/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/100205.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, February 5, 2010, Vol. 14, No. 35 Headlines 20 BAYARD: Cash Collateral Hearing Scheduled for February 23 ACCENTIA BIOPHARMA: Plan of Reorganization Now Due Feb. 18 ACCURIDE CORP: Shareholders Ask for Confirmation Slowdown ACCURIDE CORP: Wants Plan Exclusivity Until May 6 AEROTHRUST CORP: Has Until February 10 to File Schedules AIR AMERICA MEDIA: Files for Chapter 7 Liquidation ARRAY BIOPHARMA: December 31 Balance Sheet Upside-Down by $97.6MM BUCKINGHAM FIN'L: Court Denied Investors' Motion to Dismiss Case BURNING BUSH: Decrease in Enrollment Cues Chapter 11 Filing CATHOLIC CHURCH: D.E. Jackson Seeks Payment of Fees CATHOLIC CHURCH: D.E. Jackson Wants to Retain Foster Pepper CATHOLIC CHURCH: Future Claimants Committee in Spokane Sought CATHOLIC CHURCH: Spokane Fails to Stay Payments Pending Appeal CENTRAL METAL: Has Access to Cash Collateral Until February 18 CHAMPION ENTERPRISES: Committee Hoping to Derail Sale of Business CHEMTURA CORP: Enters Into 3rd Amendment to DIP Credit Agreement CHEMTURA CORP: Gets Nod to Establish Claims Objections Protocol CHEMTURA CORP: Gets Nod to Establish Claims Settlement Protocol CINRAM INTERNATIONAL: Moody's Cuts Corp. Family Rating to 'Caa1' COMMUNITY EDUCATION: Moody's Puts 'B3' Rating on $210 Mil. Notes COREL CORP: Steven Cohen and Dan Ciporin Resign as Directors DENBURY RESOURCES: S&P Affirms Corporate Credit Rating at 'BB' DOLE FOOD: Fiscal Year 2009 Results Won't Move Fitch's 'B' Rating DURA AUTOMOTIVE: Reveals New Management Structure EASTMAN KODAK: Launches Cash Tender Offer for 7.25% Senior Notes ESTATE FINANCIAL: Court to Consider Construction Loan on March 29 ESTATE FINANCIAL: Court OKs Sale of Interest in Sanger, CA Asset F&M BANK-IOWA: Fitch Puts 'B-/B' Rating on Positive Watch FAIRFIELD RESIDENTIAL: Court Sets March 15 as Claims Bar Date FAIRPOINT COMMUNICATIONS: Strikes Deal Over Union Contracts FIRSTGOLD CORP: Section 341(a) Meeting Scheduled for March 1 FLEETWOOD ENTERPRISES: Heartland RV Acquires Towable Trademarks FLEETWOOD ENTERPRISES: Proposes Amended Employee Incentive Program FLEETWOOD ENTERPRISES: Can Use Cash Collateral Until February 8 FRANKENMUTH INC: Moody's Cuts Ratings on Zehnder's Notes to 'B1' GENERAL GROWTH: Proposes Protocol for Resolving PI Claims GENERAL GROWTH: Seeks Approval of UBS as M&A Advisor GENERAL GROWTH: Wants April 26 Plan Exclusivity Extension GENERAL MOTORS: NY Town Objects to Old GM's Mediation Plan GETTY IMAGES: Moody's Affirms Corporate Family Rating at 'Ba2' GOODYEAR TIRE: S&P Assigns 'B+' Rating on New Senior Notes GULFSTREAM CRANE: Gets Final OK to Access Lenders' Cash Collateral HARBORWALK LP: Wants to Obtain DIP Financing From Klein Equities HAWKEYE RENEWABLES: Gets Final OK to Use Lenders' Cash Collateral HAWKEYE RENEWABLES: Taps Weil Gotshal as Bankruptcy Counsel HEXION SPECIALTY: S&P Raises Corporate Credit Rating to 'B-' HILCORP ENERGY: Moody's Assigns 'B2' Rating on $300 Mil. Notes HILCORP ENERGY: S&P Assigns 'BB-' Rating on $300 Mil. Notes INTERSTATE HOTELS: Faces Class Suit on Proposed Merger INTERSTATE HOTELS: First Eagle Dumps Shares Amid Tax Benefit Plan JSC BTA BANK: Seeks Bankruptcy Protection in New York KEMET CORP: Has $56-Mil. 'Distressed Exchange' Offer KEMET CORPORATION: Moody's Assigns Corporate Family Rating at 'B2' KEMET CORP: S&P Assigns Corporate Credit Rating at 'B' KLCG PROPERTY: Can Obtain $2.8MM DIP Loan from Dougherty Funding LAZARD GROUP: Moody's Reviews 'Ba1' Rating on Senior Notes LEHMAN BROTHERS: Bank of New York to Appeal CDO Ruling LEHMAN BROTHERS: ERISA Class Action Against Lehman Directors Nixed LODGENET INTERACTIVE: BlackRock Reports 5.26% Equity Stake LODGENET INTERACTIVE: Wells Fargo Discloses 10.92% Equity Stake LODGIAN INC: Inks Amendment to $130 Million Mortgage Loan MERCER INT'L: Bank of America Reports 7.6% Equity Stake MERCER INT'L: Franklin Resources Reports 3.6% Equity Stake MESA AIR: Committee Proposes Morrison as Counsel MESA AIR: Gets Final Nod to Honor Industry Related Agreements MESA AIR: Gets Final Nod to Pay Critical Vendors MHG CASA: Casa Madrano Hotel On Auction Block MOVIE GALLERY: Chapter 22 Case Summary & Creditors List MPI AZALEA: Section 341(a) Meeting Scheduled for February 19 NATURAL PRODUCTS: Court Okays AlixPartners as Claims Agent NATURAL PRODUCTS: Gets Interim Okay on Obtaining DIP Financing NEENAH ENTERPRISES: Seeks OK of $50MM BNY & $90MM BofA DIP Loans NEXTMEDIA GROUP: Gets Final OK to Obtain $20MM DIP Financing NEXTMEDIA GROUP: Has Until Feb. 19 to File Schedules & Statement NTK HOLDINGS: Files Final Report on Chapter 11 Cases NTK HOLDINGS: Wants 2 Remaining Chapter 11 Cases Closed OSHKOSH CORPORATION: Moody's Upgrades Corp. Family Rating to 'B1' PRIMUS TELECOM: Posts $15.2 Million Net Loss in Q3 2009 PROTECTIVE PRODUCTS: Wants DIP Financing & Use Cash Collateral PUBLICK FISH: Files for Chapter 11 Bankruptcy in Oregon QUANTUM CORP: BlackRock Reports 5.38% Equity Stake QUEST RESOURCE: Amends Q3/09 to Disclose MGE Contract Cancellation REMINGTON RANCH: Wants DIP Financing From James Pippin RENEW ENERGY: ALL Fuels Buys Plant from Valero for $100MM R.H. DONNELLEY: Sidley Austin Bills $2.77MM for Sept.-Nov. Work RICCO INC: U.S. Trustee Appoints 6-Member Creditors Committee ROBBINS BROS: Court Dismisses Chapter 11 Reorganization Case ROBERT MIELL: Failed to Reveal Assets, Says U.S. Trustee SEVEN SEAS: S&P Puts Junk Rating on $175MM Sr. Secured. Loan SEVERSTAL COLUMBUS: Moody's Assigns 'B3' Corporate Family Rating SHERWOOD FARMS: Asks for Court Okay to Use Cash Collateral SHERWOOD FARMS: Wants DIP Financing From Pentagon Apollo SMURFIT-STONE: 160 Claims Change Hands in Past Two Weeks SMURFIT-STONE: CCAA Court Rules on Finance II Intercompany Claim SMURFIT-STONE: Committee Balks at Finance II Switch to Ch. 7 SPRINGBOARD FINANCE: S&P Affirms 'B+' Rating on Amended Loan B STALLION OILFIELD: Moody's Assigns 'B3' Corporate Family Rating TLC VISION: Enters Deal for Alternative Restructuring Plan TRIBUNE CO: Gets Nod to Assume Agreements With NBC TRIBUNE CO: Gets OK to Purchase Tail Coverage for $5.6MM TRIBUNE CO: Hires Seyfarth Shaw for Employment Litigation TRIBUNE CO: McCormick's $50 Billion Claim Disallowed TRONOX INC: Creditors Reach Deal With Lenders TRUMP ENTERTAINMENT: Trumps Seek Right to Vote on Beal/Icahn Plan TSG INCORPORATED: Files Schedules of Assets and Liabilities TXCO RESOURCES: Reorganization Plan Receives Court Confirmation USA DRY VAN: Files Chapter 11 in Corpus Christi VERIFIED IDENTITY: L-1 Identity Solutions Named Exclusive Provider VERMILLION INC: Pays Health Discovery Corporation VICORP RESTAURANTS: Court OKs Dismissal of Reorganization Cases VISTEON CORP: Has Nod to Sell Radar Systems Biz. to Autoliv VISTEON CORP: Proposes $11 Mil. Settlement With IBM VISTEON CORP: Proposes to Sell AAC JV Assets for $3.1MM VISTEON CORP: Seeks Approval of Van Buren Township Settlement WABASH NATIONAL: BlackRock Discloses 7.54% Equity Stake WARNER CHILCOTT: S&P Withdraws 'B+' Rating on $600 Mil. Notes WASHINGTON MUTUAL: Equity Panel Wants Benesch as Del. Counsel WASHINGTON MUTUAL: Noteholders Appeal Rule 2019 Compliance Order WHITNEY DESIGN: Court Approves $8.7 Million Sale Transaction WASTEQUIP INC: Moody's Changes Default Rating to 'Caa2/LD' WILLIAMS PARTNERS: Fitch Ups Issuer Default Rating From 'BB' WICK BUILDING: Founder Invests $2.5 Million Cash to Buy Unit WM BOLTHOUSE: S&P Downgrades Rating on New Senior Facility to 'B' ZAYAT STABLES: Files Chapter 11 in New Jersey * Practical Law Company Launches PLC Law Department * BOOK REVIEW: Bankruptcy Investing: How to Profit from Dist. Cos. ********* 20 BAYARD: Cash Collateral Hearing Scheduled for February 23 ------------------------------------------------------------ The Hon. Elizabeth S. Stong of the U.S. Bankruptcy Court for the Eastern District of New York will consider at a hearing on February 23, 2010, at 11:00 a.m., 20 Bayard Views, LLC's continued access to W Financial Fund, LP.'s cash collateral. The hearing will be held at Courtroom 3585. As reported in the Troubled Company Reporter on January 4, 2010, the Debtor obtained interim approval to access cash collateral which consists of monthly rental payments from leases held by the Debtor for its 37 condominium units and 40 parking spaces located at the Bayard Condominium Complex. Rental income from the Collateral averages $130,000 a month. The WFF Appraisal establishes that the fair market value of the Collateral is in excess of $21,000,000. The Debtor would use the money to fund its Chapter 11 case, and to pay suppliers and other parties. The Debtor related that the interests of WFF and the other known secured creditors are adequately protected because the collateral is valued well in excess of WFF's Debt and the Mechanic Lien Claims. The cash collateral will be applied to maintain the value of the collateral, including payment of Court approved bankruptcy administrative fees of the Debtor. The Debtor expects to minimize the administration costs by proposing a Chapter 11 plan in the near term and obtaining confirmation of a reorganization plan within 120 days of the bankruptcy filing. During that time period, WFF and the other known secured creditors will be adequately protected due to the equity cushion and the Debtor's proposed use of cash collateral. Brooklyn, New York-based 20 Bayard Views, LLC, filed for Chapter 11 bankruptcy protection on December 4, 2009 (Bankr. E.D.N.Y. Case No. 09-50723). Leslie A. Berkoff, Esq., at Moritt Hock Hamroff Horowitz, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities in its petition. ACCENTIA BIOPHARMA: Plan of Reorganization Now Due Feb. 18 ---------------------------------------------------------- Accentia Biopharmaceuticals, Inc., and its debtor affiliates asked the U.S. Bankruptcy Court for the Middle District of Florida to approve a stipulation extending until February 18, 2010, their exclusive right to file a plan of reorganization. Lenders Laurus Master Fund, Ltd., and its affiliates signed, for the sixth time, a stipulation consenting to an extension of Accentia's plan filing periods. Laurus agreed that if the Debtors file a plan of reorganization on or before February 18, the Debtors will continue to have the exclusive rights to solicit acceptances of that plan until April 20, 2010. Headquartered in Tampa, Florida, Accentia BioPharmaceuticals Inc. (Nasdaq: ABPI) -- http://www.accentia.net/--is biopharmaceutical company focused on the development and commercialization of drug candidates that are in late-stage clinical development and typically are based on active pharmaceutical ingredients that have been previously approved by the FDA for other indications. The Company's lead product candidate is SinuNase(TM), a novel application and formulation of a known therapeutic to treat chronic rhinosinusitis. The Company has acquired the majority ownership interest in Biovest International Inc. and a royalty interest in Biovest's lead drug candidate, BiovaxID(TM) and any other biologic products developed by Biovest. The Company also has a specialty pharmaceutical business, which markets products focused on respiratory disease and an analytical consulting business that serves customers in the biopharmaceutical industry. Accentia BioPharmaceuticals and nine affiliates filed for Chapter 11 protection on November 10, 2008 (Bankr. M.D. Fla., Lead Case No. 08-17795). Charles A. Postler, Esq., and Elena P. Ketchum, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida; and Jonathan B. Sbar, Esq., at Rocke, McLean & Sbar, P.A., represent the Debtors as counsel. Attorneys at Olshan Grundman Frome Rosenzweig, and Genovese Joblove & Battista PA, represent the official committee of unsecured creditors. The Debtors said assets totalled $134,919,728 while debts were $77,627,355 as of June 30, 2008. ACCURIDE CORP: Shareholders Ask for Confirmation Slowdown --------------------------------------------------------- The Official Committee of Equity Security Holders in Accuride Corp.'s cases asks the Bankruptcy Court to adjourn the February 10 hearing on the reorganization plan until March 17, 2010. The Equity Committee also asks the Court to postpone until March 17 a motion for its dissolution filed by an ad hoc group of noteholders. The Equity Committee says that an adjournment would give the Debtors time to explore an alternative plan proposal by the equity holders. The Equity Committee filed the Motion under seal because it referred to documents produced and testimony elicited during the discovery process, all of which have been designated as "highly confidential" by the Debtors. A hearing on the Motion is scheduled for February 8. About Accuride Corp. Accuride Corp. and its affiliates are among the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America. The Company's products include wheels, wheel-end components and assemblies, truck body and chassis parts, seating assemblies and other commercial vehicle components marketed under several well-recognized brands in the industry, including Accuride, Gunite, Imperial, Bostrom, Fabco, Brillion and Highway Original. According to filings by Accuride, the Company is seeking to restructure in excess of $675 million in debt through its bankruptcy proceeding. The bankruptcy cases are pending in the United States Bankruptcy Court for the District of Delaware. Jeffrey M. Reisner and Tavi C. Flanagan, Esq., at Irell & Manella LLP's Newport Beach-based bankruptcy practice, will serve as lead counsel to the Official Committee of Unsecured Creditors in the affiliated debtors' bankruptcy cases. Mr. Reisner chairs the firm's bankruptcy practice. Kurt Gwynne, Esq., at Reed Smith LLP, serves as Delaware counsel and Joel Dryer of Morris Anderson & Associates will serve as financial advisors to the Official Committee of Unsecured Creditors. The Chapter 11 filing includes Accuride Corp. and a number of subsidiaries and affiliates, including Accuride Cuyahoga Falls, Inc., Accuride Distributing, LLC, Accuride EMI, LLC, Accuride Erie L.P., Accuride Henderson Limited Liability Company, AKW General Partner L.L.C., AOT Inc., Bostrom Holdings, Inc., Bostrom Seating, Inc., Bostrom Specialty Seating, Inc., Brillion Iron Works, Inc., Erie Land Holding, Inc., Fabco Automotive Corporation, Gunite Corporation, Imperial Group Holding Corp. -1, Imperial Group Holding Corp. -2, Imperial Group, L.P., JAII Management Company, Transportation Technologies Industries, Inc., and Truck Components Inc. ACCURIDE CORP: Wants Plan Exclusivity Until May 6 ------------------------------------------------- Accuride Corp. and its units ask the U.S. Bankruptcy Court for the District of Delaware to extend until May 6, 2010, their exclusive period to propose a Chapter 11 plan and until July 6, 2010, their exclusive period to solicit acceptances of the plan. The Debtors expect to confirm their reorganization plan at a hearing set for February 10, 2010. They said, however, that absent an extension, they may not obtain sufficient time to complete the various tasks that may need to be completed before a plan can be confirmed. About Accuride Corp. Accuride Corp. and its affiliates are among the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America. The Company's products include wheels, wheel-end components and assemblies, truck body and chassis parts, seating assemblies and other commercial vehicle components marketed under several well-recognized brands in the industry, including Accuride, Gunite, Imperial, Bostrom, Fabco, Brillion and Highway Original. According to filings by Accuride, the Company is seeking to restructure in excess of $675 million in debt through its bankruptcy proceeding. The bankruptcy cases are pending in the United States Bankruptcy Court for the District of Delaware. Jeffrey M. Reisner and Tavi C. Flanagan, Esq., at Irell & Manella LLP's Newport Beach-based bankruptcy practice, will serve as lead counsel to the Official Committee of Unsecured Creditors in the affiliated debtors' bankruptcy cases. Mr. Reisner chairs the firm's bankruptcy practice. Kurt Gwynne, Esq., at Reed Smith LLP, serves as Delaware counsel and Joel Dryer of Morris Anderson & Associates will serve as financial advisors to the Official Committee of Unsecured Creditors. The Chapter 11 filing includes Accuride Corp. and a number of subsidiaries and affiliates, including Accuride Cuyahoga Falls, Inc., Accuride Distributing, LLC, Accuride EMI, LLC, Accuride Erie L.P., Accuride Henderson Limited Liability Company, AKW General Partner L.L.C., AOT Inc., Bostrom Holdings, Inc., Bostrom Seating, Inc., Bostrom Specialty Seating, Inc., Brillion Iron Works, Inc., Erie Land Holding, Inc., Fabco Automotive Corporation, Gunite Corporation, Imperial Group Holding Corp. -1, Imperial Group Holding Corp. -2, Imperial Group, L.P., JAII Management Company, Transportation Technologies Industries, Inc., and Truck Components Inc. AEROTHRUST CORP: Has Until February 10 to File Schedules -------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware extended until February 10, 2010, AeroThrust Corporation and AeroThrust Engine Leasing Holding Company, LLC's time to file their schedules of assets and liabilities, schedules of secured and unsecured creditors, schedules of executory contracts and unexpired leases and statements of financial affairs. Miami, Florida-based AeroThrust Corporation provides engine repair, maintenance and overhaul of the CFM56 and JT8D engines. The Company filed for Chapter 11 bankruptcy protection on December 27, 2009 (Bankr. D. Del. Case No. 09-14541). Its affiliate, AeroThrust Engine Leasing Holding Company, LLC, also filed a Chapter 11 bankruptcy petition. Thomas F. Driscoll, III, Esq., at Bifferato LLC, assists the Debtors in their restructuring efforts. AeroThrust Corporation listed $50,000,001 to $100,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. AIR AMERICA MEDIA: Files for Chapter 7 Liquidation -------------------------------------------------- Air America Media LLC filed a petition for liquidation under Chapter 7 on Feb. 3, 2010 (Bankr. S.D.N.Y. Case No. 10-10615). As reported by the Troubled Company Reporter, Air America stopped broadcasting last month and said it would file for liquidation. Liquidation became necessary when an effort at finding new investors ended in failure, according to Bill Rochelle at Bloomberg News. The petition listed assets of $1.5 million and debt totaling $17.2 million, including $795,000 in secured claims. The largest single asset, a $520,000 rent deposit, is also collateral for the Manhattan landlord. Then formally named Piquant LLC, the network was in a Chapter 11 reorganization and was authorized in February 2007 to sell the business for $4.25 million to New York real estate developer Stephen L. Green, the chairman of SL Green Realty Corp., Manhattan's largest office building owner at the time. ARRAY BIOPHARMA: December 31 Balance Sheet Upside-Down by $97.6MM ----------------------------------------------------------------- Array BioPharma Inc. reported Monday financial results for the second quarter of fiscal 2010. At December 31, 2009, the Company's balance sheets showed $147.0 million in total assets and $244.6 million in total liabilities, resulting in a $97.6 million shareholders' deficit. Array reported revenue of $9.6 million for the second quarter of fiscal 2010, compared to revenue of $7.7 million for the same period in fiscal 2009. Array spent $19.1 million for proprietary research and development during the quarter to advance its wholly- owned drugs in clinical development and select discovery programs. This compares to $23.7 million spent for research and development during the second quarter of fiscal 2009. Array reported a net loss of $21.8 million, or ($0.44) per share, for the second quarter, compared to a net loss of $37.8 million, or ($0.79) per share, for the second quarter in fiscal 2009. Array ended the second quarter of fiscal 2010 with $115 million in cash, cash equivalents and marketable securities. Array reported revenue of $17.5 million for the six-month period ended December 31, 2009, compared to revenue of $13.4 million for the same period in fiscal 2009. Net loss for the six months ended December 31, 2009, was $46.6 million, or ($0.96) per share, compared to a net loss of $71.5 million, or ($1.50) per share, reported in the same six-month period in fiscal 2009. "We are delighted to partner with Amgen on our type 2 diabetes program, including AMG 151 / ARRY-403, which provided a $60 million up-front payment with additional potential milestones of $666 million and a double-digit royalty," said Robert E. Conway, Chief Executive Officer. "We continued to implement our partnering strategy with our Amgen deal, which significantly added to our cash balance and reduced our burn. Our partnerships, which include seven Array-invented drugs in clinical trials, provide Array with significant upside of $1.9 billion in potential milestones and royalties that range up to 15 percent. As a result of our partnering efforts, we are revising our guidance for the second half of the fiscal year, increasing our revenue and reducing our loss per share." A full-text copy of the Company's condensed financial statements for the second quarter of fiscal 2010 is available for free at: http://researcharchives.com/t/s?5086 Liquidity The Company has incurred operating losses and has an accumulated deficit primarily as a result of ongoing research and development spending. As of December 31, 2009, the Company had an accumulated deficit of $459.8 million. The Company has historically funded its operations through revenue from its collaborations and out-licensing transactions, the issuance of equity securities and through debt provided by its credit facilities. Until the Company can generate sufficient levels of cash from its operations, which the Company does not expect to achieve in the foreseeable future, the Company will continue to utilize its existing cash, cash equivalents and marketable securities that were generated primarily from these sources. The Company currently uses approximately $21 million per quarter to fund its operations. The Company believes that its existing cash, cash equivalents and marketable securities, excluding the value of the auction rate securities ("ARS") it holds, will enable it to continue to fund its operations at this level for the next 12 months. The Company is currently in active licensing discussions with a number of potential partners on select programs. In December 2009, the Company received a $60 million upfront payment from Amgen Inc. under a Collaboration and License Agreement with them for the Company's small-molecule glucokinase activator, AMG 151 / ARRY-403. The Company's current plan contemplates the receipt of significant additional upfront payments from new collaboration or licensing deals in the next 12 months. There can be no guarantee the Company will be successful in receiving such payments. The Company also plans to satisfy its interest payment obligations under the credit facilities with Deerfield Private Design Fund, L.P., and Deerfield Private Design International Fund, L.P., either through the issuance of shares of common stock to Deerfield in accordance with the facility agreements with Deerfield, or with the proceeds from sales of its common stock pursuant to the Equity Distribution Agreement with Piper Jaffray & Co. If the Company is unable to obtain additional funding from these or other sources to the extent or when needed, it may be necessary to significantly reduce its current rate of spending through further reductions in staff and delaying, scaling back or stopping certain research and development programs. Insufficient funds may also require the Company to relinquish greater rights to product candidates at an earlier stage of development or on less favorable terms to it or its stockholders than the Company would otherwise choose in order to obtain up-front license fees needed to fund its operations. About Array BioPharma Boulder, Colo.-based Array BioPharma Inc. (Nasdaq: ARRY) -- http:www.arraybiopharma.com/ -- is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small-molecule drugs to treat patients afflicted with cancer and inflammatory diseases. Our proprietary drug development pipeline includes clinical candidates that are designed to regulate therapeutically important target proteins and are aimed at significant unmet medical needs. BUCKINGHAM FIN'L: Court Denied Investors' Motion to Dismiss Case ---------------------------------------------------------------- The Hon. Brenda T. Rhoades of the U.S. Bankruptcy Court for the Eastern District of Texas denied Helmut Landwehr, et al.'s request to dismiss Buckingham Financial, LLC's Chapter 11 bankruptcy case. As reported in Troubled Company Reporter on January 4, 2010, Helmet Landweher, et al., investors in the TRA Operating Partnerships, sought the dismissal, relating that the investors' monies hadn't been used to acquire the land, but rather was diverted to Today Financial LLC in September and October 2008. Plano, Texas-based Buckingham Financial, LLC, operates as a real estate business. The Company filed for Chapter 11 bankruptcy protection on December 6, 2009 (Bankr. E.D. Tex. Case No. 09- 43863). John P. Lewis, Jr., Esq., who has an office in Dallas, Texas, 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. BURNING BUSH: Decrease in Enrollment Cues Chapter 11 Filing ----------------------------------------------------------- Drew Jackson at Richmond BizSense says Burning Bush Day Care filed for Chapter 11 bankruptcy protection citing two years of declining enrollment. The Burning Bush has $562,900 in assets and $406,500 in liabilities. Burning Bush said it tries to negotiate payment plans with its creditors but was unsuccessful, Mr. Jackson says. Burning Bush, Mr. Jackson notes, owes $231,500, to M&T Bank and $175,000 to Small Business Administration. There are no unsecured creditors listed in the filing, he adds. Burning Bush Day Care operates a day care center. CATHOLIC CHURCH: D.E. Jackson Seeks Payment of Fees --------------------------------------------------- Dillon E. Jackson, Esq., at Foster Pepper PLLC, in Seattle, Washington, reminds the U.S. Bankruptcy Court for the Eastern District of Washington that he has filed an application for compensation in the bankruptcy case of The Catholic Bishop of Spokane, also known as The Catholic Diocese of Spokane, on behalf of certain future claimants. Spokane's confirmed Plan of Reorganization contemplated deposits to a Plan trust for application to claims. A future claims initial trust amount of $1,000,000 was part of the process. The Future claims provisions also provided for augmentation of the Future Claims Trust from specified sources. Due to the recent activities in the bankruptcy case, which involve Certain Future Claimants, Mr. Jackson supplements his previous application for the recent work he did on their behalf. Among other things, Mr. Jackson asserts that his work with respect to the Diocese's request to seal future claimants' pleadings and the subsequent related issues involves a lot of work hours. He notes that Section 503(b)(3) of the Bankruptcy Code provides for compensation to claimants and counsel, who provide a substantial contribution to the case. "It can be argued that at this stage of the case, [Section] 503(b)(3) is not applicable. But the underlying concepts and the general equitable powers of the court to prevent injustice and to award fees to be paid from the Future Claims Trust is appropriate," Mr. Jackson says. The Court will hold a hearing on February 22, 2010, to consider the application. About The Diocese of Spokane The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. The Diocese of Spokane, the Tort Claimants Committee, the Future Claims Representative, and the Executive Committee of the Association of Parishes delivered an Amended Plan of Reorganization, and a Disclosure Statement describing that Plan to the Court on Feb. 1, 2007. The Honorable Patricia C. Williams approved the disclosure statement on March 8, 2007. On April 24, 2007, the Court confirmed Spokane's second amended joint plan. That plan is effective May 31, 2007. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: D.E. Jackson Wants to Retain Foster Pepper ----------------------------------------------------------- Dillon E. Jackson, Esq., at Foster Pepper PLLC, in Seattle, Washington, ask the United States Bankruptcy Court for the Eastern District of Washington to approve his and his firm's retention as counsel to a proposed future claimants committee. Mr. Jackson represents certain future tort claimants in the bankruptcy case of The Catholic Bishop of Spokane, also known as The Catholic Diocese of Spokane. Those claimants have proposed the appointment of the Future Claimants Committee. The Future Tort Claimants are facing adverse litigation from the Diocese, which attempts to breach the confirmed Plan of Reorganization, Mr. Jackson alleges. He avers that the Diocese's effort affects all Future Tort Claimants, known and unknown. Mr. Jackson tells the Court that he is exceptionally qualified to act on behalf of the Future Claimants Committee, and that he has been in the case from the beginning. He says that as Committee counsel, he will oppose attempts by the Diocese to renege on the terms of its settlement and Plan of Reorganization. Ms. Jackson's current hourly rate is $450. Mr. Jackson assures Judge Williams that he is not a creditor of the Diocese as defined by Section 101(10) of the Bankruptcy Code. Objections A. Diocese The Diocese contends that neither the Plan nor the Bankruptcy Code authorize the appointment of a committee post-confirmation and after substantial consummation of the Plan. Hence, the Application should be denied as moot. Daniel J. Gibbons, Esq., at Paine Hamblen LLP, in Spokane, Washington, relates that Rule 2014-1(a) of the Local Bankruptcy Rules of the Eastern District of Washington authorizes employment applications to be made only by a trustee, debtor-in-possession, creditors' committee or debtor. He argues that no committee of future claimants has been appointed. He also contends that Foster Pepper and Mr. Jackson lack standing to seek employment on their own behalf. The Application is deficient on its face, and the lack of disclosure makes it impossible to determine whether Foster Pepper and Mr. Jackson are free from conflicts of interest and are eligible to serve as counsel for a committee, Mr. Gibbons further contends. The Diocese also objects to the proposed hourly rate because a rate of $450 per hour grossly exceeds the prevailing hourly rates charged in the Spokane area. B. Claimant C.B. Future Tort Claimant C.B. has a valid and viable future tort claim against the Diocese, which is 'barred' because he previously failed to file a present tort claim correctly. He contends that the Plan is inconsistent, and challengeable, on the basis that his future tort claim is barred when others, who could have but did not make a present tort claim, later made future tort claims, which were recognized. Claimant C.B. expects that other future tort claimants will object to and oppose his claim because his successful claim reduces or would reduce the available funds for other future tort claimants. Claimant C.B. argues, if Mr. Jackson is permitted to serve as counsel for a Future Claimants Committee, he would be unable to both recognize and advance the cause of Claimant C.B. -- given his prior opposition to the positions taken by Claimant C.B. -- while representing other future tort claimants. Hence, Claimant C.B. asks the Court not to approve the Application or the request to appoint a future tort claimants committee. About The Diocese of Spokane The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. The Diocese of Spokane, the Tort Claimants Committee, the Future Claims Representative, and the Executive Committee of the Association of Parishes delivered an Amended Plan of Reorganization, and a Disclosure Statement describing that Plan to the Court on Feb. 1, 2007. The Honorable Patricia C. Williams approved the disclosure statement on March 8, 2007. On April 24, 2007, the Court confirmed Spokane's second amended joint plan. That plan is effective May 31, 2007. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Future Claimants Committee in Spokane Sought ------------------------------------------------------------- In 2008, The Catholic Bishop of Spokane, also known as The Catholic Diocese of Spokane, commenced efforts to avoid its responsibilities to pay the allowed claims of Future Claimants under the terms of the confirmed Plan of Reorganization it sponsored, Dillon E. Jackson, Esq., at Foster Pepper PLLC, in Seattle, Washington, tells the U.S. Bankruptcy Court for the Eastern District of Washington. The Plan was confirmed on April 24, 2007. The bankruptcy case was closed in 2008 and reopened in late 2009 to deal with the continued attack on the Plan by the Diocese, alleges Mr. Jackson, who represents certain future claimants. The Diocese, having failed to convince the Tort Claims Reviewer of its adversarial interpretation of the Plan terms relating to Future Claims, attempted to have the Court review the TCR's decisions in motions commencing in October 2009, Mr. Jackson says. He contends that the effort, while hard fought by the Diocese, was utterly devoid of merit. The Diocese's legal team effort, however ill-conceived, must be resisted with equal strength because the financial burden simply cannot be placed on a handful of future claimants, Mr. Jackson argues. He contends that the Future Claims Representative has been discharged and exonerated, and feels the effort would be separate from his assigned task to assist in Plan and settlement negotiations. At least 20 future claimants are known, and from this body of known claimants, a committee can be formed and function with the specific task of enforcing the Plan and combating the cynical efforts of the Diocese, Mr. Jackson asserts. He adds that the committee representation would be completely generic and would not deal with individual claims since the attacks of the Diocese are on Plan and Matrix Protocol interpretations and not claim specific. Against this backdrop, Certain Future Claimants ask the Court to appoint a future claimants committee pursuant Section 1102 of the Bankruptcy Code. Mr. Jackson argues that appointment of the committee at this stage in a case is unusual, but the circumstances are unique and cry out for the relief sought. Diocese Objects The Future Claimants' request to appoint is improperly made to the Court, rather than the U.S. Trustee, asserts Daniel J. Gibbons, Esq., at Paine Hamblen LLP, in Spokane, Washington. Regardless, he contends, there is no basis to appoint a committee after confirmation and substantial consummation of the Plan. "Not only is there no legal authority to appoint a new committee at this time, such an appointment would be inconsistent with the Plan, and would be impossible to implement in any event due to the nature of the future claim process," Mr. Gibbons argues. "And, since the Bankruptcy Court reserved jurisdiction to ensure the Plan is properly implemented and enforced, a new committee is not only unauthorized, it is unnecessary," he continues. Gayle Bush was appointed as the Future Claims Representative on June 3, 2005, as the legal representative for Future Tort Claimants, and represented the interests of the Future Tort Claimants when the Plan was negotiated and confirmed, Mr. Gibbons explains. He notes that the FCR's appointment has been terminated, and the FCR's Tort Claim has been satisfied, and all property of the Debtor has been revested in the Reorganized Debtor. Except for reconstituting the committees and reinstituting the representation of the FCR for the sole purpose of appointing a successor to the TCR or Plan Trustee, the committees and FCR have no further role in the Diocese's bankruptcy case, Mr. Gibbons further argues. He insists that the interests of Future Tort Claimants were adequately represented by the FCR during the negotiation, confirmation and consummation of the Plan, and therefore, no Future Claimants Committee should be appointed. The Diocese subsequently filed an amended objection to add an exhibit containing a copy of the Court's oral decision dated March 28, 2005, which disbanded the tort litigants committee in the case. About The Diocese of Spokane The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. The Diocese of Spokane, the Tort Claimants Committee, the Future Claims Representative, and the Executive Committee of the Association of Parishes delivered an Amended Plan of Reorganization, and a Disclosure Statement describing that Plan to the Court on Feb. 1, 2007. The Honorable Patricia C. Williams approved the disclosure statement on March 8, 2007. On April 24, 2007, the Court confirmed Spokane's second amended joint plan. That plan is effective May 31, 2007. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Spokane Fails to Stay Payments Pending Appeal -------------------------------------------------------------- Pursuant to Rule 8005 of the Federal Rules of Bankruptcy Procedure, The Catholic Bishop of Spokane, also known as the Catholic Diocese of Spokane, asks the United States Bankruptcy Court for the Eastern District of Washington for a stay of distributions to Future Tort Claimants pending a ruling on its appeal of the (i) orders regarding payment of future claims, (ii) orders granting in part and denying in part the Diocese's motion to strike, and (iii) order denying ex parte motion to seal. No bond is necessary to protect the Future Tort Claimants under the facts and circumstances of this case, Daniel J. Gibbons, Esq., at Paine Hamblen LLP, in Spokane, Washington, tells Judge Williams. He notes that the Plan Trustee is in possession of and controls the Future Claims Fund, and that the current balance of that fund is approximately $900,000. Mr. Gibbons assures the Court that the Future Claims Commitment is secured by a lien on all property of the Diocese and all real property and fixtures of FTC Parish Group 1 and FTC Parish Group 2. In short, he avers, pursuant to the Plan, the FC Fund has been fully funded, and the Diocese's obligations for Future Tort Claims under the Plan are secured. Under the circumstances, there is no need for a supersedeas bond, Mr. Gibbons asserts. In the alternative, the Diocese asks that the Court approve a supersedeas bond for $30,000, which bond will more than cover post-judgment interest at the federal rate, currently 0.41%, as well as the appellees' estimated costs of appeal. Future Tort Claims allowed on or before October 13, 2009, total approximately one half of the FC Fund, and the Diocese anticipates that the FC Fund will be exhausted in short order. Under the Plan, Future Tort Claimants must be paid in cash, in full, which means the Plan Trustee will initiate foreclosures on the Diocese and Parish property to provide the cash necessary to pay Future Tort Claims, Mr. Gibbons says. He avers that foreclosures will likely be completed prior to resolution of the appeal. Therefore, he points out, among other things, the Diocese faces irreparable harm if stay is not granted. The Diocese also asks the Court for an expedited hearing on its request. Objections A. Plan Trustee Plan Trustee Gloria Z. Nagler relates that the Diocese sought to enjoin her and the Tort Claims Reviewer, Kate Pflaumer, from paying future tort claimants who, in the TCR's exercise of discretion granted her under the Plan, qualified for the payment. Ms. Nagler contends that the Diocese waited until after months of claims consideration by the TCR had passed, and until the TCR had allowed at least seven future tort claims, to assert its contention that the TCR and Plan Trustee should be restrained from exercising their discretion under the Plan. Neither the Plan nor the Plan Trust contemplates any appellate review of the TCR's or Plan Trustee's actions in administration of the Plan or the Plan Trust, and the Court confirmed that understanding in its oral ruling of December 17, 2009, Ms. Nagler argues. She insists that the Plan and Plan Trust contemplate an opportunity for interested parties to seek declaratory relief regarding the interpretation of the Plan, but declaratory relief would not provide the Diocese with reversal of the TCR's decisions sought by the Diocese in this instance, she says. The Diocese, despite granting the TCR the power and discretion to serve as the final arbiter of disputes between the Future Tort Claimants and the Diocese for matrix and convenience claims, seeks to have the Court review each determination of law or fact made by the TCR, which the Diocese contests, Ms. Nagler argues. She alleges that the Diocese seeks to impose an appellate process on a proceeding intended as final, binding, arbitration. The unwarranted delay in final resolution of claims -- particularly when the Diocese could have sought declaratory relief when it first challenged the TCR's decision-making on future claims over a year ago -- should compel this court not to grant any further delay to the Diocese, Ms. Nagler contends. B. Certain Future Claimants Certain future claimants represented by Dillon E. Jackson, Esq., at Foster Pepper PLLC, in Seattle, Washington, ask the U.S. Bankruptcy Court for the Eastern District of Washington to deny both the Diocese's requests to stay and request to shorten. Mr. Jackson contends that granting a motion to shorten time is discretionary, but where the Diocese was dilatory in filing the request and by the delay gives respondents precious little time to oppose the request, the Court should exercise its equitable discretion in favor of denying the motion to shorten time. The Diocese does not fully state the distinction between a stay as a matter of right and a discretionary stay, Mr. Jackson argues. He asserts that the appeal must be an appeal of a money judgment against the appellant and the appellant must post a supersedeas bond in the amount set by the Court. Appeals of efforts to obtain injunctive relief are not issues allowed a stay by the mere posting of a bond, Mr. Jackson further asserts citing Rule 62(d) of the Federal Rules of Civil Procedure and Rule 7062 of the Federal Rules of Bankruptcy Procedure. He adds, among other things, that the action by the Diocese in this case was an effort to halt awards and payment of awards to future claimants by claiming a right of appeal it characterized as an issue of ultra vires action. He notes that the Court has ruled, as a matter of law, that there was no right of appeal under the terms of the Plan and no ultra vires activity. Diocese Talks Back The Diocese never filed any motion to enjoin the Plan Trustee from making distributions to the Future Tort Claimants, Mr. Gibbons argues. He asserts that until the TCR actually made a decision and allowed claims that did not qualify under the Plan, there was no controversy ripe for judicial determination. Mr. Gibbons discloses that counsel for the Diocese and the Plan Trustee had discussions in August and September 2009 about how to proceed if the TCR exceeded her authority and allowed claims that did not qualify under the Plan. He contends, among other things, that the Plan Trustee has never sought guidance from the Court despite her fiduciary duties and overwhelming authority, which requires a fiduciary to seek guidance from the Court where the correct path is unclear. The Future Tort Claimants have not been prejudiced in any manner by hearing the Motion to Stay on shortened time, Mr. Gibbons contends. He also asserts that the Diocese has not advocated that the Plan Trustee refuse to pay the Future Claims. In a declaration supporting the Diocese's response to the Plan Trustee's objection, Gregory J. Arpin, Esq., at Paine Hamblen LLP, in Spokane, Washington, contends that the Plan Trustee's statement that she was informed that the Diocese believed that Future Tort Claims had been improperly allowed by the TCR is not an accurate statement. He insists that on August 7, 2009, he had a conversation with the Plan Trustee's counsel of the Diocese's concern that the TCR was not following the terms and conditions of the Plan in her review of Future Tort Claims. * * * The Court denied the Diocese's Motion to Stay following an expedited hearing on the request. Judge Williams held that the Court's oral comments during the hearing constitute findings of fact and conclusions of law. About The Diocese of Spokane The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. The Diocese of Spokane, the Tort Claimants Committee, the Future Claims Representative, and the Executive Committee of the Association of Parishes delivered an Amended Plan of Reorganization, and a Disclosure Statement describing that Plan to the Court on Feb. 1, 2007. The Honorable Patricia C. Williams approved the disclosure statement on March 8, 2007. On April 24, 2007, the Court confirmed Spokane's second amended joint plan. That plan is effective May 31, 2007. