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/raid1/www/Hosts/bankrupt/TCR_Public/100209.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, February 9, 2010, Vol. 14, No. 39 Headlines A&C INC: Files for Chapter 11 Bankruptcy ACCURIDE CORP: Bankruptcy Judge Delays Reorganization Fight AFFILIATED MEDIA: Files Prepackaged Plan of Reorganization AIRGAS INC: Moody's Puts Ba1 Sr. Sub. Rating Under Review ALFRED WILEY CLARK: Files Schedules of Assets and Liabilities ALL AMERICAN: Has Until February 22 to File Schedules & Statement AMERICAN CAPITAL: Taps Weil Gotshal for Restructuring Advice AMERICAN INT'L: ILFC CEO Udvar-Hazy Retires; Plueger Assumes Post ANAVERDE LLC: Can Auction Substantially All Assets on April 7 ANAVERDE LLC: Can Access $700,000 of DIP Lender's Cash Collateral ANAVERDE LLC: Creditors Have Until April 6 to File Proofs of Claim ANAVERDE LLC: Section 341(a) Meeting Scheduled for February 23 ANDERSON HOMES: Can Sell Certain Properties and Transfer Liens APPLETON PAPERS: Inks First Supplement to Indenture with US Bank ASARCO LLC: Parties Oppose Sterlite Plea for Reimbursement ASARCO LLC: Plan Administrator Proposes Fee Procedures ASARCO LLC: Settles Charges on RCRA Violations in Montana ASHTON OAKS: Files for Chapter 11 Bankruptcy in Florida ASPEN LAND: Consented to the Dismissal of Chapter 11 Case ATRIUM CORP: U.S. Trustee Forms 4-Member Creditors Committee ATRIUM CORP: Pursues Dual-Track Plan of Reorganization AUTOBACS USA: Completes Bankruptcy Procedures BERNIE'S AUDIO: Has Until February 12 to File Schedules BLANCA ESTELA GAMA: Case Summary & 17 Largest Unsecured Creditors BRUNDAGE-BONE: DIP Financing, Cash Collateral Use Get Interim Nod CABI DOWNTOWN: Kaye Scholer and Bank Client Hit for Faulty Facts CABI DOWNTOWN: Disclosure Statement Hearing on March 4 CARITAS HEALTH: Has Until May 3 to Propose Chapter 11 Plan CATALYST PAPER: Defers Proposed Rights Offering CATALYST PAPER: Steelhead Partners Reports 5.6% Stake CATALYTIC SOLUTIONS: Fifth Third Grants Forbearance Until April 30 CHATSWORTH INDUSTRIAL: Claims Bar Date Set for March CHATSWORTH INDUSTRIAL: Section 341(a) Meeting Set for Feb. 10 CHEMTURA CORP: $6.89 Million in Claims Change Hands CHRYSLER LLC: To Assign Supply Contract with US Gov't to Fiat CIRCUIT CITY: InterTAN Monitor to Distribute C$5,784,906 CIT GROUP: 4-Month Search Over as Ex-Merrill Chief Named CEO CIT GROUP: Prepays $750MM of Debt; Contingent Value Rights Expire CIT GROUP: Says U.S. Treasury Holds No Stake CITADEL BROADCASTING: Sees April 30 Bankruptcy Exit CITGO PETROLEUM: Loan Amendment Won't Affect Moody's 'Ba2' Rating CMR MORTGAGE: Appointment of Ch. 11 Trustee Tentatively Denied COACHMEN INDUSTRIES: Warns Investor Regarding Incorrect Results COLUMBIAN PUBLISHING: Court Approves Plan of Reorganization CROSS CANYON: Files Schedules of Assets & Liabilities CROSS CANYON: Gets Interim Nod to Hire T&K as Bankr. Counsel CROSS CANYON: Gets Interim Okay to Use Cash Collateral ERICKSON RETIREMENT: Court Holds Pre-Trial Meet on Plan Outline ERICKSON RETIREMENT: Lenders Back New Protocol for Claims Filing EXELTECH AEROSPACE: Seeks Bankruptcy Protection in Canada FAIR FINANCE: Faces Involuntary Bankruptcy in Ohio FAIRFIELD RESIDENTIAL: Files Schedules of Assets and Liabilities FAIRPOINT COMMS: Files Bankruptcy Exit Plan FAIRPOINT COMMS: Enters Into Tentative Agreement With Unions FAIRPOINT COMMS: Files Schedules of Assets & Liabilities FAIRPOINT COMMS: Files Statement of Financial Affairs FLEETWOOD ENTERPRISES: Sells Trademark to Heartland for $306,000 FORD MOTOR: BlackRock Reports 5.19% Equity Stake FORD MOTOR: Reports 24% Sales Increase in January 2010 FRED HILL MATERIALS: Files for Chapter 11 Bankruptcy in Washington FREESCALE SEMICONDUCTOR: Wants to Amend Terms of Sr. Sec. Facility GENERAL GROWTH: Makes Distribution of 2009 Common Stock Dividend GENERAL GROWTH: Carolina Place JV Has Extension of $155M Loan GENERAL MOTORS: Employs Togut Segal as Conflicts Counsel GENERAL MOTORS: Fee Examiner Proposes Stuart as Consultant GENERAL MOTORS: Old GM's Contract Breach Suit vs. BMW GENERAL MOTORS: Saturn Buyers Commence Class Suit vs. Old GM GENERAL MOTORS: Revenue Depts. Object to Resolution Protocol GENERAL MOTORS: May Contribute to Pensions Earlier Than Planned GENERAL MOTORS: Total Sales Increase 14% in January 2010 GENERAL MOTORS: Won't Move Out of Renaissance Center GMAC INC: Posts $10.3 Billion Net Loss for FY 2009 GMAC INC: Moody's Upgrades Senior Unsecured Rating to 'B3' HARRISBURG, PENNSYLVANIA: Chapter 9 Filing Among Options HARVEST OIL: Wants Solicitation Period for Cramdown Plan Extended HAWAIIAN TELCOM: FTI Awarded $600,000 for April-September HEARTLAND PUBLICATIONS: Lender Showdown On for Feb. 19 HEXION SPECIALTY: Panel Approves 2010 Incentive Compensation Plan HEXION SPECIALTY: Inks Amended Credit Agreement With JPMorgan HEXION SPECIALTY: Amends Terms of Senior Sec. Credit Facility I & C PROPERTY: Has Until Today to File Schedules & Statement INDUSTRY WEST: Files Schedules of Assets and Liabilities ISACK ROSENBERG: Judge Clark Rejects Stipulation with Capital One KORLEY SEARS: Case Summary & 5 Largest Unsecured Creditors LBO CAPITAL: Posts $459,970 Net Loss in Q3 2009 LEHMAN BROTHERS: Examiner Files Sealed Report on Probe LINEAR TECHNOLOGY: December Balance Sheet Upside-Down by $114MM MCCLATCHY COMPANY: Fitch Raises Issuer Default Rating to CCC' MESA AIR: AAR Corp. Has 6.3% Equity Stake MGM MIRAGE: Asks Lenders to Extend Maturity of $5.55BB in Loans MIG INC: Hearing on Exclusivity Termination This Week NATURAL HEALTH: September 30 Balance Sheet Upside-Down by $579,000 NATURAL PRODUCTS: Files Chapter 11 Plan & Disclosure Statement NORTEL NETWORK: Committee Wants to Expand Scope of J&C Services NORTEL NETWORK: Cypress Questions Rejection of PLA NORTEL NETWORK: Has Cash Balance of $5 Billion at January 2 NORTEL NETWORK: Proposes Deal With Velenio Holdings OPTI CANADA: To Review Financial Results Today OPTIONS MEDIA: Posts $1.2 Million Net Loss in Q3 2009 PARLUX FRAGRANCES: Incurs $5.4 Mil. Net Loss for December Quarter PROFESSIONAL LAND: Files for Bankruptcy to Reorganize Finances PROTECTIVE PRODUCTS: Files Schedules of Assets and Liabilities READER'S DIGEST: Gets Nod for Emergency Funding to UK Unit READER'S DIGEST: Sells $525 Mil. Notes to Refinance Loans RESIDENTIAL CAPITAL: Moody's Keeps 'C' Senior Secured Bond Ratings RRI ENERGY: Fitch Affirms Issuer Default Rating at 'B' RUBICOR MEDICAL: Auction of Assets Set for on March 1 SALLY BEAUTY: December Balance Sheet Upside Down by $612 Mil. SEVERSTAL COLUMBUS: S&P Assigns 'B' Corporate Credit Rating SIX FLAGS: To Close Kentucky Kingdom Park in Louisville SLM CORPORATION: Fitch Affirms Preferred Stock Rating at 'BB' SPHERIS INC: Nonpayment of Interest Cues Moody's Rating Cut to 'D' SPHERIS INC: Has Interim Permission for $7.5 Million Loan SPRINGBOARD GROUP: Moody's Upgrades Corp. Family Rating to 'B1' SPURLOCK LOGGING: Updated Case Summary & Creditors List STALLION OILFIELD: S&P Assigns 'CCC+' Corporate Credit Rating STANDARD PACIFIC: Approves Compensation Arrangement With Officers STATE OF CALIFORNIA: CRG Tapped on $100MM Debt Restructuring TACO DEL MAR: Gets Interim Okay to Use Cash Collateral TACO DEL MAR: Section 341(a) Meeting Scheduled for March 3 TACO DEL MAR: U.S. Trustee Appoints 6 Members to Creditors Panel TH PROPERTIES: Three Companies Bid for Upper Macungie Property THORNBURG MORTGAGE: Credit Suisse Buying Servicing Business TOUSA INC: 424 Additional Creditors Face Avoidance Suits TOUSA INC: Committee's Lawsuit vs. Falcone Entities TOUSA INC: Mediators for Adversary Proceedings Designated UNIFI INC: Earns $2.0 Million for December Quarter UNISYS CORP: December 31 Balance Sheet Upside-Down by $1.27-Bil. US AIRWAYS: Blackrock Discloses 6.52% Equity Stake VISTEON CORP: Ernst & Young Charges $2.67MM for Sept.-Nov. VISTEON CORP: Liquidity Solutions Buys Claims VISTEON CORP: To Lay Off 15 More Workers at ACH Facility VISTEON CORP: Retirees to Appeal Termination of Benefits WALKING COMPANY: Withdraws Bid to Close 40 Additional Stores WALKING COMPANY: IP Suit on "It's Five O'Clock Somewhere!" Stayed WALKING COMPANY: Proposes to Set March 3 as Claims Bar Date WALKING COMPANY: Status Conference and Disclosure Statement Set WEST FELICIANA: Updated Case Summary & Creditors List WHITE ENERGY: Lenders Oppose Alternate Owner Plan W.R. GRACE: Blackrock Discloses 5.15% Equity Stake * Geithner Says U.S. Will 'Never' Lose Aaa Debt Rating * Moody's Predicts 3.3% Junk Default Rate in December * P/E Firms to Liquidate Funds Created During Financial Crisis * Alvarez & Marsal Taxand Names Two Managing Directors in Chicago * Large Companies With Insolvent Balance Sheets ********* A&C INC: Files for Chapter 11 Bankruptcy ---------------------------------------- Ben Sutherly at Dayton Daily News says A&C Inc., doing business as Asbury Trucking, filed for Chapter 11 protection in U.S. Bankruptcy Court, listing total assets of $441,029 and total liabilities of $948,526. It listed taxable income of $72,387 in 2008. A&C Inc. operates a trucking company. ACCURIDE CORP: Bankruptcy Judge Delays Reorganization Fight ----------------------------------------------------------- Steven Church at Bloomberg News reports that the Bankruptcy Court granted shareholders of Accuride Corp. a week-long delay of the Company's reorganization schedule to develop an alternative turnaround plan built on a new $400 million loan. According to the report, shareholders are trying to arrange the loan at 11% to 12% interest to fund the Company's exit from bankruptcy. Robert Richards, Esq., a lawyer for shareholders, referred to the potential loan as the "Goldman take-out," though he later declined to say whether that was a reference to Goldman Sachs Group Inc. U.S. Bankruptcy Judge Brendan Linehan Shannon set Feb. 17 as the new date when shareholders and the company will appear in court to battle over which plan is better. As reported by the TCR on Feb. 5, the Official Committee of Equity Security Holders in Accuride's cases asked the Bankruptcy Court to adjourn the February 10 hearing on the reorganization plan until March 17, 2010. 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. AFFILIATED MEDIA: Files Prepackaged Plan of Reorganization ---------------------------------------------------------- Affiliated Media, Inc., has filed with the U.S. Bankruptcy Court for the District of Delaware its prepackaged Chapter 11 plan of reorganization and disclosure statement. Under the Plan, holders of administrative expense claims will receive payment in full in cash of the unpaid portion of the claim. The senior loan non-principal claims will be allowed administrative expense claims and will be payable in cash on the effective date as part of the senior lender emergence payment. It is contemplated that payments on account of the items listed in the definition of senior loan non-principal claims will be paid to the administrative agent and the senior lenders during the reorganization case, and the administrative agent and the senior lenders will be entitled to retain all payments as allowed administrative expense claims. Professional compensation and reimbursement claims will be paid in full, in cash, as are allowed by the Court in accordance with the order relating to or allowing any such administrative expense claim. Priority Tax Claims, at the Debtor's election where applicable, will be (a) paid in full, in cash, on, or as soon as reasonably practicable after, the later of the effective date and the date on which the claim becomes an allowed claim, in accordance with the terms of any agreement between the Debtor and the holder, as may be due and owing under applicable non-bankruptcy law, or in the ordinary course of business; (b) be paid in cash in regular installment payments; or (c) be paid in other amounts and in other manner as may be determined by the Court to provide the holder deferred cash payments having a value, as of the effective date, equal to the allowed priority tax claim. Class 1 - Priority Non-Tax Claims will be paid in full, either in cash or through a different treatment as to which the Debtor and the holder will agree. Holders of Class 2 - Senior Loan Claims will receive on the effective date its pro rata share, in the aggregate, of (a) the term loan facility, (b) the senior lender common stock distribution, and (c) the senior lender emergence payment. Holders of Class 3 - Other Secured Claims will retain their legal and equitable rights unaltered by the confirmation or consummation of the Plan. At the option of the Debtor, (a) the legal, equitable, and contractual rights of the holder of the claim will be reinstated, (b) any holder of the claim will be treated in accordance with an agreement between the holder and the Debtor or (c) the treatment applicable to each holder of the claim will be disclosed in a filing with the Court no later than seven days prior to the confirmation hearing. Holders of this claim (i) to the extent that the claim isn't due and owing on the effective date, paid in full, in cash, on the effective date; (ii) to the extent the claim isn't due and owing on the effective date, be paid in full, in cash, in accordance with the terms of any agreement between the Debtor and the holder, or as may be due and owing under applicable non-bankruptcy law, or in the ordinary course of business; or (iii) be treated on other terms and conditions as are acceptable to the Debtor and the holder of the Claim. Holders of Class 4: General Unsecured Claims will retain legal and equitable rights unaltered by the confirmation or consummation of the Plan. If sufficient votes accepting the Plan are received from the holders of Class 5: Subordinated Note Claims, each holder of the claim will be entitled to receive subordinated note warrants, and each holder will receive its pro rata share of the subordinated note warrants in full satisfaction, settlement, compromise, release, and discharge of and in exchange for the remaining amount of its subordinated note claim. If sufficient votes accepting the Plan aren't received from the holders of this claim, no holder will be entitled to receive any distribution from the Debtor or the estate on account of the subordinated note claims, which will be discharged pursuant to the Plan. Legal, equitable and contractual rights of the holders of Class 6: Intercompany Claims will e reinstated or, with the consent of the holders, may be adjusted, continued, or capitalized, either directly or indirectly or in whole or in part. Legal, equitable and contractual rights of the holders of the Class 7: Securities Litigation Claims will be cancelled, and no holder of the claim will be entitled to receive any distribution from the Debtor or the estate. Class 8: Old AMI Equity Interests will be cancelled as of the effective date. Copies of the Plan and disclosure statement are available for free at: http://bankrupt.com/misc/AFFILIATED_MEDIA_ch11plan.pdf http://bankrupt.com/misc/AFFILIATED_MEDIA_ds.pdf About Affiliated Media Denver, Colorado-based Affiliated Media, Inc., aka MediaNews Group, Inc., is the holding company of MediaNews Group Inc., which owns 54 daily newspapers including the Denver Post and the San Jose Mercury News, along with television and radio broadcasters. The Company filed for Chapter 11 bankruptcy protection on January 22, 2010 (Bankr. D. Delaware Case No. 10-10202). Hughes Hubbard & Reed LLP is the Debtor's general bankruptcy counsel, while Daniel B. Butz, Esq., at Morris, Nichols, Arsht & Tunnell LLP, is the Debtor's co-bankruptcy counsel. Wilkinson Barker Knauer, LLP, is the Debtor's special FCC counsel. Carl Marks Advisory Group LLC is the Debtor's restructuring advisor. Rothschild Inc. is the Debtor's financial advisor. Epiq Bankruptcy Solutions, LLC, is the Debtor's claims agent. Sitrick and Company Inc. is the Debtor's communications consultant. The Company listed $100,000,001 to $500,000,000 in assets and $500,000,001 to $1,000,000,000 in liabilities. AIRGAS INC: Moody's Puts Ba1 Sr. Sub. Rating Under Review --------------------------------------------------------- Moody's Investors Service downgraded the ratings of Air Products and Chemicals Inc.'s senior unsecured ratings to A3 from A2 and its short-term ratings for commercial paper to Prime-2 from Prime- 1. Additionally, Moody's placed the ratings of Airgas Inc. (Baa3 senior unsecured rating and Ba1 senior subordinate ratings) under review, with direction uncertain. The review of both companies' debt was prompted by Air Products unsolicited all cash offer to acquire Airgas for $60/share, for a transaction valued at roughly $7 billion. Air Products has obtained a bridge facility sufficient to complete the transaction but has not disclosed its long term financing plans. This proposed transaction is subject to both shareholder and US regulatory approvals. The downgrade of Air Products' ratings reflects that this transaction represents a shift in strategic and financial policies at Air Products as indicated by the size of the proposed transaction. Furthermore, Air Products' weak positioning in the A2 rating category due to the recent economic downturn, combined with continued high levels of capital spending, which will limit meaningful free cash flow generation and the significant cost and management time required to successfully execute a hostile takeover of Airgas, also contributed to the downgrade. Air Products has stated that it may raise its offer for Airgas if the company can demonstrate that additional value is warranted. Under the terms of the proposed transaction Air Products would acquire Airgas' stock for roughly $5.1 billion and assume $1.9 billion of debt. Air Products has not provided any detail for its long-term financing for the proposed transaction. However, its prior offers for Airgas, which were disclosed, utilized a significant equity component and it has stated that it is committed to an investment grade rating. In Moody's opinion financing for the transaction will likely depend on the final transaction value and structure. Airgas has noted in its initial response to Air Products that its Board is evaluating the offer. Additionally, Airgas noted its rejection of prior offers was in part due to the large equity component and substantial underperformance of Air Products' stock relative to Airgas' stock. Hence, this will limit Air Products' ability to utilize it equity in any negotiated transaction with Airgas. The review of Air Products's ratings will focus on the final cost of the proposed transaction, the terms of the financing; the amount of equity to be used, if any, in financing the transaction; the detail behind the estimated synergies of $250 million; and potential asset sales required to secure U.S. regulatory approval. Additionally, Moody's will examine the ability of the combined company to generate free cash flow, after spending roughly $350-400 million to extract synergies, as well as management's willingness to reduce future capital spending to accelerate debt reduction subsequent to the transaction. Airgas' ratings have been placed under review, direction uncertain, due to the lack of visibility on the ultimate financing for the proposed transaction or any actions that Airgas may undertake to rebuff Air Products' offers and provide a financial alternative to its stockholders. Airgas' review will focus on the ultimate financial impact on the debtholders at Airgas, Inc. as a result of the success or failure of the proposed acquisition. Ratings downgraded and remaining under review for possible downgrade: Issuer: Air Products and Chemicals, Inc. -- Senior unsecured issuer rating to A3 from A2 -- Senior unsecured notes, euro-notes and debentures to A3 from A2 -- Senior unsecured short term debt to Prime-2 from Prime-1 -- Senior unsecured self registration to (P)A3 from (P)A2 -- Preferred stock self registration to (P)Baa2 from (P)Baa1 -- Senior unsecured industrial revenue bonds and pollution control revenue bonds to A3/Prime-2 from A2/Prime-1 Ratings on review direction uncertain: Issuer: Airgas, Inc. -- Senior unsecured issuer rating at Baa3 -- Senior unsecured notes at Baa3 -- Senior unsecured self registration at (P)Baa3 -- Senior subordinate notes at Ba1 Moody's most recent announcement concerning the ratings for Air Products was on August 18, 2009 when an A2 rating was assigned to $400 million of senior unsecured notes issued by Air Products. Moody's most recent announcement concerning the ratings for Airgas was on September 8, 2009 when Baa3 rating was assigned to $400 million of guaranteed unsecured notes. Air Products and Chemicals, headquartered in Allentown, PA, is a leading manufacturer and supplier of industrial, medical and specialty gases and related equipment. Air Products had sales of $8.2 billion in the LTM ending December 31, 2009. Airgas Inc., headquartered in Radnor, PA, is the largest independent distributor of industrial, medical and specialty gases and related equipment in North America. Airgas reported $4.2 billion in revenue for the LTM ending December 31, 2009. ALFRED WILEY CLARK: Files Schedules of Assets and Liabilities ------------------------------------------------------------- Alfred Wiley Clark and Janice Oglesby Clark filed with the U.S. Bankruptcy Court for the Northern District of Alabama a summary of their schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $4,997,500 B. Personal Property $4,266,172 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $3,623,448 E. Creditors Holding Unsecured Priority Claims $37,502 F. Creditors Holding Unsecured Non-priority Claims $1,010,102 ----------- ----------- TOTAL $9,263,672 $4,671,052 Wilsonville, Alabama-based Alfred Wiley Clark, aka Butch Clark, and Janice Oglesby Clark filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. N.D. Ala. Case No. 10- 00216). Frederick Mott Garfield, Esq., at Sexton & Associates, PC, assists the Debtors in their restructuring efforts. The Debtors listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. ALL AMERICAN: Has Until February 22 to File Schedules & Statement ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Pennsylvania extended until February 22, 2010, All American Properties, Inc.'s time to file its schedules of assets and liabilities, and statement of financial affairs. New York-based All American Properties, Inc., filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. M.D. Pa. Case No. 10-00273). The Company listed Robert E. Chernicoff, Esq., at Cunningham and Chernicoff PC, in its restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. AMERICAN CAPITAL: Taps Weil Gotshal for Restructuring Advice ------------------------------------------------------------ Tiffany Kary at Bloomberg News reports that American Capital Ltd. spokeswoman Katie Wisecarver said last week the Company has hired law firm Weil Gotshal & Manges LLP as it tries to win support for an out-of-court restructuring or pre-packaged bankruptcy. Bloomberg said American Capital listed Weil Gotshal and workout firm Miller Buckfire & Co. as advisers in regulatory filings last year. American Capital is an investment firm with $12 billion in assets. American Capital invests in so-called alternative assets such as private equity buyouts and early stage companies. Bloomberg says American Capital has an agreement with lenders that gives it until March 31 to win lender support for a proposed restructuring. If it doesn't get enough creditor support by then, it won't necessarily file for bankruptcy, Ms. Wisecarver said, according to the report. The amendment could be extended again, and the company could also be forced into bankruptcy at any time by two groups of lenders who haven't agreed to support the plan, she said. Bloomberg relates according to Ms. Wisecarver, American Capital's plan has the support of all holders of its $1.39 billion in unsecured debt said. The company still needs to win support from two other groups of lenders. Bloomberg says those groups include holders of $467.5 million of its $548 million in public unsecured notes, and all holders of its $415 million in private debt. Bloomberg, citing regulatory filings, notes that as an inability to borrow more money to fund investments began to hurt American Capital's business in 2008, its flagging share price and net losses led to default on $2.4 billion in debt as of Sept. 30. Bloomberg says Miller Buckfire Managing Director Stuart Erickson declined to comment. Weil Gotshal spokeswoman Barbara Gillette declined to immediately comment. Weil was the lead law firm for Lehman Brother Holdings Inc., the investment bank liquidating in bankruptcy. Bloomberg says if the company files a "prepackaged" reorganization -- a Chapter 11 filing that has already won support from creditors -- the agreement with lenders requires it to win U.S. bankruptcy court approval by May 15, and exit court protection by May 31. Bloomberg notes the company's $550 million of 6.85 percent senior unsecured notes due in 2012 are quoted at 97 cents on the dollar as of Feb. 3, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. They traded at a 52-week high of 97.56 on Jan. 27, and reached a 52-week low of 31.38 on March 3. About American Capital American Capital Ltd., formerly American Capital Strategies, Ltd., is an equity firm and a global asset manager. The Company invests in private equity, private debt, private real estate investments, early and late-stage technology investments, special situation investments and alternative asset funds managed by American Capital and structured finance investments. It operates in two segments: investment portfolio and alternative asset management business. In August 2008, the Company announced that it completed the sale of Contec Holdings, Ltd. to an affiliate of Bain Capital Partners, LLC. In March 2009, the Company completed the acquisition of the shares of its affiliate European Capital Limited, which it did not already own. In April 2009, the Company completed the combination of three portfolio companies within its Financial Services Group to create Core Financial Group. In October 2009, Grainger plc acquired Imperial Supplies, LLC from American Capital, Ltd. American Capital has $6,628,000,000 in assets against debts of $4,738,000,000 as of June 30, 2009. American Capital on November 20, 2009, entered into a Lock Up Agreement with lenders holding approximately 95% of the loans outstanding under its unsecured revolving line of credit agreement, dated as of May 16, 2007, with Wachovia Bank, NA, as administrative agent. Pursuant to the Lock Up Agreement, American Capital intends to enter into an out-of-court exchange of the loans outstanding under its Credit Agreement and its private and public unsecured notes. In case it does not obtain support from 100% of lenders for the debt-exchange, American Capital will file for Chapter 11 with a prepackaged plan. It is soliciting votes for the prepack plan simultaneously with the exchange offering. AMERICAN INT'L: ILFC CEO Udvar-Hazy Retires; Plueger Assumes Post ----------------------------------------------------------------- Steven F. Udvar-Hazy will retire as director and chief executive officer of American International Group's subsidiary, International Lease Finance Corporation, effective February 5, 2010. "On behalf of AIG, I would like to thank Steve for his tireless service to ILFC," said Robert H. Benmosche, AIG President and Chief Executive Officer. "We are grateful for the work he has done to continue ILFC's leadership in the industry." The ILFC Board is considering the long-term management of ILFC, and President John Plueger will succeed Mr. Udvar-Hazy as acting CEO. Mr. Benmosche said that AIG expects a smooth transition. Mr. Plueger has worked at ILFC for 23 years and has served as its President and Chief Operating Officer since 1995. In his current role, Mr. Plueger has been responsible for organizing ILFC's worldwide sales and marketing efforts, its relationships with the major airframe and engine manufacturers, and all company support for those activities. Prior to joining ILFC, Mr. Plueger was a Certified Public Accountant with Price Waterhouse and also held financial positions with various companies. Mr. Plueger received a Bachelor of Arts degree from University of California Los Angeles. Douglas M. Steenland, former president and chief executive officer of Northwest Airlines Corporation, who became ILFC's non-executive chairman in December 2009, will continue as non-executive chairman. Mr. Steenland, who joined the ILFC board in September 2009, is also a member of the AIG board. "ILFC and AIG are confident in the long term potential of ILFC as a leader in its marketplace," Mr. Benmosche said. "ILFC and AIG, overseen by the special committee of ILFC's Board, have worked to enhance ILFC'S long term potential, including its funding requirements and to manage its portfolio in the best interests of all ILFC constituencies. We anticipate selling some ILFC assets in the future, and we continue to review other options, including accessing the capital markets through secured debt financing." Mr. Hazy founded ILFC in 1973 with Leslie and Lou Gonda. AIG acquired ILFC in 1990. About ILFC ILFC, headquartered in Los Angeles, California, is the international market leader in the leasing and remarketing of advanced technology commercial jet aircraft to airlines around the world. ILFC owns a portfolio consisting of more than 1,000 jet aircraft. About AIG Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received from the U.S. government, and continues to seek buyers of its assets. ANAVERDE LLC: Can Auction Substantially All Assets on April 7 ------------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware approved Anaverde LLC's procedures for the sale of substantially all of its assets. The Court set March 31, 2010, at 12:00 p.m. (prevailing Eastern Time as the deadline for submitting bids. The auction will commence on April 7, 2010, at 10:00 a.m. (E.T.) As reported in the Troubled Company Reporter on January 25, 2010, the Debtor will sell the assets related to the second phase of a larger residential development which includes 3,500 undeveloped lots and an adjacent development known as Chanar planned for 157 single family home sites, to New Anaverde LLC -- the Stalking Horse Purchaser -- or the bidder with the highest or best bid at the auction. New Anaverde is under contract to buy the assets for a purchase price of (i) $10,475,000; plus (ii) an amount equal to 12% per annum, compounded annually, on $10,125,000 from December 24, 2009, until $10,125,000 is disbursed to CADIM, but in no event more than $948,699; plus (iii) CADIM's unreimbursed expenses of up to $383,000; plus (iv) a right, payable in the future if at all, to 25% of the cash profits from sales of land included in the project. The Stalking Horse Purchaser's breakup fee will be the documented actual reasonable out-of-pocket costs and expenses incurred by the Stalking Horse Purchaser in connection with the negotiation, documentation and implementation of the agreement and transactions contemplated by it and all proceedings incident thereto, plus a fee of $250,000. The hearing to consider the sale motion will be on April 14, 2010, at 10:30 a.m. (E.T.) at the U.S. District Court, 824 Market Street, 5th Floor, Courtroom 4, Wilmington, Delaware. Objections, if any are due on April 9 at 12:00 p.m. (E.T.) About Anaverde San Francisco, California-based Anaverde LLC filed for Chapter 11 bankruptcy protection on January 15, 2010 (Bankr. D. Del. Case No. 10-10113). Kevin Scott Mann, Esq., at Cross & Simon, LLC, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. ANAVERDE LLC: Can Access $700,000 of DIP Lender's Cash Collateral ----------------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware, in a final order, authorized Anaverde LLC to: -- obtain secured superpriority postpetition financing up to an aggregate principal amount of $700,000 from New Anaverde LLC; and -- grant adequate protection to the DIP lender. The Debtor would use the money to fund its Chapter 11 case, pay suppliers and other parties. As reported in the Troubled Company Reporter on January 27, 2010, the Debtor will grant security interest, liens to New Anaverde to secure obligations of the Debtor under and with respect to the DIP Facility (i) a perfected lien upon the Debtor's assets, the ALM Membership Interest and the Palmdale Membership Interest subject to the lien of the Cadim Note, Inc. Loan, that is junior in priority and payment to the lien of the Cadim Loan; (ii) a first priority, perfected lien upon all of the Debtor's assets that aren't otherwise encumbered by a validly perfected lien or security interest and all of the Debtor's right, title and interest in, to and under all proceeds of avoidance actions and any rights Section 506(c) of the U.S. Bankruptcy Code; and (iii) an allowed superpriority administrative expense claim having priority over any or all administrative expenses. The DIP facility will mature on May 1, 2010. The DIP facility will incur interest at 17% per annum, compounded monthly, but not more than the maximum rate permitted under applicable law and will be capitalized and added to the principal of the loan. In the event of default, the principal of the loan and any overdue interest or other amount will bear interest at a rate of 19%, which will be capitalized and added to the principal of the loan during the period prior to the time Cadim has received an aggregate amount in respect of the Cadim loan. Anaverde Land Management, LLC, and Palmdale Land Investors, comprising the sole members of the Debtor, have agreed to provide the collateral to secure the loans under the DIP Credit Agreement. Messrs. Simon and Mann said that the Debtors will also use the cash collateral to provide additional liquidity. San Francisco, California-based Anaverde LLC filed for Chapter 11 bankruptcy protection on January 15, 2010 (Bankr. D. Del. Case No. 10-10113). Kevin Scott Mann, Esq., at Cross & Simon, LLC, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. ANAVERDE LLC: Creditors Have Until April 6 to File Proofs of Claim ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware established April 6, 2010, at 4:00 p.m. (prevailing Eastern Time) as the deadline for any individual or entity to file proofs of claim against Anaverde LLC. The Court also set July 14, 2010, at 4:00 p.m. (prevailing Eastern Time) as the governmental unit bar date. San Francisco, California-based Anaverde LLC filed for Chapter 11 bankruptcy protection on January 15, 2010 (Bankr. D. Del. Case No. 10-10113). Kevin Scott Mann, Esq., at Cross & Simon, LLC, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. ANAVERDE LLC: Section 341(a) Meeting Scheduled for February 23 -------------------------------------------------------------- Roberta A. DeAngelis, the Acting U.S. Trustee for Region 3, will convene a meeting of creditors in Anaverde LLC's Chapter 11 case on February 23, 2010, at 2:00 p.m. The meeting will be held at J. Caleb Boggs Federal Building, 5th Floor, Room 5209, Wilmington, Delaware. 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. San Francisco, California-based Anaverde LLC filed for Chapter 11 bankruptcy protection on January 15, 2010 (Bankr. D. Del. Case No. 10-10113). Kevin Scott Mann, Esq., at Cross & Simon, LLC, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. ANDERSON HOMES: Can Sell Certain Properties and Transfer Liens -------------------------------------------------------------- The Hon. Stephani w. Humrickhouse of the U.S. Bankruptcy Court for the Eastern District of North Carolina authorized Anderson Homes, Inc. and its debtor-affiliates to: a. sell certain properties pursuant to Section 363 of the Bankruptcy Code; a. transfer all liens, claims or interests of any creditor or other party-in-interest to the sale proceeds; and b. pay certain closing costs, including broker's commissions from the sale proceeds. In conjunction with the acquisition and development of the sale properties, the Debtors arranged financing with a number of lenders, each of whom hold deeds of trust to secure the funds advanced to complete the improvements. The construction lenders holding liens on certain sale properties are: a. Bank of America b. Capital Bank c. KeySource Bankruptcy d. Paragon Commercial Bank e. RBC Centura Bank f. Regions Bank g. Wachovia Bank Other secured creditors that hold deeds of trust on certain sale properties are: a. James D. Goldston and William Goldston b. Stock Building Supply, Inc. About Anderson Homes, Inc. Headquartered in Raleigh, North Carolina, Anderson Homes, Inc., et al., are engaged in the development, construction and sale of residential properties in the form of single-family homes, townhomes and condominiums. Said properties are held for sale to the public and constitute the Debtors' inventory, which the Debtors sell in the ordinary course of business. The Debtors own, construct improvements on, and sell (i) single-family houses and townhomes in subdivisions known and referred to as Edgewater, Bridgewater, Bridgewater West, Cobblestone, Haw Village, Ridgefield, Amberlynn Valley, Cane Creek, Muirfield Village, Pine Valley, Quail Meadows, Thornton Commons Place, Willow Ridge, Creekside at Landon Farms, Keystone Crossing, Sterling Ridge, Jeffries Creek, Briar Chapel, and Villas at Forest Hills, and (ii) condominiums known as Blount Street Commons. Anderson Homes and its units filed for Chapter 11 on March 16, 2009 (Bankr. E.D. N.C. Lead Case No. 09-02062). Gerald A. Jeutter, Jr., Esq., and John A. Northen, Esq., at Northen Blue, LLP, represent the Debtors in their restructuring effort. At the time of the filing, Anderson Homes said it had total assets of $17,190,001 and total debts of $13,742,840. APPLETON PAPERS: Inks First Supplement to Indenture with US Bank ---------------------------------------------------------------- Appleton Papers Inc., the guarantor parties, and U.S. Bank National Association, as trustee, on January 29, 2010, entered into a first supplemental indenture to the indenture, dated as of September 30, 2009, relating to the Company's 11.25% Second Lien Notes due 2015. The First Supplemental Indenture amends the Indenture to permit: (i) the Appleton Papers Retirement Savings and Employee Stock Ownership Plan to own less than 50% of Paperweight Development Corp. -- Appleton's parent company -- without triggering a requirement on the part of the Company to make an offer to repurchase the Notes pursuant to the Indenture; and (ii) a capital contribution or operating lease of the black liquor assets located at the Company's facilities at Roaring Spring, Pennsylvania to a newly formed joint venture with a third party in exchange for a minority equity interest in such joint venture. A full-text copy of the First Supplemental Indenture is available at no charge at http://ResearchArchives.com/t/s?50d2 About Appleton Papers Appleton Papers Inc. -- http://www.appletonideas.com/-- headquartered in Appleton, Wisconsin, produces carbonless, thermal, security and performance packaging products. Appleton has manufacturing operations in Wisconsin, Ohio, Pennsylvania, and Massachusetts, employs approximately 2,200 people and is 100% employee-owned. As of October 4, 2009, Appleton had $830.1 million in total assets against total current liabilities of $151.1 million, long-term debt of $558.9 million, postretirement benefits other than pension of $45.7 million, accrued pension of $102.7 million, environmental liability of $38.1 million, other long-term liabilities of $9.8 million, redeemable common stock of $133.6 million, accumulated deficit of $114.1 million, and accumulated other comprehensive loss of $95.9 million. * * * Standard & Poor's Ratings Services assigned Appleton, Wisconsin- based Appleton Papers Inc.'s proposed $300 million first lien notes due 2015 its issue-level rating of 'B+' (one notch above S&P's 'B' corporate credit rating on the company). S&P assigned a '2' recovery rating to this debt, indicating its expectation of substantial (70% to 90%) recovery in the event of a payment default. At the same time, S&P affirmed all its ratings on the company, including the 'B' corporate credit rating. The rating outlook is stable. ASARCO LLC: Parties Oppose Sterlite Plea for Reimbursement ---------------------------------------------------------- Sterlite (USA), Inc., and Sterlite Industries (India) Ltd. ask the Bankruptcy Court, pursuant to Sections 105(a), 503(b)(3)(D) and 503(b)(4) of the Bankruptcy Code, to allow: (1) the return of the $50 million First Letter of Credit issued in favor of ASARCO LLC; (2) the release of claims, if any, under the original and new purchase and sale agreements between ASARCO and Sterlite; and (3) the reimbursement of compensation for professional services rendered and expenses incurred in connection with the services performed by Shearman & Sterling LLP, counsel to the Sterlite, from March 26, 2008, through November 23, 2009. Sterlite said in a recent court filing that it is seeking the reimbursement of: (i) $6,103,573 in fees for 9,735 hours of services rendered, and (ii) out-of-pocket expenses amounting to $315,781. Objections A. ASARCO On behalf of ASARCO LLC, Charles A. Beckham, Jr., Esq., at Haynes and Boone, LLP, in Houston, Texas, argues that Sterlite is not entitled to its "substantial contribution" request given that it (1) brazenly breached the Original Sterlite PSA, (2) rebid its contract to purchase the same assets but also sought to obtain release from its breach of contract liability for less than 50% of the purchase price it had agreed to pay in the Original Sterlite PSA, and (3) left another year of costly bankruptcy proceedings in its wake. "If anything," Mr. Beckham says, "Sterlite's participation in this case, and in particular its last-minute refusal to close under the Original Sterlite PSA, substantially retarded the progress of ASARCO's reorganization and imposed massive costs on the process." Sterlite's participation does not meet either the statutory or applicable case law standards for establishing a right to recover its administrative expenses, Mr. Beckham insists. As the Court previously has recognized, Mr. Beckham argues that the increasing economics of both the Debtors' and the Parent's successive plan iterations were driven by many factors -- paramount among them was the fortuitous and gradual but substantial rise in copper prices that occurred over the course of the ASARCO LLC's Chapter 11 case and specifically during the 2009 plan negotiation and confirmation process. "That factor was the key factor in propelling the Parent toward the willingness to fund a full payment plan," he insists. Even if the Court were to find that Sterlite has made a "substantial contribution" in the Debtors' bankruptcy cases, ASARCO objects to the relief requested as inappropriate and incapable of being granted under Section 503(b)(3)(D) of the Bankruptcy Code. B. U.S. Trustee Charles F. McVay, the U.S. Trustee for Region 7, contends that the Sterlite Entities failed to satisfy their burden of establishing a "substantial contribution" under Section 503(b) and thus, are not entitled to reasonable compensation for legal services or reimbursement of actual and necessary expenses for their activities in the Debtors' bankruptcy case. Hence, he insists, Sterlite's request should be denied in its entirety. Although legal authority exists for the proposition that an unsuccessful plan may constitute a substantial contribution if it results in an improved offer from a successful plan proponent, Mr. McVay asserts that the confirmation of the Parent Plan does not justify finding substantial contribution by the Sterlite Entities. He emphasizes that "the Debtors were the primary proponents of the plans competing with the Parent's plans," and the Sterlite Entities' efforts to get a plan confirmed are largely duplicative of efforts made by the Debtors and other parties supporting the Debtors' plan. Mr. McVay adds that the Sterlite Entities did not engage in any extraordinary activities in the pursuit of plan confirmation. "[E]xpected and routine activities relating to a purchaser's efforts acquire assets under [a purchase and sale agreement] do not constitute a substantial contribution to the reorganization." About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B. consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Plan Administrator Proposes Fee Procedures ------------------------------------------------------ Mark A. Roberts, Asarco LLC's Plan Administrator, asks the Court to establish deadlines and uniform procedures to govern motions for postpetition interest and attorney's fees, compliance with Rule 2019 of the Federal Rules of Bankruptcy Procedure, and other related matters. The Confirmed Plan of Reorganization for ASARCO LLC and its debtor affiliates was declared effective on December 9, 2009. Consequently, the deadline for claimants to file motions under Section 4.4 of the Plan was January 8, 2010. To date, eight Section 4.4 requests have been filed by certain creditors. The requests seek additional postpetition interest and attorney's fees. The Section 4.4 Motions involve certain common questions of law and fact and should be addressed in a consolidated manner to avoid varying results and promote judicial efficiency, Dion W. Hayes, Esq., at McGuirewoods LLP, in Richmond, Virginia, asserts. He discloses that certain of the requesting creditors unilaterally set certain of the Section 4.4 Motions for hearing, and certain of the requests have response deadlines approaching. Mr. Hayes also relates that certain of the Section 4.4 Motions appear to have been filed by entities that bought hundreds, if not thousands, of claims or by counsel representing multiple claimants. None of the requesting creditors, with multiple claims or the counsel representing multiple claimants, have complied with Bankruptcy Rule 2019 by filing a "Rule 2019 Statement," according to Mr. Hayes. Hence, the Plan Administrator seeks a Court order that requires the creditors and their counsel to comply with the provisions of Rule 2019 as a precondition to prosecuting the Section 4.4 Motions. To streamline and consolidate the Court's consideration of the Section 4.4 Motions, which involve more than 6,000 claims, the Plan Administrator specifically asks the Court to set: (i) certain guidelines, deadlines, and a hearing date for the Section 4.4 Motions; and (ii) a deadline for compliance with Rule 2019. The Plan Administrator proposes these schedules: -- The Plan Administrator and Reorganized ASARCO must file any preliminary objections to the Section 4.4 Motions by February 23, 2010; -- Any Movant or Objector may serve on each other interrogatories, requests for production of documents and requests for admission in connection with the applicable Section 4.4 Motion by March 8, 2010; -- The Movants and Objectors will serve their responses, admissions and objections to each timely Discovery Request by April 7, 2010, after being served with the Discovery Request; -- On or before April 14, 2010, the Movants and Objectors will file and serve a list of all witnesses, whose testimony the party anticipates presenting at the hearing on the applicable Section 4.4 Motion, together with a brief statement of the subjects on which each listed witness is expected to testify; -- By April 21, 2010, the relevant Movants and Objectors will exchange among themselves their respective lists identifying the witnesses or entities, whose depositions they seek to take in connection with the applicable hearings on the Section 4.4 Motions; -- Promptly after the exchange of Deposition Witness Lists, the relevant Movants and Objectors will meet and confer and use their best efforts to reach agreement on the date, time, and place at which the deposition of each person or entity identified in the Deposition Witness Lists will be held. Unless extended by the Court on good cause shown or by agreement of the Objectors or the Movants, all Depositions must be completed by May 21, 2010; -- The Objectors may, but are not required to, file a final objection to any of the Section 4.4 Motions on or before June 21, 2010, unless the Preliminary Objection is withdrawn or the Objector is otherwise excused from complying with the Final Objection Deadline by the Court, after a showing of good cause; and -- The Court will hold an evidentiary hearing on the Section 4.4 Motions on June 28, 2010. Responses A. Certain Holders Certain holders of general unsecured claims inform the Court that they do not oppose granting the Plan Administrator an appropriate amount of additional time to respond to the Section 4.4. Motions, so that either (i) a consensual resolution can be reached, or (ii) the Plan Administrator can respond to the assertions in the Section 4.4 Motions. Moreover, the Claim Holders agree with the Plan Administrator that the appropriate rate of interest to be paid to unsecured creditors must be determined by consideration of the facts and circumstances of the Debtors' bankruptcy cases. The Claim Holders, however, contend that the drawn-out discovery process proposed by the Plan Administrator is unnecessary, and appears to be designed as an "over the top litigation tool" to make it more costly for the requesting creditors to have their day in Court on the interest rate issue. The Claim Holders insist that the Plan Administrator has been given every relevant document that includes every relevant discoverable piece of information that they have within their control with respect to the underlying claims. "With respect to the Holders' unsecured claims, there is simply nothing to be gained by a discovery process," Eric J. Taube, Esq., at Brown Rudnick and Hohmann, Taube & Summers, L.L.P., in Austin, Texas, argues. "This is not a confirmation hearing or an adversary proceeding, or even a contested motion in which facts are contested." The Claim Holders assert that the Debtors' request is, for the most part, entirely unnecessary, overbroad, and far too complex for the narrow question presented. The Holders thus ask the Court to deny the request. B. Certain Allowed Judgment Claimants Certain holders of Allowed Workers Compensation Judgment Claims represented by Garry Ferraris, Esq., a Tennessee workers compensation attorney, tell the Court that they would show the Court that Rule 2019(a) is not applicable to Mr. Ferraris or his local counsel's representation of the Claimants. Mr. Ferraris contends that the Claimants have not consolidated their collection efforts in the Debtors' bankruptcy cases and are represented by counsel, who is not required to submit proof of his authority to act on their behalf. He points out that neither he nor the local counsel are non-attorney agents, attorneys in fact or proxies under Rule 9010, but are instead licensed attorneys governed by the rules of their states rather than by the rules governing agents. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B. consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Settles Charges on RCRA Violations in Montana --------------------------------------------------------- ASARCO LLC or its predecessor conducted lead smelting and related processes at ASARCO's facility in East Helena, Montana, since 1888. ASARCO has been implementing Resource Conservation and Recovery Act and Comprehensive Environmental Response, Compensation and Liability Act remedial actions at the East Helena Facility since the late 1980s. In 2001, the East Helena smelter was placed in "suspended operations" and was later permanently closed. The Montana Department of Environmental Quality has issued notice of violations to ASARCO relating to the East Helena Facility. The United States of America also asserted civil claims for alleged prepetition violations of the RCRA at the Facility, involving alleged illegal storage of hazardous waste. ASARCO contested those claims. ASARCO subsequently entered into several environmental settlements with the United States and other agencies for the cleanup of the ASARCO mines. As of the effective date of the Debtors' Plan of Reorganization, ASARCO transferred ownership of, and all further operations, at the East Helena Facility to the custodial trust established pursuant to the Consent Decree and Settlement Agreement Regarding the Montana Sites. Subsequently, on January 20, 2010, the United States Attorney for the District of Montana issued a declination letter to the United States Environmental Protection Agency for Region 8 regarding the East Helena RCRA Claims, noting a determination that a criminal prosecution should not be pursued. Under a settlement agreement, ASARCO and the United States have agreed that: -- the United States will have an allowed general unsecured claim for a civil penalty amounting to $350,000, which will be paid in full with interest in accordance with ASARCO's Confirmed Plan; -- ASARCO will pay the civil penalty by FedWire Electronic Funds Transfer to the U.S. Department of Justice in accordance with written instructions to be provided to ASARCO by the Financial Litigation Unit of the U.S. Attorney's Office for the District of Montana; and -- ASARCO will not deduct any penalties paid under the Settlement Agreement in calculating its federal income tax. ASARCO maintains that the Settlement: (i) resolves the East Helena RCRA Claims of the United States against ASARCO, including ASARCO in its reorganized form pursuant to the Plan; (ii) in no way impairs the scope and effect of the Debtors' discharge under Section 1141 of the Bankruptcy Code as to any third parties or as to any claims that are not addressed by the Settlement Agreement; and (iii) will satisfy any requirement for the United States to file any proof of claim for the East Helena RCRA Claims. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B. consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASHTON OAKS: Files for Chapter 11 Bankruptcy in Florida ------------------------------------------------------- Katlynn Lanham at The Fact reports that Ashton Oaks filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Middle District of Florida to enable the Company to put off its mortgage payments and dedicate the money to improving the property. Ms. Lanham says the Company must obtain court approval to use cash collateral. The money will be used to meet city code and fire ordinances. Ashton Oaks owns an apartment complex. ASPEN LAND: Consented to the Dismissal of Chapter 11 Case --------------------------------------------------------- The Hon. Howard R. Tallman of the U.S. Bankruptcy Court for the District of Colorado approved the dismissal of Aspen Land Fund II LLC's Chapter 11 case. As reported in the Troubled Company Reporter on January 25, 2010, Alpine Bank, a senior secured lender, asked the Court to dismiss the Debtor's bankruptcy proceeding relating that: -- there is no likelihood of rehabilitation; and -- it will reduce the administrative costs to the estate, including, but not limited to, fees payable to the Debtor's counsel and fees payable. The Debtor consented to the dismissal of the case. Based in Newport Beach, California, Aspen Land Fund II LLC is a development group that wants to build a hotel at the base of Aspen Mountain. The Company filed for Chapter 11 protection on Sept. 25, 2009 (Bankr. D. Col. Case No. 09-30162). In its petition, the Debtor said it has $31,572,828 in assets and $34,695,549 in debts. ATRIUM CORP: U.S. Trustee Forms 4-Member Creditors Committee ------------------------------------------------------------ Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed four members to the official committee of unsecured creditors in the Chapter 11 cases of Atrium Corporation and its debtor-affiliates. The Creditors Committee members are: 1. U.S. Bank National Association as Indenture Trustee for 11.0% Senior Subordinated Notes due 2012 Attn: Sandra Spivey 2300 W. Sahara Ave., Ste. 200 Las Vegas, NV 89102 Tel: (702) 251-1656 Fax: (702) 251-1657 2. Ryder Truck Rental, Inc. Attn: Kevin P. Sauntry 6000 Windward Pkwy. Alpharetta, GA 30005 Tel: (770) 569-6511 Fax: (770) 569-6712 3. Corporate Property Associates 14, Inc. c/o W.P. Carey & Co., LLC Attn: Nicholas Isham 50 Rockefeller Plaza New York, NY 10020 Tel: (212) 492-1100 4. Tower-Square Capital Partners II, LP c/o Babson Capital Management Attn: Steven J. Katz 1500 Main St., Ste. 2800 Springfield, MA 01115 Tel: (413) 226-1059 Fax: (413) 226-2059 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. Headquartered in Dallas, Texas, Atrium Corporation -- http://www.atrium.com/-- is a manufacturer and supplier of residential windows and doors in North America. The company has 5,100 employees and 63 manufacturing facilities and distribution centers in 21 U.S. states, Canada and Mexico. Atrium Corporation and various affiliates filed for Chapter 11 bankruptcy protection on January 20, 2010 (Bankr. D. Del. Case No. 10-10150). Richard M. Cieri, Esq.; Joshua A. Sussberg, Esq.; and Brian E. Schartz, Esq., at Kirkland & Ellis LLP, and Dominic E. Pacitti, Esq.; and Michael W. Yurkewicz, Esq., at Klehr Harrison Harvey Branzburg LLP, assist the Debtors in their restructuring efforts. Deloitte Financial Advisory Services LLP is the Debtors' financial advisor. Moelis & Company is the Debtors' investment banker. Goodmans LLP is the Debtors' Canadian counsel. Garden City Group Inc. is the Debtors' claims agent. As of December 31, 2009, the Debtors listed $655.9 million in consolidated debts, but didn't state their consolidated assets. Atrium Corp.'s petition says assets are up to $500,000 while debts range from $100 million to $500 million. ATRIUM CORP: Pursues Dual-Track Plan of Reorganization ------------------------------------------------------ Atrium Corp. and its units filed with U.S. Bankruptcy Court for the District of Delaware their joint plan of reorganization and disclosure statement. According to the disclosure statement, the Plan provides for the reorganization of the Debtors as a going concern and is based on a settlement among the Debtors, the Senior Secured Agent and the Ad Hoc Group of Senior Secured Lenders. Among other things, the Plan contemplates one of two restructuring alternatives: * New Value Alternative. This restructuring option contemplates an equity investment from Kenner & Company, Inc., the Debtors' current equity sponsor, and certain other potential investors, of $125,000,000, in exchange for 92.5% of Reorganized Atrium's New Common Stock (subject to dilution on account of the Management Equity Incentive Plan), which will be applied to the distribution to the Holders of Senior Secured Claims. The New Value Alternative further contemplates that Reorganized Atrium will obtain new secured loans in an aggregate amount equal to at least $250,000,000, the proceeds of which will be applied to satisfy the Claims of Holders of Senior Secured Claims. For the New Value Alternative to be implemented, valid and binding commitments to provide the equity investment and new secured loans must be delivered to and approved by the Senior Secured Agent and the Ad Hoc Group of Senior Secured Lender within 45 days of the Petition Date. * Stand-Alone Alternative. If these commitments are not delivered to or approved by the Senior Secured Agent and the Ad Hoc Group of Senior Secured Lenders by the New Value Alternative Deadline, the Plan provides for implementation of the Stand-Alone Alternative, which contemplates that Holders of Senior Secured Claims will receive, on a Pro Rata basis, a share of (a) a new first-priority senior secured term loan totaling $200,000,000 and (b) 98% of Reorganized Atrium's New Common Stock (subject to dilution on account of the Management Equity Incentive Plan). Notably, the New Value Alternative - and its contemplated investment from Kenner - is subject in all respects to higher and better offers. Indeed, the Debtors' proposed financial advisor and investment banker, Moelis & Company, LLC, has already started an open and thorough marketing process to ensure that the value of the Debtors' estates is maximized for the benefit of all stakeholders. In connection with the New Value Alternative, Holders of 11.0% Senior Subordinated Notes Claims will receive a Pro Rata share of 2.5% of Reorganized Atrium's New Common Stock and Holders of 15.0% Senior Subordinated Notes Claims will receive a Pro Rata share of 5.0% of Reorganized Atrium's New Common Stock. If the Stand-Alone Alternative is implemented, Holders of 11.0% Senior Subordinated Notes Claims and Holders of 15.0% Senior Subordinated Notes Claims will together receive a Pro Rata share of 2.0% of Reorganized Atrium's New Common Stock. Any distribution to Holders of Senior Subordinated Notes Claims is contingent -- in either restructuring scenario -- on (a) the Class of Holders of 11.0% Senior Subordinated Notes and the Class of Holders of 15.0% Senior Subordinated Notes voting to accept the Plan and (b) 100% of the Holders of the 11.0% Senior Subordinated Notes Claims agreeing to waive their Priority Rights under the Senior Subordinated Notes Indenture. In the event either or both of the foregoing conditions are not satisfied, the recoveries otherwise to be afforded to Holders of Senior Subordinated Notes Claims will be distributed to the prepetition senior secured lenders. The Plan further contemplates that under either the New Value Alternative or the Stand-Alone Alternative, holders of qualified unsecured trade claims will receive payment in full in cash on account of such claims following execution of a qualified vendor support agreement. Moreover, holders of allowed general unsecured claims will receive the lesser of (i) $0.04 on account of each dollar of the holder's allowed general unsecured claim and (ii) on a Pro Rata basis, a share of a $200,000 cash distribution. Copies of the Plan and disclosure statement are available for free at: http://bankrupt.com/misc/ATRIUM_ch11.pdf http://bankrupt.com/misc/ATRIUM_ds.pdf About Atrium Headquartered in Dallas, Texas, Atrium Corporation -- http://www.atrium.com/-- is a manufacturer and supplier of residential windows and doors in North America. The company has 5,100 employees and 63 manufacturing facilities and distribution centers in 21 U.S. states, Canada and Mexico. Atrium Corporation and various affiliates filed for Chapter 11 bankruptcy protection on January 20, 2010 (Bankr. D. Del. Case No. 10-10150). Richard M. Cieri, Esq.; Joshua A. Sussberg, Esq.; and Brian E. Schartz, Esq., at Kirkland & Ellis LLP, and Dominic E. Pacitti, Esq.; and Michael W. Yurkewicz, Esq., at Klehr Harrison Harvey Branzburg LLP, assist the Debtors in their restructuring efforts. Deloitte Financial Advisory Services LLP is the Debtors' financial advisor. Moelis & Company is the Debtors' investment banker. Goodmans LLP is the Debtors' Canadian counsel. Garden City Group Inc. is the Debtors' claims agent. As of December 31, 2009, the Debtors listed $655.9 million in consolidated debts, but didn't state their consolidated assets. Atrium Corp.'s petition says assets are up to $500,000 while debts range from $100 million to $500 million. AUTOBACS USA: Completes Bankruptcy Procedures --------------------------------------------- According to reporting by Gregory Turk at Bloomberg News, Autobacs Seven Co. said its U.S. subsidiary completed bankruptcy procedures. The Japanese parent said in statement to the Tokyo Stock Exchange that Autobacs U.S.A. was ordered to complete bankruptcy procedures by a U.S. federal court. The unit had liabilities of $3.8 million as of December 2008. Autobacs USA sells auto-part accessories. The Debtor is a subsidiary of Autobacs Seven Co. Ltd., auto-parts retailer of Japan. Autobacs U.S.A., Inc., filed for Chapter 11 on Feb. 4, 2009 (Bankr. C.D. Calif. Case No. 09-10898). Marc J. Winthrop, Esq., at Winthrop Couchot Pofressional Corporation, represents the Debtor in its Chapter 11 effort. The petition says that assets and debts are $1 million to $10 million. BERNIE'S AUDIO: Has Until February 12 to File Schedules ------------------------------------------------------- The Hon. Albert S. Dabrowski of the U.S. Bankruptcy Court for the District of Connecticut extended until February 12, 2010, Bernie's Audio Video TV Appliance Co., Inc.'s time to file its schedules of assets and liabilities, and statement of financial affairs. Enfield, Connecticut-based Bernie's Audio Video TV Appliance Co., Inc., operates 15 electronic appliance stores. The Company filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. D. Conn. Case No. 10-20087). Barry S. Feigenbaum, Esq., at Rogin Nassau LLC, serves as attorney for the Debtor. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. BLANCA ESTELA GAMA: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Blanca Estela Gama 1246 Karl Street San Jose, CA 95122 Bankruptcy Case No.: 10-50967 Chapter 11 Petition Date: January 31, 2010 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Arthur S. Weissbrodt Debtor's Counsel: Drew Henwood, Esq. Law Offices of Drew Henwood 41 Sutter St. #621 San Francisco, CA 94104 Tel: (415) 362-7412 Email: dfhenwood@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 17 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/canb10-50967.pdf The petition was signed by Blanca Estela Gama. BRUNDAGE-BONE: DIP Financing, Cash Collateral Use Get Interim Nod ------------------------------------------------------------------ Brundage-Bone Concrete Pumping, Inc., and JLS Concrete Pumping, Inc., sought and obtained interim authorization from the Hon. A. Bruce Campbell of the U.S. Bankruptcy Court for the District of Colorado to obtain postpetition secured financing from Wells Fargo Bank, National Association, and use cash collateral. David V. Wadsworth, Esq., at Sender & Wasserman, P.C., the attorney for the Debtors, explained that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. Mr. Wadsworth said that the Debtors will use the cash collateral to provide additional liquidity. The Debtors' prepetition operations were financed by Wells Fargo, N.A., which contended that it holds a valid, perfected, and enforceable lien in substantially all of the accounts of the Debtors in existence on the Petition Date as more fully set forth in the Debtors' agreements with Wells Fargo. Wells Fargo's agreement to provide the Debtors with financing expired on January 13, 2010. Because the Debtors couldn't obtain any further financing from Wells Fargo, they elected to utilize the services of Commercial Financial Services 110 LLC (CFS) for financing after the Petition Date. After extensive good faith and arm's-length negotiations with Commercial Finance Services 110 LLC, the Debtors were able to secure financing from an investment firm. CFS was willing to do a transaction either inside or outside of Chapter 11 to restructure the Debtors and was willing to provide financing on a non-priming basis to help finance the transaction, if necessary. CFS indicated a willingness to provide the necessary funding to complete a financial restructuring under Chapter 11 and act as a plan sponsor under a plan of reorganization pursuant to which CFS would infuse sufficient equity into the Debtors upon their reorganization in exchange for the substantial majority of equity of the reorganized Debtors upon consummation of the plan of reorganization (the Potential Transaction). CFS agreed to provide a junior debtor in possession financing facility that will provide the Debtors with the necessary funding to complete the Potential Transaction. Various parties in interest objected to the Debtors' requested approval of the CFS DIP Loan. Wells Fargo opposed the CFS DIP Loan in part on the basis that Wells Fargo would consent to the Debtors' use of its cash collateral (with adequate protection) and offer the Debtors' a DIP Loan facility, all on more favorable terms than those proposed by CFS. The Debtors then filed a Wells Fargo financing motion, with a further revised proposed interim budget (the Budget), seeking to withdraw their request for approval of the CFS DIP Loan and seeking the Court's approval of the Wells Fargo financing motion. The DIP Lender committed to provide an interim DIP credit facility convertible upon approval at the final hearing of up to a maximum amount equal to the (i) excess availability set forth in the Debtors' most recently delivered borrowing base certificate under the existing credit agreement, and (ii) $1 million convertible upon approval at the final hearing to a final facility. Upon the satisfaction of all terms and conditions, the interim facility will be deemed converted to the terms and conditions in the final facility, which will continue to provide credit facilities substantially on the terms governing the interim facility, but with an increase in the maximum amount to reflect the rollup of amounts due under the existing credit facility. The rollup will be binding on the Debtors but without prejudice to any other party-in-interests' right to challenge the validity, priority and extent of the bank's prepetition liens securing the existing credit facility at any time before 90 days after the date of the final hearing. The interim facility will mature 45 days after the Petition Date, while the final facility will mature 180 days after the Petition Date. The DIP facility will incur a fully-floating interest rate equal to daily LIBOR, based on a one-month tranche, plus 4.5%. The Debtors grant security interests and superpriority administrative claims in favor of the Bank as security for their performance of all their obligations under the interim and final facilities: (a) first priority liens upon all of the Debtors' prepetition and postpetition assets and the proceeds and products thereof of the same character and category as are subject to the existing prepetition security interests securing the Bank's prepetition line of credit, letter of credit and overadvance facilities; (b) a superpriority administrative claim; and (c) a first priority lien against unencumbered assets of the Debtors; and (d) a subordinate lien against all remaining assets of the Debtors. Upon entry of the interim order, the Debtors will pay the DIP Lender a fully-earned and non-refundable facility fee of $25,000. Upon the entry of the final order, the Debtors will pay the DIP Lender a fully-earned and non-refundable facility fee of $75,000. A copy of the DIP financing term sheet is available for free at: http://bankrupt.com/misc/BRUNDAGE_dipfinancingtermsheet.pdf Key Bank; RBS Asset Finance, Inc.; and Suntrust Equipment Finance & Leasing Corporation objected to the Debtors' request for DIP financing and cash collateral use. The objections were withdrawn or overruled. Wells Fargo is represented by Holland & Hart LLP. Key Bank is represented by Jonathan A. Braun. RBS Asset Finance, Inc., is represented by Horowitz & Burnett, P.C., and Bartlett Hackett Feinberg P.C. Suntrust Equipment Finance & Leasing Corporation is represented by Holme Roberts & Owen LLP. The Court has set a final hearing for March 1, 2010, at 9:00 a.m. on the Debtors' request to obtain DIP financing and use cash collateral. About Brundage-Bone Brundage-Bone Concrete Pumping Inc. and JLS Concrete Pumping Inc., claim to be the largest providers of concrete pumping services in the U.S. JLS Concrete Pumping services California and Nevada from its corporate headquarters in Ventura and from satellite yards in Bakersfield, Fresno, Gardena, Lancaster, Las Vegas, Moorpark, Palm Springs, Riverside, San Diego, San Luis Obispo, Santa Clarita, Temecula, Thousand Oaks, and Ventura. Brundage-Bone and JLS filed for Chapter 11 on Jan. 18, 2010 (Bankr. D. Col. Case No. 10-10758). According to the schedules, the Company has assets of $325,708,061, and total debts of $230,277,103. CABI DOWNTOWN: Kaye Scholer and Bank Client Hit for Faulty Facts ---------------------------------------------------------------- Judge Laurel M. Isicoff of the U.S. Bankruptcy Court for the District of Florida will convene a hearing on February 24, 2010, to consider whether Bank of America, N.A., and its counsel Kaye Scholer LLP should be sanctioned. Bank of America, as construction lender owed $205 million by Cabi Downtown LLC, filed an emergency motion on Jan. 29 asking the Bankruptcy Court to stop Cabi from leasing unsold residential condominium units at the twin-tower, 849-unit Everglades on the Bay condominium in Miami. Bank of America pointed out that the Debtor has never sought the Court's approval of its residential leasing program, and Bank of America has learned that the Debtor is not complying with its published guidelines for qualifying individuals to be tenants. BofA said that Cabi is aggressively rushing to lease residential units to generate revenue to use as cash collateral without any regard to an individual's qualifications. According to court documents, at a hearing on February 4, attorneys at Kaye Scholer acknowledged that they did not attempt to confer with opposing counsel prior to the filing of the motion, and that parts of the motion contain "serious but untrue accusations against the Debtor." The allegations were the basis upon which the Bankruptcy Court agreed to hear the Motion on an emergency basis. The judge's show cause order said that BoA's counsel has acknowledged that the paragraph containing the allegation -- the Debtor has failed to make any meaningful changes to the leasing program or consult with the Lenders in connection with the lease approval process -- is untrue. * * * Bill Rochelle at Bloomberg News reports that Judge Isicoff has allowed Cabi to continue leasing units. Judge Isicoff concluded that Cabi had in fact leased some units "outside of its own guidelines." Still, she said Cabi hadn't acted on a whim or in bad faith. She also found there was "absolutely no" evidence to show that the leasing practices adversely affected the bank's collateral. About Cabi Downtown Aventura, Florida-based Cabi Downtown, LLC, operates a real estate business and owns the 49-story Everglades on the Bay condominium in Miami. The condominium project has 849 units in two towers, with 60,000 square feet of retail space. The Company is owed by GICSA, which says it is the largest and most profitable real estate developer in Mexico. The Company filed for Chapter 11 on Aug. 18, 2009 (Bankr. S.D. Fla. Case No. 09-27168). The Debtor's legal advisors are Kasowitz, Benson, Torres & Friedman LLP; and Bilzin Sumberg Baena Price & Axelrod LLP. In its petition, the Debtor listed assets and debts both ranging from US$100,000,001 to US$500,000,000. CABI DOWNTOWN: Disclosure Statement Hearing on March 4 ------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Florida will convene a hearing on March 4, 2010, to consider approval of the disclosure statement explaining the reorganization plan for Cabi Downtown LLC. Cabi Downtown can begin soliciting votes on, then seek confirmation of, the Plan after the Court affirms the adequacy of the information in the Disclosure Statement. Objections to the Disclosure Statement are due February 25. Bill Rochelle at Bloomberg News reported that Judge Laurel M. Isicoff said at the Feb. 4 hearing that while she is not sure Cabi can win approval of a reorganization plan, she said the case was not filed in bad faith. She also concluded there is a "reasonable likelihood" Cabi can emerge from reorganization. The judge also denied a request by Bank of America, N.A., to foreclose, according to the report. Cabi Downtown LLC filed an amended Chapter 11 plan January 28 that promises that Bank of America and other construction lenders owed $214 million would recover 100 cents on the dollar through a five- year secured note where 2.5% interest would be paid in cash. The interest rate would be the London interbank offered rate plus 2.5%. The difference is to be paid in more debt. Unsecured creditors owed $7.5 million would recover 6.7% of their claims in cash. The Plan is to be funded by a new equity contribution of $4.5 million. Cabi filed the Plan to fend off a request by lenders to dismiss the Chapter 11 case. Bank of America, as lender and agent for the other secured prepetition lenders, has asked the Bankruptcy Court to dismiss Chapter 11 case, which was filed the same day BofA filed for foreclosure on the Company's Everglades on the Bay project. The lender contends its "collateral remains at risk" and there is "no realistic hope of reorganizing." A copy of the Plan, filed January 28, 2010, is available for free at http://bankrupt.com/misc/Cabi_AmendedPlan.pdf A copy of the Disclosure Statement, filed January 28, 2010, is available for free at http://bankrupt.com/misc/Cabi_AmendedDS.pdf About Cabi Downtown Aventura, Florida-based Cabi Downtown, LLC, operates a real estate business and owns the 49-story Everglades on the Bay condominium in Miami. The condominium project has 849 units in two towers, with 60,000 square feet of retail space. The Company is owed by GICSA, which says it is the largest and most profitable real estate developer in Mexico. The Company filed for Chapter 11 on Aug. 18, 2009 (Bankr. S.D. Fla. Case No. 09-27168). The Debtor's legal advisors are Kasowitz, Benson, Torres & Friedman LLP; and Bilzin Sumberg Baena Price & Axelrod LLP. In its petition, the Debtor listed assets and debts both ranging from US$100,000,001 to US$500,000,000. CARITAS HEALTH: Has Until May 3 to Propose Chapter 11 Plan ---------------------------------------------------------- The Hon. Carla E. Craig of the U.S. Bankruptcy Court for the Eastern District of New York extended Caritas Health Care, Inc., and its debtor-affiliates' exclusive periods to propose a Chapter 11 Plan and to solicit acceptances of that Plan until May 3, 2010, and July 1, 2010, respectively. The Debtors related that they need additional time to resolve claims and maximize the value of their remaining assets for the benefit of all stake holders. Caritas Health Care Inc. is the owner of Mary Immaculate Hospital and St. John's Queens Hospital. Caritas, created by Wyckoff Heights Medical Center, purchased the two hospitals in a bankruptcy sale in early 2007 from St. Vincent Catholic Medical Centers of New York. St. John's has 227 generate acute-care beds while Mary Immaculate has 189. Caritas Health Care and eight of its affiliates filed for Chapter 11 on Feb. 6, 2009 (Bankr. E.D.N.Y., Lead Case No. 09- 40901). Jeffrey W. Levitan, Esq., and Adam T. Berkowitz, Esq., at Proskauer Rose, LLP, represent the Debtors in their restructuring effort. Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP, represent the official committee of unsecured creditors. Caritas in its bankruptcy petition estimated assets of $50 million to $100 million, and debts of $100 million to $500 million. CATALYST PAPER: Defers Proposed Rights Offering ----------------------------------------------- Catalyst Paper on February 1 said it has decided to defer proceeding with its proposed rights offering. In November 2009 the company announced, in conjunction with an exchange offer involving its outstanding 8-5/8% Senior Notes due June 15, 2011, that upon completion of the Exchange Offer it intended to conduct a rights offering to raise proceeds of up to $100 million. Late in January, the company amended the terms of the Exchange Offer. The company also announced the resignation of Richard Garneau, the Chief Executive Officer, effective April 28, 2010. A search for a successor is underway and the Board has determined that completing this succession process is desirable prior to initiating the proposed rights offering. As a result of this and current market and industry conditions, the company has reconsidered the timing of the proposed rights offering and will not proceed with it at this time. Catalyst Paper manufactures diverse specialty printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With six mills located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 2.5 million tonnes. The company is headquartered in Richmond, British Columbia, Canada and its common shares trade on the Toronto Stock Exchange under the symbol CTL. Catalyst is listed on the Jantzi Social Indexr and is also ranked by Corporate Knights as one of the 50 Best Corporate Citizens in Canada. About Catalyst Paper Headquartered in Richmond, British Columbia, Catalyst Paper Corporation (TSX:CTL) manufactures diverse specialty printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With six mills strategically located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 2.5 million tones. At September 30, 2009, the Company had C$2.20 billion in total assets against C$1.29 billion in total liabilities. At September 30, 2009, the Company had liquidity of C$192.9 million, comprised of C$90.6 million cash, and availability of C$102.3 million on the Company's asset-based loan facility. * * * DBRS in November 2009 downgraded the Issuer Rating of Catalyst Paper Corporation to B (low) from BB and the Senior Debt rating to CCC from BB, and placed the Company's ratings Under Review with Negative Implications. The downgrades reflect the Company's weak financial risk which is likely to weaken further in view of expected continuation of soft industry conditions and follows the Company's announcement on November 23, 2009, of its offer to exchange its outstanding 8 5/8% Senior Debt due June 15, 2011, with new 10% Senior Secured Notes due December 15, 2016, and shares of its common stock. CATALYST PAPER: Steelhead Partners Reports 5.6% Stake ----------------------------------------------------- Steelhead Partners, LLC, James Michael Johnston and Brian Katz Klein disclosed that as of February 2, 2010, they may be deemed to beneficially own 21,479,889 shares or roughly 5.6% of the common stock of Catalyst Paper Corporation. Steelhead Navigator Master, L.P., disclosed that as of February 2, 2010, it may be deemed to beneficially own 19,279,889 shares or roughly 5.1% of the Company's common stock. Steelhead, as the investment manager of Navigator, the general partner or investment manager of those other client accounts, and as the sole member of Navigator's general partner, and each of J. Michael Johnson and Brian K. Klein, as the member-managers of Steelhead, may be deemed to beneficially own the Securities held by Navigator and such other client accounts for the purposes of Rule 13d-3 under the Securities Exchange Act of 1934, insofar as they may be deemed to have the power to direct the voting or disposition of those Securities. About Catalyst Paper Headquartered in Richmond, British Columbia, Catalyst Paper Corporation (TSX:CTL) manufactures diverse specialty printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With six mills strategically located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 2.5 million tones. At September 30, 2009, the Company had C$2.20 billion in total assets against C$1.29 billion in total liabilities. At September 30, 2009, the Company had liquidity of C$192.9 million, comprised of C$90.6 million cash, and availability of C$102.3 million on the Company's asset-based loan facility. * * * DBRS in November 2009 downgraded the Issuer Rating of Catalyst Paper Corporation to B (low) from BB and the Senior Debt rating to CCC from BB, and placed the Company's ratings Under Review with Negative Implications. The downgrades reflect the Company's weak financial risk which is likely to weaken further in view of expected continuation of soft industry conditions and follows the Company's announcement on November 23, 2009, of its offer to exchange its outstanding 8 5/8% Senior Debt due June 15, 2011, with new 10% Senior Secured Notes due December 15, 2016, and shares of its common stock. CATALYTIC SOLUTIONS: Fifth Third Grants Forbearance Until April 30 ------------------------------------------------------------------ Catalytic Solutions, Inc. (AIM: CTS and CTSU) said that Fifth Third Bank has agreed to extend forbearance on debt obligations until April 30, 2010. Under the terms of the extension, the credit limit on the Company's revolving line of credit, which is part US Dollar and part Canadian Dollar denominated, has been reduced to a total of C$7.5 million from C$8.5 million, with the limit being reduced by C$100,000 per month. The outstanding balance under the line as of 31 December 2009 was approximately C$5.4 million. In addition, the interest rate on the line has been increased by 250 basis points to US / Canadian Prime Rate plus 2.75%. Final documentation of the extension is expected be completed shortly. The board continues to seek a longer term solution to the Company's liquidity position; however there can be no guarantee of success. Further announcements regarding the Company's liquidity position will be made in due course, as appropriate. Catalytic Solutions, Inc. -- http://www.catalyticsolutions.com/-- is a global manufacturer and distributor of emissions control systems and products, focused in the heavy-duty diesel and light- duty vehicle markets. The Company's emissions control systems and products are designed to deliver high value to our customers while benefiting the global environment through air quality improvement, sustainability and energy efficiency. Catalytic Solutions, Inc. is listed on AIM of the London Stock Exchange (AIM: CTS and CTSU) and currently has operations in the USA, Canada, France, Japan and Sweden as well as an Asian joint venture. CHATSWORTH INDUSTRIAL: Claims Bar Date Set for March ---------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California ordered that the last day for filing proofs of claim or interest in the Chapter 11 case of Chatsworth Industrial Park, LP, will be 60 days from the date that the Debtor's counsel mails notice of the bar date to all creditors. Caceres & Shamash LLP, the debtor's counsel, delivered on January 27, 2010, the notice of bar date. Tarzana, California-based Chatsworth Industrial Park, LP filed for Chapter 11 on December 23, 2009 (Bankr. C.D. Calif. Case No. 09- 27368). In its petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. CHATSWORTH INDUSTRIAL: Section 341(a) Meeting Set for Feb. 10 ------------------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of creditors in Chatsworth Industrial Park, LP's Chapter 11 case on February 10, 2010, at 11:00 a.m. The meeting will be held at 21051 Warner Center Lane, #105, Woodland Hills, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Tarzana, California-based Chatsworth Industrial Park, LP filed for Chapter 11 on December 23, 2009 (Bankr. C.D. Calif. Case No. 09- 27368). In its petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. CHEMTURA CORP: $6.89 Million in Claims Change Hands --------------------------------------------------- For the period from December 18, 2009, to January 29, 2010, about 35 entities transferred claims, totaling more than $6,800,000, asserted in the Debtors' Chapter 11 cases to these entities: Transferor Transferee Amount ---------- ---------- ------ Integrated Power Creditor Liquidity $43,631 Services LLC LP Richman Chemical, Inc. Creditor Liquidity 40,414 4D Printing, Inc. Creditor Liquidity 45,708 Schwerman Trucking Co. Liquidity Solutions 62,188 Inc. HFG Engineering US, Inc. Liquidity Solutions 211,793 Tony Nistler Liquidity Solutions 2,000 Lung Tin International Liquidity Solutions 3,858 Patpol SP Z OO Liquidity Solutions 3,342 Covansky Corporation Liquidity Solutions 56,185 Tech Enterprises Liquidity Solutions 14,825 Allegro Consulting, Inc. Liquidity Solutions 27,652 TK Supplies Liquidity Solutions 133,921 Watt & Stewart Trucking, Liquidity Solutions 24,990 Inc. Breazeale Sachse & Wilson Liquidity Solutions 4,189 LLP Harwick Standard Liquidity Solutions 10,502 Distribution Corp. Net Vml, Inc. Fair Harbor Capital 825 LLC BBP Sales, Inc. Fair Harbor Capital 3,085 George E. Booth Co. Fair Harbor Capital 1,207 Exponent, Inc. Fair Harbor Capital 4,001 Lamination Service, Inc. Fair Harbor Capital 1,249 Coble Enterprises, Inc. Longacre Opportunity 24,687 Offshore Fund, Ltd. 27,248 Complete Water Services Longacre Opportunity 20,409 LLC Robinson & ole LLP Longacre Opportunity 292,859 273,923 14,668 Melton Electric Company Sierra Liquidity Fund 790 LLC Hain Capital Holdings Cohanzick Creditor 257,291 LLC Opportunities Master Fund, Ltd. VanDeMark Chemical, Inc. Cohanzick Management 220,680 LLC Sun Petrochemicals Co. Hain Capital Holdings 376,794 Ltd. Kaufman Container Co. Hain Capital Holdings 106,507 Rickie Wieberg LLC Claims Recovery Group 5,850 LLC Wozniak Packaging Claims Recovery Group 1,267 Machinery Co. Capitol Marketing Claims Recovery Group 12,545 Concepts, Inc. Delta Chemical Claims Recovery Group 7,353 Corporation New Jersey Corporation Corre Opportunities Fund 74,223 LP Bandag Incorporated Drawbridge Special 11,481 n/k/a Bridgestone Bandag Opportunities Fund LP 2,870,427 LLC Thermphos International Drawbrige Special 90,479 B.V. 69,358 277,433 361,916 799,188 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) CHRYSLER LLC: To Assign Supply Contract with US Gov't to Fiat ------------------------------------------------------------- Tiffany Kary at Bloomberg News reports that Chrysler LLC, now known as Old Carco LLC, is seeking permission from the Bankruptcy Court to assign a contract for supplying electric cars to the U.S. government to Fiat Spa. Old Carco said it wants to assign a contract effective from May 2008 to May 2013 between GEM Electric Motorcars LLC and the General Services Administration, a U.S. agency that streamlines government administrative work. The contract pertains to GEM's supply of certain low-speed electric vehicles for use by entities of the United States government. No dollar amount or value for the contract was given. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: InterTAN Monitor to Distribute C$5,784,906 -------------------------------------------------------- Honorable Justice Geoffrey B. Morawetz of the Superior Court of Justice (Commercial List) for the Province of Ontario has approved the Twelfth and Supplementary Twelfth Reports of the CCAA monitor of applicants InterTAN Canada Ltd. and Tourmalet Corporation. Full-text copies of these Reports are available at no charge at http://bankrupt.com/misc/Intertan_12thMonitorReport012610.pdf http://bankrupt.com/misc/Intertan_Supp12thMonitorReport012810.pdf The Twelfth Report was prepared by the Monitor to provide the Court and the Applicants' stakeholders with information concerning the Monitors' motion to extend the stay period to April 30, 2010, and to approve the distribution of proceeds to certain creditors whose claims have been resolved since the distribution authorized by the Honorable Justice Morawetz dated December 7, 2009, as well as to remaining creditors as and when their claims are resolved consensually. In its order dated January 29, 2010, the Court ordered that the Monitor distribute from the balance of the Sale Proceeds and other amounts received by or owing to InterTAN that are in the Monitor's possession, amounting to C$5,784,906, to be distributed to those creditors, inclusive of interest calculated at a rate of 5% per annum, by February 3, 2010. The Court also authorized and directed the Monitor to distribute, in amounts consistent with the Monitor's recommendation in its Twelfth Report, to the claimants on account of a settlement or resolution of their claims, as may be agreed to in writing between the applicable claimant, the Monitor, InterTAN, and the Purchaser. The lists of claimants are available at no charge at: http://bankrupt.com/misc/Intertan_DistributionLists012910.pdf The distributions made will be in full and final satisfaction of the claims of the recipients against the Applicants. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Circuit City Stores Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). CIT GROUP: 4-Month Search Over as Ex-Merrill Chief Named CEO ------------------------------------------------------------ CIT Group Inc. said its Board of Directors has elected John A. Thain Chairman and Chief Executive Officer effective immediately. The Board has tasked Mr. Thain (54) to continue CIT's transition to a more streamlined commercial lender focused on serving the small business and middle market sectors and optimizing the Company's business model. Mr. Thain replaces Peter J. Tobin, who has been acting as interim Chief Executive Officer. Tobin will remain a Director of CIT. Vice Admiral John Ryan, Lead Director, speaking on behalf of the Board of Directors, said, "John is a well respected financial services executive and proven leader who is uniquely qualified to lead CIT at this critical stage. CIT and its customers will benefit enormously from his breadth of experience, industry acumen and deep knowledge of the financial services sector. We have the utmost confidence in John and are pleased to welcome him to CIT." Speaking about his appointment, Mr. Thain commented, "I am pleased to have the opportunity to lead the newly reorganized CIT. The Company's numerous market-leading positions are evidence of the resiliency of the franchise and its unwavering commitment to its customers." Mr. Thain continued, "Much has been accomplished in recent months to position CIT for renewed success. We will build upon this progress and work even harder to support small and mid-market businesses. CIT can and will serve an important role in the recovery of the U.S. economy and the creation of jobs." Mr. Thain previously served as Chairman and Chief Executive Officer of Merrill Lynch until its sale to Bank of America. Prior to that, Mr. Thain held the position of Chief Executive Officer of the New York Stock Exchange, where he presided over the exchange's global transformation into a publicly-traded entity. Mr. Thain spent the majority of his career at Goldman Sachs Group, where he rose to President and Chief Operating Officer. Mr. Thain received a Bachelor of Science degree from Massachusetts Institute of Technology, and an M.B.A. from Harvard University. About CIT Group CIT Group Inc. (NYSE: CIT) -- http://www.cit.com/-- is a bank holding company with more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. CIT Group Inc. and affiliate CIT Group Funding Company of Delaware LLC announced a Chapter 11 filing on November 1, 2009 (Bankr. S.D.N.Y. Case No. 09-16565). Evercore Partners, Morgan Stanley and FTI Consulting are the Company's financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel in connection with the restructuring plan. Sullivan & Cromwell is legal advisor to CIT's Board of Directors. CIT Group on November 1 announced that, with the overwhelming support of its debtholders, the Board of Directors voted to proceed with the prepackaged plan of reorganization for CIT Group Inc. and a subsidiary that will restructure the Company's debt and streamline its capital structure. None of CIT's operating subsidiaries, including CIT Bank, a Utah state bank, were included in the filings. On December 8, the Court confirmed the Debtors' prepackaged plan. On December 11, CIT emerged from bankruptcy. CIT GROUP: Prepays $750MM of Debt; Contingent Value Rights Expire ----------------------------------------------------------------- CIT Group Inc. said its Board of Directors has authorized the voluntary prepayment of $750 million on its $7.5 billion first lien credit facility. The Company will prepay this high cost debt out of its available holding company cash position, which is in excess of $5 billion. The repayment will be made on February 9, 2010, on a pro rata basis among outstanding tranches and will be subject to the applicable 2% payment premium. In addition, the Company announced that since the terms for distribution of common shares to holders of its Contingent Value Rights (CVRs) were not met as of the February 8, 2010 Measurement Date, they have expired without value. CIT Group Inc. (NYSE: CIT) -- http://www.cit.com/-- is a bank holding company with more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. CIT Group Inc. and affiliate CIT Group Funding Company of Delaware LLC announced a Chapter 11 filing on November 1, 2009 (Bankr. S.D.N.Y. Case No. 09-16565). Evercore Partners, Morgan Stanley and FTI Consulting are the Company's financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel in connection with the restructuring plan. Sullivan & Cromwell is legal advisor to CIT's Board of Directors. CIT Group on November 1 announced that, with the overwhelming support of its debtholders, the Board of Directors voted to proceed with the prepackaged plan of reorganization for CIT Group Inc. and a subsidiary that will restructure the Company's debt and streamline its capital structure. None of CIT's operating subsidiaries, including CIT Bank, a Utah state bank, were included in the filings. On December 8, the Court confirmed the Debtors' prepackaged plan. On December 11, CIT emerged from bankruptcy. CIT GROUP: Says U.S. Treasury Holds No Stake -------------------------------------------- Linda Shen at Bloomberg News reports that CIT Group Inc. said the U.S. Treasury Department doesn't have a stake in the Company anymore. "While the U.S. Treasury no longer has an investment in CIT, we are generally endeavoring to apply Treasury governance best practices," CIT spokesman Curt Ritter said in an e-mailed statement to Bloomberg News. According to the report, the Treasury said in a filing earlier this month that it still held "contingent value rights," which CIT had distributed to preferred shareholders as part of its bankruptcy reorganization. The Treasury's preferred stake, originally valued at $2.3 billion, was obtained when CIT sought funds from the Troubled Asset Relief Program. CIT said that the contingent value rights "are terminated and cease to exist." About CIT Group CIT Group Inc. (NYSE: CIT) -- http://www.cit.com/-- is a bank holding company with more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. CIT Group Inc. and affiliate CIT Group Funding Company of Delaware LLC announced a Chapter 11 filing on November 1, 2009 (Bankr. S.D.N.Y. Case No. 09-16565). Evercore Partners, Morgan Stanley and FTI Consulting are the Company's financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel in connection with the restructuring plan. Sullivan & Cromwell is legal advisor to CIT's Board of Directors. CIT Group on November 1 announced that, with the overwhelming support of its debtholders, the Board of Directors voted to proceed with the prepackaged plan of reorganization for CIT Group Inc. and a subsidiary that will restructure the Company's debt and streamline its capital structure. None of CIT's operating subsidiaries, including CIT Bank, a Utah state bank, were included in the filings. On December 8, the Court confirmed the Debtors' prepackaged plan. On December 11, CIT emerged from bankruptcy. CITADEL BROADCASTING: Sees April 30 Bankruptcy Exit --------------------------------------------------- Citadel Broadcasting Corp., expects to exit bankruptcy around April 30 and post a profit this year. Citadel made those assumptions in the financial projections attached to its proposed reorganization plan. In the disclosure statement explaining the proposed reorganization plan, Citadel projected earnings before interest, taxes, depreciation, and amortization, or Ebitda, will rise 6.2 percent to $209.6 million this year from $197.3 million in 2009. Revenue is estimated to fall to $721.4 million, the company said. A full-text copy of the Financial Projections is available for free at http://bankrupt.com/misc/CtdlFinProj.pdf About Citadel Broadcasting Citadel Broadcasting Corporation (OTC BB: CTDB) -- http://www.citadelbroadcasting.com/-- is the third largest radio group in the United States, with a national footprint reaching more than 50 markets. Citadel is comprised of 166 FM stations and 58 AM stations in the nation's leading markets, in addition to Citadel Media, which is one of the three largest radio networks in the United States. Citadel Broadcasting filed for Chapter 11 with 50 affiliates on Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422). The Company listed assets of $1.4 billion and debt of $2.5 billion in its Chapter 11 filing. Kirkland & Ellis LLP is serving as legal counsel and Lazard Freres & Co. LLC. As financial advisor for the restructuring. Kurtzman Carson Consultants is serving as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Citadel Broadcasting Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Citadel Broadcasting Corp. and other affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CITGO PETROLEUM: Loan Amendment Won't Affect Moody's 'Ba2' Rating ----------------------------------------------------------------- Moody's Investors Service commented that CITGO Petroleum Corporation's Ba2 Corporate Family Rating and the Ba1 ratings for its Senior Secured Revolving Credit, Term Loans A and B, and pollution control bonds are not affected by the amendment to the credit facilities effective February 4, 2010. The rating outlook remains stable. The amendment grants waivers on tight leverage and interest coverage covenants as well as improved flexibility for the company to refinance its $1.15 billion revolving credit facility, which matures in November 2010. Moody's last rating action affecting CITGO occurred on September 29, 2009, when its ratings were downgraded. CITGO Petroleum Corporation is headquartered in Houston, Texas. Petroleos de Venezuela is located in Caracas, Venezuela. CMR MORTGAGE: Appointment of Ch. 11 Trustee Tentatively Denied -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California, in a tentative ruling, stated that it is inclined to deny the U.S. Trustee's motion to appoint a Chapter 11 trustee in the Chapter 11 cases of CMR Mortgage Fund II, LLC, and its debtor-affiliates. The U.S. Trustee for Region 17 has asked for the appointment of a Chapter 11 trustee in these separate, but related, Chapter 