG Business to Be Sold to TRECAP for $19.2MM CAPMARK FINANCIAL: To Assign Additional Contracts to Berkshire CARTER'S INC: S&P Affirms Corporate Credit Rating at 'BB+' CHARTER BANK, SANTA FE: Closed; New Bank Assumes Assets CHRYSLER LLC: Disclosure Statement OK'd Despite Protests CHRYSLER LLC: Dealers Complain on Violation of Arbitration Law CHRYSLER LLC: GMAC Completes Underwriting for Most Dealers CHRYSLER LLC: New Chrysler Still in Talks With UAW on Plant CHRYSLER LLC: New Chrysler to Get Rid of Wholesale Mentality CHRYSLER LLC: New Chrysler to Recall 1,000 Vehicles in China CINCINNATI BELL: Bank Debt Trades at 3% Off in Secondary Market CITADEL BROADCASTING: Bank Debt Trades at 21% Off CITIGROUP INC: Discloses 6.2% Equity Stake in Ambac Financial CLAIRE'S STORES: Bank Debt Trades at 16% Off in Secondary Market CLEAR CHANNEL: Bank Debt Trades at 19% Off in Secondary Market CLEARWATER NATURAL: Consol Told to Pay Debtors $3.9 Mil. COLUMBUS MCKINNON: Note Upsizing Won't Affect Moody's 'Ba3' Rating COLUMBIA RIVER BANK: Closed; Columbia State Assumes Deposits CR GAS STORAGE: Bank Debt Trades at 6% Off in Secondary Market CYCLE COUNTRY: Receives Non-Compliance Notice From NYSE Amex DBSD NORTH AMERICA: DISH Network Denied Plan Voting Right DISCOVERY COMMS: Bank Debt Trades at 1% Off in Secondary Market EVERGREEN BANK: Closed; Umpqua Bank Assumes Deposits FANNIE MAE: Budget Office Wants to Bring Firm on Gov't Books FAIRPOINT COMMS: Biddeford Asks for Probe by Maine PUC FAIRPOINT COMMS: Committee Wins Nod for Jefferies as Advisor FAIRPOINT COMMS: Giammarino Disposes Of 8,127 Shares FREDDIE MAC: Budget Office Wants to Bring Firm on Govt. Books FREEDOM COMMS: JPMorgan Agrees to Extend Cash Collateral Access FREEDOM COMMUNICATIONS: Disclosure Statement Approved FREMONT GENERAL: M&M Plan Offers 100% Recovery for Unsec. Claims FRESENIUS MEDICAL: Bank Debt Trades at 2% Off in Secondary Market GATEWAY ETHANOL: Wants Access to Cash Collateral Until January 29 GENERAL GROWTH: Creditors Committee Members Down to 9 GENERAL GROWTH: Plan Hearing for 10 Debtors on Feb. 16 GENERAL GROWTH: Two Add'l Debtors Win Plan Confirmation GENERAL MOTORS: Belgium Plant Wind Down Announced GENERAL MOTORS: Must Comply With Audits, Says Texas Comptroller GENERAL MOTORS: Sees 2010 China Sales to Exceed 2-Mil. Units GENERAL MOTORS: Court Extends Plan Filing Deadline Until May 27 GMAC INC: Fitch Upgrades Long-Term Issuer Default Ratings to 'B' GREEKTOWN HOLDINGS: Reports $28.3MM Revenues for Dec. to MGCB GULFSTREAM CRANE: U.S. Trustee Won't Form Creditors Committee HSH DELAWARE: Files for Chapter 11 in Wilmington I & C PROPERTY: Section 341(a) Meeting Set for Feb. 5 INDEPENDENCE FEDERAL: Receives NASDAQ Non-Compliance Notice INDUSTRY WEST: Section 341(a) Meeting Set for Feb. 5 INTERGRAPH CORPORATION: COADE Deal Won't Affect Moody's B1 Rating ISLE OF CAPRI: Bank Debt Trades at 1% Off in Secondary Market JACOBS FINANCIAL: Posts $714,000 Net Loss in November 30 Quarter JAPAN AIRLINES: CDO Ratings Not Affected by Bankruptcy, Fitch Says JAPAN AIRLINES: Delta & SkyTeam to Provide Support JAPAN AIRLINES: Failure Cues Sojitz's JPY15 Bil. Loss JAPAN AIRLINES: Issuer & Debt Ratings Revised by S&P to 'D' JAPAN AIRLINES: Position in Oneworld Not Affected by Bankruptcy JC FLOWERS: Controlled Funds Convert Ch. 7 to Ch. 11 JERK MACHINE: "Bull$%" Remark Costs Lawyer 34% of His Fees LAS VEGAS MONORAIL: February 17 Hearing on Case Dismissal Plea LAS VEGAS MONORAIL: Section 341(a) Meeting Set for Feb. 18 LEHMAN BROTHERS: Linklaters Advised PwC on Claim Resolution Pact LEHMAN BROTHERS: Wants to Expose Unreasonable Claims LEVEL 3 COMMS: Receives Consents for Unit's 12.25% Senior Notes LIFEPOINT HOSPITAL: Bank Debt Trades at 2% Off in Secondary Market MANITOWOC CO: S&P Assigns 'BB-' Rating on $400 Mil. Senior Notes MARCUS LEE: Debtor Can't Force Lender to Lend More Money MASSEY ENERGY: S&P Changes Outlook to Stable; Affirms 'BB-' Rating MERCURY COMPANIES: Wants to Sell Art Works to David Cook Galleries MERIDIAN RESOURCE: Friday Deadline to File Proxy Statement Expires METCALFE & MANSFIELD: S.D.N.Y. Won't Second-Guess CCAA Court METRO-GOLDWYN-MAYER: Bank Debt Trades at 39% Off MIDWEST BANC: Exchange Bid for Depositary Shares Expires Jan. 21 MOMENTIVE PERFORMANCE: Bank Debt Trades at 7% Off MONTGOMERY REALTY: Can Access Cash Collateral Until June 30 MOONLIGHT BASIN: Can Sell Montana Property and Use Cash Collateral NATIONAL HOME: Received Interim Access to JPMorgan Cash NEIMAN MARCUS: Bank Debt Trades at 8% Off in Secondary Market NEUMANN HOMES: BofA Files $50M Objection to Neumann Plan PACIFIC ETHANOL: Greinke Reports Stake, Buys Preferreds From Lyles PARMALAT SPA: Deloitte & Thornton Settle Lawsuit PARMALAT SPA: Dr. Bondi to Appeal Grant Thornton Dismissal PARMALAT SPA: Finalizes $100MM Settlement With BofA PENN TRAFFIC: Auction Cancelled; Bid Extension Sought PETCO ANIMAL: Bank Debt Trades at 3% Off in Secondary Market PREMIER AMERICAN BANK: Closed; New Institution Takes Over PROTECTIVE PRODUCTS: Sale Procedures OK'd; Auction Set for Feb. 18 PROTECTIVE PRODUCTS: Taps Berger Singerman as Bankruptcy Counsel PRESSTEK INC: Daeg Capital, Kimelman Disclose Equity Stake QSI HOLDINGS: High Court Won't Review Private Equity Safe Harbor RCN CORP: Bank Debt Trades at 5% Off in Secondary Market READER'S DIGEST: Court's Written Order Confirming Plan READER'S DIGEST: Gets Nod to Settle With RD Pension Trustees No. 2 READER'S DIGEST: Proposes to Sell Notes to Refinance Exit Loans ROTHSTEIN ROSENFELDT: Rothstein Wife's Photos Included in Auction RYERSON HOLDING: Moody's Assigns 'Caa3' Rating on $200 Mil. Notes RYERSON HOLDING: S&P Assigns Corporate Credit Rating at 'B-' SENTINEL MANAGEMENT: Trustee's Audit Malpractice Suit Survives SEVEN SEAS: S&P Assigns Corporate Credit Rating at 'B' SMART ONLINE: Amends Reimbursement Deal with Atlas Capital SMART ONLINE: Board Appoints Amir Elbaz as Director SMART ONLINE: To Advance Directors' Expenses Under Amended Bylaws SMURFIT-STONE: Plastipak Sues for Return of Security Deposit SMURFIT-STONE: Three Panama Unions Get New Labor Contract SMURFIT-STONE: To Take $284MM Charge for Closing of 2 Mills SPANSION INC: To Sell Italian Operations, Retain IP Rights STANDARD MOTOR: Reinstates Quarterly Dividend STERLING FINANCIAL: Former Employee Files Class-Action Lawsuit SUNESIS PHARMACEUTICALS: Investor Group to Buy $43.5MM in Equity SUNGARD DATA: Bank Debt Trades at 3% Off in Secondary Market SWIFT TRANSPORTATION: Bank Debt Trades at 5% Off TARGA RESOURCES: Bank Debt Trades at 100.2% in Secondary Market TAVERN ON THE GREEN: Gets $3.5 Million in 3-Day Auction TELESAT CANADA: Bank Debt Trades at 3% Off in Secondary Market TETON ENERGY: Plan of Reorganization Wins Court Approval TEXAS INDUSTRIES: Moody's Downgrades Corp. Family Rating to 'B2' TOUSA INC: Creditors' $60M Suit Over Failed Deal Gets OK TRANSDIGM GROUP: Bank Debt Trades at 3% Off in Secondary Market TROPICANA ENTERTAINMENT: Effective Date Deadline Extension Sought UAL CORP: Flight Attendants Protest Over Delayed Contract UAL CORP: Reports December 2009 Traffic Results UAL CORP: Tops December On-Time Performance Among Carriers US FOODSERVICE: Bank Debt Trades at 11% Off in Secondary Market VISTEON CORP: IUE-CWA Appeals OPEB Amendment Order VISTEON CORP: Plan Exclusivity Extended to February 18 VISTEON CORP: Proposes to Sell Radar Systems Business to Autoliv VISTEON CORP: Proposes to Settle With Toledo Molding for $2.6MM VISTEON CORP: Bank Debt Trades at 110.19% in Secondary Market VISTEON CORP: AFL-CIO Supports Sec. 1102 Committee VITESSE SEMICONDUCTOR: Linden Capital Discloses 9.99% Equity Stake WASHINGTON MUTUAL: Opposes Expedia Company's $3.8MM Claim WASHINGTON MUTUAL: Proposes More Work for Quinn Emanuel WASHINGTON MUTUAL: Creditors Scoff at Shareholders' Committee Bid WEST CORP: Bank Debt Trades at 1% Off in Secondary Market WILLIAM LYON: Unit Closes Sale of Real Property for $13,625,000 W.R. GRACE: Canadian Govt. Opposes Lauzon Belanger Retention W.R. GRACE: Proposes Protocol for Addressing Employee Claims W.R. GRACE: Proposes to Amend Credit Agreement With ART YRC WORLDWIDE: Special Stockholders' Meeting on February 17 YRC WORLDWIDE: Wells Fargo Discloses 5.65% Equity Stake * 2010 Bank Closings Now at 9 After 5 Banks Shut Friday * BOND PRICING -- For the Week From January 18 to 22, 2009 ********* AETERNA ZENTARIS: Receives NASDAQ Non-compliance Notice ------------------------------------------------------- AEterna Zentaris Inc. on January 21, 2010, the Company received a letter from the Listing Qualifications Department of The NASDAQ Stock Market indicating that the minimum closing bid price of its common shares had fallen below US$1.00 for 30 consecutive trading days, and therefore, AEterna Zentaris was not in compliance with NASDAQ Listing Rule 5450(a)(1). In accordance with NASDAQ Listing Rule 5810(C)(3)(a), AEterna Zentaris is provided a grace period of 180 calendar days, or until July 20, 2010, to regain compliance with this requirement. The notice has no effect on the listing of AEterna Zentaris' common shares at this time, and its common shares will continue to trade on the NASDAQ under the symbol "AEZS", as well as on the Toronto Stock Exchange under the symbol "AEZ". AEterna Zentaris can regain compliance with the Rule if the bid price of its common shares closes at US$1.00 or higher for a minimum of ten consecutive business days during the grace period, although NASDAQ may, in its discretion, require the Company to maintain a minimum closing bid price of at least US$1.00 per share for a period in excess of ten consecutive business days before determining that AEterna Zentaris has demonstrated the ability to maintain long-term compliance. If the Company is unsuccessful in meeting the minimum bid requirement by July 20, 2010, Nasdaq will provide notice to AEterna Zentaris that its common shares will be subject to delisting from the Nasdaq Global Market. If the Company receives a delisting notification, it may appeal to the Listing Qualifications Panel or apply to transfer its common shares to the Nasdaq Capital Market if AEterna Zentaris satisfies at such time all of the initial listing standards on the Nasdaq Capital Market, other than compliance with the minimum closing bid price requirement. If the application to the Nasdaq Capital Market is approved, then the Company will have an additional 180-day grace period in order to regain compliance with the minimum bid price requirement while listed on the Nasdaq Capital Market. About AEterna Zentaris AEterna Zentaris Inc. (NASDAQ: AEZS; TSX: AEZ) -- http://www.aezsinc.com/-- is a late-stage drug development company specialized in oncology and endocrinology. ALFRED WILEY CLARK: List of 20 Largest Unsecured Creditors ---------------------------------------------------------- Alfred Wiley Clark and Janice Oglesby Clark have filed with the U.S. Bankruptcy Court for the Northern District of Alabama a list of its 20 largest unsecured creditors. A full-text copy of the Debtor's list of creditors is available for free at http://bankrupt.com/misc/alnb10-00216.pdf Wilsonville, Alabama-based Alfred Wiley Clark, aka Butch Clark, and Janice Oglesby Clark filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. N.D. Ala. Case No. 10- 00216). Frederick Mott Garfield, Esq., at Sexton & Associates, PC, assists the Debtors in their restructuring efforts. The Debtors listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. ALFRED WILEY CLARK: Section 341(a) Meeting Set for February 16 -------------------------------------------------------------- The U.S. Trustee for Region of the Northern District of Alabama will convene a meeting of Alfred Wiley Clark and Janice Oglesby Clark's creditors on February 16, 2010, at 2:00 p.m. at Robert S. Vance Fed Bldg, 1800 5th Ave No, Room 127, Birmingham, AL 35203. 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. Wilsonville, Alabama-based Alfred Wiley Clark, aka Butch Clark, and Janice Oglesby Clark filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. N.D. Ala. Case No. 10- 00216). Frederick Mott Garfield, Esq., at Sexton & Associates, PC, assists the Debtors in their restructuring efforts. The Debtors listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. ALFRED WILEY CLARK: Taps Sexton & Associates as Bankruptcy Counsel ------------------------------------------------------------------ Alfred Wiley Clark and Janice Oglesby Clark have sought the approval of the U.S. Bankruptcy Court for the Northern District of Alabama to employ Frederick M. Garfield and the law firm Sexton & Associates, P.C., as bankruptcy counsel. Sexton will: a. provide Debtors legal advice with respect to their powers and duties as Debtors-In-Possession in the continued management of their financial affairs and property; b. prepare on behalf of Debtors necessary schedules, lists, applications, motions, answers, orders, and reorganization papers as is or may become necessary; c. review leases and other corporate papers and prepare any necessary motions to assume unexpired leases or executory contracts and assist in preparation of corporate authorizations and resolutions regarding Chapter 11 case; and d. perform any and all other legal services for Debtors as Debtors-In-Possession as may be necessary to achieve confirmation of Chapter 11 Plan of Reorganization. Sexton will be paid based on the hourly rates of its personnel: Frederick M. Garfield $200 Stephen L. Sexton $200 The Debtors assure the Court that Sexton is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Wilsonville, Alabama-based Alfred Wiley Clark, aka Butch Clark, and Janice Oglesby Clark filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. N.D. Ala. Case No. 10- 00216). The Debtors listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. ALL AMERICAN PROPERTIES: Section 341(a) Meeting Set for Feb. 24 --------------------------------------------------------------- The U.S. Trustee for Region 3 will convene a meeting of All American Properties, Inc.'s creditors on February 24, 2010, at 9:30 a.m. at Federal Building, Trustee Hearing Room, Room 1160, 11th Fl, 228 Walnut Street, Harrisburg, PA. 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. New York-based All American Properties, Inc., filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. M.D. Pa. Case No. 10-00273). The Company listed Robert E. Chernicoff, Esq., at Cunningham and Chernicoff PC, 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. AMBAC FINANCIAL: Citigroup Discloses 6.2% Equity Stake ------------------------------------------------------ Citigroup Global Markets Inc.; Citigroup Financial Products Inc.; Citigroup Global Markets Holdings Inc.; and Citigroup Inc. disclosed holding 18,007,831 shares or roughly 6.2% of the common stock of Ambac Financial Group, Inc., as of December 31, 2009. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provide financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial Group, Inc. common stock is listed on the New York Stock Exchange (ticker symbol ABK). Ambac's principal operating subsidiary is Ambac Assurance Corporation, a guarantor of public finance and structured finance obligations. Ambac Assurance has earned a Caa2 rating from Moody's Investors Service, Inc. with a developing outlook and a CC rating from Standard & Poor's Ratings Services with a developing outlook. Moody's Investors Service at the end of July 2009 downgraded to Caa2 from Ba3 the insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited. The rating action was prompted by Ambac's announced large loss reserve increase and credit impairment charge estimated for 2Q 2009. About Citigroup 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. AMC ENT: Fitch Says Kerasotes Buy May Be at Least Leverage Neutral ------------------------------------------------------------------ While financial details have not been disclosed, Fitch Ratings believes the acquisition of Kerasotes Theaters by AMC Entertainment Inc. could be at least leverage neutral for AMC. As such, Fitch does not expect AMC's rating to be affected by the acquisition. Almost 90% of the Kerasotes' 96 theaters and 973 screens are newly built since 1994, providing AMC with additional modern theaters. Based on Kerasotes' Web site, the company's largest areas of concentration are in Illinois, Indiana and Colorado. While there could be some need to divest theaters in Illinois due to the AMC existing presence in the state, Fitch believes that the number of theater divestures could be small. As of Oct. 1, 2009, AMC has adequate liquidity which is supported by cash of $440 million (including approximately $45 million in cash at the AMC Holdco, estimated by Fitch) and $185 million in availability under its $200 million committed revolving credit facility (reduced by $14.2 million in letters of credit). The company's maturity schedule is manageable. AMC's first material maturity is its revolving credit facility, which comes due in 2012. AMC's term loan amortizes annually at $6.5 million and has a final maturity in January 2013. Free cash flow for October 2009 latest 12 months was positive $76 million. Fitch expects that cash will be deployed for the purpose of reducing leverage by either 1) reducing debt levels (likely through continued debt repurchases) and/or 2) by making deleveraging/accretive acquisitions. There is limited tolerance in the rating for a high-multiple acquisition, for dividends paid to the sponsors or for continued capital deployment for the construction of new theaters in saturated markets. Fitch would likely view the purchase of modern theater assets, at attractive/delevering multiples, as a positive to a neutral credit event. While net leverage, through AMC Entertainment Holdings, of 7.0 times (6.3x if NCM dividends are included) is high, Fitch expects this leverage to be at its peak and expects the company to reduce leverage over time. AMC's ratings are supported by the company's competitive positioning as the second-largest domestic movie exhibitor, with 307 theatres and 4,610 screens (before the acquisition of Kerasotes), with a leading market share in many of the largest DMAs and the highest average screen count per theatre of 15. Fitch believes that the movie exhibitor industry will continue to be a key component of a movie's release. Fitch currently rates AMC: AMC -- Issuer Default Rating 'B'; -- Senior secured credit facilities 'BB/RR1'; -- Senior unsecured notes 'B/RR4'; -- Senior subordinated notes 'CCC/RR6'. Marquee Holdings Inc. -- IDR 'B'; -- Senior discount notes 'CC/RR6'. AMC Entertainment Holdings, Inc. -- IDR 'B'; -- Senior unsecured term loan 'CC/RR6'. The Rating Outlook is Stable. AMERICAN BIO: Posts $241,000 Net Loss in Q3 2009 ------------------------------------------------ American Bio Medica Corporation reported a net loss of $241,000 on net sales of $2,501,000 for the three months ended September 30, 2009, as compared to net income of $86,000 on net sales of $3,604,000 in the same period of 2008. The Company said sales in the third quarter of 2009 continued to be affected by global economic conditions and price pressures. For the nine months ended September 30, 2009, net loss was $712,000 on net sales of $7,563,000, as compared to a net loss of $177,000 on net sales of $10,368,000 in the comparable period of the previous year. The Company's working capital decreased $374,000 to $2,756,000 at September 30, 2009, when compared to working capital of $3,130,000 at December 31, 2008. In the fourth quarter of 2008, the Company reclassified its credit facilities with FNFG from long-term to short-term as a result of the Company's covenant default under the loan documents related to the credit facilities and the subsequent forbearance. The Company refinanced the FNFG line of credit with Rosenthal on July 1, 2009. The Company has historically satisfied its net working capital requirements through cash from operations, bank debt, occasional proceeds from the exercise of stock options and warrants and through the private placement of equity securities. At September 30, 2009, the Company had cash and cash equivalents of $181,000. The Company believes that it may need to raise additional capital in the future to be able to continue operations. Balance Sheet At September 30, 2009, the Company had total assets of $7,619,000, total liabilities of $4,065,000, and total stockholders' equity of $3,554,000. A full-text copy of the Company's quarterly report on Form 10-Q is available for free at http://researcharchives.com/t/s?4dc5 Going Concern Doubt Albany, N.Y.-based UHY LLP's audit report of American Bio Medica Corporation's consolidated financial statements for the year ended December 31, 2008, contained an explanatory paragraph stating that the Company's recurring losses from operations and liquidity constraints raise substantial doubt about its ability to continue as a going concern. As of the date of this report, the Company does not believe that its current cash balances, together with cash generated from future operations and amounts available under its credit facilities will be sufficient to fund operations for the next 12 months if the Company continues to experience current sales levels. About American Bio Medica Based in Kinderhook, New York, American Bio Medica Corporation -- http://www.abmc.com/-- is a biotechnology company that develops, manufactures and sells immunoassay diagnostic test kits, primarily for the immediate, point of collection testing for drugs of abuse in urine and oral fluids. AMERICAN COMMERCE: Posts $112,000 Net Loss in November 30 Quarter ----------------------------------------------------------------- American Commerce Solutions, Inc. reported a net loss of $112,303 on net sales of $644,256 for the three months ended November 30, 2009, compared with a net loss of $264,985 on net sales of $646,973 in the corresponding period of the prior fiscal year. The Company incurred a net consolidated loss from continuing operations of $112,303 for the three months ended November 30, 2009, compared with a loss of $203,850 for the three months ended November 30, 2008. The Company reported net income of $859,828 on net sales of $1,829,426 for the nine months ended November 30, 2009, compared with a net loss of $915,382 on net sales of $1,697,479 in the three months ended November 30, 2008. Results for the nine months ended November 30, 2009, includes a $1,339,172 gain on sale of the discontinued fiberglass division (net of tax). Balance Sheet At November 30, 2009, the Company had $5,160,171 in total assets, $4,270,169 in total liabilities, and $890,002 in total stockholders' equity. The Company's consolidated balance sheets at November 30, 2009, also showed strained liquidity with $1,836,071 in total current assets available to pay $2,773,455 in total current liabilities. A full-text copy of the Company's quarterly report on Form 10-Q is available at no charge at http://researcharchives.com/t/s?4dc6 Going Concern "The Company has incurred substantial operating losses since inception and has used approximately $280,200 of cash in operations for the nine months ended November 30, 2009. The Company recorded losses from continuing operations of approximately $409,200 for the nine months ended November 30, 2009. Current liabilities exceed current assets by approximately $937,400 at November 30, 2009. Additionally, the Company is in default on several notes payable. The ability of the Company to continue as a going concern is dependent upon its ability to reverse negative operating trends, raise additional capital, and obtain debt financing." About American Commerce Solutions Based in Bartow, Florida, American Commerce Solutions, Inc. is primarily a holding company with two wholly owned subsidiaries; International Machine and Welding, Inc. is engaged in the machining and fabrication of parts used in heavy industry, and parts sales and service for heavy construction equipment; Chariot Manufacturing Company, which was acquired on October 11, 2003, from a related party, manufactures motorcycle trailers with fiberglass bodies and other fiberglass parts by contract with affiliate owned, Tampa Fiberglass, Inc. Effective June 1, 2009, Chariot was sold and is classified as a discontinued operation. AMERICAN INT'L: ILFC CEO Udvar-Hazy Expected to Step Down --------------------------------------------------------- The Wall Street Journal's Serena Ng and Joann S. Lublin and Dow Jones Newswires' Doug Cameron report that people familiar with the matter said Steven Udvar-Hazy, the chief executive and a founder of American International Group's aircraft-leasing company International Lease Finance Corp., is expected to leave the company as soon as this week. The Journal recalls AIG has been trying to sell ILFC, one of the two biggest aircraft-leasing companies in the world, for the past year. A person familiar with the matter told the Journal that AIG may name John Plueger, currently ILFC's president and chief operating officer, to succeed Mr. Udvar-Hazy as CEO. Discussions on the succession plan are continuing, another individual told the Journal. The Journal notes Mr. Udvar-Hazy co-founded ILFC in 1973 with two other individuals and grew it into one of the two largest aircraft leasing firms in the world, with nearly 1,000 Boeing and Airbus aircraft. The Journal also notes that while ILFC remained profitable in the third quarter of 2009, its roughly $30 billion debt load and continuing lack of access to short-term capital markets have forced the company to rely on federal funds channeled through AIG to meet some financial obligations. In December, Moody's Investors Service downgraded ILFC's credit rating to "junk" from "investment grade," citing liquidity constraints and waning support from parent AIG, which is committed to backstopping ILFC through November 2010. According to the Journal, Moody's said, ILFC's weaker credit rating could further hamstring the aircraft financing company's ability to raise money by issuing bonds and commercial paper. Over time, it may have to sell off some of its aircraft assets at a loss to repay maturing debt, Moody's said. About AIG Inc. Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received from the U.S. government, and continues to seek buyers of its assets. AMERICAN TONERSERV: Obtains $400,000 Funding From Galt ------------------------------------------------------ American TonerServ Corp. discloses that it entered into a Note Purchase Agreement with Galt Asset Management, LLC, on January 12, 2010. Pursuant to the Note Purchase Agreement, the Company has delivered to Galt three 10% Convertible Promissory Notes for an aggregate of $400,000 which has been advanced to the Company by Galt Additional 10% Convertible Promissory Notes for up to $100,000 may be delivered for additional amounts which Galt may provide. The $400,000 received by the Company has been used to pay certain vendor accounts payable. The 10% Convertible Promissory Notes are payable interest only through October 31, 2011 at which time the notes will be payable in full. The 10% Convertible Promissory Notes will be convertible into shares of the Company's common stock beginning in 2011, unless there is an event of default or a change of control of the Company, in which case the notes would become immediately convertible. Until May 1, 2011, the conversion price of the notes will be $0.125. After that date, the conversion price of the notes will be the lower of $0.125 per share or 80% of the volume- weighted average price of the Company's common stock for the 20 trading days prior to the conversion date. The 10% Convertible Promissory Notes are secured by the customer lists and other intangible assets of two of the Company's wholly owned subsidiaries: Optima Technologies, LLC and NC TonerServ, LLC, which will guarantee the 10% Convertible Promissory Notes. As additional consideration for entering into the Note Purchase Agreement, the Company has agreed to issue to Galt 2,500,000 shares of the Company's common stock valued at $375,000, or $0.15 per share. Galt will have piggy-back registration rights with regard to the resale of the 2,500,000 shares of common stock as well as the shares of common stock into which the 10% Convertible Promissory Notes may be converted in the future. As reported by the Troubled Company Reporter, American TonerServ is seeking to renegotiate the terms of a portion of its short term note obligations or to exchange equity securities for a portion of the debt. According to the TCR, the Company believes that it will be successful in addressing its short term working capital requirements through various strategies. In a regulatory filing with the Securities and Exchange Commission in August, the Company said it has inadequate financial resources to sustain its business activities as they currently are. Management believes that the Company can achieve positive cash flow through an aggressive organic growth plan to increase sales, increasing operational efficiencies and by aggressively reducing overhead costs. During the six months ended June 30, 2009, the Company raised $360,000 in proceeds from private offerings. The Company estimated that it will need to raise an additional $1,000,000 during the next 12 months to meet its minimum capital requirements. There is substantial doubt that the Company will be able to continue as a going concern, absent raising additional financing. There can be no assurance that the Company will be successful in obtaining the required financing or renegotiating terms or converting a portion of its short term obligations into equity. At September 30, 2009, the Company had $16,717,272 in total assets against $13,784,018 in total liabilities. The September 30 balance sheet showed strained liquidity: The Company had $5,191,150 in total current assets against $9,750,020 in total current liabilities. About American TonerServ Based in Santa Rosa, California, American TonerServ Corp. (OTCBB: ASVP) -- http://www.AmericanTonerServ.com/-- markets compatible toner cartridges, serving the printing needs of small- and medium- sized businesses by consolidating best-in-class independent operators in the more than $6.0 billion recycled printer cartridge and printer services industry, offering top-quality, environmentally friendly products and local service teams. AMKOR TECHNOLOGY: Moody's Reviews Junk Rating on Sub. Notes ----------------------------------------------------------- Moody's Investors Service has placed the ratings on Amkor Technology, Inc.'s corporate family, probability of default, senior unsecured notes (B2) and senior subordinated notes (Caa1) on review for possible upgrade. The review for possible upgrade reflects Moody's expectation that over the near-to-intermediate term Amkor will benefit from a favorable business environment for OSAT services, relatively stable pricing in leading edge packaging solutions and continued demand for its advanced products. The review incorporates Moody's belief that Amkor is better positioned to capitalize on better- than-expected near-term demand as well as endure the cyclical nature of its business longer term. Since Moody's believe semiconductor end market demand will demonstrate solid growth in 2010 (compared to 2009), Amkor's product portfolio is expected to benefit from organic growth as customer buying patterns recover with the improving macroeconomic environment. The review also acknowledges Amkor's disciplined focus on pricing, operating and financial performance. Over the past year, Amkor quickly reduced its cost structure and improved working capital, which led to free cash flow generation during the recession and enabled margins to swiftly return to pre-recession levels in the September quarter. It also reflects the company's efforts at reducing and refinancing debt prior to upcoming maturity dates. As a result of these initiatives, Amkor was able to better withstand the economic downturn than some of its OSAT peers. Moody's review will focus on Amkor's operating and financial strategy in view of recent changes in senior management, the sustainability of the company's operating performance, and likelihood of material acquisitions or capital investments to support future growth initiatives. Liquidity remains good (SGL-2) with cash balances of $447 million at September 30, 2009, plus access to a $100 million undrawn secured ABL revolving credit facility maturing April 2013. Amkor also maintains access to $35 million under a $50 million working capital facility with China Construction Bank Co., Ltd. maturing January 2011. These ratings were placed under review for possible upgrade: * Corporate Family Rating -- B2 * Probability of Default Rating -- B2 * $801.8 Million Senior Unsecured Notes with various maturities -- B2 (LGD-3, 44%) * $ 42.6 Million 2.5% Convertible Senior Subordinated Notes due 2011 -- Caa1 (LGD-5, 88%) The last rating action was on February 27, 2009 when Moody's affirmed the CFR at B2 and changed the outlook to stable from positive. Amkor Technology, Inc., based in Chandler, AZ, is one of the largest providers of contract semiconductor assembly and test services for integrated semiconductor device manufacturers as well as fabless semiconductor operators. Revenues and EBITDA (Moody's adjusted) for the twelve months ended September 2009 were $2.1 billion and $486 million, respectively. ANAVERDE LLC: Files Schedules of Assets & Liabilities ----------------------------------------------------- Anaverde LLC has filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $13,000,000 B. Personal Property $12,209,953 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $64,002,622 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $1,054,851 ------------- ------------ TOTAL $25,209,953 $65,057,473 San Francisco, California-based Anaverde LLC filed for Chapter 11 bankruptcy protection on January 15, 2010 (Bankr. D. Del. Case No. 10-10113). Kevin Scott Mann, Esq., at Cross & Simon, LLC, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. ANAVERDE LLC: Wants to Auction Assets April 12 ---------------------------------------------- Anaverde LLC has filed with the U.S. Bankruptcy Court for the District of Delaware procedures for the sale of substantially all of its assets. As of January 8, 2010, the Debtor has cash and cash equivalents of $114,000 and, subject to final approval by the Court, has an additional $700,000 of post-petition financing available. The Debtor estimates that its cash and cash equivalents and the remaining financing available under the post-petition financing will be sufficient to meet its cash needs through the completion of the sale process in April 2010. Without the post-petition financing, which expires on May 1, 2009, the Debtor can't fund its post-petition operations and obligations. "As a result, time is of the essence in completing the sale process and concluding the Chapter 11 process," the Debtor says. The Debtor ran out of capital before all site stabilization activities necessary for the site to avoid damage by the elements were completed. The Debtor proposes to sell the assets related to the second phase of a larger residential development which includes 3,500 undeveloped lots and an adjacent development known as Chanar planned for 157 single family home sites, to New Anaverde LLC -- the Stalking Horse Purchaser -- or the bidder with the highest or best bid at the auction. New Anaverde is under contract to buy the assets for a purchase price of (i) $10,475,000; plus (ii) an amount equal to 12% per annum, compounded annually, on $10,125,000 from December 24, 2009, until $10,125,000 is disbursed to CADIM, but in no event more than $948,699; plus (iii) CADIM's unreimbursed expenses of up to $383,000; plus (iv) a right, payable in the future if at all, to 25% of the cash profits from sales of land included in the project. The Stalking Horse Purchaser's breakup fee will be the documented actual reasonable out-of-pocket costs and expenses incurred by the Stalking Horse Purchaser in connection with the negotiation, documentation and implementation of the agreement and transactions contemplated by it and all proceedings incident thereto, plus a fee of $250,000. The Debtor is asking for the approval of the sale procedures and the setting of: -- April 7, 2010 deadline for the submission of bids; -- April 12, 2010 auction; -- April 13, 2010 objection deadline; and -- April 19, 2010 sale hearing. A copy of the sale procedures is available for free at: http://bankrupt.com/misc/ANAVERDE_proposedsaleprocedures.pdf About Anaverde San Francisco, California-based Anaverde LLC filed for Chapter 11 bankruptcy protection on January 15, 2010 (Bankr. D. Del. Case No. 10-10113). Kevin Scott Mann, Esq., at Cross & Simon, LLC, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. ANAVERDE LLC: Wants to Hire Cross & Simon as Bankruptcy Counsel --------------------------------------------------------------- Anaverde LLC has sought permission from the U.S. Bankruptcy Court for the District of Delaware to employ Cross & Simon, LLC, as bankruptcy counsel. Cross & Simon will: a. perform necessary services as the Debtor's counsel in connection with the Debtor's Chapter 11 case, including providing the Debtor with advice concerning its rights and duties, representing the Debtor, and preparing necessary documents, motions, applications, answers, orders, reports and papers in connection with the administration of the case on behalf of the Debtor; b. take necessary actions to protect and preserve the Debtor's estate during the pendency of the Debtor's Chapter 11 case, including prosecute actions by the Debtor, defend any actions commenced against the Debtor, negotiate litigation in which the Debtor is involved, and object to claims filed against the estate; c. represent the Debtor at hearings, meetings, and conferences on matters pertaining to the affairs of the Debtor as a debtor-in-possession; and d. perform other necessary legal services. Cross & Simon will be paid based on the hourly rates of its personnel: Partners $390 Associates $220 to $390 Paraprofessionals $150 Kevin S. Mann, an associate of Cross & Simon, assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. San Francisco, California-based Anaverde LLC filed for Chapter 11 bankruptcy protection on January 15, 2010 (Bankr. D. Del. Case No. 10-10113). The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. AMERICAN MEDIA: Bank Debt Trades at 6% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which American Media is a borrower traded in the secondary market at 93.75 cents-on-the- dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.67 percentage points from the previous week, The Journal notes. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 27, 2013, and carries Moody's B3 rating and Standard & Poor's B- rating. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. American Media Operations, Inc. -- http://www.americanmediainc.com/-- is a publisher in the field of celebrity journalism and health and fitness magazines. The Company's publications include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, Muscle & Fitness, Muscle & Fitness Hers, Flex, National Enquirer, Globe, Country Weekly, Mira!, Sun, National Examiner, and other publications. The Company has aggregated its business into five reporting segments: Celebrity Publications, Tabloid Publications, Women's Health and Fitness Publications, Distribution Services and Corporate/Other. ARVINMERITOR, INC: Moody's Affirms 'Caa1' Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service affirmed the Corporate Family and Probability of Default ratings of ArvinMeritor, Inc., at Caa1. In a related action, the rating of the senior secured revolving credit facility was affirmed at B1, and the ratings of the senior unsecured notes were affirmed at Caa2. ArvinMeritor's Speculative Grade Liquidity Rating was raised to SGL-3 from SGL-4. The rating outlook is changed to stable. The stable outlook reflects Moody's views that restructuring actions taken by ArvinMeritor will be sufficient to mitigate ongoing weakness in the company's end markets over the near-term. The declining demand for commercial vehicles appears to have abated. However, the timing of a recovery in the company's end markets has yet to be determined and will likely begin modestly with a broader recovery in the later half of calendar year 2010. About 58% of the company's fiscal 2009 commercial vehicle revenues are from North America which is experiencing stabilizing economic conditions. Europe, which represented about 22% of the company commercial vehicle revenues, is expected to continue to experience challenging economic conditions into 2010. The stable outlook also considers the lower risk of financial covenant violations under the company's senior secured revolving credit facility over the near-term, given the company's expected performance. For FY 2009, ending September 30, 2009, ArvinMeritor's EBIT/Interest coverage (including Moody's standard adjustments) approximated 0.4x. ArvinMeritor's Caa1 Corporate Family Rating continues to reflect the expectation of weak credit metrics consistent with rating over the near-term. Recent upturns in freight volumes support a potential for a more stable environment for commercial vehicles. However, a recovery in commercial vehicle orders is not expected to begin until the later half of 2010. Tight credit markets also are expected to limit growth in commercial vehicle purchases over the near-term. The rating also reflects the challenges the company may face in its efforts to renew its senior secured revolving credit facility which matures in June 2011. A transaction which replaces or extends this facility will likely also need to consider addressing the maturity of $276 million of unsecured notes due in March 2012. ArvinMeritor's Speculative Grade Liquidity rating of SGL-3 indicates adequate liquidity over the next twelve months. As of FYE September 30, 2009, the company had approximately $95 million of cash on hand. Moody's anticipates that ArvinMeritor will be challenged to generate free cash flow in fiscal 2010, as an upturn in the company's end markets is not expected to occur until the later half of calendar 2010. While restructuring actions have stabilized operating performance, debt service costs and capital reinvestment are expected to consume much of the company's internally generated cash. ArvinMeritor's $700 million revolving credit facility had approximately $28 million of funding at September 30, 2009, with $27 million of LCs outstanding. The facility matures in June 2011. The principal financial covenant is a senior secured leverage test at each quarter-end of 2.0 times and is expected to provide ample cushion. Moody's expects the company's performance over the near-term to be sufficient to improve availability as earlier weaker quarters drop out of the LTM EBITDA calculation. The revolving credit is secured by a first lien on certain assets of the company of about $491 million of the company's assets as of September 30, 2009, primarily consisting of eligible domestic U.S. accounts receivable, inventory, plant, property and equipment, intellectual property and the company's investment in all or a portion of certain of its wholly-owned subsidiaries. Negative covenants under the revolver limit both annual and cumulative amounts of asset sales. Ratings raised: * Speculative Grade Liquidity Rating, to SGL-3 from SGL-4 Ratings affirmed: ArvinMeritor, Inc. * Corporate Family Rating, at Caa1; * Probability of Default, at Caa1; * Senior secured bank debt, at B1 (LGD1, 9%); * Senior unsecured notes, at Caa2 (LGD4, 65%); Ratings withdrawn: Arvin International PLC * Caa2 (LGD4, 64%) for the unsecured notes guaranteed by ArvinMeritor, Inc. (currently inter-company obligations) The last rating action on ArvinMeritor was on March 17, 2009, when the Corporate Family Rating was lowered to Caa1. ArvinMeritor, Inc., headquartered in Troy, MI, is a global supplier of a broad range of integrated systems, modules and components serving light vehicles, commercial trucks, trailers, and specialty original equipment manufacturers, as well as certain aftermarkets. Revenues in fiscal 2009 were approximately $4.1 billion. ASPEN LAND: Lender Alpine Bank Wants Chapter 11 Case Dismissed -------------------------------------------------------------- Alpine Bank, a senior secured lender in the Chapter 11 case of Aspen Land Fund II LLC, asks the U.S. Bankruptcy Court for the District of Colorado to dismiss the Debtor's bankruptcy proceeding. Alpine Bank relates that the Debtor entered into a $22,250,000 business loan agreement dated March 27, 2008, with the bank to fund the development of luxury townhomes or, alternatively, a hotel, on 2.3 acres of real property situated at the base of Lift 1A in Aspen, Colorado. The loan is secured by a deed of trust dated March 27, 2008. The Debtor has not made payments to the bank. The bank states that the dismissal of the Chapter 11 case is necessary because: -- there is no likelihood of rehabilitation; and -- it will reduce the administrative costs to the estate, including, but not limited to, fees payable to the Debtor's counsel and fees payable. Based in Newport Beach, California, Aspen Land Fund II LLC is a development group that wants to build a hotel at the base of Aspen Mountain. The Company filed for Chapter 11 protection on Sept. 25, 2009 (Bankr. D. Col. Case No. 09-30162). In its petition, the Debtor said it has $31,572,828 in assets and $34,695,549 in debts. ATRIUM COS: Chapter 11 Cues Moody's Cut on ACIH to 'D' ------------------------------------------------------ Moody's Investors Service lowered ACIH, Inc.'s Probability of default ("PDR") to D from Ca/LD following the recent announcement by Atrium Companies, Inc., that it has filed voluntary petitions from reorganization under Chapter 11 of the U.S. Bankruptcy Code and its Canadian subsidiary has initiated reorganization proceeding under the Companies' Creditors Arrangement Act in Toronto. ACIH, Inc., Atrium Companies, Inc.'s parent holding company (collectively "Atrium"), also filed voluntary petitions for reorganization. Atrium and its subsidiaries will continue to operate throughout the bankruptcy processes. Subsequent to this rating action Moody's will withdraw all of Atrium's ratings. This rating actions were taken: ACIH, Inc.: * Corporate Family Rating of Ca left unchanged; * Probability of Default Rating downgraded to D from Ca/LD; and, * $4.6 mil. Sr. Discount Notes due 2012 left unchanged at C (LGD5, 88%). Atrium Companies, Inc.: * $50.0 million Senior Secured Revolving Credit Facility due 2011 left unchanged at Caa3 (LGD3, 31%); * $348.9 mil. Sr. Secured Term Loan due 2012 left unchanged at Caa3 (LGD3, 31%); * $220.3 mil. Sr. Subordinated Notes due 2012 left unchanged at C (LGD5, 88%); and, * $47.9 mil. Sr. Subordinated Notes due 2010 left unchanged at C (LGD5, 73%). The speculative grade liquidity rating remains SGL-4. The last rating action was on May 22, 2009, at which time Moody's downgraded ACIH, Inc.'s Probability of Default Rating to Ca/LD. Atrium Companies, Inc., headquartered in Dallas, TX, is one of the largest manufacturers of residential vinyl and aluminum windows and patio doors in North America. Revenues for the last twelve months through September 30, 2009, totaled $537 million. ATRIUM COS: S&P Cuts Issue-Level Rating on Senior Notes to 'D' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered the issue-level rating on Atrium Cos. Inc.'s 15% senior subordinated notes due 2012 and 11% senior subordinated notes due 2012 to 'D' from 'CC'. The recovery rating is unchanged at '6', indicating S&P's expectation for negligible (0% to 10%) recovery for lenders in the event of a payment default. "These rating actions follow Atrium's announcement that it filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code and in Canada under the Companies' Creditors Arrangement Act," said Standard & Poor's credit analyst Tobias Crabtree. Previously, S&P lowered the corporate credit rating of Atrium to 'D' after the company entered into a forbearance agreement with its principal lenders, resulting from the company's missed scheduled interest payment due May 11, 2009, on its senior secured bank credit facilities. Standard & Poor's will review the outstanding recovery ratings for Atrium pending further information regarding the bankruptcy filing. Atrium is engaged in the manufacture and sale of windows, patio doors, and various building materials throughout North America. BANK OF LEETON: Closed; Sunflower Bank Assumes Deposits ------------------------------------------------------- Bank of Leeton, Leeton, Missouri, was closed January 22 by the Missouri Division of Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Sunflower Bank, National Association, Salina, Kansas, to assume all of the deposits of Bank of Leeton. The sole branch of Bank of Leeton will reopen as a branch of Sunflower Bank, N.A. Depositors of Bank of Leeton will automatically become depositors of Sunflower Bank, N.A. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Sunflower Bank, N.A. that it has completed systems changes to allow other Sunflower Bank, N.A. branches to process their accounts as well. As of December 31, 2009, Bank of Leeton had approximately $20.1 million in total assets and $20.4 million in total deposits. Sunflower Bank, N.A. will pay the FDIC a premium of 0.59 percent to assume all of the deposits of Bank of Leeton. The FDIC as receiver will retain most of the assets from Bank of Leeton for later disposition. Customers who have questions about the transaction can call the FDIC toll-free at 1-800-523-8209. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/leeton.html The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $8.1 million. Sunflower Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Bank of Leeton is the sixth FDIC- insured institution to fail in the nation this year, and the first in Missouri. The last FDIC-insured institution closed in the state was Gateway Bank of St. Louis, on November 6, 2009. ATRIUM COS: Noteholder Trustee Objects to DIP Financing ------------------------------------------------------- U.S. Bank National Association, in its capacity as indenture trustee, filed with the U.S. Bankruptcy Court for the District of Delaware an objection to Atrium Companies Inc. and its units' proposal to access postpetition secured financing. A group of prepetition lenders is providing $30 million of debtor-in- possession financing. U.S. Bank serves as Indenture Trustee for the Debtors' 11% and 15% Senior Subordinated Notes due 2012 and the 11-1/2% Senior Discount Notes due 2012. The objection submitted by U.S. Bank to the Court focuses on its opposition to the Debtors' pre-negotiated plan. The objection points out that U.S. Bank -- and the noteholders -- were not included in the plan negotiation process. U.S. Bank complains, among other things, that the Plan would drastically impair the rights of all Noteholders, proposing to provide them with a small percentage of equity in exchange for extinguishing over $260 million of debt, while trade creditors would be paid in full." Pre-bankruptcy, Atrium Companies reached agreement with more than two-thirds of its senior secured lenders on a plan to reduce the Company's outstanding debt by more than $350 million, or more than 50% of its existing debt, through a "pre-negotiated" restructuring of its balance sheet. About Atrium Companies Atrium Companies, Inc. -- http://www.atrium.com/-- manufactures residential vinyl and aluminum windows and patio doors in North America. Atrium and its U.S. subsidiaries filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court in Delaware on January 20, 2010 (Bankr. D. Del. Case No. 10-10150). The Company's Canadian subsidiary also initiated reorganization proceedings under the Companies' Creditors Arrangement Act (CCAA) in the Ontario Superior Court of Justice in Toronto. The Chapter 11 petition says that debts range from $100 million to $500 million. The Company's legal advisors are Kirkland & Ellis in the U.S. and Goodmans LLP in Canada. Moelis & Company is serving as financial advisor. Garden City Group Inc. serves as claims and notice agent. BERNARD MADOFF: Trustee Has Nod for Firm to Pursue Canadian Assets ------------------------------------------------------------------ Irving H. Picard, Esq., as trustee for the substantively consolidated liquidation of Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff, obtained permission from the Bankruptcy Court to retain special counsel nunc pro tunc to September 1, 2009. Mr. Picard has determined that it will be necessary to engage counsel to represent him in Canada. The Trustee, therefore, proposes to retain and employ the law firm of Kugler Kandestin, L.L.P. as its special counsel with regard to its recovery of customer property in Canada, and any related matters. Kugler will be compensated at rates 10% below its normal rates: Level of Experience Normal Rates Agreed Upon Rates ------------------- ------------ ----------------- Partner CDN$450-600 CDN$405-560 Associate CDN$200-300 CDN$180-270 Paralegal CDN$95 CDN$85.50 About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert $64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). BERNIE'S AUDIO: Final Hearing on Asset Sales on Jan. 28 ------------------------------------------------------- Bernie's Audio Video TV Appliance Co., Inc., has sought permission from the Hon. Albert S. Dabrowski of the U.S. Bankruptcy Court for the District of Connecticut to sell substantially of its assets free and clear of all liens, claims and encumbrances. The Debtor concluded that the best way to maximize the value of the business for the benefit of creditors was to conduct an orderly liquidation with the assistance of a professional liquidator, who would conduct the store closing sales at the Debtor's retail locations. Accordingly, effective as of January 13, 2010, the Debtor entered into the agency agreement whereby Hilco Merchant Resources, LLC, agreed to serve as the agent to the Debtor in connection with a liquidation sale of Debtor's assets. Hilco will be compensated from the sale proceeds following payment to the Debtor of the guaranteed amount of 80.3% of the cost value of the merchandise, expenses of the sale, and certain other amounts payable to the Debtor. Agent will complete the sale at the stores, and will vacate all of the store premises on or before February 28, 2010. Agent will accept the Debtor's gift certificates and store credits, issued by Merchant prior to the sale commencement date, and honor other customer programs required by the store closing sale guidelines. The Court held a January 15, 2010 hearing on the Debtor's request for authorization to sell assets. The Court has granted the Agent the right to use the stores, distribution center and all related store and distribution center services, furniture, fixtures, equipment and other assets of the Debtor as designated hereunder for the purpose of conducting the Sale free from interference of any entity or person, in accordance with the provisions of the Agency Agreement. The Agent will be granted a limited license and right to use during the sale term the trade names, logos and customer lists relating to and used in connection with the operation of the stores and distribution center, solely for the purpose of advertising the sale. The Court ruled that a final hearing on the Debtor's request be held on January 28, 2010, at 10:00 a.m. A copy of the Agency Agreement is available for free at: http://bankrupt.com/misc/BERNIES_AUDIO_agencypact.pdf A copy of the sale guidelines is available for free at: http://bankrupt.com/misc/BERNIES_AUDIO_saleguidelines.pdf About Bernie's Audio Enfield, Connecticut-based Bernie's Audio Video TV Appliance Co., Inc., operates 15 electronic appliance stores. The Company filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. D. Conn. Case No. 10-20087). Barry S. Feigenbaum, Esq., Matthew Wax-Krell, Esq., at Rogin Nassau LLC, assist 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. BERNIE'S AUDIO: List of 20 Largest Unsecured Creditors ------------------------------------------------------ Bernie's Audio Video TV Appliance Co., Inc., has filed with the U.S. Bankruptcy Court for the District of Connecticut a list of its 20 largest unsecured creditors. A full-text copy of the Debtor's list of creditors is available for free at http://bankrupt.com/misc/ctb10-20087.pdf Enfield, Connecticut-based Bernie's Audio Video TV Appliance Co., Inc., operates 15 electronic appliance stores. The Company filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. D. Conn. Case No. 10-20087). Barry S. Feigenbaum, Esq., Matthew Wax-Krell, Esq., at Rogin Nassau LLC, assist 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. BERNIE'S AUDIO: Section 341(a) Meeting Set for Feb. 22 ------------------------------------------------------ The U.S. Trustee for Region 2 will convene a meeting of Bernie's Audio Video TV Appliance Co., Inc.'s creditors on February 22, 2010, at 10:00 a.m. at The Giaimo Federal Building, 150 Court Street, Room 309, at intersection of Court and Orange St., New Haven, CT 06510. 