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CENTRAL METAL: Has Access to Cash Collateral Until February 18 -------------------------------------------------------------- The Hon. Vincent P. Zurzolo of the U.S. Bankruptcy Court for the Central District of California authorized, on an interim basis, Central Metal, Inc. to access prepetition lenders' cash collateral until February 18, 2010. A further hearing regarding the Debtor's continued access to cash collateral will be held on February 16, 2010 at 1:30 p.m. As of the petition date, the Debtor owed Center Bank $16.3 million and KEB LA Financial Corp. $900,000. The Debtor would use the money to fund its Chapter 11 case, purchase additional scrap metal to replenish sold inventory, and to pay suppliers and other parties. As reported in the Troubled Company Reporter on January 20, 2010, in exchange for using the cash collateral, the Debtor will grant secured creditors replacement liens against the Debtor's assets, with the replacement lien to have the same extent, validity, and priority as the prepetition lien held by the creditors. The Debtor also said that the existing personal guaranty by Jong Uk Byun provides further adequate protection. The real property upon which the Debtor runs its facilities is either owned by the Debtor or by the Debtor's principal, Jong Uk Byun. The Debtor's cash collateral use is subject to a permitted deviance of up to 10% of the total expenses for any week, with any unused portions to be carried over into the following week. The lenders' consent to cash collateral use will terminate at the first to occur of (i) upon the expiration of the cure period; (ii) Trustee's sale after grant of relief from stay to lender or any junior lienholder; (iii) conversion, dismissal or closing of this case, for any reason whatsoever; or (iv) February 18, 2010, unless the date is extended. About Central Metal Huntington Park, California-based Central Metal, Inc., is a fully integrated scrap metal processing company that purchases, processes and sells ferrous and non-ferrous metals domestically and internationally. The Company is one of the largest processing companies on the West Coast, has one of the largest land sites and processing capacities, and is fully diversified in its business portfolio that entails dynamic trading relationships with renowned metal manufacturers around the world. The Company filed for Chapter 11 bankruptcy protection on January 8, 2010 (Bankr. C.D. Calif. Case No. 10-10642). Juliet Y. Oh, Esq., who has an office in Los Angeles, California, 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. CHAMPION ENTERPRISES: Committee Hoping to Derail Sale of Business ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Champion Enterprises Inc. will ask the Bankruptcy Court at a hearing on February 8 to deny the quick sale of Champion Enterprises' business. The Creditors Committee continues to question whether an expedited sale of the substantially all of the assets of the Debtors is in the best interests of all parties-in-interest. The Creditors Committee believes that a reorganization of the Debtors' core businesses and, perhaps, a sale of certain business units, would ultimately be more beneficial to the Debtors' unsecured creditors as compared to an immediate sale of the Debtors assets at an auction where the lenders would be the stalking horse bidder. The Creditors Committee says a delay is warranted considering that "the performance of the Debtors' businesses, and therefore the value thereof, is expected to improve materially in the near term." The Proposed Auction Champion Enterprises, Inc., and its debtor-affiliates have asked the U.S. Bankruptcy Court for the District of Delaware for authorization to sell substantially all of their assets, subject to bigger and better offers. The Debtors, with the assistance of Morgan Joseph & Co., investment banker, intend to continue to market and seek bids for the assets, to hold the auction on March 1, 2010, at 11:00 a.m. The Debtors have entered into an agreement with certain new equity investors for sale of their assets. Pursuant to the LOI, the purchase price for the sale will consist of: 1) a credit bid of all obligations approximately $80 million principal amount plus accrued interest under the debtor-in- possession credit agreement dated as of November 15, 2009; 2) a credit bid of all obligations under the Company's amended and restated credit agreement, dated as of April 7, 2006; 3) the agreement of the purchaser to pay any and all cure payments required for the assumption of the designated contracts; 4) the agreement of the purchaser to fund at or after the closing of the acquisition, up to a maximum amount to be agreed and consistent with a budget to be agreed; and 5) the agreement of the purchaser to assume specified administrative expenses and other assumed liabilities. The Debtors propose a hearing on the sale motion on March 2, 2010, at 1:00 p.m. Objections, if any, are due on February 23, 2010, at 4:00 p.m. About Champion Enterprises Troy, Michigan-based Champion Enterprises, Inc., and its subsidiaries are international manufacturers of factory-built homes and steel-framed modular buildings, with operations in the United States, Canada and the United Kingdom. Buildings constructed by Champion and its subsidiaries consist of both single and multi-module units designed for either commercial or residential purposes. Champion products range from single-module HUD-Code homes to sophisticated commercial structures such as hotels. The Company filed for Chapter 11 on November 15, 2009 (Bankr. D. Del. Case No. 09-14019). The Company's affiliates also filed separate bankruptcy petitions. James E. O'Neill, Esq., Laura Davis Jones, Esq., Mark M. Billion, Esq., Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, assist Champion in its restructuring effort. The Company listed $576,527,000 in assets and $521,337,000 in liabilities as of October 3, 2009. CHEMTURA CORP: Enters Into 3rd Amendment to DIP Credit Agreement ---------------------------------------------------------------- Chemtura Corporation and its debtor affiliates disclosed in a regulatory filing with the Securities and Exchange Commission in mid-January 2010 that they entered into a third amendment of their Senior Secured DIP Credit Agreement to reflect the consent of the DIP Lenders to the proposed sale of the Company's PVC Additives Business. As previously reported, the Debtors entered into an agreement for the sale of their PVC Additives Business to SK Atlas LLC and SK Capital Partners II LP in December 2009. The SK Entities have proposed to buy the PVC Additives Business for about $2 million in cash and certain other considerations. The SK Entities will serve as stalking horse buyers and the Debtors seek to subject the sale to an auction in February 2010. The Debtors' DIP Credit Agreement was initially approved, on a final basis, by the Bankruptcy Court in April 2009. Among other things, the Original DIP Credit Agreement provided for (i) an increase in the outstanding amount of intercompany loans the Debtors could make to their non-debtor foreign subsidiaries from $7.5 million to $40 million; (ii) a reduction in the required level of borrowing availability under the minimum availability covenant; and (iii) the elimination of the requirement to pay additional interest expense if a specified level of accounts receivable financing was not available to the Debtors' European subsidiaries. The Debtors subsequently entered into a second amendment of the DIP Credit Agreement in July 2009. The Second Amendment provided for, among other things, an option by the Debtors to extend the maturity of the DIP Credit Agreement for two consecutive three- month periods. As noted, the Third Amendment to the DIP Facility is entered in relation to the PVC Additives Business proposed sale. The Debtors further note that they are exploring alternative financing to the current DIP Credit Agreement. Bloomberg News reports that Citigroup Inc. held a conference call last January 19, 2010, to discuss a $450 million credit facility loan by which Chemtura Corp. seeks to refinance the DIP Facility with. The news report notes that the loan will consist of a $150 million revolving line of credit and a $300 million term loan, and will have a 364-day maturity with no ability to extend the deadline. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Gets Nod to Establish Claims Objections Protocol --------------------------------------------------------------- Chemtura Corp. and its units obtained approval to establish uniform procedures for objecting to claims pursuant to Sections 105(a) and 502(b) of the Bankruptcy Code and Rule 3007 of the Federal Rules of Bankruptcy Procedure. Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, notes that more than 14,000 proofs of claim, asserting more than $10.1 billion in liabilities, have been filed against the Debtors. In addition, more than 8,000 claims have been asserted in unliquidated amounts or contain an unliquidated component. In light of the significant number of claims that have been filed, Mr. Cieri notes that preparing and filing individual pleadings for each objection to a Claim would be an extremely time-consuming and expensive process, and that administering a claims process involving thousands of claims without a clear set of procedural rules could add cost, confusion and delay. To address those concerns, the Debtors developed certain procedures to ensure that the claims objection process will be as streamlined as possible and to ensure the efficient and cost- effective disposition of the Objections to Claims by providing a simple and streamlined procedure for their resolution. The Debtors propose that the Objection Procedures will apply to all Claims to which an objection is asserted. The Proposed Objection Procedures divide the Objections into tiers: A. Tier I Objections include Objections to Claims that: (a) were filed after the Bar Date; (b) are duplicates of one or more other Claims; (c) have been amended or superseded by a subsequently filed claim; (d) have been formally withdrawn by the Claimant through the filing of a pleading or a court order indicating withdrawal of the claim; (e) are facially defective; (f) are filed against non-Debtor entities; (g) are docketed in error from another Chapter 11 case; (h) are filed against several Debtor entities; (i) have not specified the Debtor against whom the Claim has been filed; (j) do not sufficiently specify the basis for the Claim or do not provide sufficient documentation of the Claim; (k) are solely for the holding of equity interests; (l) do not specify any amount of the Claim; (m) already have been paid or otherwise fully satisfied according to the Debtors' books and records; (n) are inconsistent with the Debtors' books and records; and (o) are asserted for improper classification or security status, including improper priority amounts that exceed the maximum amount under section 507 of the Bankruptcy Code. Tier I Objections may be filed as an omnibus objection and will include a schedule as an exhibit, which will list all claims subject to the Objection in alphabetical order by creditor name. The Debtors may include more than 100 Claims on an Objection Schedule, where those Claims were filed by the same counsel and ask for substantially the same relief. The Debtors will notify Claimants subject to Tier 1 Objections via a personalized notice of objection. A timely response to any Tier 1 Objection must be filed with the Court no later than 4:00 p.m. on the date that is 14 calendar days after service of the Objection Notice and Tier I Objection. A hearing on a Tier I Objection will be scheduled for one of the regularly scheduled hearing dates in the Debtors' cases that is no earlier than 21 days after service of the Tier I Objection. If no hearing date has been scheduled as of the date of service, the Debtors may ask for a special hearing date. B. Tier II Objections includes substantive objections that are not based, in whole or in part, on one of the Tier I Objection grounds. Tier II Objections are further divided into two sub-tiers, Tier II(A) and Tier II(B): (a) Tier II(A) Objections consist of substantive objections that the Debtors contend raise only questions of law and may be resolved on their merits without additional fact discovery. (b) Tier II(B) Objections consist of substantive objections that the Debtors have determined may require additional fact discovery. Each Tier II Objection will include as exhibits copies of the Claims that are the subject of the Objection, and a declaration to support the basis of the Objection. If a Claim is voluminous, the Debtors may serve only a copy of the Claim form or cover sheet. A timely Response must be filed with the Court and received by the Debtors' counsel and the Committee's counsel no later than 14 calendar days after service of the Tier II Objection and Objection Notice. If no Response is timely filed and served by the established deadline, the Debtors or Committee, as applicable, may submit a form of order sustaining the Objection with respect to the Disputed Claim without any further hearing. A hearing on a Tier II(A) Objection will be scheduled to be conducted at one of the regularly scheduled hearing dates in the Debtors' cases that is no earlier than 21 days after service of the Tier II(A) Objection. If no hearing date has been scheduled as of the date of service, the Debtors or Committee, as applicable, may ask for a special hearing date. Any Claim may be subject to both Tier I and Tier II Objections. A full-text copy of the Claim Objection Procedures is available for free at http://bankrupt.com/misc/ChemObjProc.pdf * * * The Bankruptcy Court clarifies that the Procedures will not be applied to claims filed by Sonneborn, Inc., PMC Biogenix, Inc., and the United States of America, or claims concerning alleged environmental liabilities filed by any State governmental unit. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Gets Nod to Establish Claims Settlement Protocol --------------------------------------------------------------- Chemtura Corp. and its units obtained authority from the Bankruptcy Court to establish uniform procedures for the settlement of claims, designed to streamline the process by which they can consensually resolve disputes concerning numerous claims. Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, relates that more than 14,000 proofs of claim, asserting an aggregate of more than $10.1 billion in liabilities, have been filed against the Debtors. More than 8,000 of the filed claims assert unliquidated amounts or contain an unliquidated component. In light of the significant number of claims that have been filed in the Debtors' cases, Mr. Cieri asserts that a consensual resolution of Disputed Claims will be an important part of the claims reconciliation process, but note that presenting individual settlements for each Disputed Claim to the Court for approval would be unnecessarily costly and inefficient and could provide a disincentive for otherwise beneficial settlements. To address these concerns, the Debtors have developed Claims Settlement Procedures. To promote an efficient claims resolution process, the Settlement Procedures establish categories of settlements and criteria for settling Claims based on the amount of the Claims and other factors: A. Category 1 Settlements Category 1 Settlements include any written agreement between the Debtors and a Claimant for (i) the disallowance of any Claim; (ii) the allowance of any Claim, or portion of it, in any amount of up to $1,000,000, where no corresponding amount is listed for that Claim in the Debtors' Schedules of Assets and Liabilities; or (iii) the allowance of any Claim, or portion of it, where there is a corresponding amount that is listed in the Schedules and the allowed amount of the Claim is no greater than $250,000 more than the corresponding scheduled amount. Category 1 Settlements are subject to these streamlined notice and objection procedures: (a) The Debtors will provide written notice describing the basic terms of the proposed settlement and a copy of the proposed settlement to (i) counsel to the Official Committee of Unsecured Creditors, (ii) the United States Trustee for the Southern District of New York, and (iii) counsel to the agent for the Debtors' postpetition and prepetition secured lenders. If a proposed Category 1 Settlement provides for a waiver by the Debtors of any claims or causes of action arising under Chapter 5 of the Bankruptcy Code, the notice to the Settlement Notice Parties will also set forth the basis for the Chapter 5 Waiver. (b) The Settlement Notice Parties will have five business days after the notice is sent to object to or seek additional time to evaluate the proposed settlement. If no written objection or written request for additional time is received by the Debtors' counsel prior to the expiration of the five-day period, the Debtors may enter into the proposed settlement without need for further Court approval or notice to any party. If any Settlement Notice Party provides a written request to Debtors' counsel for additional time to evaluate the proposed settlement, the requesting Settlement Notice Party will have an additional five business days to file with the Court and serve a formal written objection to the proposed settlement. The Debtors may enter into a proposed settlement promptly upon obtaining approval of the Settlement Notice Parties. Objections that are not resolved may be presented to the Court for determination. B. Category 2 Settlements Unless otherwise ordered by the Court, the Debtors will provide notice of any settlements that provide for (i) an allowed Claim in excess of $1,000,000 where no corresponding amount is listed for that Claim in the Schedules, or (ii) an allowed Claim where there is a corresponding amount listed in the Schedules and the allowed amount of the Claim exceeds the corresponding scheduled amount by more than $250,000. As permitted by Rule 9006(c) of the Federal Rules of Bankruptcy Procedure and notwithstanding the terms of Rule 2002(a) of the Federal Rules of Bankruptcy Procedure, the Debtors will file settlement stipulations allowing Category 2 Settlements with the Court for presentment on 10 calendar days' notice and serve by first-class mail on (i) the Claimant; (ii) counsel to the Committee; (iii) the U.S. Trustee; (iv) counsel to the agent for the Debtors' postpetition and prepetition secured lenders; and (iv) those parties that have formally requested notice pursuant to Rule 2002 of the Federal Rules of Bankruptcy Procedure and the Local Bankruptcy Rules. Objections will be due three days before the scheduled date of presentment. Objections to settlement stipulations that are not resolved may be presented to the Court for determination. C. Other Settlement Motions Notwithstanding anything under the Settlement Procedures, the Debtors may file a motion to approve any settlement under Section 502 of the Bankruptcy Code, Rule 9019 of the Federal Rules of Bankruptcy Procedure and any other applicable provisions of the Bankruptcy Code or the Bankruptcy Rules. Any settlement motion may be heard or presented on 14 calendar days' notice, with objections due seven days before the scheduled hearing or presentment date. D. Consultation with the Committee The Debtors will consult with counsel to the Committee prior to entering into settlements that provide for (i) an allowed Claim in excess of $500,000 where no corresponding amount is listed for that Claim in the Schedules, or (ii) an allowed Claim where there is a corresponding amount listed in the Schedules and the allowed amount of the Claim exceeds the corresponding scheduled amount by more than $500,000. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. CINRAM INTERNATIONAL: Moody's Cuts Corp. Family Rating to 'Caa1' ---------------------------------------------------------------- Moody's Investors Service downgraded Cinram International Inc.'s corporate family and probability of default ratings to Caa1 and Caa2 (previously B3 and Caa1). Individual debt instruments were also downgraded by one notch. The rating actions stem directly from Cinram's announcement that "it has received written notice from Warner Home Video Inc. that WHV has exercised its option to terminate its service agreements on July 31, 2010. The notice covers all Cinram entities globally and will directly impact operations in North America, Mexico, UK, France, Germany and Spain. WHV revenues for 2009 represented approximately 28% of the total consolidated revenues. . ." This development further complicates the already challenging process of refinancing the company's bank credit facility when it comes due in May 2011. Refinance issues continue to be the primary factors unpinning Cinram's CFR and PDR. Cinram has not provided a clear explanation of the underlying commercial issues that caused the WHV contract termination notice. Consequently, in addition to the cash flow loss attributable to the WHV contract, there is the potential of similar other contracts being subject to termination for similar reasons. As well, while Cinram has not provided an estimate of one-time costs related to headcount and facilities-related adjustments, the after-tax costs could be significant and could strain liquidity arrangements. As further information related to these matters comes to light, additional rating actions may be required. Accordingly, the ratings outlook remains negative. While the company's large cash balance and available committed third party liquidity allow its speculative grade liquidity rating to be maintained at SGL-3 (indicating adequate liquidity arrangements), since Cinram's credit facilities are due May 5, 2011, the SGL rating will migrate to SGL-4 (poor liquidity arrangements) as the maturity moves into the rolling forward four quarter SGL rating horizon. This matter also contributes to the negative ratings outlook. Downgrades: Issuer: Cinram International Inc. -- Corporate Family Rating, Downgraded to Caa1 from B3 -- Probability of Default Rating, Downgraded to Caa2 from Caa1 -- Speculative Grade Liquidity Rating, Unchanged at SGL-3 -- Senior Secured Bank Credit Facility, Downgraded to B3 (LGD2, 28%) from B2 (LGD2, 28%) Moody's most recent rating action concerning Cinram was taken on November 25, 2009, at which time Moody's revised Cinram's PDR to Caa1/LD from Caa1 to reflect the company's then deemed limited default. With headquarters in Toronto, Ontario, Canada, Cinram International Inc. is one of the world's largest independent manufacturers, replicators and distributors of DVDs and audio CDs. COMMUNITY EDUCATION: Moody's Puts 'B3' Rating on $210 Mil. Notes ---------------------------------------------------------------- Moody's Investors Service has assigned a B3 rating to Community Education Centers' proposed $210 million issuance of senior secured notes. This is the first time Moody's has rated Community Education Centers, a non-publicly traded private correctional company. Community Education Centers provides community-based residential and in-prison education and treatment services, and secured detention management for local, state and federal corrections systems in the U.S. The rating outlook is stable. The proposed new secured notes will be issued in a 144a offering and have a term of six years expiring in 2016. Proceeds from the offering will be used to simplify the company's debt structure and to refinance existing debt. The notes are supported by all the company's assets, including real estate and accounts receivables. The notes are only subordinate to a new $25 million, 5-year revolving credit facility. According to Moody's, the B3 senior secured rating reflects the sound collateral provided by the real estate value of the company's 16 owned facilities, its sizable accounts receivables and the additional value contributed by the company's secure detention management service income. Moody's notes that the residential community based reentry facilities have value beyond their implied book value. This is due to the difficulty of obtaining zoning for similar facilities in urban areas and the good reputation of the established program. The programs have received consistently high accreditation scores, and independent studies have demonstrated cost savings to government entities over the long term due to reduced recidivism. Furthermore, the company has cultivated strong relationships with government entities that represent their customer base. The rating is limited by the company's small size with approximately $400 million in gross assets as of September 30, 2009. Key credit challenges for the rating include the company's high leverage and currently pressured credit metrics due to below trend occupancy levels. Consequently liquidity is strained and the company has limited access to capital. Community Education Centers' currently lower occupancy is partially attributable to an expansion of its facilities in 2007 and 2008. The additional bed capacity at its residential treatment centers has yet to be fully utilized. Lower occupancy levels are also attributable to underutilized capacity in its secure detention management facilities. Moody's is also concerned over the narrow covenant cushion on the proposed new $25 million revolving line of credit. A covenant violation would not affect bondholders, however a payment default on the revolving credit facility could trigger a cross default to the note holders, if payment on the line were not resolved during a cure period. Moody's views the triggering of the cross default provision noted in the senior secured bonds as unlikely at this time. The stable outlook reflects expectations that 2010 occupancy levels should rise and approach more normal historical levels. In addition, the current outlook reflects Moody's expectation of no liquidity challenges that may trigger acceleration of any of the company's debt. Positive rating movement would reflect occupancy increases that exceed targeted occupancy expectations and effectively filling new bed capacity on a consistent basis. This should generate positive momentum for improving credit metrics. Conversely, a downgrade would occur should there be a payment default on the revolver, or a prolonged decrease in occupancy putting additional pressure on credit metrics, or any other additional liquidity challenges that might weaken the collateral for the bondholders. This rating was assigned with a stable outlook: * Community Education Centers -- Proposed $210 million senior secured notes at B3 Community Education Centers is a non-publicly traded company based in West Caldwell, New Jersey. The company currently operates 25 community-based residential facilities, and 60 in prison treatment and education programs. It also manages 17 secure detention facilities. The services provided by the community based facilities included the assessment of causes for criminal behavior; substance abuse counseling and treatment; and individual, group and family therapy. Services focus on education, employment training, and life skills training. Due to the nature of the business, these facilities need to be near urban areas. Historically, CEC's business has been community based reentry programs. In 2007, through an acquisition, the company expanded its services to include secure detention management and in-prison treatment programs. COREL CORP: Steven Cohen and Dan Ciporin Resign as Directors ------------------------------------------------------------ Corel Corporation disclosed that on January 26, 2010, Steven Cohen and Dan Ciporin resigned as directors of the Company. On January 26, 2010, the Company applied to the NASDAQ Global Market to de-list its common shares and, later that day, the NASDAQ Global Market filed a Form 25 with the Securities and Exchange Commission regarding removal of the Company's shares from listing on the NASDAQ Global Market. The delisting became effective as of the close of business on January 26, 2010. Also on January 26, 2010, the Company applied to the Toronto Stock Exchange to de-list its common shares. It is anticipated that delisting from the TSX will become effective as of January 28, 2010. Corel also disclosed that on January 25, 2010, the Compensation Committee of the Company's Board of Directors approved an amendment to the Company's Amended 2006 Equity Incentive Plan to provide that all options granted prior to July 1, 2009, and all equity awards granted under the Plan would be cashed out, and all options granted on or after July 1, 2009, under the Plan would be assumed by the Company. Corel said this treatment is consistent with the disclosure in the Company's proxy statement filed with the Securities and Exchange Commission on December 29, 2009. Consolidation On January 26, 2010, a special meeting of Corel shareholders was held. As reported by the Troubled Company Reporter, at the special meeting, the shareholders approved the special resolution authorizing the consolidation of all of the issued and outstanding common shares of the Company on the basis of one post- consolidation common share of the Company for each 871,589 pre- consolidation shares. Fractional new common shares were not issued. Shareholders who did not hold sufficient shares to qualify for the issuance of new common shares pursuant to the Consolidation are entitled to receive cash consideration of US$4.00 in respect of each pre-Consolidation share held in lieu of any fractional shares otherwise issuable as a result of the Consolidation. Following approval of the Consolidation by the shareholders, the Company filed articles of amendment to effect the Consolidation. The Consolidation is the second and final step in the acquisition of the Company by Corel Holdings, L.P., a limited partnership controlled by an affiliate of VCP II International, L.L.C., a manager of private equity funds. The first step was a tender offer by Corel Holdings, L.P. for all of the Company's outstanding common shares not already owned by Corel Holdings, L.P. and its affiliates at a price of US$4.00 per share. At the effective time of the Consolidation, the Company became a wholly-owned subsidiary of Corel Holdings, L.P. and its affiliates. Hagerman Letter Agreement Corel also disclosed that on January 25, 2010, the Company and Kris Hagerman entered into a letter agreement to clarify that his options will not become vested as a result of the Consolidation, consistent with the disclosure in the Company's proxy statement filed with the Securities and Exchange Commission on December 29, 2009. Mutual Releases with Vector On January 26, 2010, the Company and Vector Capital Partners II International, Ltd. entered into mutual releases with each of Dan Ciporin, Steven Cohen and Barry Tissenbaum -- Designated Directors -- pursuant to which each of the Company and Vector Capital Partners II International, Ltd. released the Designated Directors from any and all claims they may have against the Designated Directors arising from their service as directors (excluding, in the case of Barry Tissenbaum, claims relating to services performed after the date of the release), and the Designated Directors released the Company and Vector Capital Partners II International, Ltd. from any claims they may have arising from their service as directors other than the compensation they were otherwise entitled to as directors of the Company (excluding, in the case of Barry Tissenbaum, claims relating to services performed after the date of the release). Also on January 26, 2010, each of the directors of the Company entered into mutual releases among and between such directors pursuant to which each such director released the other directors from any and all claims they may have arising from their service as directors. About Corel Corp. Corel Corp. (NASDAQ:CREL) (TSX:CRE) -- http://www.corel.com/-- is one of the world's top software companies with more than 100 million active users in over 75 countries. The Company provides high quality, affordable and easy-to-use Graphics and Productivity and Digital Media software. The Company's products are sold through a scalable distribution platform comprised of Original Equipment Manufacturers (OEMs), the Company's global e-Stores, and the Company's international network of resellers and retail vendors. At August 31, 2009, the Company had $189.7 million in total assets against $199.7 million in total liabilities, resulting in $10.0 million in shareholders' deficit. Corel's working capital deficiency at August 31, 2009, was $10.5 million, an increase of $7.7 million from the November 30, 2008, working capital deficiency of $2.8 million. In November 2009, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Ottawa-based packaged software provider Corel Corp. to 'B-' from 'B'. S&P also lowered the issue-level rating on the company's senior secured credit facility by one notch to 'B-' from 'B'. The '3' recovery rating on the debt is unchanged. DENBURY RESOURCES: S&P Affirms Corporate Credit Rating at 'BB' -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on Denbury Resources Inc. following its announcement that it will issue $1 billion in senior subordinated notes to finance the acquisition of Encore Acquisition Co. At the same time, S&P is raising its corporate credit rating on Encore to 'BB' from 'BB-'and removing it from CreditWatch, where it was placed with positive implications on Nov. 2, 2009. This rating action reflects the announcement that Encore's senior subordinated notes will rank pari passu with Denbury's existing notes. The outlook on Encore is negative. S&P is also revising its recovery ratings on Denbury's senior subordinated debt to '4', which indicates expectations of average (30%-50%) recovery in the event of a payment default, from '3'. The senior subordinated issue rating remains unchanged at 'BB'. Denbury announced yesterday morning that it would issue $1 billion in senior subordinated notes to finance its acquisition of Encore. The transaction, which values Encore at $4.5 billion, includes the assumption of slightly more than $1.2 billion of Encore's existing debt. The transaction is subject to shareholder votes at Denbury and Encore, and management of both anticipates shareholder approval of the transaction. The companies expect the deal to be completed in the first quarter of 2010. "The transaction will improve Denbury's business risk profile," said Standard & Poor's credit analyst Marc Bromberg. Proved reserves and daily production will essentially double, with combined total proved reserves of 427 million barrels of oil equivalent (boe). Denbury will rank among the larger oil and gas E&P companies in the 'BB' category. Geographic diversity will also improve, as the company will have two core areas for enhanced oil recovery: the Southeast U.S. and the northern Rocky Mountains region. The company will retain its focus on crude oil (roughly three-quarters of total proved reserves will be crude oil), which should allow it to generate relatively stronger cash flows compared with similarly sized natural-gas-weighted peers. The negative outlook reflects Denbury's aggressive pro forma financial leverage and its need to reduce debt to remain at the current rating level. S&P will consider a downgrade to 'BB-' if the company does not take steps to reduce financial leverage in 2010. Specifically, S&P would expect FFO to debt to approach 20% next year. The most significant factors which will influence Denbury's ability to delever are crude oil prices, asset sales, and the relative size of its 2010 capital budget. S&P does not anticipate an upgrade in the near future. S&P anticipate withdrawing the rating on Encore once the transaction with Denbury has closed. DOLE FOOD: Fiscal Year 2009 Results Won't Move Fitch's 'B' Rating ----------------------------------------------------------------- The ratings and Stable Outlook for Dole Food Company, Inc., and Solvest, Ltd, its Bermuda-based subsidiary, are unchanged following the announcement regarding fiscal 2009 operating results and proposed amendments to senior secured credit facilities, according to Fitch Ratings. While the proposed amendments to Dole's existing senior secured credit facilities are not expected to materially change its credit profile, the extension of maturities and potentially lower interest cost are viewed positively. Fitch currently rates Dole and Solvest: Dole (Operating Company) -- Long-term Issuer Default Rating 'B'; -- Secured asset-based revolver 'BB/RR1'; -- Secured term loan B 'BB/RR1'; -- Third-lien secured notes 'B+/RR3'; -- Senior unsecured debt 'CCC/RR6'. Solvest Ltd. (Bermuda-based Subsidiary) -- Long-term IDR 'B'; -- Secured term loan C 'BB/RR1'. At Jan. 2, 2010, Dole had approximately $1.6 billion of consolidated debt, modestly below Fitch's Dec. 10, 2009, pro forma estimate of $1.7 billion. Dole's debt includes $739 million of secured term loans, $767 million of senior notes -- of which an estimated $546 million is secured -- and $92 million of other obligations. For the fiscal year ended Jan. 2, 2010, Dole reported adjusted earnings before interest, taxes, depreciation and amortization of $417 million, up 1.7% from a reported $410 million in fiscal 2008. Fiscal 2010 EBITDA was slightly below Fitch's $431 million forecast. Earnings improvement in Dole's higher-margin Packaged Foods segment was offset by weather-related cost increases in its Fresh Fruit Segment, which represented 69% of the company's total $6.8 billion of annual revenue. Total debt-to-operating EBITDA for fiscal 2009 of approximately 3.8 times is slightly better than what Fitch had projected. Dole's current ratings incorporate Fitch's expectations that the company can maintain leverage in the 4.0x-5.0x range in the near- to-intermediate term. Consequently, Dole's plan for further cost and debt reductions in 2010 is viewed positively and if realized could result in an upward revision to the ratings. Anticipated amendments to the company's existing senior secured credit facilities include refinancing its $739 million of term debt due April 12, 2013, and its $350 million ABL revolver. Dole expects the amendments to reduce its interest expense, which totalled $206 million in fiscal 2009, extend its maturities, and provide for the redemption of the remaining $70 million principal amount on its 8.875% senior unsecured notes due March 15, 2011. Post the redemption of the 2011 notes, Dole's nearest maturity is $155 million of 8.75% senior unsecured notes due July 15, 2013. The 'RR1' rating on Dole's secured bank debt reflects the fact that recovery prospects on this debt will remain outstanding at 91%-100%, irrespective of proposed amendments to these facilities. The 'RR3' rating on the company's third-lien secured notes indicates good recovery prospects of 51%-70%. And finally, the 'RR6' rating on Dole's senior unsecured debt reflects Fitch's belief that recovery would be below 10% if there were an event of default. Recovery prospects for Dole's third-lien and unsecured notes could improve with continued debt reduction. Liquidity: For the latest 12-month period ended Oct. 10, 2009, Dole generated $277 million of free cash flow (defined as cash flow from operations less capital expenditures and dividends). Although Dole's FCF could modestly exceed this level for fiscal 2009, Fitch does not expect FCF generation to remain at current high levels in fiscal 2010, given that significant improvements in working capital are not likely to be sustained. Nonetheless, liquidity is expected to remain adequate in the near term. At Jan. 2, 2010, Dole's cash balance was $120 million. Availability, reduced by letters of credit, on its $350 million ABL revolver was $238.5 million at Oct. 10, 2009. The company had no outstanding borrowings on its revolver at Jan. 2, 2010. Dole's existing ABL matures on April 12, 2011, and as of Oct. 10, 2009, had a borrowing base of $330.1 million. Covenants: Financial covenants for the ABL revolver include a springing fixed charge coverage ratio of 1.0x should availability under the revolver fall below $35 million and a maximum senior secured leverage ratio of 3.75x. Dole's existing secured term loans subject the company to a maximum first priority senior secured leverage ratio of 3.0x beginning Jan. 2, 2010, stepping down to 2.75x at June 18, 2011 and to 2.5x at June 16, 2012. Dole reported that its first priority senior secured leverage ratio was less than 2.05x at Oct. 10, 2009. Fitch estimates that EBITDA would have to fall by more than 40% to breach this covenant, assuming approximately $739 million of first priority debt. DURA AUTOMOTIVE: Reveals New Management Structure ------------------------------------------------- DURA Automotive Systems, LLC disclosed new management appointments. These appointments result from the previously- announced acquisition of a majority interest in DURA by affiliates of Patriarch Partners, LLC and the planned integration of Global Automotive Systems, another Patriarch-affiliated company, with DURA. Timothy D. Leuliette becomes executive chairman of DURA and a managing director at Patriarch. In the role of executive chairman, Leuliette, who had been chairman, president and CEO, will continue to provide oversight to the company. As a managing director at Patriarch, he will be responsible for various Patriarch business interests, including DURA. "We have a solid management team and strategic vision that make DURA a lean, globally-competitive supplier that continues to provide high-quality products and technologies to our customers," Leuliette said. "Our transaction with Patriarch and our new management structure position DURA well for future growth." Torben H. von Staden, current president and CEO of GAS, becomes president and CEO of DURA. von Staden will report to Leuliette. These management team members also will report to Leuliette: Jeffrey M. Stafeil, executive vice president and chief financial officer Theresa L. Skotak, executive vice president and chief administrative officer Jim Gregory, executive vice president, Corporate Development These management team members will report to von Staden: Tom Chambers, executive vice president and chief operating officer Francois Stouvenot, executive vice president, Sales Rob Deni, executive vice president, Procurement & Logistics Avinoam Heller, executive vice president, Specialty Products DURA disclosed that recapitalization and restructuring transaction with Patriarch on December 10, 2009. Under that agreement, Patriarch said it would invest up to $125 million of capital and take a controlling stake in DURA. The closing of this transaction on January 21, 2010, completed the transformation of DURA, a company that emerged from Chapter 11 bankruptcy protection in June, 2008, into an automotive supplier with a strong balance sheet, industry-leading intellectual property and a broad low-cost global presence. With the integration of GAS, DURA will have sales of $1.6 billion and 10,800 employees in 39 manufacturing operations in 16 countries. DURA is a leading independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural components, structural door modules and exterior trim systems for the global automotive industry. "We believe that, together, these two companies create a launching pad for tremendous growth as long term partners to the industry OEMs. The combined management teams provide a depth and breadth of talent that has exceeded all our expectations. We are excited to watch the platform flourish" said Lynn Tilton, Chief Executive Officer of Patriarch Partners. About DURA Automotive DURA Automotive Systems, Inc. -- http://www.DURAauto.com/-- is a independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. DURA markets its automotive products to every North American, Asian and European original equipment manufacturer (OEM) and to many leading Tier 1 automotive suppliers. DURA is headquartered in Rochester Hills, Mich. It had sales of US$1.75 billion in 2008 and has 9,800 employees in 33 manufacturing operations in 16 countries. The Debtors filed for chapter 11 petition on Oct. 30, 2006, (Bankr. D. Del. Case No. 06-11202). On April 3, 2008, the Court approved the Debtors' revised Disclosure Statement explaining their revised Chapter 11 plan of reorganization. On June 27, 2008, the Debtors emerged from Chapter 11 bankruptcy protection. EASTMAN KODAK: Launches Cash Tender Offer for 7.25% Senior Notes ---------------------------------------------------------------- Eastman Kodak Company has commenced a tender offer to purchase for cash up to $100 million aggregate principal amount of its outstanding 7.25% Senior Notes due 2013. The tender offer is being made pursuant to an Offer to Purchase dated February 3, 2010, and a related Letter of Transmittal. Kodak is making the Tender Offer at this time in light of recently improved conditions in the debt markets that may allow the company to extend the maturity of its existing debt, thereby further improving its capital structure. Upon the terms and subject to the conditions described in the Tender Offer, including any amendments or supplements thereto, Kodak offers to purchase for cash up to $100 million in aggregate principal amount of its 2013 Notes. Kodak reserves the right to increase the Maximum Tender Amount subject to compliance with applicable law. The Tender Offer will expire at 9:00 a.m., New York City time, on March 4, 2010, unless extended or earlier terminated. Titles CUSIP Principal Maximum of Number Amount Tender Security Outstanding Amount 7.25% Senior 277461BDO $500,000,000 $100,000,000 Notes due 2013 Dollars per $1,000 Principal Amount of Securities Tender Amount of Total Offer Securities Consideration Consideration $910.0 $40.00 $950.00 (1) The Total Consideration includes the Early Tender Premium and is payable only to holders of 2013 Notes validly tendered (and not validly withdrawn) on or prior to 5:00 p.m., New York City time, on February 11, 2010, and accepted for payment. Kodak's obligation to accept for payment and to pay for the 2013 Notes in the Tender Offer is subject to the satisfaction or waiver of a number of conditions, including the raising of not less than $100 million of second lien debt on terms reasonably satisfactory to it in order to finance the Tender Offer. The Tender Offer is subject to other customary conditions that are described more fully in the Offer to Purchase. The Tender Offer is not contingent upon the tender of any minimum principal amount of 2013 Notes. Kodak reserves the right to waive any one or more of the conditions at any time. The consideration for each $1,000 principal amount of 2013 Notes validly tendered (and not validly withdrawn) and accepted for purchase pursuant to the Tender Offer will be the consideration set forth in the table above under "Tender Offer Consideration." Holders of 2013 Notes that are validly tendered at or prior to the Early Tender Date and accepted for purchase will receive the Tender Offer Consideration plus the amount set forth in the table above under "Early Tender Premium." Holders of 2013 Notes tendered after the Early Tender Date, but before the Expiration Date, and accepted for purchase will receive the Tender Offer Consideration, but not the Early Tender Premium. The "Settlement Date" will occur promptly after the company accepts the 2013 Notes for purchase. Kodak anticipates that the Settlement Date will occur on the same business day as the Acceptance Date. Payments for 2013 Notes purchased will include accrued and unpaid interest from and including the last interest payment date up to, but not including, the Settlement Date. If the aggregate principal amount of 2013 Notes validly tendered exceeds the Maximum Tender Amount, the amount of 2013 Notes purchased will be prorated based on the aggregate principal amount of 2013 Notes tendered, rounded down to the nearest integral multiple of $1,000. Tenders of the 2013 Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on February 11, 2010, but may not be withdrawn thereafter. Kodak has retained Citi to serve as dealer manager for the Tender Offer. The Bank of New York Mellon has been retained to serve as the depositary, and Georgeson, Inc. has been retained to serve as the information agent. For additional information regarding the terms of the Tender Offer, please contact Citi at (800) 558-3745 (toll free) or (212) 723-6106 (collect). Requests for documents and questions regarding the tender of 2013 Notes may be directed to Georgeson, Inc. at (800) 248-7605 (toll free) or (212) 440-9800 (collect). Copies of the Offer to Purchase and the Letter of Transmittal may be obtained at no charge from Georgeson, Inc. About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Company (NYSE:EK) -- http://www.kodak.com/-- provides imaging technology products and services to the photographic and graphic communications markets. Kodak'S balance sheet at June 30, 2009, showed total assets of $7,106,000,000 and total liabilities of $7,215,000,000, resulting in shareholders' deficit attributable to Kodak of $112,000,000. The Troubled Company Reporter on September 22, 2009, said Fitch Ratings affirmed Kodak's Issuer Default Rating at 'B-'; Senior secured revolving credit facility at 'BB-/RR1'; and Senior unsecured debt at 'B-/RR4'. On Sept. 18, 2009, Standard & Poor's Ratings Services revised its recovery rating on Eastman Kodak's senior unsecured debt to '6', indicating S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default, from '5'. S&P lowered the issue- level rating to 'CCC' (two notches lower than the 'B-' corporate credit rating on the company) from 'CCC+', in accordance with S&P's notching criteria for a '6' recovery rating. ESTATE FINANCIAL: Court to Consider Construction Loan on March 29 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California will consider at a hearing on March 29, 2010, at 1:00 p.m., a motion by Thomas P. Jeremiassen, Chapter 11 trustee for Estate Financial, Inc., to obtain financing to complete construction on certain properties. The EFI Trustee related that real estate experts informed him that the properties will likely sell more quickly and for more money in the summer. The EFI Trustee added that if the financing motion is not heard until April 23, 2010, at least a portion of the summer selling season will likely be lost as construction is anticipated to take between two and four months. Estate Financial, Inc. -- http://www.estatefinancial.com/-- is a California corporation that had been a license real estate brokerage firm since the later 1980's. EFI solicited funding for, and arranged and made, loans secured by various real property. EFI also was the sole manager of Estate Financial Mortgage Fund LLC (EFMF), a California limited liability company that was organized for the purpose of investing in and funding loans originated by EFI which were secured by first deeds of trust encumbering commercial and real estate located primarily in California and has been funding such mortgage loans since 2002. Five creditors of EFI filed an involuntary Chapter 11 petition against the real estate broker on June 25, 2008 (Bankr. C.D. Calif. Case Number 08-11457). Estate Financial Inc. consented to the bankruptcy filing on July 16, 2008. Robert B. Orgel, Esq., at Pachulski Stang Ziehl & Jones LLP, and William C. Beall, Esq., at Beall and Burkhardt, represent the Debtor as counsel. A Chapter 11 trustee, Thomas P. Jeremiassen, was appointed by the Court on July 23, 2008. Robyn B. Sokol, Esq., and Steven T. Gubner, Esq., at Ezra Brutzkus & Gubner, represent the official committee of unsecured creditors as counsel. In its schedules, Estate Financial listed total assets of $27,428,550, and total debts of $7,316,755. ESTATE FINANCIAL: Court OKs Sale of Interest in Sanger, CA Asset ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized Thomas P. Jeremiassen, Chapter 11 trustee for Estate Financial, Inc., to: -- sell interests in real property located at 2886 Casty Court, Sanger, California, free and clear of liens or interests; -- pay closing costs including brokerage commissions; -- reimburse prepetition and postpetition advances; and -- dispose or distribute balance of proceeds. Estate Financial, Inc. -- http://www.estatefinancial.com/-- is a California corporation that had been a license real estate brokerage firm since the later 1980's. EFI solicited funding for, and arranged and made, loans secured by various real property. EFI also was the sole manager of Estate Financial Mortgage Fund LLC (EFMF), a California limited liability company that was organized for the purpose of investing in and funding loans originated by EFI which were secured by first deeds of trust encumbering commercial and real estate located primarily in California and has been funding such mortgage loans since 2002. Five creditors of EFI filed an involuntary Chapter 11 petition against the real estate broker on June 25, 2008 (Bankr. C.D. Calif. Case Number 08-11457). Estate Financial Inc. consented to the bankruptcy filing on July 16, 2008. Robert B. Orgel, Esq., at Pachulski Stang Ziehl & Jones LLP, and William C. Beall, Esq., at Beall and Burkhardt, represent the Debtor as counsel. A Chapter 11 trustee, Thomas P. Jeremiassen, was appointed by the Court on July 23, 2008. Robyn B. Sokol, Esq., and Steven T. Gubner, Esq., at Ezra Brutzkus & Gubner, represent the official committee of unsecured creditors as counsel. In its schedules, Estate Financial listed total assets of $27,428,550, and total debts of $7,316,755. F&M BANK-IOWA: Fitch Puts 'B-/B' Rating on Positive Watch --------------------------------------------------------- Fitch Ratings has placed the ratings for F&M Bank-Iowa (rated 'B- /B' by Fitch), bank subsidiary of Citizens Republic Bancorp, Inc., on Rating Watch Positive. Fitch's rating action follows CRBC's announcement of an agreement to sell F&M Bank-Iowa to Great Western Bank of Sioux Falls, South Dakota, a wholly owned U.S. subsidiary of National Australia Bank (rated 'AA/F1+' by Fitch) for $50 million in cash. CRBC expects the transaction to close during the second quarter of 2010, subject to the required regulatory approvals. Fitch's rating actions are the result of a very focused review of Fitch's 'Master Global Financial Institutions Criteria' dated Dec. 29, 2009, due to the announcement of a pending sale of F&M Bank-Iowa to a subsidiary of a highly rated issuer. Citizens Republic Bancorp, Inc. is an $11.9 billion bank holding company headquartered in Flint, MI that operates 229 offices and 267 ATMs in the Midwest. It serves markets in Michigan, Ohio, Wisconsin, and Indiana as Citizens Bank, and operates F&M Bank in Iowa. CB Wealth Management, National Association is a limited- purpose trust charter. Fitch has placed these ratings on Rating Watch Positive: F&M Bank-Iowa -- Long-term deposits 'B/RR3'; -- Long-term Issuer Default Rating 'B-'; -- Short-term deposits 'B'; -- Short-term IDR 'B'; -- Individual 'D/E'; -- Support '5'; -- Support floor 'NF'. FAIRFIELD RESIDENTIAL: Court Sets March 15 as Claims Bar Date ------------------------------------------------------------- Judge Brendan Shannon at a hearing in Wilmington, Delaware, has established March 15, 2010, at 5:00 p.m. as deadline for interested parties holding a prepetition claim against Fairfield Residential LLC or its debtor-affiliates, to file a proof of claim. The Court set June 11, 2010, at 5:00 p.m. as deadline for governmental units to file a proof of claim. San Diego, California-based Fairfield Residential LLC is a fully integrated multifamily housing company that through its various subsidiaries provides a diverse mix of services to a wide range of investors, joint venture partners and clients. FFR either directly or indirectly acts as a general partner or managing member of, and owns varying stakes in, a number of project level operating companies. The Company and its affiliates -- FF Development, Inc., et al. -- filed for Chapter 11 bankruptcy protection on December 13, 2009 (Bankr. D. Delaware Case No. 09-14378). Daniel J. DeFranceschi, Esq.; Lee E. Kaufman, Esq.; Paul Noble Heath, Esq.; and Travis A. McRoberts, Esq., at Richards, Layton & Finger, P.A., assist the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Brett H. Miller, Esq., Stefan W. Engelhardt, Esq., and Melissa A. Hager, Esq., at Morrison & Foerster LLP; and William E. Chipman Jr., Esq., Kerri K. Mumford, Esq., and Kimberly A. Brown, Esq., at Landis Rath & Cobb LLP. Fairfield Residential listed $100,000,001 to $500,000,000 in assets and more than $1,000,000,000 in liabilities. Dow Jones says Fairfield listed assets worth $958 million and liabilities of nearly $835 million. FAIRPOINT COMMUNICATIONS: Strikes Deal Over Union Contracts ----------------------------------------------------------- Law360 reports that FairPoint Communications Inc. has reached a tentative agreement with its union workers to defer wage increases and extend their contracts another year as the company works its way through Chapter 11. 