11 cases: -- Hamilton Creek LLC (Case No. 08-31285); -- CMR Mortgage Fund, LLC (Case No. 08-32220); -- CMR Mortgage Fund II, LLC, (Case No. 09-30788); and -- CMR Mortgage Fund III, LLC (Case No. 09-30802). The U.S. Trustee related that the relief is appropriate to curb the on-going and pervasive gross mismanagement that continued postpetition at the hands of the non-member manager, California Mortgage & Realty, Inc. The Court said that it does not appear that the moving papers establish, by a preponderance of the evidence, that Debtors' current management engaged in fraud, dishonesty, incompetence, or gross mismanagement of Debtors' affairs, or other "cause" for appointment of a trustee. Although CMRI may have mismanaged Debtors with respect to regulatory compliance and breach of lending covenants, these acts do not rise to the level of "gross" mismanagement. The court is inclined to keep each of the 4 Debtors progressing towards plan confirmation by continuing to hold regular status conferences in each of the cases, and by setting a prompt deadline for each Debtor to file and serve a joint plan and disclosure statement. San Francisco, California-based CMR Mortgage Fund II, LLC, is a limited liability company organized for the purpose of making or investing in business loans secured by deeds of trust or mortgages on real properties located primarily in California. The Company previously funded lending activities through loan pay downs or pay offs, as well as by selling its membership interests, and by selling all or a portion of interests in the loans to individual investors. The Company commenced operations in February 2004. The Company ceased accepting new members in the third quarter of 2006. The Company and CMR Mortgage Fund III, LLC, filed for Chapter 11 protection on March 31, 2009 (Bankr. N. D. Calif. Case No. 09- 30788 and 09-30802). Robert G. Harris, Esq., at the Law Offices of Binder and Malter, represents the Debtor as counsel. The Debtor listed between $10 million and $50 million each in assets and debts. COACHMEN INDUSTRIES: Warns Investor Regarding Incorrect Results --------------------------------------------------------------- Coachmen Industries Inc. determined that its accounting treatment of the transactions with H.I.G. All American, LLC, was incorrect regarding its 2009 fourth-quarter and full year results, which were previously released on February 1, 2010. The Company cautions investors not to rely upon the previously released results. The Company said it is required to adjust its previously disclosed fourth quarter and full year results for 2009. The adjustments will result in both the conversion feature and the warrants of the convertible debt transaction to be accounted for at fair value and recorded on the balance sheet as a liability, rather than in the equity section of the balance sheet. The Company said it will revalue the conversion feature and warrants at fair value each reporting period going forward, with the resulting change in fair value being a component of interest expense. The Company said that these adjustments will not impact its cash position. The Company expects that its review of these issues and its adjustments will be completed the week of February 12, 2010. The Company will release amended and restated financial results for the 2009 fourth-quarter and full year at that time. About Coachmen Industries Coachmen Industries, Inc., doing business as All American Group, is one of America's premier systems-built construction companies operating under the ALL AMERICAN BUILDING SYSTEMS(R), ALL AMERICAN HOMES(R) and MOD-U-KRAF(R) brands, as well as a manufacturer of specialty vehicles through a joint venture with ARBOC Mobility, LLC. All American Group is a publicly held company with stock quoted and traded on the over-the-counter markets under the ticker COHM.PK. All American Group includes All American Homes, LLC and Mod-U- Kraf, LLC, which combined are one of the nation's largest builders of systems-built residential homes. Models range from single- story ranches to spacious two-story colonials to beautifully rustic log homes, under the Ameri-Log(R) brand. A line of solar homes that can generate low to zero energy bills is available under the Solar Village(R) brand. All American Building Systems, LLC, builds large scale projects such as apartments, condominiums, dormitories, hotels, military and student housing. The Company's construction facilities are located in Colorado, Indiana, Iowa, North Carolina and Virginia. * * * In March 2009, Coachmen's independent public accounting firm, Ernst & Young LLP, said that despite the Company's sale of the assets related to its RV Segment, its recurring net losses and lack of current liquidity raise substantial doubt about its ability to continue as a going concern. Coachmen said its ability to continue as a going concern is highly dependent on its ability to obtain financing or other sources of capital. COLUMBIAN PUBLISHING: Court Approves Plan of Reorganization ----------------------------------------------------------- Lynne Terry at The Oregonian says a federal judge approved the reorganization plan of The Columbian Publishing Co. to emerge from Chapter 11 bankruptcy. The deed to the company's new six-story building at 415 W. Sixth St. was transferred to Bank of America, the newspaper's last major creditor to approve the reorganization plan. According to the Troubled Company Reporter on Jan. 15, 2010, the company's Official Committee of Unsecured Creditors supported reorganization plan sponsored by management. The Columbian reports that the approval by the creditors of the plan is another step in the Company's attempt to exit from Chapter 11 protection. Under the Plan, Bank of America N.A., the secured creditor owed $15.5 million, would receive a new $9 million secured note plus a $7 million note currently owing to Columbian by an affiliate. The note is worth as much as $6.5 million. General unsecured creditors are to participate in recoveries by a trust, Bloomberg reported, according to the Troubled Company Reporter on Sept. 11, 2009. The Columbian Publishing is a family owned company that operates The Columbian newspaper, which serves Clark County and other parts of southwest Washington. It also runs the Web site http://www.columbian.com/ The Company and its affiliates filed for Chapter 11 bankruptcy protection on May 1, 2009 (Bankr. W.D. D.C. Case No. 09-43133). Albert N. Kennedy, Esq., at Tonkon Torp LLP, assists the Debtors in their restructuring efforts. Columbian Publishing listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 debts. CROSS CANYON: Files Schedules of Assets & Liabilities ----------------------------------------------------- Cross Canyon Energy Corp. has filed with the U.S. Bankruptcy Court for the Southern District of Texas its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $20,810,195 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $33,500,000 E. Creditors Holding Unsecured Priority Claims $185,306 F. Creditors Holding Unsecured Non-priority Claims $176,246 ----------- ----------- TOTAL $20,810,195 $33,861,552 Spring, Texas-based Cross Canyon Energy Corp., fdba ABC Funding, Inc., filed for Chapter 11 bankruptcy protection on January 29, 2010 (Bankr. S.D. Texas Case No. 10-30747). Rhett G. Campbell, Esq., at Thompson & Knight, 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. CROSS CANYON: Gets Interim Nod to Hire T&K as Bankr. Counsel ------------------------------------------------------------ Cross Canyon Energy Corp. sought and obtained interim approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Thompson & Knight LLP as bankruptcy counsel. T&K will, among other things: a. advise the Debtor concerning, the negotiation and documentation of debt restructurings; b. review the nature and validity of various contracts and leases relating to the Debtor's interests in real and personal property and advising the Debtor of its corresponding rights and obligations; c. review the nature and validity of liens and claims asserted against the Debtor's property and advising the Debtor concerning the enforceability of those liens and claims; and d. advise the Debtor concerning avoidance actions or other actions that it may take to collect and to recover property for the benefit of the estate and its creditors, whether or not arising under Chapter 5 of the Bankruptcy Code. Rhett G. Campbell, a partner in T&K, said that the firm will be paid based on the hourly rates of its personnel: Rhett G. Campbell $730 Partners $480-$795 Counsel & Associates $265-$690 Legal Assistants & Support Staff $50-$110 Mr. Campbell assured the Court that T&K is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. The interim order will become a final order on the 20th day after the entry of the interim order without further notice or hearing unless an objection to the interim order is filed with the Court and served on T&K on or before the 20th day after the entry of the interim order. Spring, Texas-based Cross Canyon Energy Corp., fdba ABC Funding, Inc., filed for Chapter 11 bankruptcy protection on January 29, 2010 (Bankr. S.D. Texas Case No. 10-30747). Rhett G. Campbell, Esq., at Thompson & Knight, 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. CROSS CANYON: Gets Interim Okay to Use Cash Collateral ------------------------------------------------------ Cross Canyon Energy Corp. sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of Texas to use the cash collateral securing their obligation to CIT Capital and other lenders. Rhett G. Campbell, Esq., at Thompson & Knight LLP, explained that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. The Debtors will use the collateral pursuant to a weekly budget, a copy of which is available for free at http://bankrupt.com/misc/CROSS_CANYON_budget.pdf In exchange for using the cash collateral, the Debtors propose to grant CIT Capital: (a) continuing, valid, binding, enforceable, non-avoidable and automatically and properly perfected first priority security interests in and liens (collectively, the "Adequate Protection Liens") on all Prepetition Collateral. The Debtor further proposed that the Adequate Protection Liens, subject to entry of a Final Order, will have recourse to the proceeds or property recovered in respect of any Avoidance Actions, any and all hereafter acquired assets and real and personal property of the Debtor, together with any proceeds thereof (the Collateral). The Adequate Protection Liens will be senior and prior to all other interests or liens whatsoever in or on the Collateral, and will be subject and subordinate only to a carve-out for case professionals and valid, perfected and unavoidable liens or security interests on the Petition Date or liens perfected after the Petition Date the priority and perfection of which relates back to a date before the Petition Date; (b) a superpriority administrative expense claim with priority in this case, and otherwise, over all administrative expense claims and unsecured claims whether in existence on or arising after the Petition Date against the Debtor and its estate of any kind or nature whatsoever, subject only to the Carve-Out; and (c) reimbursement of CIT Capital for its reasonable out-of- pocket expenses incurred both before the Petition Date and during the case. As adequate protection to any other secured creditor of the estate that may exist, a replacement security interest and lien in the Debtor's postpetition collateral in the same amount, and with the same validity and priority as the lien had as of the Petition Date. The Debtor and CIT reserve all rights to contest the amount, validity and priority of any and all liens and security interests asserted by the other secured creditors. The Court has set a final hearing for February 18, 2010, at 3:00 p.m. on the Debtor's request to use cash collateral. Spring, Texas-based Cross Canyon Energy Corp., fdba ABC Funding, Inc., filed for Chapter 11 bankruptcy protection on January 29, 2010 (Bankr. S.D. Texas Case No. 10-30747). Rhett G. Campbell, Esq., at Thompson & Knight, 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. ERICKSON RETIREMENT: Court Holds Pre-Trial Meet on Plan Outline --------------------------------------------------------------- Judge Stacey Jernigan of the United States Bankruptcy Court for the Northern District of Texas held a status conference on January 29, 2010, to discuss possible mediation in the Chapter 11 cases of Erickson Retirement Communities, LLC, and its debtor affiliates. At the January 29 status conference, various parties apprised the Court of the status of discussions and progress in the Debtors' Chapter 11 cases toward resolving matters in dispute. Against this backdrop, Judge Jernigan has decided to continue the status conference to February 5, 2010, to further discuss the possibility of a global mediation. Moreover, to foster continued negotiations and attempts at settlement, the Court scheduled a pre-trial conference on February 5, 2010 on these matters: (a) The Amended Disclosure Statement accompanying the First Amended Joint Plan of Reorganization; (b) The Official Committee of Unsecured Creditors' Motion for Proper Allocation of Value under the Amended Plan; (c) PNC Bank, National Association's, Capmark Finance, Inc.'s, Bank of America, N.A.'s and Wells Fargo Bank National Association's Motions to Disband Creditors Committee in certain Debtors' Chapter 11 cases; and (d) The Creditors Committee's Objection to the Debtors' Motion for More Protection to Entrance Deposits. At the February 5 pre-trial conference, the Court will also discuss rescheduling the subject matters. In light of these developments, Vincent P. Slusher, Esq., at DLA Piper LLP, in Dallas, Texas, informed the parties-in-interest that the previously scheduled February 5 hearing for the consideration of the Disclosure Statement has now been converted into a status conference meeting. Consequently, the deadline to object to the Disclosure Statement previously scheduled for February 2, 2010, has been vacated, Mr. Slusher added. Disclosure Statement Objections A. ACE Group Illinois Union Insurance Company, Westchester Fire Insurance Company, ACE Fire Underwriters Insurance Company and other members of the ACE Group of Companies complain that the Disclosure Statement explaining the Debtors' First Amended Joint Plan of Reorganization fails to explain the proposed treatment of: -- insurance policies entered between the Debtors and the ACE Group; -- a construction performance bond issued by the ACE Group to one of the Debtors; and -- a related indemnity agreement executed between the ACE Group and the Debtors. The ACE Group further contends that the Disclosure Statement fails to state whether the Amended Plan is intended to be insurance neutral, or in what way it intends to have an effect on the insurers' and the Debtors' rights and obligations under the insurance policies. If the Debtors intend to include the ACE Policies among the contracts to be assumed and assigned to Redwood Capital Investments under the Amended Plan, the ACE Group insists that the ACE Policies are not assignable without its consent. The ACE Group further asserts that the Debtors cannot assign the Bond and the Indemnity Agreement because they constitute non-assignable financial accommodations under Section 365(c)(2) of the Bankruptcy Code. Unless its concerns are resolved, the ACE Group asks the Court to deny approval of the Disclosure Statement. B. Douglas County Sharon K. Jones, Treasurer of Douglas County, Colorado, relates that Douglas County holds a properly allowable Class 2 Secured Tax Claim against Debtor Littleton Campus, LLC for $1,190,572. In line with this, she points out that the Debtors' First Amended Joint Plan of Reorganization does not disclose how it will treat Class 2 Secured Claims. Ms. Jones further contends that $62,132,000 used to fund payments to Class 4 Littleton Construction Loan constitute the proceeds of Littleton Campus' real property, which proceeds secure Douglas County's Secured Tax Claim. However, the Amended Plan ignores Douglas County's statutory property tax lien, which is senior to all other liens, she argues. Thus, Douglas County insists that the Amended Plan is unconfirmable and asks the Court to deny approval of the Disclosure Statement. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ERICKSON RETIREMENT: Lenders Back New Protocol for Claims Filing ---------------------------------------------------------------- In a joint request, PNC Bank, National Association, Bank of America, N.A., and Capmark Finance, Inc., asked the Court to approve a protocol for filing proofs of claim under Rules 3001 and 2019 of the Federal Rules of Bankruptcy Procedure. PNC Bank is administrative agent for various senior secured project lenders. BofA is administrative agent for the Debtor Dallas Campus, LP's senior secured prepetition revolving lenders. Capmark is administrative agent for the senior secured lenders to Debtor Littleton Campus, LLC. The Court has established February 28, 2010, as the deadline for filing proofs of claim in the Debtors' Chapter 11 cases. PNC Bank's counsel, Daniel I. Morenoff, Esq., at K&L Gates LLP, in Dallas, Texas, says that the documents supporting the claims of the Administrative Agents, as well as other senior secured project and senior secured corporate revolver lenders against the Debtors are voluminous. Filing physical copies of the supporting writings, he insists, would negatively impact the Debtors' estates. Lenders Support Proposed Protocol In separate filings, Wells Fargo Bank National Association, U.S. Bank National Association, Wilmington Trust FSB and Manufacturers and Traders Trust Company also known as M&T Bank join in the joint request of PNC Bank, National Association, Bank of America, N.A., and Capmark Finance, Inc., for a protocol for filing proofs of claim under Rules 3001 and 2019 of the Federal Rules of Bankruptcy Procedure. Wells Fargo and U.S. Bank further ask the Court that any order approving the Protocol Motion: (a) permit Wells Fargo and U.S. Bank to observe the procedures set forth in the Protocol Motion with respect to the filing of proofs of claim in the Debtors' Chapter 11 cases; and (b) provide that any claims submitted by Wells Fargo and U.S. Bank in conformance with the procedures will be deemed to satisfy the filing requirements of the Bankruptcy Code, Rules 2109, 3001, 3002 and 3003 of the Federal Rules of Bankruptcy Procedure and other applicable authority. Wilmington Trust also asks the Court to rule that any order on the Protocol Motion provide that: (a) Wilmington Trust is authorized, pursuant to Bankruptcy Rules 3001(b) and 3003(c)(1), to file consolidated proofs of claim on behalf of lenders for claims arising under a July 27, 2007 Credit Agreement, including any guarantee agreements. The authorization is without prejudice to the substantive rights of each Revolver Lender to: (i) file an additional or supplemental proof of claim against any of the Debtors in respect to any claims, whether or not included in the consolidated proof of claim; and (ii) vote independently on any proposed plan of reorganization. (b) Upon the filing of a consolidated proof of claim, each Revolver Lender will be deemed to have filed a proof of claim with respect to its claim against the Debtors arising under the Credit Agreement and any guarantees without the need to file a separate proof of claim against each of the Debtors. (c) Each consolidated proof of claim will be deemed filed against each of the Debtors for all purposes, without the need to file a separate proof of claim against each of the Debtors. At the request of PNC Bank, Capmark and Bank of America, the Court will consider the Protocol Motion on an expedited basis on February 5, 2010. Wells Fargo is indenture trustee for the $81,945,000 Bucks County Industrial Development Authority Retirement Community Revenue Bonds Series 2005A, Series 2005B-1, and Series 2005B-2 relating to Ann's Choice Facility, Inc., $156,365,000 Massachusetts Development Finance Agency Revenue Bonds Series 2007A, Series 2007B and Series 2007C and $178,745,000 Illinois Finance Authority Revenue Bonds Series 2007A and Series 2007B. U.S. Bank is indenture trustee for the $137,145,000 Illinois Finance Authority Revenue Bonds Series 2007A and Series 2007B. Wilmington Trust is administrative agent for the Revolver Lenders under the Credit Agreement. M&T Bank is collateral and administrative agent under a Building Loan Agreement. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) EXELTECH AEROSPACE: Seeks Bankruptcy Protection in Canada --------------------------------------------------------- ExelTech Aerospace Inc. announced February 4 that it has filed a notice of intention to file a proposal under the Bankruptcy and Insolvency Act (Canada), seeking protection from its creditors. As a consequence of such filing, any and all recourses of ExelTech's creditors are stayed for an initial period of 30 days. ExelTech also announced that its credit facility with a Canadian chartered bank has been withdrawn and consequently repayment of all amounts owed to it has been requested. The Company has temporarily laid off most of its employees. ExelTech has retained RSM Richter Inc. to act as its trustee to the NOI and Davies Ward Phillips & Vineberg, LLP as its counsel. While under the protection of its creditors, ExelTech's Board of Directors maintains its usual role and its transfer agent remains CIBC Mellon Trust. ExelTech Aerospace Inc. (TSX Venture: XLT) -- http://www.exeltech-aerospace.com/-- is a first tier maintenance, repair and overhaul company. FAIR FINANCE: Faces Involuntary Bankruptcy in Ohio -------------------------------------------------- Tiffany Kary at Bloomberg News reports that three creditors have filed an involuntary petition to send Fair Finance Co., to bankruptcy. Akron, Ohio-based Fair Finance Co., an investment company, has been closed since a November raid by the U.S. Federal Bureau of Investigation. Fair Finance's owner, Indiana businessman Timothy S. Durham, a Republican political contributor whose holdings include National Lampoon Inc., has been targeted in lawsuits and investigations over claims he funded a luxurious lifestyle with the proceeds of a Ponzi scheme. A motion to appoint a trustee filed by the petitioning creditors said that Durham and co-owner James Cochran took $176 million in loans transferred from the investment fund into Fair Holdings LLC and DC Investments LLC. They used the money to fund $220 million in other loans, according to the filing. "As many as 50 insider companies may be involved, and loans were made throughout the U.S. and Canada," the creditors alleged. FAIRFIELD RESIDENTIAL: Files Schedules of Assets and Liabilities ---------------------------------------------------------------- Fairfield Residential LLC filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $185,364,235 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $98,048,365 E. Creditors Holding Unsecured Priority Claims $6,872 F. Creditors Holding Unsecured Non-priority Claims $1,066,813,976 ----------- ----------- TOTAL $185,364,235 $1,164,869,213 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 COMMS: Files Bankruptcy Exit Plan ------------------------------------------- According to The Associated Press, FairPoint Communications Inc. has filed its bankruptcy reorganization plan after two months of delays. AP relates the Plan was filed Monday in U.S. Bankruptcy Court in New York. AP says FairPoint CEO David Hauser planned a conference call with reporters to outline the company's business plans. AP notes North Carolina-based FairPoint has also been hurt by technical problems since paying $2.3 billion for Verizon Communications' land line and Internet operations in Maine, New Hampshire and Vermont in 2008. It has operations in 18 states. FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry leading provider of communications services to communities across the country. FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. FairPoint is traded on the New York Stock Exchange under the symbols FRP and FRP.BC. Fairpoint and its affiliates filed for Chapter 11 on Oct. 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP, as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, Fairpoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FAIRPOINT COMMS: Enters Into Tentative Agreement With Unions ------------------------------------------------------------ FairPoint Communications and the International Brotherhood of Electrical Workers and the Communications Workers of America, the unions representing close to 3,000 workers in Northern New England, have reached a tentative deal as the Company works to restructure its debts, according to the Associated Press. The report noted that the Company is seeking about $30 million in concessions from the Unions. The deal, which both sides say will help FairPoint in its restructuring efforts, could be a big step in putting the Company's finances back in order as it gears up to file its restructuring plans in New York, The Nashua Telegraph related in a separate report. Details of the agreement have not been openly disclosed. The Nashua Telegraph newspaper, however, pointed out that union officials say the agreement highlights on: * The delay of a 3% wage increase until 2013; * The restructuring of compensation packages; * A one-year extension of the current labor contract through August 2014, and increased cooperation between labor and management; * FairPoint's guarantee that it will not try to reject the collective bargaining agreement in the course of its bankruptcy proceedings; and * The setting up a forum for FairPoint's workers and management to share ideas on reducing costs and improving the Company's finances. The forum will be referred to as the "Joint Committee for Operational Savings." Union members will have to vote for the ratification of the parties' tentative agreement. The new union deal has elicited good reviews from certain quarters. Communication Workers of America Local 1400 President Don Trementozzi told The Nashua Telegraph that all parties involved need to work hand in hand for the benefit of management, workers and consumers alike, and that the new union deal might just be the answer. International Brotherhood of Electrical Workers Local 2320 Business Manager Glenn Brackett is glad there is now a "framework" for both the Company and the Unions to work with. Analysts also say that a union deal could "provide some measure of financial stability once the Company emerges from bankruptcy," the newspaper noted. About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry leading provider of communications services to communities across the country. FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. FairPoint is traded on the New York Stock Exchange under the symbols FRP and FRP.BC. Fairpoint and its affiliates filed for Chapter 11 on Oct. 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP, as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, Fairpoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FAIRPOINT COMMS: Files Schedules of Assets & Liabilities -------------------------------------------------------- A. Real Property Warehouse/Plant Office, Odin, Illinois $542,252 B. Personal Property B.1 Cash on hand - Petty Cash 500 B.2 Bank Accounts Fidelity Investments 5,674,916 TDBank North 4,415,441 Branch Banking and Trust 1,855,545 Sunflower Bank 816,649 RBC Centura 17,838 Southtrust Bank, now Wachovia 12,693 Northwest Savings Bank 1,101 Bank of America 500 B.3 Security deposits 2,307 B.13 Business stock and interests - See http://www.bankrupt.com/misc/FairPt_interests.pdf B.16 Accounts Receivable A/R Other 185,317 Trade Payable Debit Balance-Motorola, Inc. 1,403 Trade Payable Debit Balance-Fieldstone Quick Stop 568 B.18 Other liquidated debts Income Tax Refund 13,852 B.21 Other contingent and liquidated claims North Carolina State Income Tax 50,211 Vermont State Income Tax 1,184 B.22 Patents, copyrights undetermined B.23 Licenses undetermined B.28 Office equipment Computer software 130,303,623 General purpose computers 11,126,188 Furniture 582,492 Office support equipment 83,279 B.29 Machinery, equipment & office supplies Construction in progress (Telephone Plant) 45,606,001 Digital Switching and Circuit Equipment 434,264 B.35 Other personal property Prepaid insurance 3,285,324 Prepaid agreements 1,226,302 Prepaid professional services 1,000,000 TOTAL SCHEDULED ASSETS $207,239,750 ============================================================ C. Property Claimed as Exempt $0 D. Creditors Holding Secured Claims Secured Debt Bank of America Term Loan B 1,342,909,011 Bank of America Term Loan A 496,626,228 Bank of America Revolving Line of Credit 150,905,193 Interest Rate Swap Liabilities Wachovia Bank N.A. 59,237,251 Morgan Stanley Capital Services 39,539,684 Letters of Credit Outstanding Undetermined UCC Liens Bank of America Undetermined Fujitsu Network Communications Inc. Undetermined General Electric Capital Corporation Undetermined Nortel Networks Inc. Undetermined Sumitomo Electric Lightwave Corporation Undetermined E. Creditors Holding Unsecured Priority Claim Taxing Authorities in Oregon, Pennsylvania, Maine, Vermont and Virginia 0 F. Creditors Holding Unsecured Non-priority Claims Unsecured Debt U.S. Bank - Bonds (New Notes) 475,961,192 U.S. Bank - Bonds (Old Notes) 98,675,803 Trade Payables 22,060,101 See http://bankrupt.com/misc/FairPtSAL_F2.pdf Litigation and Insurance Liabilities Undetermined See http://bankrupt.com/misc/FairPtSAL_F3.pdf Pension Liabilities 0 Other Liabilities Capgemini Technologies LLC 36,597,260 Microsoft Licensing, GP 2,332,547 Others Undetermined Intercompany Claims FairPoint Logistics Inc. 28,817,378 Berkshire Telephone Corporation 1,152,296 Others 3,859,691 See http://bankrupt.com/misc/FairPtSAL_F6.pdf TOTAL SCHEDULED LIABILITIES $2,758,673,635 ============================================================ About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry leading provider of communications services to communities across the country. FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. FairPoint is traded on the New York Stock Exchange under the symbols FRP and FRP.BC. Fairpoint and its affiliates filed for Chapter 11 on Oct. 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP, as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, Fairpoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FAIRPOINT COMMS: Files Statement of Financial Affairs ----------------------------------------------------- FairPoint Communications, Inc. Senior Vice President, Corporate Controller Lisa R. Hood reports that during the two years immediately preceding the Petition Date, the Company earned income from employment and the operations of its business: Year Amount ---- ----------- 01/01/09 - 09/30/09 $26,304,772 01/01/08 - 12/31/08 $27,952,605 01/01/07 - 12/31/07 $25,148,075 During the two years immediately preceding the Petition Date, FairPoint also earned income from sources other than the operation of its business: Year Source Amount ---- ------ ----------- 01/01/09 to 09/30/09 Gain/Loss on Subsidiaries $0 Interest Income $360,644 Dividend Income $397,224 Gain/Loss on Asset Sale ($31,135) Gain/Loss on Debt Extinguishment $12,357,025 Gain/Loss on Derivative Investments $8,594,856 01/01/08 to 12/31/08 Gain/Loss on Subsidiaries $45,036,673 Interest Income $1,201,932 Dividend Income $354,839 Gain/Loss on Asset Sale ($353,406) Gain/Loss on Debt Extinguishment ($8,183,864) Gain/Loss on Derivative Investments ($34,059,299) 01/01/07 to 12/01/07 Gain/Loss on Subsidiaries $73,620,383 Interest Income $603,822 Dividend Income $334,497 Gain/Loss on Asset Sale $16,970 Gain/Loss on Debt Extinguishment $0 Gain/Loss on Derivative Investments ($17,201,817) Within 90 days immediately preceding the Petition Date, FairPoint related that it paid an aggregate of $59,594,253 to numerous creditors, a detailed schedule of which is available for free at: http://bankrupt.com/misc/FairPtInc_SOFA_3b.pdf Within one year immediately preceding the Petition Date, the Company also made payments, totaling $54,736,049 to creditors who are insiders. A detailed list of the insider payments is available for free at: http://www.bankrupt.com/misc/FairPt_sofa_crdtr_insiders.pdf Ms. Hood disclosed that within one year immediately preceding the Petition Date, FairPoint was or is a party to these lawsuits and administrative proceedings: Case Name Court --------- ----- Ablett v. FairPoint Communications New Hampshire Superior Court, Strafford County Caleidoscope Communications v. U.S. District Court FairPoint Communications, Inc. Vermont Finest Painting LLC v. Portsmouth District FairPoint Communications Court Rockingham County, NH District Court John Polley v. U.S. Equal Employment FairPoint Communications Opportunity Commission Karen Pulkkinen v. Maine Federal District FairPoint Communications, Inc. Court and Verizon New England, Inc. Michael Poto v. FairPoint Communications, Inc. et al Maine Human Rights Commission Page v. FairPoint Communications Keene(NH) Superior Court Perry E. Parker v. Vermont Public Service FairPoint Communications Board Renander v. FairPoint Cumberland County District Court Wendy Kile v. U.S. District Court FairPoint Communications District of Maine Zantow v. FairPoint U.S District Court District of Maine The Company gave gifts or donations, totaling $53,429, to charitable institutions a year immediately before the Petition Date. A detailed list of the donations is available for free at: http://bankrupt.com/misc/FairPoint_sofa_donations09.pdf FairPoint also made payments, totaling $5,398,914, for consultation concerning debt consolidation, relief under bankruptcy law or preparation in bankruptcy within a year before the Petition Date. The Company's payees with respect to those services are: Firm Amount ---- ---------- Paul Hastings Janofsky & Walker LLP $2,722,133 Rothschild Inc. 1,279,272 AlixPartners LLP 1,089,697 Ernst & Young LLP 257,812 BMC Group Inc. 50,000 According to Ms. Hood, the Company transferred these properties other than in the ordinary course of business within two years preceding the Petition Date: Description of Property Transferee ----------------------- ---------- Transition Agreement Release Verizon Communications, Inc. Transfer of cash and shares of Verizon Communications, Inc. stock to purchase Verizon's Northern New Hampshire Wireline Operations January 2009 dividend FairPoint Communications Shareholders Moreover, within 12 months before filing for bankruptcy, the Company closed its Paypal Account No. 3756583195 with the Bank of America. Ms. Hood reports that within two years immediately before the Petition Date, FairPoint's books of accounts and records were kept and supervised by these individuals: Name Position Date ---- -------- ---- Alfred Giammarino Chief Fin. Officer Sep. 2008 to present John Crowley Chief Fin. Officer Oct. 2007 to Aug. 2008 Lisa R. Hood Interim CFO Aug. 2008 to Sep. 2008 KMPG LLP and Ernst & Young LLP audited the Company's books and records within two years before the Petition Date. Within two years immediately preceding the Petition Date, The Company FairPoint also issued, within two years before the Petition Date, financial statements more than 40 financial institutions, a list of which is available for free at: http://bankrupt.com/misc/FairPoint_SoFA19d.pdf Current officers, directors and stockholders of FairPoint that own, control or hold 5% or more of the voting securities of the Company are: Name Title ---- ----- Alfred Giammarino Executive Vice President, CFO Barclays Global Investors 5% Shareholder Claude C. Lilly Director D. Brett Ellis VP, Investor Relations David L. Hauser Chairman, Board of Directors David M. Remele VP, Internal Audit Gary C. Garvey Sr. VP, Human Resources Jane E. Newman Director Jeffrey Allen EVP, Northern New England Ops. Lisa R. Hood Sr. VP, Corporate Controller Michael R. Tuttle Director Patrick L. Morse Sr. VP, Government Affairs Peter G. Nixon Pres. Northern New England Ops. Robert S. Lilien Director Shirley J. Linn EVP, Secretary & General Counsel Susan L. Sowell VP, Asst. Secretary & Gen. Counsel Thomas Griffin VP, Treasurer Thomas F. Gilbane, Jr. Director About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry leading provider of communications services to communities across the country. FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. FairPoint is traded on the New York Stock Exchange under the symbols FRP and FRP.BC. Fairpoint and its affiliates filed for Chapter 11 on Oct. 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP, as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, Fairpoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FLEETWOOD ENTERPRISES: Sells Trademark to Heartland for $306,000 ---------------------------------------------------------------- Fleetwood Enterprises Inc. sold its trademarks including Prowler, Mallard, and Gearbox to Heartland Recreational Vehicles LLC for $306,000, according to Marilyn Odendah at eTruth. 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. FORD MOTOR: BlackRock Reports 5.19% Equity Stake ------------------------------------------------ BlackRock Inc. said as of December 31, 2009, it may be deemed to beneficially own 168,514,166 shares or roughly 5.19% of the common stock of Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. At Sept. 30, 2009, the Company had US$203.106 billion in total assets against US$210.376 billion in total liabilities. On March 4, 2009, Ford deferred future interest payments on its 6.50% Junior Subordinated Convertible Debentures due January 15, 2032, beginning with the April 15, 2009 quarterly interest payment. As reported by the Troubled Company Reporter on Nov. 4, 2009, Moody's Investors Service upgraded the senior unsecured rating of Ford Motor Credit Company LLC to B3 from Caa1. This follows Moody's upgrade of Ford Motor Company's corporate family rating to B3 from Caa1, with a stable outlook. Ford Credit's long-term ratings remain on review for further possible upgrade. On Nov. 3, 2009, S&P raised the corporate credit ratings on Ford Motor Co. and Ford Motor Credit Co. LLC to 'B-' from 'CCC+'. Ford Motor Co. carries a long-term issuer default rating of 'CCC', with a positive outlook, from Fitch Ratings. FORD MOTOR: Reports 24% Sales Increase in January 2010 ------------------------------------------------------ Ford Motor Company reports that higher sales for every brand and in every product category propelled the Company to a 24% sales increase in January versus a year ago. Ford cars were up 43%, crossovers were up 20%, sport utilities were up 8%, and trucks and vans were up 14%. Among brands, Ford sales were up 26%, Lincoln sales were up 16% and Mercury sales were up 6%. "Ford's focus on building products consumers want to buy and love to drive will continue," said Ken Czubay, Ford vice president, U.S. Marketing Sales and Service. "In 2010, we will give Ford customers even more reasons to Drive One." Ford estimates its January U.S. total market share was approximately 16% -- about 2 percentage points higher than in January 2009. Last year, Ford posted its first full-year U.S. market share increase since 1995. Plus, every consumer metric about the Ford brand -- including favorable opinion, consideration, shopping and intention to buy -- ended the year at record levels. Last year, favorable opinion improved 27% and intention to buy Ford increased 30%. "People increasingly are discovering that the Ford difference is the strength of our products, particularly our leadership in quality, fuel efficiency, safety, smart technologies and value," said Mr. Czubay. Among full-line manufacturers, Ford, Lincoln and Mercury vehicles recorded the largest gain in resale values from the 2009 to 2010 model year. The projected resale value of Ford vehicles increased by more than $1,300 per vehicle. Ford already holds a resale value advantage over its U.S.-based competitors, and it continues closing the gap on key imports with some Ford vehicles already having surpassed competing foreign vehicles. "Resale value is a key indicator of brand health and an important contributor to the total value equation," said Mr. Czubay. "Fleet managers monitor vehicle operating costs very carefully. They are giving Ford more consideration because of our improving resale values." In January, Ford sales to fleet customers more than doubled last January's depressed levels (up 154%) when most fleet owners deferred vehicle purchases due to the credit crunch and uncertain business and economic conditions. Ford posted gains in every fleet market -- commercial, government and rental. On an annual basis, a majority of Ford's fleet sales are to commercial and government customers where the Ford F-Series truck and Econoline van have long been top sellers. Today, products such as Fusion, Taurus and Escape are popular choices among fleet customers. Additional Sales Highlights -- Ford Fusion, recently named Motor Trend's Car of the Year, posted a January sales increase of 49%. The Fusion Hybrid recently was named North American Car of the Year. Fusion and Mercury Milan are the most fuel-efficient mid-size sedans in America. -- Ford Taurus sales totaled 3,768, up 121% versus a year ago. Since the introduction of the all-new model in August, Taurus sales are nearly double year-ago levels. -- Crossover utilities also posted strong sales increases. In 2009, the Ford brand was the top-selling brand of crossovers in the U.S., led by the Ford Escape. In January, Escape sales were up 29% versus a year ago, Edge sales were up 26% and Lincoln MKX sales were up 27%. -- Ford's F-Series, America's best-selling truck for 33 years in a row and best-selling vehicle -- car or truck -- for 28 years in row, posted a 9% increase in January, and Ford Ranger compact pickup sales were up 47%. In 2009, F-Series increased its leadership position among full-size pickups with a 4 percentage-point gain in segment share. -- Transit Connect, Ford's new versatile, fuel-efficient small commercial van, posted January sales of 1,161. The Transit Connect recently was named North American Truck of the Year. Econoline, Ford's full-size van, saw a sales increase of 5%. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. At Sept. 30, 2009, the Company had US$203.106 billion in total assets against US$210.376 billion in total liabilities. On March 4, 2009, Ford deferred future interest payments on its 6.50% Junior Subordinated Convertible Debentures due January 15, 2032, beginning with the April 15, 2009 quarterly interest payment. As reported by the Troubled Company Reporter on Nov. 4, 2009, Moody's Investors Service upgraded the senior unsecured rating of Ford Motor Credit Company LLC to B3 from Caa1. This follows Moody's upgrade of Ford Motor Company's corporate family rating to B3 from Caa1, with a stable outlook. Ford Credit's long-term ratings remain on review for further possible upgrade. On Nov. 3, 2009, S&P raised the corporate credit ratings on Ford Motor Co. and Ford Motor Credit Co. LLC to 'B-' from 'CCC+'. Ford Motor Co. carries a long-term issuer default rating of 'CCC', with a positive outlook, from Fitch Ratings. FRED HILL MATERIALS: Files for Chapter 11 Bankruptcy in Washington ------------------------------------------------------------------ Fred Hill Materials Inc. filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Western District of Washington, various sources report. According to a person with knowledge of the filing, the company got caught up in the recession and credit crisis. In May 2009, the company sold its mining operation at Shine Pit to Auburn-based Miles Sand & Gravel, and does not deliver sand and gravel anymore. The move reduced debt, saved jobs and focused Fred Hill on its core business, the person says. Ed Friedrich at Kitsap Sun says the company posted $8.6 million in assets and $5.3 million in liabilities. The company owes $1.8 million unsecured claim to Western Conference Teamsters Pension Trust. Fred Hill Materials Inc. delivers and supplies sand and gravel. FREESCALE SEMICONDUCTOR: Wants to Amend Terms of Sr. Sec. Facility ------------------------------------------------------------------ Freescale Semiconductor Inc. said it intends to seek amendments to its senior secured credit facilities to, among other things: * extend the maturity of certain of its term loans held by accepting lenders to December 1, 2016, and increase the interest rate with respect to such extended-maturity term loans; * allow for the issuance of $750 million aggregate principal amount of senior secured notes; and * allow for one or more future issuances of additional senior secured notes to be secured on a pari passu basis with the obligations under the senior secured credit facilities, so long as, among other things, the net cash proceeds from any issuance are used to prepay amounts outstanding under the senior secured credit facilities at par. The proposed amendment of the senior secured credit facilities is subject to lender consent and other conditions, and may not occur as described or at all. About Freescale Semiconductor Freescale Semiconductor -- http://www.freescale.com/-- is a global leader in the design and manufacture of embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets. The privately held company is based in Austin, Texas, and has design, research and development, manufacturing or sales operations around the world. As of October 2, 2009, Freescale's corporate credit ratings from Standard & Poor's, Moody's and Fitch were B-, Caa1 and CCC, respectively. * * * According to the Troubled Company Reporter on Feb. 8, 2010, Moody's Investors Service assigned a B2 rating to Freescale Semiconductor, Inc.'s proposed senior secured extended term loan maturing 2016 and $750 million senior secured notes. Concurrently, Moody's affirmed Freescale's corporate family, probability of default, long-term debt and speculative grade liquidity ratings. These actions follow the company's recently launched proposed amendment of its credit agreement. The assigned ratings are subject to review of final documentation and no material change in the terms and conditions of the transactions as advised to Moody's. The extended term loan and senior secured notes ratings are also contingent on passage of the amendment. GENERAL GROWTH: Makes Distribution of 2009 Common Stock Dividend ---------------------------------------------------------------- General Growth Properties, Inc. announced that its quarterly common stock dividend in the amount of $0.19 per share paid on Jan. 28, 2010, to common stockholders of record on Dec. 28, 2009, will consist of approximately $5.9 million in cash (excluding cash in lieu of fractional shares) and approximately 4.9 million shares of GGP common stock. Results of the stockholder elections are as follows: * Holders of 147.3 million shares elected to receive the dividend all in shares. * Holders of 164.1 million shares elected to receive the dividend all in cash and will receive $0.03616 per share in cash (19%) and $0.15384 per share in stock (81%). * Holders of 0.9 million shares made no election and will receive the dividend all in shares. * The Company will pay fractional shares in cash. The number of shares to be issued in the dividend was based on the volume weighted average trading prices of the Company's common stock on January 20, 21 and 22, 2010, or $10.8455 per share. The dividend paid on January 28, 2010 is a 2009 dividend and is the sole 2009 distribution on GGP common stock. The federal income tax character of the 2009 dividend paid with respect to GGP common stock is shown below. Character of Items of Income Included in Distributions per Share Payment Date: 1/28/2010 Ordinary Income Dividends: $0.102508 Capital Gain Distributions: $0.087492 Distributions per Share: $0.190000 Participants should refer to their Federal Form 1099 which will be mailed no later than March 2, 2010, and contact BNY Mellon Shareowner Services at 888-395-8037 for further information. Taxability of the 2009 common stock distributions is not indicative of the taxability of future distributions. 