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. Enfield, Connecticut-based Bernie's Audio Video TV Appliance Co., Inc., operates 15 electronic appliance stores. The Company filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. D. Conn. Case No. 10-20087). Barry S. Feigenbaum, Esq., Matthew Wax-Krell, Esq., at Rogin Nassau LLC, assist 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. BERNIE'S AUDIO: Wants to Hire Rogin Nassau as Bankruptcy Counsel ---------------------------------------------------------------- Bernie's Audio Video TV Appliance Co., Inc., has sought permission from the Hon. Albert S. Dabrowski of the U.S. Bankruptcy Court for the District of Connecticut to employ Rogin Nassau LLC as bankruptcy counsel. Barry S. Feigenbaum, a member of Rogin Nassau, says that the firm will: a. give the Debtor legal advice concerning the powers and duties of a debtor in possession; b. assist the Debtor in preparation of schedules, reports, pleadings and other legal papers required or desirable on behalf of the Debtor as debtor in possession; c. represent the Debtor in connection with adversary proceedings, contested matters and other proceedings which may be instituted in this Court; and d. perform all other legal services for the Debtor as debtor- in-possession which may be necessary. According to Mr. Feigenbaum, Rogin Nassau will be paid based on the hourly rates of its personnel: Partner $275-$485 Counsel $225-$400 Associate $175-$235 Mr. Feigenbaum assures the Court that Rogin Nassau is disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Enfield, Connecticut-based Bernie's Audio Video TV Appliance Co., Inc., operates 15 electronic appliance stores. The Company filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. D. Conn. Case No. 10-20087). The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. BILL HEARD: Bankr. Ct. Should Have Set Aside Default Judgment ------------------------------------------------------------- WestLaw reports that assuming arguendo that the "good cause" standard for obtaining relief from mere entry of a default was less strict than the standard which a movant must satisfy to obtain relief from an actual default judgment, a bankruptcy court abused its discretion in denying a motion to set aside a mere entry of default, which a newly retained attorney filed on behalf of a client which was not itself a natural person, and which was unable to represent itself, one day after the default was entered. The client, due to the bankruptcy court's earlier ruling in allowing its prior counsel to withdraw before substitute counsel had been obtained, was unable to respond to the debtors' complaint until it had found new counsel. Moreover, the client apparently misunderstood how to calculate the two-week extension orally granted by the bankruptcy court for purposes of obtaining new counsel and filing an answer. Blau v. Bill Heard Chevrolet Corp.- Orlando, --- B.R. ----, 2009 WL 5194377 (N.D. Ala.). About Bill Heard Enterprises Headquartered in Huntsville, Alabama, Bill Heard Enterprises Inc. -- http://www.billheardhuntsville.com/-- was one of the largest Chevrolet dealers in the United States. The company and 17 of its affiliates filed for Chapter 11 protection (Bankr. N.D. Ala. Case No. 08-83028) on Sept. 28, 2008. Derek F. Meek, Esq., at Burr & Forman, LLP, represents the Debtors in their restructuring efforts. An official committee of unsecured creditors has been appointed in the bankruptcy cases. Kilpatrick Stockton LLP represents the Committee. When the Debtors filed for protection from their creditors, they estimated their assets and debts at more than $500 million. BLACK CROW: Court Extends Schedules Filing Until Feb. 10 -------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, at the behest of Black Crow Media Group, LLC, et al., extended the filing of schedules of assets and liabilities, schedules of executor contracts and unexpired leases, and statements of financial affairs by an additional 15 days until February 10, 2010. The Debtors say that they won't be able to complete their schedules and statements within the first 14-day deadline after the Petition Date, due to the substantial size, scope and complexity of their Chapter 11 cases and the large volume of material that must be compiled and reviewed by the Debtors' employees and professionals in order to complete the schedules and statements during the hectic early days of their Chapter 11 cases. Daytona Beach, Florida-based Black Crow Media Group, LLC, owns and operates 17 FM and 5 AM radio stations in Daytona Beach, Live Oak, Valdosta, Huntsville, Alabama, and Jackson, Tennessee. The Company filed for Chapter 11 bankruptcy protection on January 11, 2010 (Bankr. M.D. Fla. Case No. 10-00172). The Company's affiliates -- Black Crow Media, LLC, et al. -- also filed separate Chapter 11 petitions. Mariane L. Dorris, Esq., and R Scott Shuker, Esq., at Latham Shuker Eden & Beaudine LLP, assist the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. BLACK CROW: Section 341(a) Meeting Set for Feb. 17 -------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of Black Crow Media Group, LLC's creditors on February 17, 2010, at 11:00 a.m. at FIRST FLOOR, 300 North Hogan St. Suite 1-200, Jacksonville, FL 32202. 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. Daytona Beach, Florida-based Black Crow Media Group, LLC, owns and operates 17 FM and 5 AM radio stations in Daytona Beach, Live Oak, Valdosta, Huntsville, Alabama, and Jackson, Tennessee. The Company filed for Chapter 11 bankruptcy protection on January 11, 2010 (Bankr. M.D. Fla. Case No. 10-00172). The Company's affiliates -- Black Crow Media, LLC, et al. -- also filed separate Chapter 11 petitions. Mariane L. Dorris, Esq., and R Scott Shuker, Esq., at Latham Shuker Eden & Beaudine LLP, assist the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. BLACK CROW: Taps Wiley Rein as Bankruptcy Counsel ------------------------------------------------- Black Crow Media Group, LLC, et al., have sought permission from the U.S. Bankruptcy Court for the Middle District of Florida to employ Wiley Rein LLP, nunc pro tunc to the Petition Date. Wiley Rein will, among other things: a. advise and consult on the conduct of the cases, including all of the legal and administrative requirements of operating in Chapter 11; b. attend meetings and negotiate with representatives of creditors, equity security holders, employees, and other parties in interest in these Chapter 11 cases; c. advise the Debtors in connection with any contemplated sales of assets or business combinations, including the negotiation of asset, stock purchase, merger or joint venture agreements, formulating and implementing bidding procedures, evaluating competing offers, drafting appropriate corporate documents with respect to the proposed sales, and counseling the Debtors in connection with the closing of such sales; and d. advise the Debtors in connection with postpetition financing and cash collateral arrangements and negotiating and drafting documents relating thereto, providing advice and counsel with respect to prepetition financing arrangements, and providing advice to the Debtors in connection with any additional financing, and negotiating and drafting documents relating thereto. The Debtors say that Wiley Rein will be paid based on the hourly rates of its personnel: H. Jason Gold, Partner $695 Valerie P. Morrison, Partner $630 Dylan G. Trache, Partner $510 James C. Slattery, Associate $445 Robert W. Ours, Paraprofessional $210 The Debtors assure the Court that Wiley Rein is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Daytona Beach, Florida-based Black Crow Media Group, LLC, owns and operates 17 FM and 5 AM radio stations in Daytona Beach, Live Oak, Valdosta, Huntsville, Alabama, and Jackson, Tennessee. The Company filed for Chapter 11 bankruptcy protection on January 11, 2010 (Bankr. M.D. Fla. Case No. 10-00172). The Company's affiliates -- Black Crow Media, LLC, et al. -- also filed separate Chapter 11 petitions. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. BLACK CROW: Wants Latham Shuker as Co-Counsel --------------------------------------------- Black Crow Media Group, LLC, et al., have asked for authorization from the U.S. Bankruptcy Court for the Middle District of Florida to employ Latham, Shuker, Eden & Beaudine, LLP, as its co-counsel, nunc pro tunc to January 12, 2010. Latham Shuker will: a. advise the Debtors as to their rights and duties in their Chapter 11 cases; b. prepare pleadings related to the Chapter 11 cases, including a disclosure statement and a plan of reorganization; and c. take any and all other necessary action incident to the proper preservation and administration of the estates, including co-counsel in insurance litigation. Latham Shuker will assist the Debtors' bankruptcy counsel, Wiley Rein, LLP. Wiley Rein and Latham Shuker will divide tasks and areas of responsibility in a manner which reflects their respective abilities, resources, and experience and which recognizes the firms' respective proximities to the Debtors, the Court, and the interested parties in the Debtors' Chapter 11 cases. The Debtors say that Latham Shuker will be paid based on the hourly rates of its personnel: Attorneys $450 Junior Paraprofessionals $100 According to the Debtors, Latham Shuker is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Daytona Beach, Florida-based Black Crow Media Group, LLC, owns and operates 17 FM and 5 AM radio stations in Daytona Beach, Live Oak, Valdosta, Huntsville, Alabama, and Jackson, Tennessee. The Company filed for Chapter 11 bankruptcy protection on January 11, 2010 (Bankr. M.D. Fla. Case No. 10-00172). The Company's affiliates -- Black Crow Media, LLC, et al. -- also filed separate Chapter 11 petitions. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. BLOCKBUSTER INC: S&P Gives Negative Outlook, Affirms 'B-' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Dallas-based Blockbuster Inc. to negative from stable. At the same time, S&P affirmed all ratings on the company, including the 'B-' corporate credit rating. The outlook revision reflects fourth-quarter operations that were substantially below expectations, S&P's belief that performance will remain challenged over the near term, and S&P's expectation for credit metrics to deteriorate significantly. The ratings on Blockbuster reflect its participation in an extremely competitive home entertainment market, weak operating performance, the technology risks associated with video delivery to the end user, its dependence on decisions made by the movie studios, and a highly leveraged capital structure. The company recently revised guidance below S&P's year-end expectations because of weak top-line performance in the fourth quarter. The company bolstered its inventory levels to support higher in-stock availability and increased its advertising spending during the seasonally important holiday season. However, sales failed to materialize, and operations fell significantly during the period. S&P believes performance will remain difficult over the near term. S&P expects double digit declines in revenues and margins to deteriorate from substantial negative operating leverage. The company has announced it intends to cut expenses further, but this is not likely to meaningfully improve operations over the near term. As a result of the substantial performance deterioration, S&P expects credit metrics to likely weaken over the near term. S&P believes debt to EBITDA will likely be around 7.5x as of Dec. 31, 2009, and that interest coverage will be in the low 1.0x range. As a result of ongoing performance difficulties over the near term, S&P expects leverage to increase to about 10.0x and coverage to be slightly above 1.0x over the near term. Blockbuster remains highly dependent on decisions made by movie studios, which are evaluating the traditional release window with the potential to alter the traditional home video retailer distribution period, particularly in connection with increased use of direct distribution technologies. S&P believes any reduction in the exclusivity period of the traditional window will be detrimental to Blockbuster's operating performance. BLOSSOM VALLEY: Plan Contemplates Sale of 2 Residential Projects ---------------------------------------------------------------- Blossom Valley Investors, Inc., and Pear Avenue Investors LLC filed with the U.S. Bankruptcy Court for the Northern District of California a Disclosure Statement relating to their Plan of Reorganization dated as of January 8, 2010. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, the Plan provides for the sale of the Debtor's interest in Messina Condos and Oak Knoll single family homes properties, collectively valued at $34.3 million. The Plan contemplates payment, in full, of any of the priority unsecured claims on the initial distribution date. General unsecured claims not otherwise classified, including any secured debt exceeding the value of the collateral for the debt, will be paid from the net proceeds of Messina Gardens and Oak Knoll as the net proceeds become available, but only after Class 1,2,3,4 and 5 claims have been paid in full. Unsecured claims held by insiders are subordinated to all other classes and will be paid from the net proceeds of Messina Gardens and Oak Knoll as the net proceeds become available, only after other classes have been paid in full. Prior to the confirmation of the Plan, the Debtor will seek Court approval for debtor-in-possession financing to complete development and construction of the holes at Oak Knoll and Messina Gardens. Sales of the finished homes at retail will result in payment of a substantial portion of the loan owing to Bank of the West on the Messina Gardens project, leaving a deficiency of $2 million, but much less than the deficiency would be in the event of foreclosure or liquidation. However, the Debtor estimates that the building and sale of the Oak Knoll project will result in proceeds in excess of $4 million after payment of ongoing project costs, the U.S. Bank debt in full and liens against the Oak Knoll project including liens for the DIP financing. The net proceeds from the build out of the Oak Knoll project will then be used to satisfy unpaid administrative expenses and Class 5 and 6 claims. The Debtor does not intend to complete the Grandview project and has stipulated to relief from stay to allow U.S. Bank to foreclose on its deeds of trust on the project. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/BlossomValley_DS.pdf A full-text copy of the Plan of Reorganization is available for free at http://bankrupt.com/misc/BlossomValley_Plan.pdf San Jose, California-based Blossom Valley Investors, Inc., and Pear Avenue Investors LLC filed for Chapter 11 on Sept. 10, 2009 (Bankr. N.D. Calif. Case Nos. 09-57669 and 09-57670). Joseph R. Dunn, Esq., and Jeffry A. Davis, Esq., at Mintz Levin Cohn Ferris Glovsky Popeo PC, represent the Debtors in their restructuring efforts. In its petition, Blossom Valley listed assets and debts both ranging from $10,000,001 to $50,000,000. BORDERS GROUP: Denies Delay of Payment to Publishers ---------------------------------------------------- Borders Group Inc. has issued a statement in response to an article that originally appeared January 15 on debtwire.com. Borders Group says the debtwire.com article includes inaccurate information. Specifically, debtwire.com claimed Borders has extended the length of time it takes to pay its small publisher vendors by 40%. "This is inaccurate. In fact, Borders has continued to pay its vendors in a timely manner, has not lengthened its days to pay, and has not been contacted by a group of publishers as alleged. Product is flowing to our stores for sale to customers. In fact, we have significantly increased book inventory in the fourth quarter compared to last year, a sign that we have continued to receive support from the vendor community. It is also important to note that we have not been contacted by any law firms allegedly retained to represent a small group of publishers," Borders Group says. Borders Group also notes that it was reported that the law firm of Lowenstein Sandler issued the following regarding the debtwire.com article: 'The statement in the article that a group of smaller publishers had hired the bankruptcy group of Lowenstein Sandler as legal counsel is incorrect.' "Overall, Borders Group continues to focus on running our business, including recently announced digital book partnerships with Kobo and Spring Design that position the company to be a high quality content provider of eBooks. We also continue to focus on reducing expenses and improving working capital to drive improved cash flow and debt reduction as we address the clear priority to drive profitable sales." On January 18, 2010, Borders Group reported results for the 11- week holiday period ended January 16, 2010. Total consolidated sales were $846.8 million, a 13.7% decrease compared to the same period last year. "We are disappointed with holiday results and must intensify our focus on creating and delivering a shopping experience that drives profitable sales," said Borders Group Chief Executive Officer Ron Marshall. "Given the sales challenge, we have continued to manage cash flow and have taken several important steps in line with our strategic priorities, including moving away from underperforming, low margin categories such as music and video in favor of better performing categories such as children's. The decision to exit multimedia is right long-term, but impacted comp store sales by 3.7%. In addition, as previously announced, we are right-sizing the mall business with the closure of 182 Waldenbooks Specialty Retail stores. We have continued to expand our Borders Rewards loyalty program and recently announced digital book partnerships with Kobo and Spring Design that position Borders to be a high quality content provider of eBooks. We will continue to focus on reducing expenses and improving working capital to drive improved cash flow and debt reduction as we address the clear priority to drive profitable sales." The Troubled Company Reporter on November 6, 2009, said as part of Borders Group's ongoing strategy to right-size its Waldenbooks Specialty Retail segment and emerge with a smaller, more profitable mall chain in fiscal 2010, Borders Group will close roughly 200 or two thirds of its mall stores in January, leaving roughly 130 mall-based locations open. According to the TCR, roughly 1,500 positions -- the majority of which are part-time jobs -- will be eliminated. Borders has 25,000 employees, including part-timers. Employees have been informed of the right-sizing plan and efforts will be made to place qualified individuals in other positions within Borders Group. Displaced employees will receive severance. About Borders Group Headquartered in Ann Arbor, Mich., Borders Group, Inc. (NYSE: BGP) is a leading specialty retailer of books as well as other educational and entertainment items. The company employs approximately 25,000 throughout the U.S., primarily in its Borders(R) and Waldenbooks(R) stores. Online shopping is offered through borders.com. BROADLANE INC: Moody's Affirms Corporate Family Rating at 'B2' -------------------------------------------------------------- Moody's Investors Service affirmed the B2 Corporate Family Rating of Broadlane, Inc., in conjunction with the company's proposed refinancing transaction. Moody's also assigned a B2 rating to Broadlane's proposed senior secured credit facility, consisting of a $15 million revolver and a $180 million term loan. The proceeds from the proposed facility are expected to be used to repay all existing indebtedness including the existing credit facility and the senior subordinated notes (not rated by Moody's). Concurrently, Moody's changed to the outlook to positive from stable. The B2 Corporate Family Rating is constrained by the small revenue base and meaningful customer concentration risk, as two customers constitute nearly 30% of revenue, as well as the highly competitive nature of the group purchasing organization (GPO) industry. The rating is supported by the company's strong profitability margins, the high customer retention rate, which somewhat mitigates contract cancellation risk, and the company's stable operating performance despite the difficult economy over the last 12-18 months. The positive rating outlook reflects Moody's expectation that Broadlane's credit metrics could improve appreciably over the next 12 months given the potential for further debt repayments, reduced interest expense and improved free cash flow. Further, the positive outlook reflects the assumption that Broadlane will be able to successfully renew all material customer contracts coming up for renewal over the next 12-18 months. The Probability of Default Rating was revised to B3 from B2 due to the proposed changes in the capital structure, in accordance with Moody's Loss Given Default Methodology. Upon the close of the transaction Moody's expect to withdraw the ratings on the existing credit facility. Ratings are subject to review of final documentation. Ratings Assigned: * $15 million senior secured revolving credit facility due 2015, B2 (LGD3, 32%) * $180 million senior secured term loan due 2015, B2 (LGD3, 32%) Ratings Affirmed: * Corporate Family Rating, B2 Ratings Revised: * Probability of Default Rating, to B3 from B2 Ratings to be withdrawn upon closing: * $13 million senior secured revolving credit facility due 2013, Ba3 (LGD3, 32%) * $140 million senior secured term loan due 2013, Ba3 (LGD3, 32%) The outlook was changed to positive from stable. The last rating action was July 21, 2008 when Moody's assigned first time ratings to Broadlane in connection with its leveraged buyout transaction. Broadlane is headquartered in Dallas, Texas, and delivers supply chain management and procurement services to thousands of acute care hospitals, ambulatory care facilities, physician practices and other healthcare providers in the United States. The company was initially founded as the in-house supply chain group of Tenet Healthcare, which spun out the division to form Broadlane in 1999. BROCADE COMMUNICATIONS: S&P Raises Corporate Credit Rating to 'BB' ------------------------------------------------------------------ Standard & Poor's Ratings Services said it raised its 'BB-' corporate credit rating on San Jose, California-based Brocade Communications Systems Inc. to 'BB'. In addition, S&P raised its senior secured rating on the company's bank facilities to 'BBB-' from 'BB+'. The recovery rating on the facilities remains '1'. With this rating action, all senior secured ratings are equalized at 'BBB-'. S&P also removed the corporate credit rating and issue-level rating on the bank loans from CreditWatch, where they were placed on Jan. 11, 2010. "As S&P indicated in S&P's CreditWatch listing," said Standard & Poor's credit analyst Richard Siderman, "once the amendment to the credit facility became effective, S&P would raise the corporate credit and other ratings, reflecting ample headroom under covenants, extended maturities, and moderate leverage for the rating." BUILDERS FIRSTSOURCE: Delays Registration Statement Effective Date ------------------------------------------------------------------ Builders FirstSource, Inc., on January 21, 2010, filed with the Securities and Exchange Commission Amendment No. 2 to Form S-3 Registration Statement under the Securities Act of 1933 to delay indefinitely the effective date of the Registration Statement. The accompanying prospectus relates to the resale from time to time by selling securityholders identified in the prospectus of (i) up to 2,042,465 shares of the Company's common stock and (ii) up to $139,718,000 aggregate principal amount of the Company's Second Priority Senior Secured Floating Rate Notes due 2016. The 2016 notes bear interest at the rate of 3-month LIBOR (subject to a 3.00% floor) plus 10.0% per year, accruing from the date of original issuance and payable quarterly in arrears on each February 15, May 15, August 15 and November 15, beginning February 15, 2010. The 2016 notes will mature on February 15, 2016. The 2016 notes are the Company's senior secured obligations and will rank equally in right of payment with all of the Company's existing and future senior debt. The 2016 notes will be effectively junior in right of payment to any of the Company's indebtedness that is secured by first priority liens on the assets securing the 2016 notes, including the Company's senior secured revolving credit facility, or secured by assets not securing the 2016 notes, and will be junior in right of payment to all indebtedness of any future non-guarantor subsidiaries of the Company. The 2016 notes are jointly and severally guaranteed by all of the Company's subsidiaries. The subsidiary guarantees are the senior secured obligations of the Company's subsidiary guarantors and will rank equal in right of payment with all of the Company's subsidiary guarantors' existing and future senior debt, but they will rank effectively junior in right of payment to the subsidiary guarantees of the Company's senior secured revolving credit facility. The subsidiary guarantees are full and unconditional. Each of Builders FirstSource Holdings, Inc., Builders FirstSource Northeast Group, LLC, Builders FirstSource Texas GenPar, LLC, Builders FirstSource MBS, LLC, their subsidiaries and the Company's future significant restricted subsidiaries will jointly and severally guarantee the 2016 notes. Under certain circumstances, the guarantees may be released. The Company has the right at any time to redeem some or all of the 2016 notes. If the Company experiences a change of control, the Company may be required to offer to repurchase the 2016 notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest, if any, to the repurchase date. The common stock of Builders FirstSource is traded on the Nasdaq Global Select Market under the symbol "BLDR." The last reported sales price of the Company's common stock on the Nasdaq Global Select Market on January 20, 2010 was $3.64 per share. The Selling Securityholders include: * Caterpillar Inc. Master Retirement Trust; * DDJ High Yield Fund; * GMAM Group Pension Trust III; * GMAM Investment Funds Trust; * UAW Retiree Medical Benefits Trust (VEBA); * GMAM Group Pension Trust III; * Multi-Style, Multi-Manager Funds PLC The Global Strategic Yield Fund; * Stichting Pensioenfonds Hoogovens; * Houston Municipal Employees Pension System; * Stichting Bewaarder Interpolis; * Pensioenen Global High Yield Pool; * Stichting Pensioenfonds voor Fysiotherapeuten; * Stichting Pensioenfonds Metaal en Techniek; * Stichting Pensioenfonds van de Metalektro (PME); * Fernwood Associates LLC; * Fernwood Restructurings, Ltd.; * Fernwood Foundation Fund LLC; * Fraser Sullivan CLO I Ltd.; * Fraser Sullivan CLO II Ltd.; * Fraser Sullivan Credit Strategies Funding Ltd.; * Credit Opportunity Associates II LP; * Hayman Capital Master Fund, LP; * MFP Partners, L.P.; * Northeast Investors Trust; * ORIX Finance Corp.; * Putnam Income Strategies Fund; * Ohio Tuition Trust Authority - Ohio Variable College Savings Trust Fund -Putnam CollegeAdvantage GAA Conservative Portfolio; * Ohio Tuition Trust Authority - Ohio Variable College Savings Trust Fund -Putnam CollegeAdvantage GAA Growth Portfolio; * Ohio Tuition Trust Authority - Ohio Variable College Savings Trust Fund -Putnam CollegeAdvantage GAA Balanced Portfolio; * Putnam High Yield Fixed Income Fund, LLC; * Putnam High Yield Trust; * Putnam High Income Securities Fund; * Putnam Variable Trust - Putnam VT High Yield Fund; * Putnam Variable Trust - Putnam VT Global Asset Allocation Fund; * Putnam Premier Income Trust; * Putnam Master Intermediate Income Trust; * Putnam Asset Allocation Funds - Growth Portfolio; * Putnam Asset Allocation Funds - Balance Portfolio; * Putnam Asset Allocation Funds - Conservative Portfolio; * Putnam Variable Trust - Putnam VT Diversified Income Fund; * Seasons Series Trust (Sun America) - Asset Allocation: Diversified Growth Portfolio; * Putnam Floating Rate Income Fund; * Putnam World Trust - Putnam Global High Yield Bond Fund; * IG Putnam U.S. High Yield Income Fund; * LGT Multi Manager Bond High Yield (USD); * Interpolis Pensioenen Global High Yield Pool; * Marsh & McLennan Companies, Inc. U.S. Retirement Plan - High Yield; * Regiment Capital, Ltd.; * President & Fellows of Harvard College; * XL RE LTD; * Seven Locks Master Fund L.P.; * Van Kampen Senior Income Trust; * Van Kampen Senior Loan Fund; * Wells Fargo Bank, N.A.; * Whitebox Combined Partners, LP; * Whitebox Hedged High Yield Partners, LP; * HFR RVA Combined Master Trust; * Pandora Select Partners, LP; and * Whitebox Special Opportunities Fund Series A Partners, LP A full-text copy of the prospectus is available at no charge at: http://ResearchArchives.com/t/s?4dcb On January 8, 2010, Builders FirstSource entered into a Supplemental Indenture to the Indenture dated as of February 11, 2005, with Wilmington Trust Company, as Trustee, governing the Company's Second Priority Senior Secured Floating Rate Notes due 2012. The Company solicited consents to amend the Indenture and, as of December 31, 2009, the Company had received consents from holders of $171,933,000 in aggregate principal amount of 2012 Notes, which represents 97% of the aggregate principal amount of the outstanding 2012 Notes held by holders not affiliated with the Company. The Supplemental Indenture eliminates substantially all the restrictive covenants contained in the Indenture, including those that obligate the Company to make an offer to repurchase the 2012 Notes upon a change of control and certain sales of assets and those that restrict the Company's ability to consolidate or merge, incur debt, make restricted payments (including payments of dividends), issue equity securities, incur liens, allow subsidiaries to make guarantees, and use proceeds from asset sales. The Supplemental Indenture also releases all of the liens on the collateral securing the 2012 Notes and eliminates certain conditions to defeasance and certain events of default. In addition, the Supplemental Indenture permits notice of redemption of the 2012 Notes to occur on the same day as such redemption. The amendments contained in the Supplemental Indenture become operative upon completion of the Company's debt exchange. On January 12, NASDAQ Stock Market LLC filed a Form 25 with the SEC to cancel the registration of Builders FirstSource's transferable subscription rights. About Builders FirstSource Headquartered in Dallas, Texas, Builders FirstSource Inc. -- http://www.bldr.com/-- is a supplier and manufacturer of structural and related building products for residential new construction. The company operates in 9 states, principally in the southern and eastern United States, and has 55 distribution centers and 51 manufacturing facilities, many of which are located on the same premises as its distribution facilities. The Company has total assets of $457,192,000 against total liabilities of $405,038,000 as of June 30, 2009. Builders FirstSource has corporate credit ratings of 'Caa1' from Moody's Investors Service and 'CCC+' from Standard & Poor's. BUILDERS FIRSTSOURCE: Stadium Capital Reports 14.8% Stake --------------------------------------------------------- Stadium Capital Management, LLC; Alexander M. Seaver; Bradley R. Kent; and Stadium Relative Value Partners, L.P., disclosed holding in the aggregate 13,971,668 shares or roughly 14.8% of the common stock of Builders FirstSource, Inc., as of January 14, 2010. SCM is an investment adviser whose clients, including SRV, have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Stock. Seaver and Kent are the Managing Members of SCM, which is the general partner of SRV. About Builders FirstSource Headquartered in Dallas, Texas, Builders FirstSource Inc. -- http://www.bldr.com/-- is a supplier and manufacturer of structural and related building products for residential new construction. The company operates in 9 states, principally in the southern and eastern United States, and has 55 distribution centers and 51 manufacturing facilities, many of which are located on the same premises as its distribution facilities. The Company has total assets of $457,192,000 against total liabilities of $405,038,000 as of June 30, 2009. Builders FirstSource has corporate credit ratings of 'Caa1' from Moody's Investors Service and 'CCC+' from Standard & Poor's. CALIFORNIA HOUSING: S&P Junks Counterparty Credit Ratings --------------------------------------------------------- Standard & Poor's Ratings Services said lowered its counterparty credit and financial strength ratings on California Housing Loan Insurance Fund to 'CCC-' from 'BBB'. These ratings remain on CreditWatch, where they had been placed on Oct. 27, 2009, with negative implications. "We believe that CaHLIF is likely facing negative net worth and ultimately might not have the resources necessary to pay mortgage insurance claims without additional cash infusions," said Standard & Poor's credit analyst Ron Joas. Given the state-sponsored nature of the entity, any such cash infusions beyond the $10 million line of credit from the California Housing Finance Agency would likely require action by the California state legislature and, as such, are unlikely to occur in the near term. The three-category downgrade of CaHLIF primarily reflects the rapid erosion of the organization's capital, which stemmed from the substantial rise in mortgage delinquencies and the expectation of further losses. CaHLIF's delinquencies rose to 18.5% at the end of the third quarter of 2009 from 8.6% as of Dec. 31, 2008. At the same time, operating losses rose to $42.5 million as of Sept. 30, 2009, from approximately $16.9 million as of Dec. 31, 2008, and surplus declined to $11.9 million from $53.6 million (including $25.9 million in contingency reserves) over this same period. No contingency reserves remained as of the end of the third quarter. The nature of CaHLIF's portfolio -- which is overly weighted in ultra-high loan-to-value, interest-only, condominium, and geographically concentrated loans -- resulted in high delinquency rates that have not moderated as S&P had expected. The magnitude and trend of operating losses is such that S&P believes CaHLIF's surplus for year-end 2009 could be $0 or somewhat negative, which calls into question whether CaHLIF will be able to pay all mortgage insurance claims that develop from its current book of business. CaHLIF effectively ceased writing new business in early 2009. Therefore, it is unable to benefit from the tighter underwriting conditions and higher pricing in the mortgage insurance sector since the second half of 2008. Standard & Poor's believes CaHLIF has limited sources of additional capital, particularly because it would have to obtain legislative approval to receive new capital or redirect capital from other funds. In addition, the State of California's current budgetary restrictions appear to make it unlikely that the state could use other sources of funding in the near term to recapitalize CaHLIF. As a result, S&P has not ascribed any support to CaHLIF from its relationship with the California Housing Finance Agency (CalHFA). S&P has kept the ratings on CreditWatch negative. "We will likely lower the ratings again if S&P believes that CaHLIF's claim-paying resources will be exhausted by the end of 2010," Mr. Joas added. "We will likely affirm the ratings if claim payments moderate or if CaHLIF receives further funding through legislation or other sources." CAMBIUM LEARNING: S&P Raises Rating on Senior Facility to 'B+' -------------------------------------------------------------- Standard & Poor's Rating Services said it raised its ratings on Cambium Learning Inc. to 'B' from 'CCC' and removed them from CreditWatch with developing implications, where they were placed on July 14, 2009. The outlook is stable. At the same time, S&P raised the rating on the company's senior secured bank facility to 'B+' from 'CCC'. S&P revised the recovery rating on this debt to '2' from '3'. The '2' recovery rating indicates S&P's expectation for substantial (70%-90%) recovery for lenders in the event of a payment default. The revised recovery rating reflects a higher enterprise value under S&P's simulated default analysis as a result of the recent merger with Voyager Learning Co. S&P analyzes the company on a consolidated basis with unrated Cambium Learning Group Inc., a holding company established to effect the business combination of Cambium Learning Inc. and Voyager Learning Co. Cambium had total debt of $172 million at Sept. 30, 2009. "The upgrade reflects improving operating performance, lower debt leverage, and improved liquidity following Cambium's recent merger with Voyager," said Standard & Poor's credit analyst Hal F. Diamond. The purchase doubles the size of Cambium and provides potential cost-saving opportunities. "The combination appears to be a good strategic fit," said Mr. Diamond, "as both companies are of similar revenue size and serve adjacent sectors of the education intervention services market." The combination improved debt leverage and covenant compliance, as Voyager had virtually no debt. CAPMARK FINANCIAL: CLIP in Chapter 11 to Sell Assets ---------------------------------------------------- Capmark Financial Group Inc. said December 15 that Capmark Investments LP, a subsidiary guarantor of Capmark's corporate debt obligation, is joining Capmark and its other subsidiary guarantors in its Chapter 11 proceedings. Capmark and certain of its subsidiaries filed voluntary petitions for relief under Capmark 11 of the U.S. Bankruptcy Code on October 25, 2009. Capmark Investments' filing does not include any of the funds managed by Capmark Investments nor its general partnerships in the funds. On January 14, 2010, Capmark Investments entered into an asset purchase agreement with a third party pursuant to which Capmark Investments agreed to sell its management contracts and general partnership interest in its real estate equity funds. Capmark Investments will be pursuing bankruptcy court approval to complete this sale. About Capmark Investments CILP is an investment advisory firm registered with the Securities and Exchange Commission since 2000 that provides institutional investment management services with respect to real estate equity investments and real estate-related investments in both the public and private markets. CILP declared more than $1 billion of assets and liabilities in its Petition filed in Court. The Debtor has used these names during the previous eight years: 1. GMAC Institutional Advisors LP 2. GMAC Institutional Advisors LLC Keith Kooper, president of Capmark Investment LP, certifies to the Court that these resolutions were duly adopted by the vote and consent of the directors of the Partnership at a special meeting of the Board of Directors held on January 14, 2010: (a) the firm of Dewey & LeBoeuf LLP be engaged as attorneys for the Partnership under a general retainer; (b) the law firm of Richards, Layton & Finger, P.A., be engaged as local counsel for the Partnership under a general retainer; (c) Lazard Freres & Co. LLC be engaged as investment banker and financial advisor to the Partnership; (d) Loughlin Meghji + Company be engaged as crisis managers; (e) KPMG LLP be engaged as tax and accounting advisors to the Partnership under a general retainer; (f) Epiq Bankruptcy Solutios, LLC be engaged as claims and noticing agent for the Partnership under a general retainer; and (g) Deloitte & Touche LLP be engaged as audit and accounting services provider to the Partnership under a general retainer. Mr. Kooper further discloses that Capmark Finance Inc. and Capmark Financial Group Inc. directly or indirectly own 10% or more of any class of Capmark Investments' equity interests. The equity security holders of Capmark Financial Group Inc. include GMACCH Investor LLC, which holds approximately 75.4% of the common stock of CFGI, GMAC Mortgage Group LLC, which holds approximately 21.3% of the common stock of CFGI, and certain employees and directors of CFGI, which collectively hold approximately 3.3% of the common stock of CFGI. GMACCH Investor LLC is owned by certain affiliates of Kohlberg Kravis Roberts & Co. L.P., Five Mile Capital Partners LLC, Goldman Sachs Capital Partners and Dune Capital Management LP. GMAC Mortgage Group LLC is wholly owned by GMAC LLC. The partnership interest holders of Capmark Investments LP as of January 15, 2010, are: Partnership Interest Percentage of Holder Partnership -------------------- ------------- Capmark Finance Inc. 99.0% Capmark Investment Holding LLC 1.0% Capmark Investments LP is a respected leader in managing equity real estate and mortgage-related investments in the public and private markets with approximately $1.7 billion in investments under management (as of Dec. 31, 2009). As a registered investment advise, Capmark Investments provides real estate investment strategies including income-growth, and opportunistic return/risk objectives. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684) Capmark's financial advisors are Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. Capmark has total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Bankruptcy Creditors' Service, Inc., publishes Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CAPMARK FINANCIAL: Obtains Approval for Employees' Severance Plan ----------------------------------------------------------------- Capmark Financial Group Inc. and its debtor affiliates sought and obtained the approval of Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware to implement a Severance Plan and make payments to employees who are insiders. As previously reported, the Debtors, among other things, reserved the right to file a separate motion to seek approval of a Severance Plan for insiders. Based on the Court's order identifying which employees are insiders for the purposes of Section 503(c) of the Bankruptcy Code, and after carefully reviewing the Severance Plan, the Debtors believe that the plan, as applied to all employees, including insiders, fully complies with Section 503)(c). The Severance Plan provides for certain minimum amounts payable as severance benefits: Employee Level Minimum Severance Benefit -------------- ------------------------- Staff 6 times weekly pay rate Supervisor 10 times weekly pay rate Assistant Vice President 10 times weekly pay rate Vice President 16 times weekly pay rate Senior Vice President 20 times weekly pay rate Executive Vice President 26 times weekly pay rate The Debtors have determined that the mean severance pay to non- management employees during 2010 will equal approximately $25,500. After arriving at the mean severance calculation for non-management employees, the Debtors determined the payment limitation to insiders under Section 503(c)(2)(B) would be approximately $255,000, or ten times the mean severance of $25,500 payable to non-management employees. Thomas L. Fairfield, executive vice president, general counsel and secretary of Capmark Financial Group, tells the Court that he supports the Debtors' request to implement and make payments pursuant to the Severance Plan to insider employees. Mr. Fairfield asserts that the Severance Plan fully complies with Section 503(c)(2)(B). In a separate declaration, Mr. Fairfield informs the Court that the Debtors have slightly revised the expense reduction plan upon which the mean severance payable to non-management employees was calculated. Mr. Fairfield notes that as a result of these revisions, the Debtors have recalculated the mean severance payments they plan to make to non-management employees during the 2010 calendar using the same methodology they previously utilized. After recalculating the mean severance payments, the Debtors determined the mean severance payable to non-management employees during 2010 will equal approximately $24,350. At the U.S. Trustee's behest, the Debtors calculated the mean severance that will be paid to those employees the Debtors plan to sever during the 2010 calendar year that are designated as "Staff" and "Supervisors" under the Debtors' Severance Plan. The Debtors have determined that the mean severance payable to this subset of non-management employees during the 2010 calendar year will equal approximately $15,400. Moreover, the Debtors calculated that the mean severance that will be paid to those employees the Debtors plan to sever during 2010 calendar year that are designated as "Staff," "Supervisors" and "Assistance Vice Presidents" under the Debtors' Severance Plan. Applying these limitations, the Debtors determined the mean severance payable to this subset of non-management employees during the 2010 calendar year equal approximately $17,300. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684) Capmark's financial advisors are Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. Capmark has total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Bankruptcy Creditors' Service, Inc., publishes Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CAPMARK FINANCIAL: REEG Business to Be Sold to TRECAP for $19.2MM ----------------------------------------------------------------- Capmark Investments LP and Capmark Carried Interest LLC, a non- debtor affiliate, have entered into a Purchase Agreement dated as of January 14, 2010, with TRECAP Partners LLC. Under the Agreement, TRECAP agreed to purchase the real estate equity investment advisory group business from Capmark Investments and Capmark Carried. The salient terms of the Purchase Agreement are: (A) Assets to be sold. These assets of the REEG Business will be sold pursuant to the Purchase Agreement: (1) investment management contracts associated with four commingled real estate equity funds and certain real estate equity joint venture separate accounts; (2) the general partner interests and limited liability company interests associated with the four commingled real estate equity funds; (3) the non-debtor limited liability company interests, general partner interests and limited partner interests associated with the fund incentive vehicles; (4) the entire issued share of non-debtor Capmark Investments Europe Limited, a private company limited by shares incorporated and registered in England and Wales; (5) the physical assets described in Schedule 2.1(e) to the Purchase Agreement; (b) Purchase Price. At the closing, the Purchaser will pay to Sellers the purchase price equal to $19,222,801, less the deposit of $500,000. In the event that prior to the closing, the parties have not entered into an asset management agreement, the purchase price will be reduced by $547,355. (c) Break-Up and Expense Reimbursement. In the event each of these occurs: * the Purchase Agreement is terminated by Purchaser pursuant to Section 8.1(d) of the Purchase Agreement, which provides for termination in the event the Bankruptcy Court enters an order authorizing the sale or transfer of all or some of the REEG Business to a third-party buyer; * Purchaser is not in material default under the Purchase Agreement; and * Purchaser does not purchase the REEG Business, Purchaser will be entitled to a break-up fee amounting to 2.75% of the Purchase Price and an expense reimbursement for reasonable out-of-pocket costs and expenses incurred by Purchaser or its Affiliates in connection with negotiation, documentation and implementation of the Agreement, up to a maximum amount of $240,000. The Termination Fee and Expense Reimbursement will be payable to Purchaser from the proceeds of sale to a Third Party Buyer, notwithstanding any Encumbrance on the proceeds, within three Business Days of the closing of the sale. (d) Termination of the Purchase Agreement. The Purchase Agreement may be terminated at any time before the closing: -- by mutual written consent of Sellers and Purchaser; -- by Sellers, by notice to Purchaser, if the Closing will not have occurred on or before the date that is 15 days after the date upon which the Sale Order becomes final and not appealable, and the conditions in the Purchase Agreement has been satisfied; -- by Purchaser, by notice to Sellers, if the Closing will not have occurred on or before the Date that is 15 days after the date upon which the Sale Order becomes final and not appealable -- the Drop Dead Date -- and the conditions in the Purchase Agreement have been satisfied; -- by Purchaser, by notice to Sellers, if the Bankruptcy Court enters an order authorizing the sale or transfer of some or all of the REEG Business to a party other than Purchaser; or -- by Purchaser to Sellers, by notice to the other party if the Drop Dead Date has not occurred on or prior to June 30, 2010. The Sellers intend to conduct an open bidding process for the sale of the REEG Business. Neither the Purchase Agreement nor any other agreement prohibits the Sellers from soliciting competing offers for the REEG Business and the Sellers are not otherwise limited in marketing the REEG Business. The Debtors relate that the assets comprising the REEG Business are unencumbered by any lien, mortgage, or any other security interest. Accordingly, there will be no credit bidding under Section 363(k) of the Bankruptcy Code. Bidding Procedures and the Auction To maximize the value of the REEG Business, the Debtors seek to implement a competitive bidding process for the sale of the REEG Business pursuant to the Purchase Agreement, to solicit higher or better offers through Bidding Procedures. The proposed Auction and Bidding Procedures include: (a) Any person or entity interested in participating in the Auction must submit a Qualifying Bid on or before February 18, 2010, at 12:00 p.m., in writing to: (i) counsel to the Debtors Dewey & LeBoeuf LLP 1301 Avenue of the Americas New York, 10019 Attn: Michael P. Kessler, Esq. and Judy G.Z. Liu, Esq. (ii) Corporate counsel to the Sellers Goodwin Procter LLP The New York Times Building 620 8th Avenue New York, 10018 Attn: Edward Braum, Esq. (iii) Capmark Investments LP 116 Welsh Road, Horsham, Pennsylvania, 19044 Attn: Keith Kooper, president; and (iv) counsel to the Official Committee of Unsecured Creditors Kramer Levin Naftalis & Frankel LLP 1177 Avenue of Americas, New York, 10036 Attn: Thomas Moers Mayer, Esq., and Amy Caton, Esq. (b) To participate in the bidding process and be deemed a "Qualifying Bidder," each potential bidder must submit a "Qualifying Bid" by the Bid Deadline. The bidder must prepared to enter into a legally binding purchase and sale agreement or similar agreement for the acquisition of the REEG Business on terms and conditions no less favorable to the Sellers than the terms and conditions contained in the Purchase Agreement, and with a purchase price of no less than the Purchaser's purchase price plus the Termination Fee, the Expense Reimbursement, and $500,000. The bid must include a cash deposit by wire transfer equal to 10% of the amount offered to purchase the REEG Business. (c) If no timely, conforming Qualifying Bids, other than the Purchase Agreement, are submitted by the Bid Deadline, the Sellers will not hold an Auction and instead, will request at the Sale Hearing that the Court approve the Purchase Agreement with Purchaser. (d) In the event the Sellers timely receive one or more Qualifying Bids other than the Purchase Agreement, the Sellers will conduct the Auction with respect to the REEG Business. The Auction will be held at the offices of Dewey & LeBoeuf LL, 1301 Avenue of the Americas, in New York, on February 23, 2010, at 12:00 p.m. The Debtors request that the Court schedule a Sale Hearing on or before March 4, 2010, at 10:00 a.m., to consider approval of the Purchase Agreement and the Sale, of the approval of any higher or better offer, if any, resulting from an Auction. Assumption and Assignment of Contracts To facilitate the sale and the assumption and assignment of certain assigned contracts, the Debtors will serve a notice of assumption and assignment on all nondebtor parties to the Assigned Contracts in accordance with proposed procedures. If an Assumption or Cure Objection is timely filed, the Debtors request that a hearing with respect to that objection will be held before the Court at the Sale Hearing. If, however, an Assumption or Cure Objection is not timely filed and served, the assumption and assignment of the applicable Assigned Contract will proceed without further notice at the Sale Hearing to approve the Sale of the REEG Business. If no Cure Amounts are due under the Assigned Contracts, and the nondebtor party to the Assigned Contract does not otherwise object to the Seller's assumption and assignment of the Assigned Contract, no further action need be taken on the part of that nondebtor party. The Debtors request that objections, if any, to the Sale or an Assumption or Cure Objection: (a) be in writing; (b) comply with the Bankruptcy Rules and Local Rules; (c) be filed with the clerk of the Bankruptcy Court for the District of Delaware on February 25, 2010. Accordingly, the Debtors seek entry of two orders: (i) a bidding procedures order, (a) scheduling an auction, (b) approving bidding procedures, (c) approving a break-up fee and expense reimbursement, (d) scheduling a sale hearing, (e) establishing an objection deadline, and (f) approving the proposed form and manner of sale notice and notice of assumption and assignment; and (ii) a sale order, approving the sale of substantially all the assets of Capmark Investments' REEG Business. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684) Capmark's financial advisors are Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. Capmark has total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Bankruptcy Creditors' Service, Inc., publishes Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CAPMARK FINANCIAL: To Assign Additional Contracts to Berkshire -------------------------------------------------------------- To recall, the Court entered a sale order on November 24, 2009, authorizing the sale of debtor Capmark Financial's mortgage servicing business to Berkshire Hathaway Inc.'s Berkadia Commercial Mortgage LLC. The Debtors consummated the sale on December 11, 2009. In connection with the closing of the sale, however, the Debtors discovered that counterparties to certain executory contracts to be assumed and assigned as part of the sale to Berkadia, and certain counterparties to executory contracts entered into between the Court's entry of the Sale Order but prior to the consummation of the sale in accordance with effectuating the sale pursuant to the Sale Order, did not receive notice in accordance with the procedures set forth in the Bidding Procedures Order. In connection with the notice provisions approved in the Bidding Procedures Order, each counterparty to the approximately 2,000 executory contracts, leases, and agreements assumed and assigned to Berkadia received notice of the Debtors' intention to transfer the Assumed Contracts to Berkadia, the proposed cure amount relating to the counterparty's Assumed Contracts, and the deadline by which that counterparty could object. While the Debtors undertook reasonable best efforts to identify all executory contracts that would be Assumed Contracts, approximately 85 executory contracts and agreements were included on the cure schedule that set forth the counterparties and cure amounts relating to the Assumed Contracts. As a result, counterparties to the Additional Contracts did not receive notice of the Debtors' intention to assume and assign the Additional Contracts, nor any proposed cure amounts. A list of the Additional Contracts and Additional Counterparties with their cure amounts is available for free at: http://bankrupt.com/misc/Capmark_MSBaddcontracts.pdf The Additional Contracts not included on the cure schedule include: (i) 12 pipeline transactions of the Debtors that were entered into after the Court's entry of the Sale Order but prior to the consummation of the Sale; (ii) 47 information technology related contracts and three servicing agreements that the Debtors originally intended to retain following consummation of the Sale, but subsequently decided to transfer to Berkadia under the terms of the APA; (iii) 19 ancillary agreements to certain servicing agreements or agreements with government sponsored entities that formed part of the Assumed Contracts; and (iv) certain other servicing contracts and contracts with government sponsored entities that were omitted inadvertently from the schedule of acquired assets under the APA, but subsequently added. To provide the Additional Counterparties with proper notice and an opportunity to object, the Debtors sent to all nondebtor parties to the Additional Contracts a notice of intent to assume and assign the Additional Contracts. The Notice of Assumption and Assignment reflects that the closing has occurred, but makes clear that the assumption and assignment of the Additional Contracts is subject to the approval of the Court, and that the Additional Counterparties have an opportunity to object. By this motion, the Debtors ask the Court to: (a) approve the procedures for the assumption and assignment of certain executory contracts on the terms and conditions that already-transferred agreements were assumed and assigned pursuant to the order approving exercise Put Option and authorizing the sale of the MSB Business to Berkadia Commercial Mortgage LLC, pursuant to that certain Asset Put Agreement, dated as of September 2, 2009, as amended; (b) approve the form and manner of notice of assumption and assignment of the Additional Executory Contracts. * * * Judge Sontchi authorized the Debtors to assume and assign to Berkadia all of the Debtors' rights, title, and interests in the Additional Contracts. Prior to the Court's entry of its order, Qwest Corporation and Qwest Communications Company, LLC, SunGard Availability Services LLP, and Verizon Business Network Services Inc. and the Operating Telephone Company Subsidiaries of Verizon Communications Inc. objected to the cure amounts listed in the Debtors' notice to assume additional executory contracts. Judge Sontchi, however, overruled all objections filed. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684) Capmark's financial advisors are Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. Capmark has total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Bankruptcy Creditors' Service, Inc., publishes Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CARTER'S INC: S&P Affirms Corporate Credit Rating at 'BB+' ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Atlanta, Georgia-based Carter's Inc., including the 'BB+' corporate credit rating. At the same time, S&P removed the corporate credit rating and issue-level ratings on the company's debt from CreditWatch, where they were placed with negative implications Nov. 11, 2009. The CreditWatch placement followed the company's announcement of the delayed filing of its 10-Q for the third quarter of fiscal 2009 and the restating of its previously issued financial statements for the fiscal years 2004 through 2008 and fiscal quarters from Sept. 29, 2007, through July 4, 2009. The rating outlook is stable. The affirmation follows the evaluation of the impact resulting from Carter's prior-period restatements, the filing of its 2009 third-quarter 10-Q and prior period financial restatements within the waiver expiration, and its addressing of relevant internal control weaknesses. On Nov. 17, 2009, the company had obtained a 60-day waiver to its senior credit facility that waived defaults resulting from the untimely filing of the company's third-quarter 10-Q of fiscal 2009. On Jan. 15, 2010, the company filed the 10-Q for the third quarter ended Oct. 3, 2009, along with the prior- period restatements. The reported cumulative after-tax adjustments of $7.5 million from 2003 through July 4, 2009, was a 3% reduction in retained earnings and did not have a significant impact on these prior-period restatements for the affected period. Carter's is also taking action to remediate relevant internal control weaknesses, which include restructuring the sales organization, establishing comprehensive procedures for authorizing accommodations, and implementing new procedures to improve the capture, approval, and recording of all accommodation arrangements in the appropriate accounting period. "The 'BB+' rating reflects Carter's narrow product focus and the intensely competitive operating environment in which it participates," said Standard & Poor's credit analyst Jacqueline Hui. "The company benefits from its leading positions in the infant and children's apparel industries, diverse distribution channels, and favorable demographic trends." Carter's is one of the largest manufacturers and marketers of infant and young children's apparel in the U.S., selling products under the well-recognized Carter's, OshKosh, Child of Mine, and Just One Year brands. The company has significant market positions in the layette, baby, and young children's sleepwear segments, and also competes in the young children's playwear category. Sales have increased at a 16% compounded annual growth rate since 2004 because of the OshKosh acquisition and positive demographic trends over the past few years leading to increased spending on children's apparel. Management has continued to focus on tighter working capital management, expanded product offerings, a stronger value proposition, and overall improved in-store presentation for both the Carter's and OshKosh brands. Credit measures for the 12 months ended Oct. 3, 2009 improved, in S&P's view, as the company continued to deleverage. S&P estimates that funds from operations to total debt was about 35% for the 12 months ended Oct. 3, 2009, as compared with about 27% for the prior-year period. Total debt to EBITDA was 2.0x, down from 2.7x in the prior year (these figures are adjusted for operating leases and pension and postretirement obligations). S&P estimates that Carter's EBITDA margins increased to about 15.8% for the 12 months ended Oct. 3, 2009, from 12.5% in 2008. S&P expects the consolidated operating margin will be 15.2% in 2009 and 16.1% in 2010. While S&P believes margins will continue to remain slightly weaker than those before the OshKosh acquisition, S&P expects that the company's overall solid credit protection measures will be sustained as it continues to improve the OshKosh brand's performance. CHARTER BANK, SANTA FE: Closed; New Bank Assumes Assets ------------------------------------------------------- Charter Bank, Santa Fe, New Mexico, was closed January 22 by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Charter Bank, Albuquerque, New Mexico, a newly- chartered federal savings bank and a subsidiary of Beal Financial Corporation, Plano, Texas, to assume all of the deposits of Charter Bank. The eight branches of Charter Bank will reopen on Monday as branches of Charter Bank. Depositors of Charter Bank will automatically become depositors of Charter Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. This evening and over the weekend, depositors of Charter Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual. As of September 30, 2009, Charter Bank had approximately $1.2 billion in total assets and $851.5 million in total deposits. Charter Bank did not pay the FDIC a premium for the deposits of Charter Bank. In addition to assuming all of the deposits of the failed bank, Charter Bank agreed to purchase essentially all of the assets. The FDIC and Charter Bank entered into a loss-share transaction on $805.5 million of Charter Bank's assets. Charter Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the 's transaction can call the FDIC toll-free at 1-800-323-6111. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/charter-nm.html The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $201.9 million. Charter Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Charter Bank is the seventh FDIC- insured institution to fail in the nation this year, and the first in New Mexico. The last FDIC-insured institution closed in the state was Zia New Mexico Bank, Tucumcari, on April 23, 1999. CHRYSLER LLC: Disclosure Statement OK'd Despite Protests -------------------------------------------------------- Old Carco LLC and its units received approval of the disclosure statement explaining its proposed Chapter 11 plan of liquidation. A hearing to consider confirmation of the Plan is scheduled for March 16, 2009, at 10:00 a.m., Eastern Time. Objections are required to be submitted by March 2. Ballots and the other documents in the solicitation packages are to be sent to voting creditors starting January 30. Voting deadline is on March 2. Old Carco LLC, formerly known as Chrysler LLC, and its 24 debtor subsidiaries submitted to the United States Bankruptcy Court for the Southern District of New York an Amended Joint Plan of Liquidation and accompanying Disclosure Statement on January 19, 2010. The Amended Plan and Disclosure Statement address the objections filed by various parties with respect the adequacy of the Disclosure Statement. Updates concerning the latest activities in the Debtors' bankruptcy cases, as well as those of their adversary proceedings and the Official Committee of Unsecured Creditors' complaint against Daimler Parties were among the new information added. The Amended Plan and Disclosure Statement also provide details with respect to the solicitation procedures, the Liquidation Trustee and Litigation Manager, and the termination and cancellation of Bonds, among other things. Judge Arthur J. Gonzalez will commence a hearing today, at 10:00 a.m., to consider the adequacy of the Disclosure Statement. Objections to the approval of the Disclosure Statement were due January 15. However, by agreement of the parties, the deadline for Daimler AG has been extended to January 18. Several parties and creditors filed objections to the Disclosure Statement, including the United States Trustee, the state of Michigan, Department of Environmental Quality, and U.S. Bank National Association. Clean and blacklined copies of the Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/Chrysler_AmendedPlan_01192010.pdf http://bankrupt.com/misc/Chrysler_AmendedDS_01192010.pdf http://bankrupt.com/misc/Chrysler_Blacklined_Plan_01192010.pdf http://bankrupt.com/misc/Chrysler_Blacklined_DS_01192010.pdf The Amended Plan and Disclosure Statement provide that the initial Litigation Manager will be Alan R. Brayton, Esq., the founding and senior partner at Brayton Purcell LLP. Since the appointment of the Creditors Committee, he has served as the lead counsel to one of the Committee members, Patricia Pascale, whom he represents in litigation against the Debtors on a contingency fee basis. Equity Interest The Amended Plan reveals that as of the Petition Date, 80.1% of the membership interests in Chrysler Holding LLC, Old Carco's ultimate parent, were held by Cerberus Capital Management, L.P., or its affiliates, and 19.9% of the membership interests were held by certain affiliates of Daimler AG. Pursuant to a June 2009 agreement among Chrysler Parent, Cerberus and Daimler AG, Chrysler Parent redeemed the Daimler Owners' 19.9% membership interest. Hence, Cerberus or its affiliates hold 100% of the outstanding membership interests in Chrysler Parent as of January 19, 2010. New Chrysler and UAW To provide for its continued operations, the Amended Plan provides that New Chrysler assumed the Debtors' employee tax-qualified pension plans and other tax-qualified employee benefit plans, and assumed the Debtors' retiree medical plans with respect to all populations other than the UAW-represented employees. "With respect to the UAW, New Chrysler created a mirror health care plan to provide post-Closing health benefits to UAW actives and retirees (but with respect to retirees only until January 1, 2010), and assumed payment of all liabilities under the Debtors' UAW health care plan through the pre-Closing period (but did not assume such plan)," notes Ronald E. Kolka, Old Carco's Chief Executive Officer. New Chrysler also entered into a new retiree medical funding arrangement with the UAW, which went into operation on January 1, 2010, and did not assume a prior arrangement between the UAW and the Debtors that was slated to go into effect on the same date. The Daimler/Cerberus Settlement On June 5, 2009, the Debtors entered into a settlement agreement, known as the Settlement Agreement III, with (i) Cerberus subsidiaries CG Investment Group, LLC and CG Investor, LLC, Chrysler Holding LLC and CarCo Holding I, (ii) Old Carco, (iii) Daimler AG, (iv) Chrysler Financial Daimler North America Finance Corporation, (v) Daimler Investments US Corporation, formerly known as DaimlerChrysler Holding Corporation, and (vi) the Pension Benefit Guaranty Corporation. Settlement Agreement III sought to resolve various open issues related to the Daimler Divestiture, among other things. The Daimler Divestiture relates to the acquisition by Cerberus of a controlling interest in Chrysler Parent, creating the first privately-held American auto company in 50 years. Pursuant to Settlement Agreement III, Cerberus agreed to forgive its $500 million portion of the Owners' Loan Claims in its entirety. In connection with the release of this debt, the Debtors and, certain entities affiliated with Cerberus and the Daimler Parties, among other parties, agreed to release certain current and future claims that they may have against each other under that certain Contribution Agreement, dated May 14, 2007, and related agreements. The Amended Plan provides that the Debtors, certain entities affiliated with Cerberus and the Daimler Parties, among other parties, agreed to release certain current and future claims that they may have against each other under the Contribution Agreement. In addition, subject to the terms, conditions and limitations in Settlement Agreement III, Old Carco, on behalf of itself and all of its subsidiaries, agreed to release claims against the Daimler Parties and their affiliates that were not set forth in a complaint to be filed within an agreed challenge period, with the release becoming effective and binding upon the filing of the complaint with the Bankruptcy Court. Preservation of Rights of Action Under the Amended Plan, the Liquidation Trustee may continue to analyze potential Causes of Action in consultation with the First Lien Agent and the Government DIP Lenders, as appropriate, to determine whether the pursuit of these actions would be beneficial. In addition to the Daimler Litigation, the Causes of Action retained by the Liquidation Trust include any Causes of Action that any Debtor or any Estate may have against: (a) Electronic Data Systems, LLC, doing business as HP Enterprise Services, formerly known as Electronic Data Systems Corporation, EDS Information Systems L.L.C., EDS Canada Corp., formerly known as EDS Canada, Inc., AT Kearny, Inc., and any of their predecessors or successors- in-interest, subsidiaries and affiliates; (b) Wilhelm Karmann GMBH and any of its predecessors or successors-in-interest, subsidiaries and affiliates; (c) Eisenmann Corp. and any of its predecessors or successors- in-interest, subsidiaries and Affiliates; and (d) Getrag Transmission Manufacturing LLC, Getrag International GmbH, Getrag Getriebe- und Zahnradfabrik Hermann Hagenmeyer GmbH & Cie KG and any of their predecessors or successors-in-interest, subsidiaries and affiliates. Cancellation of Bonds On the Effective Date, the Bond Indenture and the Bonds issued thereunder will be deemed terminated, and be of no further force and effect, with respect to the Debtors. Subject to the Plan, the holders of the Bonds will have no rights against the Debtors arising from or relating to those instruments and other documentation, or the deemed termination thereof. The Debtors will not have any continuing obligations or rights under the Bond Indenture and the Bonds, except with respect to any obligations to the Bondholders as holders of Allowed Claims in Class 3A and as otherwise set forth in the Plan, provided that the deemed termination with respect to the Debtors will not affect any rights and obligations arising from and in connection with the Bond Indenture and the Bonds by or among the Indenture Trustee, the Bondholders, Daimler, the Paying Agent and any other non- Debtor Entity so that the Bond Indenture and the Bonds will be unaffected and continue with respect to the Entities for all other purposes, including: (a) as necessary to preserve, pursue or administer the rights, claims, liens and interests of the Indenture Trustee and the holders of Bondholder Claims under the Bond Indenture against non-Debtor third parties, including to preserve and pursue the claims, rights and interests of the Indenture Trustee and the Bondholders against Daimler, as guarantor, under the Daimler Bondholder Guaranty; and (b) to the extent necessary to allow the Indenture Trustee to receive distributions on behalf of the holders of Allowed Bondholder Claims pursuant to the Plan, and make distributions under the Bond Indenture, on account of Allowed Bondholder Claims. For the avoidance of doubt, the Amended Plan provides that nothing in the Plan will (i) affect the obligations of Daimler under, and the terms of, the Bond Indenture and the Daimler Bondholder Guaranty, and (ii) impair the rights of the Indenture Trustee to enforce its charging liens, created in law or pursuant to the Bond Indenture, against property that otherwise would be distributed to the Bondholders. Without further action or order of the Bankruptcy Court, the charging liens of the Indenture Trustee will attach to any property distributable to the holders of Allowed Bondholder Claims under the Plan with the same priority, dignity and effect that the Liens had on property distributable under the Bond Indenture. Plan Support Letters The Debtors also filed with the Court proposed forms of letters in support of the Plan. A copy of the Debtors' Plan Support Letter, and the Plan Support Letter provided to the Debtors by the Creditors Committee can be obtained for free at: http://bankrupt.com/misc/Chrysler_Plan_Support_Letters.pdf About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. 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. 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: Dealers Complain on Violation of Arbitration Law -------------------------------------------------------------- Three lawyers for dealers claimed that Chrysler Group LLC has already violated the arbitration law by its failure to explain the reasons for each dealer's termination, according to a January 18 report by Tire Business. The lawyers who represent 65 terminated dealers said they intend to allege in each arbitration case that the auto maker showed bad faith in written communications last week with all its terminated dealers. "We're going to make an issue of this early on and explain that they're not in compliance with the law," Tire Business quoted Mike Charapp, a legal consultant to state dealer associations, as saying. The law, which was signed last month by President Barack Obama, gives dealers affected by old Chrysler LLC's bankruptcy filing a chance to appeal their termination. It establishes a binding arbitration process to determine whether dealerships ought to be reinstated. Letters to Dealers Chrysler Group announced last week it had sent a letter and an e- mail to all 789 closed dealerships in compliance with the law 's requirement to notify each dealer of the criteria used for the termination. Each mailing consisted of a four-page form letter that listed criteria used to terminate dealers and a personal scorecard of how the individual dealer performed. The form letter lists 22 criteria including sales volume and market share while the scorecard has 13 factors including customer and sales satisfaction indices. Eric Chase, one of the dealer lawyers, said the scorecard "doesn't reflect what the company did at the time of the termination decision." "I find that incredible. The common-sense interpretation of the statute requires that Chrysler tell the dealer why he was terminated," Tire Business quoted him as saying. Leonard Bellavia, another lawyer, also claimed that Chrysler Group added six criteria this week that it did not submit to the bankruptcy court in explaining dealer cuts. "Chrysler fabricated these criteria after the fact. That's the epitome of bad faith," Tire Business quoted him as saying. In an e-mailed statement, Chrysler Group, however, asserted that it did not only comply with the requirements of the legislation but exceeded them. "The information shared with the affected dealers is the specific criteria used in deciding which dealer agreements were rejected as well as the individual dealer's data. A narrative was not required," Chrysler Group reportedly said in the statement. Chrysler Has Not Given Up Right to Challenge Law Chrysler Group spokesperson Kathy Graham said that, in the mean time, the auto maker is complying with the law but it has not yet given up its right to challenge the law in court, The Detroit News reported. "We have made no decision on whether or not to challenge the law, in the mean time we are complying with the legislation and dealers have been notified where to send correspondence concerning arbitration," The Detroit News quoted Ms. Graham as saying. Sean McAlinden, chief economist at the Center for Automotive Research, earlier said at an industry briefing that Chrysler Group may need to further slash its dealers as sales continue to slide. He said the remaining dealers of Chrysler may still be more than the auto maker needs with its market share expected to slide to as low as 6% in the next two years. Chrysler Group has more than 2,000 dealers remaining after it terminated 789 dealers in June 2009 in their bid to reduce cost or enhance its competitive position in the automobile market. The termination, however, drew flak from various groups which argued that the auto maker benefits from a wide dealer network because it is the dealers which bear the risk on unsold cars and cars in transit from the factory. Chrysler Sues Officials Over Changes in Dealer Law In another development, Chrysler LLC filed a lawsuit against the Oregon Attorney General and officials in Maine, North Carolina and Illinois, saying recent changes to those states' dealer laws violate the bankruptcy code and the U.S. Constitution, Bloomberg News reported. Under the new laws, the four states would have power to block Chrysler Group from granting a franchise to a new dealer in that state or relocate a dealer into a rejected dealer's market, Chrysler LLC's lawyers said in a complaint filed in Manhattan bankruptcy court. The attorneys said the new laws interfere with the auto maker's prior termination of its 789 dealers. They seek a court order declaring the laws unconstitutional and in conflict with the bankruptcy court's prior order which authorized the termination. The suit names eight defendants including Oregon Attorney General John Kroger, the secretaries of state in Maine and Illinois, and officials in transportation departments at all four states, Bloomberg News reported. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. 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. 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: GMAC Completes Underwriting for Most Dealers ---------------------------------------------------------- GMAC Financial Services has completed the formal underwriting for 1,474 U.S. Chrysler dealers who applied for standard wholesale credit lines, approving 94 percent: * 1,377 dealerships have obtained wholesale financing, or are approved and in the process of final term negotiations, documentation or onboarding; * 14 dealerships have conditional approval, pending acceptance of loan stipulations; * 83 dealerships were declined for failure to meet credit standards. Most of these dealerships previously were on "finance hold" with Chrysler Financial and were notified by GMAC in June of 2009. Many have been in liquidation for some time. In May of 2009, GMAC was selected as the preferred financial provider and extended interim wholesale financing to Chrysler dealers previously funded by Chrysler Financial. "We approved the vast majority of Chrysler dealers who applied for wholesale credit lines, and are continuing to work with the few remaining dealers that have conditional approval," said Bill Muir, GMAC president. "GMAC is pleased to support these dealerships that are important to the Chrysler Group and their respective communities." About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. 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. 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 Still in Talks With UAW on Plant ----------------------------------------------------------- An executive of Chrysler Group LLC said the auto maker has continuing discussions with the United Auto Workers union on the future of its assembly plant in Sterling Heights, Michigan, according to a January 12 report by Reuters. Scott Garberding, senior vice president in charge of Chrysler Group's manufacturing operations, told Reuters that talks are now underway with the union about how long the plant will be kept open. The plant, which employs about 1,200 workers, produces the Dodge Avenger as well as the Chrysler Sebring which is reportedly one of the most fuel efficient vehicles in Chrysler Group's lineup. Sergio Marchionne, Chrysler Group's chief executive, earlier told Michigan lawmakers that the auto maker will keep the assembly plant open through 2011 and indicated that the Sebring would be a big part of its return to profitability, thus, requiring the continued operation of the plant. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. 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. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: New Chrysler to Get Rid of Wholesale Mentality ------------------------------------------------------------ Sergio Marchionne, chief executive of Chrysler Group LLC, said the auto maker will move away from being a wholesaler of vehicles this year, according to a January 12 report by CBC News. "[We need] to get rid of the wholesale mentality of the company. I will not turn this into a distribution machine because I know I can't make money," CBC News quoted Mr. Marchionne as saying at the North American International Auto Show in Detroit. Chrysler has been offering big discounts to its customers to maintain some semblance of previous sales volumes. Mr. Marchionne said if getting rid of this policy means losing market share and idling plants temporarily, so be it, CBC News reported. There's no use in producing cars that people aren't willing to pay [for]. I need to run this business to make money," he said. Mr. Marchionne said that the funds typically earmarked for discounting will be used to market the brand and get it to start trading on the quality of Chrysler vehicles rather than the discounts the auto maker offers, CBC New reported. The chief executive said this year will be a difficult transition year for Chrysler but he expressed optimism that the auto maker will break even this year and return to profitability in 2011. To do so, Chrysler will have to sell more than 1.1 million units in the United States and 1.65 million units worldwide. Mr. Marchionne expects sales in the first part of 2010 to be mediocre before they pick up again in the second half of the year, according to CBC News. In 2009, Chrysler's global sales dipped to a little more than 931,000 units, marking the first time it sold fewer than a million vehicles in 47 years. U.S. Transportation Secretary Ray LaHood, meanwhile, expressed optimism that Chrysler will emerge from its bankruptcy victoriously, Automobile Magazine reported. Mr. LaHood said Chrysler's new designs will "put them in the marketplace like they've never been before," according to the report. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. 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. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: New Chrysler to Recall 1,000 Vehicles in China ------------------------------------------------------------ Chrysler has announced a nationwide recall of some 24,000 Chrysler, Dodge and Jeep vehicles, according to a January 18 report by KKTV 11 News. Chrysler made the move to repair a defective part that could cause sudden and unexpected brake failure. The recall applies to some 2010 model Chrysler Sebrings and Dodge Avenger sedans, Dodge Nitros, Jeep Liberty SUVs, Jeep Commanders, Jeep Grand Cherokee SUVs and some 2009 and 2010 model Dodge Ram trucks, the report said. Some of the vehicles could have an improperly formed brake booster rod retaining clip, and some Ram trucks may have been built without the piece, which is necessary for consistent and proper functioning of the brakes, according to another report by CNNMoney.com. In a document Chrysler filed with the National Highway Traffic Safety Administration, the auto maker said it is not aware of any crashes or injuries related to the problem, CNNMoney.com reported. Earlier, news agency Xinhua reported that Chrysler Group China Sales Ltd. will recall 1,809 Wrangler vehicles in China starting February 10. The General Administration of Quality Supervision, Inspection and Quarantine, China's quality watchdog, said the recall is due to a designing defect in the gear-box, and involves vehicles which were produced between March 3, 2006, and July 10, 2008, according to the report. GAQSIQ said the reminder system in the gear-box lacks a warning function on overheating operation, which is likely to trigger potential glitch and fire risks with the increase of oil temperature, threatening the safety of occupants. It said it would follow up the recall and evaluate on the effects after the remedial measures were taken, Xinhua reported. Reports from Chrysler show that the defect has caused two accidents in China this year. The auto maker would add the reminding function by upgrading the operation software for free, according to another report by ChinaCSR.com. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. 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. 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) CINCINNATI BELL: Bank Debt Trades at 3% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Cincinnati Bell, Inc., is a borrower traded in the secondary market at 96.71 cents- on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.57 percentage points from the previous week, The Journal relates. The Company pays 150 basis points above LIBOR to borrow under the facility. The bank loan matures on Sept. 1, 2012, and carries Moody's Ba2 rating and Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. As reported by the Troubled Company Reporter on Oct. 2, 2009, Fitch Ratings has assigned a 'BB-/RR3' rating to Cincinnati Bell's proposed offering of $500 million of senior unsecured notes due 2017. The company's Issuer Default Rating is 'B+'. The Rating Outlook is Stable. Standard & Poor's Ratings Services assigned a 'B+' issue-level and a '3' recovery rating to Cincinnati Bell's $500 million senior notes due 2017. The '3' recovery rating indicates expectations for meaningful (50%-70%) recovery in the event of a payment default. In addition, S&P affirmed all ratings on CBI, including the 'B+' corporate credit rating. The outlook is stable. Moody's Investors Service assigned a Ba3 rating to Cincinnati Bell's $500 million senior unsecured notes offering. Moody's notes that the company has been addressing its debt maturities over the past two years, and in the future is likely to take out more debt coming due over the intermediate term. Headquartered in Cincinnati, Ohio, Cincinnati Bell, Inc. (NYSE: CBB) -- http://www.cincinnatibell.com/-- provides integrated communications solutions-including local, long distance, data, Internet, and wireless services. In addition, the Company provides office communications systems as well as complex information technology solutions including data center and managed services. Cincinnati Bell conducts its operations through three business segments: Wireline, Wireless, and Technology Solutions. As of Sept. 30, 2009, the Company had $2.01 billion in total assets against $2.62 billion in total liabilities, resulting in $614.0 million in stockholders' deficit. CITADEL BROADCASTING: Bank Debt Trades at 21% Off ------------------------------------------------- Participations in a syndicated loan under which Citadel Broadcasting Corporation is a borrower traded in the secondary market at 79.40 cents-on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.84 percentage points from the previous week, The Journal relates. Citadel pays 175 basis points above LIBOR to borrow under the loan facility, which matures on June 1, 2014. Moody's has withdrawn its rating, while Standard & Poor's has assigned a default rating, on the bank debt. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. 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: Discloses 6.2% Equity Stake in Ambac Financial ------------------------------------------------------------- Citigroup Global Markets Inc.; Citigroup Financial Products Inc.; Citigroup Global Markets Holdings Inc.; and Citigroup Inc. disclosed holding 18,007,831 shares or roughly 6.2% of the common stock of Ambac Financial Group, Inc., as of December 31, 2009. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provide financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial Group, Inc. common stock is listed on the New York Stock Exchange (ticker symbol ABK). Ambac's principal operating subsidiary is Ambac Assurance Corporation, a guarantor of public finance and structured finance obligations. Ambac Assurance has earned a Caa2 rating from Moody's Investors Service, Inc. with a developing outlook and a CC rating from Standard & Poor's Ratings Services with a developing outlook. Moody's Investors Service at the end of July 2009 downgraded to Caa2 from Ba3 the insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited. The rating action was prompted by Ambac's announced large loss reserve increase and credit impairment charge estimated for 2Q 2009. About Citigroup 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. CLAIRE'S STORES: Bank Debt Trades at 16% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Claire's Stores, Inc., is a borrower traded in the secondary market at 83.96 cents- on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.71 percentage points from the previous week, The Journal relates. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank loan matures on May 29, 2014, and carries Moody's Caa2 rating and Standard & Poor's B- rating. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. Claire's Stores, Inc. -- http://www.clairestores.com/-- operates as a specialty retailer of fashion accessories and jewelry for preteens and teenagers, as well as for young adults in North America and internationally. It offers jewelry products that comprise costume jewelry, earrings, and ear piercing services; and accessories, including fashion accessories, hair ornaments, handbags, and novelty items. Based in Pembroke Pines, Florida, Claire's Stores operates under two brands: Claire's(R), which operates worldwide and Icing(R), which operates only in North America. As of Jan. 31, 2009, Claire's Stores, Inc., operated 2,969 stores in North America and Europe. Claire's Stores, Inc., also operates through its subsidiary, Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint venture with AEON, Co., Ltd. The Company also franchises 198 stores in the Middle East, Turkey, Russia, South Africa, Poland and Guatemala. As stated by the Troubled Company Reporter on Sept. 14, 2009, Claire's Stores, Inc., reported a net loss of $3.733 million for the three months ended Aug. 1, 2009, from a net loss of $16.93 million for the three months ended Aug. 2, 2008. The Company reported a net loss of $32.75 million for the six months ended Aug. 1, 2009, from a net loss of $52.50 million for the six months ended Aug. 2, 2008. At Aug. 1, 2009, the Company had $2.85 billion in total assets; and $190.73 million in total current liabilities and $2.72 billion in total long-term and other liabilities, resulting in $60.10 million in stockholders' deficit. CLEAR CHANNEL: Bank Debt Trades at 19% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Clear Channel Communications, Inc., is a borrower traded in the secondary market at 80.79 cents-on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.27 percentage points from the previous week, The Journal relates. Clear Channel pays 365 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 30, 2016, and carries Moody's Caa2 rating and Standard & Poor's CCC rating. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. Clear Channel Communications, Inc. -- http://www.clearchannel.com/ -- is a diversified media company with three primary business segments: radio broadcasting, outdoor advertising and live entertainment. Clear Channel Communications is the operating subsidiary of San Antonio, Texas-based CC Media Holdings, Inc. As reported by the Troubled Company Reporter, Nov. 17, 2009, Clear Channel Communications, Inc., reported a consolidated net loss of $92.7 million for the three months ended Sept. 30, 2009, compared with a consolidated net loss of $80.2 million for the same period in 2008. For the nine months ended Sept. 30, 2009, consolidated net loss was $4.2 billion compared with consolidated net income of $1.0 billion in the same period of 2008. Consolidated revenue decreased $290.6 million to $1.4 billion during the third quarter of 2009 compared with the same period of 2008. Consolidated revenue decreased $1.0 billion during the first nine months of 2009 compared with the same period of 2008. At Sept. 30, 2009, the Company's consolidated balance sheets showed $17.7 billion in total assets and $24.7 billion in total liabilities, resulting in a $7.0 billion total members' deficit. CLEARWATER NATURAL: Consol Told to Pay Debtors $3.9 Mil. -------------------------------------------------------- WestLaw reports that a coal producer's action in improperly declaring a force majeure under the contract mining agreement that it had executed prepetition with the Chapter 11 debtor-mining company constituted a violation of the automatic stay, a Kentucky bankruptcy court has held. The contract mining agreement was an executory contract and an asset of the estate, and the coal producer's force majeure declaration constituted an exercise of control over the contract so as to deprive the debtor of its use and value. In re Clearwater Natural Resources, LP, --- B.R. ----, 2009 WL 4907032 (Bankr. E.D. Ky.). The Honorable William S. Howard ruled in the Debtor's suit (Bankr. E.D. Ky. Adv. Pro. No. 09-7007) against Consol of Kentucky, Inc., that (1) under Kentucky law, the events of force majeure claimed by Consol did not, in fact, constitute force majeure events but, rather, were normal market risks, and so the producer wrongfully declared force majeure and was liable for breach of the contract mining agreement; (2) the proper measure of damages for breach of the agreement was lost profits; (3) the debtor is entitled to net damages in the amount of $3,964,537; and (4) Consol's action in improperly declaring a force majeure constituted a violation of the automatic stay. Sally E. Edison, Esq., at McGuireWoods LLP in Pittsburgh, Pa., represented Consol of Kentucky, Inc., in this dispute. About Clearwater Natural Headquartered in Kansas City, Mo., Clearwater Natural Resources LP mines coal in the Central Appalachian region. In August 2005, the Company acquired 100% interest in Miller Bros. that became a wholly-owned operating subsidiary of the company. The Company also acquired in October 2006 all interest in Knott Floyd Land Company, a medium scale coal mining company and its operations were subsequently consolidated into Miller. Through Miller, the Company produces and sells coal from eleven mining operations in Eastern Kentucky and provide contracts mining services for two third-party owned mines located within the Appalachian region. The Company and two of its affiliates, Clearwater Natural Resources LLC and Miller Bros. Coal LLC, sought Chapter 11 protection (Bankr. E.D. Kent. Lead Case No. 09-70011) on January 7, 2009. Mary L. Fullington, Esq., at Wyatt, Tarrant & Combs LLP, and Erika A. Tristan, Esq., James A. Reeder, Jr., Esq., Stacy M. Neal, Esq., Tracey R. Keegan, Esq., at Vinson & Elkins LLP in Houston, Tex., represent the Debtors in their restructuring efforts. Administar Services Group LLC serves as the claims and noticing agent. Richard Clippard, the United States Trustee for Region 8, appointed three creditors of Debtor Miller Bros. Coal LLC to serve on an official committee of unsecured creditors. Blank Rome LLP represents the Committee. When the Debtors filed for protection from their creditors, they estimated their assets and debts at $100 million to $500 million. The Debtors filed a chapter 11 plan and disclosure statement in April 2009. COLUMBUS MCKINNON: Note Upsizing Won't Affect Moody's 'Ba3' Rating ------------------------------------------------------------------ Moody's Investors Service said Columbus McKinnon Corporation's Ba3 corporate family rating remains unchanged following the company's announcement that it has upsized and extended its existing $75 million revolver to $85 million. The previous rating action on CMCO was the November 28, 2007, upgrade of the corporate family rating to Ba3 from B1. Columbus McKinnon is a leading worldwide designer, manufacturer and marketer of material handling products, systems and services, which efficiently and ergonomically move, lift, position or secure materials. Key products include hoists, cranes, actuators, chain and forged attachments. Net sales for the twelve months ending September 30, 2009 were $535 million. COLUMBIA RIVER BANK: Closed; Columbia State Assumes Deposits ------------------------------------------------------------ Columbia River Bank, The Dalles, Oregon, was closed January 22 by the Oregon Division of Finance and Corporate Securities, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Columbia State Bank, Tacoma, Washington, to assume all of the deposits of Columbia River Bank. The 21 branches of Columbia River Bank will reopen during their normal business hours beginning Saturday as branches of Columbia State Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Columbia State Bank that it has completed systems changes to allow other Columbia State Bank branches to process their accounts as well. This evening and over the weekend, depositors of Columbia River Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual. As of September 30, 2009, Columbia River Bank had approximately $1.1 billion in total assets and $1.0 billion in total deposits. Columbia State Bank will pay the FDIC a premium of 1.0 percent to assume all of the deposits of Columbia River Bank. In addition to assuming all of the deposits of the failed bank, Columbia State Bank agreed to purchase essentially all of the assets. The FDIC and Columbia State Bank entered into a loss-share transaction on $697.4 million of Columbia River Bank's assets. Columbia State Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can call the FDIC toll-free at 1-800-523-0640. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/columbiariver.html The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $172.5 million. Columbia State Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Columbia River Bank is the ninth FDIC-insured institution to fail in the nation this year, and the first in Oregon. The last FDIC-insured institution closed in the state was Community First Bank, Prineville, on August 7, 2009. CR GAS STORAGE: Bank Debt Trades at 6% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which CR Gas Storage is a borrower traded in the secondary market at 94.35 cents-on-the- dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.68 percentage points from the previous week, The Journal relates. The Company pays 175 basis points above LIBOR to borrow under the loan facility, which matures on May 13, 2013. The bank loan is not rated by Moody's and Standard & Poor's. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. Niska Gas Storage's -- http://www.niskags.com/-- natural gas storage business is located in key North American natural gas producing and consuming regions and is connected to multiple gas transmission pipelines. Niska and its subsidiaries own and operate approximately 140 billion cubic feet of working gas capacity at three facilities: Suffield - 85 Bcf in Alberta; Countess - 40 Bcf in Alberta; and Salt Plains - 15 Bcf in Oklahoma. The Suffield and Countess gas storage facilities conduct business under the name AECO Hub. Niska Gas Storage, also known as CR Gas Storage, and formerly EnCana Gas Storage, in May 2006, completed the first phase of its sale from EnCana Corporation to the Carlyle/Riverstone Global Power and Energy Fund, an energy private equity fund managed by Riverstone Holdings and The Carlyle Group. In conjunction with the closing, Niska announced that effective immediately it has changed its name from EnCana Gas Storage to Niska Gas Storage. CYCLE COUNTRY: Receives Non-Compliance Notice From NYSE Amex ------------------------------------------------------------ Cycle Country Accessories Corp. received a notice from NYSE Amex LLC that it is not in compliance with some of the Exchange's continued listing standards. Specifically, the Exchange Notice states that Cycle Country's failure to file its Form 10-K, as required by Sections 134 and 1101 of the Exchange Company is a material violation of its listing agreement with the Exchange, for which the Exchange is authorized to suspend and remove Cycle Country's securities from the Exchange, unless Cycle Country takes prompt corrective action. The Exchange has given Cycle Country until January 28, 2010, to submit a plan of compliance to correct this noncompliance by April 14, 2010. The Company currently plans to submit a plan by the specified deadline. The Exchange will then review the plan and determine whether it will accept it. If Cycle Country fails to submit a plan or the plan is not accepted, Cycle Country will be subject to delisting proceedings by the Exchange. On January 8, 2010, Cycle Country announced that it would be unable to file its Form 10-K on time due to its discovery that the Chairman of its board of directors had misappropriated company funds. The director's resignation from the board also has caused the Company to be out of compliance with Section 801(h) of the Exchange's Company Guide, which requires the board to be comprised of at least 50% independent members. The Exchange has given Cycle Country until the earlier to occur of its next annual shareholders' meeting or January 6, 2011, to regain compliance. The Exchange Notice also states Cycle Country is no longer compliant with Section 803(2)(c) and 802(d) of the Company Guide, which require at least two members of the audit committee and that classified boards having classes of approximately equal size. The Exchange has given Cycle Country until the earlier of the next annual shareholders' meeting or January 6, 2011, to regain compliance with these requirements. The Company is actively seeking and expects to be able to appoint a new, independent director to the board within the next sixty (60) days. The Company is seeking a member who will be qualified to serve on the audit committee such that the Company will then be in compliance with the Exchange's requirements for board composition of independent versus non-independent directors and the minimum number of independent board members required to serve on the audit committee. About Cycle Country Accessories Corp. Cycle Country Accessories Corp. -- http://www.cyclecountry.com/-- is engaged in the marketing, sales, design and manufacturing of custom fitting accessories for utility all-terrain vehicles, under the brand names of Cycle Country Accessories and Weekend Warrior. Products include snowplows, mowers, 3-point hitches and implements, storage, bed lifts, brush guards and more. The Company also produces a line of specialty products for golf carts, lawn and garden equipment and motor sports vehicles under the brand name of Plazco. Under the brand name of Perf-Form, the Company manufactures and distributes a broad line of high performance oil filters for motorcycles, ATV's and watercraft. In addition, the Company provides metal fabrication and contract manufacturing services through its Imdyne division. DBSD NORTH AMERICA: DISH Network Denied Plan Voting Right --------------------------------------------------------- WestLaw reports that a satellite television provider that had a total investment in excess of $250 million in the Chapter 11 debtors' competitor, and which purchased all of the debtors' first lien debt for 100 cents on the dollar after their disclosure statement was filed, did not act in "good faith" in voting to reject the debtors' proposed plan, such that its vote could be designated. The satellite television provider was not acting as a creditor to maximize its recovery under the plan but with the ulterior purpose of using the recently purchased claims to gain control over the debtors by filing a competing plan, as demonstrated not only by its acknowledgement that its purchase of the claims might not have made economic sense, but by internal memoranda hinting at this ulterior purpose and by the fact that, in also purchasing second lien claims, it was careful to purchase only second lien claims that were not subject to an agreement to support the debtors' proposed plan. In re DBSD North America, Inc., --- B.R. ----, 2009 WL 5088734 52 Bankr. Ct. Dec. 137 (Bankr. S.D.N.Y.) (Gerber, J.). DISH Network Corporation became involved in the Debtors' cases when, after the Debtors proposed a plan of reorganization, DISH bought up all of the Debtors' First Lien Debt from its prior holders, at par, seeking by its acquisition of the Debtors' debt, "to acquire control of this strategic asset." Thereafter, literally on the eve of the plan confirmation hearing, DISH sought to terminate exclusivity and obtain permission to file its own plan, further to achieve its strategic objective. Finding that "[t]his is the paradigmatic case for the application of the Allegheny doctrine," the Honorable Robert E. Gerber ruled that DISH Network's claim should be designated pursuant to 11 U.S.C. Sec. 1126(e), and that DISH Network is disqualified from voting on the Debtors' plan. As reported in the Troubled Company Reporter on Oct. 28, 2009, Judge Gerber confirmed the Debtors' chapter 11 plan, but the plan can't take effect until the Debtors obtain adequate exit financing. And, as reported in the TCR on Nov. 27, 2009, DISH Network Corp. and Sprint Nextel Corp. have taken appeals from Judge Gerber's confirmation order to the U.S. District Court for the Southern District of New York. Headquartered in Reston, Virginia, DBSD North America Inc. aka ICO Member Services Inc. offers satellite communications services. It has launched a satellite, but is in the developmental stages of creating a satellite system with components in space and on earth. It presently has no revenues. The Company and nine of its affiliates filed for Chapter 11 protection on May 15, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-13061). James H.M. Sprayregen, Esq., Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, in New York; and Marc J. Carmel, Esq., Sienna R. Singer, Esq., at Kirkland & Ellis LLP, in Chicago, serve as the Debtors' counsel. Jefferies & Company is the proposed financial advisors to the Debtors. The Garden City Group Inc. is the court-appointed claims agent for the Debtors. When the Debtors sought for protection from their creditors, they listed between $500 million and $1 billion each in assets and debts. DISCOVERY COMMS: Bank Debt Trades at 1% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Discovery Communications, Inc., is a borrower traded in the secondary market at 99.00 cents-on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.61 percentage points from the previous week, The Journal relates. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on April 30, 2014, and carries Moody's Baa3 rating. The loan is not rated Standard & Poor's. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. Discovery Communications, Inc. -- http://corporate.discovery.com/ -- formerly Discovery Holding Company, is a global media and entertainment company that provides original and purchased programming across multiple distribution platforms in the United States and approximately 170 other countries, with over 100 television networks offering customized programming in 35 languages. The Company also develops and sells consumer and educational products and services, as well as media sound services in the United States and internationally. In addition, it owns and operates a diversified portfolio of Website properties and other digital services. The Company operates through three segments: U.S. Networks, International Networks, and Commerce, Education, and Other. EVERGREEN BANK: Closed; Umpqua Bank Assumes Deposits ---------------------------------------------------- Evergreen Bank, Seattle, Washington, was closed January 22 by the Washington Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Umpqua Bank, Roseburg, Oregon, to assume all of the deposits of Evergreen Bank. The seven branches of Evergreen Bank will reopen on Monday as branches of Umpqua Bank. Depositors of Evergreen Bank will automatically become depositors of Umpqua Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Umpqua Bank that it has completed systems changes to allow other Umpqua Bank branches to process their accounts as well. As of September 30, 2009, Evergreen Bank had approximately $488.5 million in total assets and $439.4 million in total deposits. Umpqua Bank will pay the FDIC a premium of 1.0 percent to assume all of the deposits of Evergreen Bank. In addition to assuming all of the deposits of the failed bank, Umpqua Bank agreed to purchase essentially all of the assets. The FDIC and Umpqua Bank entered into a loss-share transaction on $379.5 million of Evergreen Bank's assets. Umpqua Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can call the FDIC toll-free at 1-800-528-6215. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/evergreen-wa.html As part of this transaction, the FDIC will acquire a cash participant instrument. This instrument serves as additional consideration for the transaction. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $64.2 million. Umpqua Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Evergreen Bank is the eighth FDIC- insured institution to fail in the nation this year, and the second in Washington. The last FDIC-insured institution closed in the state was Horizon Bank, Bellingham, on January 8, 2010. FANNIE MAE: Budget Office Wants to Bring Firm on Gov't Books ------------------------------------------------------------ The Wall Street Journal's Nick Timiraos reports that the U.S. Congressional Budget Office has reiterated its support for bringing Fannie Mae and Freddie Mac onto the federal budget -- and onto the government books -- which would effectively mean accounting for their operations in the federal budget as if they were federal agencies. The Journal relates the CBO said in a report, "Recent events clearly indicate a strengthening of the federal government's commitment to the obligations of Fannie Mae and Freddie Mac." According to the Journal, the CBO pegged the government's total costs of bailing out the two companies at $291 billion and said the government's takeover could cost an additional $99 billion in the coming decade. Mr. Timiraos says the White House has resisted calls by Republicans to bring Fannie's and Freddie's obligations onto the government's books. The Journal explains the White House projects costs equal to the actual cash infusions that the Treasury injects into Fannie and Freddie each quarter to keep them afloat. That tab is currently at $112 billion, the Journal says. The CBO's estimate, as opposed to the White House's, reflects the amount of taxpayer subsidy used by Fannie and Freddie as a result of lower borrowing costs enabled by their federal backing, the Journal relates. According to the Journal, Assistant Treasury Secretary Michael Barr said the administration had no plans to alter how it accounts for Fannie and Freddie in the federal budget. The Journal recalls that in September 2008, when the government took over Fannie and Freddie through a legal process known as conservatorship, the Bush administration cited the "temporary nature of the arrangement" in opting against incorporating the obligations of the companies into the federal budget. "These are organisms that have now become a direct arm of the U.S. government and I assume that people who are now buying these securities are looking at them that way," the Journal quotes Sen. Bob Corker (R., Tenn.), as saying in an interview. About Freddie Mac 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. About Fannie Mae Fannie Mae -- http://www.fanniemae.com/-- is a government- sponsored enterprise that was chartered by Congress in 1938. Fannie Mae securitizes mortgage loans originated by lenders in the primary mortgage market into mortgage-backed securities, which can then be bought and sold in the secondary mortgage market. Fannie Mae also participates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities, including the Fannie Mae MBS, for its own mortgage portfolio. In addition, Fannie Mae makes other investments that increase the supply of affordable housing. Under its charter, Fannie Mae may not lend money directly to consumers in the primary mortgage market. Although Fannie Mae is a corporation chartered by the U.S. Congress, and although its conservator is a U.S. government agency and Treasury owns its senior preferred stock and a warrant to purchase its common stock, the U.S. government does not guarantee its securities or other obligations. 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. FAIRPOINT COMMS: Biddeford Asks for Probe by Maine PUC ------------------------------------------------------ Biddeford Internet Company, dba Great Works Internet, has petitioned the Maine Public Utilities Commission to intervene in their dispute with FairPoint Communications, Inc., and investigate the business practices of the Company, according to the Maine Public Broadcasting Network. The dispute between Great Works Internet Company and FairPoint first broke out in 2008, when GWI claimed it had been overcharged by FairPoint for $1 million in rent lines, telephone poles and space, MPBN's Anne Mostue reports. GWI CEO Fletcher Kitteridge has said, according to MPBN, that FairPoint insisted to have things done as it demanded and threatened to bill GWI an additional $3 million if its plans were rejected. Mr. Kitteridge also said FairPoint threatened to terminate service to 3,000 GWI customers around the state. In its filing with the Maine PUC, GWI alleges that (i) FairPoint has not documented its basis for the $3 million in charges it assessed against GWI, and (ii) FairPoint has not credited GWI for payments it has made, MPBN stated. FairPoint spokesman Jeff Nevins said the Company is aware of GWI's probe request and plans to file a reply on the petition, MPBN relates. "This is the result of a long-standing disagreement between FairPoint and GWI, it goes back many years, and it simply involves our efforts to have GWI pay for using our network and for services rendered by our company," the news source quoted Mr. Nevins as saying. Mr. Jeff Nevins also said that FairPoint is deferring the cutting off of service for another month. He said the move is to give GWI time to inform its customers of the service termination. The news report adds that the Maine Public Advocate, the office authorized to represent the interest of ratepayers within the jurisdiction of the Maine PUC has also interfered, and petitioned the Maine PUC to grant GWI's call for an investigation into FairPoint's business practices and to prevent FairPoint from cutting off customer lines until an investigation is successfully accomplished. Evelyn deFrees of the Maine PUC said the Commission will review FairPoint's response to GWI's charges before it decides whether to launch an investigation, MPBN said. 