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) FIRSTGOLD CORP: Section 341(a) Meeting Scheduled for March 1 ------------------------------------------------------------ The U.S. Trustee for Region 17 will convene a meeting of creditors in Firstgold Corp.'s Chapter 11 case on March 1, 2010, at 2:00 p.m. The meeting will be held at 300 Booth Street, Room 2110, Reno, NV 89509. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Lovelock, Nevada-based Firstgold Corp. filed for Chapter 11 bankruptcy protection on January 27, 2010 (Bankr. D. Nev. Case No. 10-50215). Stephen R. Harris, Esq., at Belding, Harris & Petroni, Ltd, assists the Company in its restructuring effort. The Company has assets of $17,957,805, and total debts of $26,981,427. FLEETWOOD ENTERPRISES: Heartland RV Acquires Towable Trademarks --------------------------------------------------------------- Heartland Recreational Vehicles, LLC has acquired the remaining active trademarks of the towable brands from Fleetwood Enterprises, Inc. As one of the leading former manufacturers of towable RVs in North America, Fleetwood has some of the most recognized and iconic brands in the industry. "This is an exciting transaction for Heartland. Fleetwood's towable brands have long been among the most widely recognized names in the towable RV segment, with loyal customers and an extensive dealer network. By acquiring the trademarks of Fleetwood's towable products, we will enhance Heartland's brand portfolio with industry leading names such as Prowler, Pioneer and Wilderness," said Brian Brady, CEO of Heartland. Mr. Brady continued, "In the last five years, Heartland has become one of the leading manufacturers of towable RVs and is the third largest manufacturer of fifth wheel RVs in the U.S. Our phenomenal growth and success has given us the financial strength to pursue the acquisition of Fleetwood's legendary trademarks. We would like to thank our dealers and customers for their continued support of Heartland and we look forward to enhancing our industry leadership by continuing to create great products that our customers love." In addition to producing existing Heartland RV brands, the company expects to begin manufacturing towable RVs under the newly acquired brands over the next twelve months. Under the terms of the transaction, Heartland has acquired all active trademarks of the towables RV segment of Fleetwood Enterprises from a bankruptcy proceeding, and Heartland will not assume any liability for warranties or claims relating to existing sold and unsold Fleetwood manufactured products. About Fleetwood Enterprises Based in Riverside, California, Fleetwood Enterprises was the second largest manufactured housing makers in the U.S. and the largest manufacturer of recreational vehicles over 30 feet in length. Fleetwood Enterprises, together with 19 affiliates, filed for Chapter 11 protection on March 10, 2009 (Bankr. C. D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., and Solmaz Kraus, Esq., at Gibson, Dunn & Crutcher LLP, represent the Debtors in their restructuring efforts. FTI Consulting Inc. is the financial advisors to the Debtors. The Debtors tapped Greenhill & Co. LLC as its investment banker. Fleetwood Enterprises listed assets of $560 million against debt totaling $624 million in its bankruptcy petition. Fleetwood sold its RV business in June 2009 for $53 million to private-equity investor American Industrial Partners and was authorized in August to sell the manufactured housing operations for $26.6 million in cash to Cavco Industries Inc. Fleetwood's exclusive period to file a chapter 11 plan expires April 5, 2010. FLEETWOOD ENTERPRISES: Proposes Amended Employee Incentive Program ------------------------------------------------------------------ Fleetwood Enterprises Inc. and its units are presenting to the Bankruptcy Court an amended and restated key employee incentive and retention program. The Amended Incentive Program is intended to supersede the original Key Employee Incentive and Retention Programs approved by the Court in July 2009 and applies only to participants covered by the original program and still employed by the Debtors as of February 1, 2010. The Amended Incentive Program contemplates payments of (a) incentive bonuses to four (4) of the Debtors' officers and two (2) senior non-insider key employees over and above their current salaries, and (b) severance pay to 10 non-insider key employees, all of whom are critical to the successful confirmation of a chapter 11 liquidating plan. The remaining officers participating in the Amended Incentive Program and the amounts of incentive bonus to which they are eligible if a plan is confirmed are: * Andrew Griffiths - $232,000; * Leonard McGill - $190,000; and * James Smith - $23,333 These three officers are also eligible for further discretionary bonuses for producing extraordinary results if the Committee so determines in good faith. Due to the satisfaction of prior performance goals under the Original Incentive Program, James Smith and Michael Shearin are currently entitled to bonuses of $46,666 and $51,450, respectively, subject to the resignation and termination limitations of the Amended Incentive Program. Only Todd Uhlick and Thabita Philip-Guide remain in the Senior Non-Officer group. Both are eligible for an incentive bonus of 8 weeks' salary if a plan is confirmed. Todd and Thabita are already eligible for severance equal to 11 weeks' salary under the Original Incentive Program, subject to the resignation and termination limitations of the Amended Incentive Program. Participants in the Officer Group and the Senior-Non-Officer Group are eligible for bonus and/or severance compensation even if they: (a) resign prior to plan confirmation if (i) 30 days' notice is provided to the Debtors and Committee, and (ii) such resigning participant agrees to provide consulting services at least through confirmation; or (b) are terminated without cause. Only 8 employees in the original group of 32 employees in the "Other Key Employees" group remain. The accruing of one week of salary per month of service postpetition will be capped at eleven months for 11 weeks of severance. Although the Original Incentive Program provided that all severance compensation would be forfeited upon the key employee's resignation, the Amended Incentive Program provides that key employees will now remain eligible for severance compensation if they are terminated without cause or if they resign voluntarily anytime after February 12, 2010, and give 14 days' notice to the Debtors and Committee." A hearing has been scheduled for February 11, 2010, in this matter. About Fleetwood Enterprises Based in Riverside, California, Fleetwood was the second largest manufactured housing makers in the U.S. and the largest manufacturer of recreational vehicles over 30 feet in length. Fleetwood Enterprises listed assets of $560 million against debt totaling $624 million in its bankruptcy petition. Fleetwood Enterprises, together with 19 of affiliates, filed for Chapter 11 protection on March 10, 2009 (Bankr. C. D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., and Solmaz Kraus, Esq., at Gibson, Dunn & Crutcher LLP, represent the Debtors in their restructuring efforts. FTI Consulting Inc. is the financial advisors to the Debtors. The Debtors tapped Greenhill & Co. LLC as its investment banker. Kurtzman Carson Consultants serves as claims and notice agent. Fleetwood sold its RV business in June 2009 for $53 million to private-equity investor American Industrial Partners and was authorized in August to sell the manufactured housing operations for $26.6 million in cash to Cavco Industries Inc. FLEETWOOD ENTERPRISES: Can Use Cash Collateral Until February 8 --------------------------------------------------------------- Fleetwood Enterprises, Inc., and its debtor-affiliates have reached a stipulation with Bank of America, as agent for itself and on behalf of the prepetition secured parties, allowing the Debtors to use the lenders' cash collateral to the earlier of February 8, 2010, and the effective date of a plan of liquidation for Fleetwood. BofA and the prepetition secured parties assert claims against the Debtors in the aggregate amount, as of March 6, 2009, of $61,690,980 in unpaid reimbursement obligations, plus interest and additional sums for reasonable costs and reasonable attorneys' fees, secured by substantially all of the personal property of each of the Debtors. The Bankruptcy Court has approved the Stipulation. Based in Riverside, California, Fleetwood Enterprises, Inc., together with 19 of affiliates, filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., and Solmaz Kraus, Esq., at Gibson, Dunn & Crutcher LLP, represent the Debtors in their restructuring efforts. FTI Consulting Inc. is the financial advisors to the Debtors. The Debtors tapped Greenhill & Co. LLC as its investment banker. FRANKENMUTH INC: Moody's Cuts Ratings on Zehnder's Notes to 'B1' ---------------------------------------------------------------- Moody's downgrades to B1/Speculative Grade from Aaa/VMIG 1 the ratings for the Zehnder's of Frankenmuth, Inc. Finance Program Notes (Variable Rate Series A) (relating to both Installment No. 1 & No. 2). The downgrade is in connection with the mandatory tender on February 1, 2010, due to the expiration of the confirming letter of credit provided by Federal Home Loan Bank of Indianapolis. The confirming letter of credit was issued in confirmation of the Citizens Bank, Michigan letter of credit. The rating is now based on the letter of credit provided by Citizens Bank, Michigan and the structure of the transaction which ensures timely payment of debt service and purchase price to investors. The Citizens Bank, Michigan letter of credit will terminate on February 15, 2011. Citizens Bank, Michigan is rated B1 and NP (Not Prime) for its long-term and short-term obligations. GENERAL GROWTH: Proposes Protocol for Resolving PI Claims --------------------------------------------------------- General Growth Properties Inc. and its units expect that a significant number of pending personal injury claims can be settled short of formal mediation or a hearing. With about 362 non-Debtor affiliate of General Growth Properties, Inc., and 216 Debtors whose Joint Plan of Reorganization has been confirmed, GGP currently utilizes informal dispute resolution mechanisms to reach cost-effective, consensual resolution of personal injury matters for more than two-thirds of GGP. Adam P. Strochak, Esq., at Weil, Gotshal & Manges LLP, in New York, notes that many of about 90 PI Claims involve potential liability against Debtor and non-Debtor GGP entities in a single action or dispute. In this light, the Debtors determine that it would be efficient and cost-effective for their estates and creditors at this stage if they are authorized to resolve PI Claims against all GGP entities, including Debtors, Confirmed Debtors, and non-Debtors alike, pursuant to a uniform process. Accordingly, pursuant to Rule 9019(b) of the Federal Rules of Bankruptcy Procedure, the Debtors ask the Court to enter an order: (i) modifying the Court-approved Dispute Procedures Order, as amended, to eliminate the requirement that the Debtors utilize the Dispute Procedures for all PI Claims not currently subject to the Dispute Procedures, and amend the Dispute Procedures for the PI Claims currently engaged in the Dispute Procedures; (ii) modifying the automatic stay to the extent necessary to allow any litigated PI Claim where a valid proof of claim has been filed to be liquidated in the originating court or a court of appropriate jurisdiction, provided that the PI Claim is not currently engaged in the Dispute Procedures; and (iii) subjecting settlements of all PI Claims to the authority and notice requirements provided in the order approving Settlement Procedures entered on January 20, 2010. Specifically, if the Parties agree to stipulate to stay relief to allow the PI Claim to be liquidated in the originating court or a court with appropriate jurisdiction, the Debtors request authority to enter into those stipulations without the need to file a separate motion, and propose to submit the stipulations to the Court. If the Parties are unable to agree to mediation or litigation of the PI Claim, the automatic stay will be modified to allow the PI Claim to be liquidated in the originating court. To the extent liquidation of a PI Claim results in either a settlement of that PI Claim or a judgment by a court with appropriate jurisdiction, either: (i) the settlement or judgment will have to be satisfied in full or in part from the Debtors' Self-Insured Retention requirement; or (ii) if insurance coverage will be insufficient to cover the entire amount of that settlement or judgment, the personal injury claimant will have an allowed general unsecured claim in these Chapter 11 cases for any amount not paid from insurance. The Allowed Claim will be paid only pursuant to any Chapter 11 plan of reorganization. The Debtors disclose that they have used a third party insurance adjustment firm, TransGlobal Adjusting, to assist in evaluating and processing PI Claims, including conducting settlement conferences and mediations, and intend to continue utilizing these services to promptly and economically resolve pending PI Claims. The Debtors, however, clarify that they do not seek to amend or extinguish the additional authority provided in the Disputed Procedures Order, including, the authority to: * settle past due tenant rent collection actions subject to certain notice requirements; * settle tenant bankruptcy matters subject to certain notice requirements and continue prepetition business practices with respect to tenant bankruptcy matters; and * resolve certain de minimis customer accommodation matters. Debtors Settle Rent Collection Actions In separate notices, the Debtors informed the Court on January 25, 2010, that they entered into two settlements resolving tenant rent collection actions, where the difference between the Debtors' total claim amount and the proposed settlement amount is between $300,000 and $600,000. The parties to the settlements and the difference amounts are: Parties Difference Amount ------- ----------------- Debtor Lincolnshire Commons, LLC $358,140 and Cold Stone Creamery, Inc. Debtor Mall of the Bluffs, LLC $488,350 and Bluffs, BBQ, Co. The Settlement Agreement between Lincolnshire and ColdStone resolves and dismisses the breach of contract action filed by Lincolnshire when Cold Stone defaulted in its obligation to pay rent to Lincolnshire and prematurely terminated the lease agreement between the parties. Similarly, the Settlement Agreement between Mall of the Bluffs and Bluffs BBQ resolves certain lease disputes arising when Bluffs BBQ defaulted in its obligation to pay rent to Mall of the Bluffs over a period of time. Objections, if any, to the Settlement Agreements are due February 3, 2010. If no objections are timely filed, the Settlement Agreements will be deemed unopposed, and their terms be deemed final and binding upon all parties. If objections are timely received, the Settlement Agreements will be heard before the Court. 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: Seeks Approval of UBS as M&A Advisor ---------------------------------------------------- General Growth Properties Inc. and its units seek the Court's authority to employ UBS Securities LLC as their capital markets and merger and acquisition or "M&A" advisor. Thomas H. Nolan, Jr., President and Chief Operating Officer of General Growth Properties, Inc., explains that UBS is engaged to advise and assist GGP in raising exit financing from sources like mutual fund, hedge fund, private equity and other institutional investors who invest in equity and equity linked real estate securities through a process targeted at investors who do not typically participate in Chapter 11 capital raises. UBS is specially situated to pursue capital from REIT Investors, a target investor class whom the Debtors believe will bring significant value regardless of the type of transaction that is ultimately consummated, he says. Specifically, UBS will provide these services as M&A advisor to the Debtors: (a) advise and assist GGP in analyzing, structuring, and negotiating the financial aspects of any Exit Transaction defined as a Financing, M&A Transaction or confirmation of a plan of reorganization, including: (i) evaluating potential Exit Transactions by GGP, (ii) advising and assisting GGP in structuring and effecting the terms of an Exit Transaction for GGP, (iii) advising and assisting GGP in evaluating alternative proposals relating to an Exit Transaction, (iv) advising and assisting GGP in developing and preparing materials to be used in soliciting potential investors for an Exit Transaction, and (v) advising and assisting GGP with raising sources of capital for an Exit Transaction, in each case consistent with its ordinary course of business for transactions of this type; (b) advise and assist GGP in identifying and evaluating third- party candidates as potential purchasers or capital sources for an Exit Transaction, advise GGP in negotiations and on the structure of that Exit Transaction, and assist GGP in the consummation of that Exit Transaction; (c) attend meetings of GGP's board of directors and its committees with respect to matters on which UBS has been engaged to advise GGP; (d) at GGP's request, UBS will undertake a study to enable it to render an opinion with respect to the fairness, from a financial point of view, to GGP or to holders of common stock, of the consideration to be received in an M&A Transaction. If requested, any opinion will be in written form; (e) at GGP's request, (i) advise and assist GGP in identifying potential financing sources and strategies necessary or desirable to consummate a Financing and (ii) advise and assist GGP Company in raising funds for a Financing, in each case as is reasonable and customary for these transactions; and (f) provide testimony in the Debtors' Chapter 11 cases on behalf of GGP with respect to any of the services, if necessary. Pursuant to an Engagement Letter dated December 10, 2009 between the Debtors and UBS, the Debtors may request UBS to assist in potential subsequent underwritten financings, which will be subject to a separate engagement and separate agreement regarding fees and other customary matters. Mr. Nolan discloses that in light of UBS' retention, Miller Buckfire & Co. LLC, the Debtors' financial advisor and investment banker, has agreed to fix its fee at $30,250,000, a reduction of $2,750,000 from it prior maximum fee. Miller Buckfire's new fee structure and certain other matters will be subject to a separate motion to be filed with the Court. UBS intends to charge the Debtors these fees for services rendered: (A) Advisory Fee -- a nonrefundable monthly cash advisory fee payable in advance of $150,000 per month, for the period commencing December 10, 2009 with all payable payments due upon Court approval of the engagement and subsequent payments due on each monthly anniversary thereafter. (B) Opinion Fee -- if requested to deliver an Opinion by GGP, a fee of $3.0 million, payable promptly upon UBS having delivered the Opinion, regardless of the conclusion reached by UBS in the Opinion. The entire amount of the Opinion Fee will be credited against any Completion Fee paid to UBS. (C) Completion Fee -- upon (1) the consummation of a Financing by GGP, (2) the consummation of a sale or M&A transaction of all or substantially all of GGP's assets, or (3) the confirmation of a plan of reorganization of GGP, GGP Limited Partnership, or both, UBS will earn a single fee equal to: -- with respect to a Financing or an M&A Transaction, the greater of: (a) $17,500,000; and (b) if the Common Equity Security Recovery exceeds $1 billion, payments equal in the aggregate, without duplication, to 0.33% of any amount by which the aggregate Common Equity Security Recovery exceeds $1 billion, due and payable on each date that an Equity Recovery is consummated; provided that if more than one Equity Recovery is consummated, the Equity Recovery Fee for each Equity Recovery will be paid only once without duplication and each Equity Recovery Fee paid will be credited against the aggregate Equity Recovery Fees due and payable hereunder. Equity Recovery means any transaction in which there is a Common Equity Security Recovery; -- with respect to a Plan of Reorganization that does not involve a Financing or M&A Transaction, the Equity Recovery Fee; and -- 50% of the Advisory Fee paid to UBS will be credited Against any Completion Fee paid with respect to a Financing or M&A Transaction. But, no part of the Advisory Fee shall be credited against any Completion Fee paid with respect to a Plan of Reorganization that does not involve a Financing or M&A Transaction. The Debtors will reimburse UBS on expenses incurred. The Debtors have agreed to indemnify UBS, two of its affiliates, UBS Financial Services Inc. and UBS AG, together with certain related persons under certain circumstances, from and against certain losses arising out of their engagement by the Debtors in connection with these Chapter 11 cases, other than claims resulting from the willful misconduct or gross negligence of the Indemnified Persons. Steven D. Smith, managing director, the global head of Leveraged Finance and the global head of Restructuring for UBS Securities, disclosed that his firm had previously or currently has business connections with parties in matters unrelated to the Debtors' Chapter 11 cases, a list of which is available for free at: http://bankrupt.com/misc/ggp_UBSClients.pdf Mr. Smith maintains that UBS is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About General Growth Properties Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Wants April 26 Plan Exclusivity Extension --------------------------------------------------------- General Growth Properties, Inc., and its debtor affiliates ask Judge Allan L. Gropper of the United States Bankruptcy Court for the Southern District of New York to extend their exclusive periods to: (i) file a Chapter 11 plan to August 26, 2010; and (ii) solicit acceptances to that plan on October 26, 2010. The Debtors' exclusive period to file a Chapter 11 plan will expire on February 26, while their exclusive period to solicit acceptances to that plan will expire on April 23. The Debtors believe that an extension of exclusive periods under Section 1121(d) of the Bankruptcy Code will enable them to continue to pursue several objectives necessary for their exit from bankruptcy. The Debtors relate that they have consensually restructured more than $11.6 billion of mortgage debt with respect to 111 loans. The terms of this restructuring secured an average loan maturity extension of five years from January 1, 2010, at a fixed average interest rate of 5.37% as set forth in the Joint Plan of Reorganization that the Court confirmed as to 216 Debtors and provided 100% payout to unsecured creditors and preserved equity value. As of January 27, 2010, GGP closed 83 modified loans, representing about $9.9 billion of secured and now restructured debt and emerged 189 Debtors from Chapter 11. Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, discloses that General Growth expects to close the remaining loans for Debtors subject to the Confirmed Plan in the near future. GGP has about 12 property-level loans remaining to be resolved, aggregating about $3.3 billion, he says. Moreover, GGP's stock now trades at about $9.50 per share with an overall equity market capitalization of about $3.0 billion. Most of the $7 billion of debt held by GGP, GGP Limited Partnership, GGPLP LLC, The Rouse Company LP, and a number of parent holding companies, collectively known as TopCo, trades close to or even above par, he adds. GGP believes that it has achieved substantial progress with respect to the first phase of its restructuring strategy and is now poised to begin the second phase -- resolving the TopCo capital structure while maximizing value for all stakeholders, Mr. Holtzer says. To that end, GGP intends to explore all potential alternatives, including a standalone restructuring, which will include an evaluation of traditional and non- traditional forms of exit financing or capital, as well as potential merger and acquisition or other change of control transactions with financial and strategic investors, he discloses. GGP expects to deliver its business plan to the Official Committee of Unsecured Creditors and Official Committee of Equity Security Holders on or about February 15, 2010. GGP has determined that a successful standalone restructuring will require new capital, Mr. Holtzer states. GGP thus engaged UBS Securities LLC as an additional financial advisor to assist in, among others, raising exit capital from sources like mutual fund, hedge fund, private equity, and other institutional investors in equity and equity-linked real estate securities that do not traditionally participate in Chapter 11 capital raises. GGP and its advisors expect to launch this process in late February or early March 2010, contemporaneous with the filing of GGP's year-end report to the U.S. Securities and Exchange Commission. Mr. Holtzer explains that it will take about six months to pursue and finalize the choice of transaction and file a plan. This timeline includes about three months for the capital raise process and to explore the possibility of an M&A or other change in control transaction, he says. GGP will use the additional three months for evaluating, negotiating, and preparing a plan of reorganization and disclosure statement, he adds. Mr. Holtzer points out to these good faith progresses the Debtors made towards reorganization in their Chapter 11 cases: (1) The Debtors devoted significant attention to defending against the motions to dismiss Chapter 11 cases of certain Debtors filed by several property-level secured debt lenders against certain property-level debtors. Litigation of these issues required the sustained focus of the Debtors' management and professionals. On August 11, 2009, the Court entered an order denying the motions to dismiss. (2) The Debtors continue to work diligently on a number of time-consuming tasks necessary to the administration of their Chapter 11 cases. Indeed, the Debtors have spent a considerable amount of time addressing and obtaining relief with respect to a variety of postpetition operational matters. These matters include, establishing procedures for addressing tenant obligations; alternative dispute resolution; settlement of prepetition mechanics' liens; and de minimus asset sales, obtaining authority to enter into certain transactions with department store owners, and developing and obtaining authority to enter into a key employee incentive program. Moreover, the Debtors worked on preparing their schedules of assets and liabilities and statements of financial affairs. The Debtors have also been analyzing and determining the outstanding claims with respect to their tens of thousands of executory contracts and unexpired leases. The Debtors and their professionals continue to review and address issues related to about 9,400 proofs of claim filed in these Chapter 11 cases. (3) The Debtors have maintained an operational focus with respect to running their properties on a day-to-day basis. Since the Petition Date, the Debtors have executed thousands of lease documents, maintained occupancy at their malls, and operated their properties so that the restructuring process is invisible to consumers. Moreover, the Debtors continue to concentrate on building long-term enterprise value. These efforts include the reinvestment of capital in their properties, streamlining of operations, addition of new board members to GGP, completion of new department store agreements, and substantial progress towards obtaining the approval of municipalities for future development projects, a process that can take years. Moreover, GGP successfully completed an out-of-court restructuring of about $155 million in secured property level debt, with a four- year maturity extension at the contract rate of interest, at Carolina Place L.L.C, a non-Debtor joint venture. (4) The Debtors effectively executed the first phase of their restructuring strategy by substantially resolving the property-level secured mortgage debt. The Debtors have already closed 83 modified loans, representing approximately $9.9 billion of secured debt, and emerged 189 Debtors from bankruptcy. The Debtors continue to engage in extensive negotiations with their secured lenders to consensually resolve their remaining property- level debt. If an agreement is not reached, the Debtors are prepared to move forward with nonconsensual plans of reorganization as rapidly as possible. Despite the progress made thus far in the Debtors' Chapter 11 cases, unresolved contingencies still exist, including the reorganization of TopCo, Mr. Holtzer points out. He insists that the Debtors' reorganization strategy is deliberate and complex, and involves multiple phases and requires requires additional time to reach fruition. Thus, an extension of the Exclusive Periods, he says, will facilitate an orderly, efficient and cost- effective plan process for the benefit of all creditors and equity holders. Indeed, TopCo has a number of large creditors with disparate interests and the Debtors are best positioned to reconcile these interests and create a plan of reorganization that maximizes values for all stakeholders, he insists. Termination of the Exclusive Periods, on the other hand, could give rise to, among others, an unfocused process for the capital raise and M&A alternative, the threat of multiple plans and a contentious confirmation process, and an increase in the cost and length of these Chapter 11 cases, he tells the Court. Mr. Holtzer assures the Court that the Debtors have sufficient liquidity and are paying their bills as they come due. He further clarifies that the requested extension of the Exclusive Periods is neither an attempt to pressure creditors to accede to the Debtors' demands nor a negotiation tactic. Throughout their Chapter 11 cases, the Debtors have been diligent in their efforts to keep creditors and other parties in interest apprised and informed of all developments, he says. To that end, the Debtors propose a case status conference in May 2010 to update the Court and parties-in-interest as to their progress. Mr. Holtzer discloses that the Equity Committee supports the Debtors' sought extension while the Debtors are still discussing the sought extension with the Creditors' Committee. The Court will consider the Debtors' request on February 22, 2010. Objections are due February 17. 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: NY Town Objects to Old GM's Mediation Plan ---------------------------------------------------------- The town of Salina, N.Y., is opposing a move by the bankrupt remnant of General Motors Corp. to resolve unliquidated claims filed against it in mediation, arguing that the alternative dispute forum is not the right place for the town's claims for more than $41 million in environmental cleanup costs, 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) GETTY IMAGES: Moody's Affirms Corporate Family Rating at 'Ba2' -------------------------------------------------------------- Moody's Investors Service affirmed Getty Images, Inc.'s Ba2 corporate family rating and secured debt ratings. The outlook remains stable. Moody's remain concerned by deterioration in performance and credit metrics despite the contribution of recently acquired Jupiterimages but expect performance will improve over the next year. The current credit metrics are more reflective of a Ba3 or lower rated business services company but are expected to return to levels more appropriate for a Ba2 as the economy improves and the company focuses on continued debt reduction. Getty Images Inc. is a leading global provider of stock imagery for the business community. Revenues and adjusted EBITDA for the twelve-month period ended September 30, 2009 were $794 million and $253 million, respectively. The company is headquartered in Seattle, Washington. GOODYEAR TIRE: S&P Assigns 'B+' Rating on New Senior Notes ---------------------------------------------------------- Standard & Poor's Ratings Services said it has assigned its 'B+' issue-level rating to The Goodyear Tire & Rubber Co.'s new senior unsecured notes of up to $702 million due 2020 being issued to exchange with $650 million of 7.857% notes (rated 'B+') outstanding that are due 2011. At the same time, S&P assigned its recovery rating of '5', indicating its expectation that lenders will receive modest recovery (10% to 30%) in the event of a default to the 2020 notes. The purpose of the exchange offer is to extend the maturity date of some of its indebtedness that is due in 2011. All of Goodyear's senior unsecured notes, including these notes, are pari passu with respect to right of payment. Whereas the old notes are not guaranteed by any of the company's subsidiaries, the new notes will be jointly and severally guaranteed on a senior unsecured basis by certain subsidiaries. The rating on Akron, Ohio-based Goodyear reflects the company's high leverage and the ongoing weakness in tire demand in both the replacement and original equipment markets. Ratings List Goodyear Tire & Rubber Co. (The) Corporate credit rating BB-/Negative/-- New Rating Goodyear Tire & Rubber Co. (The) Sr nts due 08/15/2020 B+ Recovery Rating 5 GULFSTREAM CRANE: Gets Final OK to Access Lenders' Cash Collateral ------------------------------------------------------------------ The Hon. Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida, in a final order, Gulfstream Crane, LLC, to access the cash collateral. The Debtor would use the money to fund its Chapter 11 case, pay suppliers and other parties. The lenders consented to the Debtor's access to the cash collateral, provided that: -- it will not use, sell, or expend, directly or indirectly, the cash collateral of Bank Midwest or any other lender who may claim an interest in cash collateral, except upon the terms and conditions set in the final order; -- the use of cash collateral will be for the funding of ordinary and necessary expenses, subject to a 10% variance, well as to pay any fees to the Office of the U.S. Trustee; -- no payments will be made to any members of the Debtor or any professional employed by the Debtor; -- it will not make any prepayments on any expense except in the ordinary course of its business; -- during the use period, the Debtor will furnish to any of the lenders who requests a copy in writing with a line item description of any variances; -- each lender is granted continuing liens and security interests in all property of the Debtor with the same validity and priority as existed prior to the petition date; and -- the cash collateral use will terminate on the occurrence of an event of default or a termination event. 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. HARBORWALK LP: Wants to Obtain DIP Financing From Klein Equities ---------------------------------------------------------------- Harborwalk, LP, et al., seek authority from the U.S. Bankruptcy Court for the Southern District of Texas to obtain postpetition secured financing from Klein Equities, LLC. The DIP lender has committed to provide up to $2.5 million. In the interim between the Petition Date and the final hearing on the DIP Motion, the Debtors are requesting sufficient financing to pay for bankruptcy related costs and expenses as set forth in the budget in an amount estimated not to exceed $540,000. A copy of the budget is available for free at: http://bankrupt.com/misc/HARBORWALK_budget.pdf Marcy E. Kurtz, Esq., at Bracewell & Giuliani LLP, the attorney for the Debtors, explains that the Debtors need the money to fund operating and development expenses, capital expenditures, current interest and fees on the DIP loan, the expenses of the administration of the Chapter 11 case, and similar costs, solely in accordance with the operating budget. The Debtors propose to grant the DIP Lender valid, binding, continuing, enforceable, fully perfected first priority security interests in and liens on the collateral that isn't subject to any pre-petition lien. The DIP facility will mature six months from the Chapter 11 petition date. The DIP facility will incur interest at 12.5% per annum. After the occurrence and during the continuance of an event of default, interest of the DIP loan will bear interest at a rate equal to 17.5% per annum or the maximum rate allowed by law, whichever is less. Interest will be payable monthly on the first day of each month. The DIP lien is subject to a carve out for U.S. Trustee and Clerk of Court fees; up to $100,000 in fees payable to professional employed in the Debtors' case; and fees of the committee in pursuing actions challenging the DIP Lender's lien. The Debtors will pay DIP Lender a facility fee equal to 1-1/2% of the outstanding commitment (the commitment at any one time outstanding not to exceed $2,500,000). The Debtors will also pay the DIP Lender an unused commitment fee equal to four-tenths of 1% per month of the amount by which the average daily commitment during a period for which payment is made exceeds the average daily outstanding principal amount of the DIP loan during the period. A copy of the DIP financing agreement is available for free at: http://bankrupt.com/misc/HARBORWALK_dipfinancingpact.pdf HAWKEYE RENEWABLES: Gets Final OK to Use Lenders' Cash Collateral ----------------------------------------------------------------- The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware, in a final order, authorized Hawkeye Renewables, LLC and its affiliates to access cash collateral of their prepetition senior lenders. The parties with interests in cash collateral are (a) Credit Suisse, as administrative and collateral agent under that certain first lien credit agreement, dated as of June 30, 2006, among Intermediate, THL-Hawkeye Acquisition LLC, the first lien agent, and the lenders; and (b) Wilmington Trust FSB, as administrative and collateral agent under a second lien credit agreement, dated as of June 30, 2006, among Intermediate, THL-Hawkeye Acquisition LLC, the second lien agent, and the lenders party thereto. As of the Chapter 11 petition date, the Debtors' owe the first lien secured parties: a. $533,543,500 on account of outstanding term loans and revolving loans made under the first lien credit agreement plus accrued and unpaid interest thereon; b. $11,191,466 on account of obligations arising from the termination of certain hedging agreements plus accrued and unpaid interest thereon; and c. unpaid fees, expenses, and charges. As of the petition date, the Debtors owe the second lien secured parties $150,000,000 on account of outstanding term loans made under the second lien credit agreement, plus accrued and unpaid interests. The Debtors would use the money to fund their 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, the Debtors will grant prepetition agents, on behalf of the prepetition senior lenders, (a) adequate protection reimbursement claims, (b) adequate protection liens, and (c) superpriority claims. Ames, Iowa-based Hawkeye Renewables, LLC -- dba Iowa Falls Ethanol Plant, LLC -- filed for Chapter 11 bankruptcy protection on December 21, 2009 (Bankr. D. Delaware Case No. 09-14461). L. Katherine Good, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., assist the Company in its restructuring effort. Blackstone Advisory Partners, LP, is the Company's financial advisor. Epiq Bankruptcy Solutions, LLC, is the Company's claims agent. The Company listed $100,000,001 to $500,000,000 in assets and $500,000,001 to $1,000,000,000 in liabilities. HAWKEYE RENEWABLES: Taps Weil Gotshal as Bankruptcy Counsel ----------------------------------------------------------- Hawkeye Renewables, LLC, et al. ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Weil, Gotshal & Manges LLP as counsel. WG&M will, among other things: -- take all necessary or appropriate actions to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; -- prepare on behalf of the Debtors, as debtor-in-possession, all necessary applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates; and -- take all necessary actions in connection with the prepackaged plan and disclosure statement and all related documents, and further actions as may be required in connection with the administration of the Debtors' estates. In a separate motion, the Debtors ask the Court to approve the employment of Richards, Layton & Finger, P.A. as co-counsel to the Debtors; Blackstone Advisory Partners, L.P., as financial advisor; and Epiq Bankruptcy Solutions, LLC as claims and noticing agent. WG&M intends to monitor and coordinate with other professionals retained in the Chapter 11 cases to prevent duplication of efforts. Michael F. Walsh, an attorney at WG&M, tells the Court that WG&M received a retainer fee and advance against expenses for services to be performed in relation to the Chapter 11 cases. As of the petition date, the retainer balance was $527,952. The precise amount of expenses incurred prior to the petition date will be determined on the final submission of all expenses. Mr. Walsh assures the Court that WG&M is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Walsh can be reached at: Weil, Gotshal & Manges LLP 767 5th Avenue New York, NY 10153-0119 Tel: +1 212 310 8197 Fax: +1 212 310 8007 Ames, Iowa-based Hawkeye Renewables, LLC -- dba Iowa Falls Ethanol Plant, LLC -- filed for Chapter 11 bankruptcy protection on December 21, 2009 (Bankr. D. Delaware Case No. 09-14461). L. Katherine Good, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., assist the Company in its restructuring effort. Blackstone Advisory Partners, LP, is the Company's financial advisor. Epiq Bankruptcy Solutions, LLC, is the Company's claims agent. The Company listed $100,000,001 to $500,000,000 in assets and $500,000,001 to $1,000,000,000 in liabilities. HEXION SPECIALTY: S&P Raises Corporate Credit Rating to 'B-' ------------------------------------------------------------ Standard & Poor's Ratings Services said that it raised its ratings, including its corporate credit rating to 'B-' from 'CCC+', on Columbus, Ohio-based Hexion Specialty Chemicals Inc. S&P removed the ratings from CreditWatch with positive implications, where they were placed on Jan. 14, 2010, following the company's announcement of its proposed financing plan. The outlook is stable. "The upgrade reflects an improvement in credit quality following the successful completion of Hexion's financing transaction including amendments to its senior secured credit facilities, and S&P's expectation that an ongoing trend of improving operating results will continue into 2010," said Standard & Poor's credit analyst Paul Kurias. The completion of the financing transaction addresses two key issues of concern: very thin EBITDA cushions under the company's financial covenant, and very high debt maturities in 2013. Cushions under the company's senior secured leverage ratio are expected to improve, following the repayment of approximately $800 million of a first-lien senior secured term loan (which is considered as debt under the covenant ratio) using proceeds from $1 billion in second-lien notes (which are not considered for the covenant ratio). The refinancing also improves the company's debt maturity schedule significantly by extending maturities beyond the near-term. S&P raised its issue-level ratings on the company's first-lien senior secured facilities to 'B-' from 'CCC+'. The recovery ratings on these facilities are revised to '3', which indicates S&P's expectation for meaningful recovery (50%-70%) in the event of a payment default, from '4'. The senior secured facilities consist of a $225 million revolving credit facility, a $2.3 billion term loan, and a $50 million synthetic letter of credit facility. The company had approximately $1.5 billion outstanding under its term loans, as of Sept. 30, 2009, pro forma for a January 2010 paydown of the term loan using proceeds from a recently completed $1 billion senior secured note issue. S&P also raised its issue-level ratings on the company's second- lien notes ($653 million in aggregate) to 'CCC+' from 'CCC', and the issue-level ratings on the company's unsecured debentures to 'CCC+' from 'D'. The unsecured debentures were lowered to 'D' in August 2009, following a buyback of a portion of debentures, which S&P considered a distressed exchange. The recovery ratings on these notes and debentures remain at '5', indicating S&P's expectation for modest recovery (10%-30%) in the event of a payment default. The issue-level rating on the company's recent $200 million first- lien revolving loan commitment, which is effective when the current $225 million revolving credit facility matures in May 2011 remains at 'B-', with a '3' recovery rating. The issue-level rating on the company's $951 million extended term loan is also 'B-' with a '3' recovery rating. The company recently extended the maturity on $951 million of its $2.3 billion term loan to 2015 from 2013. The '3' recovery ratings indicate S&P's expectation for meaningful recovery (50%-70%) in the event of a payment default. The issue-level rating on the company's $1 billion second-lien notes is 'CCC+' with a '5' recovery rating. The '5' recovery rating indicates S&P's expectation for modest recovery (10%-30%) in the event of a payment default. The issuers on the notes, which Hexion guarantees, are Hexion Nova Scotia Finance ULC and Hexion U.S. Finance Corp., 100%-owned subsidiaries of Hexion. Proceeds from the issue were used to mainly pay down approximately $800 million of the existing term loan and for general purposes. HILCORP ENERGY: Moody's Assigns 'B2' Rating on $300 Mil. Notes -------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Hilcorp Energy I, L.P.'s proposed $300 million senior unsecured notes due 2020. Moody's also affirmed Hilcorp's B1 Corporate Family Rating and the B2 rating on the company's existing senior unsecured notes. The outlook is stable. "This bond offering refinances outstanding revolver borrowings and provides additional cash to fund planned acquisitions and development," commented Francis Messina, Moody's Vice President. "While this will increase Hilcorp's debt level, Hilcorp entered 2010 with low leverage metrics relative to similarly rated peers." Pro forma for the notes offering, Moody's estimates Hilcorp's adjusted Debt/PD at approximately $10/Boe and debt plus future FAS 69 proven reserve development capex on total proven reserves at approximately $13.50/Boe. However, in terms of debt to average daily production Hilcorp carries less leverage compared to its peers estimated less than $22,000/Boe. Moody's estimates that Hilcorp will reduce further its adjusted debt/PD level below $10/boe as the company rationalizes its reserve portfolio. Hilcorp's B1 CFR reflects strong production growth trends from investments, comparatively stable production and a long generally productive history in most of its focus regions, and an expected reduction in financial leverage as earnings continue to grow. Though Hilcorp has an aggressive acquisition strategy the company has indicated it will appropriately contain leverage. Hilcorp has had a successful track record for replacing production through its acquire and exploit strategy of purchasing mature properties from the majors then adding reserves through the drillbit, with an estimated 14% compounded annual growth rate from year-end 2002 projected into 2010. The relatively low three-year drillbit costs of estimated at approximately $15.73/boe underlines Hilcorp's solid exploitation reserve replacement trend and also reflects management's strong operational expertise. Hilcorp operates 93% of its net production. The stable outlook is based on an expectation that Hilcorp funds its capital expenditures at levels largely in line with its operating cash flows while achieving its production growth targets. The outlook could be changed to negative if spending were to materially exceed operating cash flow. The outlook could also be pressured or the ratings downgraded if the company were to significantly increase debt through further property acquisitions, dividends, and/or outspend its operating cash flows. Dividends for year-end 2008 were approximately $100 million, with an estimated dividend of $75 million for 2009. The ratings for the senior unsecured notes reflect both the overall probability of default of the company, to which Moody's assigns a PDR of B1, and a loss given default of LGD 4, 62%, previously LGD 4, 66%. The B2 rating of the senior unsecured notes reflects their position in Hilcorp's capital structure, including the subordination to all first lien senior secured creditors and full guarantees of existing and future subsidiaries. The last rating action was on November 13, 2009 when Moody's upgraded Hilcorp's CFR to B1 from B2, and upgrade its senior unsecured notes to B2 from B3. Hilcorp is a private limited partnership engaged in onshore and coastal oil and gas production, acquisitions, exploitation, and divestitures. Hilcorp acquires properties late in their productive lives with a goal of boosting production through recompletions, workover and repair of downhole hardware, restimulation of the wellbore/reservoir interface, and refracturing of reservoir rock. HILCORP ENERGY: S&P Assigns 'BB-' Rating on $300 Mil. Notes ----------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its issue-level and recovery ratings to Hilcorp Energy I L.P.'s proposed $300 million senior notes due 2020. The issue-level rating is 'BB-' (the same as the corporate credit rating). At the same time, S&P assigned a recovery rating of '3', indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. "S&P's recovery analysis incorporates Hilcorp's plans to use the proceeds from the proposed notes offering to, among other things, repay outstanding balances under its revolving credit facility and fund recent and pending acquisitions," said Standard & Poor's credit analyst Patrick Lee. Houston-based Hilcorp is a private partnership that acquires, develops, and produces crude oil and natural gas. S&P's corporate credit rating on Hilcorp is 'BB-', and the outlook is stable. Ratings List Hilcorp Energy I L.P. Corporate Credit Rating BB-/Stable/-- New Rating Hilcorp Energy I L.P. Proposed $300 mil. senior notes due 2020 BB- Recovery Rating 3 INTERSTATE HOTELS: Faces Class Suit on Proposed Merger ------------------------------------------------------ Christopher L. Bennett, Executive Vice President, Secretary and General Counsel at Interstate Hotels & Resorts, Inc., reports that on December 29, 2009, a lawsuit was filed in the Circuit Court of Arlington County by Vikram Khanna against Interstate Hotels & Resorts, Inc., Hotel Acquisition Company, LLC, HAC Merger Sub, Inc., HAC Merger Partnership, L.P., and Company directors Thomas F. Hewitt, Ronald W. Allen, H. Eric Bolton, James F. Dannhauser, Leslie R. Doggett, James B. McCurry, John J. Russell, Jr., and Christopher S. Shackelton regarding the proposed acquisition of the Company and its subsidiary, Interstate Operating Company, L.P., by HAC. The Company and its directors were served with the complaint on January 13, 2010. Mr. Khanna alleges that he is a stockholder of the Company and brings breach of fiduciary duty claims against the Company directors named as defendants, and claims for aiding and abetting breach of fiduciary duty against the Company and HAC. Mr. Khanna purports to sue on his own behalf, on behalf of a class consisting of the Company's stockholders (other than the defendants and their affiliates), and on behalf of the Company in a derivative capacity. Mr. Khanna purports to seek to enjoin the proposed transaction with HAC or, in the event that the Company's transaction with HAC is consummated prior to entry of a final judgment, rescission of the transaction or an award of rescissionary damages. The defendants intend to defend the lawsuit vigorously, including opposing any efforts to enjoin the proposed transaction. As reported by the Troubled Company Reporter on December 28, 2009, Interstate signed a definitive merger agreement to be acquired by Hotel Acquisition Company, LLC, a 50/50 joint venture between subsidiaries of Thayer Hotel Investors V-A LP, a private equity fund sponsored by Thayer Lodging Group, and Shanghai Jin Jiang International Hotels (Group) Company Limited in a transaction valued at approximately $307 million. Hotel Acquisition would acquire all of the outstanding common stock and operating partnership units of Interstate for $2.25 per share in an all cash transaction. The price represents a premium of 77% over December 17 closing stock price. Interstate's lenders have approved the transaction subject to certain pay downs at closing on its senior credit facility and on one of its non- recourse mortgage loans. The transaction is not contingent upon obtaining any additional financing. Annapolis, Maryland-based based Thayer Lodging Group is a privately held real estate investment company focused on hospitality assets; Shanghai, China based Jin Jiang Hotels is a subsidiary of Jin Jiang International Holdings Company Limited, and is China's largest hotel group. Interstate intends to hold a special stockholders meeting to consider and vote upon a proposal to adopt the agreement and plan of merger, dated as of December 18, 2009, with Hotel Acquisition. There's no specific schedule yet for the meeting. About Interstate Hotels & Resorts Arlington, Virginia-based Interstate Hotels & Resorts, Inc. (NYSE: IHR) and its affiliates -- http://www.ihrco.com/-- manages or has ownership interests in a total of 232 hospitality properties with more than 46,000 rooms in 37 states, the District of Columbia, Russia, India, Mexico, Belgium, Canada, Ireland and England. The company has ownership interests in 56 of those properties, including six wholly owned assets. Interstate Hotels & Resorts also has contracts to manage 13 to be built hospitality properties with approximately 3,000 rooms which includes the company's entry into new markets such as Costa Rica. At September 30, 2009, the Company's consolidated balance sheets showed $456.2 million in total assets, $311.8 million in total liabilities, and $144.4 million in shareholders' equity. The Company reported current assets of $64 million and current liabilities of $85.4 million at September 30, 2009, resulting in a $21.4 million working capital deficit. Going Concern Doubt The Company states that the report from its independent registered public accounting firm, KPMG LLP, included in the Company's Form 10-K for the year ended December 31, 2008, included an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern due to potential credit facility covenant violations. In July 2009, the Company successfully amended the terms of the its Credit Facility which, among other things, eliminated the NYSE listing requirement, eliminated the total leverage ratio debt covenant and extended the maturity of its debt from March 2010 to March 2012. * * * Interstate Hotels carries Moody's "Caa1" corporate family rating. INTERSTATE HOTELS: First Eagle Dumps Shares Amid Tax Benefit Plan ----------------------------------------------------------------- Christopher L. Bennett, Executive Vice President, Secretary and General Counsel at Interstate Hotels & Resorts, Inc., reports that on January 19, 2010, First Eagle Investment Management, LLC filed a Schedule 13D with the Securities and Exchange Commission reporting that, as of the close of business on January 19, 2010, First Eagle was deemed to be the beneficial owner of 2,000,000 shares or approximately 6.2% of the total outstanding shares of common stock, $0.01 par value per share, of Interstate Hotels & Resorts. On January 20, 2010, the Company contacted First Eagle to discuss whether First Eagle was aware of the Company's Tax Benefit Preservation Plan, dated as of September 24, 2009, between the Company and Computershare Trust Company, N.A., and to determine whether First Eagle had actual knowledge of the consequences of its beneficial ownership under the Plan. First Eagle informed the Company that it was not aware of the Plan and confirmed that it had no actual knowledge of the consequences of its beneficial ownership under the Plan. First Eagle informed the Company that it would divest as promptly as practicable a sufficient number of shares to reduce its beneficial ownership to less than 4.99% of the total outstanding shares of Common Stock of the Company. On January 22, 2010, the board of directors of the Company determined that, pursuant to the Plan, First Eagle shall not be deemed to be or to have become an "Acquiring Person" under the Plan as a result of its inadvertent acquisition provided that First Eagle divest as promptly as practicable a sufficient number of shares to reduce its beneficial ownership to less than 4.99% of the total outstanding shares of Common Stock of the Company. On January 26, 2010, First Eagle filed Amendment No. 1 to its Schedule 13D with the SEC reporting that, as of the close of business on January 26, 2010, First Eagle had sold shares of Common Stock of the Company to reduce its beneficial ownership to 1,550,000 shares or approximately 4.82% of the total outstanding shares of Common Stock of the Company. Accordingly, First Eagle has been deemed to not be an "Acquiring Person" under the Plan. On January 22, First Eagle sold 100,000 Interstate shares for $2.23 apiece. On January 25 and 26, First Eagle sold 300,000 and 50,000 Interstate respectively for $2.22 apiece. About Interstate Hotels & Resorts Arlington, Virginia-based Interstate Hotels & Resorts, Inc. (NYSE: IHR) and its affiliates -- http://www.ihrco.com/-- manages or has ownership interests in a total of 232 hospitality properties with more than 46,000 rooms in 37 states, the District of Columbia, Russia, India, Mexico, Belgium, Canada, Ireland and England. The company has ownership interests in 56 of those properties, including six wholly owned assets. Interstate Hotels & Resorts also has contracts to manage 13 to be built hospitality properties with approximately 3,000 rooms which includes the company's entry into new markets such as Costa Rica. At September 30, 2009, the Company's consolidated balance sheets showed $456.2 million in total assets, $311.8 million in total liabilities, and $144.4 million in shareholders' equity. The Company reported current assets of $64 million and current liabilities of $85.4 million at September 30, 2009, resulting in a $21.4 million working capital deficit. Going Concern Doubt The Company states that the report from its independent registered public accounting firm, KPMG LLP, included in the Company's Form 10-K for the year ended December 31, 2008, included an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern due to potential credit facility covenant violations. In July 2009, the Company successfully amended the terms of the its Credit Facility which, among other things, eliminated the NYSE listing requirement, eliminated the total leverage ratio debt covenant and extended the maturity of its debt from March 2010 to March 2012. JSC BTA BANK: Seeks Bankruptcy Protection in New York ----------------------------------------------------- JSC BTA Bank, also known as BTA Bank of Kazakhstan, filed for Chapter 15 bankruptcy protection in New York (Bankr. S.D.N.Y. Case No. 10-10638), listing more than $1 billion in both assets and debt. BTA Bank wants the Bankruptcy Court in Manhattan to enter an order recognizing the voluntary judicial restructuring proceeding that was initiated by the bank in the Specialized Financial Court of Almaty City in Kazakhstan and opened pursuant to an Oct. 16, 2009 decision of the Financial Court, as a foreign main proceeding pursuant to 11 U.S.C. Secs. 1515 and 1517. BTA Bank is represented in the Chapter 15 proceedings by: WHITE & CASE LLP 1155 Avenue of the Americas New York, New York 10036-2787 Telephone: (212) 819-8200 Facsimile: (212) 354-8113 Abraham L. Zylberberg, Esq. Evan C. Hollander, Esq. Richard A. Graham, Esq. Road to Bankruptcy According to a filing with the U.S. Bankruptcy Court, on May 18, 2007, the Bank entered into a credit agreement with Morgan Stanley Bank International Limited pursuant to which the Bank was provided with a credit facility of JPY36,420,000,000. Following Kazakhstan's credit rating downgrade in October 2007 by S&P from 'BBB' to 'BBB-' and the general deterioration in the financial markets since August 2007, the Bank became unable to refinance its international debt, which in turn reduced its ability to make loans. In October 2008 the government of the Republic of Kazakhstan and the Agency of the Republic of Kazakhstan for Regulation and Supervision of Financial Markets and Financial Organizations announced a proposal to recapitalize the Bank as part of a broader plan to stabilize the country's financial system. The plan involved JSC National Welfare Fund Samruk-Kazyna, Kazakhstan's sovereign wealth fund, providing financial support to struggling financial institutions, and a Memorandum of Understanding in relation to this was signed on November 9, 2009. However, in early 2009, in light of the increasing deterioration in the Bank's financial position and in the quality of its loan portfolio, the Bank was required by the FMSA to increase its provisions for bad debts. Investigations and proceedings are also underway in the Republic of Kazakhstan, the United Kingdom and elsewhere in relation to fraudulent and unlawful transactions entered into by the Bank's former management prior to February 2009 which have caused the Bank very significant losses. On February 2, 2009, the government of the Republic of Kazakhstan accepted the FMSA's recommendation to recapitalize the Bank whereby Samruk-Kazyna acquired a controlling shareholding constituting 75.1% of the Bank's total share capital. The Bank also continued to down-size its operating activities in response to the deteriorating market and the Bank's financial condition. Samruk-Kazyna's acquisition of a controlling stake in the Bank triggered a change of control clause under the Morgan Stanley Credit Agreement. In accordance with its rights under the Morgan Stanley Credit Agreement, on March 27, 2009, Morgan Stanley sent a request to the Bank requiring early repayment of the Morgan Stanley Loan by March 30, 2009. The Bank had insufficient funds to repay the Morgan Stanley Loan within 7 calendar days following the due date and was also unable to fulfill its obligations to creditors under a number of other agreements. This inability to pay its debts as they fell due formed the basis for the Bank's application to the Financial Court for restructuring. Since April 20, 2009 the Bank has suspended repayment of any outstanding principal amounts under its financial indebtedness pending the restructuring of the Bank but continued paying interest until July 22, 2009, when repayment of interest was suspended as well. In May 2009, the Bank breached certain of FMSA's regulatory requirements due to: (i) a failure to repay certain liabilities; and (ii) excessive exposure to a single borrower. Following the Bank's breach of these regulatory requirements, the Bank entered into an agreement with the FMSA on May 22, 2009 pursuant to which the Bank submitted a preliminary restructuring plan to the FMSA on 10 June 2009. In June 2009 the Bank announced it had recorded negative capital. Consequently the Bank and the FMSA entered into a further agreement on 30 June 2009 pursuant to which the Bank agreed, among other things, to provide the FMSA with a restructuring plan not later than August 3, 2009 (subsequently extended to September 18, 2009). On September 18, 2009, the Bank submitted an indicative restructuring and recapitalization plan to the FMSA in accordance with the FMSA June Agreement. Following negotiations with the Bank's creditors during September 2009, the Bank and a steering committee of the creditors, signed a Memorandum of Understanding with respect to the Indicative Restructuring Plan on September 21, 2009. The FMSA approved the Indicative Restructuring Plan on September 26, 2009. Pursuant to the FMSA June Agreement (as amended), on Dec. 7, 2009, the Bank and the Steering Committee signed a principal commercial terms sheet setting out principal commercial terms of the restructuring as well as details of the different restructuring packages that will be available to the different classes of the Bank's financial creditors and certain other arrangements, principally relating to the Bank's corporate governance and other aspects of its operations and business following completion of the Restructuring. In summary, the Restructuring will be effected through the restructuring of the existing claims of all creditors of the Bank, including Samruk-Kazyna and certain related parties, save for certain categories of excluded creditors, such as depositors and certain government agencies funding special loan programs. Creditors having their claims restructured will receive a mixture of cash, senior debt, subordinated debt, other forms of debt, equity and so-called "recovery notes" in consideration for the restructuring of their claims. Payments on "recovery notes" will be funded by cash recoveries on any provisioned assets, litigation recoveries and deferred tax recoveries. The Restructuring is expected to be completed in the third quarter of 2010. Pursuant to the Restructuring, different creditors will have their claims restructured according to different "Packages" based upon the nature of their claims as against the Bank. The Restructuring envisages 4 "Senior Packages" for holders of senior debt totaling approximately US$l 0.26 billion (plus US$529 million of accrued interest through 31 March 2010) and 2 "Junior Packages" for holders of approximately US$1.35 billion in junior debt. These packages contain the terms for the restructuring of the following types of creditors: i) Senior Package 1 deals with holders of senior debt, including most bonds and bank loans; ii) Senior Package 2 deals with Export Credit Agency and other government sector creditors and certain trade finance creditors; iii) Senior Package 3 deals with all non-ECA trade finance creditors (subject to certain exclusions); iv) Senior Package 4 deals with creditors holding certain Shariah-compliant debt; v) Junior Package 1 deals with Kazakhstan-based pension funds holding subordinated debt; and vi) Junior Package 2 deals with holders of all remaining subordinated debt and perpetual bonds. The Bank made an application for restructuring under the Banking Law, the Civil Procedural Code and the Amending Law on October 7, 2009. Pursuant to the Kazakh Decision, the application was granted by the Financial Court on October 16, 2009. This approval resulted in an automatic stay of all relevant claims of the Bank's creditors and protection of the Bank's property from execution and attachment until completion of the Restructuring. As part of its decision, the Financial Court ordered that: a) the Restructuring of the Bank must be completed by September 5, 2010; b) Anvar Galimullaevich Saidenov should be responsible for conducting the Restructuring; c) the proceeding should be recognized as a judicial proceeding conducted in accordance with the insolvency legislation of the Republic of Kazakhstan which the Bank's activity is subject to supervision by the FMSA; d) the Bank should undertake various actions to notify and inform its creditors in relation to steps to be taken pursuant to the Restructuring, including publishing an information memorandum; and e) previous court decisions regarding claims against the Bank should be suspended. Pursuant to the decision of the Financial Court approving the Indicative Restructuring Plan, the Bank intends to publish an information memorandum during the first quarter of 2010, which will contain the definitive restructuring plan to be approved by the Bank's creditors at a meeting planned for the end of the quarter. The total amount of debt being restructured pursuant to the Restructuring is approximately US$11.6 billion. About BTA Bank BTA Bank AO (BTA Bank JSC), formerly Bank TuranAlem AO -- http://bta.kz/-- is a Kazakhstan-based financial institution, which is involved in the provision of banking and financial products for private and corporate clients. The BTA Group is one of the leading banking groups in the Commonwealth of Independent States and has affiliated banks in Russia, Ukraine, Belarus, Georgia, Armenia, Kyrgyzstan and Turkey. In addition, the Bank maintains representative offices in Russia, Ukraine, China, the United Arab Emirates and the United Kingdom. The Bank has no branch or agency in the United States, and its primary assets in the United States consist of balances in accounts with correspondent banks in New York City. As of 30 November 2009 the Bank employed 5,043 people inside and 4 people outside Kazakhstan. It has no employees in the United States. Most of the Bank's assets, and nearly all its tangible assets, are located in Kazakhstan. KEMET CORP: Has $56-Mil. 'Distressed Exchange' Offer ---------------------------------------------------- KEMET Corporation has commenced a tender offer for up to $56,081,000 in the aggregate principal amount of its outstanding 2.25% Convertible Senior Notes due 2026. An aggregate principal amount of $81,081,000 of the Convertible Notes is currently outstanding. The tender offer will expire at 11:59 p.m., New York City time, on March 3, 2010, unless extended or earlier terminated by KEMET. Holders of Convertible Notes who validly tender, and do not validly withdraw, their Convertible Notes on or prior to the Expiration Date will receive $965 for each $1,000 principal amount of Convertible Notes purchased in the tender offer, plus accrued and unpaid interest to, but excluding, the date of payment for the Convertible Notes accepted for payment. Tenders of Convertible Notes must be made on or prior to the Expiration Date, and Convertible Notes may be withdrawn at any time on or prior to the Expiration Date. The tender offer and KEMET's obligation to purchase and pay for the Convertible Notes validly tendered and not validly withdrawn pursuant to the tender offer is conditioned upon (1) the receipt by KEMET of the proceeds from a concurrent debt financing whereby KEMET issues debt in an aggregate principal amount of at least $275 million, which is subject to the satisfaction or waiver of certain conditions and (2) the other general conditions to the tender offer set forth in the Offer to Purchase, dated February 3, 2010, being satisfied or waived on or prior to the Expiration Date. To the extent that acceptances of all validly tendered Convertible Notes would require KEMET to purchase more than $56,081,000 in aggregate principal amount of Convertible Notes in connection with the tender offer, KEMET will allocate acceptances on a pro rata basis among the tendering holders. Full details of the terms and conditions of the tender offer are included in KEMET's Offer to Purchase and Schedule TO, which are being sent to holders of Convertible Notes and filed with the Securities and Exchange Commission, and holders are encouraged to read these documents, as they contain important information regarding the tender offer. KEMET has retained BofA Merrill Lynch to act as the dealer manager for the tender offer. D.F. King & Co., Inc. is the information agent and depositary for the tender offer. Questions regarding the tender offer should be directed to BofA Merrill Lynch at 1 888 292 0070 (U.S. toll free). Requests for the Offer to Purchase and other documents relating to the tender offer may be directed to D.F. King & Co., Inc. at (212) 269 5550 (for banks and brokers only) or 1 800 714 3312 (U.S. toll free). About KEMET Corporation Based in Simpsonville, South Carolina, KEMET Corporation (Other OTC: KEME) -- http://www.KEMET.com/-- is a leading manufacturer of the majority of capacitor types, including tantalum, multilayer ceramic, solid aluminum, plastic film, paper and electrolytic capacitors. Capacitors are one of the essential passive components used in circuit boards. KEMET manufactures capacitors in Bulgaria, China, Finland, Germany, Indonesia, Italy, Mexico, Portugal, Sweden, the United Kingdom, and the United States. Going Concern Doubt The Company's 2009 annual report included disclosure and an audit opinion that expressed substantial doubt about the Company's ability to continue as a going concern. The auditors cited a decline in net sales, profitability and liquidity during the year ended March 31, 2009. KEMET CORPORATION: Moody's Assigns Corporate Family Rating at 'B2' ------------------------------------------------------------------ Moody's Investors Service assigned to KEMET Corporation a first- time Corporate Family Rating of B2 and Probability of Default Rating of B2. Concurrently, Moody's assigned a B2 rating to KEMET's proposed $275 million Senior Notes due 2018 offering. Moody's also assigned an SGL-2 speculative grade liquidity rating. The rating outlook is stable. KEMET is a leading global manufacturer of capacitors. Private equity firm, Platinum Equity (through its affiliate, K Equity, LLC), is effectively the company's largest shareholder with an approximate 49.9% stake in the form of a warrant. The ratings were assigned in connection with KEMET's proposed debt issuance, which will be used to prepay substantially all of its existing debt including a portion of its convertible notes, existing credit facilities and term loans, as well as lines of credit. The assigned ratings are subject to review of final documentation and no material change in the terms and conditions of the transaction as advised to Moody's. The notes are secured by 51% of certain of the company's foreign subsidiaries' stock. KEMET's B2 CFR reflects KEMET's highly volatile business model, which is susceptible to economic cycles, small scale as measured by revenues and lower operating margins relative to other semiconductor and electronic component manufacturers, high customer concentration, and intense competition in an industry experiencing a long-term trend toward lower prices for capacitors. In addition, the rating is constrained by relatively high leverage as measured by debt to EBITDA (Moody's adjusted for capitalized leases) of approximately 5.4x expected at the close of the transaction. At the same time, the rating is supported by the company's leading market position within its three operating segments of Tantalum, Ceramic and Film & Electrolytic, its global reach and geographic revenue diversity, strong customer relationships, and broad product portfolio. In addition, management has successfully restructured its Tantalum and Ceramic businesses while in the process of revamping its F&E business, creating a low-cost production base to ensure sustained profitability and steady free cash flow. The SGL-2 speculative grade liquidity rating reflects KEMET's good liquidity profile over the next twelve months. The company is expected to have cash of approximately $73 million at the close of the transaction and should generate free cash flow in excess of $20 million. While the company has stable internal sources of liquidity, KEMET is not expected to have a committed revolving credit facility when the deal closes. The lack of a revolving credit facility could limit the company's financial flexibility. Although Moody's expects the company to generate sufficient cash flow to meet its working capital requirements and capital expenditure needs for the next twelve months, there may be interim quarters with negative cash flow which would require the company to fund its needs using cash on the balance sheet as no revolver would be available. The stable rating outlook incorporates the potential for operating improvement as management continues to streamline its business and restructures the F&E business while a slow rebound begins in the semiconductor and electronic components industries during 2010. It also reflects Moody's expectation for a gradual increase in revenue and profitability in 2010 such that the company's financial leverage improves. These first-time ratings/assessments were assigned: * Corporate Family Rating -- B2 * Probability of Default Rating -- B2 * $275 Million Senior Notes due 2018 -- B2 (LGD-3, 44%) * Speculative Grade Liquidity Rating of SGL-2 KEMET Corporation, headquartered in Greenville, South Carolina, is a large manufacturer and supplier of passive electronic components, specializing in tantalum, multilayer ceramic, film, solid aluminum, electrolytic, and paper capacitors. Revenues for the twelve months ended December 31, 2009 were approximately $659 million. KEMET CORP: S&P Assigns Corporate Credit Rating at 'B' ------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Greenville, South Carolina-based KEMET Corp. The rating outlook is stable. At the same time, S&P assigned KEMET's planned issuance of 275 million senior notes due 2018 its issue-level rating of 'B' (at the same level as its 'B' corporate credit rating on the company). S&P also assigned the notes a recovery rating of '4', indication its expectation of average (30% to 50%) recovery for noteholders in the event of a payment default. The company plans to use proceeds to repay the majority of its existing debt. "The 'B' corporate credit rating reflects highly competitive market conditions, KEMET's modest scope in several of its served markets, a history of unprofitable operations, and limited liquidity," said Standard & Poor's credit analyst Bruce Hyman. "The company's improving operating profitability following a series of restructuring actions and its low capital intensity partly offset these factors. The rating also incorporates S&P's expectation of a successful sale of the planned notes issue." KEMET is a major supplier of capacitors, which are passive electronic components used to regulate the flow of electricity. Capacitors are used broadly across the global economy. KEMET's financial profile eroded following two cash-based acquisitions to gain scale and diversify into the film-based and electrolytic submarkets within the capacitor industry. The company initiated restructuring actions on the acquired operations, which had been unprofitable on an operating basis. However, depressed industry conditions led to weak overall profitability and declining liquidity, effectively halting the restructuring actions. Cash balances fell to $25 million at Dec. 31, 2008, from $140 million at Dec. 31, 2007. Responding to these challenges, KEMET deemphasized a number of commodity product lines and focused on higher-margin applications, leading to materially improved profitability since the June 2009 quarter. Following an earlier partial debt refinancing, in June 2009, the company resumed its restructuring, in a program likely to run into fiscal 2012. EBITDA was about $22 million in the December 2009 quarter, representing about 11% of sales, compared to a significant EBITDA loss on comparable revenues one year earlier. Annualized debt leverage, pro forma for the proposed notes and tender, is now about 5.5x EBITDA. The company is not capital intensive, with capital expenditures of around 3% of sales, although capital outlays could be somewhat higher over the intermediate term to fund relocation of the film/electrolytic unit to low-cost regions. Free cash flow has been positive since the March 2009 quarter, versus consistently negative free cash flows prior to that time, and the company is likely to continue generating a moderate degree of free cash flow in the future. The new notes are not callable for four years, and are then callable at par plus one-half the coupon. Up to 10% of the notes can be redeemed per year at 103% during the first three years; the par redemption and call features could provide a means for the company to deleverage using free cash flow. KLCG PROPERTY: Can Obtain $2.8MM DIP Loan from Dougherty Funding ---------------------------------------------------------------- The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware, in a final order, authorized KLCG Property, LLC, et al., to obtain up to $2,800,000 postpetition secured financing from Dougherty Funding LLC. The Debtors would use the money to fund their Chapter 11 case, pay suppliers and other parties. As reported in the Troubled Company Reporter on January 4, 2010, the DIP facility will incur interest at 9% per annum. Payments more than five days after past due will be subject to a later charge equal to 4.0% of the overdue amount. In the event of default, obligations will be subject to an 11% per annum default rate of interest. The Debtors' obligations under the DIP facility are secured by all of the Debtors' assets. The Debtors will grant the DIP Lender first priority, valid, priming, perfected and enforceable liens on the assets, and grant in favor of the DIP Lender superpriority administrative claim status for all indebtedness under the DIP Facility. The Debtors are also authorized to use cash collateral. As adequate protection for any diminution in value of Dougherty Funding' collateral, the Debtors will grant Dougherty Funding replacement liens and superpriority claims. The DIP lien is subject to a carve out for U.S. Trustee and Clerk of Court fees; up to $25,000 in fees payable to professional employed in the Debtors' case; and fees of the committee in pursuing actions challenging the DIP Lenders' lien. About KLCG Property Headquartered in Gurnee, Illinois, KLCG Property, LLC, was organized in Delaware on October 13, 2005, for the purpose of constructing, owning, and operating a 414-room destination resort hotel, indoor water park and conference center located within the greater northern Chicagoland region. KLCG Property filed for Chapter 11 bankruptcy protection on December 16, 2009 (Bankr. D. Delaware Case No. 09-14418). The Company's affiliate, Gurnee Property, LLC, also filed for Chapter 11 bankruptcy protection. Donald J. Bowman, Jr., Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor assist the Debtors in their restructuring efforts. KLCG Property listed $50,000,001 to $100,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. LAZARD GROUP: Moody's Reviews 'Ba1' Rating on Senior Notes ---------------------------------------------------------- Moody's Investors Service placed the ratings of Lazard Group LLC (senior at Ba1) on review for downgrade. The review for downgrade reflects the reporting by Lazard Ltd (the parent company of Lazard Group LLC) of a $75 million operating loss in the fourth quarter and a $35 million operating loss for the full year. Moody's excludes the impact of accelerating RSUs and previously deferred cash awards when calculating operating results. By contrast, Moody's considers restructuring costs as normal operating expenses of an investment bank that must retain its key employees to generate revenue, while at the same time dealing with revenue cyclicality. In its review Moody's will focus on the relationship between the firm's financial policies (including its new share repurchase plan) and its compensation policies. Moody's will explore how management intends to balance the interests of creditors, employees and shareholders. Moody's said that a downgrade of the Ba1 rating could be either one or two notches. Moody's observed that changes to compensation policies at Lazard resulted in a 2009 full-year compensation ratio of 71.8%, even after excluding special charges. This compensation rate sharply reduced EBITDA generation for debt service in 2009 - despite improved top-line revenue performance in the fourth quarter. "Management may no longer be able to maintain a compensation ratio at 57.5% of operating revenue in most environments, reducing operating margins and cash flows," said Peter Nerby, a Moody's Senior Vice President. The rating agency said that the increases in compensation accruals made it increasingly unlikely that Lazard would be able to maintain Debt/EBITDA ratios below 4xs through the revenue cycle. In addition, in the first quarter of 2010, the firm will take additional compensation charges totaling $65.8 million, further pressuring EBITDA. Moody's noted that Lazard's strong advisory and restructuring practices are supportive of the current ratings as is the revenue diversification of the asset management business. The ratings are also supported by the firm's simple balance sheet, with a cash position of $402 million (net of accrued compensation payable) at year end. Moody's last rating action on Lazard was on April 29, 2009 when the rating outlook was changed to negative from stable. Lazard Group LLC, the entity rated by Moody's, is an intermediate holding company of publicly traded Lazard Limited. These ratings of Lazard Group LLC were placed on review for possible downgrade. * $600 million 6.85% Senior Notes due 6/15/2017 rated Ba1; * $550 million 7.125% Senior Notes due 5/15/2015 rated Ba1; Lazard Ltd is an international advisory and money management firm headquartered in New York. LEHMAN BROTHERS: Bank of New York to Appeal CDO Ruling ------------------------------------------------------ Bank of New York Mellon Corp. will appeal the recent bankruptcy court ruling on a structured debt program called Dante, to which collapsed U.S. bank Lehman Brothers Holdings Inc. was a counterparty, ABI reports. 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: ERISA Class Action Against Lehman Directors Nixed ------------------------------------------------------------------ Law360 reports that a federal judge has thrown out a putative class action against Lehman Brothers Holdings Inc.'s former directors over the management of an employee stock ownership plan that lost value when the firm failed, ruling 11 defendants were not fiduciaries to the plan and the 12th did not breach her fiduciary duties. 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) LODGENET INTERACTIVE: BlackRock Reports 5.26% Equity Stake ---------------------------------------------------------- BlackRock, Inc., disclosed that as of December 31, 2009, it may be deemed to beneficially own 1,184,612 shares or roughly 5.26% of the common stock of LodgeNet Interactive Corp. Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET) -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. As of September 30, 2009, LodgeNet had $541.5 million in total assets against $610.5 million in total liabilities, resulting in $68.9 million in stockholders' deficiency. * * * As reported by the Troubled Company Reporter on June 10, 2009, Moody's affirmed LodgeNet's B3 corporate family rating, Caa1 probability of default rating and SGL-4 speculative grade liquidity rating (indicating poor liquidity). The rating continues to be influenced primarily by liquidity matters stemming from the company's very limited financial covenant compliance cushion. LODGENET INTERACTIVE: Wells Fargo Discloses 10.92% Equity Stake --------------------------------------------------------------- Wells Fargo and Company disclosed that as of December 31, 2009, it may be deemed to beneficially own 2,461,314 shares or roughly 10.92% of the common stock of LodgeNet Interactive Corporation. Wells Capital Management Incorporated disclosed that as of December 31, 2009, it may be deemed to beneficially own 2,453,614 shares or roughly 10.89% of the common stock of LodgeNet. Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET) -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. As of September 30, 2009, LodgeNet had $541.5 million in total assets against $610.5 million in total liabilities, resulting in $68.9 million in stockholders' deficiency. * * * As reported by the Troubled Company Reporter on June 10, 2009, Moody's affirmed LodgeNet's B3 corporate family rating, Caa1 probability of default rating and SGL-4 speculative grade liquidity rating (indicating poor liquidity). The rating continues to be influenced primarily by liquidity matters stemming from the company's very limited financial covenant compliance cushion. LODGIAN INC: Inks Amendment to $130 Million Mortgage Loan --------------------------------------------------------- In a regulatory filing Tuesday, Lodgian, Inc., discloses that on January 22, 2010, Hospitality Mortgage Investments, LLC, a Delaware limited liability company, and an affiliate of LSREF Lodging Investments, LLC, a Delaware limited liability company, purchased the lender's interest in Lodgian, Inc.'s $130 million mortgage loan facility originally made by Goldman Sachs Commercial Mortgage Capital, L.P. An amendment to the loan was also concurrently entered into by Hospitality and Lodgian's subsidiary borrowing entities which own the hotels securing the loan. The material terms of the loan amendment are: -- Effective immediately, the cash lockbox provisions of the loan were amended to provide that excess cash flow from the mortgaged properties after debt service, reserves and operating expenses, will not be retained by the lender in an excess cash flow reserve account, but will instead be released to the borrowers on a monthly basis, even if the properties do not meet previously required financial ratio tests. -- The deadline for Lodgian's subsidiary which owns the Crowne Plaza Albany, New York, to complete renovation work on the hotel's parking structure was extended to May 1, 2010. -- The allocated loan amounts for each of the properties securing the loan were readjusted. -- Effective July 1, 2010, after the merger contemplated by the Agreement and Plan of Merger, dated January 22, 2010, by and among Lodgian, LSREF Lodging Investments, LLC ("Purchaser"), and LSREF Lodging Merger Co., Inc., a Delaware corporation and affiliate of Purchaser ("Merger Sub") is currently expected to have closed, the margin over LIBOR used to determine the interest rate on the loan will be increased from 1.50% to 4.25%. -- If the Merger Agreement is validly terminated for any reason other than as a result of a breach by Purchaser of any of its representations, warranties, covenants or agreements contained in the Merger Agreement such that certain of Lodgian's closing conditions set forth in the Merger Agreement would not be met, Lodgian's subsidiary borrowing entities on the loan will be required, in their sole discretion, to either pay down the principal balance of the loan by $5,000,000, or to cause the Holiday Inn Monroeville, Pennsylvania property to be pledged as additional security for the loan. If the Holiday Inn Monroeville, Pennsylvania property is pledged as additional security for the loan, it may be subsequently released from the loan upon payment of cash release price of $5,000,000. On January 26, 2010, a putative class action was commenced in the Superior Court of Fulton County, Georgia against Lodgian, each of Lodgian's directors, Purchaser and Merger Sub alleging that the members of Lodgian's board of directors breached their fiduciary duties to Lodgian shareholders in approving and adopting a merger agreement that allegedly contains preclusive deal protection measures and unfair merger consideration. The complaint further alleges that Lodgian, Purchaser and Merger Sub aided and abetted Lodgian's directors in allegedly breaching their fiduciary duties. The complaint seeks to enjoin the completion of the Merger, an award of unspecified monetary damages and to recover certain costs incurred by the plaintiff. Lodgian believes the complaint to be without merit and intends to defend against it vigorously, including opposing any efforts to enjoin the proposed transaction. In addition, on January 29, 2010, a putative class action was commenced in the Court of Chancery of the State of Delaware against Lodgian, each of Lodgian's directors, Purchaser, Merger Sub and Lone Star Funds, an affiliate of Purchaser and Merger Sub, alleging that the members of Lodgian's board of directors breached their fiduciary duties to Lodgian shareholders by allegedly failing to obtain the highest price available for Lodgian's shareholders, failing to adequately shop Lodgian and approving a merger agreement that contains preclusive deal protection measures. The complaint further alleges that Lone Star aided and abetted Lodgian's directors in allegedly breaching their fiduciary duties. The complaint seeks to enjoin the completion of the Merger, an order compelling the directors to undertake a new sale process, an award of unspecified monetary damages and costs of litigation. Lodgian believes the complaint to be without merit and intends to defend against it vigorously, including opposing any efforts to enjoin the proposed transaction. A full-text copy of the regulatory filing on Form 8-K is available at no charge at http://researcharchives.com/t/s?50ac Merger Agreement with Lone Star As earlier announced, on January 22, 2010, the Company entered into a definitive agreement to be acquired by an affiliate of Lone Star Funds, in a transaction valued at approximately $270 million, including assumed debt. Under the terms of the agreement, Lone Star will acquire all of the outstanding common stock of Lodgian for $2.50 per share in an all-cash transaction. The price represents a premium of approximately 67.2% over Lodgian's average closing share price during the trading period of one calendar month prior to January 15, 2010, and 64.3% over Lodgian's average closing share price during the trading period of six calendar months prior to January 15, 2010. Lodgian's Board of Directors has unanimously approved the merger agreement and has recommended approval of the transaction by Lodgian shareholders. A full-text copy of the merger agreement is available for free at http://researcharchives.com/t/s?50ad About Lone Star Lone Star Funds -- http://www.lonestarfunds.com/-- is a global investment firm that acquires debt and equity assets including corporate, commercial real estate, single-family residential, and consumer debt products, as well as banks and asset-rich operating companies requiring rationalization. Since the establishment of its first fund in 1995, the principals of Lone Star have organized private equity funds totaling approximately $24 billion of capital that has been invested globally through Lone Star's worldwide network of affiliate offices. Lone Star is headquartered in Dallas, Texas and has offices worldwide. About Lodgian, Inc. Lodgian, Inc. (NYSE Alternext US: LGN) -- http://www.lodgian.com/ -- is one of the nation's largest independent hotel owners and operators. The Company currently owns and manages a portfolio of 34 hotels with 6,401 rooms located in 20 states. Of the company's 34-hotel portfolio, 16 are InterContinental Hotels Group brands (Crowne Plaza, Holiday Inn, and Holiday Inn Express), 12 are Marriott brands (Marriott, Courtyard by Marriott, SpringHill Suites by Marriott, Residence Inn by Marriott and Fairfield Inn by Marriott), two are Hilton brands, and four are affiliated with other nationally recognized franchisors including Starwood, Wyndham and Carlson. Going Concern Doubt Approximately $120 million of the Company's outstanding mortgage debt was scheduled to mature in July 2009. The $120 million of mortgage indebtedness, which was originated in June 2004 by Merrill Lynch and securitized in the collateralized mortgage- backed securities market, was divided into three pools of indebtedness referred to by the Company as the Merrill Lynch Fixed Rate Pools 1, 3 and 4. The Company has reached agreements with the special servicers of Pools 1 and 4 to extend the maturity dates to July 1, 2010, and July 1, 2012, respectively, and the Company is seeking to refinance Pool 1 in anticipation of the 2010 maturity date. Pool 3, with a principal balance of $45.5 million as of September 30, 2009, matured on October 1, 2009, following two short-term extensions. The extensions were intended to provide time for the Company to reach an agreement with the special servicer to modify Pool 3. No agreement has been reached and Pool 3 is now in default. Since no agreement has been reached, the Company expects to convey the six hotels which secure Pool 3 to the lender in full satisfaction of the debt. In addition, the Company is in default on a loan secured by the Crowne Plaza Worcester, Massachusetts (the "Worcester Property") which had a balance of $16.3 million as of September 30, 2009. On October 23, 2009, the Company received notice from the lender that the mortgage had been accelerated, as anticipated. The Company does not expect further negotiation with the special servicer and intends to convey the hotel to the lender in full satisfaction of the debt. Conveying these hotels to the lenders, the severe economic recession and the tight credit markets could also have an adverse effect on the Company's ability to extend or refinance Pool 1 on or prior to its maturity in July 2010. "These factors raise substantial doubt as to the Company's ability to continue as a going concern." The Crowne Plaza in Worcester, Massachusetts (the "Worcester Property"). In addition, the Company has previously disclosed that on a trailing twelve month basis, cash flow from the Worcester Property was not sufficient to service the debt on the property, and as a result, the Company did not make required payments on the Indebtedness and intends to convey the Worcester Property to the Lender (as defined below) in full satisfaction of the Indebtedness. On November 19, 2009, the Worcester Property was transferred to a receiver appointed pursuant to a court order approved by the United States District Court for the District of Massachusetts. Under the court order, the receiver, David Buddemeyer of Driftwood Hospitality Management, LLC, took exclusive possession of the Worcester Property and is holding, operating, managing and maintaining the Worcester Property on behalf of Wells Fargo Bank, N.A., as trustee for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-through Certificates, Series 2006-C25 (the "Lender"). The receivership was approved pursuant to a petition filed by the Lender for the appointment of a receiver after the Company did not cure its previously disclosed default. The indebtedness is non-recourse, except in certain limited circumstances, which the Company believes are remote, and is not cross-collateralized with any other mortgage debt. The Company classified the indebtedness as current in its condensed consolidated balance sheet as of September 30, 2009. MERCER INT'L: Bank of America Reports 7.6% Equity Stake ------------------------------------------------------- Bank of America Corporation and Merrill Lynch, Pierce, Fenner & Smith, Inc., disclosed that as of December 31, 2009, they held in the aggregate 2,756,401 shares or roughly 7.6% of the common stock of Mercer International Inc. Vancouver-based Mercer International Inc. (Nasdaq: MERC, TSX: MRI.U) -- http://www.mercerint.com/-- is a global pulp manufacturing company. At September 30, 2009, Mercer had EUR1,085,649,000 in total assets against EUR1,005,232,000 in total liabilities. As of September 30, 2009, the Mercer consolidated group had EUR1,085,649,000 in total assets against EUR1,005,232,000 in total liabilities, resulting in EUR80,417,000 in shareholders' equity. Mercer's unrestricted subsidiaries as of September 30, 2009, had EUR603,065,000 in total assets against EUR721,858,000 in total liabilities, resulting in EUR118,793,000 in shareholders' deficit. * * * As reported by the Troubled Company Reporter on February 2, 2010, Standard & Poor's Ratings Services revised its outlook on Mercer International to positive from negative. S&P affirmed its ratings on the company, including the 'CCC+' corporate credit rating. "The outlook revision reflects S&P's view that Mercer's liquidity has improved as a result of the completion of its recent exchange offer for about $15 million of its remaining $17 million convertible subordinated notes due October 2010 for a like amount of new notes due January 2012," said Standard & Poor's credit analyst Andy Sookram. S&P thinks that the recent debt exchange will provide the company with greater financial flexibility through extended debt maturities and increased liquidity in the near term. Although Mercer's liquidity has improved, S&P is concerned about the sustainability of the recently improved pulp market conditions. Several pulp producers have announced plans to restart production at certain facilities in the near future. If this leads to a supply/demand imbalance, S&P believes there could be some reversal of the price increases S&P has seen in the last several months. Still, S&P currently does not expect selling prices to decline to the levels S&P saw in the first half of 2009, when prices averaged around $660 per ton compared with $840 per ton in 2008, because S&P thinks it is likely that demand for paper and packaging products will be modestly higher in 2010. In addition, S&P believes that the weak U.S. dollar against the euro and the Canadian dollar will continue to partly offset some of the benefits of price increases in the near term. MERCER INT'L: Franklin Resources Reports 3.6% Equity Stake ---------------------------------------------------------- Franklin Resources, Inc., Charles B. Johnson, and Rupert H. Johnson, Jr., disclosed that as of December 31, 2009, they held in the aggregate 1,333,5101 shares or roughly 3.6% of the common stock of Mercer International Inc. Vancouver-based Mercer International Inc. (Nasdaq: MERC, TSX: MRI.U) -- http://www.mercerint.com/-- is a global pulp manufacturing company. At September 30, 2009, Mercer had EUR1,085,649,000 in total assets against EUR1,005,232,000 in total liabilities. As of September 30, 2009, the Mercer consolidated group had EUR1,085,649,000 in total assets against EUR1,005,232,000 in total liabilities, resulting in EUR80,417,000 in shareholders' equity. Mercer's unrestricted subsidiaries as of September 30, 2009, had EUR603,065,000 in total assets against EUR721,858,000 in total liabilities, resulting in EUR118,793,000 in shareholders' deficit. * * * As reported by the Troubled Company Reporter on February 2, 2010, Standard & Poor's Ratings Services revised its outlook on Mercer International to positive from negative. S&P affirmed its ratings on the company, including the 'CCC+' corporate credit rating. "The outlook revision reflects S&P's view that Mercer's liquidity has improved as a result of the completion of its recent exchange offer for about $15 million of its remaining $17 million convertible subordinated notes due October 2010 for a like amount of new notes due January 2012," said Standard & Poor's credit analyst Andy Sookram. S&P thinks that the recent debt exchange will provide the company with greater financial flexibility through extended debt maturities and increased liquidity in the near term. Although Mercer's liquidity has improved, S&P is concerned about the sustainability of the recently improved pulp market conditions. Several pulp producers have announced plans to restart production at certain facilities in the near future. If this leads to a supply/demand imbalance, S&P believes there could be some reversal of the price increases S&P has seen in the last several months. Still, S&P currently does not expect selling prices to decline to the levels S&P saw in the first half of 2009, when prices averaged around $660 per ton compared with $840 per ton in 2008, because S&P thinks it is likely that demand for paper and packaging products will be modestly higher in 2010. In addition, S&P believes that the weak U.S. dollar against the euro and the Canadian dollar will continue to partly offset some of the benefits of price increases in the near term. MESA AIR: Committee Proposes Morrison as Counsel ------------------------------------------------ The Official Committee of Unsecured Creditors in Mesa Air Group Inc.'s cases seeks the Court's authority to retain Morrison & Foerster, LLP, as its counsel, nunc pro tunc to January 13, 2010. Morrison will provide a range of services to the Creditors' Committee, including: (a) to assist and advise the Committee in its consultation with the Debtors relative to the administration of these bankruptcy cases; (b) to assist and advise the Committee in its examination and analysis of the conduct of the Debtors' affairs; (c) to assist the Committee in the review, analysis and negotiation of any plan of reorganization and disclosure statement accompanying the plan; (d) to take all necessary action to protect and preserve the interests of the Committee and general unsecured creditors; and (e) to perform all other necessary legal services in these cases. Morrison will be paid its customary hourly rates, which are subject to periodic adjustments, and will be reimbursed for actual, necessary expenses and other charges incurred. The firm's current standard rates, and the professionals expected to have primary responsibility in providing the Services, are: Partners $600 - $950 Counsel $395 - $875 Associates $295 - $640 Paraprofessionals $165 - $270 Brett H. Miller, partner $800 Lorenzo Marinuzzi, partner $700 Todd M. Goren, associate $625 Erica J. Richards, associate $490 Stephen Koshgerian, associate $370 Laura Guido, paraprofessional $230 Douglas Keeton, paraprofessional $195 According to Brett H. Miller, Esq., a partner at Morrison, the firm has represented, currently represents, and will likely in the future represent, certain parties-in-interest or potential parties-in-interest in these Chapter 11 cases in matters unrelated to the Debtors, the bankruptcy cases, or the entities' claims against the Debtors. As part of its customary practice, Morrison is retained in cases, proceedings, and transactions involving many different parties throughout the United States and worldwide, some of whom may represent or be employed by the Debtors, claimants, and parties-in-interest in these Chapter 11 cases. Mr. Miller discloses that Morrison has, in the past, represented US Airways Inc., United Airlines Inc. and certain of its affiliates, and affiliates of Delta Air Lines Inc. in matters that are closed and none of which involved the Debtors. Morrison will not represent the Creditors' Committee in an adversary proceeding or other litigation against any of the firm's client without obtaining appropriate waivers where necessary or appropriate. The firm also will not represent any client in any matter involving the Debtors or their Chapter 11 cases while retained as the Creditors' Committee's counsel, Mr. Miller assures the Court. Morrison does not hold or represent any interest adverse to the Debtors' estates and, except as disclosed, does not have any connections to the Debtors' creditors, affiliates, other parties- in-interest and potential parties-in-interest, the Assistant United States Trustee for the Southern District of New York and the attorneys employed by the U.S. Trustee, or any judge in the United States Bankruptcy Court for the Southern District of New York. The firm is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code, Mr. Miller attests. To the extent that Morrison is determined to have a conflict with respect to a particular client or matter, the Creditors Committee will utilize separate conflicts counsel. The firm will make all reasonable efforts not to duplicate the services rendered by these professionals. About Mesa Air Group Mesa currently operates 130 aircraft with approximately 700 daily system departures to 127 cities, 41 states, Canada, and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, respectively, and independently as Mesa Airlines and go! Mokulele. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 3,500 employees. Mesa Air Group Inc. and its units filed their Chapter 11 petitions Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing assets of $976 million against debt totaling $869 million as of Sept. 30, 2009. Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as local counsel. Imperial Capital LLC is the investment banker. Epiq Bankruptcy Solutions is claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Mesa Air Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) MESA AIR: Gets Final Nod to Honor Industry Related Agreements ------------------------------------------------------------- Mesa Air Group Inc., and its units sought and obtained final approval to (i) honor and satisfy accrued and unpaid prepetition and postpetition obligations under the Interline Agreements, Clearinghouse Agreements, ARC Agreement, Alliance Agreements, Codeshare Agreements, and ATPCO Agreement in the ordinary course of business; and (ii) direct the applicable clearinghouse -- Airlines Clearing House, Inc. -- and any other applicable bank or financial institution to process payments and transfers and to honor all funds transfer requests made by the Debtors relating to the Industry Agreements. The airline business, according to Maria A. Bove, Esq., at Pachulski Stang Ziehl & Jones LLP, in New York, is an interdependent industry based on a vast worldwide network of agreements that govern essentially all aspects of airline operations. Without agreements that provide for the sharing and exchange of services, it would be virtually impossible for the Debtors and any airline to provide efficient and cost-effective service, she tells the Court. Most importantly, certain of the Industry Agreements allow the Debtors to fulfill their obligations to their codeshare partners, United Airlines, Inc., Delta Air Lines, Inc., and US Airways, Inc., which codeshare arrangements generate most of the Debtors' revenues. Certain of the other Industry Agreements provide for the exchange of services, rights to issues tickets, and the settlement of accounts among participating airlines and travel agents. Certain other Industry Agreements permit travel agents to make and confirm reservations, price and issue tickets automatically and also provide for publication of the Debtors' fares. The Industry Agreements, Ms. Bove says, facilitate basic levels of cooperation among the Debtors and other airlines with regard to vital activities, like making reservations and transferring passengers, freight, baggage, mail, and advertising of fares. Ms. Bove points out that as recognized in other Chapter 11 airline cases, agreements substantially similar to the Industry Agreements are an essential component to the Debtors' businesses. Certain services under these agreements are the equivalent of industry wide utility services for which no readily available alternative exists. Should the Debtors fail to honor or pay valid, accrued, and unpaid prepetition obligations owed to the parties pursuant to the Industry Agreements, these parties may refuse or delay their performance under the Industry Agreements or otherwise put at risk the parties' critical relationships, which would result in immediate and irreparable harm to the Debtors' estates and all stakeholders in these Chapter 11 cases, she says. Thus, subject to certain conditions, the Debtors seek to take immediate, active steps to preserve these essential relationships. Industry Agreements A. Interline Agreements In relation to the Debtors' go! Mokulele operations, the Debtors are party to agreements with other carriers that are commonly known as interline agreements. The Debtors are parties to Interline Agreements with each of Alaska Airlines, American Airlines, Delta Airlines, Delta Air Lines/Northwest Airlines, and Hawaii Island Air, Inc. As of the Petition Date, the Debtors estimate that the accrued and unpaid prepetition obligations under the Interline Agreements is approximately $225,000. This estimate, according to Ms. Bove, is a gross figure, and not net of certain amounts that may be owed to Mesa under certain Interline Agreements, and thus, the actual cash outlay by the Debtors will likely be materially less than $225,000. The Debtors will pay accrued and unpaid prepetition obligations under the Interline Agreements and continue honoring the Interline Agreements in the ordinary course of business. B. Clearinghouse Agreements The Debtors generally settle their accounts under certain Industry Agreements through a clearinghouse, either the Airlines Clearing House, Inc., or the International Air Transport Association Clearinghouse. The Debtors are associate members of the ACH, and are parties to two clearinghouse agreements with ACH. One of the Debtors' Clearinghouse Agreements with ACH allows the Debtors to participate in IATA billing and settlement plan regions, which facilitate international sales transactions similar to those domestic sales transactions facilitated by the other Clearinghouse Agreement with ACH. As of the Petition Date, the Debtors estimate that the accrued and unpaid prepetition obligations owed related to the Clearinghouse Agreements, including amounts that may be owed by the Debtors with respect to ACH Settled Accounts, is approximately $325,000 on a gross basis, which is comprised of approximately $225,000 owed by the Debtors under the Interline Agreements and approximately $100,000 that may be owed to global distribution systems. C. ARC Agreement The Debtors are also party to a multi-lateral agreement with the Airlines Reporting Corporation in relation to their go! Mokulele operations as to account settlements not handled by ACH. ARC serves as a clearinghouse and enables the refund claims of, and commissions owed to, travel agencies to be offset against the funds owed to airlines from travel agencies. The majority of travel agents located in the United States are members of ARC. As of the Petition Date, there are no outstanding claims under the ARC Agreement. Nonetheless, out of caution, the Debtors seek authority, but not direction, to pay accrued and unpaid prepetition obligations, if any, under the ARC Agreement, including any amounts that may be owed to ARC for its services, which the Debtors estimate may be approximately $24,000, and amounts that may be owed with respect to accounts handled by ARC, and to continue honoring this agreement in the ordinary course of business. D. Codeshare Agreements Approximately 96% of the Debtors' consolidated passenger revenues are derived from their codeshare agreements. Under the Codeshare Agreements, the Debtors provide air transportation services to the Principal Carriers' customers on various flight routes, using the Principal Carriers' flight designator codes and the Principal Carriers' livery and service marks. In exchange for providing flights and other services pursuant to the Codeshare Agreements, the Debtors receive compensation from the Principal Carriers and are also reimbursed for certain expenses by the Principal Carriers. In some cases, the Principal Carriers also provide certain customer service, ground handling service and other functions to the Debtors in connection with the foregoing. The Debtors believe that their accrued and unpaid prepetition obligations under the Codeshare Agreements, if any, are de minimis, and as noted, typically no cash outlay by the Debtors is required as generally, amounts owed are netted against the substantially larger amounts due to them. E. Alliance Agreements The Debtors and certain airlines are party to agreements that provide for cooperative marketing efforts. The Alliance Agreements provide several benefits to the Debtors' partners and their customers, including reciprocal codeshare arrangements, the ability for the Debtors' customers to accrue and redeem frequent flyer miles on flights of the participating airlines, and the ability to have reciprocal airport lounge access. In particular, the Debtors participate in the Star Alliance and SkyTeam Alliance in connection with the Debtors' Codeshare Agreements with United, US Airways, and Delta. The Debtors do not believe that, as of the Petition Date, any accrued prepetition obligations are owed by them under the Alliance Agreements. Generally, the Debtors have no financial obligations under those agreements; the Debtors' partners do. Nonetheless, out of an abundance of caution, the Debtors seek authority, but not direction, to pay accrued and unpaid prepetition obligations, if any, under the Alliance Agreements and to continue honoring the Alliance Agreements in the ordinary course of business. The Debtors' counterparties to the Alliance Agreements are: * Air Wisconsin Airlines Corp. * Aer Lingus * Air Canada * Air China * Asiana Airlines * Austrian Airlines * British Midland Airways Ltd. * Deutsche Lufthansa Aktiengesellschaft * Jet Airways * Nippon Airways & affiliates * Qatar Airways * SAS Scandinavian Airways * Societe Air France * South African Airways * TACA Airlines * TAP Portugal F. GDS Agreement The Debtors are party to separate participation carrier agreements with various global distribution systems. The GDS comprises a network of computer systems and databases that store, process, and distribute information about available passenger air transportation. The GDS enables travel agents to accept and record bookings of those services from remote locations. In addition to storing information, the GDS also allows travel agents to make and confirm reservations, price and issue tickets automatically, and process the travel agencies' internal accounting. The Debtors use Sabre Inc. as their main GDS, although the Debtors distribute their fares for corporate, government, and travel agent accounts through other GDSs: Galileo and Amadeus. As of the Petition Date, the Debtors estimate that the accrued and unpaid prepetition obligations under the GDS Agreements is approximately $100,000. Mesa seeks authority, but not direction, to pay accrued and unpaid prepetition obligations under the GDS Agreements and to continue honoring the GDS Agreements in the ordinary course of business. G. ATPCO Agreement Airline Tariff Publishing Company facilitates the publication of airline tariff filings that are communicated by ATPCO to ticket vendors pursuant to an agreement with the Debtors. The Debtors believe that, as of the Petition Date, they may owe a de minimis amount under the ATPCO Agreement, approximately $1,500 or less. The Debtors seek authority, but not direction, to pay accrued and unpaid prepetition obligations under the ATPCO Agreement and to continue honoring the ATPCO Agreement in the ordinary course of business. About Mesa Air Group Mesa currently operates 130 aircraft with approximately 700 daily system departures to 127 cities, 41 states, Canada, and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, respectively, and independently as Mesa Airlines and go! Mokulele. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 3,500 employees. Mesa Air Group Inc. and its units filed their Chapter 11 petitions Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing assets of $976 million against debt totaling $869 million as of Sept. 30, 2009. Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as local counsel. Imperial Capital LLC is the investment banker. Epiq Bankruptcy Solutions is claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Mesa Air Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) MESA AIR: Gets Final Nod to Pay Critical Vendors ------------------------------------------------ Mesa Air Group Inc. obtained final approval from Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to pay all of their outstanding obligations to critical vendors. As of the Petition Date, the Debtors estimate that the total accrued, unpaid, prepetition, trade claims aggregate approximately $60,000,000. The Debtors operate in a highly specialized, highly regulated and highly competitive industry. The uniqueness of the airline industry leaves airlines with few options when selecting vendors. Certain suppliers and service providers at various venues are simply the only option available to the Debtors. Even in those circumstances where more than one critical vendor can be located to provide a service, Federal Aviation Administration regulations inhibit an airline's ability to switch expeditiously from one supplier of goods or services to another. As of the Petition Date, the Debtors estimate that the accrued, unpaid, prepetition critical vendor claims aggregate approximately $4,778,000, or approximately 8.0% of the total aggregate trade debt: Among other things, the Debtors are authorized, but not directed, in the reasonable exercise of their business judgment, to pay some or all of the prepetition claims of the lienor critical vendors, provided that payments do not exceed $3,880,000. The Debtors are authorized, but not directed, in the reasonable exercise of their business judgment, to pay some or all of the prepetition claims of the non-lienor critical vendors up to the Non-Lienor Critical Vender Claims Cap, who agree to continue to supply goods or services to the Debtors on customary trade terms for a period after the date of the agreement and on other terms and conditions as are acceptable to and requested by the Debtors in their discretion. Each of the banks and financial institutions, at which the Debtors maintain their accounts relating to the payment of the claims that the Debtors request authority to pay in the Motion, are authorized to receive, process, honor, and pay all checks presented for payment and to honor all fund transfer requests made by the Debtors, to the extent that sufficient funds are on deposit in those accounts. About Mesa Air Group Mesa currently operates 130 aircraft with approximately 700 daily system departures to 127 cities, 41 states, Canada, and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, respectively, and independently as Mesa Airlines and go! Mokulele. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 3,500 employees. Mesa Air Group Inc. and its units filed their Chapter 11 petitions Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing assets of $976 million against debt totaling $869 million as of Sept. 30, 2009. Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as local counsel. Imperial Capital LLC is the investment banker. Epiq Bankruptcy Solutions is claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Mesa Air Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) MHG CASA: Casa Madrano Hotel On Auction Block --------------------------------------------- Sarah Duxbury at San Francisco Business Times says Casa Madrona Hotel of MHG Casa Madrona Hotel is being foreclosed. A public auction will be held at San Rafael City. The estimated opening bid is $11.4 million. Miami, Florida-based MHG Casa Madrona Hotel, LLC, operates a lodging business. The Company filed for Chapter 11 on Aug. 10, 2009 (Bankr. N.D. Calif. Case No. 09-12536). Tracy Green, Esq., at Wendel, Rosen, Black and Dean, represents the Debtor in its restructuring efforts. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. MOVIE GALLERY: Chapter 22 Case Summary & Creditors List ------------------------------------------------------- Debtor: Movie Gallery, Inc. 9275 SW Peyton Lane Wilsonville, OR 97070 Bankruptcy Case No.: 10-30696 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Hollywood Entertainment Corporation 10-30695 Movie Gallery US, LLC 10-30697 MG Real Estate, LLC 10-30698 HEC Real Estate, LLC 10-30700 Chapter 11 Petition Date: February 2, 2010 About the Company: Based in Wilsonville, Ore., Movie Gallery, Inc. is the second largest North American video and game rental company, operating stores in the U.S. and Canada under the Movie Gallery, Hollywood Video and Game Crazy brands. Movie Gallery first filed for Chapter 11 on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07- 33849 to 07-33853). Kirkland & Ellis LLP and Kutak Rock LLP represented the Debtors. The Company emerged from bankruptcy on May 20, 2008, with private-investment firms Sopris Capital Advisors LLC and Aspen Advisors LLC as its principal owners. William Kaye was appointed plan administrator and litigation trustee. Bankruptcy Court: U.S. Bankruptcy Court for the Eastern District of Virginia Richmond Division Bankruptcy Judge: The Honorable Judge Douglas O. Tice Jr. Debtors' Counsel: John A. Bicks, Esq. Sonnenschein Nath & Rosenthal LLP 1221 Avenue of the Americas New York, NY 10020-1089 Tel: (212)768-6700 Monika J. Machen Sonnenschein Nath & Rosenthal LLP 233 South Wacker Drive, Suite 7800 Chicago, IL 60606-6404 Tel: (312)876-8000 Debtors' Local Counsel: Michael A. Condyles Peter J. Barret Kutak Rock LLP Bank of America Center 1111 East Main Street, Suite 800 Richmond, VA 23219-3500 Tel: (804)644-1700 Debtors' Financial Advisor: Moelis & Company LLC 399 Park Avenue, 5th Floor New York, NY 10022 Tel: (212)883-3800 Debtors' Restructuring Advisor: Corliss, Moore & Associates, LLC 3455 Peachtree Road Atlanta, Georgia Tel: (404)995-7026 Claims Agent: Kurtzman Carson Consultants c/o Movie gallery (2010) Claims Processing 2335 Alaska Avenue El Segundo, CA 90245 Tel: (310)823-9000 Real Estate Consultants: DJM Realty Asset and Sales Consultants: Gordon Brothers Group U.S. Trustee: W. Clarkson McDow, Jr. Office of the United States Trustee 701 E. Broad Street, Suite 4304 Richmond, VA 23219 Tel: (804)771-2310 The petition was signed by Pamela R. Schneider, Movie Gallery Inc.'s executive vice president, secretary and general counsel. List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Warner Home Video Trade Debt $9,538,340 3400 Riverside Drive Building 160 Burbank, CA 97515 Tel: (818)977-8219 Fax: (818)977-5740 Sony Pictures Home Trade Debt $9,339,565 Entertainment (formerly) Columbia Tristar 10202 West Washington Blvd. Suite 2400, Culver City CA 90232 Tel: (310) 244-8485 Fax: (310) 244-2626 Twentieth Century Fox Trade Debt $8,176,597 Home Entertainment 2121 Avenue of the Stars #2500 Los Angeles, CA 90067-5049 Tel: (310)369-3900 Fax: (310)369-5262 Universal Studios Trade Debt $7,668,661 Home Entertainment 10 Universal City Plaza 4th Floor, Universal City CA 91608 Tel: (818)777-5159 Fax: (818)866-3330 Paramount Home Video Trade Debt $6,866,689 5555 Melrose Avenue Hollywood, CA 90038 Tel: (323)956-5489 Fax: (323)862-1183 VPD, Inc. Trade Debt $2,860,906 150 Park Shore Dr Folshom, CA 95630 Tel: (916)605-1540 Fax: (916)605-1679 Valassis Direct Mail Inc. Trade Debt $2,259,128 19975 Victor Parkway Livona, MI 41852 Tel: (800)437-0479 Electronic Arts Trade Debt $1,840,867 (San Mateo CA) 209 Redwood Shores Redwood City, CA 94065-1175 Tel: (650) 628-1500 Fax: (650) 628-1422 Microsoft Corporation One Microsoft Way Trade Debt $1,749,250 Redmond, WA 98052 Tel: (800)642-7676 Ostler Group Trade Debt $1,087,397 740 S. Creek Road, #1024 Sandy, UT 84093 Tel: (801)566-6085 Banta Direct Trade Debt $674,538 Marketing Group 7401 Kilmer Lane Maple Grove, MN 55369-5699 Tel: (763)315-8100 Fax: (763)315-8177 Starz Home Entertainment Trade Debt $645,265 Inc. 8900 Liberty Circle Englewood, CO 80112 Tel: (720)852-7700 Fax: (720)852-8555 Sony Computer Entertainment Trade Debt $595,241 of America 919 E. Hillsdale Blvd. 2nd Floor Foster City CA 94404 Federal Express Trade Debt $548,461 PO Box 7221 Pasadena, CA 91109-7321 Inner Workings Inc. Trade Debt $542,692 600 West Chicago Ave., Suite 850 Chicago, IL 60654 Tel: (312)642-3700 Fax: (312)642-3704 Facilitysource Inc. Trade Debt $504,190 PO Box 2535 Secaucus, NJ 07096 Tel: (800)896-9000 Active International Trade Debt $470,174 One blue Hill Plaza Pearl River, NY 10965-8705 Tel: (845)732-8516 Activision Inc. Trade Debt $425,767 3100 Ocean Park Blvd. Santa Monica, CA 90405 Hamilton-Ryker Company, The Trade Debt $390,183 P.O Box 638 Hampton, VA 213669-0638 Fred Meyer Stores Inc. Trade Debt $359,653 3800 SE 22nd Avenue Tel: (503)232-8844 Fax: (503)797-5609 Mandalay Bay Resort Casino Trade Debt $358,603 Image Entertainment Inc. Trade Debt $351,010 20525 Nordhoff St. Suite 200 Chatsworth, CA 91311 Tel: (818)407-9100 Inland Commercial Landlord $344,937 Property Management 22901 Butterfield RD Oak Brook, IL 60523 Tel: (630)218-5262 Fax: (630)218-4900 THQ Incorporated Trade Debt $336,201 29903 Agoura Road Calabasas Hills, CA, 91301 Realty Income Corporation Landlord $293,977 Escondido, CA 92025 Tel: (760)741-2111 Fax: (760)741-2235 Yahoo, Inc. Trade Debt $264,464 3333 Empire Avenue Burbank CA 91504 Tel: (818)524-3000 Fax: (818)524-3001 Moore Wallace dba Trade Debt $232,615 R R Donnelley 111 South Wacker Drive Chicago, IL 60606 Tel: (312)326-8000 Millenium Media Trade Debt $228,830 Services Inc. 2000 Avenue of the Stars Suite 410 Century City, CA, 90067 Tel: (424)202-5013 PK Sale LLC Trade Debt $174,313 PO Box 100550 Pasadena, CA 91189-0550 WYF Properties, LLC Landlord $174,188 5100 Poplar Ave. Suite 1000 Memphis, TN 38137 Tel: (503)644-9400 Fax: (503)520-9400 These parties are the equity security holders of Movie Gallery Inc.: DQ Ltd. 16.21% Enter Aspen Limited (c/o Aspen Advisors) 8.73% Enter Aspen Limited (c/o Sopris Advisors) 11.45% Lenado Partners Series A of Lenado Capital Partners L.P. 26.21% Rovida Holdings Limited 8.11% RR Investment Company LTD 8.11% Lenado DP Series A of Lenado DP L.P. 1.38% The Richmond Fund LP 0.49% Hollywood Entertainment Corporation is 100% owned by Movie Gallery Inc. Movie Gallery US, LLC is 100% owned by Movie Gallery, Inc. HEC Real Estate, LLC is 100% owned by Hollywood Entertainment Corporation MG Real Estate, LLC is 100% owned by Movie Gallery US, LLC MPI AZALEA: Section 341(a) Meeting Scheduled for February 19 ------------------------------------------------------------ The U.S. Trustee for Region 21 will convene a meeting of creditors in MPI Azalea, LLC and its debtor-affiliates' Chapter 11 cases on February 19, 2010, at 1:00 p.m. The meeting will be held at Third Floor - Room 363, Richard B. Russell Bldg., 75 Spring Street, SW, Atlanta, Georgia. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Atlanta, Georgia-based MPI Azalea, LLC, aka Highland Brooke Apartments and its affiliates filed for Chapter 11 on January 8, 2010 (Bankr. N.D. Ga. Lead Case No. 09-60803). Jimmy C. Luke, Esq., at Foltz Martin, LLC assists the Debtor in its restructuring effort. In its petition, the Debtor listed assets and liabilities both ranging from $10,000,001 to $50,000,000. NATURAL PRODUCTS: Court Okays AlixPartners as Claims Agent ---------------------------------------------------------- Natural Products Group, LLC, et al., sought and obtained permission from the U.S. Bankruptcy Court for the District of Delaware to employ AlixPartners, LLP, as noticing, claims and balloting agent, nunc pro tunc to the Petition Date. AlixPartners will, among other things: a. assist the Debtors with preparing and filing of the bankruptcy schedules and statements of financial affairs; b. process and mail notices including the initial bankruptcy notices and bar date notice; c. receive and process proofs of claim and maintain the claims register; and d. track claims transfers and update ownership of claims in the claims register accordingly. AlixPartners will be paid based on the hourly rates of its personnel: Managing Directors $685 Directors $595 Vice Presidents $425 Associates $335 Analysts $235 Paraprofessionals $120 Michelle C. Campbell, managing director of AlixPartners, assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Wilmington, Delaware-based Natural Products Group, LLC, filed for Chapter 11 bankruptcy protection on January 27, 2010 (Bankr. D. Delaware Case No. 10-10239). Eric Michael Sutty, Esq.; Jeffrey M. Schlerf, Esq.; and John H. Strock, III, Esq., at Fox Rothschild LLP, assist the Company in its restructuring effort. The Company listed $100,000,001 to $500,000,000 in assets and $500,000,001 to $1,000,000,000 in liabilities. The Company's affiliates -- Arbonne Intermerdiate Holdco, Inc.; Levlad Intermediate Holdco, Inc.; Arbonne International, LLC; Levlad, LLC; Arbonne Institute of Research and Development, LLC; Arbonne International Holdings, Inc.; and Arbonne International Distribution, Inc. -- filed separate Chapter 11 bankruptcy petitions. NATURAL PRODUCTS: Gets Interim Okay on Obtaining DIP Financing -------------------------------------------------------------- Natural Products Group, LLC, et al., sought and obtained permission from the U.S. Bankruptcy Court for the District of Delaware to obtain, on an interim basis, postpetition secured financing from a syndicate of lenders led by Canadian Imperial Bank of Commerce as administrative agent, and to use cash collateral. The DIP lenders have committed to provide up to $10 million on an interim basis, including a $250,000 letter of credit facility, with an additional $10 million available on a final basis The attorneys for the Debtors -- Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, and Thomas E. Lauria, Esq., at White & Case LLP -- explained that the Debtors need the money to fund their Cchapter 11 case, pay suppliers and other parties. The DIP facility will mature on May 31, 2010. Each Eurodollar loan will bear interest for each day during each interest period with respect thereto at a rate per annum equal to the Eurodollar rate determined for the day plus $10.00%. Each ABR Loan will bear interest at a rate per annum equal to the ABR plus 9.00% The Debtors' obligations under the DIP facility are secured by all property of guarantors Arbonne HoldCo and Levlad HOldCo, the borrowers and their subsidiaries, upon which a lien is purported to be created by any security document or any financing order. The DIP lenders are granted: (i) first lien on unencumbered property; (ii) liens junior to certain existing liens; (iii) liens priming prepetition secured lenders' liens; and (iv) liens senior to certain other liens. The DIP lien is subject to a carve out for U.S. Trustee and Clerk of Court fees; fees payable to professional employed in the Debtors' case; and fees of the committee in pursuing actions challenging the DIP Lenders' lien. A copy of the DIP financing agreement is available for free at: http://bankrupt.com/misc/NATURAL_PRODUCTS_dipfinancingpact.pdf http://bankrupt.com/misc/NATURAL_PRODUCTS_dipfinancingpact2.pdf Messrs. Schlerf and Lauria said that the Debtors will also use the cash collateral to provide additional liquidity. In exchange for using the cash collateral, the Debtors proposed to: a. grant the prepetition lenders allowed superpriority administrative claims; b. grant the prepetition lenders valid, perfected replacement security interest in and lien on all of the collateral; c. pay the prepetition lenders in cash (i) reasonable professional fees and expenses incurred by the Prepetition Administrative Agent under the Prepetition Credit Agreement arising prior to the Petition Date; and (ii) on a current basis, the reasonable professional fees and expenses incurred by the Prepetition Administrative Agent under the Prepetition Credit Agreement arising subsequent to the Petition Date; d. pay indefeasibly in cash to the Prepetition Administrative Agent, for the benefit of the Prepetition Secured Parties, in permanent reduction of the outstanding principal balance of the Prepetition Indebtedness in accordance with the application of payments provisions of the Prepetition Loan Documents, all proceeds from a sale, lease or other disposition of the collateral; and e. provide the Prepetition Administrative Agent any written financial information, periodic reporting or other information that is provided to, or required to be provided to, the DIP Agent or the DIP Lenders, and other reports, information and materials as reasonable requested by the Prepetition Administrative Agent. The Court has set a final hearing for February 22, 2010, at 12:30 p.m. on the Debtors' request to obtained DIP financing and use cash collateral. The Agent is represented by Kaye Scholer LLP and Potter Anderson & Corroon LLP. About Natural Products Wilmington, Delaware-based Natural Products Group, LLC, filed for Chapter 11 bankruptcy protection on January 27, 2010 (Bankr. D. Delaware Case No. 10-10239). Eric Michael Sutty, Esq.; Jeffrey M. Schlerf, Esq.; and John H. Strock, III, Esq., at Fox Rothschild LLP, assist the Company in its restructuring effort. The Company listed $100,000,001 to $500,000,000 in assets and $500,000,001 to $1,000,000,000 in liabilities. The Company's affiliates -- Arbonne Intermerdiate Holdco, Inc.; Levlad Intermediate Holdco, Inc.; Arbonne International, LLC; Levlad, LLC; Arbonne Institute of Research and Development, LLC; Arbonne International Holdings, Inc.; and Arbonne International Distribution, Inc. -- filed separate Chapter 11 bankruptcy petitions. NEENAH ENTERPRISES: Seeks OK of $50MM BNY & $90MM BofA DIP Loans ---------------------------------------------------------------- Neenah Enterprises, Inc., and Neenah Foundry Company, an indirect wholly owned subsidiary of NEI , and all of NEI's other direct and indirect subsidiaries ask Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware for authority to obtain postpetition secured financing to fund their chapter 11 cases. $50,000,000 Term Loan with BNY Mellon On February 3, 2010, the Company obtained a commitment, subject to satisfaction of certain conditions, from certain holders of the 9.5% Senior Secured Notes due 2017 issued pursuant to an Indenture dated as of December 29, 2006, by and among Neenah, as issuer, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee, as supplemented, to provide the Debtors with post-petition financing pursuant to a $50 million super-priority secured debtor-in-possession multiple draw term loan agreement, among Neenah, as borrower, NEI and NFC Castings, Inc., as guarantors, the subsidiaries of Neenah, as guarantors, the lenders party thereto, from time to time, and Wilmington Trust FSB, as administrative agent. The Term Loan DIP Credit Agreement provides for a term loan in the aggregate principal amount of $50 million. The Company will be permitted to make an initial draw of $25 million on the closing date of the DIP Term Loan and up to three additional draws, each in a principal amount not less than $5 million, provided that the additional draws may not exceed $25 million in principal amount. The principal outstanding on the DIP Term Loan will bear interest at an annual rate equal to LIBOR (subject to a minimum LIBOR floor of 2.5%) plus 10%. The principal outstanding on the DIP Term Loan is also subject to additional interest at an annual rate equal to 2.0% during the continuance of an event of default under the Term Loan DIP Credit Agreement. The Term Loan DIP Credit Agreement will also contain certain customary covenants, various representations and warranties, and events of default. All principal, interest and other amounts payable under the Term Loan DIP Credit Agreement will be secured by a lien on all of the Debtor's assets. $90,000,000 Revolver with BofA On February 3, 2010, the Company also obtained a commitment, subject to satisfaction of certain conditions, from the lenders under the Amended and Restated Loan and Security Agreement, dated as of December 29, 2006, as amended, to provide the Debtors with postpetition financing pursuant to a $90 million super-priority secured debtor-in-possession revolving loan and letter of credit facility pursuant to a Postpetition Agreement, by and among Neenah and certain subsidiaries of Neenah, as borrowers, the lenders from time to time party thereto and Bank of America, N.A., individually as a lender and as agent. The Revolving Loan DIP Credit Agreement provides for a revolving loan and letter of credit facility in the aggregate principal amount of $90 million when combined with the principal amount of revolving loans and undrawn letters of credit outstanding under the 2006 Credit Facility, subject to customary conditions, the imposition of reserves and limited by the Company's borrowing base, as provided in the 2006 Credit Facility. The principal outstanding on the DIP Revolving Loan will bear interest at an annual rate equal to, at Neenah's option, LIBOR (subject to a minimum LIBOR floor of 1.5%) plus 6.5% or at the Base Rate, as defined in the 2006 Credit Facility, plus 5.0%. The principal outstanding on the DIP Revolving Loan is also subject to additional interest at an annual rate equal to 2.0% during the continuance of an event of default under the Revolving Loan DIP Credit Agreement. The Revolving Loan DIP Credit Agreement will also contain certain customary covenants, various representations and warranties, and events of default. All principal, interest and other amounts payable under the DIP Revolving Loan will be secured by a lien on all of the Debtors' assets. 