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: Carolina Place JV Has Extension of $155M Loan ------------------------------------------------------------- General Growth Properties, Inc. announced its joint venture subsidiary, Carolina Place L.L.C., has closed on an extension of its $155 million mortgage loan originally scheduled to mature this month. The four-year extension is at the current contract rate of interest, 4.5975%. The all-in-interest rate after amortization of fees to be paid in connection with this loan is 5.11%. Carolina Place is a 1.3 million square foot regional shopping center located in Pineville, North Carolina. This joint venture subsidiary was not one of the GGP entities that sought bankruptcy court protection. GGP also announced completion of the restructuring of 74 secured mortgage loans aggregating approximately $9.4 billion. As a result, 180 GGP subsidiary debtors owning 96 properties are no longer in bankruptcy. This final step follows the December 2009 Bankruptcy Court approval (also called confirmation) of the plans of reorganization that permitted the restructuring of these loans and the emergence from bankruptcy for the associated subsidiaries and properties. Restructuring of the remaining 16 loans aggregating approximately $2.1 billion approved by the Bankruptcy Court in December 2009 and January 2010 is expected to be completed in the ordinary course during the next few weeks. When these restructured loans are complete, all of the plans of reorganization previously approved by the Bankruptcy Court will also be fully implemented. As a result, when complete, 36 additional subsidiary debtors associated with 16 properties will no longer be in bankruptcy. A complete list of filing and emerged entities and properties is available for free at http://ResearchArchives.com/t/s?4f83 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: Employs Togut Segal as Conflicts Counsel -------------------------------------------------------- Motors Liquidation Co. and its units sought and obtained the Court's authority to employ Togut, Segal & Segal, LLP, as their conflicts counsel, nunc pro tunc to December 21, 2010. Togut will handle matters that are not appropriately handled by the Debtors' lead counsel, Weil Gotshal & Manges LLP, or their other professionals because of a potential conflict of interest, or those which can be more efficiently handled by Togut. According to Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, the Debtors have selected Togut because of the firm's knowledge in the field of Debtors' protections and creditors' rights and complex business reorganizations under the Bankruptcy Code, particularly in the automobile sector. In addition, the Togut Firm possesses extensive expertise, experience and knowledge practicing before bankruptcy courts. Togut's employment as conflicts counsel will avoid unnecessary litigation and reduce the overall expense of administering the Debtors' Chapter 11 cases, Mr. Karotkin related. WG&M and Togut will coordinate their efforts and function cohesively to ensure that the legal services provided to the Debtors by each firm are not duplicative, he assured the Court. As conflicts counsel, Togut will render services to the Debtors for certain discrete matters in which WG&M cannot represent the Debtors because of a conflict. Togut's scope of services include: * advising the Debtors regarding their powers and duties in the continued management of their businesses and properties; * taking necessary action to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors and representing the Debtors' interests in negotiations concerning litigation in which the Debtors are involved, including, but not limited to, objections to claims filed against the estates; * preparing, on the Debtors' behalf, motions, applications, adversary proceedings, answers, orders, reports and papers necessary to the administration of the estates; * advising the Debtors in connection with any potential sale of assets; * appearing before the Bankruptcy Court and any appellate courts and protect the interests of the Debtors' estates before these Courts; and * perform other necessary legal services and provide other necessary legal advice to the Debtors in connection with the Debtors' Chapter 11 cases. For its services, the Debtors propose to pay Togut on an hourly basis plus reimbursement of actual, necessary expenses that it incurred in representing the Debtors. Togut's hourly rates are: Professional Hourly Rate ------------ ----------- Partners $800 to $935 Associates and counsels $275 to $720 Paralegals and law clerks $185 to $285 Albert Togut, Esq., a senior member of Togut, Segal & Segal, LLP, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Furthermore, Togut does not have an interest materially adverse to the interest of the Debtors' estates, Mr. Togut stresses. Fee Examiner Objects Prior to the Court's approval of Togut's employment, the Debtors' Fee Examiner asked the Court to deny the employment application until the Debtors re-submit an application that addresses the Fee Examiner's concerns regarding Togut's employment. The Fee Examiner told the Court that he does not per se oppose Togut's employment but only seeks to better define the retention and to determine the reasons why WG&M cannot fulfill the Debtors' needs. Additionally, the Fee Examiner also asks the Court to direct the Debtors to amend their proposed order to reflect that all compensation is subject to Fee Examiner Review. In his order, Judge Gerber ruled specifically that if the Debtors are adverse to any counsel's client giving rise to a conflict, then Togut, and not the Lead Counsel, will represent the Debtors in those matters. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Fee Examiner Proposes Stuart as Consultant ---------------------------------------------------------- Brady C. Williamson, as fee examiner in Old GM's Chapter 11 cases, seeks the Court's authority to employ Stuart Maue as consultant effective as of January 22, 2010, for the initial purpose of assisting in the review of interim fees and expenses of Jenner and Block LLP; Brownfield Partners LLC, Kramer Levin Naftalis and Frankel LLP, LFR Inc., and Claro Group LLC. The Designated Case Professionals reflect the diversity of professionals retained in the Debtors' cases, in terms of size, services, and client and case responsibility, making them a representative sample, Katherine Stadler, Esq., at Godfrey & Kahn, S.C., in Milwaukee, Wisconsin, notes, on behalf of Mr. Williamson. Stuart Maue is qualified to assist Mr. Williamson, given its experience as appointed fee examiner or fee consultant to committees in other bankruptcy cases including The Tribune Company, Merisant Worldwide, Inc., Stone & Webster, Incorporated and K-Mart Corporation, according to Ms. Stadler. Ms. Stadler contends that the employment of Stuart Maue will aid the Fee Examiner in the analysis of fees and expenses, thereby augmenting his ability to properly and efficiently analyze a large volume of fee and expense requests. The Fee Examiner intends to retain Stuart Maue to: (1) assist in analyzing the fee application of the Selected Case Professionals in compliance with the Bankruptcy Code, Bankruptcy Rules, the Guidelines of the United States Trustee, the Code of Federal Regulations, Local Rules and Court orders; (2) assist in preparing periodic reports with respect to additional subjects regarding professional fees and expenses; and (3) perform other services as the Fee Examiner may request, including the review of other fee applications. As consultant to Mr. Williamson, Stuart Maue will be paid based on these hourly rates: Professional Hourly Rate ------------ ----------- Project Manager $375 Legal Auditors & Senior Legal Auditors $275 to $350 IT Personnel $175 Data Control Personnel $75 For the review of the Selected Case Professionals' fee applications, the compensation will not exceed a total of $85,000, Ms. Stadler clarifies. James P. Quinn, president and chief operating officer at Stuart Maue in St. Louis, Missouri, contends that his firm will not duplicate the work performed by the Fee Examiner or any other professionals. He further assures the Court that the firm and its employees does not have any relationship with (i) the Debtors, (ii) their creditors or equity holders, (iii) other parties-in- interest, (iv) the Debtors' attorneys and accountants, or (v) the United States Trustee. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Old GM's Contract Breach Suit vs. BMW ----------------------------------------------------- Motors Liquidation Company, formerly known as General Motors Corporation, commenced an adversary proceeding before the U.S. Bankruptcy Court for the Southern District of New York against Bayerische Motoren Werke Aktiengesellschaft, more commonly known as BMW, for breach of a delivery agreement. GMC and BMW entered into the 6L45 Development and Delivery Agreement on May 6, 2004, for the development, production, and sale of transmissions. The contract and its exhibits provide extensive specifications regarding the technical requirements for the transmissions. GMC, its Powertrain Group, and its subsidiary GM Strasbourg SAS, located in Strasbourg, France, fully complied with their obligations under the contract, developing and thereafter supplying transmissions to BMW in compliance with the specifications. For its part, BMW was obligated, under the terms of the contract, to purchase a minimum of 1.9 million transmissions from GMC by December 31, 2015. In late 2008, BMW requested an amendment to the contract under which GMC would supply different transmissions incorporating new technology that is not required by or provided for in the contract. GMC -- and later MLC -- negotiated in good faith with BMW, offering technological solutions and terms that, if accepted, would have met BMW's requests. According to the Debtors, BMW, however, repeatedly rejected every solution proposed by GMC and MLC, and ultimately informed MLC that it did not intend to comply with its purchase obligations under the contract, but rather that it would shift production of transmissions to an alternate supplier. Remarkably, BMW further threatened to seek, through the Court, to recover damages from MLC. The Debtors contend that a substantial controversy exists between the parties regarding MLC's performance under the contract that warrants declaratory judgment. Moreover, because MLC has fully performed its obligations under the contract, the Court, applying German law, should order BMW to specifically perform its obligations under the contract. In the alternative, the Court should find that BMW, through its repudiation of the agreement, has breached the contract and caused MLC to incur significant and substantial damages, leaving MLC with no alternative but to seek redress from the Court. A full-text copy of GMC's Complaint against BMW is available for free at http://bankrupt.com/misc/04878.pdf About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Saturn Buyers Commence Class Suit vs. Old GM ------------------------------------------------------------ Kelly Castillo, Nichole Brown, Brenda Alexis Digiandomenico, Valerie Evans, Barbara Allen, Stanley Ozarowski, and Donna Santi represent a certified class of 150,000 consumers of the Saturn vehicle manufactured by General Motors Corp., or "Old GM". The Plaintiffs filed a class action against Old GM in the United States District Court for the Eastern District of California, wherein they alleged that Old GM "manufactured, sold, and/or distributed certain Saturn vehicles containing VTi transmissions that were inherently prone to premature failure." In a final order dated April 14, 2009, California District Judge William B. Shubb certified the Class and approved a settlement agreement entered into by Old GM and the Plaintiffs, S. Alyssa Young, Esq., at Leader & Berkon LLP, in New York, related on behalf of the Plaintiffs. As Old GM was acquired by General Motors Company or New GM and New GM is a Delaware corporation, the Plaintiffs filed in the Delaware Chancery Court on August 26, 2009, an action seeking declaration that General Motors Company or "New GM" expressly assumed liability under the Agreement and Final Judgment, pursuant to the Amended and Restated Master Sale and Purchase Agreement executed between Old GM and New GM dated June 26, 2009, as part of Old GM's bankruptcy proceedings. Subsequently, New GM removed the Declaratory Judgment Action to the U.S. District Court for the District of Delaware arguing that the Declaratory Judgment Action was a core proceeding "arising under" Title 11 of the Bankruptcy code. Thereafter, New GM moved, and the Plaintiffs consented, to transfer the Declaratory Action to the U.S. District Court for the Southern District of New York for further transfer to the Southern New York Bankruptcy Court. The Debtors noted that the Bankruptcy Court "is the proper forum" for the dispute. In their adversary complaint, the Plaintiffs specifically allege that New GM, by virtue of express or implied assumption of liability, stands in the shoes of Old GM with respect to the Class Action settlement, Ms. Young said. Plaintiffs Seek Temporary Restraining Order Ms. Young pointed out that despite the existence of the Certified Class and the Settlement, New GM is contacting Class members on an ex parte basis "to offer reimbursement in an amount less than the class members are owed under the Settlement." Ms. Young specified that in November 2009, New GM sent an internal memorandum entitled "New Special Reimbursement Policy for Vehicles Equipped With Variable Transmission Intelligence (VTi) Transmission-SO Percent of Trans Repair Cost Paid by GM or Customer May Elect $5,000 Credit" -- or the "New Special Policy. Under the New Special Policy, New GM purported to: -- reimburse Class members for eligible transmission repair expenses at a 50% reimbursement rate, rather than the maximum 100% rate provided for in the Class Judgment; and -- limit coverage to vehicles with no more than 100,000 miles, rather than the 125,000-mile coverage provided for in the Class Judgment. As the result of a massive effort by GM to induce the Class to relinquish their vehicles in exchange for less relief than is provided by the Class Judgment, the Plaintiffs asked the Court enter a temporary restraining order: (a) preserving the status quo by prohibiting New GM from engaging in ex parte communications or business transactions in a manner inconsistent with the terms of the Class Judgment, except to the extent that the Plaintiffs and the Class members are simultaneously advised of their rights under the Class Judgment; (b) prohibiting New GM from obtaining releases or arguing accord and satisfaction; and (c) expedite discovery on issues pertinent to a preliminary injunction, including communications to Class members regarding the new special policy. "The Court's intervention is required to ensure that the class members are informed of their rights before they make a decision to materially compromise their claims to their irreparable prejudice," Ms. Young contended. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Revenue Depts. Object to Resolution Protocol ------------------------------------------------------------ Following the passage of the November 30, 2009 deadline for filing of proofs of claim against Motors Liquidation Company and its affiliates, more than 68,000 proofs of claim remain either unliquidated or have an excessive claim amount, which undermine the Debtors' duty to distribute meaningful value to their creditors in an acceptable timeframe. The magnitude of the Unliquidated/Litigation Claims, with an aggregate claim amount of approximately $217 billion, will drain the Debtors' remaining assets and jeopardize creditor recoveries if not resolved expeditiously and economically, according to Harvey R. Miller, Esq., at Weil Gotshal & Manges LLP, in New York. By this motion, the Debtors seek the Court's authority to implement alternative dispute resolution procedures to facilitate the efficient resolution of each unliquidated or litigation claim that they designate without full-blown litigation, while safeguarding both their procedural rights and those of the holders of Designated Claims. Revenue Departments, et al. Object The Commonwealth of Pennsylvania Department of Revenue tells Judge Robert E. Gerber of the United States Bankruptcy Court for the Southern District of New York that implementing the alternative dispute resolution procedures with respect to its tax claims in the Motors Liquidation Co., and its debtor-affiliates' Chapter 11 cases, is "premature." The Commonwealth is a creditor of Debtors in an amount in excess of $4,000,000, on account of foreign franchise taxes due as a result of tax audits. Specifically, foreign franchise taxes due for tax years 2004 and 2005 are on appeal at the Commonwealth Court, Carol E. Momjian, Esq., Senior Deputy Attorney at the Pennsylvania Office of Attorney General, in Philadelphia, Pennsylvania, relates. Most of the pending Audit Appeals are the result of the Debtors' failure to provide information requested by the Bureau of Corporation Taxes. Once this information is provided, the Commonwealth will be in a better position to review and adjust its Claims accordingly. Hence, while the benefits of ADR are obvious, the procedure for accomplishing resolution of the tax audits is already in place, Ms. Momjian says. The Department of Treasury of the State of Michigan avers that it would not be efficient or economical to force the ADR process at a time when the Debtors control the flow of information and the parties-in-interest would need to bargain on wholly speculative positions. The Michigan Treasury Department asserts tax claims exceeding US$114 million against the Debtors, based substantially on state tax audits that are in various stages of completion. Until the Debtors provide outstanding audit compliance issues, it is impossible to enter into good faith negotiations, Assistant Attorney General Kathleen A. Gardiner, Esq., told Judge Gerber. Similarly, the Town of Salina in New York asks the Court that its claims against the Debtors -- aggregating $41,076,137 for environmental contamination of various sites within the Town and the County of Onondoga -- should be exempted from the ADR Procedures. According to Lee E. Woodard Esq., at Harris Beach PLLC, in Syracuse, New York, the Town of Salina Claims "are not ripe for determination and thus cannot be resolved at this time in mediation. Moreover, the Claims are integrated with those that the State of New York and the New York State Department of Environmental Conservation. Accordingly, exempting the Town of Salina Claims will efficiently preserve the Debtors' resources because they will be considered along with the New York State's Claims. Mr. Woodard points out that the ADR Procedures provide for "an improper and overly broad ADR Injunction" that leaves claimants in an uncertain position as they are unable to move forward with liquidating their claims. He adds that there are no terms or provisions in the ADR Procedures to ensure that requisite discovery is fully undertaken with respect to environmental claims. Mr. Woodard further says that the Debtors' proposed panel of mediators "do not appear to have any expertise in the environmental arena." In a separate filing, Jake W. Rodd asks Judge Gerber to exempt his personal injury claim in the Debtors' cases from Binding Arbitration under the ADR Procedures. Schedule of Mediators Filed The Debtors filed with the Court a schedule of mediators to serve at each of the locations where mediation and arbitration proceedings under the alternative dispute resolution procedures will be conducted, specifically in (i) New York, New York; (ii) Detroit, Michigan; (iii) Dallas, Texas; and (iv) San Francisco, California. The Debtors have noted that the proposed ADR Procedures provide a structure that will (i) promote direct settlement discussions and exchange of information between the parties; and (ii) absent a settlement as a result of direct discussions between the parties, promote resolution of certain proofs of claims through mediation or arbitration with the assistance of a neutral outside party. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: May Contribute to Pensions Earlier Than Planned --------------------------------------------------------------- Sharon Terlep at Dow Jones Newswires reports that General Motors Co. said Friday it may contribute to its U.S. hourly pension program sooner than initially planned, a move that would help fend off higher-than-anticipated retiree costs in years to come. "It's always difficult to forecast the future, but based on anticipated liabilities, we're looking at this," GM spokeswoman Noreen Pratcher said, according to Ms. Terlep. According to Ms. Terlep, Ms. Pratcher said a decision on the pension contribution isn't expected immediately but will likely come later this year. Ms. Terlep relates that, as of September 30, GM's hourly pension plan was 80% funded. The company's salaried pension plan was funded at 89%. According to Ms. Terlep, Ford Motor Co. has said it has no pension funding requirements in 2010. Ford's U.S. salaried and hourly plans are underfunded by $4.6 billion, the company said. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Total Sales Increase 14% in January 2010 -------------------------------------------------------- General Motors Co. last week said U.S. dealers for GM's brands -- Chevrolet, Buick, GMC and Cadillac -- reported retail sales of 102,420, up 3% compared to January 2009, and 145,098 total sales (up 30%). These results were driven by the continued strong growth of new GM crossovers and passenger cars. For the month, GM dealers reported 146,825 total sales (including other brands), representing a total sales increase of 14% from the previous year. "This is the fourth month in a row that Chevrolet, Buick, GMC and Cadillac have shown a collective year-over-year retail sales increase," said Susan Docherty, GM vice president, Sales, Service and Marketing. "Our long-term plan to continue to focus and strengthen our brands is delivering results." Chevrolet, Buick, GMC and Cadillac comprised 98% of the company's retail sales in January, compared to 85% a year earlier. Retail sales, including other brands, in the U.S. were 104,122 during the month. This represents a 10% decline from a year ago, driven by other brand sales -- Pontiac, Saturn, Saab and HUMMER -- that were 90% lower. GM dealers delivered 42,703 fleet vehicles, comprising 29% of total deliveries for the month. Other Key Facts: -- Chevrolet Equinox retail sales increased 67%; estimated retail share of the compact crossover segment is up 5 points (Jan. 2009 vs. Jan. 2010) -- GMC Terrain retail sales were up 162% (compared to the vehicle it replaces, Pontiac Torrent); estimated retail share of the compact crossover segment is up more than 3 points (Jan. 2009 vs. Jan. 2010) -- Cadillac SRX retail sales were up 218% vs. last year, the fifth consecutive month it has gained more than 100% year-over-year; SRX gained approximately 15 points of retail share in the Mid-lux SUV crossover segment (Jan. 2009 vs. Jan. 2010) -- In their first year on sale, GM Compact Crossovers -- Chevrolet Equinox and GMC Terrain -- have become the second best selling crossovers in the industry -- GM sells more crossovers than any other automaker, representing approximately 20% of industry crossovers sold -- Buick LaCrosse retail sales were up 142%, the fourth consecutive month it has gained more than 100% year-over- year; LaCrosse gained an estimated 12 points of retail segment share, making it number one in its segment (Jan. 2009 vs. Jan. 2010) -- Chevrolet dealers sold 5,371 Camaros -- the eighth straight month it has outsold Mustang "Our launch vehicles such as the Chevrolet Equinox and Camaro, Buick LaCrosse, GMC Terrain, and Cadillac SRX continue to attract new customers to our brands," Ms. Docherty said. "In addition to styling and fuel efficiency, customers have told us they want safe, high quality vehicles. They can have peace of mind knowing that our vehicles come standard with our 5-year, 100,000 mile powertrain warranty and OnStar." Management Discussion of January Sales Results "Global economic recovery is picking up pace," said Mike DiGiovanni, executive director, global market and industry analysis. "In the U.S., we are seeing a strong rebound in manufacturing and stabilization of consumer confidence, which will support a slow but steady improvement in the vehicle market." U.S. Economy -- Leading economic indicators point to a continuing recovery in 2010, although risks remain -- Job losses continue to decline, but initial claims of unemployment remain high, indicating continuing reduction in the labor force. Unemployment is likely to stay near 10% -- Consumer confidence stabilized at the December level. Consumer vehicle buying attitude is improving, but consumers don't anticipate a strong recovery in jobs and income -- Home prices have stabilized in large parts of the country. Housing starts dropped 4% in December, but rising housing permits indicate construction will pick up in coming months -- The manufacturing sector continues to expand. Corporate profit reports show the corporate sector is positioned to expand as the economy improves U.S. Auto Industry -- The U.S. January 2010 SAAR is estimated to be approximately 11.0 to 11.3 million (total industry estimate) -- largely on par with Q4 2009 sales -- Based on the strengthening U.S. economy, GM is increasing its 2010 CY sales outlook to 11.5 to 12.0 million (total vehicle) Other Brands Sales Down 90% in January -- Represent 1.2% of Sales, 1% of Inventory Saturn, Pontiac, Saab and HUMMER combined volumes represented 1.2% of total sales in January, compared with 12% in May 2009. Inventories for the combined brands totaled 4,212 units at January month-end, representing a 96% decrease compared to the end of May 2009 (112,141 units). A full-text copy of GM's sales report is available at no charge at http://ResearchArchives.com/t/s?5145 About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Won't Move Out of Renaissance Center ---------------------------------------------------- Sharon Terlep at Dow Jones Newswires reports that General Motors Co. said it won't move its world headquarters out of the Renaissance Center in Detroit. The company made the call because of the cost and disruption involved in such a move, GM spokesman Tom Wilkinson said. "We are deciding instead to focus on products and marketing," he said, according to Ms. Terlep. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GMAC INC: Posts $10.3 Billion Net Loss for FY 2009 -------------------------------------------------- GMAC Financial Services last week reported a net loss of $5.0 billion for the fourth quarter of 2009, compared to net income of $7.5 billion for the fourth quarter of 2008. For the 2009 full year, GMAC reported a net loss of $10.3 billion, compared to net income of $1.9 billion in 2008. Results for the 2009 fourth quarter and full year were largely affected by losses related to legacy assets in the mortgage operations. Results for the 2008 fourth quarter and full year benefited from an $11.4 billion after-tax gain from the extinguishment of debt related to GMAC's bond exchange. Results in the quarter were adversely affected by several significant items, including: -- $3.3 billion of losses related to strategic mortgage actions; -- $573 million mortgage repurchase reserve expense; -- $308 million original issue discount amortization expense related to the December 2008 bond exchange; -- $262 million provision related to legacy Nuvell subprime assets; -- $122 million of mortgage servicing rights (MSR) valuation adjustments; and -- $118 million of losses in international automotive operations related to certain wind-down costs. The aggregate pre-tax impact of these significant items was $4.7 billion. "GMAC has undergone significant transformation in 2009 and as a result, is better positioned to pursue business and market opportunities going forward," said GMAC Chief Executive Officer Michael A. Carpenter. "Key steps during the year included: diversifying the profitable automotive finance business with the addition of Chrysler; launching the Ally Bank brand, which is a key part of our funding profile; strengthening our capital and liquidity positions; and implementing major restructuring actions to minimize risk related to the legacy mortgage business. We are encouraged with the progress, and the recent upgrades of our credit ratings demonstrate that the steps we are taking are appropriate and making an impact." During the year, GMAC made the decision to sell certain businesses and has classified them as discontinued operations. Excluding the results from these businesses, net loss from continuing operations totaled $3.9 billion in the fourth quarter of 2009, compared to net income from continuing operations of $7.7 billion in the comparable prior year period. Net loss from continuing operations for full-year 2009 totaled $8.0 billion, compared to net income from continuing operations of $3.4 billion in the prior year. As of Dec. 31, 2009, GMAC changed the presentation of and the business activities comprising its operating segments and implemented a funds-transfer-pricing (FTP) methodology to bring reporting in line with industry and bank holding company best practices. The net impact of the FTP methodology is included within the results of Corporate and Other. Prior period results have also been restated. Liquidity and Capital GMAC reported that as of Dec. 31, 2009, it had $172.306 billion in total assets and total debt of $98.313 billion. GMAC's consolidated cash and cash equivalents were $14.8 billion as of Dec. 31, 2009, up from $14.2 billion at Sept. 30, 2009. Included in the consolidated cash and cash equivalents balance are: $765 million at Residential Capital, LLC (ResCap); $4.9 billion at Ally Bank, which excludes certain intercompany deposits; and $121 million at the insurance businesses. The increase in consolidated cash reflects continued growth in retail deposits. On Dec. 30, 2009, GMAC announced a series of capital actions including: a $3.79 billion capital infusion from the U.S. Department of the Treasury; the conversion of $3.0 billion of existing convertible preferred stock held by the U.S. Treasury into GMAC common equity; and the exchange of all of the remaining preferred stock held by the U.S. Treasury for $10.13 billion of newly issued mandatorily convertible preferred securities (MCP). With these actions, GMAC achieved the capital buffer required to meet the worse-than-expected economic scenario under the Federal Reserve's Supervisory Capital Assessment Program (SCAP). The $3.79 billion cash infusion was less than the $5.6 billion originally anticipated by the Federal Reserve in May 2009 due in large part to lower-than-expected losses related to the General Motors bankruptcy filing. GMAC's total equity at Dec. 31, 2009 was $20.8 billion, down from $24.9 billion at Sept. 30, 2009. The decrease in total equity was primarily due to the net loss in the fourth quarter of 2009, partially offset by the sale of $1.25 billion of MCP to the U.S. Treasury, which constituted a portion of the $3.79 billion capital infusion. GMAC's preliminary fourth quarter Tier 1 capital ratio was 14.1 percent, compared to 14.4 percent in the third quarter. The Tier 1 capital ratio was lower on a sequential basis due to the net loss in the quarter, partially offset by the $3.79 billion capital infusion by the U.S. Treasury and lower total assets. Ally Bank and ResMor Trust continue to enhance GMAC's funding flexibility through growth in deposits. Ally Bank and ResMor Trust deposits, excluding certain intercompany deposits, increased in the fourth quarter to $31.1 billion as of Dec. 31, 2009, from $28.8 billion at Sept. 30, 2009. Retail deposits at Ally Bank were $16.9 billion at quarter-end, compared to $15.9 billion at the end of the third quarter of 2009. Brokered deposits at Ally Bank increased to $10.1 billion at quarter-end, compared to $9.2 billion at the end of the third quarter of 2009. Global Automotive Services This quarter GMAC changed the presentation of its reporting to reflect Global Automotive Services, which consists of GMAC's auto- centric businesses around the world, including: North American Automotive Finance, International Automotive Finance and Insurance. GMAC had previously reported Global Automotive Finance and Insurance separately. The inclusion of Insurance is consistent with GMAC's strategic focus on dealer-related insurance offerings. Global Automotive Services reported fourth quarter 2009 pre-tax income from continuing operations of $309 million, compared to a pre-tax loss from continuing operations of $346 million in the comparable prior year period. Continuing operations in the segment were affected by improved net financing revenue driven by strong remarketing gains, offset by losses in international operations related to certain wind-down costs and a loss provision expense related to the Nuvell subprime legacy portfolio. The size of the Nuvell portfolio was approximately $4 billion at year-end 2009 and is expected to run off to approximately $2 billion by year-end 2010. GMAC remains focused on its core strength of providing automotive financing to GM and Chrysler dealers and customers. At Dec. 31, 2009, GMAC's U.S. wholesale penetration for General Motors dealer stock was 90.9 percent, compared to 85.2 percent at year-end 2008. U.S. retail penetration for GM was 30.3 percent, up significantly from 4.7 percent in the fourth quarter of 2008, when the company had restricted its retail lending as a result of challenges in the credit and capital markets. The company also continued to make significant progress in expanding its financing footprint to Chrysler dealers and customers. At year end, GMAC had completed the formal underwriting process for 1,474 U.S. Chrysler dealers that applied for standard wholesale credit lines and approved 94 percent of those dealers. GMAC's U.S. wholesale penetration for Chrysler dealer stock increased to 77.3 percent at Dec. 31, 2009, up from 67.3 percent at Sept. 30, 2009. During the fourth quarter of 2009, GMAC originated $894 million of new Chrysler retail loans, compared to $721 million in the prior quarter. GMAC's U.S. retail penetration for Chrysler during the fourth quarter improved to 25.5 percent, compared to 13.3 percent in the third quarter. Mortgage Operations Mortgage Operations, which includes ResCap and the mortgage activities of Ally Bank and ResMor Trust, reported a pre-tax loss from continuing operations of $4.0 billion during the fourth quarter of 2009, versus a pre-tax loss from continuing operations of $790 million in the comparable prior year period. Results from continuing operations in the fourth quarter of 2009 were driven by the recent strategic actions taken by GMAC to sell certain legacy mortgage assets resulting in the reclassification from HFI to HFS, which resulted in a $2.6 billion loss. The segment also reported a mortgage repurchase reserve expense for the fourth quarter of $573 million. These actions, inclusive of estimated operating losses for the period, required a total capital contribution to ResCap of approximately $2.8 billion in the form of mortgage loans acquired by GMAC from Ally Bank, GMAC debt forgiveness and cash. With the capital contribution, ResCap's net worth complies with the minimum level required to meet certain covenants. GMAC said these strategic actions are expected to minimize further effects from the legacy mortgage business and will better position GMAC to explore strategic alternatives with respect to its mortgage operations. As part of its loss mitigation efforts, GMAC continues to participate in the Home Affordable Modification Program (HAMP), which was created by the U.S. government to assist struggling homeowners. As of Dec. 31, 2009, GMAC had executed more than 9,800 permanent loan modifications, more than any other servicer, and had started more than 32,000 trial modifications. Outlook The progress made in 2009 and the capital and strategic actions taken by GMAC at the end of the year have strengthened its capital base and better-positioned the company for improved financial performance. These actions are expected to improve GMAC's access to the capital markets over time and minimize further effects from the legacy mortgage business. Additionally, these actions position GMAC to explore strategic alternatives for ResCap and the mortgage business and are expected to accelerate the repayment of the U.S. government's investment. Looking ahead, GMAC is focused on achieving these key strategic objectives: -- Capitalize on opportunities in the auto finance business -- Demonstrate improved access to the capital markets -- Continue to build deposit base at Ally Bank -- Drive critical focus on profitability -- Explore strategic alternatives to maximize value of mortgage operations and further limit risk -- Transition fully to bank holding company model A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?5146 About GMAC Financial Services GMAC -- http://www.gmacfs.com/-- is a bank holding company with 15 million customers worldwide. As a global financial services institution, GMAC's business operations include automotive finance, mortgage operations, insurance and commercial finance. The Company also offers retail banking products through its online bank, Ally Bank. * * * As reported by the Troubled Company Reporter on February 8, 2010, Moody's Investors Service upgraded the senior unsecured rating of GMAC and GMAC-supported subsidiaries to B3 from Ca, with a stable rating outlook. The long-term rating of mortgage finance subsidiary Residential Capital was affirmed at C, with a stable rating outlook. The TCR on January 29, 2010, reported that Standard & Poor's Ratings Services raised its long-term counterparty credit rating on both GMAC and Residential Capital to 'B' from 'CCC'. The 'C' short-term ratings and the 'C' preferred securities ratings are affirmed. S&P also affirmed the recovery ratings on senior secured debt at Residential Capital LLC and raising the senior secured debt ratings. The outlook on both entities is stable. GMAC INC: Moody's Upgrades Senior Unsecured Rating to 'B3' ---------------------------------------------------------- Moody's Investors Service upgraded the senior unsecured rating of GMAC, Inc., and GMAC-supported subsidiaries to B3 from Ca, with a stable rating outlook. The long-term rating of mortgage finance subsidiary Residential Capital, LLC was affirmed at C, with a stable rating outlook. This concludes Moody's review of GMAC's ratings initiated on June 10, 2009. The upgrade of GMAC's rating reflects the improvement in the firm's capital position resulting from its December 2009 issuance of $2.54 billion of trust preferred securities and $1.25 billion of mandatory convertible preferred securities to the U.S. Treasury. GMAC's capital position also benefited from the U.S. Treasury's conversion of $3.0 billion of its existing MCP into GMAC common equity. The U.S. Treasury now owns 56% of GMAC. The additional capital enabled GMAC to maintain relatively stable capital ratios even as it absorbed $3.28 billion of fourth quarter 2009 pre-tax charges to mark certain residential mortgages to fair value, $.57 billion of repurchase reserve expense, and $.81 billion of other significant items that contributed to a $4.95 billion net loss for the quarter. "In Moody's view, the U.S. Treasury's substantial stake in GMAC has a stabilizing influence on the company's otherwise challenged credit profile," said Moody's senior analyst Mark Wasden. "Though it is weaker on a standalone basis, GMAC's credit profile is lifted to a B3 level as a result of the U.S. Treasury's investment in and support of GMAC." Moody's expectation is that the U.S. Treasury will continue its involvement in and support of GMAC until it has achieved a level of operational and funding stability that puts it in a position to exist independent of government support. The stable outlook reflects Moody's view that the U.S. Treasury's involvement with GMAC will extend for at least the next 12-18 months, the timeframe for Moody's ratings outlooks. Moody's said that continuing uncertainties at ResCap, in terms of asset quality performance and liquidity, remain constraints to GMAC's ratings. Moody's assumes that GMAC will remain supportive of ResCap as it continues to manage its remaining risk exposures through eventual liquidation or sale. ResCap has approximately $2 billion of long-term debt maturing in 2010, funds for which Moody's believes are likely to be provided by GMAC, whose own liquidity resources are constrained. An unexpected deterioration in asset performance or increase in loan repurchase obligations at ResCap could further weigh on GMAC's capital and liquidity. GMAC's own liquidity challenges also continue as a rating constraint. GMAC has considerable debt maturities through 2012, including $7.5 billion of TLGP debt maturities in 2012. Moody's believes that GMAC will need to issue unsecured debt to fund debt maturities at the parent holding company. However, the firm's ability to consistently access this market is not assured, though the U.S. Treasury's investment in the firm could help to ease investor concerns. Additionally, Moody's believes there is execution risk associated with GMAC's business and funding transitions, including growth expectations for Ally Bank. Supporting GMAC's upgrade is the improved operating prospects for GMAC's auto finance operations as the economy stabilizes. However, Moody's expects that GMAC's auto finance risk-adjusted returns will remain below historical levels for the foreseeable future due to elevated credit loss experience and the high cost of certain funding sources. The rating outlook and ratings could come under upward pressure if there is a meaningful and certain diminution of GMAC's remaining credit and support exposures to ResCap. A further strengthening of GMAC's liquidity position to the degree that it can reliably serve the firm's operating requirements independent of the U.S. government's involvement would also positively influence the firm's ratings and outlook. Moody's believes that as a condition for maintaining the current B3 rating and stable outlook, GMAC must demonstrate improved profitability in its core auto finance business during 2010, as this will be necessary to improve the prospects for the firm to access debt and possibly equity capital. Ratings upgraded in the action include: GMAC, Inc.: -- Issuer Rating: to B3 from Ca -- Senior Unsecured: to B3 from Ca -- Preferred Stock, Series A: to Caa3 from C General Motors Acceptance Corp. of Canada Ltd.: -- Backed Senior Unsecured: to B3 from Ca GMAC, Australia (Finance) Limited: -- Backed Senior Unsecured: to B3 from Ca GMAC Australia LLC: -- Backed Senior Unsecured: to B3 from Ca GMAC International Finance B.V. : -- Backed Senior Unsecured: to B3 from Ca GMAC (NZ) Limited: -- Backed Senior Unsecured: to B3 from Ca GMAC Bank GmbH: -- Backed Senior Unsecured: to B3 from Ca In its last rating action on June 10, 2009, Moody's upgraded GMAC's senior unsecured rating to Ca from C and placed its ratings on review for further possible upgrade. GMAC Inc. is a global provider of auto finance, residential mortgage finance, and related products and services. HARRISBURG, PENNSYLVANIA: Chapter 9 Filing Among Options -------------------------------------------------------- Dunstan McNichol at Bloomberg News, citing the chairwoman of the city council committee, reported that Harrisburg, Pennsylvania, will consider seeking Chapter 9 bankruptcy protection along with tax increases and asset sales as options to address $68 million in debt service payments due this year. According to the report, Susan Brown-Wilson, chairwoman of the Budget and Finance Committee said every option, including tax and fee increases, bankruptcy and a state takeover through Pennsylvania's Act 47 municipal oversight program will be considered Harrisburg's Budget and Finance Committee began a week of hearings last night to consider a 2010 spending plan. The $68 million in debt service payments that Harrisburg faces in connection with the construction of a waste incinerator this year is four times what the city expects to raise through property taxes, and $4 million more than the city's entire proposed operating budget. HARVEST OIL: Wants Solicitation Period for Cramdown Plan Extended ----------------------------------------------------------------- Harvest Oil & Gas, LLC, and its debtor-affiliates ask the U.S. Bankruptcy Court for the Western District of Louisiana to extend their exclusive period to obtain acceptances of the Cramdown Plan, as it may be further amended, or alternatively, to file a joint plan with the creditor constituencies. The Debtors request that the exclusive period be extended until the Court issues its ruling on confirmation of either the Cramdown Plan or a joint plan with the creditor constituencies The Court will consider at a hearing scheduled for February 23, 2010 at 11:00 a.m. at Courtroom, Lafayette, the Debtors' motion for an extension in their exclusive period. Headquartered in Covington, Louisiana, Harvest Oil and Gas, LLC -- http://www.harvest-oil.com/-- is engaged on acquisition, development and exploration of energy resources. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. W.D. La. Lead Case No. 09-50397). Robin B. Cheatham, Esq., at Adams & Reese LLP, represents the Debtors in their restructuring efforts. The Debtors listed between $100 million and $500 million each in assets and debts. HAWAIIAN TELCOM: FTI Awarded $600,000 for April-September --------------------------------------------------------- In an order dated January 19, 2010, the Bankruptcy Court authorized Hawaiian Telcom Communications Inc. and its units to pay FTI Consulting, Inc. $600,000 in fees for services rendered and $44,886 as reimbursement for expenses incurred for the interim period from April 1, 2009 to June 30, 2009. The Court previously authorized the Debtors to pay FTI Consulting's fees for $629,708 and expenses for $21,358, and the holdback amount for the interim period from April 1, 2009, through June 30, 2009. FTI Consulting is the financial advisor of the Official Committee of Unsecured Creditors. Meanwhile, pursuant to Sections 330 and 331 of the Bankruptcy Code, Judge King authorizes the Debtors to pay the fees and expenses of these professionals for services rendered from July 1, 2009 through September 30, 2009: Firm Fees Expenses ---- ---------- -------- Morrison & Foerster LLP $609,747 $93,278 Moseley Biehl Tsugawa Lau $70,373 $4,493 & Muzzi LLLC Morrison & Foerster acts as lead counsel to the Official Committee of Unsecured Creditors while Moseley Biehl serves as the Committee's co-counsel. About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HEARTLAND PUBLICATIONS: Lender Showdown On for Feb. 19 ------------------------------------------------------ Heartland Publications LLC scheduled a hearing on Feb. 19 for approval of the disclosure statement explaining the prepackaged reorganization plan on Dec. 21. Bill Rochelle at Bloomberg News reports that an affiliate of Goldman Sachs Group Inc., however, has filed a motion asking the judge to find that the plan lacks the requisite majority support from lenders. Goldman Sachs believes it's a waste of time to go ahead with the plan-approval process because there won't be a majority of secured creditors voting for the plan. A hearing on Goldman's request is scheduled for February 19. Bill Rochelle recounts that as recited in a court filing on Feb. 3, General Electric Capital Corp., as agent for the lenders, agreed with Heartland on a reorganization plan that retains too much debt, in the opinion of an affiliate of Goldman Sachs Group Inc. Before the bankruptcy filing in December, the opinions of the lenders were split down the middle. Two favored the GECC structure, and Goldman Sachs and another opposed. Although GECC and its ally hold more than two-thirds in dollar amount of the senior debt, confirming the plan also requires a majority of lenders voting in favor. The even split wouldn't supply the required majority. According to the report, to break the logjam, as told by Goldman Sachs, GECC assigned part of its claim to affiliates so there would be a majority of creditors voting in favor. Goldman Sachs reciprocated by likewise splitting its claim. Consequently, there still aren't enough "yes" votes, Goldman Sachs says. Heartland Publications LLC filed a reorganization plan that proposes to give a new $70 million term loan and 90% of the new equity to holders of $113.7 million in prepetition first-lien debt. According to the disclosure statement, if the prepetition second lien lenders owed $44.9 million vote for the Plan, they will receive a class of equity interests representing 5% of equity value above an enterprise value of $100 million. The second-lien lenders would also receive warrants for 5% of the equity based on an equity value of $50 million. Unsecured creditors are to be paid in full if second-lien creditors vote for the Plan. About Heartland Publications Headquartered in Clinton, Connecticut, Heartland Publications, LLC -- http://www.heartlandpublications.com/-- operates 50 paid- circulation newspapers and numerous free or controlled distribution products in Georgia, Kentucky, North and South Carolina, Ohio, Oklahoma, Tennessee, Virginia and West Virginia. The Company reaches more than 250,000 print subscribers each month and many others via interactive Web sites. The Company operates 50 paid-circulation newspapers and numerous free or controlled distribution products in nine states. Heartland Publications, LLC -- aka Macon County Times, et al. -- filed for Chapter 11 bankruptcy protection on December 21, 2009 (Bankr. D. Del. Case No. 09-14459). Kenneth J. Enos, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, assist the Company in its restructuring effort. Duff & Phelps, Securities LLC is the Debtor's financial advisor. Epiq Bankruptcy Solutions is the Debtor's claims and notice agent. As of October 31, 2009, the Debtor has $134.3 million in assets and $166.2 million in liabilities. HEXION SPECIALTY: Panel Approves 2010 Incentive Compensation Plan ----------------------------------------------------------------- The Compensation Committee of the Board of Directors of Hexion Specialty Chemicals Inc. approved the company's 2010 Incentive Compensation Plan. Each of the Company's executive officers and other specified members of management are eligible to participate in the 2010 Plan. Under the 2010 Plan, participants earn cash bonus compensation based upon the achievement of business unit, division or overall Company financial targets and environmental safety and health goals, and the achievement of division or overall Company cash flow targets. Any payments under the 2010 Plan are subject to the approval of the Company's audited annual financial results by our Audit Committee and are normally paid in April of the following year. About Hexion Specialty Chemicals Based in Columbus, Ohio, Hexion Specialty Chemicals -- http://www.hexion.com/-- serves the global wood and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries. Hexion Specialty Chemicals is controlled by an affiliate of Apollo Management, L.P. At September 30, 2009, the Company had total assets of $3.020 billion against total liabilities of $5.080 billion. At September 30, 2009, the Company had accumulated deficit of $2.344 billion, shareholder's deficit attributable to Hexion Specialty of $2.075 billion, noncontrolling interest of $15 million, and total deficit of $2.060 billion. * * * Moody's Investors Service changed the outlook on Hexion Specialty Chemicals, Inc. (B3 Corporate Family Rating) to stable from negative due to the successful refinancing and extension of its term loan debt with $1 billion of 8.875% 1.5 lien notes due 2018. Proceeds were used to repay roughly $800 million in first lien term loan debt. In addition, Hexion received approval from its first lien debt holders to extend roughly $900 million of the remaining term loan for two years. HEXION SPECIALTY: Inks Amended Credit Agreement With JPMorgan ------------------------------------------------------------- Hexion Specialty Chemicals Inc. said it entered into an amendment agreement to its second amended and restated credit agreement dated Nov. 3, 2006, with JPMorgan Chase Bank N.A. The company said the final amount of lender under the company's senior secured credit facilities that have agreed to extend the maturity of their term loans represent approximately $951 million aggregate principal amount of term loans. A full-text copy of the amended and restated credit agreement is available for free at http://ResearchArchives.com/t/s?5144 Based in Columbus, Ohio, Hexion Specialty Chemicals -- http://www.hexion.com/-- serves the global wood and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries. Hexion Specialty Chemicals is controlled by an affiliate of Apollo Management, L.P. At September 30, 2009, the Company had total assets of $3.020 billion against total liabilities of $5.080 billion. At September 30, 2009, the Company had accumulated deficit of $2.344 billion, shareholder's deficit attributable