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) FAIRPOINT COMMS: Committee Wins Nod for Jefferies as Advisor ------------------------------------------------------------ The Official Committee of Unsecured Creditors in Fairpoint Communications Inc.'s cases obtained the Court's authority to retain Jefferies & Company, Inc., as its financial advisor, nunc pro tunc to November 10, 2009. Prior to the entry of the order approving the application, Richard Morgner, managing director of Jefferies & Company, Inc., informed the Court that certain sections of the Engagement Letter in connection with the Official Committee of Unsecured Creditors' proposed retention of Jefferies as its financial advisor has been amended. A full-text copy of the amendments to the Engagement Letter is available for free at: http://bankrupt.com/misc/FairPt_Jefferies_AmdEngageLtr.pdf The Creditors Committee expects that Jefferies, as its financial advisor, to render these financial advisory services: (a) Become familiar with, to the extent Jefferies deems appropriate, and analyze, the business, operations, properties, financial condition and prospects of the Debtors; (b) Advise the Committee on the current state of the "restructuring market;" (c) Assist and advise the Committee in examining and analyze any strategy, potential or proposed restructuring, amending, redeeming or otherwise adjusting the Debtors' outstanding indebtedness or overall capital structure, whether pursuant to a plan of reorganization, any sale under Section 363 the Bankruptcy Code, a liquidation, or otherwise, including, where appropriate, assist the Committee in developing its own strategy for accomplishing a Transaction; (d) Assist and advise the Committee in evaluating and analyzing the proposed implementation of any Transaction, including the value of the securities or debt instruments, if any, that may be issued in any Transaction; (e) Assist and advise the Committee in evaluating potential financing transactions by the Debtors; (f) Assist and advise the Committee on tactics and strategies for negotiating with other stakeholders; (g) Attend meetings of the Committee with respect to matters on which Jefferies has been engaged to advise the Committee; (h) Provide testimony, as necessary and appropriate, with respect to matters on which Jefferies has been engaged to advise the Committee, in any proceeding before the Bankruptcy Court; and (i) Render other financial advisory services as may from time to time be agreed upon by the Committee and Jefferies, including, but not limited to, providing expert testimony, and other expert and financial advisory support related to any threatened, expected, or initiated litigation. The Creditors Committee proposes that Jefferies be paid based on this fee consideration: 1. A monthly fee of $150,000 per month until the expiration or termination of its employment. The first Monthly Fee will be payable immediately on approval of the Employment Application, with, for the avoidance of doubt, the Monthly Fees being deemed to have accrued beginning on Nov. 10, 2009, and each subsequent Monthly Fee will be payable in advance on each monthly anniversary thereafter. 2. Reimbursement for all reasonable out-of-pocket expenses incurred by Jefferies and its designated affiliates in connection to the performance of their services as financial advisor to the Creditors Committee. Richard Morgner, a managing director at Jefferies, assures the Court that his firm does not have an interest materially adverse to the interest of the Debtors' estate or of any class of creditors or equity security holders. 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) FAIRPOINT COMMS: Giammarino Disposes Of 8,127 Shares ---------------------------------------------------- In a regulatory filing with the United States Securities and Exchange Commission dated December 31, 2009, FairPoint Communications Inc. Executive Vice President and Chief Financial Officer Alfred C. Giammarino disclosed that he disposed of 8,127 shares of FairPoint common stock. The Disposed Securities are restricted shares of FairPoint common stock, par value at $0.01 per share, awarded to Mr. Giammarino pursuant to FairPoint's 2008 Long Term Incentive Plan. About 25,000 of Mr. Giammarino's Restricted Shares were vested on December 31, 2009. Pursuant to the 2008 Plan, at Mr. Giammarino's election, he forfeited the reported Restricted Shares to satisfy applicable withholding tax obligations with respect to the vesting of the Restricted Shares. Mr. Giammarino received no consideration for his forfeiture of the Restricted Shares. The forfeiture of the Restricted Shares was made pursuant to the 2008 Plan. Claim Transfer eGear USA, Inc. informed the Court that it transferred its Claim No. 177 for $76,045 against the Debtors to Fayett Group LLC. 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) FREDDIE MAC: Budget Office Wants to Bring Firm on Govt. Books ------------------------------------------------------------- The Wall Street Journal's Nick Timiraos reports that the U.S. Congressional Budget Office has reiterated its support for bringing Fannie Mae and Freddie Mac onto the federal budget -- and onto the government books -- which would effectively mean accounting for their operations in the federal budget as if they were federal agencies. The Journal relates the CBO said in a report, "Recent events clearly indicate a strengthening of the federal government's commitment to the obligations of Fannie Mae and Freddie Mac." According to the Journal, the CBO pegged the government's total costs of bailing out the two companies at $291 billion and said the government's takeover could cost an additional $99 billion in the coming decade. Mr. Timiraos says the White House has resisted calls by Republicans to bring Fannie's and Freddie's obligations onto the government's books. The Journal explains the White House projects costs equal to the actual cash infusions that the Treasury injects into Fannie and Freddie each quarter to keep them afloat. That tab is currently at $112 billion, the Journal says. The CBO's estimate, as opposed to the White House's, reflects the amount of taxpayer subsidy used by Fannie and Freddie as a result of lower borrowing costs enabled by their federal backing, the Journal relates. According to the Journal, Assistant Treasury Secretary Michael Barr said the administration had no plans to alter how it accounts for Fannie and Freddie in the federal budget. The Journal recalls that in September 2008, when the government took over Fannie and Freddie through a legal process known as conservatorship, the Bush administration cited the "temporary nature of the arrangement" in opting against incorporating the obligations of the companies into the federal budget. "These are organisms that have now become a direct arm of the U.S. government and I assume that people who are now buying these securities are looking at them that way," the Journal quotes Sen. Bob Corker (R., Tenn.), as saying in an interview. About Freddie Mac 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. About Fannie Mae Fannie Mae -- http://www.fanniemae.com/-- is a government- sponsored enterprise that was chartered by Congress in 1938. Fannie Mae securitizes mortgage loans originated by lenders in the primary mortgage market into mortgage-backed securities, which can then be bought and sold in the secondary mortgage market. Fannie Mae also participates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities, including the Fannie Mae MBS, for its own mortgage portfolio. In addition, Fannie Mae makes other investments that increase the supply of affordable housing. Under its charter, Fannie Mae may not lend money directly to consumers in the primary mortgage market. Although Fannie Mae is a corporation chartered by the U.S. Congress, and although its conservator is a U.S. government agency and Treasury owns its senior preferred stock and a warrant to purchase its common stock, the U.S. government does not guarantee its securities or other obligations. 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. FREEDOM COMMS: JPMorgan Agrees to Extend Cash Collateral Access --------------------------------------------------------------- Freedom Communications Holdings, Inc., et al., entered into stipulation with JPMorgan Chase Bank, N.A., extending the termination date of cash collateral until 11:59 p.m. (New York City Time) on January 25, 2010. Freedom Communications, headquartered in Irvine, California, is a national privately owned information and entertainment company of print publications, broadcast television stations and interactive businesses. The company's print portfolio includes approximately 90 daily and weekly publications, including approximately 30 daily newspapers, plus ancillary magazines and other specialty publications. The broadcast company's stations -- five CBS, two ABC network affiliates and one CW affiliate -- reach more than 3 million households across the country. The Company's news, information and entertainment Web sites complement its print and broadcast properties. Freedom Communications filed for Chapter 11 on Sept. 1, 2009 (Bankr. D. Del. Case No. 09-13046). Attorneys at Young Conaway Stargatt & Taylor, and Latham & Watkins LLP serve as Chapter 11 counsel. Houlihan, Lokey, Howard & Zukin, Inc., serves as financial advisor while AlixPartners LLC is restructuring consultant. Logan & Co. serves as claims and notice agent. Freedom Communications had $757,000,000 in assets against debts of $1,077,000,000 as of July 31, 2009. FREEDOM COMMUNICATIONS: Disclosure Statement Approved ----------------------------------------------------- Freedom Communications Holdings Inc. and its units obtained approval of the disclosure statement explaining their Chapter 11 plan of reorganization. As a result, Freedom Communications may begin soliciting votes on the Plan, which cuts $445 million from the Company's secured debt. The Debtors are scheduled to present the Plan for confirmation on March 9, 2010, at 10:00 a.m. Objections are due March 1. As reported by the TCR on Jan. 22, 2010, Freedom Communications filed its joint Disclosure Statement and Plan of Reorganization, which is supported by the agent bank for its secured lenders and the Official Committee of Unsecured Creditors. Under the new, joint Plan, the Company's secured debt would be reduced from $770 million to $325 million, with the secured lenders holding 100 percent of the common stock in the new company. Additionally, the Plan provides that participants in the Company's non-qualified pension program will have 70 percent of their benefits reinstated, to be paid out according to the terms of those pension plans. Further, a fund of $5.5 million will be established for payment to trade creditors who participate in the trade arrangement outlined in the Plan of Reorganization. For the benefit of other general unsecured creditors, the Company will establish a $14.5 million trust, which will also receive rights to pursue certain litigation claims on the Company's behalf. About Freedom Communications Freedom Communications, headquartered in Irvine, California, is a national privately owned information and entertainment company of print publications, broadcast television stations and interactive businesses. The company's print portfolio includes approximately 90 daily and weekly publications, including approximately 30 daily newspapers, plus ancillary magazines and other specialty publications. The broadcast company's stations -- five CBS, two ABC network affiliates and one CW affiliate -- reach more than 3 million households across the country. The Company's news, information and entertainment Web sites complement its print and broadcast properties. Freedom Communications filed for Chapter 11 on Sept. 1, 2009 (Bankr. D. Del. Case No. 09-13046). Attorneys at Young Conaway Stargatt & Taylor, and Latham & Watkins LLP serve as Chapter 11 counsel. Houlihan, Lokey, Howard & Zukin, Inc., serves as financial advisor while AlixPartners LLC is restructuring consultant. Logan & Co. serves as claims and notice agent. Freedom Communications had $757,000,000 in assets against debts of $1,077,000,000 as of July 31, 2009. FREMONT GENERAL: M&M Plan Offers 100% Recovery for Unsec. Claims ---------------------------------------------------------------- John M. Mlynick and Audrey Mutchnik, parties-in-interest, filed with the U.S. Bankruptcy Court for the Central District of California an amended reorganization plan and disclosure statement for Fremont General Corp. M&M amended the proposed DS by the Official Committee of Equity Holders in the Chapter 11 cases of the Debtors. According to the Disclosure Statement, the Plan contemplates simplifying the corporate structure of the Debtor and its subsidiary, Fremont General Credit Corporation, and FGCC's unit, Fremont Reorganizing Corporation by effecting a merger of assets for the purpose of distribution to holders of allowed claims. Under the Plan, general unsecured claims will recover 100% of their $56.5 million claims. A full-text copy of the Blacklined Disclosure Statement is available for free at: http://bankrupt.com/misc/FremontGeneral_BlacklinedDS.pdf Based in Santa Monica, California, Fremont General Corp. (OTC: FMNTQ) -- http://www.fremontgeneral.com/-- was a financial services holding company with $8.8 billion in total assets at September 30, 2007. Fremont General ceased being a financial services holding company on July 25, 2008, when its wholly owned bank subsidiary, Fremont Reorganizing Corporation (f/k/a Fremont Investment & Loan) completed the sale of its assets, including all of its 22 branches, and 100% of its $5.2 billion of deposits to CapitalSource Bank. Fremont General filed for Chapter 11 protection on June 18, 2008, (Bankr. C.D. Calif. Case No. 08-13421). Robert W. Jones, Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at Stutman Treister & Glatt, represent the Debtor as counsel. Kurtzman Carson Consultants LLC is the Debtor's noticing agent and claims processor. Lee R. Bogdanoff, Esq., Jonathan S. Shenson, Esq., and Brian M. Metcalf, at Klee, Tuchin, Bogdanoff & Stern LLP, represent the Official Committee of Unsecured Creditors as counsel. Fremont's formal schedules showed $330,036,435 in total assets and $326,560,878 in total debts. FRESENIUS MEDICAL: Bank Debt Trades at 2% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which Fresenius Medical Care AG is a borrower traded in the secondary market at 97.70 cents-on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.60 percentage points from the previous week, The Journal relates. The Company pays 150 basis points above LIBOR to borrow under the facility. The bank loan matures on M arch 31, 2013, and carries Moody's Baa3 rating and Standard & Poor's BBB- rating. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. Headquartered in Bad Hamburg, Germany, Fresenius Medical Care AG & Co. KGaA -- http://www.fmc-ag.com/-- is a kidney dialysis company, operating in both the field of dialysis products and the field of dialysis services. The Company's dialysis business is vertically integrated, providing dialysis treatment at its own dialysis clinics and supplying these clinics with a range of products. In addition, the Company sells dialysis products to other dialysis service providers. At December 31, 2008, it provided dialysis treatment to 184,086 patients in 2,388 clinics worldwide located in more than 30 countries. In the United States, it also performs clinical laboratory testing and provides inpatient dialysis services and other services under contract to hospitals. During the year ended December 31, 2008, it provided 27.9 million dialysis treatments. It also develops and manufactures a range of equipments, systems and disposable products, which it sells to customers in over 115 countries. GATEWAY ETHANOL: Wants Access to Cash Collateral Until January 29 ----------------------------------------------------------------- Gateway Ethanol, LLC, asks the U.S. Bankruptcy Court for the District of Kansas to approved a seventh amendment to the stipulated final order authorizing Gateway Ethanol, LLC to: -- obtain secured postpetition financing from Dougherty Funding LLC; and -- grant security interests, superpriority claims and adequate protection to its secured lender. The Debtor related that it was still unable to obtain unsecured credit. The Debtor relates that the DIP facility will be amended to extend the termination date through January 29, 2010. Due to a downward adjustment in certain expenses, the Debtor only requires an additional $2,500 in funds through January 29, 2010. Pursuant to the amended DIP Facility, the DIP lender is prepared to loan Debtor the additional $2,500 in funds, increasing the maximum principal amount of the DIP Facility to $8,857,000. As of the time of filing, the DIP Lender had not given its final approval of the amendments to the DIP Facility. However, Debtor expects DIP lender approval by the time of the hearing on the motion. Pratt, Kansas-based Gateway Ethanol, LLC, operates an ethanol plant that has a capacity of 55 million gallons a year, according to Orion Ethanol's Web site. The Company filed for bankruptcy protection on October 5, 2008 (Bankr. D. Kans., Case No. 08- 22579.) Laurence M. Frazen, Esq., Megan J. Redmond, Esq., and Tammee E. McVey, Esq., at Bryan Cave, LLP, represent the Debtor in its restructuring efforts. In its schedules, the Debtor listed total assets of $94,545,022, and total debts of $93,353,654. GENERAL GROWTH: Creditors Committee Members Down to 9 ----------------------------------------------------- Pursuant to Section 1102 of the Bankruptcy Code, Diana G. Adams, United States Trustee for Region 2, removed, on January 15, 2010, Calyon New York Branch, and Capital Ventures International from the list of creditors appointed to serve as members of the Official Committee of Unsecured Creditors in General Growth Properties, Inc., and its debtor-affiliates' Chapter 11 cases. The existing members of the Committee are: -- Eurohypo AG, New York Branch; -- The Bank of New York Mellon Trust Co.; -- American High-Income Trust; -- Wilmington Trust; -- Taberna Capital Management, LLC; -- Macy's Inc.; -- Millard Mall Services, Inc.; -- General Electric Capital Corp.; and -- Fidelity Fixed Income Trust, Fidelity Strategic Real Return Fund and Fidelity Investments. About General Growth Properties Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Plan Hearing for 10 Debtors on Feb. 16 ------------------------------------------------------ Bankruptcy Judge Alan Gropper will convene a hearing on February 16, 2010, with respect to confirmation of the Joint Plan of Reorganization and final approval of the Disclosure Statement as to 10 Plan Debtors. The Plan Debtors subject to adjournment are: * Burlington Town Center II LLC * GGP-Mall of Louisiana II, L.P. * GGP-Mall of Louisiana, Inc. * GGP-Mall of Louisiana, L.P. * Mall of Louisiana Holding, Inc. * Stonestown Shopping Center, L.P. * Stonestown Shopping Center Holding L.L.C. * Stonestown Shopping Center L.L.C. * Land Trust No. FHB-TRES 200601 * Ward Plaza-Warehouse, LLC About General Growth Properties Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Two Add'l Debtors Win Plan Confirmation ------------------------------------------------------- Judge Allan L. Gropper of the United States Bankruptcy Court for the Southern District of New York issued a formal order on January 20, 2010, confirming the Joint Chapter 11 Plan of Reorganization, and approving, on a final basis, the Disclosure Statement as to VCK Business Trust and The Village of Cross Keys, LLC. The Village of Cross Keys, LLC, and VCK Business Trust were added as proponents to the plan of other General Growth Properties Inc.'s affiliates on January 19, 2010. The Plan Debtors supplemented on January 19, 2010, the Disclosure Statement accompanying the Joint Plan of Reorganization solely with respect to The Village of Cross Keys, LLC and VCK Business Trust. The Amended Disclosure Statement reported these matters: (1) the reorganization process of The Village of Cross Keys owned by VCK Business Trust and The Village of Cross Keys, LLC. There will be no changes to VCK Business Trust and The Village of Cross Keys, LLC's ownership structure. Similarly, there will be no structure changes upon emergence with respect to The Village of Cross Keys. A chart showing the reorganization process of The Village of Cross Keys is available for free at: http://bankrupt.com/misc/ggp_crosskeysreorgchart.pdf (2) the original coded organization chart, which depicts the current organizational structure of the GGP Group, as well as certain joint ventures in which the GGP Group holds ownership interests, was replaced. A copy of the Chart is available for free at: http://bankrupt.com/misc/ggp_jan19codedorgchart.pdf A full-text copy of the supplement to the Disclosure Statement is available for free at http://bankrupt.com/misc/ggp_8thDSSupp.pdf Judge Gropper approved the Disclosure Statement, as amended, pursuant to Section 1125 of the Bankruptcy Code, as providing holders of Claims entitled to vote on the Plan with adequate information to make an informed decision as to whether to vote or accept or reject the Plan in accordance with Section 1125(a)(1). Judge Gropper further determined that the Disclosure Statement provides holders of Claims and Interests and other parties-in- interest with sufficient notice of the release, exculpation and injunction provisions contained in the Plan, in satisfaction of the requirements of Rule 3016(c) of the Federal Rules of Bankruptcy Procedure. Amended Financial Projections The Plan Debtors also amended their financial projections to indicate that the addition of The Village of Cross Keys, LLC and VCK Business Trust has an immaterial impact on the aggregate numbers and, thus, the numbers have not been revised. If the Two Plan Debtors are incorporated in the financial projections, the emergence costs would increase by $1.2 million and the cash flow difference would be about $1.4 million over the 12-month time period, Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges LLP, in New York, noted. Ms. Goldstein further related that the Plan Debtors estimate that the Emergence Costs are about $428 million. Of the $428 million, $319.8 million is associated with the mortgage and mezzanine debt restructuring, including extension fees, servicer fees and expenses, catch-up amortization payments, accrued interest, the funding of certain escrows and other expenses. Moreover, $108.2 million is associated with distributions related to prepetition claims against the Plan Debtors. The Plan Debtors are expected to fund these restructuring costs and Plan distributions predominately from funds generated by the Plan Debtors since the onset of their Chapter 11 cases, with additional support from excess liquidity of GGP Limited Partnership. Ms. Goldstein further noted that the Plan Debtors' cash flow in 2010 is estimated to be about $47.4 million less than their cash needs, due primarily to the $150 million pay-down of the secured debt on GGP Ala Moana L.L.C.'s property as negotiated as part of the restructuring of that entity's property level secured loan. General Growth Properties, Inc. expects to fund this shortfall out of excess liquidity of GGP LP. The Ala Moana pay-down also can be deferred beyond 2010, she told the Court. According to Ms. Goldstein, the consolidated cash forecast shows that GGP has sufficient cash to fund the Emergence Costs of the Plan Debtors as well as the estimated $47.4 million shortfall in 2010. On a pro forma basis including all estimated Emergence Costs and other payments required by the Plan, GGP projects it will have $178.9 million in cash available at the end of 2010, she added. A table showing GGP's 13 Months Cash Forecast is available for free at http://bankrupt.com/misc/ggp_jan19cashforecast.pdf Amended Plan Exhibits The Plan Debtors submitted to the Court on January 19, 2010, amended exhibits to their Plan relating to The Village of Cross Keys, LLC and VCK Business Trust. The amended exhibits are: * a list of the Two Plan Debtors' officers and directors after the effective date of the Plan, available for free at: http://bankrupt.com/misc/ggp_2plandebofficers.pdf * a full-text copy of property-specific Exhibit "B" for The Village of Cross Keys property, available for free at: http://bankrupt.com/misc/ggp_TheVillageExhibitB.pdf * a January 19, 2010 list of contracts to be assumed by the Two Plan Debtors, available for free at: http://bankrupt.com/misc/ggp_jan19contractslist.pdf * a list of two agreements that expired under the Plan, namely: -- a price schedule to a master agreement between VCK Business Trust and Constellation NewEnergy, Inc., and -- a equipment lease between VCK Business Trust and Impact Networking. Moreover, Ms. Goldstein said that the Plan Debtors have no employees, but are instead served by employees of certain affiliates. To the extent that any of the officers or directors of the Plan Debtors are considered "insiders" under the Bankruptcy Code, they are not separately compensated for serving in that capacity, but will benefit from any applicable indemnity to which the Plan Debtors are a party, she explained. Judge Gerber confirmed the Plan, as amended, and each of its provisions under Section 1129 of the Bankruptcy Code. All rulings and orders contained in the confirmation order dated December 15, 2009 are adopted as the rulings and orders for this confirmation order dated January 20, 2010, Judge Gropper said. By prior specific agreement with certain surety companies, Judge Gropper affirmed that the provision with respect to surety bonds under the Plan will apply to the Two Plan Debtors. The provision states that unless specifically rejected by order of the Bankruptcy Court, all of the Plan Debtors' surety bonds and any related agreements, documents or instruments, will continue in full force and effect. Nothing contained in the Plan will constitute or be deemed a waiver of any cause of action that the Plan Debtors may hold against any entity, including the issuer of the surety bond, under any of the Plan Debtors' surety bonds. All objections, responses, statements and comments in opposition to the Plan, including those raised at the confirmation hearing on December 15, 2009, and the confirmation hearing on December 22, 2009, other than those withdrawn with prejudice in their entirety prior to the confirmation hearing on January 20, 2010 or otherwise resolved on the December 15 confirmation hearing or the January 10 confirmation hearing, are overruled, Judge Gropper averred. A full-text copy of the Confirmation Order dated January 20, 2010, is available for free at: http://bankrupt.com/misc/ggp_Jan20ConfOrder.pdf About General Growth Properties Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Belgium Plant Wind Down Announced ------------------------------------------------- General Motors Company said Thursday that as Opel moves quickly on its way towards a viable future, the company announced today the intent to wind down its manufacturing plant in Antwerp, Belgium in the course of 2010. Opel will continue to engage in the official information and consultation process with employee representatives regarding the envisaged restructuring. "We fully understand the effect this announcement has on the Antwerp employees and their families and we sympathize with them," said Opel CEO Nick Reilly. "Many have been dedicated to the plant over generations and have done an excellent job producing great quality cars. The decision to announce this today, was not taken lightly; instead, it is the unfortunate result of the current business reality. We must make this announcement now so that we can secure a viable future for the entire Opel and Vauxhall operations." The global economic crisis has led to a major downturn in the automotive industry. The Western European car market in 2010 is expected to be 1.5 million vehicles below 2009 levels and almost 4 million below its peak in 2007. It is not expected to return anytime soon - if ever - to these peak levels, resulting in significant overcapacity in general and at Opel in particular. To ensure long-term sustainability for the company, Opel needs to reduce capacity by approximately 20 percent. In view of current capacity utilization at all European Opel and Vauxhall plants, planned future product portfolio, timing requirements and financial impact, winding down the Antwerp plant would be the most logical approach for the company. If confirmed, production would conclude in the next few months. It is expected that the full restructuring plan, when completed, will affect all Opel and Vauxhall production sites and entities through such measures as capacity reductions, job redundancies and labor cost reductions. More details will be announced in due time. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Must Comply With Audits, Says Texas Comptroller --------------------------------------------------------------- The Texas comptroller's office has challenged a motion by Motors Liquidation Corp. -- the liquidated remains of former General Motors Corp. -- to mandate mediation to settle certain claims, saying the proposal doesn't provide a legal means to resolve the comptroller's $62 million tax audit claim against the debtor, according to Law360. General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Sees 2010 China Sales to Exceed 2-Mil. Units ------------------------------------------------------------ Dow Jones Newswires reports Kevin Wale, president and managing director of General Motors Co. China Group, said Saturday GM expects to sell more than two million units in China this year. According to Dow Jones Newswires, Mr. Wale said he expects GM's sales in China to increase faster than the overall Chinese market, which he believes will rise 10% to 15% this year from a year earlier. Dow Jones Newswires relates GM's sales in China soared 67% in 2009 from a year earlier to 1.83 million units, boosted by government measures including a purchase-tax cut for small vehicles. According to Dow Jones Newswires, analysts say the incentives may have simply pulled forward demand from this year and have forecast a slowdown in sales for 2010 in the overall market. Dow Jones Newswires reports Mr. Wale said he expects sales at GM's mini commercial vehicle joint venture, SAIC-GM-Wuling Automobile Co., to continue to increase this year. The joint venture will launch new models this year, he said without elaborating, according to Dow Jones. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Court Extends Plan Filing Deadline Until May 27 --------------------------------------------------------------- Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York grants Motors Liquidation Company, formerly known as General Motors Corp., a four-month extension of its exclusive periods to file and solicit acceptances of a plan of reorganization. Judge Gerber extends the Debtors' plan filing deadline through May 27 and the Debtors' solicitation deadline through July 27. This is the second extension of GM's exclusive periods. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GMAC INC: Fitch Upgrades Long-Term Issuer Default Ratings to 'B' ---------------------------------------------------------------- Fitch Ratings has upgraded GMAC Inc.'s long-term and short-term Issuer Default Ratings to 'B' and 'B', respectively and assigned a Positive Rating Outlook. The upgrade follows recent actions by GMAC to address regulatory capital issues and further mitigate future volatility in its residential mortgage business. As to recent capital actions, GMAC has addressed the capital shortfall identified through the Supervisory Capital Assessment Program, with the U.S. Treasury agreeing to convert its preferred investment in GMAC into common equity plus with an additional $3.8 billion of mandatory convertible preferred. With this conversion, Treasury is now a 56% shareholder of GMAC. GMAC also improved the capital positions of Ally Bank and Residential Capital LLC. In Fitch's opinion, these capital efforts provide further cushion and flexibility to address the mortgage business in an orderly manner. In assessing GMAC's overall capital, Fitch focused mainly on the company's ability to remain in compliance with regulatory capital requirements as these are the most operative targets of the company. In that regard, Fitch anticipates that GMAC will remain above the 15% total risk-based capital requirement, even factoring in the adoption of FAS 166 and 167, which require consolidation of off-balance sheet vehicles. Concurrent with the capital actions, GMAC took significant write- downs on mortgage-related assets and classified a large portion as held-for-sale. As such, Fitch believes future volatility emanating from GMAC's residential mortgage business will be significantly lower, particularly given the continued contraction of mortgage loans, which were approximately $28 billion at Sept. 30, 2009. While the upgrade primarily reflects GMAC's more strategic actions, Fitch also incorporated the company's improved funding profile and manageable credit quality in its core automotive finance business. GMAC's funding has improved as a result of its ability to fund a greater portion of its business through Ally Bank, providing the company with a more stable and cost-effective source of funds. Fitch's assessment of asset quality principally focused on the automotive finance business as this is considered a core part of the company. While GMAC is not immune to the challenges of the weak economy, Fitch considers the company's automotive credit quality to be manageable. As GMAC is now a bank holding company with a sizable bank, Fitch has assigned Support and Individual Ratings. Fitch assigned a '4' Support rating which reflects the sizable government support of the company to date; however, it is offset by the view that the Treasury investment is not considered to be long-term as this could be replaced by third party capital. Thus while near-term support for the company appears strong, long-term support is less certain. Importantly, the '4' Support rating results in Fitch establishing a long-term IDR rating floor of 'B', i.e. Fitch would not likely downgrade the rating below 'B' based on this view of support. Along with the Support rating, Fitch has assigned a 'D' Individual rating to GMAC. A 'D' Individual rating implies a bank that has weaknesses regarding its profitability and balance sheet integrity, franchise, operating environment or prospects. The Positive Outlook reflects the view that GMAC's IDR is already at Fitch's Support Floor and thus has limited downside risk. Also reflected is the possibility that, to the extent GMAC is able to further mitigate its exposure to residential mortgage assets and demonstrate and maintain core profitability, the company's ratings could be raised from their current levels. The ratings on foreign subsidiaries principally reflect the irrevocable and unconditional guarantee from GMAC. Fitch upgrades these ratings and assigns a Positive Outlook: GMAC Inc. GMAC International Finance B.V. GMAC Bank GmbH General Motors Acceptance of Canada Limited -- Long-term IDR to 'B' from 'RD'; -- Senior Unsecured to 'B/RR4' from 'CC'. General Motors Acceptance Corp. (N.Z.) Ltd. General Motors Acceptance Corporation, Australia -- Long-term IDR to 'B' from 'RD' Fitch upgrades these ratings: GMAC Inc. GMAC International Finance B.V. General Motors Acceptance Corp. (UK) Plc GMAC Australia (Finance) Ltd GMAC Bank GmbH General Motors Acceptance of Canada Limited General Motors Acceptance Corp. (N.Z.) Ltd. General Motors Acceptance Corporation, Australia -- Short-term IDR to 'B' from 'C'; -- Short-term debt to 'B' from 'C'. Fitch assigns these ratings: GMAC Inc. -- Individual 'D'; -- Support '4'; -- Support Floor 'B'. Fitch affirms these ratings: GMAC Inc. -- Long-term FDIC guaranteed debt at 'AAA'; -- Short-term FDIC guaranteed debt at 'F1+'. GREEKTOWN HOLDINGS: Reports $28.3MM Revenues for Dec. to MGCB ------------------------------------------------------------- The Michigan Gaming Control Board stated in its Web site that Greektown Casino's aggregated adjusted revenues for December 2009 is $28,322,131. Of this revenue, Greektown Casino's state wagering tax is $3,426,977. The Gaming Board also released the December 2009 revenues of two other Detroit casinos, MGM Grand Detroit and MotorCity Casino. The Board notes that MGM Grand Detroit earned $47,100,645 in December 2009 and MotorCity Casino had $34,374,824 in revenues for the same period. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. Clark Hill PLC serves as counsel to the Official Committee of Unsecured Creditors. Greektown Holdings listed assets and debts of $100 million to $500 million in its bankruptcy petition. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GULFSTREAM CRANE: U.S. Trustee Won't Form Creditors Committee ------------------------------------------------------------- The Office of the U.S. Trustee for Region 21 notified the U.S. Bankruptcy Court for the Southern District of Florida that, until further notice, it will not appoint an official committee of unsecured creditors in the Chapter 11 case of Gulfstream Crane, LLC. 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. HSH DELAWARE: Files for Chapter 11 in Wilmington ------------------------------------------------ HSH Delaware GP LLC and six affiliated partnerships filed for bankruptcy protection on January 21 before the U.S. Bankruptcy Court for the District of Delaware (Case No. 10-10187). Michael Bathon at Bloomberg News says HSH, based in Wilmington, Delaware, listed as much as $500 million in both assets and debt in Chapter 11 documents filed in Bankruptcy Court. According to Reuters, people familiar with the bankruptcy said the partnerships had total assets of $680 million. As reported by the Troubled Company Reporter on September 9, 2009, creditors with claims aggregating $27.8 million filed a petition to send affiliate HSH Delaware LP to Chapter 7 liquidation (Bankr. D. Del. Case No. 09-13145). Commerzbank AG, Lloyds TSB Bank Plc, ABN Amro Bank NV, Calyon, Royal Bank of Scotland Plc and Landsbanki Islands HF filed the involuntary Chapter 7 petition. According to Reuters, nine partnerships were created in 2006 to buy a 26% stake in HSH Nordbank AG, the world's largest shipping financier, from WestLB AG for about 1.25 billion euros ($1.76 billion). Reuters says the partnerships received unsecured term and revolving loans of EUR375 million from ABN AMRO bank to fund the purchase of HSH Nordbank shares. J.C. Flowers & Co. advised HSH and its affiliates on the purchase. HSH and its affiliates' beneficiaries are primarily investors in J.C. Flowers Fund II, Bloomberg says, citing court documents. According to Reuters, JC Flowers chief financial officer, Daniel Katsikas, said the bankruptcy will give the partnerships "breathing room" to work out a plan to restructure their debt while preventing a foreclosure on their holdings of HSH Nordbank shares, according to court documents. If seized, the shares would likely be sold at "fire-sale prices," the filing said, Reuters relates. Reuters says at the first bankruptcy hearing, scheduled for Friday, lawyers for the partnerships would ask that the three Chapter 7 cases be converted to voluntary Chapter 11 cases, according to court documents. JC Flowers did not immediately return a call for comment, Reuters says. Bloomberg, citing court papers, relates HSH Nordbank was recapitalized in July 2009 with more than $4 billion in capital and more than $14 billion in guarantees from Schleswig-Holstein and Hamburg, which own most of the bank's shares. HSH believes "the value of the HSH Nordbank stock will continue to rebound as the global market crisis eases," and the bank works to stabilize its business, which will benefit all stakeholders in the case. I & C PROPERTY: Section 341(a) Meeting Set for Feb. 5 ----------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of Industry I & C Property Management, Inc.'s creditors on February 19, 2010, at 3:30 p.m. at U.S. Courthouse, 299 E Broward Boulevard #411, Fort Lauderdale, FL 33301. 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. Oakland Park, Florida-based I & C Property Management, Inc., filed for Chapter 11 bankruptcy protection on January 12, 2010 (Bankr. S.D. Fla. Case No. 10-10539). David Marshall Brown, Esq., who has an office in Fort Lauderdale, Florida, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $100,001 to $500,000 in liabilities. INDEPENDENCE FEDERAL: Receives NASDAQ Non-Compliance Notice ----------------------------------------------------------- Independence Federal Savings Bank disclosed that on January 14, 2010, the Bank received a letter from the NASDAQ Stock Market notifying the Bank that, for the last 30 consecutive business days, the Bank's common stock has not maintained a market value of publicly held shares of at least $1.0 million, the minimum required for continued listing on the NASDAQ Capital Market per NASDAQ Listing Rule 5550(a)(5). For purposes of the NASDAQ Listing Rules, "publicly held shares" exclude shares held directly or indirectly by an officer, director or any person who is the beneficial owner of more than ten percent of total shares outstanding. NASDAQ has provided the Bank with a grace period of 90 calendar days, or until April 14, 2010, to regain compliance with Listing Rule 5550(a)(5). NASDAQ informed the Bank that if at any time during the 90-day grace period the market value of the Bank's publicly held shares closes at or above $1.0 million for at least ten consecutive business days, NASDAQ will confirm that the Bank has regained compliance with Listing Rule 5550(a)(5). NASDAQ also informed the Bank that if the Bank does not regain compliance with Listing Rule 5550(a)(5) prior to the expiration of the 90-day grace period, NASDAQ will notify the Bank that its common stock is subject to delisting. No assurance can be given that the Bank will be able to regain compliance with Rule 5550(a)(5) within the 90-day grace period. In the event the Bank's common stock is delisted from the NASDAQ Capital Market, the Bank's common stock could be quoted on the OTC Bulletin Board, provided that one or more market makers receive clearance from the Financial Industry Regulatory Authority to quote the Bank's common stock, or in the Pink Sheets. No assurance can be give that a market maker would seek to provide quotations for the Bank's common stock on the OTS Bulletin Board or in the Pink Sheets, or that any required clearances or other approvals would be obtained. About Independence Federal Savings Bank Independence Federal Savings Bank was chartered in 1968. The Bank became a publicly traded company in 1985. Headquartered in Washington, D.C., the Bank has two office locations in the District of Columbia and two in Maryland (Chevy Chase and Silver Spring). As of September 30, 2009, Independence Federal had total assets of approximately $167.5 million. INDUSTRY WEST: Section 341(a) Meeting Set for Feb. 5 ---------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of Industry West Commerce Center, LLC's creditors on February 5, 2010, at 1:30 p.m. at Office of the U.S. Trustee, 777 Sonoma Ave. #116, Santa Rosa, CA 95404. 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. Santa Rosa, California-based Industry West Commerce Center, LLC, a California limited liability company, filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. N.D. Calif. Case No. 10-10088). John H. MacConaghy, Esq., at MacConaghy and Barnier, 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. INTERGRAPH CORPORATION: COADE Deal Won't Affect Moody's B1 Rating ----------------------------------------------------------------- Moody's commented that Intergraph's ratings and stable outlook will not be affected by its announcement that it has acquired COADE Holdings, Inc. Intergraph has a B1 corporate family rating, a Ba3 senior secured first lien term loan and revolving credit facility rating, and a B3 second lien term loan rating. The last rating action was on September 18, 2009, when Moody's raised the corporate family rating of Intergraph Corporation to B1 from B2 due to continued improvement in profitability, free cash flow, and reduction in leverage. Intergraph is a leading provider of spatial information management software and systems with revenues of $767 million for last twelve months ended September 30, 2009. Headquartered in Huntsville, Alabama, Intergraph was acquired by a consortium of private equity buyers for $1.3 billion in 2006. ISLE OF CAPRI: Bank Debt Trades at 1% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Isle of Capri Casinos, Inc., is a borrower traded in the secondary market at 98.90 cents-on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 4.40 percentage points from the previous week, The Journal relates. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank loan matures on Dec. 19, 2013, and carries Moody's B1 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. Isle of Capri Casinos, Inc., located in Saint Louis, Missourri, owns and operates 18 casino properties throughout the U.S. The company also has international gaming interests in the Grand Bahamas and England. Net revenue for the 12-month period ended Oct. 26, 2008, was about $1.1 billion. JACOBS FINANCIAL: Posts $714,000 Net Loss in November 30 Quarter ---------------------------------------------------------------- Jacobs Financial Group, Inc. reported a net loss attributable to common stockholders of $713,937 on total revenues of $345,587 for the three months ended November 30, 2009, compared to a net loss attributable to common stockholders of $749,809 on total revenues of $292,726 for the corresponding period of fiscal 2009. For the six months ended November 30, 2009, the Company reported a net loss attributable to common stockholders of $1,656,879 on total revenues of $701,310, as compared to a net loss attributable to common stockholders of $1,635,836 on total revenues of $578,441 for the corresponding period of the previous fiscal period. Balance Sheet At November 30, 2009, the Company's consolidated balance sheets showed $7,174,637 in total assets and $12,754,176 in total liabilities, resulting in a $8,516,283 shareholders' deficit. A full-text copy of the Company's quarterly report on Form 10-Q is available for free at http://researcharchives.com/t/s?4dc4 Going Concern Doubt "The Company incurred operating losses (after accretion of mandatorily redeemable convertible preferred stock, including accrued dividends) of approximately $3,058,000 and $3,333,000 for the years ended May 31, 2009, and 2008, and has incurred losses of approximately $714,000 and $1,657,000 for the three and six month periods ended November 30, 2009. Losses are expected to continue until the Company's insurance company subsidiary, First Surety Corporation ("FSC") develops substantial business. While improvement is anticipated as the business plan is implemented, restrictions on the use of FSC's assets, the Company's significant deficiency in working capital and stockholders' equity raise substantial doubt about the Company's ability to continue as a going concern." About Jacobs Financial Jacobs Financial Group, Inc. (OTC Bulletin Board: JFGI) is a Charleston, West Virginia-based holding company for First Surety Corporation, a West Virginia domiciled surety, Triangle Surety Agency, an insurance agency that specializes in coal reclamation surety bonds, and Jacobs & Company, a registered investment advisor. JAPAN AIRLINES: CDO Ratings Not Affected by Bankruptcy, Fitch Says ------------------------------------------------------------------ The bankruptcy filing by Japan Airlines Corp. (JAL) will not impact the ratings of corporate synthetic collateralized debt obligations (CDOs), according to Fitch Ratings. JAL is referenced globally in one Fitch-rated synthetic CDO out of a total global universe of 270 corporate synthetic CDOs. Exposure to JAL in these transactions is limited due to a combination of JAL's speculative credit grade and minimal exposure to high yield corporate credits from the Asia-Pacific region within Fitch-rated synthetic CDOs. Additionally, the Fitch-rated transaction with JAL exposure is a single-tranche CDO with a distressed rating that is unlikely to be affected by a loss following JAL's credit event settlement, given its exposure to JAL is less than 1%. Investment-grade ratings on corporate synthetic CDOs are largely expected to be stable through 2010. However, further downgrades are expected in lower rating categories. Further defaults or credit events are expected to erode the thin remaining credit protection for non-investment-grade tranches, resulting in an increasing number of 'CCC' and below rated tranches defaulting. Fitch will continue to carefully monitor underlying corporate credit migration in Fitch-rated CDOs. If losses are projected to exceed expectations, Fitch will take rating action accordingly. About JAL Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JAPAN AIRLINES: Delta & SkyTeam to Provide Support -------------------------------------------------- Delta Air Lines and SkyTeam issued the following statement in response to the announcement that Japan Airlines (JAL) has entered into court-led financial restructuring under the guidance of the Enterprise Turnaround Initiative Corporation of Japan (ETIC). "Delta and SkyTeam fully support Japan Airlines and stand ready to provide assistance and support in any way possible. Delta fully expects that JAL, with the support of ETIC, will be successful in its restructuring and return the airline to a position of prominence. Delta went through a similar restructuring process, and as a result emerged in 2007 as one of the most financially sound and the world's largest airline. "JAL customers should continue to book their travel on the flagship carrier of Japan as they will not notice any impact to service as a result of the restructuring. "Delta has been in discussion with JAL in hopes of forming a strategic SkyTeam partnership that would provide significant benefits for JAL and all of its stakeholders." SkyTeam members include Aeroflot, Aeromexico, Air France, Alitalia, China Southern, Czech Airlines, Delta Air Lines, KLM Royal Dutch Airlines, Korean Air and associate members Air Europa and Kenya Airways. About JAL Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JAPAN AIRLINES: Failure Cues Sojitz's JPY15 Bil. Loss ----------------------------------------------------- Sojitz Corporation plans to record a loss on revaluation of securities for its holdings of Japan Airlines Corporation (JAL) type A preferred shares for the third quarter, ended December 31, 2009, of the fiscal year ending March 31, 2010, the company said in a statement. The need to record the loss arose because JAL initiated reorganization procedures in the Tokyo District Court on January 19, 2010. Sojitz said it held 15,000 million yen (book value) in preferred shares of JAL at the end of third quarter. Sojitz plans to record a valuation loss equal to the entire value of these preferred shares under extraordinary losses. Sojitz is currently examining the impact on its consolidated and nonconsolidated forecasts for the fiscal year ending March 31, 2010. An announcement will be made promptly if any revisions are needed, the company said. About JAL Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JAPAN AIRLINES: Issuer & Debt Ratings Revised by S&P to 'D' ----------------------------------------------------------- Standard & Poor's Ratings Services revised to 'D' from 'SD' its long-term corporate credit ratings on Japan Airlines Corp. (JAL) and Japan Airlines International Co. Ltd., JAL's wholly owned subsidiary. Standard & Poor's also lowered its senior unsecured debt ratings on the companies to 'D' from 'CC' and removed the ratings from CreditWatch, where they were placed with negative implications on January 13, 2010. These rating actions follow today's filing by the companies with the Tokyo District Court under the Corporate Reorganization Act. The debt ratings were placed on CreditWatch with negative implications on September 18, 2009, and the placement was maintained after downgrades on October 16 and November 4. On November 13, 2009, the ratings were lowered again and placed on CreditWatch, this time with developing implications. On January 13, 2010, the ratings were lowered, and the CreditWatch status was revised to negative. The debt issued by JAL is guaranteed by Japan Airlines International. JAL will likely finalize its reorganization plan in about six months, with the full support of the Enterprise Turnaround Initiative Corporation of Japan (ETIC). When JAL's reorganization plan is approved, Standard & Poor's will review its ratings on both companies based on the group's debt servicing ability. As part of this process Standard & Poor's will closely examine passenger revenue projections, the feasibility of plans to reduce personnel numbers, fuel and other costs, and financing plans. About JAL Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JAPAN AIRLINES: Position in Oneworld Not Affected by Bankruptcy --------------------------------------------------------------- neworld(R) said on its Web site that Japan Airlines Corp.'s position in the alliance is unaffected by the announcement that the airline is to operate under Japanese Corporate Reorganization proceedings. The state body overseeing its restructuring, the Enterprise Turnaround Initiative Corporation (ETIC), has confirmed also today its support to JAL, stressing that it is business as usual for the airline commercially and operationally during its restructuring, oneworld(R) relates. According to oneworld(R), this includes its agreements and co- operation with partners. So the airline continues to offer full oneworld services and benefits, and tickets for flights on JAL and its frequent flyer arrangements are unaffected, with JAL reassuring its passengers that they will continue to receive the same high levels of service and safety. oneworld(R) and its other member airlines have offered JAL all possible support through these difficult times and into the future, oneworld(R) adds. oneworld(R) says it remains convinced that its proposals for JAL are vastly superior in every respect to any alliance alternative available to the airline - including commercial benefits totaling US$2 billion over three years. This would provide JAL, its employees and customers, and the government and taxpayers of Japan, with the greatest long-term value at the lowest risk, bringing stability and certainty to the airline at a time when it is most needed. About JAL Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JC FLOWERS: Controlled Funds Convert Ch. 7 to Ch. 11 ---------------------------------------------------- Law360 reports that three investment funds managed by J.C. Flowers & Co. LLC succeeded on Friday in having their involuntary Chapter 7 cases converted to a Chapter 11 case, a day after six more related funds filed for bankruptcy. Based in New York City, J.C. Flowers & Co. is a private equity investment firm, focused on investments in the financial services sector. JERK MACHINE: "Bull$%" Remark Costs Lawyer 34% of His Fees ---------------------------------------------------------- WestLaw reports that a reduction in the amount of the attorney fees requested by a debtor's counsel in the debtor's fraudulent transfer action against a bank was warranted, such that counsel would be awarded 66% of the fees requested, since the conduct of the debtor's counsel and the quality of their submissions lacked the caliber of professionalism customary in federal litigation. This made the blended hourly rate of $251.57 for 181.9 hours of work excessive. In re Jerk Machine, Inc., --- B.R. ----, 2010 WL 17037 (Bankr. S.D. Fla.) (Olson, J.). Jerk Machine, Inc., sued (Bankr. S.D. Fla. Adv. Pro. No. 08-1591) Bank of America, N.A., asserting fraudulent transfer claims. Bank of America didn't win the lawsuit, but interposed an objection to the Debtor's lawyer's fee application as it related to prosecuting the fraudulent transfer litigation. The Honorable John K. Olson rejected BofA's argument that because Jerk Machine did not plead attorneys' fees in its First Amended Complaint, this constitutes a waiver of the claim for attorneys' fees under Florida law. Judge Olson did, however, cut the debtor's lawyer's fees by 34% based on his conduct. Among other offenses, Judge Olson relates that "[d]uring opening remarks by counsel for Bank of America, counsel for Jerk Machine coughed the word 'Bull$%' into the counsel table microphone," describing the scene as "reminiscent of the Interfraternity Disciplinary Council hearing in National Lampoon's Animal House." Miguel M. Cordano, Esq., in Miami, Fla., represented Bank of America in this matter. Located in Fort Lauderdale, Fla., Jerk Machine, Inc. -- http://www.jerkmachine.com/-- sells Jamaican food. Jerk Machine sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 08-21962) on Aug. 22, 2008. The Debtor is represented by David Marshall Brown, Esq., in Fort Lauderdale. At the time of the filing, the Debtor disclosed $3,274,979 in assets and $4,061,768 in liabilities. LAS VEGAS MONORAIL: February 17 Hearing on Case Dismissal Plea -------------------------------------------------------------- Ambac Assurance Corporation and Wells Fargo Bank, N.A., have asked the U.S. Bankruptcy Court for the District of Nevada to dismiss Las Vegas Monorail Company's Chapter 11 bankruptcy case. Ambac claims that the Debtor is a municipality, and that a municipality can't be a Chapter 11 debtor. According to Ambac, the Debtor certified and agreed in connection with issuance of the Bonds that it is an "instrumentality of the State of Nevada" and "controlled by the Governor of the State of Nevada," and that it is "controlled by the governor." The was organized to acquire and operate the Monorail for the public benefit and to issue bonds, payable out of the revenues derived from Las Vegas Monorail, to pursue such a public purpose. Wells Fargo says that if the Debtor convinces the Nevada legislature to grant it authority to file a Chapter 9 case, it can restructure its debt under the authority of the Court. Otherwise, the Debtor "will need to do so consensually," Wells Fargo states. According to Wells Fargo, this matters to the trustee because Congress intended for holders of government-issued bonds to have special protections and rights in any bankruptcy case filed by an entity like LVMC, including: -- the automatic stay does not apply to application of pledged special revenues; -- payments to or for the benefit of bondholders may not be avoided; and -- security interests in special revenues acquired by the debtor postpetition remain effective. The Court has set a February 17, 2010 hearing on the proposal. Ambac has made payments under its Municipal Bond Insurance Policy Number 17548BE, dated September 20, 2000 or Surety Bond No. SB1080BE in the aggregate amount of $20,532,771.15 due to the Debtor's 's failure to pay required installments of interest on the 1st Tier Bonds as and when due under the Financing Agreement and the Senior Indenture. If the Debtor never makes another payment on the 1st Tier Bonds, then Ambac estimates that its total exposure under the Policy and Surety will be approximately $1,163,435,771.15. Ambac is represented by Mcdermott Will & Emery LLP and Fennemore Craig, P.C. Wells Fargo is the trustee under a senior indenture dated September 1, 2000. It is represented by Lewis And Roca LLP. Las Vegas, Nevada-based Las Vegas Monorail Company, organized by the State of Nevada in 2000 as a nonprofit corporation, owns and manages the Las Vegas Monorail. The Monorail is a seven-stop, elevated train system that travels along a 3.9-mile route near the Las Vegas Strip. LVMC has contracted with Bombardier Transit Corporation to operate the Monorail. Though it benefits from its tax-exempt status due to being a nonprofit entity, LVMC claims to be the first privately-owned public transportation system in the nation to be funded solely by fares and advertising. LVMC says it receives no governmental financial support or subsidies. The Company filed for Chapter 11 bankruptcy protection on January 13, 2010 (Bankr. D. Nev. Case No. 10-10464). Gerald M. Gordon, Esq., at Gordon Silver, assists the Company in its restructuring effort. Alvarez & Marsal North America, LLC, is the Debtor's financial advisor. Stradling Yocca Carlson & Rauth is the Debtor's special bond counsel. Jones Vargas is the Debtor's special corporate counsel. The Company listed $10,000,001 to $50,000,000 in assets and $500,000,001 to $1,000,000,000 in liabilities. LAS VEGAS MONORAIL: Section 341(a) Meeting Set for Feb. 18 ---------------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of Las Vegas Monorail Company's creditors on February 18, 2010, at 4:00 p.m. at 300 Las Vegas Boulevard, South, Room 1500, Las Vegas, NV 89101. 