9-Month Maturity The DIP Facilities will mature on the earlier to occur of (i) the nine month anniversary of the closing date of the DIP Facilities, (ii) the effective date of any plan of reorganization, (iii) the consummation of any sale of all or substantially all of the assets of the Debtors pursuant to Section 363 of the Bankruptcy Code and (iv) the occurrence of certain termination events. The DIP Facilities will be used to fund working capital and general corporate needs, the payment of fees and transaction costs and expenses in connection with the provisions of the DIP Facilities and the payment of other post-petition obligations. Meanwhile, NEI said the Chapter 11 petitions constitute or may constitute an event of default or otherwise triggers or may trigger repayment obligations under the express terms of certain instruments and agreements relating to direct financial obligations of the Debtors. As a result of such an event of default or triggering event, all obligations under the Debt Documents would, by the terms of the Debt Documents, have or may become due and payable. The Debtors believe that any efforts to enforce such payment obligations against the Debtors under the Debt Documents are stayed as a result of the filing of the Chapter 11 Petitions in the Bankruptcy Court. The material Debt Documents, and the approximate principal amount of debt currently outstanding thereunder, are: -- the 2006 Credit Facility providing for borrowings up to $110 million due December 31, 2011, which has an aggregate outstanding principal balance of approximately $53.3 million; -- the 9-1/2% Notes due 2017, issued under the Indenture dated as of December 29, 2006, by and among Neenah, as issuer, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee, as supplemented, in the aggregate amount outstanding, including accrued interest through January 31, 2010, of approximately $237.5 million; -- the 12-1/2% Notes due 2013, in the aggregate amount outstanding, including accrued interest through January 31, 2010, of approximately $88.7 million; and -- capital lease obligations, in the aggregate amount outstanding of approximately $1.5 million. About Neenah Enterprises and Neenah Foundry Headquartered in Neenah, Wisconsin, Neenah Enterprises, Inc. -- http://www.nfco.com/-- is the indirect parent holding company of Neenah Foundry Company. Neenah Foundry Company and its subsidiaries manufacture and market a wide range of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets. Neenah is one of the largest independent foundry companies in the United States, with substantial market share in the municipal and various industrial markets for gray and ductile iron castings and forged steel products. Neenah Enterprises (formerly ACP Holding Company) has no business activity other than its ownership of NFC Castings, Inc. Neenah Foundry is a wholly owned subsidiary of NFC Castings, Inc. Neenah Enterprises and Neenah Foundry, an indirect wholly owned subsidiary of NEI, and all of NEI's other direct and indirect subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on February 3, 2010 (Bankr. D. Del. Lead Case No. 10-10360). The Chapter 11 cases have been assigned to Judge Mary F. Walrath. The Company's restructuring advisors are Sidley Austin LLP, Rothschild, Inc. and Huron Consulting Group. As of September 30, 2009, Neenah Foundry had $286,611,000 in total assets against total liabilities of $449,435, resulting in stockholder's deficit of $162,824,000. NEXTMEDIA GROUP: Gets Final OK to Obtain $20MM DIP Financing ------------------------------------------------------------ The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware, in a final order, authorized NextMedia Group, Inc., et al., to: -- obtain up to $20 million of postpetition financing from funds and affiliates of funds managed by Angelo, Gordon & Co. L.P.; -- use cash collateral of first and second lien lenders; and -- grant adequate protection to prepetition lenders. As reported in the Troubled Company Reporter on January 7, 2010, the Debtors' first lien secured debt was acquired through the November 2005 Credit and Guaranty Agreement with Wilmington Trust FSB as successor administrative agent and collateral agent and other parties. As of the petition date, the Debtors owed the first lien lenders $162.3 million, plus an additional $2.9 million in certain interest rate swap obligations. The second lien lead investors are certain funds and their affiliates managed by Strategic Value Partners LLC or its affiliates and certain funds and their affiliates managed by Angelo, Gordon & Co., L.P., or its affiliates (the Lead DIP Lenders) and other financial institutions or entities acceptable to the second lien investors. The Debtors' second lien secured debt was acquired through a November 2005 Second Lien Credit and Guaranty Agreement with NexBank, SSB, as administrative agent. As of the petition date, the Debtors owed the second lien lenders $89.6 million under the second lien credit agreement. The Debtors were unable to obtain financing on more favorable terms from sources other than the DIP lenders. The Debtors would use the money to fund their business operations. The DIP facility will mature six months from the petition date. The DIP facility will incur interest at LIBOR plus 11% or, at the Debtors' option, ABR plus 10%, payable monthly in arrears. In the event of default, interest will be payable on all outstanding obligations on demand at 2.0% above the then applicable rate. The Debtors will grant the lenders (i) superpriority claims and replacement liens, which in the case of the First Lien Lenders will be senior to all other pre-petition and post-petition liens; (ii) payment of reasonable fees and expenses of the administrative agents to the prepetition second lien credit agreement, including payment of the reasonable fees and expenses of Broadpoint Capital, Inc.; Dechert LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP (solely as FCC counsel) in their capacities as professional advisors to the second lien administrative agent, as well as the reasonable fees and expenses of one local counsel to the second lien administrative agent, to the extent applicable; and (iii) financial reporting in accordance with the terms of the Second Lien Credit Agreement. About 3% of the DIP Facility will be paid as commitment fee on the DIP Closing Date ratably to each DIP Lender based upon its commitment under the DIP Facility. NextMedia Group Greenwood Village, Colorado-based NextMedia Group, Inc., provides out-of-home media services through radio broadcasting and outdoor advertising. The Debtors operate an aggregate of 36 AM and FM radio stations in a total of seven rated and unrated small, mid- size and suburban markets, including the Greenville-New Bern- Jacksonville, North Carolina area; the Saginaw-Bay City-Midland, Michigan area; Canton, Ohio; Myrtle Beach, South Carolina; San Jose, California; suburban Chicago; and suburban Dallas. NextMedia Group filed for Chapter 11 bankruptcy protection on December 21, 2009 (Bankr. D. Delaware Case No. 09-14463). The Debtor's affiliates, NextMedia Investors LLC, et al., also filed Chapter 11 bankruptcy petitions. Paul N. Heath, Esq.; Michael J. Merchant, Esq.; and Chun I. Jang, Esq., at Richards Layton & Finger, assist the Debtors in their restructuring efforts. NextMedia Group listed $50,000,001 to $100,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. NEXTMEDIA GROUP: Has Until Feb. 19 to File Schedules & Statement ---------------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware extended until February 19, 2010, NextMedia Group, Inc., et al.'s time to file their schedules of assets and liabilities and statement of financial affairs. Greenwood Village, Colorado-based NextMedia Group, Inc., provides out-of-home media services through radio broadcasting and outdoor advertising. The Debtors operate an aggregate of 36 AM and FM radio stations in a total of seven rated and unrated small, mid- size and suburban markets, including the Greenville-New Bern- Jacksonville, North Carolina area; the Saginaw-Bay City-Midland, Michigan area; Canton, Ohio; Myrtle Beach, South Carolina; San Jose, California; suburban Chicago; and suburban Dallas. NextMedia Group filed for Chapter 11 bankruptcy protection on December 21, 2009 (Bankr. D. Delaware Case No. 09-14463). The Debtor's affiliates, NextMedia Investors LLC, et al., also filed Chapter 11 bankruptcy petitions. Paul N. Heath, Esq.; Michael J. Merchant, Esq.; and Chun I. Jang, Esq., at Richards Layton & Finger, assist the Debtors in their restructuring efforts. NextMedia Group listed $50,000,001 to $100,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. NTK HOLDINGS: Files Final Report on Chapter 11 Cases ---------------------------------------------------- In accordance with Rule 5009-1(e) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware, NTK Holdings, Inc., and Nortek Inc. submitted to the Court a final report on their Chapter 11 cases. The Final Report was submitted in support of the Debtors' Motion to close the Chapter 11 cases of NTK Holdings, Inc., and Nortek, Inc. According to the report, from the Petition Date, through and including December 4, 2009, the Affiliated Debtors were billed $3,773,982 in fees and expenses by retained professionals that provided services to the Debtors: Professionals and Type Total Fees of Services Provided and Expenses ---------------------- ------------ Weil, Gotshal & Manges LLP $1,585,157 (Counsel for the Debtors) Richards, Layton & Finger, P.A. $226,703 (Co-Counsel and Delaware Counsel for the Debtors) AlixPartners, LLP $196,096 (Restructuring Advisor for the Debtors) Blackstone Advisory Partners L.P. $378,042 (Financial Advisor for the Debtors) Ernst & Young LLP $298,971 (Auditors and Tax Advisors for the Debtors) KPMG LLP $132,187 (Internal Control Over Financial Reporting Consultants for the Debtors) Skadden, Arps, Slate, Meagher & Flom, LLP $152,623 (Special Counsel to NTK Holdings, Inc.) Ropes & Gray LLP $233,534 (Special Corporate Counsel for the Debtors) Bryan Cave LLP $254,179 (Special Counsel for the Debtors) Epiq Bankruptcy Solutions, LLC $316,486 (Claims & Noticing Agent for the Debtors) ----------- Total $3,773,982 =========== No trustee or examiner was appointed in the Affiliated Debtors' Chapter 11 cases. Accordingly, no fees were incurred in respect of a trustee or trustee's counsel. According to Richard L. Bready, president and chief executive officer of Nortek, Inc., all required fees due under Section 1930 of the Judiciary and Judicial Procedures Code have been paid current as of January 29, 2010, and any additional fees due will have been paid on or before the date of the hearing on the Final Decree Motion. As of January 29, the Affiliated Debtors have also paid quarterly fees totaling $342,050 to the United States Trustee. All claims distributions required to date under the Prepackaged Joint Plan of Reorganization Plans have been made. The Debtors will make reasonable efforts to locate addresses for claimholders that fail to provide the Debtors with a valid address; however, distributions to claimholders that cannot be located will be deemed unclaimed property under Section 347(b) of the Bankruptcy Code at the expiration of one year from the Effective Date. After the expiration, all unclaimed property or interest in property will revert to the applicable reorganized debtor and the claim of any other holder to the property or interest in property will be discharged and forever barred. Mr. Bready assures the Court that all matters to be completed upon the Effective Date of the Plans have been fulfilled or completed. Mr. Bready adds that there are no pending adversary proceedings or contested matters in the Cases which would affect the substantial consummation of the Cases. About NTK Holdings NTK Holdings Inc., the parent company of Nortek Holdings and Nortek Inc., is a diversified global manufacturer of branded residential and commercial ventilation, HVAC and home technology convenience and security products. NTK Holdings and Nortek offer a broad array of products including range hoods, bath fans, indoor air quality systems, medicine cabinets and central vacuums, heating and air conditioning systems, and home technology offerings, including audio, video, access control, security and other products. NTK Holdings Inc., together with affiliates, including Nortek International, Inc., and Nortek Holdings, Inc., filed for Chapter 11 with a prepackaged plan accepted by all impaired creditors on October 21, 2009 (Bankr. D. Del. Case No. 09-13611). The Company tapped Blackstone Group and Weil, Gotshal & Manges to aid in its restructuring effort. Mark D. Collins, Esq., at Richards Layton & Finger P.A., serves as local counsel. Epiq Bankruptcy Solutions is claims and notice agent. Nortek, Inc. and its affiliated domestic companies announced they completed their financial restructuring and emerged from bankruptcy mid-December 2009. The emergence, which came only 57 days after the filing of a prepackaged plan of reorganization, follows confirmation of the plan on December 4, 2009 by Judge Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware. Bankruptcy Creditors' Service, Inc., publishes NTK Holdings Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Nortek Holdings Inc., Nortek Internationa Inc., and their affiliates (http://bankrupt.com/newsstand/or 215/945-7000). NTK HOLDINGS: Wants 2 Remaining Chapter 11 Cases Closed ------------------------------------------------------- NTK Holdings, Inc., and Nortek Inc. ask Judge Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware to enter a final decree closing their Chapter 11 cases. According to Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that on the Effective Date of the Debtors' Plan of Reorganization, the Debtors have paid all disbursements required to be paid, de-levered their balance sheets, and emerged as stronger, reorganized companies. Accordingly, the Debtors submit that, as of January 29, 2010, the two remaining bankruptcy cases -- Case Nos. 09-13611 and 09-13647 -- have been "fully administered" as required under Section 350(a) of the Bankruptcy Code. The Court entered a final decree on December 29, 2009, closing 36 of the Affiliated Debtors' Chapter 11 cases. The NTK Holdings, Inc. and Nortek, Inc. cases remained open to resolve the Affiliated Debtors' obligations to pay professional fees. According to Mr. Holtzer, all expenses arising from the administration of the Debtors' estates, including court fees and fees required under Section 1930(a)(6) of the Judiciary and Judicial Procedures Code will have been paid as of the closing of the Cases, with the exception of fees and expenses for retained professionals, which will be paid in accordance with the Court's orders on the final fee hearing. All other motions, contested matters, and other proceedings, which were before the Court with respect to the Debtors' Chapter 11 cases have been resolved, he says. * * * The Court will convene a hearing on February 16, 2010, at 2:00 p.m., to consider the Debtors' request. Objections are due February 9. About NTK Holdings NTK Holdings Inc., the parent company of Nortek Holdings and Nortek Inc., is a diversified global manufacturer of branded residential and commercial ventilation, HVAC and home technology convenience and security products. NTK Holdings and Nortek offer a broad array of products including range hoods, bath fans, indoor air quality systems, medicine cabinets and central vacuums, heating and air conditioning systems, and home technology offerings, including audio, video, access control, security and other products. NTK Holdings Inc., together with affiliates, including Nortek International, Inc., and Nortek Holdings, Inc., filed for Chapter 11 with a prepackaged plan accepted by all impaired creditors on October 21, 2009 (Bankr. D. Del. Case No. 09-13611). The Company tapped Blackstone Group and Weil, Gotshal & Manges to aid in its restructuring effort. Mark D. Collins, Esq., at Richards Layton & Finger P.A., serves as local counsel. Epiq Bankruptcy Solutions is claims and notice agent. Nortek, Inc. and its affiliated domestic companies announced they completed their financial restructuring and emerged from bankruptcy mid-December 2009. The emergence, which came only 57 days after the filing of a prepackaged plan of reorganization, follows confirmation of the plan on December 4, 2009 by Judge Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware. Bankruptcy Creditors' Service, Inc., publishes NTK Holdings Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Nortek Holdings Inc., Nortek Internationa Inc., and their affiliates (http://bankrupt.com/newsstand/or 215/945-7000). OSHKOSH CORPORATION: Moody's Upgrades Corp. Family Rating to 'B1' ----------------------------------------------------------------- Moody's Investors Service has upgraded the corporate family rating and probability of default rating for Oshkosh Corporation -- (Oshkosh) to B1 from B2 and changed the ratings outlook to stable. The SGL rating was upgraded to SGL-1 from SGL-3. The ratings upgrade reflects the ongoing improvement in the company's balance sheet as a result of strong cash flow generation, anticipated benefits from the company's MRAP All Terrain Vehicle business, its 2009 equity issuance, and the anticipation for additional debt repayment. For 2010, the M-ATV business performance is anticipated to offset weak performance at the company's traditional businesses including its access equipment, fire equipment, and commercial operations. The stable ratings outlook reflects the belief that although the benefits of the contract to produce all terrain vehicles for the Afghanistan war will primarily support 2010's performance, the company's other businesses are expected to begin to strengthen in 2011 as the economy grows. Moody's therefore currently expect that the company's credit quality is likely to stabilize at a level that is consistent with the B1 ratings category after the M- ATV business winds down. This view is supported by the way in which the natural equipment replacement cycle of access equipment should support demand within the next couple of years even if demand from new projects does not grow meaningfully. The ratings and/or outlook could be negatively affected if the company were unable to meet its commitments to produce the M-ATV as contracted or at the profitability level anticipated by Moody's. If the company's other businesses are still weak at the time the M-ATV contract winds down, the ratings outlook or ratings could come under pressure. A reduction in free cash flow to total debt below 5% would create rating pressure as would EBITDA to interest below 2.5 times. The rating would benefit from a meaningful and sustainable improvement in the company's access equipment business given the size of the business. A reduction in leverage to under three times that was deemed to be sustainable and improving would also provide upward rating traction. The last rating action was on March 30, 2009 at which time Moody's confirmed the corporate family rating at B2 and assigned a negative ratings outlook. The SGL rating was SGL-3. Upgrades: Issuer: Oshkosh Corporation -- Probability of Default Rating, Upgraded to B1 from B2 -- Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-3 -- Corporate Family Rating, Upgraded to B1 from B2 -- Senior Secured Bank Credit Facility, Upgraded to B1 from B2 Outlook Actions: Issuer: Oshkosh Corporation -- Outlook, Changed To Stable From Negative Withdrawals: Issuer: Oshkosh Corporation -- Senior Secured Bank Term Loan A Credit Facility, Withdrawn, previously rated B2, LGD3, 47% Oshkosh Corporation is a leading designer, manufacturer and marketer of a broad range of specialty vehicles and vehicle bodies. The company operates in four segments: access equipment, defense, fire & emergency, and commercial. Oshkosh's JLG subsidiary is the world's leading producer of access equipment including aerial work platforms and telehandlers. Revenues for the fiscal year ended September 30, 2009, totaled $5.3 billion. PRIMUS TELECOM: Posts $15.2 Million Net Loss in Q3 2009 ------------------------------------------------------- PRIMUS Telecommunications Group, Incorporated reported a net loss of $15.2 million, or $(1.58) per basic and diluted common share for the third quarter ended September 30, 2009, compared to a net loss of $33.2 million, or $(0.23) per diluted share in the year-ago quarter. Net loss for the third quarter of 2009 includes a $4.4 million foreign currency transaction loss. Net income for the third quarter 2008 included a $23.0 million foreign currency transaction loss. On a year-over-year basis, net revenue decreased $23.3 million, or 10.1%. Exclusive of an unfavorable $12.8 million currency effect, net revenue decreased $10.5 million, or 4.5% from the third quarter a year ago. Net revenue less cost of revenue was $71.9 million, or 34.6% of net revenue, compared to $81.4 million, or 35.2% of net revenue, in the year-ago quarter. The year-over-year margin percentage decline is reflective of a shift in product mix. Selling, general and administrative (SG&A) expense was $51.1 million, or 24.6% of net revenue, compared to $69.5 million, or 30.1% of net revenue, in the year-ago quarter. The year-over- year $18.4 million decrease in SG&A reflects a $2.8 million decrease from foreign currency translation and a $15.6 million decrease which includes virtually all categories of expense and is reflective of the Company's cost containment actions over the past year. Income from operations was $620,000, reflecting increased depreciation and amortization as compared to the year ago quarter as a result of the fair valuing of fixed and intangible assets per Fresh Start accounting which was implemented effective July 1, 2009. Depreciation and amortization expense was $20.0 million as compared to $9.4 million in the year ago quarter. Interest expense was $8.8 million, a $4.0 million decrease from $12.8 million in the year-ago quarter. The year-over-year decrease is attributable to a reduction in the Company's level of indebtedness as a result of this restructuring. PRIMUS ended the third quarter 2009 with $41.9 million in unrestricted cash and cash equivalents up from $41.5 million at June 30, 2009. Cash uses during the quarter were comprised of $3.9 million in capital expenditures, $4.6 million for debt reduction, $4.0 million for interest, $2.8 million for taxes, $1.3 million for working capital and $6.1 million for payment of reorganization costs. These uses were offset by $21.0 million of Adjusted EBITDA and $2.1 million from currency movements. During the fourth quarter of 2009 the Company expects to make payments of approximately $4.0 million for previously accrued reorganization expenses and settlements. The principal amount of PRIMUS' long-term debt obligations as of September 30, 2009, was $252.6 million. Free Cash Flow for the third quarter 2009 was $9.1 million compared to $(6.8) million in the year-ago quarter. PRIMUS defines Free Cash Flow as net cash provided by operating activities less cash used in the purchase of property and equipment. Nine Months Results Net revenue was $599.2 million for the first nine months of 2009 compared to $692.6 million for the first nine months of 2008. Net income was $456.0 million for the first nine months of 2009 compared to net income of $10.3 million for the first nine months of 2008. A full-text copy of the Company's quarterly report is available at no charge at http://researcharchives.com/t/s?50ce About Primus Telecom PRIMUS Telecommunications Group, Incorporated (OTC BB: PMUG) -- http://www.primustel.com/-- is a facilities-based integrated global communications services provider offering international and domestic voice, voice-over-Internet protocol (VOIP), Internet, wireless, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, the United Kingdom and western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 500 points-of-presence (POPs) throughout the world, ownership interests in undersea fiber optic cable systems, 18 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia. The Company and four its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. D. Del. Lead Case No. 09-10867). George N. Panagakis, Esq., and T Kellan Grant, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, are the Debtors' proposed counsel. Davis L. Wright, Esq., Eric M. Davis, Esq., and Anthony Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, are the Debtors' proposed local counsel. The Debtor proposed CRT Investment Banking LLC as financial adviser and investment banker. When the Debtors filed for protection from their creditors, they listed assets between $100 million and $500 million, and debts between $500 million and $1 billion. The Debtors filed their proposed plan of reorganization together with their bankruptcy petitions on March 16, 2009. An amended reorganization plan was filed April 27, 2009 and the final plan was filed on June 12, 2009. Primus has implemented its Chapter 11 reorganization plan. Primus' Chapter 11 plan was confirmed by the U.S. Bankruptcy Court for the District of Delaware on June 12, 2009. * * * As reported in the Troubled Company Reporter on December 8, 2009, Standard & Poor's Rating Services assigned its 'B-' corporate credit rating to Primus Telecommunications Group Inc. S&P also assigned 'B' issue-level and '2' recovery ratings to an aggregate $130 million of debt expected to be issued by two Primus units: Primus Telecommunications Holding Inc.'s $85 million senior secured notes due 2016 and Primus Telecommunications Canada Inc.'s $45 million senior secured notes due 2016. The '2' recovery rating indicates expectations for substantial (70%-90%) recovery of principal in the event of payment default. At the same time S&P assigned its 'CCC+' issue-level and '5' recovery ratings to unit Primus Telecommunications IHC Inc.'s existing $123 million senior secured subordinated notes due 2013. The '5' recovery rating on the notes indicates expectations for modest (10%-30%) recovery in the event of payment default. Outstanding debt, pro forma for the new notes, will be approximately $260 million, not adjusted for operating leases. Primus emerged from Chapter 11 bankruptcy on July 1, 2009, having discharged over half of its pre-petition debt. PROTECTIVE PRODUCTS: Wants DIP Financing & Use Cash Collateral -------------------------------------------------------------- Protective Products of America, Inc., et al., seek authority from the U.S. Bankruptcy Court for the Southern District of Florida to obtain postpetition secured financing from Canadian Imperial Bank of Commerce, and to use cash collateral. The DIP lenders have committed to provide Up to $665,000 fund the operating loan, plus $75,000 for the wind-down loan. Jordi Guso, Esq., at Berger Singerman, P.A. -- the proposed counsel for the Debtors -- explains that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. The DIP facility will mature on February 26, 2010. The DIP facility will incur interest at 14% per annum. In the event of default, the Debtors will pay 17% default interest per annum. The DIP Lender will receive superpriority claim status, senior to any superpriority claim granted as adequate protection in respect to the Prepetition Lender and any other claims of any entity. The DIP Lender will receive (a) first priority liens on all property of the Debtors that is not subject to any properly perfected liens, and (b) second priority liens subject only to the Carve-Out and the Permitted Liens (which will have first priority). The DIP lien is subject to a carve out for U.S. Trustee and Clerk of Court fees; fees payable to professional employed in the Debtors' case; and fees of the committee in pursuing actions challenging the DIP Lenders' lien. Mr. Guso says that the Debtors will also use the cash collateral to provide additional liquidity. The Debtors will use the money pursuant to a budget. In exchange for using the cash collateral, the Debtors propose to grant the prepetition lenders superpriority claims and adequate protection liens in all collateral to secure an amount equal to the sum of the aggregate diminution, if any, subsequent to the Petition Date, in the value of the pre-petition collateral, caused by (i) the aggregate reduction in the amount of pre-petition collateral available to satisfy the pre-petition obligations as a consequence of depreciation, use, sale, loss, decline in market price or otherwise of the pre-petition collateral, or (ii) the sum of the aggregate amount of all cash proceeds of pre-petition collateral or the aggregate fair market value of all noncash pre- petition collateral that is used to satisfy any other expenses of, or claims against, Debtors other than the pre-petition obligations. The adequate protection liens will be subject only to (i) the Carve-Out, (ii) the superpriority claims and liens on the collateral to secure obligations owed to the DIP Lender under the DIP Credit Agreement, and (iii) the permitted liens, if any. A copy of the DIP financing agreement and the budget is available for free at http://ResearchArchives.com/t/s?50a8 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. PUBLICK FISH: Files for Chapter 11 Bankruptcy in Oregon ------------------------------------------------------- Portland Business Journal says Publick Fish House Inc. filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court for Oregon (Case No. 10-60500), listing both assets and liabilities of between $10 million and $50 million. The Company expects to have funds to distribute to its unsecured creditors. The Company said it owes $3.89 million, of which $2 million is secured, to General Electric Capital Corp.; $3.5 million, of which $2.46 is secured, to Sterling Savings Bank; $2.45 million to GE Commercial Finance Business Property; $2.3 million, $1.6 million secured, to Arizona Business Bank; and $1.36 million, $617,400 of it secured, to KeyBank National Association. In addition, the Company's creditors include US Bancorp, owed $1 million; Pacific Seafood, owed $106,595; Sysco Food Services of Portland Inc., owed $88,404; Pan Pacific Retail Properties/Kimco Realty, owed $62,998; and Duck Delivery Products Inc., owed $23,529, report adds. Leon Simpson of Tonkon Torp LLP represents the company, report notes. Publick Fish House operates seven restaurants in Oregon. QUANTUM CORP: BlackRock Reports 5.38% Equity Stake -------------------------------------------------- BlackRock Inc. disclosed that as of December 31, 2009, it may be deemed to beneficially own 11,451,844 shares or roughly 5.38% of the common stock of Quantum Corp. On January 28, 2010, Quantum Corp. posted net income of $4.6 million for the three months ended December 31, 2009, from a net loss of $328.7 million for the 2008 period. Quantum posted net income of $20.9 million for the nine months ended December 31, 2009, from a net loss of $346.3 million for the year ago period. As of December 31, 2009, the Company had $513.6 million in total assets against $249.8 million in total current liabilities and $353.6 million in total long-term liabilities, resulting in $89.9 million in stockholders' deficit. Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive. Quantum provides a comprehensive, integrated range of disk, tape, and software solutions supported by a world-class sales and service organization. * * * As reported by the Troubled Company Reporter on July 10, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Quantum Corp. to 'B-' from 'CC'. S&P also raised the company's subordinated rating to 'CCC' from 'C'. S&P has removed all ratings from CreditWatch, where they were placed on April 3, 2009. The outlook is negative. The TCR said July 8, 2009, Moody's Investors Service upgraded Quantum's corporate family rating and probability of default rating each to B3, from Caa1 and Ca, respectively, following the announcement that the Company has repurchased more than $135 million of its 4.375% Convertible Subordinated Notes due 2010. The rating outlook is positive. QUEST RESOURCE: Amends Q3/09 to Disclose MGE Contract Cancellation ------------------------------------------------------------------ On February 2, 2010, Quest Resource Corporation filed Amendment No. 1 to its quarterly report Form 10-Q/A for the period ended September 30, 2009, to additionally disclose the cancellation of the Missouri Gas Energy contract, which occurred on October 31, 2009. Each item of the quarterly report on Form 10-Q as originally filed on November 5, 2009, has been included in this Form 10-Q/A in its entirety. The Company disclosed that on October 31, 2009, Quest Midstream Partners, L.P.'s gas transportation contract with Missouri Gas Energy was terminated and has not been renegotiated or renewed. This customer was a significant customer to QMLP. The loss of this customer could result in an impairment of the KPC Pipeline assets and customer-related intangible assets. As of November 5, 2009, the range of impairment can not be estimated. The carrying value of these assets was $119.7 million as of September 30, 2009. A full-text copy of Amendment No. 1 to the Form 10-Q for the third quarter ended September 30, 2009, is available at no charge at: http://researcharchives.com/t/s?50a7 As reported in the Troubled Company Reporter on November 10, 2009, Quest Resource Corporation swung to a net loss of $16,724,000 for the three months ended September 30, 2009, from net income of $154,356,000 for the same period a year ago. Quest Resource posted a net loss of $126,294,000 for the nine months ended September 30, 2009, from net income of $14,881,000 for the same period a year ago. The Company booked total revenues of $23,962,000 for the three months ended September 30, 2009, from $57,043,000 for the same period a year ago. The Company booked total revenues of $77,733,000 for the nine months ended September 30, 2009, from $158,550,000 for the same period of 2008. At September 30, 2009, the Company had $459,572,000 in total assets against total current liabilities of $69,894,000, long-term derivative financial instrument liabilities of $5,294,000, asset retirement obligations of $6,346,000 and notes payable of $302,535,000. At September 30, 2009, the Company had an accumulated deficit of $383,423,000, total stockholders' deficit before non-controlling interests of $84,263,000, non-controlling interests of $159,766,000 and total equity of $75,503,000. Going Concern The Company has incurred significant losses from 2003 through 2008 and into 2009, mainly attributable to operations, legal restructurings, financings, the current legal and operational structure and, to a lesser degree, the cash expenditures resulting from the investigation related to certain unauthorized transfers, repayments and re-transfers of funds to entities controlled by its former chief executive officer. The Company has determined that there is substantial doubt about its ability to continue as a going concern. About Quest Resource Quest Resource Corporation -- http://www.questresourcecorp.com/-- is a fully integrated E&P company that owns: producing properties and acreage in the Appalachian Basin of the northeastern United States; 100% of the general partner and a 57% limited partner interest in Quest Energy Partners, L.P. ("QELP"), including subordinated units; and 85% of the general partner and 36.4% of the limited partner interests in the form of subordinated units in Quest Midstream Partners, L.P. ("QMLP"). The Company operates and controls QELP and QMLP through its ownership of their general partners. Quest Energy Partners, L.P. -- http://www.qelp.net/-- was formed by the Company to acquire, exploit and develop natural gas and oil properties and to acquire, own, and operate related assets. QELP owns more than 2,400 wells and is the largest producer of natural gas in the Cherokee Basin, which is located in southeast Kansas and northeast Oklahoma. QELP also owns natural gas and oil producing wells in the Appalachian Basin of the northeastern United States and in Seminole County, Oklahoma. Quest Midstream Partners, L.P. -- http://www.qmlp.net/-- was formed by the Company to acquire and develop transmission and gathering assets in the midstream natural gas and oil industry. QMLP owns more than 2,000 miles of natural gas gathering pipelines and over 1,100 miles of interstate natural gas transmission pipelines in Oklahoma, Kansas, and Missouri. REMINGTON RANCH: Wants DIP Financing From James Pippin ------------------------------------------------------ Remington Ranch, LLC, seeks authority from the U.S. Bankruptcy Court for the District of Oregon to obtain postpetition secured financing from James Pippin. The DIP lenders have committed to provide up to $45,000. Chad M. Stokes, Esq., at Cable Huston Benedict Haagensen & Lloyd LLP, the attorney for the Debtor, explains that the Debtor needs the money to pay limited operating expenses pending the approval of its plan of reorganization, pursuant to a budget. A copy of the budget is available for free at: http://bankrupt.com/misc/REMINGTON_RANCH_budget.pdf The DIP facility will incur interest at 6% per annum. All post-petition financing from the Lender will be given an administrative expense status, subordinate only to U.S. Trustee fees and professional fees. Powell Butte, Oregon-based Remington Ranch, LLC, is a property developer. The Company filed for Chapter 11 bankruptcy protection on January 21, 2010 (Bankr. D. Ore. Case No. 10-30406). The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. RENEW ENERGY: ALL Fuels Buys Plant from Valero for $100MM --------------------------------------------------------- ALL Fuels & Energy disclosed that its subsidiary, ALL Fuels - Jefferson, LLC, has agreed to Valero's offer price of $100 million for the purchase of Renew Energy from Valero Renewable Energy. The $100 million cash price ALL Fuels -- Jefferson LLC agreed to pay Valero is $28 million more than the $72 million winning bid made by Valero for Renew, which was confirmed by the bankruptcy court on December 11, 2009 on the motion of secured creditor Bankers Bank, based on the recommendation of William Blair & Company, LLC, the financial advisor for the sale. The $100 million offer by ALL Fuels -- Jefferson resulted from negotiations over the last few weeks, after ALL Fuels was unsuccessful in overturning bankruptcy court approval of the sale of Renew to Valero, claiming that Wm. Blair and Banker's Bank had rejected ALL Fuel's better offer at the time of the auction for no good reason. ALL Fuels had offered $77 million in the auction. "The terms of the auction were not followed in good faith" said Dean Sukowatey, President of ALL Fuels, "Our bid exceeded the successful Valero bid by $5 million, but Bankers Bank, Valero and Wm. Blair unilaterally discounted our offer, in order to terminate the auction and accept Valero's bid. We negotiated in good faith, and were ready to go much higher, but the auction was prematurely terminated. To purchase Renew Energy, we had no choice but to deal directly with Valero, and bid up the price even before the closing has taken place." On Tuesday, January 19, 2010, ALL Fuels offered Valero $82 million cash for Renew. Valero countered the ALL Fuels $82 million bid at $100 million. On Friday, January 29, ALL Fuels accepted Valero's $100 million counteroffer. Valero's closing with Bankers Bank is now set for Thursday, February 4, 2010. On Friday, January 29, after ALL Fuels agreed to Valero's $100 million price for Renew, Valero's V.P. of Alternative Energy and Project Development, George Stutzmann, notified ALL Fuels at 5:53PM, "We do not have a deal. While we casually discussed the $100 mm number as something that might be of interest awhile back, it no longer is and we are now committed to close." "Valero is in a great position now as we are offering them $28 million more than Valero is to pay for Renew as a result of the bankruptcy auction," said Dean Sukowatey, President and CEO, ALL Fuels and Energy. "For reasons we do not understand, Wm. Blair and Bankers Bank deprived Renew's creditors of $28 million in additional proceeds in order to steer the sale to Valero. ALL Fuels is actively pursuing its options." Background Valero Renewable Energy Company was awarded the best bid to purchase the Renew plant at $72 million in the Renew Bankruptcy Auction managed by Wm Blair, Chicago, and Bankers Bank, Madison. The ALL Fuels-Jefferson, LLC auction bid was $77 million. ALL Fuels-Jefferson, LLC attempted to enter a substantially higher bid but was not allowed to do so. Instead, Blair and Bankers' advised the auction participants that time had run out, the auction was closed and Blair announced that Valero had the best bid. ALL Fuels Jefferson, LLC filed a motion to reconsider and open for re- auction in the Renew Energy LLC Chapter 11 bankruptcy proceeding (U.S. Bankruptcy Court, Western District of Wisconsin, Case No. 09-10491. The appeal motion was denied Jan 12, 2010. Renew Energy is the debtor-in-possession in a Chapter 11 bankruptcy. "The ALL Fuels auction bid of $77 million was the best bid at the time, and best result for the participating banks and bondholders. Subsequent forced negotiation with Valero has yielded what we thought was an accepted offer for $100 million to purchase Renew from them, even before they close on their own purchase. The creditors of Renew were shorted $28 million. Bankers Bank and its advisor William Blair contracted for the sale of Renew to Valero at far below the market, for a price of $72 million where the real value is more than $100 million. ALL Fuels has engaged Attorney Stephen Kravit and the Kravit, Hovel & Krawczyk S.C. law firm of Milwaukee, Wisconsin to advise ALL Fuels on its options to acquire Renew" said Sukowatey. About Renew Energy Headquartered in Jefferson, Wisconsin, Renew Energy LLC -- http://www.renewenergyllc.com/-- operates an ethanol plant facility. The Company filed for Chapter 11 on January 30, 2009 (Bankr. W.D. Wis. Case No. 09-10491). Christopher Combest, Esq., at Quarles & Brady LLP, represents the Debtor in its restructuring efforts. William T. Neary, the United States Trustee for Region 11, appointed five creditors to serve on an Official Committee of Unsecured Creditors. The Debtor disclosed $188,953,970 in total assets and $194,410,573 in total debts. R.H. DONNELLEY: Sidley Austin Bills $2.77MM for Sept.-Nov. Work --------------------------------------------------------------- Bankruptcy professionals in R.H. Donnelley Corp.'s Chapter 11 cases filed applications for allowance of fees and reimbursement of expenses for these periods: Professional Period Fees Expenses ------------ --------- ---------- -------- Sidley Austin LLP 09/01 to 11/30/09 $2,774,514 $44,744 Grubb & Ellis Company 09/01 to 11/30/09 2,218,015 0 KPMG LLP 09/01 to 11/30/09 1,014,318 29,626 Lazard Freres & Co. 09/01 to 11/30/09 600,000 7,248 LLC Deloitte Financial 09/01 to 11/30/09 355,200 7,848 Advisory Services LLP Deloitte Tax LLP 09/01 to 11/30/09 202,837 1,987 PricewaterhouseCoopers 10/19 to 11/30/09 119,515 7,919 LLP Mercer(US), Inc. 09/01 to 11/30/09 95,563 11,841 Young Conaway Stargatt 09/01 to 11/30/09 80,403 42,449 & Taylor LLP Sitrick and Company, 09/01 to 11/30/09 44,904 1,124 Inc. Jackson Lewis LLP 08/01 to 1/31/09 43,493 0 About R.H. Donnelley Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (OTC: RHDCQ) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc., are the company's only direct wholly owned subsidiaries. Dex Media East, LLC, is a publisher of the official yellow pages and white pages directories for Qwest Communications International Inc. (Qwest) in the states, where Qwest is the primary incumbent local exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09- 11833 through 09-11852), after missing a $55 million interest payment on its senior unsecured notes due April 15. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, Illinois represent the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' financial advisor is Deloitte Financial Advisory Services LLP while its investment banker is Lazard Freres & Co. LLC. The Garden City Group, Inc., is claims and noticing agent. As of March 31, 2009, the Company had $929,829,000 in total assets and $1,023,526,000 in total liabilities, resulting in $93,697,000 in total shareholders' deficit. Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of R.H. Donnelley Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) RICCO INC: U.S. Trustee Appoints 6-Member Creditors Committee ------------------------------------------------------------- W. Clarkson McDow, Jr., U.S. Trustee for Region 4 appointed six members to the official committee of unsecured creditors in the Chapter 11 cases of Ricco, Inc. The Creditors Committee members are: 1. Elk District Volunteer Fire Co. Attn: Walt Ward, Jr., Chair Box 33 Elk Garden, WV 26717 Tel: (304) 446-5447 Fax: (304) 446-5762 2. Daniel P. Kelley Rt. 1, Box 169A Elk Garden, WV 26717 Tel: (304) 209-1759 Fax: (304) 788-3760 3. James F. & Mary L. Bruckey Rt. 1, Box 237 Elk Garden, WV 26717 Tel: (304) 446-5695 4. William & Marcia Lucas 1988 Kitzmiller Road Kitzmiller, MD 21538 Tel: (301) 453-3438 5. Robert Baker 17505 Garrett Highway Oakland, MD 21550 Tel: (301) 387-5668 6. Brian Sowers HC 72, Box 89-I New Creek, WV 26743 Tel: (304) 788-5293 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also Attnempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Elk Garden, West Virginia-based Ricco, Inc. -- aka Amico Partners, Ambizioso Partners, Lupo Tana Partners, and Tre Manichinos Partners -- filed for Chapter 11 bankruptcy protection on January 7, 2010 (Bankr. N.D. W.V. Case No. 10-00023). Todd Johnson, Esq., at Johnson Law, PLLC, assists the Company in its restructuring effort. The Company has assets of $15,162,600, and total debts of $4,093,674. ROBBINS BROS: Court Dismisses Chapter 11 Reorganization Case ------------------------------------------------------------ The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware dismissed the Chapter 11 case of Robbins Bros. Corporation. The Debtor related that it sold substantially all of its assets in two separate transactions which closed in May 2009. Since that time, the Debtor completed the wind down operations and satisfied all non-professional fee administrative claims. The Debtor added that it has not proposed a plan of any kind. The Court also ordered that the estate's professionals are relieved of the obligation to file applications for final compensation and reimbursement of expenses. Omni Management Group is relieved and discharged of its responsibility to act as claims and noticing agent. The Official Committee of Unsecured Creditors supported the dismissal of the case. Headquartered in Azusa, California, Robbins Bros. Corporation -- http://www.robbinsbros.com/-- aka William Pitt, Inc., sells jewelries. The Debtors filed for Chapter 11 protection on March 3, 2009 (Bankr. D. Del. Case No. 09-10708). Bruce Grohsgal, Esq., and Michael Seidl, Esq., at Pachulski, Stang, Ziehl Young & Jones represent the Debtor as counsel. Omni Management Group LLC is the Debtor's Claims, Noticing and Balloting Agent. Deloitte Financial Advisory Services LLP serves as Bankruptcy Reporting Advisor. Deloitte Tax LLP is the Debtor's Tax Advisor. William Blair & Company, L.L.C., serves as Investment Banker. Carl N. Kunz, III, Esq., and Ericka Fredricks Johnson, Esq., at Morris James LLP, represent the Official Committee of Unsecured Creditors as counsel. In its schedules, the Company listed total assets of $56,916,534 and total debts of $59,221,129. ROBERT MIELL: Failed to Reveal Assets, Says U.S. Trustee -------------------------------------------------------- David DeWitte at KCRG-TV News says a U.S. Trustee told a federal court that Robert Miell failed to disclose many of his assets when he filed for bankruptcy in 2009. Mr. Meil could be denied a discharge of his debt. Robert Miell owns a rental property company in Cedar Rapids. He filed for Chapter 11 bankruptcy protection on May 28, 2009. Jerrold Wanek assists Mr. Miell in his restructuring efforts SEVEN SEAS: S&P Puts Junk Rating on $175MM Sr. Secured. Loan ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its issue-level and recovery ratings on Seven Seas Cruises S. DE R.L.'s proposed $200 million senior secured second-lien notes due 2017. The notes have been postponed due to market conditions. The company had planned to use proceeds from the proposed notes to refinance outstanding amounts under its second-lien term loan. Due to the postponement of the notes offering, S&P assigned its issue-level and recovery ratings to Seven Seas' $175 million senior secured second-lien term loan due 2015. S&P rated the loan 'CCC+' (two notches lower than its 'B' corporate credit rating on the company) with a recovery rating of '6', indicating its expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default. S&P also affirmed its 'B' corporate credit rating on the company. The rating outlook is negative. 