to Hexion Specialty of $2.075 billion, noncontrolling interest of $15 million, and total deficit of $2.060 billion. * * * Moody's Investors Service changed the outlook on Hexion Specialty Chemicals, Inc. (B3 Corporate Family Rating) to stable from negative due to the successful refinancing and extension of its term loan debt with $1 billion of 8.875% 1.5 lien notes due 2018. Proceeds were used to repay roughly $800 million in first lien term loan debt. In addition, Hexion received approval from its first lien debt holders to extend roughly $900 million of the remaining term loan for two years. HEXION SPECIALTY: Amends Terms of Senior Sec. Credit Facility ------------------------------------------------------------- Hexion Specialty Chemicals Inc. amended its senior secured credit facility pursuant to an amendment and restatement of the credit agreement governing this credit facility. On Jan. 29, 2010, Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC, each a wholly owned subsidiary of the company, together assumed $1,000,000,000 aggregate principal amount of 8.875% senior secured notes due 2018, which mature on February 1, 2018, pursuant to a supplemental indenture, dated as of January 29, 2010, among the Companies, the Registrant, the other subsidiaries of the Registrant party thereto and Wilmington Trust FSB, as trustee, to an indenture, dated as of Jan. 29, 2010, among Hexion Finance Escrow LLC and Hexion Escrow Corporation, wholly owned subsidiaries of the Registrant, and Wilmington Trust FSB, as trustee. The notes are guaranteed, jointly and severally, on a senior secured basis, by the Registrant and certain of its existing and future domestic subsidiaries that guarantee the company's senior secured credit facility. The guaranteed obligations are secured by a security interest in the collateral owned by each guarantor. The collateral consists of a lien on substantially all of the Company tangible and intangible assets and of each subsidiary guarantor, except for those assets excluded as collateral under the company's new senior secured credit facilities; and all of the capital stock of certain of our direct subsidiaries and each subsidiary guarantor, other than the capital stock which is prohibited from being pledged pursuant to the indentures governing our other outstanding debentures, provided that no more than 65% of the capital stock of first-tier foreign subsidiaries is required to be pledged, and subject to certain exceptions if any such pledge would require that separate financial statements with respect to any such pledged entity would be required pursuant to Rule 3-16 of Regulation S-X to be provided in connection with the filing of a registration statement related to the notes or any other filing we are required to make with the Securities and Exchange Commission. Notwithstanding the foregoing, the initial collateral securing the notes shall not include: * any real estate or Principal Property; * any property or assets owned by any of our foreign subsidiaries * any assets which, if included in the collateral, would require the company's existing 7 7/8% debentures, 8 3/8% debentures and 9 2/10% debentures to be ratably secured with the notes pursuant to the terms of the indentures for such existing debentures. The notes and the guarantees are the company's senior secured obligations, and rank: pari passu in right of payment with the company's and its guarantors' existing and future senior indebtedness, including debt under its senior secured credit facilities and the guarantees thereof; effectively junior in priority as to collateral with respect to its and its guarantors' obligations under its senior secured credit facilities and any other future obligations secured by a first-priority lien on the collateral; senior in priority as to collateral with respect to its and its guarantors' obligations under its Existing Second Lien Notes and any other future obligations secured by a junior lien on the collateral; and senior in right of payment to its and its guarantors' existing and future subordinated indebtedness; subject to certain permitted liens and exceptions as further described in the Indenture and the security documents relating thereto. The Companies will pay interest on the notes at 8.875% per annum, semiannually to holders of record at the close of business on January 15 or July 15 immediately preceding the interest payment date on February 1 and August 1 of each year, commencing on August 1, 2010. The Companies may redeem the notes, in whole or part, at any time prior to February 1, 2014, at a price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest to the redemption date and a "make-whole premium." The Companies may redeem the notes, in whole or in part, on or after February 1, 2014, at the redemption prices set forth in the Indenture. At any time before February 1, 2013, the Companies may choose to redeem up to 35% of the principal amount of the notes at a redemption price equal to 108.875% of the face amount thereof with the net proceeds of one or more equity offerings so long as at least 65% of the aggregate principal amount of the notes at maturity issued of the applicable series remains outstanding afterwards. The Indenture contains covenants that limit the Companies' ability to, among other things: * incur additional debt or issue certain preferred shares; * pay dividends on or make other distributions in respect of its capital stock or make other restricted payments; * make certain investments; * sell certain assets; * create or permit to exist dividend and payment restrictions affecting its restricted subsidiaries; * create liens on certain assets to secure debt; * consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; * enter into certain transactions with its affiliates; and * designate its subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of important limitations and exceptions. The Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding notes to be due and payable immediately. A full-text copy of the indenture is available for free at: http://ResearchArchives.com/t/s?5142 Based in Columbus, Ohio, Hexion Specialty Chemicals -- http://www.hexion.com/-- serves the global wood and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries. Hexion Specialty Chemicals is controlled by an affiliate of Apollo Management, L.P. At September 30, 2009, the Company had total assets of $3.020 billion against total liabilities of $5.080 billion. At September 30, 2009, the Company had accumulated deficit of $2.344 billion, shareholder's deficit attributable to Hexion Specialty of $2.075 billion, noncontrolling interest of $15 million, and total deficit of $2.060 billion. * * * Moody's Investors Service changed the outlook on Hexion Specialty Chemicals, Inc. (B3 Corporate Family Rating) to stable from negative due to the successful refinancing and extension of its term loan debt with $1 billion of 8.875% 1.5 lien notes due 2018. Proceeds were used to repay roughly $800 million in first lien term loan debt. In addition, Hexion received approval from its first lien debt holders to extend roughly $900 million of the remaining term loan for two years. I & C PROPERTY: Has Until Today to File Schedules & Statement ------------------------------------------------------------- Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida extended until today, February 9, 2010, I & C Property Management, Inc.'s time to file its schedules of assets and liabilities, and statement of financial affairs. Oakland Park, Florida-based I & C Property Management, Inc., filed for Chapter 11 bankruptcy protection on January 12, 2010 (Bankr. S.D. Fla. Case No. 10-10539). David Marshall Brown, Esq., who has an office in Fort Lauderdale, Florida, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $100,001 to $500,000 in liabilities. INDUSTRY WEST: Files Schedules of Assets and Liabilities -------------------------------------------------------- Industry West Commerce Center, LLC, filed with the U.S. Bankruptcy Court for the Northern District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $23,670,000 B. Personal Property $617,648 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $18,673,520 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $93,339 ----------- ----------- TOTAL $24,287,648 $18,766,859 Santa Rosa, California-based Industry West Commerce Center, LLC, a California limited liability company, filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. N.D. Calif. Case No. 10-10088). John H. MacConaghy, Esq., at MacConaghy and Barnier, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. ISACK ROSENBERG: Judge Clark Rejects Stipulation with Capital One ----------------------------------------------------------------- Isack Rosenberg asked the Honorable Carla E. Craig for authority to enter into a proposed stipulation with Capital One, N.A., extending the deadline for the closing of a transaction in which the debt owed to Capital One would be purchased at a discount, as set forth in a previously approved stipulation between those parties. The Motion was opposed by Galster Funding, L.L.C., RCG Longview II, L.P., RCGLV Maspeth, LLC. Capital One also objects to the approval of the Proposed Stipulation, arguing that the original stipulation expired by its terms and that the manner in which the Debtor seeks to pay the discount amount to Capital One does not comply with the terms of either stipulation. The Original Settlement Agreement, signed by McCaren, the Debtor and Mr. Schwartz, as well as Capital One, provided that the Debtor has the right to arrange for a third party to purchase the McCaren Debt, at a discount, no later than December 21, 2009. If this right was not exercised, the Settlement Agreement provided that Capital One shall have the right thereafter to sell the McCaren Debt without interference. In the event that Debtor's right was not timely exercised, and in the event that the Debtor did not obtain a temporary certificate of occupancy for the McCaren Project by December 21, 2009, the Debtor consents to the appointment of a chapter 11 trustee for the operation and disposition of the real property owned by McCaren. At the hearing on the motion to approve the Original Settlement Agreement, the parties agreed that this would be effectuated by filing a bankruptcy petition for McCaren, and causing McCaren to consent to the appointment of a chapter 11 trustee. The Debtor and McCaren do not release their counterclaims against Capital One unless the right to purchase the McCaren Debt is successfully exercised. On November 18, 2009, the Court issued a decision and an order approving the Original Settlement Agreement, from which no appeal was taken. The Proposed Stipulation, Judge Clark says, goes too far and can't be approved because the default provisions conflict with the Bankruptcy Code. First, the settlement provides that, upon the filing of McCaren's bankruptcy petition, the Court shall "order the immediate appointment of a Chapter 11 trustee for the purpose of conducting the Section 363 sale" of the McCaren Project. Procedurally, this violates Bankruptcy Code Sec. 1104(a), which requires the bankruptcy court to appoint a chapter 11 trustee "after notice and a hearing." Other parties in interest would have the right to object, and in the event that grounds for the appointment of a trustee are not found to exist, a trustee could not be appointed. Moreover, this provision substantively violates Sec. 1106, which sets forth the duties of a chapter 11 trustee. "This Court cannot approve a stipulation between the parties that flies in the face of the Bankruptcy Code by limiting a chapter 11 trustee's duties and obligations in the McCaren bankruptcy case to selling the McCaren Project," Judge Clark says. Similarly, the Proposed Stipulation provides that if the required commitments and deposit are delivered three days after McCaren's bankruptcy filing, that case "will be dismissed and no auction sale under Section 363 will be scheduled." Section 1112 governs dismissal of chapter 11 cases, and requires "notice and a hearing" before a chapter 11 case is dismissed. That section also requires the court to determine whether there is "cause" to dismiss the case, and whether dismissal is in the best interests of the estate. 11 U.S.C. Sec. 1112(b)(1). As such, the Debtor, McCaren, Schwartz, and Capital One cannot stipulate that McCaren's case will be dismissed, thereby violating the procedural and substantive requirements mandated by Sec. 1112. Lastly, the Proposed Stipulation provides that McCaren's bankruptcy case will be assigned to the same judge presiding over the Debtor's case. The parties cannot stipulate which judge will be assigned McCaren's bankruptcy case, or engage in similar "'judge shopping,' a practice which has been for the most part universally condemned." U.S. v. Haldeman, 559 F.2d 31, 133 n.297 (D.C. Cir. 1976). While E.D.N.Y. Local Bankruptcy Rule 1073-1(b) provides that "cases involving affiliated or related debtors shall be assigned to the Judge to whom the first such case was assigned," making it likely that McCaren's case will be assigned to the same judge, there is no guarantee that such assignment will occur. Isack Rosenberg filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 09-46326) on July 28, 2009. A copy of his petition is available at http://bankrupt.com/misc/nyeb09-46326.pdfat no charge. The Debtor's assets consist primarily of ownership interests in a number of businesses, including Certified Lumber Corporation and Boro Park Home Center, lumber and hardware businesses, as well as other entities engaged in the development of real estate. One such entity is McCaren Park Mews, LLC, of which the Debtor owns 50%. McCaren owns an unfinished condominium project in Williamsburg, Brooklyn. Capital One, N.A., holds a mortgage and security interest on McCaren's assets, securing debt in the approximate amount of $50 million. The Debtor and Yitzchok Schwartz, the owner of the other half of the equity interest in McCaren, each have guaranteed the McCaren Debt. Other creditors of the Debtor include RCGLV Maspeth LLC, RCG Longview II, L.P., and Galster Funding, LLC, which individually or collectively hold a security interest in the Debtor's ownership interest in various entities, including McCaren. Judge Craig appointed an Examiner in the Debtor's case on Nov. 5, 2009. KORLEY SEARS: Case Summary & 5 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Korley B. Sears RR2 Box 308 Ainsworth, NE 69210 Bankruptcy Case No.: 10-40277 Chapter 11 Petition Date: February 2, 2010 Court: United States Bankruptcy Court District of Nebraska (Lincoln Office) Debtor's Counsel: Jerrold L. Strasheim, Esq. Attorney at Law 3610 Dodge Street Omaha, NE 68131-3218 Tel: (402) 346-9330 Email: jls@strasheimlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A full-text copy of the Debtor's petition, including a list of its 5 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/neb10-40277.pdf The petition was signed by Blanca Estela Gama, president of the Company. LBO CAPITAL: Posts $459,970 Net Loss in Q3 2009 ----------------------------------------------- LBO Capital Corp. reported a net loss of $459,970 on total revenues of $13,049 for the three months ended September 30, 2009, compared to a net loss of $159,021 on total revenues of $5,000 for the same period in 2008. During the three-month period ended September 30, 2009, net loss per share, basic and diluted, was $0.01 compared to a net loss of $0.03 for the same period of 2008. For the nine months ended September 30, 2009, the Company reported a net loss of $1,038,780 on total revenues of $714,424, compared to a net loss of $915,312 on total revenues of $5,000 for the same period of 2008. During the nine-month period ended September 30, 2009, net loss per share, basic and diluted, decreased to $0.04 compared to a net loss of $0.28 for the same period of 2008. The consolidated statements of operations for both the three and nine month periods ended September 30, 2009, include the results of operations of LBO Capital and its subsidiaries, ADCI, GTI, ECO and Load Hog. The consolidated statement of operations for both the three and nine months ended September 30, 2008, include the results of operations of LBO Capital for the full three and nine month periods and the results of operations of the subsidiaries, ADCI, GTI, ECO, for only the period beginning September 15, 2008 (acquisition date) to September 30, 2008. Balance Sheet At September 30, 2009, the Company's consolidated balance sheets showed $17,677,946 in total assets, $5,664,077 in total liabilities, and $12,013,869 in total stockholders' equity. The Company's consolidated balance sheets at September 30, 2009, also showed strained liquidity with $105,078 in total current assets available to pay $3,051,201 in total current liabilities. A full-text copy of the Company's quarterly report is available at no charge at http://researcharchives.com/t/s?5140 Liquidity and Capital Resources The Company is operating under deep cash constraints, as the revenues expected for the second and third quarter from the 3DM Powder Impression Molding ("PIM") project in Georgia have not realized, therefore the Company's cash balances were at a minimum level as of September 30, 2009. However, the Company has available through its subsidiaries ADCI and GTI a revolving line of credit agreement with American Plastics Processing Products, Inc. ("AP3"), a related party, dated April 1, 2003, with a maturity of December 31, 2010. The agreement provides for maximum borrowings of a total of $6,000,000 with interest charged at a rate of 8% per annum. The Company had an outstanding balance of $2,612,876 due to AP3 at September 30, 2009. The Company continues to be involved in the production and installation of the PIM fast lines in Douglas County, Georgia, but the customers have had difficulties in providing the Company with the necessary funds on a timely basis as promised. The Company has entered into several royalty agreements with third parties; however no cash payments have been received yet during the nine months covered by this report. For the next 12-month period the Company anticipates supporting its operations mainly through its earned or unearned revenues which are expected anytime from its customers, and if needed it may use the available line of credit with AP3 as it has done in the past. Going Concern Uncertainty The Company had a net loss of $1,038,780 for the nine months ended September 30, 2009. As of September 30, 2009, the Company had a working capital deficit of $2,946,123 and an accumulated deficit of $4,457,064. "The Company's ability to continue as a going concern is dependent on the cash flow from the commercialization of its innovative technology such as the PIM and intellectual property assets, such as the license and patents. The financial statements do not include any adjustments that might result from the outcome of this uncertainty." About LBO Capital Based in Farmington Hills, Mich., LBO Capital Corp. (LBOA: Pink OTC Markets Inc) -- http://www.lbocapitalcorp.com/-- through its subsidiaries, develops tire sensor technologies in the United States. It offers magnetic pressure sensing system and surface acoustic wave technology system that monitor the pressure inside each tire on a vehicle. The Company also involves in the development, licensing, and marketing of plastic's related intellectual properties developed under the 3DM powder impression molding and blow molding systems. In addition, it offers a patented catalytic process recovering useful hydrocarbons from waste plastics by converting them into valuable products, such as gasoline, diesel, and lubricants. Further, the Company produces pneumatic lift kits, which enable pickup trucks to function as light dump trucks and deliver labor savings and material handling services to building and landscape contractors, farmers, hobbyists, municipalities, and others. Additionally, LBO Capital, through its joint venture with Weldmation, Inc., produces composite building construction materials, automotive components, and assembly systems. LEHMAN BROTHERS: Examiner Files Sealed Report on Probe ------------------------------------------------------ Linda Sandler at Bloomberg News reports that Anton Valukas, the examiner probing Lehman Brothers Holdings Inc.'s 2008 failure, filed under seal his report investigating whether banks such as JPMorgan Chase & Co. and Barclays Plc triggered or improperly benefitted from Lehman's $639 billion bankruptcy. According to the report, Mr. Valukas said in court filings he would ask a judge for help in making the report public if people he interviewed didn't consent to lift their demands for confidentiality. The report is about 2,200 pages excluding appendixes, and divulges so much "protected information" that it would be impractical to black out those parts before publication, he said. Mr. Valukas, 66, spent a year and $34 million probing the failure of the fourth-largest investment bank by interviewing more than 100 people and scrutinizing more than 10 million documents, according to filings. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LINEAR TECHNOLOGY: December Balance Sheet Upside-Down by $114MM --------------------------------------------------------------- Linear Technology Corporation reported $1.512 billion in total assets and $1.627 billion in total liabilities resulting to a $114 million in stockholders' deficit as of Dec. 27, 2009. The Company recorded $75.5 million of net income on $256.36 million in revenues for the three months ended Dec. 27, 2009, compared with $86.24 million of net income on $249.19 million in revenues in the three months ended Dec. 28, 2008. At Dec. 27, 2009, the Company's cash, cash equivalents and marketable securities balances were $942.5 million in aggregate, representing an increase of $73.8 million over the June 28, 2009 balances of $868.7 million. This increase was primarily due to positive cash flows from operations of $188.5 million. Working capital as of December 27, 2009 was $673.5 million. The decrease in the Company's working capital as compared to the previous quarter is due to the reclassification to current liabilities of the $388.7 million current portion of the Convertible Senior Notes, whose initial redemption date is November 1, 2010. The 2027B notes are classified as a current liability because their initial put/call redemption date is within twelve months of the December 27, 2009 balance sheet date. During the first six months of fiscal year 2010, significant cash expenditures included $7.5 million for capital additions; $9.8 million face value to purchase and retire a portion of the 3.125% Convertible Senior Notes; $7.2 million to purchase its common stock; and $100.0 million for the payment of two quarterly cash dividends, representing $0.22 per share each quarter. Accounts receivable totaled $124.2 million at the end of the second quarter of fiscal year 2010, an increase of $28.7 million over the June 28, 2009 balance of $95.4 million. The increase is primarily due to higher shipments in the second quarter of fiscal year 2010 as compared to the fourth quarter of fiscal year 2009. Accrued payroll and related benefits increased $11.7 million over the fourth quarter of fiscal year 2009 primarily due to an increase in the employee profit sharing accrual. The Company accrues for profit sharing on a quarterly basis while distributing payouts to employees on a semi-annual basis during the first and third quarters of each fiscal year. Income taxes payable totaled $3.1 million at the end of the second quarter of fiscal year 2010, a decrease of $6.6 million from the fourth quarter of fiscal year 2009 primarily due to tax payments offset by the Company's tax provision and deferred tax adjustments. A full-text copy of the company's financial results is available for free at http://ResearchArchives.com/t/s?5143 Linear Technology Corporation (NASDAQ-LLTC) -- http://www.linear.com/-- manufactures high performance linear integrated circuits, including high performance amplifiers, comparators, voltage references, monolithic filters, linear regulators, DC-DC converters, battery chargers, data converters, communications interface circuits, RF signal conditioning circuits, uModuleO products, and many other analog functions. MCCLATCHY COMPANY: Fitch Raises Issuer Default Rating to CCC' ------------------------------------------------------------- Fitch Ratings has upgraded The McClatchy Company's Issuer Default Rating to 'CCC' from 'C' and removed the Rating Watch Positive. In addition, Fitch has assigned a 'CCC/RR4' rating to its $875 million 11.5% secured notes due 2017. Proceeds of the notes are expected to be used to reduce borrowings under the credit facility and fund the company's tender offer of its 7.125% notes due 2011 and 15.75% notes due 2014. The notes are secured by the same assets and guaranteed by the same subsidiaries that secure and guarantee the bank debt. Fitch has taken these ratings actions on McClatchy: -- IDR upgrade to 'CCC' from 'C'; -- Senior secured credit facility and term loan upgraded to 'CCC/RR4' from 'C/RR4'; -- Senior secured notes assigned 'CCC/RR4'; -- Senior unsecured guaranteed notes ratings affirmed at 'C/RR6'; -- Senior unsecured notes/debentures affirmed at 'C/RR6'. Fitch expects to withdraw the 'C/RR6' rating on the senior unsecured guaranteed 15.75% notes, upon the successful completion of the tender offer. There is no Rating Outlook assigned. The ratings reflect these key considerations: -- The upgrade reflects the issuance of the $875 million senior secured notes and the use of the proceeds to repay 2011 maturities. This will satisfy a significant amount of 2011 maturities and postpone refinancing risk to 2013, providing the company with some headroom to navigate its operational transition. -- While the company does not expect further declining cash flows, Fitch expects revenue, EBITDA and free cash flow to remain under pressure until print classifieds make up well under 5% of the over-all advertising revenue mix (print classifieds presently constitute around 15% of the advertising revenue mix). However, if the company can achieve sustained revenue growth, margin expansion and reduced leverage, there could be positive implication to the ratings over time. -- Although Fitch expects the pace of revenue declines to decelerate in the intermediate term, the evolution of advertiser behavior and consumer media consumption habits will provide an overhang to operations for the foreseeable future. Fitch believes McClatchy could remain timely in covering its interest payments. While free cash flow may be sufficient to cover a portion of its 2013 maturity, Fitch does not expect McClatchy to generate enough free cash flow to pay off its debt maturities in 2014 or beyond. Given Fitch's estimates that the company will be unable to repay principal organically as it comes due, Fitch remains concerned regarding the company's ability to refinance any meaningful future debt maturities. Given these factors, Fitch believes the company's new capital structure could still be untenable over the longer term. Fitch believes that there is a real possibility of default as a result of the company's reliance on external capital to meet maturities. In addition to the issuance of new notes and the completion of its tender offer, the company has amended its credit agreement extending the maturities by two years for most of its outstanding balance ($73 million in outstanding balances is expected to remain due in June 2011). In addition, the banks agreed to covenant relief by reducing the previously scheduled leverage covenant step down from 7.0 times to 6.25x in December 2010 to 7.0x to 6.75x in December 2010, reducing further to 6.5x in March 2011, 6.25x in March 2012 and finally 6.0x after December 2012. The interest coverage covenant was also amended to a minimum of 1.5x starting in March 2010 and stepping up gradually to a high of 1.7x after September 2012. The amendment also reduced availability under the revolver (the company expects $189 million in availability) and increased pricing on borrowings. Borrowings under the credit agreement will bear interest at a spread ranging from 425 basis points to 575 bps (based on the leverage ratio) and a 3% floor on LIBOR. The company expects to initially pay interest of 8% on its outstanding bank debt. The amendment also permitted the incurrence of the new senior secured notes. As of Dec. 30, 2009, McClatchy's liquidity was supported by $4 million to $5 million in cash balances and approximately $189 million in revolver availability. While the company has negotiated expanded leverage covenant levels, Fitch expects leverage to be near 7x at the end of 2010, leading to a potential covenant breach. Fitch notes that McClatchy has been successful in negotiating covenant relief and would expect the company to seek an amendment prior to breaching the covenant. Leverage as of Dec. 31, 2009, was approximately 6x. Given the increase in cash interest, potential pension funding and continued revenue pressures, offset somewhat by the elimination of the dividend (due to previous bank amendments) and the company's continued cost management efforts, Fitch expects FCF to continue to decline in 2010 and could approach break even levels. The Recovery Ratings and notching reflect Fitch recovery expectations under a distressed scenario. In computing recovery, Fitch continues to assume a 2.5x EBITDA multiple to calculate the distressed enterprise value for McClatchy. This low multiple reflects Fitch's belief that distress would be caused by some degree of obsolescence in the company's core business. In addition, given the trajectory of industry revenue trends Fitch's expectations that these trends may moderate but will not fully reverse, Fitch also attempts to estimate a level of sustainable EBITDA in the $200 million range in computing recovery estimates. Presently, Fitch's distressed enterprise valuation is between $400 million-$450 million. Fitch notes that the administrative claims adjustment employed in the computation of distressed enterprise value of 15% reflects uncertainty regarding the company's unfunded pension obligations. The 'RR4' rating for McClatchy's secured bank credit facility and senior secured notes reflects Fitch's expectation of 31%-50% recovery given that they benefit from a security interest in certain assets and a guarantee from materially all operating subsidiaries (providing priority over unsecured claims under a default scenario). Fitch does not distinguish between the bank debt and secured bond debt although Fitch recognizes the banks mature several years before the bonds. The unsecured guaranteed senior notes benefit from a guarantee provided by the same subsidiaries that guarantee the banks, giving it priority over the senior unsecured notes. However, the secured debt is not fully recovered, under Fitch recovery analysis, and all unsecured debt is rated 'RR6', reflecting the 0% recovery. MESA AIR: AAR Corp. Has 6.3% Equity Stake ----------------------------------------- In a second amendment filing to its Schedule 13D filed with the U.S. Securities and Exchange Commission, AAR Corp. discloses that as of January 12, 2010, it beneficially owns an aggregate of 11,059,600 Mesa Air Group, Inc. shares, no par value. AAR's owned shares represent 6.3% of the total outstanding shares of common stock, based upon 175,217,249 shares outstanding as of November 4, 2009, according to Richard J. Poulton, vice president, chief financial officer and treasurer of AAR. 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) MGM MIRAGE: Asks Lenders to Extend Maturity of $5.55BB in Loans --------------------------------------------------------------- MGM MIRAGE on February 8, 2010, said it is seeking amendments to its aggregate $5.55 billion of senior credit facilities which would extend the maturity of a substantial portion of those credit facilities from October 3, 2011 to February 21, 2014. The Company has asked its lenders to provide their final approvals of the transaction by February 24, 2010. Lenders approving the proposed amendments would receive prepayments aggregating not less than 20% of their outstanding loans and lending commitments, as well as certain additional interest and fees. The prepayments would increase by 1% for each full percentage by which lender participation in the transaction exceeds 80%, to a maximum of 25%. "We are pleased to have received strong initial support from our leading lenders for this proposed transaction, and are now working with the rest of our lender syndicate to achieve maximum participation," said Dan D'Arrigo, Executive Vice President and Chief Financial Officer of MGM MIRAGE. "These amendments would extend a significant portion of our credit facilities, and enhance our debt maturity profile." Lenders approving the extension would receive an increase of 100 basis points to their interest rates, as well as amendment and extension fees totaling 75 basis points times their reduced exposures. The credit facilities would also be re-tranched in a manner which would result in conversion of $1.4 billion of revolving loans and commitments into term loans. The transaction would include covenant and other amendments, and would permit MGM MIRAGE to issue additional secured indebtedness as permitted under the Company's public debt indentures. In connection with the proposed amendment, MGM MIRAGE also provided an update concerning its discussions with the New Jersey Division of Gaming Enforcement about the DGE's May 2009 recommendation to the New Jersey Casino Control Commission that MGM MIRAGE's joint venture partner in Macau be found unsuitable. MGM MIRAGE stated that it is currently involved in constructive settlement discussions with the DGE, which have centered on the Company placing its 50% ownership interest in the Borgata Hotel Casino & Spa and related leased land in Atlantic City into a divestiture trust for which MGM MIRAGE would be the sole economic beneficiary. While no definitive settlement with the DGE has been reached, the Company has asked its lenders to consent to the trust arrangement. Any settlement is subject to both DGE and CCC approval. "We disagree with the New Jersey Division of Gaming Enforcement's recommendation to the Casino Control Commission concerning our Macau partner, but believe pursuing a settlement with the DGE represents the best course of action for our company and its shareholders," said Jim Murren, Chairman and Chief Executive Officer. "We would like to put this matter behind us and move forward with the compelling growth opportunities we have in Macau." About MGM MIRAGE Headquartered in Las Vegas, Nevada, MGM MIRAGE (NYSE: MGM) -- http://www.mgmmirage.com/-- owns and operates 16 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, New Jersey, Illinois and Macau. CityCenter, an urban metropolis on the Las Vegas Strip scheduled to open in late 2009, is a joint venture between MGM MIRAGE and Infinity World Development Corp, a subsidiary of Dubai World. MGM MIRAGE Hospitality has entered into management agreements for future casino and non-casino resorts throughout the world. At September 30, 2009, MGM MIRAGE had $21.7 billion in total assets against total current liabilities of $1.15 billion, deferred income taxes of $3.14 billion, long-term debt of $12.9 billion, other long-term obligations of $221.70 million; resulting in stockholders' equity of $4.29 billion. * * * As reported by the Troubled Company Reporter on September 22, 2009, Moody's Investors Service affirmed MGM MIRAGE's Caa2 Corporate Family Rating and Caa3 Probability of Default Rating. Moody's also assigned a Caa2 rating to the company's new $475 million 11.375% senior unsecured notes due 2018. Moody's also affirmed MGM's SGL-4 Speculative Grade Liquidity rating. The rating outlook is negative. As reported by the TCR on September 24, 2009, Fitch Ratings has assigned a 'CCC/RR4' rating to MGM MIRAGE's $475 million 11.375% unsecured notes due 2018. The notes were priced at a 97.396% discount to yield 11.875%. The net proceeds will be used to reduce credit facility borrowings, and also for general corporate purposes. The offering attempts to chip away at the company's most significant credit hurdle: the maturity of its $5.8 billion credit facility in 2011, which had $4.1 billion outstanding as of June 30, 2009. MIG INC: Hearing on Exclusivity Termination This Week ----------------------------------------------------- The Bankruptcy Court will convene a hearing on February 10 to consider a request by the Official Committee of Unsecured Creditors in MIG Inc.'s cases to terminate the company's exclusive right to propose a reorganization, appoint a Chapter 11 trustee, or dismiss the case. The Committee has been saying that the reorganization was filed "for the naked purpose" of obtaining a stay of $188 million judgment by the Delaware Chancery Court in an appraisal action following MIG's acquisition in 2007. MIG Inc. is opposing the request. Absent an extension, the Debtor's exclusive period to propose a Chapter 11 plan expires February 16. Judge Kevin Gross, two days later, is scheduled on February 12 to hold a hearing to consider the adequacy of information in MIG Inc.'s Disclosure Statement. As reported by the Troubled Company Reporter on November 24, 2009, under the Plan: -- The Debtor will be reorganized, converted into a Delaware limited liability company and continue in operation. -- Allowed administrative claims and priority tax claims will be paid in full, unless agreed by the holders of the claims. -- Allowed other priority claims will be paid in full in cash on the distribution date, unless otherwise agreed by the holders of the claims. -- Allowed secured workers' compensation obligations claims will receive cash payments in the ordinary course as set forth in the order authorizing the Debtor to pay certain prepetition workers compensation obligations in the ordinary course of business. -- Class 3 Hauf secured claim will be allowed in the amount of $607,500, which is 90% of the total class 3 claims, and receive cash on the distribution date in the allowed amount of its claim. -- Allowed Class 4 general unsecured claims will be paid in cash on the distribution date, 70% of the allowed amount of each holder's claim. -- On the distribution date, each holder of an allowed class 5 claim will receive, in full, final and complete satisfaction, settlement, release, and discharge of the allowed class 5 claim its pro rata share of class 5's ratable portion of the sum of (x) 100% of excess cash; plus (y) the common B membership interests; plus (z) New MIG Notes in the principal amount equal to the difference between the (a) allowed final appraisal amount and the allowed non-appraisal amount of claims of electing class 6 holders and (b) the sum of excess cash and the common b membership equity distribution value. -- A holder of an allowed class 6 claim will be entitled to elect to receive, in full, final and complete satisfaction, settlement, release, and discharge of the allowed class 6 claim, one of the after forms of treatment under the Plan: (i) one preferred unit per share of preferred equity interests held by the holder of an allowed class 6 claim; or (ii) its pro rata share of class 6's ratable portion of the sum of (x) 100% of excess cash; plus (y) the common b membership interests; plus (z) New MIG Notes in the principal amount equal to the difference between the (a) allowed final appraisal amount and the allowed non-appraisal amount of claims of electing class 6 holders and (b) the sum of excess cash and the common b membership equity distribution value; provided, however, that the Holder of an allowed class 6 claim makes the written election provided for in Section 3.03(d)(ii) of the Plan on a validly executed ballot that is delivered on or before the otherwise voting deadline. -- A holder of an allowed class 7 common equity interest will receive its pro rata share of common a membership interests. A full-text copy of the Plan of Reorganization is available for free at: http://bankrupt.com/misc/MetroMediaIntl_PlanofReorganization.pdf A full-text copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/MetroMediaIntl_DisclosureStatement.pdf MIG was bought in October 2007 by CaucusCom Ventures LP for USUS$1.80 a share, or about USUS$170 million, according to data compiled by Bloomberg. A group of preferred shareholders asked Judge William B. Chandler of the Delaware Chancery Court to evaluate the value of their shares at the time of the merger. Judge Chandler ruled that each share was worth USUS$47.47, or a total of about USUS$188.4 million. MIG appealed the ruling. But unable to post a bond enabling an appeal, MIG filed for Chapter 11. Bankruptcy Judge Kevin Gross allowed MIG Inc. to continue an appeal of the Delaware Chancery Court decision. MIG said the amount of the judgment is "substantially overstated," and said its assets will turn out to be worth much more than the judgment, even though the assets currently are illiquid. However, this November, the Delaware Supreme Court upheld the judgment against MIG. About MIG Inc. Based in Charlotte, North Carolina, MIG Inc. (PINK SHEETS: MTRM, MTRMP) -- http://www.metromedia-group.com/-- through its wholly owned subsidiaries, owns interests in several communications businesses in the country of Georgia. The Company's core businesses include Magticom Ltd., a mobile telephony operator located in Tbilisi, Georgia, Telecom Georgia, a long distance telephony operator, and Telenet, which provides Internet access, data communications, voice telephony and international access services. MIG, Inc., fka Metromedia International Group, Inc., filed for Chapter 11 bankruptcy protection on June 18, 2009 (Bankr. D. Del. Case No. 09-12118). Scott D. Cousins, Esq., at Greenberg Traurig LLP assists the Company in its restructuring efforts. Debevoise & Plimpton LLP is the Company's special corporate counsel, while Potter Anderson & Corroon LLP is the Company's special litigation counsel. The official committee of unsecured creditors of MIG, Inc., has retained Baker & McKenzie LLP as its bankruptcy counsel, nunc pro tunc to June 30, 2009. In its petition, the Company said it had US$100 million to US$500 million in assets and US$100 million to US$500 million in debts. In its formal schedules, the Company said it had assets of $54,820,681 against debts of $210,183,657. NATURAL HEALTH: September 30 Balance Sheet Upside-Down by $579,000 ------------------------------------------------------------------ At September 30, 2009, Natural Health Trends Corp.'s consolidated balance sheets showed total assets of $9.9 million and total liabilities of $10.5 million, resulting in a stockholders' deficit of $579,000. The Company's consolidated balance sheets at September 30, 2009, also showed strained liquidity with $4.8 million in total current assets available to pay $10.5 million in total current liabilities. The Company reported a net loss of $2.9 million, or 50.0% of net sales, for the three months ended September 30, 2009, compared to net loss of $2.3 million, or 21.0% of net sales, for the three months ended September 30, 2008. Net loss was $7.0 million, or 29.0% of net sales, for the nine months ended September 30, 2009, compared to net loss of $4.1 million, or 11.8% of net sales, for the nine months ended September 30, 2008. The increase in losses was primarily due to lower net sales and less margin due to non-variable Chinese importation costs, partially offset by the reduction in selling, general and administrative expenses, as compared to the comparable periods in the prior year. Additional net loss was generated by non-cash interest expense on the convertible debentures and the loss recorded on redemption of the convertible debentures in August 2009. Net sales were $5.7 million for the three months ended September 30, 2009, compared to $11.0 million for the three months ended September 30, 2008, a decrease of $5.3 million, or 48%. Hong Kong net sales decreased $4.2 million, or 59%, over the comparable period a year ago. The decline in Hong Kong was partially due to an increase of $1.5 million in unshipped orders as compared to the quarter ended June 30, 2009, caused by certain customs issues that delayed orders placed between mid-August through the end of the quarter. Had these orders shipped timely, Hong Kong net sales would have decreased $2.7 million, or 38%, over the comparable period a year ago. The import issue arose from issues between the Company's importer and the Chinese Custom authority. The issues were mostly resolved and shipment resumed in October and most of the back orders were fulfilled by early November. Net sales for South Korea, Taiwan, and Europe were down $637,000, $806,000 and $205,000, respectively. European sales were impacted by the opening of the Company's Russian business in July 2009. Prior to the opening, sales into the Russian market were reflected in the Company's European subsidiary. Russian sales during the third quarter of 2009 totaled $684,000. Net sales were $24.0 million for the nine months ended September 30, 2009, compared to $34.7 million for the nine months ended September 30, 2008, a decrease of $10.7 million, or 31%. Hong Kong net sales decreased $6.4 million, or 28%, over the comparable period a year ago. Net sales for North America, South Korea, and Taiwan were down $1.5 million, $2.4 million, and $1.9 million, respectively. North American sales were impacted by the launch of retail product selling in Italy during June 2008. Prior to the launch, sales into the European market were fulfilled by the Company's North American subsidiaries. European sales during the first nine months of 2009 totaled $1.7 million. Additionally, net sales in China from the Company's e-commerce retail platform increased $380,000 over the comparable period a year ago. A full-text copy of the Company's quarterly report is available at no charge at http://researcharchives.com/t/s?5141 Liquidity At September 30, 2009, the Company had cash and cash equivalents of $1.5 million and a working capital deficit of $5.7 million, or $3.3 million excluding deferred revenue. During the years ended 2007 and 2008 and the first nine months of 2009, the Company incurred significant, recurring losses from operations and negative operating cash flows. Sales decreased significantly during these periods and the Company was unable to cut operating expenses sufficiently to avoid the negative operating results, though it did successfully manage to decelerate the losses in 2008 compared to 2007. The Company's losses attributable to common stockholders were $27.0 million and $3.9 million during 2007 and 2008, respectively. The Company has taken numerous actions to ensure that it will continue as a going concern. It has planned and executed many cost reduction and margin improvement initiatives since the end of the third quarter of 2007, such as (1) reducing headcount, which includes the termination of multiple management-level positions in Greater China, South Korea and North America; (2) down-sizing offices in Greater China and South Korea; (3) closing offices in Latin America and Southeast Asia; (4) renegotiating vendor contracts in Greater China; (5) increasing product pricing in Greater China, Europe and the U.S.; (6) changing commission plans worldwide; (7) streamlining logistics processes in Greater China; (8) introducing better margin pre-assortments; (9) working actively with the Company's service vendors in Greater China to ensure continued services and reduce service charges and (10) reducing company-wide discretionary expenses. As a result, the Company believes that its current cash breakeven level has been significantly reduced and is more attainable. The Company believes that its existing internal liquidity, supported by cash on hand, anticipated improvement in cash flows from operations and much lower fixed costs since October 2007 should be adequate to fund normal business operations and address its financial commitments for at least the next 12 months, assuming no significant unforeseen expense or further revenue decline. The Company has continued the positive trend of reducing the cash used in operations versus a year ago. Cash used in operations for the nine months ended September 30, 2009, was $1.5 million compared to $2.8 million in the comparable period of 2008. In August 2009, the Company utilized cash of $2.4 million to redeem each of its variable rate convertible debentures. About Natural Health Based in Dallas, Natural Health Trends Corp. (PINKSHEETS: BHIP) -- http://www.naturalhealthtrendscorp.com/-- is an international direct-selling and e-commerce company operating through its subsidiaries throughout Asia, North America, and Europe. The Company markets premium quality personal care products under the NHT Global brand. NATURAL PRODUCTS: Files Chapter 11 Plan & Disclosure Statement -------------------------------------------------------------- Natural Products Group, LLC, et al., filed with the U.S. Bankruptcy Court for the District of Delaware their prepackaged Chapter 11 plan of reorganization. According to the explanatory disclosure statement, the proposed Restructuring includes these key elements. * Corporate Restructuring. On or prior to the closing of the Restructuring, NPG will be converted from a Delaware limited liability company to a Delaware corporation that will serve as the ultimate parent of the Company after the Restructuring. If the Restructuring is effected through the Plan, this will be implemented through federal bankruptcy law and appropriate filings pursuant to the Delaware General Corporation Law. If the Restructuring is effected through the Out-of-Court Transaction, this conversion will be accomplished through a merger of NPG with a newly-formed Delaware corporation. Additionally, the two current direct subsidiaries of NPG, Arbonne Intermediate Holdco, Inc. ("Arbonne HoldCo") and Levlad Intermediate Holdco, Inc. ("Levlad HoldCo"), will merge with each other, with Arbonne HoldCo surviving the merger (the "Levlad Merger"). Arbonne HoldCo following the Levlad Merger will be referred as "New HoldCo". New NPG will be the sole stockholder of New HoldCo which, in turn, will continue to own directly Arbonne International, LLC ("Arbonne") and Levlad, LLC ("Levlad"). * OpCo Debt. All of the outstanding debt under that certain Credit Agreement, dated as of March 8, 2007, by and among Arbonne and Levlad, as borrowers, Arbonne HoldCo and Levlad HoldCo, as guarantors, and the several lenders from time to time party thereto (the "OpCo Lenders"), Canadian Imperial Bank of Commerce as administrative agent and collateral agent, CIBC World Markets Corp. and Credit Suisse Securities (USA) LLC