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. Las Vegas, Nevada-based Las Vegas Monorail Company, organized by the State of Nevada in 2000 as a nonprofit corporation, owns and manages the Las Vegas Monorail. The Monorail is a seven-stop, elevated train system that travels along a 3.9-mile route near the Las Vegas Strip. LVMC has contracted with Bombardier Transit Corporation to operate the Monorail. Though it benefits from its tax-exempt status due to being a nonprofit entity, LVMC claims to be the first privately-owned public transportation system in the nation to be funded solely by fares and advertising. LVMC says it receives no governmental financial support or subsidies. The Company filed for Chapter 11 bankruptcy protection on January 13, 2010 (Bankr. D. Nev. Case No. 10-10464). Gerald M. Gordon, Esq., at Gordon Silver, assists the Company in its restructuring effort. Alvarez & Marsal North America, LLC, is the Debtor's financial advisor. Stradling Yocca Carlson & Rauth is the Debtor's special bond counsel. Jones Vargas is the Debtor's special corporate counsel. The Company listed $10,000,001 to $50,000,000 in assets and $500,000,001 to $1,000,000,000 in liabilities. LEHMAN BROTHERS: Linklaters Advised PwC on Claim Resolution Pact ---------------------------------------------------------------- Linklaters has advised PricewaterhouseCoopers LLP, administrators to Lehman Brothers International (Europe), on the Claim Resolution Agreement, the new process by which client assets can start to be returned. It was announced late December that the CRA has become unconditional, having received the support of more than 90% of affected clients. The CRA is a multilateral contract between LBIE and its clients which governs the basis on which assets can be returned. Under these arrangements the administrators expect to return more than $11bn of client assets. The CRA replaces the originally proposed Scheme of Arrangement, which was blocked by the Court of Appeal, without delay and was accepted by an overwhelming majority of affected clients at first showing. David Ereira, banking partner at Linklaters who has led the team working on the development of the CRA, commented, "We are very pleased to have been able to advise the administrators on this hugely innovative transaction, which enables the administrators to return such a significant amount of client assets." "The CRA has addressed many of the issues now being grappled with by the government in their proposed reforms in the insolvency of investment firms without the need to change the law and will result in a speedier resolution than may be achieved in other jurisdictions where other Lehman insolvencies are going on." The Linklaters team working on first the Scheme of Arrangement and then the CRA drew upon the expertise of people across the firm who have been involved in the administration. In addition to the firm's banking and restructuring & insolvency experts, it included the debt structured products team (who undertook the detailed review of Lehman's contracts); the financial regulation group (who have been advising on all the market facing and regulatory aspects of the insolvency); the corporate practice; and the dispute resolution team. Partners included David Ereira, Michael Voisin, Stephen Fletcher, Pauline Ashall, Mark Kingstone and Nick Porter. Associates included Marcus Au Yeung, Jon Branch, Harpal Dhillon, Fionnghuala Griggs, Patricia Ho, Fiona Houston, Jacqueline Ingram, Clare Merrifield, James O'Connell, Susan Roscoe and Aisling Zarraga. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wants to Expose Unreasonable Claims ---------------------------------------------------- Lehman Brothers Holdings Inc. wants to have large banks persisting with their "outrageously unreasonable" claims to explain them in court, according to a January 12 report by Financial Times. "There are some banks whose claims are outrageously unreasonable, but if we have to, we plan to bring these claimants in front of the judge to argue why this claim is not warranted, and by doing so persuade the other claimants to be more reasonable," Financial Times quoted Mr. Marsal as saying. The banks were counterparties with LBHI, which were allowed to terminate their derivatives trades following LBHI's bankruptcy filing and to use provisions under the International Swaps and Derivatives Association contract for calculation of damages. In the week before LBHI filed for bankruptcy, it was reportedly owed $2.3 billion by the counterparties to trades. Three weeks later, they claimed they were owed $25 billion plus guaranteed claims of $25 billion by LBHI, Financial Times reported. "How does that make sense?" asked Daniel Ehrmann, co-head of derivatives at LBHI and a managing director of Alvarez & Marsal, the firm employed by LBHI in connection with its restructuring. While LBHI's representatives do not believe banks acted contrary to the contracts, they believe some used the ISDA contracts to support theoretical losses as opposed to actual losses, Financial Times reported. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEVEL 3 COMMS: Receives Consents for Unit's 12.25% Senior Notes --------------------------------------------------------------- Level 3 Communications, Inc. announced that, as part of Level 3 Financing, Inc.'s previously announced tender offer and consent solicitation for its 12.25% Senior Notes due 2013, as of 5:00 p.m., New York City time, on Jan. 19, 2010, Level 3 Financing, Inc., had received valid consents from the holders of substantially all of the outstanding 12.25% Notes to amend the indenture relating to the 12.25% Notes to eliminate substantially all of the covenants and certain events of default and related provisions contained in the indenture. As of the Consent Time, holders of 12.25% Notes (or $546,882,000 aggregate principal amount) had tendered notes in the tender offer and consented to the indenture amendments. In connection with the tender offer and consent solicitation, on Jan. 20, 2010, Level 3 Financing, Inc., entered into a supplemental indenture to effect the indenture amendments. The tender offer for the 12.25% Notes is currently scheduled to expire at midnight New York City time on Feb. 2, 2010. 12.25% Notes validly tendered in the tender offer after the Consent Time, but prior to the Expiration Date, will receive the tender offer consideration but will not receive the consent payment. Accrued interest up to, but not including, the applicable settlement date will be paid in cash on all validly tendered and accepted 12.25% Notes. 12.25% Notes tendered in the tender offer may no longer be withdrawn. The settlement date for 12.25% Notes tendered in the tender offer on or prior to the Consent Time was Jan. 20, 2010. It is anticipated that any 12.25% Notes that remain outstanding following the tender offer will be redeemed by the company on March 15, 2010, at a redemption price of $1,061.25, defeased or otherwise discharged. This announcement is not an offer to purchase, a solicitation of an offer to purchase, or a solicitation of an offer to sell securities with respect to the 12.25% Notes. The tender offer may only be made pursuant to the terms of the Offer to Purchase and the related Letter of Transmittal. The complete terms and conditions of the tender offer are set forth in an Offer to Purchase that has been sent to holders of the 12.25% Notes. Holders are urged to read the tender offer documents carefully. Copies of the Offer to Purchase and the related Letter of Transmittal may be obtained from the Information Agent for the tender offer, Global Bondholder Services Corporation, at (212) 430-3774 and (866) 389-1500 (toll-free). BofA Merrill Lynch and Citi are the Dealer Managers for the tender offer. Questions regarding the tender offer may be directed to BofA Merrill Lynch, Liability Management Group at (888) 292-0070 (toll-free) and (646) 855-3401 or Citigroup Global Markets Inc. at (800) 558-3745 (toll-free) and (212) 723-6106. Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. Level 3 Communications carries a 'Caa1' corporate family rating, and 'Caa2' probability of default rating, with negative outlook from Moody's, a 'B-' issuer default rating from Fitch, and 'B-' long term issuer credit ratings from Standard & Poor's. LIFEPOINT HOSPITAL: Bank Debt Trades at 2% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Lifepoint Hospitals Holdings, Inc., is a borrower traded in the secondary market at 97.96 cents-on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.71 percentage points from the previous week, The Journal relates. The debt matures on April 15, 2012. The Company pays 163 basis points above LIBOR to borrow under the loan facility and it carries Moody's Ba1 rating and Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. Lifepoint Hospitals Holdings, Inc., provides general and acute care hospital services. Its hospitals provide the range of medical and surgical services commonly available in hospitals in non-urban markets. These hospitals also provide diagnostic and emergency services, as well as outpatient and ancillary services, including outpatient surgery, laboratory, rehabilitation, radiology, respiratory therapy, and physical therapy. The company also provides hospital and medical insurance benefits to persons of age 65 and over, some disabled persons, and persons with end- stage renal disease. It operates 23 general, acute care hospitals with an aggregate of 2,197 licensed beds in growing, non-urban communities. Its hospitals are located in Alabama, Florida, Kansas, Kentucky, Louisiana, Tennessee, Utah, and Wyoming. LifePoint Hospitals Holdings, Inc., operates as a subsidiary of Lifepoint Hospitals, Inc. MANITOWOC CO: S&P Assigns 'BB-' Rating on $400 Mil. Senior Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB-' issue-level rating to Manitowoc Co. Inc.'s proposed new $400 million senior unsecured notes due 2018, the same as the corporate credit rating on the company. The recovery rating on this debt is '4', indicating S&P's expectation of average (30%-50%) recovery in a default scenario. S&P expects the company to use the proceeds from the new notes to repay a portion of its term loans under its senior secured credit facility. The issue-level ratings and recovery ratings for the company's existing debt remain unchanged. "The ratings on Manitowoc reflect the company's aggressive financial risk profile, characterized by high debt levels and aggressive financial policies, which more than offset its fair business risk profile," said Standard & Poor's credit analyst Helena Song. The company is a leading manufacturer that serves the cyclical construction and the more stable food service markets," said Standard & Poor's credit analyst Helena Song. Ratings List Manitowoc Co. Inc. Corp. credit rating BB-/Negative/-- New Ratings Assigned $400 million senior unsecured notes due 2018 BB- Recovery rating 4 MARCUS LEE: Debtor Can't Force Lender to Lend More Money -------------------------------------------------------- WestLaw reports that the provisions of the Bankruptcy Code that prevented a trustee or a Chapter 11 debtor-in-possession from assuming a prepetition lending agreement and permitted lenders to decline to advance postpetition funds despite any prepetition contractual obligation to make a loan rendered unenforceable any prepetition contractual right that a Chapter 11 debtor had to receive loan advances from its lender for the construction of the clubhouse for the debtor's condominium development. Thus, the debtor had no cause of action against the lender for breach of contract. In re Marcus Lee Associates, L.P., --- B.R. ----, 2009 WL 5064315 (Bankr. E.D. Pa.) (Fox, J.). Marcus Lee Associates, L.P., and Meridian of Valley Square Condominium Association, Inc. (a condominium association asserting third party beneficiary status), sued (Bankr. E.D. Pa. Adv. Pro. Nos. 09-0143 and 09-0144) Wachovia Bank, N.A., seeking to compel the lender to provide funds for construction of a clubhouse that was part of the debtor's condominium development project, alleging, inter alia, breach of contract, unjust enrichment, conversion, tortious interference, breach of trust, and specific performance. Lender moved to dismiss both adversary proceedings. Granting Wachovia's motions to dismiss the adversary proceedings, the Honorable Bruce Fox held that: (1) the association had no standing to assert claims against the lender based upon its loan agreements with the debtor or the lender's failure to provide funds for further construction of the clubhouse; (2) the Bankruptcy Code rendered unenforceable any prepetition contractual right that the debtor had to receive loan advances from the lender for construction of the clubhouse; (3) the existence of express contracts between the debtor and the lender precluded the debtor's claim for unjust enrichment; (4) the lender's refusal to advance further funds to the debtor did not support the conversion claim; (5) the lender's refusal to advance further funds to the debtor did not support a tortious interference claim; (6) the debtor and the lender did not have a fiduciary relationship; and (7) the loan agreements did not establish a clubhouse funding mechanism. Jennifer P. Knox, Esq., at Reed Smith LLP in Philadelphia represented Wachovia in this dispute. Condominium developer and condominium association Marcus Lee Associates, L.P., located in Warrington, Pa., filed a voluntary Chapter 11 petition (Bankr. E.D. Pa. Case No. 09-11037) on February 16, 2009. In its petition, Marcus Lee Associated identified Lamplighter Village Associates, L.P. as a debtor- affiliate. Lamplighter Village Associates, L.P., also based in Warrington, Pa., filed its bankruptcy petition on February 16, 2009 (Bankr. E.D. Pa. Case No. 09-11035). Marcus Lee Associates and Lamplighter Village Associates are represented by Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, P.C., in Philadelphia, as bankruptcy counsel. Marcus Lee Associates and Lamplighter Village Associates each estimate their assets and debts at less than $10,000,000. MASSEY ENERGY: S&P Changes Outlook to Stable; Affirms 'BB-' Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Massey Energy Co. to stable from negative. At the same time, S&P affirmed its ratings on the company, including its 'BB-' corporate credit rating. "The outlook revision reflects S&P's assessment that the company's performance in 2009 was better than previously expected, owing to better than expected cash costs per ton of around $50," said Standard & Poor's credit analyst Sherwin Brandford. "The outlook change also incorporates S&P's expectation that the company will sustain its operating performance during the next several quarters, despite weak steam coal demand, as a result of improved demand for met coal." Massey's financial profile has remained at a level S&P would consider appropriate for the 'BB-' rating, with total adjusted debt to EBITDA below 4x and an unrestricted cash balance of over $625 million, levels S&P expects will be sustainable in the near term. S&P estimate that Massey's 2009 EBITDA was better than expected, at around $475 million, and that EBITDA during 2010 will benefit somewhat from improved demand for met coal, and exceed $500 million, resulting in debt leverage being maintained below 4x. The 'BB-' corporate credit rating on Massey Energy reflects the company's limited geographic diversity, difficult mining conditions in Central Appalachia, high cost position, and somewhat aggressive financial policy, which supports a weak business risk profile and aggressive financial risk profile. Still, the company's position as the largest producer of high-quality, low- sulfur coal in Central Appalachia and extensive reserve base somewhat temper these factors. Looking ahead, S&P believes that strength in the met coal market, owing to the improvement in operating rates at steel mills, will help to offset the weakness in steam coal as a result of better margins on that product, resulting in 2010 performance being marginally better than 2009. S&P is expecting the company to sell around 37 million tons of produced coal at around $65 per ton and believe this would likely result in EBITDA of around $525 million. As a result, S&P expects credit metrics to remain at a level S&P would consider to be in-line with S&P's 'BB-' rating, with adjusted debt leverage below 4x. Richmond, Va.-based Massey produces about 40 million tons of coal annually, has more than 2.3 billion tons of coal reserves, and operates more than 50 active mines, making it the largest Central Appalachian coal producer. MERCURY COMPANIES: Wants to Sell Art Works to David Cook Galleries ------------------------------------------------------------------ Mercury Companies, Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Colorado for permission to sell six works of art to David Cook Galleries for $9,100, free and clear of all liens, claims, interests and encumbrances. The sale, pursuant to Section 363 of the Bankruptcy Code, will generate proceeds for the bankruptcy estate. Denver, Colorado-based Mercury Companies Inc. is a holding company primarily for subsidiaries that until recently were involved in the settlement services industry, including title services, escrow services, real estate services, mortgage services, mortgage document preparation, and settlement services software development. Mercury has since wound down or sold its operations. Mercury Companies filed for Chapter 11 protection on August 28, 2008. Two months later, six subsidiaries, namely Arizona Title Agency, Inc., Financial Title Company, Lenders Choice Title Company, Lenders First Choice Agency, Inc., Texas United Title, Inc., dba United Title of Texas and Title Guaranty Agency of Arizona, Inc., also filed voluntary Chapter 11 petitions. The units' cases are jointly administered with Mercury's (Bankr. D. Colo. Lead Case No. 08-23125). Daniel J. Garfield, Esq., and Michael J. Pankow, Esq., at Brownstein Hyatt Farber Schreck; Kathleen A. Odle, Esq., at Sherman & Howard; and Vikki L. Vander Woude, Esq., at Manatt Phelps & Phillips, represent the Debtors as counsel. Lars H. Fuller, Esq., at Baker Hostetler, serves as the official committee of unsecured creditors' counsel. MERIDIAN RESOURCE: Friday Deadline to File Proxy Statement Expires ------------------------------------------------------------------ The Meridian Resource Corporation and certain of its subsidiaries on December 22, 2009, entered into an Eleventh Amendment to Forbearance and Amendment Agreement, which amended the Forbearance and Amendment Agreement with Fortis Capital Corp., as administrative agent, and the other lenders, and agents party to the Company's Amended and Restated Credit Agreement, dated as of December 23, 2004, as amended. The amendment was executed in connection with Meridian's entry into an Agreement and Plan of Merger with Alta Mesa Holdings, LP, and Alta Mesa Acquisition Sub, LLC -- Merger Sub -- a direct wholly owned subsidiary of Alta Mesa. Among other things, the Eleventh Forbearance Amendment provided that forbearance was conditioned on the Company having filed with the Securities and Exchange Commission by January 15, 2010 the Company's proxy statement with respect to the Merger. On January 13, 2010, the Lenders agreed to extend that deadline to January 22, 2010. As of press time, Meridian has not filed the proxy statement. The Merger Agreement provides that the Company will merge with and into Merger Sub with Merger Sub continuing as the surviving company. At the effective time and as a result of the Merger, each share of common stock, par value $0.01 per share, of the Company, issued and outstanding immediately prior to the effective time of the Merger, other than shares as to which appraisal rights are properly asserted under Texas law and shares owned by the Company, Alta Mesa, Merger Sub or their subsidiaries, will be converted into the right to receive a cash amount of $0.29. At the effective time of the Merger, each outstanding option and warrant to purchase the Company's common stock will be converted into the right to receive a cash amount equal to the excess, if any, of the Merger Consideration over the exercise price per share for each share subject to the option or warrant, less any applicable withholding taxes, resulting in a cash payment to the holders of such options and warrants of $400,000. The Eleventh Forbearance Amendment extends the date on which the Fortis Forbearance Agreement will terminate to the earlier of (x) May 31, 2010, (y) the effective time of the Merger, or (z) the termination of the Merger Agreement. In addition, the Eleventh Forbearance Amendment provides that the Lenders have the right to terminate the forbearance period on or after February 28, 2010, without cause, upon unanimous written consent of the Lenders. About Meridian Resource Based in Houston, Texas, The Meridian Resource Corporation (NYSE:TMR) -- http://www.tmrc.com/-- is an independent oil and natural gas company engaged in the exploration, exploitation, acquisition and development of oil and natural gas in Louisiana, Texas, and the Gulf of Mexico. Meridian has access to an extensive inventory of seismic data and, among independent producers, is a leader in using 3-D seismic and other technologies to analyze prospects, define risk, target and complete high- potential wells for exploration and development. Meridian has a field office in Weeks Island, Louisiana. At September 30, 2009, the Company had $190,339,000 in total assets, including $18,090,000 in total current assets, against $120,634,000 in total current liabilities and $17,736,000 in asset retirement obligations. The Company noted that its default under the debt agreements, which has been mitigated in the short term by certain forbearance agreements, negatively impacts future cash flow and the Company's access to credit or other forms of capital. There is substantial doubt as to the Company's ability to continue as a going concern for a period longer than the next 12 months, the Company said. It added that it might have to seek protection under federal bankruptcy laws if it is unable to comply with the forbearance agreements or if those agreements expire. METCALFE & MANSFIELD: S.D.N.Y. Won't Second-Guess CCAA Court ------------------------------------------------------------ WestLaw reports that the narrow constraints on the availability of a non-debtor, third-party release as part of a Chapter 11 plan confirmed under United States bankruptcy law did not prevent a bankruptcy court, in a Chapter 15 case commenced by the foreign representative of Canadian debtors, from granting post-recognition relief in the forum of enforcement of a non-debtor, third-party release approved by Canadian courts following specific argument thereon, as part of a far-reaching plan that was adopted with near-unanimous creditor support. It did not matter whether the release would have been proper under United States bankruptcy law. The "public policy" exception to the availability of post- recognition relief was not implicated. In re Metcalfe & Mansfield Alternative Investments, --- B.R. ----, 2010 WL 20603 (Bankr. S.D.N.Y.) (Glenn, J.). Ernst & Young Inc., serving at the court-appointed monitor in Canadian CCAA proceedings for Metcalfe & Mansfield Alternative Investments II Corp., and other debtors and as M&M's authorized foreign representative in chapter 15 proceedings before the U.S. Bankruptcy Court, moved for recognition of the foreign proceedings and post-recognition relief in the form of enforcement of a non- debtor, third-party release approved by the Canadian court as part of a restructuring plan that was adopted with near-unanimous creditor support. The Honorable Martin Glenn held that (1) the narrow constraints on the availability of non-debtor, third-party release as part of a Chapter 11 plan confirmed under United States bankruptcy law did not prevent a bankruptcy court, in Chapter 15 case commenced by the foreign representative of Canadian debtors, from granting post-recognition relief in forum of enforcement of a non-debtor, third-party release approved by Canadian courts following specific argument thereon, and (2) no basis existed for bankruptcy court to second-guess decisions of Canadian courts. Metcalfe & Mansfield Alternative Investments II Corp., and other foreign petitioners are debtors in proceedings under Canada's Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36, as amended, commenced on March 17, 2008 and pending before the Ontario Superior Court of Justice (Commercial List). The Canadian Proceedings were initiated by the Pan-Canadian Investors Committee for the Third-Party Structured Asset-Backed Commercial Paper in order to effect the restructuring of all outstanding third-party (non-bank sponsored) Asset Backed Commercial Paper obligations, estimated to have a face value at the time of commencement of approximately C$32 billion. The ABCP restructuring is said to be the largest restructuring in Canadian history. The Ontario Court entered its Amended Sanction Order and Plan Implementation Order on June 5, 2008, and the Order was affirmed on appeal by unanimous decision of the Ontario Court of Appeal on August 18, 2008. On September 19, 2008, the Canada Supreme Court denied review. The Plan Implementation Order became effective on January 12, 2009. The Plan approved by the Ontario Court was first approved by an overwhelming vote of ABCP Noteholders (96% in number and value of all Noteholders present and voting). On January 21, 2009, new Plan Notes and cash were distributed to existing Noteholders, and assets of the Conduits (described below) were transferred to newly created Master Asset Vehicles securing the new Plan Notes. In May 2009, additional cash was distributed to Noteholders. The Ontario Court has also granted the Monitor's motion to make a final cash distribution to the Noteholders. The U.S. Bankruptcy Court put its stamp of approval on the Plan on Jan. 5, 2010. Ken Coleman, Esq., Amelie Baudot, Esq., and Rowena White, Esq., at Allen & Overy LLP in New York City represent the Foreign Representative in five chapter 15 cases (Bankr. S.D.N.Y. Case No. 09-16709) filed by Metcalfe & Mansfield Capital Corp. and four affiliates on Nov. 10, 2009. METRO-GOLDWYN-MAYER: Bank Debt Trades at 39% Off ------------------------------------------------ Participations in a syndicated loan under which Metro-Goldwyn- Mayer, Inc., is a borrower traded in the secondary market at 60.78 cents-on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 3.47 percentage points from the previous week, The Journal relates. The Company pays 275 basis points above LIBOR to borrow under the facility. The loan matures April 8, 2012, and it is not rated by Moody's and Standard & Poor's. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. Metro-Goldwyn-Mayer, Inc., is an independent, privately held motion picture, television, home video, and theatrical production and distribution company. The Company owns the world's largest library of modern films, comprising approximately 4,000 titles, and over 10,400 episodes of television programming. MGM is owned by an investor consortium, comprised of Providence Equity Partners, TPG Capital, Sony Corporation of America, Comcast Corporation, DLJ Merchant Banking Partners and Quadrangle Group. As reported by the Troubled Company Reporter on Sept. 30, 2009, The New York Post, citing multiple sources, said discussions between debtholders and equity owners on a restructuring of Metro- Goldwyn-Mayer's massive debt load have begun on a contentious note, with both sides threatening to force MGM into bankruptcy in order to gain leverage and extract better terms from the other. Bloomberg also said that MGM is in talks to skip interest payments and restructure $3.7 billion in bank loans. MGM asked creditors to waive $12 million monthly interest payments until Feb. 15, 2010. MIDWEST BANC: Exchange Bid for Depositary Shares Expires Jan. 21 ---------------------------------------------------------------- Midwest Banc Holdings, Inc., is offering to exchange up to 17,250,000 newly issued shares of its common stock, $0.01 par value, for outstanding depositary shares, $25.00 liquidation amount per share, each representing a 1/100th fractional interest in a share of the Company's Series A Noncumulative Redeemable Convertible Perpetual Preferred Stock. For each Depositary Share the Company accepts for exchange in accordance with the terms of the Exchange Offer, the Company will issue a number of shares of the Company's Common Stock having a value equal to $2.80. The Exchange Offer expired at 5:00 p.m., New York City time, on January 21, 2010. As of 5:00 p.m. New York City time on January 14, 2010, 1,222,270 Depositary Shares representing 71% of the 1,725,000 Depositary Shares outstanding had been validly tendered and not withdrawn. The Company's Common Stock and the Depositary Shares trade on the Nasdaq Global Market under the symbols "MBHI" and "MBHIP", respectively. On January 14, 2010, the closing sale price of the Common Stock on Nasdaq was $0.42 per share and the closing sale price of the Depositary Shares was $1.90 per Depositary Share. A full-text copy of the Offer to Exchange is available at no charge at http://ResearchArchives.com/t/s?4dcc On December 18, 2009, Midwest Banc and its wholly-owned subsidiary, Midwest Bank and Trust Company, formally acknowledged several actions needed to strengthen the Bank and the Company by entering into a written agreement with the Federal Reserve Bank of Chicago and the Illinois Department of Financial and Professional Regulation, Division of Banking. Midwest Banc must prepare and file with the regulators within specified timeframes various specific plans designed to improve (i) board oversight over the management and operations of the Bank, (ii) credit risk management practices, (iii) management of problem loans, (iv) the allowance for loan losses, (v) the Bank's earnings and budget, (vi) liquidity and funds management and (vii) interest rate risk management. Among other things, byy February 16, 2010, the board of directors of the Bank must submit to the Reserve Bank and the Department a written plan to strengthen board oversight of the management and operations of the Bank; and a written plan to strengthen credit risk management practices. The Bank must furnish periodic progress reports to the Department and the Reserve Bank regarding its compliance with the Agreement. As reported by the Troubled Company Reporter on December 3, 2009, the Company is negotiating with its primary lender to restructure $55.0 million of senior debt and $15.0 million of subordinated debt. At September 30, 2009, the Company had $3,544,130,000 in total assets against $3,363,891,000 in total liabilities. On October 22, 2009, the Company entered into a Forbearance Agreement with its lender through March 31, 2010, during which period the Company is not obligated to make interest and principal payments in excess of funds held in a deposit security account (which was initially funded with $325,000), and while retaining all rights and remedies within the Credit Agreements, the Lender has agreed not to demand payment of amounts due, and has agreed to forbear from exercising the rights and remedies available to it in respect of existing defaults and future compliance with certain covenants through March 31, 2010, other than the continued imposition of default interest rates. Management believes that the Forbearance Agreement provides the Company sufficient time to complete all major elements of the Capital Plan. About Midwest Banc Holdings Based in Melrose Park, Illinois, Midwest Banc Holdings, Inc. (NASDAQ:MBHI) is a half century old community bank with $3.5 billion in assets at September 30, 2009. The Company has two principal operating subsidiaries: Midwest Bank and Trust Company and Midwest Financial and Investment Services, Inc. Midwest Bank has 26 locations serving the diverse needs of both urban and suburban Chicagoland businesses and consumers through its Commercial Banking, Wealth Management, Corporate Trust and Retail Banking areas. MOMENTIVE PERFORMANCE: Bank Debt Trades at 7% Off ------------------------------------------------- Participations in a syndicated loan under which Momentive Performance Materials, Inc., is a borrower traded in the secondary market at 92.95 cents-on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.70 percentage points from the previous week, The Journal relates. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank loan matures on Dec. 5, 2013, and carries Moody's B1 rating and Standard & Poor's CCC+ rating. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. As of June 28, 2009, Momentive had $3.41 billion in total assets on $3.96 billion in total liabilities, resulting in $551.8 billion in stockholders' deficit. The Troubled Company Reporter said September 28, 2009, that Standard & Poor's Ratings Services placed all its ratings on Momentive Performance Materials and its subsidiaries on CreditWatch with positive implications, including the 'CCC-' corporate credit rating on Momentive Performance Materials. S&P believes it is likely that the waiver, together with improving operating performance, significantly reduces the likelihood of a near-term covenant breach. Quarterly EBITDA has been climbing steadily since reaching a low of about $15 million (as calculated for bank covenant purposes) in the first quarter of 2009. It was $64 million in the second quarter, and management expects it to be between $84 million and $94 million in the third quarter. MONTGOMERY REALTY: Can Access Cash Collateral Until June 30 ----------------------------------------------------------- The Hon. Dennis Montali of the U.S. Bankruptcy Court for the Northern District of California approved the second stipulation, authorizing Montgomery Realty Group Inc. to: -- use rents generated by 710 Sansome Street; -- grant lenders adequate protection. The property is encumbered by two deeds of trust in favor of: a. Bank of America, N.A. as Trustee for the Registered Certificate Holders of GMAC Commercial Mortgage Securities, Inc. Mortgage Pass Through Certificate Series 1999-WF2, acting through Capmark Financial, Inc., securing a debt of $4.3 million; and b. California Mortgage and Realty Trust, securing a debt of $1.1 million. The holders of liens encumbering the rents have consented to the use of cash collateral. The stipulation's key provisions include: a. the Debtor is authorized to fund ordinary operating expenses associated with the 710 Sansome property, including a $5,000 per month management fee, aggregating $16,000 per month; b. Capmark will receive increased adequate protection payments, commencing effective January 2010, in the amount of $39,614 per month; c. $50,980 will be set aside as a cash collateral impound and will not be disbursed absent consent of all secured creditors or a Court Order; d. no payments will be made to or on account of the junior lien held by CMR; e. the Debtor may use the balance of the rental receipts from 710 Sansome as though they were free funds, and $20,000 of those proceeds (from December 2009) will be delivered to the Debtor's counsel's trust account for use in connection with litigation expenses; f. the stipulation will terminate and expire 30 days after the conclusion of the confirmation hearing, or June 30, 2010, whichever is sooner. The Debtor related that the $10.5 million value of 710 Sansome Street gives CMR an equity cushion of more than $4 million. About Montgomery Realty Based in San Francisco, Montgomery Realty Group, Inc. filed for Chapter 11 relief on July 6, 2009 (Bankr. C.D. Calif. Case No. 09-31879. Montgomery leases and operates improved properties. Michael St. James, Esq., at St. James Law, represents the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed total assets of between $10 million and $50 million each in assets and debts. MOONLIGHT BASIN: Can Sell Montana Property and Use Cash Collateral ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Montana authorized Moonlight Basin Ranch LP to sell property pursuant to Section 363 of the Bankruptcy Code, and to use the cash collateral resulting from the sale. Lehman Commercial Paper, Inc. agreed to release up to $1,127,500 from the sale proceeds solely for the purposes specified in the final order. Jon S. Fossel agreed to purchase the real property including Tract H in Certificate of Survey No. 7/2081-BA, in Madison County, Montana, free and clear of any interest, specifically including the LCPI lien, for the gross price of $850,000 under these terms and conditions: a. the purchase price will be paid at least $300,000 in cash; b. not more than $550,000 of the purchase price will be paid through seller financing, payable over four years through four equal installment payments on the anniversary date of the sale; interest will accrue at no less than the 5 year Treasury Bill Rate on the day of closing plus 100 basis points; the Debtor will be granted a first position mortgage on the property to secure the seller financing; c. the Debtor will pay the usual and ordinary costs of closing including property taxes, closing fees, deed preparation, recording fees, and title insurance; d. no real estate commissions will be paid; e. the Debtor will grant Mr. Fossel a roadway agreement for use of Big Sky Roadway with same conditions as Big Sky Roadway Declaration for Moonlight Basin Ranch and may record that certain Fifth Amendment to Big Sky Roadway Declaration; and f. for the avoidance of doubt, the proceeds of the sale of the property will only be used in accordance with the final order, and LCPI will retain a lien on the proceeds of the sale of the property, including the Debtor's first position mortgage on the property to secure the seller financing. About Moonlight Basin Ranch LP Ennis, Montana-based Moonlight Basin Ranch LP is a golf and ski resort in Montana. The Company field for Chapter 11 bankruptcy protection on November 18, 2009 (Bankr. D. Mont. Case No. 09- 62327). Craig D. Martinson, Esq., and James A. Patten, Esq., who have offices in Billings, Montana, assist the Debtor in its restructuring effort. The Company listed $100,000,001 to $500,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. Debtor-affiliate Moonlight Lodge, LLC, also filed a separate Chapter 11 bankruptcy protection on November 18, 2009 (Bankr. D. Mont. Case No. 09-62329). The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. NATIONAL HOME: Received Interim Access to JPMorgan Cash ------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Arkansas authorized, on an interim basis, National Home Centers, Inc., to: -- use the cash securing repayment of obligation to its prepetition lenders; and -- grant adequate protection to its prepetition lenders. JPMorgan Chase Bank, as lender and agent for financial institution The CIT Group/Business Credit, Inc., provided a pre-petition credit facility to the Debtor. As of the Petition Date, the principal amount owed to the secured lenders under the credit agreement dated August 12, 2004, is approximately $11,808,000. The value of the collateral securing the debt as of the petition date is $32,456,706. The value of the collateral upon which the secured lenders would lend was $15,756,135, excluding the value of real estate. The Debtor would use the cash collateral to fund its Chapter 11 case, pay suppliers and other parties. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant the prepetition lenders replacement liens, subject to carve out. About National Home Centers National Home Centers, Inc. -- One Source Home & Building Center and Cleburne County Building Center -- operates storage units in Springdale, Arizona. The Company filed for Chapter 11 bankruptcy protection on December 8, 2009 (Bankr. W.D. Ark. Case No. 09- 76195). Charles T. Coleman, Esq.; Judy Simmons Henry, Esq.; and Kimberly Wood Tucker, Esq., at Wright, Lindsey & Jennings assist the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. NEIMAN MARCUS: Bank Debt Trades at 8% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Neiman Marcus Group, Inc., is a borrower traded in the secondary market at 92.22 cents-on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.74 percentage points from the previous week, The Journal relates. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on April 6, 2013, and carries Moody's B3 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. Neiman Marcus Group, Inc., headquartered in Dallas, Texas, operates 40 Neiman Marcus stores, 2 Bergdorf Goodman stores, 27 clearance centers, and a direct business. Total revenues are about $3.9 billion. The Company carries a 'Caa1' Corporate Family Rating and 'Caa1' Probability of Default Rating from Moody's Investors Service. NEUMANN HOMES: BofA Files $50M Objection to Neumann Plan -------------------------------------------------------- Law360 reports that Bank of America NA has balked at Neumann Homes Inc.'s liquidation plan, which the bank says could leave as much as $50 million in loans unsecured by liens. Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The Company has built more than 11,000 homes in some 150 residential communities. The Company offers formal business training to employees through classes, seminars, and computer- based training. The Company filed for Chapter 11 protection on November 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors has selected Paul, Hastings, Janofsky & Walker LLP, as its counsel in these bankruptcy proceeding. When the Debtors filed for protection from its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) PACIFIC ETHANOL: Greinke Reports Stake, Buys Preferreds From Lyles ------------------------------------------------------------------ Frank P. Greinke, an individual, and as Trustee under the Greinke Personal Living Trust, disclosed being the beneficially owner of 4,738,123 shares of common stock of Pacific Ethanol, Inc., which equals 7.6% of the outstanding shares of Common Stock as of January 5, 2010. Mr. Greinke is the Chief Executive Officer of Southern Counties Oil Co., a California Limited Partnership. On December 28, 2009, the Greinke Trust purchased 1,538,462 shares of Pacific Ethanol's Series B Preferred Stock from Lyles United, LLC, pursuant to a private transaction. The acquisition of the Series B Preferred Stock was made for investment purposes. Mr. Greinke said he intends to review the investment in Pacific Ethanol on a continuing basis. Mr. Greinke intends to have open communications with Pacific Ethanol's management to monitor his investment in the securities. "Depending on market conditions and other factors including, without limitation, [Pacific Ethanol's] financial position and investment strategy, [Greinke] may, at any time or from time to time, take such actions with respect to its investment in [Pacific Ethanol] as it deems appropriate, including without limitation acquiring additional securities of [Pacific Ethanol], or alternatively, disposing of some or all of the securities of [Pacific Ethanol] Issuer beneficially owned by them," Mr. Greinke said in a regulatory filing. At the current time, Mr. Greinke plans to transfer an undetermined portion of the Series B Preferred Stock to certain officers of Southern Counties Oil Co. in private transactions that have not been negotiated. About Pacific Ethanol Pacific Ethanol Holding Co. LLC and four affiliates filed for Chapter 11 on May 17, 2009 (Bankr. D. Del. Case No. 09-11713). Judge Kevin Gross handles the case. Attorneys at Cooley Godward Kronish LLP represent the Debtors as counsel. Attorneys at Potter Anderson & Corroon LLP are co-counsel. Epiq Bankruptcy Solutions LLC is the claims agent. Pacific Ethanol Holding disclosed $50 million to $100 million in assets and $100 million to $500 million in debts in its petition. Pacific Ethanol Inc. and its marketing subsidiaries, Kinergy Marketing LLC, and Pacific Ag. Products, LLC, have not filed for Chapter 11 bankruptcy protection. The Company is expected to continue to manage the Plant Subsidiaries under an Asset Management Agreement and Kinergy and PAP are expected to continue to market and sell the Plant Subsidiaries' ethanol and feed production under existing Marketing Agreements. PARMALAT SPA: Deloitte & Thornton Settle Lawsuit ------------------------------------------------ Lead Plaintiffs Hermes Focus Asset Management Europe Limited; Cattolica Partecipazioni, S.p.A.; Capital & Finance Asset Management; Societe Moderne des Terrassements Parisiens and Solotrat ask the U.S. District Court for the Southern District of New York, pursuant to Rule 23 of the Federal Rules of Civil Procedure, to: (a) approve of the form and manner of notice to Class members of: * a proposed settlement resolving all claims against Defendants Deloitte Touche Tohmatsu, Deloitte & Touche LLP, Dianthus S.p.A., formerly known as Deloitte & Touche S.p.A., and James Copeland; and * a proposed settlement resolving all claims against Defendants Grant Thornton International, Grant Thornton International Limited, Grant Thornton LLP and Grant Thornton S.p.A.; and (b) establish a date and time for a fairness hearing to consider: * final approval of the Settlements as well as the Plan of Allocation of the settlement proceeds; and * Lead Counsel's application for an award of attorneys' fees and reimbursement of expenses. In support of their request, the Lead Plaintiffs filed an accompanying memorandum of law, and separate declarations by James J. Sabella, Esq., at Grant & Eisenhofer P.A., in New York, and Scott D. Hakala and accompanying exhibits. Mr. Sabella, Esq., is the Lead Plaintiffs' counsel, while Mr. Hakala is their expert economist. The Settlements provide for payment to the Plaintiffs of a total of $15 million, Mr. Sabella relates. Specifically, the Deloitte Settlement provides for a settlement amount of $8.5 million, and the Grant Thornton Settlement provides for a settlement amount of $6.5 million. The Settlements provide for the release of claims against, inter alia, the Deloitte and Grant Thornton Defendants and their member firms. The issue before the Court is whether the Settlements are within the range of what might be approved as fair, reasonable and adequate, sufficient to justify transmitting to the Class notice concerning the Settlements and scheduling the Final Approval Hearing, Mr. Sabella tells Judge Kaplan. Mr. Sabella asserts that the Court is not required at this point to make a final determination regarding the reasonableness of the Settlements, and no Class member's substantive rights will be prejudiced by issuance of a preliminary order. The Court knows the history of this litigation and that the Settling Parties to both Settlements are fully conversant with the strengths and weaknesses of this case against the persons and entities being released under the Settlements, Mr. Sabella contends. He notes that the Settling Parties are aware of the rulings already entered and the facts developed. They, thus, can readily evaluate the risks associated with proceeding to trial -- indeed, trial was scheduled -- as well as the fairness of the Settlements, he continues. "In light of these strengths, weaknesses, and risks, the proposed Settlements are a good result for the Class and, Lead Plaintiffs submit, plainly fall within the 'range of possible approval,'" Mr. Sabella asserts. Accordingly, he says, the Court should direct that notice be disseminated to the Class. The Class period is set between January 5, 1999, and December 18, 2003. * * * The Court approved the form of the Notice and the Publication Notice of the Settlements. Co-Lead Counsel Cohen, Milstein, Hausfeld & Toll, P.L.L.C., is authorized to retain, and the Court appoints, Epiq Class Action and Claims Solutions Inc. as the Notice and Claims Administrator, to supervise and administer the notice procedure as well as the processing of claims. Judge Kaplan also sets these schedules: March 8, 2010 Settlement Hearing February 1, 2010 Deadline for filing Class exclusion request February 1, 2010 Deadline for filing notice of appearance February 16, 2010 Deadline for filing Settlement objections All reasonable costs incurred in identifying and notifying Class members, as well as in administering the Settlements, will be paid as set forth in the stipulations. At or after the Settlement Hearing, the Court will determine whether any application for reimbursement of Co-Lead Counsel's and other plaintiffs' counsel's fees and expenses will be approved. Neither the Deloitte Parties nor the Grant Thornton Settling Defendants nor their Counsel will have any responsibility for any application for attorneys' fees or expenses submitted by any plaintiffs' counsel. Those matters will be considered separately from the fairness, reasonableness and adequacy of the Settlements, Judge Kaplan maintained. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The Company's U.S. operations filed for Chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on December 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On January 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presided over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. PARMALAT SPA: Dr. Bondi to Appeal Grant Thornton Dismissal ---------------------------------------------------------- To recall, Judge Lewis A. Kaplan of the U.S. District Court for the Southern District of New York granted defendants Grant Thornton International, Grant Thornton LLP, and Bank of America Corporation, et al.'s request for summary judgment and for dismissal, with prejudice, pursuant to the in pari delicto defense, of all claims asserted against Grant Thornton and BofA by Plaintiffs Dr. Enrico Bondi and Parmalat Capital Finance Ltd. Judge Kaplan related in his 45-page opinion dated September 18, 2009, that there is no dispute that Parmalat Finanziaria, S.p.A., Parmalat S.p.A., their affiliates and PCFL officers engaged in a massive fraud that ended in the collapse of Parmalat. The allegedly dishonest Parmalat and PCFL officers were doing corporate business in obtaining financing from BofA and in providing fraudulent financial statements to auditors and others, Judge Kaplan noted. Whether and to what extent they also stole or embezzled money from their corporations for their own benefit if therefore of no consequence for purposes of the in pari delicto defense except to the extent, if any, that there is evidence of culpable participation by defendants in those thefts, he further pointed out. Judge Lewis A. Kaplan of the U.S. District Court for the Southern District of New York directed the Clerk the Court, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, to enter a final judgment in favor of defendants Grant Thornton International and Grant Thornton LLP, which sought summary judgment for the dismissal of complaint against them filed by Dr. Enrico Bondi, as Extraordinary Commissioner of Parmalat Finanziaria S.p.A, Parmalat S.p.A. and other related entities. On September 21, 2009, Judge Kaplan entered an opinion granting that summary judgment request. In separate filings, Dr. Bondi and Parmalat Capital Finance Limited notified the Court that they will appeal the Summary Judgment Orders and Opinions. In response to the notices, Judge Kaplan opined that there is no just reason for delay because entry of final judgment in favor of Grant Thornton will not cause duplicative appellate review inasmuch as the remaining issue of damages to be adjudicated against the remaining defendant is entirely separate and dissimilar from the issues to be appealed. He added that judicial efficiency will be advanced by continuing the determination of the remaining damages issue against the remaining defendant until the appeal is resolved, at which time depending on resolution the issue may be adjudicated on a consolidated basis with similar issues against Grant Thornton on remand, or if necessary, independently in the absence of remand. The Appeals Parmalat Capital Finance Limited notifies the U.S. District Court for the Southern District of New York that it will take an appeal to the United States Court of Appeals for the Second Circuit from Judge Kaplan's judgment dismissing its complaint, entered in the multidistrict litigation on September 23, 2009, and the Corrected Opinion entered on September 21, 2009, which corrected and vacated the opinion entered September 18, 2009. Parmalat also appeals from the order entered on June 17, 2009. In a separate filing, Dr. Enrico Bondi, as Extraordinary Commissioner of Parmalat Finanziaria S.p.A, Parmalat S.p.A. and other related entities, notifies the U.S. District Court for the Southern District of New York that it will take an appeal to the United States Court of Appeals for the Second Circuit from the final judgment for the request for summary judgment and for dismissal filed by Grant Thornton International, Grant Thornton LLP, and Bank of America Corporation, et al. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The Company's U.S. operations filed for Chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on December 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On January 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presided over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. PARMALAT SPA: Finalizes $100MM Settlement With BofA --------------------------------------------------- Judge Lewis A. Kaplan of the U.S. District Court for the Southern District of New York signed and approved the stipulation and settlement between Dr. Enrico Bondi, as Extraordinary Commissioner of Parmalat Finanziaria S.p.A., Parmalat S.p.A. and other affiliated entities; and Bank of America Corporation, Bank of America National Trust & Savings Association, Bank of America N.A, Banc of America Securities, LLC, Banc of America Securities Limited, Bank of America International Ltd. and other Bank of America related entities. Under the agreement, Bank of America will settle all issues between the Parties for $100 million. The Parties agree that their claims against each other relating to any matter in connection with Parmalat's 2003 collapse up to and including July 28, 2009, are dismissed with prejudice, including all counterclaims that have been asserted by each other in the action pending in the District Court captioned Dr. Enrico Bondi v. Bank of America Corporation, et al., which is consolidated for pretrial purposes with other civil cases under the multidistrict litigation In re Parmalat Securities Litigation. Each party will bear its own fees and costs. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The Company's U.S. operations filed for Chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on December 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On January 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presided over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. PENN TRAFFIC: Auction Cancelled; Bid Extension Sought ----------------------------------------------------- Penn Traffic Co. disclosed that no other party has come forth to post a qualified bid to compete with the $85 million offer Tops Markets LLC made for all 79 of Penn Traffic's outlets and that the auction that was scheduled for January 21 was cancelled. The sale hearing is currently scheduled for January 25, 2010. BankruptcyData reports that a group of five Penn Traffic employees filed documents with the U.S. Bankruptcy Court asserting that they are forming an Employee Stock Ownership Plan for the purpose of buying the Company. The employee group told the Court that it has secured funding and it requested a seven day-period to complete the bid process, "As employees it is our desire to keep all of our 5,600 employees working and provide the creditors with a maximum return with our bid." 