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 its 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," said 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." SEVERSTAL COLUMBUS: Moody's Assigns 'B3' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating and a B3 Probability of Default rating to Severstal Columbus Escrow, LLC. Moody's also assigned a B3 rating to Escrow LLC's $525 million senior secured notes due 2018.The rating outlook is stable. Proceeds from the senior secured notes issue will be placed into an escrow account until certain conditions are satisfied. Severstal Columbus, LLC will assume all obligations of Escrow LLC under the notes once such conditions are satisfied. This is expected to occur prior to the end of February 2010. Severstal Columbus is ultimately a subsidiary of OAO Severstal (Ba3 corporate family rating, negative outlook). Moody's views Severstal Columbus' fundamental rating to be Caa1 reflecting the start-up nature of the company in terms of reaching optimal production levels, and developing its customer base to increase the percentage of value-added business, such as direct sales to the automotive sector. Given Moody's expectation for a slow and gradual recovery in the steel industry through 2010 and into 2011, Moody's anticipate that Severstal Columbus will likely experience operating losses, certainly in 2010 and possibly in 2011. In addition, to realize better efficiencies and operating performance, the company needs to complete its Phase 2 expansion, which will take production to 3.4 million tons of steel annually from its current capacity of 1.7 million tons. This is expected to be completed in late 2011. The Phase 2 expansion will put the company on a more solid foundation financially. The B3 Corporate Family rating benefits from a one notch lift from the fundamental rating reflecting Severstal Columbus' ownership by Severstal (Ba3 CFR, negative) and the support which Severstal has provided to date. The rating anticipates that Severstal will provide the necessary funds, in the range of $300 million, to complete the Phase 2 expansion, as Moody's do not expect Severstal Columbus to be able to generate funds to cover this investment over the contemplated time frame to completion. However, the parent is not legally obligated to fund the expansion. The rating also considers the company's limited operating history, construction began in late 2005 and shipments commenced only in September 2007, and the inherent risks posed by a single mill site. However, Moody's acknowledge that should operating difficulties develop within the mill or with raw material procurement, Severstal Columbus has the ability to source material from its sister companies as well as its parent. The rating also considers the company's highly leveraged position given that the earnings recovery and growth will lag the upfront investment costs to construct the plant and the difficult steel industry operating environment over the last 16 months has contributed to losses. Moody's anticipate that leverage, as measured by the debt/EBITDA ratio, will be in the 7.5x to 9.5x range over the next two years, presuming additional funds to complete Phase 2 are provided as debt. However, Moody's note that given the EAF nature of the mill, and its technological capability, the company should be able to achieve low cash production costs, similar to that of other minimill producers in the U.S. Moody's also note the versatility of the mill given its compact strip process and value-added capabilities, which should benefit performance, particularly from 2012 onward. Given that the senior secured notes comprise the majority of debt at Severstal Columbus, they receive no lift from the corporate family rating under Moody's Loss Given Default methodology. The notes have a first priority lien on property and other non-current assets and a second priority interest on the collateral securing the $150 million borrowing base revolver, which is secured by receivables and inventory. The stable outlook reflects the company's acceptable liquidity position, and slow but improving trends in earnings performance over the next 12 to 15 months. The outlook also assumes, in line with the ratings, that Severstal will provide funds necessary to support completion of the Phase 2 expansion, which will better position the company to perform at more acceptable levels. Assignments: Issuer: Severstal Columbus Escrow, LLC -- Probability of Default Rating, Assigned B3 -- Corporate Family Rating, Assigned B3 -- Senior Secured Regular Bond/Debenture, Assigned B3 - LGD 3 (45%) This is the first time Moody's has assigned ratings to Escrow LLC, or after assumption, Severstal Columbus. Headquartered in Columbus, Mississippi, Severstal Columbus is an EAF compact strip process plant able to produce 1.7 million tons of crude steel and 3.4 million tons of hot rolled sheet as well as 1.3 million tons of cold rolled sheet and 500,000 tons of galvanized sheet. Severstal Columbus shipped approximately 1 million tons and generated approximately $525 million of revenues for the nine months ended September 30, 2009. Headquartered in Cherepovets, Russia, OAO Severstal is Russia's largest steel producer and operates through three business divisions: the Russian Steel Division, Severstal International and Severstal Resources. For the 9 months to September 30, 2009, Severstal had revenues of $9.1 billion and produced roughly 12 million tons of steel. SHERWOOD FARMS: Asks for Court Okay to Use Cash Collateral ---------------------------------------------------------- Sherwood Farms, Inc., seeks authority from the U.S. Bankruptcy Court for the Middle District of Florida to use the cash collateral of Old Southern Bank and Pentagon Capital Management Place. Old Southern claims a first priority security interest in the cash collateral and is owed $5 million. Pentagon Capital claims a second priority security interest in the cash collateral and is owed $2 million. The Debtor, as of the Petition Date, estimates the value of the cash collateral to be at least $8 million. Mariane L. Dorris, Esq., at Latham, Shuker, Eden & Beaudine, LLP, explains that the Debtor has $55,000 of funds on hand, and the Debtor requires the use of $1,132,000 of cash collateral for the first four weeks to continue and maintain the operation of its business after the Petition Date, and, depending on the week, a greater or lesser amount will be required each comparable period thereafter. The Debtor believes that its business can be operated on a positive cash flow basis. In exchange for using the cash collateral, the Debtor proposes to grant the prepetition lenders priority lien on cash collateral to the same validity, extent, and priority as its prepetition lien. Groveland, Florida-based Sherwood Farms, Inc., is a grower and wholesaler of orchids. Sherwood said owes $7 million to first and second-lien lenders. Sherwood said in a filing that cash, accounts receivable, inventory, and real property are worth $8 million. The Company filed for Chapter 11 bankruptcy protection on January 15, 2010 (Bankr. M.D. Fla. Case No. 10-00578). Mariane L. Dorris, Esq., at Latham Shuker Eden & Beaudine LLP, 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. The Company's affiliate, Sherwood Investments Overseas Limited Incorporated, filed a separate Chapter 11 petition. SHERWOOD FARMS: Wants DIP Financing From Pentagon Apollo -------------------------------------------------------- Sherwood Farms, Inc., seeks authority from the U.S. Bankruptcy Court for the Middle District of Florida to obtain postpetition secured financing from Pentagon Apollo, Ltd. The DIP lenders have committed to provide up to $500,000. About $350,000 will be available for SFI, while $150,000 will be available for SIO. R. Scott Shuker, Esq., at Latham, Shuker, Eden & Beaudine, LLP, explains that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties, pursuant to a budget. A copy of the budget is available for free at: http://bankrupt.com/misc/SHERWOOD_FARMS_budget.pdf The DIP facility will mature a year after the effective date, or the date upon which the loan is approved by the Court. The DIP facility will incur interest at 7% per annum, but will be 12% in the event of default. Except for the Carve-Out, the DIP Loan will be secured by a first priority mortgage lien upon and security interest in all assets of the Debtor and Sherwood Investments Overseas Limited, which liens and security interests will include, but not by way of limitation, a first priority security interest in all litigation claims, demands, rights of action, choices in action, and insurance claims of any type or description held by Sherwood Investments and by a first priority mortgage lien upon and security interest in all real and personal property owned by the Debtor. The Debtor asserts that the preservation of the ongoing business and ability to keep all the Debtor's properties operating provide adequate protection to the mortgage holder. Debtor agrees that DIP lender's obligation to open and fund the DIP Loan is conditioned on entry of a written order by the Court approving the loan, to be entered no later than February 26, 2010. Groveland, Florida-based Sherwood Farms, Inc., is a grower and wholesaler of orchids. Sherwood said owes $7 million to first and second-lien lenders. Sherwood said in a filing that cash, accounts receivable, inventory, and real property are worth $8 million. The Company filed for Chapter 11 bankruptcy protection on January 15, 2010 (Bankr. M.D. Fla. Case No. 10-00578). Mariane L. Dorris, Esq., at Latham Shuker Eden & Beaudine LLP, 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. The Company's affiliate, Sherwood Investments Overseas Limited Incorporated, filed a separate Chapter 11 petition. SMURFIT-STONE: 160 Claims Change Hands in Past Two Weeks -------------------------------------------------------- For the period from January 12 to 29, 2010, about 160 claims were transferred by various creditors to various entities, including Fair Harbor Capital LLC, Liquidity Solutions, Inc., Sierra Liquidity Fund LLC; United States Debt Recovery LLC; Contrarian Funds LLC; The Seaport Group LLC; and Blue Heron Micro Opportunities Fund LLP. Among the claims transferred were the claims of: Transferor Amount ---------- --------- Transport YB, Inc. $24,141 Gilbro Sisco, Inc. 19,918 BDR Enterprises 11,130 Progressive Coating, Inc. 10,684 Biobelt Laboratories, Inc. 9,225 Adchem Adhesives Toronto, Inc. 6,560 United Electric Co., Inc. 5,640 Whittinghill Disposal Service, Inc. 5,174 City of Washington Water Dept. 1,425 Nottingham Company 501 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 US$7.450 billion in total assets and US$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: CCAA Court Rules on Finance II Intercompany Claim ---------------------------------------------------------------- Aurelius Capital Management LP and Columbus Hill Capital Management, fund managers who represent certain noteholders, previously asked the Superior Court of Justice (Commercial List) for the Province of Ontario, in Canada, for an order declaring that Stikeman Elliott LLP could not continue to act as counsel for Stone Container Finance Company of Canada II. The Debtors notified parties-in-interest on January 28, 2010, that the Superior Court has released its "Reasons for Decision" regarding the intercompany claim of Finance II. The Superior Court opined that no useful purpose would be served by appointing a new counsel. "If one were to insist on independent counsel and an independent court officer for every instance of perceived conflict of interest, restructuring proceedings of corporate groups would become completely unwieldy and unproductive," Honorable Justice J. Pepall of the Superior Court said. A copy of the Superior Court's Decision is available for free at: http://bankrupt.com/misc/SmrftCCAADecInterClm.pdf 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 US$7.450 billion in total assets and US$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: Committee Balks at Finance II Switch to Ch. 7 ------------------------------------------------------------ In separate filings, the Official Committee of Unsecured Creditors in Smurfit-Stone Container Corp.'s cases and Wilmington Trust Company submitted to the Bankruptcy Court statements in support of the Debtors' objection to Aurelius Capital Management LP and Columbus Hill Capital Management LP's request to convert the Chapter 11 case of Debtor Stone Container Finance Company of Canada II into to a case under Chapter 7 of the Bankruptcy Code. Wilmington Trust is the successor indenture trustee under four series of indentures, pursuant to which notes totaling approximately $2.1 billion were issued. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, contends that the underlying issues raised in the Conversion Motion have been fully litigated in the Superior Court of Justice (Commercial List) for the Province of Ontario, in Canada, and Aurelius Capital and Columbus Hill have failed to satisfy their burden of demonstrating "cause" to convert Finance II's case into Chapter 7 liquidation proceeding. Ms. Jones further argues that Debtors have proposed a Chapter 11 Plan of Reorganization in good faith that provides specific treatment and possibility for recovery for certain claims asserted against Finance II and its creditors. She points out that given the prior litigation of certain claims and issues in the CCAA Proceedings and the opportunity to litigate additional claims before the Bankruptcy Court, there is no prejudice to Finance II or its creditors from continuing with its Chapter 11 case. Mark E. Felger, Esq., at Cozen O'Connor, in Wilmington, Delaware, argues that Conversion Motion is nothing more than an attempt to gain unwarranted leverage with respect to certain claims the Objecting Parties allege Finance II holds. He adds that the Conversion Motion is a ploy to gain leverage that would redound to the detriment of the Debtors' estates were it to be granted. For these reasons, the Committee and Wilmington Trust ask the Court to deny the Conversion Motion. 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 US$7.450 billion in total assets and US$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) SPRINGBOARD FINANCE: S&P Affirms 'B+' Rating on Amended Loan B -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on the U.S. dollar-denominated tranche of Springboard Finance LLC's (a.k.a. Skype US LLC 2) amended term loan B. The issue-level rating was affirmed at 'B+' (the same level as the 'B+' corporate credit rating on parent company Springboard Group (d/b/a Skype)) and the recovery rating remains at '4', indicating S&P's expectation of average (30%-50%) recovery for lenders in the event of payment default. S&P is also assigning its issue-level rating of 'B+' and a recovery rating of '4' to the euro-denominated term loan B tranche. The $800 million five-year term loan will consist of up to a $400 million euro-denominated tranche, with the remainder denominated in U.S. dollars. The company plans to use proceeds to repay the $125 million of junior hybrid securities. The ratings are based on preliminary documentation and are subject to the proposed transaction closing and S&P's review of the final documents. In addition, S&P affirmed its 'B+' corporate credit rating on Skype. The outlook is stable. Pro forma for the loan transaction, the company has $800 million in outstanding debt. "The 'B+' corporate credit rating reflects S&P's view of rapid technology and market evolution, Skype's short track record at current performance levels, and aggressive near-term leverage," said Standard & Poor's credit analyst Naveen Sarma. "Somewhat tempering these factors, in S&P's opinion, are the company's significant global scale, which provides strong network effects, and healthy free cash flow conversion, which provides for potential deleveraging given the credit facility's cash flow sweep feature." With about 455 million registered users, Skype is a global Internet communications company that delivers its voice over Internet protocol communication and other services through a peer- to-peer network architecture. Although the majority of customers use Skype to make free voice and video calls to other Skype users, the company has indicated that it derives most of its revenues from a relatively small percentage of users that use the SkypeOut product to make calls to non-Skype phones. Skype focuses on low- volume international long-distance calling routes. S&P believes the company has a competitive advantage in these markets because it can offer its users a price below traditional fixed-line telephone companies. Adjusted leverage, at 4.1x, pro forma for the proposed transaction, is aggressive, though S&P believes the company has the ability to quickly reduce its leverage. If Skype were to continue on its present growth trajectory with double-digit revenue growth, S&P would expect the company to generate healthy amounts of free cash flow, as capital expenditure requirements are likely modest, at less than 5% of revenues. The terms of its bank facility require the company to make mandatory prepayments using its excess cash flow beginning in 2011. Thus, S&P expects adjusted leverage to decline to less than 4x by the end of 2010. STALLION OILFIELD: Moody's Assigns 'B3' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service assigned Stallion Oilfield Holdings, Inc., a B3 Corporate Family Rating and also assigned a B3 rating to the company's proposed offering of $225 million of senior secured notes due 2015. The proceeds of the offering will be used to repay all outstanding borrowings under Stallion's existing senior secured credit facility and add to cash on hand. The outlook is stable. "Stallion's B3 rating reflects the significant reduction in debt following its bankruptcy and good liquidity," commented Pete Speer, Moody's Vice-President. "The company's cash flows remain weak and Moody's don't expect a significant recovery in 2010." The B3 CFR reflects Stallion's relatively small size and dependence on the highly cyclical onshore drilling activity in the United States. While drilling activity has been increasing since bottoming in May 2009, Stallion's earnings have been roughly flat over the second half of 2009. At current run rate EBITDA levels, the company's pro forma Debt/EBITDA is around 6.5x. Moody's believe that the excess oilfield services capacity in North America that was built during the strong upcycle could limit the ability of Stallion and its peers to meaningfully increase cash flows in 2010. The B3 is supported by company's good liquidity position following the secured notes offering. The company expects to have approximately $35 million of cash and an undrawn $40 million asset-based revolving credit facility, subject to borrowing base availability based on accounts receivable. The revolver's minimum fixed charge maintenance covenant will only apply in the event that availability falls below a specified amount. The ratings are subject to the offering and credit facility being completed as proposed and a review of the final documentation. The B3 senior secured notes rating reflects both the overall probability of default of Stallion, to which Moody's assigns a PDR of B3, and a loss given default of LGD 4 (51%). The expected $40 million credit facility will be secured by a first lien claim to accounts receivable, inventory and cash balances. The senior secured notes will have a first lien claim to substantially all of Stallion's property, plant and equipment and other assets that are not encumbered by the revolver. Given the size of the revolver relative to the notes and the lack of more junior debt in the capital structure, the secured notes are rated the same as the B3 CFR under Moody's Loss Given Default Methodology. This is the initial rating action on Stallion. The Ca CFR, Ca senior unsecured and B3 senior secured ratings for Stallion's subsidiary, Stallion Oilfield Services Ltd., were withdrawn on October 19, 2009, following the company's bankruptcy filing. Stallion Oilfield Holdings, Inc., is based in Houston, Texas and is a provider of workforce accommodations, wellsite construction and other oilfield services primarily to oil and gas companies in the United States. TLC VISION: Enters Deal for Alternative Restructuring Plan ---------------------------------------------------------- TLC Vision Corporation has entered into a plan sponsor agreement with certain affiliates of a fund managed by Charlesbank Capital Partners pursuant to which the Company has proposed an alternative plan of reorganization which would result in the payment in full of all outstanding amounts owing to the Company's senior secured lenders under its credit facility and under the Company's current debtor-in-possession financing. In connection with the new plan, Charlesbank has agreed to provide $25 million in debtor-in- possession financing. The new plan with Charlesbank provides for the following: the payment in full of all amounts owing to the Company's senior secured lenders under its credit facility; the acquisition by Charlesbank of substantially all the assets of the Company, including 100% of the equity of TLC Vision Corporation and the Company's six refractive centers in Canada; payments to employees and critical vendors in the ordinary course of business; and distributions to certain secured and unsecured creditors. There is no assurance of any distribution of funds to the shareholders of the Company under the plan. The plan sponsor agreement is subject to Bankruptcy Court approval and completion of the plan is subject to customary conditions, including Bankruptcy Court approval and all other regulatory approvals. In connection with the plan sponsor agreement, the Charlesbank fund has provided a written commitment to fund up to $134.4 million to or for the benefit of the Company and its subsidiaries subject to the Chapter 11 proceedings, in connection with the plan and the transactions contemplated thereby. The written funding commitment is subject to the satisfaction of all conditions to the plan sponsor's obligations set out in the plan sponsor agreement and certain other conditions. To expedite its financial restructuring, the Company and two of its wholly owned subsidiaries, TLC Vision (USA) Corporation and TLC Management Services Inc., previously filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on December 21, 2009. In addition, the Company has received recognition of its Chapter 11 filing in a case in the Ontario Superior Court of Justice under the Canadian Companies' Creditors Arrangement Act. No other company operations, affiliates or subsidiaries -- including its TLC Laser Eye Centers -- are involved in the filing. TLCVision President and Chief Operating Officer Jim Tiffany stated, "After careful analysis by our board of directors and advisors, we have decided to enter into an alternative plan of reorganization with Charlesbank. Charlesbank is committed to helping us grow our business and has made a significant funding commitment that will allow us to emerge from our Chapter 11 filing with a strong competitive advantage, including the retention of our Canadian centers. Additionally, and critically, upon closing of the Charlesbank transaction, the Company will pay in full over $100 million of existing secured debt and emerge from Chapter 11 with a substantially de-levered balance sheet. We look forward to partnering with Charlesbank." Continued Tiffany, "The agreement with Charlesbank will not affect the Company's commitments to employees, affiliates, vendors and others. Clinical care for patients has continued without change or interruption since the filing and will continue without change under the new plan. TLCVision will continue to honor the TLC Lifetime Commitment. It has been and will continue to be 'business as usual' at TLC." In conjunction with the announcement, TLCVision has exercised its right of termination pursuant to its existing plan support agreement with its senior secured lenders and has filed motions seeking a temporary restraining order to prevent such lenders from exercising remedies that might interfere with the new plan prior to its approval by the Bankruptcy Court and for approval of the plan sponsor agreement and new debtor-in-possession financing. About TLCVision TLCVision -- http://www.tlcvision.com/-- is North America's premier eye care services company, providing eye doctors with the tools and technologies needed to deliver high-quality patient care. Through its centers' management, technology access service models, extensive optometric relationships, direct to consumer advertising and managed care contracting strength, TLCVision maintains leading positions in Refractive, Cataract and Eye Care markets. TLC Vision (USA) Corporation, and two of its corporate affiliates filed petitions for Chapter 11 on Dec. 21, 2009 (Bankr. D. Del. Case No. 09-14473). The petition says assets and debts are $100 million to $500 million. The Company's lead U.S. restructuring counsel is the law firm of Proskauer Rose LLP and Canadian restructuring counsel is the law firm of Torys LLP. The Company's financial advisor is Conway Del Genio Gries & Co., LLC. Epiq Bankruptcy Solutions is claims and notice agent. TRIBUNE CO: Gets Nod to Assume Agreements With NBC -------------------------------------------------- Debtors Tribune Broadcasting Company, Tribune Broadcast Holdings, Inc., WGN Continental Broadcasting Company, Tribune Television Company, Tribune Television Holdings, Inc., Tribune Television Northwest, Inc., Tribune Television New Orleans, Inc., Channel 39, Inc., Channel 40, Inc., KSWB, Inc., KTLA Inc., WPIX, Inc., KIAH Inc., WTXX Inc., and WDCW Broadcasting, Inc., obtained the Court's authority to assume certain amended syndicated program agreements with Universal City Studios Productions LLP, a subsidiary of NBC Universal, Inc. The Tribune Parties, and other Debtors, have prepetition syndicated program agreements with NBCU --> WHAT IS NBCU?NBC Universal for general entertainment programming, including the popular daytime talk show Maury, The Jerry Springer Show, and The Steve Wilkos Show. All three programs that are the subject of the NBC Agreements are original, first-run productions in the Tribune Parties' daytime programming. The NBC Agreements allow the Tribune Parties to broadcast Maury, Jerry Springer, and Steve in time periods that allow the corresponding Tribune television station to schedule programming to maximize audience retention from program to program and to otherwise manage their broadcast schedules to greatest advantage. According to Kate J. Stickles, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, the Tribune Parties and NBCU have engaged, over the past year, in discussions regarding the terms for the Tribune Parties' continued broadcast of Maury, Jerry Springer, and Steve. As a result of the discussions, the Tribune Parties have agreed to assume certain of the NBC Agreements subject to amendments that will extend the agreements' terms beyond their scheduled termination in September 2010 through September 2012 and reduce the license fees paid to NBCU over the extended terms. The Tribune Parties have agreed to assume 40 of the NBC Agreements, a list of which is available for free at http://bankrupt.com/misc/Tribune_NBCagreements.pdf The license fee for Maury will be reduced by 6% and the license fee for Jerry Springer will be reduced by 12% effective with the September 2010 season and the license fee for Steve will be reduced by approximately 36% effective with the September 2009 season. According to Ms. Stickles, the aggregate savings to the Tribune Parties from these reductions will exceed $7 million over the life of the contract terms. In consideration for the Tribune Parties' assumption of the amended NBC Agreements to be assumed, NBCU has agreed to waive and release a portion of the amounts that the Tribune Parties would otherwise be required to "cure" as a condition of the assumption of those NBC Agreements. The Tribune Parties and NBCU agree that the total prepetition amount owing under the NBC Agreements to be assumed is $4,933,086. The parties agree that Tribune will pay 90% of the prepetition amounts owing to NBCU for Maury and Jerry Springer and 85% of the prepetition amounts owing to NBCU for Steve, for a total of $4,377,402. The Tribune Parties will pay the Cure Amount within 10 business days after the later to occur of the entry of the order approving the Motion and the parties' execution of the amendments to the NBC Agreements to be assumed. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Gets OK to Purchase Tail Coverage for $5.6MM -------------------------------------------------------- Tribune Co. and its units gained approval to purchase tail coverage and to pay insurance providers an aggregate premium of $5.6 million. Prior to the entry of the Court's order, the Debtors certified to the Court that no objection was filed as to the Motion. In connection with its indemnification obligations, Tribune Company maintains certain directors and officers liability and fiduciary liability insurance policies, principally for the benefit of the Debtors' directors, officers, employees, and agents who are or were involved or may be involved in the future in any threatened, pending, or completed action, suit, or proceeding, by reason of the fact that those persons are or were serving as a director, officer, employee, or agent of the Debtors, including service with respect to the Debtors' employee benefit plans. The Policies include primary directors and officers liability coverage provided by Federal Insurance Company, a member of the Chubb Group, and primary fiduciary liability coverage provided by Illinois National Insurance Company, a member of Chartis. Kate J. Stickles, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, relates that Tribune completed its review in mid-December 2009 for an extension of the existing Policies with the Insurance Providers, and, in its ordinary course of business, extended the coverage that has existed for the past two years for an additional year. The 12-month extension of the Policies is effective December 20, 2009, and provides coverage, under the terms, conditions, limitations, and exclusions of the Policies, for claims made on or prior to December 20, 2007. According to Ms. Stickles, the cost of the 12-month extension was approximately $9.8 million. In addition, Ms. Stickles notes, the Insurance Providers agreed to offer the Debtors a six-year extended reporting period under the Policies that could be exercised at any time during the 12-month extension of the Policies, in accordance with the Policies' terms. She tells the Court that the cost of the additional Tail Coverage is approximately $5.6 million in the aggregate for the Policies, provided the Tail Coverage offer is accepted prior to the offer expiration date of February 3, 2010, and is paid in full upon acceptance. In the event the Debtors exercise the Tail Coverage during the 12-month extension period, no further premiums will be payable to obtain the Tail Coverage, she maintains. The 12-month extension of the Policies also includes an additional 3-month extension option, available for election until December 20, 2010, which provides for further extension of the Policies until March 20, 2011, in return for a pro-rata premium to be calculated based on the annual extension premium applicable to the existing Policies. If the additional 3-month extension is selected, the period to exercise Tail Coverage is also extended until March 20, 2011, without any additional premium beyond the cost of the 3-month extension of the overall Policies. The Debtors believe that it is more likely than not that a plan of reorganization will be confirmed in their Chapter 11 proceedings during the next 15 months, necessitating the acquisition of tail coverage equivalent to what is being offered by the Insurance Providers, except that the coverage would normally cost between 1 and 2.5 times the total annual premiums. The Debtors have determined that in the event a plan is not confirmed within the next 15 months, and if the existing insurers are not willing to provide a further extension of the Tail Coverage offer and the underlying insurance coverage under the Policies at reasonable rates, the Debtors will exercise the Tail Coverage so as not to lose the benefit of the approximately $5.6 million premium spent to obtain the Tail Coverage for their estates. The Debtors tell the Court that they have obtained a commitment from the Insurance Providers to leave open their offer of Tail Coverage at reduced rates for a period of 45 days after December 20, 2009, so that they may obtain the Court's approval to purchase the Tail Coverage and pay the approximately $5.6 million in premium within that time. The Insurance Providers' offer expires unless accepted by the Debtors prior to February 3, 2010. As approved by the Court, Tribune Company will purchase a six-year extended reporting period under the Debtors' existing directors and officers liability and fiduciary liability insurance policies for an aggregate premium of approximately $5.6 million, which could be exercised at any time over the next 12-month period. According to Ms. Stickles, Chapter 11 debtors routinely purchase "tail" coverage in connection with a plan of reorganization, to extend existing "claims-made" insurance policies following the effective date of the plan, which typically terminates that coverage according to the policy terms. She relates that the Debtors have been offered the opportunity to purchase the Tail Coverage now, in advance and outside of the plan process, at a significant discount over what the Debtors would otherwise expect to pay to purchase separate tail coverage. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Hires Seyfarth Shaw for Employment Litigation --------------------------------------------------------- Tribune Co. and its units sought and obtained the Court's authority to employ Seyfarth Shaw LLP as special counsel for certain employment litigation matters nunc pro tunc to December 1, 2009, pursuant to Sections 327(e) and 1107 of the Bankruptcy Code. The Debtors has hired Seyfarth primarily as an ordinary course professional. In recent months, Seyfarth has represented the Debtors with respect to various labor arbitration and litigation matters that have arisen subsequent to the Petition Date. Those representations of the Debtors by Seyfarth, taken together with Seyfarth's pre-existing representations of the Debtors in various disputed prepetition claims, caused Seyfarth's fees to exceed the $50,000 Monthly Cap for OCPs. The Debtors and Seyfarth have agreed that, as was the case while Seyfarth rendered services to the Debtors as an OCP, Seyfarth will charge the Debtors for its legal services on an hourly basis in accordance with its ordinary and customary rates and for reimbursement of all costs and expenses. The Debtors will pay Seyfarth based on the firm's current billing rates: Professional Rate/Hour ------------ --------- Partners $510-$685 Associates $285-$435 Para-professionals $80-$275 The Debtors will also reimburse Seyfarth for customary out-of- pocket expenses including photocopying, travel expenses, transcription costs, as well as non-ordinary overhead expenses. In connection with Seyfarth's retention being modified, the Debtors have advised Seyfarth to apply to the Court for allowance of compensation for services rendered and reimbursement of expenses. Jeremy P. Sherman, Esq., at Seyfarth Shaw LLP, assures the Court that his firm does not hold or represent any interest adverse to the Debtors or their estates in matters for which it is proposed to be retained. Prior to the entry of the Court's order, the Debtors certified to the Court that no objection was filed as to the Application. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: McCormick's $50 Billion Claim Disallowed ---------------------------------------------------- The Bankruptcy Court sustained Tribune Co.'s objection to Claim No. 5844 of JoAnna Canzoneri McCormick. Prior to the entry of the Court's order, the Debtors certified to the Court that no responses were filed as to the Objection. Tribune Company and its debtor affiliates ask Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to disallow and expunge Claim No. 5844 filed against Debtor Tribune Company by claimant JoAnna Canzoneri McCormick asserting $50,000,000,000 claim. The Debtors assert that the McCormick Claim is not an allowable claim because the claim: (i) fails to set forth the factual and legal basis for any "right to payment" that could constitute prima facie evidence of the validity and amount of the alleged $50,000,000,000 claim; and (ii) no legal or factual theory exists upon which relief could be granted under any applicable law. The McCormick Claims is asserted to be based on "Heir/Beneficiary and Ownership" and is asserted to be secured by real estate, motor vehicle, "personal property", and "intelligent property contract fraud." The asserted amount of the McCormick Claim is unliquidated but is estimated on its fact at $50,000,000,000. The Debtors relate that while no supporting details were filed with the McCormick Claim, it suggests that the claim is based upon "the new discovery of charges of murder of Robert Rutherford McCormick and a fraud [sic] Last Will and Testament along with assets, money, property from a will to a Foundation." About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRONOX INC: Creditors Reach Deal With Lenders --------------------------------------------- Tronox Inc. is seeking approval from the Bankruptcy Court of a document that would settle a lawsuit brought by the Official Committee of Unsecured Creditors against the agent for the Company's lenders. Both the Creditors Committee and Credit Suisse AG, as administrative agent under that certain Credit Agreement dated November 28, 2005, are also parties to the settlement. Under the Settlement Agreement, Tronox will receive $5 million -- comprised of a waiver of accrued but unpaid default interest in the amount of $2,044,746 and a reduction of principal in the amount of $2,955,254 -- in exchange for the dismissal, with prejudice, of the Committee Litigation (Adv. Proc. No. 09-01388 (ALG)) and a release by Tronox and the Creditors Committee of the Agent and the lenders under the Term Loan Facility from all claims, including the claims set forth in the Committee Litigation. Tronox says the Settlement Agreement is an integral part of the plan support agreement entered into by Tronox and many of its significant stakeholders, which sets the foundation for Tronox's standalone reorganization. The Settlement Agreement is a product of extensive good faith and arm's-length negotiations and enabled Tronox to secure replacement DIP financing, the plan support agreement and the equity commitment agreement, which, taken together, place Tronox on a path to emerge from Chapter 11 as a standalone enterprise. In connection with the plan support agreement, Tronox repaid its existing prepetition and postpetition secured debt in full, less $5 million outstanding under the Term Loan Facility, which was placed in escrow pending definitive documentation and Court approval of the Settlement Agreement. Upon Court approval of the Settlement Agreement, this $5 million will be returned to Tronox, the Committee Litigation will be dismissed with prejudice and Tronox and the Creditors Committee will release Credit Suisse and the lenders under the Term Loan Facility. A hearing on the Settlement is scheduled for February 23. Objections are due February 16. A copy of the Settlement is available for free at: http://bankrupt.com/misc/Tronox_Lenders_Settlement.pdf About Tronox Inc. Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets: TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer of titanium dioxide pigment, with an annual production capacity of 535,000 tonnes. Titanium dioxide pigment is an inorganic white pigment used in paint, coatings, plastics, paper and many other everyday products. The Company's four pigment plants, which are located in the United States, Australia and the Netherlands, supply high-performance products to approximately 1,100 customers in 100 countries. In addition, Tronox produces electrolytic products, including sodium chlorate, electrolytic manganese dioxide, boron trichloride, elemental boron and lithium manganese oxide. Tronox has $1.6 billion in total assets, including $646.9 million in current assets, as at September 30, 2008. The Company has $881.6 million in current debts and $355.9 million in total noncurrent debts. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders have been appointed in the cases. The Creditors Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRUMP ENTERTAINMENT: Trumps Seek Right to Vote on Beal/Icahn Plan ----------------------------------------------------------------- Donald J. Trump and daughter Ivanka Trump are asking Judge Judith Wizmur of the U.S. Bankruptcy Court for the District of New Jersey to temporarily allow their claims for purposes of voting on the bankruptcy exit plan proposed by Beal Bank and Carl Icahn for Trump Entertainment Resorts, Inc., and its debtor-affiliates. Judge Wizmur has earlier signed off on a stipulation temporarily allowing the Trumps' claims for purposes of voting on the bankruptcy exit plan propounded by the Debtors and the ad hoc committee of holders of Trump Entertainment's 8.5% Senior Secured Notes Due 2015. The stipulation was entered into by the Trumps and the Ad Hoc Committee. In view of the stipulation, David M. Friedman, Esq., at KASOWITZ, BENSON, TORRES & FRIEDMAN LLP, said the Trumps filed the motion so that they will not be disenfranchised unfairly from voting on the Icahn/Beal Plan. "Given that the Trumps' claims will be temporarily allowed for voting purposes under the AHC/Debtor Plan, it is appropriate to temporarily allow such claims for voting purposes under the Icahn/Beal Plan, in order to provide this Court with an apples to apples comparison of the two competing plans at confirmation," according to Mr. Friedman. Donald Trump has asserted claims of not less than $100 million for alleged breach of his trademark license agreement and related agreements with the Company; as well as claims for indemnification, subrogation, reimbursement or contribution and claims for unpaid amounts under various other agreements with the Company, and in connection with his former position as a member and Chairman of the casino's Board of Directors. Ivanka Trump asserted claims against the Debtors for misappropriation of her image for commercial purposes without her permission and for unpaid amounts in connection with her former position as a member of the casino's board of directors. The Ad Hoc Committee has objected to the Claims. Pursuant to the Stipulation, the Trumps and the Ad Hoc Committee agreed to temporarily allow Mr. Trump a claim for $3 million with respect to certain Debtors, and another claim for $10 million with respect to other Debtors. Daughter Ivanka will be temporarily allowed a claim for $2 million. The Trumps are represented by: Paul R. DeFilippo, Esq. WOLLMUTH MAHER & DEUTSCH LLP One Gateway Center, 9th Floor Newark, NJ 07102 Tel: (973) 733-9200 Fax: (973) 733-9292 pdefilippo@wmd-law.com -- and -- David M. Friedman, Esq. Robert M. Novick, Esq. KASOWITZ, BENSON, TORRES & FRIEDMAN LLP 1633 Broadway New York, New York 10019 Tel: (212) 506-1700 Fax: (212) 506-1800 dfriedman@kasowitz.com rnovick@kasowitz.com Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The Company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the Company and, as its non- executive Chairman, is not involved in the daily operations of the Company. The Company is separate and distinct from Mr. Trump's privately held real estate and other holdings. Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other affiliates filed for Chapter 11 on February 17, 2009 (Bankr. D. N.J., Lead Case No. 09-13654). The Company has tapped Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the Company's auditor and accountant and Lazard Freres & Co. LLC is the financial advisor. Garden City Group is the claims agent. The Company disclosed assets of $2,055,555,000 and debts of $1,737,726,000 as of December 31, 2008. Trump Hotels & Casino Resorts, Inc., filed for Chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Trump Hotels' obtained the Court's confirmation of its Chapter 11 plan on April 5, 2005, and in May 2005, it exited from bankruptcy under the name Trump Entertainment Resorts Inc. TSG INCORPORATED: Files Schedules of Assets and Liabilities ----------------------------------------------------------- TSG Incorporated filed with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $10,981,000 B. Personal Property $8,065,129 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $6,267,763 E. Creditors Holding Unsecured Priority Claims $113,361 F. Creditors Holding Unsecured Non-priority Claims $2,554,950 ----------- ----------- TOTAL $19,046,129 $8,936,074 North Wales, Pennsylvania-based TSG Incorporated operates a real estate business. Founded in 1901 under the name of Levy's International Water Shrinking and Drying Company, the Debtor has operated as a privately held, family owned business for over 108 years. Locally headquartered in North Wales, Pennsylvania, the Debtor is in the business of fabric finishing, coating and embossing. TSG -- which is an acronym for "The Synthetics Group" -- is one of the largest commission finishers in the United States. The Company filed for Chapter 11 bankruptcy protection on November 29, 2009 (Bankr. E.D. Pa. Case No. 09-19124). Michael Jason Barrie, Esq., at Benesch Friedlander Coplan & Aronoff LLP assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. TXCO RESOURCES: Reorganization Plan Receives Court Confirmation --------------------------------------------------------------- ABI reports that TXCO Resources Inc. will emerge from bankruptcy by mid-February under the ownership of both Newfield Exploration Co. and former rival suitor Anadarko Petroleum Corp. after the oil and gas explorer and producer won confirmation of a reorganization plan outlining its sale for roughly $310 million. TXCO Resources Inc. is an independent oil and natural gas enterprise with interests in the Maverick Basin of Southwest Texas, the Fort Trinidad area of East Texas, the onshore Gulf Coast region and the Marfa Basin of Texas, the Midcontinent region of Western Oklahoma and willow Gulf of Mexico waters. The Company's business strategy is to acquire undeveloped mineral interests and internally develop a multi-year drilling inventory through the use of advanced technologies, such as 3-D seismic and horizontal drilling. The Company accounts for its oil and natural gas operations under the successful efforts method of accounting and trade its common stock under the symbol "TXCOQ.pk." The Company and its subsidiaries filed for Chapter 11 protection on May 17, 2009 (Bankr. W.D. Tex. Case No. 09-51807). The Debtors hired Deborah D. Williamson, Esq., and Lindsey D. Graham, Esq., at Cox Smith Matthews Incorporated, as general restructuring counsel; Fulbright and Jaworski, L.L.P., as corporate counsel & conflicts counsel; Albert S. Conly as chief restructuring officer and FTI Consulting Inc. as financial advisor; Goldman, Sachs & Co. as financial advisor for assets sale; Global Hunter Securities, LLC, as financial advisors and investment bankers; and Administar Services Group LLC as claims agent. Gardere Wynne Sewell LLP represents the Committee. USA DRY VAN: Files Chapter 11 in Corpus Christi ----------------------------------------------- USA Dry Van Logistics LLC filed a Chapter 11 petition on Feb. 2 in Corpus Christi, Texas (Bankr. S.D. Tex. Case No. 10-20102). Bill Rochelle at Bloomberg News reports that the Company notified the secured lender in January that there had been a "substantial overstatement" of eligible accounts receivable, resulting in a "significant overadvance." USA Dry Van is a trucker operating between the U.S. and Mexico. Operating from Laredo and McAllen, Texas, USA Dry Van has 570 trucks and almost 2,000 trailers. The lender, General Electric Capital Corp., is owed $28.8 million. GECC is providing financing for the Chapter 11 effort. VERIFIED IDENTITY: L-1 Identity Solutions Named Exclusive Provider ------------------------------------------------------------------ L-1 Identity Solutions, Inc. disclosed that it will be the exclusive provider for the program formerly known as Registered Traveler as a result of Alclear LLC winning the competitive bid for Verified Identity Pass Inc. assets. The competitive bidding process was conducted though procedures approved by the U.S. Bankruptcy Court, Southern District of New York. In connection with Alclear's purchase of VIP's assets, L-1 is expected to receive a multi-year contract to serve as prime integrator for the program formerly known as Registered Traveler. In that role, L-1 is expected to be the exclusive provider for all of the program's systems integration, enrollment services and verification needs once the program is re-started. In recognition of its prior investments and contributions to the program, L-1 will also receive an equity investment in Alclear. "We have a long standing relationship with Caryn Seidman Becker, the CEO of Alclear LLC, and we are excited at the opportunity to work together on this exciting program, one we believe will become an important vehicle in providing increased airport security and travel convenience across the United States once it is fully deployed," said Robert V. LaPenta, Chairman, President and CEO of L-1 Identity Solutions. "With our previous experience on this program, we are uniquely able to provide the services and technology necessary to stand up the program quickly and efficiently to the benefit of both our partners and frequent travelers." About L-1 Identity Solutions L-1 Identity Solutions, Inc. protects and secures personal identities and assets. Its divisions include Biometrics, Secure Credentialing and Enterprise Access solutions, as well as Enrollment and Government Consulting services. With the trust and confidence in individual identities provided by L-1, international governments, federal and state agencies, law enforcement and commercial businesses can better guard the public against global terrorism, crime and identity theft fostered by fraudulent identity. L-1 Identity Solutions has more than 2,200 employees worldwide and is headquartered in Stamford, CT. Verified Identity Pass, Inc., filed for Chapter 11 on Dec. 1, 2009 (Bankr. S.D.N.Y. Case No. 09-17086). Paul R. Niehaus, Esq., at Niehaus LLP, represents the Debtor. The petition says that assets range from $1,000,001 to $10,000,000 while debts range from $10,000,001 to $50,000,000. Verified Identity Pass filed for Chapter 11 bankruptcy to close the sale of its assets. Verified Identity Pass operates Clear Registered Traveler program at 18 of the 21 airports in the United States. VERMILLION INC: Pays Health Discovery Corporation ------------------------------------------------- Health Discovery Corporation has received the final payment that was due under the agreement that settled the Company's patent infringement lawsuit against Vermillion, formerly known as Ciphergen Biosystems, Inc. In 2006, Health Discovery Corporation sued Ciphergen Biosystems in Federal District Court for infringement of several of its patents covering the use of support vector machines (SVMs) for the discovery of biomarkers. As alleged in the complaint, Ciphergen's researchers had used SVMs to identify the most promising biomarkers for diagnosis of ovarian cancer, the results of which had been reported in a number of medical publications. The settlement agreement, through which Ciphergen was granted a limited license to continue its use of the Company's SVM technology only in conjunction with its protein based SELDI mass spectrometry technology, was inked in July 2007. No rights were granted under the license to use HDC's SVM technology for gene-based molecular diagnostic discovery, digital pathology interpretations, digital radiology interpretation nor any other discovery use outside of the very narrow field of SELDI- based protein discovery. Vermillion went on to further develop these biomarkers into the OVA1(TM) test, which was approved by the FDA in September 2009 and exclusively licensed to Quest Diagnostics. Based on these favorable developments, Vermillion recently emerged from bankruptcy and has enjoyed phenomenal growth in its share prices. "The results achieved by Vermillion provide further testimony to the value of Health Discovery Corporation's proprietary SVM technology, both from a technical and a financial perspective," said Dr. Stephen Barnhill, Chairman and CEO of Health Discovery Corporation. "In addition to our own biomarker discovery programs, we are continuing to pursue revenue-producing licensing opportunities, retroactively, as in the case of Vermillion, and going forward, to develop new applications of the technology within our intellectual property portfolio." The applicability of SVM technology to countless uses is allowing Health Discovery Corporation to direct its licensing efforts both within and outside of the healthcare arena, including high-tech applications such as Internet search engines, electronic health records, fraud detection, security and surveillance, and fault detection and prediction in vehicles and aircraft. About Vermillion Inc. Vermillion, Inc. -- http://www.vermillion.com/-- is dedicated to the discovery, development and commercialization of novel high- value diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. Vermillion, along with its prestigious scientific collaborators, has diagnostic programs in oncology, hematology, cardiology and women's health. Vermillion is based in Fremont, California. The Company filed for Chapter 11 on March 30, 2009 (Bankr. D. Del. Case No. 09-11091). Vermillion's legal advisor in connection with its successful reorganization efforts is Paul, Hastings, Janofsky & Walker LLP. At September 30, 2008, the Debtor had $7,150,000 in total assets and $32,015,000 in total liabilities. In January 2010, Vermillion successfully emerged from protection with all creditors receiving 100 percent of allowed claims and with the common stock being fully restated. VICORP RESTAURANTS: Court OKs Dismissal of Reorganization Cases --------------------------------------------------------------- The Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware approved the dismissal of the Chapter 11 cases of VI Acquisition Corp. and VICORP Restaurants, Inc, and the dissolution of their corporate entities. Headquartered in Denver, Colorado, VICORP Restaurants, Inc. and VI Acquisition Corp. -- http://www.vicorpinc.com/-- operate family- dining restaurants under the Village Inn and Bakers Square brands. The Debtors also operate 3 pie production facilities that produce pies that are offered in the Debtors' restaurants and are sold to select third-party customers including supermarkets and other restaurant chains. The Debtors filed separate petitions for Chapter 11 relief on April 3, 2008 (Bankr. D. Del. Lead Case No. 08-10623). Kimberly Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A. Robinson, Esq., at Reed Smith LLP, Ann C. Cordo, Esq., and Donna L. Culver, Esq., at Morris Nichols Arsht & Tunnell, and Joseph E. Cotterman, Esq., at Gallagher & Kennedy, P.A., represent the Debtors as counsel. The Debtors selected The Garden City Group, Inc. as their claims agent. Abhilash M. Raval, Esq., Dennis Dunne, Esq., and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP, Domenic E. Pacitti, Esq., and Michael W. Yurkewicz, Esq., at Klehr Harrison Harvey Branzburg & Ellers, represent the Official Committee of Unsecured Creditors of the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets of $100 million to $500 million and debts of $100 million to $500 million. VISTEON CORP: Has Nod to Sell Radar Systems Biz. to Autoliv ----------------------------------------------------------- Visteon Corporation and its debtor affiliates obtained 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 Debtors File Revised Proposed Order In order to resolve the concerns raised by Honda Manufacturing of Alabama, LLC, and Honda of Canada Mfg., a division of Honda Canada, Inc., the Debtors have agreed to a modification of the proposed form of order. The Revised Proposed Order provides that Honda's right to assert any warranty and indemnity claims against the Debtors relating to parts, components or systems manufactured prior to the Sale Closing Date in the Radar System Business and sold to Honda is expressly preserved to the extent the liability for the warranty and indemnity claims has not been assumed by Autoliv ASP, Inc., pursuant to the Asset Sale Agreement. Based upon inclusion of the mentioned language in the Revised Proposed Order, Honda withdrew its objection to the Radar Systems Business Sale Motion. Judge Sontchi granted the Debtors' request, as modified. The Court approved the Revised Proposed Order submitted by 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: Proposes $11 Mil. Settlement With IBM --------------------------------------------------- Visteon Corp. and its units seek the Court's authority to enter into a settlement agreement, dated January 27, 2010, with International Business Machines Corporation. In conjunction with their entry into the Settlement Agreement, the Debtors also ask the Court for permission to: (a) assume an Information Technology Outsourcing Agreement, dated September 1, 2002; and (b) purchase certain assets from IBM pursuant to the Settlement Agreement. The Debtors and IBM have operated since 2002 under an IBM Contract, pursuant to which IBM provides comprehensive services and resources to support the Debtors' global information technology needs. The IBM Contract specifically provides for IBM's provision to the Debtors of services, which include (i) application development and maintenance of numerous software and computer systems used by the Debtors, (ii) mainframe services, (iii) host servicing for all non-mainframe servers, (iv) network services, and (v) IT administrative and support services. "Indeed, given the expansiveness of services provided to Visteon by IBM, any disruption in such services without a transition period would render Visteon unable to use critical IT systems and would likely require Visteon to shutdown operations," says Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware. Since the execution of the IBM Contract more than seven years ago, the Contract has been amended and restated about 38 times. The Debtors have paid IBM more than $1.3 billion in the aggregate under the IBM Contract, which payments comprise of amounts due to IBM totaling more than $150 million annually. During the pendency of their Chapter 11 cases, the Debtors relate that they have actively addressed their IT needs with the intention of securing a contract with clarified payment mechanisms, improved economics, and service provisions better matched to their post-emergence operations. However, although they were open to contracting with a new IT service provider, the Debtors estimated that contracting with one or more service providers in lieu of IBM would require the expenditure of an additional $13.7 million and up to an additional 12 months for completion of the requisite analysis and execution of necessary agreements with the selected vendor or vendors. In addition, the Debtors note, the operational risks, including the risk of data loss associated with moving to a new vendor, are substantial. Accordingly, the Debtors determined it to be in the best interest of their estates to maintain a going forward relationship with IBM. Nevertheless, the Debtors acknowledge that their relationship with IBM has not been without dispute. The Parties have had certain ongoing disputes regarding the interpretation of certain language in the IBM Contract concerning payable fees to IBM. Specifically, disputes include those concerning (i) the Debtors' invocation of a "Business Impacts" provision under the contract allowing for the reduction of IBM fees in connection with reduced Visteon demand for services; (ii) equitable adjustments to certain fixed fee charges associated with IBM's management of the delivery of services to the Debtors in the face of the Debtors' reduced consumption of services; (iii) the Debtors' reduction in their use of and payments for application development and maintenance services; (iv) rates charged by IBM for certain services provided via its primary subcontractor, (v) IBM's performance of obligations to refresh the Debtors' network environment, and (vi) the Debtors' centralized approach to administering their contractual fee withhold remedy. And as previously reported, IBM filed a motion seeking relief from the automatic stay in December 2009 so it could exercise its termination rights under the IBM Contract. In the alternative, IBM asked the Court to compel the Debtors to assume or reject the IBM Contract within 10 days. IBM also sought an immediate payment from the Debtors of more than $6 million relating to services allegedly provided under the IBM Contract for the postpetition period through October 31, 2009, or, in the alternative, a Court confirmation that IBM's claimed amount is an administrative expense. To resolve their dispute and the issues raised in IBM's Lift Stay Motion, the Parties negotiated a Settlement Agreement, which provides that: (a) The Debtors will assume the IBM Contract, as amended by the terms of the Settlement Agreement, and pay to IBM a cure, pursuant to Section 365 of the Bankruptcy Code, in the aggregate amount of $11,258,765 plus certain fees to be invoiced and paid in the ordinary course prior to the effective date of assumption. The Cure Amount consists of $6,572,712 for prepetition claims and $4,686,053 for postpetition claims; (b) IBM will promptly cancel and withdraw certain disputed line items from the Debtors' invoices. IBM agrees and acknowledges that none of the charges set forth in those invoice line items will be due or owing or subject to any future invoice or IBM demand for payment; (c) The Parties will amend the IBM Contract by eliminating certain services and clarifying and eliminating the disputed contractual language; (d) IBM will continue to provide certain services to the Debtors with clarified pricing, payment, and termination; (e) The Debtors will distribute a portion of the aggregate cure amount directly to, and will pay the previously disputed increased rates associated with services provided by, IBM's primary subcontractor for ADM Services, and IBM will pass-through appropriate amounts of those payments to that subcontractor; (f) IBM will withdraw or amend its proofs of claim numbered 345, 2831, and 3197 in the Debtors' Chapter 11 cases, asserting claims in the aggregate amount of more than $28 million, and claims in connection with the IBM Contract will be deemed expunged as of the Closing Date of the Settlement Agreement; (g) Each Party will defend and indemnify the other Party, its affiliates, and its subcontractors from and against certain third-party claims and actions as set forth under the Settlement Agreement; (h) Each Party will release certain claims against the other Party related to the IBM Contract; and (i) The Debtors will acquire from IBM all right, title, and interest in and to certain IT equipment used by them but owned by IBM for an acquisition price of approximately $1.6 million. In connection with the Settlement Agreement, the Debtors have entered into an agreement with IBM's primary subcontractor for ADM Services, effective concomitantly with approval of the amended IBM Contract, under which a material amount in IBM fees will be returned to the Debtors in the form of a credit. The Debtors expect the Settlement with IBM to result in savings with a value of more than $21 million on a going forward basis through September 2012. The Debtors further seek the Court's authority to file the Settlement Agreement and IBM Contract under seal. The Debtors assert that the Settlement Agreement and the IBM Contract contain information that the Parties, IBM in particular, regard as highly sensitive and not subject to public disclosure. 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 AAC JV Assets for $3.1MM ------------------------------------------------------- Visteon Corp. and its units intend to exit their interiors line of business in the United States. In connection with the resourcing of certain of the Debtors' interior component production under certain accommodation agreements, certain of the Debtors' customers have indicated their intent to resource the production of interiors components by Atlantic Automotive Components, LLC -- a 70/30 joint venture between Visteon Corporation and VIC Management LLC, an affiliate of Mayco International, LLC. As an alternative to liquidating the Atlantic Automotive JV prior to or in connection with the planned resourcing, the Debtors have agreed to pursue the sale of their interest in the Atlantic Automotive JV to JVIC Manufacturing LLC, as purchaser. JVIC is also an affiliate of Mayco International. Accordingly, pursuant to a purchase and sale agreement dated January 28, 2010, Visteon Corp., Atlantic Automotive JV and JVIS Manufacturing intend to enter into these contemplated transactions: -- JVIS Manufacturing will purchase substantially all assets of Atlantic Automotive JV for $3.1 million; -- JVIS Manufacturing will assume substantially all of the liabilities of Atlantic Automotive JV; -- To facilitate the sale transition, the Debtors will assign certain contracts to JVIS Manufacturing as well as provide certain transition services and sourcing of certain parts, previously sourced to Atlantic Automotive JV, to JVIS Manufacturing; -- A $50,000 payment in exchange for the Debtors' assignment to JVIS Manufacturing of certain purchase orders and supply contracts entered into by Visteon Corp. related to the Atlantic Automotive JV production; -- A release from all obligations to the Atlantic Automotive JV related to accounts payable for goods delivered or services provided prior to the Petition Date, which obligations are estimated to equal about $3.9 million; -- Reimbursement of certain transition services to be provided to JVIS Manufacturing upon the request of JVIS; -- The resourcing of certain Atlantic Automotive JV business to a Visteon facility in Mexico. A full-text copy of the Sale Agreement is available for free at: http://bankrupt.com/misc/Visteon_JVISSaleAgmt.pdf The Member Payment Agreement The Debtors also seek to enter into a Member Payment Agreement with VIC Management, the other member of the Atlantic Automotive JV. The Member Payment Agreement accomplishes the second step in the Debtors' exit from Atlantic Automotive JV, which is the distribution of the remainder of Atlantic Automotive assets. The salient terms of the Member Payment Agreement are: -- The Debtors will receive equipment with an estimated liquidation value of approximately $700,000 to $900,000 and cash in the amount of $2.95 million in satisfaction of the Atlantic Automotive Loans, which total $14 million; and -- VIC Management would receive $150,000 in cash in satisfaction of certain loans to Atlantic Automotive JV. Assumption & Assignment Procedures Moreover, the Debtors believe that it is necessary to establish an orderly and fair process (i) by which cure amounts related to the assignment of executory contracts related to the Atlantic Automotive JV business can be established, and (ii) by which contract counterparties can request additional information regarding adequate assurance of future performance. The Debtors thus propose these Assignment Procedures: (a) The Debtors are to serve, by February 1, 2010, a Cure Notice to each of the counterparties to a Transferred Visteon Executory Contract, notifying each Contract Counterparty of the Debtors' intent to assume and assign the applicable Transferred Visteon Executory Contracts and of the aggregate Cure Amount the Debtors believe is necessary to be paid to that Contract Counterparty in connection with that assumption and assignment. (b) Any Contract Counterparty seeking to (i) assert a Cure Amount based on defaults, conditions, or pecuniary losses under a Transferred Visteon Executory Contract different from that set forth on the Applicable Cure Notice, or (ii) object to the potential assumption and assignment on any other grounds, will be required to file and serve a written objection. (c) To be considered timely, a Cure Objection must be filed with the Bankruptcy Court no later than February 11, 2010. (d) If a Contract Counterparty timely files a Cure Objection alleging a Cure Amount other than the amount set forth on the Cure Notice, the relevant Transferred Visteon Executory Contracts will nevertheless be assumed and assigned to the Purchaser on the Closing Date, the Debtors will pay the undisputed portion of the Cure Amount on or as soon as reasonably practicable after the Closing Date, and the disputed portion of the Cure Amount will be determined and paid as reasonably practicable by the Debtors following resolution of that disputed Cure Amount. (e) Unless a Cure Objection opposing the assumption and assignment of a Transferred Visteon Executory Contract on a basis other than the proposed Cure Amount is timely filed by the Cure Objection Deadline, the Bankruptcy Court will enter an order authorizing or effecting the assumption and assignment of the applicable Transferred Visteon Executory Contract at the omnibus hearing scheduled for February 18, 2010. (f) Contract Counterparties that fail to file Cure Objections will be deemed to have waived and released any and all cure obligations, and will be forever barred and estopped from asserting or claiming against the Debtors, the Purchaser, or any other assignee of the relevant Transferred Visteon Executory Contract that any additional amounts are due or defaults exist, or prohibitions or conditions to assignment exist or must be satisfied, under that Transferred Visteon Executory Contract for the period prior to the assumption and assignment of that Transferred Visteon Executory Contract. By this motion, the Debtors seek the Court's authority to enter into the Sale Agreement with JVIS Manufacturing and the Member Payment Agreement with VIC Management. They also seek Court permission to assume and assign related contracts to JVIS under the parties' Sale Agreement. At the Debtors' behest, Judge Sontchi will hear convene a hearing on February 18, 2010, at 10:00 a.m. Eastern Time, to consider the Sale Motion. Objections from parties-in-interest are due no later than February 11. 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: Seeks Approval of Van Buren Township Settlement ------------------------------------------------------------- Visteon Corp. and its units ask the Court to approve a settlement agreement by and among (i) Visteon Corporation and State Street Bank and Trust Company of Connecticut, National Association, in its capacity as trustee for the Oasis Holdings Statutory Trust, a Connecticut statutory trust of which Visteon Corp. is the sole beneficiary, on the one hand, and (ii) the Charter Township of Van Buren, on the other hand. The Debtors' corporate headquarters, located in the Van Buren Township, encompasses a number of land parcels and nine buildings, which are subject to property tax valuation and assessment within the Township. The Township assisted the Debtors in financing the construction of a Visteon Village by issuing certain bonds supported by the full faith and credit of the Township. The Township primarily relies on the property taxes it collects from the Debtors to service the debt obligations owing on account of the Township Bonds. The Debtors relate that since the Petition Date, they have paid the Township an amount equal to $2.95 million, comprised of the principal amount of unpaid real estate tax bills that were due on and after May 29, 2009 and unpaid 2009 real estate tax bills due in February 2010. For the purposes of computing real estate taxes, the Township currently values the Visteon Village at approximately $165 million. Due to recent turmoil in the real estate market in Michigan and throughout the United States, the Debtors believe that the Visteon Village is worth substantially less than its original value. Accordingly, in September 2009, the Debtors began negotiations with the Township to obtain a reduction of the assessed value of the Visteon Village. The Debtors informed the Township that they would likely have to commence litigation against the Township if the parties were unable to reach an agreement on a reduced tax assessed value for the Visteon Village. Subsequently, the Township engaged appraisers to value the property and the parties engaged in negotiations on the tax assessed value of the Visteon Village. The Debtors and the Township are also parties to certain industrial facility tax agreements that provide the Debtors tax abatements to locate their operations in the Township and to satisfy certain other obligations. As a result of economic conditions, the Debtors have been unable to meet certain obligations under the Tax Abatement Agreements in connection with staffing levels at the Visteon Village, entitling the Township to seek revocation of those Agreements. Subsequent, the parties engaged in negotiation to resolve their dispute and ultimately executed a settlement agreement on January 25, 2010, which provides that: (a) Effective December 31, 2009, the Township will set the fair value of the Visteon Village at $60 million for real estate property tax purposes, resulting in a taxable and assessed value of the Visteon Village equal to $30 million; (b) On or before the effective date of the Debtors' plan of reorganization, the Debtors will pay the Township $2.2 million in cash; (c) The Township will file with the Court, and the Debtors will not object to, a proof of claim for a general unsecured claim for $9,831,427 against the Debtors for remaining amounts owing to the Township in connection with the Tax Abatement Agreements; provided that the Debtors will be permitted to reduce on a dollar-for-dollar basis the amount distributed, if any, pursuant to that general unsecured claim up to $2.2 million; (d) The Township agrees that the Debtors' good faith inability to meet their commitments in the Tax Abatement Agreements will not be a basis to void or cancel the Tax Abatement Agreements; and (e) To the extent that the property tax payments made with respect to the Visteon Village are inadequate to permit the Township to meet its payment obligations on the Township Bonds, the Debtors agree to negotiate with the Township in good faith to determine the amount of the shortfall with respect to those bonds and make a non-tax payment, payment in-lieu-of tax, to the Township to assist the Township in making timely payments on the Township Bonds. The Debtors believe the Settlement Agreement represents a fair and reasonable resolution of their dispute with the Township. The Debtors expect to generate substantial future tax savings from the approximately $100 million reduction in the assessable value of the Visteon Village and the maintenance of the Tax Abatement Agreements, which savings will over time exceed the costs of the Settlement Agreement. Moreover, the Debtors assert, entering into the Settlement Agreement avoids potentially protracted and costly litigation with the Township, with respect to which the result is uncertain. 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) WABASH NATIONAL: BlackRock Discloses 7.54% Equity Stake ------------------------------------------------------- BlackRock, Inc., disclosed that as of December 31, 2009, it may be deemed to beneficially own 2,351,970 shares or roughly 7.54% of the common stock of Wabash National Corp. As reported by the Troubled Company Reporter, Wabash on July 17, 2009, entered into a Third Amended and Restated Loan and Security Agreement, which was effective August 3, 2009, with Bank of America, N.A., as a lender and as agent and the other lender parties. The Credit Agreement has a maturity date of August 3, 2012. The Amended Facility has a capacity of $100 million, subject to a borrowing base, and borrowings outstanding totaled $25.5 million at August 3, 2009. The lenders waived certain events of default that had occurred under the previous credit facility and waived the right to receive default interest during the time the events of default had continued. At September 30, 2009, the Company's consolidated balance sheets showed $240.5 million in total assets, $176.7 million in total liabilities, $19.4 million in preferred stock, and $44.4 million in shareholders' equity. The Company reported current assets of $88.4 million and current liabilities of $138.0 million at September 30, 2009, resulting in a working capital deficit of $49.6 million. About Wabash National Headquartered in Lafayette, Indiana, Wabash National Corporation is one of the leading manufacturers of semi-trailers in North America. Established in 1985, the company specializes in the design and production of dry freight vans, refrigerated vans, flatbed trailers, drop deck trailers, dump trailers, truck bodies and intermodal equipment. Its innovative core products are sold under the DuraPlate(R), ArcticLite(R), FreightPro(TM) Eagle(R) and Benson(TM) brand names. The company operates two wholly owned subsidiaries; Transcraft (R) Corporation, a manufacturer of flatbed, drop deck, dump trailers and truck bodies; and Wabash National Trailer Centers, trailer service centers and retail distributors of new and used trailers and aftermarket parts throughout the U.S. WARNER CHILCOTT: S&P Withdraws 'B+' Rating on $600 Mil. Notes ------------------------------------------------------------- Standard & Poor's Ratings Services said that it has withdrawn its 'B+' issue-level rating and '6' recovery rating on Warner Chilcott Corp.'s $600 million of 8.75% senior subordinated notes due in 2015 following the company's redemption of outstanding subordinated notes on Feb. 1, 2010. The subordinated note redemption followed a tender offer that expired on Jan. 14, 2010. Rating List Warner Chilcott Corp. Ratings Withdrawn To From ----------------- -- ---- 8.75% subordinated notes NR B+ Recovery rating NR 6 WASHINGTON MUTUAL: Equity Panel Wants Benesch as Del. Counsel ------------------------------------------------------------- By this application, the Official Committee of Equity Security Holders in Washington Mutual Inc.'s cases asks Judge Walrath to authorize them to engage the services of Benesch, Friedlander, Coplan & Aronof LLP, as its Delaware and conflicts counsel, effective as of January 11, 2010. According to Michael Willingham, chairman of the Equity Committee, Benesch, with Benesch Friedlander's broad-based experience in reorganization proceedings, the firm will be able to represent, and perform services for, the Equity Committee in connection with carrying out its fiduciary duties and responsibilities under Section 1103(c) of the Bankruptcy Code. As Delaware and conflicts counsel to the Equity Committee, Benesch will charge these hourly rates for the services it is contemplated to render: Professional Hourly Rate ------------ ----------- Partners $340 to $725 Associates $230 to $360 Paralegals $175 to $230 Administrative Assistants $115 to $120 Document Clerks $115 to $120 Benesch will also be reimbursed for necessary out-of-pocket expenses it incurs or has incurred. Bradford J. Sandler, Esq., at Benesch Friedlander Coplan & Aronoff LLP, in Wilmington, Delaware, tells the Court that his firm is a disinterested person as that term is defined under Section 101(14) of the Bankruptcy Code. A hearing to consider the Equity Committee's application will be held on February 22, 2010. Objections, if any, must be filed by February 16. 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: Noteholders Appeal Rule 2019 Compliance Order ---------------------------------------------------------------- The Washington Mutual, Inc. Noteholders Group informed parties- in-interest that it has taken an appeal to the U.S. District Court for the District of Delaware of Judge Walrath's order compelling the WaMu Noteholders Group to comply with Rule 2019(a) of the Federal Rules of Bankruptcy Procedure at the behest of JPMorgan Chase Bank, National Association. JPMorgan, as purchaser of Washington Mutual Bank's assets, previously insisted that the WaMu Noteholders Group must disclose the amount of each of their claims, the dates on which the claims were acquired, any related amount paid, and any subsequent disposition that were not reflected in certain disclosures and representations in the Debtors' Chapter 11 cases. The WaMu Noteholders Group countered that Bankruptcy Rule 2019 was only intended to apply to "a body that purports to speak on behalf of an entire class or broader group of stakeholders in a fiduciary capacity with the power to bind the stakeholders that are members of such a committee." 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). WHITNEY DESIGN: Court Approves $8.7 Million Sale Transaction ------------------------------------------------------------ Rick Desloge at St. Louis Business Journal reports that the St. Louis federal court approved a $8.7 million sale transaction of Whitney Design Inc. over objections from the U.S. Department of Commerce to try to block the deal. Officials have completed the transfer of the company's assets to Household Essentials LLC to avoid million of dollars in penalty tariffs. Whitney Design Inc. imports and sells household goods, mainly ironing boards, pads and covers and closet organizers. The company filed for Chapter 11 protection on November 21, 2010 (Bankr. E.D. Mo. Case No. 09-51928). David A. Warfield, Esq., at Thompson Coburn LLP, represents the Debtor. In its petition, the Debtor listed both assets and debts of between $1 million and $10 million. WASTEQUIP INC: Moody's Changes Default Rating to 'Caa2/LD' ---------------------------------------------------------- Moody's Investors Service changed the probability of default rating of Wastequip Inc. to Caa2/LD from Caa2 and affirmed the corporate family rating at Caa2. The ratings outlook has been revised to stable from negative. The rating action follows the company's decision to change its interest payment date on its mezzanine notes to April 15, 2010, in accordance with the amended mezzanine notes, which Moody's defines as a limited default. Moody's definition of default captures all missed or delayed interest or principal payments according to the original terms of a credit agreement, even if an amendment has been successfully executed to allow for the change in payment date. The "LD" designation has been temporarily assigned to the PDR to denote that a limited default has occurred on the unrated $212 million mezzanine debt. The "LD" designation will be removed in approximately three business days. Moody's does not believe that the assignment of the limited default will have any implications on Wastequip's capital structure. The stable outlook is a reflection of Wastequip's adequate liquidity profile which is viewed as a near-term offset to Wastequip's highly leveraged capital structure. The stable outlook is highly reliant on Wastequip's ability to maintain a liquidity profile that benefits from high unrestricted cash balances of over $80 million, positive cash flows and the favorable terms in its amended debt agreements which support financial covenant compliance over the long term. Further, the stable outlook reflects Moody's view that Wastequip's volume declines appear to be stabilizing, at low levels, and that earnings should begin to improve in 2010. These ratings were changed: * Probability of Default Rating to Caa2/LD from Caa2 These ratings were affirmed: * Corporate Family Rating at Caa2; * Senior secured revolving credit facility at B3 (LGD2/28%); and * Senior secured term loan at B3 (LGD2/28%) The last rating action was on December 17, 2009, when the Corporate Family rating of Wastequip was downgraded to Caa2 from Caa1. Wastequip is the largest manufacturer of waste handling and recycling equipment used to collect, process, and transport solid and liquid waste in North America. Revenues for the twelve months ending September 30, 2009, exceeded $300 million. WILLIAMS PARTNERS: Fitch Ups Issuer Default Rating From 'BB' ------------------------------------------------------------ Fitch Ratings has amended the release that went out on February 2, 2010; it has revised information in the first paragraph. Fitch Ratings has assigned a 'BBB-' rating to Williams Partners L.P.'s $3.5 billion senior notes. The Senior Notes are being issued in three tranches due 2015, 2020 and 2040. In addition, Fitch has upgraded the Issuer Default Rating and the unsecured debt rating on WPZ and William Partners Finance Corp.'s (who co- issued the debt) outstanding debt to 'BBB-' from 'BB' and removed them from Rating Watch Positive where they were placed on Jan. 19, 2010 following the announcement that The Williams Companies, Inc. (rated 'BBB-' with a Stable Outlook by Fitch) was proposing to consolidate its regulated pipeline and midstream operations under WPZ. WPZ's and Williams Partners Finance Corp.'s Rating Outlook is Stable. Under a proposed multi-step transaction WMB will contribute the majority of its pipeline and natural gas midstream assets, along with its general partner and limited partner interests in Williams Pipeline Partners L.P., into WPZ. In exchange, WPZ will issue 203 million Class C limited partner units, which will convert to WPZ common units following the distribution record date with respect to the first fiscal quarter the Class C units are outstanding, to WMB and fund a tender for up to $3 billion of outstanding WMB debt with the Senior Note proceeds. The asset contribution and the WMB debt tender offer are expected to close in mid-February. Following the asset contribution, WPZ will launch an exchange offer for the public common units in WMZ. At completion of the transaction, WPZ will be one of the four largest diversified master limited partnerships. WPZ's rating upgrade reflects a strengthening operating and financial profile and investment-grade pro forma credit measures. Fitch expects WPZ's pro forma 2010 debt to EBITDA to be under 4.0 times and its distribution coverage to meet or exceed the current industry norms of approximately 1.2x. However, actual results will be affected by changes in natural gas liquids and natural gas prices throughout the year and the ability of WPZ to effectively hedge its price exposure. With these events, the scale and scope of WPZ's operations will increase materially. Also, the quality and predictability of cash flow will improve through its ownership of WMB's premier FERC- regulated interstate pipelines, Transcontinental Gas Pipeline Company, LLC (rated 'BBB') and Northwest Pipeline GP (NWP; rated 'BBB'). As a result of the above positive considerations, WPZ's financial flexibility and access to capital will also improve. Commodity price exposure to WPZ from its midstream operations, while still a negative consideration, will be reduced with its future mix of assets. As contemplated, WMB will continue to own 100% of its exploration and production assets, its Canadian and olefins midstream operations and a 25.5% interest in Gulfstream Pipeline. Upon completion of the transaction, including the exchange for WMZ units, WMB's ownership of WPZ will increase to 80% from 24% pre- transaction, and functional changes will be minimal. While WMB's parent company debt will be reduced by $3 billion following execution of the tender offer, resulting in improved standalone credit measures, cash flows from pipeline and certain midstream assets will be further subordinated under the new organizational structure. Fitch believes the overall effect on WMB's credit profile from the organizational restructuring to be neutral. WICK BUILDING: Founder Invests $2.5 Million Cash to Buy Unit ------------------------------------------------------------ Wisconsin State Journal reports that John F. Wick, founder of Wick Building Systems Inc., made a $2.5 million cash offer to buy Wick Buildings and keep it running, with all of its 220 employees. Based in Mazomanie, Wisconsin, Wick Building System Inc. is a manufacturer of modules for commercial and residential construction. Wick has three plants in Wisconsin. The Company filed for Chapter 11 on November 23, 2009 (Bankr. W.D. Wisc. Case No. 09-17978). The petition says assets and debts are $1,000,001 to $10,000,000. WM BOLTHOUSE: S&P Downgrades Rating on New Senior Facility to 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its issue- level rating and revised its recovery rating on Wm. Bolthouse Farms Inc.'s proposed new first-lien senior secured credit facility, which consists of a $55 million revolving credit facility, due 2015, and a $550 million first lien term loan, due 2016. S&P lowered the issue rating to 'B', the same as the corporate credit rating on Bolthouse, from 'B+'. S&P revised the recovery rating to '3', indicating S&P's revised expectation for a meaningful (50%-70%) recovery in the event of a payment default, from '2'. The ratings on Bolthouse's proposed new $175 million second-lien senior-secured term loan facility, due 2016, remain unchanged. The issue-level rating is 'CCC+', two notches lower than the corporate credit rating, and the recovery rating is '6', indicating S&P's expectation for negligible (0%-10%) recovery in the event of a payment default. "These rating revisions reflect an increase in the proposed size of this new first-lien term loan to $550 million from the previously proposed $500 million, and a corresponding decrease in the proposed size of the new second-lien term loan to $175 million from the previously proposed $225 million. In addition, the revolver has been reduced to $55 million, from the previously proposed $65 million," said Standard & Poor's credit analyst lison Sullivan. The ratings on Bolthouse reflect its narrow focus on carrots and super-premium natural beverage categories, its high debt leverage, and its participation in the highly competitive vegetable, beverage, and salad dressing industries. Ratings List Wm. Bolthouse Farms Inc. Corporate credit rating B/Stable/-- Ratings Lowered Wm. Bolthouse Farms Inc. Proposed first-lien sr secd credit facility To From -- ---- $55 mil. revolving credit facility, due 2015 B B+ Recovery Rating 3 2 To From -- ---- $550 mil. first-lien term loan, due 2016. B B+ Recovery Rating 3 2 ZAYAT STABLES: Files Chapter 11 in New Jersey --------------------------------------------- Zayat Stables LLC filed a Chapter 11 petition in Newark, New Jersey (Bankr. D. N.J. Case No. 10-13130). Bill Rochelle at Bloomberg News reports that Zayat blamed the filing to a dispute with secured lender Fifth Third Bank, owed more than $34 million, who was engaged in "predatory lending practices" in connection with the debt, some of which matured as early as August 2007. The Cincinnati-based bank had filed suit and was seeking the appointment of a receiver. Hackensack, New Jersey-based Zayat Stables owns of 203 thoroughbred horses. The horses, which are collateral for the bank loan, are worth $37 million, according an appraisal mentioned in a court paper. Ahmed Zayat said in a court filing that he personally invested $40 million in the business. Keeneland Association Inc. is owed $2.4 million while $1.2 million is owing to other creditors. Ahmed Zayat guaranteed the bank debt up to $38.7 million, according to a court filing. According to the Bloomberg report, the Company intends to file a reorganization plan "quickly" to pay creditors "over a reasonable period of time." The court paper said the bank "likely" will be paid in full "on its secured claim to the extent recognized by the Court." The Company says it has counterclaims against the bank. * Practical Law Company Launches PLC Law Department --------------------------------------------------- Practical Law Company, Inc. continues to help effect change within the legal industry with the launch of PLC Law Department, its online, content-based service for US legal departments. According to PLC Law Department Head Karen Sheehan, "In-house lawyers are often called upon to advise their clients across a wide range of practice areas. In one day, they may find themselves negotiating a lease, developing a social media policy and handling a complex corporate transaction. We created PLC Law Department to give them access to a bank of knowledge that will enable them to deliver guidance quickly, accurately and affordably." Known for years within legal circles for offering unique online content in Europe and worldwide -- and recently cited as "one of the most inventive legal-field operations in the nation" by ABA Law Practice -- PLC Law Department extends PLC's arsenal of unique, practical resources to U.S. legal departments and will transform the way in-house counsel operate. PLC launched its first U.S. services for law firms with great success in January 2009. "PLC is committed to helping legal professionals -- whether in legal departments or law firms -- practice more efficiently," explains Jeroen Plink, CEO of PLC U.S. "Our U.S. Law Department service has been designed specifically for in-house counsel and will enable law departments to improve efficiency, do more with less and control costs." PLC only hires attorneys with experience at the world's leading law firms and legal departments. Building on this, PLC Law Department has teamed up with a panel of more than 20 top law firms that collaborate with PLC's attorney editors to produce and maintain their resources. Panel firms are recognized experts and the go-to law firms in their respective practice areas. "We are honored to be working with our prestigious panel firms to meet the challenge of allowing our in-house clients to truly do more with less," says Plink. "Service providers must be willing to change with the times and PLC Law Department is a great example of what can be achieved when dedicated companies get together to effect positive change in the marketplace." An Alliance Partner of the Association of Corporate Counsel (ACC), PLC is offering free trials of PLC Law Department to in-house counsel. The initial trial also includes a one-year subscription to Practical Law The Journal, the print companion to PLC's online services. PLC's Panel Firms -- Alston + Bird LLP (Tax) -- Davis Polk & Wardwell LLP (Capital Markets) -- Dorsey & Whitney LLP (Labor & Employment) -- Drinker Biddle & Reath LLP (Intellectual Property & Technology) -- Holland & Knight LLP (Environmental) -- Howrey LLP (Antitrust) -- Hughes Hubbard & Reed LLP (Alternative Dispute Resolution) -- Jackson Lewis LLP (Labor & Employment) -- Kelley Drye & Warren LLP (Commercial and Litigation) -- Kirkland & Ellis LLP (Bankruptcy and Private Equity) -- Latham & Watkins LLP (Capital Markets, Corporate Governance and Private Equity) -- Littler Mendelson P.C. (Labor & Employment) -- Loeb & Loeb LLP (Commercial, Intellectual Property & Technology) -- Morrison & Foerster LLP (Capital Markets and Corporate Governance) -- Ogletree, Deakins, Nash, Smoak & Stewart, P.C. (Labor & Employment) -- O'Melveny & Myers LLP (Litigation) -- Richards, Layton & Finger, P.A. (Business Entities and Real Estate) -- Seyfarth Shaw LLP (Employee Benefits & Executive Compensation) -- Simpson Thacher & Bartlett LLP (Capital Markets, Corporate Governance, Employee Benefits & Executive Compensation and Mergers & Acquisitions) -- Sive, Paget & Riesel P.C. (Environmental) -- Skadden, Arps, Slate, Meagher & Flom LLP (Employee Benefits & Executive Compensation, Environmental and IP & Technology) -- Thompson Hine LLP (Intellectual Property & Technology) -- Vinson & Elkins LLP (Labor & Employment) -- Weil, Gotshal & Manges LLP (Antitrust, Bankruptcy, Corporate Governance, Litigation, Private Equity and Tax) -- White & Case LLP (Alternative Dispute Resolution) About Practical Law Company Practical Law Company (PLC) is a leading provider of practical know-how for business lawyers. Started in the U.K. in 1990, PLC's clients include approximately 85% of the UK's largest 500 law firms; 70 of the AmLaw 100 firms; and over 1,700 legal departments worldwide. PLC's recently launched U.S. services are created and maintained by its team of editors with significant front-line experience practicing at the world's leading law firms and corporate legal departments. PLC is a proud winner online: www.practicallaw.com. * BOOK REVIEW: Bankruptcy Investing: How to Profit from Dist. Cos. ------------------------------------------------------------------ Author: Ben Branch and Hugh Ray Publisher: Beard Books Paperback: 344 pages List Price: $39.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/1587981211/internetbankrupt The book Bankruptcy Investing: How to Profit from Distressed Companies, is written by Ben Branch and Hugh Ray. Corporate bankruptcies are at an all-time high, and this trend is likely to continue. Bankruptcy Investing introduces investors to the risky but lucrative opportunities to invest in the securities of troubled companies. Every area of this exciting field is described in complete detail. Real-world examples illustrate the explanations. Companies in distress may go through an informal or formal workout of problems, or they may enter Chapter 11 or Chapter 7 bankruptcy. The investment implications for the securities of firms in each of these stages are considered in full. Everything the investor needs to know is contained in this book. The authors show why it can be smart to invest in troubled companies. Whether you are a savvy investor or experienced fund manager (or aspire to be one), Bankruptcy Investing introduces you to the risky but lucrative opportunities for investing in the securities of troubled companies. This timely new book describes in detail the rules of the game and how to apply them to pick the winners. The authors, both experts in the legal and financial aspects of bankruptcy investing, explain everything you need to know about investing in distressed companies, including estimating bankruptcy values, how to use timing to your advantage, quantitative techniques to minimize risks, evaluating available data, characteristics of various types of short-term and long-term debt instruments, investment strategies, and sources of additional information. You'll fully understand all the implications of investing in the securities of firms in all stages of financial distress--from informal or formal workouts to Chapter 11 or Chapter 7 bankruptcy- -as well as investing in both debt and equity securities. Real-world examples illustrate how you can profit from investing in troubled companies and what risks are incurred. An extensive glossary defines legal, economic and financial terms. Bankruptcy Investing translates the often-confusing lexicon of bankruptcy into a profitable investment program that you can implement immediately. You too will discover an exciting way to find new investment winners. Two financial experts guide you through the risky but lucrative investment opportunities available in troubled companies. Whether your interests are informal or formal workouts, Chapter 11 or Chapter 7 bankruptcies, debt or equity securities, this book will explain everything you need to know about investing in distressed corporations. Topics include estimating bankruptcy values, how to use timing to your advantage, quantitative techniques to minimize risk, evaluating available data, the characteristics of various types of short-term and long-term debt instruments, and investment strategies. ********* 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 ***