as joint lead arrangers and joint bookrunners, Credit Suisse as syndication agent, and Freeport Financial LLC and General Electric Capital Corporation as codocumentation agents, on the other hand, would be fully satisfied and restructured. -- An aggregate of $125 million of the existing OpCo Debt would be reinstated as a new term loan by and among Arbonne and Levlad as borrowers, and the existing OpCo Lenders. Each OpCo Lender would participate on a pro rata basis in the Reinstated OpCo Term Loan. -- In full satisfaction of the OpCo Debt not reinstated pursuant to the Reinstated OpCo Term Loan, New NPG will issue to each OpCo Lender its pro rata share of 85% of the common stock of New NPG to be issued upon the Effective Date, subject to dilution for (i) New NPG Common Stock issuable upon the exercise of the New NPG Warrants, (ii) New NPG Common ii Stock issuable upon the exercise of any New NPG Options that may be issued under the Long Term Management Incentive Plan (up to an additional 7.5% of the New NPG Common Stock, on a fully diluted basis), and (iii) any additional New NPG Common Stock that may be awarded in accordance with the Long Term Management Incentive Plan. * HoldCo Debt. All of the outstanding debt under the HoldCo Credit Agreement, dated as of June 19, 2006, by and among Arbonne HoldCo and Levlad HoldCo, as borrowers, and the several lenders from time to time party thereto (the "HoldCo Lenders"), Wilmington Trust FSB, as successor in interest to Credit Suisse, New York Branch as administrative agent, Credit Suisse Securities (USA) LLC and CIBC World Markets Corp. as joint lead arrangers and joint bookrunners, CIBC World Markets Corp. as syndication agent, and CitiCorp North America, Inc. and UBS Securities LLC, as codocumentation agents, will be fully satisfied: -- New NPG will issue to each HoldCo Lender its pro rata share of warrants that will entitle the holders thereof to purchase New NPG Common Stock equal to an aggregate of 5% of the New NPG Common Stock, subject to dilution for (i) New NPG Common Stock issuable upon the exercise of any New NPG Options that may be issued under the Long Term Management Incentive Plan (up to an additional 7.5% of the New NPG Common Stock, on a fully diluted basis), and (ii) any additional New NPG Common Stock that may be awarded in accordance with the Long Term Management Incentive Plan. -- The New NPG Warrants will have an aggregate cash exercise price equal to the sum of 100% of the principal amount of the OpCo Debt plus accrued interest thereon as of the closing date of the Restructuring, plus the principal, interest, fees and expenses outstanding under the New Term Loan as of the closing date of the Restructuring. The aggregate cash exercise price of the New NPG Warrants will be allocated among all HoldCo Lenders on a pro rata basis * In connection with the Restructuring, each OpCo Lender will be entitled to participate in providing to Arbonne and Levlad a new senior secured debtor-in-possession facility (in the event of a prepackaged chapter 11 filing) or new term loan (in the event of the Out-of-Court Transaction) in an initial amount of $10 million, which shall be drawn on the effective date of such facility, with the option of the borrowers to borrow up to an additional $10 million at any time prior to June 30, 2010 in one subsequent draw upon the satisfaction of certain conditions. If the Restructuring is effected pursuant to a chapter 11 filing, the debtorin- possession facility would automatically become a term loan under an exit lending facility on the Effective Date. If the Restructuring is effected as an Out-of-Court Transaction, there will be no debtor-in-possession facility because it will be unnecessary. Instead, the New Term Loan would be implemented consensually at the closing of the Restructuring. Except with respect to the debtor-in-possession facility, the New Term Loan will be part of a single facility that will include the New Term Loan and the Reinstated OpCo Term Loan. In consideration for providing the commitment in respect of the New Term Loan, each lender under the New Term Loan portion of the Exit Facility will receive its pro rata share of 10% of the New NPG Common Stock to be issued on the Effective Date, subject to dilution for (i) New NPG Common Stock issuable upon the exercise of the New NPG Warrants, (ii) New NPG Common Stock issuable upon the exercise of any New NPG Options that may be issued under the Long Term Management Incentive Plan (up to an additional 7.5% of the New NPG Common Stock, on a fully diluted basis), and (iii) any additional New NPG Common Stock that may be awarded in accordance with the Long Term Management Incentive Plan. Treatment of Claims Under the Plan, each holder of an Administrative Claim will receive (i) the amount of the holder's Administrative Claim in one cash payment, or (ii) other treatment as may be agreed upon in by the Debtors and the holder. The Debtors will pay a Plan Distribution of Cash, without interest, in an amount equal to all fees and the reasonable out- of-pocket expenses incurred by, and administration fees payable to, the Prepetition OpCo Agent under the OpCo Credit Agreement for the period through the Effective Date, in each case to the extent not reimbursed on or prior to the Effective Date, without the necessity of filing a fee application or any other application of any kind or nature with the Court. Holders of Tax Claims will receive in full satisfaction of the claims (a) payments in cash, in regular installments over a period ending not later than five years after the Petition Date, of a total value, as of the Effective Date, equal to the allowed amount of the claim; (b) a lesser amount in one cash payment as may be agreed upon by the holder; or (c) other treatment as may be agreed upon in by the holder. Holders of Class 2 - OpCo Lender Claims and Class 3 - HoldCo Lender Claims are entitled to vote on the Plan, while holders of Class 1 - Priority Claims, Class 4 - Secured Claims, Class 5 - Unsecured Claims, Class 6 - NPG Equity Interests, and Class 7 - Other Equity Interests aren't entitled to vote on the Plan. Class 1 - Priority Claims will be paid in full and in cash. Holders of Class 2 - OpCo Lender Claims will receive (i) the Reinstated OpCo Term Loan, and (ii) 85% of the New NPG Common Stock issued under the Plan on the Effective Date, subject to dilution for (a) New NPG Common Stock issuable upon the exercise of the New NPG Warrants, (b) New NPG Common Stock issuable upon the exercise of any New NPG Options that may be issued under the Long Term Management Incentive Plan, and (c) any additional New NPG Common Stock that may be awarded in accordance with the Long Term Management Incentive Plan. This claim will be allowed in an amount equal to the sum of (i) the aggregate principal amount outstanding under the OpCo Credit Agreement as of the Petition Date, of approximately $530.5 million, plus (ii) accrued and unpaid interest and default interest under the OpCo Credit Agreement through the Petition Date, plus (iii) amounts drawn on the Letters of Credit from the Petition Date through the Effective Date, plus (iv) accrued and unpaid letter of credit fees, administrative fees, and other fees and expenses incurred under the OpCo Credit Agreement through the Petition Date. Holders of Class 3 - HoldCo Lender Claims will receive Pro Rata Share of the New NPG Warrants. The HoldCo Lender Claims will be allowed in the aggregate amount of $215.6 million. Class 4 - Secured Claims will be unimpaired under the Plan, and either (i) all of the legal, equitable, and contractual rights to which the Secured Claim entitle the holder of the claim will be fully reinstated and retained on and after the Effective Date, or (ii) the holder will receive, in full satisfaction, settlement, release, and discharge of, and in exchange for its Secured Claim, either (w) Cash in the full amount of the Secured Claim, (x) the proceeds of the sale or disposition of the collateral securing the Secured Claim to the extent of the value of the holder's secured interest in such collateral, (y) the collateral securing the Secured Claim and any interest on the Secured Claim required to be paid pursuant to section 506(b) of the U.S. Bankruptcy Code, or (z) other distribution as necessary to satisfy the requirements of section 1129 of the Bankruptcy Code. Class 5 - Unsecured Claims will be unimpaired under the Plan, and either (i) all of the legal, equitable, and contractual rights to which the Unsecured Claim entitle the holder of the claim will be fully reinstated and retained on and after the Effective Date, or (ii) the holder will receive, in full satisfaction, settlement, release, and discharge of, and in exchange for its Unsecured Claim, Cash in the full amount of the Unsecured Claim, including any postpetition interest required to be paid thereon under applicable non-bankruptcy law. Class 6 - NPG Equity Interests will be unimpaired under the Plan, and all of the legal, equitable, and contractual rights to which the Equity Interests entitle the holder of the Equity Interests will be fully reinstated and retained on and after the Effective Date. Copies of the Chapter 11 Plan and disclosure statement are available for free at: http://bankrupt.com/misc/NATURAL_PRODUCTS_ch11.pdf http://bankrupt.com/misc/NATURAL_PRODUCTS_ds.pdf 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. NORTEL NETWORK: Committee Wants to Expand Scope of J&C Services --------------------------------------------------------------- The Official Committee of Unsecured Creditors in Nortel Network's cases seeks permission from the Court to expand the scope of services of its investment banker, Jefferies & Company Inc. The Creditors Committee wants Jefferies' role expanded to include these additional responsibilities: (1) Extensive interfacing with various bidders; (2) Serving as a primary point of contact for various bidders; (3) Directly negotiating with bidders on the structure of bids and process issues; (4) Providing extensive feedback on proposals, deal terms and negotiation dynamics to both the Debtors and certain bidders; (5) Providing considerable securities valuation analysis; and (6) Extensive bidder, transaction structure and pro-forma business plan due diligence. In connection with the proposed expanded services, the Creditors Committee asks the Court to approve the proposed modification to the terms of the firm's compensation structure. The modified terms are: (1) Pursuant to the original application, Jefferies' monthly fee was to be reduced from $250,000 to $200,000 on and after June 1, 2009. As modified, the monthly fee will remain at $250,000 until February 1, 2010, at which time the monthly fee will be reduced to $200,000; provided that the Creditors Committee will have the right to extend the date on which the monthly fee is reduced to $200,000 to a date that occurs after February 1, 2010, pursuant to a unanimous vote of the members of the Creditor Committee. (2) Pursuant to the original application, 50% of the monthly fees actually paid to Jefferies in excess of $2.6 million were to be credited against the transaction fee payable to the firm. As modified, 50% of the monthly fees paid to Jefferies for services rendered on and after August 1, 2010, will be credited against the transaction fee payable to the firm; provided that the Creditors Committee will have the right to extend the period during which monthly fees are not creditable against the transaction fee payable to Jefferies to a date that occurs after August 1, 2010, pursuant to a unanimous vote of the members of the Creditors Committee. (3) Should Jefferies be asked to produce an expert report or otherwise provide expert testimony in the form of deposition or live testimony in connection with the Debtors' cases, the firm and the Creditors Committee will determine a mutually agreeable fee based on the scope of services for the requested expert work. In no instance will expert fees exceed $150,000 for any discrete matter in which testimony is not provided; $500,000 for any discrete matter under any circumstances; and $2,000,000 in aggregate fees for expert work performed in the Debtors' cases. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORK: Cypress Questions Rejection of PLA -------------------------------------------------- Cypress Communications Inc. asked the Court to deny the proposed rejection of its purchase and license agreement with the Debtors, saying it is a "bundled contract" under the sale agreement between Nortel Networks Inc. and GENBAND Inc. Bundled contracts are those executed by NNI that provide for the sale of products or provision of services related to the Carrier VoIP and Application Solutions business. Cypress pointed out that under the CVAS Business Sale Agreement, NNI agreed to work with GENBAND or the successful bidder for the CVAS business to preserve bundled contracts for at least 180 days post-closing to give the buyer the opportunity to negotiate concerning the assignment of those contracts as part of the sale. Cypress argued that NNI breached its sale agreement with GENBAND by proposing the rejection of the Cypress License Agreement before the expiration of the 180-day period or before the deadline for submitting bids for the CVAS business. "Rejection of the PLA will deprive GENBAND or any other bidder of the opportunity to designate the PLA for assignment or otherwise negotiate a transfer of the PLA from Cypress pursuant to the Carrier sale," said Cypress' attorney, Frederick Rosner, Esq., at Messana Rosner & Stern LLP, in Wilmington, Delaware. In connection with the filing of its objection, Cypress sought and obtained the Court's approval to file under seal an unredacted version of its objection, the PLA and related documents. The PLA and the related documents purportedly bear restrictive legends and contain confidentiality provisions that prohibit their disclosure. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORK: Has Cash Balance of $5 Billion at January 2 ----------------------------------------------------------- Ernst & Young Inc., the firm appointed to monitor the assets of Nortel Networks Corporation and its four affiliates that filed for creditor protection under Canada's Companies' Creditors Arrangement Act, delivered to the Ontario Superior Court of Justice its 35th monitor report. The Monitor Report provides updates on the consolidated cash position and liquidity of NNC and its subsidiaries as of January 2, 2010, actual receipts and disbursements, and cash flow forecast, among other things. Ernst & Young noted that as of January 2, 2010, NNC and its subsidiaries had consolidated cash balance of about C$5 billion, including C$2.9 billion of total treasury cash. Their consolidated cash balance is held globally in various Nortel units and joint ventures. As of January 2, 2010, the Nortel companies based in North America have cash available for operations and post-filing intercompany settlements of about C$1 billion compared to a gross cash position of about C$1.1 billion. Of this, about C$88 million is held by the Canada-based Nortel units while approximately C$917 million is held by the U.S.-based units. The administrators of U.K.-based Nortel units have available cash of approximately C$726 million for operations and post-filing intercompany settlements for Nortel Networks UK and other foreign-based units. Nortel entities in the Asia Pacific region have about C$443 million of available cash for operations and intercompany settlements. NETAS, a joint venture in which NNC and its subsidiaries have a 53% stake, has approximately C$66 million of cash, of which about $35 million represents Nortel's proportionate share. Nortel Networks (CALA) Inc.'s available cash is $82 million. Other Nortel units in the Caribbean and Latin America that are not in bankruptcy have about $66 million of available cash, which is expected to be used to fund their in-country operations and intercompany settlements. Divestiture Proceeds Divesture proceeds of $2.059 billion are being held in escrow until an agreement is reached regarding the allocation of these proceeds to various Nortel units, including NNL, according to Ernst & Young. The proceeds relate to amounts held by JPMorgan Chase Bank N.A. in escrow that include: -- $1.026 billion from the sale of Code Division Multiple Access (CDMA) business and Long Term Evolution (LTE) assets; -- $18 million from the sale of the Layer 4-7 business; -- $9.86 million from the sale of the Next Generation Packet Core business; and -- $874 million from the sale of Enterprise Solutions business. The proceeds also relate to $70 million held in escrow by CitiBank for the sale of the CDMA business and LTE assets, and $60.6 million held in escrow by Wells Fargo Bank for the sale of the Enterprise Solutions business. The consolidated cash position balances do not reflect deposits of $38 million received from Ciena Inc. for the sale of the Metro Ethernet Networks assets. Actual Receipts and Disbursements from November 29, 2009 to January 2, 2010 The actual consolidated net cash outflow of NNC and the other CCAA applicants for the period November 29, 2009 to January 2, 2010 was $75.5 million, according to the Monitor Report. Available cash was higher than forecast by approximately $1.1 million as a result of a favorable foreign exchange translation on Canadian dollar denominated cash balances due to the appreciation of the Canadian dollar relative to the U.S. dollar. Cash Flow Forecast for the Period January 3 to April 24, 2010 NNC and its subsidiaries, with the assistance of Ernst & Young, prepared a 16-week cash flow forecast for the period from January 3 to April 24, 2010. The cash flow forecast indicates that NNC and the other CCAA applicants will have total receipts of $371 million and total disbursements of $323.2 million, resulting in a net cash inflow of $47.8 million. As of January 2, 2010, the CCAA Applicants have available cash balances of about $87.1 million, excluding restricted cash and unavailable cash of about $64.6 million. Full-text copies of the 35th Monitor Report and supplements to the report are available without charge at: http://bankrupt.com/misc/Nortel35thMonitorReport.pdf http://bankrupt.com/misc/NortelSupp35thMonitorReport.pdf About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORK: Proposes Deal With Velenio Holdings --------------------------------------------------- Nortel Networks Inc. and its affiliated debtors seek permission from the U.S. Bankruptcy Court for the District of Delaware to enter into an agreement with Velenio Holdings Ltd. The parties' Agreement was hammered out to authorize the assignment of Russian Telecommunications Development Corp.'s debt under a 2004 loan agreement with NNI to Velenio. The move came after Velenio acquired RTDC's stake in certain operators controlled by RTDC and Sky Link, an affiliate of Velenio. RTDC entered into the 2004 Loan Agreement with NNI to avail of $3.7 million to finance the supply of Code Division Multiple Access (CDMA) equipment and to ensure additional working capital for it and its operators. The 2004 financing was intended to give the Debtors a foothold in the CDMA market in Russia and be a long-term supplier to RTDC and Sky Link. The Debtors' effort to enter the Russian market, however, failed and resulted in the non-payment of a large portion of the 2004 loan. Counsel to the Debtors, Ann Cordo, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, Delaware, says that the Debtors have thought of pursuing a litigation on the RTDC matter, but have determined that the likelihood of substantial recovery is extremely low. Under the NNI-Velenio deal, NNI expects to recover only $192,210 of the $2,901,227 outstanding balance due from RTDC as of December 31, 2009, Ms. Cordo tells the Court. Although the proposed recovery is a fraction of the overall outstanding amount of the debt, the Debtors nevertheless believe the NNI-Velenio Agreement presents the best opportunity to maximize the value of RTDC's debt for distribution to creditors. "Participation in the [Agreement] obviates the need for litigation, saves the Debtors significant time and expense in the potential litigation over the debt and avoids distracting the Debtors' officers and employees during the[ir] chapter 11 proceedings," Ms. Cordo says in court papers. A full-text copy of the NNI-Velenio Agreement is available for free at http://researcharchives.com/t/s?4ed0 The Court will hold a hearing on February 3, 2010, to consider approval of the NNI-Velenio Agreement. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) OPTI CANADA: To Review Financial Results Today ---------------------------------------------- OPTI Canada Inc. will conduct a conference call on Feb. 9, 2010, at 7:00 a.m., to review the its year end 2009 financial and operating results. Chris Slubicki, President and Chief Executive Officer, and Travis Beatty, Chief Financial Officer, will host the call. To participate in the conference call, dial: * (888) 231-8191 (North American Toll-Free) * (647) 427-7450 (Alternate) OPTI Canada Inc. is a Calgary, Alberta-based company focused on developing major oil sands projects in Canada using its proprietary OrCrude(TM) process. The first project, Phase 1 of Long Lake, consists of 72,000 barrels per day of SAGD (steam assisted gravity drainage) oil production integrated with an upgrading facility. The upgrader uses the OrCrude(TM) process combined with commercially available hydrocracking and gasification. Through gasification, this configuration substantially reduces the exposure to and the need to purchase natural gas. On a 100% basis, the Project is expected to produce 58,500 bbl/d of products, primarily 39 degree API Premium Sweet Crude with low sulphur content, making it a highly desirable refinery feedstock. Due to its premium characteristics, the Company expects PSC(TM) to sell at a price similar to West Texas Intermediate (WTI) crude oil. The Long Lake Project is being operated in a joint venture with Nexen Inc. OPTI holds a 35% working interest in the joint venture. OPTI's common shares trade on the Toronto Stock Exchange under the symbol OPC. * * * As reported by the Troubled Company Reporter on November 18, 2009, Moody's Investors Service lowered OPTI Canada's Caa1 Corporate Family Rating to Caa2, and Caa1 $1.75 billion second lien notes rating to Caa3. Moody's also assigned a B1 rating to OPTI's proposed C$150 million secured revolver and a B2 rating to its proposed secured notes issue. The rating outlook remains negative. The ratings on the existing C$350 million revolver will be withdrawn when the new C$150 million revolver closes. The TCR also said November 18, 2009, Standard & Poor's Ratings Services assigned its 'B+' debt rating to OPTI Canada Inc.'s proposed US$425 million senior secured notes due 2012, and its C$150 million secured revolving credit facility. (The closing of the new credit facility is subject to the notes' sale.) S&P will withdraw the ratings on OPTI's existing C$350 million credit facility when the proposed credit facility closes. S&P also assigned a '1' recovery rating to the notes and credit facility, indicating S&P's expectations of very high (90%-100%) recovery in the event of a default. S&P views the sale of the proposed notes as neutral to OPTI's credit profile. OPTIONS MEDIA: Posts $1.2 Million Net Loss in Q3 2009 ----------------------------------------------------- Options Media Group Holdings, Inc., and subsidiaries reported a net loss of $1,222,184 on net revenues of $1,755,280 for the three months ended September 30, 2009, compared to a net loss of $820,953 on net revenues of $908,544 for the same period of 2008. The Company had a net loss of $3,851,032 on revenues of $6,187,652 for the nine months ended September 30, 2009, compared to a net loss of $1,620,852 on net revenues of $950,478 for the same period of the previous year. Total operating expenses increased to $2,368,224 and $7,769,910 respectively for the three and nine months ended September 30, 2009, compared to $1,487,953 and $2,325,129 respectively for the three and nine months ended September 30, 2008. Compensation and related costs for the three months and nine months ended September 30, 2009, was $1,029,703 and $3,712,059 respectively. Compensation and related costs for the three months and nine months ended September 30, 2008, was $519,113 and $1,216,339 respectively. Commission expense for the three months and nine months ended September 30, 2009, was $215,051 and $803,133 respectively, which represent the amounts the Company incurred for sales commissions on sales made during the respective periods. Commission expense for the three months and nine months ended September 30, 2008, was $62,015 and $63,252 respectively. Bad debt expense for the three months and nine months ended September 30, 2009, was $155,684 and $253,245 respectively. Bad debt expense for the three months and nine months ended September 30, 2008, were $7,397 and $58,297 respectively. Balance Sheet At September 30, 2009, the Company's consolidated balance sheets showed total assets of $12,516,376, total liabilities of $4,254,245, and total stockholders' equity of $8,262,131. The Company had a working capital deficiency of $3,486,729 at September 30, 2009. This compares with a working capital deficit of $1,919,811 at December 31, 2008. A full-text copy of the Company's quarterly report is available at no charge at http://researcharchives.com/t/s?511b Going Concern Doubt As of the date of this report, the Company has limited working capital. The Company is currently seeking to raise additional money to meet its working capital needs including paying its loans. If the Company is not able to raise at least $2,000,000, it may not be able to remain operational. In order to raise additional capital to meet its working capital needs, Options Media expects to issue additional shares of common stock or securities convertible, exercisable into common stock from time to time, which could result in substantial dilution to investors. For the nine months ended September 30, 2009, the Company had a net loss of $3,851,032 and used net cash of $969,585 in operations. At September 30, 2009, the Company had a working capital deficiency of $3,486,729, which includes $1,080,000 and $300,000 of secured notes payable with maturing dates of August 31, 2009, and September 30, 2009, respectively which were extended until December 31, 2009, and unsecured notes payable of $90,000 and $100,000 with maturing dates in August 2009 and December 2009, respectively which were also extended until December 31, 2009. Additionally, at September 30, 2009, the Company had an accumulated deficit of $7,356,463. "These matters and the Company's expected needs for capital investments required to support operational growth and maturing debt raise substantial doubt about its ability to continue as a going concern." Based on actions being taken to improve liquidity, management believes that the Company will meet its expected needs required to continue as a going concern through September 30, 2010. About Options Media Based in Boca Raton, Florida, Options Media Group Holdings, Inc. (OTC: OPMG) -- http://www.optionsmedia.com/-- is an e-mail services provider of on-demand e-mail marketing that allows its clients to create, send, and track professional and permission- based e-mail marketing campaigns. Options Media provides clients with access to software, hardware, bandwidth, and exclusive domains and IP addresses, as well as the ability to upload and manage subscribers, and review and upload campaigns and track results for a 360-degree full-service customer marketing solution. A dditionally, the Company is a provider of precision direct marketing solutions including e-mail marketing, SMS/mobile marketing, SMS/keyword marketing, custom lead generation and creative services. PARLUX FRAGRANCES: Incurs $5.4 Mil. Net Loss for December Quarter ----------------------------------------------------------------- Parlux Fragrances Inc. reported a net loss of $5.4 million for the quarter ended Dec. 31, 2009, compared with a net loss of $4.5 million during the same period in the prior year. As of Dec. 31, 2009, the Company has $112.3 million in total assets and $17.5 million in total liabilities, resulting to $109.4 million stockholders' equity. The Company's net sales reached $50.3 million, including $3.5 million in sales of GUESS inventories to the new licensee, compared to $47.3 million in the same prior year quarter, an increase of 6%. For the nine-month period ended December 31, 2009, net sales were $130.4 million, compared to $123.0 million in the same prior year period, also an increase of 6%. Mr. Frederick E. Purches, Chairman and CEO, said, "In 2009, the Company had embarked on a strategy of heavy investment in the U.S. department store segment of its business, and unfortunately consumer spending did not improve as anticipated. Our department store sales for the important third quarter were down 30% compared to prior year and even though discretionary advertising spending was reduced, our committed advertising expenses could not be reduced enough to overcome the downtrading from that segment due to the severe economic conditions." "However," Mr. Purches continued, "our nine-month sales in the department store segment were basically flat, whereas most of our competitors had decreases. Our new launches of Queen Latifah and Marc Ecko have been well received. As previously announced, the loss we reported includes inventory provisions relating to the termination of the GUESS license and slower moving brands. With more cautious spending commitments in the department store segment, the Company expects improved results." A full-text copy of the company's financial results is available for free at http://ResearchArchives.com/t/s?5118 About Parlux Fragrances Parlux Fragrances, Inc. (NASDAQ:PARL) -- http://www.parlux.com/-- is a manufacturer and international distributor of prestige products. It holds licenses for Paris Hilton, Jessica Simpson, GUESS?, Nicole Miller, Josie Natori, Queen Latifah, Marc Ecko, Rihanna, Kanye West, XOXO, Ocean Pacific (OP), Andy Roddick, babyGund, and Fred Hayman Beverly Hills designer fragrances, as well as Paris Hilton watches, cosmetics, sunglasses, handbags and other small leather accessories. As of September 30, 2009, the Company's consolidated balance sheets showed $148.4 million in total assets, $36.0 million in total liabilities, and $112.4 million in total shareholders' equity. Extension of Forbearance Period As reported in the Troubled Company Reporter on November 3, 2009, the Company signed a Second Amendment to Loan Agreement and Amendment to Forbearance Agreement with Regions Bank extending the forbearance period through February 15, 2010, and calling for the Company to repay the remaining loan balance over the course of the extension period. PROFESSIONAL LAND: Files for Bankruptcy to Reorganize Finances -------------------------------------------------------------- Tampa Bay Online reports that Professional Land Development LLC filed for Chapter 11 bankruptcy to reorganize its finances. The company has $29 million in secured debt and $5.5 million in unsecured debt. According to report, the real estate crash hampered, efforts and last summer one of Bella Verde's community development districts filed a foreclosure suit against the company. Professional Land Development LLC is a property developer. PROTECTIVE PRODUCTS: Files Schedules of Assets and Liabilities -------------------------------------------------------------- Protective Products of America, Inc., filed with the U.S. Bankruptcy Court for the Southern District of Florida its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $86,678,781 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $7,602,760 E. Creditors Holding Unsecured Priority Claims $4,572 F. Creditors Holding Unsecured Non-priority Claims $19,504,787 ----------- ----------- TOTAL $86,678,781 $27,112,119 Headquartered in Sunrise, Florida, Protective Products of America, Inc. -- http://www.protectiveproductsofamerica.com/-- fka Ceramic Protection Corporation, 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. READER'S DIGEST: Gets Nod for Emergency Funding to UK Unit ---------------------------------------------------------- In light of the recent unexpected indication by the UK Pension Protection Fund that it will not approve the pension application filed by the UK unit of Reader's Digest Association, Reader's Digest and its U.S. units sought and obtained emergency authority from Judge Drain of the U.S. Bankruptcy Court for the Southern District of New York to provide limited funding to the UK business to cover the costs and expenses necessary to assist the foreign unit in pursuing its options under UK insolvency law. James H.M. Sprayregen P.C., Esq., at Kirkland & Ellis LLP, in New York, says the Debtors are seeking expedited relief from the Court for authority to use estate assets and take certain actions prior to their emergence from Chapter 11 to: (i) address the potential need to discontinue operations of their UK business following notice by the UK Pension Regulator that it will not consent to the agreed settlement of RDA UK's pension liabilities; and (ii) establish an escrow arrangement to facilitate the prompt closing of the Debtors' pending high yield bond offering, the proceeds of which will secure the bonds until the release from escrow upon the satisfaction of certain conditions, including addressing the situation in the UK. The Debtors previously sought and obtained authority to enter into a settlement to resolve certain liabilities -- estimated as of March 31, 2009 to be approximately GBP109 million or approximately $177 million -- related to a defined benefit pension scheme sponsored by RDA UK, a non-debtor foreign subsidiary. The Debtors negotiated the UK Pension Settlement with the primary economic parties-in-interest with respect to the UK pension scheme deficit, namely: (i) The Reader's Digest Pension Trustees No. 2 Limited, which is the current trustee for the UK pension scheme who acts as a fiduciary for the pensioners, and (ii) the Board of the Pension Protection Fund, which is the UK regulatory body, or "safety net," responsible for making statutory payments to the scheme members once their pension scheme has "passed" to the PPF following an insolvency of the scheme's sponsoring company. As part of the comprehensive settlement of the UK pension liabilities, the Debtors agreed to provide certain consideration in satisfaction of RDA UK's liability to the scheme, which the Debtors believe constitutes reasonably equivalent value and fair consideration in satisfaction of the liability, and which the Debtors are willing to fund to avoid a liquidation of RDA UK and preserve the enterprise value associated with a go-forward UK business free of its unmanageable and uncapped pension obligations. The very predicate for negotiations among all parties-in-interest to the UK Pension Settlement was to reach an agreement on a fair contribution to the scheme that would exceed amounts recoverable in a liquidation scenario -- the only alternative for RDA UK given its economic situation, Mr. Sprayregen asserts. He relates that RDA UK does not currently generate free cash flow sufficient to cover its pension obligations under a "recovery plan" agreed to with the UK Trustee in May 2009, which requires annual payments, in monthly installments, of approximately GBP4.56 million or $7.4 million through March 31, 2022. Under the UK Pension Settlement, the Debtors agreed to fund a one- time lump sum payment to the scheme of GBP10.9 million or approximately $17.6 million, and to issue 33% of the equity of RDA UK to the scheme, subject to a five-year call option to buy back the equity for approximately GBP1.8 million. An express condition precedent to effectiveness of the UK Pension Settlement is the consent of the UK Pensions Regulator and, more specifically, that the Regulator agrees to provide "clearance" for the transaction. Although the Debtors reasonably believed that the Regulator's interests would be aligned with the UK Trustee and the PPF, the Regulator notified RDA UK that it would not consent to the proposed settlement and that the application for "clearance" with respect to the proposed settlement had been denied. In light of the unanticipated response by the Regulator to the proposed settlement, the Debtors have determined that it is appropriate and in the best interests of the estates to take certain steps in advance of the Debtors' imminent emergence from bankruptcy. In the absence of reasonable assurance that the UK pension liability can be compromised, the Debtors do not believe it is prudent to provide or have their other foreign subsidiaries provide continued financial support to fund ongoing operations of the RDA UK business. "[T]he business is cash-flow negative in its present state -- a drain on enterprise assets that is a net borrower of the Debtors' European cash pooling arrangements -- and remains liable for a variable, uncapped funding deficit associated with its pension scheme, which the UK Pension Regulator has now suggested cannot be compromised," Mr. Sprayregen says. "Indeed, any financial support directed at RDA UK would be primarily to maintain the legal existence of a company whose only economic purpose is to service an increasingly burdensome pension liability," he continues. To minimize any collateral damage to the reorganized enterprise associated with a UK insolvency proceeding, the Debtors believe it is appropriate to dedicate a limited amount of estate resources or global enterprise funds to provide short term support to RDA UK to enable it to evaluate its options and prepare for a potential insolvency proceeding. The Debtors also believe the total costs and expenses they could potentially incur in connection with facilitating the commencement of an orderly insolvency proceeding of RDA UK will not exceed $2 million. Importantly, Mr. Sprayregen asserts, an insolvency of RDA UK will also immediately crystallize and cap the amount of the pension scheme deficit under applicable UK law, which liability would be addressed in accordance with applicable UK insolvency laws. Sale of Securities Meanwhile, in anticipation of emergence from Chapter 11, the Debtors have undertaken significant efforts to obtain credit on better terms than those provided by the exit facilities in the Plan, Mr. Sprayregen discloses. He says the Debtors have been working with J.P. Morgan Securities Inc., Banc of America Securities LLC, Credit Suisse (USA) Securities, Inc., Goldman, Sachs & Co., Moelis & Company LLC, and certain other potential parties on a purchase and sale of the Securities pursuant to a purchase agreement, which has been approved by the Court. Accordingly, in an effort to capture the benefits of their extensive work to date while simultaneously alleviating any concerns by potential purchasers of the Securities related to the short delay of bankruptcy emergence necessary to address the situation in the UK, the Debtors seek to enter into an escrow arrangement with the Initial Purchasers whereby the net sale proceeds from the Securities as well as certain other funds contributed to the escrow issuer by the Debtors necessary for redemption of the Securities will be held in escrow until certain conditions have been satisfied. The principal terms and conditions of the Escrow Arrangement are: -- Escrow Issuer. The Debtors will establish a wholly-owned, unrestricted subsidiary, RD Escrow Corporation, to issue the Securities. The Escrow Issuer will deposit the Escrowed Funds into a segregated escrow account until the date that the Escrow Conditions are satisfied. The Escrowed Funds will be pledged as security for the benefit of the holders of the Securities and upon satisfaction of the Escrow Conditions will be used to refinance the debt obligations issued to the Debtors' existing lenders upon Emergence; -- Escrow Agent will be Wilmington Trust Company Corporation; -- Escrow Term. The Escrow Conditions must be satisfied on or prior to a date to be agreed, which will be no later than three months from the date of execution of the Escrow Agreement; -- Escrow Conditions. The Escrow Agent will not release the Escrowed Funds until Reader's Digest submits an officer's certificate certifying the satisfaction of certain conditions, including a condition with respect to the pension liability in the UK and that the Effective Date of the Plan has occurred; and -- If the Escrow Conditions are not satisfied on or prior to the Expiration Date, the Securities will be redeemed at 100% of the issue price to the purchasers thereof, plus accrued and unpaid interest to, but excluding, the date of redemption. Pursuant to the terms of the DIP Credit Agreement and the Final DIP Order, the Debtors require a waiver to be able to provide support to RDA UK while it in pursues options under UK insolvency laws and fund any interest payment or other shortfalls if required to do so under the terms of the Escrow and Security Agreement. The Debtors, therefore, seek immediate authority to enter into the DIP Waiver. The Debtors believe that their actions and requests for relief are necessary and appropriate to enable them to capture the benefits of their recent refinancing efforts, remain on track for an expeditious emergence from Chapter 11 and simultaneously ensure minimal enterprise disruption and risk associated with the administration of the Debtors' UK business. * * * Judge Drain granted the request following an expedited hearing. The Court authorized, but not directed or required, the Debtors to take any and all actions necessary and appropriate in the their sole discretion and business judgment to limit or withdraw any financial support provided to RDA UK, whether in the form of access to group cash pooling arrangements, through the group treasury function or otherwise, and to provide notice to RDA UK of those intentions, provided that the Debtors will work in good faith with RDA UK to facilitate an orderly process for the commencement of any insolvency proceedings. The Debtors are also authorized (i) to use or transfer estate funds for the exclusive purpose of paying reasonable fees, costs or expenses necessary to facilitate the orderly administration or insolvency proceedings of the estates of RDA UK and its affiliated businesses under applicable law, and (ii) to take all actions in furtherance thereof and in connection therewith, provided the Debtors will not be permitted to spend more than $2 million in connection therewith. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of US$2.2 billion against total debts of US$3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) READER'S DIGEST: Sells $525 Mil. Notes to Refinance Loans --------------------------------------------------------- The Bankruptcy Court granted Reader's Digest Association and its units authority to enter into an agreement to issue and sell notes to refinance their (i) obligations under their new first and second priority secured term loans to be issued on the effective date of their plan of reorganization, and (ii) reinstated euro term loan. Dow Jones Newswires, citing a person familiar with the deal, said Reader's Digest priced $525 million of floating-rate 7-year notes through lead managers J.P. Morgan Chase & Co., Bank of America Corp., Credit Suisse, and Goldman Sachs. Terms of the bond offering are: Amount: $525 million (net proceeds $509.25 million) Maturity: Feb. 15, 2017 Issue Price: 97 Spread: 650 basis points over 3-month Libor, with a 3.0% Libor floor Settlement: Feb 11, 2010 (T+7) Call: Non-callable for 3 years Ratings: B1 (Moody's Investors Service) B (Standard & Poor's) According to Standard & Poor's, Reader's Digest is the first issuer to try to access the bond market for bankruptcy exit financing since 2005, Michael Aneiro of Dow Jones Newswires said. While most high-yield notes involve fixed-rate coupons, the floating-rate note structure of the Reader's Digest note offering mimics pricing terms more commonly found in the bank loan market, Mr. Aneiro noted. Price guidance for the post-bankruptcy $525 million offering of seven-year floating-rate notes is in the area of 650 basis points over the London interbank offer rate at a discounted face value of 97 cents on the dollar, the report cited KDP Investment Advisors. Judge Drain finds that all of the Debtors' obligations under the Purchase Agreement, including the Indemnification Obligations, the Contribution Obligations and the fees and expenses, are actual, necessary costs and expenses of preserving the bankruptcy estate and, hence, will be treated as administrative expenses under Section 503(b) of the Bankruptcy Code. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of US$2.2 billion against total debts of US$3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) RESIDENTIAL CAPITAL: Moody's Keeps 'C' Senior Secured Bond Ratings ------------------------------------------------------------------ Moody's Investors Service said it is maintaining Residential Capital's senior secured, junior secured, and senior unsecured bond ratings at C. The outlook for all ratings is stable. In a separate action, Moody's upgraded ResCap's parent GMAC Inc.'s senior debt to B3 from Ca. The C rating reflects ResCap's standalone credit profile and uncertainty regarding long term support from GMAC. Although Moody's believes GMAC is likely to provide ResCap with sufficient liquidity support to service its 2010 obligations, GMAC's long- term support and ownership of ResCap is more questionable due to the lack of strategic fit between the companies. From a standalone perspective, ResCap has required support from GMAC to continue as a going concern for some time. ResCap will likely require support from GMAC to service its 2010 debt maturities, and may require additional capital support as well. Although the company's recent action to write-down a substantial amount of its mortgage portfolio reduces the risk of further charges related to these assets, there could be further deterioration, especially if the US economy follows a worse than expected path. Additionally, ResCap is exposed to the risk of liability for loans sold with recourse and contingent commitment to fund draws on home equity lines of credit in off-balance sheet securitizations. Each of these issues could be a drain on capital and liquidity. Should parental support be discontinued Moody's believes ResCap would eventually default on its obligations. Should ResCap default and be liquidated, Moody's believes the recovery for bondholders could be low (less than 50%), which is consistent with a C rating. "ResCap has recorded thirteen consecutive quarterly losses, its liquidity position is tenuous, capital insufficient and franchise impaired," said Moody's Vice President and Senior Credit Officer Craig Emrick. In regards to support, Moody's acknowledges that GMAC's ability to support ResCap has increased through GMAC's receipt of multiple capital injections from the US Treasury, the latest occurring in December 2009. Additionally, GMAC has shown a willingness to support ResCap. GMAC's $2.7 billion capital injection into ResCap in December 2009 was the latest in a long series of actions taken to provide capital and liquidity support. Moody's does believe it is likely GMAC will provide ResCap with sufficient liquidity support to service its 2010 obligations. However, GMAC's long- term support and ownership of ResCap is more questionable due to the lack of strategic fit between the companies. ResCap's senior and junior secured notes have a second and third lien claim behind the GMAC senior secured credit facility on certain assets of ResCap. However, these secured notes are rated the same as ResCap's unsecured debt because Moody's does not believe these notes are likely to experience a significantly enhanced recovery due to the small amount and low quality of eligible collateral. The last rating action on ResCap was November 20, 2008, when Moody's downgraded the company's senior secured, junior secured, and unsecured senior debt to C from Ca. RRI ENERGY: Fitch Affirms Issuer Default Rating at 'B' ------------------------------------------------------ Fitch Ratings has affirmed RRI Energy's ratings and revised its Outlook to Stable from Negative. Additionally, Fitch has revised its Recovery Rating on RRI's senior unsecured debt to 'RR3' from 'RR2'. The ratings actions are: -- Issuer Default Rating affirmed at 'B'; -- Senior secured debt affirmed at 'BB/RR1'; -- Senior unsecured debt revised to 'B+/RR3' from 'B+/RR2'; -- Short-term IDR at 'B'. The revision in Outlook to Stable reflects the company's balance sheet deleveraging and expected improvements in earnings and cash flow due in part to RRI's focus on hedging and securing capacity revenue at its fleet. RRI's ratings reflect the challenging competitive generation environment Fitch expects for 2010 and 2011, tempered by steps taken by RRI to improve its balance sheet and hedge a portion of its commodity exposure. Fitch now considers RRI's liquidity position as strong and its business risk profile has improved with the sale of the retail electricity marketing businesses in 2009. The working capital and collateral financing requirements of the retail business, along with its attendant margin volatility, had previously weighed heavily on the rating. RRI currently conducts its wholesale merchant business in a manner that results in a fairly high level of revenue and cash flow stability and predictability. Capacity payments and a hedging policy limit margin compression due to commodity and power prices, which Fitch expects to be under pressure in 2010 and 2011. RRI has hedged approximately 30% and 29% of expected power generation from its PJM coal plants for 2010 and 2011 (based on megawatt hours), respectively, and hedged an additional 5% and 12% of its expected power generation for 2010 and 2011 with gas puts. RRI's contracted capacity and hedging program should allow the company to protect against a significant downturn in commodity and power prices while retaining margin upside should there be market improvements. Additionally, the affirmation considers the company's liquidity position. As of Sept. 30, 2009, RRI had $1.7 billion in total liquidity consisting of $1.2 billion in cash and roughly $500 million in availability under its revolver. RRI's cash balance will enable it to retire the $400 million in debt associated with Orion Power which matures in 2010. With manageable near-term maturities and projections for decreased capital spending, due to the completion of some of its environmental capital expenditures in 2009, RRI's liquidity should provide an adequate cushion for the company should it fail to meet Fitch and management's projections for free cash flow positive operating results in 2010. Fitch's concerns include the significant leverage and less than robust credit metrics at RRI. The ratings also consider that any upside performance at RRI going forward is going to be strongly correlated to economic recovery and a return of power demand growth. In addition, RRI has significant exposure to potential legislation and there remains a high degree of uncertainty surrounding the possibility of Federal carbon legislation and the form and cost of any possible EPA regulation of greenhouse gas emissions. The affirmed 'RR1' rating reflects the outstanding (91%-100%) recovery prospects expected in a default scenario of the senior secured issuances. The 'RR3' rating reflects good (51%-70%) recovery prospects of the senior unsecured debt, in part due to the structural subordination of this debt, and weaker expected recovery prospects in a hypothetical default scenario. RUBICOR MEDICAL: Auction of Assets Set for on March 1 ----------------------------------------------------- Rubicor Medical, Inc., seeks strategic or financial parties interested in the acquisition of the Company's assets, either in part or in their entirety. An auction will be held on March 1, 2010, at 10:00 a.m. (EST). Qualified Bids are required to be submitted on or before 5:00 p.m. (EST) on February 24, 2010. The winning bid will be submitted for Bankruptcy Court approval on March 4, 2010, at 10:30 a.m. (EST). A $6.3 million stalking horse bid has been selected from the pre- petition secured lenders Hologic, Inc., and Medical Partners, Inc. The purchase will be subject to Bankruptcy Court approval and any higher and better offers that might be received during the solicitation and auction process. A copy of the bidding procedures is available for free at: http://ResearchArchives.com/t/s?5148 For more information, Rubicor's Financial Advisor can be reached at: Ted Gavin, CTP Principal NHB Advisors, Inc. 919 N. Market Street Wilmington, DE 19801 Tel.: (302) 655-8997 x151 (office) (484) 432-3430 (mobile) E-mail: tgavin@nhbteam.com Michael Savage, CTP, CIRA Managing Director NHB Advisors, Inc. Tel.: (617) 378-7158 (mobile) (617) 973-5105 (office) E-mail: msavage@nhbteam.com Redwood City, California-based Rubicor Medical, Inc., was formed in 1998 and has engaged in the development of breast biopsy medical devices based largely on proprietary technology. The Company owns various patents and related intellectual property. The lead investor of the last financing round for the Company, Safeguard Scientific, was unwilling to allow further investment in Rubicor unless senior management was replaced and the Company was restructured according to its terms, thus rendering all sources of capital unavailable to the Company. This led to the shutdown of Rubicor's going-concern operations and termination of all of its employees in July 2008. The Company's founder, Dr. James Vetter, with help from others, continued to successfully solicit new investors resulting in term sheets and bridge loan offerings to recapitalize the Company. On each occasion, Safeguard continued to exercise what it alleged to be its rights under the Shareholder Rights Agreement and block all attempts at funding which led to an involuntary filing under Chapter 7 of the bankruptcy code in July 2009 and a conversion of that case to a proceeding under Chapter 11. Though it is presently inactive on a going-concern basis, the Company has maintained its extensive patent portfolio through funds available to it by way of its senior secured lender, Medical Partners, Inc. SALLY BEAUTY: December Balance Sheet Upside Down by $612 Mil. ------------------------------------------------------------- Sally Beauty Holdings Inc. reported $1.53 billion in total assets and $2.14 billion in total liabilities resulting to a $612 million stockholders' deficit for quarter ended Dec. 31, 2009. The Company's consolidated net sales for the fiscal 2010 first quarter were $704.9 million, an increase of 9.2% from the fiscal 2009 first quarter, and include a positive impact from foreign currency exchange of $9.1 million, or 1.3% of sales. Same store sales in the fiscal 2010 first quarter grew 3.8% from the fiscal 2009 first quarter. GAAP net earnings in the quarter were $26.1 million, growth of 62.7%. GAAP diluted earnings per share were $0.14, growth of 55.6% when compared to earnings per share of $0.09 in the fiscal 2009 first quarter. The fiscal 2010 first quarter adjusted net earnings, a non-GAAP measure, were $24.7 million, an increase of 37.4% over fiscal 2009 first quarter. Adjusted earnings per share were $0.13, growth of 30.0% when compared to $0.10 adjusted earnings per share in the fiscal 2009 first quarter. Adjusted EBITDA increased 7.1% in the fiscal 2010 first quarter to $87.4 million, versus $81.6 million in the fiscal 2009 first quarter. Net cash provided by operating activities in the fiscal 2010 first quarter was $19.8 million and capital expenditures were $12.1 million. Total store count at the end of the fiscal 2010 first quarter was 3,935, an increase of 166 stores or growth of 4.4% over the fiscal 2009 first quarter. "We are pleased to report strong financial results in the fiscal 2010 first quarter -- surpassing $700 million in quarterly revenue for the first time ever," stated Gary Winterhalter, President and Chief Executive Officer. "Year over year growth in our adjusted net earnings was 37% with earnings per share of $0.13; a strong start to the new fiscal year. As always, we are focused on a balanced approach in our use of cash. We plan to continue investing in company growth via acquisitions and organic store openings while reducing our long-term debt." A full-text copy of the Company's financial result is available for free at http://ResearchArchives.com/t/s?513f About Sally Beauty Denton, Texas-based Sally Beauty Holdings, Inc. (NYSE: SBH) -- http://www.sallybeauty.com/-- is an international specialty retailer and distributor of professional beauty supplies with revenues of more than $2.6 billion annually. Through the Sally Beauty Supply and Beauty Systems Group businesses, the Company sells and distributes through over 3,700 stores, including approximately 200 franchised units, throughout the United States, the United Kingdom, Belgium, France, Canada, Puerto Rico, Mexico, Japan, Ireland, Spain and Germany. Sally Beauty Supply stores offer more than 6,000 products for hair, skin, and nails through professional lines such as Clairol, L'Oreal, Wella and Conair, as well as an extensive selection of proprietary merchandise. Beauty Systems Group stores, branded as CosmoProf or Armstrong McCall stores, along with its outside sales consultants, sell up to 9,800 professionally branded products including Paul Mitchell, Wella, Sebastian, Goldwell, and TIGI which are targeted exclusively for professional and salon use and resale to their customers. The Company posted net earnings of $31,489,000 for the three months ended June 30, 2009, from net earnings of $29,359,000 for the same period a year ago. The Company posted net earnings of $72,143,000 for the nine months ended June 30, 2009, from net earnings of $56,098,000 for the same period a year ago. At June 30, 2009, the Company had $1,464,897,000 in total assets and $2,110,057 in total liabilities, resulting in $650,695,000 in stockholders' deficit. SEVERSTAL COLUMBUS: S&P Assigns 'B' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' long-term corporate credit rating to U.S.-based steel company Severstal Columbus LLC and to Severstal Columbus Escrow LLC, both wholly owned, indirectly held subsidiaries of Russia-based steel company OAO Severstal (BB-/Negative/--). The outlook is negative. At the same time, S&P assigned a 'B' issue rating to the proposed $525 million senior secured notes due 2018 to be issued by Severstal Columbus Escrow. S&P also assigned a recovery rating of '3' to these notes, indicating S&P's expectation of meaningful (50%-70%) recovery prospects in the event of a payment default. "The 'B' CCR on Severstal Columbus reflects the company's stand- alone credit profile of 'B-', plus one notch for parental support from OAO Severstal," said Standard & Poor's credit analyst, Alex Herbert. "The SACP reflects S&P's view of Severstal Columbus' "vulnerable" business risk profile and "highly leveraged" financial risk profile. Constraining factors include S&P's view that Severstal Columbus is a small, single-site steel producer with crude steel production capacity of 1.7 million tons, operating in a highly competitive, cyclical, and capital-intensive industry that is experiencing difficult market conditions." Furthermore, Severstal Columbus has only a short trading history, from 2007, and has not yet established a track record of profitability or cash flow generation. With ongoing significant capital expenditures in a second phase of expansion to 3.4 million tons by late 2011, S&P foresee negative free operating cash flow and a highly leveraged capital structure, which could persist for a couple of years. Supportive factors include S&P's view that Severstal Columbus has built a high-quality, efficient asset base in recent years. It also has flexible operations as a mini mill, together with rolling capacity, a nonunionized workforce, and a good safety record. In S&P's view, there is the possibility of a downgrade, if, for example, the SACP on Severstal Columbus were to weaken due to a sustained period of weak operating performance, or there were delays or difficulties in completing the planned phase 2 expansion of the plant. Also, while S&P anticipate that conditions in the steel market will gradually improve, the global economy has not yet established a sustainable path to growth, which leads to S&P's cautious view of future steel volumes and prices. Furthermore, the negative outlook reflects that on parent company OAO Severstal. Downward pressure on the ratings on Severstal Columbus would also build if S&P felt that parental support from OAO Severstal was weaker than S&P currently anticipates. Ratings stability for Severstal Columbus could be established if parental support were to strengthen, although this could be offset by a weaker SACP. In addition, stability could be established if Severstal Columbus were able to successfully complete its phase 2 expansion, and demonstrate a clear and sustainable improvement in its credit metrics. SIX FLAGS: To Close Kentucky Kingdom Park in Louisville ------------------------------------------------------- Six Flags announced February 4 that as it nears the scheduled end of its restructuring process, it has decided to reject its lease with the Kentucky State Fair Board relating to the Kentucky Kingdom park. In recent weeks, Six Flags had proposed a new lease arrangement to the fair board that would have enhanced the viability and future of the park. Unfortunately, those proposals were not accepted and the park will cease operations and the company will move expeditiously to re-locate employees and several of the more than 40 rides and attractions to one of its 13 other markets. "We are deeply disappointed to be leaving such a great fan base in the greater metropolitan area of Louisville and we are grateful to the thousands of employees at Kentucky Kingdom and the millions of guests for their dedication, support and loyalty over the years," said Mark Shapiro, Six Flags President and CEO. "This action relates solely to Kentucky Kingdom," Shapiro continued. "The substantial lease payment has been a significant hurdle for this park in recent years. Our other parks, which reside largely on company-owned land, will be completely unaffected and will open as scheduled for the full 2010 season." About Six Flags Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SLM CORPORATION: Fitch Affirms Preferred Stock Rating at 'BB' ------------------------------------------------------------- Fitch Ratings has revised the Rating Outlook for SLM Corporation to Stable from Negative. Fitch also affirms SLM's ratings: SLM Corporation: -- Long-term Issuer Default Rating at 'BBB-'; -- Short-term IDR at 'F3'; -- Senior Debt at 'BBB-'; -- Short-term debt at 'F3'; and -- Preferred Stock at 'BB'. Approximately $29.3 billion of debt and preferred stock is affected by these actions. The Outlook revision reflects SLM's ability to refinance and extend the maturity of its ABCP facility in January 2010. The new facility will provide $10 billion of borrowing capacity in the first year, $5 billion in the second year and $2 billion in the third year, with a final maturity date of Jan. 11, 2013. The borrowing cost is expected to be commercial paper plus .5% in the first year, which compares to a borrowing cost of commercial paper plus 1.3% on the prior 364-day facility. Additionally, SLM entered into a lending agreement with the Federal Home Loan Bank of Des Moines through its subsidiary, HICA Education Loan Corporation, whereby it can borrow using FFELP loans as collateral. Fitch views the additional borrowing capacity and liquidity positively. The ratings affirmation reflects SLM's position as one of the largest originators and servicers of government-guaranteed student loans, its low consolidated credit risk, stable liquidity profile, and adequate risk-adjusted capitalization. Fitch believes SLM will continue to transition to a fee-for-service business model with a bank subsidiary that originates higher-risk private education loans. SLM was one of four servicers selected to participate in the Department of Education's servicing contract. At Dec. 31, 2009, the company was servicing approximately $19 billion of loans under the contract, and earned $9 million of related servicing revenue in the fourth quarter, equating to a yield of about 0.19%. Fitch believes the company will obtain additional servicing volume in 2010, and will, at a minimum, retain at least a 25% market share. Fitch's current ratings reflect the expectation that the FFELP product will go away in 2010 as proposed in the Student Aid and Fiscal Responsibility Act. Should FFELP be retained, the benefits for SLM include an additional fee stream from the origination of FFELP loans and a potential boost to its market share on the servicing side, as SLM, which has the most significant school channel relationships, would likely be able to retain servicing on all loans it originated. Fitch believes the retention of FFELP would serve to further solidify the company's ratings at their current level. SLM's current ratings reflect Fitch's expectation that unsecured debt outstanding will be repaid as it comes due with available liquidity and cash flows from the legacy business model. Fitch believes portfolio cash flows are sizeable and relatively predictable and include ABS trust servicing cash flows, ABS residual cash flows, which are backed largely by lower-risk FFELP loan collateral, loan principal repayments, and other operating cash flows. At Dec. 31, 2009, non-bank liquidity included about $5.4 billion of cash and unrestricted investments and unencumbered FFELP loans amounted to $2.1 billion. The most meaningful unsecured debt maturities occur in 2010, 2011, and 2014, at $5.2 billion, $6.4 billion, and $5.1 billion, respectively. Although 2010 and 2011 maturities were reduced by the January tender for $812 million in unsecured debt. Negative rating momentum could result from free cash flow generation below Fitch's expectations, which impairs the company's ability to meet its debt service obligations, additional deterioration in private education loan asset quality metrics, and/or legislative change which removes the private sector from the servicing and collection of government guaranteed student loans. SPHERIS INC: Nonpayment of Interest Cues Moody's Rating Cut to 'D' ------------------------------------------------------------------ Moody's Investors Service has downgraded Spheris Inc.'s probability of default rating to D from B3 and the corporate family rating to Ca from B3. The downgrade reflects the company's failure to pay its December 15, 2009 interest payment within the 30-day grace period allowed by the senior subordinated notes. At the same time, Moody's lowered the ratings on the senior subordinated notes to C from Caa1 reflecting Moody's estimate of a limited recovery. On February 3, 2010, Spheris filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. Subsequent to the actions, all ratings will be withdrawn. Moody's has withdrawn this rating because the issuer has entered bankruptcy. Please refer to Moody's Withdrawal Policy on Moodys.com. These ratings were downgraded: -- Corporate Family Rating to Ca from B3; -- Probability of Default Rating to D from B3; and -- $125 million Senior Subordinated Notes due 2012 to C (LGD5/86%) from Caa1 (LGD5/75%). The last rating action on Spheris was on September 2, 2009, when the rating outlook was changed to negative from stable. Headquartered in Franklin, Tennessee, Spheris Inc. is a leading outsource provider of clinical documentation technology and services to health systems, hospitals and group medical practices throughout the U.S. For the twelve months ended June 30, 2009, the company generated approximately $170 million in revenues. SPHERIS INC: Has Interim Permission for $7.5 Million Loan --------------------------------------------------------- Bill Rochelle at Bloomberg News reports that Spheris Inc. was given interim authority to take down a $7.5 million loan. At a final hearing on Feb. 19, Spheris will be looking for $15 million in borrowing power. Spheris Inc., has entered into an agreement under which MedQuist Inc. and CBay Inc., portfolio companies of CBaySystems Holdings Ltd., have agreed to purchase substantially all of Spheris' assets pursuant to a transaction that is to be implemented under Section 363 of the United States Bankruptcy Code. Ableco, L.L.C., as collateral agent, and Cratos Capital Management LLC, as administrative agent, are leading the lenders providing up to $15 million in Debtor-in-Possession financing to the Debtor. The financing facility will be used to fund ongoing operations and repay outstanding revolving credit loans under its pre-petition credit facility as of the filing date. About Spheris Based in Franklin, Tennessee, Spheris Inc. -- http://www.spheris.com/-- is a global provider of clinical documentation technology and services. Spheris Inc., along with five affiliates, filed for Chapter 11 on Feb. 3, 2010 (Bankr. D. Del. Case No. 10-10352). Matthew Barry Lunn, Esq., and Ryan M. Bartley, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their Chapter 11 effort. The petition says that assets range from $50,000,001 to $100,000,000 while debts range from $100,000,001 to $500,000,000. SPRINGBOARD GROUP: Moody's Upgrades Corp. Family Rating to 'B1' --------------------------------------------------------------- Moody's Investors Service upgraded Springboard Group S.a.r.l's corporate family rating to B1 from B2 due to the better than projected operating performance over the past six months, strong liquidity position, and rapid expected deleveraging even after factoring in the roughly $100mm in additional senior debt the company incurred at the end of 2009 to help pay for the settlement of the litigation among the private equity groups that acquired the company and Skype's founders. As part of the rating action, Moody's affirmed the B1 (LGD3, 34%) senior secured instrument ratings on the $30 million senior secured revolving credit facility and the upsized $800 million senior secured term loan issued through Springboard Finance LLC, the primary US operating subsidiary of Skype. Moody's notes that of the term loan, up to $400 million equivalent will be available in a Euro tranche to provide a natural hedge to the company's largely Euro-denominated receivables. The proceeds of the increase in the term loan and cash on hand will be used to repay about $129 million outstanding under the eBay PIK seller note. In addition, Moody's affirmed the B2 probability of default rating reflecting the new debt capital structure (consisting primarily of first lien senior secured bank facilities). The outlook remains stable. Rating Actions: Issuer: Springboard Group S.a.r.l * Corporate Family Rating -- Upgraded to B1 from B2 * Probability of Default Rating -- Affirmed, B2 Issuer: Springboard Finance LLC * Senior Secured Revolving Credit Facility -- Changed to B1, LGD3 -34% from B1, LGD3 -43% * Senior Secured Term Loan -- Changed to B1, LGD3 -34% from B1, LGD3 -43% Skype's B1 CFR continues to reflect the significant industry and technology risks inherent to the rapidly evolving field of peer- to-peer internet communications and the wider deployment of Voice- over-Internet-Protocol technology across the world, in addition to competitive threats from incumbent carriers, other technology developers, social networking sites, and regulatory bodies. These risks are significant and likely to weigh on the rating over the medium-to-long term, particularly given the limited product diversity of the company's revenue stream. On the other hand, near term prospects are more favorable as the company capitalizes on its significant global user base and the quality of its product. Moody's expects Skype's adjusted Debt/EBITDA leverage (including the eBay seller financing) at year end 2009 to be about 4.7x, which is a material deleveraging from the total adjusted level previously anticipated at closing of about 5.2x, based on 9/30/09 EBITDA, and including $125 million in seller financing from eBay. The rapid EBITDA growth, and more importantly high cash conversion and favorable working capital trends should enable the company to further delever in the near term and provide credit support to the lenders. In addition, the rating is supported by the significant equity cushion provided by the sponsors, the restrictions on additional debt and distributions imposed by the current credit facility, the collateral package and the company's success in building over a relatively short time period, a growing and profitable business with strong cash generating capabilities. Skype's revenues and EBITDA have grown substantially over the past several years in conjunction with the company's registered user base which is estimated to be around 450 million. While this number is substantial, the company has only monetized a relatively small proportion of the user base, by generating revenues primarily from its international long distance voice service offering, which allows paying users to participate in calls between their computers and traditional telephone lines. Although this service has been successful to date, its longevity is threatened by the ongoing migration of land line users to internet-based phones (Skype does not charge users for computer to computer calls) as well as the possibility of future regulatory action in certain jurisdictions, as these calls effectively circumvent tariff-based international long distance calls, which can be an important revenue source for emerging market telecom operators and governments. Consequently, Moody's believes Skype's long-term success will ultimately be dependent on the company's ability to further develop new revenue streams, including mobile, advertising and enterprise sales that harness the powerful network effects of its large user community. The rating is prospective in nature under the expectation that most of the generated cash will be devoted to debt repayment via more rapid amortization than is customary with institutional loan facilities and the excess cash flow recapture, and the stable outlook takes into account Moody's view that the company will achieve adjusted Debt/EBITDA of 3.5x in 2011. Moody's most recent rating action for Skype was on November 10, 2009, at which time the rating agency affirmed the company's ratings following the news that it settled the litigation among the private equity groups that acquired the company and Skype's founders. Headquartered in Luxembourg, Skype is a technology company centered around P2P communications and VoIP software tools. SPURLOCK LOGGING: Updated Case Summary & Creditors List ------------------------------------------------------- Debtor: Spurlock Logging, Inc. 6395 County Road 4260 P.O. Box 795 Woodville, TX 75979 Bankruptcy Case No.: 10-90008 Chapter 11 Petition Date: January 12, 2010 Court: United States Bankruptcy Court Eastern District of Texas (Lufkin) Debtor's Counsel: Frank J. Maida, Esq. Maida Law Firm 4320 Calder Avenue Beaumont, TX 77706-4631 Tel: (409) 898-8200 Fax: (409) 898-8400 Email: maidalawfirm@gt.rr.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 18 largest unsecured creditors is available for free at: http://bankrupt.com/misc/txeb10-90008.pdf The petition was signed by Charles F. Spurlock, president of the company. STALLION OILFIELD: S&P Assigns 'CCC+' Corporate Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' corporate credit rating to Stallion Oilfield Holdings Inc. and placed the rating on CreditWatch with positive implications. In addition, S&P is assigning a 'B-' issue-level rating with a '4' recovery rating to the proposed $225 million senior secured notes due 2015, indicating expectations of average (30% to 50%) recovery in the event of a payment default, pending the successful close of this notes offering and new revolving credit facility. Stallion Oilfield Holdings Inc. plans to use the proceeds from the notes offering to repay its senior secured credit facility. Stallion emerged from bankruptcy on Feb. 2, 2010, and improved its capital structure as a result of restructuring its balance sheet. In October 2009, Stallion reached an agreement with lenders, debtholders, and equity holders to reduce its unsecured debt by approximately $515 million, along with $26 million of accrued interest. The $250 million unsecured bridge loan and the $265 million 9.75% unsecured senior notes have been converted on a pro rata basis for 98% of the common equity of Stallion, leaving approximately $213 million of outstanding senior secured debt. The rating on Stallion reflects high debt leverage, limited liquidity, participation in the highly cyclical North American oilfield services market, and a short operating track record. The rating also reflects the company's low annual maintenance capital spending requirements, moderate geographic mix, and an experienced management team. Stallion Oilfield Holdings Inc.'s operating subsidiary is Stallion Oilfield Services Ltd. (CCC+/Developing/--). The Houston-based operating subsidiary provides wellsite support services (workforce accommodation units, surface equipment rental, communications services, and solids control), and production and logistics services (site construction and rig relocation). An upgrade of the corporate credit rating will be predicated on a successful completion of the notes offering and revolving credit facility. If the notes offering is successful, the company will use proceeds to refinance its revolving credit facility and term loan (maturing in 2011 and 2013, respectively). A successful offering will improve the company's liquidity with a new $40 million revolving credit facility. S&P expects to resolve the CreditWatch and upgrade the corporate credit rating to 'B-' upon the closing of the revolver and notes offering. If it becomes apparent that Stallion will not be able to successfully refinance its senior secured credit facility or obtain a new revolver, S&P will likely affirm the 'CCC+' corporate credit rating. STANDARD PACIFIC: Approves Compensation Arrangement With Officers ----------------------------------------------------------------- The Compensation Committee of the Board of Directors of Standard Pacific Corp. has: * approved a bonus pool and individual bonuses to be paid to the Company's employees, including the "named executive officers" for 2009. Mr. Campbell, the Company's Chief Executive Officer and President, received a bonus of $1,758,000 and Mr. Stowell, the Company's Chief Operating Officer, received a bonus of $1,235,000. The bonuses payable to Mr. Campbell and Mr. Stowell will be paid 35% in cash and 65% in Company common stock. The Company common stock will be fully vested upon issuance, but will be subject to a restriction on transfer that will lapse with respect to one-third of the shares on each of the first three anniversaries of the issue date. * set 2010 base salaries. The base salaries of Mr. Campbell and Mr. Stowell were unchanged for 2010. In addition, the Committee approved the payment to Mr. Campbell of an additional $208,000 as a base salary catch up for 2009 to compensate Mr. Campbell for the difference between the salary he was receiving at MatlinPatterson while serving as our Chief Executive Officer and the amount he would have received had we paid him his $850,000 base salary for the entirety of 2009. * established incentive compensation arrangements for each of Mr. Campbell and Mr. Stowell for 2010. If the Committee establishes a bonus pool for the Company's employees for the year ending December 31, 2010, Mr. Campbell will be entitled to receive 1.85% of the Adjusted EBITDA of the Company and Mr. Stowell will be entitled to receive 1.3% of the Adjusted EBITDA of the Company. A full-text copy of Ken Campbell's 2010 Incentive Compensation Arrangement is available for free at http://ResearchArchives.com/t/s?513d A full-text copy of Scott Stowell's 2010 Incentive Compensation Arrangement is available for free at http://ResearchArchives.com/t/s?513e Based in Irvine, California, Standard Pacific Corp. (NYSE: SPF) -- http://www.standardpacifichomes.com/-- one of the nation's largest homebuilders, has built more than 108,000 homes during its 43-year history. The Company constructs homes within a wide range of price and size targeting a broad range of homebuyers. Standard Pacific operates in many of the largest housing markets in the country with operations in major metropolitan areas in California, Florida, Arizona, the Carolinas, Texas, Colorado and Nevada. The Company provides mortgage financing and title services to its homebuyers through its subsidiaries and joint ventures, Standard Pacific Mortgage, Inc. and SPH Title. As of September 30, 2009, the Company had $2.068 billion in total assets against $1.717 billion in total liabilities. * * * Standard Pacific Corp. carries 'Caa1' long term corporate family and probability of default ratings from Moody's. It has a 'CCC+' issuer credit ratings from Standard & Poor's. It carries a 'CCC' long term issuer default rating from Fitch. STATE OF CALIFORNIA: CRG Tapped on $100MM Debt Restructuring ------------------------------------------------------------ Capital Restructure Group reports it has been retained as the lead strategist to assist in the restructuring of $100 million in debt on a $750 million real estate project on California's Central Coast. Capital Restructure Group provides consulting services to real estate investors and developers both in and out of chapter 11 whose real estate debt ranges in size from $1 million to $200 million. On the Net: http://www.capitalrestructuregroup.com/ TACO DEL MAR: Gets Interim Okay to Use Cash Collateral ------------------------------------------------------ Taco Del Mar Franchising Corp. sought and obtained permission from the Hon. Thomas T. Glover of the U.S. Bankruptcy Court for the Western District of Washington to use, on an interim basis, the cash collateral of Banner Bank and a prior security interest over Canadian royalties and franchise fees in favor of Regge Egger. The Debtor has a $450,000 debt outstanding to Banner Bank; and $100,000 secured debt outstanding to Regge Egger, secured, with an additional of $50,000 unsecured debt. George S. Treperinas, Esq., the attorney for the Debtor, explained that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. In exchange for using the cash collateral, the Debtor proposed to grant Banner Bank a monthly payment of up to $5,000, as reflected in the budget, a copy of which is available for free at: http://bankrupt.com/misc/TACO_DELMAR_budget.pdf The Debtor proposed that the secured creditors be granted security interests and liens in and to: (a) all proceeds from the disposition of all or any portion of the prepetition collateral, (b) all of the Debtor's property in its estate of the same kind, type and nature as the prepetition collateral that is acquired after the Petition Date, and (c) all proceeds of the foregoing. If and to the extent the adequate protection of the interests of secured creditors in the prepetition collateral granted to TDM proves insufficient, secured creditors will be entitled to a claim in the amount of any such insufficiency. The postpetition security interests will be senior in rank, priority and right of payment to all other liens on the Debtor's property in its estate of the same kind, type and nature as the Prepetition Collateral that is acquired after the Petition Date, and all proceeds of the foregoing. Banner Bank objected to the Debtor's request for use of cash collateral, asking the Court that that the request be conditioned on monthly payments to Banner Bank of $15,660 per month. The Debtor claimed that there was some question as to whether Banner Bank holds a security interest in the "royalty" payments due from the franchisees. According to Banner Bank, the parties have since agreed that the security interest extends to those fees. Banner Bank's security agreement provides an interest in all inventory, accounts, equipment, franchise fees, furniture and fixtures. Banner Bank wants that the use of cash collateral be conditioned upon payments to Banner Bank in an amount no less than the ordinary monthly payment as had been made prior to maturity. The Charles and Emma Frye Free Public Art Museum also objected to the Debtor's request to use cash collateral, as the cash collateral budget unilaterally reduces the lease payments on the Debtor's office space. The Debtor leases 5,294 square feet of office space from the Frye Art Museum in the Frye Commerce Center. The monthly lease payment is $7,305.72, but the Debtor's proposed budget provides for payment of only $1,500. The Court has set a final hearing for March 1, 2010, at 9:30 a.m. on the Debtor's request to use cash collateral. Banner Bank is represented by Hacker & Willig, Inc., P.S. Frye Art Museum is represented by Riddell Williams P.S. Founded in Seattle, Washington, in 1992 by brothers James and John Schmidt, Taco Del Mar is a quick-service casual restaurant chain inspired by southern Baja, Mexico, and coastal beach shacks known for serving some of the tastiest burritos and tacos. Today, Taco Del Mar operates in more than 225 locations throughout the U.S., Canada and Guam. Taco Del Mar Franchising Corp. filed for Chapter 11 bankruptcy protection on January 22, 2010 (Bankr. W.D. Wash. Case No. 10- 10528). Andrew J Liese, Esq., and George S. Treperinas, Esq., at Karr Tuttle Campbell, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. The Company's affiliate, Conrad & Barry Investments Inc., filed a separate Chapter 11 petition. TACO DEL MAR: Section 341(a) Meeting Scheduled for March 3 ---------------------------------------------------------- The U.S. Trustee for Region 18 will convene a meeting of creditors in Taco Del Mar Franchising Corp.'s Chapter 11 case on March 3, 2010, at 9:00 a.m. The meeting will be held at US Courthouse, Room 4107, 700 Stewart St, Seattle, WA 98101. 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. Founded in Seattle, Washington, in 1992 by brothers James and John Schmidt, Taco Del Mar is a quick-service casual restaurant chain inspired by southern Baja, Mexico, and coastal beach shacks known for serving some of the tastiest burritos and tacos. Today, Taco Del Mar operates in more than 225 locations throughout the U.S., Canada and Guam. Taco Del Mar Franchising Corp. filed for Chapter 11 bankruptcy protection on January 22, 2010 (Bankr. W.D. Wash. Case No. 10- 10528). Andrew J Liese, Esq., and George S. Treperinas, Esq., at Karr Tuttle Campbell, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. The Company's affiliate, Conrad & Barry Investments Inc., filed a separate Chapter 11 petition. TACO DEL MAR: U.S. Trustee Appoints 6 Members to Creditors Panel ---------------------------------------------------------------- Robert D. Miller Jr., the acting U.S. Trustee for Region 18, appointed six members to the Official Committee of Unsecured Creditors in Taco Del Mar Franchising Corp.'s Chapter 11 cases. The Committee members include: 1) Big Ads, Inc., dba R/West Attn: Sean Blixseth, President 1430 SE 3rd Avenue, Third Floor Portland, OR 97214 Tel.: (503) 223-5443 Fax: (503) 223-5805 E-mail: seanb@r-west.com 2) The Coca-Cola Company Attn: William Kaye c/o JLL Consultants Inc. 31 Rose Lane East Rockaway, NY 11518 Tel.: (516) 374-3705 Fax: (516) 569-6531 E-mail: billkaye@jllconsultants.com 3) BullTrend Investments LLC Attn: Brad Loyd, General Manager 238 Cattail Bay Windsor, CO 80550 Tel.: (970) 402-8092 Fax: (866) 853-3703 E-mail: brad@bulltrend.com 4) Charles and Emma Frye Free Public Art Museum Attn: Alan Cornell, Sr. Vice President Nitze-Stagen 2401 Utah Avenue South, #305 Seattle, WA 98134 Tel.: (206) 467-0420 Fax: (206) 467-0423 E-mail: alanc@nsco.com 5) James Schmidt 2615 - 28th Avenue West Seattle, WA 98199 Tel.: (206) 658-5671 E-mail: jamesconrad2010@gmail.com 6) RNM Lakeville, LP Attn: Paul Elmore, President c/o RNM Properties 135 Main Street, Suite 1140 San Francisco, CA 94105 Tel.: (415) 356-2000 Fax: (415) 543-2917 E-mail: pelmore@rnmproperties.com Founded in Seattle, Washington, in 1992 by brothers James and John Schmidt, Taco Del Mar is a quick-service casual restaurant chain inspired by southern Baja, Mexico, and coastal beach shacks known for serving some of the tastiest burritos and tacos. Today, Taco Del Mar operates in more than 225 locations throughout the U.S., Canada and Guam. Taco Del Mar Franchising Corp. filed for Chapter 11 bankruptcy protection on January 22, 2010 (Bankr. W.D. Wash. Case No. 10- 10528). Andrew J Liese, Esq., and George S. Treperinas, Esq., at Karr Tuttle Campbell, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. The Company's affiliate, Conrad & Barry Investments Inc., filed a separate Chapter 11 petition. TH PROPERTIES: Three Companies Bid for Upper Macungie Property -------------------------------------------------------------- Kelly Martin at The Morning Call reports that three entities submitted bids for TH Properties Whitfield Estates development in Upper Macungie. The Company said it would not divulge the names, saying the bidding process is confidential. An auction will be held in Wednesday in Philadelphia, Ms. Martin says. Philadelphia-based T.H. Properties, L.P., has 12 working developments in Pennsylvania and New Jersey. Timothy Hendricks and his brother Todd started the firm in 1992. T.H. Properties and its affiliates filed for Chapter 11 bankruptcy protection on April 30, 2009 (Bankr. E.D. Pa. Case No. 09-13201). Barry E. Bressler, Esq., at Schnader, Harrison, Segal & Lewis, LLP, and Natalie D. Ramsey, Esq., at Montgomery McCracken Walker and Rhoads LLP represent the Debtors in their restructuring efforts. The Debtors listed assets between $100 million and $500,000,000, and debts between $10 million and $50 million. THORNBURG MORTGAGE: Credit Suisse Buying Servicing Business ----------------------------------------------------------- Joel I. Sher, the Chapter 11 trustee for TMST Inc., formerly Thornburg Mortgage Inc., decided that Portfolio Servicing Inc. made the best offer to buy the mortgage-servicing business under procedures approved by the bankruptcy judge in December. According to Bill Rochelle at Bloomberg News, Select Portfolio, an affiliate of Credit Suisse Group AG, will pay 0.77% of the unpaid principal balances of the mortgages loans, plus receivables owing on account of servicing advances. The sale is expected to close by Feb. 26. Thornburg was servicing 29 securitizations containing mortgages with outstanding balances aggregating $11.05 billion when it applied to the judge for authority to conduct the sale. A hearing for approval of the sale will be held Feb. 10. The trustee was appointed after the U.S. Trustee alleged that the top two officers formed a new company to carry on Thornburg's business plan and used Thornburg employees to work on their new venture. About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- was a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originated, acquired, and retained investments in adjustable and variable rate mortgage assets. Its ARM assets comprised of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage, Inc., and its four affiliates filed for Chapter 11 on May 1 (Bankr. D. Md. Lead Case No. 09-17787). Thornburg has changed its name to TMST, Inc. Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, has been tapped as counsel. Orrick, Herrington & Sutcliffe LLP is employed as special counsel. Jim Murray, and David Hilty, at Houlihan Lokey Howard & Zukin Capital, Inc., have been tapped as investment banker and financial advisor. Protiviti Inc. has also been engaged for financial advisory services. KPMG LLP is the tax consultant. Epiq Systems, Inc., is claims and noticing agent. In its bankruptcy petition, Thornburg listed total assets of $24,400,000,000 and total debts of $24,700,000,000, as of January 31, 2009. On October 28, 2009, the Court approved the appointment of Joel I. Sher as the Chapter 11 Trustee for the Company, TMST Acquisition Subsidiary, Inc., TMST Home Loans, Inc. and TMST Hedging Strategies, Inc. TOUSA INC: 424 Additional Creditors Face Avoidance Suits -------------------------------------------------------- In separate filings, Tousa Inc. and its units initiated adversary complaints against another 424 creditors to avoid and recover preferential transfers of property for the period from January 26 to 29, 2010. As previously reported, the Debtors filed avoidance actions against 1,054 creditors for the period from January 19 to 22, 2010. The Debtors' deadline for the commencement of these types of avoidance action was through the end of January 2010. Under the Additional Avoidance Actions, the Debtors continue to assert that they transferred property to the 424 Creditors within 90 days before the Petition Date or the "Preference Period." On the Debtors' behalf, Kristopher Aungst, Esq., at Berger Singerman, P.A., in Miami, Florida, emphasizes that: -- each of the 424 Creditors is a "creditor" of the Debtors within the meaning of the term under Section 101(10)(A) of the Bankruptcy Code at the time of the Transfers, and that the Creditors had a right to payment on account of the obligations owed to the Creditors by the Debtors at the time of the Transfers; -- the Transfers were to or for the benefit of the Creditors under Section 547(b)(1) of the Bankruptcy Code because the Transfers either reduced or fully satisfied a debt then owed by the Debtors to the Creditors; and -- the Transfers constitute a transfer of an interest of the property of the Debtors. Mr. Aungst, however, contends that the Debtors were insolvent at all times during the 90 days before the Petition Date and as a result of the Transfers, the Creditors received more than they would have received if: (i) the Debtors' Chapter 11 cases were proceedings under Chapter 7 of the Bankruptcy Code; (ii) the Transfers had not been made; and (iii) the Creditors received payment of their claims under the provisions of the Bankruptcy Code. In this light, the Transfers are avoidable pursuant to Section 547(b), Mr. Aungst asserts. The Creditors, he adds, were the initial transferees of the Transfers or the immediate or mediate transferees of the initial transferees or the persons for whose benefit the Transfers were made. The Debtors inform the Court that they have sent a letter to each Creditor demanding the return of the preferential payments made. Accordingly, by virtue of the Adversary Complaints, the Debtors ask Judge Olson to: (a) enter a judgment against the 424 Additional Creditors; (b) avoid the Transfers pursuant to Section 547, and to the extent they are avoided, grant recovery of those transfers pursuant to Section 550 of the Bankruptcy Code; (c) award prejudgment interest at the maximum legal rate running from the date of each Transfer to the date of judgment in the Adversary Cases; and (d) order that, in accordance with Section 502(d) and (j) of the Bankruptcy Code, any claims held by the 424 Creditors or their assignees be disallowed. Additional Avoidance Actions Categorized Pursuant to the Court-sanctioned Adversary Proceedings Protocol Order, the 424 Additional Adversary Complaints initiated by the Debtors are classified under Adversary Proceeding Tracks I, II, III and IV depending on the transfer amounts to be recovered. Out of the 424 Additional Creditors Defendants, the Debtors commenced against 173 Creditors adversary complaints classified under Adversary Proceeding Track I. Amounts to be recovered by the Debtors under the Adversary Proceeding Track I ranged from $25,000 to $50,000. Among the Creditors sued by the Debtors for Adversary Proceeding Track I are: * CIT Technology Financial Services, Inc. * Network Communications, Inc. * HSBC Bank USA * CT Corporation System * CIT Group-Equipment Financing, Inc. The Additional Adversary Complaints against 71 Creditors are classified under Adversary Proceeding Track II. Amounts to be recovered by the Debtors under the Adversary Proceedings Track II range from $50,001 to $250,000. Among the Creditors sued by the Debtors under the Adversary Proceedings Track II are: * Waste Management of Tenn., Inc. * De Lage Landen Financial Services, Inc. * G.E. Enterprise, Inc. * William Scotsman, Inc. * Las Vegas Review-Journal The Debtors' Adversary Complaints against 107 Creditors are classified under Adversary Proceeding Track III. Amounts to be recovered by the Debtors under the Adversary Proceedings Track III range from $50,001 to $250,000. Among the Creditors to be sued by the Debtors under the Adversary Proceedings Track III are: * General Electric - Nashville * GBR Associates, Inc. * American Express * GE Appliances - San Antonio * Clear Channel Broadcasting The Debtors' Adversary Complaints against 73 Creditors are categorized under Adversary Proceeding Track IV. Amounts to be recovered by the Debtors under Adversary Proceeding Track IV total more than $250,000. Among the Creditors sued under the Adversary Proceeding Track IV category and the corresponding amounts the Debtors seek to recover are: Creditor Recovery Sought -------- --------------- Stock Building Supply, Inc. $3,186,469 Bison Brothers Construction, Inc. 1,357,861 The Miami Herald Publishing Co. 165,040 Residential Design Systems, Inc. 712,816 Waterproofing Systems 271,625 Chas. Roberts Air Conditioning, Inc. 23,705 Del-Air Heating & Air 23,056 84 Lumber Company 22,121 Desert Vista, Inc. 18,963 Earth & Sun Adobe, Inc. 10,000 The Debtors also filed a complaint against Bison Brothers and Universal Forest Products Western Division, Inc., seeking to recover $990,020. In a separate complaint, the Debtors seek to recover from Bison Brothers and Alpine Lumber Co., $1,625,890. The Debtors commenced six adversary proceedings against Stock Building, seeking to recover $3,186,469 in the aggregate. Earth & Sun Adobe, Chas. Roberts, and Desert Vista are among the Debtors' top 49 largest unsecured creditors. About Tousa Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. TOUSA INC: Committee's Lawsuit vs. Falcone Entities --------------------------------------------------- The Official Committee of Unsecured Creditors in Tousa Inc.'s cases commenced an adversary complaint on January 26, 2010, against: (a) Falcone/TEP Holdings, LLC; TEP Holdings, Inc. formerly known as Transeastern Properties, Inc.; Arthur J. and Edward W. Falcone and 69 other entities who were parties to a "TOUSA/Falcone Settlement;" and (b) Kendall Land Development, LLC and its founder Jose Boschetti and Martin Caparros, Jr; Boschetti Capital Partners, LLC; Prestige Builders Capital Investments, LLC; Sylvia Boschetti; Patricia Caparros, who were parties to a "TOUSA/Kendall Settlement." A list of the parties to the TOUSA/Falcone Settlement is available for free at: http://bankrupt.com/misc/Tousa_AddlFalconeEntities.pdf Essentially, the Committee seeks to recover more than $54 million, which the Falcone Entities and the Kendall Entities allegedly received in the midst of the crashing credit and housing market crisis in July 2007, as part of a global settlement of litigation that arose out of a disastrous business venture among certain of the Debtors and the Falcone Entities and Kendall Entities. The Transeastern Joint Venture Jessica S. Budoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, relates that Debtor TOUSA Homes LP and Falcone/TEP Holdings, LLC formerly known as Falcone/Ritchie LLC, formed TE/TOUSA LLC to acquire substantially all of the homebuilding assets of Transeastern Properties, Inc. in March 2005. The TE/TOUSA entity became known as the "Transeastern Joint Venture." By August 2005, the Transeastern JV completed its acquisition of the Transeastern Assets for more than $800 million. To finance the acquisition, the Transaction JV created four special purpose subsidiaries -- (1) EH/Transeastern LLC; (2) TE/TOUSA Senior, LLC; (3) TE/TOUSA Mezzanine LLC, and (4) TE/TOUSA Mezzanine Two LLC -- for the purpose of obtaining financing for the acquisition transaction. Accordingly, three of the four Transeastern JV Subsidiaries entered into credit agreements with separate group of lenders, each dated August 1, 2005, totaling $675 million. Moreover, TOUSA, Inc. and TOUSA Homes LP provided a $20 million subordinated bridge loan and TOUSA and the Falcone Entities contributed $165 million in equity. As a condition precedent to the Transeastern Credit Agreements, TOUSA Inc. and TOUSA Homes LP executed three unsecured completion guaranties and three unsecured executed carve-out guaranties for each of the credit agreements in favor of the Transeastern Lenders. However, by October 2006, the Transeastern JV was put on notice by certain Falcone Entities on alleged payment defaults on four option agreements. The Transeastern JV quickly floundered and by November 2006, certain lenders sued TOUSA Inc. and TOUSA Homes LP on account of the $675 million Transeastern Debt, Ms. Budoff relates. Specifically, in October and November 2006, the TOUSA Guarantors received demand letters from Deutsche Bank Trust Company Americas, requiring payment under the TOUSA Guaranties. The TOUSA Guarantors countered this move by filing an action in a Florida state court in November 2006 against Deutsche Bank, seeking a declaration that their have not been triggered. Around the same time, Deutsche Bank also filed a lawsuit in New York against the TOUSA Guarantors, asserting claims allegedly arising