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. PETCO ANIMAL: Bank Debt Trades at 3% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which PETCO Animal Supplies Stores, Inc., is a borrower traded in the secondary market at 97.42 cents-on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.67 percentage points from the previous week, The Journal relates. The loan matures on Sept. 26, 2013. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. The Troubled Company Reporter said on June 29, 2009, that Moody's affirmed PETCO Animal Supplies Stores, Inc.'s Corporate Family Rating at B2; Probability of Default Rating at B2; $686 million senior secured term loan due 2013 at B1 (LGD 3, 33%), and changed the outlook to stable from negative. PETCO Animal Supplies, Inc., headquartered in San Diego, California, is a specialty retailer of premium supplies, food and services for household pets. The Company operates about 1,000 stores in all 50 U.S. states. Revenues were about $2.6 billion for the last twelve months ending May 2, 2009. PREMIER AMERICAN BANK: Closed; New Institution Takes Over --------------------------------------------------------- Premier American Bank, Miami Florida, was closed January 22 by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Premier American Bank, National Association, Miami, Florida, a newly-chartered national institution, to assume all of the deposits of Premier American Bank. Premier American Bank, N.A. is a subsidiary of Bond Street Holdings, LLC, Naples, Florida. The four branches of Premier American Bank will reopen on Monday as branches of Premier American Bank, N.A. Depositors of Premier American Bank will automatically become depositors of Premier American Bank, N.A. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. As of September 30, 2009, Premier American Bank had approximately $350.9 million in total assets and $326.3 million in total deposits. Premier American Bank, N.A. did not pay the FDIC a premium for the deposits of Premier American Bank. In addition to assuming all of the deposits of the failed bank, Premier American Bank, N.A. agreed to purchase essentially all of the assets. The FDIC and Premier American Bank, N.A. entered into a loss-share transaction on $300 million of Premier American Bank's assets. Premier American Bank, N.A. will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can call the FDIC toll-free at 1-800-591-2916. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/premieramerican.html As part of this transaction, the FDIC will acquire a cash participant instrument. This instrument serves as additional consideration for the transaction. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $85 million. Premier American Bank, N.A.'s acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Premier American Bank is the fifth FDIC-insured institution to fail in the nation this year, and the first in Florida. The last FDIC-insured institution closed in the state was Peoples First Community Bank, Panama City, on December 18, 2009. PROTECTIVE PRODUCTS: Sale Procedures OK'd; Auction Set for Feb. 18 ------------------------------------------------------------------ The Hon. John K. Olson of the U.S. Bankruptcy Court for the Southern district of Florida has approved Protective Products of America, Inc., et al.'s proposed bidding and sale procedures. On January 13, 2010, the Debtors entered into an asset purchase agreement wherein it would sell acquired assets to Protective Products Enterprises, Inc., an affiliate of Sun Capital or to a higher bidder for $8 million, and for the Proposed Purchaser to assume certain liabilities, including the cure costs of the assumed contracts. Pursuant to the agreement, the Proposed Purchaser has posted a deposit of $500,000. The Debtors are cash-constrained and require an immediate and significant cash infusion. To maximize the value of their estates and ensure continued and uninterrupted operations, it is in the best interests of the Debtors and their creditors to complete the marketing and sale of the Acquired Assets through an organized auction process on an expedited basis. Qualified bidders are those entities who (i) have executed and delivered to the Debtors a confidentiality agreement in form and substance satisfactory to the Debtors in their sole discretion, (ii) have delivered to the Debtors the potential bidder's most recent audited financial statements, or in the case of a potential bidder formed for the purpose of acquiring the Acquired Assets, current financial statements of the equity holder(s) of the potential bidder or other financial disclosure, acceptable to, and requested by, the Debtors, which information will demonstrate the financial capability of the potential bidder to purchase the Acquired Assets, and provide "adequate assurance of future performance" with respect to assumed contracts should the potential bidder be the successful bidder; provided, however, if the prospective bidders have financial statements that are audited by outside accountants, the financial statements required hereby will be audited financial statements, and in all events an authorized representative of the bidder will certify the financial statements required hereby as true and correct, (iii) have provided evidence that the bidder has the necessary internal authorizations and approvals necessary to engage in the transaction without the consent of any entity that has not already been obtained or that if any consent is required it can be obtained, and (iv) have delivered a cashier's check made payable to Berger Singerman, or wire transfer in an amount not less than $500,000. The bid must include an executed definitive purchase agreement which will be for the purchase of all or substantially all of the acquired assets and the assumption of substantially all of the assumed liabilities and must be marked to show changes from the agreement (the "Marked Agreement"). Modifications or amendments to the proposed Agreement that are contained in the Marked Agreement must be "red lined" in order to be enforceable against the Debtors. The Marked Agreement must, among other things, provide for consideration to the Debtors' estates of not less than $8,870,000 in cash, plus and the assumption of the assumed liabilities, exclusive of any post closing adjustments provided for in the Marked Agreement that do not guarantee additional cash to the Debtors' estates. Under the approved bidding and sale procedures, bids must be submitted to Berger Singerman, P.A., and Kirkland & Ellis on or before 4:00 p.m., Prevailing Eastern Time, on February 15, 2010. Minimum amount of the incremental bids must be at $100,000. The auction will be held on February 18, 2010, at 10:00 a.m., prevailing Eastern Time, at the offices of Berger Singerman. The sale hearing will be on February 19, 2010, at 9:30 a.m., prevailing Eastern Time. A copy of the sale agreement and bidding procedures is available for free at http://ResearchArchives.com/t/s?4dcd The Debtors are also allowed to assume and assign certain unexpired leases and executory contracts. Proposed Purchaser's is represented by Kirkland & Ellis LLP. About Protective Products Sunrise, Florida-based Protective Products of America, Inc., formerly known as Ceramic Protection Corporation -- http://www.protectiveproductsofamerica.com/-- engages in the design, manufacture and marketing of advanced products used to provide ballistic protection for personnel and vehicles in the military and law enforcement markets. The Company filed for Chapter 11 bankruptcy protection on January 13, 2010 (Bankr. S.D. Fla. Case No. 10-10711). The Company's affiliates -- PC Holding Corporation of America; Ceramic Protection Corporation of America; Protective Products International Corp.; and Protective Products of North Carolina, LLC -- also filed separate Chapter 11 petitions. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. PROTECTIVE PRODUCTS: Taps Berger Singerman as Bankruptcy Counsel ---------------------------------------------------------------- Protective Products of America, Inc., et al., have asked for permission from the U.S. Bankruptcy Court for the Southern District of Florida to employ Jordi Guso and the law firm of Berger Singerman, P.A., as bankruptcy counsel, nunc pro tunc to the Petition Date. Berger Singerman will, among other things: a. prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the Debtors' Chapter 11 cases; b. protect the interests of the Debtors in matters pending before the Court; c. advise the Debtors in connection with the sale of their businesses; and d. represent the Debtors in negotiations with their creditors and in the preparation of a plan. Jordi Guso, a shareholder of Berger Singerman, says that the firm will be paid based on the hourly rates of its personnel: Jordi Guso $525 Attorneys $260-$560 Legal Assistants & Paralegals $75-$195 Mr. Guso assures the Court that Berger Singerman is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. The Court has granted an interim approval on the Debtors' request to employ Berger Singerman. The Court has set a hearing for February 10, 2010, at 2:30 p.m. on the Debtors' request for the employment of Berger Singerman. Sunrise, Florida-based Protective Products of America, Inc., formerly known as Ceramic Protection Corporation -- http://www.protectiveproductsofamerica.com/-- engages in the design, manufacture and marketing of advanced products used to provide ballistic protection for personnel and vehicles in the military and law enforcement markets. The Company filed for Chapter 11 bankruptcy protection on January 13, 2010 (Bankr. S.D. Fla. Case No. 10-10711). The Company's affiliates -- PC Holding Corporation of America; Ceramic Protection Corporation of America; Protective Products International Corp.; and Protective Products of North Carolina, LLC -- also filed separate Chapter 11 petitions. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. PRESSTEK INC: Daeg Capital, Kimelman Disclose Equity Stake ---------------------------------------------------------- Daeg Capital Management, LLC; Daeg Partners, L.P.; and Scott Kimelman disclosed beneficial ownership of shares of Presstek, Inc. common stock. Daeg Capital and Daeg Partners hold 2,000,600 or roughly 5.4% of Presstek shares. Mr. Kimelman holds 2,031,300 or roughly 5.5% of Presstek shares. As reported by the Troubled Company Reporter on December 28, 2009, Presstek and certain of its affiliated U.S. companies entered into an Amendment No. 1 to Forbearance and Amendment Agreement with its bank lending group consisting of RBS Citizens, National Association, as Administrative Agent and Lender, Keybank National Association and TD Bank, N.A. The expiration date of the Original Forbearance was extended to the earlier of the fifth day following the date on which the pending sale by the Company of its Lasertel, Inc. subsidiary is completed and March 31, 2010. Presstek expects to finalize a new revolving credit facility at or around the time of the closing of the sale of the Company's Lasertel subsidiary, which is currently expected to occur in the first quarter of 2010. The extension of the forbearance agreement is intended to ensure that the Company will continue to have access to its credit facility to meet its operating needs until the expected new credit facility is in place. About Presstek Greenwich, Connecticut-based Presstek, Inc. (NASDAQ: PRST) -- http://www.presstek.com/-- manufactures and markets high tech digital imaging solutions to the graphic arts and laser imaging markets. Presstek's patented DI(R), CTP and plate products provide a streamlined workflow in a chemistry-free environment, thereby reducing printing cycle time and lowering production costs. Presstek solutions are designed to make it easier for printers to cost effectively meet increasing customer demand for high-quality, shorter print runs and faster turnaround while providing improved profit margins. Presstek subsidiary, Lasertel, Inc., manufactures semiconductor laser diodes for Presstek's and external customers' applications. QSI HOLDINGS: High Court Won't Review Private Equity Safe Harbor ---------------------------------------------------------------- WestLaw reports that certiorari has been denied from a decision in which the Sixth Circuit Court of Appeals, ruling on a matter of apparent first impression for the court, held that payments that were made to a corporate debtor's shareholders in connection with the leveraged buyout of privately held securities qualified as "settlement payments" for purposes of 11 U.S.C. Sec. 546(e), the section of the Bankruptcy Code generally barring a trustee's avoidance of prepetition margin and settlement payments made by or to a commodity broker, forward contract merchant, stockbroker, financial institution, financial participant, or securities clearing agency. The transaction had the characteristics of a common leveraged buyout involving the merger of nearly equal companies, the Court of Appeals explained, and nothing in the statute indicated a congressional intent to restrict the statute's protection to publicly traded securities. Moreover, there was no reason to conclude that unwinding the settlement would have less of an impact on the financial markets than a settlement involving publicly traded securities. The Court of Appeals also held that the role played by a bank in the leveraged buyout satisfied the requirement that the transfer be made to a financial institution. The bank collected shares of the debtor's stock from individual shareholders and the trustee for the debtor's employee stock ownership trust (ESOT), transferred those securities to the acquiring company, and distributed consideration to individual shareholders or to the ESOT trustee for distribution to ESOT participants. The debtor's petition for writ of certiorari presented two questions. First, the petition asked "[w]hether section 546(e) prevents a trustee from recovering otherwise avoidable prepetition transfers solely because the funds passed through a financial institution that had no dominion or control over the funds[.]" The second question asked "[w]hether a payment made in a purely private securities transaction is a 'settlement payment' exempt from avoidance, even though both the statutory definition (requiring such payments to be 'commonly used in the securities trade') and the legislative history of the provision show that the term applies only to public transactions[.]" Both questions were important to the administration of bankruptcy cases, the petition stated, and on both issues the federal courts are in conflict. QSI Holdings, Inc. v. Alford, --- S.Ct. ---- (Mem), 2010 WL 154962 (U.S.), 78 USLW 3239. The Troubled Company Reported about the case below, In re QSI Holdings, Inc., 571 F.3d 545 (6th Cir.), on July 14, 2009. RCN CORP: Bank Debt Trades at 5% Off in Secondary Market -------------------------------------------------------- Participations in a syndicated loan under which RCN Corporation is a borrower traded in the secondary market at 94.85 cents-on-the- dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.66 percentage points from the previous week, The Journal relates. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank loan matures on April 24, 2014. It carries Moody's B1 rating while it is not rated by Standard & Poor's. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. RCN Corporation (NASDAQ: RCNI) -- http://www.rcn.com/-- is a provider of bundled cable, high-speed internet and phone services delivered over its own fiber-optic local network to residential, small business and commercial customers in the U.S. The Company provides service in the Boston, Chicago, Eastern Pennsylvania, New York, and Washington, D.C. metropolitan markets. One of its divisions, RCN Business Services, provides bulk video, high- capacity data and voice services to small and medium business customers. RCN's other commercial division, RCN Business Solutions, is dedicated to meeting the fiber-based network requirements of enterprise, wholesale telecom and government accounts. READER'S DIGEST: Court's Written Order Confirming Plan ------------------------------------------------------ Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York signed a written order, on January 19, 2010, confirming the Third Amended Joint Plan of Reorganization filed by The Reader's Digest Association, Inc., and its debtor-affiliates. Judge Drain confirmed the Plan after finding that it satisfies the statutory requirements under Sections 1129(a) and (b) of the Bankruptcy Code: A. The Plan complies with all applicable provisions of the Bankruptcy Code as required by Section 1129(a)(1) of the Bankruptcy Code, including Sections 1122 and 1123 of the Bankruptcy Code. Pursuant to Sections 1122(a) and 1123(a)(1) of the Bankruptcy Code, the Plan provides for the separate classification of Claims and Interests into 10 Classes, based on differences in the legal nature or priority of the Claims and Interests, other than Administrative Expense Claims, DIP Facility Claims and Priority Tax Claims, which are not required to be designated as separate Classes pursuant to Section 1123(a)(1). Valid business, factual and legal reasons exist for the separate classification of the various Classes of Claims and Interests created under the Plan, the classifications were not done for any improper purpose and the creation of the Classes does not unfairly discriminate between or among Holders of Claims or Interests. In accordance with Section 1122(a), each Class of Claims and Interests contains only Claims or Interests that are substantially similar to the other Claims or Interests within that Class. Accordingly, the requirements of Sections 1122(a), 1122(b), and 1123(a)(1) have been satisfied. B. The Debtors, as proponents of the Plan, have complied with all applicable provisions of the Bankruptcy Code as required by Section 1129(a)(2), including Sections 1122, 1123, 1124, 1125, 1126 and 1128 of the Bankruptcy Code and Rules 3017, 3018 and 3019 of the Federal Rules of Bankruptcy Procedure. Votes to accept or reject the Plan were solicited by the Debtors after the Court approved the adequacy of the Disclosure Statement pursuant to Section 1125(a) of the Bankruptcy Code. The Debtors have solicited and tabulated votes on the Plan and have participated in the activities described in Section 1125 fairly, in good faith within the meaning of Section 1125(e), and in a manner consistent with the applicable provisions of the Solicitation Procedures Order, the Disclosure Statement, the Bankruptcy Code, the Bankruptcy Rules, the Local Rules and all other applicable rules, laws and regulations, and are entitled to the protections afforded by Section 1125(e) and the exculpation provision set forth in Plan. The Debtors have participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code with regard to the offering, issuance and distribution of recoveries under the Plan and, therefore, are not liable at any time for the violation of any applicable law, rule or regulation governing the solicitation of acceptances or rejections of the Plan or distributions made pursuant to the Plan, so long as the distributions are made consistent with and pursuant to the Plan. C. The Debtors have proposed the Plan in good faith and not by any means forbidden by law. In determining that the Plan has been proposed in good faith, the Bankruptcy Court has examined the totality of the circumstances surrounding the filing of the Chapter 11 Cases, the Plan itself, and the process leading to its formulation. The Plan is the product of extensive, good faith, arm's length negotiations between the Debtors and certain of their principal constituencies, including the Consenting Lenders, Consenting Shareholders and the Official Committee of Unsecured Creditors. The Plan itself and the process leading to its formulation provide independent evidence of the Debtors' good faith, serve the public interest and assure fair treatment of Holders of Claims. Consistent with the overriding purpose of Chapter 11, the Chapter 11 cases were filed, and the Plan was proposed, with the legitimate purpose of allowing the Debtors to reorganize and emerge from bankruptcy with a capital structure that will allow them to satisfy their obligations with sufficient liquidity and capital resources. Accordingly, the requirements of Section 1129(a)(3) are satisfied. D. Payments made or to be made by the Debtors for services or for costs and expenses in or in connection with the Chapter 11 cases, or in connection with the Plan and incident to the Chapter 11 cases, have been approved by, or are subject to the approval of, the Bankruptcy Court as reasonable. Hence, the requirements of Section 1129(a)(4) are satisfied. E. The Debtors have disclosed the identity and affiliations of the individuals proposed to serve as the directors and officers of the Reorganized Debtors, to the extent known, and the identity and nature of any compensation for any insider, who will be employed or retained by the Reorganized Debtors. The appointment of the remaining directors and officers, if any, and the compensation of all of the Reorganized Debtors' directors will be consistent with each Reorganized Debtor's applicable constituent documents, the amended forms of which were filed as part of the Plan Supplement. The proposed directors and officers for the Reorganized Debtors Plan are qualified, and the appointments to, or continuance in, the offices of the proposed directors and officers is consistent with the interests of holders of Claims and with public policy. Thus, the Debtors have satisfied the requirements of Section 1129(a)(5). F. The Plan does not contain any rate changes subject to the jurisdiction of any governmental regulatory commission and will not require governmental regulatory approval. Therefore, Section 1129(a)(6) is inapplicable to these Chapter 11 cases. G. Each Holder of an Impaired Claim or Interest either has accepted the Plan or will receive or retain under the Plan, on account of that Claim or Interest, property of a value, as of the Effective Date, that is not less than the amount that the Holder would receive or retain if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code on that date. The liquidation analysis to the Disclosure Statement and the other related evidence in support of the Plan that was proffered or adduced at or prior to the Confirmation Hearing: * are reasonable, persuasive, credible and accurate as of the dates the analysis or evidence was prepared, presented or proffered; * utilize reasonable and appropriate methodologies and assumptions; * have not been controverted by other evidence; and * establish that, Holders of Allowed Claims in every Class will recover as much or more under the Plan on account of the Claim, as of the Effective Date, than the amount the Holder would receive if the Debtors were liquidated on the Effective Date under Chapter 7. Hence, requirements under Section 1129(a)(7) are satisfied. H. Classes 1 and 2 are Unimpaired Classes of Claims and Class 9 a Class of Unimpaired Intercompany Interests, each of which are conclusively presumed to have accepted the Plan under Section 1126(f) of the Bankruptcy Code. As set forth in the Voting Certifications, Classes 3, 4, 6 and 10 have voted to accept the Plan and Class 5 has voted to reject the Plan. Classes 7 and 8 are not receiving any distributions under the Plan, and are conclusively deemed to reject the Plan pursuant to Section 1126(g). Because the Plan has not been accepted by Class 5 and because Classes 7 and 8 are conclusively deemed to reject the Plan, the Debtors sought Confirmation under Section 1129(b), rather than Section 1129(a)(8) of the Bankruptcy Code. Although Section 1129(a)(8) has not been satisfied with respect to the Rejecting Classes, the Plan is confirmable because the Plan does not discriminate unfairly and is fair and equitable with respect to the Rejecting Classes and, thus, satisfies the requirements of Section 1129(b) with respect to those Classes. I. The Treatment of Allowed Administrative Expense Claims, Allowed DIP Facility Claims and Priority Tax Claims under the Plan satisfies the requirements of, and complies in all respects with, Section 1129(a)(9), hence, the requirements of that section 1129(a)(9) are satisfied. J. As set forth in the Voting Certifications, Classes 3, 4, 6 and 10 voted to accept the Plan. Thus, there is at least one Class of Claims that is Impaired under the Plan that has accepted the Plan without including any acceptance of the Plan by any insider. The Debtors, therefore, have satisfied the requirements of Section 1129(a)(10). K. The Plan satisfies Section 1129(a)(11) because the evidence supporting the Plan proffered or adduced by the Debtors at, or prior to, or in declarations filed in connection with, the Confirmation Hearing: * is reasonable, persuasive, credible and accurate as of the dates such analysis or evidence was prepared, presented, or proffered; * utilizes reasonable and appropriate methodologies and assumptions; * has not been controverted by other evidence; * establishes that the Plan is feasible and Confirmation of the Plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the Reorganized Debtors or any successor to the Reorganized Debtors under the Plan except as provided in the Plan; and * establishes that the Reorganized Debtors will have sufficient funds available to meet their obligations under the Plan. Therefore, the Debtors satisfied the requirements of Section 1129(a)(11). L. The Debtors have satisfied the requirements of Section 1129(a)(12) because the Plan provides that all fees payable pursuant to Section 1930 of the of the Judicial and Judiciary Procedures Code, as determined by the Bankruptcy Court at the Confirmation Hearing, will be paid prior to the closing of the cases when due or as soon thereafter as practicable. M. Section 1129(a)(13) requires a plan to provide for "retiree benefits" at levels established pursuant to Section 1114 of the Bankruptcy Code. The Plan provides that, on and after the Effective Date, all retiree benefits will continue to be paid for the duration of the periods the Debtors have obligated themselves to provide those benefits, if any, and subject to any contractual rights to terminate or modify the benefits in accordance with applicable law. Accordingly, the requirements of Section 1129(a)(13) have been satisfied. N. The Debtors do not owe any domestic support obligations, are not individuals and are not non-profit corporations. Sections 1129(a)(14), 1129(a)(15) and 1129(a)(16), therefore, are not applicable to the Debtors' cases. Finding that the Plan complies with the statutory requirements, Judge Drain confirmed the Plan on January 15, 2010, and signed his findings of fact, conclusions of law and order confirming the Plan on January 19. Judge Drain held that any resolutions of objections to Confirmation explained on the record at the Confirmation Hearing are incorporated by reference, and all unresolved objections, statements, and reservations of rights are overruled on the merits. A full-text copy of the signed Confirmation Order is available for free at http://bankrupt.com/misc/RDA_Confirmation_Order.pdf Under the Plan, the Debtors will reduce its total debt by 75% from more than $2.2 billion to approximately $555 million. General unsecured creditors, including the retirees, will get a 3.3% to 3.6% recovery on estimated claims of $110 million to $120 million. Holders of the Debtors' senior secured debt will receive equity, effectively transferring ownership of Reader's Digest to a lender group led by J.P. Morgan Chase & Co. The Debtors' retirees have strongly opposed to the confirmation of the Plan. In their response to the Plan objections, the Debtors asserted that the Plan provides for the continuation of retiree benefits. In his 76-page Confirmation Order, Judge Drain held that the Debtors or the Reorganized Debtors will continue their Pension Plan in accordance with its terms. He also directed the Debtors or Reorganized Debtors to satisfy the minimum funding standards and administer the Pension Plan in accordance with the provisions of the Employee Retirement Income Security Act and the Internal Revenue Code, subject to any contractual or statutory rights to terminate or modify that plan. 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: Gets Nod to Settle With RD Pension Trustees No. 2 ------------------------------------------------------------------ Reader's Digest Association Inc. and its units obtained approval of approval their settlement agreement with The Reader's Digest Pension Trustees No. 2 Limited, acting in its capacity as trustee of the UK Pension Scheme, the Board of the Pension Protection Fund, and The Reader's Digest Association Limited. James H.M. Sprayregen P.C., Esq., at Kirkland & Ellis LLP, in New York, tells Judge Drain that the settlement will resolve significant liabilities related to a defined pension plan in the United Kingdom and avoids liquidation of RDA's UK subsidiary, RDA UK, which would undoubtedly have a considerable negative impact on the value of the Debtors' bankruptcy estates. Specifically, the Settlement Agreement resolves certain large claims asserted by the Trustee and the PPF in the Debtors' Chapter 11 cases and provides for the Debtors to contribute funding on account of the UK Pension Scheme to ensure against the potential liquidation of RDA UK in the face of its substantial defined pension liabilities. The UK Pension Scheme's deficit is in excess of GBP109 million, and the Trustee and PPF have jointly filed 48 contingent, unliquidated proofs of claim in each of the Debtors' Chapter 11 cases to protect their entitlement to any money that could flow from the Chapter 11 Debtors to the UK Pension Scheme as a result of a potential investigation by the Pensions Regulator. As part of the resulting compromise among the Parties, and in exchange for release and withdrawal of the claims filed by the PPF and the Trustee and in satisfaction of RDA UK's liability under the UK Pension Scheme, the Debtors have agreed to make a lump sum payment and provide certain other consideration to the Trustees and the PPF, Mr. Sprayregen discloses. He asserts that the consideration constitutes reasonably equivalent value and fair consideration in satisfaction of the liability related to the UK Pension Scheme and is necessary to avoid liquidation of RDA UK, and thus, preserve value for the Debtors' and the global Reader's Digest Association enterprise. The salient terms of the Settlement Agreement are: (a) Debtors, RDA UK and the Trustee will cooperate to facilitate that the Section 75 debt obligations of the UK Pension Scheme and all associated liabilities will be apportioned between a Newco and RDA UK in accordance with the terms of the Regulated Apportionment Arrangement to ensure that if necessary, the UK Pension Scheme will, in its entirety, be able to meet the eligibility requirements for admission into the PPF upon an insolvency event for the purpose of Section 121 of the Pensions Act 2004 occurring in relation to Newco. Newco is a newly incorporated UK company, which will have assumed the status as principal employer of the UK Pension Scheme in the place of RDA UK; (b) These considerations will be paid or otherwise transferred in connection with the Compromise, and are the bases that the Trustee agrees to the satisfaction of the claims against RDA UK and the UK Pension Scheme Claims as well as clearance of all other parties, including the Debtors: * after approval of the Settlement Agreement, the Debtors or Reorganized Debtors will deposit into an escrow account GBP10,931,400 or $18 million; * within 10 business days after the effective date of the Debtors' Plan, the Debtors or Reorganized Debtors will deposit into the Escrow Account for the benefit of the UK Pension Scheme, undated certificates or other instruments evidencing a 33% equity interest in RDA UK; * Pursuant to the Parties' Call Option Agreement, the Debtors will retain a call option on the UK Pension Scheme's 33% equity interest in RDA UK for five years from the date the UK Pension Scheme is transferred to the PPF, which may be exercised by paying GBP1,821,900 to the UK Pension Scheme; and * the Debtors will pay all professional fees, costs and expenses incurred by the Trustee and the PPF related to the UK Pension Scheme, and all reasonable professional fees, costs and expenses incurred by the Trustee; and (c) The consideration will also be paid in satisfaction of RDA UK's liability under the UK Pension Scheme but that satisfaction of liability will only take effect if and when the RAA is put in place in relation to the UK Pension Scheme. A full-text copy of the Settlement Agreement can be obtained for free at: http://bankrupt.com/misc/RDA_UKPension_Settement_011410.pdf The Debtors subsequently filed an amended copy of the settlement agreement consisting mostly of minor changes in the terms and language used in the original agreement. 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: Proposes to Sell Notes to Refinance Exit Loans --------------------------------------------------------------- Reader's Digest Association Inc. and its units seek the Court's authority to enter into an agreement to issue and sell notes to refinance their (i) obligations under their new first and second priority secured term loans to be issued on the effective date of their plan of reorganization, and (ii) reinstated euro term loan. The Debtors also ask the Court to approve certain indemnification and contribution obligations, and payment of fees and expenses to the initial purchasers. James H.M. Sprayregen P.C., Esq., at Kirkland & Ellis LLP, in New York, relates that the Debtors are moving expeditiously to exit from the Chapter 11 cases, and hope to have the Effective Date of the Plan occur no later than January 31, 2010. On January 19, the Court entered its findings of fact, conclusions of law and order confirming the Debtors' Third Amended Joint Chapter 11 Plan of Reorganization. Pursuant to the Debtors' debtor-in-possession credit agreement, on the Effective Date, the DIP Facility will (a) subject to the terms of the DIP Facility, convert into a new first priority term loan pursuant to the Exit Credit Agreement, or (b) be paid off in full in cash. In addition, the Plan provides that, on the Effective Date, the Debtors will enter into a new second priority term loan, and reinstate their euro term loan. As noted in the Disclosure Statement, Mr. Sprayregen notes, the New First Priority Term Loan, the New Second Priority Term Loan and the Reinstated Euro Term Loan may be refinanced at any time. As part of a proposed refinancing, the Debtors are working with J.P. Morgan Securities Inc., Goldman, Sachs & Co., Credit Suisse (USA) Securities, Inc., and potentially certain other parties for a proposed purchase and sale of senior secured fixed rate notes and senior secured floating rate notes pursuant to the Purchase Agreement. The Initial Purchasers will work with the Debtors to prepare offering materials to be used in a "road show" to identify qualified institutional purchasers, to whom the Initial Purchasers will resell the Securities. While the terms of the Purchase Agreement, including pricing and cost, are not yet finalized, and the Debtors have not made a final decision as to whether to proceed with the Purchase Agreement, they say they are seeking authority to enter into the Purchase Agreement at this time for several important reasons. The Debtors believe that the current conditions in the bond market may make it an optimal time to arrange an issuance and sale of the Securities. By taking advantage of current market conditions and locking in commitments as soon as possible, the Debtors anticipate being able to refinance their obligations under the Exit Facilities, according to Mr. Sprayregen. Were the Debtors to proceed with the refinancing, they believe the refinancing will result in significant savings as well as ensure certainty in a financing landscape that is dynamic, ever-changing and subject to global economic conditions, Mr. Sprayregen asserts. He notes that the Debtors cannot be sure that optimal conditions will exist in the future given the volatile and unpredictable nature of the financial markets. Once the terms of the Purchase Agreement are finalized, the Debtors will need to move quickly to effectuate the transaction, Mr. Sprayregen tells the Court. Because it is impracticable for the Debtors to finalize the terms of the Purchase Agreement and subsequently file a motion seeking authority to enter into that agreement, he avers that the Debtors are seeking authority at this time. He assures Judge Gonzalez that the Debtors intend to enter into the Purchase Agreement only if entry into the Purchase Agreement will result in material interest expense savings. The Debtors say they intend to communicate the proposed material terms of the Purchase Agreement to the steering committee for the prepetition lenders and the Official Committee of Unsecured Creditors on a confidential basis once terms are finalized. In addition, in the meanwhile, the Debtors disclose that they will explore if alternative financing can be obtained on better economic or other terms than could be obtained through the Purchase Agreement, including through a bank financing, prior to executing the Purchase Agreement. Should they proceed with the Purchase Agreement, the Debtors will utilize the proceeds from the sale of the Securities to pay off the principal on the Exit Facilities, Mr. Sprayregen tells Judge Gonzalez. The salient terms of the Purchase Agreement are: (a) The Reader's Digest Association, Inc., agrees to issue and sell the Securities to the Initial Purchasers, and each Initial Purchaser, agrees, severally and not jointly, to purchase from Reader's Digest the respective principal amount of the Fixed Rate Notes and Floating Rate Notes; (b) Reader's Digest and each of the Guarantors jointly and severally agree to indemnify and hold harmless each Initial Purchaser from and against all losses, claims, damages and liabilities that arise out of, or are based upon, any untrue statement contained in the Preliminary Offering Memorandum, or any untrue statement made in reliance upon and in conformity with any information relating to any Initial Purchaser furnished to Reader's Digest in writing by the Initial Purchaser through its representatives; (c) If the Indemnification Obligations are unavailable to an Indemnified Person or insufficient in respect of any losses, then each Indemnifying Person, in lieu of indemnifying that Indemnified Person, will contribute to the amount paid or payable by the Indemnified Person as a result of the losses, claims, damages or liabilities: * in proportion as is appropriate to reflect the relative benefits received by Reader's Digest and the Guarantors, on the one hand, and the Initial Purchasers on the other from the offering of the Securities; or * if that first allocation is not permitted by applicable law, in proportion as is appropriate to reflect not only the relative benefits of that allocation but also the relative fault of Reader's Digest and the Guarantors, and the Initial Purchasers in connection with the statements or omissions that resulted in those losses, claims, damages or liabilities, as well as any other relevant equitable considerations; and (d) Whether or not the transactions contemplated by the Purchase Agreement are consummated or the Purchase Agreement is terminated, Reader's Digest and each of the Guarantors jointly and severally agree to pay all costs and expenses incident to the performance of their respective obligations. Mr. Sprayregen notes that both the Debtors and the Reorganized Debtors will be bound by the terms of the Purchase Agreement solely upon execution of and entry into the Purchase Agreement. The Debtors also ask the Court for a shortened notice period on their request so that a hearing to consider the request can set for January 21, 2010. 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) ROTHSTEIN ROSENFELDT: Rothstein Wife's Photos Included in Auction ----------------------------------------------------------------- Paula McMahon at South Florida Sun-Sentinel reports the U.S. Bankruptcy Court denied Scott Rothstein's bid to block the sale of his wife posing with public figures as Bill Cosby and Florida Gov. Charlie Crist. Sun-Sentinel reports that Mr. Rothstein had asked that seven photos showing his wife, Kimberly, be withheld from an auction that took place Saturday to reimburse creditors and investors. According Sun-Sentinel, Mike Seese, Esq., Mr. Rothstein's bankruptcy counsel, said his client was concerned that the photos would wind up being put on display in restaurants or other establishments. "Mr. Rothstein feels that his wife has been through enough," Sun-Sentinel quotes Mr. Seese as saying. He offered to allow the trustees to shred the photos if they wanted, to prevent the sale, Sun-Sentinel relates. Sun-Sentinel says U.S. Bankruptcy Judge Raymond Ray held that Mr. Rothstein had already put the photos in the public domain and used them in the commission of a crime; specifically, to make himself appear legitimate in the eyes of would-be investors. "Mr. Rothstein had them out there for a purpose," Judge Ray said, according to the report. Sun-Sentinel relates the photos showed Scott and Kimberly Rothstein with Cosby; Crist; Dan Marino; U.S. Sen. John McCain and his wife, Cindy; California Gov. Arnold Schwarzenegger; U.S. Sen. Joe Lieberman; former U.S. Sen. Mel Martinez; and former Republican vice presidential nominee Sarah Palin. Sun-Sentinel relates Chuck Lichtman, Esq., counsel to the bankruptcy trustee, said it was "selfish" of Mr. Rothstein to seek to prevent the sale of those photos. He noted that the auctioneers selling the items believe they have significant value because of Mr. Rothstein's notoriety, according to the report. As reported by the Troubled Company Reporter on January 22, 2010, Fisher Auction Co., Inc. was engaged by the U.S. Bankruptcy Trustee, Herbert Stettin, to conduct an auction scheduled for January 23 of the contents of Mr. Rothstein's former law offices -- Rothstein Rosenfeldt Adler PA. Mr. Rothstein is now in custody on a variety of federal charges. Auction was to take place at AMC Liquidators Showroom, 3705 West Commercial Blvd., Tamarac, Florida, commencing 10 a.m. Creditors of Rothstein Rosenfeldt Adler PA signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. RYERSON HOLDING: Moody's Assigns 'Caa3' Rating on $200 Mil. Notes ----------------------------------------------------------------- Moody's Investors Service assigned a Caa3 rating to Ryerson Holding Corporation's proposed $200 million of Senior Discount Notes (Discount Notes) and assigned Caa1 corporate family and probability of default ratings to Ryerson Holding, which owns Ryerson Inc, a leading North American metals service center. These ratings have a negative outlook. Net proceeds of the note offering will be used to pay a dividend to Ryerson Holding's shareholder, Platinum Equity. The Caa1 corporate family rating represents an effective one-notch downgrade of the CFR primarily due to the additional debt associated with the financing, which will raise adjusted leverage to approximately 30x FY2009 EBITDA, and Moody's expectation for a continuation of weak end-market demand for metals in 2010, while the Caa3 rating for the Discount Notes reflects their structural subordination to approximately $1.33 billion of debt, pension liabilities and trade payables at Ryerson Inc. In a related action, Moody's affirmed the Caa1 rating for Ryerson Inc.'s senior secured notes. If the proposed financing concludes as planned, Moody's will withdraw the existing B3 corporate family and probability of default ratings for Ryerson Inc., and re-assign its SGL-3 speculative grade liquidity rating at Ryerson Holding. Moody's convention is to assign these "issuer" ratings to the highest level in a family's corporate structure that has rated debt. While Platinum Equity believes the Discount Notes will be retired in the near term with the proceeds of an initial public offering, the same industry factors that are negatively impacting Ryerson Holding's operating results and weighing on its credit metrics may be an impediment to an IPO. While Moody's foresees improvement in metals markets in 2010 over comatose 2009 conditions, the improvement is likely to be gradual, modest and very sensitive to global macroeconomic developments. Therefore, Moody's believe it is very financially aggressive for Ryerson Holding to be adding debt and taking a dividend at this time. Pro forma for the Discount Notes, Ryerson Holding's consolidated debt will be $950 million as of December 31, 2009 (in addition, Moody's adds $476 million of debt-equivalent liabilities to take into account $296 million of underfunded pension obligations and $180 million of operating lease adjustments). In 2009, the company earned approximately $47 million of EBITDA on a LIFO basis, making pro forma debt to EBITDA 20x on a pro forma as-reported basis and 30x on a Moody's-adjusted basis. In addition, even with an anticipated improvement in operating results, it is likely that Ryerson Holding's operating cash flow will be negative in 2010 as working capital builds from its currently low levels. From peak (2Q08) to trough (2Q09), Ryerson Holding's net working capital fell by approximately $650 million, which provides a benchmark for forecasts of future changes in working capital. Finally, with respect to the rating on the proposed Discount Notes, their structural subordination to all other debt and other liabilities at Ryerson Holding and its subsidiaries, approximately $1.33 billion, leads to a 94% loss- given-default (LGD) for the Discount Notes and a two-notch difference from the corporate family rating. These ratings were assigned: Ryerson Holding Corporation * $200 million Senior Discount Notes due 2015 -- Caa3 (LGD6, 94%) * corporate family rating -- Caa1 * probability of default rating -- Caa1 * speculative grade liquidity rating -- SGL-3 These ratings were affirmed: Ryerson Inc. * $102.9 million of senior secured floating rate notes due November 2014 -- Caa1 (LGD4, 58%) * $376.2 million of senior secured 12% notes due November 2015 -- Caa1 (LGD4, 58%) Moody's previous rating action for Ryerson was on December 4, 2008, when the ratings for Ryerson Inc. were lowered two notches, the corporate family rating to B3 from B1, and the senior secured notes to Caa1 from B2. Ryerson Holding's ratings have been assigned by evaluating factors that Moody's believe are relevant to the company's risk profile, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside Ryerson Holding's core industry; Ryerson Holding's ratings are believed to be comparable to those of other issuers with similar credit risk. Ryerson Inc., which is wholly owned by Ryerson Holding Corporation, is the second largest metals service center in North America, with approximately 100 locations in the U.S., Canada, and China. For the 12 months ended September 30, 2009, it had net sales of $3.4 billion. RYERSON HOLDING: S&P Assigns Corporate Credit Rating at 'B-' ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Chicago, Illinois-based Ryerson Holding Corp., holding company parent of Ryerson Inc., a leading North American processor and distributor of metals. At the same time, S&P affirmed its existing ratings on Ryerson Inc., including its 'B-' corporate credit rating. The outlook on both ratings is negative. S&P also assigned a 'CCC' issue-level rating (two notches below the corporate credit rating) and a '6' recovery rating to Ryerson's proposed $200 million five-year senior discount notes. The '6' recovery rating reflects S&P's expectation of negligible (0%-10%) recovery in the event of a payment default given the structural subordination of the proposed notes to Ryerson's existing credit facility and senior secured notes. Ryerson Holdings Corp. is a holding company that has no operations or assets other than the stock of Ryerson, which S&P understands is its principal operating subsidiary, and its other subsidiaries, as well as 30% direct ownership of Ryerson's China operations. S&P view Ryerson Holding Corp. as a consolidated enterprise. The proceeds from the proposed note issuance will be used to pay an approximately $190 million dividend to its owners, Platinum Equity. Pro forma for the proposed transaction at year end 2009, S&P expects Ryerson Inc. to have approximately $950 million of outstanding consolidated debt. "The rating affirmation reflects S&P's expectation that the recent weakness in both steel and aluminum market conditions in North America over the past several months will continue at least into the first half of 2010," said Standard & Poor's credit analyst Maurice Austin. "Despite weak end markets resulting in lower profitability, S&P expects Ryerson to maintain sufficient liquidity to meet its near-term financial obligations." In addition, the company faces minimal near-term debt maturities as its credit facility does not expire until October 2012. Still, consolidated credit measures continue to be weak for the rating, with pro forma total adjusted debt to EBITDA well over 10x for 2009. However, as S&P assumes higher EBITDA in 2010 due to S&P's expectations of a moderate economic recovery in the second half of the year, S&P expects this measure to strengthen as 2010 progresses possibly to less than 10x by the end of the year, although, in S&P's view, this would still be somewhat weak for the rating given the company's vulnerable business risk profile. The rating on Ryerson reflects its very highly leveraged financial profile and thin interest coverage, given its very challenging operating conditions, low margins relative to some of its peers, and participation in the highly cyclical and volatile steel industry. Still, S&P expects that the company's near-term liquidity position will remain sufficient to meet its obligations. However, declining inventory levels and values have lowered the borrowing base collateral, which could constrain liquidity as demand improves and the company has to maintain higher inventory levels to service its customers. In the highly fragmented steel distribution industry, Ryerson's operations are highly cyclical and working-capital intensive, which results in a high degree of volatility in profitability and cash flow. In addition, its operating margins (before depreciation and amortization) of about 3% are lower than those of some other service centers, which typically average in the mid-to- high single digits. This difference is attributable to the combination of their historical working-capital management relative to inventory as well as Ryerson's customer mix, which is about 55% contractual and generates lower margins than transactional business. However, the company would like to increase its exposure to the higher-margin transactional business. Still, during cyclical downturns, depleting inventories are typically a source of cash, which the company could use to reduce debt and maintain liquidity. The negative rating outlook reflects that S&P's rating assumptions incorporate the impact of the ongoing cyclical downturn on Ryerson's financial performance and overall credit profile over the next several quarters. Ryerson has a good market position, and S&P believes that the steel industry has good long-term growth prospects. However, the company's extremely leveraged financial profile, combined with S&P's expectation that market conditions will remain challenging in the near term, poses rating downside potential. Based on S&P's operating assumptions, 2009 pro forma total debt to EBITDA will likely exceed 20x, with EBITDA coverage of interest about 1x and total liquidity, consisting of revolver availability and cash remaining close to $350 million. In 2010, S&P expects total debt to EBITDA of about 9x, with EBITDA coverage of interest about 1.5x and total liquidity of about $400 million. Although S&P considers Ryerson's credit measures to be weak for the rating, S&P believes that liquidity is sufficient to meet its near-term obligations. S&P could lower the rating if its assumed first-half 2010 recovery takes longer than expected and operating conditions continue to deteriorate, or if the company's revolver availability continues to decline. Specifically, if the revolver availability declines to less than $125 million. A positive rating action could occur if prices and volumes increased, resulting in improving operating performance, though this seems less likely in the near term given Ryerson's highly leveraged financial profile and the difficult market conditions. SENTINEL MANAGEMENT: Trustee's Audit Malpractice Suit Survives -------------------------------------------------------------- WestLaw reports that the inference, under the allegations of a Chapter 11 trustee's complaint, that the debtor-investment advisor received meaningful benefits as a result of its principals' alleged fraud was not so strong as to warrant the dismissal, on a motion to dismiss, of the trustee's claims against the debtor's prepetition auditors for negligent accounting malpractice and aiding and abetting based on the in pari delicto doctrine. Although the complaint indicated that the principals' wrongdoing allowed the debtor to acquire more money and control of assets for its own accounts and, by inference, gave the debtor more time to work its way out of its difficulties, a question remained as to whether the benefits to the debtor were meaningful, as opposed to illusory benefits meant to conceal the benefits solely intended for those who controlled the debtor. Grede v. McGladrey & Pullen LLP, --- B.R. ----, 2009 WL 3094850 (N.D. Ill.) (Zagel, J.). Coverage about the Chapter 11 Trustee's $550 million suit against McGladrey & Pullen LLP appeared in the Troubled Company Reporter on Mar. 25, 2008. Based in Northbrook, Illinois, Sentinel Management Group Inc. -- http://www.sentinelmgi.com/-- was a full service firm offering a variety of security solutions. The Company filed a voluntary Chapter 11 petition on August 17, 2007 (Bankr. N.D. Ill. Case No. 07-14987). Ronald Barliant, Esq., Randall Klein, Esq., and Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black Rosenbloom & Moritz, Ltd., represent the Debtor. Lawyers at Quinn, Emanuel Urquhart Oliver & Hedges, LLP, represents the Official Committee of Unsecured Creditors. When the Debtor sought bankruptcy protection, it estimated assets and debts of more than $100 million. On August 28, 2007, the Court approved Frederick Grede as the Debtor's Chapter 11 Trustee. Marc I. Fenton, Esq., at DLA Piper US LLP, and Vincent E. Lazar, Esq, at Jenner & Block LLP, represent the Chapter 11 Trustee. As reported in the Troubled Company Reporter on January 2, 2009, the Court confirmed a plan of liquidation for Sentinel on December 15, 2008, and Mr. Grede is managing the liquidation. SEVEN SEAS: S&P Assigns Corporate Credit Rating at 'B' ------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Seven Seas Cruises S. DE R.L. The rating outlook is negative. At the same time, S&P assigned its issue-level and recovery ratings to Seven Seas Cruises proposed $200 million second-lien senior secured notes due 2017. The notes were rated 'CCC+' (two notches lower than the 'B' corporate credit rating on the company) with a recovery rating of '6', indicating S&P's expectation of negligible (0% to 10%) recovery for noteholders in the event of a payment default. The company will primarily use proceeds to refinance Seven Seas Cruises' existing $139 million second-lien term loan, to repay $10 million of the existing first-lien term loan (which S&P does not rate), to collateralize a $20 million second-lien letter of credit, and to bolster cash balances. The corporate credit rating for Seven Seas incorporates a view of a consolidated enterprise, including both Seven Seas (operator of the Regent cruise brand) and Oceania Cruises Inc. as wholly owned subsidiaries of Prestige Cruise Holdings Inc., a corporation controlled by Apollo Management L.P. Although management's intention is to operate Oceania and Regent as two independent brands, and while they are financed separately, S&P believes that the strategic relationship between the entities within the context of Apollo's investment in the high-end cruise line niche warrants S&P's taking a holistic view of the family of companies. "The 'B' corporate credit rating reflects Seven Seas' vulnerability within the cruise sector because of its small fleet and niche market strategy; limited cash flow diversity, with three vessels driving the bulk of cash flow generation; high debt leverage; the capital-intensive nature of the cruise industry; and the travel industry's susceptibility to economic cycles and global political events," noted Standard & Poor's credit analyst Emile Courtney. "The high quality of Seven Seas' Regent branded vessels, S&P's favorable view of the niche segment in which the company operates, and the company's good visibility into future bookings serve as partial offsets to the negative rating factors." SMART ONLINE: Amends Reimbursement Deal with Atlas Capital ---------------------------------------------------------- Smart Online, Inc., and Atlas Capital S.A., a Swiss business organization, on January 19, 2010, entered into an amendment to the Reimbursement Agreement, dated November 10, 2006, between the Company and Atlas. Atlas previously procured a letter of credit in favor of Paragon Commercial Bank to serve as security under the Company's revolving credit arrangement between the Company, as borrower, and Paragon, as lender. The Reimbursement Agreement sets forth the terms by which Atlas may be reimbursed by the Company for any drawdowns by Paragon on the letter of credit. The Second Amendment provides that Atlas may elect, in its sole discretion, to be reimbursed by the Company for any such drawdowns in either common stock of the Company, bonds, or cash. Prior to such amendment, the Reimbursement Agreement allowed the Company to reimburse Atlas in either cash or stock, at the Company's election. Atlas is a beneficial owner of 10% or more of the Common Stock of the Company, and an "Investor" as defined in the Convertible Secured Subordinated Note Purchase Agreement, dated November 14, 2007, between the Company and certain Investors, under which the Company is entitled to elect to sell to the Investors, and the Investors are obligated to buy convertible promissory notes. The Company entered into the Second Amendment in consideration for a waiver from the Investors. Sales of Notes to the Investors are subject to certain conditions, including the absence of events or conditions that could reasonably be expected to have a material adverse effect on the ability of the Company to perform its obligations under the Note Purchase Agreement. The agent for the Investors has advised the Company that the Company's obligations to Dennis Michael Nouri and Reza Eric Nouri, former officers of the Company who have obtained a judgment against the Company for the advancement of expenses incurred by them in connection with their defense of certain criminal and civil actions, may constitute such a material adverse effect. However, Atlas, as the majority Investor, advised the Company that it would be willing to waive the funding conditions relating to the judgment if, and for so long as, the Nouris do not actively pursue enforcement of such judgment, and, in addition, if the Company entered into the Second Amendment. About Smart Online Durham, North Carolina-based Smart Online, Inc. -- http://www.smartonline.com/-- develops and markets software products and services (One Biz(TM)) targeted to small businesses that are delivered via a Software-as-a-Service model. The Company sells its SaaS products and services primarily through private- label marketing partners. In addition, the Company provides sophisticated and complex Web site consulting and development services, primarily in the e-commerce retail and direct-selling organization industries. At September 30, 2009, the Company had $1,788,096 in total assets against $13,610,936 in total liabilities, resulting in stockholders' deficit of $11,822,840. SMART ONLINE: Board Appoints Amir Elbaz as Director --------------------------------------------------- Smart Online, Inc.'s board of directors unanimously appointed Amir Elbaz as a director of the Company, effective January 15, 2009, to fill a vacancy in the Board. Mr. Elbaz will serve until his successor is duly elected and qualified. Mr. Elbaz currently advises technology and renewable energy companies on business strategy, restructuring and business development initiatives. Mr. Elbaz served as the Executive Vice President & Chief Financial Officer of Lithium Technology Corporation until November 2008. Mr. Elbaz joined LTC in 2006 to oversee finances and marketing, as well as business development. Prior to joining LTC, Mr. Elbaz served as a Senior Associate of Arch Hill Capital NV, a Dutch venture firm, from 2005-2006. During 2004 and most of 2005 Mr. Elbaz served as Vice President of Corporate Finance at Yorkville Advisors, where Mr. Elbaz sourced, structured and managed investments in more than a dozen public and private companies. Prior to joining Yorkville Advisors, Mr. Elbaz served for several years as an Analyst with the Economic Department in the Procurement Mission of the Israeli Ministry of Defense in New York City. In that capacity Mr. Elbaz co-headed multi-million dollar negotiations with first tier technology companies, and was in charge of the financial aspects of the day- to-day operations. Mr. Elbaz holds a B.A. from the University of Haifa, Israel, and an MBA in Finance & Investments from Bernard Baruch College, CUNY, New York. Following his MBA graduation, Mr. Elbaz was elected to the International Honorary Finance Society of Beta Gamma Sigma. There is no arrangement or understanding between Mr. Elbaz and the Company, or to the Company's knowledge, between Mr. Elbaz and any other person pursuant to which Mr. Elbaz was selected as a director. Mr. Elbaz has been determined by the Board to be "independent" within the meaning of the Nasdaq Marketplace Rules definition of that term. Mr. Elbaz was appointed by the Board to serve on the Audit Committee of the Board. There have been no transactions, and no transactions are proposed, by Mr. Elbaz with related persons as defined by Item 404(a) of Regulation S-K. Mr. Elbaz will receive compensation in the amount of $1,500 per month as a director of the Company. About Smart Online Durham, North Carolina-based Smart Online, Inc. -- http://www.smartonline.com/-- develops and markets software products and services (One Biz(TM)) targeted to small businesses that are delivered via a Software-as-a-Service model. The Company sells its SaaS products and services primarily through private- label marketing partners. In addition, the Company provides sophisticated and complex Web site consulting and development services, primarily in the e-commerce retail and direct-selling organization industries. At September 30, 2009, the Company had $1,788,096 in total assets against $13,610,936 in total liabilities, resulting in stockholders' deficit of $11,822,840. SMART ONLINE: To Advance Directors' Expenses Under Amended Bylaws ----------------------------------------------------------------- Smart Online, Inc., discloses that effective January 13, 2010, it amended and restated the Fifth Amended and Restated Bylaws of the Company in its entirety. The Sixth Amended and Restated Bylaws modifies the prior bylaws by providing for changes to the Company's policies on the indemnification and advancement of directors and officers, which previously required the Company to provide indemnification and advancement rights to the greatest extent permitted under law. The Bylaws now require the Company to indemnify and advance certain expenses to directors and officers and others acting on the Company's behalf as may be required by Delaware law, or if a majority of the disinterested members of the Board, or a duly appointed committee thereof, determine that the person requesting indemnification acted in good faith in the performance of his or her duties to the Company. Furthermore, under the Bylaws, indemnification would not be available for any director or officer who was terminated for "cause" or who was convicted of a felony. About Smart Online Durham, North Carolina-based Smart Online, Inc. -- http://www.smartonline.com/-- develops and markets software products and services (One Biz(TM)) targeted to small businesses that are delivered via a Software-as-a-Service model. The Company sells its SaaS products and services primarily through private- label marketing partners. In addition, the Company provides sophisticated and complex Web site consulting and development services, primarily in the e-commerce retail and direct-selling organization industries. At September 30, 2009, the Company had $1,788,096 in total assets against $13,610,936 in total liabilities, resulting in stockholders' deficit of $11,822,840. SMURFIT-STONE: Plastipak Sues for Return of Security Deposit ------------------------------------------------------------ Plastipak Packaging, Inc., has filed a complaint against Smurfit- Stone Container Corporation, seeking the return of a certain security deposit. Before the Petition Date, Plastipak and the Debtor entered into a sublease agreement for a property commonly known as 35 Industrial Drive, East Longmeadow, Massachusetts, pursuant to which Plastipak posted a $39,479 security deposit. After the Petition Date, the Court authorized the Debtor to reject the Sublease Agreement, and Plastipak timely vacated the Property and asked the Debtor to return the Security Deposit. Maria Aprile Sawczuk, Esq., at Stevens & Lee P.C., in Wilmington, Delaware, tells the Court that Plastipak has made numerous demands on the Debtor to return the Security Deposit but the Debtor failed to return it. Accordingly, Plastipak asks the Court to compel the Debtor to return the Security Deposit, including an award of interest and attorney fees. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Three Panama Unions Get New Labor Contract --------------------------------------------------------- The International Brotherhood of Electrical Workers, the International Association of Machinists and Aerospace Workers, and the United Steel Workers ratified a new labor contract with Smurfit-Stone Container Corporation in Panama City, The News Herald reports. According to the new report, the New Contract will protect workers' pensions. In addition, workers will get two-percent raises each year for four years, two extra holidays, and retroactive pay. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: To Take $284MM Charge for Closing of 2 Mills ----------------------------------------------------------- As part of its restructuring, Smurfit-Stone Container Corporation planned to permanently close its Ontonagon, Michigan and Missoula, Montana mills, effective December 31, 2009. The Ontonagon Mill, which produces 280,000 tons of medium annually, and the Missoula Mill, which produces 620,000 tons of liner annually, are high-cost facilities that do not provide adequate returns over the long term, SSCC said in a statement. With regard to the closures, SSCC expects to incur a restructuring charge of approximately $284 million, of which approximately $246 million is non-cash, in the fourth quarter of 2009. The Ontonagon Mill already ceased operations in September 2009 while the Missoula Mill was expected to continue operating until December 31. However, the date was pushed back to January 5, 2010, to fill out orders, then January 7, 2010, as small groups are needed to "mothball" the mill, Roy Houseman, a workers's union spokeman, said in an interview with The Billings Gazette. The Ontonagon Mill has 182 employees and the Missoula Mill has 417 employees. "These decisions were made to ensure [SSCC's] long-term growth and profitability and do not reflect on the hard work and commitment of the employees at the Ontonagon and Missoula mills," Steve Klinger, SSCC's president and chief operating officer said in the statement. With the impending closures, questions are asked regarding the fate of millworkers and the industrial sites. The Missoulian reports that SSCC's board is still undecided as its priority is an orderly shutdown. However, according to The Associated Press, unemployment insurance experts are said to be helping workers file claims. As of January 4, 2010, more than 230 parties-in-interest have asked the Court to require SSCC to sell the Ontonagon Mill rather than allow it to remain vacant or dismantle it. A list of these parties is available for free at: http://bankrupt.com/misc/SmrftPlntClsRsps.pdf In addition, they ask that the Mill be heated throughout the winter months. Caroline Hofferle, one of the parties who responded to the Plan Closures, told the Court that the Ontonagon Mill is of more value to creditors, and to the economy of Ontonagon and the State of Michigan to be sold in full rather than dismantled. She said, in order to be sold and prevent environmental damage, the Ontonagon Mill must be heated during the winter months to prevent freezing and permanent damage to the equipment. Ms. Hofferle explained that if the liquor, acid and caustic tanks are left to freeze, their tanks will split. In the spring when the temperature rises, the contents will thaw and contaminate the ground and the water supply, thus violating both Title III and Title IV of the Clean Water Act. In addition, she said that there is also an issue with the wastewater plant as water from the coal pile goes into the wastewater plant. If the area is not pumped out, it will overflow into the Ontonagon River causing surface water contamination issues. The Ontonagon River is one of the largest rivers contributing to Lake Superior, one of the largest fresh-water lakes in the world. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SPANSION INC: To Sell Italian Operations, Retain IP Rights ---------------------------------------------------------- In an effort to decrease costs without losing out on potential benefits, Spansion Inc. has agreed to transfer operations of its Italian research division to Elpida Memory Inc. while retaining partial ownership of the technology developed there, Law360 reports. Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/-- is a Flash memory solutions provider. Spansion is a former joint venture of AMD and Fujitsu. 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) STANDARD MOTOR: Reinstates Quarterly Dividend --------------------------------------------- Standard Motor Products, Inc.'s Board of Directors has approved the reinstatement of a quarterly dividend. The Board approved a dividend of five cents per share on the common stock outstanding to be paid on March 1, 2010, to stockholders of record on February 15, 2010. Lawrence I. Sills, Standard Motor Products' Chairman and Chief Executive Officer, stated, "Our Board's decision to reinstate the dividend reflects our improved financial performance. The aggressive steps we have taken over the past twelve months have strengthened our financial and liquidity position, which has now allowed us to return to providing cash dividends to our shareholders." In November 2009, Standard Motor Products sold its European distribution business to the current managers of the business for GBP1.8 million ($3 million) in cash and a promissory note and approximately GBP1.9 million ($3.1 million) in assumed debt. The Company will retain its manufacturing operation in Poland, certain land available for sale in the United Kingdom, and a small investment in a joint venture. The proceeds from the sale will be used to pay down debt. The Company estimated non-cash charges for the transaction would range from GBP4.0 million ($6.6 million) to GBP4.5 million ($7.4 million). (U.S. dollar equivalents were calculated at an assumed foreign currency exchange rate of GBP 1.65.) About Standard Motor Standard Motor Products, Inc. (NYSE: SMP), headquartered in Long Island City, New York, is a manufacturer and distributor of replacement parts for the automotive aftermarket industry. The company is organized into two principal divisions: (i) Engine Management (ignition and emission parts; ignition wires; battery cables; and fuel system parts) and (ii) Temperature Control (air conditioning compressors; other air conditioning parts; and heater parts). Standard Motor's annualized revenues currently approximate $775 million. * * * As reported by the Troubled Company Reporter on July 17, 2009, Moody's Investors Service withdrew all ratings of Standard Motor Products' after the only rated debt having been redeemed upon maturity. Ratings withdrawn include the Corporate Family Rating at Caa1, and $32 million convertible subordinated debentures due July 2009 at Caa2. The last rating action occurred on June 30, 2009, when its CFR was upgraded to Caa1 from Caa2. On June 23, the TCR said Standard & Poor's Ratings Services withdrew its 'CC' corporate credit rating and other debt ratings on Standard Motor Products at the company's request. There is a small amount of rated debt remaining after the recently completed exchange offer. STERLING FINANCIAL: Former Employee Files Class-Action Lawsuit -------------------------------------------------------------- A former employee of Spokane-based Sterling Savings Bank has filed a class-action lawsuit claiming the bank and its holding company, Sterling Financial Corporation failed to protect employees' investment in company stock through the company's 401(k) Plan. The suit filed by Hagens Berman Sobol Shapiro at the U.S. District Court replaces a similar suit filed on Jan. 11, 2010, which the firm dismissed at the request of Cory Deter. Attorneys representing plaintiff Philip Laue believe that Sterling stock price has imploded as the result of ill-advised commercial real estate, construction and land loans, improper accounting and inadequate capitalization. Sterling and other defendants failed to properly manage 401(k) funds by maintaining a large investment in Company Stock long after the stock became an imprudent investment -- a violation of the federal Employment Retirement Income Security Act (ERISA), the complaint states. "No qualified financial advisor would encourage rank-and-file employees to invest more than a modest amount of retirement savings in company stock, but actually advise against it," said HBSS managing partner Steve Berman. "Employees often interpret a match in company stock as an endorsement of the company and its stock. In this case, Sterling matched the stock employees invested in the 401(k) plan with worthless Company Stock, further putting the pension fund at risk." Berman said the bank failed to disclose the company's massive financial problems caused by inadequately secured loans in commercial real estate, construction and land loans, and masked by allegedly improper accounting. The lawsuit charges that the company deliberately misled employees and shareholders on the value of the stock and failed to secure adequate reserves against its credit portfolio. Employees in the class include those who owned stock in the Sterling 401(k) from July 23, 2008, to the present. The plan heavily invested in Sterling stock despite a clear decline in performance. As of Dec. 31, 2007, the plan held approximately $16 million in Sterling common stock. A year later, Dec. 31, 2008, the plan held approximately $13 million in Sterling common stock, representing in excess of 20 percent of the assets of the pension plan. In the wake of its diving stock performance, Sterling allegedly failed to adequately and timely record losses for its impaired loans and secure assets to safeguard against its defaulting credit portfolio. As a result, Sterling stock traded at artificially inflated prices during the class period, reaching a high of $14.72 per share on Oct. 1, 2008, the lawsuit states. As of last Friday, the beleaguered stock closed at 70 cents per share. Sterling Bank is one of the largest commercial banks headquartered in Washington. It is one of the largest regional community banks in the U.S. that offers mortgage lending, construction financing and investment products to individuals, small business and commercial organizations and corporations. Golf Savings Bank, a branch of Sterling, focuses on the sale of single-family residential mortgage loans. HBSS, a Seattle-based class-action law firm experienced in ERISA and securities litigation, estimates over 2,500 employees in Washington, Oregon, Idaho, Montana and California are affected by the actions listed in the complaint. The lawsuit charges that Sterling deliberately misled employees and investors and mismanaged its pension plan on a number of fronts, noting specifically that Sterling: -- Failed to account for and disclose Sterling's commercial real estate, construction and land development loans and failed to reflect impairment in the loans; -- Failed to adequately reserve for loan losses, such that Tier 1 capital was presented in violation of banking regulations and Generally Accepted Accounting Principles (GAAP). As a result, Sterling would be forced to consent to a cease and desist order from the Federal Deposit Insurance Corporation (FDIC) directing it to raise $300 million in capital; -- Failed to adequately account for its goodwill or its deferred tax assets such that its financial statements were presented in violation of GAAP. This new lawsuit filed against Sterling Financial Corp. supersedes the Jan. 11, 2010 complaint filed by HBSS and Brodsky & Smoth, LLC, which has been dismissed. Prospective class members who want to learn more about legal requirements and membership in the class should contact Nick Styant-Browne at 1-206-268-9373 or STSA@hbsslaw.com. About Hagens Berman Sobol Shapiro Hagens Berman Sobol Shapiro (HBSS) is a law firm with offices in Seattle, Chicago, Cambridge, Los Angeles, Phoenix and San Francisco. Named to the 2006 and 2009 Plaintiffs' Hot List by National Law Journal, HBSS has developed a nationally recognized practice in class-action litigation. The firm has co-lead counsel in litigation to recover losses from Enron employees' retirement funds and represented Washington and 12 other states in lawsuits against the tobacco industry that resulted in the largest settlement in the history of litigation. The firm also served as counsel in several other high-profile cases, including the Washington Public Power Supply litigation, which resulted in settlements of nearly $1 billion. The firm also served as co-lead counsel in a VISA/Mastercard litigation, which resulted in excess of a $3 billion settlement. About Sterling Financial Corporation Sterling Financial Corporation of Spokane, Wash., -- http://www.sterlingfinancialcorporation-spokane.com/-- is the bank holding company for Sterling Savings Bank, a commercial bank, and Golf Savings Bank, a savings bank focused on single-family mortgage originations. Both banks are state chartered and federally insured. Sterling offers banking products and services, mortgage lending, construction financing and investment products to individuals, small businesses, commercial organizations and corporations. As of Sept. 30, 2009, Sterling Financial Corporation had assets of $11.87 billion and operated 178 depository branches throughout Washington, Oregon, Idaho, Montana and California. SUNESIS PHARMACEUTICALS: Investor Group to Buy $43.5MM in Equity ---------------------------------------------------------------- Sunesis Pharmaceuticals, Inc., on January 19, 2010, entered into an agreement to amend the securities purchase agreement, dated March 31, 2009, as amended, with accredited investors party thereto, which include certain members of the Company's management. The Agreement provides for the private placement of up to $43.5 million of the Company's equity securities. The investor group consists of: * Bay City Capital Fund V, L.P.; * Bay City Capital Fund V Co-Investment Fund, L.P.; * Growth Equity Opportunities Fund, LLC; * Alta BioPharma Partners III, L.P.; * Alta BioPharma Partners III GmbH & Co. Beteiligungs KG; * Alta Embarcadero BioPharma Partners III, LLC; * Swisher Revocable Trust; * Bjerkholt/Hahn Family Trust; and * Steven Blake Ketchum The Amendment Agreement amends the securities purchase agreement to provide that notice of the election of the Majority Purchasers to consummate the Common Equity Closing contemplated by the securities purchase agreement must be delivered by June 30, 2010, rather than December 31, 2010 as previously provided by the securities purchase agreement. On January 20, 2010, the Company entered into a controlled equity offering sales agreement with Cantor Fitzgerald & Co., pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $15.0 million from time to time through Cantor acting as agent or principal. Sales of the Company's common stock through Cantor, if any, will be made on the NASDAQ Capital Market by means of ordinary brokers' transactions at market prices, in block transactions or as otherwise agreed by Cantor and the Company. Cantor will use its best efforts to sell the Company common stock from time to time, based upon the Company's instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company will pay Cantor a commission rate ranging between 3.0% and 5.0% of the gross sales price per share of any common stock sold through Cantor as agent under the sales agreement. The Company has also agreed to reimburse Cantor for certain expenses incurred in connection with entering into the sales agreement and provided Cantor with customary indemnification rights. The Company may also sell shares of common stock to Cantor, as principal for its own account, at a price negotiated at the time of sale. If the Company sells shares to Cantor in this manner, the Company will enter into a separate agreement setting forth the terms of any such transactions. On January 19, 2010, the Company filed a certificate of amendment to the certificate of designation of the Series A preferred stock, or the Certificate of Amendment, with the Secretary of State of the State of Delaware. The Certificate of Amendment amends the voting rights provisions of the holders of the Company's Series A preferred stock to provide for a termination of such holders right to consent to certain issuances of the Company's equity securities after June 30, 2010, rather than December 31, 2010, to correspond to the amendment made to the securities purchase agreement pursuant to the Amendment Agreement. Going Concern Sunesis said it has incurred significant losses and negative cash flows from operations since its inception, and as of September 30, 2009, had cash, cash equivalents and marketable securities totaling $3.9 million and an accumulated deficit of $352.4 million. The Company's independent registered accounting firm issued an opinion on the audited consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2008 that the Company's recurring operating losses raise substantial doubt about the Company's ability to continue as a going concern. The Company believes that currently available cash, cash equivalents and marketable securities, including the net proceeds of roughly $4.7 million from the second closing of the Private Placement completed on October 30, 2009, are sufficient to fund the Company's operations until the end of the first quarter of 2010, and the Company will need to raise additional funds in the near term in order to sustain operations beyond that time. About Sunesis Pharmaceuticals South San Francisco, California-based Sunesis Pharmaceuticals, Inc. (NASDAQ: SNSS) -- http://www.sunesis.com/-- is a biopharmaceutical company focused on the development and commercialization of new oncology therapeutics for the treatment of solid and hematologic cancers. Sunesis has built a highly experienced cancer drug development organization committed to advancing its lead product candidate, voreloxin, in multiple indications to improve the lives of people with cancer. SUNGARD DATA: Bank Debt Trades at 3% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which SunGard Data Systems, Inc., is a borrower traded in the secondary market at 96.63 cents-on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.59 percentage points from the previous week, The Journal relates. The Company pays 375 basis points above LIBOR to borrow under the facility. The bank loan matures on Feb. 28, 2014, and carries Moody's Ba3 rating and Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. SunGard Data Systems, Inc., headquartered in Wayne, Pennsylvania, is a provider of software and IT services to the financial services industry well as higher education institutions and the public sector. SunGard also provides disaster recovery/business continuity services through its Availability Services division. As stated by the Troubled Company Reporter on Sept. 1, 2009, Moody's Investors Service affirmed SunGard's 'B2' corporate family and probability of default ratings, along with its SGL-2 speculative grade liquidity rating. Standard & Poor's Ratings Services rates (i) SunGard's corporate rating at 'B+', and its (ii) $2.7 billion tranche B secured term loan maturing Feb. 28, 2016, and the $580 million secured revolving credit facility maturing May 11, 2013, at 'BB'. SWIFT TRANSPORTATION: Bank Debt Trades at 5% Off ------------------------------------------------ Participations in a syndicated loan under which Swift Transportation Co., Inc., is a borrower traded in the secondary market at 94.95 cents-on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.70 percentage points from the previous week, The Journal relates. The Company pays 325 basis points above LIBOR to borrow under the facility. The bank loan matures on March 15, 2014, and carries Moody's B3 rating and Standard & Poor's B- rating. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. Swift Transportation Co., Inc. -- http://www.swifttrans.com/-- hauls freight such as building materials, paper products, and retail merchandise throughout the U.S. and in Mexico. The Company operates a fleet of about 18,000 tractors and 48,000 trailers from a network of about 40 terminals. Its services include dedicated contract carriage, in which drivers and equipment are assigned to a customer long-term. Besides standard dry ans, Swift's fleet includes refrigerated, flatbed, and other specialized trailers, as well as about 5,800 intermodal containers. TARGA RESOURCES: Bank Debt Trades at 100.2% in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Targa Resources, Inc., is a borrower traded in the secondary market at 100.20 cents-on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.56 percentage points from the previous week, The Journal relates. The loan matures on Oct. 31, 2012. The Company pays 500 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's and Standard & Poor's. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. Targa Resources, Inc. -- http://www.targaresources.com/-- is a provider of midstream natural gas and natural gas liquid services in the United States. The Company provides these services through its integrated platform of midstream assets. Its gathering and processing assets are located in the Permian Basin in west Texas and southeast New Mexico, the Louisiana Gulf Coast primarily accessing the offshore region of Louisiana, and, through Targa Resources Partners LP, the Fort Worth Basin/ Bend Arch in north Texas, the Permian Basin in west Texas and the onshore region of the Louisiana Gulf Coast. Its NGL logistics and marketing assets are located primarily at Mont Belvieu and Galena Park near Houston, Texas and in Lake Charles, Louisiana, with terminals and transportation assets across the United States. TAVERN ON THE GREEN: Gets $3.5 Million in 3-Day Auction ------------------------------------------------------- The New York Times' Glenn Collins reports that the auction of Tavern on the Green restaurant items took in some $3.5 million including the 22% premium, the fee buyers paid to Guernsey's auction house, which conducted the sale. NY Times says the take fell far short of satisfying more than $9 million owed to more than 450 unsecured creditors of Tavern, which closed on New Year's Day. NY Times notes Sotheby's auction house had assessed a portion of the inventory at $8 million before the economic downturn. NY Times says more than 1,000 in-house and online bidders grazed on a trove of 25,000 colorful and memory-tugging items at the landmark restaurant in Central Park. "The treasures ranged from samovars to murals, leaded-glass ceilings, banana-split dishes, doormen's green frock coats and a Wurlitzer jukebox," Mr. Collins reports. The three-day auction ended on January 15, 2010. NY Times relates that most of the auction proceeds went to Tavern's lone secured creditor, TD Bank, which is owed $6.6 million. NY Times says Tavern also obtained $3.5 million from the sale of its Long Island City warehouse. NY Times says hundreds of unsecured creditors are waiting anxiously for a court decision on the last of the restaurant's major assets: the Tavern on the Green name, which has been valued at $19 million. A federal judge is weighing whether New York City -- Tavern's landlord -- or the family of the flamboyant restaurateur Warner LeRoy, which ran the restaurant since 1976, owns the trademark. * * * According to an article posted at The Wall Street Journal's Bankruptcy Beat, New York City lost a bid to claim ownership of the 3,800-plus square feet of chestnut paneling, plaster ceiling figures and 19th-century mural, which defined Tavern's Park, Chestnut and Crystal dining rooms, on the grounds that they were integral to the restaurant and their removal would physically damage the building. The article says before the auction began on January 13, Judge Allan L. Gropper of the U.S. Bankruptcy Court in Manhattan sided with Tavern, declaring it the items' true owner of the items and allowing Tavern to put the items on the block. At the auction, however, New York City dropped $150,000 to acquire the three items. About Tavern on the Green Tavern on the Green LP is the operator of the 75-year-old restaurant in New York's Central Park. Tavern on the Green, the second-highest grossing restaurant in the U.S. last year, was founded in 1934 by New York Parks Commissioner Robert Moses and the license was bought by restaurateur Warner LeRoy in 1974. The Company filed for Chapter 11 on September 9, 2009 (Bankr. S.D.N.Y. Case No. 09-15450). It listed assets and debts of as much as $50 million each. TELESAT CANADA: Bank Debt Trades at 3% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Telesat Canada is a borrower traded in the secondary market at 97.48 cents-on-the- dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.68 percentage points from the previous week, The Journal relates. The loan matures on June 6, 2014. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's and Standard & Poor's. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. Headquartered in Ottawa, Ontario, Canada, Telesat Canada is the world's fourth largest provider of fixed satellite services and one of three companies operating on a global basis. The company has a fleet of 12 in-orbit satellites comprised of ten owned and operated satellites, one satellite with a prepaid lease, and one satellite leased from DIRECTV, Inc. Telesat carries 'B2' long term corporate family ratings from Moody's and 'B+' issuer credit ratings from Standard & Poor's. TETON ENERGY: Plan of Reorganization Wins Court Approval -------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware confirmed Teton Energy Corporation's Plan of Reorganization. According to the amended Disclosure Statement, holders of these claims will receive, when the claims become payable under the applicable law, in full satisfaction, settlement, release, and discharge of and in exchange for the allowed priority tax claim, cash equal to the unpaid portion of the face amount of the claim or other treatment as to which the holder and the Debtor will have agreed: (a) administrative claims, (b) priority tax claims, (c) other priority claims, and (d) other secured claims. All DIP Loan claims will be paid by the Reorganized Teton in cash, while holders of trade claims will receive, in full satisfaction, settlement, release, and discharge of and in exchange for the allowed trade claim, cash equal to the amount of its allowed trade claim (i) as paid pursuant to the trade claim orders prior to the effective date of the Plan, and/or (ii) as paid pursuant the Plan, which Plan distribution will be made as soon as reasonably practicable after the later of the effective date or the date immediately following the date that the claim becomes an allowed trade claim. Holders of prepetition secured lender claims will receive in full satisfaction, settlement, release, and discharge of and in exchange for all prepetition secured lender claims against the Debtors, the auction proceeds, but in no event less than the sum of $18,000,000. Holders of general unsecured claims and convertible debenture claims will receive pro rata share of the cash contribution, and any excess auction proceeds after satisfaction in full of the holders of allowed convertible debenture claims will be distributed pro rata to the holders of allowed general unsecured claims until paid in full. Holders of interests in subsidiaries will retain their interests, while interests in TEC will be cancelled and each holder of those interests will not be entitled to, and won't receive or retain any property or interest in property on account of, the interests. Assets held by the Debtors immediately before the effective date will re-vest in the prepetition owners of the same assets, as reorganized debtors, free and clear of all liens, claims, encumbrances and other interests. On the effective date, individuals designated as officers or members of the Board of Directors of the Debtors will be deemed to have resigned. A copy of the Amended Plan is available for free at: http://bankrupt.com/misc/TETON_ENERGY_amended_plan.pdf A copy of the Amended Disclosure Statement is available for free at http://ResearchArchives.com/t/s?4c30 Denver, Colorado-based Teton Energy Corp. is an independent oil and gas exploration and production company focused on the acquisition, exploration and development of North American properties, primarily concentrated in the Midcontinent and Rocky Mountain regions of the U.S. The Company filed for Chapter 11 bankruptcy protection on November 8, 2009 (Bankr. D. Delaware Case No. 09-13946). As of June 30, 2009, the Company listed $24,219,447.57 in assets and $44,316,387.28 in liabilities. TEXAS INDUSTRIES: Moody's Downgrades Corp. Family Rating to 'B2' ---------------------------------------------------------------- Moody's Investors Service downgraded Texas Industries, Inc.'s corporate family rating and probability of default rating to B2 from B1, the rating on its $200 million senior secured credit facility to Ba2 from Ba1, and the rating on its $550 million senior unsecured notes to B3 from B2. The rating outlook is stable. The rating downgrade results from continued weakness in Texas Industries' end-markets and resulting impact on the company's operating performance and credit metrics. As a result of substantive volume declines of approximately 30%-40% from peak levels and weakening pricing power, the company's operating margins declined from typical 9%-12% to 4%-5%, while adjusted Debt-to-EBITDA leverage has increased from 3.1x at 5/31/2008 to about 5.8x at present. While Texas Industries is expected to realize benefits from federal stimulus spending targeting public works and infrastructure construction in its markets, it is unlikely that general industry conditions will improve materially over the next 18 months as private spending remains depressed, thus limiting opportunities for the company to strengthen its operating profile and credit metrics. Therefore, Moody's views Texas Industries' intermediate-term credit profile better positioned in the B2 rating category. The B2 corporate family rating reflects the company's exposure to cyclical construction end-markets, its elevated financial leverage, and currently weakened operating profile. The rating remains supported by Texas Industries' leading position in served markets, which have strong long term growth fundamentals and relatively high exposure to the public construction and infrastructure segment, and the expected benefits the company may realize once federally supported infrastructure spending begins to materialize in 2010. Additionally, the company's rating is supported by its sufficient liquidity, lack of near-term debt maturities, and a solid cash position. The stable outlook presumes that Texas Industries will continue focusing on cost cutting and operating efficiencies in order to support and ultimately improve its operating and credit metrics. Additionally, stable outlook presumes that the company will maintain sufficient liquidity through cash conservation and capital expenditure deferrals. Moody's last rating action for TXI was on January 13, 2009, when the company's CFR and PDR were downgraded to B1 from Ba3, and the outlook changed to stable from negative. Texas Industries, Inc, headquartered in Dallas, Texas manufactures cement, aggregates and ready-mixed concrete. The company serves end-use markets such as public works, commercial, industrial, institutional and residential construction sectors, and energy markets. Texas Industries typically generates approximately 80% of its revenues in Texas and 20% in California, which in the LTM period ending November 2009 were approximately $688 million. TOUSA INC: Creditors' $60M Suit Over Failed Deal Gets OK -------------------------------------------------------- Law360 reports that a judge has allowed unsecured creditors of Tousa Inc. to file suit seeking about $60 million that was paid to the former owners of rival builder Transeastern Properties Inc. as part of a legal settlement over Tousa's ill-fated attempt to take over the company. 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) TRANSDIGM GROUP: Bank Debt Trades at 3% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which TransDigm Group is a borrower traded in the secondary market at 97.38 cents-on-the- dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.91 percentage points from the previous week, The Journal relates. TransDigm pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on June 7, 2013, and it is not rated by Moody's and Standard & Poor's. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. TransDigm Group, Inc. -- http://www.transdigm.com/-- is a global designer, producer and supplier of highly engineered aircraft components for use on commercial and military aircraft. The Company operates through its wholly owned subsidiary, TransDigm, Inc. During the fiscal year ended Sept. 30, 2009, 95% of the Company's net sales were generated by products, for which it owns the design. Its customers include distributors of aerospace components; worldwide commercial airlines, including national and regional airlines; large commercial transport and regional and business aircraft original equipment manufacturers; various armed forces of the United States and foreign governments; defense OEMs; system suppliers, and various other industrial customers. On Aug. 10, 2009, AeroControlex Group, Inc., a subsidiary of TransDigm acquired certain product line assets of Woodward HRT, Inc., a subsidiary of Woodward Governor Company. TROPICANA ENTERTAINMENT: Effective Date Deadline Extension Sought ----------------------------------------------------------------- BankruptcyData reports that Tropicana Entertainment filed with the U.S. Bankruptcy Court a motion of the OpCo Debtors for an order extending the deadline to consummate the OpCo Plan through February 28, 2010. The period provided under the OpCo Plan for the satisfaction or waiver of all conditions to consummation of the plan is currently set to expire on January 31, 2010. Tropicana Entertainment LLC and its units owned eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and certain affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08- 10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana have emerged from bankruptcy pursuant to a reorganization plan. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have emerged from Chapter 11 via a separate Chapter 11 plan. On April 29, 2009, non-debtor units of the OpCo Debtors, designated as the New Jersey Debtors -- Adamar of New Jersey, Inc., and its affiliate, Manchester Mall, Inc. -- filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to effectuate a sale of the Atlantic City Resort and Casino to a group of Investors-led by Carl Icahn. Judge Judith H. Wizmur presides over the cases. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) UAL CORP: Flight Attendants Protest Over Delayed Contract --------------------------------------------------------- United Air Lines, Inc. flight attendants represented by the Association of Flight Attendants-CWA, AFL-CIO held worldwide protests in light of United's failure to negotiate a new contract on time, according to the AFA-CWA's public statement dated January 7, 2010. According to the AFA-CWA, negotiations between AFA-CWA and United began on April 6, 2009, with the intent of having a new flight attendant contract in place by January 7, 2010. A federal mediator was also assigned by the National Mediation Board, joined the negotiations after the union and United company filed for mediation in August to have a new agreement in place by January 7, 2010. Despite these events, United's management has not even presented a full contract proposal, the AFA-CWA complained. The AFA-CWA insisted that flight attendants are working at 1994 wage levels in the year 2010 and they are working 48% more compared with 2002 schedules and staffing. The flight attendants are angry that United has not discussed the improvements envisioned, seeming only interested in delaying a new contract for flight attendants, the AFA-CWA alleged. United spokesperson, Megan McCarthy said in a Chicago Tribune interview that United did not want the contract process to drag. Ms. McCarthy insisted that United has been consistent in trying to reach mutually beneficial agreements with its unions that provide for competitive wages, benefits and work rules, Chicago Tribune noted. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. UAL CORP: Reports December 2009 Traffic Results ----------------------------------------------- United Air Lines, Inc., reported its preliminary consolidated traffic results for December 2009. The company reported a December consolidated passenger load factor of 81.9 percent. Total consolidated revenue passenger miles (RPMs) were flat in December on a consolidated capacity decrease of 3.1 percent in available seat miles (ASMs) compared with the same period in 2008. 2009 2008 Percent Dec. Dec. Change ----- ----- ------- Revenue passenger miles ('000) North America 4,522,291 4,707,393 (3.9%) Pacific 1,815,583 1,813,196 0.1% Atlantic 1,420,983 1,351,211 5.2% Latin America 287,263 344,902 (16.7%) Total International 3,523,829 3,509,309 0.4% Total Mainline 8,046,120 8,216,702 (2.1%) Regional Affiliates 1,161,450 991,399 17.2% Total Consolidated 9,207,570 9,208,101 0.0% Available seat miles ('000) North America 5,561,626 5,774,514 (3.7%) Pacific 2,094,230 2,359,615 (11.2%) Atlantic 1,674,532 1,690,606 (1.0%) Latin America 358,645 457,054 (21.5%) Total International 4,127,407 4,507,275 (8.4%) Total Mainline 9,689,032 10,281,789 (5.8%) Regional Affiliates 1,549,680 1,313,419 18.0% Total Consolidated 11,238,712 11,595,208 (3.1%) Load factor North America 81.3% 81.5% (0.2 pts) Pacific 86.7% 76.8% 9.9 pts Atlantic 84.9% 79.9% 5.0 pts Latin America 80.1% 75.5% 4.6 pts Total International 85.4% 77.9% 7.5 pts Total Mainline 83.0% 79.9% 3.1 pts Regional Affiliates 74.9% 75.5% (0.6 pts) Total Consolidated 81.9% 79.4% 2.5 pts Revenue passengers boarded ('000) Mainline 4,342 4,662 (6.9%) Regional Affiliates 2,094 1,874 11.7% Total Consolidated 6,436 6,536 (1.5%) Cargo ton miles ('000) Freight 132,558 95,703 38.5% Mail 22,517 25,209 (10.7%) Total Mainline 155,075 120,912 28.3% About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. UAL CORP: Tops December On-Time Performance Among Carriers ---------------------------------------------------------- United Air Lines, Inc., took the top spot among the major network carriers in on-time performance for the month of December, based on preliminary industry data. In the month, 76.4% of United's flights were on-time in a month that experienced significant winter weather challenges along the East Coast and in the Midwest as well as the airline's highest load factors of any previous December. Finishing first among the network carriers will result in a monthly bonus payment for employees and will mark the 10th time that United employees earned a bonus payout for their contribution to the company's leading on-time performance result for 2009. For the year, United will pay out almost $32 million, meaning more than 39,000 front-line employees will earn $825 each for their achievements in on-time performance results. Additionally, United's customer satisfaction measurements for the month of December showed a 34% improvement compared to December 2008, which follows an all-time high customer satisfaction performance in November 2009 for cabin cleanliness, condition, and workability as well as employee courtesy index. "Our people managed through enormous weather challenges and heavy holiday travel traffic and did an outstanding job of getting our customers where they needed to be safely and on time," said John Tague, president, United Airlines. "We began 2009 with a goal of being the number one major network carrier in on-time performance. By working together, we are now consistently competing for the top spot in on-time performance, significantly improving customer satisfaction levels each month and doing all the things necessary for running a great airline." Launched in January 2009, United's Arrival: 14 cash incentive program pays employees $100 for each month that the company finishes first among its network peers. If the company finishes second or achieves its internal goal, employees earn $65. Baggage Rates Meanwhile, United Air Lines, Inc., will raise the fee for the first check-on bag from $25 to $30, and $30 to $35 for the second bag, The Wall Street Journal reported on January 13, 2010. According to the report, the new rates will take effect on tickets purchased on or before January 14, 2010, for travel on or after January 21, 2010. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. US FOODSERVICE: Bank Debt Trades at 11% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which U.S. Foodservice, Inc., is a borrower traded in the secondary market at 88.80 cents- on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.83 percentage points from the previous week, The Journal relates. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank loan matures on July 3, 2014, and carries Moody's B2 rating. The bank is not rated by Standard & Poor's. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. U.S. Foodservice, Inc. -- http://www.usfoodservice.com/-- is a foodservice supplier serving some 250,000 customers from more than 70 distribution facilities. The Company supplies restaurants, hotels, school, and other foodservice operators with a wide variety of food products, including canned and dry foods, meats, frozen foods, and seafood. It also distributes kitchen equipment and cleaning supplies among other non-food supplies. U.S. Foodservice distributes both national brand products and its own private labels. Tracing its roots to 1853, the company is owned by private equity firms KKR & Co. and Clayton, Dubilier & Rice. VISTEON CORP: IUE-CWA Appeals OPEB Amendment Order -------------------------------------------------- The International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers - Communications Workers of America or IUE-CWA intends to take an appeal to the U.S. District Court for the District of Delaware of Bankruptcy Judge Sontchi's order authorizing the Debtors to amend or terminate Post-Employment Health Care and Life Insurance Benefits for certain employees and retirees and their surviving spouses, domestic partners and dependents. The IUE-CWA wants the District Court to determine whether the Bankruptcy Court entered its order improperly where the Debtors did not first negotiate over revocation of retiree benefits and where the Bankruptcy Court did not consider whether the Debtors made a significant showing that the health and life insurance benefits of IUE-CWA were not vested. Committee Seek Papers in Appeal In a separate filing, the Official Committee of Unsecured Creditors seeks to be placed on the service list with respect to the Notice of Appeal filed by IUE-CWA with respect to the OPEB Termination Order. 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 Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Plan Exclusivity Extended to February 18 ------------------------------------------------------ Visteon Corp. and its units asked Bankruptcy Judge Christopher Sontchi to extend their exclusive periods to file a plan of reorganization through February 18, 2010, and to solicit votes on that Plan through April 22, 2010. The Debtors relate that despite the unprecedented downturn in the automotive sector, they are on the verge of completing an ambitious operational restructuring in the short time that has passed since filing for Chapter 11. At the same time, the Debtors note that they have been working hard to develop a plan of reorganization based on their recently developed business plan. Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, relates under a certification of counsel, that the Official Committee of Unsecured Creditors has approached the Debtors to discuss alternative plan structures, the development of which requires further diligence on the part of the parties and potential plan sponsors. According to Mr. Billion, the parties, having considered (i) the necessity for additional time for continued diligence in connection with the alternative plan structures, and (ii) the potential risk and uncertainty inherent in allowing the Exclusive Periods to expire, have agreed to enter into a stipulation. Pursuant to the parties' Stipulation, the Committee assents to the Debtors' request that their exclusive right to propose and file a Chapter 11 plan be extended through February 18, 2010. The Committee further assents to the Debtors' request for the period during which the Debtors may solicit and obtain acceptances of the Plan to be extended through April 22, 2010. Accordingly, Judge Sontchi has extended the Debtors' exclusive right to propose and file a Chapter 11 plan through February 18, 2010. Judge Sontchi also extended the Debtors' deadline to solicit and obtain acceptances of that Plan through April 22, 2010. 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 Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Proposes to Sell Radar Systems Business to Autoliv ---------------------------------------------------------------- Visteon Corporation and its debtor affiliates seek authority from Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware to sell their Radar Systems Business to Autoliv ASP, Inc. Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, relates that the proposed sale of the assets comprising the Debtors' blind spot monitoring business or the "Radar System Business" represents one more step in the Debtors' ongoing process of exiting certain lines of business for value while maintaining important customer relationships in accordance with their restructuring objectives. He notes that although the Debtors believe the systems produced by the Radar System Business have been well-regarded technically in the marketplace, issues arising from the Debtors' position in the blind spot monitoring system value chain led the Debtors to closely evaluate their continued participation in the business even before the Petition Date. Mr. Billion informs that Court that at present, components produced by the Debtors' Radar System Business comprise merely 20% of the value of each blind spot monitoring system incorporated into the vehicles of the Radar System Business's customers, Chrysler Group LLC and Honda Motor Company, Ltd., with the remaining 80% of system value accounted for by components produced by Autoliv. As a result of the Debtors' lack of control over a significant element of total system cost, they have been unable to satisfy customer demands for substantial system cost reductions, according to Mr. Billion. The Debtors estimate that additional efforts to reduce the system costs within their control would further erode the value accruing to them from the Radar System Business. Because the blind spot monitoring systems that utilize Autoliv components require a complementary component produced by the Debtors' Radar System Business, Mr. Billion maintains that Autoliv is uniquely positioned to provide the Debtors with the greatest value from a sale of the Radar System Business. Mr. Billion relates that acquisition of the Radar System Business assets will provide Autoliv with direct control over the production of all components currently required to produce systems for Chrysler and Honda, as well as the capability to become a producer of integrated blind spot monitoring systems on a going-forward basis. Moreover, he notes, a sale to Autoliv serves the Debtors' customer relationship goals by minimizing the potential for disruptions in the supply chains of Chrysler and Honda. Accordingly, the Debtors and Autoliv memorialized the terms of their transaction under an asset sale agreement dated Dec. 22, 2009. Pursuant to the Sale Agreement, Autoliv will pay $1.9 million for the assets, as well as assume certain liabilities related to the Radar System Business. Autoliv has also agreed (i) to take assignment of certain of the Debtors' contracts with Chrysler and Honda for the production of blind spot monitoring system components, which will be assumed by the Debtors at closing, and (ii) to offer employment to the active Visteon full- time employees primarily engaged in the Radar System Business as to the Closing Date. The consummation of the proposed sale is contemplated to occur on the 15th day after the day a sale order is entered by the Bankruptcy Court if all other conditions of the closing as set forth in the Asset Sale Agreement will have been satisfied or waived or at an earlier date as agreed between the parties to the Asset Sale Agreement. The proposed sale of the Debtors' Radar Systems Business to Autoliv does not contemplate an auction. The Debtors propose to sell the Assets by way of a private sale to avoid cost and delay associated with conducting a public auction and because they believe they will not obtain a higher and better bid by an auction. The Debtors maintain that a private sale is appropriate with respect to their Radar Systems Business as they and Autoliv benefit from an intricately connected relationship. The Debtors assert that because of where Autoliv is positioned in the blind spot monitoring system supply chain, it has better profit opportunities with respect to production of the Radar System Business components than that of Visteon or another third-party operating the business on a stand-alone basis and therefore, represents the party capable of providing the highest price for the Assets. A full-text copy of the Visteon-Autoliv APA is available for free at http://bankrupt.com/misc/Visteon_Autolivapa.pdf A list of the contracts to be acquired by Autoliv is available for free at http://bankrupt.com/misc/Visteon_Autolivcontracts.pdf In a related declaration filed with the Court, Albert Faraj, global director for Electronics and Sales and Strategy of Visteon Corporation, stated that he believes that the Debtors' entry into the Autoliv Asset Sale Agreement represents an exercise of their sound business judgment. He averred that the Asset Sale Agreement is fair and reasonable. "The private sale of the Assets is warranted to avoid the cost and delay associated with a public auction," he related. Honda Objects Honda Manufacturing of Alabama, LLC, and Honda of Canada Mfg. object to the Radar Systems Business Sale Motion to the extent the Debtors seek to terminate their rights to assert warranty and indemnity claims. The Debtors and the Honda Entities are parties to various contracts, including an agreement for the purchase and sale of goods. Honda relates that its Contracts with the Debtors impose certain continuing warranty and indemnity obligations upon the Debtors relating to the sale of parts to Honda. Honda tells the Court that as of January 14, 2010, it is unaware of any warranty or indemnity claims under the Honda Contracts. Honda notes, however, that due to the nature of warranty and indemnity claims, those claims may arise in the future relating to the sale of goods by the Debtors to Honda prior to closing on the Debtors' Asset Purchase Agreement with Autoliv. 