out of its rights under the TOUSA Guaranties. Deutsche Bank was the administrative agent under the Transeastern Credit Agreements through March 13, 2007. Deutsche Bank Securities acted as financial advisor to certain of the TOUSA Guarantors and Transeastern JV Subsidiaries pursuant to a letter agreement. In March 2007, Deutsche Bank Securities filed an action in New York for claims allegedly arising out of the DB Letter Agreement. The Transeastern Global Settlement In light of the various lawsuits and defaults, the Debtors consummated a multi-tiered "global settlement" among TOUSA Inc., TOUSA Homes LP, the Falcone Entities, and the Transeastern Lenders. Ms. Budoff tells the Court that as part of the Transeastern Settlement, TOUSA Inc.; TOUSA Homes LP; TOUSA, LLC; TOI, LLC; the Transeastern JV; and the Falcone Entities entered into a Settlement and Release Agreement on May 30, 2007: (x) by which certain of the Falcone Entities received over $50 million in exchange for a portion of their assets, and additional payments to cover certain costs related to the Transeastern JV; and (y) by virtue of certain release and obligation transfers, the Falcone Entities were released and indemnified from any further obligations arising out of the Transeastern JV, including their guaranty obligations to the Transeastern Lenders, and were promised that the TOUSA Entities would continue paying certain costs in connection with winding down projects post-settlement. Similarly, Ms. Budoff continues, pursuant to the Transeastern Settlement, the TOUSA Entities entered into a settlement and release agreement on June 29, 2007, with the Kendall Entities. She notes that under the TOUSA/Kendall Settlement: (x) option and construction agreements between the Transeastern JV and the Kendall Entities were terminated; (y) claims that arose out of the Transeastern JV's real estate project known as "Kendall Commons" were settled; and (z) the Kendall Entities were paid millions of dollars and received "non-cash" transfers in the form of releases and other obligations by the TOUSA Entities. In order to fund the JV Settlements and related Cash Transfers to the Falcone Entities and the Kendall Entities, TOUSA Inc., together with TOUSA Homes LP and the Conveying Subsidiaries, entered into three secured credit facilities on July 31, 2007. The Facilities are: (1) A Second Amended and Restated Revolving Credit Agreement with Citicorp North America, Inc., as administrative agent and certain lenders; (2) A $200 million first lien term loan facility with Citicorp, as administrative agent and certain lenders; and (3) A $300 million second lien term loan facility with Citicorp as administrative agent and certain lenders. Ms. Budoff says that the obligations under the Revolving Debt and First Lien Term Credit Agreement were allegedly secured by first priority liens on, among others, the property and assets of all the Debtors. Similarly, the obligations under the Second Lien Term Credit Agreement were allegedly secured by a second priority lien on the Prepetition Collateral. Against this backdrop, Ms. Budoff argues that the funding for the Cash Transfers to the Falcone Entities and the Kendall Entities was made possible -- only because TOUSA Inc. and TOUSA Homes LP forced certain of their direct and indirect subsidiaries to become co-borrowers and guarantors under secured credit facilities with the New Lenders. She insists that the Conveying TOUSA Subsidiaries financed the JV Settlements notwithstanding the fact that those Subsidiaries were not obligated on the Transeastern Debt; were not involved with the Transeastern JV; and were not parties to the litigation underlying the Transeastern Settlement. The Committee thus alleges that the Conveying TOUSA Subsidiaries did not benefit from the acquisition of the Transeastern JV assets from certain of the Falcone Entities, nor did they benefit from any other consideration that was transferred in connection with the JV Settlements. "Indeed, nearly all of the Conveying TOUSA Subsidiaries received nothing in return for taking on new debt to fund the JV Settlements, while TOUSA Homes Florida, LP received assets from the wound-down Transeastern JV that were encumbered by more liabilities than such assets were worth," Ms. Budoff contends. In this light, she stresses, the Debtors did not receive reasonably equivalent value for the transfers to the Defendants in connection with the JV Settlements. The Committee further contends that at the time of the "Fraudulent Transfers," the Debtors, both individually and on a consolidated basis, were (i) either insolvent or rendered insolvent, (ii) left with unreasonably small capital, or (iii) unable to pay their debts as the debts became due. Moreover, Falcone Entities Century Communications of Florida Inc. and WI 825 Partners LLC filed proofs of claim in May 2008, aggregating $591,000, on account of obligations owed by the TOUSA Entities under the TOUSA/Falcone Settlement. Ms. Budoff asserts that the Claims arose out of the transfers made in connection with release and obligation transfers made by the Debtors to the Falcone Entities under the TOUSA/Falcone Settlement. "Those transfers should be avoided," she maintains. Absent the Fraudulent Transfers, the Claimants do not have a valid basis for the Claims, Ms. Budoff asserts. Accordingly, the Committee asks the Court to enter an order: (a) avoiding and granting recovery of all Cash Transfers, and any other payment amounts, to the Falcone Entities and the Kendall Entities in connection with the JV Settlements pursuant to Sections 544, 548, 550 of the Bankruptcy Code, Sections 273, 274, 275 and 278 of the New York Debtor and Creditor Law, and Sections 726.105 and 726.108 of the Florida Statutes; (b) avoiding all Release and Obligation Transfers, and any other non-cash transfers, made in favor of the Falcone Entities and the Kendall Entities in connection with the JV Settlements pursuant to Sections 544(b) and 550 of the Bankruptcy Code, Sections 726.105, 726.106 and 726.108 of the Florida Statutes, and Sections 273, 274, 275, and 278 of the New York Debtor and Creditor Law; (c) disallowing the claims of Century Communications and WI 825 Partners, and any other prepetition claim held by any of the Falcone Entities and Kendall Entities based on obligations set forth in the JV Settlements in their entirety, or in the alternative, pursuant to Section 502(d) of the Bankruptcy Code, disallowing the Claims until the Claimants have repaid any transferred property they may have received; and (d) granting other and further relief, including to the extent warranted, equitable subordination, as the Court deems just, proper and equitable, including the fees and expenses of the Committee's lawsuit. In a related request, the Committee sought and obtained the Court's authority to serve the Falcone Entities and the Kendall Entities with an unredacted version of the Complaint. Ms. Budoff told the Court that on January 26, 2010, the Committee notified all counsel to the parties to a Stipulated Protective Order dated August 12, 2008, by electronic mail that absent any objection, the Committee intended to serve the Falcone Entities and the Kendall Entities with an unredacted version of the Complaint. None of the parties, including the Debtors, objected to service of the unredacted Complaint. About Tousa Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. TOUSA INC: Mediators for Adversary Proceedings Designated --------------------------------------------------------- The Bankruptcy Court has entered an order designating the mediators that will conduct mandatory mediations in the avoidance actions and preferential and fraudulent actions Tousa Inc. and its units filed or intend to file against certain creditors. The mediators contemplated to conduct the mandatory mediations for the Debtors' Adversary Proceedings are: Mr. Peter L. Borowitz, Esq. Debovoise & Plimpton LLP 919 Third Avenue New York 10022 Mobile: (914) 720-1217 Fax: (212) 521-7525 E-mail: plborowitz@debovoise.com Mr. Francis L. Carter Esq. Katz Barron Squitero Faust & Berman, P.A. 2699 South Bayshore Drive, 7th Floor Miami, Florida 33133 Phone: (305) 856-2444 Mobile: (305) 776-9143 Fax: (305) 285-9227 E-mail: flc@katzbarron.com Mr. David H. Lichter Esq. Higer Lichter & Givner LLP 2999 NE 191st Street, Suite 709 Aventura, Florida 33180-3116 Phone: (305) 933-9970 Fax: (305) 933-0998 E-mail: DLichter@HLGLawyers.com Mr. Herbert Stettin Herbert Stettin P.A. One Biscayne Tower Two South Biscayne Boulevard, Suite 3700 Miami, Florida 33131 Phone: (786) 493-5734 Mobile: (786) 493-5734 Fax: (305) 349-7261 E-mail: hmstettin@bellsouth.net The Mediators will be assigned, in alphabetical order by last name, by the last two digits of the Adversary Proceeding case number, the Court ruled. Specifically: * Mr. Borowitz will be assigned to all Adversary Proceedings with case numbers ending in 00 through 24; * Mr. Carter to all Adversary Proceedings with case numbers ending in 25-50; * Mr. Lichter to all Adversary Proceedings with case numbers ending in 51-75; and * Mr. Stettin to all Adversary Proceedings with case numbers ending in 76-99. In the event any mediator is unable or unwilling to serve in any Adversary Proceeding assigned to him, the next mediator in alphabetic order will be assigned to mediate that Adversary Proceeding, Judge Olson held. In the event any two or more of the Adversary Proceedings are consolidated into a single case, for purposes of trial or otherwise, the mediator assigned to the first sequential Adversary Proceeding will be assigned, the Court added. About Tousa Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. UNIFI INC: Earns $2.0 Million for December Quarter -------------------------------------------------- Unifi Inc. reported net income of $2.0 million for the second quarter of fiscal 2010 compared to a net loss of $9.1 million for the prior year quarter. The company said it has $485.9 million in total assets, $47.9 million in total current liabilities, $181.7 million in long-term debt and other liabilities, and $371,000 deferred income taxes, resulting to a stockholders' equity of $255.9 million for quarter ended Dec. 27, 2009. The Company's Net sales for the quarter increased $16.5 million or 13.1% to $142.3 million, and reflect the combined impact of improvements in retail sales across the Company's primary end-use segments and increases in market share. The Company is also reporting adjusted earnings before interest, taxes, depreciation and amortization of $13.3 million for the current quarter compared to $2.1 million of Adjusted EBITDA for the prior year quarter. Quarter over prior year quarter highlights include: * Gross profit increased $15 million and gross margin improved to 12.2%; * Adjusted EBITDA improved by $11.2 million; * The Company's share of earnings from its equity affiliates improved by $1.4 million; and * UTSC, the Company's wholly-owned subsidiary in China, reached profitability in the quarter. For the first half of the 2010 fiscal year, the Company is reporting net income of $4.4 million or $0.07 per share compared to a net loss of $9.7 million or $0.16 per share for the prior year period. Although net sales for the first half of the fiscal year decreased $9.6 million or 3.3% to $285.1 million, Adjusted EBITDA increased to $28.4 million compared to $16.0 million for the first six months of fiscal 2009. Results for the quarter and the first half of the fiscal year were positively impacted by a $1 million reduction in the Company's bad debt provision. "I am very pleased with our overall results for the first half of the fiscal year, in which we maintained profitability and generated $12 million more Adjusted EBITDA compared to the prior year period, as we have adapted our business model to the post- recession reality," said Bill Jasper, President and CEO of Unifi. "With the gradual improvement of the economy, we are encouraged by the demand levels we are seeing and the resurgence in the number of development programs using our premium value-added yarns, particularly our REPREVE recycled product. In addition, progress continues on our Central American operation, and we expect to begin shipping locally-produced yarn in Central America during the June quarter." Cash-on-hand at the end of the December quarter was $54.4 million, which represents a decrease of $1.3 million from the end of the September quarter, but an increase of $42 million over the last twelve months. Total cash and cash equivalents at the end of the December quarter, including restricted cash, were $58.1 million and total long-term debt was $183.4 million. Ron Smith, Chief Financial Officer for Unifi, said, "compared to a year ago, the Company's substantial margin improvement was driven by significantly better volumes, resulting in higher utilization rates, as well as the Company's continuous improvement efforts focused on quality, operating efficiencies and cost structures. We do see an upward trend in polyester raw material costs over the next two quarters, which may put some pressure on margins, but we are optimistic as a result of the improving demand and our ability to recover such cost increases over the long-run." A full-text copy of the company's second quarter results is available for free at http://ResearchArchives.com/t/s?5114 About Unifi Unifi, Inc. (NYSE: UFI) -- http://www.unifi.com/and http://www.repreve.com/-- is a diversified producer and processor of multi-filament polyester and nylon textured yarns and related raw materials. The Company adds value to the supply chain and enhances consumer demand for its products through the development and introduction of branded yarns that provide unique performance, comfort and aesthetic advantages. Key Unifi brands include, but are not limited to: AIO(R) - all-in-one performance yarns, SORBTEK(R), A.M.Y.(R), MYNX(R) UV, REPREVE(R), REFLEXX(R), MICROVISTA(R) and SATURA(R). Unifi's yarns and brands are readily found in home furnishings, apparel, legwear, and sewing thread, as well as industrial, automotive, military, and medical applications. As reported by the Troubled Company Reporter on November 20, 2009, Moody's Investors Service revised Unifi, Inc.'s ratings outlook to stable from negative. Moody's affirmed the company's Caa1 Corporate Family and Probability of Default Ratings, and the Caa2 rating on its senior secured notes due 2014. UNISYS CORP: December 31 Balance Sheet Upside-Down by $1.27-Bil. ---------------------------------------------------------------- Unisys Corporation said it has $2.95 billion in total assets, $1.39 billion in total liabilities, 845.9 million in long-term debt, $1.64 billion in long-term postretirement liabilities, $347.3 million in commitments and contingencies resulting to a $1.27 billion stockholders' deficit for fourth quarter ended Dec. 1, 2009. The company reported fourth-quarter 2009 net income of $114.5 million, or $2.64 per diluted share. This compared with a fourth-quarter 2008 net loss of $58.0 million, or a loss of $1.59 per diluted share, which included a $99.0 million pretax cost- reduction charge. Revenue in the quarter declined 5 percent to $1.21 billion compared with revenue of $1.28 billion in the year- ago quarter. Foreign exchange rates had an approximately 5 percentage-point positive impact on revenue in the quarter. For the full year of 2009, Unisys reported net income of $189.3 million, or $4.75 per diluted share. This compared with a full- year 2008 net loss of $130.1 million, or a loss of $3.62 per diluted share, which included $103.1 million of pretax cost- reduction charges. Revenue in 2009 declined 12 percent to $4.60 billion compared with revenue of $5.23 billion in 2008. Foreign currency fluctuations had an approximately 4 percentage-point negative impact on revenue for the full year. "This was a year of significant progress for Unisys," said Unisys Chairman and CEO Ed Coleman. "I am pleased by the way our team rose to the challenge and executed against the priorities of our turnaround program in 2009. We did this work in a difficult economic environment, and we saw the fruits of our efforts in our results over the past three quarters. Our fourth-quarter profitability and cash flow were particularly strong, driven by a more cost-efficient services business and strong sales of ClearPath systems. "The Unisys turnaround is not complete by any measure," Mr. Coleman said. "While we've taken positive first steps, our goal is to become a consistently and predictably profitable company that generates free cash flow and delivers outstanding customer service in our targeted areas of security; data center transformation, including our server business; end user outsourcing; and application modernization. In 2010 we will focus on continuing to execute against our priorities of concentrating our resources more effectively, sharpening the value propositions for our offerings, improving the cost efficiency of our labor model, and simplifying our operations to reduce overhead." A full-text copy of the company's financial results is available for free at http://ResearchArchives.com/t/s?511c About Unisys Based in Blue Bell, Pennsylvania, Unisys Corporation (NYSE: UIS) -- http://www.unisys.com/-- provides a portfolio of IT services, software, and technology that solves critical problems for clients. With more than 26,000 employees, Unisys serves commercial organizations and government agencies throughout the world. US AIRWAYS: Blackrock Discloses 6.52% Equity Stake -------------------------------------------------- BlackRock, Inc., disclosed with the U.S. Securities and Exchange Commission, on January 29, 2009, that it beneficially owns 10,501,852 shares of US Airways Group Inc SHS representing 6.52% of shares outstanding. As of October 16, 2009, there were approximately 161,102,717 shares of US Airways Group, Inc. common stock outstanding. As previously announced, BlackRock completed on December 1, 2009, its acquisition of Barclays Global Investors from Barclays Bank PLC. As a result, substantially all of the BGI Entities are now included as subsidiaries of Blackrock for the purposes of Schedule 13G filings. About US Airways US Airways, along with US Airways Shuttle and US Airways Express, operates more than 3,200 flights per day and serves more than 200 communities in the U.S., Canada, Europe, the Middle East, the Caribbean and Latin America. The airline employs more than 33,000 aviation professionals worldwide and is a member of the Star Alliance network, which offers its customers more than 17,000 daily flights to 916 destinations in 160 countries worldwide. And for the eleventh consecutive year, the airline received a Diamond Award for maintenance training excellence from the Federal Aviation Administration (FAA) for its Charlotte, North Carolina hub line maintenance facility. For more company information, visit http://www.usairways.com/ Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it listed $8,805,972,000 in total assets and $8,702,437,000 in total debts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As of June 30, 2009, reorganized US Airways had total assets of $7,858,000,000 against debts of $8,194,000,000, for a stockholders' deficit of $336,000,000. In February, Moody's Investors Service affirmed the 'Caa1' Corporate Family and Probability of Default ratings of US Airways Group, Inc., and the SGL-4 Speculative Grade Liquidity rating. US Airways Group carries a 'CCC' issuer default rating from Fitch. VISTEON CORP: Ernst & Young Charges $2.67MM for Sept.-Nov. ---------------------------------------------------------- Pursuant to Sections 330 and 331 of the Bankruptcy Code, more professionals of Visteon Corp. filed their interim fee applications: Professional Period Fees Expenses ------------ --------- ---------- ---------- Ernst & Young LP 09/01/09- 11/30/09 $2,665,228 $137,869 Accretive Solutions- 11/30/09- Detroit, Inc. 12/27/09 99,357 0 PricewaterhouseCoopers 06/17/09- LLP 07/31/09 1,404,009 6,552 Ernst & Young provides valuation services to the Debtors. Accretive Solutions-Detroit is the Debtors' tax consultants. Kirkland & Ellis serves as the Debtors' counsel. PwC is the Debtors' tax advisors. Pachulski is the Debtors' co-counsel. Ashby & Geddes and Brown Rudnick serve as the Committee's counsel. 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: Liquidity Solutions Buys Claims --------------------------------------------- In separate filings, creditors of Visteon Corp. or its units notified the Court, on January 22, 2010, that they intend to transfer each of their claims to Liquidity Solutions, Inc. The Creditors are: Transferor Claim No. Claim Amount ---------- --------- ------------ Washington Penn Plastics Co Inc. 2514 $33,293 Washington Penn Plastics Co Inc. 2826 33,293 ATF Inc 1822 26,889 ATF Inc 2014 6,294 Novelis Corporation 1962 676,552 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: To Lay Off 15 More Workers at ACH Facility -------------------------------------------------------- Visteon Corp. is permanently terminating another 15 workers at a facility leased by its subsidiary, Automotive Components Holdings LLC, in Indianapolis, Indiana, Inside Indiana Business related in a January 28, 2010 report. The 15 workers to be laid off are in addition to the 187 job cuts Visteon previously announced it is planning to take, starting January 29, 2010, at the ACH Plant. The Company noted it has informed ACH of the planned plant closure. The specific date of closure, however, has not been made known, according to Inside Indiana Business. The affected Visteon workers are expected to be jobless by March 31, 2010, the news source noted. 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: Retirees to Appeal Termination of Benefits -------------------------------------------------------- Randall Chase at The Associated Press Business Writer reports that attorneys for retired Visteon workers are taking an appeal from the Bankruptcy Court's order allowing the Debtors to terminate their health and life insurance benefits. Mr. Chase reports a notice of appeal was filed Thursday in federal court in Delaware, and the case will now be referred for mediation. According to AP, attorneys for retired union workers question whether the order was proper, given that Visteon did not first negotiate with them, and that the Bankruptcy Court did not consider whether Visteon made a significant showing that the benefits were not vested. AP relates Visteon has said the benefits for some 8,000 retirees represented a $310 million liability and a significant obstacle to a successful reorganization. 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) WALKING COMPANY: Withdraws Bid to Close 40 Additional Stores ------------------------------------------------------------ The Walking Company and its debtor-affiliates have withdrawn, without prejudice, a request to (i) establish "Post-Holiday" Store Closing Procedures and (ii) initiate additional store closing sales. In mid-January, the Debtors identified 40 additional stores for possible closure. When they filed for bankruptcy, the Debtors operated 210 stores in malls across the nation. As part of its right-sizing strategy, the Debtors initially identified 90 underperforming stores. The Debtors said the additional 40 locations have either operations that are either unprofitable or only marginally profitable. On January 21, the Debtors obtained permission to reject leases associated with 17 stores. On January 26, the Debtors identified another real property lease for rejection. The Debtors said the disposition of their remaining leases and executory contracts is addressed pursuant to the Chapter 11 plan they filed last week. About The Walking Company The Walking Company Holdings, Inc., consists of its The Walking Company and Big Dogs subsidiaries. The Walking Company is a leading independent specialty retailer of high-quality, technically designed comfort footwear and accessories that features premium brands such as ECCO, Dansko, UGG Australia, MBT and Aetrex, among many others. These products have particular appeal to one of the largest and most rapidly growing demographics in the nation. The Walking Company operates over 210 stores in premium malls across the nation. Big Dogs develops, markets and retails a branded, lifestyle collection of unique, high-quality, popular-priced consumer products, including active wear, casual sportswear, accessories and gifts. The Walking Company and affiliates Big Dog USA, Inc., and The Walking Company Holdings Inc., filed for Chapter 11 bankruptcy protection on December 7, 2009 (Bankr. C.D. Calif. Lead Case No. 09-15138). Arent Fox LLP serves as the Debtors' Reorganization Counsel. Clear Thinking Group acts as the Debtors' Financial Advisors. Kurtzman Carson Consultants serves as Claims Agent. The United States Trustee has appointed Deckers Outdoor Corp.; Ken Atchinson; Simon Property Group; General Growth Properties, Inc.; Dansko, LLC; Ecco USA Inc.; UPS; Aetrex Worldwide Inc.; and MBT-Masai USA Corp. as members of the Official Committee of Unsecured Creditors. Pachulski Stang Zhiel & Jones serves as counsel to the Committee. BDO Seidman, LLP acts as the Committee's Financial Advisor. The Walking Company listed $100,000,001 to $500,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. WALKING COMPANY: IP Suit on "It's Five O'Clock Somewhere!" Stayed ----------------------------------------------------------------- Rachel Feintzeig at Dow Jones Daily Bankruptcy Review reported that The Trademark Trial and Appeal Board of the United States Patent and Trademark Office on January 20, 2010, approved the request of The Walking Company to stay proceedings related to Margaritaville Enterprises, LLC's opposition to the Company's application to trademark the phrase "It's Five O'Clock Somewhere!" Margaritaville Enterprises filed Opposition No. 91186184 against App. Ser. No. 78979408 in classes 16, 24, and 25 for the mark IT'S FIVE O'CLOCK SOMEWHERE! owned by The Walking Company Holdings, Inc. Margaritaville Enterprises has filed Opposition No. 91186185 against App. Ser. No. 78453043 in Class 043 for the mark IT'S FIVE O'CLOCK SOMEWHERE! owned by The Walking Company Holdings, Inc. Both proceedings are currently pending before the Board. The two proceedings have been consolidated into one proceeding. In a Notice of Opposition filed with the Board in September 2009, artist Jimmy Buffett, owner of Margaritaville, said that after the release of his song "It's Five O'Clock Somewhere," Margaritaville began commercializing the phrase "IT'S FIVE O'CLOCK SOMEWHERE" as a trademark. As early as December 2003, Mr. Buffett said Margaritaville began selling "IT'S FIVE O'CLOCK SOMEWHERE"-branded shirts, beverages, glassware, and decorative magnets. Margaritaville has continuously used the mark. Mr. Buffett said Margaritaville's "IT'S FIVE O'CLOCK SOMEWHERE" mark is virtually identical to Walking Company's proposed "IT'S FIVE O'CLOCK SOMEWHERE!" mark in "sight, sound, meaning and commercial impression." The only difference is Walking Company's addition of an exclamation point at the end of the mark. Mr. Buffett is represented in the IP suit by Jeffrey M. Smith, Esq., Kristen L. Francher, Esq., and Joel R. Feldman, Esq., at Greenberg Traurig LLP in Atlanta, Georgia. About The Walking Company The Walking Company Holdings, Inc., consists of its The Walking Company and Big Dogs subsidiaries. The Walking Company is a leading independent specialty retailer of high-quality, technically designed comfort footwear and accessories that features premium brands such as ECCO, Dansko, UGG Australia, MBT and Aetrex, among many others. These products have particular appeal to one of the largest and most rapidly growing demographics in the nation. The Walking Company operates over 210 stores in premium malls across the nation. Big Dogs develops, markets and retails a branded, lifestyle collection of unique, high-quality, popular-priced consumer products, including active wear, casual sportswear, accessories and gifts. The Walking Company and affiliates Big Dog USA, Inc., and The Walking Company Holdings Inc., filed for Chapter 11 bankruptcy protection on December 7, 2009 (Bankr. C.D. Calif. Lead Case No. 09-15138). Arent Fox LLP serves as the Debtors' Reorganization Counsel. Clear Thinking Group acts as the Debtors' Financial Advisors. Kurtzman Carson Consultants serves as Claims Agent. The United States Trustee has appointed Deckers Outdoor Corp.; Ken Atchinson; Simon Property Group; General Growth Properties, Inc.; Dansko, LLC; Ecco USA Inc.; UPS; Aetrex Worldwide Inc.; and MBT-Masai USA Corp. as members of the Official Committee of Unsecured Creditors. Pachulski Stang Zhiel & Jones serves as counsel to the Committee. BDO Seidman, LLP acts as the Committee's Financial Advisor. The Walking Company listed $100,000,001 to $500,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. WALKING COMPANY: Proposes to Set March 3 as Claims Bar Date ----------------------------------------------------------- The Walking Company and its debtor-affiliates have asked Judge Robin L. Riblet of the U.S. Bankruptcy Court for the Central District of California, in Santa Barbara, to establish March 3, 2010, as the deadline for creditors holding pre-bankruptcy claims to file proofs of claim in the Debtors' cases. The Walking Company Holdings, Inc., consists of its The Walking Company and Big Dogs subsidiaries. The Walking Company is a leading independent specialty retailer of high-quality, technically designed comfort footwear and accessories that features premium brands such as ECCO, Dansko, UGG Australia, MBT and Aetrex, among many others. These products have particular appeal to one of the largest and most rapidly growing demographics in the nation. The Walking Company operates over 210 stores in premium malls across the nation. Big Dogs develops, markets and retails a branded, lifestyle collection of unique, high-quality, popular-priced consumer products, including active wear, casual sportswear, accessories and gifts. The Walking Company and affiliates Big Dog USA, Inc., and The Walking Company Holdings Inc., filed for Chapter 11 bankruptcy protection on December 7, 2009 (Bankr. C.D. Calif. Lead Case No. 09-15138). Arent Fox LLP serves as the Debtors' Reorganization Counsel. Clear Thinking Group acts as the Debtors' Financial Advisors. Kurtzman Carson Consultants serves as Claims Agent. The United States Trustee has appointed Deckers Outdoor Corp.; Ken Atchinson; Simon Property Group; General Growth Properties, Inc.; Dansko, LLC; Ecco USA Inc.; UPS; Aetrex Worldwide Inc.; and MBT-Masai USA Corp. as members of the Official Committee of Unsecured Creditors. Pachulski Stang Zhiel & Jones serves as counsel to the Committee. BDO Seidman, LLP acts as the Committee's Financial Advisor. The Walking Company listed $100,000,001 to $500,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. WALKING COMPANY: Status Conference and Disclosure Statement Set --------------------------------------------------------------- Judge Robin L. Riblet of the U.S. Bankruptcy Court for the Central District of California, in Santa Barbara, will hold a hearing on March 12, 2010, at 1:00 p.m., to consider the adequacy of the disclosure statement explaining The Walking Company Holdings, Inc., and its debtor-affiliates' Original Joint Chapter 11 Plan. Judge Riblet will hold a status conference in the Debtors' cases on February 10 at 2:00 p.m. As reported by the Troubled Company Reporter on February 4, 2010, the Debtors filed a reorganization plan under which the company intends to keep 207 of its 214 current store locations open, and pay off all of its debts and future obligations to trade creditors. According to Reuters, the Company said it had negotiated new lease agreements with landlords of about 90 of its 210 stores and that the move will generate annual cost savings of about $3 million, report says. The Company said it has obtained a commitment from an investor group led by Richard Kayne of Kayne Anderson Capital Advisors LP to invest $10 million to recapitalize the company, report adds. Wells Fargo Retail Finance has agreed to provide $30 million as exit financing. The Plan proposes to satisfy all of the prepetition obligations of the Debtors, with the exception only of certain voluntary discounts agreed to by holders of secured notes and the possible impairment of the Holding company's Existing Common Stock pursuant to terms of an Investor Commitment Letter. In light of a new $30 million credit, the Plan calls for payment in full on the $25.7 million in first-lien debt. Secured noteholders with $20.2 million in claims will receive a new $19.5 million note plus more than $420,000 in cash. Unsecured creditors will be paid in full. The Debtors believe that the Plan provides the greatest and earliest possible recoveries to creditors and stockholders, that confirmation of the Plan is in the best interest of all parties- in-interest, and that any alternative would result in further delay, uncertainty, and expense to the Estates. A full-text copy of the Chapter 11 Plan is available at no charge at http://bankrupt.com/misc/TWCCh11Plan.pdf A full-text copy of the Disclosure Statement is available at no charge at http://bankrupt.com/misc/TWCDisclosureStatement.pdf A full-text copy of the Chapter 11 Status Report is available at no charge at http://bankrupt.com/misc/TWCStatusReport.pdf About The Walking Company The Walking Company Holdings, Inc., consists of its The Walking Company and Big Dogs subsidiaries. The Walking Company is a leading independent specialty retailer of high-quality, technically designed comfort footwear and accessories that features premium brands such as ECCO, Dansko, UGG Australia, MBT and Aetrex, among many others. These products have particular appeal to one of the largest and most rapidly growing demographics in the nation. The Walking Company operates over 210 stores in premium malls across the nation. Big Dogs develops, markets and retails a branded, lifestyle collection of unique, high-quality, popular-priced consumer products, including active wear, casual sportswear, accessories and gifts. The Walking Company and affiliates Big Dog USA, Inc., and The Walking Company Holdings Inc., filed for Chapter 11 bankruptcy protection on December 7, 2009 (Bankr. C.D. Calif. Lead Case No. 09-15138). Arent Fox LLP serves as the Debtors' Reorganization Counsel. Clear Thinking Group acts as the Debtors' Financial Advisors. Kurtzman Carson Consultants serves as Claims Agent. The United States Trustee has appointed Deckers Outdoor Corp.; Ken Atchinson; Simon Property Group; General Growth Properties, Inc.; Dansko, LLC; Ecco USA Inc.; UPS; Aetrex Worldwide Inc.; and MBT-Masai USA Corp. as members of the Official Committee of Unsecured Creditors. Pachulski Stang Zhiel & Jones serves as counsel to the Committee. BDO Seidman, LLP acts as the Committee's Financial Advisor. The Walking Company listed $100,000,001 to $500,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. WEST FELICIANA: Updated Case Summary & Creditors List ----------------------------------------------------- Debtor: West Feliciana Acquisition, LLC 2105 LA Hwy 964 Saint Francisville, LA 70775 Bankruptcy Case No.: 10-10053 Chapter 11 Petition Date: January 17, 2010 Court: United States Bankruptcy Court Middle District of Louisiana (Baton Rouge) About the Business: Debtors' Counsel: Louis M. Phillips, Esq. One American Place 301 Main Street, Suite 1600 Baton Rouge, LA 70801 Tel: (225) 381-9643 Fax: (225) 336-9763 Email: lphillips@gordonarata.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $10,000,001 to $50,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/lamb10-10053.pdf Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ ASTENJOHNSON Trade $297,039 PO Box 751985 Charlotte, NC 28275-1985 Automatic Handling Intl Trade $96,118 Batson Lumber Co LLC Trade $95,417 Chemstone Inc. Trade $110,140 E I DU Pont De Nemours Trade $122,983 and Co Entergy Trade $1,742,440 PO Box 8103 Baton Rouge, LA 70891-8103 Environmental Business Trade $79,688 Specialists LLC Falco Lime Trade $117,698 Gloster Chips Inc. Trade $110,754 Hercules Trade $644,348 PO Box 932575 Atlanta, GA 31193-2575 Johnson Controls Trade $82,214 Johnson Foils Trade $241,488 Lofton Staffing Services Trade $202,527 Lorentzen & Wettre USA Trade $98,871 Inc. Paperchine, Inc. Trade $130,293 Plum Creek Marketing Trade $189,722 Roco Rescue Inc Trade $91,680 TDC LLC US Trade $230,913 Terre Management Company Trade $82,527 LLC Turner Industries Group Trade $197,074 LLC The petition was signed by F. Allen Byrd, the company's chief executive officer. WHITE ENERGY: Lenders Oppose Alternate Owner Plan ------------------------------------------------- Bill Rochelle at Bloomberg News reported that White Energy Inc. may be faced with a competing reorganization proposal, even though there is a March 4 hearing for approval of the plan largely negotiated before the Chapter 11 filing in May. White Energy's plan is designed to give secured lenders owed $308 million almost all of the new stock. According to the report, White Energy's owner, Columbus Nova Ethanol Holdings LLC, was able to file a competing plan because the bankruptcy judge in December terminated the Company's exclusive right to propose a reorganization. The agent for the lenders, WestLB AG, New York Branch, believes there is no reason to permit the owner's plan to go to creditors for a vote. Although the Columbus Nova plan would allow the owner to retain control by investing a fresh $35 million, WestLB says the owners have demonstrated no ability to raise the funding. They also say the plan is a non-starter because the secured lenders vow to vote "no." While the owner's plan says it would pay the lenders' $307 million of claims in full, WestLB opposes the terms of the $260 million note that would represent part of the lenders' recovery. The official creditors' committee is also opposed to approval of the owner's disclosure statement without changes. About White Energy Headquartered in Dallas, Texas, White Energy, Inc. -- http://www.white-energy.com/-- owns three ethanol plants. White Energy's plants have a combined capacity of producing 240 million gallons of ethanol a year, making it one of the 10 largest ethanol producers in the U.S. and the second-largest gluten maker. Two plants are in Texas with the third in Kansas. White spent $323 million building the plants in Texas. The Company and its debtor-affiliates filed for Chapter 11 on May 7, 2009 (Bankr. D. Del. Lead Case No. 09-11601). Michael R. Lastowski, Esq., at Duane Morris LLP, represents the Debtors in their restructuring efforts. The Debtors tapped The Garden City Group Inc. as claims agent. On the petition date, White Energy disclosed assets and debts ranging from $100 million to $500 million. W.R. GRACE: Blackrock Discloses 5.15% Equity Stake -------------------------------------------------- BlackRock, Inc., in a Schedule 13G filed with the U.S. Securities and Exchange Commission disclosed that, as of January 20, 2010, it owns 3,719,146 shares of W.R. Grace & Co. common stock or 5.15% of the 72,236,518 shares outstanding as of October 31, 2009. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * Geithner Says U.S. Will 'Never' Lose Aaa Debt Rating ---------------------------------------------------- Bloomberg News reports that Treasury Secretary Timothy F. Geithner said an ABC News interview that the U.S. is in no danger of losing its 'Aaa' debt rating even though the Obama administration has predicted a $1.6 trillion budget deficit in 2010. "Absolutely not," Mr. Geithner said, when asked whether a downgrade is a concern. "That will never happen to this country." Mr. Geithner said investors around the world turn to U.S. Treasury securities and dollar-denominated assets whenever they are worried about global stability. That reflects "basic confidence" in the U.S. and its ability to bounce back from the global recession, he said. Moody's Investors Service Inc. last week said the U.S. government's bond rating will come under pressure in the future unless additional measures are taken to reduce budget deficits projected for the next decade. * Moody's Predicts 3.3% Junk Default Rate in December ----------------------------------------------------- The start of 2010 saw speculative-grade liquidity trends continuing to improve with another monthly drop in Moody's Liquidity-Stress Index, hinting that corporate liquidity needs through the early part of 2011 are being addressed, said Moody's Investors Service its latest "SGL Monitor Flash" report. The percentage of corporate issuers with the weakest liquidity ratings fell to just 7.7% of all SGL-rated companies in January 2010, following a steady, 11-month decrease from the March 2009's record level of 20.9%. January's percentage of SGL-4 issuers also marks the Liquidity-Stress Index's lowest level since November 2007. "The latest drop in the Liquidity-Stress Index suggests that issuers are being proactive about addressing maturities through the beginning of next year, as the corporate sector continues to tackle a growing mountain of refinancing needs through 2014," said John Puchalla, Moody's Vice President -- Senior Analyst. Nearly all of the nine SGL upgrades during January reflected two broad themes for the speculative-grade issuers, the report said: their continued access to credit markets, which has allowed companies to refinance maturities, and has provided more covenant cushion; and their strong cash reserves and free cash flow projections. There was only one SGL downgrade in January 2010. The drop in the Liquidity-Stress Index suggests the long-awaited decline in the default rate expected during 2010 is unlikely to reverse course in early 2011. Moody's predicts that the default rate for all speculative-grade non-financial corporate issuers will drop from 12.5% at the end of December 2009 to just 3.3% at the end of December 2010. Moody's has published a monthly SGL Monitor since 2002 and now publishes the SGL Monitor Flash at the beginning of every month to provide investors with a first look at the latest liquidity data. The next SGL Monitor will be published later this month. The SGL Monitor is available at http://www.moodys.com/sglmonitorand detailed information about SGL ratings is available at http://www.moodys.com/sgl * P/E Firms to Liquidate Funds Created During Financial Crisis -------------------------------------------------------------- Pierre Paulden and Saijel Kishan at Bloomberg News report that BlueMountain Capital Management LLC is among firms that are liquidating funds raised during the financial crisis to buy debt at depressed prices as they see gains moderating after last year's record market rally. According to the report, BlueMountain last month returned money to investors from a $100 million two-year loan fund that gained 34 percent since its inception in March. Silverback Asset Management LLC is giving money back from its $210 million two-year convertible-bond fund, the firm said. Highland Capital Management LP said it liquidated a November 2008 fund that gained 138% before fees by investing in collateralized loan obligations. * Alvarez & Marsal Taxand Names Two Managing Directors in Chicago ----------------------------------------------------------------- Keith Kechik, formerly of KPMG, and John Easterday, formerly of True Partners Consulting, have joined Alvarez & Marsal Taxand, LLC, as managing directors in Chicago. The firm also announced the promotion of Richard Sherman, a member of the firm's Transaction Tax Practice, to managing director in Chicago. "From global private equity firms to local franchises, the demand for independent tax advisory services continues to increase as the complexities of international and local tax laws evolve," said Robert N. Lowe, Jr., CEO of A&M Taxand. "We welcome Keith and John to the firm and look forward to adding their deep industry knowledge to our growing Midwest presence." With more than three decades of experience handling tax matters related to private equity funds and global companies, Mr. Kechik has a deep understanding of various transactional matters such as structured finance investments, mergers and acquisitions, disposition strategies, joint ventures, securitizations, leasing and cross-border planning. He most recently served as the western region partner-in-charge of mergers and acquisitions with the Transaction Tax Services group at KPMG. Previously, he was a partner with both Deloitte and Arthur Andersen, where he spent more than twenty-five years combined. A licensed Certified Public Accountant for the state of Illinois, he earned bachelor's and master's degrees in accounting from De Paul University. Mr. Easterday concentrates on state income and franchise taxation for middle market to Fortune 50 companies, including matters such as managing controversy, restructuring, mergers and acquisitions, and compliance. He also has extensive industry knowledge in sales and use, as well as property and employment taxes. Most recently, he spent four years as a managing director with True Partners Consulting where he led the State Income and Franchise Tax and Employment Tax practices. Prior to that, he served in various roles at PricewaterhouseCoopers and Arthur Andersen. He earned a bachelor's degree in accounting from DePaul University and is a Certified Public Accountant, licensed in Illinois and Indiana. Mr. Easterday is also a member of the AICPA and Illinois and Indiana CPA Societies. About Alvarez & Marsal Taxand Alvarez & Marsal Taxand -- http://www.alvarezandmarsal.com/re/taxandus-- an affiliate of global professional services firm Alvarez & Marsal (A&M) is an independent tax group comprised of experienced tax professionals dedicated to providing customized tax advice to clients and investors across a broad range of industries. Its professionals extend A&M's commitment to offering clients a choice in advisers who are free from audit-based conflicts of interest, and bring an unyielding commitment to delivering responsive client service. Alvarez & Marsal Taxand has offices in major metropolitan markets throughout the U.S., and serves the U.K. from its base in London, England. A founding member of Taxand, a global network of leading tax advisors from independent member firms in nearly 50 countries, Alvarez & Marsal Taxand was recently named Tax Restructuring Firm of the Year by International Tax Review as part of its 2009 Americas Tax Awards. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Total Share- Total Working Holders" Assets Capital Equity Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ ------- -------- ACCO BRANDS CORP ABD US 1,078.00 217.20 (102.90) AFC ENTERPRISES AFCE US 115.70 (0.30) (22.90) AFFYMAX INC AFFY US 144.93 7.14 (2.73) AGA MEDICAL HOLD AGAM US 332.79 28.51 (47.64) AMER AXLE & MFG AXL US 1,986.80 71.10 (559.90) AMERICAS ENERGY AENY US 0.60 0.59 (0.01) AMR CORP AMR US 25,754.00 (1,448.00) (2,859.00) ARTIO GLOBAL INV ART US 280.40 - (33.37) ARTIO GLOBAL INV A1I GR 280.40 - (33.37) ARVINMERITOR INC ARM US 2,499.00 98.00 (1,112.00) AUTOZONE INC AZO US 5,385.82 (186.44) (483.96) BLOUNT INTL BLT US 487.85 29.49 (22.15) BLUEKNIGHT ENERG BKEP US 316.83 (4.27) (133.64) BOARDWALK REAL E BEI-U CN 2,405.68 - (36.79) BOARDWALK REAL E BOWFF US 2,405.68 - (36.79) CABLEVISION SYS CVC US 10,128.00 (111.68) (5,193.36) CARDTRONICS INC CATM US 457.20 (41.75) (8.29) CC MEDIA-A CCMO US 17,696.08 1,507.96 (7,020.56) CENTENNIAL COMM CYCL US 1,480.90 (52.08) (925.89) CENVEO INC CVO US 1,601.19 203.42 (178.97) CHENIERE ENERGY CQP US 1,918.95 28.24 (472.03) CHOICE HOTELS CHH US 353.03 (13.42) (132.91) CONEXANT SYS CNXT US 273.75 65.77 (66.65) CYTORI THERAPEUT CYTX US 25.00 11.37 (1.42) DELCATH SYSTEMS DCTH US 6.77 (4.98) (4.94) DEXCOM DXCM US 53.96 25.84 (9.10) DISH NETWORK-A DISH US 8,658.74 710.57 (1,381.37) DOMINO"S PIZZA DPZ US 443.74 106.68 (1,350.12) DUN & BRADSTREET DNB US 1,600.30 (181.70) (720.30) DYAX CORP DYAX US 51.59 23.57 (49.20) EPICEPT CORP EPCT SS 11.96 5.79 (5.16) EXELIXIS INC EXEL US 421.10 91.53 (142.77) EXTENDICARE REAL EXE-U CN 1,655.19 126.26 (47.76) FORD MOTOR CO F US 205,896.00 (9,751.00) (7,270.00) FORD MOTOR CO F BB 205,896.00 (9,751.00) (7,270.00) GENCORP INC GY US 935.70 111.20 (289.10) GLG PARTNERS-UTS GLG/U US 466.58 168.33 (277.14) GREAT ATLA & PAC GAP US 3,025.43 248.68 (358.47) HEALTHSOUTH CORP HLS US 1,754.40 35.90 (534.50) HOVNANIAN ENT-A HOV US 2,024.58 1,261.10 (316.31) IMS HEALTH INC RX US 2,110.52 230.86 (42.68) INCYTE CORP INCY US 472.82 358.38 (199.36) INTERMUNE INC ITMN US 157.15 92.82 (83.36) IPCS INC IPCS US 559.20 72.11 (33.02) JAZZ PHARMACEUTI JAZZ US 102.17 (8.97) (82.44) JUST ENERGY INCO JE-U CN 1,378.06 (392.04) (350.05) KNOLOGY INC KNOL US 643.99 20.90 (41.94) LIBBEY INC LBY US 799.18 115.23 (61.99) LIN TV CORP-CL A TVL US 772.71 6.57 (188.41) LINEAR TECH CORP LLTC US 1,512.83 673.47 (114.33) MANNKIND CORP MNKD US 247.40 8.81 (59.22) MEAD JOHNSON MJN US 1,964.30 502.30 (697.50) MEDIACOM COMM-A MCCC US 3,721.86 (253.93) (434.75) MOODY'S CORP MCO US 2,003.50 (225.90) (1,043.60) NATIONAL CINEMED NCMI US 607.80 85.00 (504.50) NAVISTAR INTL NAV US 10,027.00 1,563.00 (1,739.00) NPS PHARM INC NPSP US 154.65 72.04 (222.37) OCH-ZIFF CAPIT-A OZM US 1,976.06 - (88.36) OSIRIS THERAPEUT OSIR US 110.80 48.53 (3.29) OVERSTOCK.COM OSTK US 144.38 34.09 (3.10) PALM INC PALM US 1,326.92 61.03 (151.17) PDL BIOPHARMA IN PDLI US 264.45 (16.23) (242.39) PETROALGAE INC PALG US 3.23 (6.62) (40.14) PRIMEDIA INC PRM US 241.09 (14.36) (110.72) PROTECTION ONE PONE US 628.12 29.11 (83.27) QWEST COMMUNICAT Q US 20,225.00 766.00 (1,031.00) REGAL ENTERTAI-A RGC US 2,512.50 (13.60) (258.50) REVLON INC-A REV US 802.00 105.40 (1,043.40) SALLY BEAUTY HOL SBH US 1,529.70 360.62 (580.19) SANDRIDGE ENERGY SD US 2,310.97 1.42 (190.99) SELECT COMFORT C SCSS US 82.27 (68.66) (38.75) SIGA TECH INC SIGA US 8.17 (4.07) (11.49) SINCLAIR BROAD-A SBGI US 1,629.15 (17.99) (132.17) STEREOTAXIS INC STXS US 40.48 1.36 (15.27) SUN COMMUNITIES SUI US 1,189.20 - (95.46) TALBOTS INC TLB US 839.70 (3.95) (190.56) TAUBMAN CENTERS TCO US 2,607.20 - (466.57) THERAVANCE THRX US 183.47 123.53 (175.21) UAL CORP UAUA US 18,347.00 (2,111.00) (2,645.00) UNISYS CORP UIS US 2,956.90 308.60 (1,271.70) UNITED RENTALS URI US 3,859.00 244.00 (19.00) US AIRWAYS GROUP LCC US 7,454.00 (458.00) (355.00) VENOCO INC VQ US 715.17 (13.00) (169.00) VERMILLION INC VRMLQ US 7.15 (2.96) (24.87) VIRGIN MOBILE-A VM US 307.41 (138.28) (244.23) WARNER MUSIC GRO WMG US 4,070.00 (650.00) (143.00) WEIGHT WATCHERS WTW US 1,076.72 (329.14) (748.21) WORLD COLOR PRES WC CN 2,641.50 479.20 (1,735.90) WORLD COLOR PRES WC/U CN 2,641.50 479.20 (1,735.90) WR GRACE & CO GRA US 3,968.20 1,134.00 (290.50) ZYMOGENETICS INC ZGEN US 243.39 59.40 (21.76) ********* 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 ***