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 Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Proposes to Settle With Toledo Molding for $2.6MM --------------------------------------------------------------- Visteon Corp. and its units are parties to numerous purchase orders with Toledo & Die, Inc., under which Toledo Molding manufactures interior and climate controlled parts for the Debtors. The Debtors aver that continued receipt of the Component Parts are essential to their ongoing operations. Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, contends that the Debtors cannot immediately resource production from Toledo Molding and without receipt of the Component Parts, the Debtors will shut down their manufacturing lines for Ford Motor Company, Chrysler Group LLC, General Motors Corporation, Nissan North America and Honda North America, causing a default under the purchase orders and accommodation agreements between the Debtors and those customers. Toledo Molding alleges that the Debtors owes it more than $9.6 million for component parts received prior to the Petition Date, unpaid tooling invoices, and other commercial claims. Toledo Molding also claims a lien on all tooling in its possession for unpaid amounts due related to certain Tooling, and unpaid amounts due for Component Parts manufactured with the Tooling. Significantly, Toledo Molding asserts liens on the Tooling, some of which relates to production that the Debtors will no longer continue and therefore, release of those Tooling to the Debtors' customers is required of the Debtors under their customer accommodation agreements. The Debtors, on the other hand, alleges that they are owed approximately $1.3 million by Toledo Molding for contractual productivity givebacks and decreased raw material costs arising prior to the Petition Date. The Debtors believe that Toledo Molding is a "distressed supplier" as contemplated in the Critical Vendors Order entered by the Bankruptcy Court, authorizing the Debtors to pay certain prepetition claims of critical and financially distressed suppliers. Mr. Billion asserts that in the event Toledo Molding is unable to manufacture the Component Parts, the Debtors' production lines will be shut down and the Debtors, in turn, will be unable to manufacture component parts for their customers. Consequently, the Debtors will suffer not only a loss of revenue, but also be subjected to significant damage claims from their affected customers, loss of good will and be in breach of their customer accommodation agreements, he points out. The parties have decided to negotiate a resolution to their dispute and entered into a settlement agreement, whereby: -- The Debtors will pay Toledo Molding a lump sum cash payment of $2.6 million, release certain claims against Toledo Molding, and assume certain purchase orders with Toledo Molding at agreed pricing. -- In exchange, Toledo Molding will release claims against the Debtors. -- In addition, Toledo Molding will effectuate a setoff of the Debtors' Claim against the Toledo Molding Claim. By this motion, the Debtors ask the Court to authorize their entry into the Toledo Molding Settlement Agreement. Mr. Billion reminds the Court that the Debtors have equity interest in Toledo Molding. He asserts that failure to enter into the Settlement, causing Toledo Molding to be unable to renew its financing and potentially closing its doors will not only cause damages to the Debtors through shutting down their customers, but may also substantially decrease equity of Toledo Molding thus decreasing the value of the Debtors' estate. In a separate filing, the Debtors seek the Court's authority to file under seal certain schedules to the Settlement Agreement, which set forth propriety pricing and other propriety information, and to file only the redacted version of the Settlement Agreement as an exhibit to the Settlement Motion. The Debtors aver that the Sealed Schedules contain propriety pricing information and program information that, if revealed to the Debtors' competitors, may give those competitors an advantage in negotiating commercially advantageous terms with the Debtors' customers, or if revealed to the Debtors' suppliers, may give them an advantage in negotiating with the Debtors. 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 Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Bank Debt Trades at 110.19% in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Visteon Corporation is a borrower traded in the secondary market at 110.19 cents-on-the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.53 percentage points from the previous week, The Journal relates. The loan matures on May 30, 2013. Visteon pays 300 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt and it is not rated by Standard & Poor's. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: AFL-CIO Supports Sec. 1102 Committee -------------------------------------------------- The Industrial Division of the Communications Workers of America, AFL-CIO, CLC filed with the U.S. Bankruptcy Court a statement in support of the appointment of an official Sec. 1102 committee of participants in the Visteon System C&B Plan, Caribbean Plans VVP Benefits Plans, BankruptcyData reports. Among other things, the motion asserts that such an appointment "could result in greater efficiency in this proceeding..an official committee would avoid a duplication of resources and consolidate the parties appearing in this proceeding regarding Visteon Pension Plan matters." As reported by the TCR on Friday, the Interim Ad Hoc Committee of Non-union Defined Benefit Plan Participants of Visteon Entities is asking the Court to appoint an official committee of participants in the Visteon Systems C&B, Caribbean Plan and Visteon Pension Benefit Plans. Under the Debtors' proposed Plan of Reorganization, the VPP, the Visteon C&B and the Caribbean Plan are proposed to be terminated and control surrendered to the Pension Benefit Guaranty Corporation. "If, as proposed by the Debtors, the VPPs are terminated, the plan participants in each of the VPPs will suffer irreparable harm in the form of the loss of hundreds of millions of dollars of earned pension benefits," says Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, co-counsel to Interim Ad Hoc Committee of VPP Participants. 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 Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VITESSE SEMICONDUCTOR: Linden Capital Discloses 9.99% Equity Stake ------------------------------------------------------------------ Linden Capital LP, a Bermuda limited partnership; Linden GP LLC, a Delaware limited liability company; and Siu Min Wong disclosed that as of December 31, 2009, they collectively owned: (i) 12,471,723 shares of Vitesse Semiconductor Corporation Common Stock, (ii) 187,503 shares of the Company's Series B Participating Non-Cumulative Convertible Preferred Stock, and (iii) $6,150,000 principal amount of the Company's 8.00% Convertible Second Lien Debentures due 2014. The shares of Series B Preferred and the 8.00% Debentures held by Linden et al. are convertible into shares of Common Stock but only to the extent that conversion would not cause the holder to become a beneficial owner of more than 9.99% of the shares of Common Stock outstanding. Linden et al. are deemed to collectively beneficially own an aggregate of 43,406,321 shares of Common Stock, which represent 9.99% of the number of shares of the Company's Common Stock deemed to be outstanding. About Vitesse Semiconductor Based in Camarillo, California, Vitesse Semiconductor Corporation (Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of high-performance, cost-competitive semiconductor solutions for Carrier and Enterprise networks worldwide. Engineering excellence and dedicated customer service distinguish Vitesse as an industry leader in Gigabit Ethernet, Ethernet-over-SONET, Optical Transport, and other applications. Vitesse had total assets of $107,636,000 against total debts of $160,101,000 as of June 30, 2009. Vitesse entered into debt restructuring agreements in October 2009 with its major creditors, which allow the Company to satisfy its creditors by converting most of its debt into new common stock, preferred stock and new convertible debentures. Vitesse is seeking stockholder approval to increase the number of authorized shares of the Company's common stock from 500,000,000 to 5,000,000,000 in conjunction with the debt restructuring agreements. The Company has warned if stockholders do not approve the proposal to authorize the Company to issue more shares by February 15, 2010, it will face a 1.0% per month interest charge on the New Debentures (at a cost of about $500,000 per month) beginning on February 16, 2010 and continuing until the increase in the authorized shares is approved. In addition, the holders of the New Debentures will have the right to demand repayment of the principal amount of the debt, plus potentially certain make-whole interest payments representing interest that would have been earned if the bonds had not been converted early. The Company could potentially be forced to file for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. WASHINGTON MUTUAL: Opposes Expedia Company's $3.8MM Claim --------------------------------------------------------- Washington Mutual Inc. and its units ask Judge Walrath to expunge, in its entirety, Claim No. 3678 for $3,790,867 filed by Egencia LLC, an Expedia Company formerly known as Expedia Corporate Travel LLC, also known as ECT. The Debtors and Expedia are parties to a Master Services Agreement, dated as of September 1, 2007, pursuant to which Expedia provided certain travel management services to Debtor WMI Investment Corp. on a prepetition basis. In March 2009, the Debtors sought and obtained the Court's authority to reject the MSA, on account of which the Expedia Claim was filed to recover damages based on "an estimate of net revenues over the expected term of the MSA." Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates that pursuant to its own terms, the MSA and any related statement of work were terminable by the Debtors at any time upon 60 days' notice, and WMI Investment would only be responsible for that "portion of the compensation owed to Expedia for any Services rendered prior to the effective date of the termination." Accordingly, Expedia is, at best, entitled to a claim for compensation for services rendered to WMI Investment prior to the Petition Date for which it did not receive payment, Mr. Collins avers. It is not, however, entitled to expectation damages for the remaining life of the Agreement, he explains. In addition, the MSA is unequivocal about the Debtors' ongoing ability to change the level of services they purchased from Expedia, including their absolute right to choose to order no services, Mr. Collins relates. While the MSA provides the general terms and conditions of the parties' agreement, he avers that the MSA (i) contemplates a separate statement of work that sets forth pricing and the particular services to be delivered, and (ii) expressly provides for WMI Investment's right to decide not to order any services from Expedia. Mr. Collins adds that the MSA also fails to require the payment by the Debtors of any "retainer" fees. "Given the clear ability of the Debtors to suspend use of Expedia's services, Expedia had no expectation of continuing revenue and therefore, is not entitled to assert the Claim for expectation damages," Mr. Collins emphasizes. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WASHINGTON MUTUAL: Proposes More Work for Quinn Emanuel ------------------------------------------------------- Washington Mutual Inc. and its units seek the Court's authority to expand the services of Quinn Emanuel Urquhart Oliver & Hedges, LLP, which serves as their special litigation and conflicts counsel, nunc pro tunc to April 3, 2009. According to Charles E. Smith, WaMu's executive vice president and general counsel, amending Quinn Emanuel's retention is reasonable and necessary in order for the Debtors to most efficiently administer their estates and to discharge their responsibilities to their creditors. The amended retention and employment of Quinn Emanuel specifically includes the firm's representation of the Debtors in connection with: (i) objecting to claims asserted against the Debtors' estates by certain ad hoc groups of holders of notes issued by the Debtors' primary operating subsidiary, Washington Mutual Bank in Henderson, Nevada, in coordination with Weil, Gotshal & Manges LLP, as the Debtors' general counsel; (ii) the Seattle U.S. Attorney's investigation into certain Debtor attorney-client privilege issues; and (iii) other matters which, due to the nature of the work completed by Quinn Emanuel to date on the Initial Retention or due to other conflicts possessed by Weil Gotshal, would be most efficient for Quinn Emanuel to be engaged. Fees and expenses for the Quinn Emanuel with respect to the "Additional Services" will be handled in the manner approved by the Court under the Retention Order, according to Mr. Smith. "To date, Quinn Emanuel has been careful not to duplicate the work of Weil Gotshal or any of the other Debtor-professionals. These efforts will continue," Mr. Smith added. Susheel Kirpalani, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP, in New York, assures the Court that his firm does not hold or represent any interest adverse to the Debtors' estates. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WASHINGTON MUTUAL: Creditors Scoff at Shareholders' Committee Bid ----------------------------------------------------------------- Creditors in the bankruptcy of Washington Mutual Inc. have joined forces with the debtor's attempts to scrap a committee of equity holders, contending that there is not likely to be any recovery for common shareholders and that administration expenses will consume too much of the estate's resources, Law360 reports. Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WEST CORP: Bank Debt Trades at 1% Off in Secondary Market --------------------------------------------------------- Participations in a syndicated loan under which West Corporation is a borrower traded in the secondary market at 98.73 cents-on- the-dollar during the week ended Friday, Jan. 22, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.29 percentage points from the previous week, The Journal relates. The Company pays 387 basis points above LIBOR to borrow under the loan facility, which matures on July 1, 2016. The bank debt carries Moody's B1 rating while it is not rated by Standard & Poor's. The debt is one of the biggest gainers and losers among 166 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 22. The Troubled Company Reporter on Oct. 9, 2009, said that Moody's does not expect to take any immediate rating action following West Corporation's announcement that it has filed for an initial public offering of its common stock. West indicated in its Form S-1 filing that it intends to use part of the net proceeds from the offering to repay or repurchase indebtedness. The last rating action on West Corporation was on May 8, 2007, at which time Moody's lowered the senior secured credit facility rating to B1 from Ba3 while affirming all other credit and liquidity ratings. Based in Omaha, Nebraska, West Corporation is a leading provider of business process outsourcing services. West has a B2 Corporate Family Rating and a stable rating outlook. WILLIAM LYON: Unit Closes Sale of Real Property for $13,625,000 --------------------------------------------------------------- Colin T. Severn, Vice President, Chief Financial Officer and Corporate Secretary of William Lyon Homes, relates that William Lyon Homes, Inc., a California corporation and subsidiary of the Company, on December 24, 2009, consummated the sale of certain real property -- comprising 165 acres -- in San Bernardino County, California; San Diego County, California; Clark County, Nevada; and Maricopa County, Arizona, for an aggregate purchase price of $13,625,000. The approximate aggregate book value of these properties on the closing date as reflected on the consolidated balance sheet of the Company and its subsidiaries was $84.2 million. About William Lyon Homes Based in Newport Beach, California, William Lyon Homes and subsidiaries -- http://www.lyonhomes.com/-- are primarily engaged in designing, constructing and selling single family detached and attached homes in California, Arizona and Nevada. As of September 30, 2009, the Company had $738,740,000 in total assets against $597,784,000 in total liabilities. * * * As reported by the Troubled Company Reporter on November 25, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on William Lyon Homes to 'CCC' from 'CCC-' and removed it from CreditWatch, where it was placed with positive implications on Oct. 30, 2009. At the same time, S&P raised its rating on the company's senior unsecured notes to 'CC' from 'D'. The outlook is developing. "S&P raised its rating on William Lyon Homes because S&P believes that near-term liquidity pressure has eased somewhat following the partial funding of a secured term loan and reduced maturing credit facility debt," said credit analyst James Fielding. "However, this privately held homebuilder remains very highly leveraged and may face challenges repaying or refinancing intermediate-term debt maturities if its business prospects don't improve in the interim." W.R. GRACE: Canadian Govt. Opposes Lauzon Belanger Retention ------------------------------------------------------------ Her Majesty the Queen in Right of Canada maintains that the application to retain a special counsel, filed by parties asserting claims relating to Zonolite Attic Insulation manufactured by W.R. Grace & Co. in Canada, must "be adjourned to be heard sometime after the Crown has exhausted her rights" with respect to the approval of the Amended and Restated Minutes of Settlement. As previously reported, the CDN ZAI Claimants have sought to retain Lauzon Belanger S.E.N.C.R.L. and Scarfone Hawkins LLP as special counsel to represent their interests in the U.S. proceedings, retroactively to September 1, 2008, and going forward to the date of the confirmation of the Debtors' Chapter 11 Joint Plan of Reorganization. Concurrently, Lauzon and Scarfone asked the Bankruptcy Court to authorize them to engage the services of Daniel K. Hogan and his firm, The Hogan Firm, as local bankruptcy counsel nunc pro tunc to September 1, 2008. Jacqueline Dais-Visca, Esq., senior counsel at the Ontario Regional Office in Canada, relates that On November 16, 2009, Grace and the representative counsel for the Companies' Creditors Arrangement Act executed the 2009 Restated Settlement. The Crown is not a party to the 2009 Restated Settlement. Canada first became aware that the Crown Release had been removed upon receipt of the 2009 Restated Settlement on November 16, 2009. The 2009 Restated Settlement purports to release Grace from all liability for CDN ZAI Claims but, in contrast to the 2008 CDN ZAI Settlement, maintains the CDN ZAI Personal Injury claimants' right to pursue the Crown not just for any alleged several liability of the Crown but also for all joint liability alleged to be shared with Grace and channels the Crown's claim over for contribution or indemnity to the Asbestos PI Trust Fund. Ms. Dais-Visca laments that Grace and the CCAA Representative Counsel, without prior notice to the Crown, withdrew the Crown Release approved not only by the CCAA court in Canada but by the U.S. Bankruptcy Court, and replaced it to reflect that "claims may be pursued by CDN ZAI PI Claimants against the Crown even though they may give rise to the CDN ZAI PI Claims by the Crown for contribution, indemnity or otherwise, provided that such CDN ZAI PI Claims by the Crown shall be channeled to the Asbestos Trust by the First Amended Joint Plan." Ms. Dais-Visca says that the Crown is filing an objection to the approval of the Restated Settlement "which approval process seems to be proceeding by way of Grace seeking confirmation to the incorporation of further amendments to the Joint Plan reflecting the terms of the 2009 Restated Settlement." Specifically, the Crown will be filing an Objection to confirmation of the treatment of the Crown contribution and indemnity claims in the Asbestos PI Trust Distribution Procedures as reflected in the Third Modifications to the Joint Plan and the Asbestos PI Trust Distribution Procedures. Ms. Dais-Visca tells the Bankruptcy Court that there is no evidence to support an argument that it is urgent that the Special Counsel Application be heard in January 2010. "This Special Counsel Application puts the cart before the horse," she contends. In a separate response, David T. Austern, the Court-appointed legal representative for future asbestos personal injury claimants says that while he does not object to the Application, any approval of the Application must clarify that, "in connection with the Debtors' Chapter 11 cases, and consistent with Section 524(g)(4)(B)(i) of the Bankruptcy Code . . . only the PI FCR represents the interests of holders of future asbestos personal injury demands, including, but not limited to, asbestos personal injury demands directly or indirectly arising out of or in any way connected to the Debtors' manufacture, sale or distribution of Zonolite attic insulation products in Canada." CCAA Representatives Talk Back Lauzon and Scarfone contend that there is no evidence to the Crown's allegation that a concurrent conflict of interest exists, thereby preventing them from serving the Canadian ZAI Claimants as Special Counsel, Daniel K. Hogan, Esq., at The Hogan Firm in Wilmington, Delaware, replies, on behalf of Lauzon and Scarfone. Mr. Hogan further argues that contrary to the Crown's contention, the 2009 Restated Settlement "is a fair and reasonable resolution of the CDN ZAI Claims and . . . does not prejudice the Crown, the CDN ZAI PD Claimants or CDN ZAI PI Claimants." It is, in fact, "more advantageous to ZAI PI Claimants as it provides some potential recourse against the Crown for claims for which the Crown is jointly liable, whereas, the Original Settlement did not," Mr. Hogan points out. 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: Proposes Protocol for Addressing Employee Claims ------------------------------------------------------------ W.R. Grace & Co.'s claims registers contain approximately 6,935 Claims filed by employees, former employees or beneficiaries of Employees or former employees who are entitled to receive benefits under Grace's existing plans, programs, and policies regarding employee bonuses and other compensation, indemnity agreements or various medical, insurance, severance, retiree and other benefits. To efficiently address and dispose of the Employee Benefit Claims and notify the Claimants of the preservation of their Applicable Employee Benefits, the Debtors ask Judge Fitzgerald to approve a protocol. According to the Debtors' books and records, each Claimant has been receiving his or her Applicable Employee Benefits since the Petition Date. The Debtors intend to continue paying all the Benefits through the remainder of their Chapter 11 cases and thereafter, Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, relates. None of the Claimants therefore will have allowable claims for Applicable Employee Benefits accruing or that will otherwise become payable prior to the Grace's emergence from these bankruptcy cases. Furthermore, the Plan provides that, upon its consummation, the Reorganized Debtors will assume the Grace Benefit Programs. Each Claimant will thereafter continue to receive all of his or her Benefits pursuant to the Grace Benefit Programs. In this light, the Claimants will not have any allowable claims as of the Effective Date for any Applicable Employee Benefits accruing or otherwise becoming payable after the Effective Date. Accordingly, each of the Employee Benefits Claims should be disallowed, Ms. Jones explains. The Employee Benefits Claim Resolution Protocol will provide "appropriate procedural safeguards" for Claimants during the claims disallowance process, while allowing the Debtors to avoid expense and delay of having to individually object to the 6,935 Employee Benefits Claims. Implementation of the Protocol calls for these terms: (1) Each Claimant will receive an individualized Benefit Continuation Notice, stating that (i) the Claimant will continue to receive all Applicable Employee Benefits after the effective date of the Debtors' Plan of Reorganization; and (ii) the Claimant's Employee Benefits Claim will be disallowed as of the Effective Date. (2) A Benefit Contribution Notice will be distributed, which will contain an explanation of Grace's right to modify or otherwise amend the Grace Benefit Programs under the terms of the applicable compensation or benefit plan, other agreement, or applicable non-bankruptcy law. (3) The Benefit Continuation Notice will provide Claimants with points of contact via mail, telephone, fax and e-mail to whom they can direct any questions or concerns that they may have regarding his or her Applicable Employee Benefits. (4) The Benefit Continuation Notice will provide each Claimant with a means of filing a written response to the Debtors' objection to his or her Employee Benefits Claim on or before a response deadline to be established by the Protocol Order; (5) The Debtors will address each written response to the Notices individually to attempt to resolve the issues raised in the written response. (6) The Debtors will file a report with the Court addressing the resolution of each written response. (7) The Debtors may file a reply to any remaining unresolved written responses to the extent necessary. Upon the Court's approval of the Employee Benefits Claims Resolution Protocol, the Debtors will file an omnibus objection to the Employee Benefits Claims, requesting their disallowance on the basis. Establishment of Deadlines The Debtors further ask Judge Fitzgerald to approve these deadlines pursuant to the Employee Claims Resolution Protocol: * March 1, 2010 -- deadline for Debtors to file an omnibus objection to the Employee Claims * April 16, 2010 -- deadline for Claimants to file written responses * June 25, 2010 -- deadline for Debtors to file a report on the status of resolving each of the Responses * June 25, 2010 -- deadline for Debtors to seek leave to file replies to the Responses * July 12, 2010 -- omnibus hearing to consider the Objections The Court will convene a hearing on February 16, 2010, to consider the Debtors' request. Objections, if any, must be filed by February 5. 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: Proposes to Amend Credit Agreement With ART ------------------------------------------------------- W.R. Grace & Co., Inc., and its units seek the Court's authority to amend the credit agreement between W.R. Grace & Co.-Conn. and Advanced Refining Technologies LLC to (i) extend its termination date to February 28, 2011, and (ii) reduce Grace's revolving credit commitment from $20.25 million to $15 million. James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, relates that effective March 1, 2001, Grace and Chevron Products Company, a division of Chevron US.A. Inc formed ART, a Delaware limited liability company. ART develops, manufactures and sells hydroprocessing catalysts, which are used in the petroleum refining industry for the removal of certain impurities from petroleum feedstock. Initially, Grace owned a 55% interest in ART and Chevron USA owned a 45% interest. In October 2009, Grace sold 5% of the total company interest to Chevron USA; and as a result, each of Grace and Chevron USA now owns a 50% interest in ART. ART is governed by the Limited Liability Company Agreement dated as of March 1, 2001, between Grace and Chevron USA. In connection with the formation of ART, Grace and Chevron Capital Corporation, an affiliate of Chevron USA entered into separate credit agreements with ART under which they provided ART with an aggregate of $20 million of revolving credit in proportion to the ownership of ART, consisting of (i) $11 million from Grace and (ii) $9 million from Chevron Capital. On January 14, 2010, Grace announced that it completed the sale of a 5% interest in ART. Grace has reduced its 55% interest to 50% to achieve a balanced ownership structure. Grace and Chevron have also amended certain agreements governing Grace's supply of catalyst to the joint venture and the related funding of capital spending in support of the joint venture. As a result of the sale, Grace intends to deconsolidate ART's results of operations, cash flows and financial position from its consolidated financial statements on a prospective basis effective December 1, 2009. Previously, Grace reported 100% of ART's sales and 55% of ART's income, with 45% of ART's income reported as Chevron's non-controlling interest. Subsequent to the sale, Grace intends to record its investment in ART and its portion of ART's income and dividends using the equity method of accounting. Included in Grace's previously reported consolidated net sales for the nine months ended September 30, 2009, and years ended December 31, 2008 and 2007 were sales of $234.1 million, $348.7 million, and $335.7 million, respectively, related to ART. The ART Credit Agreements commitments were subsequently increased to a total of $45 million -- $24.75 million from Grace and $20.25 million from Chevron Capital -- and their terms have been extended to March 1, 2008, and then to March 1, 2010. A subsequent amendment in 2009 reduced the Grace commitment to $20.25 million to reflect the change of ART's ownership to 50% Grace and 50% Chevron USA. The amendments to the ART Credit Agreement between Grace and ART were authorized pursuant to orders entered by the Court on January 22, 2004. Referring to the Joint Venture, Greg Poling, vice president at W. R. Grace & Co., and president at Grace Davison noted that "Grace is committed to providing customers in the petroleum refining industry with innovative, technology-leading catalysts and systems." "Our relationship with Chevron, through ART, is integral to that commitment. Given ART's current size as a business and its growth prospects, this restructuring provides ART with a stronger and more flexible platform to pursue continued investment and growth opportunities," Mr. Poling added. Two ART Credit Agreements are substantially identical. The Operating Agreement provides that loans under the ART Credit Agreements aggregating $2,000,000 or integral multiples thereof will be lent 50% by Grace and 50% by Chevron Capital. For administrative convenience, loans in lesser amounts are made exclusively by Grace until their balance reaches $2,000,000. The ART Credit Agreements provide financing arrangements so that excess cash from operations can be used to pay dividends to Grace and Chevron and to fund ART growth, and not be tied up to fund periodic "spikes" in working capital. In this regard, ART has paid dividends of $96.7 million to Grace and Chevron during 2008 and 2009, and has declared an additional $19.0 million of dividends to be paid in 2010. In 2010 and thereafter, ART expects to continue experiencing spikes in working capital requirements and therefore to continue to require the existing lines of credit, particularly if excess cash is distributed in dividends or used to further grow the ART joint venture, Mr. O'Neill tells the Court. As a result of this transaction, Grace expects to record a gain of approximately $5 million. Over the next few years, ART expects new refinery projects and other transactions that will require initial orders of several million pounds of catalyst. The working capital lines will be needed as the long production time on the orders will require temporary buildup of inventory. "However, Grace and Chevron Capital believe that based on ART's current business scale and analysis of various scenarios impacting cash flow, the level of their revolving credit commitments should be decreased to $15 million each," Mr. O'Neill says. In addition, Grace and Chevron Capital have decided that the extended term of the Credit Agreements should be limited to 364 days in order to support closer oversight by its owners of ART's credit situation. Grace and Chevron Capital agree that it is more cost-effective to continue the existing lines of credit than to tie up cash in ART continuously in order to be prepared to meet financing needs if and when they occur. When the financing needs are not pressing, ART's positive cash flow will be distributed as dividends to Grace and Chevron USA for other uses or used for growth by internal expansion, acquisitions or other strategic initiatives. Then, if ART requires additional financing, it is available under the extended ART Credit Agreements, explains Mr. O'Neill. The Court will convene a hearing on February 16, 2010, to consider the Debtors' request. Objections, if any, must be filed by February 5. 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: Special Stockholders' Meeting on February 17 ----------------------------------------------------------- A Special Meeting of Stockholders of YRC Worldwide Inc. will be held at the Company's General Office, 10990 Roe Avenue, Overland Park, Kansas 66211, on February 17, 2010 at 10:00 a.m., Central time, to consider these matters: 1. To amend the Company's Certificate of Incorporation to (i) reduce the par value of the Company's common stock from $1.00 to $0.01, and (ii) increase the number of authorized shares from 125,000,000 shares to 2,005,000,000 shares, of which 5,000,000 shares will be preferred stock, par value $1.00 per share, and 2,000,000,000 shares will be common stock, par value $0.01 per share; 2. To amend the Company's Certificate of Incorporation to (i) effect a reverse stock split of the Company's common stock following the effectiveness of the Par Value Reduction and the Authorized Share Increase, at a ratio that will be determined by the Company's board of directors and that will be within a range of one-for-five (1:5) to one-for-25 (1:25), and (ii) reduce the number of authorized shares of the Company's common stock by the reverse split ratio; and 3. To approve the adjournment of the Special Meeting, if necessary, to solicit additional proxies, if there are not sufficient votes at the time of the Special Meeting to approve proposals No. 1 and/or No. 2. The board of directors recommends a FOR vote for proposals No. 1, No. 2 and No. 3. The Company has undertaken a restructuring as part of a comprehensive plan to reduce costs, to improve operating results and cash flow from operations, to improve liquidity and to reduce debt. On December 31, 2009, as part of this restructuring plan, the Company settled exchange offers in which the Company exchanged 36,504,043 shares of its common stock and 4,345,514 shares of the Company's Class A Convertible Preferred Stock for (i) $214,417,000 in aggregate principal amount of its 5.0% Net Share Settled Contingent Convertible Senior Notes due 2023, (ii) $2,350,000 in aggregate principal amount of its 5.0% Contingent Convertible Senior Notes due 2023, (iii) $143,015,000 in aggregate principal amount of its 3.375% Net Share Settled Contingent Convertible Senior Notes due 2023, (iv) $5,384,000 in aggregate principal amount of its 3.375% Contingent Convertible Senior Notes due 2023 and (v) $105,043,000 in aggregate principal amount of 8 1/2% Guaranteed Notes due April 15, 2010 of YRC Regional Transportation, Inc., a wholly owned subsidiary of the Company. Approval of the Company's stockholders was not needed to consummate the exchange offers; however, to automatically convert each share of Class A Convertible Preferred Stock issued in the exchange offers into 220.28 shares of common stock, the Company's stockholders must approve an amendment to the Company's Certificate of Incorporation to effect the Authorized Share Increase and the Par Value Reduction. Following the exchange offers and the Conversion, the Company expects that the price per share of its common stock will fall as a result of the dilution resulting from the issuance of a large amount of new shares of common stock. The Company's board of directors has authorized an amendment to the Company's Certificate of Incorporation to effect the Reverse Stock Split with a view to increasing the per share trading price of the Company's common stock after giving effect to these new issuances such that the Company may maintain a price per share for its common stock sufficient to increase the marketability and liquidity of its common stock and satisfy listing requirements for the NASDAQ stock exchange. However, even if the Reverse Stock Split is implemented, there can be no assurance that the Reverse Stock Split will result in an increase in the market price of the Company's common stock or that the market price of the Company's common stock will not decrease at any time. Other factors, including (but not limited to) the Company's financial results, market conditions and the market perception of the Company's business, may adversely affect the market price of the Company's common stock. As reported by the Troubled Company Reporter on January 6, 2010, the board of directors of the Company has fixed the close of business on January 4, 2010, as the record date for the determination of holders of record of its common stock and Class A Convertible Preferred Stock entitled to notice of, and to vote at, the Special Meeting or any reconvened meeting after any adjournments of the Special Meeting. A full-text copy of the Company's proxy statement is available at no charge at http://ResearchArchives.com/t/s?4dca Not Off the Hook Yet As reported by the Troubled Company Reporter on January 12, 2010, Moody's Investors Service revised YRC Worldwide's Probability of Default Rating to Caa2 from Ca\LD, and the ratings on the company's convertible senior notes due 2023 and YRC Regional Transportation, Inc.'s 8-1/2% notes due 2010 to Caa3 from Ca. Moody's affirmed YRC's Caa3 corporate family rating. Moody's said YRC's PDR was raised by two notches to Caa2 in recognition of a reduction in default risk over the next 12 months that can be ascribed to the recent completion of an exchange of debt for equity. Moody's said the exchange provided important relief to YRC. However, the Caa2 PDR reflects Moody's belief that the company continues to face substantial risk and will be challenged to significantly improve its financial performance despite what is expected to be a period modest recovery in trucking demand over the near term. Moreover, Moody's notes that YRC must still achieve a refinancing of about $45 million of senior notes that mature in April 2010; under agreements with bank lenders YRC is precluded from using existing financial resources to repay the notes making it imperative that a refinancing plan be implemented in the near term. As reported by the TCR on January 14, 2010, Standard & Poor's Ratings Services raised its corporate credit rating on YRC Worldwide to 'CCC-' from 'SD' (selective default). S&P raised the senior unsecured issue-level ratings to 'CC' from 'D' on the company's remaining notes that were subject to the exchange offer, as well as a '6' recovery rating, indicating negligible (0%-10%) recovery of principal in a payment default scenario. The company has issued a combination of common and preferred equity in exchange for the existing notes. Despite the company's improved capital structure, YRCW's liquidity position remains constrained, due to the $45 million upcoming April 15 maturity, S&P said. S&P could lower the ratings if YRCW is unsuccessful in raising new capital to fund upcoming maturities, or if liquidity becomes further constrained. A full-text copy of the Company's proxy statement is available at no charge at http://ResearchArchives.com/t/s?4dca 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. 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. YRC WORLDWIDE: Wells Fargo Discloses 5.65% Equity Stake ------------------------------------------------------- Wells Fargo and Company and certain affiliates report that they beneficially own 3,401,764 shares or roughly 5.65% of the common stock of YRC Worldwide Inc. as of December 31, 2009. Wells Fargo & Company made the disclosure on behalf of these subsidiaries: -- Wells Capital Management Incorporated; -- Wells Fargo Bank, N.A.; -- Wells Fargo Advisors Financial Network, LLC.; -- Wachovia Bank, National Association; -- Wells Fargo Investments, LLC; -- Wells Fargo Funds Management, LLC; and -- Wells Fargo Advisors, LLC Not Off the Hook Yet As reported by the Troubled Company Reporter on January 12, 2010, Moody's Investors Service revised YRC Worldwide's Probability of Default Rating to Caa2 from Ca\LD, and the ratings on the company's convertible senior notes due 2023 and YRC Regional Transportation, Inc.'s 8-1/2% notes due 2010 to Caa3 from Ca. Moody's affirmed YRC's Caa3 corporate family rating. Moody's said YRC's PDR was raised by two notches to Caa2 in recognition of a reduction in default risk over the next 12 months that can be ascribed to the recent completion of an exchange of debt for equity. Moody's said the exchange provided important relief to YRC. However, the Caa2 PDR reflects Moody's belief that the company continues to face substantial risk and will be challenged to significantly improve its financial performance despite what is expected to be a period modest recovery in trucking demand over the near term. Moreover, Moody's notes that YRC must still achieve a refinancing of about $45 million of senior notes that mature in April 2010; under agreements with bank lenders YRC is precluded from using existing financial resources to repay the notes making it imperative that a refinancing plan be implemented in the near term. As reported by the TCR on January 14, 2010, Standard & Poor's Ratings Services raised its corporate credit rating on YRC Worldwide to 'CCC-' from 'SD' (selective default). S&P raised the senior unsecured issue-level ratings to 'CC' from 'D' on the company's remaining notes that were subject to the exchange offer, as well as a '6' recovery rating, indicating negligible (0%-10%) recovery of principal in a payment default scenario. The company has issued a combination of common and preferred equity in exchange for the existing notes. Despite the company's improved capital structure, YRCW's liquidity position remains constrained, due to the $45 million upcoming April 15 maturity, S&P said. S&P could lower the ratings if YRCW is unsuccessful in raising new capital to fund upcoming maturities, or if liquidity becomes further constrained. 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. 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. * 2010 Bank Closings Now at 9 After 5 Banks Shut Friday ------------------------------------------------------- Regulators closed three banks January 22 -- Charter Bank, Santa Fe, NM; Evergreen Bank, Seattle, WA; Columbia River Bank, The Dalles, OR; Bank of Leeton, Leeton, MO; Premier American Bank, Miami, FL -- raising the total closings for this year to nine. The Federal Deposit Insurance Corporation was appointed receiver for the banks. The FDIC has signed deals where three separate banks would assume the assets of Town Community and St. Stephen State. A deposit insurance national bank was created for Barnes Banking to allow depositors access to their insured deposits and time to open accounts at other insured institutions. The four banking failures this year are expected to cost the FDIC's deposit insurance fund $539.1 million. In accordance with Federal law, allowed claims against failed financial institutions will be paid, after administrative expenses, in this order of priority: 1. Depositors 2. General Unsecured Creditors 3. Subordinated Debt 4. Stockholders 2010 Failed Banks List The FDIC was appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks that agreed to assume the deposits of most of the closed banks. The FDIC also entered into loss-share transactions on assets bought by the banks. For this year, the failed banks are: Loss-Share Transaction Party FDIC Cost Assets of Bank That Assumed to Insurance Closed Bank Deposits & Bought Fund Closed Bank (millions) Certain Assets (millions) ----------- ---------- -------------- ----------- Charter Bank $1,200.0 Charter, Albuquerque $201.9 Evergreen Bank $488.5 Umpqua Bank, Roseburg $64.2 Columbia River Bank $1,100.0 Columbia State Bank $172.5 Bank of Leeton $20.1 Sunflower Bank $8.1 Premier American Bank $350.9 Bond Street subsidiary $85.0 Town Community $69.6 Bank First American $17.8 St. Stephen State $24.7 First State Bank $7.2 Barnes Banking $827.8 {DINB Created} $271.3 Horizon Bank $1,400.0 Washington Federal $539.1 In 2009, there were 140 failed banks, compared with just 25 for 2008. A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html 552 Banks on Problem List The Federal Deposit Insurance Corp. said in its Quarterly Banking Profile released November 24 that the number of insured institutions on the agency's "Problem List" rose from 416 to 552 during the quarter, and total assets of "problem" institutions increased from $299.8 billion to $345.9 billion. Both the number and assets of "problem" institutions are now at the highest level since the end of 1993. Total assets of the nation's 8,099 FDIC-insured commercial banks and savings institutions decreased by $54.3 billion (0.4%) during the third quarter of 2009. Total deposits increased by $79.8 billion (0.9%) during the quarter, primarily due to activity in foreign offices, which was up $81.9 billion (5.6%). FDIC's deposit insurance fund (DIF) decreased by $18.6 billion during the third quarter to a negative $8.2 billion primarily because of $21.7 billion in additional provqisions for bank failures. Also, unrealized losses on available-for-sale securities, combined with operating expenses, reduced the fund by $1.1 billion. Accrued assessment income added $3.0 billion to the fund during the quarter, and interest earned, combined with realized gains from sale of securities and surcharges from the Temporary Liquidity Guarantee Program, added $1.2 billion. Fifty insured institutions with combined assets of $68.8 billion failed during the third quarter of 2009, the largest number since the second quarter of 1990 when 65 insured institutions failed. Ninety-five insured institutions with combined assets of $104.7 billion failed during the first three quarters of 2009, at a currently estimated cost to the DIF of $25.0 billion. As of November 20, the list has risen to 124. The DIF's reserve ratio was negative 0.16% on September 30, 2009, down from 0.22% on June 30, 2009, and 0.76% one year ago. The September 30, 2009, reserve ratio is the lowest reserve ratio for a combined bank and thrift insurance fund since June 30, 1992, when the ratio was negative 0.20%. On November 12, 2009, the FDIC adopted a final rule amending the assessment regulations to require insured depository institutions to prepay their quarterly risk-based assessments for the fourth quarter of 2009 and for all of 2010, 2011, and 2012 on December 30, 2009, along with each institution's risk-based assessment for the third quarter of 2009. The FDIC is asking banks to prepay three years of premiums on Dec. 30 to raise $45 billion for the fund. "Today's report shows that while bank and thrift earnings have improved, the effects of the recession continue to be reflected in their financial performance," FDIC Chairman Sheila Bair said in a November 24 statement. "Problem" institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. They are rated by the FDIC or Office of the Thrift Supervision as either a "4" or "5", based on a scale of 1 to 5 in ascending order of supervisory concern. The Problem List is not divulged to the public. No advance notice is given to the public when a financial institution is closed. Problem Institutions Failed Institutions -------------------- ------------------- Year Number Assets (Mil) Number Assets (Mil) ---- ------ ------------ ------ ------------ Q3'09 552 $345,900 50 $68,800 Q2'09 416 $299,800 24 $26,400 Q1'09 305 $220,047 21 $9,498 2008 252 $159,405 25 $371,945 2007 76 $22,189 3 $2,615 2006 50 $8,265 0 $0 2005 52 $6,607 0 $0 2004 80 $28,250 4 $170 A copy of the FDIC's Quarterly Banking Profile for the quarter ended Sept. 30, 2009, is available for free at: http://bankrupt.com/misc/FDIC_QBP_Q3_09.pdf * BOND PRICING -- For the Week From January 18 to 22, 2009 ---------------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- 155 E TROPICANA 8.750% 4/1/2012 21.000 ABITIBI-CONS FIN 7.875% 8/1/2009 12.000 ACARS-GM 8.100% 6/15/2024 17.375 ADVANTA CAP TR 8.990% 12/17/2026 12.500 ALERIS INTL INC 9.000% 12/15/2014 8.000 ALERIS INTL INC 10.000% 12/15/2016 8.250 AMBAC INC 9.375% 8/1/2011 54.000 AMER REAL ESTATE 7.125% 2/15/2013 100.000 AMR CORP 10.450% 3/10/2011 76.125 APRIA HEALTHCARE 3.375% 9/1/2033 60.000 ARCO CHEMICAL CO 10.250% 11/1/2010 75.750 AT HOME CORP 0.525% 12/28/2018 0.125 ATHEROGENICS INC 1.500% 2/1/2012 0.375 BALLY TOTAL FITN 14.000% 10/1/2013 1.100 BANK NEW ENGLAND 8.750% 4/1/1999 10.110 BANK NEW ENGLAND 9.875% 9/15/1999 10.750 BANKUNITED FINL 3.125% 3/1/2034 4.875 BANKUNITED FINL 6.370% 5/17/2012 5.000 BLOCKBUSTER INC 9.000% 9/1/2012 29.250 BOWATER INC 6.500% 6/15/2013 33.000 BOWATER INC 9.500% 10/15/2012 33.000 CAPMARK FINL GRP 5.875% 5/10/2012 28.000 CHAMPION ENTERPR 2.750% 11/1/2037 5.625 CITADEL BROADCAS 4.000% 2/15/2011 5.000 CMP SUSQUEHANNA 9.875% 5/15/2014 37.000 COLLINS & AIKMAN 10.750% 12/31/2011 1.000 COMPUCREDIT 3.625% 5/30/2025 43.750 CONGOLEUM CORP 8.625% 8/1/2008 21.003 COOPER-STANDARD 8.375% 12/15/2014 30.750 CREDENCE SYSTEM 3.500% 5/15/2010 64.250 DECODE GENETICS 3.500% 4/15/2011 5.875 DECODE GENETICS 3.500% 4/15/2011 6.250 DEX MEDIA INC 8.000% 11/15/2013 27.000 DEX MEDIA INC 9.000% 11/15/2013 33.000 DEX MEDIA INC 9.000% 11/15/2013 33.000 DEX MEDIA WEST 9.875% 8/15/2013 38.500 FAIRPOINT COMMUN 13.125% 4/1/2018 12.750 FAIRPOINT COMMUN 13.125% 4/2/2018 17.440 FEDDERS NORTH AM 9.875% 3/1/2014 0.740 FINLAY FINE JWLY 8.375% 6/1/2012 0.999 FRANKLIN BANK 4.000% 5/1/2027 2.000 GENERAL MOTORS 7.125% 7/15/2013 25.380 GENERAL MOTORS 7.700% 4/15/2016 25.750 GENERAL MOTORS 9.450% 11/1/2011 23.750 HAIGHTS CROSS OP 11.750% 8/15/2011 40.500 HAWAIIAN TELCOM 9.750% 5/1/2013 2.875 IEP-CALL01/10 8.125% 6/1/2012 102.000 IEP-CALL02/10 7.125% 2/15/2013 100.000 INN OF THE MOUNT 12.000% 11/15/2010 49.750 INTL LEASE FIN 4.200% 2/15/2010 96.066 LANDRY'S RESTAUR 9.500% 12/15/2014 85.140 LEHMAN BROS HLDG 1.500% 3/23/2012 17.000 LEHMAN BROS HLDG 4.375% 11/30/2010 19.625 LEHMAN BROS HLDG 4.500% 7/26/2010 19.000 LEHMAN BROS HLDG 4.500% 8/3/2011 18.000 LEHMAN BROS HLDG 4.700% 3/6/2013 14.000 LEHMAN BROS HLDG 4.800% 2/27/2013 12.500 LEHMAN BROS HLDG 4.800% 3/13/2014 20.500 LEHMAN BROS HLDG 5.000% 1/14/2011 18.770 LEHMAN BROS HLDG 5.000% 1/22/2013 18.500 LEHMAN BROS HLDG 5.000% 2/11/2013 17.010 LEHMAN BROS HLDG 5.000% 3/27/2013 16.500 LEHMAN BROS HLDG 5.000% 8/5/2015 17.375 LEHMAN BROS HLDG 5.100% 1/28/2013 17.500 LEHMAN BROS HLDG 5.150% 2/4/2015 16.250 LEHMAN BROS HLDG 5.250% 2/6/2012 20.000 LEHMAN BROS HLDG 5.250% 2/11/2015 16.000 LEHMAN BROS HLDG 5.250% 3/5/2018 17.875 LEHMAN BROS HLDG 5.500% 4/4/2016 19.750 LEHMAN BROS HLDG 5.500% 2/4/2018 18.375 LEHMAN BROS HLDG 5.500% 2/19/2018 17.550 LEHMAN BROS HLDG 5.500% 11/4/2018 17.500 LEHMAN BROS HLDG 5.550% 2/11/2018 16.000 LEHMAN BROS HLDG 5.600% 1/22/2018 18.500 LEHMAN BROS HLDG 5.625% 1/24/2013 21.438 LEHMAN BROS HLDG 5.700% 1/28/2018 16.000 LEHMAN BROS HLDG 5.700% 4/13/2029 14.063 LEHMAN BROS HLDG 5.750% 4/25/2011 19.500 LEHMAN BROS HLDG 5.750% 7/18/2011 10.625 LEHMAN BROS HLDG 5.750% 5/17/2013 19.625 LEHMAN BROS HLDG 5.750% 1/3/2017 0.150 LEHMAN BROS HLDG 5.875% 11/15/2017 19.000 LEHMAN BROS HLDG 6.000% 4/1/2011 17.700 LEHMAN BROS HLDG 6.000% 7/19/2012 19.500 LEHMAN BROS HLDG 6.000% 6/26/2015 12.875 LEHMAN BROS HLDG 6.000% 12/18/2015 16.500 LEHMAN BROS HLDG 6.000% 2/12/2018 17.010 LEHMAN BROS HLDG 6.000% 2/12/2020 17.125 LEHMAN BROS HLDG 6.000% 1/29/2021 16.000 LEHMAN BROS HLDG 6.150% 4/11/2031 15.000 LEHMAN BROS HLDG 6.200% 9/26/2014 20.125 LEHMAN BROS HLDG 6.250% 2/22/2023 16.500 LEHMAN BROS HLDG 6.500% 7/13/2037 16.625 LEHMAN BROS HLDG 6.600% 10/3/2022 15.250 LEHMAN BROS HLDG 6.625% 1/18/2012 20.000 LEHMAN BROS HLDG 6.850% 8/16/2032 17.700 LEHMAN BROS HLDG 6.850% 8/23/2032 17.000 LEHMAN BROS HLDG 6.900% 6/20/2036 11.900 LEHMAN BROS HLDG 7.000% 4/16/2019 16.000 LEHMAN BROS HLDG 7.000% 5/12/2023 16.130 LEHMAN BROS HLDG 7.000% 9/28/2037 16.000 LEHMAN BROS HLDG 7.000% 2/1/2038 17.111 LEHMAN BROS HLDG 7.000% 2/7/2038 15.000 LEHMAN BROS HLDG 7.000% 2/8/2038 17.625 LEHMAN BROS HLDG 7.000% 4/22/2038 16.415 LEHMAN BROS HLDG 7.250% 2/27/2038 16.033 LEHMAN BROS HLDG 7.350% 5/6/2038 16.415 LEHMAN BROS HLDG 7.730% 10/15/2023 15.500 LEHMAN BROS HLDG 7.875% 11/1/2009 20.000 LEHMAN BROS HLDG 7.875% 8/15/2010 20.000 LEHMAN BROS HLDG 8.000% 3/5/2022 14.000 LEHMAN BROS HLDG 8.000% 3/17/2023 16.625 LEHMAN BROS HLDG 8.050% 1/15/2019 15.500 LEHMAN BROS HLDG 8.500% 8/1/2015 20.680 LEHMAN BROS HLDG 8.500% 6/15/2022 15.500 LEHMAN BROS HLDG 8.750% 12/21/2021 17.000 LEHMAN BROS HLDG 8.800% 3/1/2015 19.437 LEHMAN BROS HLDG 8.920% 2/16/2017 20.000 LEHMAN BROS HLDG 9.500% 12/28/2022 16.995 LEHMAN BROS HLDG 9.500% 1/30/2023 18.125 LEHMAN BROS HLDG 9.500% 2/27/2023 17.000 LEHMAN BROS HLDG 10.000% 3/13/2023 18.750 LEHMAN BROS HLDG 10.375% 5/24/2024 16.000 LEHMAN BROS HLDG 11.000% 10/25/2017 17.500 LEHMAN BROS HLDG 11.000% 6/22/2022 18.375 LEHMAN BROS HLDG 11.000% 8/29/2022 17.250 LEHMAN BROS HLDG 11.000% 3/17/2028 16.000 LEHMAN BROS HLDG 11.500% 9/26/2022 18.125 LEHMAN BROS HLDG 18.000% 7/14/2023 18.250 LEINER HEALTH 11.000% 6/1/2012 8.250 LTX-CREDENCE 3.500% 5/15/2011 61.000 MAGNA ENTERTAINM 8.550% 6/15/2010 40.500 MAJESTIC STAR 9.500% 10/15/2010 76.000 MAJESTIC STAR 9.750% 1/15/2011 10.560 MERRILL LYNCH 0.000% 3/9/2011 96.250 METALDYNE CORP 10.000% 11/1/2013 10.000 METALDYNE CORP 11.000% 6/15/2012 2.000 MILLENNIUM AMER 7.625% 11/15/2026 16.750 MORRIS PUBLISH 7.000% 8/1/2013 34.000 NEFF CORP 10.000% 6/1/2015 12.000 NETWORK COMMUNIC 10.750% 12/1/2013 40.250 NEWARK GROUP INC 9.750% 3/15/2014 37.000 NEWPAGE CORP 12.000% 5/1/2013 55.000 NORTH ATL TRADNG 9.250% 3/1/2012 35.000 OSCIENT PHARM 12.500% 1/15/2011 4.050 PMI CAPITAL I 8.309% 2/1/2027 20.000 POPE & TALBOT 8.375% 6/1/2013 0.750 QUANTUM CORP 4.375% 8/1/2010 85.500 RAFAELLA APPAREL 11.250% 6/15/2011 49.750 RAIT FINANCIAL 6.875% 4/15/2027 39.852 RH DONNELLEY 6.875% 1/15/2013 12.000 RH DONNELLEY 6.875% 1/15/2013 11.750 RH DONNELLEY 6.875% 1/15/2013 11.000 RH DONNELLEY 8.875% 1/15/2016 11.000 RH DONNELLEY 8.875% 10/15/2017 11.625 RJ TOWER CORP 12.000% 6/1/2013 1.000 SIX FLAGS INC 9.625% 6/1/2014 31.400 SIX FLAGS INC 9.750% 4/15/2013 30.500 SPHERIS INC 11.000% 12/15/2012 47.895 STATION CASINOS 6.000% 4/1/2012 20.700 STATION CASINOS 6.500% 2/1/2014 1.530 STATION CASINOS 6.625% 3/15/2018 1.250 STATION CASINOS 7.750% 8/15/2016 17.438 THORNBURG MTG 8.000% 5/15/2013 10.125 TIMES MIRROR CO 7.250% 3/1/2013 29.750 TOUSA INC 7.500% 3/15/2011 4.000 TOUSA INC 7.500% 1/15/2015 4.660 TOUSA INC 9.000% 7/1/2010 50.000 TOUSA INC 9.000% 7/1/2010 57.875 TOUSA INC 10.375% 7/1/2012 4.250 TRANSMERIDIAN EX 12.000% 12/15/2010 12.114 TRIBUNE CO 4.875% 8/15/2010 29.750 TRIBUNE CO 5.250% 8/15/2015 26.000 TRIMAS CORP 9.875% 6/15/2012 101.500 TRS-CALL01/10 9.875% 6/15/2012 102.250 TRUMP ENTERTNMNT 8.500% 6/1/2015 1.052 VERASUN ENERGY 9.375% 6/1/2017 6.625 VERENIUM CORP 5.500% 4/1/2027 44.000 VION PHARM INC 7.750% 2/15/2012 15.820 WASH MUT BANK FA 5.125% 1/15/2015 0.400 WASH MUT BANK FA 5.650% 8/15/2014 0.400 WASH MUT BANK NV 5.500% 1/15/2013 0.400 WASH MUT BANK NV 5.550% 6/16/2010 46.000 WASH MUT BANK NV 5.950% 5/20/2013 0.400 WASH MUT BANK NV 6.750% 5/20/2036 0.625 WCI COMMUNITIES 7.875% 10/1/2013 1.550 WII COMPONENTS 10.000% 2/15/2012 60.000 YELLOW CORP 5.000% 8/8/2023 83.125 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. 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 2010. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***